CURRENT AFFAIRS
National Affairs
Japan, Mexico, Uganda,
Austria and Turkey have
joined the UN’s powerful
Security Council as non-
permanent members for a
two-year term, replacing
South Africa, Indonesia,
Belgium, Italy and Panama.
The 15-member Council
comprises five permanent
and 10 non-permanent
members, five of whom retire
each year and their
replacements are chosen by
the General Assembly. The
newly elected members will
join Libya, Vietnam, Burkina
Faso, Costa Rica and Croatia
whose two-year term expires
on December 31, 2009.
The super-luxury train, Royal
Rajasthan on Wheels
(RROW), with spas and wi-fi
system among other
attractions, chuged off for the
first time from the Safdarjang
railway station, New Delhi, on
January 11, 2009.
Mumbai-based Tata Institute
of Fundamental Research
(TIFR), the country’s premier
research organisation, has
decided to set up its second
campus in Hyderabad with
an investment of Rs 2,500
crore.
Tamil Nadu is the best e-
governed State in India,
according to a study by IDC
India. Apart from its high IT
spends, the southern State
has also scored high on
parameters such as citizen
and business satisfaction.
The other States in the top
five include: Himachal
Pradesh, Delhi, Haryana and
Andhra Pradesh.
The Atomic Energy
Commission has accorded
permission for setting up an
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Month in a Nutshell
RBI infuses 20k crore: On
January 2, 2009, the Reserve Bank of
India (RBI) announced a further easing
of money supply with the reduction of
key rates and ratio which it said would
release Rs 20,000 crore into the bank-
ing system. While the cash reserve
ratio—the amount of cash that banks
need to keep in reserve—has been cut
by 0.5 per cent to 5 per cent, repo and
reverse repo rates—the short-term
rates at which the RBI lends and bor-
rows from banks—have been cut by
100 basis points each to 5.5 per cent
and 4 per cent, respectively. Following
the RBI measures, government-owned
banks provided a respite from high
interest rates to individuals wanting to
buy a house and to the distressed
owners of Micro, Small and Medium
Enterprises (MSMEs).
Companies can now launch
IPOs 1 year after SEBI nod: The
Securities and Exchange Board of India
(SEBI) has granted greater flexibility to
corporate to raise funds and outlined
measures to prevent the kind of panic
redemptions that brought the mutual
fund industry to its knees in October
2008. SEBI has now approved a propos-
al to extend the validity period for an
initial public offering approval from
three months to a year. The new rule
comes as a relief for those who were
forced to defer their IPOs even though
they had obtained approval. Under the
new rule, the companies can go public
within one year of receiving the regula-
tor’s approval. However, SEBI has
stipulated that companies will have to
update the document with fresh num-
bers and any other material changes
whenever required.
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alongwith your complete name and address.
Economy gets another booster
dose: On December 7, 2008, the Union
government announced major tax cuts
across the board for housing sector
and duty cuts for companies that pro-
vide finance to real estate companies.
The move was intended to prop up sag-
ging demand in sectors such as hous-
ing, exports, textile and infrastructure.
Paying special attention to exports, the
government has decided to provide an
interest subvention of 2 per cent up to
March 2009 for pre- and post-shipment
export credit for labour-intensive
exports like textiles, leather, marine
products and SME sector. Items of
Contents or Translation of contents of this document must not be reproduced in any manner without prior permission.
handicrafts will be included under
Vishesh Krishi and Gram Udyog Yojana
among other initiatives.
30k-cr oil bonds: The govern-
ment is working on a bailout package
to prevent its three blue chip oil com-
panies—Indian Oil, Bharat Petroleum
and Hindustan Petroleum—from clos-
ing 2008-09 in the red. The package
proposes to provide additional oil
bonds of Rs 30,000 crore to the oil
companies to compensate them for
losses incurred on fuel sales at govern-
ment-controlled prices. The total sub-
sidy for 2008-09 is estimated at around
Rs 1,06,000 crore. The government
gives oil bonds to the State-run OMCs
to partly compensate their losses for
keeping retail prices of four fuels
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below market rates. The compensation
was based on a ‘burden sharing
formula’ approved by theCabinet on
October 11, 2007 while extending fuel
subsidy schemes up to April 1, 2010.
