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 150

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Contents

10

Editorial

43

Editors Column

A Letter from the Editor

MAGAZINE

Focus : New Legislation

Uttarakhand Disaster
Focus : Natural Disaster

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Analysis: Economic Issue

18

Uttarakhand Disaster

National Food Security Bill

Analysis : Government Policy

47

50

18

National Food Security Bill

25

United India Divided States

Focus : National Issue

25
United India Divided States

29

Syrian Crisis
Focus : Global Crisis

33

Companies Bill

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Tumbling Rupee
Fumbling Government

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Rising India

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Current Affairs

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01

Issue: Oct-Nov-Dec, 2013

PM Visits to Japan & Thailand

Focus : International Relation

53

Durga Shakti Nagpal

Focus: Movers & Shakers

Indian Sites on World

Heritage List

128 Environment & Wildlife

135 Committees & Commissions

Focus : Indian Heritage

138 Current Economy

Indus Water Treaty

148 Current Sports

Focus: Bilateral Agreement

54

National Affairs

74

International Affairs

85

Books & Authors

87

Awards & Honours

97

Persons in News

162 At the 11th Hour

162
At the 11th Hour

168 Ready Reckoners

106 Places in News

171 Toppers Interview : ESE-2012

110 Defence in News

175 Recently Held Exam Papers

110

33

115 Science & Technology

UPSC Engg. Services Exam, 2013

Prasar Bharti : 2 June, 2013
Prasar Bharti : 21 July, 2013
UP PCS - 2013 : 26 June, 2013

198 Latest Current Affairs

PM Visits to Japan & Thailand

Defence in News

Questions

nnn

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Publications. They should be understood as the personal opinions of the author/ authors.

Current Affairs

Issue : Oct. - Dec., 2013

Editor-in-Chief s Column

Rising India
Proud to be an Engineer

India, in its thousands of

years of history, has passed
through several different
phases of time, the Indus
Valley Civilization, the Vedic
times, the Mauryan Empire,
the Medieval times, the
Mughal Empire, the British
Rule and eventually the postB. Singh (Ex. IES)
independence era : the time
CMD, MADE EASY Group
in which we are living today.
During all these different
eras of testing and challenging times India has always
emerged as a rising power because of its, indomitable
desire to rise.
India was an agrarian country and most of the world
ignored Indias economic growth. Developed nations
expected agricultural growth rate in India, whereas India
faced all the challenges of difficult times and changing
world and established itself, with its own ideologies as an
emerging powerful nation of the world.
The sea of change that India is witnessing at present
moment is the most beautiful and exciting changes
that could have ever happened in its entire history. The
most important part of this entire transformation to
the rising India is its Engineering Workforce. Yes, the
Indian Engineers and we all should feel proud to be an
engineer.
The civil engineers are building the most beautiful
infrastructures across the country; the electronic
engineers are fabricating the most exotic and amazing
gadgets; the mechanical engineers are designing the
most powerful machines; the electrical engineers are
constructing the biggest power generating setups and the
computer engineers are making life simpler & simpler by
decoding the most complex programs.

The Indian Railways the biggest public transport system

in the world, is expanding at a fast pace and reaching
every nook and corner of the country. The Metro
Rail is connecting major metropolitans of the country.
The defence system of the country is becoming more
indigenous. The water and irrigation network is getting
better. The power generation setup is upgrading its
capacity. The telecommunication network is expanding;
reaching almost every small village of the country.
It stands without doubt that it is all because of the
Indian engineers; it is their toil that is bringing colour,
development and prosperity to the nation.
But we need to understand that all of this is just a journey
and not a destination. A lot of such similar (and more
enthusiastic) things are still supposed to happen. And
for this more engineers are required; to serve the nation
and make her more prosperous. This is true because the
prosperity of an individual depends upon the prosperity
of their nation.
There was a time when the government establishments
in India were seen with no positive growth and nothing
good was expected from them. It was never expected
that they could change or bring any growth and bring
profits to the nation; or could bring prosperity in the life
of people who were associated with them.
It was the private sector that was seen as the real index
of growth of the nation. It was believed that it was
only the private sector that could do some good to the
nation. At one point of time people had even begun to
believe that privatization was the only way to escape a
real disaster.
But the recent global recession, which was triggered
especially in private sector has completely changed
the nation. The recession has affected every engineer,
every manager, businessman and almost every person
of the workforce community on this planet. The AfterIssue : Oct. - Dec., 2013

Current Affairs

Current Affairs | made easY

effects of recession are still to come in existence due to

which people today see the growth of private sector with
scepticism.
It was hard to believe that when the world was in doldrums
because of the recession, the government sector of our
country was growing, developing & rising. People took
days to believe that a revision in the pay scale of the
government employees i.e.6th Pay Commission, could
be made at a time when the entire private domain was
struggling for its static existence. After the arrival of the
6th pay commission; today an engineer in any government
organization takes home an average salary of about
Rs. 40000 per month and that too with a stability and
assured growth with time.
Now people also understand and appreciate the
importance of stability in the career they chose. Talking
about stability might not be appreciated by all. But after
the turmoil caused by recession, today expectation for
stability in life should be given priority.
All this brought about a complete inversion of the
opinion of the Indian people towards the government
sector; to the extent that a government job which was
earlier not considered to be the best option as a career
opportunity has today become one of the most sought
after options; not only for an engineer, but for other
graduates also in any sector of work.
It is true that for some time after independence (1947
- 1991), India had been a closed, inward-looking and a
highly controlled economy. Moreover, it was an import
driven economy. However, this model could not last for
long because of the inefficiencies, poor implementations.
Thanks to the then finance minister Dr. Manmohan
Singh, who in 1991 under the guidance of Prime
Minister P.V. Narasimha Rao eliminated the License
Rule (which used to lay strict government controls on
setting up and operating industrial establishments in
India); and adopted more liberal market policies and
made India open to the world for free trade and business.
It was later realized that this decision was the harbinger
of a beautiful change that happened in India. At the
same time, projects like the Golden Quadrilateral by the
then Prime Minister Atal Bihari Vajpayee, which had a
focus on developing national infrastructure, triggered
the national development still faster. These projects
Current Affairs

