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Index

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2
Economic Survey

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4
BUDGET 2016-17

MAY 2016

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Designed by:
Chandan Kumar Raja

6
US Presidential Election Process

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CURRENT AFFAIRS

National Issues
International Issues
India & the World
Economy
Science and Technology
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Selected Articles from


Various Newspapers & Journals

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Small Savings Schemes

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Myanmar Democratisation

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Economic Survey

ECONOMIC SURVEY
The Economic Survey 2015-16
was tabled in Parliament by the Union
Finance Minister Shri Arun Jaitley.
Survey expects Indian economy to
perform well dispute the gloomy
picture of international economic
environment. Survey says India stands
as a haven of stability and an outpost
of opportunity. Survey says Indian
economy will doing well because of
mainly two reasons; the governments
commitment to fiscal consolidation
and low inflation. The Survey also
praised reorientation of government
spending toward needed public
infrastructure. Describing these
achievements as remarkable, the
Survey emphasizes that the task is
now to sustain them in an even more
difficult global environment.
The Survey further states that
the countrys performance reflects
the implementation of number of
meaningful reforms. Economic
environment in country has been
helped by the governments
commitment towards reducing
corruption, which is imminent in
auctioning the assets. Survey also
praised the governments initiative to
2

liberalise the FDI across the board


and vigorous efforts have been
undertaken to ease the cost of doing
business.
Survey said agriculture being
the important section of Indian
economy. Governments initiative of
a major crop insurance programme
will help this sector. The Survey has
highlighted creation of bank
accounts for over 200 million people
under Pradhan Mantri Jan Dhan
Yojana (PMJDY), the worlds largest
direct benefit transfer programme in
case of LPG with about 151 million
beneficiaries receiving Rs. 29,000
crore in their bank accounts has been
praised by Suvey. However, the
Survey has expressed concern over
approval of GST Bill being elusive so
far, the disinvestment programme
falling short of targets and the next
stage of subsidy rationalization being
a work-in-progress. It adds that
corporate and bank balance sheets
remain stressed affecting the
prospects for reviving private
investments. It further says that
perhaps the underlying anxiety is that
the Indian economy is not realizing

its full potential.


Like previous year Survey again
states that the countrys long run
potential growth rate is still around 810%. For that to achieve government
needs to work on three important
fields, India being pro-industry must
evolve into being genuinely procompetition. Similarly, skepticism
about the state must translate into
making it leaner. Secondly, the Survey
calls for major investments in health
and education of people to exploit
Indias demographic dividend to
optimal extent. Third, survey says
government needs to put major
emphasis on the Agriculture. On the
education front, the declining
educational outcomes reflected in
lower reading levels in both public
and private sector schools are areas
of concern.
According to Annual Status of
Education Report (ASER) 2014,
there is sharp decline between 2007
to 2014 in the number of children in
Standard V who can read a textbook
of Standard II, in both government
and private schools. Economic
Survey 2015-16 states that the

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Economic Survey
Gender Parity Index (2013-14
Provisional) however, shows an
improvement in girls education, with
parity having been achieved
between girls and boys at almost all
levels of education. The Government
has taken several steps to provide
education to underprivileged,
vulnerable and marginalized people
such as SCs, STs, other Backward
Classes (OBC) including Minorities
and other Economically Backward
Classes through various programmes
of education. Digital Gender Atlas for
Advancing Girls Education in India
was launched last year to help identify
low-performing geographic pockets
for girls, particularly from
marginalized groups.
A number of scholarship
schemes to encourage enrolment and
learning levels among different
groups are in operation. National
Scholarship Portal, a single window
system for various types of scholarship
schemes administered by different
Ministries/Departments has been
introduced under Direct Benefit
Transfer (DBT) mode. During 201516, about 90 lakh Minority students
are to be benefited under the Prematric, Post-matric and Merit-cumMeans scholarship schemes, while
about 23.21 lakh SC students
benefited under Pre-matric, 56.30
lakh under Post-matric and 3354
under the Rajiv Gandhi National
Fellowship including the Top Class
Education scholarship scheme are to
be assisted.
The Survey accepts that
external environment remains
unusually challenging and weak,
government policy needs to be
designed to counter that. Major
currency re-adjustment in the wake
of Chinese de-valuation is a major risk
for India according to survey.
Another external risk is capital
controls taken to respond to curb
outflows from large emerging market
countries. The Survey says that in

either case, foreign demand is likely


to be weak which requires to find and
activate domestic sources of demand
to prevent the growth momentum
from weakening.
In the economic outlook, real
GDP growth for 2016-17 is expected
to be in the 7% to 7.75% range.
However, it cautions that if the world
economy remains weak, Indias
growth will face considerable
headwinds. On the domestic side,
two factors can boost consumption,
increased spending from higher
wages and allowances of
government workers if the seventh
pay commission is implemented and
return of normal monsoon. At the
same time, the Survey enumerates
three down side risks turmoil in
global economy could worsen the
outlook of exports, contrary to
expectations oil prices rise would
increase the drag from consumption
and the most serious risk is
combination of the above two factors.
Another challenging are for the
Indian economy is the twin balance
sheet problem the impaired
financial positions of the Public
Sector Banks (PSBs) and some
corporate houses. The twin balance
sheet challenge is restraining fullfledged economic recovery and it
also reduces the private investment
in the Indian economy. Survey
provides four steps to resolve the
problem of twin balance sheet.
Recognition;
Recapitalization;
Resolution and
Reform.
Banks must value their assets as
far as possible close to true value
(recognition) as the RBI has been
emphasizing; once they do so, their
capital position must be safeguarded
via infusions of equity (recapitalisation)as the banks have been
demanding; the underlying stressed
assets in the corporate sector must
be sold or rehabilitated (resolution)

as the government has been desiring;


and future incentives for the Private
Sector and corporates must be setright (reform) to avoid a repetition of
the problem, as everyone has been
clamouring. The survey states that
overall exports declined by
18percent in last three quarters. In
order for country to realise Indias
medium term growth potential of 810 percent, proper growth of exports
is necessary. Major problem area for
the growth of exports is Indias poor
competitiveness. Country needs to
develop competitiveness close to
China. On the issue of trade policy,
the Survey says that introspection is
overdue on issues which are
providing support to farmers in light
of WHO rules.
The Survey underlines that
Indias position in agriculture has
changed, it has become more
competitive and relies relatively more
on domestic support. It suggests
Indias WTO obligations could
predominantly be based on this
domestic shift away from border
protection to domestic support. It
further suggests that India could
consider offering reduction in its very
high tariff bindings and instead seek
more freedom to provide higher
levels of domestic support.
Stating that the trade policy is
under stress also for reasons related
to the ongoing turmoil in the
international environment and the
global demand is weak, the Survey
suggests that India should resist calls
to seek recourse in the protectionist
measures, especially in relation to
items that could undermine the
competitiveness of downstream firms
and industries. It also suggests that
India should strengthen procedures
that allow WTO-consistent and hence
legitimate actions against dumping
(anti-dumping), subsidization
(countervailing duties), and surges in
imports (safeguard measures) to be
taken expeditiously and effectively.

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Budget 2016-17

BUDGET 2016-17
Union government presented
its second full budget in the
parliament on 29th feb 2015. This
years budget gives special emphasis
for the development of rural India.
Although India has to go through
various external challenges but still
India is fastest growing major
economy in the world. Budget
continued the path setup in last
budget of improving the fiscal
discipline and making legislative and
tax reforms. This was the first budget
presented after recommendation of
pay commission has been accepted
and also government has
implemented One rank one pension
for Armed forces. This will provide
additional burden on the government
finances. However government has
nicely maintained its fiscal discipline.
Along with rural economy
governments focus on improving the
infrastructure of the country has
continued from last years budget.
Important decisions of budget
are given below sector wise:
Rural Economy
Allocation of 5500 crore under
PM fasal Bima yojana. 28.5 lakh
4

hectares will be brought under


irrigation under Pradhan Mantri
Krishi Sinchai Yojana.
15000 crore allocation for
interest subvention to reduce
burden of loan repayments.
Soil health card to cover all the
land holdings.
Unified Agricultural marketing
platform for wholesale markets.
Farmers income to be doubled
by 2022.
Dedicated Long Term Irrigation
Fund will be created in
NABARD with initial corpus of
Rs. 20,000 crore.
Rs. 9 lakh crore will be given as
Agricultural credit in 2016-17.
FCI will undertake online
procurement of food grains.
This will bring transparency and
convenience to farmers through
prior registration and monitoring
of procurement.
R. 2.87 lakh crore will be given
as Grant in Aid to Gram
Panchayats and Municpalities as
per the recommendations of
the 14th FC. This translates to
Rs. 81 lakh per gram panchayat

and over Rs. 21 crore per


Municipality.
Every Block in drought and rural
distress areas will be taken up
under Deen Dayal Antoyodaya
Mission.
300 Rurban Clusters will
incubate growth Centres in
Rural Area.
MUDRA Loan target of
1,80,000 crore in 2016-17.
Social Sector
Massive Mission to provide LPG
connection to poor households
will be launched. 1.5 crore poor
households will benefit in 201617. Scheme will continue for
two more years to cover a total
of 5 crore BPL households. LPG
connection to be given in the
name of woman member of the
family.
New Health Protection scheme
will be launched. Health cover
up to Rs. 1 lakh per family and
additional Rs. 30,000 for senior
citizens to be provided.
A new Eco System for SC/ST
entrepreneurs will be set up.

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Budget 2016-17
SC/ST Hub to be set up in
MSME Ministry.
Education
An enabling regulatory
architecture will be provided to
10 public and 10 private
institutions to emerge as world
class teaching and research
institutions.
Higher Education Financing
Agency will be set up with an
initial capital base of Rs. 1,000
crore.
Skills
1500 Multi Skill Training
Institutes will be set up under
Pradhan Mantri Kaushal Vikas
Yojana
Entrepreneurship education
and training will be provided in
2200 colleges, 300 schools, 500
govt. it is and 50 vocational
training centres through open
online courses.
Government of India will pay
EPS contribution of 8.33% for
all new employees enrolling in
EPFO for the first three years of
employment. Applicable to
those with salaries of Rs. 15,000
per month
Interlinking
of
State
Employment Exchanges with
National Career Service
Platform.
Small and medium shops to be

permitted to remain open all 7


days a week on voluntary basis.
New jobs in retail sector.
Infrastructure Development
Rs. 2,18,000 crore will be spent
on capital expenditure of roads
and railways in 2016-17. This
Includes: Rs. 27,000 crore
PMGSY, 55,000 crore Road
Transport and highway, 15,000
crore NHAI Bonds, 1,21,000
crore Railways.
Unserved and underserved
airstrips to be revived by AAI
and also in partnership with
State Governments.
Road
transport
sector
(passenger segment) to be
opened up by removing permit
system. This is a major reform
measure.
To
promote
private
participation in infrastructure
projects, Public Utility
(Resolution of Disputes) Bill will
be introduced.
For the benefit of farmers, 100%
FDI through FIPB route will be
permitted for marketing of food
products, produced and
manufactured in India.
Individual units of CPSEs can be
disinvested to raise resources
for investment in new projects.
financial sector
A comprehensive Code on

Resolution of Financial Firms


will be enacted. Together will
the Bankruptcy and Insolvency
Law,
SARFAESI Act to be amended
to
strengthen
Asset
Reconstruction Companies. This
will help in dealing with
stressed assets of Banks.
Public Sector Banks (PSB) (a)
Recapitalisation of PSBs; (b)
roadmap to be spelt out for
consolidation of PSBs; (c)
considering reduction of
Government equity in IDBI Bank
to 49% of below; (d) DRTs to
be
strengthened
with
computerized processing of
court cases.
Comprehensive
Central
legislation to deal with Illicit
Deposit Taking schemes will be
enacted.
Fiscal Discipline
Fiscal deficit target of 3.5% of
GDP in 2016-17
Committee for review of FRBM
Act.
Removal of -/Non Plan
classification from 2017-18
Rationalisation of Central Plan
Schemes. More than 1500
Central Plan schemes have been
restructured to about 300
Central sector and 30 centrally
sponsored Schemes.

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US Presidential Election Process

US PRESIDENTIAL ELECTION PROCESS


An election for President of the
United States occurs every four years
on Election Day, held the first
Tuesday after the first Monday in
November. The 2016 Presidential
election will be held on November
8, 2016. The election process begins
with the primary elections and
caucuses and moves to nominating
conventions, during which political
parties each select a nominee to unite
behind. The nominee also announces
a Vice Presidential running mate at
this time. The candidates then
campaign across the country to
explain their views and plans to
voters and participate in debates with
candidates from other parties.
During the general election,
Americans head to the polls to cast
their vote for President. But the tally
of those votesthe popular vote
does not determine the winner.
Instead, Presidential elections use the
Electoral College. To win the
election, a candidate must receive a
majority of electoral votes. In the
event no candidate receives the
majority,
the
House
of
Representatives chooses the
6

President and the Senate chooses the


Vice President.
The US Presidential election
process runs for more than a year. The
typical process follows this pattern.
Spring of the year before an election
Candidates announce their
intentions to run. Summer of the year
before an election through spring of
the election year Primary and
caucus debates take place. January
to June of election year States and
parties hold primaries and caucuses.
July to early September Parties hold
nominating conventions to choose
their candidates. September and
October Candidates participate in
Presidential debates. Early
November election for the President
happens. Electors cast their votes in
the Electoral College in December.
US constitution provides some
necessary requirements for the
Presidential candidates. These
requirements include:
Be a natural-born citizen of the
United States
Be at least 35 years old
Have been a resident of the
United States for 14 years

Any person who meets these


requirements can declare his or her
candidacy for President at any time.
In India qualifications are different.
In India any citizen can be a
candidate of Presidential election.
Primary and Caucuses
Before the general election,
most candidates for President go
through a series of state primaries and
caucuses. Though primaries and
caucuses are run differently, they
both serve the same purposeto
allow the states to help choose the
political parties nominees for the
general election. State primaries are
run by state and local governments.
Voting occurs through secret ballot.
Caucuses are private meetings run by
political parties. In most, participants
divide themselves into groups
according to the candidate they
support, with undecided voters
forming into a group of their own.
Each group then gives speeches
supporting its candidate and tries to
persuade others to join its group. At
the end of the caucus, party
organizers count the voters in each

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US Presidential Election Process


candidates group and calculate how
many delegates each candidate has
won.
At stake in each primary or
caucus is a certain number of
delegates, or individuals who
represent their states at national party
conventions. The candidate who
receives a majority of his or her partys
delegates wins the nomination. The
parties have different numbers of total
delegates due to the complex rules
involved in awarding them.
2016 US presidential Election
In 2016, a Democratic
candidate must receive 2,383 of the
estimated 4,765 delegates to
become the partys nominee.
Democratic candidates must win at
least 15 percent of the votes earned
in a primary or caucus to receive any
pledged delegates. Candidates
generally receive pledged delegates
on a proportional basis. The 2016
Republican candidate must receive
1,237 of the estimated 2,472

delegates to win the partys


nomination. Depending on the state,
delegates may be awarded
proportionally, on a winner-take-all
basis, or using a hybrid system. The
percentage of primary or caucus votes
a candidate must win to receive
delegates varies from state to state.
If no nominee has a partys
majority of delegates going into its
convention, then the delegates pick
their Presidential candidate in a
brokered or contested convention.
Pledged delegates usually have to
vote for the candidate they were
awarded to in the first round of voting,
while unpledged delegates dont.
Pledged delegates may be allowed
to choose any candidate in
subsequent rounds of voting.
Balloting continues until one
nominee receives the required
majority to win.
Electoral College
Citizens in US vote to elect
Electors for the President. Electors

are part of the Electoral College, the


process used to elect the U.S.
President and Vice President. The
Electoral College serves as a
compromise between election of the
President by a vote in Congress and
election of the President by a popular
vote of qualified citizens. The process
begins when political parties select
the people who will serve as electors,
The electors meet to vote for
President and Vice President, and
then Congress counts the electoral
votes.
There are a total of 538 electors.
A candidate needs the vote of more
than half (270) to win the Presidential
election. Each states number of
electors is equal to the number of its
U.S. Senators plus the number of its
U.S. Representatives. In 48 states,
when a candidate receives the
majority of votes, he or she receives
all of the states electoral votes. Maine
and Nebraska are the only two states
that use the congressional district
method.

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National Issues

NATIONAL ISSUES
Union government will assess
loss to the crop

provided there is no wind or


hailstorm in the coming days.
Supreme Court says Childs
interest should be the focus
during adoption

The Centre has sent teams to


Punjab, Haryana and other
northern and western States to
assess the loss of winter-sown
(rabi) crops, including wheat,
due to untimely rains and
hailstorms in the past few days.
There are reports of damage to
wheat crop in parts of Punjab,
Haryana and Western Uttar
Pradesh as hail and rain,
accompanied with strong
winds flattened the standing
crop at many places.
The current spell of rain and
hailstorms in parts of Rajasthan
has also threatened the mustard
crop.
On a conservative side, the
wheat crop might have been
damaged in five per cent of the
total sown area in these northern
States.
Wheat has been sown on
around 29 million hectares this
season across the country and
out of this, around half the
wheat is sown in the northern
and western States.
Agriculture experts say the
current spell of rains is
detrimental for the early sown
varieties. However, the latesown crops could survive
8

Noting that the interests should


be kept first and foremost
during adoption, the Supreme
Court directed the Centre and
the States to frame regulations
under the Juvenile Justice (Care
and Protection) Act, 2015.
SC also directed Centre and the
States to implement the new
guidelines for in-country and
inter-country adoption to make
the process transparent,
friendly and fool-proof.
The new juvenile law defines
adoption as the process
through which the adopted
child is permanently separated
from his biological parents and
becomes the lawful child of his
adoptive parents with all the
rights,
privileges
and
responsibilities that are
attached to a biological child.
Section 2 of the 2015 Act
mandates that adoption
regulations should be framed by
the authority notified for the
purpose by the Centre.

Terming the new law and its


guidelines comprehensive
and in line with the U.N.
Convention on the Rights of the
Child of 1989, the Supreme
Court said it puts in place
safeguards against trafficking of
children in the name of
adoption.
In 2011, there were 5,964 incountry adoptions and 589
inter-country adoptions. In
2014-15, there were 3,988 incountry adoptions and 374
inter-country ones.
The Bench, however, refused
the NGOs plea for an omnibus
CBI probe into such rackets in
the past in various parts of the
country.
First payment under OROP sent
The government said it had
credited revised pensionary
benefits along with arrears
under one-rank one-pension
(OROP) scheme to more than 2
lakh pensioners drawing service
and disability pensions.
As to the more than 1.46 lakh
family pensioners, the
government will credit the new
benefits by the end of this
month.
Defence Pension Disbursing
Offices [DPDOs] under the
Controller General of Defence
Accounts have released revised
pensionary benefits to 2,21,224
defence pensioners .
Government hopeful to bring
big bang reforms
The National Democratic

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National Issues
Alliance government hopes to
press the accelerator on reforms
and pass the landmark
Constitution
(122nd
Amendment) Bill for a national
Goods and Services Tax (GST)
and a separate bill for
Bankruptcy and Insolvency
Code, 2015.

The current session of


Parliament has already seen the
passage of one landmark
legislation the Aadhaar
(Targeted Delivery of Financial
and other Subsidies and
Services) Bill, 2016.
The legislation meant to provide
statutory backing to the unique
identification number.
FM said We are trying to have
special emphasis now both in
terms of legislative changes and
resources being put to
strengthen the banking system.
Next few months, in bringing
about structural change, are
going to be extremely
important.
Mr. Jaitley said that the
constituency within India
supporting reforms is much
bigger than its opponents. He
also said that exhibiting
determination to move on the
reforms path, India can provide
a significant amount of growth
to the world.
The GST Bill was passed by the
Lok Sabha but is stuck in the
Upper House, where the ruling
NDA does not have a majority
and is dependent on the

support of the Congress for its


passage.
The Constitution amendment
Bill needs two-third majority or
162 votes in the 242-member
Rajya Sabha. After it clears the
Rajya Sabha, the legislation will
have to be ratified by at least
half of the 29 States.
Also speaking at the
Conference, IMF Managing
Director Christine Lagarde said
that the world had lots to learn
from Indias Aadhaar initiative
that would affect revenue
generation in a big way.
Ms. Lagarde also told reporters
she didnt see much of a
downside from the global
economy to Indias growth rate
since the country has a solid
growth model, a growing
population, scale of market and
was pursuing reforms.
RSS calls for end of caste based
reservation

At its annual meeting, the RSSs


highest decision-making body,
Akhil Bharatiya Pratinidhi Sabha,
made a pitch for social justice,
passing a resolution on the
need
to
end
caste
discrimination.
RSS general secretary Suresh
(Bhaiyyaji) Joshi said that while
Hindu thought was supreme,
many discriminatory practices
had come up over time for
which Hindus should take
responsibility.

He added that harmony was a


must and caste discrimination
must end.
Taking a progressive yet
cautious line on the recent
controversy over temple entry
for women in a Maharashtra
temple, Mr. Joshi said that
regressive thinking of gender
segregation needed to be
addressed, but through
dialogue rather than agitation.
Restrictions lifted from women
entry to Para military forces

After declaring reservation for


women in constabulary in
paramilitary forces, they can
now also be inducted as
officers in combat roles in all five
Central Armed Police Forces.
The Union Home Ministry
recently published new rules
allowing women to apply as
direct-entry officers in border
guarding force Indo-Tibetan
Border Police (ITBP), the only
paramilitary which hitherto did
not allow women to join in
supervisory combat roles owing
to its task of guarding the
difficult Sino-India border.
Among five of the Central
Armed Police Forces, the
Central Reserve Police Force,
the Central Industrial Security
Force, the Border Security
Force and the Sashastra Seema
Bal have been allowing women
to apply as direct-entry officers.
Now, by allowing women to

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National Issues
apply as direct-entry officers in
ITBP, all restrictions have been
lifted on women.
PM says India proves
democracy and high growth can
go together

economies in the world.


India and the IMF also
announced the signing of a
Memorandum of Understanding
for establishing the South Asia
Regional Training and Technical
Assistance Centre.
It is expected to become the
focal point for planning,
coordinating, and implementing
the
IMFs
capacitydevelopment activities in the
region.
UNDP says marital rapes
criminalisation is commitment
under SDG

Taking a swipe at China, Prime


Minister Narendra Modi said that
Indias growth rate of over seven
per cent was being achieved in
a country that is also a vibrant
democracy.
Speaking at the Advancing Asia
conference here, he said India
dispelled the myth that
democracy
and
rapid
economic growth could not go
together.
Indias rapid economic growth,
he said, was also very distinct in
Asia, as the country had never
tried to gain in trade at the
expense of partners, never
undervalued its exchange rate;
it rather added to the world and
Asian demand by running
current account deficits.
The IMF recently included
Chinas yuan into its reserve
currency basket.
Amid global problems, Mr. Modi
said, India was a haven of
macro-economic stability.
In a difficult external
environment and despite a
second successive year of weak
rainfall, India has increased
growth rate to 7.6 per cent, the
highest
among
major

10

Just days after government said


it wouldnt criminalise marital
rape, a top U.N. official said that
the issue is one of consent, not
culture, suggesting that India
would be violating the
Sustainable Development
Goals if it did not amend the law
accordingly.
UNDP made a significant pitch
for all countries that had not
made domestic abuse and
marital rape criminal offences to
do so at the earliest.
This is significant because the
United Nations Development
Programme is monitoring the
implementation of the SDGs by
2030.
On March 10, in a written answer
to a question by an MP,
Government had submitted the
governments position in
Parliament, saying that the
concept of marital rape, as
understood internationally,
cannot be applied in the Indian
context due to level of
education/illiteracy, poverty,
customs and values, religious
beliefs, mindset of society to
treat the marriage as a
sacrament, etc..

Some good news for Indian


students applying for US visa
After all the negativity
associated with US education
in the recent months, here is
some good news for Indian
students.
The US government has made
certain changes to nonimmigrant visas that will now
allow the eligible students to
obtain the Optional Practical
Training (OPT) for three years.
However, the facility will be
extended only to the Science,
Technology, Engineering and
Mathematics (STEM) students
who secure their degrees from
accredited institutes and the
companies that are part of the
E-verify programme.
Since most Indian students enrol
in these courses, the new norms
may work to their advantage
despite the stringent norms
attached to the changes.
The new rule also says that
STEM-OPT students should not
replace any American worker,
temporary or permanent and
the salary offered to the OPT
students should be similar to the
American workers.
Students who prefer good
institutes in the US will gain
while those from nonaccredited institutions will not
gain from the new rules.
Another positive note may be
that OPT students will get more
time to apply for the H1B visas
that are capped at 65,000 every
year in addition to the 20,000
meant for US-educated
students.
Kerala secures top ranking in
public affairs index
Kerala and Tamil Nadu have

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acquired the first and second


rank in the public affairs index
(PAI) of governance in States,
while Bihar, Jharkhand and
Odisha lag behind, a latest
survey by a think-tank, Public
Affairs
Centre
(PAC),
Bengaluru, has revealed.
Karnataka secured the top
position among all States in the
category of providing adequate
and effective social protection
to its citizens. West Bengal and
Kerala secured the second and
third positions.
The survey, which was based on
10 themes, 25 focus subjects
and 68 indicators, said Mizoram,
Himachal Pradesh and Delhi
secured top three ranks among
the small States (less than two
crore population).
Karnataka, which ranked ninth
in the ease of doing business in
the World Bank report released
last year, was placed at an overall
rank three in the PAC survey.
'Education and health are said
to be the pillars of development
and it is worth mentioning that
the State has performed well
and has bagged the second
rank, the survey said.
Punjab, which secured overall
6th rank, bagged top spot on
the infrastructure front,
followed by Haryana and
Gujarat. Among small States,
Delhi led, followed by Goa and
Himachal Pradesh.
In maintenance of law and
order, Tamil Nadu topped the
list followed by Gujarat and
Kerala.
Bihar, Jharkhand and Odisha are
ranked low in social protection,
economic freedom, delivery of
justice, women and child
development and essential
infrastructure indicators.

RSS think tank wants education


and health should be prioritise

BJP president Amit Shah spoke


at the Akhil Bharatiya Pratinidhi
Sabha, the RSSs highest
decision-making body. The
conclave passed resolutions on
affordable education and health
care.
The meeting passed resolutions
on affordable education, with
suggestions for more budgetary
allocation for education and a
greater
community
participation.
"Inadequate allocation for
education and lack of priority
for education in the
government policy during the
preceding years have left open
this field to institutions aiming
for profits, the resolution said.
The resolution called for valuebased,
nationalistic,
employment-oriented and skillbased education for each child.
The health resolution called for
medical facilities in small towns
and villages and made a case
for more philanthropic health
care efforts. It also called for
medicines to be brought within
the reach of the people.
PM glorifies India's culture at
World Cultural festival
Prime Minister Narendra Modi
braved both the environmental
controversy and unexpected
rains to attend the World Culture
Festival, organised by the Art of

Living (AoL) Foundation, led by


Sri Sri Ravi Shankar.
Mr. Modi not only watched the
cultural programme seated
beside Ravi Shankar, but, in a
speech, praised the spiritual
guru for taking Indian culture to
the world.
In an apparent reference to the
controversy surrounding the
event, taking place on the
Yamuna floodplains and its
impact on the environment, he
said, If we keep criticising
everything we have and do not
take pride in our cultural legacy,
why should the world look at
us?
Earlier in the day, the National
Green
Tribunal
(NGT)
accepted the AoL Foundations
argument that it was a charitable
organisation which could not at
short notice raise Rs. 5 crore
imposed by the NGT.
The Tribunal, in an interim
direction, ordered the
Foundation to pay Rs. 25 lakh
before the commencement of
the programme and granted
three weeks' time to pay the
remaining Rs. 4.75 crore.

Government ordered audit of


telecom's after CAG report

With the CAG report tabled in


Parliament on Friday indicating
a loss of Rs. 12,489 crore to the
exchequer
due
to
understatement of revenues by
six telecom operators,

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12

including Airtel, Idea and


Vodafone, the government has
ordered a special audit of
telecom companies for three
years.
Commenting on the findings,
Telecom Minister Ravi Shankar
Prasad said special audit of the
operators books would be
done for three years from 2009,
to check for under-reporting of
revenues.
Even though in terms of wellestablished parliamentary
procedure, the report will go to
the
Public
Accounts
Committee.
In conclusion, the audit found
that even after 16 years of the
introduction of the revenue
share regime, the correctness
and completeness of revenue
flowing into the consolidated
Fund of India could not be
assured by DoT.
The CAG report said the
financial impact on LF and SUC
due to understatement of gross
revenue stood at Rs. 1,507.25
crore
for
Reliance
Communications, Rs. 1,357.68
crore for Tata Teleservices, Rs.
1,066.95 crore for Airtel, Rs.
749.85 crore for Vodafone, Rs.
423.26 crore for Idea and Rs.
107.61 crore for Aircel.
On the other hand, the two
industry bodies representing
telecom operators in a joint
statement said that matters
relating to interpretation of
Gross Revenue/Adjusted Gross
Revenue
of
telecom
companies for the purpose of
calculation of licence fees are
under litigation in various
judicial forums including the
TDSAT, High Courts and the
Supreme Court.
The telecom operators had

earlier opposed auditing of their


books by the CAG. However, a
Supreme Court ruling in favour
of the auditor in 2014 forced the
companies to share the
information.
The report observed noncompliance with the licence
conditions by netting off of
discounts/waivers granted to
post-paid subscribers and
under-reporting of revenue
from infrastructure sharing with
other telecom operators, among
others.
Satyameva Jayate word use is
not in violation of State Emblem
of India Act

The Bombay High Court sought


responses from actor Aamir
Khan and Star TV to a public
interest litigation plea by an
activist that objects to the use
of the phrase Satyameva Jayate
, the name of their popular TV
programme, as it is a part of the
emblem of India.
Responding to the petition, the
Ministry of Home Affairs (MHA)
in its affidavit said the use of the
phrase Satyameva Jayate was
not in violation of the State
Emblem of India (Prohibition
and Improper Use) Act and
State Emblem of India
(Regulation of Use) Rules.
The Act and Rules prohibit
improper use of the State
Emblem of India as a whole.
There is no provision which

prohibits the use of its part like


Satyameva Jayate , the lion, the
bull, the horse and so on.
Hence the use of the words
Satyameva Jayate in a TV
programme does not violate any
provision of the Act and Rules,
the affidavit said.
In his petition, activist
Manoranjan Roy said Satyameva
Jayate is a part of the Emblem
of India, and their use for the
name of a TV programme
violates laws governing its use.
Aadhaar Bill passed by lower
house
The Lok Sabha passed the
Aadhaar Bill, providing statutory
backing to the unique
identification number for
transferring
government
subsidies and benefits, as a
money Bill after the government
overruled the Oppositions
objections.
Finance Minister Arun Jaitley
said thousands of crores of
rupees would be saved by
plugging leakages and
diversions as he rejected the
Opposition demand for
referring the Bill to a standing
committee.
Overruling the Congress
objections that the legislation
had been turned into a money
Bill to avoid voting in the Rajya
Sabha where the government
did not have a majority, he said
Aadhaar was a money Bill in true
definition.
The Bill will empower the
States to distribute resources to
deserving people and save the
resources that undeserving
people get.
Earlier, participating in the
debate, Tathagat Satpathy
(BJD) said there were fears that

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the government might use the
provisions of the Bill for mass
surveillance and ethnic
cleansing.
SC says states are not bound to
provide reservation in
promotion

The Supreme Court refused a


plea to order States to
mandatorily collect data on
Scheduled Castes and
Scheduled Tribes (SC/ST) for
fixing reservation in matters of
promotions in government jobs,
saying such a step would be
equivalent to the Judiciary
entering the domain of the
Legislature.
Bench held that State
governments were not bound
to make reservation for SCs/STs
in matters of promotion, and
thus, the Supreme Court could
not compel them to undertake
the exercise of collecting the
qualitative data of SC/STs.
The collection of qualitative
data of the SC/STs was a
necessary pre-condition to
setting aside a quota for the SC/
ST category as held in the M.
Nagaraj judgment in 2006 by a
Constitution Bench.
The State is not bound to make
reservation for Scheduled
Castes and Scheduled Tribes in
matter of promotions.
Therefore, there is no duty. In
such a situation, to issue a
mandamus to collect the data

would tantamount to asking the


authorities whether there is
ample data to frame a rule or
regulation. The judgement held.
Real estate bill passed
The Rajya Sabha passed a
landmark Real Estate Bill with a
promise to secure the interests
of homebuyers and developers
in equal measure and remove
corruption and inefficiency
from the sector
Real estate contributes nine per
cent to the national GDP and the
Bills passagewas seen as crucial
to ensuring better regulatory
over- sight and orderly growth
in the industry.
The first draft was rejected last
year by the Rajya Sabha, with
Opposition leaders saying it
favoured developers and did
not serve the interests of
consumers.
Compared to the previous
version of the Bill, in which
constructions below the sizeof
1,000 square metres or 12
apartments were left out of the
accountability ambit, the new
Bill has reduced the size and
exempts projects only below
500 square meters.
Previously, in the absence of a
regulatory authority, real estate
deals were largely done on faith
or based on the experience of
friends and family
one of the significant aspects of
the Bill was the definition of
carpet area. Buyers will now
be paying only for the carpet
areaand not the super built-up
area which was fraught with
confusion earlier
the developers will now have
to take consent of 66 per cent
of the home- buyers in case they
have to increase the number of

floors or change the building


plans. This will protect the
buyers from any ad-hoc
changes that are a norm
presently.
If builders still cause delays in
transferring properties to
buyers, the appellate tribunal
would intervene and slap fines
on them within 60 days. In a
worst case scenario, the
tribunals can send a developer
found guilty of fraud to jail for
three years.
The builders would also
beresponsible for fixing
structural defects for five years
after transferring the property to
a buyer. In case consumers fail
to make payments to
developers, the appellate
tribunal can fine them, too.
Radio channels to smoothen
your drive

The Union RoadTransport and


Highways Ministry is working on
an ambitious plan to broad- cast
traffic updates through a
dedicated radio frequency
across various national
highways.
The Ministry is in talks with the
Information and Broadcasting
Ministry to get a frequency band
to disseminate among national
highway commuters travel tips,
safety tips, traffic up- dates,
including information on
accidents and diversions.
The Ministry would also have to

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get the approval of the


Telecom Regulatory Authority
of India for voice broadcasting.
A pilot project, the government
on Thursday launched Highway
Advisory Services to give traffic
updates to commuters on the
256-km Delhi-Jaipur National
Highway-8.
While on the Delhi stretch All
India Radio FM Gold will air the
updates, AIR in Alwar and
Jaipur would cover the stretch
in Rajasthan.
Doordarshan was planning to
return its unused UHF band
(ultra high frequency) to the
government and it had already
asked the Information and
Broadcasting Ministry to allocate
that frequency to the Highways
Ministry.
Another option was to get a
licence for the unused 105.6
MHz frequency which was
earlier allotted to Indira Gandhi
National Open University
(IGNOU) for its educational
radio channel Gyan Vani.

CBI knew about Vijay Mallyas


flight plan
The Central Bureau of
Investigation had prior
knowledge that businessman
Vijay Mallya, who is facing
charges of defaulting on a
Rs.900-crore loan from IDBI
Bank, was to board a Londonbound flight at Indira Gandhi
Inter- national Airport
At this stage, there is no
restriction on Mr. Mallyas
foreign visits. Therefore, legally,
he is allowed to go abroad. He
is a non-resident Indian and has
to remain abroad for at least
183 days every year to retain the
status. He also has a 10-year
British business visa.
14

The information on his travel


plans was provided to the CBI
in response to a lookout circular,
valid for a year, the agency had
sent to the exit ports across the
country on October 16, 2015.
Under the circular that carries
passport details and other
particulars of suspects, an
agency can request the
immigration department to
provide information on the
arrival or departure of the
person concerned; seize travel
documents and send them to
the agency; prevent the person
from entering India and inform
the agency; or detain and hand
over the person to the local
police.
World Culture Fest
Though the festival has come
under fire for its ecologicallysensitive venue, it was given
the go-ahead by the National
Green Tribunal (NGT)
Nearly 36,000 artistes from
around the world will perform
on what is possibly the worlds
largest stage.
before this carnival atmosphere
took over the floodplains, the
site was flanked by two bridges
connecting the Trans-Yamuna
area to therest of Delhi.Farmers
grew vegetables at the site that
will now host a mega festival.
The farmers who had been at
the site for years were moved.
The soil was compacted and
debris was added to give it
some stability. Vegetation was
completely removed. It will take
years for the area to recover
from the damage.
While the NGT has said that the
floodplains have been
damaged, the Art of Living
Foundation has maintained that

it hasnt done anything wrong.


Golden Jubilee of the historic
concert of M.S. Subbulakshmi

It is 50 years since Carnatic


music
legend
M.S.
Subbulakshmi and her
daughter, Radha Vishwanathan,
graced the General Assembly
Hall of the United Nations. This
significant moment, when M.S.
played a cultural ambassador, is
all set to be recreated in the
course of her centenary year
celebrations
On October 23, 1966, M.S. and
Radha presented a Carnatic
music concert the first time
any Indian musician sang in the
hallowed precincts as part of
U.N. Day celebrations.
To mark the Golden Jubileeof
the historic concert, the
performance will be re-enacted
song-by-song by M.S.s great
granddaughters S. Aishwarya
and S. Saundarya on March 26
as part of this years Cleveland
Tyagaraja Festival
Every number of the U.N.
concert was a smashing hit and
was set into an LP record.
Upper house to look after
Aadhaar Bill
The question of whether or not
the Aadhaar Bill is a Money Bill
continues to vex Parliament,
with the Rajya Sabhas Business
Advisory Committee (BAC)
meeting ending inconclusively.

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Opposition demanded specific
clauses of Article 110(1) of the
Constitution that defines a
Money Bill to be part of Speaker
Sumitra Mahajans certification
of it as such.
The Aadhaar Bill seeks to give
legal backing to the unique
identification
number
programme as the means to
identify and disburse subsidies
to eligible sections of the
population.
According to the Constitution,
a Money Bill has to be returned
to the Lok Sabha after clearing
the Rajya Sabha within 14 days
of it being introduced in the
Up- per House. If it is not, it will
be deemed as passed
Government managers present
at the meeting, quoted clause
(4) of the Article that states the
Speakers exclusive powers to
certify a Money Bill.
IAF short of aircraft to face
wars
At a time whenSouth Asia is
seeing induction of advanced
fighter air- craft in large
numbers,the current fighter
strength of the country is inadequate to handle a two- front
war.
steps are being taken to address
the issue and the governmentto-government agreement for
36 Rafale aircraft was agreed to
in this regard.
The Air Force has a sanctioned
strength of 42 squadrons but the
numbers are steadily dropping
with the MiG series being
phased out and the squadron
strength is at its lowest at 33.
Another concern is the low
serviceability of various aircraft,
especially the Su-30s, 272
ofwhich will eventually be

fielded by the IAF.


This, at a time when Pakistan is
inducting JF-17 fighters in large
numbers and set to receive
eight more F-16 fighters from
the U.S. China, meanwhile, is
likely to receive the first of the
24 Su-35jets from Russia by yearend even as its fifth generation
aircraft programmes make
progress.
the Air Force has something to
cheer as the indigenously
developed Light Combat
Aircraft (LCA) is expected to
get Final Operational Clearance
The IAF has 120 LCAs on order,
of which 100 will be an
improved variant. Hindustan
Aeronautics Limited (HAL),
which is manufacturing them is
ramping up production to 18
aircraft per year and the first
aircraft with improvements is
scheduled to be ready by 2018.
This years Iron Fist exercises
with the motto demonstrating
the capability to punish will
feature a series of firsts with
indigenously
developed
weapon systems getting ready
to show their prowess.
The Advanced Light Helicopter
will fire rockets and the LCA will
demonstrate swing role
capability by simultaneously
firing a Beyond Visual Range
(BVR) missile and precision
guided
bombs.
The
indigenously developed BVR
missile Astra will be fired from a
Su-30 jet while Akash Surface
to Air Missile (SAM) will perform
live firing for the first time.
Art of living event gets go ahead
after fine
Imposing an initial fine of Rs. 5
crore, the National Green
Tribunal (NGT) gave the go-

ahead to the World Culture


Festival, a three-day cultural
extravaganza being organised
by Sri Sri Ravi Shankars Art of
Living Foundation on the flood
plains of the Yamuna.

It also directed the Art of Living


to bear the cost of restoring the
area into a biodiversity park after
the completion of the event,
holding it responsible and liable
for the damage caused to the
environment, ecology, biodiversity and aquatic life of the
river.
The green watchdog also
pulled up the Delhi Pollution
Control Committee (DPCC) and
the Delhi Development
Authority (DDA), stating that
they hadnt discharged their
statutory functions.
The Tribunal directed Art of
Living to give an undertaking by
Thursday that enzymes will not
be released into the Yamuna
and no further degradation of
environment will happen.
Art of Living said that it would
file an appeal in the Supreme
Court against the fine. A
spokesperson said: The festival
will go on as planned and since
we have not violated any rules
we will appeal against the NGT
order.
T20 World Cup match between
India-Pak shifted to Kolkata
The uncertainty over the IndiaPakistan World T20 match in

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Dharamshala was cleared when
ICC CEO Dave Richardson
announced that the match, to
be played on March 19, would
be shifted to Eden Gardens in
Kolkata.

The decision has been taken for


security reasons, following
consultations with the BCCI, the
State associations, the ICC and
BCCI security consultants.
The ICC and the BCCI
understand the disappointment
that is likely to be felt by many
over the decision to move the
match.
But the safety and security of
the event is of paramount
importance to the ICC and we
have taken into consideration
the concerns shared with us by
our security advisers as well as
the Pakistan Cricket Board.
Chief Minister Virbhadra Singh
had opposed any India-Pakistan
match as a mark of respect for
the two martyrs from Himachal
Pradesh killed at the Pathankot
airbase in January.

The Enemy Property


(Amendment and Validation)
Bill, 2016 passed in lower house
The Lok Sabha passed a Bill to
amend a 48-year-old law to
guard against claims of
succession or transfer of
properties left by people who
migrated to Pakistan and China
after the wars.
The
Enemy
Property
(Amendment and Validation)
16

Bill, 2016, which amends the


Enemy Property Act, 1968, was
passed by voice vote amid the
governments assertion that the
measure should not be seen
from the prism of religion or
caste.
It does not pertain to Pakistan
alone, but also to those Chinese
who left India after the 1962
China-India War. Even their
property comes under the ambit
of this Bill.
In the wake of the India-Pakistan
war of 1965 and 1971, there
was migration of people from
India to Pakistan and under the
Defence of India Rules framed
under the Defence of India Act.
The government of India took
over the properties and
companies of such persons who
had taken Pakistani nationality.
These enemy properties were
vested by the Union
government in the Custodian of
Enemy Property for India.
The amendments include that
once an enemy property is
vested in the Custodian, it shall
continue to be vested in him as
enemy property irrespective of
whether the enemy, enemy
subject or enemy firm has
ceased to be an enemy due to
reasons such as death.
The new Bill ensures that the
law of succession does not
apply to enemy property; that
there cannot be transfer of any
property vested in the
Custodian by an enemy or
enemy subject or enemy firm
and that the Custodian shall
preserve the enemy property till
it is disposed of in accordance
with the Act.
The amendments are aimed at
plugging the loopholes in the
Act to ensure that the enemy
properties that have been

vested in the Custodian remain


so and do not revert to the
enemy subject or firm.
No labour inspection in Startups for three years

Start-ups will be exempted


from inspection by labour
inspectors for up to three years
if they give a self-declaration
that they are complying with
nine labour laws.
The nine labour laws include
Industrial Disputes Act, 1947,
Trade Unions Act, 1926,
Building
and
Other
Constructions
Workers
(Regulation of Employment and
Conditions of Service) Act,
1996
and
Industrial
Employment (Standing Orders)
Act, 1946.
From the second year onwards
and up to three year from the
time they were set up, such
start-ups would be required to
furnish self-certified returns.
They would be inspected only
if credible and verifiable
complaint of violation was filed
in writing and approval was
obtained from the higher
authorities.
Banks seek travel ban on Vijay
Mallya
The Supreme Court agreed to
urgently hear a plea by a
consortium of banks, led by SBI,
for a restraint order to prevent
liquor baron Vijay Mallya, who

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National Issues

owes them over Rs. 9,000 crore,


from the leaving the country.
A Bench, led by Chief Justice
of India T.S. Thakur, ordered
that the case be listed for
hearing on March 9 after
Attorney-General
Mukul
Rohatgi sought an urgent
audience. The action followed
a Karnataka HC decision
refusing to grant them an exparte interim order against Mr.
Mallya, the U.K.-based Diageo
Plc and United Spirits Limited.
The banks told the Supreme
Court that the threat to their
financial interests were so
immediate and grave that the
High Court should have passed
the interim order without first
hearing the embattled
industrialist and others,
including the debtor firm
Kingfisher Airlines Limited.
The banks want the Supreme
Court to pass an interim order
to freeze Mr. Mallyas passport
or direct him not to leave the
jurisdiction of this country
without the courts permission.
The banks had moved the DRT
in the backdrop of Mr. Mallyas
recent resignation from the
chairmanship of United Spirits.
Diageo Plc, the current owner
of the liquor company, has
agreed to pay Mr. Mallya $75
million (roughly Rs 515 crore)
in severance package.

SC says government should


take every measure to provide
voting right to soldiers
The Supreme Court stood up for
the constitutional right of
soldiers to vote, noting that they
risked their lives to protect the
borders, from the icy Siachen
glacier to the remote and harsh
terrains of Jammu and Kashmir

and the North-East.


The Centre should pull all stops
to ensure that the soldiers
voices are heard loud and clear
during election results, the court
said.
SC directed the Centre to
finalise a fool-proof mechanism
to ensure that their postal
ballots reached authorities in
time so that these soldier do not
feel left out in the countrys
democratic process.

IRNSS-1F navigation satellite


will be put into orbit on Mar 10

The countdown for the launch


of Polar Satellite Launch Vehicle
PSLV-C32 began at the Sathish
Dhawan Space Centre at
Sriharikota in Nellore district.
The 54-hour countdown will
conclude on March 10 at 4 p.m.
when the PSLV will be launched
to put the 1,425-kg IRNSS-1F
navigation satellite into orbit.
SHAR director P. Kunhikrishnan
and other space scientists are
closely monitoring the progress
of the countdown.
With this, the ISRO is moving
closer to the task of completing
the Indian Regional Navigation
Satellite System with seven
satellites.
Civil society and government
will come together on
Conference on South-South
Cooperation
Almost all the major civil society

organisations of India will


participate in the March 10-11
Conference on South- South
Cooperation, being organised
by the Research and
Information System for
Developing Countries (RIS) of
the MEA, to showcase the
expanding space for civil
society organisations in the
scheme of the External Affairs
Ministry.
This comes after the Ministry of
External Affairs displayed the
achievement of the civil society
organisations in the field of
sustainable development and
renewable energy during the
Cop21 Paris climate change
conference and the India Africa
Summit of 2015.
New South-South cooperation
is needed in view of the
shrinkage of resources in the
developed North and the
emergence of South as a new
centre of economic activity.
The conference, to be
attended by at least 100 experts
from the field of international
affairs and development
economics, will be a platform
for the Government's long term
plan to use development
assistance as a tool for Indias
diplomacy.
The Ministry of External Affairs
has been showcasing civil
society initiatives at the
international level and also used
organisations like the Barefoot
College of Tilonia to highlight
India's commitment to the
sustainable development goals
(SDGs).
In addition to the civil society
connection, the conference will
also launch the Network of
Southern Thinktanks (NeST)
which will connect think tanks

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National Issues
across Africa, Southeast Asia,
Central and South Americas.
Government takes action
against Vijay Mallya
In a setback to businessman
Vijay Mallya, the Bengaluru
Bench of the Debt Recovery
Tribunal on Monday temporarily
restrained U.K.-based Diageo
Plc from paying $75 million to
him as per the reported
agreement signed with him
the sum would stand attached
till further orders on the
proceedings initiated by the
banks to recover money
borrowed by the Mallya-owned
Kingfisher Airlines Limited
According to the banks, the
total outstanding is now nearly
Rs. 10,000 crore
The tribunal also directed
Diageo and Mr. Mallya to provide
particulars of their agreement to
the banks led by the State Bank
of India, which have sought a
garnishee order claiming first
right over the $75 million that
Mr. Mallya is to get from Diageo.
It was reported that Diageo had
offered to pay $75 million to Mr.
Mallya in a five year period for
stepping down from the post of
Chairperson of United Spirits
Ltd, which Diageo had acquired,
and agreeing not to compete in
business with it for a certain
period
The ED has received a copy of
the CBI case of corruption and
criminal conspiracy registered
in October 2015 against Mr.
Mallya as director of Kingfisher
Airlines
The ED will soon summon Mr.
Mallya and the other accused
to record their statements
The Directorates move to
investigate money-laundering
18

charges comes in the backdrop


of the Karnataka High Court
order to issue notice to Mr.
Mallya and nine others based on
a petition filed by SBI and 12
other banks.
Reduced disolved oxygen kills
fishes in Karnataka

India's first test tube baby born


Born at Jaslok Hospital to Indias
first test tube baby Harsha
Harsha Chawda is Indias first
test tube baby, a feat that had
made IVF specialist Indira
Hinduja a household name in
the country
Palaeolithic hand-axe found in
north Kerala

Garden citys famed Ulsoor Lake


became
a
graveyard.
Thousands of fish were found
dead, floating on the lakes
waters, all victims of the early
summer heat and soaring
temperature
Fish kill in the citys lakes have
almost become an annual
phenomenon, during the onset
of summer. It is usually a direct
result of reduced dissolved
oxygen level in the water.
While algae in the lake release
oxygen into the water during
daytime, it uses up dissolved
oxygen during night time along
with the fish creating a big drop
in the dissolved oxygen levels.
So, most fish kills are observed
in early mornings.
Raw sewage let into the lake will
be thick during summer
compared to the rainy season,
leading
to
a
higher
concentration of nutrients in
the lake, which also causes
drop in dissolved oxygen levels.
The water temperature of the
lake will also shoot up,leading
to such fish kills

Belying 19th century British


geo-archaeologist Robert Bruce
Footes argument on prehistoric
habitation in the State, north
Kerala is fast emerging as the
site of fresh discoveries of
remnants of Stone Age cultures.
Findings include the typical
Palaeolithic hand-axe from
Vanimel river basin (Kozhikode)
and pointed choppers and side
scrapers from Anakkayam and
Cheerkkayam river basin of
Chandragiri (Kasaragod) are
some of the first-time evidence
of Palaeolithic implements in
these districts.
This revealed that handaxe
fabrication technique in quartz
was also familiar among the
prehistoric settlements in the
area
The evidence includes black
and red ware pottery, eagle
head-like figures made of clay,
iron chopper and dagger, black
ware, smoke pipe, iron knife,
iron sickle and several iron
ingots. The well-polished
symmetrical shaped Stone
Adzes made of quartz showed
the high expertise in quartz
fabrication of Neolithic people
in Kozhikode.
Indians could face a higher risk
of diabetes-induced lung
ailments
Diabetes may be impeding the

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National Issues

normal functioning of lungs and


common medicines that are
used to treat insulin resistance
may actually be exacerbating
conditions such as asthma,
report a team of Indian,
European and American
scientists in a forthcoming
edition of the American
Physiological
Society
Selectjournal.
There is a suspect link between
diabetes a condition
characterised by the hormone
insulin failing to regulate blood
sugar in the body and
impaired lung function that
makes Indians particularly
vulnerable to respiratory disease
Recently, there have been a
number of studies showing that
when adjusted for body size,
Indians have among the smallest
lungs in the world or nearly a
third smaller than a white
European of similar size.
This means a reduced efficiency
to filter oxygen from ingested
air, an accelerated decline in
lung function with age as well
as an increased propensity to
contract respiratory diseases
The International Diabetes
Federation showed that nearly
6.9 crore people in India were
sufering from diabetes in 2015
and their ranks are expected to
swell to 12.5 crore by 2040.
Human lung tissue that were
treated with excessive insulin
and saw an abundance of two
kinds of tissue primary human
airway smooth muscle (ASM)
cells and induced collagen
that are known to indicate
deteriorating lung quality
Most medicines to treat
diabetes attempt to control the
excess blood sugar by pumping
in everincreasing quantities of

insulin into the body. That only


makes matters worse. Theres no
solution to this other than
exercise and a diet that strikes
a balance between protein and
carbohydrates

some inputs suggested that the


terrorists could have moved
from Gujarat to Delhi.
Rotavirus vaccine will be
launched through the national
immunisation programme

Terror alerts across the country


Gujarat and the national capital
were on high alert with several
teams of National Security
Guard commandos on standby
in the wake of intelligence
inputs suggesting that a group
of 8 to 10 terrorists may have
sneaked into India from
Pakistan.
The alert came on the eve of
Shivratri festival on Monday.
National Security Adviser Ajit
Doval told the Gujarat police
top brass about the input on a
team of 10 terrorists sneaking
into the State to carry out terror
strikes.
Senior officials in the State
claimed that Pakistans National
Security Adviser Naseer Khan
Janjua informed his Indian
counterpart about the group of
fidayeen from the Lashkar-eTaiba and Jaish-e Muhammed
on a major mission in the State.
Gujarat Chief Minister
Anandiben Patel told the media
in Delhi that the authorities had
taken all measures, so there was
no need to worry.
Meanwhile, all public functions
to celebrate Shivratri at the
historical Somnath temple have
been cancelled.
Police have also heightened
security at another historical
pilgrimage centre, Dwarka, and
Bhavnath in Junagadh where a
huge fair is organised on
Shivratri.
The national capital went into
alert mode on Sunday, after

The Indian Council of Medical


Research will be launching the
rotavirus vaccine through the
national
immunisation
programme by the month-end.
The vaccine will be initially
provided to all children in
Andhra Pradesh, Haryana,
Odisha and Himachal and later
expanded across the country.
ICMR would soon be
undertaking the first phase of
trial of malaria vaccine.
The challenges in India were
different from the West and
hence the Western ideas could
not be copied here.
We need to step up treatment
options for malaria, tuberculosis,
kala azar diseases that the
West did not have to worry
about.
The University awarded six
honorary doctorate degrees on
eminent professionals in the
field of engineering, science,
medicine, social science and
theology.
Modi says go beyond women
development to women led
development
Prime Minister Narendra Modi
stressed the importance of

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women-led development and


said a nation was always
empowered by its women.
Mr. Modi, addressing the
valedictory session of the
National Conference of Women
Legislators in the Central Hall of
Parliament here, said: We must
think beyond women
development, and move
towards
women-led
development.
A country is always
empowered by its women. It is
she who in different roles as
a mother, a sister and a wife
nurtures citizens and these
empowered citizens then play
a role in building up an
empowered society and
country, said Mr. Modi.
Mr. Modi said that multi-tasking,
which is considered to be a very
important element of modernday management, comes
naturally to women.
Women representatives from
both Houses of Parliament, State
Legislative Assemblies and
Councils are attending the twoday.
Mr. Modi urged the women
legislators to engage with their
constituents using technology.

