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On the brink of starvation to death

SEPTEMBER 2011, XVII Year, Issue No. 09

A collective failure at Horn of Africa


Africa, the poorest and the economically the most backward segment of the globe is now providing opportunities for the rich people of the world to become richer. The entire world, including the developed, emerging and developing, are moving fast towards this vast unhindered, unexplored, unexploited region of the world. Most of the nations have scrambled for concessions in African continent with sheer motives of making outright profits for them. But the big powers have always neglected the pains and underdevelopment of the African countries. The Africans have faced incessant ethnic violence and political instability ...

CHIEF EDITOR Vivek S Raj ASSOCIATE EDITOR Vinita S Raj EDITOR AND BUREAU CHIEF R K Singh, Ex-civil Servant EXECUTIVE EDITORS Abhinav Mathur, Nitesh Khabrani EDITOR (HON.) Dr. Apporva ASSISTANT EDITOR Vishi S Raj EDITORIAL BOARD Manish Singh, Prof. R K Singh, Saurabh Agrawal, M.S. Yadav, Rohini Sarkar, Gaurav Malhotra Subscription Queries: 09871220001

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SPECIAL FEATURE

2nd India - Africa Forum Summit

Strengthening Look Africa policy


It was the colonial heritage which compelled India to look West since the dawn of independence. When the curtains were down on the Cold War, the nation realized the importance of looking East. The new millennium ushered in new hopes for the country with many international agencies and analysts predicting a superpower stature for it by the middle of the millennium. And yet, the realization of such hopes would first need the addressing of certain challenges faced in an increasingly inter-connected world. To address such ...

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125 126 129 130 130 131 132 138

India - US strategic talks: Visit of Hillary Clinton to India India and Pakistan relations: Visit of Hina Rabbani Khar India and Pakistan relations: Post Osama equations India, China and Bhutan Pakistan, China and India India, China and Nepal India, Myanmar and China Pakistan, Afghanistan and India India, Bangladesh and Myanmar India and Maldives India and South Korea India and Myanmar: Indias Thailand Elections, the new PM Yingluck Shinawatra Afghanistan Troop: withdrawal starts Turkey: Erdogan wins Yemen: Vacuum looming large Libya: United States recognizes rebels At Brussels: Euro Zone Summit South Sudan: Joins UN as 193rd member G20 Agriculture Ministers Meet: on Food Security Issues

10 19 112 120 121 121 122 122 123 124 124

approach towards Suu Kyi India - New Zealand relations Towards FTA India and Kyrghyzstan: Bio-medical research centre India and Turkey Joint Naval: Exercises in A. Sea India and Colombia: Signed double tax avoidance treaty India and Sri Lanka: Re-building Kankesanthurai port India and Poland Relations: Visit of Radoslaw Sikroski India and Mauritius on revised DTAA

CURRENT INTERNATIONAL

27 29 29 30 30 31 31 32

St. Petersburg: International Economic Forum 2011 32 At Bangkok: 5th Asia-Pacific Urban Forum, 2011 33 5th Conference of SAARC: Speakers and MPs 33 Morocco: Towards Constitutional Monarchy 34 Vietnam:Truong Tan Sang nominated 3 4 LAquila Summit, July 9, 2009 137 Darjeeling Hills get more power 135 NSG Guidelines Jeopardizing Indian prospects 136

CURRENT NATIONAL DEBATE

Towards better governance: Changing facets of Judicial Activism in India 132 Gorkhaland agreement inked
35 SPECIAL SUPPLEMENT ON STATISTICS 55 CURRENT ECONOMY 77 SHORT NEWS 94 CURRENT NATIONAL 99 CURRENT SCIENCE AND TECHNOLOGY

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On the brink of starvation to death

A collective failure at Horn of Africa


"There is a new economic growth story emerging from Africa. Africa possesses all the prerequisites to become a major growth pole of the world. The India-Africa partnership is unique and owes its origins to history and our common struggle against colonialism, apartheid, poverty, disease, illiteracy and hunger." Indian PM

frica, the poorest and the economically the most backward segment of the globe is now providing opportunities for the rich people of the world to become richer. The entire world, including the developed, emerging and developing, are moving fast towards this vast unhindered, unexplored, unexploited region of the world. Most of the nations have scrambled for concessions in African continent with sheer motives of making outright profits for them. But the big powers have always neglected the pains and underdevelopment of the African countries. The Africans have faced incessant ethnic violence and political instability leading to mass hunger and poverty. The role of United Nations, US and other big powers in this region has been far from satisfaction and needs to be streamlined through instrospection. The present crisis in the Horn of Africa, in which more than 12 million Afri-

cans, mainly pastoralists in the dry lands of Somalia, Ethiopia, Kenya, Uganda and neighbouring countries, are at risk of starvation after two failed rainy seasons. It is a major challenge for every leading nations, NGOs, international organizations, private sector investment and grassroots initiatives to get rid of the insurmountable conditions of this region. Thousands of Somalis have fled to the neighbouring Kenyan camp of Dadaab, which was originally built for 90,000 people is currently hosting more than 440,000 refugees and in this hunger more than 3.5 million people may starve to death. The World Food Programme says it cannot reach 2.2 million Somalis who live in territory controlled by al-Shabab in south-central Somalia. According to the UN report some 3.7m people in Somalia are dependent on foreign food aid distributed by their World Food Programme. The political instability, extreme poverty, malgovernance, global warming - all have made the Horn of Africa, Yemen and beyond as the most vulnerable region of the world. The world efforts have wasted trillions of dollars in sending peace keeping forces and military operations but no concerted effort was made to help the region to strengthen the pastoralist economies in the face of these environSEPTEMBER 2011, XVII Year, Issue No.9
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mental threats. A proper roadmap was never developed by the world institutions like IMF, World Bank, IDA, IFC, etc. The UN and other aid agencies have described the current situation in the East and Horn of Africa as the worst drought in 60 years and the "worst humanitarian crisis in the world," but have done nothing significantly in this regard. The UN always tried to rely on the politics of USA to meet the demands of the region. Moreover, the "traditional donors", including the US and the EU, have fallen far short of promises they made at the G8 summit in L'Aquila, Italy, in 2009 to assist smallholder farmers, including pastoralists. I firmly believe in one thing that nothing succeeds hunger. Hunger is the most pathetic, brutal and tormenting experience of life. The history has categorically told that without proper economic stability, political stability cannot be achieved. The brutal and inhuman politics amidst hunger is the most unpardonable act of a living being. Somalia has lacked an effective government since before the famine of the early 1990s. Most of southern Somalia is controlled by the al-Shabab Islamist group, which has prevented most international aid organisations, including the World Food Programme, from operating in its areas two years ago. It is unfortunate when the militants of al-Shabab are trying to stop men from joining the tens of thousands of people who are fleeing the parched regions of southcentral Somalia that the fighters control. It has been reported that in many cases, the al-Qaida-linked militants are also intercepting the men and even they started indiscriminate killings. It has to be noted that the famine in the Horn of Africa has threatened al-Shabab's hold on areas it controls, with the militants fearing this disaster will drive away the people they were taxing, forcing to work and conscripting into military service. The World Food Programme has admitted that since 1992, the proportion of short and long-term food crises that can be attributed to human causes has Civil Services

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more than doubled, rising from 15 percent to more than 35 percent. All too often, these emergencies are triggered by conflicts. Since 2004, conflict in the Darfur region of Sudan has uprooted more than a million people, precipitating a major food crisis -- in an area that had generally enjoyed good rains and crops. In war, food sometimes becomes a weapon. Soldiers will starve opponents into submission by seizing or destroying food and livestock and systematically wrecking local markets. Fields and water wells are often mined or contaminated, forcing farmers to abandon their land. When conflict threw Central Africa into confusion in the 1990s, the proportion of hungry people rose from 53 percent to 58 percent. By comparison, malnutrition is on the retreat in more peaceful parts of Africa such as Ghana and Malawi. The povertystricken do not have enough money to buy or produce enough food for themselves and their families. In turn, they tend to be weaker and cannot produce enough to buy more food. The Report further says that poor farming practices, deforestation, overcropping and overgrazing are exhausting the Earth's fertility and spreading the roots of hunger. Increasingly, the world's fertile farmland is under threat from erosion, salination and desertification. In Ethiopia, high inflation and fast-rising food prices have also forced people out. The Report has clearly indicated that a big hunger crisis was inevitable under these conditions and nothing was done by the top people, nations and companies of the world to prevent such a disaster. And now the international organizations and communities are asking for donation and aid to support the region to get out of the vicious cycle of hunger and starvation. It is really perturbing to note that as per UN Report of 2010, up to half the food aid sent to the hungry millions in Somalia never makes it to those who need it most and instead the aid ends up in the hands of corrupt contractors, radical Islamic militants and local United Nations staff. It has been confirmed by the report that much of the 340 million a year in food aid is held to ransom by a corrupt cartel of Somali distributors who then sell it SEPTEMBER 2011, XVII Year, Issue No.9
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illegally and use the funds to buy weapons. The UN report says that fraud is widespread with about 30 percent of aid skimmed by local partners and local World Food Program personnel. A further 10 percent is taken by the ground transporters and 5 to 10 percent by the armed group in control of the area where it is to be distributed. It is unfortunate that report was not considered properly by the enforcing agencies and as a result of this, the situation further aggravated to this level of agony and despair. In fact if such reports were coming, there was no logic to continue the same channel of aid and food supply and the top nations and UN agencies must have strived for an alternative option to deal with the situation. Besides, blaming the UN agencies, USA and China has to also moral responsibility for such a mess and mismanagement. The dominant livelihood in the Horn of Africa has long been herding. The world agencies have done virtually nothing to improve their traditional system and without a proper roadmap for a green revolution in the region nothing significant could be achieved. Oxfam has accused several European governments, including France, Italy and Denmark of "wilful neglect" of a crisis and says that of the $1bn (619m) needed to avert a humanitarian disaster only $200m had been pledged. This is truly shocking from all perspectives. If not tackled properly, the entire world is going to be affected. Somalia which is now known as one of the most dangerous places in the world with pirates roaming off the horn of Africa and hijacking cargo ships that are held for ransom. The incidents of piracy would be increased beyond the level of control and the trade through this important route may get further 8

threatened. Under such a sordid state of nature, the entire world should collectively fight against the man-made natural disaster in the region. All the sovereign nations, NGOs, international organizations and communities along with corporate must come forward and honestly help the humanity from dying in undignified and horrible manner. In the world of globalization,

when Africa is opening avenues for the richer nations and their corporates, if people are going to die in such manner then this would be the most unethical, immoral and painful portrayal of leading powers in the world. A combination of long and short term strategies have to be evolved to meet this trying and hard moment in that region. Besides controlling the activities of militants, no plan is going to be successful. At the same time, proper roadmap for agricultural development has to be chalked out. In this regard, a solid shift to green technologies in world farming is vital if endemic food crises are to be overcome and production boosted to support the global population. And as a first step, governments and international agencies should focus on boosting small-scale agriculture in developing countries with support services like rural roads and sustainable irrigation. The UN survey has said that food security must now be attained through green technology so Civil Services

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tial if growing environmental and land degradation was to be halted. The survey correctly highlighted that achieving food security through "a truly green agricultural revolution" would provide a long-term solution to hunger and malnutrition and ease price volatility while protecting the environment. It is distressing to see the glaring disparities between the northern and southern Africa and this disparity is going to be further widened by the ongoing effects of globalization in Africa through the massive expansion of the trade activities and investment in services sector. And all the leading agencies including UN, AU must come forward to surmount these imbalances. But the main question is that who will do these things to ward off hunger of this magnitude. Those who are meant to perform are preaching, then what will happen to the world. I am still in search of the answer along with those 12 million people who are facing the test of being human. as to reduce the use of chemical inputs - fertilizers and pesticides - and to make more efficient use of energy, water and natural resources. In this regard, a sharp move away from large-scale, intensive systems of agriculture was essenSecond India - US strategic talks

(Vivek S. Raj) dialogue was held in June 2010 on the eve of the historic Obama visit to India. The visit of US Secretary of State, Hillary Clinton to India and her meeting with Indian External Affairs Minister, S.M.Krishna on 19th July 2011

Visit of Hillary Clinton to India


he India- US civil nuclear agreement 2005, signed between Indian Prime Minister, Dr. Manmohan Singh and the then US President, George W. Bush was a watershed in India- US relations, as it elevated the relations, which saw gradual improvement since the end of the Cold War to a strategic level. The Bush administration took strategic talks ahead with the rubric of the Next Steps in Strategic Partnership (NSSP), which included cooperation in the spheres of (a) civil nuclear energy, (b) defence, (c) space and (d) high - technology. The NSSP was truly the instrument which ensured that relations between the two largest democracies in the world went beyond diplomatic niceties into the orbit of the more serious and concrete strategic issues. Undoubtedly, it was recognition by the US of Indias growing importance not only in Asia as a regional power but also in the world as a global power. It showed US intentions to engage with India as a strategic partner in the near and distant future. For India, it meant a reassurance that it had begun coming of age and also a great opportunity to leverage its growing economic clout to its strategic and diplomatic advantage. The civil nuclear deal between India and the US virtually became the launching platform for India into the world of strategic affairs and signified a sense of new importance for not only the nation but also its citizens. While the Bush administration built the stage, it was left to the Obama administration to stand up on that stage and announce to the world the launch of the strategic dialogue in an institutionalized framework. The inaugural strategic SEPTEMBER 2011, XVII Year, Issue No.9
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was for the purpose of holding the second India- US strategic dialogue and for taking the strategic partnership forward. The strategic dialogue joint statement issued after the meeting clearly highlighted the eagerness of both the sides in broadening and Civil Services

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deepening the bilateral global strategic partnership. The seriousness of the visit in furthering strategic ties could be understood from the fact that the US Secretary of State was accompanied by a high profile delegation consisting of the Director of National Intelligence, James Clapper; the Presidents Advisor for Science and Technology, Dr. John P. Holdren; the Deputy Secretary of the Department of Energy, Daniel Poneman; the Deputy Secretary of the Department of Homeland Security, Jane Holl Lute etc. From the Indian side, the delegation was no less high profile with Deputy Chairman of Planning Commission, Dr. Montek Singh Ahluwalia; the Prime Ministers Public Information Infrastructure and Innovation Advisor, Sam Pitroda; Foreign Secretary, Nirupama Rao joining External Affairs Minister at the high table of talks. Indian Union Home Minister, P. Chidambaram and Union Human Resource Development and Information Technology Minister, Kapil Sibal also joined the talks. Secretary Clinton added further value to her visit by meeting PM, Dr. Manmohan Singh; Finance Minister, Pranab Mukherjee; UPA Chairperson, Smt. Sonia Gandhi; Leader of the Opposition in the Lok Sabha, Smt Sushma Swaraj; and National Security Adviser, Shivshankar Menon. The visit began on a somber note with Secretary Clinton paying her condolences to the victims of yet another terror attack in Mumbai on 13th July 2011, an attack which was another grim reminder of the horrors of terrorism right on the eve of the Clinton visit. The presence of the Director of National Intelligence in the US delegation meant that the words of support uttered by Clinton and her reiteration that the people of America stand by the Indian people in their times of trial were not mere clich. The Secretary of State hoped that the perpetrators of the Mumbai terror attacks are brought to justice for their crime. Reiterating their cooperation in the fight against terrorism, the Indian EAM, S.M.Krishna welcomed the expressions of support from Clinton, the US President and the US Congress against terror attacks in India. In their joint statement, the two sides SEPTEMBER 2011, XVII Year, Issue No.9
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recognized the fact that ever since the beginning of the strategic dialogue; progress has been made in every component of the dialogue as well as in every sphere of human endeavor. Bilateral cooperation has increased in the areas of (1) counter-terrorism, (2) intelligence sharing and (3) law enforcement exchanges. Areas which have witnessed steady advancement include (1) defence, (2) export controls and non - proliferation cooperation with respect to sensitive nuclear technologies, (3) science, (4) space and technology, (5) cooperation in clean energy, and (6) engagements among entrepreneurs and social innovators. The strategic relationship, it was acknowledged was ultimately based on the shared values of the two countries which included (1) pluralism, (2) tolerance, (3) openness and respect for fundamental freedoms and human rights.

has been scheduled for September 2011. The nations also agreed to hold strategic consultations in other regions of the world such as Latin America and the Caribbean. 2. The two countries decided to launch a senior official level trilateral dialogue along with Japan. 3. A bilateral dialogue on UN matters was started in March 2011. This dialogue will continue and the two sides agreed to hold the next meeting on this matter in Washington DC in early 2012. Regular consultations between capitals and in UN cities will continue as appropriate. 4. The India- US Joint Working Group (JWG) on UN Peacekeeping Operations held a successful meeting in New Delhi in March 2011. The next and tenth meeting of the JWG will be held in early 2012. 5. Reaffirming their commitment for

US Secretary of State Hillary Clinton was on a three-day visit to India and attended the second IndiaUS Strategic Dialogue

In order to further expand India - US global partnership for the mutual benefit of the two countries, Asia and the world, the joint statement on strategic dialogue outlined new sets of goals, which are as follows: Global stability and prosperity: 1. To expand their strategic dialogue in Central and Western Asia, two strategically important and politically volatile regions in the world, a Central Asia Dialogue and a West Asia Dialogue were launched by the duo in New Delhi in June 2011 and Washington DC in July 2011 respectively. The East Asian Dialogue is already in place and the fourth round of the dialogue 12

consultation, coordination and cooperation on Afghanistan, the two sides decided to further expand the already existing work on capacity - building, agriculture and womens empowerment in Afghanistan. Both sides agreed to an Afghan reconciliation that is Afghan- led and Afghan-owned. It was recognized by the nations that increased trade, transit and commercial linkages across South and Central Asia will benefit Afghanistan not only economically but will also contribute to its long- term peace, prosperity and stability. 6. Food security being a crying need in the poverty, famine and war- strickCivil Services

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en continent of Africa, the two sides declared their intention to promote food security in the continent through a triangular cooperation program with Liberia, Malawi and Kenya. Participation of Africans in Indian universities and research and technical institutes in mutually agreed capacity building programs was identified as a potential area of collaboration. Additional areas of collaboration can be explored subject to requests from the three African countries. 7. The India - US Dialogue on Open Government was launched in November 2010. As part of that dialogue, the two countries have decided to jointly create an open source platform named Data.gov by the first quarter of 2012. The platform will be taken to interested countries globally. The open source platform is a user- friendly website and a package of e- governance applications aimed at enhancing public service delivery system and improving the access of citizens to government information. It utilizes the combined strengths of the two nations in high- technology, especially Information Technology, in bettering information and public service outreach of government. 8. Welcoming the technical collaboration between the Indian International Institute of Democracy and Election Management and the Washington DCbased International Federation of Electoral Systems; the two sides emphasized their commitment to strengthen election management capacity in interested countries. 9. Regarding Indias aspirations to book a berth in the UN Security Council as a permanent member, Secretary Clinton recalled the statement of US President Barack Obama during his 2010 visit to India that, in the years ahead the US looks forward to a reformed UN Security Council that includes India as a permanent member. Enhancing India - US Bilateral Relationship Defence, security and counter- terrorism: 1. India and USA launched the Homeland Security Dialogue in New Delhi in May 2011. The program of cooperation, it has been decided, will include SEPTEMBER 2011, XVII Year, Issue No.9
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in its ambit 1) global supply chain management, 2) mega city policing, 3) combating counterfeit currency and illicit financing, 4) cyber security, 5) critical infrastructure protection, and 6) capacity- building and technology upgrading. 2. With respect to counter- terrorism cooperation, the countries decided to strengthen ties through, but not restricted to 1) intelligence sharing, 2) information exchange, 3) operational

spective National Security Councils. A broad range of issues were deliberated upon finally culminating in the Memorandum of Understanding between the Computer Emergency Response Teams of both sides (between CERT-IN and US-CERT). The CERTs will 1) exchange information on cyber attacks, 2) shape up responses to cyber security incidents, 3) cooperate on cyber security technology, and 4) exchange information on cyber secu-

cooperation, and 4) access to advanced counter- terrorism technology and equipment. The ninth meeting of the bilateral Joint Working Group (JWG) on Counter - Terrorism was held in March 2011 was held in New Delhi. 3. The joint statement was blunt in its emphasis that for the defeat of terrorism in Afghanistan and for success in that country, elimination of terror safe havens and its infrastructure not only in Afghanistan but also in Pakistan is a must. Success in Afghanistan is also essential also for regional and global security. Almost clubbing Afghanistan and Pakistan with respect to terrorism, the statement condemned terrorism in all its forms and reiterated that all terrorist networks, including those in Pakistan must be defeated. The two sides asked Pakistan to expedite prosecution of those involved in the November 2008 Mumbai terror attacks. India and the US decided to continue comprehensive sharing of information relating to the investigation and trial of the Mumbai attacks. 4. Cyber issues were discussed by experts on either side led by their re14

rity policy and best practices. It will also focus on capacity building and exchange of experts. 5. Defence cooperation between the nations has witnessed progress with the Defence Policy Group meeting in March 2011 and planning another meeting in early 2012. The US defence industry has for long been vying to be a major player in the expanding Indian defence market, which at present is dominated by Russian and Israeli products. A pointer to the growing defence business is the fact that Indian defence orders from US companies have breached the USD 8 billion mark over the past decade, in terms of cumulative value. Areas of future defence cooperation include 1) technology transfer, 2) joint research, development and production of defence items. There have been progresses in bilateral defence exchanges, exercises, capacity building, information sharing in areas including but not limited to 1) counter- narcotics, 2) counter piracy, 3) maritime safety, and 4) humanitarian assistance/ disaster relief. Some of the key Civil Services

