You are on page 1of 21



Call: 09582948810, 09953007628

Stringent Mobile Radiation Standards introduced
From 1st September 2012 India has been inducted in the list the selected few countries in the world to have stringent EMF( Electromagnetic Frequency) Radiation Standards, established in the interest of public health, for mobile towers and mobile handsets. Indian standards would now be 10 times more stringent than more than 90% countries in the world. The following are the highlights of the Standards:

Mobile Towers (EMF Radiation Norms)

a) EMF (Electromagnetic Frequency) exposure limit (Base Station Emissions) has been lowered to 1/ 10th of the existing ICNIRP exposure level.

b) Telecom Enforcement Resource & Monitoring (TERM) Cells have been entrusted with the job of conducting audit on the self certification furnished by the Service Providers. TERM Cell will carry out test audit of 10% of the BTS site on random basis and on all cases where there is a public complaint.

c) Telecom Engineering Centre (TEC) has revised the Test Procedure for measurement of EMF for verification of EMF compliance for BTS towers in accordance with new standards. d) For non-compliance of EMF standards, a penalty of Rs. 5 lakhs is liable to be levied per BTS per Service Provider. Mobile Handsets a) All the new design of mobile handsets shall comply with the Specific Absorption Rate (SAR) values of 1.6 W/kg averaged over 1 gram of human tissue.

b) The mobile handsets with existing designs which are compliant with 2.0 W/kg averaged over 10 gram of human tissue, will continue to co-exist up to 31st August 2013. From 1st Sept. 2013, only the mobile handsets with revised SAR value of 1.6 W/kg would be permitted to be manufactured or imported in India. c) Mobile hand set manufactured and sold in India or imported from other countries shall be checked on random basis for compliance of SAR limit after

Weekly Current Affairs 27th August to 3rd September, 2012

a. Cardio respiratory endurance, b. Muscular strength, d. Flexibility, c. Muscular endurance, e. Explosive Strength, and

TEC SAR Laboratory is set up by end of 2012. Test results from international accredited labs will be acceptable in the interim period.

d) The manufacturers in India will provide self declaration of SAR value of the handset.

Draft on National Physical Fitness Programme for School Children unveiled

Union Minister of State (Independent Charge) Youth Affairs & Sports Shri Ajay Maken has unveiled the Exposure Draft on National Physical Fitness Programme (NPFP), for school children. Recognizing Physical Fitness as the underlying paradigm core for social as well as the economic well being of the nation, the programme aims at ensuring Physical Fitness amongst all school children by putting into place a system that would assess and ascertain a child's physical fitness from class V onwards. It would entail the formulation of a scientific programme and criteria to first motivate and encourage school going children of both sexes to be physically fit and concurrently evaluate their fitness. It has to be realized that the scheme needs to be motivational rather than coercive and to obtain this, the achievement of fitness by a child as to be rewarded in a manner similar to reward for academic achievement. Six basic components of physical fitness have been identified:

f. Body composition (percentage of body fat). The fitness tests will be executed at least two times in a year i.e., in the month of June and January of academic session, which will provide an idea regarding present status as well as improvement of physical fitness during academic session of the student. The National Physical Fitness Programme envisages that every school going child studying in class V and above, should be evaluated on the above mentioned six components of physical fitness by

being made to participate and compete in the enumerated eight measurable fitness tests. The student's performance is accordingly graded and fed into the child's 'Assessment Card' and the school's 'Fitness Assessment Subsequent collection & collation from across the schools shall be done at the level of the District and grades allotted to every child on the basis of percentile system for marking & grading. The scores/grades achieved by every child shall be enumerated in print on standardised 'Assessment Cards and Fitness Assessment Forms' prepared by LNUPE, Gwalior. After collection and collation of data at the district level, the same shall be linked to the Central Server administered by the LNUPE through the Core Application Software (CAS) supplemented by System Integrators. Setting up of a Knowledge Resource Centre is of paramount importance, as its role will be very critical in working out and developing age specific, gender specific and region specific physical fitness parameters, collection and analysis of data with regard to physical fitness standards and re-working of the physical fitness norms, if necessary on the basis of data collated during implementation and the initial few years.

Regulation) Act, 1986, to ban employment of children aged up to 14 in any form of industry. It will be an offence to employ such children not only in factories or industries but also in home or on farms, if their labour is meant to serve any commercial interest. Quoting the National Sample Survey Organisation's figures, the amendment would benefit 46 lakh children who have been working in various industries now, and they can concentrate on education. The Cabinet also approved another amendment to define those children aged 14-18 as "adolescents" and prohibit their employment in mines, explosive industries, chemical and paint industries and other hazardous establishments.The government's decision is in line with the convention of the International LabourOrganisation (ILO), which prohibits any form of child labour until the age of 14. Since the Right of Children to Free and Compulsory Education Act or RTE now stipulates compulsory and free education of children up to the age of 14, the upper age limit in the Child Labour Act has been kept at 14.The RTE, which makes education the fundamental right of a child, was passed by Parliament on August 4, 2009. It sets forth the modalities of free and compulsory education for children aged 6-14. The Act came into effect on April 1, 2010.

The top 10 percentage of gender wise performers in each district in the battery of tests indicated above shall be given an additional 3% to the percentage obtained by him/her in academic disciplines. Subsequently, performers between top 10 to 20 percentage will get additional 2.5 %, performers between 20 to 30 percentage will get 2%, between 30 to 40 percentage will get 1.5% and between 40 to 50 percentage will get additional 1% weightage in their marking which may be converted into grades as per prevalent norms. In India the concept of nation-wide implementation of Physical Fitness programme was initiated during 1959 and the then Ministry of Education and Social Welfare, Govt. of India had developed a test battery "National Physical Efficiency Drive" (NPED) for inculcating awareness of Physical fitness among the people. The level of physical efficiency was then assessed and graded by awarding "Star system" (i.e. 3 stars, 2 stars etc.) However, the programme was discontinued as it was based on inappropriate and inaccurate assessment of physical fitness norms.

The Union Cabinet has approved a proposal for amending the Child Labour (Prohibition and
[ 4 ]

Cabinet approved proposal for banning child labour below 14

Prohibition of Employment as Manual Scavengers and their Rehabilitation Bill, 2012

The Prohibition of Employment as Manual Scavengers and their Rehabilitation Bill, 2012, to be tabled in Parliament in the ongoing Parliament session, envisages a hefty penalty for employing people for this inhuman practice and in the hazardous job of cleaning septic tanks and sewers. The financial implication for implementing the law is expected to be about Rs. 4,825 crore. According to the bill every insanitary latrine will have to be demolished or converted into sanitary toilets within nine months of the notification of the law. It prohibits any agency or individual from employing manual scavengers and those already in this job - directly or indirectly - will have to be discharged irrespective of any contract, agreement, custom or traditional commitments. An insanitary latrine is defined as a toilet where excreta is cleaned or manually handled before complete decomposition either in situ or in an open drain or a pit. Employing or hiring people for

Weekly Current Affairs 27th August to 3rd September, 2012

cleaning septic tanks and sewers within one year of the notification of the Act can attract imprisonment up to two years and a fine of Rs. 2 lakh for the first violation. Subsequent instances will attract imprisonment up to five years and a fine of Rs. 5 lakh. No civil court will have jurisdiction in respect of any matter to which any provision of this law applies, and no injunction shall be granted by any civil court in respect of anything, which is done or intended to be done by or under the law.

loans to start their own alternative occupation on a sustainable basis.