After backlash from salaried


class EPF proposal likely to be
taken back
All options on the controversial
budget proposal to tax EPF
savings are on Prime Minister
Narendra Modis table and a
decision, even on a complete
rollback, is expected at the
highest level in the government
soon.
A senior official of the Finance
Ministry conceded that the
entire proposal was under
review.
20

The Ministrys original intent was


to promote the New Pension
Scheme that had failed to take
off even over 10 years after it
was launched, as the EPF
offered better tax benefits.
Finance Ministry has introduced
into the debate by saying that:
only 60 per cent of the interest
income from EPF savings would
be taxed or the entire EPF
corpus at retirement would be
tax-free if an employee buys an
annuity with 60 per cent of his
EPF account balance.
Pak minister says Pakistan
team will play only after
security clearance

Pakistans Interior Minister said


that the Pakistani Cricket team
would not take part in the March
19 Dharamshala League match
of the ICC T20 World Cup series
till security clearance was
granted by his government.
His statement comes a day after
Home Minister Rajnath Singh
offered paramilitary security for
the Pakistani cricket team for the
Dharamshala match.
Earlier, Pakistan Cricket Board
spokesperson said that a mere
verbal assurance would not
suffice and strong security
measures were needed. We
want a guarantee that can be
given at the government level.
Meanwhile, the PCB has
stopped the India tour of its
womens team until it gets
written security assurances.

President wants parties to clear


Womens bill
President Pranab Mukherjee
has appealed to all political
parties to clear the Constitution
(108th) Amendment Bill to set
aside one-third of seats in
Assemblies and Parliament for
women.
Addressing women lawmakers,
he said this would be the natural
fulfilment of the ideals of the
Panchayati Raj Act.
Madras HC makes in
mandatory to include National
anthem singing in curriculum
The Madras High Court has
ordered that private schools in
the State must follow singing of
national anthem as part of their
curriculum, keeping in mind the
mandate of the Constitution of
India, the respect for national
anthem and the national flag.
The Bench passed the order on
a Public Interest Litigation (PIL)
petition moved by N.
Selvathirumal, who claims to be
an ex-service.
The petitioner submitted that
most of the schoolchildren were
of the opinion that the national
anthem was a movie song.
He brought the courts attention
to Article 51A of the
Constitution which envisages
every citizen of the country to
abide by the Constitution and
respect the national flag and the
national anthem.
Four States and one UT to go on
poll from April 4
The Election Commission of
India announced the schedule
for Assembly elections in four
States and one Union Territory
which will be conducted in

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multiple phases from April 4 to


May 16.
Elections in Tamil Nadu, Kerala
and Puducherry will be held in
a single phase on May 16, said
Chief Election Commissioner
Nasim Zaidi.
In West Bengal, owing to
security issues, polling will be
held in six phases, the first
phase on April 4 and 11, and
the rest on April 17, 21, 25, 30
and May 5. Assam will go to the
polls in two phases on April 4
and 11.
Asked whether action would
be taken if any reference was
made on the Tamil Nadu
governments decision to remit
the life sentence of the Rajiv
Gandhi assassination case
convicts, Mr. Zaidi said: As and
when the reference comes, the
Commission will take an
appropriate view to ensure that
our voters are not influenced.
The votes will be counted on
May 19. The model code of
conduct immediately comes
into effect.
The electronic voting machines,
for the first time, will carry a
NOTA (none of the above)
symbol created by the National
School of Design.
Photographs of the candidates
will also be featured alongside
the
voting
buttons.
Identification of voters through
voter card at polling booths has
been made mandatory, but if
required, use of additional
documents will be allowed.

Supreme Court looking for


ways to make legal profession
better
The Supreme Court decided to
set up a Constitution Bench to
evolve a filtering mechanism to

once and for all clean up the


legal profession.
I also looks to prevent anti-social
elements from becoming
lawyers, who resort to fighting,
agitating, stone-throwing and
abuse instead of arguing in
court.
A Bench, led by Chief Justice
of India, said it was time to raise
the benchmark for the
profession.

The award is the highest official


recognition in Indian cinema.
The 78-year-old actor became
the 47th recipient of the award,
which consists of a golden lotus,
a cash prize of Rs 10 lakh and a
shawl.

Former Lok Sabha speaker


P.A.Sangma passes away

Purno Agitok Sangma, a


politician from the Northeast,
died of a heart attack here on
Friday at the age of 68.
The Lok Sabha, of which he was
Speaker two decades ago, was
adjourned for the day.
He was elected to the Lower
House nine times. Mr. Sangma,
who was born in 1947 at
Chapahati in West Garo Hills
district of Meghalaya, earned an
MA in International Relations
from Dibrugarh University in
Assam and studied law.
Manoj Kumar will get
prestigious Dada Saheb Phalke
Award
Veteran actor Manoj Kumar,
who played the patriotic Indian
in most of his films, and had the
sobriquet Bharat Kumar
bestowed on him, has been
chosen for the prestigious Dada
Saheb Phalke Award.

Kumar was born as Harikrishna


Giri Goswami in Abbottabad,
which was a part of preIndependent India.
At the age of 10, his family
shifted to Delhi. He graduated
from Hindu College and
decided to make a career in
showbiz.
PM says government is
working to improve
infrastructure
Prime Minister Narendra Modi
said that the government was
putting in all efforts to build
infrastructure, especially rural
roads, in a comprehensive
manner.
PM Said Veins give strength to
our
body.
Similarly,
infrastructure will give speed
and
strength
to
the
development of India.
There will be progress if we
focus on building road and
railway networks, optical fibre
network, water, grid and
electricity connectivity, along
with electricity supply.
Rs. 50,000 crore Setu Bharatam
project was launched by Prime
Minister. The project aims to
make all national highways free

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National Issues
from railway level-crossings by
2019 to ensure road safety.
Under the project, 208 rail
overbridges and underbridges
will be built at a cost of Rs.
20,800 crore. Also, 1,500
decade-old bridges will be
reconstructed and revamped,
spending Rs. 30,000 crore.
The country, PM said, needs
both highways and i-ways
(information ways), referring to
digital connect.
Tamil Nadu wants centres
advice on releasing convicts in
Rajiv Gandhi assassination
In yet another bid to release the
seven convicts in the Rajiv
Gandhi assassination case, the
Tamil Nadu government wrote
to the Centre, seeking its views
on its decision to free them.
Under Section 435 of the Cr.PC,
the State has to consult the
Centre before releasing
prisoners prosecuted by the
CBI or under a Central law.
In December last year, the
Supreme Court had ruled that
the State government had no
power to release the convicts
without
the
Centres
concurrence.
In 1999, the Supreme Court
found the seven guilty of conspiring to assassinate Rajiv
Gandhi in May 1991.
The State governments earlier
attempt in 2014 to release the
seven
failed,
as
itscommunication to the Centre
gave only three days time for a
response.
The main petition questioning
the legality of the governments
order of release is still pending
before a three-judge Bench of
the SC.

22

After increasing states share


Union government is cutting the
funding
For the second year in a row,
the Modi government has
reduced fund available to child
health interventions, with a
massive cut from Rs.
15,483.77 crore last year to Rs.
14,000 crore in the latest
budget.
The National Family Health
Survey (NFHS)-4 data for 15
States shows that 37 per cent
of children under the age of five
are stunted; 22 per cent are
wasted while 34 per cent under
the age of 5 are under weight.
The
Integrated
Child
Development Scheme (ICDS)
has seen a 7 per cent reduction
in fund.
The scheme, implemented by
the Women and Child
Development (WCD) Ministry, is
the
countrys
flagship
intervention to improve child
nutrition in the country.
Thats not all the percentage
share of the Mid-Day Meal
(MDM) scheme in the total
Union Budget allocation has
gone down from 0.74 per cent
in 2014-15 (BE) to 0.49 perCent
in 2016-17 (BE).
The allocation for the MDM
scheme for 2016-17 stands at
Rs. 9,700 crore (2016-17 BE).
The budget comes a week after
the Economic Survey states that
India needed to increase
investments on child nutrition
programmes if it were to
capitalise on the demographic
advantage offered by its young
population.
The total amount spend on
child health by the government
would be Rs. 65,758 crore. Over

the last two years, allocations for


ICDS has seen a sharp decrease,
maintain experts.
Cabinet committee on Security
cleared purchase of AWACS
from Israel

Ahead of PrimeMinister
Narendra Modis visit to Israel
later this year, a first by an Indian
Prime Minister, the Cabinet
Committee on Security (CCS)
has cleared the purchase of
additional surveillance aircraft
from the country.
The CCS chaired by Mr. Modi
cleared the proposal to acquire
two more Phalcon Airborne
Early Warning and Control
Systems (AWACS) at a cost of
Rs. 7,500 crore under a
tripartite agreement with Israel
and Russia.
The AWACS are advanced
radars mounted on an aircraft to
give 360 degree coverage to
detect incoming aircraft and
missiles at long ranges.
India had procured three
Phalcon AWACS, Israeli radars
mounted on Russian IL-76
transport aircraft, in 2003 at cost
of $1 billion. Indo-Israel ties got
a major boost after Mr. Modi
came to power.
Document for Lalit Modis
extradition submitted
Enforcement Directorate (ED)
officers submitted documents
for the extradition of former

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National Issues
cricket administrator Lalit Modi
to the Prevention of Money
Launder- ing Act (PMLA) court.
Interpol had asked for certain
documents from ED to be sent
to the London court, as a
requirement for Lalit Modis
extradition. It is part of the
procedure followed as per the
extradition Act.
Despite several efforts, Interpol
had not issued a Red Corner
Notice against Mr Modi.
Supreme Court questions the
validity of All-India Bar
Examination
The Supreme Court on Tuesday
questioned whether the
conduct of the All-India Bar
Examination (AIBE) is a
violation of the fundamental
right to practise a profession,
leaving the Bar Council of India
in the dock.
Law graduates are required to
clear the AIBE within two years
of their enrolment in order to
practise law. Its rules notified in
2010, the AIBE was advertised
by the BCI as a positive step to
improve the quality of the
profession.
To say that one has to pass an
examination for practising as an
advocate will negate his or her
right to profession.
He has a fundamental right to
practise. Conditions cant be
put after enrolment. If, at all, it is
required, the condition should
be put at the enrolment stage,
the Bench said.
The apex court has called for
Law Commission reports on the
issue of holding such an
examination and posted the
case for March 2.

India would ask questions about


Pak team to probe Pathankot
attack

As the decks were cleared for


the visit of Pakistani
investigators to India to probe
the attack on the Pathankot
airbase, India will ask the
neighbouring country about the
composition of the team and
the contents of the evidence
required by them.
India has accused the Pakistanbased outfit Jaish-e-Mohammad
(JeM) of planning and
executing the attack on the
airbase on the intervening night
of January 1-2.
The decision to let the Pakistani
team access the airbase, a highly
sensitive defence installation,
would be taken by Prime
Minister Narendra Mo- di and
National Security Adviser Ajit
Doval.
The three accused arrested by
Pakistan have been identified as
Khalid Mahmood, Irshadul
Haque and Muhammad Shoaib.
They had allegedly facilitated
the attack.
Rural India and Poor are at the
Centre of Union Budget
Dispelling all notions about the
NDA government being a Suit
boot ki Sarkar in his third
Budget, government dedicated
it to farmers, the poor and
vulnerable sections of society.
Union budget also raised taxes

on the incomes of the super-rich


and introducing new cesses on
services and cars to fund farmer
welfare
projects
and
infrastructure, respectively.
Mr. Jaitleys budget for 2016-17
attempted to address the
distress in the rural economy
that has hit demand creation
and new investments, with
enhanced outlays of nearly Rs.
2.75 lakh crore for programmes
in the social sector, farmer
welfare and the rural sector.
FM said Our initiatives in the
last 21 months have not only
placed the economy on a faster
growth trajectory but have
bridged the trust deficit,
created by the previous
Government.
He also said government had to
work in an unsupportive global
environment, adverse weather
conditions and an obstructive
political atmosphere.
Despite higher expenditure
owing to the 7th Central Pay
Commission and the one rank
one pension norm for defence
forces, the Finance Minister
chose to stick to the fiscal
consolidation road map he
outlined last year and set a 3.5
per cent of GDP target for 201617.
The government will infuse a
capital of Rs.25,000 crore this
financial year into state- owned
banks, which are reeling under
the burden of bad loans.

One time four month


compliance window for
domestic black money holders
The government has decided
to open a one-time, four-month
compliance window for
domestic black money-holders.
This gesture is intended to help

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them come clean by paying tax


and penalty of 45 percent.
Capability of the tax department
to detectevasion had improved
be- cause of increased access
to information and the
availability of technology-driven
analytical tools to process such
information.
The compliance window will
enable one to declare
undisclosed income or income
represented in the form ofany
asset, and clear up past tax
transgressions by paying tax at
30 per cent, a surcharge of 7.5
per cent and a penalty of 7.5
per cent.
The surcharge at 7.5 per cent
will be called Krishi Kalyan
surcharge, and the money thus
raised will be used for
agriculture and rural economy.
There will be no scrutiny of
money declared, either under
the Income-Tax Act or the
Wealth Tax Act.
And the declarants will have
immunity from prosecution.
They will also get immunity from
the Benami Transaction
(Prohibition) Act, 1988, subject
tocertain terms.
The compliance window,
named Income Disclosure
Scheme, will open on June 1. It
will be open till September 30.

After revelations by Home


Secretary Home ministry to relook at Ishrat Jahan case
The Ministry of Home Afairs
(MHA) has decided to reexamine the Ishrat Jahan files,
amid allegations by the former
Home Secretary G.K. Pillai that
the affidavit citing the Mumbra
womans allegiance to terrorist
outfit Lashkar-e-Taiba (LeT) was
changed at the political level.
24

Mr. Chidambaram said on


Monday that he accepted
responsibility for the affidavit
and it is disappointing that the
Home Secretary who was
equally responsible wanted to
distance himself today.
The then UPA government had
submitted two affidavits one
claiming that the four who were
killed in an alleged fake
encounter were terrorists and
the second saying there was no
conclusive evidence to prove
they were within two months
in 2009.
SC wants centres response to
practice of triple talaq
The Supreme Court on Monday
admitted a petition filed by a
woman to declare the practice
of triple talaq, nikah halala and
polygamy under Muslim
personal laws as illegal,
unconstitutional, and violative of
the rights to equality, dignity, life
and freedom of religion under
the Constitution.
The petitioner said Practice of
polygamy is not an integral part
of Islam, and polygamy has
been recognised as injurious to
pub- lic morals.
The practices under challenge,
which practically treat women
like chattel belonging to men,
are neither harmonious with the
modern principles of human
rights and gender equality nor
an integral part of Islamic faith.
Ms. Bano said many Islamic
nations, including Saudi Arabia,
Pakistan, and Iraq, have banned
or restricted such practices,
while they continue to vex not
only Indian Muslim women but
also the society at large, notwithstanding that the Muslim
community of India has itself

been clamouring for reform and


ban of oppressive practices that
have no basis in Islam or the
Holy Quran.
Various provisions to take care
of middle class: FM
Union Finance Minister Arun
Jaitley on Monday asserted that
the budget will take care of the
peoples fear of taxation.
The proposed extension ofthe
simplified presumptive taxation
regime to professionals
including lawyers, doctors,
architects and who report total
gross receipts of less than Rs. 50
lakh under which profits will be
deemed to be 50%, will further
reduce the compliance burden
of the middle class.
The increased rent deduction
from Rs. 24,000 to Rs. 60,000
and the higher ceiling for tax
rebate under Section 87A from
Rs. 2,000 to Rs.5,000, he said,
are all relief and benefits for the
middle class.
Budget looks after
manufacturing sector

Finance Minister Arun Jaitley


announced several proposals in
the Union Budget 2016-17 to
boost the governments Make in
India (MII) initiative.
To help start-ups innovate,
generate
employment,
Mr.Jaitley proposed to back
them through 100 per cent
deduction of profits for three

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National Issues

out of five years for start-ups set


up during April 2016 to March
2019.
In another initiative, Mr. Jaitley
chose to follow advanced
nations and proposed to grant
foreign investors Residency
Status subject to certain riders.
Currently, these investors are
granted business visa only up to
five years at a time.
To strengthen the MII initiative,
there was an allocation of
Rs.1,804 crore towards the
scheme for Investment
Promotion and Amended
Technology Upgradation Fund.
Changes were proposed in
Customs and Excise Duty rates
on certain inputs, raw materials,
intermediaries/components
and other goods while several
procedures were simplified.
Finance Minister Arun Jaitley
announced a record budgetary
allocation of Rs. 2.21 lakh crore
for infrastructure sector, in a
crucial move to revive
investments in the sector with
the participation of the private
players.
The roads sector alone has
been allocated Rs. 97,000 crore
as the government plans to
award 10,000 kilometres of new
road projects in FY17, including
Rs. 19,000 crore earmarked for
rural roads under the
Pradhanmantri Gram Sadak
Yojna.

FDI reforms will improve ease


of doing business index
To facilitate ease of doing
business for foreign investors
and their domestic recipients,
the Union Budget 2016-17 has
proposed liberalisation of
foreign direct investment (FDI)
norms in a host of sectors.

These include insurance,


pension, Asset Reconstruction
Companies (ARC), stock
exchanges, marketing of food
products, listed Central Public
Sector Enterprises (CPSE)
except banks and areas
governed by financial sector
regulators, falling beyond the 18
specified NBFC activities.
This the second time such big
bang FDI reforms are being
announced by the government
under Prime Minister Narendra
Modi.
In November last year, the
Centre had similarly eased
norms across 15 sectors,
including defence, private
sector banking, construction,
single brand retail, broadcasting
and civil aviation to boost
investment sentiment and
attract more foreign capital into
the country.
Following these reforms and
the Make in India initiative, FDI
during April-December 2015 in
FY16 was up 40 per cent yearon-year to $29.5 billion.
To help banks and financial
institutions (FI) address the
problem of huge bad loans, the
FY17 Budget has proposed
100 per cent FDI in ARCs
through automatic route.
ARCs play a crucial role in
resolution of non-performing
assets by acquiring them from
banks and FIs.
The FY17 Budget also
proposed that foreign portfolio
investors will be allowed up to
100 per cent of each tranche in
securities receipts issued by
ARCs subject to sectoral caps.
The government has also
proposed to allow 100 per cent
FDI through FIPB route in
marketing of food products

produced and manufactured in


India.
PM urges state governments to
give priority to farm sector

Prime Minister Narendra Modi


urged the State governments to
give priority to agriculture even
as he pledged to double the
income of farmers by 2022, to
mark Indias 75 years of
independence.
To attain that goal, Mr. Modi said
the Centre had adopted a
scientific approach to farming
and urged farmers to utilise the
various agricultural initiatives
introduced by his government.
Fleshing out a formula for
productive agriculture, Mr.
Modi stressed the need to
divide farming practices into
three sectors, traditional
farming, tree or timber
plantation (along the periphery
and borders of fields) and
livestock rearing.
The Prime Minister praised the
Shivraj Singh Chouhan-led
government for its irrigation and
farming schemes for the
turnaround in the agriculture
sector.
Listing the Centres steps to get
better prices for farmers, Mr.
Modi hit out at the State
governments for misusing funds
allocated for the Mahatma
Gandhi National Rural
Employment
Guarantee
Scheme (MGNREGS).
He appealed to the States to use

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MGNREGS funds to support
agriculture.
PMs Mann ki Baat focused
upon students who have board
exams
Prime Minister Narendra Modis
monthly radio address, Mann Ki
Baat reached out to students
preparing to sit for their schoolleaving Board exams, many of
whom are likely to enter
universities.
He had roped in cricketing
legend Sachin Tendulkar, chess
grandmaster Vishwanathan
Anand and scientist C.N.R. Rao
in this pep talk to students on
the eve of the exams.
Mr. Tendulkar emphasised the
need to have a positive attitude
and to compete with oneself. I
will only say that you set your
targets and dont come under
pressure of expectations of
others.
Vishwanathan Anand said
Work hard but set a realistic,
achievable target and try to
achieve it.
Army uniform sale banned in
Punjab
The Punjab government on
Sunday imposed a ban on the
sale of Army uniforms across the
State.
Punjab had witnessed terror
attacks in Pathankot and
Gurdaspur in the recent past
where militants had disguised
themselves in the Army fatigues.
Any person who wants to buy
the uniform would have to
submit a self-attested copy of
his identity card and phone
number with the shopkeeper
and this record would be
maintained along with date of
sale in the record register of the
26

shop- keeper.
The State has also banned use
of red and blue coloured
stickers used by police on
vehicles.
Vinod Rai would be first
chairman of Bank Board Bureau

Prime Minister Narendra Modi


approved the setting up of the
Bank Board Bureau with former
Comptroller and AuditorGeneral of India Vinod Rai as its
first Chairman.
The Bureau is mandated to play
a critical role in reforming the
troubled public sector banks by
recommending appointments
to leadership positions and
boards in those banks and
advise them on ways to raise
funds and how to go ahead with
mergers and acquisitions.
The bureau will recommend for
selection the heads of public
sector banks and financial
institutions and help banks in
developing strategies and
capital raising plans.
The bureau was announced last
August as part of the sevenpoint Indradhanush plan to
revamp these banks.
It will constantly engage with
the boards of all 22 public
sector banks to formulate
appropriate strategies for their
growth and development.
The non-performing assets of
public sector banks are
estimated at almost Rs. 4 lakh
crore, and they need to raise

capital of Rs. 2.4 lakh crore by


2018 to conform to Basel-III
capital requirement norms,
according to the government.
Eleven years after NDMA
Centre looks after disaster
victims
Eleven years after the National
Disaster Management Act
(NDMA) became law in 2005,
centre have said that much is to
be done in States across the
country to ensure that disaster
victims access even minimum
standards of relief.
A letter written by the Joint
Secretary, Policy and Plan,
National Disaster Management
Authority, on February 25 to the
Chief Secretaries of all States has
called for immediate action to
frame a road map to provide
Minimum Standards of Relief
mandated under Section 12 of
the NDMA in disaster-hit areas.
A Bench led by Justice Dipak
Misra on Friday ordered the
Chief Secretaries to complete
the framing of guidelines while
remarking that providing
minimum standards of relief
under the NDMA is a
fundamental duty of the State.
PM says govt blocked all routes
to corruption
Prime Minister Narendra Modi
launched a scathing attack on
the Opposition, saying they
were criticising him as he had
blocked all routes of
corruption and the hungama
over petty issues stemmed from
this.
PM said his government had
stopped chor bazaar (black
market) in many sectors, citing
the fertilizer manufacturing and
distribution as an example.

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PM also said The chor
bazaarwale are angry and all
these hungama over petty issues
is because of it.
Parliamentary standing
committee on defence wants
higher allocation to defence

Parliaments
Standing
Committee on Defence has
expressed dismay over the
governments reluctance to
commit to a minimum
percentage of its expenses for
the armed forces, despite its
recommendations.
The committee desires that
declining ratio should be
arrested in the next financial
year itself, so that the services
are provided adequate funds,
and hence they are not
deprived
of
essential
equipmentand ammunition.
The committee had then told
the government that it should
consider fixing a minimum
benchmark for this percentage,
which should be adhered to, in
every case.
Though the defence budget is
increasing numerically annually,
as a proportion of the Central
budget, it has consistently been
declining.
In 2009- 10, the defence
expenditure of Rs. 1,41,781
crore was 13.84 per cent of the
total expenditure.
In 2010-11, the budget
increased in absolute terms, but

in percentage terms, it came


down to 12.87 per cent.
In 2011-12, the defence
expenditure rose to Rs.
1,70,913 crore, but in
percentage terms, it was merely
13.1 per cent of the
governments expenditure.
Since then, it has been sliding
continuously.
In 2012-13, the defence
expenditure was pegged at Rs.
1,81,776, which was 12.89 per
cent of the governments
expenditure. However, it
further came down to 12.81 per
cent under the revised budget.
Govt. may leverage assets
under LIC, EPFO
The government is exploring
the possibility for leveraging the
assets under management of
Life Insurance Corporation,
Employees Provident Fund
Organisation and the National
Pension Scheme.
They will be used as part of the
plans for recapitalising the
public sector banks that have
stressed balance sheets and are
saddled with bad loans.
Finance Minister Arun Jaitley
could also make a small
reference to the road map
being planned.
The
Economic
Survey
recommends that the assets of
the RBI and other regulatory
institutions be similarly used.
Cross-holdings among banks
could be considered later.
Survey calls for reforms and
welfare schemes
Shunning last years overoptimism, Economic Survey
2015-16 projects that the real
GDP growth for the current
financial year and for 2016-17

will be in the range of 7-7.75


per cent.
The Central Statistics office
estimates that growth this year
will be 7.6 per cent, lower than
the 8.1- 8.5 per cent projected
in the last Survey.
There is anxiety that the
economy is not realising its full
growth potential, which in the
long run is still around 8-10 per
cent, says the survey.
Improved investments in
education and health, where
India fares the worst among
BRICS nations, the survey says,
and adequate attentionto
agriculture could realise the
potential.
The medium-term potential can
be realised over the next two
to five years, if the retrievable
setbacks andthe unfinished
agenda are undertaken.
In the unfinished agenda, he
listed the Goods and Services
Tax, strategic disinvestment,
de-stressing of the balance
sheet of both banks and private
companies,
and
the
rationalisation of subsidies.
Stretched corporateand bank
balance sheets are affecting
prospects for reviving private
investments, and so the
underlying stressed assets must
be sold or rehabilitated.
The survey makes a case for
unpopular reforms, such as
bringing agricultural incomes in
the tax net, rationalisation of
fertiliser subsidies estimated at
Rs. 75,000 crore (excluding
arrears) and the withdrawal of
tax benefits which, he argued,
benefit mainly the rich.

President called for revision of


Indian penal code
President Pranab Mukherjee
has called for a thorough

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revision of the Indian Penal
Code (IPC) for meet- ing the
changing needs of the 21st
century.

Mr. Mukherjee pointed out that


the IPC has undergone very
few changes in the last 155
years. Very few crimes have
been added to the initial list and
declared punishable.
Even now, here are offences in
the code which were en- acted
by the British to meet their
colonial needs.
Mr. Mukeherjee said the
century witnessed the
proliferation of technology in
wider spaces of human
interaction and transaction.
It has resulted in greater
conveniences but, at the same
time, has led to the occurrences
of newer types of offences.
Survey says private sector help
necessary to tackle climate
change
The Economic Survey finds that
India will find it hard to meet its
variety of obligations to tackle
climate change without
substantial help from the private
sector.
Successful implementation of
the Paris Agreement, the
Sustainable Development
Goals (SDGs) and the ambitious
targets set out in the Intended
Nationally
Determined
Contributions (INDCs) will
require huge financial resources
which cannot be met through
28

budgetary sources alone.


Leveraging private finance
along with public fi- nance, both
international and national, will
be critical.
The SDGs set by the United
Nations last September lay the
onus on countries to make
significant progress on a wide
range of goals including ending poverty and hunger and
combating climate change.
The INDCs are plans by
governments communicated to
the United Nations climate
change council regarding the
steps they will take to address
climate change domestically.
As part of its domestic climate
commitments, India has said it
would source nearly 60,000MW
of its energy by wind- power
and 1,00,000 MW mega- watts
via solar power by 2022.
The latter is extremely
ambitious considering that as of
to- day only 5% of this proposed
solar capacity has been installed.
The Survey also notes that a
mission on Climate Change and
Health mooted since early
2015 is being developed
and a National Expert Group on
Climate Change and Health has
been constituted.
Supreme Court asks centre to
ban Child porn
An anguished Supreme Court
told the Centre to take steps
and frame rules to stop access
to websites featuring child
pornography, classifying them
as obscene and a threat to
social morality.
The court said technical
glitches and jurisdictional
niggles were not excuses forthe
Centres inaction in this regard.

Innocent children cant be


made prey to this kind of
situations and a nation cannot
afford to carry on any kind of
experiment with its children in
the name of liberty.
The court directed the Centre
to file an affidavit on ways and
means to curb free access to
child pornography on the
Internet and asked the
government to reply whether
there could be a ban on
watching porn of any form in
pub- lic places.
Suresh Prabhu presented
customer oriented budget

Railway Minister Suresh Prabhu


effected no hike in passenger
fares, indicated a cut in freight
tariffs.
He admitted that the global
economic slowdown is hurting
Indias core sectors and pointed
out that the looming impact of
the Seventh Pay Commission
made it one of the toughest
times to formulate a Budget.
Yet, Mr. Prabhu, in his second
Rail Budget, unveiled a bouquet
of new train services,
innumerable new initiatives to
make life easier for passengers
and proposed an ambitious
capital outlay of Rs. 1.21 lakh
crore for 2016-17, a jump of 21
per cent over this year.
While the Railway Minister
didnt refer to a sharp 50 crore
shortfall in his passenger traffic
estimates for 2015- 16 the
Railways is expected to carry

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just 810 crore passengers down


from 860crore that he had
projected in the last budget.
He sought to win back
passengers by offering some airplane-type features like onboard entertainment and travel
insurance options at the time of
booking.
Railways is looking at bringing
down its freight rates for the first
time in the coming year, in a bid
to increase revenues through
higher volumes.
Minister also said With an
optimistic outlook for the
economy, we hope to generate
revenues of the order of Rs.
1,84,820 crore next year, 10.1
per cent higher than the revised
target for 2015-16.
The Railways will increase the
senior citizen quota per coach
by 50 per cent, resulting in
almost 120 lower berths per
train for senior citizens.
All stations will be made
disabled-friendly and at least
one disabled-friendly toilet in
all platforms in A1 Class stations
will be built in the next financial
year.
One-time registration for the
persons with disabilities for
availing concessions while
booking tickets online was also
announced along with online
booking of wheelchairs &
Braille-enabled new coaches.
As a pilot, the Railways will make
available childrens menu items
on trains along with baby foods,
hot milk, hot water and
changing boards for babies in
train toilets.
The Budget suggests sale of
tickets through hand-held
terminals on suburban or short
distance travel and sale of
platform tickets through ticket

vending machines with credit/


debit cards as accepted
payment modes besides cash.
Further, the e-ticketing facility
will be extended to foreign
debit/credit cards for foreign
tourists and NRIs.
For cancelling a ticket, it is
proposed that a customer can
simply call the 139 helpline instead of going to a booking
window to avail the refund.
The Ministry is working with
insurance companies to offer
optional travel insurance for rail
journeys at the time of booking.
Railway Minister Suresh Prabhu
announced
four
new
categories of trains one for
unreserved passengers and
three for reserved passengers.
Antyodaya Express, a longdistance, fully unreserved,
superfast train service, for the
common man, to be operated
on dense routes.
Govt. will also add two to four
DeenDayalu coaches to some
long-distance trains for
unreserved travel to enhance
our carrying capacity for the
masses.
Minister also announced a fully
third AC train, called Humsafar.
The Tejas category of trains will
run at 130 km an hour, with
entertainment, local cuisine, WiFi and other amenities on board.
The final category is UDAY
(Utkrisht Double- Decker Airconditioned Yatri), which will
be overnight trains plying on the
busiest routes to increase
capacity by 40 per cent.

NGT wants real estate


developers to be punished for
the dust
The National Green Tribunal
(NGT) asked civic bodies and

public authorities in Delhi-NCR


to check air pollution caused by
dust
emanating
from
construction sites and initiate
action against real estate
developers
violating
environmental norms.
The green panel has also asked
municipal corporations to
strictly impose a fine of Rs.
50,000 on builders who violate
the Environment Ministry's 2010
guidelines on constructions.
The announcement of the fine
was made by the Tribunal last
year.
NGT Chairperson Justice
Swatanter Kumar said that
allcorporations and public
authorities must concentrate on
builders who raised huge
constructions and did not follow
pollution norms.
It also directed the municipal
corporations to file a list of
builders involved in violations.

UB group chairman Vijay


Mallya resigned
UB Group Chairman Vijay Mallya
has resigned as the nonexecutive chairman of United
Spirits Limited (USL) with
immediate effect.
Recently, there have been
allegations and uncertainties
over Mr. Mallyas relationship
with British alcoholic beverages
company Diageo, the majority
stakeholder in the USL.
Ever since Diageo purchased a
majority stake of about 54 per
cent in the USL in July 2014,
tussles between Mr. Mallya and
the firm have been reported.
After the acquisition of majority
stake in the USL, Diageopushed
for the exit of Mr. Mallya, which
he refused.

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Electronic tourist visa extended
to 37 more countries

Electronic tourist visas (e-TVs)


will be extended to citizens of
37 more countries from Friday,
taking the total number to 150.
The new additions are Albania,
Austria, Bosnia & Herzegovina,
Botswana, Brunei, Bulgaria,
Cape Verde, Comoros, Cote
dlvoire, Croatia, Czech
Republic, Denmark, Eritrea,
Gabon, Gambia, Ghana,
Greece, etc.
TVoA (tourist visa on arrival),
enabled by electronic travel
authorisation, popularly known
as the e-tourist visa scheme, was
launched on November 27,
2014.
Since then, more than 7.5 lakh
such visas have been issued. At
present, on an average, 3,500
e-TVs are granted daily.
Supreme Court says agitations
can't hold the nation to ransom
Agitations cannot hold the
nation to ransom and be a
reason to vandalise pub- lic
property, the Supreme Court
said. Organisers of such
agitations will have to pay the
cost.
The courts resolve hit home
after the widespread Jat quota
agitation saw killings, burning
and looting of shops, and mobs
destroying canals supplying
water to the National Capital.
The Haryana government
30

reeled under losses worth


several thousands of crores and
the Army was brought in to
protect public property.
The apex court had on January
14 asked the AG to assist it on
the approach to be adopted in
dealing with cases where public
property was damaged on a
large scale.
Hardik has claimed that the
charges had been wrongly
been invoked against him.
Karnataka High court lifted the
stay on enforcement of bigger
pictorial warnings
The Karnataka High Court lifted
the stay on enforcement of new
rules which enhanced the area
for displaying health warning to
85 per cent from 50 per cent of
the principal area on the packs
of tobacco products.
The Ministry of Health and
Family Welfare recently filed an
application requesting the
Court to vacate the stay by
pointing out the direction
issued by the Apex Court in
2009.
Ministry asked the High Courts
not to interfere in the
implementation of Cigarette and
other Tobacco Products
(Packaging and Labelling)
Rules, 2008, and the matter is
still pending before the
Supreme Court.
Justice Malimath pointed out
that the legal issue related to the
Rules of 2014 is also pending
with the apex court as a litigant
had sought a direction for the
enforcement of the amended
rules of 2014 by questioning the
notification, which indefinitely
deferred display of health
warning on the packages of
tobacco products.

Astronaut Sunita Williams will


visit India on a two day visit
Captain Sunita Williams,
Astronaut with the National
Aeronautic and Space
Administration (NASA) of the
U.S., will be in India on a twoday visit.
In Delhi, Capt. Williams has a
series of engagements
addressing students on her
journey as an astronaut and
womens
empowerment
through Science, Technology,
Engineering and Mathematics
(STEM) Education.
Capt. Williams is an American
astronaut and United States
Navy oicer of Indian- Slovenian
origin.
Coinciding with the visit a NASA
team lead by the Deputy
Administrator Dava Newman is
at the Indian Space Research
Organisation
(ISRO)
headquarters in Bengaluru for
the third face-to-face meeting
of the ISRO-NASA Mars
Working Group.
JNU students accused of antinational slogans surrendered

Jawaharlal Nehru University


students Umar Khalid and
Anirban Bhattacharya, facing
sedition charge, surrendered to
the police late night after the
Delhi High Court directed them
to give themselves in earlier in
the day.

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The students left the campus in
a university vehicle escorted by
guards around 11-45 p.m. and
were taken into custody by a
police team waiting outside one
of the exit gates of the varsity.
They were joined by a large
number of students who went
right up to the west gate of the
university. Four teachers and a
lawyer also accompanied the
two.
Five students -- Ashutosh
Kumar, Anant Prakash, Rama
Naga, besides Umar and
Anirban are wanted by the
police in a sedition case.
Presidents asks for debate with
out disruption
Anticipating a stormy Budget
session of Parliament, President
Pranab Mukherjee on Tuesday
exhorted all MPs to discharge
their responsibility in a spirit of
cooperation and mutual
accommodation.
Addressing the joint sitting of
both Houses, President
Mukherjee said, Democratic
temper calls for debate and
discussion, and not disruption
or obstruction.
He also said let noble thoughts
come from all directions
should be the spirit behind
debate in this temple of
democracy.
Being a member of this great
institution bestows great honour
as well as important
responsibilities.
The President also told the MPs
that we owe a great debt to
our freedom fighters.It is time
to repay that debt, by building
the country that they
envisioned and fought for.

Amnesty International says civil


liberties in India are not up to
International standard
Criticising the government for
using archaic laws to suppress
dissent, Amnesty International,
in its report for 2015-16, has
included India among countries
that have failed to match up to
the international standard of
freedom of expression and civil
liberties.
The report especially noted that
over the past year, crackdown
on freedom of expression by
majoritarian groups linked to the
government had intensified.
Report said, Censorship and
attacks on freedom of
expression by hardline Hindu
groups grew. Scores of artists,
writers and scientists returned
national honours in protest
against what they said was a
climate of growing intolerance.
It criticised India for a negative
gender justice environment,
and for violating international
legal obligations for the recent
modifications in the juvenile
justice system which allows
children aged 16 to 18 to be
treated as adults in cases of
serious crimes.
The report also made a special
mention of Tripura, which was
the first State to withdraw the
Armed Forces Special Powers
Act.
Presidents address to Joint
sitting of Houses focuses on
FasalBeema Yojana
In his address to the joint sitting
of both Houses of Parliament,
President Pranab Mukherjee
dwelt on the governments
programmes, especially those
aimed at financial inclusion and

the agricultural sector,


including the recently
launched Pradhan Mantri Fasal
Beema Yojana.
My government has recently
launched the farmer- friendly
Pradhan MantriFasalBeema
Yojana, with the biggest-ever
governments contribution to
crop insurance, and with the
lowest- ever premium rates for
farmers.
It has many firsts to its credit like
national coverage of postharvest losses due to inundation
and unseasonal rains, no
capping on subsidyand use of
technology for early and
accurate settlement of claims.
Assistanceto farmers affected
by natural calamities has been
increased by 50 per cent and
eligibility norms have been
relaxed.
The
President
said
amendments to the Prevention
of Corruption Act to make it
more stringent were on the anvil.

Defence minister directed armed


forces for identification of
contemporary relevance projects

Conducting a comprehensive
review
of
defence
procurements cleared in the
last two years, Defence Minister
Manohar Parrikar has directed
the armed forces to identify
procurement projects of
contemporary relevance in
the next few months.

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He made these observations
while chairing a meeting of the
Defence Acquisition Council
(DAC).
The review comes as the
Defence Ministry is in the final
stages of formulating the
newDefence Procurement
Procedure (DPP) expected to
be released in the next couple
of months.
A contemporary review is
particularly relevant as a large
number of defence proposals
in the pipeline have been
pending for several years and
even over a decade in many
cases and are now irrelevant
due to change in requirements
of the forces and advancement
in technology.
Observing that despite
concerted eforts to expedite
procurements, Mr. Parrikar
noted that there still remain 314
cases which have not yet
fructified.
Out of these 86 schemes worth
approximately Rs. 1.5 lakh crore
are close to final stage of
approval.
Jat protest turns ugly
Even after the Centres
assurance on reservation for the
Jats, the agitation in Haryana
doesnt seem to die down.
Three more persons were killed
in police firing during protests
in Sonipat district, even as the
State government said the
situation was returning to
normality.
The death toll in the State has
gone up to 16 and 183 persons
have been injured. So far, 320
cases have been filed and 102
persons have been arrested.
The State Cabinet meeting,
chaired by the Chief Minister, is
32

reported to have witnessed a


heated exchange of words
between some Ministers.
The Cabinet decided to give
full compensation for the
damage to private property,
both
residential
and
commercial.
The Cabinet also decided to
introduce a Bill for reservation
in the coming session of the
Assembly.
Three of the finest soldiers died
in Kashmir
The Army lost three of its finest
soldiers, two young oicers and
a jawan from the Para Special
Forces in the deadliest
fidayeen at- tack in the Srinagar
area in many years. It was not an
iso- lated incident, but part of a
disturbing trend of the Army
losing some of its finest soldiers
as the Kashmir violence flares up
yet again.
While statistics may hide much
of it, the reality is that the Army
has lost many of its most
experienced
counterinsurgency operatives in recent
months because of a host of
actors, including the return of
fidayeen attacks.
Among the possible reasons
being discussed in intelligence
circles is the role of dubious
sources planting wrong
information on Army units
operating in the Valley.
Earlier this month, two jawans
were killed in a 22-hour gunfight
in the Chowkibal forest in
Kupwara.
Lance Naik Mohan Nath
Goswami, another para
commando who was awarded
Ashok Chakra this Republic Day,
was killed in September last
year along with another

commando. A month later, four


more soldiers were killed in the
district.
In November last, Colonel
Santosh Mahadik, commanding
officer of 41 Rashtriya Rifles, was
grievously injured in Kupwara,
not very far from where the
earlier casualties occurred, and
died later.
A police officer of the Special
Operations Group was also
killed in the operations.
Supreme Court refuses to topple
Arunachal government
Remarking that the Arunachal
Pradesh experiment to topple
State governments may prove
deadly, the Supreme Court on
refused to intervene in the
formation of the new
government under dissident
Congress leader Kalikho Pul.
The five-judge Constitution
Bench, led by Justice J.S.
Khehar, is looking into the
constitutionality of State
Governor J.P. Rajkhowas move
to advance the Arunachal
Assembly session, which
eventually triggered a political
crisis that lead to the ouster of
the Congress-led Nabam Tuki
government and proclamation
of emergency in the State on
January 26 this year.
The court told the Congress
leaders that it should be
allowed to comprehensively
deal with the issue rather than
in a piecemeal, hotchpotch
fashion.
Global banking giants HSBC
gets tax evasion notice
Armed with sufficient
evidence, Indian tax authorities
have issued notices to the global
banking giant HSBC, warning of

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prosecution against its Swiss
and Dubai arms for allegedly
abetting tax evasion by four
Indians and their families.

The U.K.-based HSBC, which


also disclosed ongoing probes
by tax authorities from various
countries in connection with
alleged abetment of tax evasion
and money laundering through
its Geneva branch, said it was
cooperating with the authorities
concerned and cautioned of
significant financial impact as
a result of these investigations.
HSBC has been under the
scanner ever since a leaked list
of hundreds of Indian clients of
its Geneva branch found its way
to the Indian tax authorities.
Similar lists made their way to
tax authorities in various other
countries, prompting probes.
The Indian government has
stepped up its fightagainst
black money, allegedly stashed
away in Switzerland, in recent
years and there have been
apprehensions that the socalled illicit wealth might have
got shifted to other places such
as Dubai.
Without disclosing the names of
the Indians who indulged in the
alleged tax evasion through its
Swiss or Dubai units.
HSBC said while announcing its
annual results that it had first
received summons in February
2015 from Indian tax
authorities, while fresh notices
were issued in August and then
in November.

Govt decided to give other


backward class status to Jats
The Jat agitation in Haryana
claimed one more life, taking
the death toll to 11, as the State
remained on edge even as the
government decided to bring a
Bill to grant other backward
class (OBC) status to Jats.
The decision was taken at a
meeting of the Home Minister,
the National Security Adviser,
the Army chief and the Delhi
Police Commissioner with Jat
leaders.
BJP leader, told reporters that
the Jat community would get
reservation in jobs, and a
Billwould be brought in the
next session of the Haryana
Assembly.
Fresh incidents of violence and
arson were reported in the State
as the agitation enteredthe
ninth day. Rohtak, Bhiwani,
Jhajjar, Jind, Hisar, Hansi,
Sonipat and Gohana continue
to be under curfew.
Integrated Child Health Record
will map childs health records
digital
With Indias first ever digital
platform, Integrated Child
Health Record (ICHR), you can
now have your childs health
records made available at the
click of a button.
Supported
by
cloud
computing and mobile
technology, ICHR offers to map
a childs health and track
vaccination.
ICHR is supported by a mobile
application to address the
pressing concern of parents
who are keen to track their
childs growth and vaccination.
The mobile interface will be

available for both an- droid and


iOS users.
ICHR provides and auto- mates
long-term surveillance of a
childs growth.
It also offers benefits including
helping in early detection of
obesity and malnutrition in
urban and rural population
respectively.
It also addresses the dire need
of maintaining the data centrally
for research purposes.
Rurban mission launched by
PM
Prime Minister Narendra Modi
said on Sunday that he has
successfully brought the
government to the people of the
country from the corridors of
New Delhi.
Launching Rurban Mission in
Dongargad, a town in
Rajnandgaon district, he said:
Previous governments had the
habit of doing everything by
sitting in Delhi. They would
invite 200 to 400 people to the
Vigyan Bhavan in Delhi and light
some candles [at the launch of
pro- grammes]. Some media
friends also used to help them.
But I have brought the
government out of Delhi and
among the people.
His government is for the Dalits,
the tribals and the poor, Mr.
Modi said.
Praising Kovarbai, a 104- yearold woman from the State, for
selling her goats to build a toilet
in her home, Mr. Modi called her
a
symbol
of
new
development.
Unemployment rate stable in
rural areas
The unemployment rate in
urban areas reduced from 4.5

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per cent in 2004-05 to 3.4 per


cent in 2011-12, new data from
the National Sample Survey
office show.
In rural areas, the rate has been
stable at around 1.7 per cent
during this period.
According to the survey, which
was conducted in 2011- 12 and
released, the unemployment
rate across all the religious
groups in rural areas was on the
lower side than those in urban
areas for both males and
females.
Un- employment rate is defined
as the number of persons
unemployed as a proportion of
the labour force (persons who
are either working or seeking
or available for work), not the
total population.
Christians have the highest rate
of unemployment in both rural
(4.5 per cent) and urban (5.9
per cent) areas in 2011-12.
The rate in urban areas for
Christians stood at 8.6 per cent
in 2004-05 while the rural rate
stays constant.
Self-employment is the major
source of income for almost half
the households, across all
religious groups, in rural areas,
followed by casual labour.
In urban areas, the proportion
of households deriving major
income from regular wage or
salary earnings is the highest.
Half the Muslim households in
urban areas have selfemployment as major source of
income, the highest among all
religions, while regular wage or
salary earnings was the highest
for Christians with 45.8 per cent
households.

JAT protest paralyses Haryana


Violence triggered by the Jat
34

agitation for reser- vation spread


to more areas in Haryana on
Saturday, with reports saying
protesters set fire to vehicles
and public and private property
and blocked roads and the railway track. Four persons were
reportedly killed and several
injured in the State as security
forces opened fire.

had secured the Cabinets


backing to recommend to
voters that Britain stay in the
bloc it joined in 1973.
The agreement granted Britain
an explicit exemption from the
founding goal of an ever closer
union, offered concessions on
the welfare rights of migrant
workers andsafeguards for the
City of London.
Matribhasha Diwas to be
observed on March 3 by
Universities and colleges

Security personnel resort- ed to


firing after protests erupted in
Rohtak and Jhaj- jar districts,
taking the death toll to five. A
hospital oicial in Rohtak said two
persons were brought dead to
the Pandit Bhagwat Dayal
Sharma Postgraduate Institute
of Medical Sciences (PGIMS) in
Rohtak and one critically injured
patient died after an operation.
Curfew has been clamped in
more towns, including Jind,
Hisar, Hansi, Sonipat and
Gohana.
Referendum in Britain for
European Union membership
British Prime Minister David
Cameron called a June 23
referendum on member- ship of
the European Union as he
sought to rally his divided
Conservative Party behind a
deal which he said would
guarantee Britains prosperity
and security in the bloc.
After spelling out details of the
deal -- clinched at an EU summit
in Brussels -- to his senior
Ministers, Mr. Cameron said he

Universities and colleges across


the country will now have to
mark March 3 on their calendars.
While educational institutions
thought they do not have to
conduct any activities on
Matribhasha Diwas on
February 21 as it happens to be
a Sunday, the University Grants
Commission (UGC) has asked
them to observe the day on
March 3 instead.
Matribhasha Diwas is otherwise
observed as International
Mother Language Day across the
world.
The theme for 2016 is Quality
education, language(s) of
instruction and learning
outcomes.
According to an earlier letter by
the UGC to education
institutions, they are expected
to organise elocution,
debating, singing, essay writing
competitions,
painting
competitions, music and drama
performances, exhibitions,
online resources and activities.
Noble laureate Satyarthi wants
more budgetary allocation to
Children
Though children below 18 years
of age constitute 41 per cent of

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National Issues

the countrys population, the


budgetary allocation for them
remains dismal, child rights
campaigner and Nobel Laureate
Kailash Satyarthi said.
He said: India is proud of being
the youngest society in the
world We all talk about
demographic dividend but
when it comes to investment on
children, on their health,
education and protection, it is
dismal I would say. This is only
four per cent or less of the
budget on children health education and protection.
Mr. Satyarthi also said no
country could accomplish
inclusivity and sustain
development, along with social
developmentand peace, unless
it gave priority to the health and
education of its children.
Speaking on the proposed
amendments to the existing law
on child labour, he ex- pressed
the hope that Parliament would
pass a progressive law.
While the existing law
identified 83 hazardous
occupations
prohibiting
children from working, Mr.
Satyarthi said the proposed
amendment reduced the
number
of
hazardous
occupations only to three.