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Social Issues 05. Education Reforms 77. Pains of Transitional Society: The Curse of a Developing Nation 150. Media and Democracy: 'Sting' or 'Stink' Operation 156. Corruption In Government Offices 189. Shrunken World Shrinking Relations 210. Reservation in Private Sector 250. Growing Fundamentalism in India 254. Live - In Relationships 258. Section 377: Should it be wiped out? 286. Sustainability of the Child Labour Act 303. Right to Negative Voting: An Evaluation in Indian Context 315. Raghavan Committee on Ragging 330. Pattern of Voting Behaviour in India 350. Terrorism: Is It Essentially Ideological? 354. Women Reservation: Meaningful or Irrelevant 377. Status of Women: An Introspection is needed 437. Role of media: Beyond TRP and advertisement 456. Trial by media: Looking beyond the pale of legality 502. Right to Education reality, but yet unrealistic 507. Ensure food security: Dismantle middlemen 531. Khap Panchayats: requires reorientation 535. Consensus on Caste-based census 540. Opening higher education to foreign institutions 546. Internal Security: North-eastern scenario 549. Nuclear liability bill: analysing implications 597. Social networking 603. Digital Divide Divides divide 612. From Vedas to Vedanta 638. Role of the Union Public Service Commission in ensuring Good Governance 661. MNREGA 666. Electoral Reforms 674. Role of Morality and Ethics in Administration 679. Food Security: Need to establish food democracy 696. Public Distribution System 728. Corruption: Kill it or get killed 733. Money as God: A journey from salvation to depression Political Issues 11. Good Governance: Tracing Provenance of ill-Governance 15. Regional Disparity: A Source of All Discontent 22. Corruption: Between Needs and Greeds 31. Define Secularism: To boost Nationalism 38. On Mumbai Attack: We Can, but we cannot 53. Good Governance: An Utopian Concept? 58. Internal Security: Streamline or Perish 63. Parochialization of Politics: Pains of Coalition Politics 68. Disaster Management: No Time to Cure, Please 83. Preventive Detention Law and the Rights of an Individual 94. North-east Problems: A Look into their Grievances 98. ULFA in Retrospect 103. Challenges of Terrorism: A Collective Responsibility 106. Criminalization of Politics: Do We Deserve? 134. Non-Proliferation Treaty Privilege of 'Haves' don't review, reform and revamp 140. Regionalism Nationalism and Globalization Democracy Myth or Reality Kashmir in retrospect: Knowing it Before Egypt Document 126. Governor: His Masters Voice 170. Challenges Before A Civil Servant 178. Factors To Make and Feel Democracy 184. Centre-State Relations More Grievances Less Commitment 214. Capital Punishment: In Relations to Article 21 217. Democracy: Maturing or Withering 222. Students Politics: Desirable or Undesirable 226. Reservation QUOTA: Progressive or Regressive 233. Expansion of Article 21: Personal Reputation 240. Unlawful Activities (Prevention) Act and NIA 262. Coastal Security: Need for a complete overhaul 267. Police Reforms: A Must For Good Governance 320. Coalition Politics in India 347. Coalition politics and its impact 368. Abortion Issue and Right to Die 370. Demands for New States: A Balanced Approach Is Needed 381. New Delhi-Beijing-Moscow axis 387. Naxalism: A Threat to Internal Security 396. Pluralism and Federalism: Can Go Together? 399. Right to Information 405. Presidential v Parliamentary 481. Political Corruption Reform funding for political parties? 495. Separation of Power: Fundamentals of Rule of Law 504. Role of hostile witnesses in criminal justice 526. PILs: making more meaningful 543. Centre-state relations: Madan Mohan Punchhi Report 552. On Collegium System: Appointment procedure in retrospect 554. Governors removal: preventing pernicious practice 565. Raising FDI in Defence Sector 590. From selection to retirement 620. Kashmir Crisis: Engineered and reengineered 628. MPs Salary hike 633. Voting rights to NRIs 643. Tracing the roots of scams 708. River disputes and interlinking of rivers Issues related to foreign policies 44. Global Recession: Time For Introspection 134. Non-Proliferation Treaty Privilege of 'Haves' don't review, reform and revamp 175. Perils of Unipolar World 427. Coping with the threat of nuclear menace and new economic order 440. Nuclear non-proliferation without disarmament 446. Relevance of territorial disputes in a globalised world 450. Looking beyond Copenhagen: The last lost opportunity 511. Politics of Appeasement US-Pakistan Strategic Dialogue 515. A good start but where the end lies 580. A world of two unequals: From mindest to machines 657. Preparedness of our society for Indias global leadership Economic Issues 88. Agriculture: A Colossal Neglect 131. Energy Security: The 21st Century Challenge 145. Challenges in the Light of New Economic Order 163. Tragedy: Its Not Vidarbha But For Every Indian 194. Looking Beyond 9 Per cent A New Approach 116. 121.

STALLS ON STALLS
is Needed Delinking Nuclear Weapons and Nuclear Energy 203. Nano-Technology: The Future of All Sciences 281. Global Recession: Impact on India 298. Corporate Reforms: The Corporate World After Raju 325. Deflation: Is it Good or Bad? 344. RTAs and Multilateralism: Promoters or Inhibitors 359. Introduction of IT: Advantages and Disadvantages 364. E-Governance: Prospects and Problems 407. Trade Union in IT and BPO 411. FDI in Retail: Analysis and Implications 415. Disinvestment: Prospects and Prevention 419. Challenges Before Indian Economy 423. Fate of FRBMA 425. Goods and Service Tax 466. Tobin Tax: India needs or not 468. Food security or insecurity 473. Commission on Insurance Agents: Swaroop Commission 476. Dollar as common currency SDRs, Euro or Gold 484. Pending Second Generation Reforms 486. Dreaded Drought Furious Floods 490. Land Reforms wisely conceived, poorly executed 522. Learning from Greek crisis fiscal prudence is a must 557. A painful shift from APM to MDPM 569. Analysing two decades of reforms and impact of globalization 583. A Budget bye the common man; far the common man; and off the common man 650. Black Money 688. Food inflation 720. Life under double-digit food inflation Judiciary 111. Judicial Activism or Judicial Reforms? 238. Appointment of Judges: Law Commission Reports 276. Judicial Reforms: The Need of the Hour 292. Judicial Activism Versus Legislative Activism 310. Judicial Accountability: Regarding Declaration of Judges Assets 335. Contempt of Court: Desirable or Not desirable 339. All India Judicial Services: Creation is Needed or Not Needed 393. Code of Criminal Procedure 463. Cr PC Amendments come into effect: an analysis 198.

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objectives of defence cooperation include 1) maritime security, 2) unimpeded commerce, 3) freedom of navigation as per international law, and 4) peaceful settlement of maritime disputes. 6. India and the US have been carrying out consultations on maritime security cooperation in the Indian Ocean Region (IOR) and other suitable forums such as the Defence Policy Group and its appropriate sub- groups. They agreed to continue consultations and also exchange views on promoting a regional security architecture that improves maritime security in the Indian Ocean region. 7. Indias decision to chair a plenary of the Contact Group on Piracy off the Coast of Somalia in 2012 was welcomed by the US. Civil Nuclear Cooperation 1. The two sides reiterated their commitment to the full implementation of the India- US civil nuclear energy cooperation agreement. A strong civil nuclear cooperation would be based on the participation of US civil nuclear energy firms in India on the basis of mutually acceptable technical and commercial terms and conditions that ensure a viable tariff regime for the electricity generated. India also committed itself to ensuring a level playing field for US companies entering the Indian civil nuclear energy sector, which are consistent with the nations national and international obligations. 2. Talks between the US- India Civil Nuclear Energy Working Group (CNEWG) are due to be held next week in Oak Ridge Laboratory, USA. Membership of Export Control Regimes 1. Both sides noted substantial progress in attainment by India of full membership of four multilateral export control regimes, namely 1) Nuclear Suppliers Group, 2) Missile Technology Control Regime, 3) Australia Group, and 4) Wassennaar Arrangement. The Indian entry in these regimes will be in a phased manner subject to the fulfillment of rules relating to membership requirement and Indias step by step full adoption of the regimes export control requirements. Export Control Cooperation US has taken steps to exclude Indian entities from the US Department of SEPTEMBER 2011, XVII Year, Issue No.9
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Commerces Entity List and has also got the process of realigning India in US export control regulations. Both these steps have been welcomed by India. Nuclear Security The first meeting of the India- US Joint Working Group to implement the MOU on Cooperation with Indias Global Center for Nuclear Energy Partnerships will be held in late 2011. Both sides look forward to it. Strategic Security Dialogue Both sides felt that the Strategic Security Dialogue is a crucial element in the bilateral dialogue architecture between India and the US, which can strengthen global non- proliferation objectives. The duo also looked forward to the commencement of negotiations of the Fissile Material Cutoff Treaty in the Conference on Disarmament. Prosperity 1. Bilateral trade has grown by a whopping 30 per cent in 2010 as compared to 2009. The growth in services trade in particular has been balanced and positive. Two way FDI inflows has also witnessed an increase though there was no mention in the statement of the approximate figures. 2. In order to increase transparency and predictability for investors and to support economic growth and job creation in both countries, the two sides agreed to resume technical negotiations on the Bilateral Investment Treaty (BIT) in Washington DC in August 2011. 3. To further bolster trade ties, the India- US Trade Forum planned a meeting in October 2011. Public- private discussions continue to take place under the Commercial Dialogue. 4. For discussions on consular and visa matters, the nations showed their intention to take part in the first Consular Dialogue on 25th July in Washington DC. 5. A Bilateral Aviation Safety Agreement was signed on 18th July. 16

6. Clean energy and energy efficiency are important issues in todays world. Keeping this in mind, the US Overseas Private Investment Corpo-

ration (OPIC), the US Export- Import Bank, the US Trade Development Agency (USTDA), the US Agency for International Development along with other US agencies are taking part in the development of clean and renewable energy projects, energy- efficient buildings and Smart Grids in India. The bilateral Energy Cooperation Program supported by USTDA works with Indian and US businesses for deployment of clean energy technology in India. The bilateral Joint Clean Energy Research and Development Center is bringing about collaboration between the public and private sectors of the countries in solar energy, energy- efficient buildings and advanced biofuels. 7. The India- US agriculture dialogue of September 2010 has stimulated collaboration on the very important issue of food security, including joint work with third party countries. 8. A monsoon desk which will share the latest monsoon prediction models, has been set up by the National Oceanic and Atmospheric Administration of the US and the Ministry of Earth Sciences of India. The desk is making forecasts for the 2011 Indian monsoon season. Women Empowerment A Womens Empowerment Dialogue has been planned in New Delhi in September 2011. Education, Innovation, Science and Technology 1. A bilateral Higher Education Summit will be held in Washington DC Civil Services

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Trends and challenges of Indian foreign policy India and Neighbouring Countries India - Pakistan Relations India - Sri Lanka Relations India - Bhutan Relations India - China Relations Understanding string of pearls India - Afghanistan Relations India - Bangladesh Relations India - Nepal Relations India - Maldives Relations India - Myanmar Relations India and East Asia India - Japan Relations India - South Korea Relations India - DPRK India - Mongolia Relations Look East Policy After ASEAN-FTA India - Cambodia India - Indonesia India and Laos PDR India - Philippines India - Malaysia India - Thailand India - Vietnam India - Singapore The Gulf, West Asia and Middle-East Policy India - Kazakhstan India - Tajikistan India - Uzbekistan India - Belarus India - Iran India - Saudi Arabia India - Jordan India - Syria India- Israel India - Kuwait India - Oman India - Yemen India - Qatar India - Iraq India - United Arab Emirates India and Americas Relations India - Brazil India- Venezuela India -Mexico India - Ecuador India - Colombia India - Canada India - Chile India - Argentina India - Liberia India - Peru India - United States of America India - Russia Relations India and Europe Relations-I GSP and India India-European Union Summits EU and India FTA India - United Kingdom Relations India - France Relations India - Germany Relations India and Europe Relations II India Turkey India-Finland India-Hungary India-Poland India - Belgium India-Bulgaria India-Netherlands India - Slovenia India-Switzerland India-Denmark India-Iceland India-Italy India-Spain India-Greece India-Luxembourg India-Norway India-Cyprus India - Sweden India - Latvia India - Austria India and Africa Relations 2nd India- Africa Forum Summit India - South Africa South Africa and SACU India - Bermuda India - Seychelles India - Mozambique Piracy: India suggests five step anti-piracy action plan to UN DTAAs to curb black money India - Ethiopia India - Libya India - Nigeria India - Egypt India - Mauritius India - Namibia India and African Trade Relations India-MERCOSUR-SACU framework Strengthening and stretching South-south cooperation G-15 at Tehran 2010 Indian economic interaction with African countries India and Australia-NZ Relations India - Australia India - New Zealand Indias Economic Interaction with the World ASEAN and India-FTA India and Korea CEPA India and Malaysia FTA BIMSTEC SAARC Preferential Arrangement (SAPTA) Mekong-Ganga Cooperation (MGC) The Indian Ocean Rim-Association for Regional Cooperation (IOR-ARC) Gulf Cooperation Council (GCC) BASIC Group The Asia-Pacific Economic Cooperation (APEC) IBSA The Asia-Pacific Trade Agreement (APTA) MERCOSUR The Asia Cooperation Dialogue (ACD) Economic and Social Commission for Asia and the Pacific (ESCAP) North America Free Trade Agreement The United Nations Industrial Development Organization (UNIDO) The European Free Trade Association (EFTA) AEM PTA with Chile The Global System of Trade Preferences (GSTP) OECD The Commonwealth of Independent States (CIS) SADU African Union Common Market for Eastern & Southern Africa (COMESA) East African Community (EAC) SACU South African Development Community (SADC) Economic Commission for West African States NEPAD/NPCA Pan African e-Network

ON STALLS Focus Africa Programme Techno-Economic Approach for Africa India Movement or TEAM 9 Kimberley Process (KP) World Intellectual Property The Madrid System and the Hague System The Patent Cooperation Treaty (PCT) The Law of Patents (SCP) Future prospects of WIPO ISA and IPEA WIPO, WTO and TRIPS International Bank for Reconstruction and Development The International Development Association ICSID The International Finance Corporation (IFC) India and the World Bank Sustainable Urban Transport Project (SUTP) MIGA MIGA and FDI International Monetary Fund and India India and IMF Special Drawing Rights World Trade Organisation Towards Multilateralism Delhi Meet Functioning Components of WTO Intellectual Property Rights AD-CVD Summits and their analysis 10th Trilateral Foreign Ministers Meet at Wuhan Nuclear non-proliferation without disarmament 17th ASEAN Summit at Ha Noi in Vietnam Seoul Summit of G20 Relevance of Territorial Disputes in a Globalised World CHOGM: In search of relevance From Prague to Washington: A good start but where the end lies Politics of Appeasement: US-Pakistan Strategic Dialogue Non-Aligned Movement 15th Summit at Sharm el-Sheikh, Egypt BRICS Summit Sanya, Hainan, China 10th Summit on SCO and Indian Strategic Position India joins UNSC as non-permanent member 16th SAARC Summit India and LDCs Ministerial Conference at New Delhi Diplomatic Terms

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on 13th October 2011 to identify avenues through which higher education collaboration can take place. The higher education dialogue, to be chaired jointly by the US Secretary of State and the Indian Minister of Human Resource Development will be expanded so as to convene it annually and incorporate within it the private/ nongovernmental sectors and higher education communities. The dialogue will carry out informed governmentto- government discussions. 2. The governments announced publication of requests for proposals from post- secondary educational institutions that support the objectives of the Obama- Singh 21st Century Knowledge Initiative (OSI), which include strengthening teaching, research, and administration of Indian as well as US institutes through university linkages and junior faculty development. 3. The Passport to India initiative of the US is expected to encourage an increase in US students studying and interning in India. At present, nearly 1 lakh Indian students study and intern in USA. 4. The US Department of Energy and the Indian Department of Atomic Energy have signed an Implementing Agreement on Discovery Science that will pave the way for cooperation in accelerator and particle detector research and development at Fermi National Accelarator Laboratory, Thomas Jefferson National Accelarator Facility, and Brookhaven National Laboratory. 5. The India- US S&T Endowment Board plans to dish out an annual $ 3 million to entrepreneurial projects that aim at commercializing technologies to improve health and empower citizens. 6. The India- US S&T Forum, which is ten years old, has brought about interaction of almost 10, 000 Indian and US scientists and technologists. 7. The third annual Women in Science Workshop will be held in September 2011. Space Technology 1. Cooperation in space technology is an important spin- off from the civil nuclear agreement between India and the US. A major landmark in such cooperation was the participation of NASA in Indias Moon mission, ChanSEPTEMBER 2011, XVII Year, Issue No.9
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drayana-1. It cleared the way for the review of further cooperation between NASA and ISRO and some of the potential identified areas were 1) earth observation, 2) space exploration, 3) space sciences and 4) satellite navigation. Early finalization of im-

plementing agreements for sharing of satellite data on oceans and global weather patterns have been agreed upon. NASA expressed its willingness to cooperate with ISRO on human space flight, even as the possibility of joint experiments on the International Space Station was explored. The two sides also decided to expand cooperation in the sphere of global navigation satellite systems (GNSS) with the ultimate objective of bringing about interoperability between the Global Positioning System of the US, Indian satellite systems and those of other countries. Advantages for India: 1. The strategic dialogue is extremely broad in its scope and hence it allows an emerging power like India to gain from US expertise in various spheres of human activity through different institutional mechanisms like Joint Working Groups, Dialogues and Memorandums of Understanding. A strategic relationship with the US is something most nations vie for and yet very few get. 2. While Central Asia falls within Indias extended neighborhood, the region remains largely out of bounds from India. India is making significant efforts to make its presence felt in the region by engaging with the Shanghai Cooperation Organization as well as with the individual Central Asian Republics. However China, Indias strategic competitor looms large over the SCO making it unlikely for India to fully explore the strategic potential of the Central Asian region by being only within that organization. It is here that India may gain 18

from its strategic dialogue with the US in the region. The SCO members have steadfastly kept the US out of it. However the US is a major player in the region. By engaging both with the US and the SCO, India now has a twopronged approach for establishing a strong foothold in Central Asia, where it has significant strategic interests. Even with respect to West Asia, Indias dialogue with the US will be helpful and will allow the nation to fulfill its energy, trade and investment interests in the region with US help. 3. There has been intense debate in India as to whether the country has extracted the full benefits of the IndiaUS civil nuclear agreement. The dialogue statement refers to the full implementation of the nuclear agreement thereby making it clear that Indias concerns regarding enrichment of nuclear fuel etc are more or less uncalled for. 4. The dialogue has made it amply evident that the US is going to put its entire weight behind India in the latters quest for membership in various export control regimes. 5. The exclusion of Indian entities from the US Department of Commerces Entity List means that entities like the DRDO and other vital organizations will no longer be given pariah like treatment in the international community. Not only will it help these organizations do commerce with USA, but also with other nations of the world. 6. The trilateral dialogue process involving the US and Japan will help India gradually offset increasing Chinese influence in the East Asian and South East Asian regions. This is especially because China and Japan often view each other as rivals. 7. By engaging the US strategically, India is mounting diplomatic pressure on Pakistan to rein in its home grown terrorists who target India with tacit Pakistani support. The dialogue statement sent another strong message to Pakistan to curb terror mushrooming in its soil. The timing of the recent Mumbai terror attacks on 13th July 2011, just days before the visit only served to strengthen the message given by the US to Pakistan. Advantages for the US: 1. The US nuclear power companies Civil Services

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get the opportunity of tapping the enormous Indian energy market which has a lot of inherent potential. India is the second fastest growing economy in the world. Its energy requirements, though sizeable even now are likely to grow in the future. The dialogue statement mentions that US companies will have a level playing field in Indian markets and will get suitable tariff for energy generation. More business for US nuclear energy companies in India will in turn result in more jobs in the US which in turn will benefit the US economy. 2. In return for pushing Indias case in various export control regimes and striking off Indian entities from the Entities List of its Department of Commerce, the US has slowly managed to get India to gradually confirm to international norms with respect to its civil nuclear assets. India is reorienting itself to the rules and regulations of the export control regimes and this is a success for US diplomacy which had been trying this for decades though by diplomatic arm- twisting, which in turn had been resisted by India. 3. India has had its reservations with respect to the Fissile Material Cutoff Treaty. But the US has managed to con-

India and Pakistan relations

Visit of Hina Rabbani Khar


Creating history beyond the pale of history

he series of Secretary level meetings that had taken place between India and Pakistan within a span of a few months, starting with the meeting between the Home/ Interior Secretaries and concluding with the Foreign Secretary level talks paved the way for the visit of Pakistani Minister of Foreign Affairs, Ms. Hina Rabbani Khar to India and her meeting with the India External Affairs Minister, S.M.Krishna. Scarred once again by terror attacks on its financial capital just prior to the Pakistani Ministers visit, India showed maturity by rolling out the red carpet to its neighbor and not allowing the recent Mumbai attacks once again derail the dialogue process. A review of the bilateral dialogue process at the Secretarial level was done by the two Ministers, who expressed satisfaction at the progress made on the issues of 1) counter - terrorism (including the trials of the 26/11 Mumbai terror attacks), 2) narcotics control, 3) humanitarian issues, such as the release of prisoners inadvertently trapped in the jails of the two countries, 4) commercial and economic cooperation, 5) Wullar barrage/ Tulbul navigation project, 6) Sir Creek, 7) Siachen, 8) peace and security, including different Confidence- Build-

vince the Indians to engage in negotiations on the treaty in the Conference on Disarmament. 4. Its increasing strategic relations with India will help the US in checking the rise of China. Many international analysts have felt that the US looks upon India as a major ally in Asia, which can help it in curtailing the rising Chinese economic and military clout. The trilateral dialogue with India and Japan, which the US is deeply interested in, is only a pointer to that. 5. By engaging with India strategically, the US can slowly goad India to open up its markets and integrate itself completely with the world economy. This in turn will provide immense opportunities to US businesses in India and in turn US economy. SEPTEMBER 2011, XVII Year, Issue No.9
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The meeting between the Home/ Interior Secretaries and concluding with the Foreign Secretary level talks paved the way for the visit of Pakistani Minister of Foreign Affairs, Ms. Hina Rabbani Khar to India and her meeting with the India External Affairs Minister, S.M.Krishna. ing Measures (CBMs), 9) Jammu and Kashmir, and 10) promotion of friendly exchanges, such as easing visa related procedures thus facilitating people- topeople contact. The two Ministers talked peace as they reiterated the importance of carrying forward the dialogue process and resolving all outstanding issues through peaceful means, by engaging each other in constructive and result- oriented talks with the ultimate intention of establishing cooperative, good neighborly relations. Reference to terrorism was brief and somewhat clichd with the Ministers noting in the joint statement that terrorism posed a continuing threat to peace and security and committing themselves to fighting it in all its forms and manifestations. The word terrorism has been interpreted differently by the two countries. By including the term all its forms and manifestations, the statement ensured that either side had enough latitude to interpret the term in a manner that suited them. Indias main concern has been the terror directed at it from Pakistani soil with effective Pakistani state backing. Pakistan, which has recently bled from multiple and frequent terror attacks from radical, antiUS outfits which appear determined to punish the nation for its forced support 19 Civil Services