Issue : Oct. - Dec., 2013

eventually also resulted in an amazing increase in the

per capita income of the nation and better mobilization
of goods and services to the common man. All this has
eventually put India on the track of the fastest growing
economies of the world.
Today, India is among top 10 economies in the world
by nominal GDP and among the top 5 economies by
Purchasing Power Parity (PPP). It is one of the prominent
economies of G-20 and a member of BRICS. India is
also daring to be among the top 20 major exporters in
the world. When the entire world was troubled by the
after-effects of recession; India has shown GDP over 9%
during 2010 - 11.
Today, PSUs (Public Sector Undertakings) like Indian Oil,
Power Grid, Bharat Heavy Electricals (BHEL), National
Thermal Power Corporation (NTPC), Steel Authority of
India (SAIL), Oil and Natural Gas Corporation (ONGC)
to name a few are proving to be the global giants in
their respective domains. Most of these organizations
are listed on the Sensex and Nifty of India; which further
corroborates their excellence. All this is not without a
reason. It is we Indians who are bringing about this
change. People from different segments, and different
workforce communities, have also come together to
make all this happen. Further, I would again be correct
to say that the majority of this workforce community is
engineers. The engineering brains are creative, initiating
and implementing all of these wonders in the service of
the nation.
But, at the same time, I restate that all of this is just a
journey and not a destination. And for this journey to
continue, more engineers are required; to be a participant
in this grand transformation of India in the rising of
India.
There was a time when moving abroad and being
called an NRI was considered to be one of the biggest
achievements in life. People back at home used to feel
pride in the fact that our fellow Indians are moving to
every corner of the world and bringing good name to
the country.
But unfortunately, we did not realize that those best
brains of our country, who were moving to foreign lands
to live a life of comfort, if stayed back in the country

Current Affairs | made easY

could have done miracles to this country. They could

have made India develop a worth so that people from
across the world come to our place in search of good
opportunities.
It is rightly said that the wheels of time
move on and a change definitely happens.
There was a time when Indians moved
abroad to work in big multinational companies.
But today all the major known multinationals
across the globe want to get a chance to establish
their presence in India. And probably every
Indian, living as an NRI, has this craving desire
that, given a chance, he would definitely want to
return to his homeland.
I would again restate with strong belief that today
it is the best time to have been born in India; to
witness the sea of change happening around; to
be a part of this exciting change; to be a part of
the rising of India. I believe that today if an
Indian is not in India; he is missing a
great opportunity.
After talking of this, my conclusion is simple and
straightforward. India is developing, growing and rising I
request all the engineers to be a part of this revolutionary
rising.

For this you need to upgrade your technical knowledge as

well as your awareness domain so as to become a better
contributor now. Practically speaking, I believe that
this would be possible through the GATE (Graduate
Aptitude Test in Engineering) exam; the pathway for an
engineer to go for higher studies. Alternately, you could
directly associate with the government organizations.
This would be possible by entering into the prestigious
IES (Indian Engineering Services) or into the PSUs
(Public Sector Undertakings).
I would also add that after completing the masters
degree, an engineer is also eligible to become an
Assistant Professor in an engineering college. In the past,
a teaching job was not looked upon as a good career
opportunity. But after the turmoil faced by the private
industry (recession), compounded by the revision of
pay scale in the academic world, today it has become
the most sought after career for many engineers of this
country.
I look forward to see you as true engineer by acquiring
skillful technical knowledge and to become contributor
to Rising India and let us dream together that India
becomes super power in economy, infrastructure and
intelligence in coming days.
B. Singh (Ex. IES)
Chairman and Managing Director
Made Easy Group

Issue : Oct. - Dec., 2013

Current Affairs

EDITORIAL
Take An EDGE
Enhanced Degree of General awareness for Exam success has become the epitome of the various

critical requirements in the present day competitive examinations. General Awareness is a very
important part of the syllabuses in the Examination ranging from UPSC Civil Services Examination,
Indian Engineering Services Examination, Indian Forest Services Examination and the Public Sector
Undertakings Examinations to the various States Services Examinations. Competitive Examinations
from the General Studies areas are having questions belonging to the basics of the core subjects along
with the questions based upon the contemporary issues. In the light of this what, when, why, where, who
and how of those contemporary issues the content needs to be prepared in comprehensive yet precise
manner. The quintessential part of the coverage of the information is its relevance to the examinations
you are preparing for. Ability to distinguish between relevant and immaterial content is very important,
as they say in Sanskrit Yatha kharaschandana - bharavahi bharasya vetta na tu chandanasya
means the Ass carrying its load of sandalwood knows only the weight and not the value of sandalwood.
Once you will be able to understand the essence and spirit of the preparation, it will no longer be a load,
you will enjoy the fragrance of the knowledge and an inevitable success attached to it.
One should never forget that Success is not automatic; it has to be earned by Intelligence, Enthusiasm,
Endurance and Perseverance. For achieving success in the competitive examinations, mainly two
things are required; one is the Content and the other is unrelenting and resolute preparation. Content
is the Bow and Preparation is an arrow and both of them are required to hit the Bulls eye. We have
aimed with the help of this magazine to accomplish the target of providing a qualitative content and
the readers have the onus of preparation. Discipline, Hard work and Focused Perseverance bridges
the gap between Goals and Accomplishments Way to success may be difficult sometimes like walking
on the thin edge of a razor. The road to success may be full of obstacles, long, perilous and you will
come across a number of naysayers throughout your march towards the goal, but do not despair. As
swami Vivekananda said and I quote, Awake, Arise and Stop not till the goal is achieved.
While bringing the current edition of Current Affairs Made Easy, I can only say that this is an
Ebullient, Dedicated Guides Endeavour to show such a path that when you open the pages of this
Magazine, you will be opening even the most tightly closed doors of success.