Kalikho Pul sworn in as Chief


Minister of Arunachal Pradesh
The dissident Congress leader,
Kalikho Pul, was sworn in as
Chief Minister in the night.
Prior to this, both factions of the
Congress, one headed by
Mr.Pul and the other by former
Chief Minister Nabam Tuki,
staked their claim to form a new
government in the State.
At present, the dissenting
Congress faction consists of 21

leaders.
Since they have the support of
11 BJP MLAs, they have the
numerical majority in the 50member Assembly.
India welcomes Pakistan move
to file case for Pathankot attack
In a clear hint of the two
countries holding the Foreign
Secretary-level talks soon, India
welcomed Pakistans move to
file a case against an unnamed
extremist group suspected of
executing the January 2 attack
on the Pathankot airbase.
Indias response came a day
after the Pakistani police filed a
case against a suspected terror
group under the strict Anti
Terrorism Act and the Pakistan
Penal Code.
Immediately after the attack,
India pointed the finger at the
Jaish-e-Mohammed, which has
its headquarters in Gujranwala,
but did not receive a favourable
response even after providing
technical evidence of the
involvement of members of this
group.
But the press release from
Pakistan indicated that the
police had filed the case against
the terror group, though an
official confirmation is
expected.
BCCI to point out difficulties in
implementing Lodha committee
recommendations

The BCCIs full, associate and


affiliate members, without
going deep into the report of
the Supreme Court- appointed
Lodha Committee on Reforms
In Cricket, authorised secretary
Anurag Thakur to file an
Affidavit in the court.
Affidavit will point to the
anomalies and difficulties in
implementing
the
recommendations.
Constitutional lawyer K.K.
Venugopal will appear for the
BCCI before the Bench on
March 4.
Successful hotbed test of
cryogenic engine makes ISRO
upbeat
Indian Space Research
Organisations (ISRO) bid to
acquire the capability to launch
heavier satellites into orbit
received a boost with the
successful hotbed test of the
cryogenic engine for the upper
stage of the GSLV Mark 3 rocket.
The long-duration test at the
ISRO Propulsion Research
Centre at Mahendragiri lasted
640 seconds.
Using Liquid Hydrogen at -253
degrees C and Liquid Oxygen
at -193 degrees C as propellants,
the high-thrust cryogenic
engine (CE20) generates
power of approximately 2 MW.
Developed at the Liquid
Propulsion System centre
(LPSC) here, the engine had
already undergone two shortduration tests for engine ignition
and steady stateperformance.
Last
year,
the
first
developmental
engine
completed different hot tests in
various operating regimes.
The third engine identified for
flight use will be vacuum tested

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in the high altitude test facility
as part of the flight acceptance
test.
SC declined to hear the bail plea
of Kanhaiya Kumar
The Supreme Court agreed with
Kanhaiya Kumar, president of
the Jawaharlal Nehru University
Students Union, that repeated
mob violence on court premises
against him was unusual and
extraordinary, but stopped
short of hearing his bail petition
barely 24 hours after listing the
case at the top of the days work
chart.
Instead, a Bench of Justices J.
Chelameswar and Abhay
Manohar Sapre transferred the
petition to the Delhi High Court
to be heard expeditiously.
The court ordered the Centre
and the police to provide
special security arrangements,
with the entry to the High Court
regulated by the RegistrarGeneral of the latter.
Mr. Kumar, now lodged in the
Tihar jail on a 14-day remand,
moved the Supreme Court
under Article 32 of the
Constitution seeking protection
of his life and liberty.
Haryana government gave
assurance about Jat reservation

The Haryana government,


which said it accepted the
demand of the Jats for
reservation after their stir turned
violent, gave an assurance that
36

the relevant Bill would have


legal sanctity.
The new Bill will have legal
sanctity. With a view to ensuring
that no loss is caused by
including them in the category
of Economically Backward
Classes (EBC).
the quota for the same will be
increased from 10 to 20 per
cent and the income ceiling go
up from Rs. 2.5 lakh to Rs. six
lakh.
Earlier in the afternoon, police
said the protesters who had
gathered at the Rohtak bypass
road of the Delhi-Hisar National
Highway turned violent and
allegedly attacked police
vehicles and the house of State
Finance Minister Capt.
Abhimanyu.
After JNUSU president getting
threats in Patiala house court
SC to hear his bail application
A day after violence returned
to the Patiala House courts in
defiance of the Supreme
Courts call for calm.
The apex court accepted that
something extraordinary is
going on in this country and
agreed to hear the bail petition
of JNUSU president Kanhaiya
Kumar, facing sedition charges
on the allegation that antinational slogans were allegedly
raised on the university campus.
Bench
brushed
aside
objections raised in the
courtroom that the court should
not function like a magistrate
and hear bail pleas, and posted
the student lead- ers case for
urgent hearing.
If a citizen comes to this court
saying his fundamental rights are
under threat, wehave to hear
him. Something extraordinary is

going on in this country. Said


Justice Chelameshwar.
Pak anti-terrorism court wants
24 Indian eyewitnesses
statement to be recorded
The Pakistani anti-terrorism
court holding the Mumbai attack
trial has ordered the Federal
Investigation Agency (FIA) to
present all 24 Indian witnesses
before it so that their statements
can be recorded.
The Anti-Terrorism Court in
Islamabad, which is holding the
trial of the seven accused
including Mumbai attack
mastermind and LeT operations
commander Zakiur Rehman
Lakhvi.
Court also directed that the
boats used by Ajmal Kasab and
others be broughtback from
India and made case property.
The official said the Interior
Ministry will write to the Foreign
Ministry in this regard.
Experts wants India to learn
from China for pollution control
Experts who worked on Chinas
successful pollution control
measures have said India should
learn from Chinas mistakes and
put in place regional and
national level action plans.
Delhis poor air quality has been
at the top of the government and
the publics agenda, with road
rationing, car-free days and
other measures being tried out.
However, measures restricted to
Delhi cannot have any
substantial impact on the air
quality just like the Chinese
authorities learned.
The Chinese government woke
up to the problem of air
pollution only in the early 2000s,
particularly in the run up to the

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2008 Olympics.
They tried out pollution control
measures in Beijing, which
hosted the games, but found
that the problem lay elsewhere.
Apart from the crackdown on
polluting industries, China
expanded its air quality
monitoring system, which is
something India needs to do as
well.
Some of the most polluted parts
of the country do not have an
air quality monitor- ing station.
An online platform for each
province of China was created,
where air quality data, including
emissions from individual
industrial units in the area, is
available to the public via an
app.
A five-year plan with specific
targets for pollution reduction
was also drawn up in 2013.
Pollution control became a
political agenda as well, with
local
government
representatives being judged
on whether they achieve air
quality targets.
Li-Fi could make use of LED
bulb for providing Internet
Imagine an LED bulb doubling
up as an access point for
connecting to the Internet and
ordinary light being used as a
medium to carry data.
A whole new world wherein a
bulb would not only give us light
but also help us access the Web
might not be too far away, if a
new technology called Li- Fi (or
Light-Fidelity) goes mainstream.
Prof. Harald Haas of the
University of Edinburgh, who
coined the term Li-Fi in 2011.
Li-Fi was a disruptive
technology that could transform
business models, create new

opportunities, and was poised


to be a $113 billion industry by
2022.
Prof. Haas said that the RF (radio
frequency) spectrum would not
be enough considering the rate
of growth of wire-less data
communication.
The visible light spectrum was
much larger. The use of the light
spectrum for Li-Fi overcomes
the issues in traditional wireless
communication, like the
shortage of spectrum and
network disruption because of
interference.
In Li-Fi, anyone who has access
to light can access theInternet.
The system also allows users to
move from one light source to
another without losing their
network connection
In order to provide Internet at
night, the stream of photons can
be reduced to a minimal level
that wont produce visible light
but enough to carry data
The inability of light rays to pass
through walls and similar
structures is seen as a major
drawback of this technology.

Toxicity testing of drug in the


Indian population will start in
India by month end

A pilot programme to test the


toxicity, particularly cardiotoxicity, of bedaquiline drug
(for combating multi-drugresistant TB) in the Indian
population.

Programme will assess drugs


ability to achieve culture
conversion and to check the
feasibility of using the drug to
treat MDR-TB patients will start
in India by the end of this month
or on World TB Day.
Six hundred MDR-TB patients
will be enrolled in six
institutions two in Delhi and
one each in Mumbai,
Ahmedabad, Guwahati, and
Chennai to study the
suitability of thedrug for the
Indian population.
Only those resistant to both
rifampicin and isoniazid, the
first-line TB drugs, will be
enrolled.
The pilot programme would last
for six months. As per the
WHOs recommendation,
bedaquiline will be given to
patients, besides the regular
multidrug treatment regimen.
Unlike clinical trials, the
sixinstitutions will not enrol a
certain number of patients each.
Instead, patients willing to
participate in the pro- gramme
will be enrolled on a first come,
first served basis.
Defence Minister says OROP
may also be given to military
personnel retiring Prematurely
The government is reconsidering the denial of One
Rank One Pension (OROP) to
personnel opting Pre-Mature
Retirement (PMR) in light of the
concerns expressed by serving
and retired military personnel.
The PMR in the armed forces is
a way of maintaining a younger
officer profile at the middle
level and open up vacancies for
lower ranks.
Currently the PMR tenure for
Jawans
and
Junior

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National Issues
Commissioned Officers (JCO) is
15 years and for officers it is 20
years after which they are
eligible for pension.
However, he said that there has
to be a distinction between
those leaving service for
greener pastures and those
leaving for the sake of the
country.
The government issued the
notification implementing the
OROP in November last year
which stated that personnel
opting for the PMR will be out
of the ambit of the OROP
effectively distinguishing those
who had already retired and
those opting for the PMR in
future.
Vice-Chancellors of central
universities accept Tricolour
will increase nationalism

to look into specific complaints,


some of the VCs present in the
meeting said.
Some of the resolutions passed
addressed
optimising
academic output of the student
community through an active
monitoring system and
transparent proac- tive
mechanism for grievance redress of the varsity community.
Govt set to revoke Presidents
rule in Arunachal Pradesh
A day after the Supreme Court
refused to stop the dissident
leaders and the Governor in
Arunachal Pradesh from forming
a new government, the Union
Cabinet sought the revocation
of Presidents rule in the State
imposed on January 26.
The dissidents had staked a
claim to form a government. Mr.
Pul was accompanied by 19
rebel Congress MLAs, along
with 11 BJP legislators, and two
Independents.
Cabinet gives in principle
approval to gravitational wave
detector

The decision to unfurl the


national flag at central
universities taken at a meeting
of Vice-Chancellors in
Surajkand, Haryana comes as a
surprise as some of the central
universities, already have the
tricolour flying from their
buildings.
The Flag Code of India, 2002,
provides the specifications of
the national flag, and when it is
to be flown on public buildings.
The meeting was called to
discuss the issues of
discrimination on campuses and
the setting up of an ombudsman
38

Days after an international team


of scientists, including several
from India, formally announced
that it had detected
gravitational waves from deep
space, the Union Cabinet,
chaired by Prime Minister
Narendra Modi, said it had, in
principle, approved a proposal
to have a gravitational wave
detector in India.
Those connected with the
project said it was an important
development and marked the
government
formally
acknowledging it but a final
decision regarding the money,
and how it would be spent, was

still some time away.


Current estimates suggest the
project would cost at least Rs.
1,200 crore.
The gravitational waves were
detected by the Laser
Interferometer Gravitational
Wave Observatory (LIGO) a
system of detectors in
Washington and Louisiana.]
Known as the LIGO-India
project, it is piloted by
Department of Atomic Energy
(DAE) and Department of
Science and Technology
(DST).
The LIGO-India project will be
jointly coordinated and
executed by three Indian
research institutions: the InterUniversity Centre for Astronomy
and Astrophysics (IUCAA),
Pune and Department of
Atomic Energy organisations:
Institute for Plasma Research
(IPR), Gandhinagar and the Raja
Ramanna Centre for Advanced
Technology (RRCAT),Indore.
Another ambitious megascience project, the Indian
Neutrino Observatory (INO)
project a proposed, underground observatory in Tamil
Nadu to detect ephemeral
particles called neutrinos
had been cleared by the
Centre in 2015, after several
years of deliberations.
By year end at least one fighter
aircraft from Private sector
Defence Minister Manohar
Parrikar said that by the yearend, India would select one or
more fighter aircraft which will
be manufactured locally by a
private company under the
Make in India initiative.
This is in addition to the Light
Combat Aircraft (LCA), the

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National Issues
production of which is be- ing
scaled up.
India and France are in
advanced stage of talks to
conclude
an
intergovernmental agreement for the
direct purchase of 36 Rafale
fighter jets. This fighter aircraft
will likely be other than the
Rafale.
The Air Force is expected to
induct over 100 of the improved
LCAs which will feature an
Advanced Electronically
Scanned Array radar,mid-air
refuelling and improved
electronic warfare suite in
addition to other minor
improvements.
India and Nepal begin to repair
strained ties
India and Nepal hope to begin
repairing ties as Prime Minister
K.P. Sharma Oli makes his first
official visit to India.
But as Mr. Oli lands in Delhi on
the six-day visit, the two sides
are unlikely to dwell too much
on the past few months of strain,
choosing instead to focus on
the earthquake reconstruction
effort, Indian power projects in
the pipeline and future
cooperation.
In accordance with tradition,
Mr.Oli is making India his first
destination abroad after
becoming Prime Minister in
October 2015.
He will meet his Indian
counterpart Narendra Modi and
other leaders in Delhi besides
visiting two of Indias worst
earthquake-hit areas, looking at
the hydropower station built in
Tehri, Uttarakhand, and reconstruction projects in Bhuj,
Gujarat.
Equally clear is the desire on

both sides to put events since


August 2015 behind them,
when India and Nepal fought a
public and blistering battle over
the new Constitution.
India refused to welcome the
Nepal Constitution passed in
September 2015, as the statute
ignored the concerns of groups
in the southern Madhes region
of Nepal that borders India, and
demanded four amendments to
be made: on reservations,
constituency delimitation,
demarcation of provinces and
citizenship rights.
Vodafone gets tax notice
Tax authorities have issued a
reminder to Vodafone Group
Plc asking the company to pay
Rs. 14,200 crore of tax dues
that the U.K.-based firm has
referred to international
arbitration or risk having its
assets seized.
The government stated in 2014
that exist- ing tax disputes,
including vodafones, would be
resolved through existing
judicial process.
The notice, dated February 4,
to Vodafone International
Holdings BV pertains to its 2007
acquisition of Hutchisons 67
per cent stake in a telecom
venture in India for $11 billion.
The deal was executed through
companies that are not based
in India.
The arbitration process does
not stop the Tax Department
from going ahead and seeking
dues that it feels are legitimate
tax demands, said a tax
consultant.
Supreme Court directed Central
Bank to give list of defaulter
companies
The Supreme Court has

directed the RBI to submit a list


of companies which have
defaulted on bank loans of over
Rs. 500 crore.
The court also asked it to submit
in six weeks the list of
restructured loans.
Directing that the list be placed
on record in a sealed cover, the
court asked how State-owned
banks and financial institutions
were advancing huge loans
without proper guidelines and
whether there was adequate
mechanism to recover them.
Employees provident fund
organisation recommends
interest rate of 8.8 percent
The board oftrustees of the
Employees Provident Fund
Organisation (EPFO) has
recommended an 8.80 per cent
rate of return on Rs. 10 lakh crore
of retirement savings for 201516.
The Finance and Investment
panel of the EPFO board had
earlier recommended a higher
interest of 8.95 per cent on EPF
savings.
There are as many as 8.5 crore
EPF accounts.
Aamir likely to become brand
ambassador of Jalyukta Shivar
Abhiyan
Faced with an increased risk of
seasonal
drought
and
subsequent suicide by
thousands of farmers every year,
the Maharashtra government
has roped in actor Aamir Khan
to promote its flagship schemes
in the sector of water and
scarcity.
The actor is likely to be
associated
with
the
governments Jalyukt Shivar
Abhiyan, Chief Minister

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Devendra Fadnavis flagship
scheme, to make Maharashtra a
drought-free State by 2019.
The programme aims to make
5,000 villages free of water
scarcity every year. Mr. Fadnavis
is likely to make an
announcement in the regard
along with the actor.
The actor would be asked to
promote use of micro-irrigation
system for efficient use of water,
thereby increasing the irrigated
area in the drought- prone
regions.
The government has allocated
Rs 1,000 crore for the scheme.

1993 delivered by a nine-judge


Constitution Bench.
The 1993 case law had said that
judges should be transferred
only in public interest i.e. for
promoting
better
administration of justice
throughout the country.
Supreme Court wants
Parliament to decide the legality
of passive euthanasia

After HC Judge stays his


transfer, Supreme Court freezes
his functions
The judicial hierarchy turned
turtle when Justice C. S. Karnan
of the Madras High Court
stayed the Chief Justice of
Indias proposal to transfer him
to the Calcutta High Court.
It forced the Supreme Court to
authorise a freeze on his
functions as a judge.
In
an
unprecedented
development which threatened
institutional esteem, a Bench of
Justice J.S. Khehar and Justice
R. Banumathi was informed by
the Madras High Court that its
sitting judge, Justice Karnan, has
passed a suomotu judicial
order staying the Chief Justice
ofIndias recommendation to
transfer him.
The High Court judge stayed
any move to transfer him to
Kolkata, asking the CJI not to
interfere in my jurisdiction, as I
am in the process of finalising
an order on merits.
He even suggests to Chief
Justice Thakur to look up the
Second Judges case law of
40

The Supreme Court said


Parliament or the people's
court should be the final judge
to decide the legality of passive
euthanasia and Living Will.
The Centre agreed with the
apex court and illustrated the
complexity of medically taking
a person's life by pointing at how
Formula One legend Michael
Schumacher is being kept alive
for years on the hope he will
wake up from his coma oneday.
A Constitution Bench, said it will
wait till July 20 with the
unwritten hope that the
government or Parliament will
finalise a law on passive
euthanasia.
The act of withdrawing medical
treatment with deliberate
intention of causing the death
of a terminally-ill patient.
On legalising the Living Will
an advance directive to
physicians for end-of-life
medical care the Bench
asked whether the concept was
fundamentally against aperson's

instinctive urge to live.


It asked whether such a person
should be given every minute
chance to recover without alien
intervention.
Mysuru gets top position in
Swachh Bharat Ranking
Mysuru city in Karnataka
retained the top position in
Swachh Bharat Rankings for
2015 that were released by the
Ministry of Urban Development.
Compared to the 2014 rankings,
Chandigarh has replaced
Tiruchirapalli of Tamil Nadu in
the second rank while Dhanbad
of Jharkhand is reeling at the
73rd slot, the lowest rank.
Urban development minister
said that the survey was more
participatory and evidence
based as all the featured cities
were informed two months in
advance
about
the
methodology.
In a year-long survey, the
researchers studied 476 firsttier cities with two parameters:
one,
how
minimal
opendefecation was in the city;
two, how robust the
municipalities were with the
solid waste management
system.
Launched in October 2014 by
Prime Minister Narendra Modi,
the Swachh Bharat Mission is the
flagship sanitation programme
of the National Democratic
Alliance government, which
aims to bridge the gap between
sewerage and solid waste
management and construct
several million toilets in the
urban centres.
With a Central funding of
Rs.14,623
crore,
the
government aims to build 1.4
crore household toilets, 2.5 lakh

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National Issues
community toilets and 2.6 lakh
public toilets by 2019.
The oldest operational aircraft
carrier INS Viraat to be
decommissioned

inducted into the Indian Navyas


INS Viraat in 1987.
Supreme Court dismisses plea
for bringing pending cases
under RTI

In what is probably her last port


of call, INS Viraat, the oldest
operational aircraft carrier in the
world, dropped anchor in
Chennai.
Commissioned as HMS Hermes
as part of the Royal Navy, she
was in the thick of action during
the Falklands campaign in 1982.
After serving the United
Kingdom for almost 28 years
since 1959, the carrier was

Fifteen years after its verdict


that the confidence of litigants
would be shaken if judgments
were kept pending for years, the
Supreme Court dismissed a plea
to maintain the data on its
pending judgments and make
the information public under
the Right to Information (RTI)
Act.
The courts refusal to be made
accountable under the RTI Act
is despite the decision of the

Central Information Commission


(CIC) to disclose the number of
pend- ing or reserved
judgments.
The Commissions decision was
upheld by a single judge of the
Delhi High Court in a case in
which the Supreme Court itself
was an opposing party.
The CIC had directed the
Supreme Court to maintain its
record in such a manner that
RTI
applicants
could
beinformed of the number of its
reserved judgments.
We are of the view that the total
number of such cases in which
orders are reserved should be
duly intimated to the public.
Said CIC.
Now that the benefit of
computerisation is available,
placing such data in the public
domain should not be
particularly difficult, the CIC
had said.

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INTERNATIONAL ISSUES
Peace talks for Syria started

Talks to e nd Syrias civil war


opened in Geneva, but hopes
for a breakthrough remained
remote with the sides locked in
a bitter dispute over the future
of President Bashar Al-Assad.
The negotiations, which began
a day before the fifth
anniversary of the outbreak of
the conflict, are the latest effort
to end violence that has killed
more than 270,000 people and
displaced millions.
As the delegations arrived in
Geneva oaver the weekend,
Damascus warned that any
discussion about removing Mr.
Assad would be a red line.
UN envoy said agreeing on a
new Syrian government was the
main obstacle to forging a lasting
peace.
Myanmar will get new
President today
Myanmars
Parliament
confirmed it will pick the
countrys new President on
Tuesday after the three
proposed candidates.
Nominees include a close aide
of Aung San Suu Kyi and others.
The front runner is Htin Kyaw, a
42

respected writer and close


friend of Ms. Suu Kyi.

He has been put forward by her


National League for Democracy
party to act as a proxy for
democracy veteran Suu Kyi,
who is barred from the highest
office by a junta-scripted
charter.
Indian born business man Rajat
Gupta released after two years

India-born former Goldman


Sachs Director Rajat Gupta has
been released after completing
his two-year prison term, weeks
after a U.S. court agreed to
rehear his appeal to throw out
his 2012 insider trading
conviction.
While Guptas prison term was
to end on March 13, but since
the date fell on a Sunday, he
was released on Friday, four

years after he lost his insider


trading trial and suffered
multiple legal setbacks to
overturn his conviction.
Apart from the two-year prison
term, he was fined $5 million
and the Securities and
Exchange Commission also
slapped a $13.9 million penalty
against him.
Gupta started out his prison term
in 2014 at FMC DEVENS, an
administrative security federal
medical centre with an adjacent
minimum security satellite camp
in Ayer, Massachusetts.
US president wants mobile data
to accessible to government
President Barack Obama has
made a passionate case for
mobile devices to be built in a
way that will allow the
government to access personal
data if needed to prevent a
terror attack or enforce tax laws.
The President said he could not
comment on the legal case in
which the FBI is trying to force
Apple to allow access to an
iPhone linked to San
Bernardino, California, shooter
Rizwan Farook.
But he made clear that despite
his commitment to Americans'
privacy and civil liberties, a
balance was needed to allow
some government intrusion if
necessary.
Last month, the FBI obtained a
court order requiring Apple to
write new software and take
other measures to disable

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International Issues
passcode protection and allow
access to Farook's iPhone.
UN to probe South Sudan attack

A high-level board of inquiry


will investigate how United
Nations
peacekeepers
responded to an attack at their
camp in South Sudan where
tens of thousands of civilians
were sheltering.
Gunmen in army uniforms
stormed the camp in the
northeastern town of Malakal on
February 17 and 18, firing on
civilians and torching shelters.
At least 25 people were killed
and 160 were wounded.
UN said the independent panel
will conduct an in-depth
investigation into the UN
mission's response to clashes
that broke out.
The UN mission in South Sudan
is also reviewing security at the
eight protection of civilians
sites.
Senator's objection to F-16 deal
did not find success

An attempt by Republican
Senator Rand Paul to stall the
U.S. move to sell eight F-16s to
Pakistan hit a procedural

roadblock in the Senate, but


lawmakers expressed strong
disapproval of the deal.
The State Department had last
month approved the sale to
Pakistan.
Mr. Pauls move to disrupt the
deal found support from 24
Senators 12 Republicans and
12 Democrats, in a rare
development.
The Congress has never
overturned administrations
decisions on foreign military
sales. In this case, even those
who supported the deal
pledged to oppose its funding
through U.S. assistance.
They have called for
demonstrable behavioural
changes from Pakistan in terms
of its support for terrorism and
its dealings with India.
I cant in good conscience look
away as America crumbles at
home and politicians tax us to
send the money to corrupt and
duplicitous regimes abroad,
Mr. Paul said.

Syu Kyi's aide Htin Kyaw


moves closer to become first
civilian leader in Myanmar
A trusted aide of Myanmars
Aung San Suu Kyi was a step
closer to becoming the
countrys first civilian leader in
generations after sailing through
a parliamentary vote.
While the still-powerful military
put forward a hard-line retired
general as its Vice-President
nominee.
Htin Kyaw, a respected writer
who helps run Ms. Suu Kyis
charitable foundation, was seen
as the top choice to act as a
proxy for the democracy
veteran who is barred from the
office by a junta-scripted

charter.
One further vote of approval is
needed in the combined
houses before Htin Kyaw can
officially be anointed leader of
the nation that has been run by
the military for decades.
The country still burdened by
the legacy of nearly 50 years of
rule by the military, which
retains significant influence
including a quarter of the
Parliament's seats.
Scientists believe Britains exit
from EU will be a disaster to
science
Over 150 Fellows of Britains
leading scientific institution, the
Royal Society, have expressed
their opposition to Brexit
[Britains exit from the European
Union] arguing that it could be
a disaster for science.
In a letter to The Times, the
signatories, who include
physicist Stephen Hawking,
astronomer Royale Martin Rees
and eminent Cambridge
scientist Alan Fersht, have
drawn attention to the benefits
that have accrued to science as
a shared enterprise in the EU.
The signatories point to the
example of Switzerland, which
was for long a popular
destination for scientists.
It now has limited access to EU
funds be- cause it voted to
restrict the free movement of
workers, and is desperately
trying to find other ways to
attract young talent.
Think tank believes SAARC
should include China as well
Globalisation is putting pressure
on the South Asian Association
for Regional Cooperation
(SAARC) to change its

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International Issues

traditional ways of working,


according to Regional Centre
for Strategic Studies (RCSS), a
23-year-old South Asian
regional think tank.
The message behind the trend
of globalisation is that the region
has to include China, which, he
called, has now become a
South Asian country for all
practical purposes.
This is because the South Asian
countries, be it India, Pakistan,
Bangladesh or Sri Lanka, were
having very close and strong ties
with China in terms of trade and
development.
Emphasising the need for
changes in the two fundamental
provisions of the SAARC
Charter, he said a time-frame
had to be fixed for the
continuance of the two
provisions decisions at all
levels to be based on unanimity
and exclusion of bilateral
issues.
It was all right to have these
stipulations 30 years ago at the
time of establishment of the
SAARC but you cannot have
them frozen.

Sri Lankan Parliament adopted


resolution to convert itself into
a Constitutional Assembly
The Sri Lankan Parliament
adopted unanimously a
resolution to convert itself into
a Constitutional Assembly.
Introduced by Prime Minister
Ranil Wickremesinghe in
January, the resolution, since
then, has undergone a number
of changes on the basis of
amendments proposed by the
Sri Lanka Freedom Party, Joint
Opposition and the Janatha
Vimukthi Peramuna.
However, the amendments did
44

not affect the essence of the


original resolution, asserted
Jayampathy Wickramaratne,
Member of Parliament and who
heads a committee at the Prime
Ministers Office to provide
technical support to the
Constitution-making process.
Though the preamble of the
original resolution, which talked
of providing a Constitutional

resolution of the Tamil question,


has been removed, Dr.
Wickramaratne said everything
would be on the table [for
discussion].
The abolition of executive
presidency
and
the
introduction of electoral
reforms are among the subjects
which were likely to be covered
during the process.

Plan to reduce refugee crisis tentatively agreed

EU and Turkish leaders sought


to turn into a lasting accord a
plan on easing Europes refugee
crisis hailed as a game-changer
by Ankara and Brussels but
swiftly criticised by the UNs
refugee chief.
The day after agreeing the
tentative plan following late
night talks in Brussels, Turkish
Prime Minister Ahmet Davutoglu
was to discuss how it could
work in a crucial meeting with
his Greek counterpart Alexis
Tsipras.
The EU is wooing Turkey
used by over one million
migrants in the last year as a
springboard for reaching the
bloc as the key player in
helping ease Europes worst

migrant crisis since World War


II.
A key pillar of the mooted deal
was the unexpected offer by
Ankara to take back every
irregular migrant that crosses
from Turkey to the islands of EU
member Greece.
In return, the EU would then
resettle one Syrian living in
Turkey on its territory for every
Syrian migrant it takes back from
Greece.
The hope is that the plan will
eliminate incentives for migrants
to come to Greece by boat, but
it ran into swift opposition from
the head of the UN refugee
agency Filippo Grandi.
Turkey and Greece signed a
protocol over the readmission

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International Issues

of migrants in 2002 but it has


rarely been activated and its use
could transform the refugee
crisis.
German Chancellor Angela
Merkel who has been the
strongest proponent of a deal
with Turkey gave cautious
support. It is a breakthrough if
it becomes reality, she told
reporters.
European Commission chief
Jean-Claude Juncker also called
the plan a real game changer,
insisting that it was legally
feasible.
Turkey is the main launching
point migrants making the
dangerous crossing over the
Aegean Sea to the Greek
islands. It hosts 2.7 million
refugees from the five-year civil
war in neighbouring Syria, more
than any other country.
For Turkey, perhaps the biggest
gain was the European Unions
agreement to bring forward to
June visa-free travel to the blocs
Schengen passport-free area for
Turkeys 75 million people,
provided that Ankara honours
its promises.

China warns of action in


Korean region
An assertive China warned that
it would not hesitate to
intervene if its fundamental
interests on the Korean
Peninsula were harmed, and
made it plain that its deeprooted ties with the South China
Sea could not be rivalled by any
foreign power.
At an annual press conference,
Chinese Foreign Minister Wang
Yi set several markers to explain
the broad thrust of Beijings
evolving, and increasingly bold,
foreign policy, where growing

competition with the U.S. was


the underlying theme.
In his detailed response to a
query on spiralling tensions in
the Koreas, Mr. Wang said China
would not sit by and see the
destabilisation of the peninsula.
Yet, in order to defuse tensions,
Mr. Wang advocated a multipronged approach where
denuclearisation of the
peninsula would be combined
with signing of a formal peace
treaty.
That would replace the 1953
Armistice, which was meant to
insure a complete cessation of
hostilities and of all acts of
armed force in Korea until a final
peaceful settlement is
achieved.
The Korean Peninsula is on
edge following the start on
Monday of the largest-ever U.S.South Korea military exercise,
which has been fused with
North Koreas threat of a preemptive nuclear strike.
In an obvious reference to the
U.S., Mr. Wang asserted: I want
to remind some people that
freedom of navigation doesnt
give them the licence to do
whatever they want. If someone
wants to muddy the waters in
the South China Sea and to
destabilise Asia, China will not
agree to it and I think the
overwhelming majority of
countries in the region will not
allow that to happen.
The Chinese foreign minister
stressed that Chinas emotional
and historical bonds with the
South China Sea could not be
rivalled by any other power.

International Women's day gift


by Air-India
National carrier Air India said it

flew the worlds longest all


women
operated
and
supported flight from the
national capital to San
Francisco
The flight, which travelled a
distance of around 14,500 km
in close to 17 hours, was
operated as part of International
Womens Day celebrations.
This year for the first time, on
the worlds longest non-stop
flight, entire flight operations
from cockpit crew to cabin
crew, check-in staf, doctor,
customer care staf, ATC [air
traffic control] and the entire
ground-handling...
were
handled by women
The flight was under the
command of Kshamta Bajpayee
and Shubhangi Singh, along
with First Oicers Ramya Kirti
Gupta and Amrit Namdhari. The
carrier has about 3,800 women
employees, including pilots,
cabin crew, engineers,
technicians, doctors, security
personnel and executives
Ray Tomlinson, credited with
inventing e-mail died
Ray Tomlinson, the U.S.
programmer credited with
inventing e-mail in the 1970s
and choosing the @ symbol
for the messaging system, died
at the age of 74.
Mr. Tomlinson invented direct
electronic messages in 1971.
Before his invention, users could
only write messages to others on
a limited network.
Peace talks of syria will start in
March 14
Syrias regime said it had been
invited to peace talks in Geneva
from March 14 but the
opposition said it was still

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International Issues
considering whether to attend
despite a major lull in fighting.
The United Nations is hoping to
restart peace talks that
collapsed last month, building
on a ceasefire that has led to the
first significant decline in
violence in Syrias nearly fiveyear civil war.
The UNs Syria envoy Staffan de
Mistura has said he hopes the
talks can begin from Thursday
but officials have indicated it
could take several days of
preparations
for
the
negotiations to get off the
ground.
Presidential nomination race
still open
The
Republican
Party
establishments efforts to stop
real estate developer Donald
Trump from winning the partys
presidential
nomination
appears to have an unintended
consequence, if at all.
All anti-Trump voters in the
party are now gravitating
towards Texas Senator Ted
Cruz, who won two of the four
States that voted in the
nomination race.
On the Democratic side, front
runner Hillary Clinton won only
one of the three States that
voted but picked up more
delegates than Senator Bernie
Sanders.
Mr. Sanders said after the results
that his campaign would
continue all the way up to the
party national convention.
Nomination is secured by
winning a majority among the
delegates at the respective
national conventions of parties.
After Saturday, with 27.89 per
cent of the total delegates
allocated on the Democratic
46

side, Ms. Clintons lead


appeared unassailable.
With 37.37 delegates allocated
on the Republican side, the
contest remains scattered but
Mr. Trumps advantage is
apparent.
He has 378 delegates, still a long
distance away from the halfway
mark of 1,297 needed to secure
the nomination. Mr Cruz has
won 295 so far.
1.26 million People seek EU
asylum in past year
The number of people applying
for asylum in the European
Union (EU) more than doubled
in 2015, reaching a record 1.26
million, according to the EU
statistics agency.
Syrians accounted for almost a
third of the total, with 362,775
people seeking shelter in
Europe, followed by Afghans
and Iraqis, Eurostat said.
The data came as Brussels
stepped up warnings to
member states to take urgent
action to resolve the refugee
crisis by agreeing on plans to
redistribute asylum seekers
around Europe.
The European Commission also
called on countries to lift all
internal border controls by
November, while stepping up
protection of Europes external
frontiers.
Since September, eight
countries have reintroduced
border checks, aimed at
preventing large numbers of
refugees and migrants entering
their countries.
The latest Brussels plan is based
on the assumption that Turkey
will take decisive steps to
reduce the number of people
making the perilous crossing

across the Aegean Sea.


EU leaders are meeting the
Turkish Prime Minister, at an
emergency summit in Brussels,
where they hope to get a
promise of decisive action to
reduce numbers, especially
targeted at people who do not
qualify for EU asylum.
Taliban reject peace talks with
govt.
The Taliban refused to hold
direct peace talks with the
Afghan government, dealing a
blow to international efforts to
revive long-stalled negotiations
aimed at ending the deadly 14year insurgency.
The statement, which comes as
face-to-face talks were
expected to start in Islamabad
this week, stressed longstanding
preconditions for dialogue,
including the departure of
foreign troops from Afghanistan.
The Talibans seemingly
intractable position follows a
string of military victories for the
insurgent group after NATO
formally ended its combat
operations more than a year ago.
The announcement marks a
setback in efforts by
Afghanistan, China, Pakistan and
the U.S. to restart negotiations
aimed at ending the insurgency.
Delegates from the four
countries had met in Kabul late
February for a fourth round of
talks aimed at reviving the
nascent peace process, which
stalled last summer.
The quartet had called for a
direct dialogue between the
Taliban and Kabul by this week,
a deadline that some analysts
called completely unrealistic.
The group also accused the
U.S. of duplicity, saying it had

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International Issues
boosted troop numbers,
increased air strikes and night
raids against the insurgents in
tandem with its efforts to revive
talks.
The Taliban have also stepped
up attacks on government and
foreign targets in Afghanistan
even in the winter months when
fighting usually abates
underscoring a worsening
security situation.
Afghan security forces have
suffered record casualties since
NATO ended its combat mission
in December 2014, leaving
them to battle the resurgent
Taliban largely on their own.
In recent months the Taliban
briefly captured the northern
city of Kunduz, the first urban
centre to fall to the insurgents,
and have seized territory in the
opium-growing southern
province of Helmand
After Border and maritime
issue resolution Bangladesh
wants Teesta issue resolved
After the the resolution of the
land boundary and maritime
issues, Bangladesh is now
looking up to India for an
immediate signing of the
Teesta water-sharing accord,
which the two governments
had agreed over four years ago.
Mr. Alam, the State Minister,
said Bangladesh had fully
delivered by undertaking
specific measures to address
Indias security concerns.
With more and more dedicated
institutional mechanisms being
put in place, we are having
better,
targeted
and
coordinated action in various
sectors of security. And the
cooperation will continue.
BJP spokesperson said New

Delhi would like to solve all the


pending issues with Dhaka.
China says that US responsible
for South China Sea problems

China has slammed the Pivot to


Asia doctrine of the United
States, blaming it for the
growing tensions the South
China Sea, where a trilateral
exercise involving New Delhi,
Washington, and Tokyo is
scheduled later this year.
The war of words between
China and the U.S. escalated
when Fu Ying, the spokesperson
for the National Peoples
Conference (NPC), countered
the U.S. assertion that China
was responsible for the
militarisation of the South China
Sea.
The Chinese official stressed,
that the Pivot to Asia was an
important decision, which
enabled Washington to deploy
as many as 70 per cent of its
naval force in the Asia-Pacific.
China claims sovereignty over
most of South China Sea, a
position that is contested by
several countries including
Vietnam, Philippines and
Taiwan.
It has recently accelerated
conversion of some of the
disputed reefs into artificial
islands, and positioned surfaceto-air missiles at Woody Island
in the Paracel island chain.
The spokesperson stressed that
China was ready to play the role

of a regional security provider.


Ms. Fu said that China was ready
to seek joint development of the
Nansha islands, but that is on
the prerequisite of not giving up
our sovereignty.
Ms. Fus remarks follow
assertions by Admiral Harry B.
Harris during the course of the
Raisina dialogue in New Delhi,
where, in a veiled reference to
China, he asserted that, While
some countries seek to bully
smaller nations through
intimidation and coercion, I
note with admiration Indias
example of peaceful resolution
of disputes with your
neighbours in the waters of the
Indian Ocean.
The U.S. Admiral also revealed
that that the forthcoming
Malabar naval exercise
comprising India, U.S. and Japan
would be held in the north
Philippine Sea, not far from the
South China Sea.
In Beijing, China addressed
Admiral Harris assertions with
restraint: We have no objection
to relevant countries normal
cooperation, but we believe
that relevant cooperation
should not be targeted at a third
party.
Zika virus kills cells that form
key brain tissue

In what may be the first lab


evidence of the potency of the
Zika virus, researchers in the

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United States have found that it
severely damages a type of
neural stem cell that gives rise
to the brains cerebral cortex.
The findings are significant
given that the World Health
Organisation (WHO) is set to
decide, within the next few
months, whether the Zika virus
historically known to be
relatively benign is indeed
wholly responsible for the
outbreak of microcephaly, or
deformed skulls, in newborns in
Brazil and other parts of South
America.
The team of researchers, led by
Guoli Ming and Hongjun Song
of the Johns Hopkins University
School of Medicine and Hengli
Tang of Florida State University
report in the current edition of
the journal Cell Stem Cell that
they saw the virus destruction,
on neuronal cells derived from
human induced pluripotent
stem cells.
Several other questions
however remain. For instance,
why are the symptoms in adults
so mild? How is the virus
entering the nervous system of
the developing foetus?
India filled complaint in WTO
over via fee issue
India has filed a complaint to the
World Trade Organization
(WTO) against the United States
over its measures raising fees on
some applicants for temporary
work visas, mostly involving the
tech sector.
India has notified it has started
dispute proceedings alleging
the U.S. measures are not
consistent with Washingtons
commitments to accept
services from other countries.
In its request for consultation,
48

India alleges the U.S. had


increased fees for temporary
visas in December.
It argues that as a result, some
Indians receive unfair treatment
compared with Americans in
the United States in providing
similar services in sectors like
computer services.
India in effect is seeking
consultations with the U.S. The
WTO will make further
information available in coming
days.
The Indian move is unusual at
the WTO, where most disputes
involve goods, tariffs and
restrictions, not services.
Last summer, the WTO upheld
a ruling that India was unfairly
blocking imports of U.S. poultry
and eggs, which the Obama
administration called a major
victory that could expand
export opportunities for
American farmers.

Rajiv Gandhi assassination case


The Centre was examining the
Tamil Nadu governments
request for freeing the convicts
in the Rajiv Gandhi assassination
case, but made it clear that the
government was constitutionally
bound to act by the ruling of
the Supreme Court
This happened a day after the
State government wrote to the
Centre to seek its opinion
necessary under Section 435 of
the Code of Criminal Procedure
on its decision to remit the
life sentences of all the seven
convicts
On December 2, 2015, the
Supreme Court held that the
Centre and not the State
government would have the
primacy and that the States
could not exercise suo motu the

power to decide whether or not


those convicted in the cases
investigated by the CBI or
another Central agency could
be released.
Lodha panel recommendations
to be followed without delay

Giving no quarter, even as BCCI


or State cricket associations
blamed the Lodha Committee
for keeping them in the dark
about its recommendations
SC rejected the statements
saying it was international news
that SC had formed the Justice
Lodha Committee to suggest
reforms in cricket. The whole
world knew it.
The court allowed a batch of
State cricket associations and
former players like Bishan Singh
Bedi and Kirti Azad to intervene
in the case.
One of the questions was why
the BCCI and State cricketing
bodies have ministers as
members. The Lodha report had
banned government servants
and ministers
To the BCCI's objection to the
Lodha panels recommendation
on an age cap of 70 years for
cricket administrators, Chief
Justice Thakur replied, tongueincheek, Lawyers like you get
better with age, is that so with
cricketers also? We feel 70 is a
good age for retirement. At 70,
they should sit at home and
watch cricket on TV.
The BCCI complained that

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Justice
Lodha
had
recommended voting rights
based on territorial boundaries
of States and did not take into
account historical demarcation
of boundaries among members
as per the levels of cricket
played. This had led to
Maharashtra and Gujarat having
multiple existing members in
BCCI.
Non-essential plastic to be
banned in Karnataka
The State Cabinet approved the
final draft notification on
banning the utilisation of nonessential plastics. Officials of
the Department of Forest,
Environment and Ecology, who
drafted the notification, believe
that this will spur the use of
ecofriendly materials, and
reduce the amount of plastics
in garbage dumps
Took the decision to ban the
manufacture, storage, sale,
distribution, and use of plastic
carry bags, irrespective of their
thickness
The decision goes beyond the
2011 notification that banned
plastic below 40 microns and
aims at banning products for
which eco-friendly alternatives
are available
Additions include thermocol,
micro-beads and even plastic
cutlery which were
suggestions given by activists
and citizens.
The ban is expected to reduce
non-degradable plastic content
in municipal waste by over a
third.
ASEAN-Plus military drill
begins in Pune
Military personnel of adversarial
world powers converged upon

the Aundh Military Station in


Pune to thrall spectators with the
largest Multinational Field
Training Exercise (FTX) ever
conducted on Indian soil
Force 18 (initially labelled
FTX-2016) is an elaborate and
ambitious military training
exercise involving Army units
from eighteen countries, often
locked as adversaries in the
arena of global realpolitik.
They include nine members of
the Association of South East
Asian Nations and eight
observer States: India, Japan,
Korea, China, Russia, the United
States, Australia, and New
Zealand. Myanmar was
compelled to back out owing
to elections and security issues
pertaining to border infiltration.
The broad objective of Force
18 was to build common
understanding and achieve
inter-operability among the 18
ASEAN-Plus countries
The drill also aims at reaffirming
Indias expertise as the lead
agency in Southeast Asia for
Peacekeeping Operations and
Humanitarian Mine Action
A unique facet of the exercise
is that the Indian Army
contingent of 40 soldiers is
being led by Lt Col Sophia
Qureshi, a woman officer from
the Corps of Signals, who now
has the rare distinction of
becoming the first woman
officer to lead an Indian Army
training contingent in such a
multinational exercise

Trump and Hillary gets massive


lead
Donald Trump and Hillary
Clinton won seven States each
among the 11 States their
respective parties contested in
and placed themselves far

ahead of their rivals in the race


for Republican and Democratic
presidential nominations.
Mr. Trump, whose highly
controversial
and
confrontational campaign has
deeply divided the Republican
leadership as well as electorate,
sought to bridge that gap by
declaring himself as the unifier
and the most inclusive
candidate in the field
Mr. Trump lost four States
three to Texas Senator Ted Cruz
and one to Florida Senator
Marco Rubio but these losses
only take him closer to the
nomination.
Neither Mr. Cruz nor Mr. Rubio
will quit the race, and is certain
to go for each others throat,
after a week of coordinated
attacks against Mr. Trump
Ms. Clinton, now confident that
she is closer to the nomination
than ever before, made a victory
speech that for the most part
sounded like Mr. Sanderss
previous speeches.

Malaysian missing Airplane MH


370 debris suspected near
Mozambique
A piece of debris found along
the eastern African coast
between Mozambique and
Madagascar may be from the tail
section of the Malaysia Airlines
plane that dis- appeared two
years ago.
Engineers who have looked at
the debris have said there is a
good chance it belonged to
MH370.
Reuters could not immediately
confirm the report, and
Mozambican authorities have no
information on the sighting of
such an object of the coast of
Inhambane province.

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Fight against Sunni militancy on
cards in Iraq

Recent gains against the Islamic


State (IS) in eastern Syria have
helped sever critical supply
lines to Iraq and set the stage
for what will be the biggest
fight yet against the Sunni
militancy, the battle to retake
Mosul.
U.S.-backed forces had begun
laying the groundwork for the
fight by moving to isolate Mosul
from the ISs de facto
headquarters in Raqqa, Syria.
Kurdish and Arab forces retook
the town of Shaddadi in eastern
Syria last week, cutting of what
Defense Secretary called the
last major artery between Raqqa
and Mosul.
Retaking Mosul could also
sharply demoralise IS fighters,
raising questions about whether
the group could still credibly
call itself a caliphate.
The long fight by Iraqi security
forces to take back Ramadi from
the IS, which concluded in
December, offers a preview of
the battle to come over Mosul.
Advancing inch by inch, Iraqi
forces, backed by U.S. airstrikes,
took more than five months to
gain control of the city centre
of Ramadi, the capital of Anbar
province.
Constitutional restrictions
makes it difficult for Suu Kyi to
get countries top post
Myanmars Parliament will bring
50

forward a vote for the next


President to March 10, it was
announced on Tuesday, leaving
little time for Aung San Suu Kyi
to strike a deal to let her take
the top office.
The countrys democracy
figurehead is currently banned
from becoming President under
the junta-era Constitution.
Ms. Suu Kyi has held several
rounds of closed-door talks with
the powerful military since her
National League for Democracy
(NLD) party won crushing
victory at elections.
But news that the presidential
vote has been brought forward
by one week suggests
negotiations have failed to reach
a deal to clear her path to
power.
Sri Lankas Northern Province
CM looks for Indias help in
Constitution
Chief Minister of Sri Lankas
Northern Province C.V.
Wigneswaran called upon India
to ensure that the spirit behind
the 13th Constitutional
Amendment be retained in the
new Constitution.
The 13th Amendment, an
outcome of the 1987 India-Sri
Lanka accord, is the only
document through which
India could function as the
guarantor of interests and
rights of Tamils in Sri Lanka.
Mr. Wigneswaran had said India
alone could get defect-free
federal system.
WhatsApp to end support for
BlackBerry
Messaging service provider
WhatsApp will end its support
by the end of this year to
BlackBerry phones and those

powered by Nokias Symbian


operating system.
The
Facebook-owned
company has over a billion users
globally. A major chunk of these
users are from emerging
markets like India.
Mobile operating systems
offered by Google, Apple and
Microsoft, account for 99.5 per
cent of sales today.
Oscar awards
Best Picture: Spotlight
Direction: The Revenant,
Alejandro G. Irritu
Actor: Leonardo DiCaprio, The
Revenant
Actress: Brie Larson, Room
Supporting Actor: Mark Rylance,
Bridge of Spies
Supporting Actress: Alicia
Vikander, The Danish Girl
After South Carolina victory
momentum in favour of Hillary
Clinton
A decisive victory over her
challenger Senator Bernie
Sanders in South Carolina
brought back momentum into
former U.S. Secretary of State
Hillary Clintons campaign for
the Democratic presidential
nomination.
Two narrow victories and one
massive loss to Mr. Sanders over
the last month had eroded the
aura of invincibility that
surrounded her and Saturdays
landslide victory in South
Carolina, where she won 3/
4thof the votes, restores that in
good measure.
March 1 is called as Super
Tuesday where 11 states will
have primaries and caucuses.
Both the Democratic Party
candidates
criticised
Republican front-runner Donald

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Trump in their responses,
keeping their eyes firmly on the
November general elections.
Rouhanis allies won all 30
parliamentary seats
Reformist allies of Hassan
Rouhani
won
all
30
parliamentary seats in Iranian
capital.
The List of Hope, a pro- Rouhani
coalition of moderates and
reformists, was on course to
wipe out its conservative rivals
in Tehran with 90 per cent of
ballots counted.
The clean sweep was a major
fillip for the President, signalling
overwhelming public backing
in the capital for his landmark
nuclear deal with world powers
last year that ended a 13-year
stand-off.
The landslide in Tehran came
after mixed results for the
Presidents supporters in the
provinces in the first elections
since sanctions were lifted last
month under the nuclear
agreement.
After five years calm in Syria
A rare calm prevailed across
much of Syria as the first major
ceasefire of the five-year war
took hold and an international
task force prepared to begin
monitoring the landmark truce.
Guns fell silent at midnight in
suburbs around the capital and
the bomb-scarred northern city
of Aleppo, after a day of intense
Russian air strikes on rebel
bastions.
The nationwide cessation of
hostilities, brokered by
Washington and Moscow, is
seen as a crucial but fragile step
towards ending a war that has
claimed 270,000 lives and

displaced more than half the


population.
It faces formidable challenges,
including the exclusion of the
Islamic State (IS) jihadist group
and Al-Qaedas Syria affiliate AlNusra Front, which control large
parts of the country.
United Nations envoy Staffan de
Mistura said peace talks would
resume on March 7 if the truce
holds and more aid is delivered
a key sticking point in
negotiations.
The complexities of a conflict
which escalated from antigovernment protests into a fullblown war drawing in rival
world powers make brokering
a lasting halt to the fighting a
huge challenge.
Iran indicates for a split verdict
The first results from Irans
parliamentary election showed
a split of seats among
conservatives, reformists and
independent candidates,
media reports said, after turnout
of around 60 per cent.
Coming just a month after
sanctions were lifted under
Irans nuclear deal with world
powers, the outcome of vote is
being seen as a de-facto
referendum on President
Hassan Rouhani.
Out of 27 constituencies less
than 10 per cent of the total
eight went to conservatives, four
to reformists and eight to
independents, with others set
to go to a second round
because no candidate won 25
per cent of the vote.
As well as electing 290 MPs the
electorate was voting for a new
Assembly of Experts a
powerful
88-member
committee that will elect the

next supreme leader.


First election in Iran after lifting
of sanctions

Millions of Iranians voted in


high-stake elections that could
shift the balance of power
within the hardline-controlled
Islamic elite by ushering in a
reformist comeback or help
conservatives tighten their grip
on power.
The contest is seen by some
analysts as a make-or-break
moment that could shape the
future for the next generation,
in a country where nearly 60 per
cent of the 80 million population
is under 30.
At stake is control of the 290seat Parliament and the 88member Assembly of Ex- perts,
the body that has thepower to
appoint and dismiss the
supreme leader, Irans most
powerful figure.
Both are currently in the hands
of hardliners. During its next
eight-year term it could name
the successor to Mr. Khamenei,
who is 76 and has been in
power since 1989.
New development bank will
focus on renewable energy
projects
The New Development Bank
(NDB) a multi- lateral lender
with a focus on the Global South
of the of the (BRICS) grouping
is all set to fund more than a

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International Issues

dozen projects this year that will


focus on renewable energy.
Lending, which will commence
in April, would fund a project
each from the five member
grouping. But NDB president
K.V.Kamath added that 10-15
projects are in the pipeline for
the remaining part of the year.
The NDB would include market
borrowing to raise capital, but
stressed that bonds in local
currency, rather than hard
currency, would be favoured.
The NDBs initial capital has
been fixed at $50 billion, and
the total paid in capital would
be $10 billion.
On the eve of its operational
launch, the NDB has bagged a
AAA institutional rating from
domestic credit rating agencies
in China, where the China
Development Bank and the
Bank of China have been
appointed as rating advisers.

Seven Indian companies


products component ended up
in explosives of IS
Products from at least seven
Indian companies figure in a
large supply of components that
have ended up in explosives
used by Islamic State terrorists,
according to a study released.
The European Union-fund- ed
20-month-long study by the
Conflict Armament Re- search
(CAR) states that the seven
Indian
companies
manufactured most of the
detonators, detonating cord,
and safety fuses documented
by their field investigation
teams.
However, there was no illegality
on the part of the Indian
companies, the report says.
The study established that 51
52

companies from 20 countries


produced or sold more than
700 components used by IS to
build improvised explosive
devices (IEDs).
Companies from other countries
such as Turkey, Brazil and the
United States also appeared on
the list.
Solar Industries, India,
produced one spool of
detonating cord on 27 February
2014 and exported it to the
Turkish company lci, Ankara.
On 31 December 2012, Gulf Oil
Corporation, India, had
produced a spool and
exported it to the Turkish
company NitromakDyno Nobel,
Ankara.
Solar Industries, India,
produced a further two spools,
on 21 and 23 October 2012,
and exported them [on an
unspecified date] to the
Lebanese company Maybel,
headquartered in Beirut.
However, all those Indian
products landed up with the IS
through some intermediaries.

Commonwealth Ministerial
action group calls for free and
fair election in Maldives

The Common-wealth Ministerial


Action Group (CMAG), at its
extraordinary meeting in
London, called upon the
Maldives to show progress in
many areas, including political
dialogue, to ensure inclusive,
free and fair elections in 2018.

During the meeting, ministers


expressed their continuing
concern regarding political
space available to the
opposition and detention or
custody of opponents.
Separation of powers,
independence
of
the
judiciaryand,
the
independence and lawful
functioning of democratic
institutions were the other areas
over which the ministers had
conveyed their opinion.
Third straight caucuses win for
Trump
Republican
presidential
aspirant Donald Trump had said
a few weeks ago he would not
lose a single vote even if he shot
someone dead in full public
view.
He is in fact getting more of
them as he won a massive victory
in the Nevada caucuses,
leading his nearest rival Senator
Marco Rubio by at least 22
points.
With three consecutive victories
under his belt, Mr. Trump heads
into Super Tuesday on March 1
when 11 States will have
their primaries or caucuses.
Going by the outcomes in four
states that have voted, Mr.
Trumps support is now is
geographically
and
demographically spread across
the U.S.
As Mr. Trump continues with his
triumphalism, his main rivals Mr.
Rubio and Senator Ted Cruz,
who finished third for a second
time, are hoping that the more
than 30 per cent undecided
voters in the Super Tuesday
states could be mobilised in
their favour.
What gives them both hopes is

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International Issues
the fact that still a majority of
Republican voters believe,
according to opinion polls, that
Mr. Trump cannot be a winning
candidates in the general
election.

India approves Chabahar port


plan
India approved a $150 million
project to develop the strategic
Iranian port of Chabahar, which
includes a transit route to
Afghanistan
bypassing
neighbouring Pakistan.
New Delhi signed a multimillion-dollar memorandum of
understanding with Tehran last
May to develop the port on its
southeastern coast, but the deal
had been stuck since.
The approval came at a cabinet
meeting chaired by Prime
Minister Narendra Modi.
The statement said the project
would provide opportunities
to Indian companies to
penetrate and enhance its
footprint in the region,.
Note also added that Cabinet
approves provision of credit of
$150 million USD to Islamic
Republic of Iran for Chabahar
port development.