Due to an unprecedented jump in
crude oil price, the formula was later
abandoned. The crude oil prices had
peaked at $147 a barrel in mid-July
2008.
CURRENT AFFAIRS
atomic power plant at Kumahrian in
Fatehabad district of Haryana.
The Innovation of Science Pursuit for
Inspired Research (INSPIRE)
programme has been designed as a
national endeavour to attract young
India to embrace scientific research.
The philosophy of INSPIRE is to
create excitement, motivation,
nurturing and promotion of excellence
with assured career opportunities.
Ksenya Sukhinova of Russia has
been crowned Miss World 2008. The
first runner-up was Parvathy
Omanakuttan of India. Gabriel Walcott
of Trinidad and Tobago was the
second runner-up. The contest was
held in Johannesburg, South Africa.
Anna University Coimbatore has
achieved the distinction of becoming
the first University in India to adopt
and implement the radical
Examination Management System
(EMS) to conduct its UG and PG
exams.
Parliament has approved three-fold
increase in the monthly salary of the
President, Vice-President and State
Governors. While the President will
get Rs 1.50 lakh per month, it will be
Rs 1.25 lakh for the Vice-President
and Rs 1.10 lakh for the Governors.
The revision in salary and pension will
come into effect from January 1, 2006.
The Union government has cleared an
ordinance to hike salaries of Judges,
making it Rs 1 lakh per month for the
Chief Justice of India, Rs 90,000 per
month for Supreme Court Judges and
High Court Chief Justice and Rs
80,000 per month for High Court
Judges.
The RBI has asked National Building
Organisation (NBO), a government
agency that collects statistics on the
country’s housing construction
activities, to launch a housing start-up
index by March 2009 to help it assess
the impact of fiscal and monetary
stimulus offered to revive the sector.
All major economies use similar
indices to assess economic activity
using demand and supply data on the
housing sector.
Ferrari head honcho Luca di
Montezemolo has made it known that
Tata branding would appear for the
first time on the scarlet Ferraris of
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Factory output drops to
negative terrain: Industrial pro-
duction unexpectedly fell 0.4% in
October 2008, shocking policy-
makers. It slipped into negative ter-
ritory for the first time in 15 years,
highlighting the case for further
aggressive interest rate cuts and fis-
cal measures to shore up a slowing
economy. The drop was on the back
of a 1.2% year-on-year contraction in
manufacturing activity, confirming
fears the economic slowdown was
gathering pace amid a faster-than
expected drop in demand slowdown
in overseas and domestic markets.
Manufacturing accounts for nearly
80% of the Index of Industrial
Production (IIP), which rose by a
revised 5.5% in September 2008.
PMO nod to new pay panel
for armed forces: The Prime Minis-
ter’s Office has approved a separate
pay commission for the armed
forces. The Seventh Pay Commission
for soldiers would be delinked from
the civilian pay panel. The decision
comes after a committee, headed by
External Affairs Minister Pranab
Mukherjee, submitted its report to
review the concerns in the armed
forces. The concerns were raised
after the Sixth Pay Commission
recommended placing lieutenant
colonels and equivalent ranks in the
Air Force and Navy at a lower pay
band than their counterparts in the
paramilitary/Group A services and
IAS. The government has also agreed
to accommodate lieutenant colonels
in a higher pay band and increase
their monthly salary by Rs 8,000.
However, the government has not
yet addressed the sweeping discon-
tent in the military’s higher echelons
over lieutenant generals and their
equivalent being excluded from the
higher pay band.
Centre accepts 70% pay hike
for teachers: In line with the Sixth
Pay Commission recommendations
for Central government employees,
the Union government has accepted
the G.K. Chadha Committee report
recommending a 70% hike in pay
scales of teachers. Other recommen-
dations in the report include a uni-
form retirement age of 65, opportu-
nities for re-employment up to 70
years, flexibility to accommodate tal-
ent through incentives, and one-time
grants for research for teachers in
Central, State and deemed universi-
ties. At the early level, the recom-
mendations aim to attract talented
young people hoping to get into the
teaching profession. Among other
things, it includes advance incre-
ment, enhanced research grants and
facilities for housing and research.