Aniruddh Pratap Singh

Editor

A letter from THE editor

Dear Readers,
In todays fast changing world, everything has become so competitive that sometimes even better is not enough,
it requires only the best. Be it life or be it examination, it is imperative to have the best of the preparations and
hence, Timely and Timeless preparation is an essence of the success in the competitive examinations. Competitive
examinations are sometimes less about strength or intelligence and more about understanding the examination
requirements and incessant effort to unlock our potential for accomplishing the goal.
It gives me immense pleasure and satisfaction in introducing the current issue of Current Affairs Made
Easy. The very basic purpose of launching this Magazine is to be able to fulfill the requirement of various
competitive examinations in an efficient and effective way and help the aspirants achieve the desired success
in those examinations. We have tried to provide an ingenious, resourceful, authentic and relevant informations
in a most lucid, comprehensible, communicative and self- explanatory manner. With the comprehensive yet
precise coverage, This issue of the Current Affairs Made Easy will be accomplishing the requirements of the
various Competitive Examinations like Civil Services Examination, State Civil Services Examinations, Indian
Engineering Services Examination, Indian Forest Services Examination, GATE, and the various Public
Sector undertakings Examination. Despite Competitive examinations being the main focus, The Magazine
will generate awareness about the Nation and the World among the General Readers too.
In this issue of the Magazine, we have covered the wide ranging issues of National and International
importance that occurred in the last Three months or so with additional inputs in order to provide the
basic understanding of the key issues. Background material has been covered for such issues which require
greater attention keeping examination requirement in mind. All important Awards and Honours, Books and
Authors, Persons and Places, Meeting and Summits, Institutions and Organisations have been covered in
such a manner that examination requirement is successfully met. Issues of greater importance like Falling
Rupee, Uttarakhand Disaster, Food Security Bill, New Companies Bill, Syrian Crisis, Indias Look East Policy
Initiatives, Proposed creation of Telangana State, New sites from India inscribed in the world heritage list as
well as inclusion of Indian biosphere reserve on the world network of biosphere reserve, Water Conservation
Year and some other topics have been given both the objective and the Analytical coverage.
I sincerely hope that this Magazine will help you access the hidden treasure trove of success and will act
as a pathfinder through the journey towards your dream.
Wishing you all the very best and a bright future ahead.

Aniruddh Pratap Singh

Editor

Issue : Oct. - Dec., 2013

Current Affairs

Analysis: Economic Issue

Tumbling Rupee Fumbling Government

US decions to Taper Quantitaive Easing is adding fuel to the fire

ne Indian Rupee equal to

One US Dollar, if anyone
speaks, one would say it is not good
to go for day dreaming and others
would consider it as a work of
fiction. On the contrary, this was the
real exchange rate of Indian Rupee
in US Dollar in 1947 when India
became independent and Joined
International Monetary Fund (IMF).
At that point in time India pegged its
currency with Great Britain Pound at INR 13.33 to a Pound.
After that, India witnessed two highly volatile economic
situation forcing India to devalue its currency, once in 1966
and then in 1991. In 1966, Rupee was directly pegged to US
Dollar at INR 7.50 per US Dollar whereas in 1991, 1$ was
equal to 17.50 `. In 2013, the rupee have taken a historic dip
to touch the record low level and have passed 68.80 Rupee
per US Dollar level. In terms of British pound, it has crossed
the century and was traded at 106 Rupee per Pound level.
A free fall in the rupee value has been caused by both, the
Global and the Domestic Factors.

US interest rates to control inflation

in US, which made the investment
in US more attractive and safe and
the investor looking for the risk
off investment heading back to
US withdrawing their investment
from the East Asian Countries at
a time when Asia was accounted
for around Fifty percent of total
capital inflow. The hot capital from
those countries especially from
the South East Asian nations started fleeting, leading to
Financial Crisis.
Highly speculative activities by the various currency
dealers in non-deliverable forward (NDF) markets located
in Singapore, New York and London, have also contributed
in the Rupee slide. Recently released RBI report shows that
there is a strong co-relation between the NDF transactions
and Indian spot prices, especially when Rupee is feeling
the heat. The NDF market transaction normally are more
influenced by the existing cycle, for example, if offshore
prices closes higher on a day particular, then there is a
high probability that the rupee will be under more pressure
next day.