U.K.s Trade Union Congress


representing six million workers
came out in support of the Stay
campaign.
Leave campaigners allege that
the business bosses some of
them Conservative Party funders
who have signed up to the
letter com- prise just a third of
the FTSE 100 companies.
Initiated by the Britain Stronger
in Europecampaign and the
Prime Ministers office, it
includes heads of business
houses like Marks and Spencer,
British Telecom, Vodafone, and
ASDA, although equally big
businesses have not signed.
The political divide over Brexit
could not have been more
evident in the House of
Commons on Monday, when
David Cameron presented
hiscase for staying in a
reformed Europe.
It was an un- usual Commons
debate not least because the
two opposing groups did not
face each other as occupants
of Treasury and Opposition
benches usually do.

Syrias regime agreed to ceasefire deal

The campaign to decide


Britains future in began in U.K.
The campaign on Brexit has
begun in the U.K., with Prime
Minister David Cameron
receiving early backing for his
call for the country to remain in
the European Union from
opposite ends of British society.
Even as the pound, which had
taken a plunge in response to
the Brexit uncertainty, slowly
recovered ground, nearly 200
business leaders employing
over 1.2 million people, and

Syrias regime agreed to a


ceasefire deal announced by
the United States and Russia,
but there were widespread
doubts it could take effect by
the weekend as hoped.
The agreement, announced,
does not apply to jihadists such

as the Islamic State group and


the alNusra Front, putting up
major hurdles to how it can be
implemented on Syrias
complex battlefield.
The deal calls for a cessation
of hostilities between forces
loyal to PresidentBashar alAssad and opposition groups
that would take effect overnight
Friday-Saturday in Damascus.
The High Negotiations
Committee the leading
Syrian opposition group gave
its conditional acceptance to
the deal.
But after several previous failed
attempts, few had serious
expectations for a lasting
ceasefire.
Islamic States is deepening its
reach in Africa
The Islamic States branch in
Libya is deepening its reach
across a wide area of Africa,
attracting new recruits from
countries like Senegal that had
been largely immune to the
jihadist propaganda and
forcing the African authorities
and their Western allies to
increase efforts to combat the
fast-moving threat.
The U.S. air strikes in
northwestern Libya, which
demolished an Islamic State
training camp and were aimed
at a top Tunisian operative,
underscore the problem.
The more than three dozen
suspected IS fighters killed in
the bombing were recruited
from Tunisia and other African
countries, and were believed to
be re- hearsing an attack against
Western targets.
Even as U.S. intelligence
agencies say the number of IS
fighters in Iraq and Syria has

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International Issues

dropped to about 25,000 from


a high of about 31,500, partly
because of the U.S.-led air
campaign there, the groups
ranks in Libya have roughly
doubled in the same period, to
about 6,500 fighters.
More than a dozen U.S. and
allied officials spoke of their
growing concern about the
militant
organisations
expanding reach from Libya
and across Africa on rules of
anonymity because the
discussions
involved
intelligence and military
planning.
IS leaders in Syria are telling
recruits travelling north from
West African nations such as
Senegal and Chad, aswell as
others streaming up through
Sudan in eastern Africa, not to
press on to West Asia.
The IS in Libya is now the most
dangerous of the groups eight
affiliates, counter-terrorism
officials say.
About half a dozen senior IS
lieutenants have arrived from
Syria in re- cent months to build
up the franchise.
New U.S. and allied intelligence
assessments say IS commanders
in Libya are seizing territory
there, starting to tax its residents
and setting up quasigovernment institutions.

Jamaat men held for killing


Hindu priest

Bangladesh
54

Police

have

detained three people in


connection with the attack on a
temple in north Bangladesh
where a Hindu priest was killed
and a devotee shot at.
Two of the detainees are said
to be members of the banned
Jamaatul
Mujahideen
Bangladesh (JMB) and the other
a Jamaat-e-Islami activist.
The unidentified attackers slit
the throat of the 50-yearold
Jogeswar Dasadhikari, who
headed the Santo Gaurio
temple, after hacking him with
sharp weapons.
Meanwhile,
the
SITE
Intelligence Group, the U.S.based terror monitoring group,
said the Islamic State (IS) has
claimed responsibility for the
temple attack.
Provisional deal on Syria
ceasefire reached
U.S. Secretary of State John
Kerry on Sunday said that a
provisional agreement has
been reached on a cease-fire
that could begin in the next few
days in Syrias five-year civil war.
Mr. Kerry declined to go into
the details of the agreement,
saying it is not yet done. But
he said he hoped President
Barack Obama and Russian
President Vladimir Putin would
talk soon and that after that,
implementation could begin.
Fighting has intensified in Syria
during recent weeks and an
earlier deadline to cease
military activities was not
observed.
The United States, Russia and
other world powers agreed on
Feb 12 on a deal calling for the
ceasing of hostilities within a
week, the delivery of urgently
needed aid to besieged areas

of Syria and a return to peace


talks in Geneva.
UN envoy Stafan De Mistura
halted the latest Syria talks on
February 3, because of major
differences between the two
sides, exacerbated by
increased aerial bombings and
a wide military offensiveby
Syrian troops and their allies
under the cover of Russian air
strikes.
The humanitarian situation has
only gotten worse, with an
estimated 13.5 million Syrians in
need of aid, including 6 million
children.
Shooting came back to haunt
U.S.
A man suspected of randomly
opening fire in a Michigan town
and shooting dead at least
seven people, including a
teenager, was arrested.
There were three separate
shootings one outside an
apartment complex, another
out- side a car dealership, and
the third at a chain restaurant.
One of the five people shot at
the restaurant was a teenage girl
not a child as initially
reported while a father and
son were among the dead at the
car dealership.
The suspect was armed when
he was arrested at a traffic stop,
but surrendered peacefully
The suspect was describedas a
white male in his late 50s, who
drove a blue station wagon.
Britains exit from European
Union will have far-fetched
repercussions
A British exit from the European
Union would rock the Union
already shaken by differences
over migration and the future of

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National Issues

the euro zone by ripping


away its second-largest
economy, one of its top two
military powers and by far its
richest financial centre.
Pro-Europeans warn an exit
could also trigger the break-up
of the United King- dom by
prompting another Scottish
independence vote.
The $2.9-trillion British
economy would face years of
uncertain negotiations over the
terms of a divorce.
Prime Minister David Cameron
is due to make a statement to
Parliament on Monday,
triggering the start of the
campaign for the referendum
on EU membership he called
after striking a deal with the
Union.
Opponents of EU membership
say Britain would pros- per
outside what they say is a
doomed Germany-dominated
bloc that punches way below
its weight on the world stage.
The issue of Europe has
divided the Conservatives for
three decades and played a
major part in the downfall of
Camerons two Conservative
predecessors,
Margaret
Thatcher and John Major.

New sanctions imposed by U.S.


on North Korea

U.S. President Barack Obama


signed into law a piece of
legislation passed by Congress
imposing new sanctions against

North Korea for testing a nuclear


device on January 6 and
launching a satellite on February
7 using ballistic missile
technology.
New unilateral sanctions by the
U.S seek to sharpen and
expand the scope of existing
sanctions against the North, but
with its neighbour and closest
ally China opposed to it, the
efficacy of the move remains
ambiguous at best.
Despite intense U.S diplomatic
efforts, including a visit by
Secretary of State John Kerry to
China in January last week, there
has been no agreement
between the two countries on
the nature of the measures to
be taken against a defiant North.
As a result, negotiations at the
UN for new multilateral
sanctions are stuck. China has
opposed the unilateral
sanctions announced by the
U.S.
The new sanctions regime will
require the President to
mandatorily investigate and
designate persons and entities
for violations.
The law will also give more tools
to the administration to enforce
secondary sanctions which
are restrictions on a third
country from doing business
with the North.
The law also provides for $50
million to support humanitarian
programmes and transmit radio
broadcasts into the North.
North Koreas main supply lines
are from China, which has been
unwilling to be harsher with
sanctions.
U.S.s unilateral push could
further add to the tensions with
China, heightened in recent
days over disputes in South
China Sea.

Membership talks between U.K.


And E.U. To continue some
more time
A European Union (EU) summit
to negotiate new membership
terms for Britain was forced into
extra time as Prime Minister
David Cameron struggled for a
deal he could sell to sceptical
British voters in a referendum.
A plenary session to review
progress was postponed several
times and then the 28 leaders
were asked to book hotel rooms
for an extra night in Brussels.
Mr. Cameron cancelled plans to
fly home andchair a Cabinet
meeting due to have approved
a deal and set in motion
procedures to call a plebiscite
expected on June 23.
EU officials said the main
outstanding problems involved
Britains demands to curtail
welfare benefits for migrant
workers from other EU
countries, although other snags
remained.
U.S. President will visit Cuba
U.S. President Barack Obama
will visit Cuba on March 21-22
and meet with Cuban President
Raul Castro, in the first U.S.
presidential trip to the country
in nearly 90 years as relations
between the for- mer
adversaries thaw.
During the trip, Mr. Obama will
have the opportunity to meet
with Mr. Castro, Ben Rhodes
Mr. Rhodes noted the ultimate
aim is to persuade Con- gress to
lift the trade embargo, Havanas
biggest request of the U.S.
Although short-term prospects
have seemed un- likely, a
Republican congress- man just
back from leading a delegation

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of lawmakers to Cuba said he
believed legislation ending the
embargo could pass Congress
by the end of the year
Word of his travel plans drew
immediate resistance from
opponents of warmer ties with
Cuba including Re- publican
presidential candi- dates.
China deployed surface to air
missile in disputed woody
Island

China has deployed an


advanced surface-to-air missile
system to one of the disputed
islands it controls in the South
China Sea, ratcheting up
tensions even as U.S. President
Barack Obama urged restraint
in the region.
The missile batteries had been
set up on Woody Island. The
island is part of the Paracels
chain, under Chinese control for
more than 40 year but also
claimed by Taiwan and Vietnam.
Images from civilian satellite
companyImageSat
International show two
batteriesof eight surface-toairmissile launchers as well as a
radar system.]
China claims most of the South
China Sea, through which more
than $5 trillion in global trade
passes every year, and has been
building runways and other
infrastructure on artificial islands
to bolster its claims.
Taiwan President-elect Tsai Ing56

wen said tensions were now


higher in the region.
World Health Organization
needs $ 56 million to combat
Zika virus
The World Health Organization
(WHO) said that $56 million
were needed to combat the
Zika virus until June, including
for the fast-tracking of vaccines,
diagnostics and research
studies into how it spreads.
The funds, including $25 million
for the WHO and its regional
office, would also be used to
control the mosquito- borne
virus that has spread to 39
countries, including 34 in the
Americas.
The WHO expects the funds to
come from member states and
other donors and said that in the
meantime it has tapped a new
emergency contingency fund
for $2 mil- lion to finance its
initial operations.
First train arrived from China to
Tehran

The first train from Chinas


trading hub of Yiwu has arrived
in Tehran, signalling Irans firm
integration in the Beijing ledBelt and Road connectivity
initiative along the New Silk
Road.
The train ferrying 32 containers
completed its 14-day journey,
covering over 10,399 km, after
passing through the arid

landscape of Kazakhstan and


Turkmenistan in Central Asia.
Iran is currently in desperate
need of investment for
infrastructure construction.
However, as oil prices are low
now, Irans revenue in this sector
has seen sharp de- crease.
At the same time, China is
promoting the belt and road
initiative. Iran is expected to
become one of the major
participants of that initiative.
Obama govt wants congress
approval for F-16 under Foreign
military financing scheme
After notifying Congress of its
intention to sell eight F-16
fighter planes to Pakistan, the
Obama administration has
quickly moved for Congressional
approval for financing the deal
under the countrys Foreign
Military Financing (FMF)
scheme.
U.S. administration proposes to
pay the bulk of the $699 million cost of the deal while
Pakistan is required to pay $200
million.
The administrations request to
Congress is for the first tranche
of money, though the exact
amount sought was not
immediately known.
While the notification itself
does not need a positive
approval from Congress,
spending by the administration
requires legislative approval,
which is not going to come
easily.
Indian Ocean is core to
Maritime Silk Road project
A military base in Djibouti along
with major port development
projects in Myanmar and Sri

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Lanka are defining the contours


of Chinas Maritime Silk Road
an oceanic connectivity
project, of which, the Indian
Ocean is the core.
Reuters is quoting Ismail Omar
Guelleh, Djiboutis President, as
saying that Chi- na will soon
commence work on the naval
base.
The Horn of Africa nation is
strategically located on the
junction of the Indian Ocean
and he Red Seaa gateway to
the Suez Canal via the Strait of
BabAl-Mandab.
Djibouti would become an ideal
location for securing sea lanes,
in the vicinity, which radiate
from this area towards Africas
Indian Ocean coastline and the
Arabian Sea.
China has also quietly signed a
deal to develop an Industrial
Park and a deep water port in
Kyaukphyu in Myanmar.
The facility in the Bay of Bengal
amplifies Beijings pitch to
deepen its stakes in Myanmar in
order to lower its dependence
on the Straits of Malaccaa
strategic commercial channel,
dominated by the U.S. sixth
fleet.
Xinhua has reported that a
consortium led by the China
International Trust and In-

vestment Corporation (CITIC),


a construction company, has
won the bid towards the end of
last year to develop the two
projects.
The deep sea enterprise
includes development of 10
berths at the Maday Island
Terminal and the Yanbye Island
Terminal.
It will be completed in four
phases spanning a period of 20
years.
Maday Island has already
emerged as a major pillar of
Chinas energy security. Last
year, a pipeline from the island
transited oil sourced mainly
from West Asia and Africa to
Chinas Yunnan province, thus
avoiding the Malacca trap.
Nepal PM on maiden visit to
India

Nepal Prime Minister K.P.


Sharma Oli said his maiden visit
to India this week is aimed at
bringing bilateral ties back on

track
by
clearing
misunderstandings even as he
defended
the
new
Constitution, opposed by
Madhesis, as inclusive and
democratic.
Mr. Olis much-anticipated visit
to India at the invitation of Prime
Minister Narendra Modi comes
days after agitating Madhesis,
largely of Indian-origin, ended
their crippling protests and
blockade that had soured the
bilateral ties.
The year 2015 remained a
landmark in our history as we
were able to promulgate the
new Constitution despite the
hardship facing the people due
to the five-month-long
blockade in the countrys
southern border, even after
suffering from the devastating
earthquake that hit the country
10 months ago.
The
new
Constitution
promulgated on September 20,
2015 was inclusive and
democratic as it has all the
features of a democratic
Constitution
including
guarantee of human rights,
independent judiciary, social
justice and equality.

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India & The World

INDIA & THE WORLD


BSF and BGB of Bangladesh
conducted first ever joint
exercise in Sundarbans

In an attempt to bring in more


synergy in coordinated border
management, border-guarding
forces of Bangladesh and India
conducted their first-ever joint
exercise in the riverine borders
of the Sundarbans.
The exercise between the
Border Security Force (BSF)
and the Border Guard
Bangladesh
(BGB)
commenced with troopers,
including dog and bomb
squads, from both the forces
carrying out joint searches of
cargo vessels on the Ichamati
river.
Congratulating both the forces
on the successful conduct of
the drill, senior BSF and BGB
officers said the exercise would
become a regular affair in the
future.
The drill can be a big deterrent
to smugglers and criminals who
will have to deal with the
combined efforts of both the
forces.
The officials said the joint
exercise would be extended
58

on land as well to make it part of


a
coordinated
border
management plan.
Speaking about cross-border
smuggling, both BSF and BGB
officers pointed out that
smuggling of cattle has come
down by nearly 60 to 70 per
cent in the recent times.
BSF officials also flagged
concerns about smuggling of
Fake Indian Currency Notes
(FICN).
Regarding concerns about
smuggling of Phensedyl from
India to Bangladesh, BSF
officials said the recent
decision to ban on the cough
syrup would help the forces to
stop smuggling.
India's quest for permanent seat
in UNSC face challenge from
Mexico
Indias quest for permanent
membership of the United
Nations Security Council
(UNSC), faced a new challenge
with Mexico coming out in
opposition to Indias campaign.
We dont support Indias
campaign for permanent seat at
the UNSC. We do not think
adding more permanent
members in the Security
Council is the solution. More
veto
power-wielding
permanent members will mean
more paralysis of the U.N,
Foreign Minister of Mexico said.
Mexican foreign minsiter
indicated that India has taken a
maximalist position by
demanding a permanent
membership at the UNSC with

veto powers as the permanent


members of the United Nations
are yet to give up their control
over the United Nations.
Interestingly, the Mexican
opposition to Indias quest at the
UNSC came two days after the
United Nations held the
Informal Plenary meeting of the
Inter-governmental
Negotiations on equitable
representation with India
strongly reiterating its demand
for reform of the UNSC.
In the Plenary held on
Wednesday, Indias Permanent
Representative,
Syed
Akbaruddin tried to convince
those countries who oppose
new members with veto power
in the UNSC arguing that the
issue of the veto can be
reviewed later whereas the
democratisation of the U.N.
cannot wait any longer.
PM Modis visit to US will
revive the India-U.S. tie

Foreign Secretary S. Jaishankar


visited the U.S. capital ahead of
Prime Minister Narendra Modis

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India & The World

visit scheduled for later this


month.
The visit was aimed at
reviewing the India-U.S.
bilateral relations and preparing
for Indias participation in the
forthcoming Nuclear Security
Summit later this month, said a
statement by the Indian
embassy.
The visit comes amid Indias
efforts to stop the U.S. from
selling eight F-16 fighter planes
to Pakistan.
Talks between the two
countries on three key defence
agreements are also progressing
ahead of U.S. Defence
Secretary Ashton Carters visit
to India in April.
In a meeting with U.S. National
Security Adviser Susan Rice, he
discussed bilateral relations
and cooperation against
terrorist groups such as Lashkare-Taiba (LeT) and Jaish-eMohammed (JeM).

Security concerns increases on


Arabian sea

Following the alert by the


Intelligence Bureau (IB) and the
Gujarat Police, the security
along the area has been
enhanced.
The recovery of so many fishing
boats has led to several theories.
Some oicials argued that these
were old boats used by drug
syndicates for moving drugs
from the Pakistani shore to the
mid-sea where the cargo was
transferred to other boats that
take them to various
destinations across the globe.
These boats were possibly
abandoned and pushed
towards the Indian side
because of tidal movement.
Another group believed these
were boats used for illegal
fishing, and when those who
manned them suspected that
the Indian side had detected
them, they abandoned the boat
Credible evidence has
emerged that a major global
drug smuggling racket is active
in the waters of Gujarat. In April
2015, a boat carrying drugs
worth over Rs. 600 crore was
seized of Gujarat. A few weeks
later, an Iranian fishing boat was
found floating in the waters of
Kerala
Former Afghanistan President
Hamid Karzai wants India to be
part of Taliban talks

Several ageing Pakistani fishing


boats have been washing
ashore in the Sir Creek area in
Gujarat, leading to much
speculation in the security
establishment.
Most of the recoveries were
made along the 32-km long GLine, the nearest habitation
being 30 km away in Lakhpat,
to the south

India, Iran and Russia should be


included in the talks with the
Taliban, says former Afghanistan
President Hamid Karzai, who
said that the current talks among
the Quadrilateral Coordination
Group
(QCG)
were
Afghanistans only hope for
peace despite the fact that the
talks were being held in
Pakistan.

Mr. Karzais comments came as


there was uncertainty in
Islamabad over just when the
next round of QCG talks that
include representatives from
the U.S., China, Pakistan and
Afghanistan, would be
scheduled.
The group had met twice, in
February in Islamabad and
Kabul, expressing the hope that
the direct talks between the
Afghan government and Taliban
representatives would be
scheduled in early March, after
which the QCG had met.
However, in a statement on
Saturday, the Taliban said it
would not attend the talks until
all the International Security
Assistance Force (ISAF) forces
had left the country.
Afghan analysts have also been
worried that the presence of
the U.S. and China in the QCG
would push President Ghani to
accept more and more
concessions toward the Taliban,
even though they have been
unable to bring enough
pressure to bear on Pakistan to
use those levers.
India has stayed disengaged
from the process, saying that it
would support any initiative that
is Afghan-owned and Afghanled.
Defence Minister says no joint
patrol with US right now

Days after a top U.S. Admiral


expressed keenness in co-

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India & The World

ordinated patrols between


India and U.S,, Defence
Minister Manohar Parrikar said
that there was no scope for such
patrols at this point of time.
As of now India has not taken
part in joint patrols but we do
participate in joint exercises. So
the issue of joint patrols at this
time does not arise, Mr. Parrikar
told a press conference.
U.S. Defence Secretary Ashton
Carter is scheduled to visit India
in April during which the
agreements are expected to be
discussed.
The Defence Ministry had not
returned Rs. 11,000 crore from
the budget but had indeed
saved the amount by utilising
funds locked in the Foreign
Military Sales (FMS) account.
There is an account for paying
the U.S. for defence
procurements under the FMS
route. The amount is paid to the
U.S. government which further
pays the companies concerned.
Last year, India paid Rs. 6,000
crore for committed liabilities
from this account.

India and China to build


connectivity

India and China jockeyed over


their plans to build connectivity
during the Ministry of External
Afairs first Raisina Dialogue
international conference with
India projecting its own plans
in the Indian Ocean and across
Central Asia as a counter to
60

Chinas estimated 1-trillion


dollar One Belt One Road
(OBOR) project.
Comparing Indias approach to
Chinas (without referring
directly to either China or the
OBOR), Indias plans for
connectivity were cooperative
rather than a unilateral
approach, adding that an
environment of trust and
confidence is the pre-requisite
for a more interconnected
world.
China views South Asian
countries as very important
partners and stands ready to
focus on roads, manufacturing,
free trade zones. OBOR is not
an exclusive initiative, so
welcomes participation of
various countries and regional
organisations
Anti-tank Guided missiles
Rafael of Israel and Kalyani
group are setting up a joint
venture (JV), Kalyani Rafael
Advanced Systems, to build
weapon systems in India. It
could start with the production
of Spike AntiTank Guided
Missile (ATGM) which the
Indian Army is in the process of
procuring.
Under a tripartite agreement the
JV is expected to manufacture
sub-assemblies and Bharat
Dynamics Limited (BDL) will do
electro optics and do hot
integration at its Hyderabad
facility which currently
manufactures French Milan
ATGMs
Conforming to Foreign Direct
Investment (FDI) norms in
defence the Kalyani group will
hold 51 percent stake with
Rafael holding the rest. The
initiative is in line with the

governments Make in India


policy and will enable the
development and production
of high end technology systems
within the country.
The Rs.3,200 crore deal for the
ATGMs was cleared in 2014 by
the Defence Acquisition
Council chaired by Defence
Minister Arun Jaitley which put
an end to uncertainty after the
U.S. ofer of joint production of
Javelin missiles.
The deal includes 8,000 plus
missiles, 300 plus launchers and
requisite technology transfer to
the Indian entity which was
initially supposed to be BDL.
Spike is a third generation, fire
and forget anti-tank missile
Another terrorist attack in
Jalalabad consulate
In the fourth attack since 2007,
heavily-armed terrorists,
including suicide bombers,
struck the Indian consulate in
Afghanistans Jalalabad city,
killing nine persons, including
an Afghan security person and
causing damage to the
chancery.
All Indians in the mission were
safe and six terrorists, who
carried out the attack, were
dead.
While two terrorists blew
themselves up, four militants
were killed by the Afghan
police. Two civilians were also
killed in the crossfire.
The attack on the Indian
consulate was part of a trend of
such operations launched from
Pakistan.
They are simply attacking Indias
presence in Afghanistan,
whenever they get the
opportunity.
The whole spectrum of the

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India & The World


India- Afghan relations, the
relationship itself, is the target
of the attacks.
First Raisina Dialogue started in
New Delhi

The
Raisina
Dialogue
conference, attended by
speakers from 40 countries, is
being seen as the governments
attempt to rival conferences
around the world that attract
global players such as the
Shangri-La dialogue in
Singapore, and the Munich
Conference on national security.
Speaking at the inauguration,
Ms. Swaraj and her Bangladesh
counterpart Mahbboob Ali
spoke of the importance of
building road and rail
connectivity through the BBIN
grouping of Bangladesh,
Bhutan, India and Nepal.
Tensions between India and
Pakistan have held back South
Asian integration, said former Sri
Lankan President Chandrika
Kumaratunga, calling for greater
South Asian cooperation and
economic integration.
Turmoil in Maldives is stalling
PM Modis visit
Continuing political turmoil in
the Maldives is the reason Prime
Minister Naren- dra Modis visit
to Male has had to be put of
repeatedly.
The visit that was cancelled at
the last moment in March 2015

owing to protests over former


President Nasheeds trial has
been due since early January
this year, but each time, actions
by the government spark of a
new crisis that makes it difficult
for Mr. Modi to travel to the
Islands.

When Indias largest new aircraft


carrier INS Vikramaditya,
accompanied by two support
ships travelled to the Maldives
on February 14 for a goodwill
visit, many in Male fully

expected that Mr. Modi would


also be on his way.
MEA believes that moment will
only come with some political
resolution and a more
controlled narrative in Male that
seems to be fast spinning out of
President Yameens grip.
India has stayed away from
direct criticism of the Yameen
government over the past few
months as it tried to rebuild ties
with the Maldives.
However, it is a member of the
Commonwealth Ministerial
Action Group (CMAG) that
passed a resolution giving the
government one months time
to start a dialogue with the
Opposition and halt the use of
anti-terror laws against political
opponents.

Indias plan of acquiring aircraft from Japan facing problems

Indias plans to acquire


amphibious aircraft from Japan,
in the first big military deal
between the two countries, is
facing serious challenges.
Indicating at a longer wait- ing
period for Indias plans to
acquire the amphibious aircraft,
US-2, in a deal involving 12-18

aircraft, Japan had no


immediate plans for selling or
delivering the capacitymultiplier aircraft to India.
The absence of diplomatic
progress on India acquiring the
aircraft is significant in view of
the fact that during Prime
Minister Shinzo Abes visit to

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India & The World


India in December 2015.
The two countries had
concluded agreements on
Transfer of the Defence
Equipment and Technology,
and, Security Measures forthe
Protection of Classified Military
Information, aimed at deals such
as the one on the US-2.
India will approach UN to
include Masood in globally
designed terrorists

In its biggest diplomatic move


after the Pathankot attack, India
will approach the United
Nations to include the Pakistanbased terror master- mind
Maulana Masood Azhar on the
list of globally designated
terrorists.
India would formally request the
1267 Sanctions Committee,
which consists of 15 members,
to schedule a discussion on
Masood Azhar on Friday.
The decision is significant since
it is the second time in less than
a year that India will attempt to
isolate an international terrorist
through the anti-terror
committee.
In June 2015, India moved the
committee in the United
Nations, demanding an explanation from Pakistan for its
decision to release the 26/ 11
attack plotter Zakiur Rahman
Lakhvi from jail.
The attempt to isolate Pakistan,
however, failed at the last

62

moment because of Chinas


opposition. this year too, Chinas
attitude would be watched.

India, Nepal sign seven accords

Principle of sovereign equality


should guide the India-Nepal
relations, said Oli
Asserting Nepals sovereignty,
visiting Prime Minister K.P.
Sharma Oli on Monday said that
ties be- tween India and Nepal
should be based on the
principle of sovereign
equality.
Our cultural connections are
deep. Pashupatinath and
Bishwanath, Janakpur and
Ayodhya, Lumbini and
Bodhgaya and many more are
icons of our shared civilization
and our relationship should not
be judged on the basis of
agreements and treaties, Mr.
Oli said
Mr.Olis comments came a day
after he defended Nepals new
Constitution, which he
described as a living dynamic
document that had emerged
out of a long process of
democratic struggle to end
discrimination.
His assessment of the
constitutional democratic
process went against Indias
viewpoint.
Reflecting the Indian concern
for the democratic process in
Nepal, External Afairs Minister
Sushma Swaraj said India was
playing the role of an elder
brother.
Indias role of an elder brother
is not similar to the Western
concept of a Big-Brother.
Mr. Oli asked India to make most
of the opportunities provided
by Nepal and partner the new
development process.

India and Nepal signed seven


agreements at a summit meeting
of Prime Minister Narendra Modi
and his Nepal counterpart K.P.
Sharma Oli, even as leaders of
the Madhesi people in Nepal
threatened one more blockade.
Addressing the press after the
signing ceremony at the
Hyderabad House, Mr.Oli said
that both sides were
determined to avoid the
disruption of Nepals transit
facilities as experienced over
the past five months.
Referring
to
Nepals
dependence on India for
receiving
essential
commodities, Mr.Oli said
without naming Madhesi
protesters, Unscrupulous
elements should not be allowed
to abuse the open borders
between Nepal and India.
Though both the sides tried to
address the grievances of the
pro-blockade agitators by
agreeing to build a road network
in the Madhesregion, the
leaders of the Madhesis are
planning more agitation.
Nepals PM on visit to India
Aiming for Nepals recovery
from more than five months of
economic blockade, Prime
Minister K.P. Sharma Oli, who
arrived on a six-day visit to India
on afternoon, is expected to
seal
crucial
bilateral

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India & The World


agreements.
This visit is a confidenceboosting step. Its not just about
agreements and accords.
Mr.Olis visit, however, began on
a dramatic note when 40
Madhesi students from Nepal
were detained by the Delhi
police near the embassy of
Nepalwhen they were trying to
reach the public reception
organised by the ambassador of
Nepal.
Earlier, another group of
Madhesi students staged a
protest outside the Indira
Gandhi International Airport.
EU-India summit to be held
after the gap of four years

Investment Agreement (BTIA).


the visit by Mr. Modi, who will
stop in Brussels on his way to
the U.S. will also see an
announcement
on
the
resumption of talks on the BTIA,
as the free trade agreement
(FTA) is known.
there are still some obstacles
preventing the resumption of
the India-EU FTA talks that
were suspended in 2013 after
16 rounds of negotiation.
To begin with, the EU is learnt
to have asked India to
substantially bring down the
high duties on automobiles as
a pre-condition for resumption
of the FTA negotiations.
Indias import duty on cars
range from 60-120 per cent as
against the EUs 10 per cent.
Counter terrorism operation
needs to be viewed with
flexibility

Prime Minister Narendra Modi


will travel to Brussels for the EUIndia summit on March 30,
which is being held after a long
gap of four years that have also
seen the suspension of talks on
the Bilateral Trade and

Manohar Parrikar spoke about


sending troops to fight the IS in
Syria, India told the United
Nations Special Committee for
Peacekeeping Operations that
it recognises the need for
flexibility on international antiterror operations if they are
backed by U.N. authorisation.
Presenting Indias position on
the HIPPO (High Level
Independent Panel on Peace
Operations) report, which is
aimed
at
countering
international terror groups, Syed
Akbaruddin, said: We
understand that these issues
[response to counter-terrorism
operation
with
U.N.
authorisation] need to be
viewed with flexibility in
response
to
emerging
challenges.
The HIPPO report has
expanded the scope of
counter-terror operations
beyond the traditional U.N.
peacekeeping operations by
recommending that ad hoc
coalitions authorised by the U.N.
Security Council can undertake
counter-terror operations with
the intention of peacekeeping
and peace-enforcement.

Weeks after Defence Minister

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Economy

ECONOMY
WPI is in negative again

Retail inflation slowed to a fourmonth low in February, while


the wholesale price index
posted a negative reading for a
16th straight month.
It prompted industry groups to
call on the Reserve Bank of India
(RBI) to cut interest rates to spur
economic growth.
Consumer price index-based
inflation decelerated to 5.2 per
cent from 5.7 per cent in the
preceding month.
Wholesale
prices
also
continued to soften with official
numbers for the wholesale price
index (WPI) showing a 0.91 per
cent contraction in February.
The data marks the first break in
the six-month streak of
accelerating retail inflation.
Coming soon after official
statistics showing industrial
output continues to shrink, the
figures signal domestic demand
is yet to gain significant traction.
RBI Governor Raghuram Rajan
had taken note of the poor
industrial performance in
January and said while the
economy was recovering, this
recovery was volatile and that
not all economic indicators
were moving in the same
64

direction.
Index for Industrial Production
(IIP) in January showed output
contracted 1.53 per cent
compared with the 1.18 per
cent contraction in December
2015.
Food inflation in the CPI came
in at 5.5 per cent in February
compared with 6.7 per cent in
January.
In the WPI, the rate of inflation
in food articles also decreased
to 3.35 per cent in February
from 6 per cent in January.
Primary article inflation in the
WPI slowed down significantly
in February to 1.6 per cent
compared to 4.6 per cent in
January.
Similarly, the rate of inflation in
the fuel & power segment in
the WPI was -6.4 per cent in
February compared to -9.2 per
cent in January.
The fuel & light segment in the
CPI came in at 4.6 per cent in
February, down from 5.3 per
cent in January.
Inflation in the housing segment
of the CPI accelerated to 5.3 per
cent from 5.2 per cent in
January.
Cairn India hopeful over recent
changes in the natural gas
sector
Cairn India has expressed the
hope that recent Cabinet
approvals for changes in the
natural gas sector will also help
resolve some of the long
pending issues with the
government, such as the fate of

its Rajasthan fields and a 'fair


price' for its crude oil.
These changes will also help
India take a step closer to energy
security.

A major decision taken by the


Cabinet was to approve the
Hydrocarbon Exploration and
Licensing Policy, a main facet of
which involves granting
explorers a uniform licence for
the exploration and production
of all forms of hydrocarbons.
Government devised three part
strategy for stressed loans

As part of the governments


three-part plan to address
stressed assets of public sector
banks, structural issues would be
dealt with to avoid recurrence
of these problems, whether
wilful or due to policy paralysis
or business challenges, in
future.
Last week, Finance Minister

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Economy

Arun Jaitley told Parliament that


Rs. 1 lakh crore of stressed
assets were added in the first
nine months of the current
financial year itself.
In the case of the largest public
sector bank, State Bank of India,
loans worth Rs. 11,700 crore
have been reported to be
locked up as non-performing
assets with nearly 1,160
defaulters wilfully deciding not
to repay.
The list includes Winsome
Diamonds & Jewellery which
owes Punjab National Bank
(PNB) Rs. 900.37 crore and
Zoom Developers (owing Rs.
410.18 crore to PNB).
The state-owned PNB has
declared 904 borrowers who
owe it a combined Rs.
10,889.71 crore as wilful
defaulters. Of these, 140
companies were added to the
PNBs list of wilful defaulters in
the December quarter alone.
Separately, speaking also at the
Advancing Asia Conference,
International Monetary Fund
Managing Director Christine
Lagarde said that Reserve Bank
Governor Raghuram Rajans
move to address bank balance
sheets head-on is the right
approach.

regulator has written to the


Income Tax Department in
nearly 100 cases where more
than 1,800 entities are
suspected to have traded in
shares valued beyond their
disclosed income.
Such activities were mostly
happening through shares of
shell companies or thinly-traded
penny stocks. There has not
been any instance of a blue-chip
stock being used for generating
bogus profits or losses to evade
taxes.
An analysis of the enforcement
and surveillance measures
taken by Sebi since August
2014 shows that 167 stocks have
been completely suspended
for trading and trading has been
restricted to a lower price band
of 2 per cent for 123 others.
SEBI has also written to Income
Tax Department with details of
1,854 entities who have
provided exit to preferential
allottees for trade value of
nearly Rs 3,900 crore.
India Ratings and Research
revised its outlook for
telecommunications services

SEBI debarred over 1000


entities for tax evasion
In a major clampdown, regulator
SEBI has debarred over 1,000
entities from the capital markets
after they were found to be
misusing stock exchange
platforms for tax evasion to the
tune of more than Rs 15,000
crore.
SEBI has also suspended
trading in shares of as many as
167 companies, while the

India Ratings and Research


revised its outlook for
telecommunications services to
stable-to-negative from stable
for 2016-17 as it expects the
introduction of Reliance Jio to
intensify
competition,
squeezing market share and

operating profitability.
Data tariffs will also see a major
correction due to the launch of
Reliance Jio, it said, adding that
the benefits from higher data
volumes as well as subscriber
growth will be back-ended.
Additionally, the operators
debt profile will deteriorate as
they are likely to incur high
capex on network expansion
and acquisition of additional
spectrum through trading,
largely to compete with
Reliance Jio.
Further, spectrum is expected
to drive consolidation in the
sector, helped by recent
guidelines allowing spectrum
sharing and trading transactions
within industry participants.
This will help smaller players to
monetise their spectrum assets
while bigger players enhance
their spectrum holdings, it said.
Government planning to
provide PF to contractual
labours as well
The government has decided
to get tough with large
employers who increasingly rely
on contract workers often
without paying them their
statutory dues such as
employees provident fund
contribution.
As part of the plan, the
Employees Provident Fund
Organisation (EFPO) has asked
all the public sector firms to
upload on their websites the
details of project contracts
awarded to various agencies in
a bid to ensure contract workers
get provident fund benefits.
Central PF Commissioner V.P.
Joy, who recently took charge
of the Rs. 10 lakh crore
retirement fund body, is

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Economy

expected to send a similar


directive to 4,700 private
companies employing over
1,000 workers each.
The Contract Labour Act
requires employers to pay equal
pay and benefits for work done
by contract employees that is
similar to regular employees
role.
But its implementation has been
weak and attempts to bring in a
stronger law have been
thwarted as government
agencies and public sector
units also deploy a large number
of contract employees and are
reluctant to pay them more.
EPFO is looking to make public
as well as private sector
companies, which are the
principal employers of contract
workers, accountable for
providing PF benefits.
The public sector companies
will have to register the details
of all contract employers of
each project on EPFOs
website.

Central Bank Governor says


exchange rate is at right place
Reserve Bank of India Governor
Raghuram Rajan sought to allay
fears about Indias weak
exchange rate saying that it is
broadly in the right place and
the countrys trade is likely to
be muted for some time.
Indian trade is likely to be
muted for some time. But we are
not alone in this. Global trade is
weak. said Raghuram Rajan
Apart from the exchange rate
and the weak global economy,
Mr. Rajan pointed to several
other reasons that could be
leading to this decline in global
trade.
The first, he said, is that as
66

countries get more developed,


they begin to consume services
more, which are not generally
traded. The second reason was
that the trade in capital goods
has seen a decline.
And the third reason was that
countries are increasingly
pulling inwards. That is, their
supply chains are increasingly
being geared towards their own
needs rather than the needs of
other countries,
Mr. Rajan said I believe the
monetary reforms of this
government will stand out as
one of its major achievements.
The
Monetary
Policy
Committee, the composition of
which was laid out in the
Finance Bill 2016, will be in
charge of keeping inflation
within specified targets, failing
which it will be answerable to
the government.
While emphasising the need for
macroeconomic stability, the
Governor
lauded
the
government on its adherence to
its fiscal targets and in focussing
on structural reforms.
Economists will say we need
structural reforms. But such
moves tend to upset
constituencies. The problem is
that the costs are immediate and
well-defined. But it is an illdefined group which doesnt
know if it will benefit from the
changes later on.
The Governor also pointed out
that the cumulative FDI in this
financial year till January at
$38.7 billion was just $3 billion
short of the highest FDI ever
recorded in India, of $41.7
billion in 2008-09, and there
were two months still to be
completed.

IIP data again increases call for


rate cut

Industrial output shrank for the


third straight month, contracting
by 1.5 per cent in January 2016.
The data prompted industry
groups to make fresh calls for
the Reserve Bank of India (RBI)
to cut interest rates at its
monetary policy review slated
for April 5.
The decline compared with the
2.8 per cent growth in industrial
output in January 2015.
According to the data released
by the Central Statistical
Organisation (CSO) on Friday,
the year-on-year growth was ()1.5 per cent in January.
The drop in output was due to
various factors, including a huge
contraction in the capital goods
sector.
Manufacturing sector output
contracted by (-) 2.8 per cent,
capital goods shrunk by (-)20.4
per cent and consumer nondurables fell by (-) 3.1 per cent.
Ten out of 22 industry groups in
the manufacturing sector
registered negative growth.
Electrical machinery and
apparatus recorded the
maximum negative growth of ()50.3 per cent.
The 1.5 per cent fall in industrial
output this January was against
2.8 per cent growth in January
2015 and (-)1.2 per cent in
December 2015 (revised from
-1.3 per cent earlier).

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Economy
The Budget has tried to address
tax related issues for
manufacturing and we are
hopeful that they would yield
results.
But we would like to see further
rate reduction in the
forthcoming monetary policy
(of the RBI) that can stimulate
demand and investments in the
economy
to
support
manufacturing growth.
With the Budget sticking to the
fiscal consolidation roadmap by
targeting to limit the fiscal
deficit at 3.5 per cent of GDP in
2016-17, the government had
claimed that it had done its job
well by maintaining fiscal
discipline to ensure macroeconomic stability.
This in turn has provided some
space for monetary policy to be
loosened up.
Fiscal deficit for the current
fiscal is projected at 3.9 per
cent. Experts are expecting a
minimum 25 basis points repo
rate cut by the RBI, most
probably earlier than April, to
perk up growth.
Global financial market
volatility, a potential further
deterioration in exports and
strain in bank and corporate
balance sheets could weigh on
India's growth prospects, the
IMF had said.
In January 2016, growth in
mining output was 1.2 per cent
while that of electricity was 6.6
per cent, basic goods (1.8 per
cent), intermediate goods (2.7
per cent) and consumer
durables (5.8 per cent).
The factors being blamed for
the fall in industrial output
include the Chennai floods and
poor revival of investment.
Experts are expecting a

minimum 25 basis points repo


rate cut by the RBI, most
probably earlier than April
Depending upon monsoon and
reform growth rate could be
close to 8 % in 2016-17

keenly watched.
The governments commitment
on capital infusion is just enough
to meet the minimum capital
requirements as the banks
migrate to the stricter Basel-III
regime.
A normal monsoon season this
year can lead to a 4 per cent
growth in agriculture.
New gas pricing formula
approved by cabinet

The countrys GDP can grow by


7.9 per cent next fiscal if the
monsoon is normal and
government implements the
reform measures announced so
far, domestic rating agency Crisil
said.
The growth forecast, highest by
any house and even above the
governments own estimate of
7-7.75 per cent, has been
arrived assuming a faster growth
in agriculture.
The country has faced weather
shocks for three consecutive
years, including two years of
deficient rains in 2014 and
2015, and a normal monsoon
season this year can lead to a 4
per cent growth in agriculture
on lower base effect.
Crisil said oil and commodity
prices are expected to remain
soft, which will ensure that
crucial
macroeconomic
indicators such as fiscal deficit
and inflation are as per
expectations.
Welcoming the Budget as one
with realistic growth and
revenue targets, Crisil said
achievement of the divestment
target, which the government
has trailed in the past, will be

The Union Cabinet approved a


new pricing formula for gas
discoveries made in difficult- toaccess areas.
The formula will be based on a
weighted one-year average of
prices of fuel oil, naptha and
imported coal.
Since the rate is not enough to
incentivise exploration, the
government approved the new
price formula for undeveloped
gas discoveries in deep-sea,
ultra-deep sea and hightemperature, high- pressure
areas using average of landed
price of naphtha, fuel oil and
liquefied natural gas (LNG)
This will definitely be positive
for up- stream companies since
the new pricing will be
applicable to exist- ing as well
as future discoveries.
This will lead to prices rising by
about 70-80 per cent of their
cur- rent levels and will enable
companies to begin work on
their new discoveries in these
difficult areas.
The Cabinet also approved the
Hydrocarbon Exploration and
Li- censing Policy (HELP).
The high- lights of the new
policy involve granting
explorers a uniform license for
exploration and production of
all forms of hydrocarbons. The

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Economy
previous policy required a
separate license for each type
of hydrocarbon.
The new policy also
incorporates an open acreage
policy wherein exploration and
production companies will be
allowed to choose the blocks
they want to use from the
designated area.
In addition, the policy moves
towards an easier revenuesharing mechanism from the
current
profit-sharing
mechanism.

remain so for many more.


The ECB cuts its deposit rate to
-0.4 per cent from -0.3 per cent,
in line with expectations, but it
also surprised markets by
cutting its other two interest
rates.
Wall Street retreated sharply in
volatile trading as a slide in oil
prices undermined gains from
the European Central Bank's
move to cut rates and expand
its stimulus programme.
Ministry of Shipping expects to
sign major pacts in summit

In order to boost economy ECB


cuts rate
The European Central Bank cut
all three of its interest rates and
expanded its asset-buying
programme, delivering a biggerthan-expected cocktail of
actions to boost the economy
and stop ultra low inflation
becoming entrenched.
The ECB cuts its deposit rate
deeper into negative territory,
charging banks more for parking
their cash, and increased
monthly asset buys to 80 billion
euros from 60 billion euros,
exceeding expectations for an
increase to 70 billion.
Surprising markets, it cut its main
refinancing rate to zero from
0.05 per cent. The euro fell
around 1 per cent against the
dollar.
Hoping to boost lending,
consumption and inflation, the
ECB said it would also start
buying corporate debt and
launch four new rounds of
cheap loan packages, to be
extended by banks to the real
economy.
Inflation has been below the
ECBs nearly 2 per cent target
for three years and is likely to
68

The government is expected to


sign agreements worth over Rs.
72,000 crore with private
players on port-related projects
at the Indian Maritime Summit
to be held in Mumbai next
month.
The Ministry of Shipping has
identified 109 projects worth
Rs.72,864 crore on which
agreements will be signed
during the event to be held from
April 14-16. South Korea will be
the partner country for the
Summit.
The sectors identified for
investment include shipbuilding, ship repair and
recycling, port modernisation,
new port development and
multi-modal logistic hubs
among others.
In addition, more than 150
projects will be showcased for
investment under the Sagarmala
Project for port modernisation.

Govt. is planning to create 40


lakh direct employment and 50
lakh indirect employment
(opportunities) in five years in
the maritime sector.
The Shipping Minister said
logistic cost is hurting India,
while logistic cost was 18 per
cent in India, it was 8-10 per
cent in China and 10-12 per
cent in European countries.
If development near ports
happen and we are able to cut
the logistic costs by four per
cent, the exports will double,
the Minister said.
Under the Sagarmala Project,
the major development
programmes identified by the
government include port
modernisation (Rs. 90,000
crore), port connectivity
(Rs.1.20 lakh crore) and port-led
industrialisation (Rs.90,000
crore) besides coastal
community development.
Give it Up campaign a major
success
More than 80 lakh households
have given up LPG subsidy
under the Give it Up scheme,
as of March 3, 2016. The Give it
Up campaign is part of the
governments endeavour to
reduce its LPG subsidy bill.
Under the scheme, LPG users
who can afford to pay the
market rate for the fuel are
encouraged to give up their
subsidy.
The government, on its part, has
promised to use the savings
from this to provide more LPG
connections
to
the
unconnected.
More than 53 lakh consumers
have voluntarily surrendered
subsidy on LPG in the last six
months.

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Economy
Oil Marketing Companies
(OMCs) are making efforts to
target the higher income group
(taxable income of more than
Rs.10 lakh) using technology
and available information.
Consumers are also provided
with on-line facility to declare
their income and submit their
self-declaration in the
prescribed form to distributors
if the taxable income of self or
his/her spouse exceeds Rs.10
lakh.
The Give it Up campaign goes
hand-in-hand with the
governments Direct Benefit
Transfer in LPG wherein the
subsidy amount is directly
transferred to beneficiaries
bank accounts, thereby
reducing the scope for leakage.
Government raises fund limits
to seed start-ups
The Department of Science and
Technology (DST) may invest
up to Rs. 1 crore in every fresh
start-up that it will seed from the
next financial year.
The DSTs outlay for seeding
has been increased four-fold
from Rs. 40 crore to Rs.180
crorein the coming financial
year to help fund the increased
investment.
Currently, the maximum
permissible investment is Rs.50
lakh. Promoting start-ups has
been among the governments
major promises with Prime
Minister Narendra Modi
frequently asking Indias youth
to
become
more
entrepreneurial.
On 16 January, Mr.Modi
addressed a massive gathering
of entrepreneurs from India and
abroad and outlined several
initiatives to energise Indias

start-up ecosystem including


making the profits of fledgling
units tax-free for three years,
Rs.10,000 crore of government
funding over four years, no visits
by labour inspectors for three
years and quicker and
subsidised patent clearances.
As of 2014 the latest
available report 68 Science
Technology
and
Entrepreneurship
Parks
(STEPs) and TBIs are located
across India.
According to the latest figures
from the science ministry, about
2000 ventures have been
incubated of which 950 have
graduated, meaning they have
reached a certain size and have
a significant support from
investors.
Some of the incubators, said
Mr.Sharma, who are known to
have a successful track record
in incubating companies will be
deemed
World
Class
Incubators and can annually
avail of Rs. 10 crore for five years.
Banks looking to change
strategy to keep talented
employees

State-run lenders like Bank of


Baroda and IDBI Bank are
planning to offer stock options
to staff in a bid to retain top
talent.
This assumes significance in the
backdrop of the imminent entry
of 21 new niche banks which
have been granted licences by

the RBI to begin operations, as


well as the prospect of a clutch
of
mid-management
professionals
reaching
retirement age soon.
The lender, which is planning
to increase the employee
strength to 21,500 by March 31,
2019 from the 15,500 at
present, is not only working out
a scheme for career progression
but also mulling an employee
stock option plan (ESOP) to
incentivise them.
The board had already
approved the ESOP. Now, the
bank will write to the
government for its approval.
State Bank of India (SBI), the
countrys largest lender, had
floated the idea of ESOP for its
employees some time ago.
However, the proposal is still
awaiting
governments
approval.
Most banks plan to offer stock
options to their employees in
the rank of assistant general
manager and above.
Union Finance Minister Arun
Jaitley had said recently that the
government was actively
discussing the proposal for
Employee Stock Ownership
Plan (ESOP) for public sector
bank employees.
Public sector banks are facing
headwinds on the human
resources front as many midmanagement officers are
retiring over the next five years,
prompting the central bank to
term it a retirement decade.
In addition, the 21 new banks,
which
have
received
differentiated licences from the
Reserve Bank of India (RBI), will
try to poach employees from
existing banks.
In August-September last year,

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Economy
RBI has granted licences to 11
payment banks and 10 small
finance banks to start
operations.
While these banks were given
18 months time to roll out
services, most of these entities
are expected to start operations
in 2016.
At a lower level, public sector
institutions pay better than their
counterparts. But while
progressively going up, there is
a gap that really becomes
unmanageable.
RBI says banking infrastructure
is not good enough
Growth of card acceptance
infrastructure like automated
teller machines (ATMs) and
point-of-sale (PoS) terminals is
not on a par with that of card
issuance.
This was observed by the
Reserve Bank of India (RBI) in
its concept paper on card
acceptance infrastructure
released on Tuesday.
Another disconcerting feature
is that the rate of growth in
setting up card acceptance
infrastructure has also slowed
down during these three years.
Debit cards vastly outnumber
the volume of credit cards
issued in the country. Further, a
high number of debit cards have
been issued in recent times
under the Prime Ministers Jan
Dhan Yogana, especially to
customers in rural areas and
smaller towns.
According to the concept
paper, the lower growth of ATM
and PoS terminals, both in terms
of numbers and geographical
spread, has impacted card use.
Cash continues to be the
predominant mode of payment
70

as it appears to be costless in
comparison to the visible costs
associated with card/electronic
payments.
Some of the factors that have
inhibited growth in the
acceptance infrastructure are
lack of adequate and low-cost
telecom infrastructure and lack
of incentive for merchants for
acceptance of cards, among
others.
Government identifying banks
for consolidation
The government will identify six
to ten public sector banks
which will drive the
consolidation process among
the state-owned banks
Large lenders like State Bank of
India (SBI), Bank of Baroda
(BoB), Punjab National Bank
(PNB) and Canara Bank could
become the anchor banks
The government will set up an
expert panel for the
consolidation process. The
Bank Board Bureau headed by
former Comptroller and Auditor
General (CAG) Vinod Rai, which
was recently formed to select
chief executives and board
members of public sector banks,
will also help in the
consolidation process.
Merger between the banks will
be based on geographical and
technological synergies, human
resources and business profile,
among others
Consolidation among public
sector banks has been under
discussionfor about a decade
now.
There are 22 public sector
banks in the country apart from
five associate banks of State
Bank of India. The present
National Democratic Alliance

(NDA) government has looked


at the consolidation process
diferently and initiated it.
Interestingly, during Gyan
Sangam in Pune, bankers had
opposed the idea of
consolidation among public
sector banks on the ground that
the financial health of most of
the banks had deteriorated.
Hence, no bank was ready to
absorb even a weaker institution
The financial performance of
public sector banks reflected a
sharp deterioration after the RBI
conducted an Asset Quality
Review (AQR). During the
review, the central banks
inspectors found that many
accounts, which ideally should
have been treated as
nonperforming, were not
classified so by the banks.
The RBI then directed the
banks to classify those accounts
as non-performing and provide
accordingly during the
October-December
and
January-March quarters.
As a result, as many as 11 public
sector banks including Bank of
Baroda, IDBI Bank, Bank of
India and Indian Overseas Bank
reported losses last quarter.