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to the US in its war on terror, has pointed out to India and the international community that it is no less a victim of terror than its eastern neighbor. Pakistan has also, though without evidence and rather churlishly, pointed its finger at the Indian government and its external intelligence agency, the Research and Analysis Wing (R&AW) for sponsoring terror attacks in its turbulent Balochistan province. Though a bilateral terror mechanism exists between India and Pakistan, the mutual distrust between the countries has rendered such mechanism rather ineffective. This prompted the two leaders to underscore the need for sustained bilateral efforts to enable the building up of a relation of trust and mutually beneficial cooperation. Apparently such trust will be fostered through better contacts and interactions between the people of both sides, with the statement referring to their yearning for peace and development as a check for terrorism and violence. The perpetrators of terror crimes need to be brought to justice and for that there has to be improved counter- terrorism cooperation, especially between the relevant departments and agencies. Two such agencies are Indias R&AW and Pakistans ISI, who at present view each other as foes. For bringing the agents of terror to justice, it is first necessary to identify them. This is a job that has to be done by the intelligence and investigative agencies of the two countries. For doing the job effectively, intelligence inputs and investigative evidence needs to be shared. Such sharing is only possible if there is the minimum semblance of trust between the concerned agencies without which the agencies and their governments may engage only in blame game without making any concrete headway in punishing the executors of terrorism. To build up an environment of trust, it was decided to set up institutional mechanisms that would look into the process of releasing prisoners and fishermen of each country, locked up in the jails of the other. Accordingly, the Judicial Committee of Prisoners, which was set up to look into this matter gave the following recommendations: 1. early repatriation of prisoners who SEPTEMBER 2011, XVII Year, Issue No.9
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completed their sentences and whose travel documents are available; 2. adoption of a humane approach in dealing with cases of fishermen, women, elderly, juvenile prisoners, terminally ill prisoners or those suffering from serious illness or physical/ mental disability; and 3. monitoring the welfare of prisoners so as to ensure their humane treatment. The Ministers gave their stamp of approval to the recommendations. Confidence Building Measures (CBMs) are the key to peace and security and

ed at the respective facilitation centers on either side. 3. The number of trading days has been increased from 2 days a week to 4 days a week. On those days, truck movement will take place both on Srinagar - Muzaffarabad and PoonchRawalakot routes. 4. Operational issues with respect to cross- LOC trade will be resolved by the Designated Authorities through regular interaction. 5. Facilitation of regular interaction between the Chambers of Commerce

hence the duo agreed to convene separate meetings of the Expert Groups on Nuclear and Conventional CBMs in Islamabad in September 2011. The thorny issue of Jammu and Kashmir in itself occupied very little space in the joint statement. The two sides agreed to continue discussions with the objective of reaching a peaceful solution by narrowing divergences and building up on convergences. Rather, the Ministers concentrated on facilitating trade and travel across the Line of Control (LOC) as a means of easing tensions by facilitating trade and people- to- people ties between the Kashmiris on either side of the LOC. The following measures have been proposed to facilitate cross- LOC trade: 1. A list of 21 products of permissible items for cross- LOC trade will be respected by the two countries. A Working Group will review the list to include more permissible items. 2. Adequate facilities will be provid20

and traders on either side. 6. Strengthening of existing telephone communication facilities. 7. Holding meetings of the Designated Authorities alternately at the Terminal of the Crossing Points on both sides of the LOC every quarter or as and when required. The following decisions were taken with respect to cross- LOC travel: 1. Cross- LOC travel would be expanded so as to include religious pilgrimage and tourism. The modalities would be worked out by both sides. 2. Facilities at the operational crossing points, such as waiting area, terminal and clearing procedures will be streamlined by both sides for smooth cross- LOC travel. 3. Cross-LOC bus services between Srinagar- Muzaffarabad and PoonchRawalakot routes will run on Mondays from now onwards. 4. Application forms and relevant documents with respect to cross- LOC travel will be exchanged through eCivil Services

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mail between Designated Authorities on both sides. Such mail transfers would be backed up by hard copies of such exchanges. 5. Processing time for applications will be expedited and will at no time be more than 45 days. 6. Coordination meetings will be held between the Designated Authorities at the terminals alternately on either side of the LOC on a quarterly basis or when considered necessary. The baggage of mutual mistrust between the two nations have so far hampered their trade relations with Pakistan refusing the Most Favored Nation (MFN) status to India and meting out discriminatory treatment to the latters goods. The Foreign Ministers have recognized the fact that increased trade and commerce was in the interest of both countries but for that to happen, it was necessary to establish a non- discriminatory bilateral trade regime, wherein tariff and non- tariff barriers were either removed or reduced to a minimal. The steps taken by the Commerce Secretaries in Islamabad in April 2011 to facilitate trade and reduce imbalances were noted by the Ministers with satisfaction. The leaders of the countries continued to carry on the Secretary level meetings on the issues being negotiated in the dialogue statement. They also acknowledged the importance of the people on both sides of the border and the LOC in improving bilateral relations. Considering the common people of the two countries to be at the heart of the relationship, the leaders decided to accord topmost priority to humanitarian issues such as the finalization of a revised Visa agreement which would usher in a liberalized visa regime, people- to- people, business- tobusiness and sports contacts. Despite the fact that there has been very little change in Pakistans stance vis--vis its sponsorship of terror to India, there is little doubt that bilateral talks between the neighbors have progressed. Much of this is because the Indian political and diplomatic leadership has not allowed itself to be swayed by the enormous public opinion that demands the freezing of ties following every single terror attack on the countrys soil. It also shows a sense of determination on the part of India to decouple the dialogue process from the issue of crossborder terrorism. While India will do whatever it has to diplomatically and from the security point of view, it will continue engaging with Pakistan not only on the issue of terrorism but also on other outstanding issues. On the one hand, it can continue building up international diplomatic pressure on Pakistan and make it act against its home grown terror infrastructure. On the other, it can continue the dialogue process thus earning the approval and goodwill of not only the international community but also that of ordinary Pakistanis, who have nothing to do with the countrys policy making. Besides, disengagement with Pakistan at a time when that nations very nationhood is under threat from terrorism itself is perhaps not a very viable option. Pakistan is like a wounded creature, which seeks solace from its wounds by hurting its neighbor. Engagement with necessary strictures, rather than open hostility is the best way to deal with such a volatile neighbour. SEPTEMBER 2011, XVII Year, Issue No.9
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SPECIAL FEATURE

2nd India - Africa Forum Summit

Strengthening Look Africa policy

t was the colonial heritage which compelled India to look West since the dawn of independence. When the curtains were down on the Cold War, the nation realized the importance of looking East. The new millennium ushered in new hopes for the country with many international agencies and analysts predicting a superpower stature for it by the middle of the millennium. And yet, the realization of such hopes would first need the addressing of certain challenges faced in an increasingly inter-connected world. To address such challenges, Indian policy- makers and analysts have recognized the need to establish new global relations and re- invent the old ones. So after looking West and East, it is now time for India to look Africa. The huge potential of the world's largest continent and indeed the most diverse has caught the eyes of the whole world, and India cannot afford to be left behind, especially at a time when one of its economic competitors, China is making a beeline for the Dark Continent. Historically, India has always had links with Africa and had maintained cultural contacts with the continent since ancient times. Ever since inde-

Manmohan Singh was warmly received by the African leader

pendence and even before that, India has been a staunch supporter of Africa's liberation from the chains of colonialism being itself a victim of colonial bondage and thus sharing the same sentiments of freedom and democracy with the Africans which had fuelled India's independence struggle. A major part of Africa remained Non- Aligned along with India during the Cold War years in a bid to distance themselves from superpower politics and to concentrate on their development. The end of license - raj and the ushering of economic reforms in India propelled the country on a high- growth trajectory. As the nation opened its doors to the winds of globalization, it began to witness fundamental changes in its economics, which in turn began to shape its policy- making. In the modern era of globalization and liberalization, economics has become the driving force behind politics, especially with respect to international relations. This is true for almost every nation in the world and India cannot be an exception. With a growth rate of nearly 7 per cent to 8 per cent, for a population of over a billion, the Indian economy needs energy, raw materials and a vibrant and growing market. No part of the world can geographically provide all these things in SEPTEMBER 2011, XVII Year, Issue No.9
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large magnitudes the way Africa can. This is a realization that has dawned on Indian policy- makers, though somewhat belatedly, some would say. Traditionally, India's relation with Africa has been cultural, political and spiritual. While these aspects of the relationship remain as vital as ever, it is economics that is expected to be the hallmark of the relationship in the 21st century. While large parts of Africa remain steeped in extreme poverty and locked in political conflicts accentuated by the significant presence of armed militias and guerrilla groups, the continent has nonetheless showed sufficient signs of economic growth and mushroomed zones of economic prosperity to keep any major emerging economic power interested in it. The African story has been a much chequered one, and yet it has enough in it to arouse hope. The West was developed, the East is developing, it is time now for Africa to develop and sensing this, major developed and emerging economies, including India feel the need to invest in its development, not only economically, but also socially and politically. As far as India is concerned, this means establishing a deeper and multifaceted relationship with Africa with a greater focus on economic relations than was the case in the past. The Indian government in a bid to systematize and regularize its interactions with the African continent came up with the idea of tri- yearly forum summits, the first of which was held in 2008 in New Delhi. The 2008 Summit set up an Africa- India Framework of Cooperation under which a Plan of Action was adopted. Three years since that summit, on 24th and 25th May, 2011 the 2nd India- Africa Forum Summit was held in Addis Ababa, Ethiopia under the theme 'Enhancing Partnership, Shared Vision', thus elaborating the fact that the second summit is aimed at further enhancing the cooperation between India and Africa, which was established in systematic manner during the first summit. The Addis - Ababa Declaration made it clear that it was further building up on the Delhi Declaration of April 2008 which can be considered as the foundation stone of Indo- African strategic Civil Services

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partnership, which in turn is based on the fundamental principles of equality, mutual respect and benefit, the same principles which guided their independence struggles and their fights for self- determination. It was agreed that the partnership will continue to be guided by mutual respect for each other's independence, sovereignty and territorial integrity; commitment to deepen African integration; dialogue among civilizations to promote peace, tolerance and respect for different religions, cultures and human rights; as well as respect for gender equality; and a commitment to pluralism, multi- culturalism and multi- ethnicity. It is always useful to lay down the basic principles on the basis of which a relationship is laid down. At present, many nations are eyeing Africa, most of them with greed and only a few with the intention of establishing a relation based on equality. India wants to make it clear that unlike many it is not interested in trying to make the resourcerich Africa a type of neo- colony which satiates its hunger for raw materials and thirst for energy, but rather is eager to engage it in a manner which benefits both. The refer-

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ence to the 'dialogue among civilizations' is a tacit negation of the concept of the 'clash of civilizations' which suggests a fundamental, inherent difference between world religions and civilizations based on them and predicts a clash in the future. Both India and Africa feel such a clash can be avoided and peace promoted through sustained dialogue between religions and greater tolerance for pluralism with respect to culture and ethnicity. India and Africa are both immensely diverse. They agree that therein lies their strength. The new architecture of Indo- African relations is undoubtedly based on their economic cooperation. Both sides noted that they had come out reasonably well from the economic crisis which swept the world in 2008. While growth in Africa has returned to the levels existent prior to the crisis, India continues to remain a predominant 'growth node' of the world. Critics may point out that both India and Africa remained relatively unscathed by the economic crisis simply because they were less integrated to the global economy as compared to the West, but nonetheless such arguments lose sight of the fact that studied insulation from destabilizing aspects of the world economy cannot be considered bad economics especially in the wake of a crisis. India and Africa are both young economies in the sense that a high percentage of their populations comprise of young people have tremendous energy, zeal, initiative SEPTEMBER 2011, XVII Year, Issue No.9
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and potential which if nurtured properly through suitable human resource development policies can open up new avenues of economic development. New initiatives to enhance partnership between the two sides in recent years include substantial financial flows from India to Africa in the form of grants, FDI and concessional loans which in turn has contributed in human resource development, and capacity building in the African private sector, infrastructure, agriculture and SMEs. Other areas of cooperation include sharing of strategies with respect to sustainable development, poverty alleviation, healthcare and universal education, and use of suitable technologies, all of which are of common concern. Sharing of each other's experiences in these spheres can also be of mutual benefit. Global warming and climate changes are phenomena to which developing countries like the ones in Africa and India have contributed the least but from which they suffer the most. The vagaries of climate change are faced to the greatest extent by the world's poorest, who do not have the financial and technological capacity to protect themselves from the fury of Mother Nature, a fury stoked to no insignificant extent by the greed of developed countries. Herein lies the inherent injustice in the phenomenon of climate change. To do away with this injustice, the developing world has long advocated the principle of equity and common but differentiated responsibility based on respective capabilities as the fundamental principle on the basis of which the global fight against climate change and global warming is to be carried out. This principle, on which stood the Kyoto Protocol, stated that while tackling climate change is a common responsibility of both developed and developing countries, nonetheless given that developed countries have historically contributed more to climate change than developing countries hence the former will have to do more to control the problem than the latter. Thus Kyoto Protocol set up specific targets for reduction of greenhouse gases, which contribute the most to global warming, only for the develSEPTEMBER 2011, XVII Year, Issue No.9
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oped countries leaving out the developing ones. With the Kyoto Protocol set to expire in 2012, the India- Africa summit declaration called for a second commitment period under the Protocol, something which is being pressed hard by all developing countries and resisted stiffly by all developed countries. In this respect the importance of the Bali Action Plan, 2007 worked out under the aegis of the UN Framework Convention on Climate Change (UNFCCC) was also highlighted. The summit also demanded that the developed world set for themselves more ambitious plans for reducing greenhouse gases and also provide adequate financial and technological support to developing countries, so as to help them in adapting to a world where climate is undergoing unexpected changes. Reiterating the positive aspects of the Cancun Conference on Climate Change, the summit urged developed countries to operationalize the institutional arrangements included in the Cancun decisions. One of the major effects of climate change on Africa has been the advancement of the Sahara desert. In many central and western African countries surrounding the Sahara, rainfall has reduced over the last decade as a result of climate change. This in turn has increased desertification. The problem was highlighted by the UN Inter- Governmental Panel on Climate Change. The African response has been the visualization of the Great Green Wall Project. The project intends to establish a wall of trees from Senegal to Djibouti, comprising a total of 11 countries in a bid to check the southward expansion of the Sahara desert. The biggest challenge for the project, which was first proposed by Nigeria President Olesegun Obasanjo, will be the proper choice of trees to be planted. The Addis Ababa declaration wished the project well and promised it support. The summit declaration expressed serious concern over the triple crisis, namely food crisis, energy crisis and financial crisis, all of which are economic in nature and which are plaguing the world in a recurrent manner. 24

Even as the global economy tries to grapple with one crisis, another looms large over the horizon. In fact, issues relating to food, energy and finance are inter- related and the world economy has to strike a balance between them, so as to ensure that addressing problems relating to one does not trigger off problems relating to another. Just as many other global and bilateral summits, the Addis Ababa summit also remained circumspect over the sustainability of the present global economic recovery. One of the great perils of globalization is that economically weaker countries often have to pay the price for the mistakes committed by economically stronger countries. The global financial crisis of 2008 resulted in a massive financial crunch, especially for many advanced economies thus effectively drying up the flow of capital from these countries to Africa. The sudden scarcity of capital adversely affected the development of African as well as many other developing na- tions. Not only that the volatility of capital flows has been a major

probl e m , raised in different summits, as it has caused volatility of foreign exchange reserves. The 2nd Africa- India summit supported stable, long- term capital flows from developed countries to developing ones. It also gave its economic rationale as to how such capital flows can in turn benefit the developed countries as well. Long- term capital flows, it was pointed out can stimulate investment, especially in the infrastructure sector. African countries and India have tremendous potential to absorb infrastructure investments, which in turn can trigger economic activity thereby enhancing global demand. Enhanced demand would mean more demand for manufactured Civil Services

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goods, thereby providing a boost to the manufacturing sectors of developed countries. Nothing can guarantee sustainable economic recovery than a return to health of the manufacturing sectors of advanced countries. While injection of financial stimulus has been the popular global approach to revive the world economy, it remains fraught with risks such as the possibility of upward inflationary trends and overheating of assets, all of which can once again push the economy into depression. The approach to make the economic recovery sustainable as pointed out above by the summit is also likely to address developmental imbalances in the world. Urging major economies to bring about macro- economic policy coordination, the summit acknowledged the G20 as an 'important forum for international economic cooperation' and requested fair representation of Africa in that forum so as to ensure that the voice of Africa is adequately heard in the high table of international economic decision- making. No place in the world has a greater stake in the fulfillment of the UN Millennium Development Goals which were agreed upon in the UN Millennium Declaration than Africa. India too has many millennium development goals to fulfill, which if it can, will ensure greater social and human resource development, thus aiding its economic growth and ensuring more egalitarian distribution of the fruits of such growth. The summit committed itself to the fulfillment of the MDGs by 2015 but also emphasized that financial support and technical cooperation, especially from developed countries would be needed for the achievement of the goals. In this context, it was expected that developed countries would fulfill their target of providing 0.7 per cent of their GNI as Official Development Assistance (ODA) to developing countries. It is a pity that major economies like the US provide much less than the stipulated amount as developmental assistance to the developing world. While committing themselves to the overarching developmental goals, the summit nonetheless spoke of giving the African countries sufficient elbow space SEPTEMBER 2011, XVII Year, Issue No.9
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for making policies which suit their unique socio- economic conditions, without being hamstrung by any one developmental model. Flexibility in policy- making is a must in a diverse continent like Africa. Support for economic programs in Africa under the Program for Infrastructure Development in Africa (PIDA), the New Partnership for Africa's Development (NEPAD) and the Comprehensive Africa Agriculture Development Program (CAADP) was declared. The summit expressed concern that the Doha Round had so far made no significant progress in justifying for itself the adjective 'development round'. It sought an agreement that addresses concerns regarding livelihood, food security and rural development of developing countries. Similarly concerns on Non- Agricultural Market Access (NAMA) services and rules also need to be concerned. The African countries and India strongly opposed trade distorting domestic agricultural support by developed countries which are preventing access for developing countries to the lucrative developed country markets, thereby hampering the livelihoods of many developing country farmers. Africa and India are both deeply committed to multilateralism and called for greater democratization of the UN decision- making process. The Addis Ababa declaration sought to strengthen ties between the two sides in forums where they are co- participants, such as the UN and G-77. With respect to international peace- keeping, efforts made by the African Union Peace and Security Council in maintaining peace in Africa were commended and the African side appreciated India's commitment to peace- keeping operations in the African continent. The African Standby Force, which was raised to improve peace and security in the continent, was given support by India. Reforms within the UN are an important issue concerning both India and Africa. India has been campaigning 25

hard to book a berth in the UN Security Council as a permanent member. But its efforts have been thwarted, among other factors by the lack of unanimity in the 54 member African Union regarding its permanent membership in the UNSC. In fact India stalled its efforts to occupy the cherished high seat in the UN when the AU failed to collectively back it. That was one occasion when over- confident Indian diplomats realized that they could not take African support for granted and would have to do much more to get Africa on their side on that particular issue. African backing is crucial for India in its UNSC aspirations. In the Addis Ababa summit, while the Africans welcomed India's election to the non- permanent seat of the UNSC for the years 2011-12, they

nonetheless remained non- committal on the issue of a permanent UNSC berth for India by simply taking note of India's position and aspirations. African support for India's permanent UNSC membership undoubtedly comes with a caveat; India's support for African representation in the permanent membership of the UNSC. In this respect, Africa has collectively elaborated its position in the Ezulwini Consensus, wherein it stated that Africa should have two of its countries as permanent members of the UNSC having full veto power. The Consensus also gave the onus of choosing these two countries to the AU itself. It is clear that any support India might expect from Africa would depend on its support to the Ezulwini Consensus. In Addis Ababa, India took a measured step by 'noting' the African position. Overall it was agreed that urgent and comprehensive reforms of the UN was required so that it could Civil Services

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function in an efficient, effective and transparent manner. The functioning of the UN would also largely depend on the implementation of UNSC resolutions, not only in letter but also in spirit. It has been felt by many, and the summit seemed to agree with such viewpoints, that UNSC resolutions 1970 and 1973 on Libya have been interpreted in such a manner by the Western powers as to justify NATO bombings on Libya. Taking a different view of the resolutions the summit called for immediate cessation to hostilities in Libya and urged the warring parties to search for a political rather than a military solution to the problem. It also supported the AU High- Level Ad hoc Committee initiative and the AU roadmap for a peaceful and consensual resolution of the bitter conflict, which has taken the proportions of a civil war. Speaking of the need for a global, nondiscriminatory and verifiable elimination of nuclear weapons and other weapons of mass destruction, the summit affirmed its commitment to the consensus in the Final Document of the Tenth Special Session of the UN General Assembly on Disarmament. Support for an International Convention Prohibiting the Development, Production, Stockpiling and Use of Nuclear Weapons leading to their destruction was extended The Rajiv Gandhi Action Plan of 1988 had visualized the gradual reduction and ultimate elimination of all nuclear weapons and weapons of mass destruction. The two sides called for negotiations to fulfill the goal of the Action Plan. The summit declaration also suggested the commencement of negotiations on the Treaty Banning the Production of Fissile Material for Nuclear Weapons and Other Nuclear Explosive Devices in the Conference on Disarmament. Both sides welcomed the coming into force of the Pelindaba Treaty or the African Nuclear Weapon Free Zone which envisions the establishment of a nuclear weapons free zone in the African continent and which also seeks the prohibition of research, development, manufacture, stockpiling, acquisition, testing, possession, control or stationing of any nuclear explosive device in the territory of any party to the treaty as SEPTEMBER 2011, XVII Year, Issue No.9
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well as the dumping of radioactive wastes in Africa by any party to the treaty. Efforts to operationalise the African Commission on Nuclear Energy (ACNE) for the promotion of peaceful use of nuclear energy were also welcomed. India and Africa, who have both suffered from terrorism, were unequivocal in their strong denouncement of any act of terrorism. The declaration stressed that an act of terror in any part of the world was a threat to every part of the world. The need to strengthen international cooperation in combating terrorism was reiterated as was the necessity to comply with all international terror conventions and related protocols and UN Security Council resolutions on anti- terrorism by all member states. Legal hassles relating to extradition of terrorists have to be addressed and terrorists and their associates must be strongly prosecuted. Mention was made about the need to curb crossborder terrorism and serious concerns were expressed regarding terrorist kidnappings and hostage- takings. Modern day terrorism has international implications and hence the response has to be international. In this context the two sides agreed to expeditiously finalize and adopt the Comprehensive Convention on International Terrorism at the UN. Arms and explosives fuel terrorist and guerrilla attacks. Illicit trafficking of small arms and light weapons is a major problem in many parts of the world, including Africa. Hence the summit declaration called for full implementation of the UN Program of Action on SALWs and welcomed the efforts made by Africa towards that end. Another major security related threat faced both by India and Africa is that of piracy which has mostly reared its ugly face off the Coast of Somalia. Africa welcomed Indian efforts at combating piracy in the Gulf of Aden, Arabian Sea and the Indian Ocean. 26