Huge volatility levels have been seen world over including

in the currencies of developing countries like Indonesia,
Brazil, Turkey, Russia, and South Africa. The Brazilian real
Skepticism and lack of confidence among the investors
has lost almost 20% of its value against the dollar
especially in the wake of apparent policy paralysis and
since the start of the year while Turkish lira
since the government entering in the election year,
is also down by around 10%. As Federal
populism is set to take the drivers seat and the
Indias
Reserve Chairman Ben Bernanke talked
anything substantial on the reforms can only be
of tapering the quantitative easing,
Finance Ministers
expected after General Elections are over.
the global financial market went into
present age is equal to
tailspin. Emerging markets have
one Dollar
Not enough intervention has been done by
grown tense as some see the situation
the RBI in stemming rupee slide. RBI doesnt
Narendra Modi
a reminiscent of 1997-99 East Asian
have much liberated room for the intense
financial crisis which was triggered
intervention too as it is having forex reserve
There is no need for
after similar sequence of events
sufficient to fulfill import requirement for
excessive and
taking place. The US economy goes
around seven months only.
into recession in early 1990s, the US
unwarranted pessimism
Federal Reserve Bank goes for the
RBI has also been sending confusing signals
- P. Chidambaram
quantitative easing, the US economy
albeit inadvertent regarding the monetary policy.
slowly recovers, and then Federal
First RBI tightened its monetary policy to impede
Reserve under Alan Greenspan raises the
the forex market volatility. It increased the marginal

Current Affairs

Issue : Oct. - Dec., 2013

12

Current Affairs | made easY

standing facility rate by 200 basis points and then it was

followed up by further tightening measures. But when RBI
saw unabated decline in Rupee value, it hinted of reversing
the tightening policy.
Appreciation or Depreciation in the values of a currency
can have positive or negative bearing on an economy
depending on its structural composition. Indias import bill is
highly inelastic especially crude oil is the biggest and highly
inelastic component. India have little room to manoeuvre its
import side, calls for the structural reforms in the economy
paving the way for promotion of exports and attracting
the foreign investment by bringing much awaited policy
reforms. Declining rupee is not only hurting importers but
also making life tougher for the people willing to go abroad
for educational, medical and tourism purposes. Decline in

Impossible Trinity
In the month of July, 2013, RBI governor D. Subbarao,
in his statement on the review of the monetary
policy said that India is currently caught in a classic
impossible trinity.
Impossible Trinity also sometimes called as Trilemma is a hypothesis in the international economics
which says that at a given point in time a country cannot have all three A fixed exchange rate, Free capital movement and An independent monetary policy
existing together. Whichever country try to have this
impossible trinity, will surely not able to do that.
the value of Rupee directly or indirectly contributes in fuelling
the domestic inflation. Raw material and Technological
know how import starts becoming dearer thus stifling the
GDP growth. Less attractive growth numbers and lackluster
orientation towards bringing economic reforms indicating
policy paralysis makes a cocktail of problems and thus
hampers the incoming foreign investment opportunities.
Indias degrading Balance of Payment position and
burgeoning trade deficit is rubbing salt into the open
wound. Declining rupee contributes in making imports
costlier which contributes in pushing inflation up, which in
turn leads to less than expected real return on investment
which lead to flight of the hot capital which increases the
demand of foreign currency leaving the country which
further depreciate the value of Rupee, creating a big chain
of event creating dominos effect.
As if declining GDP growth and Industrial Production
numbers, surging current account deficit, and populism

Current Affairs

Issue : Oct. - Dec., 2013

over real economics in the elections vicinity were not

enough, unsatiated appetite for the metals of gold and
silver is making the situation even more precarious. Gold
is the second highest constituent of Indias total imports
after petroleum product. Indias Gold import in the first three
quarters of the current financial year was worth nearly $38
billion and the total value of gold imported in 2011-12 was
around $56.5 billion. Petroleum products and gold import
amounts around 70 percent of the total trade deficit. Global
factors can only be considered as one of the other various
factors responsible for this steep decline.
The Biggest chunk of Foreign Investment in India comes via
the Portfolio Investment route, an investment which is very
capricious. This hot money leaves the country fast either it
finds a better alternative outside or whenever it sees any
problems looming large on the economy. For making India
more attractive destination for Foreign Direct Investment,
Indian Government needs to remove the roadblocks. As
per the FDI Regulatory Restrictiveness Index prepared by
the OECD Group, which measures statutory restrictions on
foreign direct investment in 55 countries, including all OECD
and G20 countries, India is ranked fifth most restrictive
economy among the countries studied in the report.
The Finance minister of India, rather than seeking RBI
intervention and appealing citizens to restrain from buying
gold shall focus more on taking certain steps which can
enhance more confidence among the foreign investors.
Government of Indias decision to hike customs duty on gold
has failed to curb the import of gold rather it has brought
more speculation in the trade of gold. Gold importers
anticipating further decline and more stringent steps have
started importing more gold. Government shall work on
making a cash-based settlement of gold contracts, like it
exists in case of crude contracts, in place of delivery-based
future contracts which drives gold imports.
Innovative financial instruments which can provide net
positive return after discounting for inflation is the need
of the hour. Measure like creating more awareness about
availability of government and corporate bonds and
Inflation linked government securities and instruments shall
be taken to create alternative investment opportunities.
Gold-backed investment instruments shall be promoted
in place of investing in physical gold so that investors can
easily hedge against inflation and it would not be creating
burden on the imports. But even for the informed investors,
these instruments sometimes appear to be esoteric and the
investors shy away of those instruments primarily because

14

Current Affairs | made easY

of the complexities in understanding them. Serious and

intense investor awareness campaign along with the
aggressive marketing of those financial products can be of
some help.
Higher level of inflation has rendered real interest rates
negative. RBI should be looking for increase in the interest
rate even if it is meant for the temporary duration.