To boost research and consultancy
projects, the panel also encourages
teachers in universities and college
to accept consultancy, directing
projects, registering patents, R & D
products and technology transfers.
Education schemes get
Cabinet nod: The Cabinet Commit-
tee on Economic Affairs has
approved a scheme, National Mis-
sion on Education, to use the Infor-
mation Communication Technology
(ICT) to provide personalized and
interactive knowledge modules to
students. The scheme will cost Rs
4,612 crore in the 11th Plan. Over
18,000 colleges across India will get
computer infrastructure and connec-
tivity, including all departments in
419 universities, deemed universi-
ties and institutions of national
importance. In another decision, the
Cabinet approved the Rashtriya
Madhyamik Shiksha Abhiyan to
increase enrolment rates in second-
ary education from 52.56 per cent at
present to 75 per cent in 2012.
Under the scheme 11,188 new
schools will be built and 44,000
existing schools strengthened and
1.79 lakh additional teachers will be
appointed.
India, US ink $2.1 bn defence
deal: The Union government has
signed the biggest-ever defence deal
with US—a $2.1 billion contract for

Felippe Massa and Kimi Raikkonen
fighting for world championship
honours in 2009.
After 137 years, the government of
India has recognized Kuka Namdhari
Movement of 1871 and Jallianwala
Bagh massacre, 1919, as part of the
national freedom movement. The
recognition is required for purpose of
grant of pension under the Swatantra
Sainik Sanman Pension Scheme
1980.
International Mobile Equipment
Identity (IMEI) number is a unique 15-
digit code that can identify a mobile to
a GSM network. It prevents stolen
handsets from being used to make
calls and allows lawful interception to
prove that a particular device was
used for making calls.
Sun Pictures has bought the
production rights for the costliest
Indian movie to date, Robot, starring
Rajnikanth and Aishwarya Rai. The
Sci-fi movie is to be directed by
Shankar, with a whopping Rs 100
crore plus budget.
eight Boeing P-8I Long-Range mari-
time Reconnaissance (LRMR) aircraft
for Navy. India will get the first P-8I
towards end 2012 or early 2013,
with the other seven following in a
phased manner by 2015-2016. The
contract also provides an option for
India to order four to eight more
such planes. Armed with torpedoes,
depth bombs and Harpoon anti-ship
missiles, the P-8I will also be capable
of anti-submarine warfare and anti-
surface warfare. They will replace
the eight ageing and fuel-guzzling
Russian Tupolev-142M turboprops
currently being operated by Navy.
India, Russia clinch civil
nuclear accord: During the visit of
Russian President Dmitry Medvedev
in December 2008, New Delhi and
Moscow signed an agreement on
civil nuclear cooperation. Russia is
the third country to sign such an
agreement with India after France
and US. India also signed the $1.2
billion deal to buy 80 Mi-17 V-5 heli-
copters even as both countries work
towards resolving “outstanding
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issues” over the lease of a nuclear-
powered submarine and huge cost
escalation in aircraft carrier Admiral
Gorshkov’s refit. In the initial stages,
Russia will help India build two addi-
tional nuclear power plants at Kun-
dankulam. Even before the NSG
waiver, Russia was helping India
build two 1,000 MW nuclear power
plants at the same site. The
Russians, however, had to wait for
the NSG waiver to India for a more
focused N-cooperation. More
such power plants of Russian
design, according to the two sides,
will come up at other places in the
country.
Jammu & Kashmir elects
new government: In first week of
January 2009, the decks were
cleared for Omar Abdullah, 38, to
become the youngest and the 13th
Chief Minister of Jammu and Kash-
mir after his party, the National Con-
ference (NC), and the Congress
decided to share power in the State.