Make universal healthcare a reality: President

President Pranab Mukherjee called upon all stakeholders in the health sector to make universal healthcare a reality. According to him, India's medical healthcare system must be developed to cater to all sections, in rural as well as in urban areas, merely constructing hospitals was not enough. Human resource was required to make them functional and effective. There was a need to augment medical colleges, nursing institutions, and training schools for paramedical professions. On the issue of affordability, technology-based initiatives including telemedicine could be employed to broaden the reach of healthcare. Ways to encourage cooperation between the public and private sectors in achieving health goals also must be identified and emphasised the need to promote preventive healthcare. According to it, the key factors that will decide the success of the UHC programme would be focus on health outcomes by reducing disease burden through a robust and functioning primary care system, quality in-patient care and facilitating effective utilisation of the available infrastructure. President also favoured an integrated approach to ensure focus on allied determinants that have a critical impact on health, mainly nutrition, sanitation and wellness. Universal health cover for India suggests that including out of pocket expenditure, the estimated total spending on health would be between 5.5 per cent and 6 per cent of GDP. China, which has embarked on a journey toward universal health care (UHC) and covered 84 per cent of its population, spends 5.1 per cent of the GDP on health, of which 2.7 per cent was spent by the government.

As per the draft of the Bill, the governments or local agencies will help in conversion of insanitary latrines within nine months of the notification of the Act. But non-receipt of assistance will be no reason for continuation of insanitary toilets, which the local authorities will demolish and the occupier will have to bear the cost.

Any flouting of this provision will attract imprisonment up to one year and a fine of Rs. 50,000 for the first offence and subsequent violations, imprisonment of up to two years and Rs. 1-lakh fine. The offences will be cognisable and non-bailable and tried by an Executive Magistrate. The National Commission for SafaiKarmacharis will monitor the implementation of the law, while district magistrates will be responsible for implementing it and ensuring that there are no insanitary latrines in their jurisdiction. Monitoring will be done by vigilance committees at the district and subdivisional levels, and state panels will report to the central monitoring committee periodically. Once identified as a manual scavenger, the individual will be given a photo identity card with details of dependent family members; there will be an initial one-time financial assistance and scholarships for his/her children under government schemes; the government will provide him/her a residential plot and financial assistance to construct a house or provide a built house under the scheme run by the Centre or the State government or local authorities. Sanitary workers or one family member will be imparted training in skill development and will also be eligible for subsidy and concessional

Weekly Current Affairs 27th August to 3rd September, 2012



China's PoK rail link plan gains traction
China is planning to build a railway line from western China through Pakistan-occupied Kashmir (PoK).

The planned railway line runs from Kashgar, the old Silk Road town in China's far-western Xinjiang region, through the Khunjerab pass in PoK and on to Havelian, where it will join Pakistan's railway network. However, the pre-feasibility work on the proposed railway line has now been completed. China and Pakistan claim that this new link will enhance the economic ties between China and Pakistan as well as create a new link between East and South Asia. It is also being reported that China is set to take over management of the slow-moving port project at Gwadar, after the Singapore Port Authority pulled out of a contract. In such a situation, the railway link from Kashgar can run up to Gwadar if it is connected to the domestic rail network, providing an alternative route to Chinese imports from West Asia.

India has voiced its concerns to China about the railway line stressing that India views the region as an integral part of Jammu and Kashmir. India has also pointed to China's own long-standing opposition to the involvement of third-party countries in projects in disputed areas. Most recently, China voiced its objections to the presence of ONGC Videsh in exploration projects with Vietnam in the South China Sea.

But Chinese officials have indicated that their involvement in PoK projects was "without prejudice" to any disputes between India and Pakistan. China is also widening and repaving the Karakoram Highway, which runs from Kashgar through PoK to Pakistan, and is working to make it an all-weather road - the highway is closed for around six months every year during the winter, and has been damaged by recent flooding. While work on the Chinese side has been completed, China is assisting Pakistan in a $500-million effort to repave and widen the highway in Pakistan and in PoK.
[ 6 ]


China views the road and rail links as crucial elements to taking forward plans to build a Special Economic Zone in Kashgar - the first such zone in western China, modelled on the success of Shenzhen in the east. The plans will boost China's economic presence westward and also bring development to southern Xinjiang, which has lagged behind the rest of the region and been the source of ethnic unrest and terrorism.

IAEA sets up special Iran Task Force

The U.N. nuclear agency has created a special Iran Task Force of nuclear weapons experts, intelligence analysts and other specialists focused on probing allegations that Tehran has been or is secretly working on developing atomic arms. The brief announcement by the International Atomic Energy Agency appeared to be an attempt to focus and streamline the IAEA's handling of the sensitive Iran file by concentrating experts and other resources in one unit. The Vienna-based UN agency, which regularly inspects Iran's nuclear sites, has voiced growing concern over the last year of possible military dimensions to the country's nuclear program. Tehran says its nuclear work is entirely peaceful. A new report to be circulated to IAEA member states is expected to reveal that Iran has installed 350 new centrifuges in its underground Fordow facility since May. Iran is enriching uranium to a fissile concentration of 20 percent -- easily upgraded to the 90 percent needed for bombs -- at Fordow, buried deep inside a mountain near the holy Shi'ite city of Qom to protect it from foreign attack. The Vienna diplomats also expect the report to chastise Iran over sanitizing its military base at Parchin. The ongoing sanitization efforts, meant to eliminate evidence of possible nuclear work at the site, may make inspections "pointless," according to the diplomats.

Chinese tested 14,000-km range missile

The Chinese military had successfully tested the new 14,000 km-range Dongfeng-41 Intercontinental Ballistic Missile (ICBM), the China's most advanced missile.

Weekly Current Affairs 27th August to 3rd September, 2012

The development of the missile, representing the third generation of China's ICBMs, is a significant boost to the country's deterrence capabilities. It can carry between three and 10 nuclear warheads, and is regarded as the first Chinese missile that can penetrate American missile defence systems with its mobility making it hard to detect. The DF-41 has been seen as reflecting China's rapidly developing ICBM programme, which now has a range that can reach U.S. cities.

sub-regional issues in the Middle East, Africa, Latin America and the Caribbean; and development, social and human rights issues. Member States of the NAM considered current international developments and various issues related to the Movement such as Israel's recent prevention of the NAM Committee on Palestine to meet in Ramallah; the situation in Syria; the reform of the United Nations, including the Security Council and the General Assembly. Common challenges facing all NAM members including the financial crises, sustainable economic development, peace and security, human rights, democracy and rule of law, climate change, and meeting the Millennium Development Goals (MDGs) were among the issues also deliberated during the summit. The final communiqu expressed support for Iran's nuclear energy program, rejected the United States' unilateral sanctions against the Islamic Republic, and called for greater efforts to support the Palestinian cause. The need to combat Islamophobia and racism throughout the world as well as global nuclear disarmament were some of the other key issues mentioned in the document.

NAM Summit 2012

The 16th Summit of the Non-Aligned Movement was held from 26 to 31 August 2012 in Tehran, Iran. The summit was attended by leaders of 120 countries. The theme of the summit was Lasting Peace through Joint Global Governance.

The major political questions on the Agenda of Tehran 2012 are international concern over the 'Nuclear Programme' being pursued by the Islamic Republic of Iran and the escalating internal conflict in the Syrian Arab Republic.