Some of the Actions taken by the Government and

the RBI to Stem the Rupee fall:
Finance Minister P. Chidambaram is working overnight to
stem the unprecedented fall which is also affecting stock
markets negatively. He is meeting with foreign institutional
investors (FIIs) and with the heads of the various Indian
banking companies. Finance Minister is trying to convince
the foreign investors by reiterating the governments
commitment of not imposing any capital controls including
controls on repatriation. He also said that the rupee was
undervalued and the current account deficit could
be smaller than the previously estimated $70 billion.
Government is mulling over certain steps like going for the
direct funding of crude oil purchases to be made by the
refiners. Finance minister said Government is committed to
contain the fiscal deficit in 2013-14 at 4.8 percent. He also
said that the Current Account Deficit will be contained at
USD 70 billion and will be fully and safely financed.
RBI stepped in directly by starting to sell dollars which not
helped Rupee gaining some ground since RBI started it
after the close of the market it also has positive influence
in lowering rates at the offshore non-deliverable forward
(NDF) markets. RBI has put the restriction with respect to
the amount an Indian citizens and companies can invest
abroad. This will reduce pressure on the Indian Rupee.
RBI has simplified rules governing investments by nonresident Indians (NRIs) in portfolio investments like equities
and debt so that inflow of foreign currency can be attracted.
RBI has also done away with the unique code for branches
and has asked banks to administer the PIS scheme for
NRIs as per their convenience. Earlier, under the Portfolio
Investment Schemes (PIS) for NRIs, banks were given
unique code for each branches, making it cumbersome for
them to administer the scheme.
RBI have also taken the steps to ban the imports of gold
coins and medallions. Along with this, the government of
India have increased duty on the import of gold and silver in
an attempt to counter the gargantuantly increasing current
account deficit. The import duty on gold was hiked to a

Current Affairs

Issue : Oct. - Dec., 2013

record 10 percent, the third such increase in eight months,

while duty on silver was hiked from 6 percent to 10 percent.
The excise duty on gold bars was hiked to 9% from 7%.

Actions Desired to Stem the Rupee Fall

Growth: Growth is the panacea for all economic ills. Growth
means more production of commodity and services, and
that means more employment opportunities and increased
purchasing power. Increase in total production at factor
cost means increased level of real return from investment
and that will lead to instilling confidence in the Economy
not only in the minds of domestic entrepreneurs but also
will give assurance to foreign investors who would also
be then willing to invest more in India. Inbound foreign
investment will stay for long in India only If Indian Economy
registers good growth.
Exports Promotion: Exports brings that amount of foreign
exchange which do not owe any liability in comparison to
foreign investment especially the foreign portfolio investment which is a hot capital. Foreign Portfolio Investment
have a tendency of fleeing the country whenever it finds
any better alternative elsewhere in the world. Exports Promotion shall be the core focus of Indias Foreign Policy.
Exports not only brings better forex it also generates employments opportunities in the country and contributes
positively in the growth of the country.
Reducing Imports: Government shall take actions to reduce
the import of non-productive and non-essential items by
taking rational decision of duty hikes. Policy of importing
items like crude oil products shall be revisited. India should
try to import crude oil more from those countries like Iran
which are ready to accept payments in terms of Indian
Currency or from those countries which have provide more
flexible payment options so as it puts less pressure on the
Indian Currency in the adverse conditions.
Infrastructure Development: A countrys economic health is
directly affected by the level of infrastructure it has. Industries of Coal, Steel, Cement, Electricity, Refineries, Natural
Gas, Fertilizers and Crude Oil need to be given due care
and attention. Energy is considered as one of the most fundamental drivers of economy and level of per capita electricity consumption is considered as one of the benchmarks for
understanding the growth level. India is lagging far behind
in those areas. India is having decent level of coal reserves
but Coal India Limiteds existing capacity of coal mining is
not able to fulfill the domestic demand. Imported coal is
causing forex problems. Government should seriously look
into clearing the allocation of coal mines as well should also

16

Current Affairs | made easY

work on increasing CILs mining capacities. Various development project stalled because of administrative and regulatory hurdles should be cleared in a fixed timeframe.
Policy Reforms: Policy paralysis has badly hurt Indias image
as a better investment destination. Long pending economic
reforms in the various sectors are the need of the hour. It is
a high time to clear the long pending reforms in Insurance,
Pension, Healthcare, Defence and other areas, if India is seriously looking for foreign investors to be investing in India.
Reducing Trade Deficit: Indian govt. should draft the policies to
reduce their trade deficit with the countries like China. Having
right kind trade negotiations making Chinese investor invest
India will also help in addressing current account deficit.

Fiscal Prudence: Fiscal Deficit shall be kept under check.

Government should work on reducing non-productive
expenditures and shall try to bring revenue deficit to zero
level.
Economics over Populism: There is a huge difference
between social welfare and populism. Good Economic
policy only helps in executive social welfare oriented
policies. The policies brought to win over votes in the
election years can in no way termed as the welfare actions.
These populist policies dents the government exchequer
and balloons the Fiscal Deficit and thus bring economy
into jeopardy. Government policies should aim at building
long term human capabilities by investing in Education,
Health, Nutrition and Skill development.