Though India is still behind major economies like China is establishing trade with Africa, it has nonetheless made substantial progress. The Trade Ministers from African nations and India met before the summit and issued a Joint Statement in which many future ideas on ways and means to enhance cooperation were enshrined. During the meeting, The Duty Free Tariff Preference Scheme of India, which will help in boosting African exports to India, cluster development initiatives and the identification of priority sectors of partnership were discussed in the meeting as means of intensifying economic engagement. Initiatives were also taken to estab-

lish investment linkages between the two sides. It was further mentioned that India and Africa have a common take on the WTO Doha Round and agree with the basic principles of Special and Differential (S&D) Treatment and more preferential treatment for Least Developed Countries (LDC). The declaration concluded by noting with appreciation that the 2nd IndiaAfrica Summit, which was also the first one to be held in Africa, had been a success. While the first summit had started a Framework of Cooperation, the second one took the process further by setting up a Framework of Enhanced Cooperation. India, some analysts feel still needs to do much more investing, both in time and money, in Africa to catch up with China whose trade with the continent is already double that of India's. On the other hand, there are others who quip that while China is investing in Africa's present, India is all set to invest in the Dark Continent's future. Civil Services

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Thailand Elections, the new PM

Yingluck Shinawatra
fter undergoing years of political turbulence wherein Prime Minis ters came and went, Thailand is likely to witness a period of stability with the election of Yingluck Shinawatra, youngest sister of former PM, Thaksin Shinawatra as the new Prime Minister of the country. With her appointment to the most important post in Thailand, she is also set to make history by becoming the first woman PM of the country. Yinglucks candidature and her ultimate appointment to the top job has been a miracle of sorts, what with her almost nil political experience. But her political pedigree and the fact that she had the backing of her elder brother, who many feel has remote controlled her to power, thereby paving the way for his return from virtual political wilderness, finally ensured that she had the necessary numbers in her favor in the House of Representatives. Realizing the need of the times, Yingluck, a 44- year old business executive made political reconciliation the main plank of her election campaign. Thailand has suffered from political infighting since 2005-2006 when the Peoples Alliance for Democracy (PAD) began to stage massive protests against the Thai Rak Thai party led government of Thaksin Shinawatra which eventually led to the ouster of the latter from his country. Thailands troubles did not end with that as the nation hurtled further towards political instability with the return of Shinawatra after his political allies won subsequent elections and formed a coalition government. Thaksin continued to retain substantial support in Thailand and efforts by the yellow- shirt PAD workers to push him and his red- shirt workers out of Thai political landscape proved futile. What followed was the period of extended political crisis from 2008 to 2010, which culminated in the military crackdown on protestors in 2010 which left hundreds dead and nearly thousands injured. The events that unfolded after the ouster of Thaksin Shinawatra made it clear that a stable Thailand is unimaginable without the Shinawatra family and its sizeable support base. But Yingluck did not have things all going her way to the Prime Ministership. With the Pheu Thai Party left leaderless after the resignation of its previous head, Yongyuth and with expectations of another election rife in 2011, the stage was all set for a showdown within the party. The two leading contenders for the party leadership were Yingluck Shinawatra and Mingkwan Sangsuwan. Till January 2011, Yingluck remained a reluctant candidate till her name was proposed by veteran politician, Chalerm Ubumrung. She finally gave in to her new responsibilities and was finally catapulted to the highest position within the party when the green signal came from her elder brother, Thaksin Shinawatra who in what is likely to be a memorable quote in the future said in an interview some said she is my nominee. That is not true. But it can be said that Yingluck is my clone. He went on to add that his sister can take decisions on his behalf, though most political analysts would say that it is the reverse that might be true. Apart from announcing in her campaign the general public demand for national political reconciliation, Yingluck also promised to empower the Independent Truth and Reconciliation Commission of Thailand (ITRC), which had been set up by the previous Abhisit Vejjajiva led Democratic Party government to investigate the killings which resulted due to the military crackdown in 2010. As could be expected, the ITRC was given inadequate powers by the government whose military was responsible for the deaths and was subjected to frequent interventions. The commission had itself complained of interventions by the government and the military. But Yinglucks promises of giving more teeth to the ITRC appear to be in sharp contradiction of her SEPTEMBER 2011, XVII Year, Issue No.9
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other major proposal - giving general amnesty to all politically motivated incidents, starting from the coup of 2006 which resulted in Thaksins exile to the military crackdowns of 2009 and 2010. The amnesty would also apply to court rulings banning the Thai Rak Thai and Peoples Power Party leaders from contesting elections and seeking offices, the seizures by the PAD government of Government House and the Don Muang and Suvarnabhumi airports, and most significantly the conviction of Thaksin Shinawatra on charges of abuse of power. The amnesty ploy is undoubtedly motivated by political interests and it was expectedly heavily criti-

cized by the PAD party, which said that it was aimed at specifically giving amnesty to Thaksin. Undoubtedly, the move will allow Thaksin backdoor entry into Thai politics and rejuvenate the entire red- shirt brigade in a big way. The master move however was to include the military excesses within the amnesty fold. By doing so Yingluck ensured that the powerful Thai military which played an important role in sidelining Thaksin was not antagonized towards either her or her party. It is noteworthy that after Yinglucks election the Civil Services

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military chief commented that his force would not interfere in government matters. While some Thai political commentators and ordinary people remain skeptical about the militarys claims, given the history of prior military interventions in the country, with the new government enjoying a comfortable majority and showing foresightedness in forging alliances with other parties, the scope for the military in the present political scenario has become relatively less. The amnesty offer, Yinglucks critics and political opponents insist, will also result in returning back to Thaksin the 46 billion baht worth of his wealth which was seized by the previous government as a penalty. Yingluck however maintained that getting back the wealth was not one of the priorities of her government. The other electoral promises made included the reduction of corporate income tax from 30 per cent to 23 per cent and thereafter 20 per cent by 2013. This move is likely to be very popular in the corporate world and may well be viewed as a gift to them from one who belonged to that same world. For the common labourer, Yingluck promised to raise minimum wage to 300 baht per day and for university graduates 500 baht per day. With respect to agriculture, farmers have been promised loans up to 70 per cent of their expected income, based on guaranteed rice price of 15,000 baht per ton. The one laptop per child scheme, which was part of the Thai Rak Thai governments agenda, but which was sent to cold store after the 2006 coup is likely to be reactivated. At the same time, free WiFi may be given to the public. The political polarization in Thailand stemmed in part from the economic disparities between the haves represented by the PAD and the have- nots represented by Thaksin and his allies. Economically as in case of her political policies, the main theme of Yingluck Shinawatras electoral campaign has been reconciliation. Thus she has tried to maintain balance between the corporate sector and the agricultural sector while at the same time paving the way for the revival of some of her brothers old policies and schemes. In a way, with her election as PM, life has done SEPTEMBER 2011, XVII Year, Issue No.9
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a full circle for the Shinawatra family in a span of five troublesome years. Challenges before Yingluck Shinawatra: The victory gives an opportunity to Yingluck to manage Thailand's political and social-economic fissures that were highlighted with exile of Thaksin Shinawatra, after a military coup in 2006. Establishing democratic stability in the country will be the top most priority for her new government. She needs to boost Thailand's stability in the short term and reduce the chance of intervention by the coup-prone military five years after it ousted Yingluck's fugitive brother-in-exile, former premier Thaksin Shinawatra. Another major challenge before her would be to reconcile the interest of the red shirts (Thaksin's supporters) and the yellow shirts. If she makes any attempts to close the corruption cases against her

brother Thaksin Shinawatra that could revitalize the yellow shirts.

Yingluck Shinawatra - A profile Yingluck Shinawatra was born on 21st June 1967 in Chiang Mai. She obtained a bachelors degree in Public Administration in 1988 from the Faculty of Political Science and Public Administration, Chiang Mai University and thereafter did her Masters from Kentucky University in 1991 with the same subject and with specialization in Management Information Systems. Thereafter she became an executive in the businesses founded by Thaksin Shinawatra. She first did her sales and marketing internship in Shinawatra Directories Co., Ltd, a telephone directory business founded by AT&T International, wherein she later became the director of procurement and the director of operations. She became the general manager of Rainbow Media, a subsidiary of International Broadcasting Corporation (later known as TrueVisions) in 1994 and went on to become its dep- Yingluck uty CEO. She left IBC in 2002 and became the Shinawatra CEO of Advanced Info Services (AIS), Thailands largest mobile phone operator. She resigned from the AIS after the sale of its parent company, Shin Corporation to Temasek Holdings. She however continued to remain the Managing Director of SC Asset Co. Ltd, the Shinawatra family property development company. Yingluck has had her share of controversies. She was accused by the Abhisit Vejjajiva government of playing an important part in funding red- shirt protests against it. In fact, her bank account was among the 86 bank accounts that were accused by the government of funding the protestors. The Department of Special Investigation found that millions of bahts were withdrawn from her account while a lesser amount was deposited during the period April 2009 to May 2010. That was the heyday of protests. On 28th April 2010 alone 144 million baht were withdrawn. She was also accused of wealth concealment, charges which she dismissed as being politically motivated. 28 Civil Services

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Afghanistan

Troop withdrawal starts


President Obama has finally announced the much-awaited plan of withdrawal of troops from Afghanistan. According to the plan, 10,000 American troops will be withdrawn from Afghanistan by the end of 2011 with another 23,000 set to be evacuated by September 2012. The calling back of troops from Afghanistan and the simultaneous winding down of the war in Iraq is expected to help the United States refocus its attention and resources to resolve its economic and other problems and to unify a politically divided nation. It is worth not-

ing that over the course of the last decade, the US spent around $1 trillion on the wars in Iraq and Afghanistan. European leaders welcome troop withdrawal: European leaders welcomed the decision of America for the withdrawal of troops from Afghanistan. They believe that the leaders of the terror organisation have been forced out of Afghanistan and are no longer able to train terrorists on Afghan soil. In view of the fragile internal Afghan situation, it should be underscored that any withdrawal of should not be carried out to quickly. The situation is still unstable and the gains made up to this point are not irreversible. Afghan troop withdrawal and implications for Pakistan: The troop withSEPTEMBER 2011, XVII Year, Issue No.9
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drawal is definitely going to have a major impact on the relationship between Pakistan and the USA. Pakistan has been a major ally of USA in the battle against terrorism, while on the other hand it seemed apparent that at least a part of the Pakistani military and intelligence had been infiltrated by terror network. This was the reason for not informing Pakistani authorities of the action against bin Laden. The current withdrawal of troops will definitely enhance the internal as well as strategic security challenges for Pakistan. The US will continue to press Pakistan to expand its participation in securing a more peaceful future for this war-torn region. Pakistan now shares more responsibilities, it needs to assist in the development of its neighbour along with checking that terrorist groups doesnt re-gather their strength at its neighbour because ultimately it Pakistan that will feel the heat of extremist activities at its borders and would cripple its crippling domestic situations. Is the future of Afghanistan certain? The decision of America to withdraw troops from Afghanistan comes as a relief to the war weary European nations. The European nations that contribute troops to Afghanistan are UK, Germany and France and they have all made it clear that they will not stay engaged in the war against Taliban beyond 2014. The US and European countries rush towards an exit from the war against terror, which has indeed turned into a quagmire of sorts, is unjustified, given the realities both on the ground inside Afghanistan and the unfavourable geo-political climate in the broader region. Instead the Western coalition particularly the US should announce firmly that any troop withdrawal in the future will be tied to the actual progress on the ground in Afghanistan towards ending the war and bringing durable stability. But such a commitment to Afghanistan by the Western coalition, no doubt, will be very expensive politically, militarily and financially. The whole plan of withdrawal and disengagement from Afghanistan by the Western coalition led by the US is built on these assumptions that an eventual conciliatory deal with the Taliban will bring the war to an end, the Af29

ghan security forces will keep and enforce the peace and a small contingent of American troops in permanent/long-term military bases and armed with predator drones and superior fire power will guard against the return of Al-Qaeda and other international terror organizations to Afghanistan. Though such a scenario, however, is too far-fetched, difficult to achieve and yet more difficult to sustain over the long-term. Therefore, a withdrawal plan that is not tied to the actual level of progress on the ground in Afghanistan has the effect of further complicating the problems, emboldening the Taliban and actually leaving Afghanistan more vulnerable to interference by its neighbours. The key to Afghanistans stabilization, preservation of past achievements and prevention of yet another chapter of turmoil lies in reaching a genuine regional and international consensus by way of much greater regional consultation and collaboration. Turkey

Erdogan wins
Turkeys ruling Justice and Development Party or AKP has won a third term in parliamentary elections, setting the stage for the rising regional

Recep Tayyip Erdogan


power to pursue economic growth, assertive diplomacy and an overhaul of the military-era constitution. But the Justice and Development Party of Prime Minister Recep Tayyip Erdogan fell short of a two-thirds majority in parliament, a shortcoming that will force it to seek support for constitutional change from other political groups. Erdogans third term could Civil Services

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make him the longest-serving leader since Turkeys founder Mustafa Kemal Ataturk. His re- election with an increased share of the vote, the largest in almost half a century, will help the premier consolidate his victory over the military, which introduced Turkeys current constitution after a 1980 coup, and which has accused Erdogan of seeking to impose his Islamic values on Turkeys secular laws. It should be noted that despite a record of democratic reform, the government has faced increasing criticism that it has sought to consolidate power at the expense of consensus-building. The Prime Minister Recep Tayyip Erdogan has promised to start work on a new constitution with consensus of the main opposition parties, the media, NGOs and with academics. Economic Issues in Turkey: Turkey is facing problem of current-account deficit, inflation and bank credit growth. The new should have to tackle the issue by imposing a tight fiscal policy supporting the central bank in its efforts to calm down slightly-too-strong GDP growth. Foreign Policy Agenda of Turkey: Rebuffed in its efforts to join the EU, Turkey now borrows at 10-year yields lower than at least eight members of the 27nation bloc. In the Middle East, where popular revolts have swept away longtime leaders this year, Erdogans political success and Turkeys economic progress have been cited as a model by opposition parties including Egypts Muslim Brotherhood. Turkey has maintained good relations with Syria by keeping the countrys southern border with Syria open to refugees fleeing a crackdown on pro-democracy demonstrations. Yemen

Vacuum looming large


A third Arab nation is on the verge of overthrowing a longserving dictator after Yemens President Ali Abdullah Saleh had flown to Saudi Arabia for medical treatment following an attack on his presidential palace. The news of departure of Yemini leaders started festive celebrations all over Yemen but the political future of Yemen hangs in doldrums because it is still doubtful whether Ali Abdullah Saleh, a masterful political survivor who has held power for nearly 33 years, will yet return - or leave the country in ruins if he cant. Hanging in the balance is a country that even before the latest tumult was beset by deep poverty, malnutrition, tribal conflict and violence by an active al-Qaida franchise with international reach. With the departure of Salen, Vice President Abed Rabbo Mansour Hadi took over as temporary head of state. Dilemma raised due to his sudden exit: Politically his sudden departure raised many questions, including whether his Saudi hosts want him to return. The Saudis have backed Saleh and cooperated in confronting al-Qaida and other threats, but they are now among those pressing him to give up power as part of a negotiated deal. Saudi Arabia has watched with concern the anti-government protests that have spread to other neighbouring countries like Bahrain and is SEPTEMBER 2011, XVII Year, Issue No.9
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eager to contain the unrest on its doorstep. Another reason to fear is that international mediators, including US and Saudi Arabia may force him to pass his powers- a strong indicating that they are trying to push Saleh from power permanently. Internal security threats are also on the anvil with the departure of Salen. The presidents absence raised the specter of an even more violent power struggle between the armed tribesmen who have joined the opposition and loyalist military forces under the command of Salehs son and other close relatives. Street battles between the sides have already pushed the political crisis to the brink of civil war. Background to the protest in Yemen: Anti-regime protests in Tunisia have ignited public demonstrations in other pockets of the Arab world. Following the footsteps of Tunisia, Egyptians took to the streets of Cairo en masse to demand the resignation of their leader, Hosni Mubarak. This wave of protest had its impact on politics of Yemen also, which resulted in Yemeni protesters flooding the nations capital city of Sanaa to call for their president, Ali Abdullah Saleh, to cede control of the government. Yemen is one of the poorest nations in the Middle East, and Saleh has presided over the countrys deterioration for the past 32 years. While protesters are railing against the same kind of corruption and improper governance that Tunisians and Egyptians face, but Yemens movement appears less revolutionary and more conservative than the others taking shape. It needs to be kept in mind that President Saleh is a longtime ally of the United States in its war on terror, and Yemen is a key front in that effort. Libya

United States recognizes rebels


The United States and more than 30 other nations have formally recognized Libyas main opposition group as the countrys legitimate government, giving the rebel movement a major boost. The decision, which declared Libyan leader Moammar Gadhafis regime no longer legitimate, gives his foes greater credibiliCivil Services

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ty and will potentially free up billions in cash that the rebels fighting Libyan forces urgently need. The front lines in the Libyan civil war have largely stagnated since the popular uprising seeking to oust Gadhafi broke out in February. Rebels, backed by NATOs air force bombings, control much of the countrys east and pockets in the west. But Gadhafi controls the rest from his stronghold in Tripoli, the capital. This decision was announced by the Foreign ministers of the socalled Contact Group on Libya (Along with the U.S., the 32-nation Contact Group on Libya includes members of NATO, the European Union and the Arab League). Implications of the decision: The recognition of rebel forces as the legitimate government gives the enemies of Khadafi a major financial and credibility boost. Diplomatic recognition of the council means that the U.S. will be able to fund the opposition with more than $30 billion in Khadafi-regime assets that have been frozen in American banks. After this decision the nations would deal with Libyas main opposition group the National Transitional Council, or NTC as the legitimate governing authority in Libya until an interim authority is in place that will organize free and fair elections. It is also hoped that early resumption of legitimate government in Libya would assist in resuming oil exports. The recognition given to National Transitional Council will also help in restoration of human rights in Libya and will pave the way to a truly democratic Libyan government. The U.S and others nations were impressed by the progress the NTC has made in laying the groundwork for a successful transition to a Libya that protects the rights of all its citizens, including women and minority groups. At Brussels

financial markets of Europe. Other agreements reached during the summit include: (a) It was agreed to give another 159 billion euros to Greece to stop debt contagion across Europe. To ease Greeces debt repayments on its loans, the summit agreed to extend them from 7.5 years to between 15 and 30 years in some cases, and at a rate of

3.5 percent, down from 4.5 percent. (b) The European leaders appreciated the measures taken by the Greek government to stabilize public finances and reform the economy as well as the new package of measures including privatization recently adopted by the Greek Parliament. (c) It has been agreed to design a new programme for Greece.

South Sudan

Joins UN as 193rd member


Newly independent South Sudan became the 193rd member of the United Nations. South Sudan was welcomed into the international community amid an uneasy peace with the Sudanese government in the north. It is here underscored that the January 2011 referendum held under the terms of the 2005 Comprehensive Peace Agreement (CPA) that ended the decades-long civil war between the North and the South Sudan resulted South Sudans independence from the rest of Sudan. South Sudans President is Salva Kiir and the capital city is Juba. Issues and Challenges for South Sudan: Independence for South Sudan was the climax of a 2005 peace agreement that ended decades of civil war with the Arabdominated north and called for a referendum in which South Sudan voted overwhelmingly for secession. But still differences remain between the north and the mainly ethnic African south over borders and wealth-sharing among other things. In fact, the leaders in the South predominantly Christian and various tribal religions are accusing the Islamic regime to the North of inciting unrest and rebellion in the new nation. Besides that the most contentious issue remains unresolved to divide up the oil money from the Abyei region that straddles the new border between the two countries. Further , The corruption here is very high because the culture of war has been institutionalized. Despite these inherent limitations both North and South Sudan will have to resolve their outstanding disputes with pragmatism and doable approach. The leadership of both the nations need to understand that wellbeing and future prosperity of their citizen depends on the practical behaviour shown by each other. South and North share a common destiny they must see a future as true partners, not rivals. 31 Civil Services

Euro Zone Summit


A 17-nation Euro Zone Summit was held in Brussels; capital of Belgium. The summit hovered around the objective of finalizing a second rescue package for debt plagued Greece and calm the financial markets of Europe. The participating nations agreed on Marshall Plan for Europe to revive the SEPTEMBER 2011, XVII Year, Issue No.9
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G20 Agriculture Ministers Meet

on Food Security Issues


The Agriculture Ministers from the G20 countries has met in Paris with the aim to develop an action plan to submit to the G20 leaders summit in November. The current Chairman of the G20, Nicolas Sarkozy, President of France, made food security one of his priority issues and called the first ever G20 Agriculture Ministers meeting. The Ministerial Declaration is more market oriented than expected and will be known for what was excluded as well as included. The summit discussed food security and proposal for regulating the global agricultural markets. At the summit France declared that it wants a central database on crops, limits on export bans, international market regulation, emergency stockpiles and a plan to raise global output. The Ministerial Declaration released at the end of The current the summit provided an Action Chairman of the Plan on Food Price G20, Nicolas Volatility and AgSarkozy, President riculture with five of France major objectives: (1) improve agricultural production and productivity, (2) increase market information and transparency, (3) strengthen international policy coordination, (4) improve and develop risk management tools, and (5) improve the functioning of agricultural commodities derivatives markets. Increasing production through productivity improvements is at the heart of food security in a global sense, but market signals and government policies will drive outcomes through supply chains that start at the farm level. The leaders of the G20 nations have agreed to improve agricultural productivity and total output through proper technology research. Further they recognized that increased market information and transparency is key to increasing global agricultural productivity. It has also been agreed to create a new Agricultural Market Information System (AMIS) within the FAO of the UN with cooperation from the International Grains Council. The real key to this effort is the involvement of the G20 countries with invitations to other major producing, exporting and importing countries. The Ministers also supported a Global Agricultural Geo-Monitoring Initiative to use remote sensing tools for crop production forecasting. Conclusions from the meet: The first ever endeavour by the G20 nations to face the challenge of agricultural productivity were more positive for international trade and market solutions to food security issues than had been feared by some analysts, but there is nothing that will solve food security issues. All issues deal with individual farm, firm and country decisions on agricultural research, food production and government regulations not easily changed by G20 actions. The Ministerial Declaration provided a benefit by highlighting dozens of on-going efforts from technology research to risk management plans that are already having an impact. The declaration also provides plenty of common ground where exporters and importers can work together to increase production and provide better diets for people though unrestricted trade. Past G20 summits have addressed food issues, but have had limited follow up actions. That should not be surprising given their complexities and competition for time and money of other issues. The best outcome is to again call attention to program that work and encourage national governments to remain committed to the cause. SEPTEMBER 2011, XVII Year, Issue No.9
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This programme will be designed notably through lower interest rates and extended maturities, to decisively improve the debt sustainability and refinancing profile of Greece. (d) The Euro Zone nations have agreed to adhere strictly to the fiscal targets, improve competitiveness and address macro-economic imbalances. Public deficits in all countries except those under a programme will be brought below 3 percent by 2013 at the latest. Are all future worries settled by the Euro Zone Summit: The emergency summit may have done enough to settle the Greek problem for the time being. But it could yet cause shudders in the rest of the euro area as investors with exposure to other countries worry about taking a hit. And although European leaders insisted that their remedies for Greece were exceptional and unique, Ireland and Portugal may think otherwise. At best, Europe has won a breathing-space. But so much can still go wrong, not least in Greece, whose chances of getting on top of its towering debt without a much bigger restructuring still look remote. By going for a modest restructuring now, European leaders will find it harder to impose a more stringent one in the future, leaving European taxpayers footing even more of the bill if Greece cant get its debt under control. The euro area may have taken a step back from the brink, but it is still perilously close to the edge. St. Petersburg