The Outcome Document focuses on three major areas i.e. global governance issues, including the review of the international situation; regional and

Weekly Current Affairs 27th August to 3rd September, 2012



Shome panel Report
The expert committee on GAAR (the General Anti-Avoidance Rules), headed by Parthasarathi Shome to address the concerns of foreign and domestic investors, has recently submitted its draft report.

The panel has advocated postponement of the controversial tax provision by three years till 201617 along with abolition of capital gains tax on transfer of securities. Some recommendations:

a) Panel suggested that GAAR should be made applicable only if the monetary threshold of tax benefit is Rs.3 crore and more.

b) There should be postponement of the controversial tax provision by three years till 2016-17. The committee has suggested that the implementation of GAAR may be deferred by three years on administrative grounds. GAAR is an extremely advanced instrument of tax administration - one of deterrence, rather than for revenue generation - for which intensive training of tax officers, who would specialise in the finer aspects of international taxation, is needed. Hence GAAR should be deferred for three years. But the year, 2016-17, should be announced now. In effect, therefore, GAAR would apply from Assessment Year 2017-18. Preannouncement is a common practice internationally, in today's global environment of freely flowing capital. c) The capital gains tax on transfer of securities needs to be abolished.

d) The provisions of GAAR should not be invoked to "examine the genuineness of the residency of an entity set up in Mauritius," the government should retain the provisions of the CBDT circular issued in the Year 2000 on acceptance of Tax Residence Certificate (TRC) issued by Mauritius. e) The government may consider increasing the rate of Securities Transaction Tax (STT) appropriately."

f) The Approving Panel (AP) for purposes of invoking GAAR provisions should consist of five
[ 8 ]


members, including Chairman, who should be a retired judge of the High Court. Besides, two members should be from outside government and persons of eminence drawn from the fields of accountancy, economics or business, with knowledge of matters of income- tax, and two members should be chief commissioners of income-tax or one Chief Commissioner and one Commissioner.

g) It also suggested that GAAR can be invoked only with the approval of the Commissioner.

Ministry of Finance Notifies Advance Price Agreement (APA) Scheme

The Ministry of Finance has notified an "Advance Pricing Agreement Scheme". An APA is an agreement between the Central Board of Direct Taxes and any person, which determines, in advance, the arm's length price or specifies the manner of the determination of arm's length price (or both), in relation to an international transaction. Hence, once APA has been entered into with respect to an international transaction, the arm's length price with respect to that international transaction, for the period specified in the APA, will be determined only in accordance with the APA. The APA process is voluntary and will supplement appeal and other Double Taxation Avoidance Agreement (DTAA) mechanism for resolving transfer pricing dispute. The term of APA can be a maximum of five years. The APA scheme notifies three types of APA: unilateral, bilateral and multilateral. The choice is on the applicant to choose a particular type of APA at the time of making the application. Unilateral APA is an agreement between the Board and the applicant and this process does not involve any agreement with the treaty partner. In bilateral and multilateral APA request, the applicant is required to make an application with the Competent Authority of India as well as the Competent Authority of the other country. The APA scheme has many advantages. It will provide tax certainty with regard to determination of arm's length price of the international transaction with respect to which the APA has been entered

Weekly Current Affairs 27th August to 3rd September, 2012

into, reduce the risk of potential double taxation through bilateral or multilateral APA, reduce compliance cost by eliminating the risk of transfer pricing audit and resolving long drawn and time consuming litigation and other dispute resolution process and alleviate the burden of record keeping as the taxpayer knows in advance the required documentation to be maintained to substantiate the agreed terms and conditions of the agreement. Arm's Length Price is the price at which two unrelated and non-desperate parties would agree to a transaction. This is most often an issue in the case of companies with international operations whose international subsidiaries trade with each other. For such companies, there is often an incentive to reduce overall tax burden by manipulation of inter-company prices. Tax authorities want to insure that the inter-company price is equivalent to an arm's length price, to prevent the loss of tax revenue.

accounts one annual statement would be sent in electronic or physical form as opted for by the BO.The annual maintenance charges structure will be on a slab basis.

Air India to stop PLI

The Ministry of Civil Aviation notified that the provision of PLI would be done away with from July, in accordance with the recommendations of the Justice Dharmadhikari Committee report. According to the report, while a part of the PLI will be merged with the salary, certain components will be given as profit or productivity related pay (PRP) only after the airline turns profitable. With this, it is feared that while pilots and engineers will lose up to 70 per cent and 40 per cent of their monthly income, respectively, the other grade employees will bear some impact. The PLI was introduced in 1996 to prevent poaching of pilots and engineers. The management and the associations had entered into memorandum of settlements (MoS) for PLI payment and was also ratified by a court.

No-frills demat account for small investors proposed

The Securities and Exchange Board of India (SEBI) proposed that all depository participants (DPs) would make available a Basic Services Demat Account (BSDA) with limited services and reduced costs for retail individual investors if the value of securities held in the demat account does not exceed Rs.2 lakh at any point of time. An individual can have only one BSDA in his/ her name across all depositories. The annual maintenance charges (AMC) structure for BSDA would be on a slab basis. If the value of holding is up to Rs.50,000, there will be nil AMC and for Rs.50,001-200,000, the AMC will be up to Rs.100.

The value of holding would be determined by the DPs on the basis of the daily closing price or NAV of the securities or units of mutual funds. If the value of holding in such BSDA exceeds the prescribed criteria on any date, the DPs may levy charges as applicable to regular accounts (non-BSDA) from that date onwards. Further, SEBI said that transaction statements would be sent to the BO (beneficiary owner) at the end of each quarter. If there are no transactions in any quarter, no transaction statement may be sent for that quarter. One annual physical statement of holding would be sent to the BO in respect of accounts with no transaction and nil balance and for remaining

Weekly Current Affairs 27th August to 3rd September, 2012


CBDT sets up technical panel to firm up legal views on major cases

The Central Board of Direct Taxes (CBDT) has decided to set up a committee comprising senior officials of the Finance Ministry and the Income-Tax Department to look into the legal intricacies involved in some of the contentious and "controversial" cases of the likes of the Vodafone dispute that the taxmen are confronted with. The objective of setting up a Central Technical Committee (CTC), according to an official note, is to usher in clarity on contentious legal issues and, thereby, reduce litigation through adoption of a consistent approach on similar matters of taxation. The CTC, as per the CBDT decision, is to be headed by a Joint Secretary-level official, and its members will consist of senior I-T officials. A Regional Technical Committee (RTC), comprising local tax officials, will act as the sub-office of the CTC. The CTC will look into cases involving large revenue implications or strategic legal ramifications and analyse divergent views from all units of the IT Department such as investigation, assessment and pricing before a legal reply is filed in the high courts or the Supreme Court.



High Level Meeting Between Indian Coast Guard and Sri Lanka Coast Guard
A high level delegation led by Rear Admiral AARA Dias, the Director General Sri Lanka Coast Guard (SLCG) held a High Level Meeting, with the Indian delegation led by Vice Admiral MP Muralidharan, Director General Indian Coast Guard. The visit is in continuation of the various efforts by the governments of the two countries towards cooperation between the ICG and SLCG and pursuance of the discussions on maritime issues of mutual concerns to formulate a cooperative approach.