Finance minister says


infrastructure projects will not
be delayed in the future
Plans outlined in the Union
Budget, along with the
enactment of the recently
amended arbitration law, could
make the spectre of stalled
infrastructure projects across
the country a thing of the past
One of the important factors
that stalls these projects is that
with the passage of time, costs
escalate beyond estimates,
both because of raw material

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Economy
and labour costs going up and
therefore,
nobody
in
government is willing to take the
responsibility for such cost
escalations
A statutory mechanism to
negotiate cost escalations
under an oversight would be
put into operation.
The countrys arbitration law
now provided a fast-track
mechanism to resolve cases
within a year and commercial
divisions had been created in
every High Court
Ahead of Aadhaar Bills
passage, Govt. okays housing
subsidy for workers

Even as the Aadhaar Bill is yet


to be passed in the Lok Sabha,
the government has begun
approving new subsidies to be
delivered using the biometricsbacked Unique Identification
(UID) number.
Labour Ministry has approved a
scheme to offer higher housing
subsidies to about 75 lakh
beedi workers and miners
working in non-coal mines using
Aadhaar
However, the UID Authority of
India (UIDAI) will find it diicult
to capture their fingerprints
owing to the nature of their
work, according to its own
biometric authentication
standards
Finance Minister Arun Jaitley
tabled the Aadhaar (Target

Delivery of Financial and Other


Subsidies, Benefits and
Services) Bill, 2016 in Lok
Sabha.
The Bill, tabled as a Money Bill
(not requiring Rajya Sabhas
approval) is aimed at providing
legal backing for transferring all
government subsidies using
Aadhaar.
Under the Revised Integrated
Housing Scheme of 2016, the
Labour Ministry will give Rs.1.5
lakh as subsidy through direct
benefit transfer, from the
current Rs.40,000, to beedi and
nonmine workers to build a
house on their own land.
The move comes despite the
UIDAIs own suggestion that
construction and mining
workers be put in the list of
exceptions to which the
Aadhaar system may not apply.
In a detailed document titleded
Aadhaar Authentication
Framework, the UIDAI had said
that people engaged in hard
manual labour like construction
workers or mining workers may
be treated as exceptions in
the Aadhaar system as they had
all of their fingers in extremely
poor condition with respect to
fingerprint quality
There will always be a set of
population who will be
temporarily or permanently
excluded from a specific
biometric system. They are
termed as outliers, in such
cases, alternative biometrics
such as iris scan could be used.
The new Housing Scheme of
the Labour Ministry will give
assistance to workers having
their own land with a carpet
area of at least 30 square metres.
The subsidy amount will be
released in three instalments:

the first amount of Rs. 37,500


will be given as advance,
second Rs.90,000 after the
construction of house reaches
the lintel level and the third
instalment of Rs.22,500 after
completion of the construction
work. The worker can make an
additional contribution at his or
her own will.
Also, for the first time, the
government may give Rs.1.5 lakh
as an upfront amount to those
workers who want to secure a
bank loan to build houses.
The Housing for All project,
which provides Rs. 1 lakh as
Central grant for a house under
the slum rehabilitation
programme and Rs. 1.5 lakh to
economically weaker section
households, aims to build 2
crore houses in five phases till
2021-22.
Country heading more towards
a cashless economy
E-payments and mobile wallets
are getting more popular among
the youth in the country.
As these are gaining wider
acceptance, a major concern of
our financial regulator too is
getting addressed the
Reserve Bank of India (RBI) has
started working towards making
India a cashless economy and
to bring in accountability and
transparency in each financial
transaction.
Last week, the Union Cabinet
cleared the implementation of
a few short and long term
measures to promote digital and
card-based payments to curb
cash use in the system.
Some of the measures include
withdrawal of surcharge, service
charge or convenience fee on
card and other digital

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Economy

72

transactions. With this, digital


payment, which is already
gaining traction, is expected to
gain momentum.
Foreseeing this big opportunity,
a bunch of youngsters has kickstarted a movement by
launching mobile wallets and is
slowly changing the way
Indians transact.
A mobile wallet app is a virtual
wallet where a registered
customer can pre-load a certain
amount of money with any
service provider, which can be
used for various bill payments
and recharges.
The major reason for this is the
smart phone that enables
internet penetration in to rural
parts of India. Increasing
government support is another
catalyst.
According to a recent report
from TechSci Research titled
India Mobile Wallet Market
Opportunities and Forecast,
2020, the mobile wallet market
in India is projected to reach
$6.6 billion by 2020.
In April last, e-commerce major
Snapdeal had made one of the
biggest acquisitions in the
Indian e-commerce industry by
buying
wallet
player
Freecharge for about $400
million.
As the wallets allow a user to
load cash from a very small
amount to a maximum of Rs
10,000, the risk associated with
the loss of money through
transaction is minimal. Apart
from this, the wallet companies
provide high security standards
for customers while transacting.
Recently, the RBI had issued
certain guidelines that allow the
users to increase their limit to Rs
1,00,000 based on a certain KYC

verification.
The mobile wallet user base in
India has even surpassed the
total number of credit cards
issued in the country.
The RBI data shows that till
November 2015, around 22
million credit cards have been
issued by 55 banks, while a
rough estimate shows there are
more than 100 million wallet
users in India.
In a bid to garner market share,
almost all players are offering
cash back and discounts, which
can be used for another
transaction. Some players even
provide offline way of wallet
balance top up.
Mobikwik has its 'Cash Pickup'
service in select cities that will
facilitate cash to be directly
added to MobiKwik wallet.
There are different types of Ewallets:
OPEN WALLETS: The ones that
allow you to buy good and
services, withdraw cash at
ATMs or banks and transfer
funds; these services can only
be jointly launched with a bank.
Apart from the usual merchant
payments, it also allows you to
send money to any mobile
number bank account. M-Pesa
by Vodafone is an example.
SEMI-OPEN WALLETS: You
can't withdraw cash or get it
back. In this scenario, a
customer has to spend what he
loads. Airtel Money is a semiopen wallet, which allows you
to transact with merchants
having contract with Airtel.
CLOSED WALLETS: Quite
popular with e-commerce
companies, where a certain
amount of money is locked with
the merchant in case of a
cancellation or return of the

order, or gift cards.


SEMI-CLOSED WALLETS:
These do not permit cash
withdrawals or redemption, but
allow you to buy goods and
services from listed merchants
and perform financial services
at listed locations. Paytm is an
example.
The Committee appointed to
suggest changes in the
Companies Act submitted its
report
The Committee appointed by
the Government of India to
suggest changes in the
Companies Act, 2013 and Rules
made there under, in the
interests
of
various
stakeholders, has submitted its
report.
The Committee has suggested
that Section 4 (1)(c) of the
Companies Act, 2013 should
be amended to allow
companies to have a generic
object clause to engage in any
lawful activity or business as per
the law for the time being in
force.
This proposal is based on
Section 31 of the Companies
Act, 2006 of the U.K. To
supplant this English Law on to
the Indian sub soil without
regard to the ground realities of
Indian business is highly
misleading.
The Committee has suggested
that the present prohibition
against more than two layers of
subsidiaries for investments
should be done away with.
While
the
Committee
recognises that numerous layers
of subsidiaries are created to
hide the source of funds so as
to siphon off money, the
Committee has sought to omit
this provision in the Companies

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Economy

Act, 2013 in order not to


impede the efficacy of
corporate structuring.
When it comes to independent
directors, Section 149 of the
Companies Act, 2013 says that
an independent director
cannot have any pecuniary
relationship with the company
in which he is appointed as an
independent director or with its
satellites during the last two
financial years or in the current
year.
A similar provision in SEBI
Regulations
for
listed
companies says that an
independent director should
not have material pecuniary
relationship with a company or
with its satellites in the last two
financial years or in the current
year.
The definition of a managing
director under the Companies
Act, 2013 is almost identical
with the definition under the
Companies Act, 1956.
However, unlike under the
Companies Act, 1956, under
the Companies Act, 2013, the
proviso saying that the
managing director should be
allowed to exercise his powers
subject to the superintendence
control and direction of the
Board of directors, has been
omitted.
When it comes to the National
Financial Reporting Authority
(NFRA), the following views of
the Committee are quite
appropriate:
As suggested by the
Committee, the provisions
relating to the constitution of
the National Company Law
Tribunal and the National Law
Appellate Tribunal should be
amended to conform to the

Supreme Court of Indias order


of May, 2015. Otherwise, such
a tribunal may become a still
born baby.
Law is as good as it is
administered. The Companies
Act, 2013 is a modern law for a
rising India. It is important that
the administrators of such a law
have a mindset keeping with the
spirit of such a law.
China continues its effort to
change to a self-sustaining
economy based on consumption

China is targeting growth of


about 6.5-7 per cent this year,
in tune with an effort to
transition from a low-end
manufacturing and exports
nation to a self-sustaining
economy based on innovation
and consumption.
While presenting his work
report Chinese Prime Minister Li
Keqiang said Beijing was taking
measures to avoid falling into a
middle income trap. The term
refers to the inability of many
countries, starting from a low
base, to transition to developed
status after experiencing years
of high economic growth.
Fiscal deficit has been
calibrated to 3 per cent of the
GDP this year, up from last years
2.3 per cent of the GDP, Mr. Li
said. That figure, expected to
stand at $335 billion is the
highest since economic reforms
began in 1979.

The fiscal stimulus is expected


to focus on tax breaks for small
businesses, especially in the
fast-growing services sector,
seen among the major drivers of
the restructured new normal
economy.
China is now focusing on
electric cars, deep space
exploration, aero-engines,
robotics and nuclear power,
and the services industry, such
as healthcare to restructure its
economy.
In a panel discussion with
political advisors from the China
Democratic
National
Construction Association and
the All-China Federation of
Industry and Commerce,
President Xi said that China
should stick to its basic socialist
economic system while
strengthening and developing
both public and non-public
sectors of the economy.
Mr. Li acknowledged that
transforming the Chinese
economy would be far from
easy, in a world witnessing weak
growth in trade, and
experiencing fluctuations in
financial and commodity
markets, whose impact should
not be underestimated.
Over $15 billion are being
earmarked for the next two
years as a safety net to tackle
unemployment.
Government looking into the
proposal of consolidating public
sector banks
The government will soon set up
an expert group to look into
consolidation of public sector
banks as the country needs
stronger rather than a large
number of banks, Finance
Minister Arun Jaitley said.

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Economy
He also said the government is
considering ESOPs for PSU
bank
officials
besides
strengthening the SARFAESI
Act and Debt Recovery
Tribunals to deal with the
problems of stressed assets that
are estimated at around Rs.8
lakh crore.
There could be niche banks and
banks which could survive
independently and sustain
themselves well, he said,
observing that the Gyan
Sangam strongly supported the
idea of consolidation in the
banking sector.
With regard to the rising Non
Performing Assets or bad loans,
Jaitley said that besides
strengthening the institutional
mechanism, the government has
been taking sector specific
decisions to deal with the
problems in segments like
power, highways, sugar and
steel.
On the NPA situation in the
banking sector, Jaitley said
banks are taking steps to
recovery bad loans. As far as
recovery is concerned,
whatever steps have to be taken
with regard to recovery banks
have various rights for recovery
through DRT, SDR... Neither loan
waiver has been given to
anyone, nor will be given, he
said.
In the current global
environment, Jaitley said, banks
have to take all the measures in
order to clean up their books
by effecting recoveries.
He also said that there are some
sector specific decisions which
are required to be taken by the
government. These include,
power, highways, sugar and
steel.
74

Application window for the new


Sovereign Gold Bond (SGB)
scheme will be March 8-14
The government announced
that the application window for
the third tranche of the
Sovereign Gold Bond (SGB)
scheme will be March 8-14 and
the bonds issued on March 29.
The first tranche of the scheme,
unveiled in November 2015,
attracted 62,169 applications
for 915.9 kg of gold worth Rs.
246.2 crore. This subdued
performance prompted the
government to tweak the
schemes rules to make it easier
to buy the bonds.
The second tranche, which
opened in January 2016, met
with greater success, attracting
3.16 lakh applications for 2,790
kg of gold worth Rs.726 crore.
The Government of India, in
consultation with the Reserve
Bank of India, has decided to
issue third tranche of SGB.
Applications for the bond will
be accepted from March 8,
2016 to March 14, 2016. The
Bonds will be issued on March
29, 2016.
The Bonds will be sold through
banks,
Stock
Holding
Corporation of India Ltd.
(SHCIL) and designated Post
Offices, according to a
statement from the government
on Friday.
The announcement of the third
tranche of the scheme comes
at a time when gold prices are
rallying.
The governments plan behind
the SGB scheme is to encourage
those who use gold as a store of
value to instead invest in the
gold bonds as opposed to the
physical yellow metal itself.

The idea, among others, is to


reduce Indias substantial gold
imports, which were at $2.9
billion in January 2016, up 85
per cent over the same month
of the previous year.
The bonds, issued by the
Reserve Bank of India on behalf
of the government, have a tenor
of eight years with an exit option
from the fifth year onwards.
The maximum quantity which
can be subscribed is 500 grams
per person per financial year
and the interest rate on the
bonds are set at 2.75 per cent
per annum, payable on a halfyearly basis.
The maximum quantity which
can be subscribed is 500 grams
per person
Tax exemptions for capital gains
investment in venture capital

To help start-ups mobilise


capital at affordable rates during
the initial stages, the
Department of Industrial Policy
and Promotion (DIPP) will soon
take up with the Finance
Ministry a proposal to grant
Capital Gains Tax (CGT)
exemption for those investing
their capital gains in regulated/
notified Venture Capital (VC)
and angel funds.
The budget had proposed CGT
exemption for persons
investing their capital gains only
in regulated / notified Fund-ofFunds (FOF).

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Economy
FOFs, as per the DIPPs Startup
Action
Plan,
are
professionally managed funds
that will not invest directly in
start-ups, but contribute to the
capital of VCs registered with
capital markets regulator SEBI.
These VCs, in turn, provide the
needed early stage funding for
start-ups. CGT is the tax-onprofit made by a person
through sale of a capital asset
(such as an investment or realestate).
DIPP would hold a meeting with
the Finance Ministry to take up
the issue of allowing SEBIregistered VCs and angel funds
to also be notified for the
purpose of CGT exemption.
Cell formed to study subsidies to
industry
The government has set up a
special cell to compile
information on subsidies given
by other countries to their
industry.
The constitution of the special
cell as well as proposed
measures including changes in
laws such as Customs Act is
also aimed at indirectly helping
India Inc file applications
before the government seeking
imposition of anti-subsidy duties
on subsidised imports of items,
such as steel, harming local
industries.
The development comes in the
backdrop of slowdown in
global trade and measures
taken (including against
merchandise exports from
India) by several countries such
as the U.S. to protect their
domestic industries from
unfairly low-priced imports.
Under the WTO norms,
subsidies refer to financial

contribution (loan, loan


guarantee, grant, import duty
exemption, equity infusion,
fiscal incentives and purchase
of goods) by the government or
state agencies resulting in
advantages to those players
availing it.
Action against subsidies is
meant to level the playing field.
The move to create a special
cell with representatives from
several ministries including
commerce and finance also
comes at a time when the
government is keen to boost
local manufacturing through
initiatives such as Make In India,
Start-up India and Digital India.
Outrage on taxing EPF
Following widespread outrage
over the Union Budget proposal
to tax Employees Provident
Fund (EPF) withdrawals, the
Prime Ministers Office (PMO)
held a review with top officials
The Union Labour and
Employment Ministry made a
strong case for a rollback of the
proposal to tax 60 per cent of
EPF savings at the time of
withdrawal,
This is the second intervention
by the PMO on the issue, the
first one being an hour-long
discussion with Finance
Minister Arun Jaitley and Mr.
Adhia
Initially it was said that only the
interest earned on EPF savings
would be taxed. Later, the
Ministry said taxing interest
income was just one among the
representations the government
had received. It said those who
bought an annuity product with
60 per cent of their EPF corpus
would not be taxed

EPF tax would cost dearly to


low income workers

Union Budget 2016-17 holds


another tax whammy for
employees provident fund
savings which will particularly
hurt millions of low-income
workers earning as little as
Rs.5,000 a month.
Such employees would be
taxed at the highest marginal
income tax rate of 34.6 per cent
if they withdraw EPF savings of
Rs 50,000 or more, before
completing five years of
continuous service.
The tax, is to be levied at the
highest personal tax rate for
those members who dont have
a PAN card, according to the
Finance Ministry. For those with
a PAN card, the tax is levied at
10.3 per cent
Those with a balance of just
Rs.50,000 in their EPF account,
after, say 59 months of service,
are essentially low income
workers who are not liable to
pay tax to begin with. Yet they
will be taxed at the rate
applicable for those earning
over a crore of rupees a year
To put that in perspective,
banks deduct income tax at
10.3 per cent on interest
income of over Rs.10,000
earned from fixed deposits. In
cases where a depositor hasnt
shared his PAN card details with
the bank, such interest income
is taxed at 20.6 per cent.
Separately, a PAN number is

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Economy
mandatory for jewellery
purchases over Rs. one lakh.
Personal income is tax free in
the country for those earning
about Rs.21,000 a month or
Rs.2.5 lakh a year
An EPF account is mandatory
for all employees earning up to
Rs.15,000 per month (raised
recently from Rs.6,500 per
month) in firms employing over
20 workers. As per the law, 24
per cent of an employees salary
is contributed to EPFO as a
social security net for old age
a part of that (8.33 per cent) is
diverted to an employees
pension scheme (EPS).
This is a very regressive move
and would not only lead to
taxing those who are not part of
the tax net or pushing them to
get a PAN card though their
income is well below the
taxable limit, but also create a
huge
compliance
and
paperwork headache for
employers as well as the EPFO,
who would have to issue tax
deduction certificates
The government has defended
its proposal to tax 60 per cent
of EPF savings as a tool to push
people into the pension habit
and said that only high-income
workers would be affected,
while those earning upto
Rs.15,000 a month wont be
taxed.
Aadhaar Bill introduced in Lok
Sabha
Union Finance Minister Arun
Jaitley introduced the Aadhaar
(Targeted Delivery of Financial
and Other Subsidies, Benefits
and Services) Bill, 2016 in the
Lok Sabha. The Bill provides
statutory backing to Aadhaar,
the unique identity number
76

through which the government


plans to target delivery of
subsidy benefits and services.
The expenditure for the
nationwide Aadhaar exercise is
incurred from the Consolidated
Fund of India.
The Bill provides for the
establishing of the Unified
Identification Authority of India
(UIDAI) and the establishment,
operation and maintenance of
the Central Identity Data
Repository. The Authority shall
ensure
the
security,
confidentiality and protection
of identity information and
authentication records of
individuals in its possession or
control,
including
the
information stored in the
repository, according to the Bill.
These include biometric
information collected, created
and stored in electronic form.
The Supreme Court has
restricted the use of the
Aadhaar number until a
Constitution Bench delivers its
verdict on a number of cases
concerning privacy and other
issues
Under the provisions of the Bill,
the Aadhaar number cannot
confer right of or proof of
citizenship of domicile
Mr. Jaitley introduced the
measure as a money Bill, which
can only be introduced in the
Lok Sabha and to which the
Rajya Sabha where the NDA
government does not enjoy a
majority
cannot
make
amendments. The Upper House
can
only
make
recommendations to money
Bills and must return such
legislation to the Lok Sabha
within 14 days from the date of
their receipt, thus ensuring a

time-bound process
The Opposition also demanded
to know if the Bill can be
referred to the standing
committee on finance. Money
Bills cannot be referred to a joint
committee of Parliament
MAT will not be possible until
all corporate tax exemptions are
rolled back

A reduction in the Minimum


Alternate Tax (MAT) will not be
possible until all corporate tax
exemptions are rolled back
The rate of the Minimum
Alternate Tax a tax put in
place to bring into the net
companies that have been not
been paying tax due to the
various exemptions granted to
the corporate sectoris
between around 19 per cent
and 21.34 per cent for Indian
companies, and between 19
per cent and 20 per cent for
foreign companies
Companies
have
been
demanding a reduction in the
MAT rate as well as in the
corporate tax rate, which, till
recently, was at a flat 30 per
cent (plus cesses and
surcharges)
Manufacturing companies that
are incorporated after March 1,
2016 will be given an option to
be taxed at 25 per cent plus
cesses and surcharges as long
as they do not avail of profit and
investment-linked deductions

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Economy
or certain other tax exemptions.
In addition, the finance minister
proposed to lower the
corporate tax rate for
companies with a turnover not
more than Rs. five crore a year
to 29 per cent
Government will take final call
on EPF tax
Finance Minister Arun Jaitley
said that the government would
take a final decision on his
budget proposal to tax 60 per
cent of employees provident
fund (EPF) savings of those
earning over Rs.15,000 per
month, before it responds on
the issue during a debate on
the Finance Bill in Parliament.
The finance ministry had issued
a clarification that EPF savings
wont be taxed at retirement, if
the retiring employee opts to
use 60 per cent of his EPF
account balance to buy an
annuity product that provides
them a monthly pension.
The Budget had announced
that 40 per cent of EPF savings
will be tax-free at the time of
withdrawal on retirement. Till
now, EPF savings are taxexempt at the time of
retirement.
Mr. Jaitley said that the tax
proposal was not aimed at
revenue generation, but help
everyone get a pension in their
old age.
The balance 60 per cent (of
EPF savings) if converted to
annuity and used for a regular
pension will not be taxed. The
objective is to incentivise
people to get pension and
disincentivise consumption of
savings, he said.
Stressing that the proposal
would only impact high-income

private sector employees, the


minister said that nearly three
crore active EPF members
receive monthly salaries of less
than Rs.15,000 and would not
be affected by the tax.
Corporate wants Taxation of
incomes from corporate
dividends to be reviewed
After protests from middle class
against the EPF provisions, the
super-rich too have raised
demands that the NDA
Government reconsider its
Budget proposal regarding the
taxation of incomes from
corporate dividends in excess
of Rs.10 lakh.
Former CII President Rajive Kaul
and Salil Singhal of PI Industries
both said that the proposal
amounts to triple taxation.
The CII will collate the various
requests for reconsideration
and comments on various
budget proposals made at
meeting to be submitted to the
Finance Ministry.
As a result, tax payers even with
high dividend income and who
fall in higher income tax
brackets are subjected to
dividend tax only at the rate of
15 per cent.
It is with the view to eliminate
this vertical inequity across
dividend income earners that
the budget has proposed an
additional 10 per cent tax on
income in excess of Rs.10 lakh
from dividends on corporate
profits.
Faced by backlash from salaried
class government to look into
EPF tax
Faced with a strong and
immediate backlash from the
salaried class, political parties

and trade unions, the Prime


Ministers Office stepped in to
take stock of the issue as well as
the intent behind the proposal
early in the day, holding a fairly
long parley with Finance
Minister.
By noon, the revenue secretary
had clarified in an interview to
All India Radio that the tax
would only be applicable on
interest income paid on EPF
savings and if an employee
chose to buy an annuity with 60
per cent of his EPF account
balance at retirement, it would
be tax-free.
This position, however,
changed further, with the
finance ministry issuing a
clarification.
Clarification stated that the idea
to tax interest income was only
based on some representations
received today and will be
considered by the FM before
passage of the Finance Bill,
along with other suggestions on
the proposal.
When NPS (created in 2004)
was not there, EPF was given
the exempt-exempt-exempt
(EEE) tax status mainly for the
3 crore people, not the 70 lakh
high-income people who were
allowed to join EPF on a
voluntary basis.
An investment instrument with
EEE status means that all
contributions, the return on
them and the withdrawal of the
accumulated corpus are taxfree. The NPS so far has an EET
regime that taxes only
withdrawals on retirement.

RBI unlocked additional capital


to Indian banks
The Reserve Bank of India (RBI)
revised norms on capital

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Economy
recognition, making available an
additional Rs.40,000 crore to
Indian banks.
The move comes at a time when
public sector banks are facing
pressure on their profitability
due to a sharp rise in nonperforming assets, which is
eroding their capital base.
The announcement is a big
relief for, mainly, public sector
banks, after finance minister
Arun Jaitley announced in his
budget speech a capital

infusion of Rs. 25,000 crore for


the fiscal year starting in April.
RBI said banks can recognise
foreign currency reserves
arising due to translation of
financial statements of foreign
operations to the re- porting
currency as common equity tierI (CET1) capital.
Deferred tax assets arising due
to timing differences may be
recognised as CET1 capital up
to 10 per cent of a banks CET1
capital, it added.

Agriculture minister believes budget will help in getting 4 percent


in agriculture

Union Agriculture Minister


Radha Mohan Singh said the
Union Budget would put the
agricultural sector towards path
of progress and would help in
addressing agriculture distress
and achieve 4 per cent growth.
Budgetary provision of
Rs.35,984 crore for Agriculture
and Farmers Welfare Ministry
2016-2017 manifests that NDA
government is committed to
villages, the poor and farmers,
Mr. Singh said.
Governments positive steps
coupled with a good monsoon
could help agriculture sector
78

grow at 4 per cent in the next


fiscal year, he added.
He said the government aims to
double the in- come of farmers
in the next five years.
We also intend to multiply yield
per unit, a better return of the
products related to farmers, he
said.
Controller General of accounts
questioned the new accounting
method
The Controller General of
Accounts has asked the
government to be careful in
adopting the accrual method of

accounting considering the


costs involved as only a few of
its departments can benefit.
CGA said that There is no such
thing as a big-bang approach.
Even if you've heard of some
advanced countries that have
made this transition, like
Australia, New Zealand, South
Africa, UK, you must understand
that the background to the
introduction of accrual
accounting was not that it was
an end by itself.
The Fourteenth Finance
Commission had strongly
recommended the adoption of
the accrual system of
accounting.Accrual method is
the standard accounting
procedure for most medium
and large companies.
The method, according to
experts, provides a more
accurate picture of the
company's current financial
position.
However, it is a more complex
accounting system than cash
accounting, which the
government uses currently and
so is more ex- pensive and timeconsuming to implement.
While cash accounting
recognises a transaction only
when money changes hands,
accrual accounting recognises
the transaction at the time it is
made, thereby providing a more
current snapshot.

NDBs president says Bank is an


assertion of global south
The formation of the New
Development Bank (NDB) of
the Brazil-Russia- India-ChinaSouth Africa (BRICS) grouping
is an assertion of the Global
South and its significance
would be felt beyond the

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Economy
economic domain, says K.V.
Kamath.
The New Development Bank
was not an economic instrument
alone, but an initiative that also
symbolised an assertion of
political sovereignty of the five
emerging economies.
Currency reserve arrangement
that is in place in the BRICS
context, it is a commitment of
another 100 billiondollars.
Mr. Kamath also said that two
institutions, NDB and the Chinaled Asian Infrastructure
Investment Bank (AIIB) are
complementary rather than
competitive.

Singapore and Cyprus are


actually from the U.S. or from
India-related investors.
The Mauritius route is used for
availing tax benefits and for
ensuring anonymity.
FDI from Mauritius is however
sector-agnostic unlike FDI from
countries like Japan, Germany
and France, which are mostly in
manufacturing-related sectors.
G-20 asks to look for policies of
growth other than ultra low
interest rates

Survey says only 5.5% pay


taxes

Survey says More scrutiny on


FDI is needed
A close scrutiny of foreign
direct investments from
Singapore and Mauritius is
needed as both the nations
accounted for about 60 per
cent of the $30 billion worth of
FDI in India during the first
three quarters of the current
fiscal year.
A detailed examination is
needed to find out if they
constitute actual investments or
whether they are diversions
from other sources to avail tax
benefits under the Double
Taxation
Avoidance
Agreement (DTAA) that India
has with these two countries,
according to the Economic
Survey.
According to government data,
of the $29.5 billion FDI into
India during April-December
2015 in 2015-16, around $11
billion was from Singapore,
while $6.1 billionwas from
Mauritius.
Most of the FDI coming in- to
India through Mauritius,

concerns over escalating


geopolitical tensions and
Europe's refugee crisis.
The G20, which spans major
industrialised economies such
as the United States and Japan
to the emerging giants of China
and Brazil and smaller
economies such as Indonesia
and Turkey, reiterated in the
communique a commitment to
refrain from targeting exchange
rates for competitive purposes,
including through devaluations.

The world's top economies


declared that they need to look
beyond ultra-low interest rates
and printing money to shake the
global economy out of its torpor,
while renewing their focus on
structural reform to spark
activity.
A communique from the Group
of 20 (G20) finance ministers
and central bankers flagged a
series of risks to world growth,
including volatile capital flows,
a sharp fall in commodity prices
and the potential "shock" of a
British exit from the EU.
The global recovery continues,
but it remains uneven and falls
short of our ambition for strong,
sustainable and balanced
growth.
Faltering growth and market
turbulence have exacerbated
policy frictions between major
economies in recent months,
and the statement also noted

India is far from being a full taxpaying democracy with about


5.5 per cent of the people who
earn paying tax and only 15.5
per cent of the net national
income being reported to the
tax authorities, according to the
Economic Survey tabled in the
Parliament.
The survey estimated that just
four per cent Indias voters are
taxpayers, though it should be
closer to 23 per cent, and 85
per cent of the net national
income fall outside the tax net.
The tax to GDP ratio at 16.6%,
as a result, is well below that of
the
emerging
market
economies of 21 per cent and
OECD average of 34 per cent.
The survey, however, pointed
out that the democracies
withhigher ratiostook a long
timeto strengthen tax capacity.
On the expenditure side, Indias
spending on human capital,
education and health, to the
GDP ratio is the lowest among
BRICS and lower than the
OECD and emerging market
economies averages.
To widen the tax net and raise
revenue for spending on Indias

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Economy
human capital development,
the survey called for bringing
rich farmers into the tax net,
raising property tax rates and
phasing out tax exemptions.
If the UPA Government had not
raised in the 2012- 13 the
threshold level of personal
income tax, the survey
calculated that an additional
1.65 crore in- come tax payers
would have got incorporated.
The tax-GDP ratio would have
been 0.32% higher as Rs.31,500
crore additional tax revenue
would have been collected.
According to the survey fast
growing years in the 2000s were
in fact associated with rising
inequality at the very top end of
the Indian income distribution.
India is getting more and more
technological start ups

Within a year, the number of


technology start ups in the
country has grown by 40 per
cent to over 4,200, making India
the third largest base of
technology start-ups in the
world, according to the
Economic Survey 2015-16.
This has further helped create
about 80,000-85,000 jobs
during 2015.
As of January 2016, there were
19,400 technology-enabled
start-ups in India, of which
5,000 had been started in 2015
alone.
The survey added no lessthan
80

2000 of the start-ups have been


backed by venture capital/
angel investors since 2010, of
which 1005 were created in
2015 alone.
Survey looking for faster labour
reforms
The economic survey criticised
the slow pace of reforms in
labour laws, arguing that firms
negotiate regulatory hurdles
imposed to protect employees
who get poor quality jobs as a
consequence and suggested
easier retrenchment norms and
low- er statutory deductions
from salaries to create good
jobs.
The slow pace of labour reform
has encouraged firms to resort
to other strategies to negotiate
regulatory cholesterol.
Noting that contract labour
hiring grew faster in states with
relatively more rigid labour laws.
The Industrial DisputesAct
1947 requires firms with more
than 100 workers to seek
governments approval before
retrenching workers.
The law has encouraged
factories to employ contract
workers to stay out of the rule
books
even
though
entrepreneurs feelcontract
labour is not the ideal solution
for them.
Indian industry welcomes
railway budget
India Inc, welcoming the railway
budget for its focus on various
initiatives aimed atfuelling
economic growth.
many initiatives announced in
the budget would restore the
Indian railways back to good
health.
Bajaj Auto Chairman said many

positive steps had been taken


in the right direction but large
expenditure on a project like
the bullet train should be
postponed and the money
utilized for the much required
improvement and expansion of
the railways.
Railway budget lays emphasis
on PPP projects
The Railway Budget has laid
emphasis on Public Private
Partner- ships (PPP) to
implement initiatives such as rail
connectivity for ports, stationredevelopment, rail-side
logistics parks and warehousing as well as satellite
terminals.
A committee appointed for the
purpose of revamping the
ministrys PPP cell has submitted
its re- port and the initiative is
under implementation.
The capital expenditure for the
next financial year, pegged at
Rs.1.21 lakh crore, calls for
abandoning the business-asusual approach and continually
innovating to develop new
frameworks for PPP.
Foreign investors from Spain
and France were keen on
dedicated freight corridors
(DFC) projects provided they
were structured properly in
terms of financial returns and
risk-allocation and mitigation.
The railway minister said his
ministry would take up
dedicated freight corridors and
implement it in a time-bound
manner through innovative
financing
mechanisms,
including PPP.
Referring to the Cabinet
approval for redevelopment of
400 stations through PPP,
Prabhu said on the basis of a

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Economy
bankable structure for private
participation, the government
will undertake a bidding
process for a few large and
medium stations during the next
financial year.
The government is also
considering availing multilateral
financial investments for the
development of certain other
stations and partnering with
states.
Hurun Global Rich List adds 27
new Indian billionaires
India added 27 new billionaires
with Mukesh Ambani, Chairman
of Reliance Industries (RIL),
emerging at the top with a
personal wealth of $26 billion,
according to Hurun Global Rich
List 2016.
Cumulative Indian billionaires
wealth stood at $308 billion,
registering a 25 per cent growth
over last year. Mr. Ambani, who
is ranked 21st globally, was
followed by Sun Pharma
promoter, Dilip Shanghvi , with
personal wealth of $18 billion.
India is home to 111 billionaires
and most of them are from
Mumbai, according to the
report.
The rich in China overtook their
U.S. counterparts to make
Beijing, the `billionaire capital of
the world for the first time,
according to Hurun.
Standing committee on finance
recommends to make names of
wilful defaulters public
The Standing Committee on
Finance recommended that
state-owned banks make public
the names of their respective
top 30 stressed accounts
involving wilful defaulters.

This will act as a deterrent and


enable banks to with- stand
pressure and interference from
various quarters in dealing with
the promoters for recoveries or
sanctioning further loans, the
committee said in its report
tabled in Parliament.
Wilful defaulters owe PSU banks
a total of Rs.64,335 crore or 21
per cent of total non-performing
assets, (NPA), according to the
report.
The sharpest increase in NPAs
in the banking industrywas
observed in mid size corporates
(Rs.25 croreRs.100 crore
exposure to commercial
entities) as they rose to 9.7 per
cent in September 2015 from
6.4 per cent in March 2014.
Union cabinet to promote
cashless transactions
The Union Cabinet approved
several steps to promote
cashless transactions, which
include mandatory card-based
or electronic payments beyond
a prescribed threshold.
Some of the other major steps
approved by the Cabinet
include the withdrawal of any
additional charge currently
imposed on card or digital
payments
by
various
government entities and the
introduction of the required
infrastructure for digital
payments in all government
offices.
The Cabinet also approved the
rationalisation of the merchant
discount rate (MDR) on card
transactions and telecom
service charges for digital
financial
transactions
topromote mobile banking.
Later in the year, the
government also proposed to

levy a nominal cash handling


charge on cash transactions
above a specified level, though
this was not included in the
steps approved by the Cabinet.
Policy on strategic sale of stateowned companies soon
The government will soon come
out with a policy on strategic
sale of state-owned companies
and the disinvestment will not
be confined to loss-making
enterprises.
Broadly, the strategic sale is that
government is selling the equity
of the company along with the
controlling management.
How much stake will be sold, it
will vary from place to place
and company to company.
The previous NDA Government
led by Atal Bihari Vajpayee had
from 1999 to 2004 privatised
about a dozen state- owned
firms and hotels including
VideshSanchar Nigam Ltd.
(VSNL), Bharat Aluminium
Company Ltd. (BALCO), CMC
Ltd. and Hindustan Zinc (HZL).
But the policy was buried after
the UPA came to power and
only minority stake sales was
pursued since then.
WTO compliant National
Intellectual Property Rights
policy in fortnight
The government is likely to
announce its Nation- al
Intellectual Property Rights
(IPR) Policy within a fortnight.
The policy -- which will be
entirely compliant with the
World Trade Organisations
agreement on Trade Related
aspects of IPRs (TRIPS) -- will,
as per Prime Minister Narendra
Modi's suggestion, have a

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Economy

82

special thrust on awareness


generation and effective
enforcement of IPRs.
However, the policy will not
suggest any changes in the
existing Indian IPR laws or other
related policies on the patentdisabling
Compulsory
Licencing (CL) and the
provision-preventing 'evergreening' of drug patents (done
through minor modifications of
an existing drug).
The move to retain the
provisions on CLs (in the
National Manufacturing Policy
and Section 84 of India's
Patents Act) as well as Section
3(d) of India's Patents Act
(preventing ever-greening of
drug patents) comes even as the
European Union and the US
have been pressing India to
make changes in this regard to
boost innovation, researchand
development (R&D) and
foreign investment in India.
According to Section 3(d),
besides novelty and inventive
step,
improvement
in
therapeutic efficacy is a must for
grant of patents when it comes
to incremental inventions.
The EU and U.S. had objected
to India's adoption of CL in
industrial sectors (in the
National Manufacturing Policy)
saying it will discourage
investment and innovation.
The policy will also suggest
incentives such as tax benefits
and fee waivers to encourage
R&D and IP creation to
strengthen the Make In India/
Start-up/Digital India initiatives.
To protect 'small inventions'
developed especially in the
informal / unorganised sectors,
the policy will pro- mote 'utility
patents'
(with
lower

compliance burden and shorter


period of protection, when
compared to the nor- mal
patents) only for mechanical
innovations.
This 'utility patents' may not be
extended
to
the
pharmaceutical
sector
considering the sensitivities
involved in ensuring the efficacy
of the drugs.
FII investment in public sector
banks may increase to 49
percent

The government is considering


a proposal to in- crease the cap
on foreign institutional
investment in public sector
banks to 49 per cent from 20
per cent.
The move comes at a time
public sector banks need equity
capital while their stocks have
taken a hammering after
reporting huge losses in the
third quarter due to a sharp rise
in non-performing assets.
According
to
present
regulations, a single nonbanking institution cannot hold
more than 10 per cent in a bank
while one bank can hold
maximum 5 per cent stake in another bank.
The public sector banks will
need to raise tier-I capital as
their capital positions have
depleted due to higher
provisioning for bad loans.
While the government has
committed Rs.70,000 crore

capital infusion in four years


(starting from this financial year)
that amount may be inadequate,
several rating agencies had
pointed out.
Earlier, the government had
estimated an amount of Rs.2.8
crore as capital infusion for the
public sector banks by 2018.
Public sector banks are
constraint to raise equity capital
from the markets as most of them
are trading at a significant
discount to their book value.
Most
public
sector
banksreported weak earnings in
Q3 after Reserve Bank of India
(RBI), found in its asset quality
review (AQR) that certain
accounts needs higher
provisioning and asked the
lenders to classify those
accounts as non-performing
and gave the lenders two
quarters Q3 & Q4 to
complete the task.
Most banks have classified 50
per cent of the RBI identified
accounts in Q3 and remaining
will be identified in Q4, which
will result in further rise in NPAs.
The one of the biggest hurdle
to increase the foreign
shareholding cap in public
sector banks was Reserve Bank
of India, which was not in favour
of higher limit due to concerns
over stability.

Government wants to bring


growth reforms through budget
The Union Budget for 2016-17
will primarily focus on
stimulating growth without
deviating too much from the
fiscal deficit target set by the
Finance Minister Arun Jaitley in
his previous Budget.
Mr. Jaitley had set a fiscal deficit
target of 3.9 per cent of GDP

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Economy
for 2015-16, paring it further to
3.5 per cent for 2016-17 and 3
per cent for 2017-18.
However, with the economic
recovery still tentative and
private sector investments
remaining elusive, there has
been a growing clamour for the
government to relax its deficit
targets in order to pump prime
the economy via enhanced
public investments.
Given the fiscal constraints, it is
the governments endeavour to
present a budget which is
growth oriented and maintains
the momentum of growth and
tries to develop on it.
For Budget 2016-17, the
government invited suggestions
from citizens through Twitter for
the firsttime, even conducting
a series of polls to gauge public
priorities and expectations from
the budget.
Government will divest five
percent of its stake in NTPC

The government announced it


will be divesting five per cent
of its stake in NTPC through the
ofer-for-sale route.
The sale is expected to garner
Rs.5,029 crore at a floor price of
Rs.122 per share.
The stake sale is to be spread
over two days, with institutional
bidders getting to buy shares
and retail investors.
The retail investors have 20 per
cent of the shares re- served for
them.

The five per cent stake in NTPC


works out to 41.22 crore
shares.At the floor price of
Rs.122 per share, this could
fetch the government Rs.5,029
crore.
The government has been
struggling to meet the
disinvestment target of
Rs.69,500 crore for the financial
year.
With about 40 days left in the
financial year, the government
has managed to realise only
Rs.13,330 crore through
divestment which is less than20
per cent of the budgeted
target.
Commerce Ministry is assessing
the impact of China
Indias Commerce Ministry is
assessing the implications of the
likelihood of China being
granted Market Economy
Status (MES) from December
this year under the World Trade
Organisation (WTO) norms.
This comes against the
backdrop of instances of India's
manufacturers in steel,
chemicals, electrical and
electronics sectors being
severely hurt by unfairly lowpriced imports from China, and
the extensive usage of antidumping duty by India to offset
the losses caused to the local
manufacturers due to dumping.
Of the 535 cases where antidumping duties were imposed
by India from 1994- 2014, a
maximum of 134 has been on
goods from China.
Beijing has cited the 2001
agreement on China joining the
WTO to say that WTO- member
countries had then decided to
deem China as a 'market
economy' from December 2016

while adjudicating antidumping cases.


As per the 2001 agreement
(Protocol on the accession of
China to the WTO), in
calculating the 'normal value' of
the exported goods while
adjudicating anti-dumping
cases, the WTO member nations
could for 15 years ignore selling
price and production costs in
China.
Once China is granted MES, it
will severely limit India's ability
to resort to anti- dumping as the
authorities (DGAD) will have to
accept the production costs
and sell- ing price in China as
the benchmark, the sources
said.
They added that it will in turn
mean lesser chances of antidumping duties being imposed
or lesser anti-dumping duties
even if they are imposed.
Adequacy of foreign exchange
reserves and currency turmoil
The upbeat mood was
pervasive, and even infectious.
A radiant smile, expanding into
a wide grin was common on the
faces of government and RBI
officials about 10 years ago
when conversations would
gravitate towards the topic of
foreign exchange reserves.
Successive years of high and
increasing positive overall
balance
of
payments,
occasioned by large portfolio
capital inflows and RBIs
continuous buying of U.S.
dollars from the local forex
market resulted in a very rapid
rise in foreign exchange
reserves from about $60 billion
in 2002 to a little over $160
billion by mid-2006.
Some were quick to conclude

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Economy

that the reserves then were


much in excess of what was
needed to ensure an orderly
forex market and for external
stability and blamed RBI for
running a faulty forex market
intervention policy.
There were still others who saw
in this an opportunity to hive of
the excess reserves for setting
up a sovereign wealth fund, on
the lines of China, Russia etc.
A few fortune-seekers offered
to leverage their relationships
and influence to the benefit of
asset managers of the world
eager to get a slice of the
reserves for fee-based
discretionary management and
RBI seemed willing to play ball.
A comparison with China here
is instructive in many respects.
A similar computation leads to
a range of $3 $4.5 trillion. The
current level of reserves at
$3.23 trillion constitutes about
110 per cent of the lower
bound.
Even after making allowance for
the possibility of overestimation
inthis regard, the usable
reserves of China likely lie in the
range of $2.8 $3 trillion.
This, coupled with the fact that
the re- serves are falling rapidly
there explain why both
residents and non-residents
alike see the yuan much lower.
They are either taking out capital
from China at a ferocious pace
or betting hard against the yuan
at offshore locations.

XIV finance commission


members wants Independent
council for budget
Members of the XIV Finance
Commission have questioned
the governments failure to act
on its recommendation to
84

constitute an Independent
Fiscal Council that objectively
evaluates
budget
announcements and forecasts,
stressing that such an institution
was critical to improve the
governments credibility on
fiscal management.

The Centre opts for creative


accounting, pauses or simply
doesnt follow the targets it has
submitted toParliament under
the Fiscal Responsibility and
Budget Management (FRBM)
Act of 2003.
States have constraints in
managing their finances as the
RBI controls their defi- cit and
cannot float a bond on a states
behalf without the Centres
approval. Since the 2003 FRBM
law came into effect, there have
been four pauses in the def- icit
targets enshrined in it and a few
occasions where the targets
have been flout- ed.
The
Commission
had
recommended a sharp increase in allocations to state
governments in its re- port
released last February, which
the government accepted.
It had also mootedan
Independent Fiscal Council as
an oversight body over the
finance ministry.
The council would report to the
Parliament on how realistic
government projections are,
citing similar independent
budget and fiscal management
monitoring offices in 35
countries.

Christine Lagarde says


spillovers are necessary for G20
IMF Managing Director
Christine Lagarde said that G20
finance ministers and central
bank governors should focus on
global economic spillovers from
their policy decisions when
they meet in Shanghai.
The G20, is going to have to
focus on spillovers, on
spillbacks and on the
combination of various policies
in play at the moment.
Lagarde said that at the moment,
the asynchronicity of U.S.,
Japanese and European
monetary policies needed to be
reviewed and practices better
coordinated.
She also said that G20 ministers
should examine the interactions
of their countries' fiscal policies
and structural reform moves.
Banks require holistic cure
Even as mounting bad loans
have put Indian banks in a
pincer-like situation, the idea of
a government-backed bad
bank has kicked of quite a
debate.
Bad bank concept allows a
government-supported entity
to buy bad loans from stressed
banks at a fair price (dis- count).
Such an entity will then be
responsible for recovering the
debt.
The objective is simple to
help banks clean up their books,
and use their capital resources
(which are other- wise locked
up in making pro- vision for bad
loans) for funding the growth in
credit needs.
The current debate also comes
close on the heels of Italy and
the EU inking an agreement to

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Economy

allow the Italian banks sell their


NPA (non- performing assets)
portfolios to private investors
with government guarantee.
Pointing out that these public
sector banks are backed by the
Government, he has argued
against creating a new entity.
A national asset reconstruction
company (ARC) or `bad bank
given its size and expertise - can
fetch multiple advantages to
stakeholders, and bring about a
quicker resolution to the
recovery problems posed by
the NPA imbroglio.
The NPA levels of these banks
are over Rs.3 lakh crore. How
much of these can be ab- sorbed
by such an ARC or`bad bank?
Even allowing for a discounted
price for such purchases, the
effort requires quite a funding
from the Government.
A
resource-constrained
Government will have difficulty
in providing money for this.
Elsewhere in the globe,
national ARCs were funded by
issuing long-term Governmentguaranteed bonds.

Historically low solar tariffs


could dent operating margins
Low tariff bids for recent solar
projects could prove risky for
developers as any slight changes
in costs could dent operating
margins.
Developers are banking on the
fact that module prices have
been falling and so will fall in
the future, then this could work
adversely for them since
module prices have already
started plateauing.
Solar tariffs hit a historic low of
Rs 4.34 per unit in January
following the bid for a 70 MW
project in Rajasthan by Finnish

solar power company Fortum


Energy.
At the time, many experts said
that the tariffs are moving too
low and that they would
dissuade private lenders from
giving loans for solar projects.
The key to boosting rooftop
solar adoption something
that has been sluggish so far
is to make the power
distribution
companies
(discoms) more financially
secure.
At a time when the health of the
discoms is so poor, they dont
particularly favour people going
for rooftop solar and buying less
from the grid.
The renewable energy sector in
India, though benefiting from
the huge push by the NDAgovernment, still needs some
incentives- both in policy and
in the upcoming Budgetfor
the sector to take off.
At the moment, the country has
34 GW of operating wind
capacity and 4 GW of operating
solar capacity.
Going by the bid processes in
the last year, an additional 2 GW
should be under construction
in each of the sectors.

Competitive prices and shorter


shipping distances makes easier
to import from OPEC

Indias oil imports from Saudi


Arabia and Iraq hit the highest
in more than a decade last
month as OPECs top producers

gained at the expense of Latin


American crudes, a validation
of the OPEC policy of
maintaining output and fighting
for mar- ket share.
Competitive prices and shorter
shipping distances are giving
the Middle East members of the
Organisation of the Petroleum
Exporting Countries (OPEC)
the upper hand in India, the
worlds third-largest crude oil
importer.
Saudi Arabia was the top
supplier to India in January, with
volumes jumping 29 per cent
from the same month a year ago
to nearly 9,40,000 barrels per
day (bpd).
Just behind was Iraq at 9,30,000
bpd, up 52 per cent from
January levels last year. The
daily rates from both were at
their highest since at least 2001.
In contrast, total imports from
Latin America fell by a quarter
in January from a yearago to
7,06,000 bpd, the data showed.

Reliance will start oil lifting


from Iran
Indias Reliance Industries Ltd,
owner of the world's biggest
refining complex, is preparing
to lift oil from Iran next month
after a gap of about five years,
The Indian conglomerate, controlled by billionaire Mukesh
Am- bani, stopped Iranian oil
imports in 2010 because it was
worried that the threat of U.S.
sanctions on companies doing
business with the Islamic
republic would com- plicate its
eforts to boost market share for
its fuels in the United States.
The shipment will make
Reliance Iran's first new Indian
oil customer since the lifting of
the sanctions.

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Economy
Reliance's
sophisticated
complex at Jamnagar in western
Gujarat state can refine 1.24
million bpd of crude as varied
as light West African to heavy
sour Middle East and Latin
American grades, allowing it to
switch to whatever crude is
cheapest.
Ministry moots National Social
Security Authority
The Labour Ministry has mooted
the idea of forming a National
Social Security Authority,
chaired by Prime Minister
Narendra Modi, and a separate
Social Security Department
within the ministry to provide
social security to the entire
population in a bid to prop up
the governments pro-worker
credentials.
The functions of the authority
should be mainly to formulate
the National Policy on Social
Security and to co-ordinate the
central and state level
programmes and to en- sure that
the objectives of the policy are
achieved within the time frame
prescribed.
The note proposes a four-tier
system to cover the entire
population of the country,
including both formal and informal sector workers, through
a common Social Se- curity
Code.
It said the cur- rent social
security programmes and
schemes
can
be
strengthened
and
universalised.
It said the first tier would
include the destitute and
people below the poverty line,
the second tier would have
workers in the unorga- nised
sector who may be cov- ered
86

under a subsidised scheme and


the third tier would cover
workers who can, with the help
of employ- er, can make
contribution to the schemes.
The fourth tier would include
people who are comparatively
affluent and can make their own
provisions for meeting
contingencies or risks as and
when arise.
The note visualised that the
social assistance pro- grammes
for the first tier shall be based
on tax revenue.
Indias most affordable
smartphone will cost 251 rupees
Noida-based smart-phone
maker Ringing Bells is set to
unveil Indias most affordable
smartphone, priced at Rs.251, a
move that is set to disrupt the
booming Indian mobile handset
market.
The 3G handset, Freedom 251,
features a 4-inch display,
Qualcomm 1.3-GHz quad- core
processor and 1 GB RAM,
according to details shared by
the company.
The Android Lollipop-based
handset will have an onboard
storage of 8 GB with support for
expandable memory of up to 32
GB.
The mass market device will
come with preinstalled apps
including Women Safety,
Swachh Bharat, Fisherman,
Farmer, Medical, WhatsApp,
Facebook and YouTube.
Bookings for the Freedom 251
will start on Thursday.
Department of Pharmaceuticals
are expected to come up with
bulk drug policy
Department of Pharmaceuticals
is expected to come out with a

newbulk drug policy in less than


amonth with an objective to
growthe
Indian
pharmaceuticals sector to a
$200 billion industry by2030.

Under this policy, the


government wants to build an
ecosystem to help pharma
companiesto move up in the
value chainand develop new
moleculesthrough innovations.
The industry which grew inthe
last 15 years has potential tobe
a $200 billion industry andcan
be the worlds largest if itscales
up and moves up thevaluechain.
Until 1970 India was
dependent on other countries
for
itspharmaceutical
requirementsand in 20 years
time it becameself sufficient to
meet its own requirements.
India has now become a
superpower as far as generic
drugs are concerned. India can
become a $300 billion industry
including medical devices by
2030.
As per this report the countrys
pharmaceutical industry has the
potential to touch $200 billion
by 2030 from the present $32
billion.
And the medical devices
segment can grow from $5
billion now to $100 billion.
With the Prime Minister's office
setting a target to switch at least
90 per cent of all official
transactions to paperless mode
by the end of 2016, Finance

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Economy
Minister Arun Jaitley launched
a new e-platform for non-tax
receipts.
NTPC made the maiden
payment on the portal
developed by the Controller
General of Accounts, by
remitting Rs.989 crore as an
interim dividend to the
government.
The major sources of non-tax
revenue for the government are
from dividends paidby public
sector companies,the Reserve
Bank of India, etc.
During
his
previous
year'sBudget speech, Mr.Jaitley
hadsaid that one major way
tocurb black money is to
discourage cash transactions
infavour
of
electronic
transactions.
New BOT annuity model to be
used by Indian Railways
The Indian Railways has
identified the first three projects
to be taken up for development
through the new build, operate,
transfer (BOT) annuity model at
an estimated cost of around Rs
2,450 crore.
The three targeted projects are
developing third line between
Nagpur and Wardha (both in
Maharashtra),
Kazipet
(Telangana) and Balharshah
(Maharashtra) and, Bhadrak and
Nergundi (both in Odisha).
The total estimated cost of
development of 357 km third
line is around Rs 2450 crore.
The Railways has received Rs
14,000 crore worth investment
commitments since 2014 after
it introduced new models for
projects through public-private
partnership (PPP) model.
This is a sharp rise from roughly
around Rs 4,000 crore

investments generated in 20022012.


Under the BOT annuity model
for rail projects, the private
developer gets a revenue
guarantee of 80 per cent of
projected revenue at the time
of bidding.
The developer gets a full right
to revenue between 80 and 120
per cent and the Indian
Railways do not take any share
from it.