Task Force on Currency Swap Arrangements and Trade

Keeping the growing current account deficit and the trade deficit problem in focus, a need has been felt to
examine the role of Currency Swap Arrangement/Agreements in order to suggest a possible mechanism to address
the issue. Government has decided to constitute a Task Force on Currency Swap Arrangements/Agreements. The Task
Force may submit its recommendations to the Department of Commerce in four weeks.
The Task Force will have the following Terms of Reference:

To examine various types of Currency Swap Agreements/Arrangements and their implication for Indias trade and
financial system;

To study the pros and cons of Currency Swap Agreement/Arrangement for Indias trade;

To explore the possibility of Currency Swap Arrangement/Agreement between India and identified countries and
make recommendations accordingly.
A currency swap is a foreign-exchange agreement between two institutions to exchange aspects (namely the principal
and/or interest payments) of a loan in one currency for equivalent aspects of an equal in net present value loan in
another currency; see foreign exchange derivative. Currency swaps are motivated by comparative advantage. A
currency swap should be distinguished from a central bank liquidity swap.
It is worth mentioning here that India has currency swap agreements with Bhutan and Japan worth $100 million and
$15 billion respectively. Under a swap agreement with Japan, India can have an access to US Dollar upto the agreed
limit in case of crisis situation, which India can return back on a later date as agreed upon.
China is also interested in having a currency swap arrangement with India. It is noteworthy that ASEAN+3 countries
(ASEAN Countries, China, japan and South Korea), in the wake of Asian financial crisis 1997-1999, have signed a
currency swap arrangement known as Chinag mai Initiative. It draws from a foreign exchange reserves pool worth
US$120 billion and was launched on 24 March 2010. That pool has been expanded to $240 billion in 2012.

What is Currency Swap?

Currency swaps are normally used by banks, multinational corporations and institutional investors. Similar transaction
but normally at bigger level can take place between various countries under the Currency Swap Arrangement.Currency
swaps are mainly the over-the-counter (Outside the Exchange) derivatives. They help in reducing foreign
borrowing costs and along with this could be used as tools to hedge exposure to exchange rate risk.

Current Affairs

Issue : Oct. - Dec., 2013

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Currency Swap involves the exchange of principal and interest in one currency for the same in another currency.
The two parties agreeing for a currency swap could arrange to swap currencies by establishing an interest rate, an
agreed upon amount and a common maturity date for the exchange.

Analysis : Government Policy

National Food Security Bill

Balance between Economic, Social and Environmental requirement is a key to sustainable
Survival. Good Economics and Social Welfare shall co exist

mbitious project of UPA II and a brainchild of UPA

Chairperson Sonia Gandhi, The National Food Security
Bill, 2013 was passed by Lok Sabha on 26th August 2013
after a full day long debate. Principal opposition party, BJP
also voted in favour of the bill. The bill considered by many
as a game-changer, provides for a legal entitlement to 67
per cent population (upto 75% of the rural population and
upto 50% of the urban population) for getting subsidized
food grains under the Targeted Public Distribution System
(TPDS). More than 80 crore of the Indian Population will be
covered by the bill.
It can be recalled that, with a view of ensuring food and
nutritional security to the people of India, President of India
in July 2013, has promulgated the National Food Security
Ordinance, under the powers conferred upon by the article
123 of the constitution. The ordinance was supposed to be
replaced by a bill in the Monsoon session of Parliament to
make it a law as the article 123 of the constitution requires
an ordinance promulgated by the President shall be
passed by both the houses of parliament within six weeks
of their first sitting.
The Food Security Bill has special focus on the needs of
poorest of the poor, women and children. In case of nonsupply of food grains, people will be having the right to
get the Food Security Allowance. The bill also provides
for grievance redressal mechanism and penalty for
noncompliance by public servant or authority. Once fully
implemented, this will be the largest food security scheme
in the world.

Current Affairs

Issue : Oct. - Dec., 2013

Important Features of the Ordinance:

Coverage of two thirds population
The food ordinance will cover upto 75% of the rural
population and upto 50% of the urban population. The
eligible population will have uniform entitlement of 5 kg
foodgrains per month per person at highly subsidized
prices of Rs. 3, Rs. 2 and Rs. 1 per kg. for rice, wheat and
coarse grains respectively . It will entitle about two thirds of
our 1.2 billion population to subsidised foodgrains under
the Targeted Public Distribution System (TPDS).

Antyodaya Anna Yojana to continue

The poorest of poor households would continue to receive
35Kg foodgrains per household per month under Antyodaya
Anna Yojana at subsidized prices of Rs 3, Rs 2 and Rs
1. It is also proposed to protect the existing allocation of
foodgrains to the States/UTs, subject to it being restricted
to average annual offtake during last three years.

States to identify the Eligible households

The State wise coverage of population will be determined
by the Central Government but the work of identification
of eligible households within the States/UTs is left to the
concerned States/UTs. The concerned States/UTs may
frame their own criteria or use Social Economic and Caste
Census data, if they so desire, in order to identify the
eligible households.