India offers Bangladesh a stake in Tipaimukh project

The Tipaimukh multipurpose project is meant to regulate flood waters in the lower Barak Valley and downstream through controlled releases and generate electricity for peak-hour distribution through the northern grid. The Barak originates in Assam and, after traversing through Manipur, joins the Brahmaputra in Bangladesh. It will be constructed by NHPC, which entered into an agreement with Sutlej Jal Vidyut Nigam and the Manipur government for the project last year. Located about 210 km upstream of Bangladesh, the project has become controversial ever since Dhaka raised issues about lean period water discharges and impact on downstream agriculture, fisheries and environment as the availability of water in the Surma, Kushiara and Meghna rivers will decrease and the irrigation and environment of the lower riparian country will get effectecd. Though no impact assessment was conducted yet, India on the other hand, has repeatedly assured at the highest level that it would not do anything in the project which would go against Bangladesh's interests. India also said the barrage at the project site would release more water to Bangladesh during dry season and control the same during monsoon to save the lower riparian country from floods. At the first meeting of the subgroup of the IndiaBangladesh Joint Consultative Commission (JCC) that concluded in New Delhi, India handed over the fivevolume DPR to Bangladesh to enable it carry out an impact study on the hydroelectric dam to be built on the Barak river in northeastern Indian state of Manipur. India shared data with Dhaka on the project as well as finalised the Terms of Reference of a study to be conducted on downstream impact. The study is likely to examine the location of the dam and its impact on catchment areas, flora and fauna, biodiversity and ecology on the Bangladeshi side India has offered Bangladesh a stake in the Rs.15,000-crore Tipaimukh hydroelectric project on the Barak river in Manipur.

The focus of the meeting was on further strengthening the operational level interaction between the two Coast Guards.

During the High Level discussions, it was mutually agreed to strengthen the cooperation on evolving collaborative approach, in addressing a spectrum of maritime issues concerning safety and security.

India is likely to give its nod for the visit of a Pakistani judicial commission to Mumbai for the second time and allow cross-examination of 26/11 attack case witnesses for gathering evidence against seven accused including LeT commander Zakiur Rehman Lakhvi.

After the Pakistani court dealing with the 26/11 case had said that evidence collected by the commission during its first visit to India in March had no "evidentiary value" to punish those involved in the Mumbai terror attack, Islamabad had asked New Delhi to allow its panel to visit Mumbai again. This will lead to facilitate the speedy trial in Rawalpindi of seven men accused of masterminding the 26/11 attack. The successful conclusion of the Rawalpindi trial would be a major confidence building measure that would help bridge the trust deficit and shore up public opinion for normalising ties with Pakistan. The 2008 Mumbai carnage by 10 Pakistani terrorists had left 166 people dead. Nine of the terrorists were killed by the security a force while Ajmal Kasab, was nabbed and is lodged in a Mumbai jail. He has been given capital punishment.

Judicial Commission from Pakistan visiting Mumbai again

Weekly Current Affairs 27th August to 3rd September, 2012


Novel mutations linked with sudden cardiac death among Indians found
Novel genetic mutations responsible for sudden cardiac death due to a type of heart disease among Indians were found.

The study analysed several genes in patients suffering from hypertrophic cardiomyopathy (HCM) in south India. In HCM, the left ventricular muscle gets thickened and this in turn affects its contraction. Certain proteins called sarcomeric genes are mainly involved in contraction and relaxation of the heart muscle. Chest pain, breathlessness, swelling in the legs and irregular heart beat were some of the common symptoms in HCM patients. The families of HCM patients with these mutations had a history of sudden cardiac death.

A high prevalence of mutations was found at three positions in protein Troponin I (TNNI3) which plays a key role in contraction and relaxation of the heart muscle. Due to the thickening caused by the mutations, the heart muscle does not receive enough blood as compared to the normal heart. Findings would help in screening populations which were at risk for sudden cardiac death and also in providing genetic counselling and therapy to hypertrophic cardiomyopathy patients.

The results also corroborated with earlier findings that some of the mutations were specific to Indians and in a way explain the reasons for a higher prevalence of cardiovascular diseases in the country.

IIT Madras formulate a very sensitive TNT sensor

Researchers at the Indian Institute of Technology, Madras, (IIT-M) have developed a novel device that can visually detect even a single molecule of TNT used in the making of powerful explosives. Apart from national security, this ultra-sensitive and highly selective detection method will have applications in early identification of diseases and in radiation prevention There is a complete change in luminescence from red to green when TNT is added to the sensor. All that is required to detect the change in luminescence

Weekly Current Affairs 27th August to 3rd September, 2012


is a fluorescence microscope. The results can be double checked by Raman spectroscopy. Raman spectrum specific to TNT gets enhanced and hence identifying the signature becomes easy. The researchers have claimed that they can also detect extremely low levels of mercury - an environmental contaminant -- using the same sensor strategy. The concept could also be used for the detection of very low concentration of other substances by incorporating appropriate molecules called "ligands' on their sensor thereby opening up applications in catalysis, bio-imaging and other areas.

Prevalence of extensively drug-resistant TB increasing

New study has revealed that prevalence of extensively drug-resistant tuberculosis (XDR- TB) is increasing due to expanded use of second-line drugs in people suffering from multidrug-resistant (MDR) diseases. The study found alarming levels of TB in Africa, Asia, Europe and Latin America that are resistant to four powerful antibiotics. The study, conducted from January 2005 to December 2008, on over 1,200 people, found that rates of both MDR-TB and XDR-TB were higher and threatening the global efforts to curb the spread of the disease. The researchers enrolled consecutive adults with locally confirmed pulmonary MDR-TB at the start of second-line treatment in Estonia, Latvia, Peru, Philippines, Russia, South Africa, South Korea, and Thailand. Drug-susceptibility tests were done at the Centres for Disease Control and Prevention for 11 first-line and second-line drugs. Among 1,278 patients, 43.7 per cent showed resistance to at least one second-line drug, 20 per cent to at least one second-line injectable drug and 12.9 per cent to at least one fluoroquinolone. Over six per cent of patients had XDR-TB (range across study sites 0.8 to 15.2 per cent). It shows that the prevalence of resistance is high (43.7 per cent) and that the risk of XDR-TB (6.7 per cent). MDR-TB is resistant to at least first-line drugs isoniazid and rifampicin, while XDR-TB is resistant

to those two drugs as well as the powerful antibiotic, fluoroquinolone, and a second-line injectable antibiotic. Fluoroquinolone resistance and XDR-TB were more frequent in women than in men. Unemployment, alcohol abuse, and smoking were associated with resistance to second-line injectable drugs across countries. Other risk factors differed between drugs and countries. India has also reported several cases of drug resistant and XDR-TB cases.

The compound from the aminopyridine class (code named MMV390048) shows potent activity against multiple points in the malaria parasite's lifecycle. The synthetic molecule from the aminopyridine class, which has been described as novel and potent, not only has the potential to become a single-dose cure for malaria, but researchers are convinced that it could block transmission of the malaria parasite from person to person. The drug is the first compound researched on African soil to enter preclinical development in partnership with Medicines for malaria venture (MMV), a not-for-profit public-private partnership, in Switzerland.

Scientists claim to have discovered a drug that could cure all strains of malaria with a single oral dose.


Single-dose drug for malaria

Weekly Current Affairs 27th August to 3rd September, 2012

Tamper-proof EVMs to come in 2014
The Election Commission of India will introduce new-age EVMs with a voter-verifiable paper audit trail. But huge costs are involved as 7 lakh of the 11 lakh existing EVMs deployed in Lok Sabha polls are incompatible with a printing unit. Thus EC may introduce the new voter-verifiable paper trail system in some select states, while letting the other states vote with the old set of EVMs.