RBI governor says there is no


need for currency devaluation
The Reserve Bank of India (RBI)
and the government dont
favour undervaluation of the
exchange rate as a means to
spur economic growth
There are those who argue that
in countries such as China, Japan
and Korea business enterprises
grew via an undervalued
exchange rate.
However there are a lot of
problems with undervaluing the
exchange rate and some of
these problems are reflected in
the economic condition that
these countries find themselves
in today.
sustained undervaluation over a
long period of time is not a
feasible or desirable strategy.
Which is why the RBIs
philosophy of not focusing on
the level of exchange rate and
trying to manipulate it up or
manipulate it down but trying
instead to minimise situations of
extreme
volatility
and
intervening in situations when
the exchange rate becomes
extremely volatile in either
direction is the right one.
The Indian rupee is one of
Asias worst performing
currencies against the U.S.

dollar this yearamid renewed


concern about the health of the
world economy and dwindling
investor confidence
The advantage to Micro Small
and Medium Enterprises
(MSMEs) should come from
their capabilities, costeffectiveness and innovative
ideas rather than from
undervaluation.
MSMEs can act as a means of
social empowerment where
disadvantageous sections of
society can be empowered
with money and wealth
Lack of infrastructure and
logistics, lack of access to
marketing, difficulty and the
expense in acquiring land and
financing are some of the
impediments faced by MSMEs.
Kerala, with its literacy rate and
educational achievements, is
quite capable of triggering a
revolution on the MSME front

National capital goods policy


introduced

The government introduced a


National Capital Goods Policy to
spur capital goods sector and
the Make in India initiative.
Heavy Industry and Public
Enterprisewas part of the
governments commitment to
turn the country into a world
class hub for capital goods.
The objective of the policy was
to increase production of
capital goods from Rs. 2.30 lakh

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Economy
crore in 2014-15 to Rs. 7.50 lakh
crore in 2025 and raising direct
and indirect employment from
the current 8.4 million to 30
million
The policy envisages making
India a net exporter of capital
goods and aims at facilitating
improvement in technology
across sub-sectors, increasing
skill availability, ensuring
mandatory standards and
promoting growth and capacity
building of MSMEs.
Some of the key issues
addressed include availability
offinance, raw material,
innovation and technology,
productivity, quality and
environment-friendly
manufacturing practices,
promoting exports and creating
domestic demand.
The
key
policy
recommendations include
strengthen- ing the existing
scheme
of
the
DHI
(Department of Heavy Industry)
on
enhancement
of
competitiveness of capital
goods sector by increasing
budgetary allocation and
increasing its scope to further
boost global competitiveness in
various sub sectors and
enhancing export of Indian
made capital goods through a
Heavy Industry Export and
Market
Development
Assistance Scheme (HIEMDA).

88

It has also made provision for


introducing a Technology
Development Fund, upgrading
existing and setting up a new
testing and certification facility,
making standards mandatory in
order to reduce sub-standard
machine imports and at the
same
time
providing
opportunity
to
local
manufacturing units by utilising
their installed capacity and
unveiling scheme for skill
development for capital goods
sector.
Exports shrink for 14th straight
month in January

Merchandise exports fell for the


14th consecutive month with
shipments in January, 2016
contracting 13.6 per cent yearon-year to $21 billion due to
weak overseas demand as well
as fall in major export items such
as engineering goods and
petroleum products.
Imports also fell during the
month by 11 per cent to $28.7
billion, resulting in the trade
deficit narrowing to an 11month low of $7.6 billion.

The trade deficit would have


been lower had the gold
imports not recorded an 85.16
per cent increase in January to
$2.91 billion.
The growth in exports have
fallen for U.S.A. (-10.51%),
European Union (-9.48%) and
China (-7.01%) for November
2015 over the corresponding
period previous year as per
WTO statistics
Seventeen of the 30 export
sectors
recorded
a
negativegrowth in January.
These included major sectors
such as engineering goods (27.6 per cent to $4.98 billion),
ready- made garments (-6.1 per
cent to $1.4 billion) and
petroleum products (-35.1 per
cent to $1.9 billion). Nonpetroleum ex- ports in January
2016 fell 10.55 per cent to $19.1
billion
Reflecting the fall in global oil
prices, oil imports in January
2016 were 39 per cent low- er
year-on-year at $5 billion.
However, non-oil imports
during January, 2016 were only
1.4 per cent lower at $23.7
billion.
The net export of services for
April-December, 2015-16 was
estimated at $54.8 billion, lower
than $56.5 billion during AprilDecember 2014-15.

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Science & Technology

SCIENCE & TECHNOLOGY


The global surface
temperatures in February were
1.35 degree Celsius warmer

that is only likely to happen


during a northern hemisphere
summer, when most of the
worlds land mass heats up.
New findings will reduce power
consumption by computers

Global temperatures in
February smashed previous
monthly records by an
unprecedented
amount,
according to NASA data,
sparking warnings of a climate
emergency.
It confirms preliminary analysis
from earlier in March, indicating
the
record-breaking
temperatures.
The
global
surface
temperatures across land and
ocean in February were 1.35
degree Celsius warmer than the
average temperature for the
month, from the baseline period
of 1951-1980.
The global record was set just
one month earlier, with January
already beating the average for
that month by 1.15 degree
Celsius above the average for
the baseline period.
Although the temperatures
have been spurred on by a very
large El Nino in the Pacific
Ocean, the temperature
smashed records set during the
last large El Nino from 1998,
which was at least as strong as
the current one.
The month did not break the
record for hottest month, since

In a breakthrough for energyefficient computing, engineers


at the University of CaliforniaBerkeley have shown for the
first time that magnetic chips can
operate with the lowest
fundamental level of energy
dissipation possible under the
laws of thermodynamics.
The findings mean that dramatic
reductions
in
power
consumption are possible as
much as one-millionth the
amount of energy per operation

used by transistors in modern


computers.
This is critical for mobile
devices, which demand
powerful processors that can
run for a day or more on small,
lightweight batteries.
On a larger industrial scale, as
computing increasingly moves
into the cloud, the electricity
demands of the giant cloud data
centres are multiplying,
collectively taking an increasing
share of the countrys and
worlds electrical grid.
Magnetic computing emerged
as a promising candidate
because the magnetic bits can
be differentiated by direction,
and it takes just as much energy
to get the magnet to point left
as it does to point right.

Finally, a bacterium that degrades polluting plastics identified

bacterium species capable of


breaking down plastic
polyethylene terephthalate
(PET) has been identified by
a team of Japanese researchers.

The bacterium uses two


enzymes in sequence to break
down
the
highly
biodegradation-resist- ant
polymer PET.

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Science & Technology


Except for rare instances of two
fungi that have been found to
grow on a mineral medium of
PET yarns, there are no reports
any bacteria biologically
degrading PET or growing on
the chemically inert substance.
looked for microorganisms that
relied on PET film as a primary
source of carbon for growth.
At first they identified a distinct
microbial consortium that
contained a mixture of bacteria
species that degraded the PET
film surface at 30 degree C; 75
per cent of the PET film surface
was broken down into carbon
dioxide at 28 degree C
From the microbial consortium,
the researchers isolated a
unique
bacterium

Ideonellasakaiensis 201-F6
that could almost completely
de- grade a thin film of PET in a
short span of six weeks at 30
degree C. The PET film was
almost fully degraded after six
weeks at 30 degree C
The bacterium degrades PET
using two enzymes that act on
it in sequence. First, the
bacterium adheres to PET and
produces an intermediate substance through hydrolysis.
The second enzyme then works
with water and acts on this
intermediate substance to
produce the two monomers
ethylene
glycol
and
terephthalic acid used for
making
PET
through
polymerisation
IRNSS-1F placed in orbit
ISRO successfully put into orbit
Indias sixth dedicated
navigation satellite, the IRNSS1F. The satellite was launched
on-board Indias workhorse
launch vehicle, the Polar
90

Satellite Launch Vehicle


(PSLV).
The Independent Regional
Navigation Satellite System
(IRNSS) is designed to pro- vide
accurate position information
service to users in India and the
region extending up to 1,500
km from the border.

The IRNSS-1F carrying two


payloads the navigation
payload and ranging payload
was put into orbit 20 minutes
after take-of from the second
launch pad at the Satish Dhawan
Space Centre, Sriharikota.
[PSLV] has taken the satellite
into the right orbit. We have only
one more satellite in this
constellation to complete our
sequence of seven satellites for
the regional navigation system
The satellite had a lift-of mass of
1,425 kg and was powered by
two solar panels generating
1660 W and one Lithium-ion
battery of 90 Ampere-hour
capacity
With this launch, India inches
closer to having its own
navigation system (like a GPS).
The navigation payload of
IRNSS-1F will transmit
navigation service signals and
will operate in the L5 band and
S band. The ranging payload
consists of a C-band transponder that facilitates accurate
determination of the range of
the satellites.
ISRO is now preparing to launch

the last satellite in the IRNSS


series, the IRNSS-1G, and work
has already begun on it.
Artificial fingertip for texture

A team of Swiss scientists has


enabled an amputee feel
smoothness and roughness in
real-time with an artificial
fingertip that was surgically
connected to nerves in his
upper arm.
The nerves of non-amputees
were also stimulated to feel
roughness, meaning that
prosthetic touch for amputees
can now be developed and
safely tested on anyone, said
the team from the Swiss Federal
Institutes of Technology (EPFL).
Mr. Sorensen is the first person
in the world to recognise
texture using a bionic fingertip
connected to electrodes that
were surgically implanted
above his stump.
Nerves in his arm were wired to
an artificial fingertip equipped
with sensors.
As the fingertip moved across
textured plastic, the sensors
generated an electrical signal.
This signal was translated into a
series of electrical spikes,
imitating the language of the
nervous system, then delivered
to the nerves.
Evidence of element, curium,
related to solar system
formation found
Scientists from University of
Chicago have discovered

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Science & Technology


evidence of a rare element
named curium that was present
during the formation of the solar
system.

The team found evidence of


curium in an unusual ceramic
inclusion they called Curious
Marie, taken from a
carbonaceous meteorite.
Curious Marie and curium are
both named after Marie Curie
whose pioneering work laid the
foundation of the theory of
radioactivity.
This finding ends a 35-year-old
debate on the possible
presence of curium in the early
solar system and plays a crucial
role in reassessing models of
stellar evolution and synthesis of
elements in stars.
Curium became incorporated
into the inclusion when it
condensed from the gaseous
cloud that formed the sun early
in the history of the solar system.
On Earth, curium exists only
when manufactured in
laboratories or as a by-product
of nuclear explosions.
Thanks to this sample, the
research team was able to
calculate the amount of curium
present in the early solar system
and to compare it to the amount
of other heavy radioactive
elements such as iodine-129
and plutonium-244.
Scientists find evidence of
curium in a ceramic inclusion
taken from a meteorite

Indian Institute of Science have


developed a eco-friendly lamp

Barely half a litre of water and


two spoons of salt is the recipe
for light.
In a country where electricity is
yet to reach millions and where
dim kerosene lamps overlook
the life of many in villages,
researchers from Indian
Institute of Science (IISc.) have
developed an eco-friendly
lamp that runs entirely on salt
water.

The salt water-run battery is as


powerful as four AA batteries,
and can power an LED lamp for
1,500 hours (or a little more than
two months) at a stretch.
The concept is one that most
are familiar with in high school
chemistry. Electricity can be
produced when two electrodes
(one that can readily give away
its electrons, and another to
accept them as easily) are
dipped in an electrolyte.
Salt water or seawater, which is
nearly free, has to be replaced
every 100 hours or so; while,
after nearly 1,500 hours of use,
the magnesium electrode has to
be changed.
Currently, each electrode costs
Rs. 50. It is this kind of
conversion
of
simple
technology, using renewable
resources, that the fledgling
company and the IISc.

Critically endangered
Great Indian Bustard seen on the banks of Tungabhadra

The banks of the Tungabhadra


in Karnatakas Sirguppa taluk
have provided a ray of hope for
the revival of the critically
endangered Great Indian
Bustard (GIB).

They were among the first to


spot the species here in 2006.
In the years preceding that, it
was assumed that the GIB had
been wiped out from Karnataka.
The semi-arid and arid

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Science & Technology


grasslands in the interiors of
Sirguppa taluk could potentially
be a perfect habitat for the
Bustard.
The sighting of the GIB has
spurred the Forest Department
into action, with additional antipoaching units and personnel

being deployed in the region.


At least six major government
agencies and industries,
including the DRDO, the
Bhabha Atomic Research
Centre, the Indian Institute of
Science (IISc.) and ISRO, have
been allotted and for industrial,
research purposes.

from distant galaxies, based on


the measurement of an efect
known as plasma dispersion.
Experiment proves acidification
diminishes the coral-reef
growth

Powerful radio waves from an enigmatic source to Earth

Astronomers have, for the first


time, detected repeating short
bursts of mysterious and
powerful radio waves from an
enigmatic source that is likely
located well beyond the edge
of the Milky Way galaxy
The findings indicate that these
fast radio bursts come from an
extremely powerful object,
which occasionally produces
multiple bursts in under a
minute
All previously detected fast
radio bursts (FRBs) have
appeared to be one-of events
as a result, most theories about
the origin of these mysterious
pulses
have
involved
cataclysmic incidents that
destroy their source a star
exploding in a supernova, for
92

example, or a neutron star


collapsing into a black hole
The new finding, however,
shows that at least some FRBs
may have other origins. The
FRBs, which last just a few
thousandths of a second, have
puzzled scientists since they
were first reported nearly a
decade ago. Despite extensive
follow-up eforts, astronomers
until now have searched in vain
for repeat bursts
The finding suggests that these
bursts must have come from an
object, such as a rotating
neutron
star
having
unprecedented power that
enables the emission of
extremely bright pulses
Scientists believe that these
and other radio bursts, originate

A ?rst-of-its kind, ?eldcontrolled experiment carried


out for 22 days in a natural coralreef community has allowed
scientists to unequivocally show
the detrimental effects of
ocean acidi?cation on coral
reefs across the world.
Coral reefs, which provide
marine ecosystems comparable
to tropical rain forests, are most
vulnerable
to
ocean
acidi?cation.
Ocean acidi?cation arises when
nearly 25 per cent of carbon
dioxide released in- to the
atmosphere and absorbed by
the oceans reacts with water to
form carbonic acid.
The carbonic acid thus
produced leads to ocean
acidi?cation by decreasing the
pH of the ocean, reducing the
concentration of carbonate ion.
oceans are already 30 per cent
more acidic than they were
before the Industrial Revolution.
Increasing the pH of the ocean
to make it more alkaline than
acidic will provide an ideal
condition for coral reefs to
grow.
Global warming has not only
increased the acidity of the

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Science & Technology


oceans but has also elevated the
sea surface temperature.
While a warming ocean would
have initially favoured coral
reefs and led to
more growth, the
continued increase
has proved harmful.
Hence, coral reefs
suffer from the
c o m b i n e d
onslaught of both
acidi?cation and
elevated
sea
s u r f a c e
temperature.
Climate-driven
reduction in sea-level rise
The rate of rise of sea level
globally has lessened by 20 per
cent during the last decade,
according to a new study.
This is because of 3.2 trillion tons

of excess liquid water storage


on land in aquifers, lakes and
other water bodies.
Though glaciers and ice bergs

have been steadily melting, the


earth has been behaving like a
sponge and absorbing the water
which should otherwise have
owed back to the oceans from
the land, thus closing the
hydrological cycle.

While increase in sea level can


be attributed to glacier and icesheet melting and transfer of
water from aquifers to ocean
from humandriven pumping,
the reason for the slowing down
of the sea level rise has not been
accurately attributed until this
study, which states that climate
driven hydrology has a major
role.
Human-induced changes in
land water storage include the
direct effects of groundwater
extraction,
irrigation,
impoundment in reservoirs,
wetland drainage, and
deforestation.
Several studies of large aquifers
suggest that trends in regional
and global land-water storage
are now strongly in?uenced by
the effects of groundwater
withdrawal..

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Sports

SPORTS
Vijender singh beats Hungarys
Alexander Horwath

and venue for which would be


decided later.
Rest of India pulled off stunning
chase

There was no stopping Indian


boxing star Vijender Singh as he
notched up his fourth
successive
knockout
professional win by pummelling
Hungarys Alexander Horvath in
under three rounds here.
Vijender had little trouble
outpunching his opponent,
who failed to get up after being
thrown off balance by his body
blows in the third round of the
six-round contest of the
middlewight (75kg) category
late on Saturday night.
The 30-year-old Indian, who
went into the contest on the
back of three successive
knockout triumphs, continued
to be a cut above his rivals, who
talk big but deliver little inside
the ring.
The 20-year-old Horvath, with
an experience of seven pro
fights, had been drinking snake
blood to prepare himself but it
seemed the bizarre routine
helped little in countering the
ferocity of Indias first Olympic
and World Championships
bronze medallist.
Vijender will next be seen in
action on April 2, the opponent
94

Rest of India upset all


predictions by chasing down
480 to win the Irani Cup match,
against Ranji champion Mumbai.
Akhil Herwadkars direct hit
from point, which saw the exit
of Rest captain Naman Ojha,
kindled hopes of a home team
win but Stuart Binnys big blows
(54, 3x4, 2x6) and an equally
dynamic performance by
Sheldon Jackson (59 not out,
4x4, 1x6) took their side past
the finishing line in the
mandatory overs.
It was the third-highest run
chase in Indias domestic firstclass tournament history (see
factbox) and Rests win was
memorable because it was behind in the first innings by 297
runs.
BCCI says despite problems
India-Pak match will happen

The Board of Control for Cricket


in India (BCCI) has said the
India-Pakistan World Twenty20
Cricket match at Dharamsala will
be held as per schedule (on
March 19) and that the State

government was on board.


After an hour-long meeting with
senior officials of the Ministry of
Home Affairs (MHA) at North
Block, Tournament Director
M.V. Sridhar said the Himachal
Pradesh government was on
board for the cricket match.
The statement assumes
significance as Himachal
Pradesh Chief Minister
Virbhadra Singh had opposed
the match and even told a
visiting Pakistani team a day ago
that the State government
would not provide any security
to the cricket team.
India beat Bangladesh in Asia
cup final

India demonstrated its


dominance in Twenty20 cricket
and regained continental
supremacy, downing host
Bangladesh by eight wickets in
the final of the Asia Cup at the
Sher-e-Bangla National Cricket
Stadium.
Bangladesh found its total of
120, after having been asked to
bat, too meagre to challenge the
efficiency of the Indians who
completed the run chase with
seven balls to spare.
The match was reduced to a 15over affair after a thundershower

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Sports
delayed the start by two hours.
Shikhar Dhawan played the lead
with a chanceless 60 (44b, 9x4,
1x6) while Virat Kohli (41 not
out) supported him ably in a 94run stand for the second wicket.
Captain Mahendra Singh Dhoni
produced late fireworks,
scoring 20 off just six balls (two
sixes and a four), to ensure
Indias sixth Asia Cup title. This
was the 10th win in 11 matches
for India an encouraging
statistic ahead of the ICC World
T20.
Patna pirates are the winner of
Pro Kabaddi league

Patna Pirates had struggled to


break the semifinal jinx in the
previous two editions of the
ProKabaddi League (PKL).
Having got past that hurdle, the
side went all the way on
Saturday, defeating defending
champion U Mumba 31-28 in
the dying seconds of the game
to win the title but not before
Mumba gave it a scare till the
last few seconds of the game.
Tied 28-28 till the last 45
seconds, it was more a case of
holding nerves than anything
else and Patna, with the monkey
off its back, was the one that
gave it the final push.
Mumba skipper Anup Kumar
its key raider and, on this day,
someone who almost took his
team to the title single-handedly
had kept his calm and
pushed his team to fight back

from an eight-point deficit at half


time.
But his final raid, that saw him
slip and go out of the play area
to concede a point, saw the
trophy slip away.
Martin Crowe passes away

New Zealands greatest


batsman Martin Crowe died at
the age of 53 after a long battle
with cancer
Crowe enjoyed a 13-year
international career from 198295, including four years as
captain.
In his retirement, Crowe devised
a new ultra-short form of the
game called Cricket Max for his
new employer Sky Television,
which was pitched to British
officials and helped lay the
foundation for the modern
Twenty20 revolution.

Asia cup final would be between India and Bangladesh

Bangladesh quelled the


demons within to surpass
Pakistan's modest total and
ensure its first T20I final entry,
at the Sher- e-Bangla National
Cricket Stadium.
The hosts returned from the
edge of the precipice playing
out a dramatic 19th over, where
fortunes swung like a
pendulum, to overhaul the
target of 130 with five wickets
and as many balls to spare.
Rendering the rest of the league
phase
inconsequential,

Bangladesh will now play India


in the final on Sunday.
Gianni Infantino
becomes FIFA chief
Swiss football executive Gianni
Infantino vowed to lead FIFA,
the sports world governing
body, out of years of corruption
and scandal after being elected
president to succeed Sepp
Blatter.
He now inherits a very different
job from that inhabited by his
compatriot Blatter, who toured

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Sports
the world like a head of state
for 17 years.
Before the election, the
Congress had overwhelmingly
passing a set of reforms
intended to make it more
transparent, professional and
accountable.
BrendomMcCullum quit
international cricket

New Zealand captain Brendon


McCullum insisted the time was
right to quit international cricket
despite hitting one of his best
innings just days earlier.
It was not the way the 34- yearold wanted to retire, as Australia
completed a 2-0 series sweep
by winning the second Test by
seven wickets.
But McCullum did mark his
swansong in trademark fashion,
setting records for the fas- test

96

century and most sixes in Test


history (107).
South Asian games ended with
full flare
The closing ceremony at the
India Gandhi Stadium brought
the curtain down on the 12th
South Asian Games.
Twelve days of competition saw
action in 22 disciplines 15 in
Guwahati and seven in Shillong
and the awarding of 789
medals to athletes representing
the eight participating nations.
Nepal was introduced as the
host of the 13th edition of the
Games in 2018.
India finished its tally of medals
at 308, with 188 golds, 90 silver
and 30 bronze medals.
Sri Lanka and Pakistan took
second and third position
respectively.
India going firm in South Asian
Games
The Indian victories in both the
categories came in contrasting
fashion as the men had to put
their best foot forward against
Pakistan, before winning the

close encounter at 9-7, while


the womens team hardly had
to break sweat en route to an
easy 36-11 victory over
Bangladesh.
India, made a clean sweep in
the mens boxing event
bagging all the seven gold
medalson offer

Nepal made a fine comeback


in the second half to beat host
India 2-1 in the final of the
mens football at the Indira
Gandhi Stadium. The win saw
Nepal reclaiming the South
Asian Games gold after 23 years.
Kamala found her touch in the
crucial match by scoring a brace
as India scripted a convincing
4-0 win over Nepal in the
womens football final.

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War and possible peace in Syria


The agreement reached in
Munich by major world powers,
including the United States and
Russia, to work towards a cessation
of hostilities in Syria within a week is
the most constructive step yet to find
a political solution to the countrys
civil war. For years, the world looked
away when Syria was transformed
0into a geopolitical battlefield where
several countries were involved,
either directly or through their
proxies, to maximise their interests.
The war has nearly destroyed the
country,
triggering
an
unprecedented humanitarian crisis.
A report released last week by the
Syrian Centre for Policy Research
paints a picture graver than what
even the UN had estimated. About
470,000 people have been killed and
1.9 million injured since the crisis
began in March 2011. Nearly 45 per
cent of the population has been
displaced, while life expectancy has
dropped from 70 to 55.4 in five years.
That a civil war in a small nation of
about 23 million people was allowed
to get this catastrophic, itself points
to the failures of the international
system.
The positive development in
the Munich agreement is that both
Russia and the U.S. have strongly
come out for a cessation of hostilities.
Russia is directly backing the regime
of President Bashar al-Assad, while
the U.S. and its allies, Saudi Arabia
and Turkey, support the anti-regime
rebels. To be sure, both blocs have
different solutions to offer for the
crisis. While the Russians want the
regime to be sustained, with or

without Mr. Assad, the Americans and


their allies want Mr. Assad to go. Still,
there is some common ground. Both
Washington and Moscow are fighting
the Islamic State. Despite its military
intervention in favour of the Assad
regime, Russia is consistently pushing
for an eventual political solution. The
U.S. has over the years mellowed its
hardline stand. Though it still calls for
Mr. Assads ouster, it doesnt say when
he should go. This common ground
opens the possibilities for a ceasefire,
which, if it is put in place successfully,
could set the stage for serious
negotiations. But even the
implementation of a ceasefire faces
serious challenges. Since the Russian
intervention, the regime forces have
made substantial advances on the
ground. The weakening of rebel
positions has upset their regional
backers. Saudi Arabia and Turkey
have announced they are
considering sending ground troops
to Syria. If they do that, Russia would
be forced to expand their
involvement, which would
dangerously escalate the crisis.
Another key question is whether
President
Assad,
already
emboldened by the military advances
made, would be ready to make
concessions. In an interview last week
he vowed to retake the whole of the
country by force. But after the neartotal destruction of Syria, it is
delusional to think of a military
solution. If the U.S. and Russia are
committed to the Munich
agreement, they should put serious
pressure on their allies and bring them
to the table. Thats the only way
forward for Syria.

State overreach on the campus


The Union governments
response to the recent developments
at Jawaharlal Nehru University betrays
a disquieting intent to create an
atmosphere of fear amongst its
students and teachers. The rationale
for the police action was an event to
mark the anniversary of the execution
of Afzal Guru, a convict in the
Parliament attack case, and it is
alleged that slogans were raised
against Indias sovereignty. However,
unless there was actual incitement to
violence, there really was no case for
the police to swoop down on the
campus, arrest students, and slap
charges of sedition and criminal
conspiracy on them. The Delhi Police
seemed to have taken the cue from a
remark made by Union Home Minister
Rajnath Singh that anti-national
activities would not be tolerated, and
invoked the draconian preConstitution law of sedition. The
arrest of Kanhaiya Kumar, president
of the JNU Students Union, who
belongs to the All-India Students
Federation, an organisation known to
be affiliated to the CPI, is quite
inexplicable, except in terms of the
theory that he was chosen for his
political antipathy to the Akhil
Bharatiya Vidyarthi Parishad, the
RSSs student wing. Neither his union
nor the party to which it is affiliated
supports separatism in Kashmir or
opposes parliamentary democracy.
The union has in fact disassociated
itself from the views expressed by a
small group of students who
organised the event. Yet, an
impression is sought to be created
that Mr. Kumar and many other like-

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minded student activists in JNU are
anti-national.
Once again, Section 124-A of
the Indian Penal Code, which makes
sedition punishable with life
imprisonment, has been casually
invoked despite the Supreme Court
repeatedly cautioning that even
words indicating disaffection against
the state will not constitute the
offence, unless there is a call for
violence or a pernicious tendency to
create public disorder. It is difficult
to dismiss the police action as a
routine or expected response by the
state to reports of allegedly antinational speeches. The JNU campus
nurtures political opinion of all
shades. It is a haven for legitimate
dissent and a locus of inevitable
differences. Its atmosphere should
not be undermined by some to whom
its intellectual space is an eyesore. In
recent times, the suicide of a scholar
in the University of Hyderabad roiled
the student community across the
country and created an upsurge
against the ruling dispensation
wielding its ideological influence on
campus activities. The misconceived
manner in which Afzal Guru was
commemorated by a handful of JNU
students should not be a provocation
for tarring the students union with
the brush of alleged anti-nationalism.
The government should not sense in
these developments an opportunity
to suppress all dissent and seek to kill
the ideological orientation of some
student groups. Deviation from its
own notion of nationalism cannot be
treated as sedition. The line between
dissent and treason may be thin to
some, but the ability to distinguish
between the two is a constitutional
duty of the state. And given the
history of its misuse and its
incompatibility with a modern
98

Constitution, Section 124-A of the IPC


ought to be junked altogether.
Sedition and the government
The arrest by the Delhi Police,
at the behest of the Home Ministry,
of Kanhaiya Kumar, president of the
Jawaharlal Nehru University (JNU)
Students Union, on complaints of
sedition, represents the latest
deplorable attack on free speech by
the Indian state. The move presents
with vivid clarity the governments
pointed efforts at quelling any and
every form of dissent. It also, through
the invocation of Section 124-A of
the Indian Penal Code (IPC), 1860,
provides a stark reminder of the sheer
depravity of some of our antiquated,
colonial-era laws.
In the case of Section 124-A of
the IPC, which defines sedition in
wide, expansive terms, and punishes
the act with imprisonment for life, the
danger doesnt lie merely in its abuse,
or even in its potential for causing antidemocratic mischief. Unlike other
provisions that might assume a pitiless
character based on the nature of their
usage, Section 124-A is intrinsically
draconian. The problems in the clause
are obviously apparent in its
wordings, and the purpose that it
unequivocally seeks to achieve: a
suppression of all kinds of opposition.
Although sedition was originally
a part of the IPC, as drafted by
Thomas Macaulay, it was bizarrely
dropped from the law when it was
enacted in 1860. A decade later, the
offence was introduced into the IPC
as Section 124-A, following explicit
recognition from the colonial
government that the earlier omission
was based on a mistake. The
provision, as it reads today after some
amendments, defines sedition as any
action whether by words, signs or

visible representation which


brings or attempts to bring into
hatred or contempt, or excites or
attempts to excite disaffection
towards the Government established
by law in India. Tellingly, the section
also contains a clarification to the
effect that the word disaffection
includes disloyalty and all feelings of
enmity.
In 1942, for the first time, the
courts in India raised pressing
questions against the use of sedition
as a weapon to chill all innocent forms
of dissidence. Sir Maurice Gwyer, the
chief justice of the Federal Court,
ruled that public disorder, or the
reasonable anticipation or likelihood
of public disorder, is the gist of the
offence. In so doing, he drew a
necessity for a link between words
uttered and actual threat of violence
for maintaining a prosecution of
sedition. But Gwyers ruling fell short
of devising any rational test to
determine how this link had to be
drawn, as to how imminent an act of
violence had to be for the state to
prosecute a speech or expression.
Nonetheless his reasoning gave to the
offence of sedition an iota of
legitimacy.
After the Constitution was
adopted in 1950, it appeared Section
124-A would soon be denounced as
an abhorrent relic of our colonial past.
After all, efforts made by some
members of the Constituent
Assembly to include sedition as an
express ground for limiting speech
in Article 19(2) had been
successfully resisted. Moreover, the
reasoning adopted in the two earliest
free speech cases decided by the
Supreme Court Brij Bhushan v.
State of Delhi and Romesh Thapar v.
Union of India also pointed to the
incompatibility of laws of sedition

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with the Constitution. In both these
cases, efforts to ban publications on
the purported threats that they posed
to public safety were ruled
unconstitutional, since the exception
in Article 19(2), as it read then, was
restricted to dangers to the security
of the state. When the first
amendment to the Constitution was
introduced, to include public order
as a specific limitation to free speech,
Prime Minister Nehru was still
categorical in his belief that the
offence
of
sedition
was
fundamentally unconstitutional.
Now so far as I am concerned
[Section 124-A] is highly
objectionable and obnoxious and it
should have no place both for
practical and historical reasons, if you
like, in any body of laws that we might
pass, he said, in Parliament. The
sooner we get rid of it the better.
Yet, more than 65 years later,
sedition continues to not only remain
in the IPC, but also occupies a pride
of place in the states arsenal. This is
because, astonishingly, in spite of two
different High Courts having found
sedition unconstitutional, in 1962, the
Supreme Court upheld Section 124A, in Kedar Nath Singh v. State of
Bihar . Here, the court adopted a
flawed premise that the law was
enacted in the interest of public
order, which was by then one of the
specifically recognised limitations to
free speech. Although this ruling is in
accord with elements of Gwyers
reasoning, it is clear, as we saw earlier,
that the colonial government thought
of seditious speech as punishable on
its own accord. They saw no
requirement for the establishment of
any link between such expressions
and the maintenance of public order.
In the decades since Kedar
Nath Singh , Indian free speech

jurisprudence has gone through


substantial change. The court has
proceeded towards expounding
something resembling a practical
theory that distinguishes advocacy
and incitement. In 1995, the court
acquitted some men who had raised
a number of seemingly incendiary
slogans in the wake of Indira Gandhis
assassination, on the grounds that
there existed no link between the
slogans and actual threats to public
order. Last year, in Shreya Singhal v.
Union of India , in declaring
unconstitutional the notorious
Section 66A of the Information
Technology Act, the court ruled that
speech howsoever offensive,
annoying or inconvenient cannot be
prosecuted unless its utterance has,
at the least, a proximate connection
with any incitement to disrupt public
order.
Never waste a crisis
Finance ministers are judged
unsympathetically on fiscal deficits
and Mr. Jaitley is well aware of this.
No finance minister wants to be
remembered as the one on whose
watch the government missed a
target. And for Mr. Jaitley, who
committed this sin by pausing on
fiscal consolidation in his last Budget,
it is time to seek redemption.
Yet, back on his table again this
year is Keynesian advice: invest your
way out of sub-8 per cent GDP
growth to steer the economy to a
higher trajectory.
The highest GDP growth rates
in Indias history came under the
United Progressive Alliance
government. But the boom ended
quickly when growth plummeted to
sub-5 per cent in its dying years. GDP
grew 7.3 per cent in the OctoberDecember quarter of 2015-16,

slower than the upwardly revised 7.7


per cent in July-September. On
February 29, when Mr. Jaitley will
present the Budget, scrutiny will be
greater than what he has had to face
earlier. Among those cautioning Mr.
Jaitley against this type of growth
strategy is the Reserve Bank of India
Governor Raghuram Rajan, who holds
the key to lower lending rates. Mr.
Jaitley knows that without Mr. Rajans
support, spurring private investments
and growth will be almost impossible.
Fiscal credibility will also make it
possible to sustain the current growth
rate, and to convert potential into
actual growth. Should Mr. Jaitley
preserve it by keeping the fiscal
deficit reduction targets as they are?
Or should he spend now with the
hope that public investments will
generate so much growth that he will
be able to recoup the lost fiscal space
in the form of higher taxes?
Since the passage of the Fiscal
Responsibility
and
Budget
Management Act in 2003,
governments have paused on the
consolidation path four times. In
2008-09, the year the 6th Central Pay
Commission
award
was
implemented, the governments
fiscal deficit doubled to 6 per cent.
Living beyond its means meant that
the UPA governments borrowings
from the markets shot up to a little
over Rs. 3 lakh crore by the next year,
thereby playing a big role in distorting
interest rates. The then Finance
Minister Pranab Mukherjee projected
the fiscal deficit at 6.8 per cent of
GDP in his Budget; this earned the
epithet Going for Broke. It is the
same old devil again this year.
Mr. Jaitley has budgeted Rs. 1.1
lakh crore for pay and pension hikes,
slightly more generous than the 7th
Pay Commissions recommendations.

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The challenge of this huge
outgo can only mean one thing:
unpopular reforms are now
inevitable. If challenges are
opportunities, finance ministers need
the strong support of their prime
ministers. Mr. Modi must lend his
weight to the bold and massive
disinvestment plan that Mr. Jaitley has
proposed. It can bring in revenue
and also deliver on the goal of
minimum government. Why must the
government own and run the Balmer
Lawrie, a Mini-Ratna I public sector
enterprise, under the Ministry of
Petroleum and Natural Gas? It makes
steel barrels, industrial greases,
specialty lubricants and runs a
corporate travel and logistics service.
Mr. Modi will have to show political
appetite for strategic sales of such
profitable state-owned companies.
Success on the disinvestment
front will only help the Finance
Minister and the Prime Minister sell
de-control of urea prices and other
such expenditure-side reforms to
their Cabinet colleagues and industry
lobbies. The low-hanging fruit of
higher taxes on petrol and diesel
wont yield sufficient revenue. Mr.
Jaitley will have to clean up the clutter
of tax incentives for the corporate
sector to plug revenue leakages and
to set the stage for lower tax rates, as
was promised in the last Budget. The
business lobby is bound to be
unenthusiastic about giving up sops,
but Mr. Jaitley will have to resist pleas
for their retention. The tax-GDP ratio
has fallen below 11 per cent. The
only way to improve this is to widen
the net. Mr. Jaitley could chip away
at the growing impression of the
government as being pro-rich, by
taxing high salaries. Industrialists, a
big support group of the BJP, are by
and large facing tepid domestic and
100

international demand and are carrying


mountains of debt on their balance
sheets. They will expect a rescue
operation. The public sector banks
with the exposure to these bad loans
and stressed assets will need bailouts.
In the Finance Ministers
defence, Union Budgets cannot be
one-time fixes. Annual allocations to
States were broadly fixed by the 14th
Finance Commission last year, which
Mr. Jaitley can only build on to some
extent. Mr. Modi doesnt wait for the
Budget to announce big-ticket
schemes such as crop insurance or
financial inclusion. But having said
that, some measures such as fixing the
fiscal deficit can be taken only during
the Budget.
If the decision to disburse the
7th Pay Commission award will
suffuse into the economy the missing
feel-good factor, disinvestment and
discretionary urea and leaky kerosene
subsidies rationalisation would score
on the parameter of reforms and
control the fiscal deficit. The chief
architect of the National Democratic
Alliance governments first budget
was a bureaucrat: former Finance
Secretary Arvind Mayaram. The
prime mover of the second was an
economist: Chief Economic Adviser
Arvind Subramanian. The strategy this
time ought to be one scripted by Mr.
Modi and Mr. Jaitley.
Make cities clean and
sustainable
Acentury ago, Mahatma Gandhi
lamented that the Indian city was
mostly a stinking den, and Indians as
a people were not used to city life.
The squalid urban landscapes of the
21st century, with mountains of
garbage merely relocated to the
suburbs to maintain clean cities,
would seem to prove that not much

has changed since then. The quest


for clean cities has only grown more
complicated, as steady urbanisation
is putting pressure on a poorly
prepared municipal administration
system, and the more affluent
consumers produce ever-higher
volumes of trash. The neglect of social
housing, sanitation and water supply
has ensured that there is nothing like
a truly clean, green and sustainable
city. It would not be fair, of course, to
dismiss the efforts of cities such as
Mysuru,
Chandigarh
and
Tiruchirapalli, which have scored the
top three ranks in the competition
organised by the Swachh Bharat
Mission of the Ministry of Urban
Development to choose the cleanest
cities for 2015. In fact, with the high
level of political will now being
shown to address the problem of
waste and filth, there has never been
a better time for State governments
to act. Beyond the cosmetic solution
of removing waste to landfills or
releasing untreated sewage into
hidden waterways, however, the
challenge is staggering even with
the 1.04 crore household toilets and
five lakh community and public toilets
to be built, the sewage treatment
capacity in cities would have to be
expanded by 63 per cent. The
scenario is equally depressing for
solid waste, since only 20 per cent of
it can be treated scientifically at
present.
The Centres decision, against
this background, to ask fertilizer
companies to sell municipal compost
is among the more promising
initiatives to stem the rising pile of
trash. Cities can take a leaf out of
international best practices, and
encourage communities to create
food gardens in every area possible
using this resource. At the very least,

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reduction of garbage can be
achieved if residents start segregating
their waste at home, and
municipalities acquire the systems to
manage it. But there is a major policy
disconnect here, since tonnagebased contracts issued by cities have
created a vested interest in
transporting waste to landfills, rather
than to reduce it through rules that
require segregation, composting and
recycling. The imagery of the Swachh
Bharat Mission, which currently
dwells on citizen behaviour and the
visual appeal of clean cities, needs
to extend to waste reduction and
recycling. Building the necessary
infrastructure is easier today, since a
variety of financial instruments are
available, including Central funds,
corporate sponsorship and the
Swachh Bharat cess on services that
alone will garner an estimated
Rs.3,700 crore during 2015-16.
Achieving sustainable clean cities
will ultimately depend on the
attention devoted to human
development and environmental
governance. Without inclusive city
planning, affordable housing, water
and sanitation, the trend of
urbanisation can only add to the
squalor that depressed Gandhiji in
Varanasi. This is the bulwark on which
cities can achieve cleanliness and
good health.
The curious case of Justice
Karnan
In the chronicles of aberrant
behaviour by judges, Justice C.S.
Karnan of the Madras High Court
would occupy one of the most
prominent spots. Few judges have by
their conduct within and outside the
court damaged the standing of the
judiciary to this degree or exposed
the helplessness of the system in
dealing
with
over-the-top

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functioning. The judge now appears


to have crossed all bounds, and his
understanding of the law is such that
he takes up the case of his own
transfer to the Calcutta High Court
and stays the recommendation of
the Chief Justice of India. This is just
the latest instance of his ways that
have included, even as a sitting judge,
his going into the court when a
Division Bench was hearing a petition
on the selection of judges and
seeking to file an affidavit opposing
the list of appointees recommended
by the Chief Justice. His interaction
with other judges in the High Court
was found to be so offensive that 21
of them signed a petition of
complaint and a Chief Justice of the
High Court was constrained to send
a formal communication to the Chief
Justice of India seeking his transfer.
To top it all, the Madras High Court
registry had to file a petition in the
Supreme Court of India after he had
passed a suo motu order staying the
recommendation of the Chief Justice
of India transferring him and get his
order stayed. That he has frequently
raised the issue of his caste status
complaining to the National
Commission for Scheduled Castes
and even threatening to file criminal
charges under the Scheduled Castes
and Scheduled Tribes (Prevention of
Atrocities) Act against chief justices
and other judges in justification of
his conduct, has only served to
trivialise the issue of caste
discrimination and the genuine
difficulties that Dalits face.
It is inconceivable that so long
a rope would have been given to any
judge in a well-ordered democracy
functioning under the rule of law. It
was almost two years ago that the
Supreme Court condemned Justice
Karnans conduct in seeking to argue

in another court as uncharitable and


ungenerous, and indecorous. Yet,
he was allowed to continue with his
ways, each subsequent episode
marking a new low. While his initial
selection is itself testimony to the
weakness of the collegium system of
appointments, the Karnan episode
has brought to light the inadequacies
of the judicial system in keeping its
own house in order. Impeachment is
one option, but if a judge facing
impeachment chooses to brazen it
out rather than resign, it goes before
Parliament where political
considerations come into play. Short
of impeachment, very few effective
measures seem to be available. Even
the remedy of transfer now being
applied would only shift the problem
to another high court, though by
removing him out of his familiar circle
of friends and supporters it may serve
to mute it. The most that can be said
of the transfer is that it is better than
doing nothing.
Right step on savings schemes
The 25-basis points reduction
in interest rates on short-tenure small
savings schemes from April 1 may
have come as a huge disappointment
for countless savers. For the middle
class, especially for millions of retired
persons, these schemes are risk-free,
and provide safe parking slots for their
hard-earned money. The returns
these schemes offer also help them
balance their budget. Read in this
light, the decision to pare the interest
rates on these schemes, even if only
by a small measure, is bound to put
the National Democratic Alliance
government at the Centre in an
uncomfortable position vis--vis a
crucial component of society, the
middle class, which is considered the
core constituency of the Bharatiya

101

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Janata Party. The decision, however,
must be viewed in the context of the
big picture that is emerging on the
national economy. The Reserve Bank
of India cut the key policy rate by a
total of 125 basis points in 2015, and
it has only been partially transmitted
to end-borrowers. In fact, a little less
than half of this reduction had been
passed on by banks to their clients.
The problem, in a way, lies in the
peculiar predicament the banks find
themselves in. It is easy to put banks
on the mat for not passing on the rate
reduction to customers. Already
under huge stress, they can do so only
if they could correspondingly cut
their deposit rates. But there is a catch
here. The deposit mobilisation
exercise of banks often encounters
competition from these small savings
schemes. By reducing the interest
rates on short-term savings schemes,
the government has sought to erase
the return advantage they currently
enjoy over similar-tenure government
securities. Indeed, it has set the stage
for a uniform interest rate regime
at least from a short-term perspective
and cleared a major roadblock for
banks in cutting their deposit rates,
and eventually the lending rates as
well. Viewed from this perspective,
the move is a welcome one.
By leaving the interest rates on
long-term and certain special
category
savings
schemes
unchanged, the government has sent
out the message that it has in mind
the larger good of society as a whole,
and that it is keen to encourage
people to save for the future. A
distorted interest regime is the
principal cause for driving the
economy into a costlier zone. For
individuals, no doubt, the impact of
the interest rate cut on small savings
schemes could be immediate and
102

visible in terms of lower returns on


their savings. However, the effect of
such a cut will have a cascading effect
on the entire value chain, and will
inevitably bring the cost structure
down for the economy. Surely, that is
the right way to go. The government
has indeed done well to take this lessthan-popular step.
Restoring
goodwill in India-Nepal ties
This week, Nepal Prime Minister
K.P. Sharma Oli will undertake his first
official visit to India. While both sides
are keeping expectations low, his
visit offers a welcome opportunity to
have a frank chai pe charcha and clear
the air about the recent differences
which had led to some harsh
exchanges. Briefing the Nepali
Parliament, Mr. Oli said his visit aims
at removing recent differences
between the two countries and
strengthening the historic bilateral
ties. Given the background, he
emphasised he would further Nepals
relations with India based on
principles of equality, mutual respect
and benefit. He also announced that
before embarking for India on
February 19, a high-level political
committee will be set up to review
the provincial boundaries in a threemonth time frame. This was intended
as much for the agitating Madhesi
groups as for Delhi.
Mr. Olis differences with India
arose in the run-up to his election as
Prime Minister. Following the 2013
elections, UML had supported Nepali
Congress (NC) in its bid for the post
of the Prime Minister on the
understanding that after the new
Constitution was promulgated, NC
would support his claim to the post.
Neither the UML nor he personally
was receptive to Madhesi demands

on federalism and proportional


representation. Consequently, he
reacted negatively to Indian
suggestions that the new Constitution
take on board Madhesi reservations
to create a broad consensus, rather
than be pushed through by majority
in an increasingly polarised
environment.
NC Prime Minister Sushil Koirala,
who passed away this month, wanted
to introduce certain changes which
could have addressed Madhesi
demands but Mr. Oli was a man in a
hurry and saw this as a delaying tactic.
He wanted NC to deliver on the
original understanding. Finally Koirala
resigned as Prime Minister but the NC,
instead of supporting Mr. Olis
candidature, renominated Koirala to
the post. People close to Mr. Oli
maintain that Koiralas candidature
was backed by India. Mr. Oli built
alliances with the Maoists and other
parties by generous promises which
helped him defeat Koirala, thus
becoming Nepals 38th Prime
Minister last October.
Meanwhile, the continuing
Madhesi agitation had claimed more
than 50 lives and brought life in the
Terai to a complete standstill. Mr. Oli
blamed India for supporting the
Madhesis by imposing an unofficial
blockade even as India urged him to
resolve political issues so that stability
and security could be restored and
normal movement of goods resumed.
For the first time, India and Nepal
traded harsh words, in Geneva, in a
multilateral forum. Mr. Oli used the
plank of Nepali nationalism to bolster
his coalition and blamed India for his
troubles. Like others before him, he
also flaunted the China card by
sending delegations to China to
develop alternative supply routes
across the Tibetan border, the

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limitations of which soon became
apparent.
Whenever Nepals domestic
politics gets polarised, India gets
blamed for interfering in Nepals
internal affairs and anti-Indianism
rises. Indian suggestions that
outstanding issues be resolved on the
basis of consultation and dialogue did
not go down well as the Madhesi
agitation intensified. A point of view
that a pro-Madhesi stance would help
the BJP in the Bihar Assembly
elections gained currency. Mixed
signalling added to misgivings. The
enormous amount of goodwill
generated by Prime Minister
Narendra Modis maiden visit to Nepal
in August 2014 and Indias generous
support following the devastating
earthquake in April 2015 eroded
rapidly, raising questions about the
neighbourhood first foreign policy.
Many opinion-makers in Kathmandu
were sympathetic to Madhesi
demands which were also shared by
Janjatis and Tharus; however, the
overt identification of Indian support
ended up isolating the Madhesis
politically.
Ideologically too, Mr. Oli is the
one UML leader who has always been
sceptical of the Maoist agenda
though he had to do a deal with them
when the NC backtracked on its
earlier understanding. He was aware
that Prachanda had already started
hinting that a more acceptable leader
was needed to deal with the political
instability and for improving relations
with India. After the death of Sushil
Koirala, the NC is pre-occupied with
its convention, scheduled for early
March, to elect a new President and
other office-bearers. The competition
seems to be between former Prime
Minister Sher Bahadur Deuba and NC
Vice President Ram Chandra Poudel.