Former Speaker and Congressman
Tara Chand has been appointed as
the new Deputy Chief Minister. The
NC emerged as the single biggest
party in the 87-member State
Assembly after winning 28 seats in
the month-long elections. The Peo-
ple’s Democratic Party (PDP) and the
Congress, which had an alliance gov-
ernment over the past six years, fol-
lowed with 21 and 17 seats, respec-
tively. The BJP sprung a major sur-
prise by emerging victorious in 11
constituencies.
BJP secures majority in Kar-
nataka Assembly: Karnataka’s rul-
ing Bharatiya Janata Party (BJP) won
five out of eight seats in crucial by-
elections, cementing its hold in the
State’s Legislative Assembly where it
had been short of an outright major-
ity by three seats since May 2008.
The BJP now has 115 out of 224
Assembly seats. The by-polls also
marked the entry of Deve Gowda’s
daughter-in-law Anita Kumara-
swamy into Karnataka politics—
CURRENT AFFAIRS
the fourth member from the Gowda
family to do so. She won on a
JD(S) ticket from Madhugiri
constituency.
Parliament passes Bills on
anti-terror apparatus, NIA: The
Parliament, despite opposition from
Left parties on select provisions, has
approved the anti-terror Unlawful
Activities (Prevention) Amendment
(UAPA) Bill—which analysts say is
similar to the Prevention of Terror-
ism Act (POTA), repealed after the
Congress-party-led United Progres-
sive Alliance (UPA) assumed power.
The complementary National Investi-
gation Agency Bill, 2008, that seeks
to create a federal agency to investi-
gate terror-related incidents has also
been passed. After the President’s
assent the National Investigative
Agency (NIA) started functioning
from January 1, 2009.
Right to Education Bill:
Almost six years after Parliament
passed the 86th Constitutional
Amendment, the government has
introduced the Right of Children to
Free and Compulsory Education Bill
in the Rajya Sabha. The 86th Amend-
ment made free and compulsory
education for children between the
age of 6 and 14 years a fundamental
right. The proposed legislation pro-
vides a blueprint for systemic
reforms in the elementary educa-
tion. It promises to counter the
growing lobby for the privatization
of school education. The legislation
is, in fact, a step towards the com-
mon school system first proposed
by the Kothari Commission.
Self-regulation guidelines
for media in place: With visual
media drawing the flak for coverage
of the Mumbai mayhem and the gov-
ernment mulling an emergency pro-
tocol, India’s broadcasters associa-
tion has unveiled self-regulatory
guidelines. These include no live
reporting of hostage crises and
blocking information which may
CURRENT AFFAIRS
help terrorists. The guidelines, billed
as first big step towards self-regula-
tion, were formulated and unveiled
by the News Broadcasters Associa-
tion. Among the major guidelines
are: Don’t give live coverage of
hostage crises; Block information
that may help terrorists; Don’t dis-
close details of hostages; withhold
sensitive information on rescue
operations; Avoid live contact with
victims and with security personnel
engaged in rescue operations in
26/11-like situations; Avoid un-
necessary repetition of archival
footage which may agitate the minds
of viewers.
Cash for vote scam: A Lok
Sabha panel probing allegations that
Members of Parliament (MPs) were
bribed to vote in favour of the Unit-
ed Progressive Alliance (UPA) gov-
ernment in the July 22, 2008 trust
vote gave a clean chit to two politi-
cians, even as committee members
belonging to the Opposition Bharatiya
Janata Party (BJP) and the Left submit-
ted dissent notes while differing with
the conclusions. The two Rajya Sabha
MPs at the centre of the controversy
were Samajwadi Party general
secretary Amar Singh and Congress
President Sonia Gandhi’s political
secretary Ahmad Patel.