To update an existing EVM and have it attached to a printer is estimated to cost anything between Rs 8,000 to Rs 10,000. And if all the EVMs are to be updated, the total cost would work out to nearly Rs 1,000 crore. However, of the 11 lakh existing EVMs, only 4 lakh are compatible with printers. The remaining cannot even be updated. Besides, printers being bulky and prone to snags like ink-related issues and jamming, especially in extreme climates, and the rather-impractical task of having them serviced and maintained in between elections, the EC views the solution as highly impractical in the long run.

There is the second option of going in for an entirely new set of EVMs, which will have an inbuilt hardware to enable a paper trail. This will cost approximately Rs 1,800 crore.

Commissioning of Indian Coast Guard Ship Rajkiran

Indian Coast Guard Ship `Rajkiran`, the third of the series of eight Inshore Patrol Vessels (IPVs), designed and built by M/s Garden Reach Shipbuilders and Engineers, Kolkata was commissioned at Vishakhapatnam by Vice Admiral Anil Chopra, Flag Officer Commanding Eastern Naval Command.

The indigenous IPV displaces 300 tonnes and can achieve a maximum speed of 34 knots with an endurance of 1500 nautical miles at economical speed of 16 knots. Equipped with state-of-the-art weaponry and advanced communication and navigational equipment, it makes an ideal platform for undertaking multifarious close-coast missions such as surveillance, interdiction, Search and Rescue, and medical evacuation. The special features of the ship

Weekly Current Affairs 27th August to 3rd September, 2012

New Navy Chief

include an Integrated Bridge Management System (IBMS), Integrated Machinery Control System (IMCS) and an integrated gun mount with indigenous Fire Control system (FCS).

Admiral Devendra Kumar Joshi took charge as the Navy chief, succeeding Admiral Nirmal Verma. He will have three-year tenure as the 21st Chief of the Naval Staff Admiral Joshi, who was the Western Naval Commander, has commanded the tri-services Andaman and Nicobar Island Command. He also headed the Integrated Defence Staff Headquarters. Admiral Joshi has also commanded aircraft carrier INS Viraat, guided-missile destroyer Ranvir and corvette INS Kuthar. He has been awarded the Nausena Medal, the Vishisht Seva Medal and the Yudh Seva Medal. He commanded the Vizag-based Eastern Fleet, wherein he was awarded the Ati Vishisht Seva Medal.

Raghuram Rajan: New Chief Economic Advisor

Raghuram G. Rajan, former chief economist of the International Monetary Fund (IMF) assumed charge as the Chief Economic Advisor (CEA) in the Ministry of Finance. He is also a visiting professor for the World Bank, Federal Reserve Board, and Swedish Parliamentary Commission.

Major uranium deposit found in Rajasthan

In a major boost to the quest for deposits of uranium ore in the country, the Department of Atomic Energy (DAE) has come across another site with a large deposit of the mineral in Rajasthan. The deposit found at Rohil in Rajasthan's Sikar district is estimated at 5,185 tonnes, which makes it the fourth largest in the country after Tummalapalle, Chitrial and Peddagattu extension in Andhra Pradesh. The new site is close to the Rohil North region, which has already been found to have a deposit of about 381 tonnes.

Aditi Mukherji
Aditi Mukherji, a senior researcher with the International Water Management Institute (IWMI) in New Delhi, has won the first Norman Borlaug Award for Field Research and Application, endowed by the Rockefeller Foundation. Her work on groundwater resources in agriculture led to major policy changes that benefitted thousands of farmers in West Bengal. She will receive the $10,000 award at the World Food Prize international symposium in the US in October. This award recognizes exceptional, science-based achievement in international agriculture and food production by an individual under 40 who has clearly demonstrated intellectual courage, stamina, and determination in the fight to eliminate global hunger and poverty.

V.V. Giri Memorial Award 2011

The V.V. Giri Memorial Award 2011, instituted by the V.V. Giri National Labour Institute, an autonomous body of the Ministry of Labour and Employment, Government of India, was conferred to Prof. Utsa Patnaik, a Professor in the Jawahar Lal Nehru University, New Delhi in recognition of her outstanding contributions to labour studies. In her academic and policy oriented research studies, she has strongly argued for the promotion of labourintensive small-scale production, which ensures sustainable agrarian development. Besides stressing the necessity of enhancing public investment in rural development, Prof. Utsa Patnaik has also emphasized the need to provide poor households with greater access to land and other productive assets.



Weekly Current Affairs 27th August to 3rd September, 2012

Defending the indefensible
The parliamentary stalemate continues on one of the greatest corruption scandals in Indian history. Allocation of natural resources has been a subject matter of public debate in the last two decades, particularly with the entry of the private sector in infrastructure development. Minerals are an important natural resource. The private sector has a great role to play in development of mineral-based industries. However, the policy of allocation of these natural resources has been discretionary, thereby leaving ample scope for allocation on account of corrupt and collateral motives. It is, therefore, important that aware of the characters of polity and governance, discretions be eliminated and objective criteria be introduced. Competitive bidding Most tangible resources such as minerals, spectrum, oil and gas must be allocated only through a competitive bidding mechanism. The discretionary allocation of 2G spectrum resulted in a scam of disproportionate magnitude. It is now proven that Rs.1,658 crore fixed for an all-India licence spectrum in 2008 was not the market value of the spectrum then. Under adverse market conditions, the government itself in 2012 has fixed the base price for 2G auction at Rs.14,000 crore. There has to be an equitable balance between the interests of the public exchequer and the optimum use of natural resources for economic development. Whispers about misdemeanours in the allocation of coal blocks have been rife in the last few years. The government took a correct policy decision on June 28, 2004 that competitive bidding be introduced in the coal block allocation policy. For most of the next five years, the Prime Minister was the Coal Minister. The exploitation of coal blocks allotted between 2004 and 2012 is negligible. For most of these coal blocks, statutory and environmental permissions have not been given. the private sector allottees and a corresponding opportunity and real cost to the public exchequer. The Prime Minister's alternative defence is that his government was handicapped by the Opposition from the coal and lignite States to competitive bidding. In any federal polity, it is legitimate for the States to be concerned about the development of power production in their own States. Mineralproducing States have always been concerned about the minerals mined in their States. The Prime Minister overlooks the fact that coal as a major mineral is in the domain of the Central government. His government admittedly overruled the States in 2006. The present Minister of State, Coal, Sriprakash Jaiswal, admitted in Parliament on December 21, 2009 that the majority of States had agreed to the competitive bidding process. Thus to shift the blame to the States is a very poor alibi. Federalism cannot be blamed for the corruption of the United Progressive Alliance. The Prime Minister's statement is an assault on constitutionalism and constitutional authority. Instead of respecting the observations of the Comptroller and Auditor General of India (CAG) and taking remedial action, the Prime Minister has evolved a logic which is in defiance of ethical governance. His government's policy is to subvert the institutions but if they assert themselves, to attack them. The Prime Minister has no answer for the fact that despite the initial policy decision of June 2004, it was the Prime Minister's Office which circulated a parallel note on September 11, 2004 highlighting the drawbacks in the decision of competitive bidding. It was the Law Ministry that delayed the competitive bidding by first giving the opinion that administrative instructions were enough to switch over to competitive bidding. They then suggested an alternative that the Mines and Minerals (Development & Regulation) Act (MMDR) be amended. Over two valuable years were wasted and finally, when the MMDR (Amendment) Bill was approved by Parliament on September 9, 2010, the UPA government took 17 months to notify it. The tenders of competitive bidding have not been prepared yet as the government was so