Focus : National Issue

United India Divided States

Welfare of the States concerned and the Nation as a whole in the backdrop of Unity and integrity of India shall be the most important basis for creation of a state

Telangana to be 29th State

It is a marriage of an innocent girl with a mischievous
man, the statement was quite often quoted by the various
people in support of creation of Telangana state, attributing
the statement to Jawahar lal Nehru who purportedly made
this statement in Nizamabad after the merger of Hyderabad
into Andhra to form greater and united Andhra Pradesh.
This merger itself is considered as the Raison dtre of the
Telangana Movement under which there have been demand
to reverse the merger to form a new state of Telangana.
States reorganization Commission appointed in 1953
also had expressed apprehensions about the immediate
merger. The creation of Vishalandhra (Andhra Pradesh)
appeared to have been more of a passionate decision. One
of the principal causes of opposition of the United Andhra
Pradesh was the apprehension felt by the educationally
backward people of Telangana that they may be swamped
and exploited by the more advanced people of the coastal
areas. But the then Central Government headed by J L
Nehru took a decision to merge Andhra state and Telangana
to form Andhra Pradesh state on 1 November 1956. Under
the merger plan, Telangana region was provided certain
safeguards in the form of Gentlemans agreement. But the
opposition by many continue unabated.

on Telangana issue, headed by Justice B.N. Srikrishna.

The committee submitted its report 30 December 2010.
Committee suggested following six options after analysing
the separate statehood issue on the basis of existing
level of development in the various regions of Andhra
Pradesh, Distribution of economic resources, Health and
Education situation; Water Resources, Irrigation and Power
Development; Public Employment Issues, Issues concerning
Hyderabads position and the Socio-cultural aspects.

Committee suggested following options:

1.

Maintaining Status Quo;

2.

Bifurcation of the State into Seemandhra and Telangana

with Hyderabad as a Union Territory and the two States
developing their own capitals in due course;

3.

Bifurcation of State into Rayala-Telangana and coastal

Andhra regions with Hyderabad being an integral part
of Rayala-Telangana;

Finally after number of valuable lives lost and the huge

financial losses in terms of loss of enormous number of
working days in Andhra Pradesh, Union Government
has taken a decision to carve out the state of Telangana.
Proposed Telangana will comprising of 10 districts.
The districts which may become the part of the new
Telangana state may be the districts of Hyderabad,
Adilabad, Karimnagar, Mahbubnagar, Medak, Khammam,
Nizamabad, Warangal, Nalgonda and Rangareddy.
Hyderabad may be declared as the joint capital of the
two states for at least next 10 years, by that time a new
Capital may be developed for the Andhra Pradesh sans
Telangana. Considering the proposed areas, telangana
may a population of around 3.5 crore. It may have 17 Lok
Sabha seats and 119 assembly seats.

Srikrishna Panel on Telangana

The Central Government-appointed five member committee

Telengana

Issue : Oct. - Dec., 2013

Current Affairs

Focus : Global Crisis

Syrian Crisis
Illegitimate and Unilateral action of West in Syria will only magnify the crisis in Middle East

Syrian Civil War

There seems to be an inevitable situation of
western military action led by US and the Major
European Countries against Syrian President
Bashar Assads regime, especially in the wake
of the recent incidence of alleged chemical
attack which has been openly called by US as
a handiwork of Assads regime. On 21 August
2013, around 1000 -1500 people were killed
when an alleged Chemical Weapon attack took
place in Jobar, Zamalka, Ain Tirma, and Hazzah
in the Eastern Ghouta region, in Rif Dimashq
Governorate of Syria.
After the alleged chemical weapons attack, the
UN investigators which wanted to visit the site
were initially not allowed by Syrian government.
But later they were allowed. As they were
approaching the affected sites, they were being
fired upon by unidentified personnels. Later Syria
asked them to leave the area citing the security
concerns. UN Investigators have said that they
have gathered valuable evidence before leaving
the areas, although they were not allowed to visit
all areas they wanted to visit.
Algerian national Lakhdar Brahimi, currently
serving as the United Nations and Arab League
Special Envoy to Syria, in response to the attacks
have said that although there are certain evidences
that suggests that some kind of substance was
used in Syria, but any military strike in response
to this incident must only take place if it is having
an approval from 15 member UN Security Council
which has US , Russia, Britain, China and France
as the permanent members and each of the
permanent members have the veto power.
The United States, France, the United Kingdom,
Israel, Sweden, Turkey, Canada, and the Arab
League held Assad government responsible
for carrying out the attack. While officials from
Russia and Iran have said that the attacks must

International Agreement and Group

Against Chemical Weapon
Chemical Weapon Convention
The CWC aims to eliminate an entire category of weapons of
mass destruction by prohibiting the development, production,
acquisition, stockpiling, retention, transfer or use of chemical
weapons by States Parties. States Parties, in turn, must take
the steps necessary to enforce that prohibition in respect of
persons (natural or legal) within their jurisdiction. Full name
of the convention is Convention on the Prohibition of the
Development, Production, Stockpiling and Use of Chemical
Weapons and on their Destruction.
A unique feature of the CWC is its incorporation of the challenge
inspection, whereby any State Party in doubt about another State
Partys compliance can request the Director-General to send
an inspection team. Under the CWCs challenge inspection
procedure, States Parties have committed themselves to the
principle of anytime, anywhere inspections with no right of
refusal.
The Organisation for the Prohibition of Chemical Weapons
(OPCW) is the implementing body of the Chemical Weapons
Convention (CWC). CWC was signed on 13 January 1993 and it
came into effect on 29 April 1997. As of August 2013, It has 189
Member States including India. India is a founder member of the
convention and have achieved 100% destruction of Chemical
Weapons Stockpile. Israel and Myanmar have signed but have
not ratified the Convention. Angola, Egypt, North Korea, South
Sudan and Syria are the states which have neither signed nor
acceded to the Chemical Weapons Convention.

The Australia Group

The Australia Group (AG) is an informal forum of countries which,
through the harmonisation of export controls, seeks to ensure
that exports do not contribute to the development of chemical
or biological weapons. The group has 42 members.
India is not a member of the Australia Group.