International Economic Forum 2011


Indonesian President Susilo Bambang Yudhoyono, Finnish President Tarja Halonen and Spanish Prime Minister Jose Luis Rodriguez Zapatero recently took part in the St. Petersburg International Economic Forum 2011 held in St. Petersburg, Russia (SPIEF 2011). The XVth St. Petersburg International Economic Forum convened under the theme Emerging Leadership for a New Era. This distinguished group of political leaders were joined by over 250 of the worlds top CEOs. Over 5,000 of the worlds political and business leaders, as well as leading voices from academia, civil society and media and discussed and Civil Services

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deliberated on key issues facing Russia and the world. This year the Forum aimed to broaden its representation to cover key emerging markets, as well as introduce a number of technological enhancements and new session formats to provide better interaction and networking opportunities, and to improve the overall participant experience for participants. About SPIEF: The St. Petersburg International Economic Forum (SPIEF) was established in 1997. Since 2006 it has been held under the auspices of the President of the Russian FederaAt Bangkok

tion. Over the past five years the Forum has become a leading business event, attracting participants representing government and business leaders from around the world. Opportunities Offered by SPIEF: (a) Networking: meet partners, clients, and form new relationships (b) Unique opportunities for discussions with government officials from Russia, CIS and other nations (c) Community: establish working groups to achieve urgent business objectives (d) Set agendas: select, discuss and review the key issues and trends affecting Russia and

5th Asia-Pacific Urban Forum, 2011


Delegates from governments, civil society, private sector and academia in the Asia-Pacific region gathered in Bangkok for a United Nations-convened forum to discuss ways of ensuring that urban economic prosperity is socially equitable and ecologically sustainable. The theme of the Fifth Asia-Pacific Urban Forum (APUF), was Cities of opportunity: Partnerships for an inclusive and sustainable future and was organized by the UN Economic and Social Commission for Asia and the Pacific (ESCAP). Major Objectives of APUF: (a) Discuss emerging and critical urban development issues from the perspectives of different stakeholders (b) Share experiences on good practices and approaches among nations. (c) Explore cooperation opportunities and links to regional and global processes and development objectives. Major Urban challenges in Asia and Pacific: Urban areas in AsiaPacific are growing at an unprecedented rate and scale. How the regions cities develop and function will shape the future of not just Asia-Pacific but the world. While the regions cities are engines of economic growth and centres of culture and creativity, they also exhibit enormous ecological footprints, concentrations of poverty and disparities, and vulnerability to natural and man-made disasters. Shifting to inclusive and sustainable urban development therefore means environmentally sustainable economic growth, sharing the benefits in a more equitable manner to meet everyones basic needs, as well as enhanced resilience of cities and their populations to the broad spectrum of natural and man-made crises and disasters. The strategy to face these urban challenges: These challenges require adaptive and inclusive governance and a strengthened urban social fabric. It requires financing approaches that promote resource efficiency effectively. It requires strategic use of appropriate technologies and enabling institutional and regulatory frameworks and policy interventions. Implementing the inclusive and sustainable development paradigm means clearly identifying barriers to incremental and transformative change and to introduce incentives to overcome them. SEPTEMBER 2011, XVII Year, Issue No.9
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the world, learn from leading world experts (e) Use cutting-edge equipment: the latest technologies and a wide range of IT platforms. Agenda covered by SPIEF 2011: The theme of this years meeting was Emerging Leadership for a New Era. The SPIEF 2011 sessions was structured around three major subthemes: Securing Global Growth, Building Russias Creative Capital, and Expanding Technology Horizons. With the recovery from the global economic crisis still uncertain and the powers, trends, technologies and issues reshaping the global agenda under rapid flux, this years Forum promises to be of high importance to global leaders seeking to better understand and find common purpose in shaping the emerging global environment. Just as the world is under change, so too is the St.Petersburg Forum. 2011 Forum participants were even more diverse in recognition of the increasing role emerging economies are playing in driving global growth and impacting innovation models. Moreover the Forum aimed to introduce a number of technological enhancements and new session formats to better interaction and networking, and enrich the overall participant experience. 5th Conference of SAARC

Speakers and MPs


The Fifth Conference of the Association of SAARC Speakers and Parliamentarians was held in New Delhi. The Conference deliberated on two themes, first Consolidating Democracy: Strengthening Trust between Parliament and the People and on Sustainable Development in SAARC Countries: The Way Forward in six sessions spanning over two days. The conference served its purpose of educating the speakers and parliamentarians from all the SAARC nations who came together and exchanged their views on topics of regional interests. This forum provides a good opportunity to the parliamentarians of the region to strengthen the roots of democracy in the region, work for protection of individual rights, sustaining rule of law and delivering justice to the people of the region. The forum realized the challenge to maintain effective mechanism of checks and balCivil Services

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ance in the democratic setup. The executive, legislative and judicial arms of the government must be clearly defined and separation of powers guaranteed. The conference highlighted its commitment to uphold the sovereignty of Parliament and prevent it from becoming a mere rubber stamp in the hands of the executive. It needs to be underscored that if the parliament and its democratic institutions need to maintain trust and confidence of the people, there must be complete accountability and transparency in the administrative setup of the nations. The conference is conducted under the auspices of the Association of SAARC Speakers and Parliamentarians. The Association of SAARC Speakers and Parliamentarians was set up in 1992 to promote people to people contacts and interactions among the parliamentarians so as to further deepen the roots of parliamentary democracy in the region. The first conference was held in 1995 in Delhi. The second was held in Islamabad in 1997. The Sixth Conference of the Association will be held in Islamabad in 2012 and the Seventh Conference in the Maldives in 2013. Morocco

to corruption. The revamped draft constitution will make officials more accountable, the Parliament in Rabat more dynamic and will give the government greater powers. The new prime minister would have new powers in decision-making and in day-today management relieving the king of a number of duties and aligning the style of management along the lines followed by some European Union countries. In an example of power sharing, the draft constitution empowers the prime minister to dissolve the House of Representatives, and stresses that the king shall consult him before announcing the dissolution of Parliament. The new constitution aims to ensure separation of powers as well as establish balance and cooperation between all the branches of the government. Under the reforms, Morocco will also have an independent judiciary and provide equal rights for women. Vietnam

The other side of reform process- will it work? The reforms process in Morocco appears to be genuine, but the security apparatus, cabinet positions and religious appointments remain under the finger of the king. It is doubtful whether these reforms hold something good for a nation that has been accused of human rights abuses in the past. By announcing these reforms process the king of Morocco may well have succeeded in staying ahead of the protest that has led to the demise of the regimes in Tunisia and Egypt and that has troubled Libya, Syria, Yemen and Bahrain. Whether the reforms are short lived or transform Morocco into Arab worlds first constitutional monarchy will depend not only on how the king acts in the coming months, but also on the capacity and willingness of Moroccan political organizations to build on the opportunities the constitution offers them.

Truong Tan Sang nominated


Chairman of Vietnams 13th one-party National Assembly, Nguyen Sinh Hung has nominated Truong Tan Sang, permanent member of the Party Secretariat as Vietnamese State President for the 2011-2016 tenure. Sang, an arch rival of Prime Minister Nguyen Tan Dung is the ninth President of the country, the first being revered founding father Ho Chi Minh. Sang has succeeded Nguyen Minh Triet, who served one term. It is here underscored that the role of the president in Vietnam is mostly ceremonial, while the prime minister runs the countrys day-to-day operations. It is to be referred that Vietnam is a one-party system and it does not tolerate any challenge to its rule, and publicly calling for a multiparty system can fetch long-term imprisonment. Background to his appointment: The appointment of the new President was made amid challenges at home with the economy and abroad with China over disputed territory in the potentially resource-rich South China Sea. Vietnam, one of Asias fastest-growing countries is also facing domestic challenges over its economic woes. It is battling huge trade and current account deficits, a weak currency and double-digit inflation thats squeezing the countrys poor by driving up food prices. 34 Civil Services

Towards Constitutional Monarchy


Moroccos King Mohammed VI has announced a series of Constitutional reforms that aim to turn the country into a Constitutional monarchy. The same were even got approval of the people of the nation on the basis of referendum held in the month of July. The referendum was approved by 98.49 per cent of voters. Based on the new Constitution, the king will remain the supreme commander of the army and a new article formalized him as the highest religious authority in the kingdom. Under the referendum, voters are empowered to select a prime minister, ending the longstanding practice in which the king has selected his own man for the job. The prime minister has tended to take his lead from the sovereign on key matters of state. It is here underscored that thousands of young Moroccans have taken to the streets, inspired by the Arab Spring. Their real demand has been creation of more jobs and an end SEPTEMBER 2011, XVII Year, Issue No.9
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Statistics

STATISTICS
OUTLINE Statistics section in GS (Paper-II) aims to check basic knowledge of statistics and data interpretation of candidates. This particular section is most direct and piece of cake in comparison with other descriptive sets of question. Statistics is a relationship between data and decision making in the following manner: summarizing, presenting, analyzing, interpreting, and drawing conclusions Looking into the utility of Statistics, one can summarize and simplify large amounts of numerical data using this tool. One can draw conclusions about data. Statistics may reveal underlying patterns in data not normally observable (especially true in multivariate analyses). One of the sub-sections, CORRELATION is a discipline that examines data and can calculate numerical estimates of so called estimated/probable/true values. The estimation or correlation comes along with the concept of PROBABILITY, as one cannot prove anything- estimates are normally presented in probabilistic terms (e.g. we are 95% sure ...) Statistics can be useful tools for helping professionals of different backgrounds while taking any decisions. Researchers and scientists often use tables and graphs to report findings from their research. In newspapers, magazine articles, and on television they are often used to support an argument or point of view. Statistics is important in the field of engineering by it provides tools to analyze collected data. For example, a chemical engineer may wish to analyze temperature measurements from a mixing tank. Statistical methods can be used to determine how reliable and reproducible the temperature measurements are, how much the temperature varies within the data set, what future temperatures of the tank may be, and how confident the engineer can be in the temperature measurements made. There are some common terminologies followed in statistics: Population: Population is a collection of all subjects possessing a common characteristic that is being studied. The total set of measurements. Census: Census is the collection of data from every element in a population. Sample: A subgroup or subset of the population. Collection of objects which are a subset of the population of interest and are taken as representative of the population. TYPES OF QUESTION DATA INTERPRETATION AND GRAPHS This type of questions aims at converting the data (in form of table or language) into Graphical mode and vice-versa. A basic practice of Data Interpretation section for the CSAT paper will prove a big advantage in the mains examination. DI questions evaluate the test takers ability to interpret the given data one way or the other by forcing him to use mathematical calculations to reach the desired result. The questions are calculation-intensive and hence pose a SEPTEMBER 2011, XVII Year, Issue No.9
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lot of problems for individuals who cannot calculate and approximate the given data fast. A graph is a visual way to display information from different areas including engineering, sciences, economics etc. A basic knowledge of all varieties of graph is essential in order to same time. Following points must be taken care-of, while playing with data or graphs, Never ignore the units given for the variables (in million dollars, in thousands etc.) Instead of wasting time in doing lengthy calculations, you must try to solve the questions using approximations. Use direct per cent to ratio conversions, to speed up the calculations. Read the question as well as the Graph axes titles, accurately. The common errors are like absolute difference vs. relative difference etc. Tables vs. Graphs Although both are form of data only but still both possess a peculiarity of their own. Tables and graphs are both ways to organize and arrange data so that it is more easily understood by the viewer. Tables and graphs are visual representations. They are used to organize information to show patterns and relationships. A graph shows this information by representing it as a shape. Tables and graphs are related in the sense that the information used in tables is frequently also used for the basis of graphs. It is important to know how to create and interpret tables and graphs as they are used in many important areas of research, and used to help people in decision making. Tables and graphs are relevant to almost all areas of the curriculum. The conventions of tables and graphs are consistent across all curricula. It is the context in which they are used that identifies them as science, social sciences, geography, etc. Graph Types There are five basic types of graphs that are used most frequently. There are more complex types that are used for specific purposes, usually technical in nature, which will not be discussed here because they would rarely be asked this particular paper. Here are the five basic graph types: a) Area - This graph shows the relationship of different parts to a whole over time. One example would be to show the breakdown of the total organization profit by product

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line over the last five years. This graph can show many (46) data series at a time. b) Column - This graph shows the differences in individual values vertically. It can be used to show the differences between values in different time periods or other data groupings. Examples include showing the total number of phone calls each month for the past year or the number of orders received by each order method (fax, phone, e-mail, web, walk-in) over the last month. This graph works best with fewer (1-3) data series. Column graphs are similar to bar graphs and line graphs. All three have grid lines going horizontally and vertically. The column graph is more similar to the bar graph in that it is used more for one time or single events rather than continuous events. In the column graph the data is literally presented in columns. The category names can be on the graph or underneath the column. It is not necessary to assign different colors to the columns although one could do so and then attach a legend that would explain the different colors and which category they stood for.

case, the numbers for each category are across the bottom of the chart. A bar chart is marked off with a series of lines called grid lines. These lines typically mark off a numerical point in the series of numbers on the axis or line. Bar graphs are useful to get an overall idea of trends in responses - which categories get many versus few responses. Bar graphs should be used for categorical, ordered, and discrete variables. If the number of units in a discrete variable is large it may be displayed as a continuous variable. d) Line - This graph shows values at different points in time. It is usually best to have equal time intervals along the horizontal axis of the graph. One example would be to show the trend in the number of customer service calls handled by the five offices each month over the last year. A line graph can display many (4-6) data series quite well.A line graph represents a numerical or mathematical relationship and so has more information "buried" in it than other graphs. Line graphs can sometimes be used to make predictions for values that were not measured, by interpolating or extrapolating the trend, or by looking at the shape. A line graph is most useful in displaying data or information that changes continuously over time.

c) Bar - This graph shows the differences in individual values horizontally. It is not a good choice for showing values in different time periods. It works better for showing the results of one or two data series. One example would be to show the popularity of the top eight answers to a survey question. Bar graphs are an excellent way to show results that are one time, that aren't continuous - especially samplings such as surveys, inventories, etc. Below is a typical survey asking students about their favorite after school activity. Notice that in this graph each column is labeled - it is also possible to label the category to the left of the bar. In this

EXAMPLE: Answer these questions about the graph at the right:

a. How much rain fell in Mar of 1989? b. How much more rain fell in Feb of 1990 than in Feb of 1989? c. Which year had the most rainfall? d. What is the wettest month on the graph? SOLUTION: a: 2 inches (from graph) b: 2 inches c: Total rain will be estimated by adding all the month rainfall. SEPTEMBER 2011, XVII Year, Issue No.9
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R (1989) = 4+2+6+8+6+2 = 28 R (1990) = 2+4+2+6+4+8 = 26. Hence, higher rain in the year 1989. d: April 1989 EXAMPLE: Water flows out of an inverted cone (i.e. the water flows through the pointy end of the cone and the widest part of the cone is at the top). The volume of the water is decreasing at a constant rate. Draw a sketch graph of the height of the water in the cone versus the time. SOLUTION: We need to model the height at time t based on what we know about cones. We also need to assume several things. The volume of a cone is V = r2h/3. For simplicity, let r = h, then V = h3/3. So the height of the cone is given by the cube root of 3V/. We take a cone with "easy" values, say h = r = 10. This has volume 1000/3 units. If the water drains out in 10 seconds, it means 100/3 units will drain out each second. Thus the amount of water left after t seconds is given by (1000 - 100t)/3 units. The height at time t will be the cube root of (1000 - 100t). That is, The graph of our model is given below.

vided to the organization by each level of government in the past year.Pie graphs (sometimes called pie or circle charts) are used to show the parts that make up a whole. Circle or pie graphs are particularly good illustrations when considering how many parts of a whole are inception. To the right of the pie chart is a legend that tells which color stands for which category. In addition, the percents are also near the pie slice that stands for that particular amount of time spent. Because it is difficult to compare different circle graphs, and often hard to compare the angles of different sectors of the pie, it is sometimes better to choose other sorts of graphs.

SUMMARY TABLE:
Pie chart A pie chart displays data as a percentage of the whole. Each pie section should have a label and percentage. A total data number should be included. A bar graph displays discrete data in separate columns. A double bar graph can be used to compare two data sets. Categories are considered unordered and can be rearranged alphabetically, by size, etc. A line graph plots continuous data as points and then joins them with a line. Multiple data sets can be graphed together, but a key must be used. -Shows percent of total for each category -Use only with discrete data -Hard to compare 2 data sets -Can easily compare two or three data sets -Use only with discrete data -Visually strong

EXAMPLE: Draw the graph (distance vs. time) that matches each of the following stories: a. I had just left home when I realized I had forgotten my books so I went back to pick them up. b. Things went fine until I had a flat tire. c. I started out calmly, but speed up when I realized I was going to be late. SOLUTION: Considering initial velocity as constant.

Bar graph

Line graph

-Can compare multiple continuous data sets easily -Interim data can be inferred from graph line

Using Graph paper:

e) Pie - This graph shows the proportions of each segment of a whole. This graph only handles one data series. An example would be to show the proportion of funding proSEPTEMBER 2011, XVII Year, Issue No.9
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While converting any data collection into graph, following points must be taken care of: selecting an appropriate graph to communicate the data providing a title for the graph naming the axes (X and Y) deciding on the appropriate scale to use when constructing graphs marking sub-units on the axes at regular intervals (although occasionally marking at irregular intervals may be acceptable) including the units of measure (plus any multipliers) on each axis of a graph answering questions that involve calculations plotting information from an article/ written text identifying trends, explaining or synthesizing relationships between two graphs, or two or more variables reading the overall shape or trend of a graph EXAMPLE: The electric power P (in watts) delivered by a battery as a function of the resistance R (in ohms) is :

Plot the power as a function of the resistance. Take following inferences from the graph: Maximum power Resistance value beyond which nature of the trend changes SOLUTION:

The maximum power of 50 W occurs when resistance R = 0.5 W P decreases as R increases beyond 0.5 W EXAMPLE: The birth weight of several babies was recorded as shown in the table below. Construct a bar graph and a pie graph (in terms of %) to visually display this data. Birth Weight of Babies Baby Charlie Joan Matthew SOLUTION: Weight (lbs) 6.9 7.9 9.4 Baby Dennis Lori Sarah Weight (lbs) 8.1 6.2 10.5

Table formation Tables are an organiser for an investigation a way of presenting data in a report an organiser to assist comprehension and thinking. For investigations with no numerical data it is usually better to use a table to present the data. A table with numerous variables can be broken down into smaller tables that look at each variable separately. The interaction between the various variables can then be explored. Structure The independent variables (if they have been identified) go in the left hand columns, the dependent variables on the right. Any column heading should have all the information needed to define the table's meaning. A categoric variable should include a description of the class. A discrete or continuous variable should identify units and any multipliers (e.g., hundreds of people, millions of dollars, kilometres). A title summarises what the table is showing. When investigating, the order of the entries is arbitrary. When reporting results, they should be sorted into an order. Sometimes it is better to put data into bands, e.g., < 10 years, 10-15 years, 16-20 years this makes it more manageable, and easier to see trends and patterns. EXAMPLE: Answer Q1 to Q4 based on following information: Y2K compliance by market segments

1. How many companies in India is Y2K non-compliant? 2. By December 31, 1999; 60% of the partially compliant and 10% of non-compliant companies of the sample size become fully compliant. How many companies in the sample size are still not Y2K compliant? 3. In percentage terms of compliance, which segment has the same rank in both, full as well as partial compliance? SEPTEMBER 2011, XVII Year, Issue No.9
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4. In how many segments are more than 10 companies that are fully compliant? SOLUTION: 1. We only know Y2K-compliance of the companies sampled not all companies in India. Hence data is insufficient to answer the question. 2. Services have 23% of 58 companies which gives the highest number of companies. 3. Partially compliant companies = 94 60% become compliant Remaining = 40% of 94 Non - compliant companies = 97 10% become compliant Remaining = 90% of 97; Remaining 0.4 94 + 0.9 97 = 125 4. Manufacturing has 4th rank in both categories. Govt/ PSU has 3rd rank in both categories. EXAMPLE: In ABC Corp. ltd., New Delhi, there are total 100 employees in the year 2000.The male vs. female ratio is 3:2 in 2000. In the year 2000, there are only 5 local (New Delhi) males and total 80 non-local staff. In the next year total 10 new local employees joined out of which 50% were male. Summarize the above data in form of table showing male to female ratios and local to non-local staff ratios for both the years. SOLUTION: 2000 2001 Male / Local 5 10 Male / Non-Local 55 55 Female / Local 15 20 Female / Non-Local 25 25 100 110 Male : Female 3:2 13:9 Local : Non-Local 1:4 3:8 INTEREST CALCULATION Today's financial world totally runs on the fluctuations of Interest rates. There is various kind of Interest rates meant for very small to a heavy transaction of monetary value. Whenever we borrow money from a bank, we pay interest and in case we deposit our earnings in bank, then we get some interest. In the first case the interest is really a fee charged for borrowing the money, it is a percentage charged on the principle amount for a period of a year usually. On the other hand, in the second case, we get a part of the interest that bank is earning using our money. In case you want to know how much interest you will earn on your investment or if you want to know how much you will pay above the cost of the principal amount on a loan or mortgage, four parameters must be known: 1. PRINCIPAL AMOUNT 2. RATE OF INTEREST (ANNUALLY, QUARTERLY ) 3. TIME PERIOD 4. INTEREST PATTERN (SIMPLE, COMPOUNDED ) Simple interest As the name suggest, this is the most basic and common form of interest rate. Although at very few places this form is exactly used, but still it forms the basis of all other forms of interest calculations. Because simple interest is a linear function, it is quite easy to see how a loan or an investSEPTEMBER 2011, XVII Year, Issue No.9
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ment will turn out in the future. We can calculate simple interest by multiplying the Principal amount by Rate by Time, given by the following formula (taking care of all the units): I=Pxrxt Here, principal (P) is the amount to begin with, whether it's invested, lent, or borrowed. This amount increases by the given interest rate (r) over a period of time (t). To calculate not just the accrual but the resulting amount to which interest is applied, you can use the amount function: A = A0 + I A = A0 +(A0 x t x r) A = A0 x (1 + t x r) In the given formula, A0 is the principal amount (Initial amount deposited or borrowed), r is the annual rate of interest, t is the number of years the amount is deposited or borrowed for. A is the amount of money accumulated after n years, including interest. Compound Interest "Compound interest is paid on the original principal and on the accumulated past interest." This form interest rate is comparatively trickier, but it shows the actual picture of real interest calculations. Compound interest may be contrasted with simple interest, where interest is not added to the principal (there is no compounding). Compound interest is standard in finance and economics, and simple interest is used infrequently (although certain financial products may contain elements of simple interest). Interest is periodically added to the current amount, and the amount you get (or owe) is computed from the following formula: A = A0 x (1 + r/n)n x t A0 is the principal amount (Initial amount deposited or borrowed), r is the annual rate of interest, t is the number of periods, the amount is deposited or borrowed for, A is the amount of money accumulated after n years, including interest, And n is the basis of compounding (Quarterly=4, Half yearly=2) Hence: Annually = A0 (1 + r) = (annual compounding) Quarterly = A0 (1 + r/4)4 = (quarterly compounding) Monthly = A0 (1 + r/12)12 = (monthly compounding)