The Prime Minister's argument that pending change of policy to competitive bidding, allocation was necessary for the growth of GDP is eyewash. None of these coal blocks has contributed to the GDP. They have only contributed to the huge valuation of

Weekly Current Affairs 27th August to 3rd September, 2012


overenthusiastic in continuing the discretionary process in allotment. When vested interests realised that the doors of discretion were about to be closed, they queued up for allotments through the Screening Committee mechanism. The Prime Minister's final defence that the Screening Committee mechanism was fair and transparent is repelled by an observation of the CAG in Paragraph 4.1 of its report. The CAG has stated: "It was also noted that the Screening Committee recommended the allocation of coal block to a particular allottee/allottees out of all the applicants for that coal block by way of minutes of the meeting of the Screening Committee. However, there was nothing on record in the said minutes or in other documents on any comparative evaluation of the applicants for a coal block which was relied upon by the Screening Committee. Minutes of the Screening Committee did not indicate how each one of the applicant for a particular coal block was evaluated. Thus, a transparent method for allocation of coal blocks was not followed by the Screening Committee." Ordinarily, Parliament is the forum for debate on the issue. The Public Accounts Committee (PAC) is the forum where CAG recommendations should be considered. Our experience of the recent past in relation to the CAG recommendations in the 2G spectrum allocation have convinced us that the ruling party has decided to subvert the parliamentary accountability available through the PAC. The PAC has been effectively made non-functional on that issue. Legitimate tactic

The Mobility Of Information

Aided by new media has the information explosion become unmanageable? An animated debate is raging around social media. More specifically, around its negative and destructive use in certain contexts, the most recent of which is its schizophrenic role in Assam's ethnic violence. The narrative of the circulation of morphed images and messages of false forebodings resulting in the subsequent government clampdown is by now well known. New media is vibrant, volatile, and some even say, unmanageable. But that's not all that there is to the ongoing debate. The clash of views has placed the very idea of information at the centre of the problem. The debate has brought up basic questions, uncertainties and dilemmas about how to handle the over-abundance of news, often inseparable from rumours, gossip and misinformation. What's more significant is that the volume of both 'truth' and 'lies' seems poised to grow in future, as social media also proliferates and expands. The key to understanding the fluidity of social media lies in understanding the quirky nature of the constant flow of information and its networks. People have always had an organic connection to all kinds of information, from the trivial to the serious. The insatiable human hunger for information existed even before the onset of the technological and cyber revolutions, before newspapers and the radio appeared on the scene. As a Bengali i can think of 'addas' thriving at street corners, bookshops, coffee houses and tea stalls where no topic is tabooed and no censorship is applicable, as a precursor to modern flows of information. From politics to art and theatre, local to national, gossip to serious introspection 'addas' could well pass off as one of the most effective and diverse information networks. The free flow of news and gossip is carried from person to person by word of mouth. In innocuous situations that would be a fairly harmless thing, but as historians and anthropologists have shown, unauthorised, mobile information can, through rumour and gossip, lead to violence, riots and death. Even before the explosion of cyber technology information travelled across boundaries. The difference was that news, back then percolated mostly through the controlled sluice of the mainstream media, and that glimpse of the truth behind everyday affairs of state rarely came to the fore. Once in a while the Bob Woodwards and Carl Bernsteins of media lore would appear on stage with

Parliamentary obstructionism should be avoided. It is a weapon to be used in the rarest of the rare cases. Parliamentary accountability is as important as parliamentary debate. Both must co-exist. If parliamentary accountability is subverted and a debate is intended to be used merely to put a lid on parliamentary accountability, it is then a legitimate tactic for the Opposition to expose the government through parliamentary instruments available at its command. Presently, a national debate on allocation of natural resources is on. Left to this government, it would have distributed these resources for collateral purposes to its own favourites. The Prime Minister must own full and real responsibility. Let him cancel these 142 discretionary allocations, put them on auction and test whether they had been allocated at a fair price. Source: The Hindu


Weekly Current Affairs 27th August to 3rd September, 2012

fantastic exposes. For much of the time however decisions, even when conflicted, were handed down, in a sanitised form, without revealing any of the messy backroom transactions that had made them possible. Media historians have chronicled the history of the irrepressible curiosity among citizens to know and confront the 'unknown', to catch a glimpse of the invisible hand behind major political, economic and military decisions. This is where curiosity, fear and conspiracy cross paths - when information moves without us knowing who is moving it.

no longer ever be absolutely false, since it has once been credible." Paradoxically, as we witness in recent happenings, the phenomenon of hybrid virtual communities, erasing boundaries between nationalities and cultures, has gone hand in hand with burgeoning ethnic and nationalistic jingoism. This sharp xenophobic language calls for closing borders to immigrants, ensuring that the free mobility of information and capital is not matched by the unfettered circulation of populations. The contradictory pulls and tensions mutating the world of information, and its intimate connection with people's lives have opened up a new discourse about how to regulate the sector. Source: Times of India

Such curiosity gives birth to conspiracy theories, like those which have recently gained ground, going hand in hand with media proliferation. Consider for example, Julian Assange - the radical purveyor of information. It's perhaps only fitting that the architect of WikiLeaks, Assange is a reader of surreal and subversive authors like Kafka, Koestler and Solzhenitsyn. He revels in his conspiracy theories around states and perhaps owes his present status of an outlaw to the inevitable logic of leveraging a centralised media using a myriad of servers and hundreds of media activists spread across networks.

As information networks have diversified, leaks have also become that much more difficult to stem. Leaks have filled a vacuum not only in terms of the simple volume of information they reveal, but also in the desire of the consumer to know more than the obvious. The more an organisation attempts to guard against leaks, the more severe becomes its internal contradiction between the requirement of sharing information and that of controlling it. Some of these dynamics are on display in the current struggle over the scope of tools like the Right to Information and question over what falls within its purview. How then does one dam this information deluge? Against its insurgent character, Noam Chomsky's famous theory of manufacturing consent - arguing that information is routed through a propagandist indoctrination model - seems to collapse. The advance in cyber technology has created, according to Howard Rheingold, a 'virtual community', intransient and perennially on the move. Monopolising information, controlling and vetting it, is trickier than before because of the dispersed nature of sources now actively dealing with the business of disseminating information. As philosopher Jean Baudrillard observed: "You put out an item of information. So long as it has not been denied, it is plausible. And, barring some happy accident, it will never be denied in real time and so will always remain credible. Even if denied, it will

Weekly Current Affairs 27th August to 3rd September, 2012

Summary of findings

Much more than a survival scheme

In the midst of the debates that prevail in this country over the feasibility of the world's largest public works programme, the MGNREGA Sameeksha - an anthology of independent research studies and analysis on the Mahatma Gandhi National Rural Employment Guarantee Act, from 2006-2012 - is a significant innovation to evaluate policy and delivery. In bringing out MGNREGA Sameeksha , a collection of critical independent voices, released in English and Hindi by the Prime Minister on July 14, the Ministry of Rural Development provides a platform for evaluation of a law designed to assist the most invisible in India's political spectrum. The Sameeksha is not a 'new' study. As the introduction explains, it is "an analytical anthology of all major research studies done on MGNREGA that were published in academic journals or came out as stand-alone reports". No department, from the social sector or otherwise, has published a summary of findings of all the independent research studies conducted on its major programmes. To do so asserts confidence in independent evaluations, and the wisdom that the government would do well to consider such views and analyses. Given India's very poor record of rural development, it was important that the world's largest employment programme be evaluated by credible institutions and researchers. By bringing a summary of findings of all the studies together, Sameeksha facilitates informed understanding, analysis, implementation, and reform where necessary. Sameeksha is an initiative of Jairam Ramesh, Minister of Rural Development, edited by Planning

Evaluating MGNREGA on the basis of rigorous research, rather than anecdotal evidence, offers a rational framework for improvement, and rejects irrational demands for closure. It also becomes the basis for more informed discussion to write articles, conduct television studio debates, and even design policy initiatives. In the midst of ill-informed adverse criticism, this compendium gives us a set of answers based on fact and not opinion.