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Mr. Oli enjoys good relations with


both and would do well to bring the
NC on board eventually to increase
his support base and form a national
unity government.
Domestically, Prime Minister
Olis challenge now is to get the postearthquake reconstruction activity
going. After a highly successful
international conference last June
where a collective pledge of $4.4
billion was made, delivery has stalled.
Before the earthquake, Nepals
economy was expected to grow at 4
per cent; after the destruction
caused by the quake, the political
instability and the shutdown in the
Terai, growth estimates for the
current year are close to zero.
India had pledged $1 billion of
reconstruction aid, of which 40 per
cent was grant and the balance in the
form of soft loans. This was in addition
to the $1 billion assistance
announced during Mr. Modis visit,
bringing Indias total commitment to
$2 billion over the next five years.
During the forthcoming visit, the
modalities for identifying projects and
efficient disbursements need to be
worked out. Mr. Oli is also expected
to visit Bhuj, which is held up as an
example of efficient post-quake
reconstruction. The two Project
Development Agreements for
hydropower generation signed by
GMR (for Upper Karnali) and SJVN
(for Arun III) during the last eighteen
months will add 1800 MW to Nepals
current generation of 800 MW and
need to be fast-tracked.
Mr. Olis visit provides an
opportunity to close the chapter on
the rather unproductive politics of
recent months and revive the
neighbourhood first policy that Mr.
Modi had presented in 2014, of a
friendly and caring India, sensitive to

Nepals concerns, and generous in


seeking mutually beneficial
partnerships.
Gay rights are human rights
The human rights of LGBTQ
(Lesbian, Gay, Bisexual, Transgender,
and Queer) people have reached
centre stage. Curative petitions have
been referred to a Constitution Bench
with observations by Chief Justice of
India (CJI) T.S. Thakur that the issues
sought to be raised are of
considerable importance and public
interest .
When Michael Kirby, a
distinguished former Judge of the
High Court of Australia and a former
President of the International
Commission of Jurists, delivered the
2013 Tagore Law Lectures, his theme
was Sexual Orientation and Gender
Identity a new province of law for
India. In 1999, Justice Kirby had
publicly shared with the world that
he was homosexual.
Since the early 1990s, the nonprofit Lawyers Collective led by
Anand Grover (the lead counsel in
the Naz Foundation case) has been
in the vanguard of asserting,
upholding and enlarging the rights of
people living with and vulnerable to
HIV, including homosexual men and
transgender people.
This warm embrace changed
from symbolism to reality when the
Delhi High Court delivered its
judgment on July 2, 2009 (Chief
Justice A.P. Shah and Justice S.
Muralidhar) decriminalising Section
377 in the case of consensual adult
sex in private in the Naz Foundation
case. LGBTQ people could breathe
easier, free of the yoke of criminality.
It opened up a new world of dignity,
privacy and equality for them.
After enjoying this freedom for
103

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four years, five months and nine days,
the Supreme Court judgment in
Suresh Kumar Koushal (Justices G.S.
Singhvi and S.J. Mukhopadhaya)
came like Rahu eclipsing their rights
and reversing the Naz Foundation
judgment. If Justice Kirby and Justice
Cameron were to visit India after the
Koushal judgment, would they be
treated as honoured guests or as
suspected felons?
In fairness to the reader I must
disclose that I appeared in the review
for Naz Foundation in the Delhi High
Court, which was dismissed on
November 3, 2004 on the ground of
lack of cause of action (Chief Justice
B.C. Patel and Justice Badar Ahmed).
Later the Supreme Court set aside this
order and remanded the matter. I also
appeared in the preliminary stages in
the Supreme Court in the Koushal
case for some parents supporting Naz
Foundation.
Second, I wrote an article in on
October 12, 2006 (Human rights
versus Section 377) where I argued
that homosexual practices between
consenting adults in private should
be decriminalised. My article
adverted to the rich jurisprudence of
the European Court of Human Rights
(ECHR) liberating homosexuals and
lesbians. It also referred to the U.S.
Supreme Court decriminalising
homosexual behaviour between
consenting adults in private by
invalidating a Texas law while
reversing its earlier decision.
Miscarriage of justice is writ
large in the Koushal judgment.
LGBTQ people are treated as
unapprehended felons a great
blow to the doctrine of equality,
privacy and dignity embodied in
liberal judgments of our Supreme
Court under Articles 21, 14 and 15. It
has caused enormous public mischief
104

and, as represented by the Ministry


of Health, contributes to gravely
exacerbating the spread of HIV.
The Koushal judgment
diminished the high standing of
Indian human rights jurisprudence. It
ignored a long line of the ECHR
judgments. It exhibited a total
disconnect with the expanding
horizon of human rights. Without
being pejorative, a queer judgment
on queer people has muddied the
waters of Indias human rights record.
The balance must be rapidly
restored by institutional action of the
Supreme Court. The reference of the
curative petitions to a Constitution
Bench is the first step in the right
direction.
Lord Denning observed, The
doctrine of precedent does not
compel your Lordships to follow the
wrong path until you fall over the
edge of the cliff. As soon as you find
that you are going in the wrong
direction you must at least be
permitted to strike off in the right
direction. The pithy observation of
Justice Robert H. Jackson of the U.S.
Supreme Court is also worth recalling:
I see no reason why I should be
consciously wrong today because I
was unconsciously wrong yesterday.
To conclude with the admirable
words of Justice V.R. Krishna Iyer:
Horace wrote: But if Homer, who is
good, nods for a moment, I think it a
shame. We, in the Supreme Court,
do nod despite great care to be
correct, and once a clear error in
judgment is revealed, no sense of
shame or infallibility complex
obsesses us or dissuades this Court
from the anxiety to be ultimately right,
not consistently wrong.
A landmark for Indian scientists
The Union Cabinet has finally

granted in-principle approval for a


gravitational wave detector in India.
The clearance, awaited for five years,
comes close on the heels of the
detection of the elusive gravitational
waves for the first time; the Laser
Interferometer Gravitational-Wave
Observatory (LIGO) based in
Washington and Louisiana in the U.S.
found evidence of gravitational waves
coming from two black holes
colliding and fusing together 1.3
billion light years away. By virtue of
having the same sensitivity as the LIGO
detectors in the U.S. and being
geographically separated by
thousands of kilometres, the Rs.1,200crore LIGO-India project, scheduled
to become operational in about eight
years, will at once vastly improve the
level of accuracy and ability to detect
new gravitational wave events. Since
all detectors may not be operational
all the time for instance, the VIRGO
detector, based near Pisa in Italy, had
remained shut on September 14,
2015 the addition of an Indian
detector will increase the chances of
detecting events that generate
gravitational waves. When the
advanced LIGO and LIGO-India
detectors reach their full sensitivity,
many more events will become
detectable and the ability to detect
faraway signals would also increase
dramatically. For instance, 50 to 100
gravitational wave-generating events
a year may become detectable. And
in the case of neutron stars, signals
from as far away as 600 million light
years could be detected as
compared with 200 million light years
now.
Though Indian scientists were
part of the LIGO project, their
involvement was limited to
theoretical aspects and data analysis.
The LIGO-India project will change

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this altogether as the construction,
commissioning and running of the
observatory will be Indias
responsibility. It will offer
unprecedented opportunities for
Indian industry and scientists from
diverse fields to be actively involved
in a scientific project of a scale never
before seen in the country. For
instance, though many of the critical
components such as mirrors and lasers
will be shipped from the U.S., an ultrahigh capacity vacuum system that can
handle one million litres of vacuum
(as in the case of CERN), and
secondary optics, have to be
manufactured in India. An active
programme to develop optics for the
laser system that could be used in
future upgrades to the detectors is
already under way at the Indorebased Raja Ramanna Centre for
Advanced Technology. Currently
only a few students from Indian
institutions are able to participate in
the LIGO project, but this will change
completely when the observatory
becomes operational in India,
providing easier access for a larger
number of students. Besides playing
a pivotal role in gravitational wave
astronomy, the Indian observatory
could thus be a catalyst in changing
the landscape of Indian scientific
efforts. Together with other mega
projects such as the India-based
Neutrino Observatory project,
experimental science will at last get
a much-needed boost in the country.
Labour in the twenty first
century
There are eight core ILO
Conventions against forced labour.
India refuses to ratify four of those:
C87 (Freedom of Association and
Protection of the Right to Organise
Convention); C98 (the Right to
Organise and Collective Bargaining

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Convention); C138 (Minimum Age


Convention), and C182 (Worst Forms
of Child Labour Convention). India
also refuses to ratify another major
convention, C131, or the Minimum
Wage Fixing Convention. These
refusals in themselves present a
succinct picture of the status of, as
well as the states attitude to, labour
welfare in India.
The Annual Global Rights Index,
published by the International Trade
Union Confederation (ITUC), rates
141 countries on 97 indicators
derived from ILO standards. The
rating is on a scale of 1 to 5-plus,
based on the degree of respect
accorded to workers rights. In 2015,
India had a rating of 5, the secondworst category. It denotes no
guarantee of rights. Despite being a
constitutional democracy, on the
matter of worker rights, India is in the
same club as Saudi Arabia, UAE and
Qatar, all dictatorships.
So yes, India certainly has a
labour problem. And a reform of the
present labour regime is a must. But
what form should this reform take?
In 2014, the industry body
Federation of Indian Chambers of
Commerce and Industry (FICCI) and
All India Organisation of Employers
(AIOE) put out a paper titled
Suggested Labour Policy Reforms.
The paper pointed out that Indias
obsession with an archaic labour
policy is keeping investors away,
hindering employment growth and
making
Indian
enterprises
uncompetitive. The paper goes on
argue that it is the multiplicity (44
Central and 100-odd at the Statelevel) of labour laws that is pushing
workers to the informal sector, as
companies seek to circumvent the
rigorous labour policies.
According to the ILO, labour

market flexibility is as high as 93 per


cent in India. This means that 93 per
cent of Indias workforce anyway do
not enjoy the protection of Indias
144 labour laws. But industrys
solution to the labour problem is a
dilution of these laws so that the mass
of informal workers can be employed
formally, but without legal
protections.
Contrary to the ILO-mandated
norm of tripartite consultations
between employers, the state, and
the unions in formulation of labour
legislations, the NDA government has
been faithfully following the FICCIAIOE script, brushing aside CTUO
demands. Do Indias trade unions
have it in them to lead the fight in the
face of this legislative blitz?
First, the argument goes, in a
globalised Indian economy, the
centre of gravity has shifted from
manufacturing to services. Second,
even in manufacturing, the advent of
global supply chains has meant a mass
informalisation of employment as
multinational enterprises break up the
production process and sub-contract
to suppliers in different parts of the
world. To cite just one example, as
reported by the NGO, the India
Committee of the Netherlands, 80
per cent of the garment workers in
Bengaluru toil in sweatshop
conditions.
Party affiliations entail three
things: one, a restriction of the
CTUOs ability to expand, as it will
put off those who do not like its
parent party; two, party interests often
trump union/labour interests; and
three, disunity between the
differently-affiliated unions.
For instance, the Congressaffiliated INTUC could not get the
United Progressive Alliance to curb
the rampant violation of labour laws
105

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during its 10 long years in power.
Similarly, it is evident that the BMS
has had no say in the drafting of the
NDAs labour law amendments.
While their political masters the
BJP and the Congress are on the
same page so far as labour reforms
are concerned, the CTUOs have
struggled to forge a united front.
Their second big weakness,
according to Chennai-based activist
V. Baskar, is the leadership, which he
believes is marked by the
bureaucratic mentality of a labour
aristocracy. Is it really workers who
are heading the CTUOs? he asks.
They may have been workers once
but today they function more like
bureaucrats. They prefer policy
analysis to on-ground organising.
They have failed to extend their
reach to the growing mass of informal
workers.
The third weakness has to do
with the changing labour landscape.
With the majority of the workforce
outside the purview of unions, their
power to intervene or disrupt has also
shrunk proportionately.
One sector where the CTUOs
do admit to some difficulty is the
burgeoning IT services sector, which
is marked by little union presence
despite demanding work conditions.
Says AITUC general secretary and CPI
politician Gurudas Dasgupta, Yes, we
havent made much headway in the
IT sector. Here our biggest challenge
has been the instant termination of
workers involved in unionising
activity. This has created tremendous
fear in the minds of the workers. Adds
Mr. Sen: The state has become such
a shameless collaborator that the
moment union papers reach the
labour department, a call goes to the
employer. They obtain the names of
the workers who had applied, and
106

terminate all of them.


Harbhajan Singh Sidhu, general
secretary of HMS, rejects the charge
of disunity among the CTUOs. All the
unions are unanimous on two points:
regularisation of contract workers
engaged in perennial work; and equal
pay for contract workers performing
the same job as permanent workers.
Of course, the series of actions
planned in March will be a test not
only of the CTUOs unity but also their
strength. Mr. Dasgupta rubbishes
claims that Indias CTUOs are a spent
force rendered even more irrelevant
by the absence of a base outside the
organised sectors. The central trade
unions are still very strong in the
strategic sectors oil, coal, banking,
defence, insurance.
All the union leaders emphasise
that the might of the 11 CTUOs is more
than the numerical addition of their
individual memberships. During our
general strike last year, it wasnt just
the CTUO-affiliated unions but even
independent unions and nonunionised workers who participated.
All of them are against labour
reforms, says Mr. Sidhu.
To grow or not to grow
The coming Union Budget is a
huge challenge for the government.
The world economy is facing the
severest stresses since the financial
crisis of 2008. In 2015-16, the Indian
economy will grow at 7-7.5 per cent,
less than the 8.1-8.5 per cent
projected earlier. On present trends,
growth in 2016-17 will not be any
higher than in 2015-16. Indias public
sector banks (PSBs) are in their worst
shape in over a decade. The stock
market has declined to the level seen
before the Narendra Modi
government assumed power in 2014.
Against this background, the promise

of an early return to the growth path


of 8 per cent has faded. The Budget
must do what it takes to ensure an
early return. As the animal spirits of
businessmen are weak, government
spending must take the lead.
Following the financial crisis of
2008, the government knew what to
do. It opted to provide both fiscal
and monetary stimuli as
governments the world over did. This
was the obvious thing to do then
because there was space for both
types of stimuli. Growth revived
strongly in India after the crisis
(although we had to reckon with
higher inflation down the road). The
situation today is different. The space
for fiscal stimulus is limited by the
commitment on a fiscal consolidation
path given by the government. The
space for monetary stimuli is limited
by the monetary policy framework
agreed to by the government and the
Reserve Bank of India, which commits
the RBI to a time table for meeting
specified targets for inflation.
As a result, the government
today faces critical choices. Should
it opt to accelerate growth in the
present situation? If so, should it do
so through fiscal stimulus or by
creating conditions for a monetary
stimulus? And how should it go
about restoring the health of PSBs so
that credit growth is not
undermined?
The answers must be
determined by the conditions on the
ground. Indias growth is estimated
to be below its growth potential. Two
sources of aggregate demand,
exports and private investment, are
weak at the moment. Greater public
investment is clearly the answer. In
the coming year, the government is
not in a position to reduce costs
significantly enough (by pruning

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subsidies drastically, for instance) or
to raise revenues sufficiently (by
disinvestment or a buoyancy in tax
revenues). Something must give. This
has to be the fiscal deficit target of
3.5 per cent for 2016-17. Many
economists oppose any departure
from the stipulated path of fiscal
consolidation. They say it will
undermine investor confidence in
the Indian economy. They warn that
FIIs will flee the Indian market, and
this will devastate the markets and the
rupee.
One doubts that the situation is
as grim as that. Foreign investors will
see the case for boosting growth in
the
present
international
environment. They know that Indias
macro-economic indicators are in
better shape than those of most
emerging markets. Rational investors
will focus on the quality of spending,
not the size of the fiscal deficit itself.
As long as the departure from the
fiscal deficit target is on account of
higher investment spending (which
is growth-inducing), they are unlikely
to take a harsh view of matters.
It is possible to exaggerate the
comparison, and hence the dangers
to macro-economic stability, of a
limited fiscal stimulus at this point.
Brazil is a commodity exporter and is
a loser in a context in which
commodities prices have been
hammered down. India is a net
importer of oil and hence a potential
gainer. Indias public debt to GDP
ratio has declined over the years and
is today below 70 per cent, which
looks a lot better than that of many
advanced economies, including the
U.K. and the U.S.
Not least, as the Mid-Year
Review of the Finance Ministry points
out, the fiscal multiplier the
increase in GDP per unit of

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government spending (or borrowing)


tends to be high in times of
economic contraction. Any increase
in the fiscal deficit will tend to be
offset by an even greater increase in
the GDP. This should cause the ratio
of fiscal deficit to GDP to decline.
Theres a third argument against
a fiscal stimulus at this point, that
sticking to the 3.5 per cent target will
make it easier for the RBI to drop its
policy rate by, say, 25 basis points.
We can thus facilitate growth through
a monetary stimulus rather than a fiscal
stimulus.
One wishes matters were as
simple. First, its not clear that with
retail inflation climbing to 5.7 per
cent in January, the RBI will oblige
with a rate cut soon. Second, we have
seen that RBI rate cuts over the past
year have not translated into
commensurate reductions in lending
rates. Of the 125 basis points in rate
reduction since January 2015, banks
have passed on only about 50-60
basis points. There are many reasons
for this. Banks face high deposit rates
because of high regulated rates on
government savings instruments.
They have to contend with huge
pressure on profits because of high
non-performing assets, hence they
need to maintain high margins (the
difference between lending and
borrowing rates).
Moreover, banks have
traditionally priced their loans using
the average cost of funds. When the
rate of incremental borrowing falls
(following a policy rate cut), it does
not much impact the average cost of
funds and hence the lending rate.
The RBI has recently asked that banks
link their lending rates for new loans
to the marginal cost of funds. It will
be a while before the impact of this
change kicks in.

It is not the cost of loans alone


that is the problem today. The volume
of loans is also an issue. PSBs have
seen their net worth being battered
in recent days. This follows the RBIs
determination to get banks to
recognise and provide for nonperforming assets in full here and now.
It has made clear its objective of
cleaning up banks balance sheets by
2017.
This is a laudable objective.
However, for banks to be able to lend
freely, they need an adequate buffer
of capital over and above the
regulatory minimum. This can happen
only if there is a substantial infusion
of capital into PSBs by the
government. The infusion of capital
will have to be higher than the
Rs.70,000 promised over four years
under the Indradhanush plan. There
is a case for relaxing the fiscal deficit
target on this count too. Only then
can credit revive strongly and private
investment pick up.
Gandhi and Ambedkar, a false
debate
Enemies often share more than
friends, and may even enjoy a closer
relationship. This is certainly the case
with those would-be rivals who
attempt either to oppose or to
reconcile Gandhi and Ambedkar,
seen as representatives of caste
thinking on the one hand and its
repudiation on the other. Instructive
about this increasingly vocal rivalry,
among activists as much as
academics, is the fact that neither
side questions the pairing of
Mahatma and Babasaheb, which
serves as a stereotyped way of
joining the two in ideological
debate. But while such a relationship
makes pedagogical sense in a
classroom, I want to argue here that
it is not true to history, and
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dangerously misguided in the
context of todays politics.
Those who would reconcile
Gandhi and Ambedkar acknowledge
their many disagreements, but point
out that Babasahebs resignation from
Nehrus cabinet, rejection of the
Constitution he had played such a
large part in drafting and turn to
religion brought him closer to the
Mahatma, who also placed more
emphasis on faith and social reform
than he did upon the state. For his
part, Gandhi is said to have
approached Ambedkar in his
acceptance of intermarriage, the
forsaking of caste occupations and
legal measures against discrimination.
But how different is the intimacy of
this reconciliation from that which
insists on opposing the two men in
such a way as to make Babasaheb the
real father Indias freedom, and so
nothing more than the Mahatmas
replacement?
Invoking the Poona Pact
While Ambedkar seems to have
promoted his opposition to Gandhi
as a principled one, he continued to
deploy explicitly Gandhian terms and
practices like satyagraha, thus
refusing to be defined by this enmity.
Rather than a move towards the
Mahatma, however, this suggests he
recognised their relationship as being
neither equal nor exclusive. For while
Babasaheb was obliged by political
realities to spend an inordinate
amount of time thinking and writing
about the Mahatma, the reverse was
not true, and he is very rarely
mentioned in Gandhis collected
works. It is perhaps because of this
asymmetry that those who pose
Ambedkar against Gandhi are
reduced to relying on a single event,
the Poona Pact of 1932, for so much
108

of their argumentation.
Ambedkar himself made of
the Poona Pact the chief example of
his fight with Gandhi, but at the time
it was signed he was assiduous in
defending it against all critics, of
whom Godses fellow ideologues
were the most vociferous. The Poona
Pact was agreed after the Mahatma
went on a fast unto death, ostensibly
against the discrimination exercised
by caste Hindus against Dalits, but
also to protest the British granting
separate electorates to them as part
of the Communal Award just as
they had earlier to Muslims, and so
by default Hindus as well. By its
terms Ambedkar relinquished
separate electorates for the
reservations that in later years he
argued were ineffectual, because
they made Dalits dependent on
caste Hindu votes and support. Seen
by Congress as well as Hindu
nationalists as a divide and rule
policy meant to keep India under
British tutelage, separate electorates
had also threatened to fragment
Hindus as a community and reduce
their majority relative to Muslims.
Indeed, the grant of separate
electorates to Dalits had come out of
the Minorities Pact at the Round
Table Conference in London, where
Ambedkar had allied with Muslim,
Christian, Anglo-Indian and other
minorities who claimed to represent
a plurality of Indias population, thus
denying that any majority existed in
the country. And if there was no
majority in India, then of course
there were no minorities either,
which meant that these categories
could now be redefined beyond
the communal identities of Hindus
and Muslims.
Ambedkar and others in the
Minorities Pact argued that the
inequalities of Indian society meant

that peoples interests were


permanently aligned with their castes
or communities. But if Hindus were
to become a permanent majority and
Muslims a permanent minority after
Independence, then democracy was
impossible in India, since it required
shifting interests that allowed all
groups the chance to hold power.
Hindus therefore had to be
disaggregated by caste, so as to make
for changing alliances that produced
political rather than communal
majorities. The Congress, however,
questioned the legitimacy of these
minority voices, and maintained that
Independence would erase caste
and communal distinctions, allowing
people to vote along economic lines
instead.
While the Poona Pact is much
invoked in the battle that sets
Babasaheb against Mahatma,
interesting about the Minorities Pact
is that it is just as regularly ignored. Is
this because any acknowledgement
of it would immediately reveal that
the Gandhi-Ambedkar debate
possessed neither autonomy nor
integrity, but was instead given
meaning by its triangulation with other
classes and communities? For
although caste relations in everyday
life might exclude third parties, they
have always been mediated by these
latter in the arena of national politics.
Thus Godses dedication to caste
inter-dining was prompted by his fear
of Hindu fragmentation in the face of
what he saw as Muslim aggression.
By focussing on the relationship
between Gandhi and Ambedkar,
those who oppose as much as
reconcile these men end up
confining them to an intimacy that is
premised upon caste-like exclusions.
And in doing so they are unable to
chart the political constellation in

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which Babasaheb and Mahatma
belonged. For if Jinnah has more
claim to be Gandhis chief rival, he
also became an obstacle for
Ambedkar, for whom the Muslim
Leagues domination of opposition
politics pushed his Dalit cause into
the background. Despite many years
of cooperating with the League,
Ambedkar also knew that Jinnah
would come to an arrangement with
Gandhi and his caste Hindu following
that would leave Dalits in the political
wilderness.
Without any Muslim issue or
organisation being involved in such
controversies, this minority has again
come to triangulate caste relations as
well as conflict between the left and
right. In both cases the Muslim issue
allowed students in Hyderabad and
Delhi to be accused of anti-national
activities. But it is important to
recognise that the same logic of
mediation also permitted Godse to
work for an end to caste
discrimination among Hindus. In
other words, this logic is a structural
one, and can assume opposing
political forms. And if Ambedkar is
omnipresent in todays controversies,
Gandhi is by the same token absent
from them. There no longer exists
any relationship, let alone debate,
between the two.
Delivering on Make in India
In its last 18 months, the UPA
government faced up to an
economic reality: new investments
had come to a halt and projects
worth lakhs of crores of rupees
caught in red tape were turning
unviable, posing a threat to banks
that had lent for them. The then
Prime Minister, Manmohan Singh,
heeded Finance Minister P.
Chidambarams concern about the
impact on public sector banks if

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these projects were not brought


back on track through high-level
intervention. When the NDA
government assumed office, it found
that the mechanism that Dr. Singh
had approved to fix the problem
a project monitoring group in the
Cabinet Secretariat to steer around
roadblocks
to
big-ticket
manufacturing and infrastructure
projects had helped clear
projects worth Rs.6.5 lakh crore. In
June 2014, the Prime Ministers
Office asked the group to ascertain
if the projects it had helped had
begun operations. The PMO wanted
to know if more chimneys were
billowing smoke, if production was
going up and jobs were being
created on the ground. Three
months later, the government
launched its Make in India
programme to encourage the world
to use the country as a global
production hub. It promised reforms
on norms for foreign direct
investment many of which it
subsequently delivered and a fix
for problems that gave the country a
poor reputation among foreigners,
including unpredictable tax policies
and a difficult regulatory
environment.

the event. These include some by


foreign firms such as Oracle (Rs.2,749
crore) and Ascendas (Rs.4,571
crore), but the list is dominated by
Indian
players
making
announcements to coincide with the
occasion, including a Rs.6,204-crore
project by public sector undertaking
Rashtriya Chemicals and Fertilizers.
Instead of doubting the numbers, it
may be more pertinent to focus on
two other developments of the
week. Authorities served Vodafone
a reminder for tax, which warned of
asset seizure in case of failure to pay
the dues, prompting a sharp reaction
from the British firm. It also emerged
that Foxconn was yet to follow
through on a $5-billion investment it
had announced in Maharashtra last
August. To capitalise on the success
of Make in India, the government must
now show sustained improvement on
the ease of doing business and create
a transparent and stable tax
environment to prove it is capable of
delivering on its intent. It should use
the same yardstick to measure Make
in Indias success as it did for the
earlier stalled projects: would
products start rolling out of factory
gates anytime soon?

Over the last week, about 1,000


CEOs and 4,000 delegates
representing 2,000 overseas firms
were in Mumbai at a glitzy event to
showcase Make in India, which Prime
Minister Narendra Modi presented as
the biggest brand to emerge from the
country. He said India was adding
deregulation to its strengths of
democracy, demography and
demand, and promised to end
retrospective taxation that had
spooked investors during the UPA
rule. The Industries Ministry has
claimed that Rs.15.2-lakh crore worth
of investments were committed at

Referendum gamble for Britain


British Prime Minister David
Cameron wants London to stay in and
out of the European Union (EU) all at
the same time, and his counterparts
would let it be. Regardless of the
result in the June 23 in-out
referendum on the question of the
U.K.s EU membership, the difficult
and delicate deal stitched together
among the leaders of the 28-member
bloc carries immense diplomatic
significance and value for its near
future. The slogan of ever-closer
integration in Europe may have
carried some romantic appeal in a
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world recovering from the ravages of
the two great wars. It may not be so
compelling any longer. The
enlargement of the original bloc of
six countries into what is today a
gigantic transnational entity of 28 is
forcing the leaders of as many
sovereign states to confront, from
their individual perspectives, the
cumulative and complex realities of
competing nationalisms. As for
Britain, the question whether it
should stay or leave the EU has
overshadowed the better part of the
forty-plus years of its membership
since 1973. Now, in the midst of the
influx of immigrants in their millions
from North Africa and West Asia, the
U.K. feels the urgency to define its
equation with the rest of the bloc in
more precise terms. Live and let live,
Mr. Cameron told his counterparts in
Brussels, as he secured safeguards for
the minority of non-eurozone states,
significant in view of Londons large
financial services industry.
For their part, EU leaders, while
increasingly wary of the U.K.s
persistent and shrill eurosceptic
stance, would not easily reconcile to
the idea of the exit of one of the
continents biggest economies, one
with immense international clout and
a permanent UN Security Council
seat. There was implicit, if unspoken,
appreciation in Berlin, Paris and
Brussels in recent months that the
prospect of a Brexit would not bode
well politically for the bloc, as much
as a Grexit would severely dent the
project of the single currency, now
nearing completion of two decades.
That Britain is in a minority of countries
that neither share the euro nor
participate in the Schengen borderfree zone does not diminish its weight
and importance in the larger EU
framework. Conversely, the
110

exemption of Britain from ever-closer


integration in the Union a founding
principle promised in the latest
agreement, represents an important,
if symbolic, selling point for Mr.
Cameron. Several Conservative eurosceptics, both within and outside the
Cabinet, are to campaign for an
outright exit in the coming
referendum. In a compromise, Mr.
Cameron had to concede the
retention, with some modifications,
of benefit payments to immigrant
workers and their children from within
the EU. On both, the original
unrealistic position favoured an
outright ban. The Leave Campaign
will undoubtedly view these changes
as carrying little substance against
their decided position. Despite the
uncertainty over the outcome of the
June vote, it is hard to imagine the
British public being excited into exit
mode, notwithstanding a frenzied
media campaign.
A carrot for the honest
The government is in
discussions with the Reserve Bank of
India (RBI) to allow more free ATM
transactions, so we hear. The thought
does have merit, since withdrawing
money from an ATM costs banks less
than encashment at the bank branch.
But it is about time a real comparison
was made of debit card usage at
ATMs and in electronic transactions
and direct policy moves suitably.
In other words, would it not be
more cost-effective if the same card
is used to go cashless? Youll find that
the gains go beyond saving the mere
Rs. 20 it costs the bank when you
draw money from an ATM. In real
terms, this would help reduce the
flow of cash into the economy. For,
quite possibly, stacks and stacks of
those currency notes that today

constitute black money may well


have originated from perfectly
legitimate transactions made by
honest taxpayers themselves! If only
these payments were made in
cashless form, they would have been
automatically accounted for and
would have also beefed up the
government coffers in multiple ways
with additional sales tax, service
tax and other forms of tax collections.
Under the current scheme of
things, the seller of goods obviously
has a lot to lose by accepting the
debit card. For one, he stands to pay
a merchant discount rate (varying
from 0.75 per cent to 1 per cent),
and this eats directly into his margin.
More importantly, he also knows every
such transaction is accounted for
and, therefore, liable to be taxed.
Suppose a sales tax concession is
offered for such point-of-sale
payments to go electronic as has
been suggested in some quarters.
Even then the shopkeeper would not
be motivated hed much rather
save the entire tax than claim a small
indirect tax rebate for supporting the
cashless drive.
What, then, is the answer?
Perhaps it lies in giving a small
incentive to the taxpayer to use his
card or mobile. A carrot to the honest.
For example, the government could
grant a 5 per cent income tax rebate
for taxpayers who make more than
85 per cent of their payments in
cashless mode. The required
percentage of cashless transactions
for rebate eligibility could be even
higher for very high income groups.
A routine bank statement/certificate
stating percentage of cash debits
separately should suffice to claim the
rebate. Personal banking statements
are already being used to show
interest income accrued and tax

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payable/deducted, so administering
such incentive would involve no extra
burden either on the banks or the
taxpayer.
That brings us to the question
of loss to the exchequer. Lets do the
maths. As per Department of
Revenues website, Rs. 1.71 lakh
crore was collected as personal
income tax in 2011-12, registering an
average compound annual growth
rate of 14.81 per cent for the period
between 2006-07 and 2011-12.
Applying the same growth rate, the
estimated collection in 2015-16
would be Rs. 2.96 lakh crore.
Assuming that the government
chooses to pay 5 per cent rebate and
25 per cent of taxpayers qualify, the
payout is still only Rs. 3,700 crore.
Based on published studies and
reports, the total cost for ATM
operations is roughly around Rs.
18,000 crore. Even if this shift to
cashless transactions were to reduce
ATM transactions by just 25 per cent,
it would still save the banking sector
around Rs. 4,500 crore in ATM costs
alone. And if we were to top up these
savings with a hugely conservative
estimate of 1 per cent resultant
increase in sales tax/value-added tax
revenues across States, that would be
another Rs. 4,400-plus crore. Need
there be a more compelling pitch for
the tax rebate?
Revenue-wary policymakers
can fine-tune eligibility percentages
and the percentage of rebates to play
it really safe. Since the rebate has to
be earned over a year, the human
tendency would be for taxpayers to
switch to cashless transactions as a
matter of habit. And merchants who
hesitate to honour a card will find
themselves being pushed to do so.
Hopefully, savings in ATM
subsidies for the relatively affluent

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could get suitably channelled to give


adequate incentives for establishing
an operating infrastructure in rural
areas for accepting electronic
payments and providing cash-out
facilities. Virtually all households have
a bank account, and a big chunk of
them have a RuPay card too. What is
the whole point of pumping out
direct benefits to the newly opened
bank accounts if it cant be converted
into purchasing power in the hands
of the poor?
Income tax rebate for cashless
transactions could well trigger a
series of coordinated policy tweaks
that could help boost revenues for
the government, productivity for the
economy and an effective
infrastructure for direct benefit
transfers and financial inclusion.
A partnership to Mars and
beyond
Just about a year ago, during an
official state visit to India, U.S.
President Barack Obama delivered
an address to the Indian people. He
declared that the relationship
between India and the United States
can be one of the defining
partnerships of this century. He
spoke about our commonalities as
societies that celebrate knowledge
and innovation, and how together,
we unlock new discoveries from
the particles of creation to outer
space two nations that have gone
to both the Moon and to Mars.
Prime Minister Narendra Modi
and President Obama used the
occasion of the state visit to issue a
joint statement in which, among other
things, they agreed to further
promote
cooperative
and
commercial relations between India
and the United States in the field of
space.

The momentum that generated


out of this official state visit
particularly in U.S.-India cooperation
in space is growing today.
The U.S. is leading a journey to
Mars that will send astronauts to the
Red Planet in the 2030s. Today, both
our great nations are working
together to lay the groundwork.
ISROs Mars Orbiter Mission
(MOM) and NASAs Mars
Atmosphere and Volatile EvolutioN
spacecraft (MAVEN) have been
together in Mars orbit since they
arrived at the Red Planet within two
days of one another in September
2014. Our high expectations, our
dreams for these two spacecraft are
being realised as they are both
contributing
to
scientific
understanding of Mars and its
atmosphere. Our joint Mars Working
Group has been very active. Our
teams are meeting this week in
Bengaluru for their third face-to-face
meeting. The working group
representatives are considering ways
in which we can cooperate on MOM
and MAVEN and other missions in the
future.
Closer to home, NASA and the
Indian Space Research Organisation
(ISRO) are collaborating on our firstever joint earth science satellite
mission. The NASA-ISRO Synthetic
Aperture Radar (NISAR) will acquire
critical, first-ever, all-weather, highresolution radar measurements for
use in a wide range of applications
such as global food security,
freshwater availability, human health,
disaster prediction and hazard
response, climate monitoring and
adaptation, and urban management
and planning. This is a significant
mission to which both nations are
making substantial contributions.
Indeed, without the contributions of
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both India and the U.S., the highly
capable NISAR mission would not be
possible. Again, were turning dreams
into reality.
The list of other cooperative
activities underway today is long. It
includes exchange visits of U.S. and
Indian researchers and even a joint
airborne campaign that involves the
flight of an advanced NASA visible/
infrared imaging spectrometer
instrument on an ISRO aircraft over
sites in India. That mission, which
began last December and runs
through next month, is producing vast
amounts of precise data.
These are excellent examples
of how, in the past several years,
NASA and ISRO have made major
strides in developing U.S.-India space
cooperation, by communicating
often about our respective
programmes, identifying mutual
interests, and defining areas of
potential collaboration.
We have recently taken this
engagement to a whole new level.
As true partners, we are implementing
challenging mission activities and
have seen steady engagement at the
programme, project, and senior
leadership levels.
U.S.-India
civil
space
cooperation dates back to 1963 with
the launch of NASAs Nike-Apache
sounding rocket from Indian soil. Its
our sincere hope that the future will
bring new avenues of cooperation in
earth and space science, deep space
communications, and perhaps
research aboard the International
Space Station.
Its very exciting that just days
ago Prime Minister Modi announced
that India will build a Laser
Interferometer Gravitational-Wave
Observatory facility, and together we
will explore gravitational waves, the
112

most exciting discovery in


fundamental physics in this new
millennium. Albert Einsteins dreams
are becoming reality. U.S. and Indian
scientists are a part of that reality and
are showing that together we can
tackle difficult and important
scientific questions.
Drug pricing:
a bitter pill to swallow
The
international
pharmaceutical industry has found its
cash cow in Indias beleaguered
consumers. With a minimum wage of
Rs.250/day for a government worker,
a basic wage worker afflicted with a
chronic disease like multi-drugresistant tuberculosis faces penury.
His treatment, with drug
combinations, which works out to
roughly Rs.1.2-Rs.1.5 lakh, is the
equivalent of nearly 4-6 years of
savings. Even managing a disease like
diabetes can erode much of his
monthly income.
Turing
Pharmaceuticals,
headed by Martin Shkreli, was
castigated for buying Daraprim, a
drug used to treat HIV patients, and
raising its price from $20 to $750
an
increase
considered
unjustifiable even for the drug
industry (HIV Medicine Association,
September 2015). In India, Glenmark
announced an equated monthly
instalment scheme for two anti-cancer
drugs, Abirapro (250mg; 120 tablet
pack is Rs.39,990) and Evermil (10
mg; 10 tablet pack is Rs.29,965).
Glivec, another anti-cancer drug, saw
its base price rise from Rs.8,500 to
over Rs.1 lakh per month over the last
decade. A new hepatitis C drug,
Sovaldi, is $1,000 per pill. Cortisporin,
for ear infections, developed by
Glaxo Wellcome and approved in
1975, has had its price rise from $10
to $195 a pricing that its formulator,

Endo Health Solutions, believes is


rational and appropriate (David
Lazarus, American business and
consumer columnist, February 2016).
Indias drug pricing regime has
evolved. While the Drugs Order
(Display of Prices) 1962 froze
medicine pricing, the landmark Hathi
Committee Report (1975) led to the
Drug Policy (1978) which set up a
National Drug Authority and selective
price control on medicines. The Drug
Price Control Order (DPCO), 2013,
brought 348 drugs into Indias
National List of Essential Medicines
(NLEM) 2011, with significant
exclusions made for formulation and
presentation (S. Srinivasan, EPW ,
2014).
But loopholes remain. While
358 formulations of paracetamol are
under price control, over 2,714
combinations (80 per cent of market
share) are not (Sourirajan Srinivasan,
2013). Despite price controls, the
Drug (Prices Control) Order, 2013
covers only 18 per cent of the
domestic market (55 per cent is
excluded combinations of NLEM
drugs), with little impact. As
highlighted by the Supreme Court,
Indias current drug pricing policies
have tended to fix the maximum price
of a medicine above the retail price
of the market volume leader (All India
Drug Action Network or AIDAN,
2015).
While
the
National
Pharmaceutical Pricing Authority
struck down its notification on ceiling
prices for 50 non-scheduled
medicines in 108 formulation/
dosages, the public interest in
ensuring affordable access remains
(S. Srinivasan, EPW , 2014). Indias
pharmaceutical industry suffers from
a significant lack of competition.
Given significant information

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asymmetry, customers often buy the
priciest product to alleviate an
immediate need. Indias drug pricing
regime remains ripe for change.
Price controls remain an
effective answer to ensuring
affordability. Even free markets in the
West utilise price, volume and costeffective controls to mitigate healthcare inflation. Canada has its Patented
Medicine Prices Review Board, while
Egypt has brought all medicines
under price control. Lebanon has
utilised regressive margin pricing and
improved transparency by publishing
patient prices on its online Lebanon
National Drug Index (AIDAN 2009).
In addition, we must encourage
a centralised procurement system, as
utilised by Tamil Nadu, for purchasing
drugs. A Tamil Nadu government
tender for the antiparasitic
Albendazole (400 mg) tablets has
attracted prices of 35 paisa per
tablet; retail prices are quoted at
Rs.12 (AIDAN 2009). Unethical and
unfair drug selling practices, such as
holiday trip offers and fancy gifts,
used to influence doctors and key
bureaucrats, need to be curbed. As
suggested by AIDAN, the NLEM
should be revised every 2-3 years,
with price regulation based on the
therapy considered, instead of a
focus on formulation. VAT
abolishment on essential medicines
can also be considered, as Tajikistan
has.
We need to create an accessible
and affordable health-care system
that offers scale, multi-generational
permanence (multi-generational and
is supported by sustainable financing
mechanisms to ensure affordability.
Along with debt financing, policy
interventions like cheaper loans and
tax breaks on interest payments could
be tried to generate fund flow. Easing

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the Reserve Bank of Indias rules on


external commercial borrowings by
health-care projects can help access
cheaper funds from a larger credit
source; 20 per cent of private equity
funds are expected to be invested
in
health
care
(PricewaterhouseCoopers, 2012).
Insurance can help as well. The
governments push for low cost inpatient
insurance,
while
encouraging, should also incorporate
out-patient expenses. Low-cost
diagnostic capabilities, generic drug
stores (Rajasthans Life Line drug
stores) and low-frills hospitals that
provide affordable care (Vaatsalya)
can be considered.
Medicines remain overpriced
and unaffordable in India. In a
country mired in poverty, medical
debt remains the second biggest
factor for keeping millions back into
poverty. With little to no availability
of basic health insurance, and a
preference for private practitioners,
drugs engender poverty. With
innovative policymaking, the troika of
quality, affordability and access can
be achieved.
The human face of Budget
2016-17
With an eye on the upcoming
elections in different States, Union
Finance Minister Arun Jaitley has
declared that he is presenting a
Budget that provides additional
resources for vulnerable sections,
rural areas and social and physical
infrastructure. But since aggregate
expenditure in nominal terms is slated
to rise by just 10.8 per cent between
this financial year and the next, that
seems difficult to believe.
Consider, for example, the
scheme that even the National
Democratic Alliance government

declares as being one of its flagship


programmes for the poor: the
Mahatma Gandhi National Rural
Employment Guarantee Scheme
(MGNREGS). It is widely known that
over the last two years, that scheme
has been slipping in terms of both
resource allocation and man-days of
employment generated. The number
of man-days of employment provided
was down to less than 40 per
household, as compared with the
promised 100. Moreover, many
workers have not been paid, with
large accumulated arrears. What was
needed, therefore, was a substantial
step-up in allocations. But the Budget
for 2016-17 provides just Rs.38,500
crore for the programme, which is not
much higher than the revised
estimate for the poor performance
year 2015-16. If we take account of
the arrears from the previous year that
must be met, the allocation for the
coming year on a programme which
is known to positively affect the poor
and the vulnerable would, in all
probability, fall.
In many cases, the figures
quoted in the Budget speech to back
its welfare thrust are misleading, to
say the least. The government has
declared that it would double the
income of farmers by 2022. In pursuit
of that goal, the Finance Minister has
provided a total allocation for
Agriculture, Cooperation and
Farmers Welfare (ACFW) of
Rs.35,984 crore. On the surface, this
seems to be a huge increase in the
allocation for this sector when
compared to the revised estimate of
Rs.15,809.54 crore for 2015-16. But
that is a result of a change in
classification. The Budget Estimate
for 2016-17 includes Rs.15,000 crore
for interest subsidy for short term
credit to farmers. This head earlier
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appeared as part of the demand for
grants of the Finance Ministry, and its
inclusion inflates the ACFW figure for
2016-17. Adjusting for that, the
nominal increase in allocation to
farmers is just 33 as opposed to the
impressive 128 per cent.
In some areas with welfare
implications, such as health and
family welfare and school education
and literacy, the incremental
spending projected for 2016-17 is
not much above the difference
between the revised estimate for
2015-16 and the actuals for 201415. While health insurance schemes
for the poor are welcome, they do
not make up for the gross
inadequacy of spending in these
areas. In the case of women and
child development, where spending
fell by Rs.1,188 crore in 2015-16
relative to 2014-15, the budgeted
increase in spending in 2016-17 is
just Rs.56.23 crore. As a result,
spending on the all-too-important
Integrated Child Development
Services, which fell from Rs.16,415
crore in 2014-15 to Rs.13,636 crore
in 2015-16, is now budgeted to
receive only Rs.15,873 crore.
Banks need an autonomy
stimulus
At a time when banks are in
trouble globally, recent reported
losses heighten the tendency to put
Indian banks in the same basket. But
global bank shares are falling because
of an expected fall in bank earnings
as interest rates become negative. In
India, however, interest rates are
firmly positive. In India, reported
bank profits are soft because
provisions are being made for weak
assets. Tackling a problem at the root
bodes well for the future. U.S. banks
whose balance sheets were cleaned
up are doing better than European
114

banks where only cosmetic liquidity


was provided. Moreover, the asset
quality problem affects only a part of
the banking system, and only a
particular type of loan. Nonperforming assets (NPAs) that have
stopped producing income are
concentrated in public sector bank
(PSB) loans to large corporates.
Therefore the problem is limited in
size and funds required to restore
health are not excessive.The sharp
rise in emerging markets (EMs)
corporate debt from 45 per cent of
gross domestic product (GDP) in
2005 to 74 per cent in 2014 is a major
source of global risk. It also rose in
India, but is only 14 per cent of GDP.
Debt is concentrated in large
infrastructure firms, but even so
average debt-equity ratios remain at
around unity since they are low for
other firms. Ignoring local detail leads
to a blind echoing of global fears a
relative perspective diminishes
Indias debt-related risk.
Caps on external debt reduced
fluctuations in Indian interest rates
compared to more open EMs. A
mechanical sell-off of EM assets
occurs in periods of rising global risk,
as liquid portfolios are sold
irrespective of a countrys own
prospects. But the Indian experience
in 2008, 2011 and 2013 is that they
tend to return if prospects are robust.
In the current cycle there are signs
that domestic investors are using
foreign exit to come in at a good price
a sign of maturing markets with a
wider base. Indian restrictions on
short-term debt have reduced
chances of large cumulative cycles
occurring as corporate bankruptcies
create NPAs and stressed banks stop
lending. The problems of PSBs now
are partly due to government
interference but also to errors of

judgment and to external shocks. The


first two led them to participate much
more than private banks in
infrastructure financing. They came
from a history of hand-holding large
corporates in order to encourage
development. The onus fell more on
them after development banks were
shut. They did not foresee the
governance and administrative
problems that delayed projects that
were expected to be viable under
high growth. Interest rate hikes,
following the 2011 inflation peaks,
also hit PSBs. A loan-based system is
highly sensitive to a rise in interest
rates.
NPAs were expected to come
down as the economy revived. But
external shocks and domestic
political logjams continue to delay
recovery. Capital adequacy
regulation should ideally be
countercyclical with buffers built up
in good times. But recovery is taking
too long. Moreover, loan growth from
PSBs is the slowest, possibly because
of a larger share of stressed assets.
Therefore it is necessary to clean up
bank balance sheets. The onus is on
the government as the largest
shareholder. The Budget has made a
contribution towards refinancing
PSBs. There is little risk for depositors
or of systemic spillovers.
The Indian taxpayer has,
however, for long subsidised
government and large private
investment. Earlier this was through
loss-making
public
sector
undertakings and development
banks whose loans were rarely repaid.
The 1990s reform closed some of
these channels, and sought to bring
in a larger role for market forces. But
private infrastructure investment was
inadequate. So PSBs were persuaded
to step in again. Therefore,

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refinancing must be accompanied by
reforms that build proper incentives.
These should increase PSBs
independence, and force promoters
to share risk and potential losses,
while making it easier to change
management and allow equity
infusion to keep viable businesses
going. If loans are written off, a
business can become viable as fresh
equity and new promoters are more
likely to come in. Banks with clean
balance sheets are more willing to
lend.
The problem is banks tend to
stop lending to companies whose
assets are declared to be NPAs. If an
asset is recognised as an NPA,
provisions must be made for possible
losses. Even so, it is time for change,
for arbitrage-free systems with
greater
transparency.
The
government can subsidise industry if
it is necessary, but this must be done
upfront with the correct share of risk
allocated to promoters and minimum
discretion. The political system has
too often taken taxpayers for a ride,
with small benefits masking large
hidden costs. They have the right to
know what they are paying for. The
SC has already asked for information
on large defaulters. Stronger boards
and
improved
governance
mechanisms can ensure that PSBs
make independent decisions on
purely commercial grounds.
Appropriate structural change
makes some monetary stimulus
feasible, both to reduce the pain and
in response to the global slowdown.
Many negatives need positive
counters.
A message
aimed at the heart of India
Stung by the criticism of being
a suit boot ki sarkar and by the
National Democratic Alliances

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electoral reverses in Bihar, Finance


Minister Arun Jaitley has made bold
to address the perception deficit in
announcing a raft of proposals aimed
at the rural sector and farmers. From
a cess of 0.5 per cent on all taxable
services that would expressly be
used to finance improvements in
agriculture and schemes to benefit
farmers, to a dedicated long-term
irrigation fund with a corpus of
Rs.20,000 crore, the Union Budget
seeks to pave the path for making
good Prime Minister Narendra Modis
promise to double farm incomes by
2022. Other measures to further this
course include an outlay of Rs.19,000
crore that the Central government
will spend this year on rural roads as
part of its goal to ensure that all
habitations are connected by 2019,
and a push to achieve universal
village electrification in the next two
years. Between improved road
connectivity and the availability of
electricity, the potential is significant
for a multiplier effect on the rural
economy and improvements to the
quality of life for residents of the
hinterland. Two more steps are
noteworthy. The Budget proposes
the introduction of a health
insurance scheme that would
provide up to Rs.1 lakh as coverage
against hospitalisation costs for
economically weak households, with
senior citizens above the age of 60
eligible for another Rs.30,000 in topup cover. While the sum offered as
protection is low by most standards
for contemporary critical in-hospital
care, especially in the private sector,
for the indigent this could well mean
the difference between not even
attempting to seek medical care and
a chance at surviving a debilitating
illness. The other, equally laudable,
initiative is to provide all families
below the poverty line with cooking

gas. This can afford those in


underprivileged homes the dignity
of a quicker and less harmful way to
keep their kitchen fires running.
From a larger macroeconomic
perspective, Mr. Jaitley has for now
said he will stick to his prior fiscal
deficit commitments, but he has
simultaneously flagged the need for
more flexibility in dealing with
situations when overall economic
conditions are unfavourable. For this
he has proposed the setting up of a
committee to review the entire road
map mandated by the Fiscal
Responsibility
and
Budget
Management Act of 2003 to study the
possibility of having a target range
instead of fixed numbers that would
give the government the needed
policy space to align a fiscal
expansion or contraction with credit
availability. For the individual tax
payer, the Budget offers little to cheer,
save some tax sops that lower and
middle income families can leverage
to invest in affordable housing, or
squirrel away some more cash from
an increase in the deduction towards
house rent. The salaried class is likely
to feel hard done by a move to tax 60
per cent of the corpus created from
contributions to the Employees
Provident Fund starting April 1 as
part of a move to create a pensioned
society. With elections to five
provincial Assemblies due this year,
Mr. Jaitleys focus on the rural and
agrarian communities is clear proof
that the Budget still retains its
relevance as a powerful messaging
tool of a governments political
stances. Whether Budget 2016 will
engender a harvest of votes, only time
will tell.
Policy shame: sick, rare and
ignored
Rare diseases are a diverse set
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of over 7,000 different conditions
that afflict an estimated 1 in 20 Indians
and 350 million people worldwide.
Put simply, it means that every bus on
the road with a full complement of
passengers possibly has two people
with a rare disease.
Rare diseases are often
congenital, chronic, debilitating and
fatal. For instance, muscular
dystrophy is a group of rare muscle
diseases that cause progressive
weakness because the body is
unable to produce healthy muscles.
Therefore, patients gradually lose
their ability to walk, carry out daily
tasks or even swallow and breathe. A
significant proportion of rare diseases
occur in children, many of whom do
not survive beyond their fifth
birthday. Most rare diseases have no
cure or treatment and for thousands
of rare diseases, there is no ongoing
research effort to develop a
treatment.
The rarity of such diseases and
the complexity of associated
symptoms many rare diseases
breach traditional disciplinary
boundaries of medical specialities
result in frequent misdiagnosis, and,
more worryingly, damaging
treatments. Even when there is a
diagnosis, treatment options are just
not available, or are far too expensive;
this situation will continue without
adequate government intervention.
Under Article 21 of the Constitution,
the Indian state guarantees equitable
and non-discriminatory access to
health care to all as part of each
citizens right to life. Yet, the draft
National Health Policy, 2015, makes
no mention at all of rare or genetic
diseases.
Overseas, the European
Commission has declared rare
diseases to be a public health priority
116

and more than 19 European


countries have adopted rare disease
strategies in the past few years. The
United States was the first to give
policy preference to rare diseases
through the enactment of the Orphan
Drug Act (ODA) in 1983. These drugs
are called orphan because under
normal market conditions, the
pharmaceutical industry has little
interest in developing and marketing
products intended for only a small
number of patients. ODA is said to
have facilitated pharmaceutical
interest in rare diseases in the U.S.
with approximately 400 such drugs
being developed after 1983; it was
around 10 between 1973 and 1983.
However, ODA has been criticised
for allowing pharma companies to
charge exorbitant prices. An Indian
rare disease policy should make it
financially attractive for the private
sector to evince interest in rare
diseases while being careful not to
allow pharma companies to exploit
any incentives given to them.
Tackling rare diseases requires
planned effort, which must be
guided by an overarching national
rare disease policy to facilitate
coordination between patients,
scientists, doctors, regulators and the
pharma industry. In this, India
woefully trails many countries. It
doesnt as yet define and catalogue
rare diseases, a prerequisite for any
concerted policy response. The
objectives of such a policy will best
be implemented through the
establishment of a national rare
disease organisation, which can act
as a nodal authority to increase
capacity building in rare diseases.
If the Indian government is
serious about its commitment to
realise the rights of its citizens to
universal and equitable health care,

it cannot ignore rare diseases. Some


State governments, such as Delhi,
have established a panel to tackle rare
diseases. However, any State-level
intervention must be guided by a
comprehensive national policy to
ensure that the entire rare diseaseaflicted community benefits.
For a paradigm shift in fiscal
deficit
Mr. Jaitley seems to recognise
the possibility of an inverse
correlation between fiscal deficit
(fiscal expansion) and bank credit
(monetary expansion). That is, if
credit growth falls, fiscal deficit may
need to rise and if credit rises, fiscal
deficit ought to fall to ensure
adequate money supply to the
economy. As the FRBM Act ignores
the possible inverse link between
monetary and fiscal economies, the
Finance Minister has rightly looked for
an objective basis for fiscal deficit.
The logic of correlation
between credit expansion and fiscal
deficit has five sequential limbs. One,
money is the blood of economic
growth. Two, most money that fuels
the economy is created by banks, not
by government. Three, banks and
financial institutions fund business
and others, and it is that credit money
which drives the economy. Four, if,
for whatever reason including lack of
business confidence, the bank credit
to the economy does not adequately
grow, like it did not in the last few
years, economic growth will suffer for
want of adequate money. Five, that is
when the Budget needs to step in, to
pump money into the economy by
incurring deficit (spending more than
the income), and, for the purpose,
borrow the money lying with banks
or even by printing more money, if
that is needed. The fifth limb ensures

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that growth does not decelerate for
want of enough money circulating in
the economy. Otherwise, it will. The
FRBM law has ignored the fourth and
fifth limbs of the logic and fixed the
3 per cent fiscal deficit as inviolable.
The time has come to uncover how
far its intents match with the reality
and how rational its fixation with the
3 per cent limit is. The working of the
FRBM law, particularly in the last few
years, needs a reality check.
To preface the reality check on
the FRBM law, it is necessary to know
how the 3 per cent fiscal deficit limit
emerged. The story is amusing, even
bizarre. The magic number made its
debut in the famous Maastricht Treaty
to form the European Union (EU) in
1992. The treaty prescribed four
criteria which EU members had to
comply to be eligible to adopt the
Euro as the common currency. One
criterion was the 3 per cent fiscal
deficit limit the others being limits
on inflation, long-term interest rates
and public debt.
Why did the EU treaty mandate
the 3 per cent limit? EU members like
Greece and Italy were operating on
high fiscal deficits while Germany and
France had much lower numbers. In
the tussle between prudent and
profligate EU members, the limit
emerged as a negotiated rate after
give and take. Now, come to how the
3 per cent limit got its celebrated
status in Indian fiscal economics. It
was an open secret that the FRBM
Act enacted in 2003 and
implemented from 2004, had
adopted the ready-made EU limit of
3 per cent. But some fake reports had
first hinted that an expert committee,
which never existed, had
recommended the limit. Faced with
criticism that the EU rate of 3 per cent
was carbon copied into the FRBM

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Act, some convoluted arithmetic was


devised retroactively to explain the
logic of the magic figure of 3 per cent.
Here, now, is a reality check on
FRBM norms. Banks create and control
most money stock in the economy.
This constitutes the monetary
economy which is entirely under the
control of the Reserve Bank of India.
The revenues and expenditure of the
government constitute the fiscal
economy. If the government spends
more than its income, then deficit
arises, which it has to finance by
borrowing money created by banks.
The FRBM Act says it cannot borrow
more than 3 per cent of GDP even
if banks do have money, even if the
private sector does not take it, and
even if the economy needs it for
growth. The money may lie idle in
banks, and yet the law will not allow
the government to borrow! This is
perverse economics. The guild of
economists the world over which
rarely agrees on most issues
unanimously agrees that as money is
critical for economic growth, without
adequate money, GDP growth will
suffer.
The economic debate on the
money-growth link dates back to the
Great Depression of the 1930s. While
the celebrated Nobel laureate, Milton
Friedman, talked about inadequate
money supply as the cause of the
Great Depression, James Tobin
pointed to inadequate demand for
money (credit) as the cause. That is
even if there is money, a lack of
business confidence or high interest
may reduce the demand for money.
There is no doubt that both lack of
money supply as well as lack of
demand for credit weaken growth.
From 2012-13 to now, i.e. 2015-16,
the Indian economy seems to have
been experiencing both the Milton

and Tobin effects shrinking money


expansion and credit demand
shrinking even faster.
Look at how the monetary and
fiscal segments have operated in the
last few years. Money supply growth
had averaged 17.8 per cent between
2006-7 to 2010-11. It began
declining later. It declined from an
average growth of 16.5 per cent in
the two years ending 2010-11 to an
average growth of 13.5 per cent in
the three years ending 2013-14. In
2014-15 its growth had come down
to 11.5 per cent a fall in growth of
45 per cent as compared to 201011. The money supply growth is less
than the growth of nominal GDP for
2014-15. The year-on-year growth in
bank credit too more than halved from
16.7 per cent in 2009-10 to less than
8 per cent in 2015-16. As a proportion
of the growth of nominal GDP too
bank credit growth has fallen. The
credit growth, which had equalled
the growth of nominal GDP in 201011, almost halved in 2014-15. The
credit expansion as related to GDP
too fell to 5.6 per cent in 2014-15
and to 4.4 per cent in the nine months
of 2015-16, from 11 per cent in 200910. This establishes that, in the last
six years, both money supply growth
and credit expansion have halved
absolutely and in relation to GDP
growth. Even the combined fiscal
deficit (fiscal expansion) and credit
growth (monetary expansion) as a
percentage of GDP has halved from
17.4 per cent in 2009-10 to 8.8 per
cent, which is less than nominal GDP
growth. Three things are obvious.
Money supply growth has reduced.
Credit expansion has fallen. And
even fiscal deficit and credit growth
put together have declined, all
pointing to the growing economy
being starved of the needed money
117

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needed, in which the FRBM Act has
also lent its hand.
Review the fiscal consolidation
path
Passed almost three years after
it was first introduced in Parliament,
that too in a significantly watered
down form, the Fiscal Responsibility
and Budget Management Act has
faced a rocky road in terms of
implementation. Paused four times
since its enactment in August 2003,
including for a reset of the fiscal
deficit target in 2008-09 following the
global financial crisis, the FRBM Act
has become a subject of animated
debate. Central to this has been the
question of whether the law has
served the purposes for which it was
envisaged. There is no denying that
the Act has helped focus attention
on the issues relating to fiscal
consolidation thanks to the
mandatory medium-term and
strategy statements that the
government of the day is required to
present annually before Parliament.
But with regard to the larger
objective of ensuring macroeconomic stability, the record has
been less than ideal. Both headline
consumer price inflation and the
debt-servicing costs for the Central
government were, at different points
in the post-FRBM era, at divergence
with the performance of fiscal deficit,
raising questions about the overemphasis on a cast-in-stone target
number. The nub of the issue is this:
has the law allowed the government
the elbow room needed to use all the
fiscal tools at its command to ensure
that the growth momentum is
maintained, without either
significantly fuelling inflation or
curtailing spending on vital and socioeconomically relevant development
programmes? If it has not, this may
118

be the time to review the Act, and if


necessary, amend it significantly.
It is in this context that Finance
Minister Arun Jaitleys Budget
proposal to have a committee review
the implementation of the FRBM Act
even as he committed himself to
sticking to the 3.5 per cent fiscal
deficit target for the next financial
year is timely and germane. He has
referred, for instance, to the
possibility of adopting a target range
rather than a specific number. The
argument is that this would give the
necessary policy space to deal with
dynamic and volatile situations such
as the one India currently faces
global economic and financial market
uncertainty, a slowdown in China,
and tepid private investment
demand domestically. The
suggestion that fiscal expansion or
contraction should be aligned with
credit contraction or expansion, as
mentioned in the Budget speech, is
worth exploring. While any attempt
to jettison or even revisit the fiscal
deficit targets is bound to draw sharp
criticism from, among others, the
global credit rating agencies, Mr.
Jaitley has to look no further than the
BRICS compatriot China. Chinese
Premier Li Keqiang has just unveiled
a budget deficit of 3 per cent of GDP,
the highest level for that country since
1979 and a significant jump from last
years 2.3 per cent target. But Mr.
Jaitley will need to ensure that any
resources freed up from a fiscal reset,
when that happens, are spent
imaginatively for an economic
stimulus, and primarily on the creation
of long-term public assets.
Dont let down the children
With worrying levels of stunting
and lack of healthy weight among
children revealed by the fourth round

of the National Family Health Survey


(NFHS) for 15 States, Budget 201617 was expected to provide some
remedies. To begin with, it could
have raised funding for the flagship
nutrition programme, the Integrated
Child Development Services. Instead,
the Budget has dealt the ICDS a blow
in the form of a 7 per cent cut over
the revised estimate of expenditure
for the previous year, of about
Rs.15,500 crore. This follows the
pattern of Budget 2015-16 which cut
the outlay initially, but with provision
of some supplementary grants later
in the year. Such an approach to a
welfare programme that is so crucial
to the health of the next generation
reflects a poor set of development
priorities. It also defies economic
reasoning, given that India has been
growing steadily after liberalisation
and has the wherewithal to
substantially raise social sector
expenditure annually. To their credit,
several States have used the ICDS to
improve health and welfare by
providing good supplementary
nutrition to children under six; the
support of the Supreme Court has also
helped in ensuring that commercial
interests are unable to corner the
funds, and there is provision for
community oversight. The Ministry of
Women and Child Development must
focus on States such as Bihar and
Madhya Pradesh with a large burden
of stunted, wasted and underweight
children as revealed by the latest
NFHS data. Figures for all States
together will give a full picture,
including best practices.
Empirical evidence on the
effectiveness of supplementary
nutrition should prompt the Centre
to enhance funding for the ICDS. Data
from an earlier round of the NFHS
show that when nutrition is available

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every day to children under two,
there is a marked positive effect on
their height, particularly for girls. Such
early interventions have a life-long
impact, in the form of higher
productivity and earnings. Scholars
have, however, found a tendency
within the ICDS in some States to
neglect the needs of children less
than two years old. Only 6 per cent in
this age group were getting adequate
daily nutrition a decade ago. The
more progressive States have
corrected the bias, with striking
results. There is a clear lesson here
for others, and it is incumbent on the
Central Ministry to monitor the
implementation of the scheme. It can
take the support of local communities
and self-help groups, as provided for
in the Supreme Court judgment of
2004, to ensure that wholesome
cooked meals are provided and
contractors are not engaged. More
recently, the court wanted high
standards of hygiene and nutrition
maintained in ICDS centres. Finance
Minister Arjun Jaitley has missed the
opportunity in the Budget to secure
the future of Indias children, but he
can still make amends. Raising the
outlay, instituting a mechanism to
heighten awareness among
communities in less developed
States and achieving full coverage are
needed remedies.
Time to deliver on Womens Bill
By clockwork precision, talk
about the Womens Reservation Bill
has duly floated in ahead of March 8,
International Womens Day. President
Pranab Mukherjee and VicePresident Hamid Ansari have called
for reviving the Constitution (108th)
Amendment Bill to reserve for
women one-third of seats in
Parliament and the State legislatures.
Prime Minister Narendra Modi has

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been less forthcoming in revealing


whether his government has any plans
to pilot the Bill through the Lok Sabha.
This is particularly disappointing. The
Bill was passed in the Rajya Sabha in
March 2010 amid obstructive
theatrics from parties such as the
Rashtriya Janata Dal and the
Samajwadi Party, but also with an
unusual level of cooperation among
the national parties, especially the
Congress, which was leading the
United Progressive Alliance
government, and the Bharatiya Janata
Party. Thereafter they could not or
would not overcome similar odds
in the Lok Sabha to deliver on their
stated support for the Bill. Six years
on, Mr. Modis BJP commands a clear
majority in the Lok Sabha. It is
therefore in a position not only to get
the Bill passed by mopping up the
support of just a few more MPs, but
also to force the Congress and the
Left into reaching out across the aisle
in a polarised Parliament to affirm
fidelity to a long-voiced promise.
Every session of Parliament must
serve as a reminder that the real
stumbling block to the Bill has not
been political from parties opposed
to it, but essentially patriarchal within
the very same parties that have
affirmed support to it.
In the two decades since it was
first presented in Parliament, different
governments have tried clearing it
but faced tremendous opposition,
often accompanied by manhandling
and name-calling. It is obvious that
despite the pretty speeches and
public posturing, the political space
in the country, regardless of the
ideological divide, is uniformly and
strongly chauvinistic. Opposition to
the Bill has often taken the form of a
demand for the proposed quota to
be diced along other parameters of

disadvantage, such as caste and class.