Administrative Reforms
Commission: In what will be one of
the biggest changes in the bureau-
cratically-run Indian governance sys-
tem, the Administrative Reforms
Commission (ARC), headed by Con-
gressman M. Veerappa Moily, has
suggested much-desired changes
that aim to free the system from
political meddling and also from the
grip of bureaucrats hiding behind
self-serving safety nets. The ARC
wants a change in the profile and
method of recruiting civil servants
to provide for a lateral entry on ear-
marked posts, identify specialists
and have accountability. It also rules
out assured promotions, besides
having a civil services authority to
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administer the services. These are
among the dozen new path-breaking
suggestions, probably the biggest
since Lord Thomas Macaulay laid
down the basic policy governing
recruitment to civil services in India
in 1854. Among the major recom-
mendations are: Lower age profile,
lateral entry; Armed forces person-
nel can apply for top IPS posts;
Higher accountability; No assured
promotions; New civil authority to
control and decide on selections;
Change in exam system; No deputa-
tion for IAS for profit-making
bodies.
Terror strike in Guwahati:
The year 2009 began with terror
striking, this time in Assam. Three
serial blasts in as many hours, trig-
gered by suspected ULFA militants,
left five people dead and over 60
injured in Guwahati. The explosions
took place a few hours before P. Chi-
dambaram flew in for his maiden
visit as Home Minister. Terrorists
appeared to mock heavy security put
in place for the New Year in the wake
of the 26/11 carnage and for the
Home Minister’s visit. Assam Chief
Minister Tarun Gogoi admitted that
there were security lapses.
Important News in
Detail
BANKING & FINANCE
RBI infuses 20k crore
On January 2, 2009, the Reserve
Bank of India (RBI) announced a fur-
ther easing of money supply with
the reduction of key rates and
ratio which it said would release
Rs 20,000 crore into the banking
system.
While the cash reserve ratio—
the amount of cash that banks need
to keep in reserve—has been cut by
0.5 per cent to 5 per cent, repo and
reverse repo rates—the short-term
rates at which the RBI lends and bor-
rows from banks—have been cut by
100 basis points each to 5.5 per cent
and 4 per cent, respectively.
Even while cutting rates, the RBI
has expressed concerns of growing
credit risk for banks due to deterio-
rating economic conditions. Simulta-
neously, the RBI said the banks
should price risk appropriately and
ensure that quality enterprises con-
tinue to get funding.
Following the RBI measures,
government-owned banks provided
a respite from high interest rates to
individuals wanting to buy a house
and to the distressed owners of
Micro, Small and Medium Enterpris-
es (MSMEs). Led by the State Bank of
India (SBI), 26 public-sector banks
lowered interest rates on home loans
up to Rs 5 lakh to 8.5 per cent and
on loans above Rs 5 lakh to Rs 20
lakh to 9.25 per cent, a cut of up to
200 basis points (100 basis points
makes 1 percentage point).
The new interest rates are appli-
cable only for loans being availed for
the purchase of newly built houses
or resale properties—not for swap-
ping existing home loans—because
the aim is to generate demand in the
economy. Providing relief to existing
borrowers is not the aim of the cuts.
The interest rates will be fixed
for the first five years, after which
borrowers will have the option to
either shift to a floating rate or a
fixed rate.
PLANNING & ECONOMY
Economy gets another
booster dose
On December 7, 2008, the Union
government announced major tax
cuts across the board for housing
sector and duty cuts for companies
that provide finance to real estate
companies. The move was intended
to prop up sagging demand in sec-
tors such as housing, exports, textile
and infrastructure.
As part of efforts to boost the
housing sector, public sector banks
were asked to announce a package
for home loan borrowers in two
categories—upto Rs 5 lakh and
between Rs 5-20 lakh.
Micro and small enterprises,

which are facing a credit crunch,
would get collateral free lending and
the government has doubled the cur-
rent guarantee cover for loans to up
to Rs 1 crore from the existing limit
of Rs 50 lakh.
Paying special attention to
exports, the government has decided
to provide an interest subvention of
2 per cent up to March 2009 for pre-
and post-shipment export credit for
labour-intensive exports like tex-
tiles, leather, marine products and
SME sector.
Items of handicrafts will be
included under Vishesh Krishi and
Gram Udyog Yojana among other
initiatives. The government has
decided to completely lift import
duty on Naphtha for use in the
power sector while export duty on
iron ore fines will be eliminated.
The package also includes a 4
per cent cut in ad-valorem duty
across the board, to boost additional
spending, besides enhanced credit
for exporters, along with a Rs
10,000-crore mop up for India Infra-
structure Finance Company.