Continuing critical comments and assertions beg for answers. Has the MGNREGA really built assets, or has it just been a compendium of useless earth work? Has it created a lazy workforce that is affecting our work culture? Has it negatively affected agriculture by drying up the labour market? Has the MGNREGA become the biggest source of corruption in rural India? Has it failed to arrest distress migration? Has it helped household income, and reduced hunger in the poorest households? These papers provide answers premised on detailed research or study. For instance, the oftrepeated aggressive assertion that MGNREGA does not build useful assets has been made without the support of any study to justify this claim. These assertions arise very often from fleeting visits to roadside worksites, with insufficient time for anything more than an anecdote. This off-the-cuff dismissal of "useless earth works" arises from a group which often lives on the other side of a fractured India, for whom mud and dirt become synonymous! It also raises the pertinent question of what indeed is a productive asset - a village tank that recharges 40 wells, or only a work of brick and mortar.

Sameeksha has a whole chapter dedicated to studies on asset creation which, by and large, show that sustainable assets have been created. A study of the best performing water harvesting assets in Bihar, Gujarat, Rajasthan, and Kerala for instance show the potential of these works where a majority of the assets studied had a return on investment of well


Commission Member Mihir Shah and compiled by a team led by Neelakshi Mann and Varad Pande. To ensure academic merit, suitable coverage of major studies, and veracity of reportage, the anthology was refereed by two prominent academics/writers; economist Jean Dreze, and the editor of the Economic and Political Weekly , C. Rammanohar Reddy. This anthology is finally a tribute to the MGNREGA, and the millions of workers who have diligently struggled against poverty and unequal implementation, and even violence in some cases to access their rights.

over 100 per cent, with investment costs recovered in less than one year! Perception-based surveys, including those carried out by the National Sample Survey Organisation (NSSO) in three States showed that the vast majority of assets were being used, and the people found them useful. Multiplier effect This report should give policymakers and politicians a chance to take stock. Interestingly, the compendium effectively answers many of the basic criticisms of MGNREGA that have emanated from politicians and bureaucrats even within the system. The Prime Minister will hopefully acknowledge the findings contained in Sameeksha , and accept that MGNREGA is more than a lifeline for survival. Different studies have shown that it has provided livelihood and income security, decreased the incidence of poverty, increased food intake, reduced mental depression, positively affected health outcomes, and been successful as a self targeting scheme - as the poorest and most marginalised communities have sought work. In many States, it has decreased gender differential in wages, increased real wages accompanied by an increase in agricultural productivity and growth. This increase in agricultural productivity could be due to the watershed and water harvesting works, as well as the land development work on the fallow private lands of SC, ST and BPL families to make them productive. The studies do not bear out the assertion that MGNREGA has caused a shortage of farm labour. Importantly, some studies seem to indicate a significant multiplier effect on the rural economy suggesting, as the authors say, a need to study this aspect further. The report also shows that there is poor implementation in many places. Average wages paid are lower than minimum wages; there is a distressing delay in the payment of wages; demand is not properly captured (an NSSO survey found 19 per cent of people who wanted work did not get it); dated receipts for work applications are not properly given; and the payment of unemployment allowance is a rarity. There is a shortage of staff, and there are many instances of irregular flow of funds. Noncompliance with proactive disclosure provisions such as muster rolls being available at worksites continues to be a problem in some States. As a result, leakages and corrupt practices continue to exist. While social audits in Andhra Pradesh have significantly increased awareness and identified fraud, Sameeksha notes that social audits are a facade in most other States.

Weekly Current Affairs 27th August to 3rd September, 2012

Several initiatives have a mixed outcome. The Management Information System places the largest set of data of any public works programme in the public domain via the MGNREGA website, but States are still struggling to upload data online on a realtime basis. Ten crore bank and post office accounts have been opened, bringing about financial inclusion, and reduced corruption in wage payments, but the delay in payments through such accounts is a major cause of distress. Many of these concerns obvious to those who work in rural India have been corroborated by the scope and rigour of academic research. The area specific outcomes have been no less significant. We have seen thanks to the MGNREGA offering alternative work, hundreds of bonded labour (Saheriya adivasis) in Rajasthan freed from generations of bondage. People have been saved from destitution in Uttar Pradesh, Bihar, Orissa, and Chhattisgarh, women have been empowered and are participating in huge numbers in Tamil Nadu, and the programme is even showing very positive results in "non-NREGA" States like Himachal Pradesh and Kerala.

remains high and large emerging economies are seeing a rapid fall in GDP growth. Weak growth in emerging markets will, in turn, slow down the world economy. In the last decade, growth in the US and China contributed to a benign global environment, which made it possible for India to get away with more policy mistakes. Now, the government needs a bigger focus on building confidence in private investment. The slowdown of GDP growth in emerging economies appears to be well entrenched now. In 2010, there seemed to have been a rebound in emerging economies, but it has not been sustained. The GDP growth in Brazil declined from 6.1 per cent in 2007 to 2.7 per cent in 2011. China has seen a dramatic fall in GDP growth from 14.2 per cent in 2007 to 9.1 percent in 2011. In 2012, emerging economies are expected to slow down further. China was a big contributor to post-crisis world GDP growth. China's GDP growth will be roughly 7.5 per cent in 2012. Two factors are at work. There are deeper problems in China's growth model that are beginning to rein in growth. In recognition of these deeper problems, the government pushed towards policies that would yield sustainable growth. These policies inevitably entailed slower growth. Recent indicators suggest that the Chinese economy is slowing down to a greater extent than expected. With consumer prices falling in the last three months, indicating a possible deflation, the Chinese central bank announced two interest rate cuts. China also has significant scope for a fiscal stimulus at the central and local levels. What was wrong with the old Chinese model of growth? In the pre-crisis years, Chinese families saved half their incomes, and American families consumed more than they earned. Low Chinese consumption was engineered through the exchange rate, monetary policy, financial repression, etc. The delicate balance between China and the US broke down in the crisis. Policymakers everywhere have talked about the need for a rebalanced world in which Chinese households save less and American families consume less. A rebalancing should lead to a lower current account surplus for China, reducing its build-up of reserves; less buying of US treasury bills by China; and lower liquidity and asset price bubbles in the US economy. A good part of this required adjustment has come about. China's current account surplus has fallen from a high of 10 per cent in 2007 to 2.8 per cent in 2011. While this is good for the world, these changes require substantial changes within China. Growing