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Instead of a linear rate being applied, we see an exponential growth: each time the amount A is compounded by an interest rate dependent on that current amount A. In investing, that sounds like a good way to make your money grow. In borrowing, however, that doesn't sound that great. In order to define an interest rate fully, and enable one to compare it with other interest rates, the interest rate and the compounding frequency must be disclosed. Always check, whether the question is meant for the Final amount or just the interest earned. EXAMPLE:A man buys a piece of land for 96000$, he sells 2/5th of it at a loss of 6%. At what gain percent should he sell the remaining piece of land to gain 10% at the whole? SOLUTION:2/5 of $96,000 ought to have fetched $38,400 as a break-even price but lost 6% of that by being sold at a loss = $2,304 The aim is to sell the other parcel of land purchased for $57,600 for sufficient to make up that loss and to put a net total of $105,600 (i.e. $96,000 + $9,600) in the bank. $36,096 has already been placed there by the first transaction and therefore the cash price wanted is 105,600 - 36,096 = $69, 504. So the question is "what percentage of $57,600 is $69,504?" and the answer is 120.6666%. So the selling price has to involve a gain of 20.6667 % of the purchase price of the second parcel of land for the overall gain to be 10%. EXAMPLE: In accordance with the provisions of the new budget, a man pays tax at the rate of 5% and 10% as special surcharge on the amount of income tax levied. He altogether pays a tax of Rs. 11,000. Find the gross pay of the man (The allowed standard deduction is 20%) SOLUTION: Let GP gross pay = Rs. 1,000. After 20% deduction, remaining = 1000 80% = Rs. 800 Rs. 800 5% tax = Rs. 40 Rs. 40 + 10% of 40 (surcharge) = Rs. 44. When the amount of tax is Rs. 44, GP = Rs. 1,000 Rs. 11,000 , GP = 1000/44 * 1000 = Rs. 2,46,363 nearly about Rs. 250,000. EXAMPLE:A sum of $5000 is invested at an interest rate of 9% per year. Find the time required for the money to double if the interest is compounded semi-annually? SOLUTION: We have P = $5000, r = 0.09, and n = 2. We want the principal to double, so A = 2P = $10, 000. Then, using A = P (1 + r/n)nt 10000 = 5000 (1 + 0.09/2)2t t=log2 / (2*ln(1+0.045)) ~ 8 years BASIC NUMERACY This section is particularly aims at basic numerical calculations including calculating averages, speed calculation, work problems etc. The questions are comparatively straightforward and less time consumer. Practice of playing with numbers will increase both speed well as accuracy in this section. One must practice how to translate simple English statements into mathematical expressions, like "of" can indicate "times". This frequently comes up when using percentages. Percentage (Percent means per hundred) SEPTEMBER 2011, XVII Year, Issue No.9
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Percentage problems usually work off of some version of the sentence "(this) is (some percentage) of (that)", which translates to "(this) = (some decimal) (that)". You will be given two of the values, or at least enough information that you can figure two of them out. Then you'll need to pick a variable for the value you don't have, write an equation, and solve for that variable. As a short-cut, following table must be used while converting any statement into percentage form, and vice versa.
Percent Decimal 1% 5% 10% 12% 20% 25% 33.33% 50% 0.01 0.05 0.1 0.125 0.2 0.25 0.333... 0.5 Fraction 1/100 1/20 1/10 1/8 1/5 1/4 1/3 1/2 Percent Decimal 75% 80% 90% 99% 100% 125% 150% 200% 0.75 0.8 0.9 0.99 1 1.25 1.5 2 Fraction 3/4 4/5 9/10 99/100 1 5/4 3/2 2

EXAMPLE: Answer the following questions: a) The average of 20 numbers is zero. Of them, at the most, how many may be greater than zero? b) The average weight of 8 person's increases by 2.5 kg when a new person comes in place of one of them weighing 65 kg. What might be the weight of the new person? SOLUTION: a) Average of 20 numbers = 0. Sum of 20 numbers (0 x 20) = 0. It is quite possible that 19 of these numbers may be positive and if their sum is a then 20th number is (-a). b) Total weight increased = (8 x 2.5) kg = 20 kg. Weight of new person = (65 + 20) kg = 85 kg. EXAMPLE: Answer Q1 & Q2 based on following information: John had calculated (correctly) that he had enough corn to feed his birds for 16 days only (keeping in mind the normal feeding), so he kept four birds and sold the rest. He also cut down their feeding by 20% (thus keeping the feed at 80% of the normal feed). He was thus able to make the corn last for 60 days. 1. How many birds did he have to start with? 2. If he had sold only the number of birds than he actually sold, for how many days would his corn have lasted? (at 80% of normal feed) SOLUTION: 1. Four birds at 80% feed for 60 days. Hence, for 16 days at 100% feed, number of birds = 4 80/ 100 60/16 = 12 2. He sells 2 birds; hence 10 birds have feed for 24 days. Work problems Work is defined as the amount of job assigned or the amount of job actually done.Problem on work are based on the application of concept of ratio of time and speed. There exists an analogy between the time-speed-distance problems and work. Remember, Rate of work is just the speed of doing work. Work Rate problems are based on two and only two concepts: 1. Rates of doing work are additive. 2. Work done = Rate * Time (much like Distance = Speed * Time) 40 Civil Services

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The basic questions of work rate are of the following form: If A, working independently, completes a job in 10 hours and B, working independently, completes a job in 5 hours, how long will they take to complete the same job if they are working together? Since A completes a job in 10 hours, his rate of work is 1/ 10th of the job per hour. B's rate of work is 1/5th of the job per hour. Their combined rate of work would then be 1/10 + 1/5 = 3/10th of the job per hour. As we said before, Work done = Rate * Time 1 = 3/10 * T (because 1 job has to be done) or T = 10/3 hours. This implies that A and B will together take 3.33 hours to do the job. Time taken when A and B work together will obviously be less than time taken by A or B when they are working independently. Time is not additive. In the question above, you obviously cannot say that A and B will together take 10+5 = 15 hrs to complete the job. Working together, they will take less time than either one of them working alone takes. If A can do a piece of work in 'a' number of days, then in 1 day of the work is done. Conversely, if a man does of work in a day, then he can complete the work in days. If A is 'x' times as good a workman as B, then he will take of the time by B to do the same work. If A and B can do a piece of work in 'a' days and 'b' days respectively, then working together, they will take days to finish the work and in one day, they will finish part of work. To compare the work done by two or more people, you first need to calculate the amount of work each can do in the same time. If the number of men to do a job is changed in the ratio a : b, then the time required to do the work will be changed in the inverse ration, i.e. b : a. If two man A and B together can finish a job in 'x' days and if A alone takes 'a' days more than A and B working together and B working alone takes 'b' days more than A and B working together then EXAMPLE: Paul finishes 3/10 of the work in 5 days. But realizing the urgency of work, he employed Peter and they together finished the work in 7 days. How much time would have Peter needed to finish the work if Paul was not available for assistance and he had to do the whole work all alone? SOLUTION: Assume the work has 150 units (LCM of 3, 10, 5). Hence, Paul does 9 units per day. In 5 days he finishes 45 units. The rest 105 units are being completed in 7 days. Hence, 15 units are being done by Peter and Paul each day. So Peter does 6 units per day. He will take 150/ 7 = 25 days to complete the job alone. SEPTEMBER 2011, XVII Year, Issue No.9
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Speed Problem Distance" word problems, often also called "uniform rate" problems, involve something travelling at some fixed and steady ("uniform") pace ("rate" or "speed"), or else moving at some average speed. Whenever you read a problem that involves "how fast", "how far", or "for how long", you should think of the distance equation, d = rt, where d stands for distance, r stands for the (constant or average) rate of speed, and t stands for time. (The concept of changing velocity i.e. acceleration is not covered here). A set of typically asked questions from the topic "Speed Time Distance" that acquaints you to different concepts in the topic including relative speeds, average speeds, different units for measurement of speed, time and distance and the conversions of these units. Also includes questions on boats in streams and jets with tailwind. Make sure that the units for time and distance agree with the units for the rate. For instance, if they give you a rate of feet per second, then your time must be in seconds and your distance must be in feet. Sometimes they try to trick you by using the wrong units, and you have to catch this and convert to the correct units. You can add distances and you can add times, but you cannot add rates. If you drive 20 mph on one street, and 40 mph on another street, does that mean you averaged 60 mph? Loss / Gain problems Profit and Loss accounting is a fundamental way to measure the financial performance of a business. A firm grasp of the basics is essential. There are two distinct kinds of profit and loss problems those in which profit or loss is based on cost and those in which profit or loss is based on selling price. Before such a problem can be solved it must be known in which of these classes it belongs. Profit and Loss Based on Cost When a percent of profit or loss is given, it is understood, unless stated to the contrary, that this percent is based on the cost. Thus, if someone states simply that he or she sold something at a profit of 10%, it is understood to mean that it was sold for an amount equal to its cost plus 10% of its cost. In modern business, however, it is customary to figure profit and loss as a percent of selling price. This is because commissions, discounts, certain taxes and other items of expense are commonly based on selling price, and in a complicated business it makes for simplicity in accounting to base profit and loss also on selling price. Profit and Loss Based on Selling Price Modern accounting practice favors the basing of profit and loss on selling price rather than on cost. This is because commissions and other selling expenses are figured as percentages of selling price, and it also simplifies accounting to base profit and loss on selling price. SALES PRICE (SP): The price at which goods/services are sold COST PRICE (SP): The expenses occurred in making a product (or providing a service) and it includes the price of the raw material. REVENUE: is compensation received for your product or services. 41 Civil Services

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If the shop sells a thing for more than they paid for it, then the difference is the 'profit': Profit = selling price - cost price If the shop sells a thing for less than they paid for it, then the difference is the 'loss': Loss = cost price - selling price Both profit and loss can be expressed either in absolute currency form, OR as a percentage of the cost price / Sell price. Profit Percentage = (Profit / Cost (OR Sell) Price) * 100 Percentage profit or loss is calculated on C.P. % profit = [profit / C.P.] 100, % loss = [loss / C.P.] 100 S.P. or C.P. can be calculated from S.P. = [(100 + P%) / 100] C.P., S.P. = [(100 - L%) / 100] C.P. C.P. = [100 / (100 + P%)] S.P., C.P. = [100 / (100 +L%)] S.P. S.P. = M.P. -discount Where: C.P. - Cost Price, S.P. - Sell price, M.P. - Market price VENN DIAGRAMS Venn Diagrams are pictorial ways of representing interactions among sets to display information that can be read easily. The Venn diagram is made up of two or more overlapping closed shapes like circles. It is often used in mathematics to show relationships between sets. It uses intersecting circles to illustrate the similarities, differences, and relationships between groups. Similarities between groups are represented in the intersecting portions of the circles, while differences are represented in the non-intersecting portions of the circles. Venn diagrams can be successfully applied to a wide range of subjects. For instance, students can compare and contrast several cities and their climates during a Geography lesson, organize various animals or different cell structures in Biology and study the character traits of different protagonists in works of twentieth century Literature. The more aspects that are included in a Venn diagram, the more comprehensive the analysis is. To optimize the process you can use various colors and shapes. Originally, Venn diagrams were made using simple circles; however, triangles and quadrangles can be also used, especially when constructing several diagrams at the same time. If used correctly, this graphic tool makes the teaching and learning process a lot more interesting and effective.

15 had air conditioning 2 had air conditioning and power windows but no radios 12 had radio 6 had air conditioning and radio but no power windows 11 had power windows 4 had radio and power windows 3 had all three options. What is the number of cars that had none of the options? SOLUTION: Total Number of cars according to the diagram = 2 + 6 + 3 + 1 + 5 + 2 + 4 = 23. Therefore, number of cars having none of the given options = 25 - 23 = 2.

EXAMPLE: A survey on a sample of 25 new cars being sold at a local auto dealer was conducted to see which of the three popular options air conditioning, radio and power windows were already installed. The survey found: SEPTEMBER 2011, XVII Year, Issue No.9
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MMM (MEAN / MODE / MEDIAN) Statistics is a field of mathematics that pertains to data analysis. Statistical methods and equations can be applied to a data set in order to analyze and interpret results, explain variations in the data, or predict future data. A few examples of statistical information we can calculate are: Average value (mean) Most frequently occurring value (mode) On average, how much each measurement deviates from the mean (standard deviation of the mean) Span of values over which your data set occurs (range), and Midpoint between the lowest and highest value of the set (median) Mean, median, and mode are three kinds of "averages". There are many "averages" in statistics, but these are, the three most common, and are certainly the three you are most likely to encounter. The mean, median and mode of a data set are collectively known as measures of central tendency as these three measures focus on where the data is centred or clustered. To analyse data using the mean, median and mode, we need to use the most appropriate measure of central tendency. The following points should be remembered: The mean is useful for predicting future results when there are no extreme values in the data set. However, the impact of extreme values on the mean may be important and should be considered. E.g. The impact of a stock market crash on average investment returns. The median may be more useful than the mean when there are extreme values in the data set as it is not affected by the extreme values. The mode is useful when the most common item, characteristic or value of a data set is required. The "range" is just the difference between the largest and 42 Civil Services

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smallest values. It shows the spread of the data MODE: The mode of a set of data values is the value(s) that occurs most often. The mode has applications in printing. For example, it is important to print more of the most popular books; because printing different books in equal numbers would cause a shortage of some books and an oversupply of others. Likewise, the mode has applications in manufacturing. For example, it is important to manufacture more of the most popular shoes; because manufacturing different shoes in equal numbers would cause a shortage of some shoes and an oversupply of others. It is possible for a set of data values to have more than one mode. If there are two data values that occur most frequently, we say that the set of data values is bimodal. If there is no data value or data values that occur most frequently, we say that the set of data values has no mode. MEDIAN: Median is the middle value of the series. It is also called 50th percentile or second quartile. Individual series: 1. First arrange the series the series in ascending or descending order. 2. If the number of values is odd then, median is the middle number. 3. If thenumber of values is even then, median is the average of two middle numbers. EXAMPLE:Find the mean, median, mode, and range for the following list of values: 13, 18, 13, 14, 13, 16, 14, 21, 13 SOLUTION: The mean is the usual average, so: (13 + 18 + 13 + 14 + 13 + 16 + 14 + 21 + 13) 9 = 15 Note that the mean isn't a value from the original list. The median is the middle value, so I'll have to rewrite the list in order: 13, 13, 13, 13, 14, 14, 16, 18, 21 There are nine numbers in the list, so the middle one will be the (9 + 1) 2 = 10 2 = 5th number: 13, 13, 13, 13, 14, 14, 16, 18, 21 So the median is 14. The mode is the number that is repeated more often than any other, so 13 is the mode. The largest value in the list is 21, and the smallest is 13, so the range is 21 - 13 = 8. STANDARD DEVIATION / VARIANCE The variance and the closely-related standard deviation are measures of how spread out a distribution is. In other words, they are measures of variability. The standard deviation gives an idea of how close the entire set of data is to the average value. Data sets with a small standard deviation have tightly grouped, precise data. Data sets with large standard deviations have data spread out over a wide range of values.

SOLUTION: Mean: 10.222 Now, subtract the mean individually from each of the numbers given and square the result. This is equivalent to the (x - Mean)
X 4 (x -x )2 38.7 9 1.49 11 12 0.60 3.16 17 45.9 5 27.3 8 4.94 12 14 3.16 14.3

Now add up these results (this is the 'sigma' in the formula): 139.55 Divide by n (n is the number of values, so in this case is 9). This gives us: 15.51 And finally, square root this: 3.94 Z-score A z-score (also known as z-value, standard score, or normal score) is a measure of the divergence of an individual experimental result from the most probable result, the mean. Z is expressed in terms of the number of standard deviations from the mean value.

where is the mean, N is the number of elements, is Standard deviation and 2 is the Variance. EXAMPLE: Find the standard deviation of 4, 9, 11, 12, 17, 5, 8, 12, 14? SEPTEMBER 2011, XVII Year, Issue No.9
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X = Experimental Value = Mean = Standard Deviation Z-scores assuming the sampling distribution of the test statistic (mean in most cases) is normal and transform the sampling distribution into a standard normal distribution. Whenever using z-scores it is important to remember a few things: Z-scores normalize the sampling distribution for meaningful comparison. Z-scores require a large amount of data. Z-scores require independent, random data. The relationship of the mean, median, and mode to each other can provide some information about the relative shape of the data distribution. If the mean, median, and mode are approximately equal to each other, the distribution can be assumed to be approximately symmetrical. If the mean > median > mode, the distribution will be skewed to the left or positively skewed. If the mean < median < mode, the distribution will be skewed to the right or negatively skewed. PROBABILITY: The probability of an event is a measure of the likelihood that the event will occur. By convention, statisticians have agreed on the following rules. The probability of any sample point can range from 0 to 1. Thus, if event A were very unlikely to occur, then P(A) would be close to 0. And if event A were very likely to occur, then P(A) would be close to 1. The sum of probabilities of all sample points in a sample space is equal to 1. The probability of event A is the sum of the probabilities of all the sample points in event A. The probability of event A is denoted by P(A). EXAMPLE: There are 5 questions with 4 options each. Out of 4 options one is right and 3 are wrong. A right answer adds 1 mark, and one wrong answer deducts 1/4. What is the probability of getting a zero if all the questions are mandatory? SOLUTION: Total number of possible combinations = 4 4 4 4 4 = 45 = 1024 43 Civil Services

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To get a score of zero 1 right and 4 wrong. Each question has 1 right and 3 wrong options. If right option is chosen from question number 1, then all the other questions should be wrong. Number of combinations = 1.3.3.3.3 = 81. This will work for all 5 questions Total number of favourable combinations= 5 81 = 405 So the required probability =405/1024 FORMULAE i. Sample mean = x = ( xi ) / n

ii. Sample standard deviation=s=sqrt[ ( xi - x ) /( n - 1 ) ] iii. Sample variance = s2 = ( xi - x )2 /( n - 1 ) iv. n factorial: n! = n * (n-1) * (n - 2) * . . . * 3 * 2 * 1. By convention, 0! = 1 v. Permutations of n things, taken r at a time: nPr = n!/(n - r)! vi. Combinations of n things, taken r at a time: nCr = n! / r!(n - r)! = nPr / r! vii. Rule of addition: P(A B) = P(A) + P(B) - P(A B) viii. Rule of multiplication: P(A B) = P(A) P(B|A) ix. Rule of subtraction: P(A') = 1 - P(A)

Practice Papers on Statistics with stipulated time limit TEST-1


Each question carries 8 marks and Total Marks-40 Time Limit: 30 Minutes Best is 25 Minutes 1. Three boxes of supplies have an average (arithmetic mean) weight of 7 kilograms and a median weight of 9 kilograms. What is the maximum possible weight, in kilograms, of the lightest box? 2. Of the students in a certain class, 10 had taken a course in A, 11 had taken a course in B, and 14 had taken a course in C. If 3 students had taken a course in all of the A, B, and C, and 20 students had taken a course in only one of A, B, and C, how many students had taken a course in exactly two of A, B, and C? 3. Mike has started running, hoping to run a marathon in six months. For the last six days, his running times (in minutes) have been: 39, 43, 68, 40, 49, 61. I. Compute the mean, median, and mode of these data. II. Compute the range and standard deviation. 4. ABC Mobile collects data from 25 cars. He then computes a correlation between weight of the car and its gas mileage. The answer he arrives at is -1.4. Interpret. 5. The following line graph shows income and expense of Shiva in different months in the year 2005.

I. Which of the industry sectors witnessed the maximum rate of growth during the period 1999-2000? II. Which of the industry sectors witnessed a negative growth during the period 1999-2000? III. What was the rate of growth witnessed by the Software & IT sector during this period? IV. What was the rate of growth witnessed by the Petroleum sector during this period? V. What was the rate of growth shown by the non-petroleum sectors between 1999 and 2000? 2. The arithmetic mean of the 5 consecutive integers starting with's' is 'a'. What is the arithmetic mean of 9 consecutive integers that start with s + 2? 3. John and Jane have five children whose ages are 1, 3, 7, 9 and 10. a. What are the mean, median, and modal ages of these children? b. What is the range and standard deviation of these ages? 4. (Assume that the population per office is same for all categories of bank offices)
Commercial banking at Glance No. of Commercial banks (a) All Scheduled Comm. Banks Of which RRBs (b) Non-scheduled commercial banks No. of bank offices (a) Rural (b) Semi-urban (c) Urban (d) Metropolitan Population per office (in thousands) Deposits of Scheduled Commercial banks (Rs Cr) Credit of Scheduled Commercial banks (Rs Cr) Credit Deposit ratio * RRB - Regional rural banks March 2004 297 297 196 65521 32179 14301 10716 8325 15 Sept 2004 297 297 196 65735 32632 14431 10244 8428 15 March 2005 296 296 196 65908 32533 14508 10354 8513 15

I. Find the percentage of saving with respect to income for the first six months? II. Find the average income of Shiva in the year 2005?

TEST-2
Each question carries 8 marks and Total Marks-40 Time Limit: 30 Minutes Best is 25 Minutes 1. Use the information provided in the two pie charts provided below. The total contribution to the GDP by the seven sectors mentioned in the pie charts in the year 1999 was Rs.289640 crores and Rs.317000 crores in the year 2000. SEPTEMBER 2011, XVII Year, Issue No.9
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822133 469032 57.105

867984 496006 57.14

950705 556436 58.5

I. In March 2005, what % of total scheduled commercial Civil Services

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banks are not RRB's? II. What is the ratio of population in rural areas to population in metro? III. The per capita of deposits in scheduled comm. banks have changed between Mar 2004 and Mar 2005 by what %? IV. The bank deposits per capita in March 2005 are (approx)? 5. Convert the below mentioned data into an appropriate table and graph: In the first test match between India and England, the individual scores of all batsmen werefurther categorized in form of score less than or equal to 50, between 50 and 100 & score higher than or equal to 100. For India the numbers were 6, 4 and 1 and those of England were 7, 3 and 1. In the next match the numbers were India (5,4 and 2) & England (4, 6 and 1).