ELECTIONS
Jammu & Kashmir elects
new government
In first week of January 2009,
the decks were cleared for Omar
Abdullah, 38, to become the
youngest and the 13th Chief Minis-
ter of Jammu and Kashmir after his
party, the National Conference (NC),
and the Congress decided to share
power in the State. Former Speaker
and Congressman Tara Chand has
been appointed as the new Deputy
Chief Minister.
The NC emerged as the single
biggest party in the 87-member State
Assembly after winning 28 seats in
the month-long elections. The
People’s Democratic Party (PDP) and
the Congress, which had an alliance
government over the past six years,
followed with 21 and 17 seats,
respectively.
The BJP sprung a major surprise
by emerging victorious in 11 con-
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stituencies as compared to only one
in the last Assembly elections. While
the PDP gained five seats, the
Congress lost three against their
previous tallies.
The 2008 J&K Assembly poll
scored over the 1996 and 2002 polls,
not only in terms of minimal vio-
lence and high turnout, but also due
to the fact that the azaadi rhetoric
of the separatist forces was seen
making way for development issues
such as electricity, roads and water
in shaping the voters’ mind.
The high voter interest in the
J&K polls is seen to be linked with
the low levels of militancy and infil-
tration seen over the last couple of
years, thanks to Pakistan’s pre-
occupation with other domestic mat-
ters—be it restoration of democracy
or dealing with the Taliban on its
western borders—and fencing of
border stretches in J&K. The reduced
interest of Pakistan-backed terror
groups like Hizbul Mujahideen
ensured that no candidate was killed
this time compared to 2002 when 50
political activists, including two can-
didates, were killed. The NC had
bore the brunt of the political
killings, losing up to 30 political
workers, including its candidate
from Lolab constituency, the then Law
Minister Mushtaq Ahmed Lone. The
Election Commission too left no stone
unturned to ensure that poll is free of
any rigging and there was no coercion
whatsoever of the voter by the Army
or other security forces.
LEGISLATION
Parliament passes Bills on
anti-terror apparatus, NIA
The Parliament, despite opposi-
tion from Left parties on select pro-
visions, has approved the anti-terror
Unlawful Activities (Prevention)
Amendment (UAPA) Bill—which ana-
lysts say is similar to the Prevention
of Terrorism Act (POTA), repealed
after the Congress-party-led United
Progressive Alliance (UPA) assumed
power. The complementary National
Investigation Agency Bill, 2008, that
CURRENT AFFAIRS
seeks to create a federal agency to
investigate terror-related incidents
has also been passed.
After the President’s assent the
National Investigative Agency (NIA)
started functioning from January 1,
2009.
The government also
announced that a 24 × 7 country-
wide intelligence sharing system has
been activated from January 1, 2009.
In 2001, the government had estab-
lished a Multi-Agency Centre (MAC)
in the IB as a nodal agency for intel-
ligence. An executive order has been
issued to ensure that the MAC
shares intelligence with all other
agencies, States and vice-versa. For
the purpose, all State capitals will
get MAC offices, ensuring real-time
sharing on terrorism, threats and
offences across the country.
NIA will be a super body with
far-reaching and country-wide
powers. It will control and investi-
gate everything connected to terror-
ism, counterfeiting of currency,
threat to atomic installations and
energy, maritime security, hijacking,
sedition and waging a war against
the nation, among other crimes. The
NIA will be backed by special courts,
provision for in camera proceedings
and protection of witnesses. Its offi-
cials will have over riding powers
over State police forces when deal-
ing with these designated crimes
that will fall under its ambit.
The amendments to the Unlaw-
ful Activities (Prevention) Act, 1967,
provide for preventive detention of
an accused up to 180 days instead of
90 days as at present. No accused
can be given bail without the prose-
cution being heard out in the court.
And there will be no bail on a
personal bond.
Further, the bail can also be
denied if the court feels that the
charges against a person are prima
facie true. Foreign nationals who
have entered the country illegally
and unauthorized and are being
accused under this law will be
denied bail.