Academic studies contextualise experience and anecdote, within the framework of critical factual analysis. Policymakers cannot brush these aside as irrelevant. Ironically, the report also reveals the many issues and areas that have not been researched. It exposes the missed opportunities of the academia to invest in detailed and widespread study of this very unique right, entitlement and programme. Perhaps this report can help be a force multiplier for the studies conducted so far, which in turn will encourage more research. The MoRD has also invited the Comptroller and Auditor General to conduct a performance audit of MGNREGA, and mentor the social audit process. The CAG oversight should enable a detailed appraisal of the shortcomings in implementation. These kinds of partnerships must become a regular activity not only within one Ministry, but in the government. It will help improve implementation and could be a creative way in which governance could be improved with the help of modes of independent evaluation and public participation. Source: The Hindu

The emerging slowdown

Emerging economies survived the global shock in 2008 quite well. But now that the industrial countries have not fully recovered, the crisis in Europe continues, the uncertainty in world markets

Weekly Current Affairs 27th August to 3rd September, 2012


inventories, a fall in export orders and declining capacity utilisation all suggest that the slowdown in China is intensifying. The Chinese slowdown is cause for concern worldwide. By itself, this yields slower world GDP growth. Many emerging economies are part of the supply chain that feeds Chinese manufacturing, and have benefited from Chinese demand. A slowdown in China will lead to a decline in their growth. In July 2012, Indian exports to China showed an 8 per cent decline on a year-on-year basis: a sharp contrast to the explosive growth of recent years. The bulk of this decline was in iron ore. Another channel of impact for India is indirect: through the world prices of tradeables. The world price of things that can be globally traded - for instance, steel - is influenced by over-capacity in China. The Chinese slowdown is exerting a negative influence on the global prices of tradeables. This hampers the profitability, and thus the outlook for investment, of Indian firms that make tradeables. This channel of influence is likely to be more important for India, when compared with the small scale of Indian exports to China. Chinese households consume about 30 per cent of Chinese GDP, compared to Indian households, which consume about 70 per cent. The value of 30 per cent is the lowest consumption share in the world. If the Chinese economy slows down, there are two possibilities. One is that households continue to earn and spend the same share in GDP. This could lead to social unrest, and further disrupt growth.

to shift the growth model. We in India need to factor this into our thinking about our growth model. From 2004 onwards, the Indian leadership has neglected the foundations of economic growth. The economic policy reforms of previous years, coupled with benign global conditions, gave effortless growth, and the focus of the UPA was on spending. Now we need to re-evaluate our growth model, and ask how to rebuild the confidence of private investors so as to obtain growth even when global conditions are adverse. Source: Indian Express

Most observers believe that this scenario will not arise. The key is to increase the share of consumption, so that even if GDP growth slows, consumption growth stays strong. This is closely linked to the problems of the Chinese model of growth, which emphasised a very high investment rate. The question before China today is finding a new policy framework involving a lower share of resources going into investment, an increasing share of consumption in GDP, ending the emphasis on export of goods and capital, and settling into a lower but sustainable growth trajectory. The Chinese leadership appears to have understood that their old growth model was flawed. They appear to be keen on moving towards a new growth model. In other words, it is not likely that the emerging GDP slowdown will bring forth a fresh wave of highway projects to prop up the economy. The recent stimulus measures were small and intended to slow down the speed of reduction of growth rate. The debate within China is about how

Bifurcating functions

Airline safety, finances need separate watchdogs

The most recent developments in Kingfisher Airlines, where the pilots are yet again on strike and the company is operating only 11 aircraft and 85 flights in a day, raises an important question: Should the financial viability of an airline be totally and completely linked with its safety aspects? Or, should the two - financial sustainability and safety -- be separated, with lapses in either providing enough grounds to shut down an airline? Should an airline that may be technically 'safe', but financially in a poor state, be allowed to run? After all, could not its poor finances eventually compromise on the safety of its operations as well? At the moment, both the financial and safety aspects of airlines are looked into by the Directorate General of Civil Aviation (DGCA). According to Civil Aviation Requirement (CAR) norms regulating the operations of airlines in the country, the DGCA can consider adverse financial indicators - such as significant lay-offs or turnover of personnel, delays in meeting payrolls, evidence of cutting corners, demands for 'cash on delivery' by suppliers who were earlier providing credit, inadequate maintenance of aircraft, shortage of supplies and spare parts, curtailment or reduced frequency of revenue flights, and sale or possession of aircraft or other major equipment - for taking action, including shutting down, against the airline. It is another thing, though, that the DGCA hardly invokes these provisions. Instead, the airline watchdog confines itself to only the safety aspects. As a result, there is no body that closely monitors the financial conditions of airlines and takes action based on these indicators that can be the precursor to non-adherence to safety standards. The Government is making some attempts at changing this state of affairs by proposing the setting

Weekly Current Affairs 27th August to 3rd September, 2012

up of a Civil Aviation Authority (CAA), whose mandate would extend to safety, economic regulation and grievance resolution functions. The CAA will be a financially autonomous body, which will have separate wings looking into the financial and safety aspects of operating airlines. The proposal of bifurcating the two functions within a single regulatory body was mooted first two years ago, after the crash of an Air Indian Express airline in Mangalore, which resulted in the death of 150 people. Given the precarious finances of not just Air India, but even Kingfisher - which have implications in terms of unpaid, overworked and de-motivated employees not giving their best the need to take action based on both aspects cannot be overemphasised. Incidentally, this is also the practice globally, where the safety and financial aspects of the aviation sector are looked after by different agencies. In the US, for example, there is the National Transportation Safety Board (NTSB) and the Federal Aviation Administration (FAA).

thousands of crores in arrears, and operate truncated flight schedules for months leaving harassed flyers literally on the ground. Should the Government in these cases wait for an untoward incident to happen, before initiating any action? Or is it waiting for the airlines to collapse under piles of debt, which will then save it from taking any tough decision? In the current scenario, there is no clarity as to what a body like the DGCA can do about addressing the financial viability aspects of any airline. DGCA officials claim they are only a safety watchdog - though the CAR says otherwise and hence not mandated to shut down an airline if it is not financially viable. At the moment, any decision to shut the airline will have to be taken by the DGCA in consultation with the Ministry of Civil Aviation. And while this is not happening, Kingfisher continues to operate its truncated fleet. Way forward Another school of thought believes that if Kingfisher - or for that matter any other airline is not making money - it should be the owner's decision to shut down the airline. After all, this is what happens in any business. But since the government gives permission to airlines to fly in the skies after checking out their financial standing, shouldn't it also play a role in deciding to shut down an airline? Of course, in the event of shutting down, what will happen to the employees of the airlines and thousands of others who depend on it for their livelihood? The only way forward is to expedite the formation of the CAA and ensure that its mandate is carefully thought through before it becomes operational. Source: Business line

The NTSB is an independent federal agency charged with determining the probable cause of transportation accidents, promoting transportation safety, and assisting victims of transportation accidents and their families. The FAA's mission on the other hand is to provide the safest, most efficient aerospace system in the world. No clarity in the air

Coming back to the domestic aviation sector, the guidelines for running a domestic airline currently require an airline to operate with a minimum fleet of five aircraft and a paid-up capital of at least Rs 50 crore. Both these are conditions that the likes of Kingfisher or Air India meet. Of course, it is a different matter when the airlines have disgruntled staff members, owe various entities

Weekly Current Affairs 27th August to 3rd September, 2012