Issue : Oct. - Dec., 2013

Current Affairs

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Current Affairs | made easY

With respect to Syrian Civil war, India has been treading a very cautious path. India have always said that an unilateral
action in Syria will not resolved the issue, rather it will exacerbate the problem and the repercussions will not be restricted to
the boundaries of Syria as it may engulf entire middle east region. Earlier in May 2013, India abstained along with 58 other
countries from voting on the Arab-backed, US supported resolution on Syria in the UN General Assembly, which called
for a political transition, a resolution which was opposed by Russia. India is of an opinion that only Syrian people have a
right to decide about their government and its leadership. Any type of Military Intervention in Syria may had a catastrophic
impact on the middle east from where Indias has a big import of Crude Oil, and this situation may lead to spiraling Oil
Prices, which will dent the Indian Economy. First Gulf War in 1991 had a similar impact when India faced a severe Balance
of Payment crisis.

Syria
Syria, located in Western Asia, shares border with Lebanon and the Mediterranean Sea to the West, Turkey to the north,
Iraq to the east, Jordan to the south and Israel to the southwest. Kurds, Armenians, Assyrians, Turks, Christians, Druze,
Alawite Shias and Arab Sunnis are the
main ethnic and the religious group
on Syria. Around 60 percent of Syrian
are Sunni while around 13 percent are
Shia. Christians accounts for around 10
percent of the population
Damascus is the capital city of Syria.
Aleppo is the largest city of Syria. The
modern Syrian state was established
after the First World War as a French
mandate under the League of Nations
mandate. It became independent in
April 1946. For a brief period of 3 years,
Syria and Egypt established a Union
called United Arab Republic.
Bashar al-Assad is the present president
of Syria since 2000. He succeeded his
father Hafez al-Assad who was headed
Syria from 1970 to 2000.
Since March 2011, Syria is witnessing
a civil war, between the government
and the opposion group which are
against Assad and the neo-Baathist
government, in which tens of the
thousand people have been killed.
Opposition group together have formed
an alternative government called as the
Syrian National Coalition.
Syria is a lower middle income country
and its economy is mainly dependent
on the oil and agriculture sectors.
Syria

Current Affairs

Issue : Oct. - Dec., 2013

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Focus : International Relation

PM Visits to Japan and Thailand

Reasserting Indias Look East Policy with Japan and ASEAN being the Epicenter

PM Visit to Japan and Thailand

PM Manmohan Singh, from May 27, 2013 to May
31, 2013 was on a trip to the East to visit important
friend and partner countries of Japan and Thailand.
PM described those visits as Highly Successful.
Manmohan Singh who was Indian finance minister
when the then PM Narasimha Rao charted out Indias
Look East Policy, said that Look East policy is paying
rich dividends and will continue to do so.

Japan Visit
His visit to Japan was the Annual Summit between
the two countries, which got deferred last year due
to impending general election in Japan. Japan is a
key regional and global partner for India. PM visited
Japan at the invitation of the Prime Minister of Japan, Mr.
Shinzo Abe.
PMs Visit to Japan was very important in the backdrop that
in the redefining of the Indias Look East Policy Japan is
being given the place in the centre. The fact that India and
Japan are the 2nd and the 3rd largest economies of Asia, a
strong multilateral cooperative attitude of the two countries
can pay rich dividend in the various fields. PM Shinzo Abes
landslide victory in Japans Upper House elections in July
augurs well for India especially in the wake of fulfilling a
vigorous economic and security agenda.

PM Manmohan Singh with Japanese Premiere Shinzo Abe

invitation to their Majesties the Emperor and the Empress
of Japan to visit India.
The two Prime Ministers also noted the successful
outcomes achieved during the2 plus 2 dialogue, the
Foreign Secretary level Dialogue, the Foreign Office
Consultations, the Defence Policy Dialogue, the Trilateral
Dialogue between India, Japan and the United States, as
well as other key interactions on various areas including
cyber, counter-terrorism and economic partnership. The
two Prime Ministers welcomed the launch of the bilateral
Maritime Affairs Dialogue, the first meeting of which was
held on 29 January, 2013 in Delhi.

The two Prime Ministers expressed satisfaction that the

The two Prime Ministers held extensive talks on bilateral,
first bilateral exercise between the Indian Navy (IN) and
regional and global issues on 29 May, 2013 in Tokyo.
the Japan Maritime Self-Defense Force (JMSDF) was
Commemorative events were held to celebrate the 60th
held in June 2012 off the coast of Japan and decided to
anniversary of the establishment of diplomatic relations
conduct such exercises on a regular basis with increased
between the two countries in 2012. The two Prime Ministers
frequency. They decided to establish a Joint Working
reaffirmed that India and Japan, as the two largest
democracies in Asia sharing such universal values
as freedom, democracy and rule of law, enjoy very
Recent International Visits of PM
close and wide-ranging relations. They expressed
To Japan and Thailand : (May 27- 31, 2013 )
their resolve to further consolidate and strengthen
the Strategic and Global Partnership between India
To Germany : (April 10-12, 2013 )
and Japan in the years ahead, taking into account
To Durban for the BRICS Summit : (March 25-29, 2013 )
changes in the strategic environment.
To Cambodia for the India-ASEAN Summit : (Nov. 18-20, 2012)
Prime Minister Abe expressed his appreciation for the

To Tehran for NAM Summit : (Aug. 28-31, 2012 )

Issue : Oct. - Dec., 2013

Current Affairs