What could be the maximum aggregate marks obtained by him? 5. Convert the following table into bar chart:

TEST-4
Each question carries 8 marks and Total Marks-40 Time Limit: 30 Minutes Best is 25 Minutes 1. If the mean of numbers 28, x, 42, 78 and 104 is 62, then what is the mean of 128, 255, 511, 1023 and x? 2. It takes 1.5 hours for Tim to mow the lawn. Linda can mow the same lawn in 2 hours. How long will it take John and Linda, work together, to mow the lawn? 3. If a merchant offers a discount of 40% on the marked price of his goods and thus ends up selling at cost price, what was the % mark up? 4. The difference between compound interest and simple interest at the same interest at the same rate for Rs. 5,000 for 2 years is Rs. 72. The rate of interest per annum is? 5. Prof. Dinkar rated the performance of all the male and female students of his class as Average, Good or Excellent and stored the data on a floppy. However, the floppy got corrupted and part of the data has been lost. The data that could be retrieved have been given below : PERFORMANCE

TEST-3
Each question carries 8 marks and Total Marks-40 Time Limit: 30 Minutes Best is 25 Minutes 1. A certain city with a population of 132,000 is to be divided into 11 voting districts, and no district is to have a population that is more than 10 percent greater than the population of any other district. What is the minimum possible population that the least populated district could have? 2. For a certain race, 3 teams were allowed to enter 3 members each. A team earned 6-n points whenever one of its members finished in the nth place, where 1<=n<=5. There were no ties, disqualifications or withdrawals. If no team earned more than 6 points, what is the least possible score a team could have earned? 3. A water treatment plant needs to maintain the pH of the water in the reservoir at a certain level. To monitor this, they take samples at 37 locations every hour, measure the pH for each sample, and find their average. If the pH level of the reservoir is ok, the samples will have varying results, with an average pH of 8.5 and a standard deviation of 0.22. If the pH level of the reservoir is ok, what is the probability that one hour's samples average MORE than 8.42? 4. For admissions to its postgraduate programme, six institutes conducted a common admission test. The test had four sections with the maximum marks in each section being 50. The following tables give the aggregate as well as sectional cut-off marks fixed by the six institutes. A student will get interview calls only if he/she gets marks higher than or equal to the cut-off marks in each of the sections and his aggregate marks are at least equal to the aggregate cut-off marks as specified by the institute.

The professor also managed to gather the following information a) Half the students were either excellent or good. b) 40% of the students were female. c) A third of the male students were Average. I. How many of the female students are excellent? II. What proportion of the good students are male? III. What proportion of female students are good? IV. How many students are male and good? V. Among the average students, what is the ratio of male to female students?

TEST-5
Each question carries 8 marks and Total Marks-40 Time Limit: 30 Minutes Best is 25 Minutes 1. The average weight of a group of 30 friends increases by 1 kg when the weight of their football coach was added. If average weight of the group after including the weight of the football coach is 31kgs, what is the weight of their football coach in kgs? 2. Draw a pictorial image/Venn diagram for the statement: "Some mammals are carnivores. All mammals are animals. 45 Civil Services

I. Arun got calls from all colleges. What could be the minimum aggregate marks obtained by him? II. Bala got calls from two colleges. What could be the minimum marks obtained by him in a section? III. Chandu did not get a call from even a single college. SEPTEMBER 2011, XVII Year, Issue No.9
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Therefore, some animals are carnivores." 3. A man invested Rs 5,000 at some rate of simple interest and Rs 4,000 at 1% higher rate of interest. If the interest in both the cases after 4 years is same the rate of interest in the former case is? 4. The following graph gives prices (in Rs.) of 500 Kgs of A, 1000 Kgs of B and the average cost of 500 kgs each of A, B and C. Product D is made from A, B and C when they are mixed in the ratio 1:2:3.

girls are sampled. What is standard deviation of the difference (male absences minus female absences)?

TEST-7
Each question carries 8 marks and Total Marks-40 Time Limit: 30 Minutes Best is 25 Minutes 1. The average of 5 quantities is 6. The average of 3 of them is 8. What is the average of the remaining two numbers? 2. A man can row 5 kmph in still water. If the river is running at 1kmph, it takes him 75 minutes to row to a place and back. How far is the place? 3. Two merchants sell, each an article for Rs.1000. If Merchant A computes his profit on cost price, while Merchant B computes his profit on selling price, they end up making profits of 25% respectively. By how much is the profit made by Merchant B greater than that of Merchant A? 4. Answer the questions based on the following information. All figures are in Rs. lakh.

I. In which year was the price of C the highest? II. What was the ratio of price of C in 1995 to that in 1996? III. What was the percentage increase in price of C from 1996 to that in 1997? IV. If I decide to buy 10 kgs each of A, B and C, then in which year do I pay the least amount of money? V. What was the cost of D in 1996 if 6000 kgs of D was purchased? VI. Price of 100 kgs of D was least in which year? 5. Calculate the mean, median, mode and range for two sets of data. Set A contains the numbers 2, 2, 3, 5, 5, 7, 8 and Set B contains the numbers 2, 3, 3, 4, 6, 7.

TEST-6
Each question carries 8 marks and Total Marks-40 Time Limit: 30 Minutes Best is 25 Minutes 1. The average age of a group of 10 students was 20. The average age increased by 2 years when two new students joined the group. What is the average age of the two new students who joined the group? 2. A tap can fill the tank in 15 minutes and another can empty it in 8 minutes. If the tank is already half full and both the taps are opened together, the tank will be emptied in how much time? 3. Show below mentioned problem in form of Venn diagram: "Out of forty students, 14 are taking English Composition and 29 are taking Chemistry. Five students are in both classes." 4. Convert the table into suitable graph:

I. The average revenue collected in the given 7 years is approximately? II. The expenditure for the 7 years together forms what per cent of the revenues during the same period? III. Which year showed the greatest percentage increase in profit as compared to the previous year? IV. In which year was the growth in expenditure maximum as compared to the previous year? 5. Convert the table to a appropriate graph

TEST-8
Each question carries 8 marks and Total Marks-40 Time Limit: 30 Minutes Best is 25 Minutes 1. The average wages of a worker during a fortnight comprising 15 consecutive working days was $ 90 per day. During the first 7 days, his average wages was $ 87/day and the average wages during the last 7 days was $ 92 / day. What was his wage on the 8th day? 2. It takes 6 hours for pump A, used alone, to fill a tank of water. Pump B used alone takes 8 hours to fill the same 46 Civil Services

5. For boys, the average number of absences in the first grade is 15 with a standard deviation of 7; for girls, the average number of absences is 10 with a standard deviation of 6. In a nationwide survey, suppose 100 boys and 50 SEPTEMBER 2011, XVII Year, Issue No.9
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tank. We want to use three pumps: A, B and another pump C to fill the tank in 2 hours. What should be the rate of pump C? How long would it take pump C, used alone, to fill the tank? 3. A man buys a piece of land for 96000$.he sells 2/5th of it at a loss of 6%. At what gain percent should he sell the remaining piece of land to gain 10% at the whole? 4. Answer the questions based on the following graph.

5. The following table shows the grouped data, in classes, for the heights of 50 people.

TEST-10
Each question carries 8 marks and Total Marks-40 Time Limit: 30 Minutes Best is 25 Minutes 1. Average age of A & B is 24 years and average of B, C & D is 22 years. The sum of the ages A, B, C & D will be? 2. A 555-mile, 5-hour plane trip was flown at two speeds. For the first part of the trip, the average speed was 105 mph. Then the tailwind picked up, and the remainder of the trip was flown at an average speed of 115 mph. For how long did the plane fly at each speed? 3. A trader professes to sell his goods at a loss of 8% but weights 900 grams in place of a kg weight. Find his real loss or gain percent? 4. A given data set has a mean and a standard deviation . a) What are the new values of the mean and the standard deviation if the same constant k is added to each data value in the given set? Explain. b) What are the new values of the mean and the standard deviation if each data value of the set is multiplied by the same constant k? Explain. 5. If the standard deviation of a given data set is equal to zero, what can we say about the data values included in the given data set?

Employees in thousands Sales-Cost=Profit I. Which month records the highest gross profit? II. In which month is the total increase in the cost highest as compared to two months ago? III. In which month is the percentage increase in sales the highest as compared to two months ago? IV. Which month has the highest profit per employee? V. Assuming that no employees left the job, how many more people did the company take on in the given period? 5. For a certain examination, a score of 58 was 2 standard deviations below the mean, and a score of 98 was 3 standard deviations above the mean. What was the mean score for the examination?

TEST-9
Each question carries 8 marks and Total Marks-40 Time Limit: 30 Minutes Best is 25 Minutes 1. A pupil's marks were wrongly entered as 83 instead of 63. Due to that the average marks for the class got increased by half (1/2). The number of pupils in the class is? 2. A car and a bus set out at 2 p.m. from the same point, headed in the same direction. The average speed of the car is 30 mph slower than twice the speed of the bus. In two hours, the car is 20 miles ahead of the bus. Find the rate of the car. 3. A trader makes a profit equal to the selling price of 75 articles when he sold 100 of the articles. What % profit did he make in the transaction? 4. Convert the column chart to histogram:

TEST-11
Each question carries 8 marks and Total Marks-40 Time Limit: 30 Minutes Best is 25 Minutes 1. In a survey of political preference, 78% of those asked were in favour of at least one of the proposal I, II and III 50% of those asked favoured proposal I, 30 % favoured II proposal, and 20 % favoured proposal III, If 5 % favored all the three proposals, what % of those asked favoured more than one of the three proposals? 2. Read the following information's carefully and answer the questions given below. A person deposits some amount regularly in a nationalized and private bank. The rate of interest is compounded every two month in both the banks. The following chart shows the amount and time of deposits made by the person. Nationalised Bank Private Bank 1 Jan, 2001 1 Mar, 2001 1 May,2001 3000 2000 4000 4000 2000 5000

Total interest given by the nationalized bank in first 6 month is Rs.171 I. What is the compound rate of interest bimonthly (every two months) given by the nationalised bank? II. Total interest given by both the banks in first 6 month is SEPTEMBER 2011, XVII Year, Issue No.9
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Rs. 424. What is the compound rate of interest bimonthly (every two month) given the private bank? 3. Solubility - Temperature relationships for various salts. (The Y-axis denotes Solubility (kg/litres of water)

4.

I. Approximately, how many kg of Potassium Nitrate can be dissolved in 10 litres of water at 300C? II. By what % is the solubility of Potassium Chlorate in water increased as the water is heated from 300C to 800C? III. If 1 mole of Potassium Chloride weighs 0.7456 kg, approximately, how many moles of Potassium Chloride can be dissolved in 100 litres of water at 360C? 4. A salesman's commission is 5% on all sales upto Rs 10,000 and 4% on all sales exceeding this amount. He remits Rs 31,100 to the parent company after deducting his commission. His sales were worth how much? 5. Which is a better investment: 12% stock at par with an income tax at the rate of Re 0.05 per rupee or stock at 120 free from income tax?

I. Which year of showed the greatest percentage increase in profit as compared to the previous year? II. The average revenue collected in the given seven years is? III. In which year was the growth in expenditure greatest as compared to the previous year? IV. The expenditure for the seven years together forms what percent of the revenues during the same period? V. If the profit in 1996 shows the same annual rate of growth as it had shown in 1995 over the previous year, then what approximately will be the profit in 1996? 5. Convert the following table into four categorized pie charts:
Production (000 tonnes) Brooke Bond Nestle Lipton MAC Total (incl. Others) 2.97 2.48 1.64 1.54 11.60 Capacity Sales Utilisa- (000 tion (%) tonnes) 76.50 71.20 64.80 59.35 61.30 2.55 2.03 1.26 1.47 10.67 Total Sales Value (Rs. Cr.) 31.15 26.75 15.25 17.45 132.80

SOLUTION-1
1. If three items have an average weight of 7, then collectively, the three items have a weight of 7x3 = 21. If three items have a median weight of 9, then the middle of the three items is actually 9. This one isn't a variable; we can't change this number. The first (or lightest) of the three, therefore, has to be equal to or less than 9 (because it is to the left of the median). Check the answers quickly - in this case, unfortunately, that information doesn't help us to eliminate any answers. If the middle box is actually 9, then we can subtract that from 21 to get the combined weight for the other two boxes. 21 - 9 = 12. So the lightest and heaviest boxes have to add up to 12. Now, do we want to minimize or maximize the weight of the heaviest box? The heaviest box has to be equal to or greater than 9 (because it is to the right of the median). We want to maximize the weight of the lightest box, so we need to minimize the weight of the heaviest box. So, the smallest possible weight for the heaviest box is 9. If the heaviest box is minimized to 9, and the heaviest and lightest add up to 12, then the maximum weight for the lightest box is 3. 2. Answer is 3.

TEST-12
Each question carries 8 marks and Total Marks-40 Time Limit: 30 Minutes Best is 25 Minutes 1. The independent probabilities that the three sections of an accounts department will encounter a computer error are 0.2, 0.3 and 0.1 per week respectively. What is the probability that there would be at least one computer error per week? 2. Instead of a metre scale, a cloth merchant uses a 120 cm scale while buying, but uses an 80 cm scale while selling the same cloth. If he offers a discount of 20% on cash payment, what is his overall percent profit? 3. Convert the table into appropriate graph:

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3. Mean: 300/6 = 50 No mode Median=46, midpoint between 43 and 49, the two middle times Range: 68-39 = 29 minutes difference from mean difference squared 39 - 50 = -11 121 43 - 50 = -7 49 68 - 50 = 18 324 40 - 50 = -10 100 49 - 50 = -1 1 61 - 50 = 11 121 sum = 0 sum = 716 The variance is 716/5= 143.2; the standard deviation is the square root of 143.2 or approximately 11.96. 4. He made a mistake. Correlation cannot be less than -1. 5. I. 7.7% II. Average income = 116000/12 = 9666

SOLUTION-3
1. Let's say that we're going to minimize the population in District 1. Because all 11 districts have to add up to 132,000 people, we want to maximize the population in Districts 2 through 10. How can we do that? Now, we need more information from the problem: "no district is to have a population that is more than 10 percent greater than the population of any other district" So, if the smallest district has 100 people, then the largest district could have 110 people but can't have any more than that. If the smallest district has 500 people, then the largest district could have 550 people but can't have any more than that. How did we calculate those numbers? In each case, we take 10% of the original number and add that figure to the original number to give us our maximum. In the given problem, we don't know the number of people in the smallest district, so let's call that x. If the smallest district is x, then calculate 10% and add that figure to x: x + 0.1x = 1.1x. So the largest district could be 1.1x but can't be any larger than that. We want to maximize all of the 10 remaining districts, so we should assume that all 10 districts are equal to 1.1x. As a result, we have (1.1x)(10) = 11x people in the 10 maximized districts (Districts 2 through 10), as well as our original x people in the minimized district (District 1). The problem told us that all 11 districts add up to 132,000, so write that out mathematically: 11x + x = 132,000 12x = 132,000, x = 11,000 2. Let the teams be A, B and C. with team members [a1, a2, a,3] [b1, b2, b3] and [c1, c2, c3] respectively. So now I have 9 people participating in a race. Now take a look at the conditions: Each point is given by 6-n where 1<=n<=5. This follows that there are no points for the 6th, 7th, 8th and 9th positions. 6-n would mean 5 points for the first position (6-1), 4 points for the second (6-2) and so on till the last (6-5). Please look at the constraints mentioned in the problem, that no team gets more than 6 points. ABC 542 13 You can now arrange the points in such a way that the conditions mentioned in the problem are satisfied. In each case the team with the least score has 4 points. 3. 8.5 = 50% 8.5 - .22 = 8.28 8.28+ = approx 65% 8.42 is to the right of 8.28 meaning the probability is less than that for 1 std deviation. 4. I. To get calls from all the colleges, Arun should have 49 Civil Services

SOLUTION-2
1. I. Software and IT II. Steel III. 22% IV. 12% V. 7% VI. Ad and Media 2. The fastest way to solve such questions is to assume a value for 's'. Let s be 1. Therefore, the 5 consecutive integers that start with 1 are 1, 2, 3, 4 and 5. The average of these 5 numbers is 3. 9 consecutive integers that start with 1 + 2 are 3, 4, 5, 6, 7, 8, 9, 10 and 11. The average of these 9 numbers is 7. Now, let us take a look at the answer choices and substitute '1' for's' and '3' for 'a'. The only choice that provides us with an answer of '7'. 3. Mean: 30/5=6 No mode Median = 7 Range: 10 - 1 = 9 years difference from mean difference squared 1 - 6 = -5 25 3 - 6 = -3 9 7-6=1 1 9-6=3 9 10 - 6 = 4 16 sum = 0 sum = 60 The variance is 60/4 = 12; the standard deviation is the square root of 12 or approximately 3.464. 4. I. 100/296 i.e. 33.8% II. The ratio of population can be estimated by the ratio of banks in the respective areas, since there is a constant population per bank. Hence ratio is 3.85. III. [(950/659)-(822/655)]/ (822/655) = 15% IV. 9616 5. Table:
Test Match 1st Score <=50 50-100 >=100 <=50 50-100 >=100 INDIA 6 4 1 5 4 2 ENGLAND 7 3 1 4 6 1

2nd

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scored at least the highest value of cut-off in each section, i.e., 44 + 44 + 45 + 44 = 177 and also at least the highest value of aggregate cut-off for any institute, i.e., 176. II. The minimum aggregate marks to get calls from two colleges is 171. If he scores 50 each in three sections he needs to score at least 21 marks in the fourth section. III. Four colleges have a cut-off for section C and the remaining two colleges have a cut-off for section D. If a student misses the cut-off in these two sections, he/she would miss calls from all the colleges. The maximum possible marks such a student gets is 50 + 50 + 40 + 42 = 182. 5. Bar chart:

group increases by 1kg. Therefore, the total weight of the group after including the weight of the football coach = 31 * 31 = 961 kgs. Therefore, the weight of the football coach=961-900=61 kgs. 2. Venn diagram:

SOLUTION-4
1. The average (arithmetic mean) of the 5 numbers 28, x, 42, 78 and 104 is 62. Therefore, the sum of these 5 numbers is 62 * 5 = 310 i.e., 28 + x + 42 + 78 + 104 = 310 Hence, x = 310 - 252 = 58. The average of 128, 255, 511, 1023 and x = 395 2. Let t be the time for John and Linda to mow the Lawn. The work done by John alone is given by t*(1/1.5) and work done by Linda alone is given by t*(1/ 2). 6 (t * (1 / 1.5) + t * (1 / 2) ) = 6 t = 6 / 7 hours = 51.5 minutes. 3. If the merchant offers a discount of 40% on the marked price, then the goods are sold at 60% of the marked price. The question further states that when the discount offered is 40%, the merchant sells at cost price. Therefore, selling @ 40% discount = 60% of marked price (M) = cost price (C) i.e., a mark up 66.66% 4. 12% 5. I. None II. 0.73 III. 0.25 IV. 22 V. 2:3

Venn diagram of the syllogism Some mammals are carnivores; all mammals are animals; therefore, some animals are carnivores. 3. 5000 x 4/100 = 4000 (x + 1) 4/100? x = 4. 4. I. Year 1997 II. 8:7 III. 100% IV. 1998 V. Rs. 25500 VI. 1998 5.

SOLUTION-6
1. The average age of a group of 10 students is 20. Therefore, the sum of the ages of all 10 of them=10*20= 200 When two new students join the group, the average age increases by 2. New average = 22 Now, there are 12 students. Therefore, the sum of the ages of all 12 of them=12*22= 264 Therefore, the sum of the ages of the two new students who joined = 264 - 200 = 64 And the average age of each of the two new students = 64/2 = 32 years. 2. Rate of waste pipe being more the tank will be emptied when both taps are opened. Net emptying work done in 1min =(1/8 -1/16)= 1/16 So full tank will be emptied in 16 min Half tank will be emptied in 8 minutes. 3. Venn diagram:

SOLUTION-5
1. The new average weight of the group after including the football coach = 31 As the new average is 1kg more than the old average, old average without including the football coach = 30 kgs. The total weight of the 30 friends without including the football coach = 30 * 30 = 900. After including the football coach, the number people in the group increases to 31 and the average weight of the SEPTEMBER 2011, XVII Year, Issue No.9
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4. Line graph:

5. Find the mean difference (male absences minus female absences) in the population. d = 1 - 2 = 15 - 10 = 5 Find the standard deviation of the difference. d = sqrt( 12/n1+22/n2 ) d = sqrt(72/100 + 62/50) = sqrt(49/100 + 36/50) = sqrt(0.49 + .72) = sqrt(1.21) = 1.1

From the above table, clearly, the answer is 1992, as in 1992 the profit is maximum, i.e. 33.33%. IV. The growth in expenditure over the previous year can be expressed as:

SOLUTION-7
1. The average of 5 quantities is 6. Therefore, the sum of the 5 quantities is 5 * 6 = 30. The average of three of these 5 quantities is 8. Therefore, the sum of these three quantities = 3 * 8 = 24 The sum of the remaining two quantities = 30 - 24 = 6. Average of these two quantities = 3. 2. Speed downstream = (5+1) km/hr = 6 km/hr Speed upstream = (5-1)km/hr = 4 km/hr Let the required distance be x km x/6 + x/4 = 75/60 2x+3x = 15 x = 3km 3. Merchant B computes his profit as a percentage of selling price. He makes a profit of 25% on selling price of Rs.1000. i.e. his profit = 25% of 1000 = Rs. 250 Merchant A computes his profit as a percentage of cost price. Therefore, when he makes a profit of 25% or 1/4th of his cost price, then his profit expressed as a percentage of selling price = 1/(1+4) = 1/5th or 20% of selling price. So, Merchant A makes a profit of 20% of Rs.1000 = Rs.200. Merchant B makes a profit of Rs. 250 and Merchant A makes a profit of Rs. 200 Hence, Merchant B makes Rs.50 more profit than Merchant A. 4. I. To handle this type of questions, the best way is to express the data in tabular form.