Additionally, resistance has been
rationalised as a caution that womens
quota would be appropriated by
relatives and proxies of powerful
politicians, neatly ignoring the fact
that such a reality could well obtain
with regard to male legislators too.
Women need to overcome gender
prejudice firstly in their respective
parties before entering the wider
electoral fray. It is also a sign of lack
of seriousness on the Bill that parties
have not taken up a considered
discussion of the impact of the
rotation of reserved constituencies
envisioned, and purposefully debate
its merits against suggestions for
double-member constituencies,
proportional representation and
mandatory womens quotas for parties
while announcing candidate lists for
elections. To have more women in
legislatures and the government is a
big step towards empowering
women in society. The experience
of several village panchayats that have
women as effective leaders bears
testimony to this fact. Affirmative
action of this kind is the best way to
usher in social and gender justice.
Buying influence in Washington
A shock wave ripped through
South Asian policy circles in midFebruary when the U.S. confirmed
that lengthy negotiations between
Washington and Islamabad had
resulted in a decision to supply
Pakistan with eight F-16 fighter
aircraft worth $699.04 million,
despite a year of unrelenting protest
from India. While the deal marked the
continuation of standard U.S. policy
on Pakistan, namely support for an
ally in the global fight against terror,
it reflects a troubling conundrum for
India, which is that Washington
appears to be unable or unwilling, to
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scale back military transfers to
Islamabad despite evidence of
complicity between the Pakistani
Inter-Services Intelligence and
various extremist groups.
Yet, even as the Modi
administration fumed and as Mr.
Corker and other Congressmen
dashed off sharp letters to Secretary
of State John Kerry, threatening to
block U.S. taxpayer funds to support
the sale of the jets, Mr. Kerry in his
annual budget sent to the U.S.
Congress proposed a financial
assistance package of $859.8 million
for Pakistan, including $265 million
for military hardware.
In other words, an all-toofamiliar subcontinental dilemma for
India has again resurfaced. On the
one hand, Osama bin Ladens
hideaway villa was discovered in
Abbottabad, Pakistani-American
Faisal Shahzad attempted to
spectacularly car-bomb New Yorks
Times Square, and Haqqani network
terrorists regularly flee to safe havens
inside Pakistan after attacking U.S.
soldiers in Afghanistan. On the other,
the U.S. readily proffered financing
to Pakistan enabled by the KerryLugar Bill, sold the country around
$5.4 billion worth of military
equipment from 2002 to 2014, and is
now handing over even more F-16s,
beyond the 70 that the Pakistani Air
Force has gradually acquired since
the 1980s.
Islamabads peddlers of
shadowy influence on Pennsylvania
Avenue and Capitol Hill have been a
force to reckon with for decades,
most notably during the term of
General Pervez Musharraf when a
battalion of fleet-footed lobbyistninjas rehabilitated Pakistans
reputation on the eve of U.S.
120

President George W. Bushs War on


Terror. Scarcely one month after the
9/11 terror attacks, Gen. Musharraf
faced cascading pressure from the
Bush White House to allow the transit
of enormous U.S. military supplies
through Pakistan as the campaign to
overthrow the Taliban in Afghanistan
kicked off in earnest.
Instead, Gen. Musharraf quietly
enlisted the services of Houstonbased Republican Stephen Payne,
described as a staunch Bush
supporter and a member of a firm
known as Team Eagle, and signed a
$1,80,000-a-year contract with that
entity on October 13, 2001,
according to a government database
maintained under the Foreign Agents
Registration Act (FARA). According
to an investigation by Talking Points
Memo, Team Eagle helped Pakistan
negotiate a 5-year, $3 billion dollar
aid package from the U.S. [and]
coordinated the removal of
economic and military sanctions
imposed on Pakistan under the
Clinton Administration.
As much as the historical record
of the Pakistani lobby in the U.S.
reflects creativity and single-minded
focus, in equal measure it has allowed
itself to be carried too far into the dark
side of backroom politicking, with the
expected toxic fallout. Most wellknown among these is the case of
Syed Ghulam Nabi Fai, a U.S. citizen
of Kashmiri origin who was arrested
by the Federal Bureau of Investigation
in 2011 for clandestinely pushing the
cause of the Pakistani government in
seeking to influence the U.S. position
on the Kashmir issue.
There is one notable exception
to this observation, when the
influence of the Indian and IndianAmerican lobbies engulfed every
corridor of the U.S. Congress and

animated the Oval Office like never


before in the run-up to the signing
of the India-U.S. civil nuclear
agreement in 2005, between
President Bush and Prime Minister
Manmohan Singh. According to
disclosures under FARA, the Indian
government paid several lobbying
firms $60,000 each per month, one
being Barbour Griffith and Rogers, the
employer of Robert Blackwill, U.S.
Ambassador to India from 2001 to
2003 and a confirmed backer of
Indias rise in the 21st century world
order.
After this high point, however,
with no major big-bang policy goals
in sight, the focus on lobbies appears
to have somewhat blurred on the
Indian side. For example, data
collected under FARA and the
Senate Office of Public Records and
reported by the non-partisan Centre
for Responsive Politics research
group suggest that between 2008
until 2013 India spent $3.91 million
whereas Pakistan spent $5.15 million.
If there was a price to pay for reining
in lobbying expenditure, it may have
come in the form of painful but
relatively manageable bilateral
conflicts breaking out from time to
time, such as the Devyani Khobragade
affair of 2013-14.
Some of them characterised the
deal as an inevitable blip within the
broader rhythm of the bilateral
compact between India and the U.S.,
but one that was perhaps less likely
to cause genuine geopolitical
instability in the region than the
scaremongers would have us believe.
That bilateral compact is more
regularly validated, they argued, by
the vast strides that New Delhi and
Washington have made together
for example, in terms of defence
trade and technology transfers. Thus

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while lobbying Washington may
bring quick wins or stave off tactical
setbacks, strategic convergence
between nations may depend much
more on governments rolling up their
sleeves and working together to
deliver what lofty vision statements
have promised.
Cooling the earth down
The Paris Conference last year
primarily discussed plans to reduce
carbon emissions, which is
understandable as this is the most
immediate item for action. But other
measures for dealing with global
warming, in particular climate
engineering, may soon acquire more
importance.
Today, climate engineering
efforts are viewed either as secondary
measures to be undertaken alongside
reducing emissions or as technologies
which have not matured enough to
warrant discussion by world leaders.
But the situation can change
dramatically in the future. Even if all
the national commitments made in
Paris are fulfilled, the effects of global
warming will inevitably worsen in the
near term. As nations struggle to
reduce emissions even further,
alternative
solutions
using
engineering innovations will
increasingly gain currency.
A variety of such proposals for
battling global warming are already
on the table a few are being tried
out and others are being seriously
researched.
Most
climate
engineering efforts can be divided
into two categories which address,
respectively, the management of
carbon and the management of
sunlight. The first category is directed
towards removing greenhouse gases
from the atmosphere. A prominent
example is carbon capture and

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storage (CCS), where some of the


carbon dioxide (CO{-2}) being
emitted by coal-fired power stations
is recaptured by physically sucking it
in and transporting it elsewhere to be
sequestered underground. The first
115 MW CCS retrofitted coal power
plant commenced operation at
Boundary Dam in Canada in 2014.
The CO{-2}captured there is
transported and pumped into nearby
oilfields for enhanced oil recovery.
This has reduced its CO{-2}emission
by one million tonne each year.
Studies are on in the U.K. and other
nations on the feasibility of similar
installations there. Another method
for removing CO{-2}from the
atmosphere is to increase forest cover
as plants will absorb some of the
unwanted CO{-2}. Increased
forestation is part of Indias strategy
for reducing CO{-2}.
More ambitious, but also more
worrisome, is the second category of
climate engineering: solar radiation
management (SRM). Here the plan is
to reduce global warming by cutting
down the heat absorbed by our
planet from the sun. Among the
techniques being considered are
marine cloud brightening, cirrus
cloud manipulation and stratospheric
aerosol injection (SAI). SAI, the
boldest and also the most risky of
climate engineering interventions,
involves spraying into the
stratosphere fine, light-coloured
particles designed to reflect back
part of the solar radiation before it
reaches and warms the earth. SAI
proponents claim that this could
bring down the global temperature
by as much as 1C a substantial
amount in the climate change
context.
But SAI also has the potential
for disastrous side effects, crossing

national boundaries. The Pinatubo


volcanic eruption is also said to have
reduced precipitation, soil moisture,
and river flow in many regions.
Injection of sulphur compounds into
the stratosphere is likely to increase
acid deposition on the ground and
also contribute to ozone layer
depletion. Apart from such known
unknowns, there could also be, to
use the catchphrase, the unknown
unknowns. The global climate
system is too complex for current
computational techniques to predict
all possible consequences of
tampering with it. Once the aerosol
has been injected into the
atmosphere, it cannot be removed.
Yet, if for any reason the injection,
once begun, is discontinued
prematurely, there can be rapid rewarming. That, ironically, could do
more damage than the gradual global
warming that we are seeking to
combat.
SAI research is still at a
theoretical and laboratory level.
Development of these techniques to
large-scale deployment is years away.
In that case, why should the larger
community worry about it now? The
reason is SRM interventions could
happen sooner than one thinks. The
technology does not seem to be
astronomically expensive by
standards of national budgets. Using
a few airplanes to inject the necessary
amount of aerosol to bring the
temperature down by one degree
could cost only a few billion dollars
well within the reach of even
developing countries.
As climate change worsens,
some coastlands could go
underwater and other regions could
suffer extreme heat and severe
droughts causing massive human
suffering. Under such pressure, and
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in the absence of international
regulatory regimes, the affected
nation, even a small developing one,
may well resort to using whatever SAI
technology is available by then in the
international market. In their
desperation, possible harmful effects
on other countries may not weigh
heavily on their decision-making.
Meanwhile, just the fear of possible
adverse side effects could lead other
nations to take preventive action
against the perpetrator. Nations
have gone to war for less.
One simple way to deal with this
problem is to just ban further research
in these fields. In fact, some climate
scientists have already suggested this.
They also fear that even the possibility
of SRM interventions may undermine
efforts to reduce carbon emissions.
But a blanket ban on SRM would be
unwise and difficult to implement.
Technology, benign or malevolent,
has a way of continuing to advance.
Besides, banning all SRM research will
amount to throwing the baby out with
the bathwater. The goal of SRM is to
mitigate damage done by carbon
emissions. If there is some chance of
it succeeding safely, it would be
unwise to abandon it at this stage.
Abandonment would also leave SRM
technologies dangling midway,
insufficiently tested or refined. That
may nevertheless not deter some
desperate climate change-afflicted
nation from deploying it, leading to
disaster.
While
active
climate
engineering researchers have already
been conscientiously worrying about
these issues, it is not too early for the
rest of us to start thinking about it.
Dont compromise on privacy
The Aadhaar Bill, which the
government introduced in the Lok
122

Sabha last week, has not come a day


too soon. More than six years have
passed since the first attempt was
made to give legal validity to Aadhaar,
an ambitious project that seeks to
provide unique identification
numbers to each individual in a
country of over a billion people,
collecting demographic and
biometric information in the process.
And through these years, amid many
legal and political challenges and a
change in government, over 98 crore
numbers have been issued. The
stated idea of the Aadhaar (Targeted
Delivery of Financial and Other
Subsidies, Benefits and Services) Bill,
2016, is to provide for efficient,
transparent, and targeted delivery of
subsidies, benefits and services.
This, along with a clause that says the
unique numbers will not be
considered as proof of citizenship, is
welcome. And yet, the process of
legislating for Aadhaar has not been
wholly reassuring. The Bill has
attracted immediate criticism for
being introduced as a money bill, by
virtue of which it does not require
approval of the Rajya Sabha, where
the BJP-led government does not
have the numbers to ensure its
passage. Bypassing the Upper
Houses vote does give the Bill an easy
route to becoming law. The question
is, given that Aadhaar was a signature
project of the Congress-led UPA,
could not the government have made
the effort to reach out to lawmakers
across the board on such a crucial,
bipartisan issue?
Wider political consensus and
scrutiny are vital. Section 7 of the Bill,
for instance, makes proof of Aadhaar
necessary for receipt of certain
subsidies, benefits and services. This
must be read in the backdrop of a
Supreme Court ruling that said

Aadhaar cannot be made mandatory.


A key concern over the collection of
personal information on this scale is
data protection. There are provisions
in this Bill that seem to address the
concern, including one that prohibits
any official from revealing information
in the data repository to anyone. But
the exceptions cause unease. Two
provisions are particularly troubling.
The first is Section 29(4), by which
no Aadhaar number or biometric
information will be made public
except for the purposes as may be
specified by regulations. The
second, which experts have already
flagged, is Section(33), under which
the inbuilt confidentiality clauses will
not stand when it concerns national
security. The only reassurance could
be that in such cases the direction
has to come from an official who is
not below the rank of a Joint
Secretary to the government.
Nonetheless, without robust laws to
protect their data, citizens would be
rendered vulnerable. It is not about
just snooping. It is also being said that
in order to be useful and effective,
Aadhaar data might have to be used
alongside other databases. That
could trigger further privacy
questions. There is little doubt that
India needs to streamline the way it
delivers benefits, and to empower
citizens with a basic identification
document. But this cannot be done
without ensuring the strictest
protection of privacy.
Upgrading Indias cyber
security architecture
Two things set aside Indias
digital spaces from that of major
powers such as the United States and
China: design and density. India is a
net information exporter. Its
information highways point west,

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carrying with them the data of millions
of Indians. This is not a design flaw,
but simply reflects the popularity of
social media platforms and the lack
of any serious effort by the Indian
government to restrict the flow of
data. Equally important is the density
of Indias cyberspace. Nearly 500
million Indians use the Internet today,
but they do not access the Internet
from the same devices. Apples
market share in the U.S., for instance,
is 44 per cent, but iPhones account
for less than 1 per cent in India. The
massive gap between the security
offered by the cheapest phone in the
Indian market and a high-end
smartphone makes it impossible for
regulators to set legal and technical
standards for data protection.
Indian authorities have spent
the lions share of their resources
tackling localised cybercrime while
responding to major attacks on a caseby-case basis. Recognising the
strategic dimensions of cyberspace,
the Prime Ministers Office (PMO)
created the position of the National
Cyber Security Coordinator in 2014,
a welcome first step. There is,
however, no national security
architecture today that can assess the
nature of cyber threats and respond
to them effectively. Indias civilian
institutions have their own firefighting
agencies, and the armed forces have
their own insulated platforms to
counter cyber attacks.
What could such an agency look
like? The first requirement is to house
it with permanent and semipermanent staff that is technically
proficient in cyber operations, both
defensive and offensive. India faces
a shortage of officers trained in
creating and breaking encrypted
platforms as well as using digital
networks for intelligence gathering.

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Were such a National Cyber Security


Agency (NCSA) to be created, it
should have a functional nucleus or
secretariat. The second requirement
is to coordinate the agencys policy
functions and operations. The
current cybersecurity policy,
articulated in 2013 by the Ministry of
Communications and Information
Technology, is basically a statement
of first principles. The NCSA should
be guided by a document outlining
Indias cyber strategy, much like its
nuclear doctrine.
India currently has a top layer
of agencies performing cyber
operations the National Technical
Research Organisation, the National
Intelligence Grid, and the National
Information Board, to name a few
but there is also an additional layer of
ministries performing governance
functions. The Ministries of Defence,
Home, External Affairs and IT should
be part of a policy wing that provides
their assessments of local and regional
developments. Indias intelligence
agencies should separately provide
their consolidated inputs to aid the
operations of the NCSA.
Last, India should not hesitate
to build its offensive cyber
capabilities. This would involve the
development of software designed
to intrude, intercept and exploit
digital networks. The deployment of
cyber weapons is not a low-cost
affair, as the digital trail allows
adversaries to track and possibly
predict the development of future
technologies. Nevertheless, a cyber
arsenal serves the key function of
strategic deterrence. Indias cyber
command should be the primary
agency responsible for the creation
and deployment of such weapons.
A fully operational cyber
command will take years to complete.

It is the need of the hour, given that


Indias digital capabilities lag
significantly behind regional and
global players. Whatever final form
Indias cyber command takes, the
government would do well to pursue
a two-pronged strategy in the interim.
First, advocate restraint in
cyberspace as a global norm. India is
an active participant in discussions
around the Tallinn Manual, which is a
set of non-governmental guidelines
for engagement during war. A group
of government experts will convene
later this year under the aegis of the
UN India is expected to be at the
table to discuss norms that trigger
cyber war. At these forums, India
should underline the basic premise
that it is impossible to thwart all cyber
attacks, and therefore encourage
nation-states to restrain from
deploying cyber weapons. Second,
the government should draft
recruitment guidelines to hire and
train a cadre of cyber specialists.
Attracting such officers may require
high pay scales and other benefits
a model the U.S. has aggressively
pursued but they would bring in
Indias best minds. If Indias
cyberspace
has
built-in
vulnerabilities, it also has a highly
skilled IT workforce, which should be
harnessed by the government for
strategic use.
Good economics is good politics
The backdrop to Finance
Minister Arun Jaitleys third Budget
was a domestic economy
confronted with a rather adverse
global environment, an agricultural
sector reeling from two successive
years of drought, and a
manufacturing sector that has been
limping along. Although the gross
domestic product (GDP) growth

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rate has been relatively impressive at
over 7 per cent (though this figure
has been contested as unduly high
by many who attribute the
overestimate to the shift in the
method of computing GDP), there
was a universal feeling that the
economy was in a vulnerable state
and that even a relatively minor
shock could cause a big downward
slide.
Economic sense seemed to
suggest that the Finance Minister
would have to choose one or the
other option. However, Mr. Jaitley
seems to have achieved the
impossible. He has definitely
embraced fiscal prudence. He has
announced that the budgetary
deficit for the current year will not
exceed 3.9 per cent of GDP, and has
promised to lower the fiscal deficit
for 2016-17 to 3.5 per cent of GDP.
Since these are figures that were
mentioned last year, the intention is
clearly to ensure that there is no
financial slippage in so far as the
Central government is concerned.
Surprisingly, fiscal prudence does
not seem to have come at the cost of
a cut in government expenditure.
Mr. Jaitley has announced a
significant increase in the allocation
to agriculture and rural development,
as well as infrastructure. He has also
made a large budgetary provision for
payments arising out of the Seventh
Pay Commission awards and the
modified pension scheme for the
military. Moreover, the tax measures
are anything but draconian. So, how
has he managed to square the circle?
The government has benefited
a great deal from the windfall gain
arising from the steep fall in crude oil
prices. The price of crude oil is less
than half of what it was a year ago.
However, the government has not
124

passed on the substantial savings


achieved on the import bill to
consumers the retail prices of
petrol and diesel have come down
by only a few rupees! Clearly, the
government is hoping to continue its
reliance on this source of non-tax
revenue. Of course, this strategy
carries with it the risk that the
government estimates of revenue on
this account during 2016-17 will be
hit for a six if the global economy
recovers from its current slump. This
would result in an increase in the
demand for oil and hence a rise in
crude oil prices.
Mr. Jaitley has also made some
rather optimistic assumptions about
the volume of resources available to
finance
the
governments
expenditure. He is hoping for a
significant increase in revenue from
personal income tax. The bulk of this
increase must come from better tax
compliance since there has been
only a modest increase in taxes for
the super-rich. What is more
questionable is his assumption that
disinvestment and the strategic sale
of public sector enterprises will fetch
the exchequer the sum of Rs.56,000
crore. This is surely quite
unreasonable in view of the fact that
the revised estimate for 2015-16 is
less than half this figure. The stock
market will have to improve
considerably if disinvestment
proceeds are going to be anywhere
close to Mr. Jaitleys estimate.
The government also hopes to
exploit non-budgetary sources of
financing infrastructure projects.
First, there is the hope that some
infrastructure projects will be funded
through public-private partnerships.
Second, the National Investment and
Infrastructure Fund (NIIF) has been
allocated Rs.4,000 crore in the 2016-

17 Budget. The government hopes


that the NIIF can leverage this to raise
additional funds through the bond
market. Third, there are approved
market borrowings of around
Rs.30,000 crore for several financial
intermediaries. Of course, the
government cannot be completely
certain that the targeted volume of
resources will materialise from these
sources. There is also the danger that
public borrowings will crowd out
private borrowing if the overall credit
scenario is not satisfactory.
As far as budgetary allocations
are concerned, the emphasis has
definitely been on agriculture and the
rural sector in general, with a huge
increase in the allocation to the
sector. A key policy instrument will
be a large increase in investment in
irrigation, with the emphasis on
completing several projects very
soon. The Budget also provides for
an increase in funds allocated to gram
panchayats. This is part of a huge
increase in outlay on rural
development, including rural road
construction. Somewhat surprisingly,
the Budget has dramatically
increased funding for one of the
previous United Progressive Alliance
governments flagship programmes
Mahatma Gandhi National Rural
Employment Guarantee Scheme.
Other benefits to farmers include
smoother credit flow, insurance
against crop failures, and improved
marketing facilities.
Echoing the Prime Ministers
recent promise, Mr. Jaitley too has
announced the target of doubling
farm incomes within five years. This
can be nothing more than a pipe
dream. Farm incomes would have to
record an average annual growth rate
of about 14 per cent in order to
achieve this target. The annual growth

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rate of agricultural output in India
during any five-year period has not
even touched half this level. What
magic wand does the Finance
Minister have to achieve this
miraculous feat? And even if this
could be achieved, who will buy
double the current volume of
agricultural output given the low
income elasticity of demand for
agricultural output? Of course, there
are many countries where farmers
incomes are several times that of
Indian farmers. But, in order for
Indian farmers to reach these levels
of income, agricultural productivity
has to increase dramatically and far
fewer people have to depend on
agriculture for a livelihood. This in turn
requires massive migration of people
from the rural to the urban sector.
There is no mention in the Budget
speech of whether this is expected
to take place.
There has been very little
change in the structure of taxation.
The Finance Minister has stayed
away from overt populism such as
raising the income tax exemption
limit. There is clearly no justification
for such a move when barely 5 per
cent of households pay personal
income tax. Direct tax rates for the
vast majority of taxpayers remain
unchanged, but those with taxable
income above Rs.1 crore will pay a
higher surcharge. Moreover, tax
compliance is sought to be
increased by levying a penal tax on
undisclosed incomes. Some minor
concessions have been provided to
small taxpayers and new companies.
Taxes on diesel cars have been
increased in order to discourage
their use. Diesel itself is difficult to tax
since this has an adverse knock-on
effect on the entire transport sector.
However, it has always been a
mystery why Mr. Jaitleys

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predecessors have not imposed a


disincentive tax on diesel cars. After
all, indirect taxes are also supposed
to serve an allocative purpose.
Four corners of a good deal
On March 2, speaking at a
conference in New Delhi, the head
of United States Pacific Command
issued a clarion call for more robust
U.S.-India cooperation in the AsiaPacific. Admiral Harry Harris
observed that India is beginning to
exert its leadership in the region,
which he referred to as the IndoAsia-Pacific. His appeal for
partnership was strikingly direct. We
are ready for you, he declared. We
need you. Lets be ambitious
together.
Of particular note was Admiral
Harriss pitch for greater cooperation
between the U.S., India, Japan, and
Australia. The U.S.-Japan-India
trilateral has gained momentum in
recent years, with regular meetings
and a variety of collective exercises.
Conversely,
the
four-way
arrangement has made much less
progress and has largely been limited
to some meetings and naval exercises
several years back.
However, something significant
gets lost amid all this loud talk of
national security and China concerns:
a closer relationship between these
four key democracies can also boost
Indias tenuous energy security in a
big way. Indias yawning energy
needs are well-known. Economists
say that for Indian economic growth
to return to double digits, energy
supplies must increase by three to
four times over the next few decades.
Deficits, however, are immense
including, for electricity alone, peak
demand deficits of 25 per cent in
some southern States.

This helps explain Indias


addiction to overseas energy. Eighty
per cent of its oil is imported, as is
about 20 per cent of its coal though
in recent years, coal imports have
increased by as much as 56 per cent
in a single year. India also imports 40
per cent of its uranium. And it is
increasingly importing natural gas.
Import-dependent energy policies
are always fraught with risk, and
Indias is no exception. Many, if not
most, of its hydrocarbon imports
come from unstable or faraway
regions; two thirds of its oil comes
from West Asia, and distant
Venezuela is also a key source of oil.
Additionally, India sees great
potential in gas-rich Central Asia.
However, because Pakistan denies
India transit rights to Afghanistan,
India lacks direct access to the
region.
Meanwhile, the lifting of
sanctions on Iran following its nuclear
deal with the U.S. opens up energy
possibilities for India, which has
reduced its imports from Iran in
recent years. However, New Delhi
faces serious competition from other
importers rushing to cash in.
Australia can provide immense
energy benefits to India. It already
provides sizeable quantities of coal.
The two sides have explored uranium
cooperation. And most importantly,
Australia is a top global producer of
LNG. In recent weeks, New Delhi has
telegraphed a strong desire to
capitalise on Australias gas riches.
With LNG prices having fallen by 75
per cent since 2014, the timing could
not be more ripe to explore deeper
energy cooperation particularly
given the volatile location of Qatar,
the top current source of Indias LNG
imports. The quadrilateral would
boost India-Australia relations overall,
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and better position New Delhi to
negotiate workable LNG agreements
with Canberra.
Additionally, Indonesia and
Australia despite their proximity
to the South China Sea and their
susceptibility to Islamist militancy,
including attacks by the Islamic State
are far more stable than West Asia,
which would ease concerns about
the security of Indian energy assets
and imports originating in these two
countries. More broadly, for India, the
quadrilateral relationship could
enhance energy engagement with
the U.S., Japan, and Australia across
the board. These three countries
have signed on to the India-led
International Solar Alliance. Japan
and India are offtakers for U.S. LNG
projects. And all four countries have
an interest in energy infrastructure
development.
Action plan to
fix public sector banks
The bloated levels of stressed
assets in Indias state-owned banks
have been a big cause for concern
for quite some time now. With the
Reserve Bank of India keeping up the
pressure on them to identify,
recognise and make provision for bad
loans, a better picture can be had of
the magnitude of the stress in the
banking system. The RBI is convinced
that banks should clean up their books
so that legacy issues are dealt with
once and for all to enable them to
move forward with a clean slate. This
has, predictably, caused a scare
across different layers of the
economy. Given this somewhat grim
background, there were legitimate
expectations that the Centre, being
a majority owner of public sector
banks, would step in to provide
increased fund assistance. In the
end, Finance Minister Arun Jaitley has
126

stuck to what he had promised


earlier, and committed in his Budget
speech capital infusion into these
banks of just Rs.25,000 crore for the
coming year. Mr. Jaitleys offer is
inadequate given the magnitude of
the fund needs of these banks.
Asserting that we are solidly behind
these banks, he did indicate that the
government would find fresh funds
should a requirement arise. Capital
need is just a subset, or consequence,
of the larger malaise of inefficiency
that has been hurting these public
sector banks for a long while now.
Indeed, as Mr. Jaitley suggested in
the Budget speech, the strength of
the financial sector is dependent on
a strong and well-functioning
banking system. Viewed in this
context, the decision to set up a
Banks Board Bureau, headed by
former Comptroller and Auditor
General Vinod Rai, is a significant
move forward. The board could yet
be an effective mechanism to end
political interference in business
procedures and decision-making in
banks. An empowered independent
bureau such as this could help reset
the concept of an arms-length
relationship in public sector banking.
Once ownership is delinked from
management, fixing accountability
becomes that much easier. This can
foster a decision-making framework
that privileges business sense. It is,
however, important to ensure that
systems are in place to make the
autonomous functioning of this
bureau sustainable.
Mr. Jaitley has done well to
take a holistic approach to the bad
loans problem. Letting the sponsor of
an asset reconstruction company to
hold up to 100 per cent stake in it
should spur foreign entities to look at
the Indian bad asset market as an
opportunity. A bankruptcy code is

long overdue, and it would help


banks pursue recovery action
purposefully. A tough regulator and
a stingy government appear to have
combined forces tacitly to lay the
groundwork for possible M&A
(mergers and acquisitions) activity in
the Indian banking space. It is
commendable that there is a
concerted effort to clean up the
ecosystem to ensure fair play in the
banking field.
A flight shows up the system
Vijay Mallyas quiet departure, a
week before the Supreme Court
heard a plea from a consortium of
lenders to his defunct Kingfisher
Airlines seeking an order restraining
the businessman from leaving the
country, glaringly exposes the
loopholes in the system that prevails
in India. The court was informed by
the government that the liquor baron
flew out on March 2, the same day
the banks had moved the Debt
Recovery Tribunal to have Mr. Mallya
arrested and his passport frozen. The
failure on the part of the tribunal and
subsequently the Karnataka High
Court to act immediately to ensure
that Mr. Mallya remained within the
country to face judicial proceedings
prompted the lenders to petition the
Supreme Court. The Kingfisher
Airlines promoter faces cases for the
recovery of about Rs.9,000 crore the
airline owes the banks for which
he had stood personal guarantee.
That a consortium of 13 banks, which
includes the countrys largest lender,
the State Bank of India, and the might
of the government were unable to
restrain a person declared a wilful
defaulter from evading due process
and flying abroad right under the
nose of the authorities, reflects poorly
on the justice and law enforcement
systems. Timely judicial orders

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protect the parties interests, but in
this case even the DRT order stopping
a payment of $75 million from Diageo
to Mr. Mallya appears to have come
too late as the British company had
already paid him a significant part of
the amount. Even a look-out notice
issued to all airports had no effect,
according to the Central Bureau of
Investigation.
Mr. Mallya has sought to project
the corporate loan default as a case
of business failure due to
macroeconomic factors and adverse
government policies. The banks,
however, say he is a wilful defaulter.
The CBI also alleges corruption in a
Rs.900-crore loan sanctioned by top
officials of IDBI Bank despite the
airlines poor credit rating. And the
Enforcement Directorate has
registered a money-laundering case
against him in connection with the
same transaction. Mr. Mallya has
sought to portray himself as a
wronged man, singled out for multiple
proceedings while those who owe
much bigger sums have not been
designated as defaulters or
investigated. He has also claimed that
banks had recovered Rs.1,244 crore
through the sale of pledged shares
and that another sum of Rs.1,250
crore deposited in the High Court is
available for recovery. These charges
and claims can only be judicially
settled, for which Mr. Mallyas
presence and availability are vital. He
would do well to return to the country
if he wishes to establish his
innocence and bona fides. For the
banks and their recovery processes,
it is a question of credibility, as they
can ill-afford to give the impression
to the average borrower that a highflying debtor can get away with
brazen default. For Mr. Mallya, the
lesson from this episode is that

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flaunting his wealth may give a man


an appearance of flamboyance in
good times, but it ill-serves his
reputation in circumstances of
adversity, especially when he is
perceived to be flouting the law.
Respect for nature is devotion
The grandiose spectacle that
the Art of Living Foundation has
organised on a thousand-acre site on
the floodplain of a river in Delhi to
demonstrate humanitarianism and
the oneness of cultures will go down
as a spectacular example of
thoughtless
environmental
destruction. The Central and Delhi
governments have, in a display of
extraordinary non-application of
mind, allowed a private entity to take
over part of the Yamuna floodplain,
an area with well-known ecological
vulnerabilities, for a show. The low
priority accorded in recent times to
environmental impacts of official
decisions is manifest here: large parts
of the biodiversity-rich floodplain
have been irresponsibly levelled,
provision made for approach roads
and vehicle parking, and a massive,
40-foot-high stage with garish
symbols built for the event. The Union
Ministry of Culture, the Uttar Pradesh
and Delhi governments, the Sangeet
Natak Akademi, the Lalit Kala
Akademi and other organisations that
have supported the three-day
extravaganza should worry that they
have lent their credentials to the
creation of a large and destructive
footprint for the river. The Yamuna is
a major resource for Delhi, and there
is a great deal of scientific literature
on why it should be protected and
rejuvenated for the benefit of the
national capital region. Studies done
on Delhis water needs indicate that
there are twice as many people living

in the city than it can support based


on carrying capacity norms. The
imperative therefore should be to
help the Yamuna use its full potential
of recharging its aquifers using
monsoon flood flows across a
generous one-kilometre width,
bringing more precious water to
Delhi.
Heeding the spirit of the
amendment
For the second year in a row, an
Opposition-sponsored amendment
to the Motion of Thanks on the
Presidents Address has been
adopted by the Rajya Sabha. Last year,
the Motion of Thanks was amended
on the issue of black money; this
week, the amendment focussed on
legislation passed by Bharatiya Janata
Party governments in Rajasthan and
Haryana limiting the rights of citizens
to contest panchayat elections.
Before 2015, there were just three
occasions on which the Presidents
Address was amended in the Rajya
Sabha, once each during the tenures
of Indira Gandhi, V.P. Singh and Atal
Bihari Vajpayee. The Presidents
Address sets out a governments
policies and programmes, and is first
approved by the Union Cabinet.
Should an amendment to the
Address be carried through in the Lok
Sabha, the government would have
to resign. There is, of course, no such
obligation in the Rajya Sabha, but it is
still seen to undermine the
governments ability at consensusbuilding. For the members of the
Rajya Sabha, it is a way to give notice
that they cannot be taken for granted.
It is therefore not just an
embarrassment for the BJP-led
National Democratic Alliance
government to have faced this
situation twice less than halfway
through its five-year term. It also hints
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at the ruling partys failure to reach
out to the Opposition and forge a
working consensus on the legislative
agenda. With its clear majority in the
Lok Sabha, the BJP may feel
unencumbered by the need for floor
management of the sort that ruling
coalitions have had to work at over
the past couple or decades this
weeks vote shows that its lack of
numbers in the Rajya Sabha does in
fact demand an inventive outreach
to the Opposition if it wants support
on important Bills in the Upper House.
The first instance of such an
amendment to the Motion of Thanks
came in 1980 on the issue of
engineering defections. The second
was in 1989, when six amendments
including on the Ram
Janmabhoomi-Babri Masjid dispute
and the India-Sri Lanka accord
were approved. The third occasion
was in 2001, when the House
adopted an amendment on the sale
of a public sector undertaking, Balco,
to a private company. These were all
politically contentious issues. So was
the issue on which the Opposition
parties mobilised themselves this
year, and it raises vital questions for
democracy. Imposing curbs on who
may contest panchayat elections
based on requirements of
educational qualifications and having
toilets in homes effectively cuts the
underprivileged out of the fray. The
BJP could plead helplessness over its
lack of numbers in the Rajya Sabha,
and instead cite the passage in the
House of the Real Estate Bill this week
as proof that it is getting on with its
legislative workload. Or it could heed
the spirit of the institutional
mechanism of the amendment to a
Motion of Thanks, and take up the
subject highlighted for a follow-up
debate in Parliament.
128

Transparency at any cost


The shutdown of the 220 MW
Unit-1 of the Kakrapar Atomic Power
Station located in Gujarats Surat
district following leakage of heavy
water used to cool the nuclear
reactor, on March 11, the fifth
anniversary of the Fukushima Daiichi
nuclear plant disaster in Japan, is at
once a reminder of the inherent risks
associated with operating nuclear
reactors and the importance of
augmenting safety mechanisms.
Unlike the Fukushima accident, rated
seven (the highest level) on the
International
Nuclear
and
Radiological Event Scale, where
meltdown of the core of three
reactors occurred due to the failure
of the cooling system, it is reassuring
that the safety systems of the KAPS
reactor worked as intended,
including the backup cooling
systems, thus preventing any
cascading event leading to
radioactivity release outside the
plant. While this may be a rare event
for a functioning plant that
happened for the first time in India,
it is a cause for concern that the
magnitude of the coolant system
failure was significant. That the
reactor has been shut down and an
independent assessment of the
safety situation at the plant is being
undertaken by scientists from the
Atomic Energy Regulatory Board
evokes confidence. The second unit
here has remained shut since July
2015 for maintenance. While the
AERB has maintained its
independence in terms of its risk
assessment and management
functions, there is no room for
complacency. It must be borne in
mind that collusion between the
Japanese government, the countrys

regulator and the operator had led to


many violations that were detrimental
to the environment and human
health.
Given the heightened fear of
nuclear energy in India following the
Fukushima disaster, the only way
AERB officials can reassure the public
and win confidence is by being more
transparent with its findings, however
grave they are, and by taking all
necessary steps to ensure that similar
events are averted in the future. Just
as lessons learnt from the Fukushima
accident led to an enhancement of
the level of safety of the backup
systems in reactors that are under
construction in India, lessons from this
incident should be put to good use.
These steps are indeed warranted as
India plans to increase the installed
nuclear power capacity from the
current 5,780 MW to 10,080 MW by
the end of the Twelfth Plan (2017)
and 20,000 MW by 2020. Also, India
gave an assurance in Paris that by 2030
it would reduce carbon emissions
relative to its GDP by 33-35 per cent
from 2005 levels and also generate
40 per cent of the countrys
electricity from non-fossil fuel-based
sources, using among others the solar,
wind and nuclear options. While India
has positioned itself as a leader in the
renewable energy sector by playing
a pivotal role in the creation of the
International Solar Alliance, the
nuclear space is plagued by delays
in completing the construction of
reactors, as seen in the case of Kota
in Rajasthan (RAPP 7 and 8) and at
Kakrapar (KAPP 3 and 4). Whether
public sentiment supports fresh
nuclear reactor proposals would
depend on how well the AERB fulfils
its tasks.

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Small Savings Schemes

SMALL SAVINGS SCHEMES


Small savings schemes include
PPF, Senior Citizens Savings Scheme,
Post office deposit etc. They were
initially created to mobilise saving by
encouraging small earners to save.
They offered abovemarket deposit
rates in accessible locations like post
offices for this purpose. Each of the
small saving scheme is designed for
different purpose. Some of them look
to target specific target groups like
girl child, working class, senior
citizens etc. Though good for the
targetted group, small savings
schemes are presenting a problem to
banks. Because small savings
schemes offer high and fixed deposit
rates (within year) and compete with
banks, it is difficult for banks to
reduce their own deposit rates and
hence pass on policy rate cuts to
consumers in form of lower lending
rates.
Presently thirteen National
Saving Schemes (NSS) viz Post Office
Savings Accounts, Time Deposits (1
year, 2 year, 3 year and 5 years),
Monthly Income Scheme, Post Office
Recurring Deposit Scheme, National
Savings Certificate (VIII Issue), Kisan

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Vikas Patra Scheme, Public Provident


Fund Scheme, Sukanya Samriddhi
Account Scheme and Senior Citizens
Savings Schemes are under
operation.
Various important small savings
schemes details are given below:
Senior Citizen Savings
Scheme
There shall be only one deposit
in the account in multiple of
INR.1000/- maximum not
exceeding INR 15 lakh.
An individual of the Age of 60
years or more may open the
account.
An individual of the age of 55
years or more but less than 60
years who has retired on
superannuation or under VRS
can also open account subject
to the condition that the
account is opened within one
month of receipt of retirement
benefits and amount should not
exceed the amount of
retirement benefits.
Maturity period is 5 years.

Sukanya Samriddhi yojana


Minimum INR. 1000/-and
Maximum INR. 1,50,000/- in a
financial year. Subsequent
deposit in multiple of INR 100/
- Deposits can be made in lumpsum No limit on number of
deposits either in a month or in
a Financial year
A legal Guardian/Natural
Guardian can open account in
the name of Girl Child.
A guardian can open only one
account in the name of one girl
child and maximum two
accounts in the name of two
different Girl children.
Account can be opened up to
age of 10 years only from the
date of birth. For initial
operations of Scheme, one year
grace has been given.
If minimum Rs 1000/- is not
deposited in a financial year,
account
will
become
discontinued and can be
revived with a penalty of Rs 50/
- per year with minimum
amount required for deposit for
that year.
129

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Small Savings Schemes


Partial withdrawal, maximum
up to 50% of balance standing
at the end of the preceding
financial year can be taken after
Account holders attaining age
of 18 years.
Account can be closed after
completion of 21 years.
Public Provident Fund
Minimum INR. 500/- Maximum
INR. 1,50,000/- in a financial
year.
Deposits can be made in lumpsum or in 12 installments.
An individual can open
account with INR 100/- but has
to deposit minimum of INR 500/
- in a financial year and
maximum INR 1,50,000/ Maturity period is 15 years but
the same can be extended
within one year of maturity for
further 5 years and so on.
Premature closure is not
allowed before 15 years.
Deposits qualify for deduction
from income under Sec. 80C of
IT Act.
Interest is completely tax-free.

130

Kisan Vikas Patra


Amount Invested doubles in
100 months (8 years & 4
months).
Available in denominations of
Rs 1,000, 5000, 10,000 and Rs
50,000. Minimum deposit Rs
1000/- and no maximum limit.
Certificate can be purchased
by an adult for himself or on
behalf of a minor or by two
adults.
Certificate can be transferred
from one person to another and
from one post office to another.
Certificate can be encashed
after 2 & 1/2 years from the date
of issue.
Post Office savings scheme
Minimum balance to be
maintained in a non-cheque
facility account is INR 50/-.
Interest earned is Tax Free up
to INR 10,000/- per year from
financial year 2012-13.
Account can be transferred
from one post office to another.
Account can be opened in the
name of minor and a minor of

10 years and above age can


open and operate the account.
At least one transaction of
deposit or withdrawal in three
financial years is necessary to
keep the account active.
ATM/Debit Cards can be
issued to Savings Account
holders( having prescribed
minimum balance on the day
of issue of card) of CBS Post
offices.
In order to provide benefit to
banks under stress, government has
reduced the interest rates on various
small savings schemes. New Interest
are as follows: Senior Citizens Savings
Scheme will get 8.6 percent from
earlier 9.3. Similarly Public Provident
Fund Scheme will get 8.1 from earlier
8.7. Kisan Vikas Patra will get 7.8 %
from earlier 8.7 %. Sukanya Samriddhi
Account Scheme will get 8.6% from
earlier 9.2%. These rates cuts
correctly show the reality. They will
also ease the pressure on Banks who
were not able to cut the interest rates
because more rates were given by
small savings schemes.

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Myanmar Democratisation

MYANMAR DEMOCRATISATION
Myanmar is presently witnessing
a major change towards democratic
values. The National League for
Democracy (NLD) under the
leadership of Aung San Suu Kyi has
won Myanmars Presidential election
with a big margin. NLD won 80
percent of the seats both in the Lower
House as well as in the Upper House
of the parliament. Along with that
they won 75 percent of seats in the
regional legislatures. Myanmar had
over five decades of military rule and
about four years of guided
democracy or semi-democracy.
After such a long period of military
rule transition to democracy towards
democracy is not complete in
Myanmar. Though the president and
one vice-president in the new
administration will be of NLDs
choice, the second vice-president
will be chosen by the military.
Similarly, the military will retain
control over the three top ministries defence, home and border affairs. All
this will have significant impact on
Myanmars relationship with other
countries. India will also have to
balance its approach because

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problem of insurgency has significant


relation with Myanmars defence and
border affairs ministry.
Another
important
development is Aung San Suu Kyi has
been allowed to become the
president of the country. Although
she has put her closest aide as
President, still it would have been
better for India has Aung San Suu Kyi
has been allowed to become
President. India also needs to be
careful with developing relationship
between Myanmar and China. Suu Kyi
had recently visited China, which still
retains considerable economic
interests in Myanmar. Although Suu
Kyis familys has very close links with
India, but she has expressed her
disquiet over New Delhi not being
sufficiently proactive on the issue of
Myanmars
democratisation.
However, both countries are likely to
continue to maintain robust militaryto-military relations.
Process of democratisation
started with the new Myanmar
constitution of 2008. It led to a new
parliament, which holds the prospect
of reconciliation among the three

stakeholders in Myanmar: the military,


the political parties and the ethnic
groups. This democratisation will
improve the countries economic
situation. It has seen big isolation from
outside world for a long time.
Democratisation in Myanmar would
restore the balance in its polity and
help address the issue of
developmental neglect in minority
dominated border provinces. As the
ASEAN members (and the world
community) take note of Chinas
assertion in the South China Sea and
Chinas access to the Indian Ocean,
a growing interest in Myanmars
democratisation process is a
welcome development.
Former Prime Minister India
Manmohan Singh visited Myanmar in
2012. This was the first visit of Indian
PM in 25 years. India needed to
balance the two things, first is giving
preference todemocratisation and
second to engage with the junta for
ensuring security in the insurgencyaffected North-East. India will
continue to do it with junta keeping
important portfolios with themself.
Myanmar is also extremely important
131

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Myanmar Democratisation
for the development of N-E states.
Myanmars role is essential in Indias
Act East Policy.
Myanmars vast oil and natural
gas reserves and other resources
make it a natural partner for many
countries in the world. India, being
its next door neighbour, cannot be
indifferent to this reality. Besides,
geo-political considerations,
historical and civilizational links, and
the ethnic overlap across their
borders, have all come together to
make Indias North-East the land
bridge between the South and
South-East Asia through Myanmar.
The 1,640 km-long border between
Myanmar and the Indian states of
Arunachal Pradesh, Nagaland,
Manipur and Mizoram signifies the
importance of this eastern neighbour
for India. India expects to reap

132

various economic benefits by


bolstering bilateral trade and
investment, which critically depends
upon better connectivity in the
region.
For the development of north
eastern part of India, Myanmar is
extremely important. India has
designed Act east policy for N-E
states and also for the diversification
of Indias economic partners. Act east
policy provides strog emphasis to
infrastructure across south eastern
countries. India also aims to build an
Asian Highway. The Trilateral
Highway aims at connecting Indias
North-East with Thailand via Myanmar.
It could mitigate the disadvantages
of landlocked North-East India. The
Asian Highway can also be interlinked
with other critical projects such as the
Kaladan Multimodal Transit Project

and
Trans-Asian
Railways.
Withimproved
connectivity
apprehension about illegal migrants
also improve. This issue can also be
better taken care of with
democratisation of Myanmar
government.
Nevertheless, with better
connectivity and implementation of
various development projects, the
Asian Highway would enable the
North-East region to become a
business hub of South Asia. Thus, with
the coming of the Asian Highway,
Myanmar will become the point of
convergence as well as the linking
route between India and the other
South-East Asian countries. That, in
turn, will lead to the creation of more
secure and safe living spaces for the
populace residing on either side of
the border.

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