Hence, it is maximum for 1992. 5. Graph:

SOLUTION-8
1. The total wages earned during the 15 days that the worker worked = 15 * 90 = $ 1350. The total wages earned during the first 7 days = 7 * 87 = $ 609. The total wages earned during the last 7 days = 7 * 92 = $ 644. Total wages earned during the 15 days = wages during first 7 days + wage on 8th day + wages during the last 7 days. => 1350 = 609 + wage on 8th day + 644 => wage on 8th day = 1350 - 609 - 644 = $ 97. 2. The rates of pumps A and B can be calculated as follows: A: 1 / 6 and B: 1 / 8 Let R be the rate of pump C. When working together for 2 hours, we have 2 (1/6 + 1/8 + R ) = 1 51 Civil Services

The average revenue collected in the given 7 years = 166.42 which is approximately Rs. 167 lakh. II. Expenses of 7 years add up to 877. Revenue of 7 years add up to 1165. Hence, the required answer is >> 75%. III. We need to find the profit in each year. SEPTEMBER 2011, XVII Year, Issue No.9
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R = 1 / 4.8 , rate of pump C. Let t be the time it takes pump C, used alone, to fill the tank. Hence t * (1 / 4.8) = 1 t = 4.8 hours , the time it takes pump C to fill the tank. 3. 2/5 of $96,000 ought to have fetched $38,400 as a breakeven price but lost 6% of that by being sold at a loss = $2,304 The aim is to sell the other parcel of land purchased for $57,600 for sufficient to make up that loss and to put a net total of $105,600 (i.e. $96,000 + $9,600) in the bank. $36,096 has already been placed there by the first transaction and therefore the cash price wanted is $105,600 - 36,096 = $69, 504. So the question is "what percentage of $57,600 is $69,504?" and the answer is 120.66%. 4. I. July II. May III. May IV. July V. 5000 5. Let M = the mean Let SD = 1 standard deviation M + 3SD = 98 M - 2SD = 58 if we subtract we get: 5SD = 40 SD = 8 M - 2(8) = 58 M = 58 + 16 M = 74

4.

5. a) We first find the midpoints of the given classes.

SOLUTION-9
1. Let there be x pupils in the class. Total increase in marks = x/2= (83 - 63) x/2 = 20 x= 40. 2.

Let m i be the midpoint of the i th class and fi be the corresponding frequency. mean of grouped data = = (mi*fi) / fi = (125*2 + 135*5 + 145*25 + 155*10 + 165*8) /(2+5+25+10+8) = 148.4 b) standard deviation of grouped data=[((mi-)2*fi)/ fi ] =[(2*(125-148.4)2+5*(135-148.4)2+25*(145-148.4)2+10*(155148.4)2+8*(165-148.4)2) /(50)] = 9.9

SOLUTION-10
1. The ONLY data given is two equations: 1. (A+B)/2 = 24 2. (B+C+D)/3 = 22 this means that [3(A+B) + 2(B+C+D)]/6 = 46. That is 3A+5B+5C+2D=276, and value of sum cannot be calculated from the given data. 2. Using "d = rt",

(As it turns out, I won't need the "total" row this time.) The first row gives: the first row gives me d = 105t and the second row gives: d + 20 = 2(2r - 30) 555 - d = 115(5 - t) The second row gives: Since the two distances add up to 555, I'll add the two disd = 2r tance expressions, and set their sum equal to the given total: 3. Let S be the selling price of 1 article. 555=105t +115(5 - t) Therefore, the selling price of 100 articles = 100 S. ...(1) The profit earned by selling these 100 articles = selling price t=2 3. The trader professes to sell his goods at a loss of 8%. of 75 articles = 75 S .... (2) We know that Selling Price (SP)=Cost Price (CP)+Profit - Therefore, Selling Price = (100 - 8)% of Cost Price or SP = 0.92CP ..... (3) Selling price of 100 articles = 100 S and Profit = 75 S from But, when he uses weights that measure only 900 grams while he claims to measure 1 kg. (1) and (2). Substituting this in eqn (3), we get Hence, CP of 900gms = 0.90 * Original CP 100 S = C.P + 75 S. Hence, C.P = 100 S - 75 S = 25 S. So, he is selling goods worth 0.90CP at 0.92CP Profit % = 300% SEPTEMBER 2011, XVII Year, Issue No.9 52 Civil Services
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Therefore, he makes a profit of 0.02 CP on his cost of 0.9 CP profit %= 2.22% 4. a. We limit the discusion to a data set with 3 values for simplicity, but the conclusions are true for any data set with quantitative data. Let x, y and z be the data values making a data set. The mean = (x + y + z) / 3 The standard deviation =[((x -)2 + (y -)2 + (z - )2)/3 ] We now add a constant k to each data value and calculate the new mean '. '=((x+k)+(y+k)+(z+k)) / 3 = (x + y + z) / 3 + 3k/3 = + k We now calculate the new mean standard deviation '. ' = [ ((x + k - ')2 +(y + k -')2+(z + k - ')2)/3 ] Note that x + k - ' = x + k - - k = x - also y+k-'=y+k--k=y- and z+k-' =z+k--k = z - Therefore ' = [((x - )2 +(y - )2+(z - )2)/3 ] = If we add the same constant k to all data values included in a data set, we obtain a new data set whose mean is the mean of the original data set PLUS k. The standard deviation does not change. b. We now multiply all data values by a constant k and calculate the new mean ' and the new standard deviation '. ' = (kx + ky + kz) / 3 = k ' = [ ((kx - k)2 +(ky - k)2+(kz - k)2)/3 ] = |k| If we admultiply all data values included in a data set by a constant k, we obtain a new data set whose mean is the mean of the original data set TIMES k and standard deviation is the standard deviation of the original data set TIMES the absolute value of k. 5. We limit the solution to a data set with 4 values for simplicity, but the conclusions are true for any data set with quantitative data. Let x, y, z and w be the data values making a data set with mean . The standard deviation =[((x-)2+(y-)2+(z-)2+(w-)2)/3] Let = 0, hence [ ((x - )2 + (y - )2 + (z - )2 + (w - )2)/3 ] = 0 Which gives (x - )2 + (y - )2 + (z - )2 + (w - )2 = 0 All terms in the equation are positive and therefore, the above equation is equivalent to (x - )2 = 0, (y - )2 = 0, (z - )2 = 0 and (w - )2 = 0. Which gives x=y=z=w= : all data values in the set with = 0 are equal.

SOLUTION-12
1. 0.496 2. The shopkeeper uses a 120 cm scale instead of a 100 cm scale. Thus, while buying 100 cm of cloth, he pays just (100/ 120), i.e. (5/6) times the actual worth of the goods. If he has 100 cm of material, then while selling, he charges the customer for (100/80), i.e. (5/4) times the actual worth of goods sold. On this SP, he gives a discount of 20%, thus making the actual SP as (0.8)(5/4) = 1. Thus for 100 cm of cloth, his CP is (5/6) while the SP is 1. This gives a profit of 20% on the CP. 3. Bas graph:

4. I. Percentage Increase = [Final value - Initial value] 100/ Initial value. Using this formula & conversion of fractions into percentage, calculate the percentage increase for the various years. Maximum percentage increase is for the year 1992 = (40 - 30)/30 = 1/3 = 33.33%. II. Average Revenue = (Total Revenue)/(Number of years) = (122 + 130 + 145 + 170 + 185 + 200 + 222)/7 = 1174/7 = 167.7 = 168(approx.) III. From the table, it can be seen that growth in expenditure as compared to the previous year was maximum in 1992. IV. Total Revenue = 1174 Total Expenditure = 700 + (2 + 5 + 15 + 30 + 35 + 40 + 50) = 887 %formed by the revenue = 887/1174 ~ 900/1200= = 75% V. % profit in 95 = (72 - 60) /60 = 1/5 = 20% As per the given condition % profit in 96 = 20% Then total profit will be (6 72)/5 ~ 86 lakhs. 5. Pie charts:

SOLUTION-11
1. 78=50-(x+y+5)=30-(y+z+5)+20-(x+z+5)+(x + y + z)+(5) or, 78=100-(x + y + z)10 or,(x + y + z)=17 2. I. 1.5% II. More than 1.5% 3. I. At 30 degree centigrade solubility of potassium nitrate is 0.38 kg/lt., so in 10 lt. 3.8 kg = 4 of potassium nitrate can be dissolved in it. II. 4 % increase in solubility of potassium chlorate = (0.4 0.1) 100/0.1 = 300%. III. Solubility of potassium chloride at 36 C. = 0.4 kg/lt. Therefore amount of potassium chloride that can be dissolved in 100 lt. at 36 C = 40 kg. Number of moles = (Wt. In kg)/(Wt. of 1 mole) = 40/0.07456 = 533(approx) 4. Rs. 32,500 5. 12% stock SEPTEMBER 2011, XVII Year, Issue No.9
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UN Conventions against Transnational Organized Crime and Corruption:


India has ratified the United Nations Convention against Transnational Organized Crime and its three protocols and the United Nations Convention against Corruption. The United Nations Convention against Transnational Organized Crime is the main international instrument in the fight against transnational organized crime. It recognizes the need to foster and enhance close international cooperation in order to tackle those problems. The convention is further supplemented by three Protocols, which target specific areas and manifestations of organized crime namely Protocols to combat (1) trafficking in persons (2) migrant smuggling and (3) illicit trafficking in firearms. The United Nations Convention against Corruption complements the United Nations Convention against Transnational Organized Crime. The Convention introduces a comprehensive set of standards, measures and rules that all countries can apply in order to strengthen their legal and regulatory regimes to fight corruption. The Convention enumerates in detail the measures to prevent corruption, including the application of prevention policies and practices, the establishment of bodies for that purpose, the application of codes of conduct for public servants, and public procurement. It recommends promoting transparency and accountability in the management of public finances and in the private sector, with tougher accounting and auditing standards. Measures to prevent money-laundering are also provided for, together with measures to secure the independence of the judiciary, public reporting and participation of society are encouraged as preventive measures. The Convention recommends the State Parties to adopt such legislative and other measures as may be necessary to establish a whole series of criminal offences. These are: (a) Corruption of national or foreign public officials and officials of public international organizations. (b) Embezzlement, misappropriation or other diversion by a public official of any public or private property. (c) Trading in influence. (d) Abuse of functions and illicit enrichment. In the private sector, the Convention calls for the creation of offences of embezzlement and corruption. There are other offences relating to laundering the proceeds of crime, handling stolen property, obstructing the administration of justice, and participating in and attempting embezzlement or corruption. Significance of India Ratifying the Convention: Six years after India signed the UN Convention against Corruption, the country has finally ratified it. The UN Convention will help the government to deal with the problem of black money and corruption through legislative and administrative measures, thus helping the government to seize illicit money and assets. According to the UN convention, each member country shall consider adopting appropriate legislative and administrative measures, consistent with the objectives of the Convention and in accordance with the fundamental principles of its domestic law, to prescribe criteria concerning candidature for and election to public office. The ratification of the Convention is reaffirmation of our governments commitment to fight corruption and to undertake vigorously administrative and legal reforms to enable our law enforcement agencies to recover illicit assets stolen by SEPTEMBER 2011, XVII Year, Issue No.9
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corrupt practices. It needs to mention here that India signed the accord in December 2005 and is one of the 140 signatories to the convention. The ratification comes as the country reels from several corruption scandals that have led to everything from sacked ministers to hunger strikes. Background: United Nations Crime and Justice Information Network, or UNCJIN, as mandated by United Nations Economic and Social Council resolution 1986/11. From 1995 to 1999, UNCJIN has been hosted and supported by the Institute of Applied Computer Science and Information Systems at the University of Vienna. On 15 November 2000, the General Assembly adopted the first UN Treaty against Transnational Organized Crime. Trafficking With regard to heroin trafficking, around 90 per cent of the global heroin supply comes from opium poppy cultivated in Afghanistan, and the majority of this is consumed in Europe, the Russian Federation and countries en route to these destinations. ?he route to the Russian Federation takes advan- tage of crossborder social and ethnic linkages in the new states of Central Asia, mostly moving the heroin in small amounts on board commercial and private vehicles. In contrast, the flow to Europe appears to be more organized, with much larger shipments crossing a greater number of borders involving states with much higher interdiction capacity. With regard to cocaine trafficking, the vast bulk of the flow proceeds from the Andean region to North America (often via Central America) and Europe (often via West Africa) though an increasing share is directed to the Southern Cone of South America. Civil Services

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Reports
World Trade Report 2011 The WTO and preferential trade agreements: From co-existence to coherence: The ever-growing number of preferential trade agreements (PTAs) is a prominent feature of international trade. The World Trade Report 2011 describes the historical development of PTAs and the current landscape of agreements. It examines why PTAs are established, their economic effects, and the contents of the agreements themselves. Finally it considers the interaction between PTAs and the multilateral trading system. According to the latest report of the WTO accumulated trade opening at the multilateral, regional and unilateral level has reduced the scope for offering preferential tariffs under PTAs. As a result, only a small fraction of global merchandise trade receives preferences, and preferential tariffs are becoming less important in PTAs. The report highlights the fact that global production networks have promoted the emergence of these deep PTAs as good governance on a range of regulatory areas is far more important to these networks than further reductions in already low tariffs. WTO projects that the world trade will grow 6.5 per cent by volume in 2011: The latest report of the WTO has projected that the world trade will grow by 6.5 percent this year, which is above the average rate between 1990 and 2008 of 6 percent, but if fails short of last years dramatic rebound. The WTO maintains that the growth in merchandise trade in 2010 as measured by volume of exports was 14.5 percent, revised up from its previous forecast of 13.5 percent. Developing country trade as measured by exports growth is projected to grow by 9.5 percent, while that of developed countries is set to grow only 4.5 percent. India is 10th top services exporter: According to the latest report of the WTO, India has achieved 10th rank in export of services worldwide, while emerged as the 20th biggest merchandise exporter in 2010. In value terms last year, India exported services and merchandise worth USD 110 billion and USD 216 billion respectively. Indias goods exports went up by 31 per cent in 2010, helping the country to expand its market share to 1.4 per cent from 1.2 per cent in 2009. According to the report, China ranked first in terms of merchandise exports followed by the US and Germany. In services export, the US is on the top slot followed by Germany and UK. Defining Preferential Trade Agreements: PTA is basically a trade pact be-

Global Innovation Index 2011


India has continued to deteriorate in the index as it has slipped to 62nd position in the 2011 edition of the Global Innovation Index rankings from being 56th in 2010 and 41st in 2009. India has performed poorly on the Input side at ranked 87th: India is in the last quintile on sub-pillars business environment, elementary education, tertiary education, and knowledge workers. In the Innovation Efficiency Index, India however improved its ranking to 9th this year. It was followed by Sri Lanka (82), Bangladesh (97), and Pakistan (105). The 2011 rankings were by the leading international business school INSEAD and its knowledge partners, Alcatel-Lucent, Booz & Company, the Confederation of Indian Industry, and the World Intellectual Property Organisation (WIPO). Switzerland has been regarded as ranked one ahead of Sweden, Singapore, Hong Kong and Finland. The other major countries are; US (7), China (29), Brazil (47) and Russia (56). The Global Innovation Index has been computed as an average of the scores across inputs pillars (describing the enabling environment for innovation) and output pillars (measuring actual achievements in innovation). It added that five pillars constitute the Innovation Input Sub-Index: 'Institutions,' 'Human capital and research,' 'Infrastructure', 'Market sophistication' and 'Business sophistication'. The Innovation Output Sub-Index is comprised two pillars: 'Scientific outputs' and 'Creative outputs'. The Innovation Efficiency Index, calculated as the ratio of the two Sub-Indices, examines how economies leverage their enabling environments to stimulate innovation results. SEPTEMBER 2011, XVII Year, Issue No.9
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tween countries that reduces tariffs for certain products to the countries who sign the agreement. While the tariffs are not necessarily eliminated, they are lower than countries not party to the agreement. It is a form of economic integration. PTAs and Multilateral Trading System: Preferential trade agreements pose a big challenge for the multilateral trading system. PTAs have a range of disadvantages compared with the multilateral regime, e.g. in trade facilitation and in dispute settlement. Though it will be difficult to stop the further spreading of PTAs, attempts can be made to reduce the negative effects of trade agreements that discriminate other countries. The collapse of Doha development round has further fuelled the desire for the preferential trade agreements among the nations. With no agreement on the Doha Development Round in sight, the global economy is poised for a new round of preferential agreements. Listed below are the major motives of the policy makers for negotiating and concluding preferential agreements: - (a) The length of negotiations in the current round causes difficulties for democratically elected governments, which tend to operate within shorter electoral cycles of three to five years. Preferential agreements can be tailored to fit into such time frames. (b) Bilateral agreements seem to provide immediate, reciprocal gains for the own economy. This perception allows governments to work with coalitions supporting liberalization, which are instrumental in overcoming internal opposition to an agreement. (c) Transnational cooperations are increasingly pushing the implementation of preferential agreements. This short list of reasons for the emergence of the strong trend for preferential trade agreements is not comprehensive. However, it demonstrates that the motives for implementing preferential agreements are embedded in the political systems of WTO member states. This pattern is unlikely to change in the short- or medium term. Issues related to the PTAs: In principle, there are two schools of thought on preferential agreements. The first one argues that these agreements are contributing to deeper global integraCivil Services

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tion. The second school of thought questions the utility of these agreements and considers them to be dangerous for international economic relations. As long as trade liberalization occurs, it does not matter whether it is at a bilateral, regional or multilateral level. In theory, preferential agreements can have significant benefits, e.g. promoting technology and knowledge transfers, domestic reforms, productivity gains and improved developmental prospects. On the other hand the negative impact of the PTAs include the distortion in trade patterns between insiders and outsiders which undermine the welfare gains arising from expanded trade. The most critical and widely recognized issue with regard to preferential agreements is the erosion of GATTs fundamental non-discrimination principle. Asian Development Bank Economic Report 2011 The Asian Development Bank (ADB) has released its economic report on Asian economies titled as Asia 2050 Realizing the Asian Century, saying that by the year 2050, over 45 per cent of the entire worlds gross domestic product (GDP) will be contributed by seven Asian nations. According to the report, Asias rise will be led by China, India, Indonesia, Japan, the Republic of Korea, Malaysia, and Thailand. In this exclusively prepared comprehensive report, the Asian Development Bank has referred to these seven countries as the driving engines for the re-emergence of the entire Asia. According to the estimates, around 3.1 billion total populations were living in these seven Asian nations in the year 2010. This population makes 78 per cent of the entire population living in Asia. In 2010, these seven countries were generating around $ 14.2 trillion gross domestic product. Indian middle class population seen at 1.2 billion in next 20 years- ADB: Regarding its estimates on India the ADB report has predicted that Indias middle class population could be as much as its current population - roughly 1.2 billion - 20 years from now. The rising number of middle class in India will trigger higher levels of consumption and that result in higher economic growth rates. Powering this growth will be the Indian work force. SEPTEMBER 2011, XVII Year, Issue No.9
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Unlike Japan, where the work force has started declining since 2000, and in contrast to China, where the growth of its youthful working age population is already peaking and is set to dip well before India, Indias demographic dividend is projected to kick in. India will still have a relatively young population even by 2050. Its labour force will continue to grow, before reaching nearly one billion workers by 2050. Rise in middle class numbers and the challenges before India (a) Education improvements are needed to match the needs of the growing middle class and the growing Indian economy: In order to ensure that the growing middle class is absorbed into the economy and can contribute to growth, the right education is crucial. The challenge is to increase the quality of public education (particularly universities) and foster more competition between private and public players. (b) Matching middle class skills with the demands of the growing economy: One benefit of Indias strong economic growth is that the economy has the potential to provide employment for the growing middle class. The boom in call centres and other outsourcing industries helped many households to achieve higher incomes over this past decade. However, one challenge is to continue increasing skills at all levels of the income pyramid to ensure that the newly emerging middle class (or those on the fringe of the middle class) are viable employees. The second challenge, of a more general nature, is to increase the number of skilled professionals in the workplace to change the structure of the economy to a higher-skilled economy. (c) The political economy of the middle class: The middle class in India show its apathy towards the political system of the nation. However, there is widespread anecdotal and suggestive evidence that while the middle class may have strong opinions about politics and the shape of the country, actual participation in the democratic system lags behind. (d) Inequality will rise: Rising inequality within India will become a major problem. Since 1980, the degree of inequality between the states, as 56

measured by the Gini Coefficient has shot up 50 per cent, as rural states such as Bihar and Orissa struggle to catch up with more urban states like Punjab and Haryana. In the urban states capital is readily available and investments are frequently being made in areas like infrastructure and IT, but in the rural states many farmers still use decades-old equipment that they cant afford to replace. With the rise in middle class population, this divide is also going to enlarge and will pose one of the biggest challenges for the institutions of the day to tackle. (e) Problem of Infrastructure: With the rise in number of middle class, the administration is definitely going to face the problem of providing basic infrastructure facilities to the population. In short, we can predict a busy future for our administrative machinery. We have to improve our urban infrastructure, tackle the problem of inequality and increase the efficiencies in our economic infrastructure. On the other hand we will have to take the growing concerns for our environmental issues and other constraints on our natural resources. World Competitiveness Rankings 2011 India has slipped one rank, to 32nd position in overall competitiveness among 59 nations, according to the latest World Competitiveness Rankings, announced by the International Institute for Management Development, Lausanne (Switzerland). The recovery of financial markets pushed the US and Hong Kong to first place, followed by last years topper, Singapore, which fell to third spot. In 2010, the US and Hong Kong ranked second and third, respectively. Indias neighbouring competitor, China, also slipped one rank, to 19th and Japan went up one rank to 26th slot. Though Indias ranking is below the midway mark, it still did better than Indonesia (37) Philippines (41), Brazil (44) and Russia (49). Sharply different trends were observed in Indias ranking in four major parameters. While the ranking relating to economic performance, government efficiency and infrastructure availability marginally improved, India slipped on business efficiency, which pulled down its overall ranking. On governCivil Services

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ment efficiency, which includes fiscal management and business legislation, India went up to 29th rank in 2011 from 30th rank in 2010. In economic performance, a macroeconomic evaluation of the domestic economy and related to areas like trade, investments, employment and prices, the position of India improved by two ranks to 18th place. In the case of infrastructure availability to meet basic, technological, scientific and human resources needs of business, the country improved its position to 50th rank in 2011, from the 54th position last year. This indicates the considerable infrastructure investment of recent years have started showing results. However, on the business efficiency parameter, relating to productivity and management practices, India slipped from 17th rank in 2010 to 22nd rank in 2011. Apart from Hong Kong and Singapore, two other Asian nations, Taiwan and Qatar, came in the top 10 list. Venezuela was the least competitive. About World Competitiveness Yearbook: The IMD World Competitiveness Yearbook (WCY) is the worlds most thorough and comprehensive annual report on the competitiveness of nations, published without interruption since 1989. It is considered to be the first access point to world competitiveness, providing objective benchmarking and trends, as well as a worldwide reference point to statistics and opinion data that highlight the competitiveness of key economies. The WCY analyzes and ranks how

nations and enterprises manage the totality of their competencies to achieve increased prosperity. An economys competitiveness cannot be reduced only to GDP and productivity because enterprises must also cope with political, social and cultural dimensions. Therefore nations need to provide an environment that has the most efficient structure, institutions and policies that encourage the competitiveness of enterprises. This year, the WCY provides extensive coverage of 59 economies, all key players in world markets. In this 2011 edition, we have added the United Arab Emirates (UAE) as an additional country. All economies are chosen because of their impact on the global economy and the availability of comparable international statistics. Importance of World Competitiveness Yearbook: The WCY is an invaluable, dynamic and constantly updated benchmark for decision-makers. The business community uses it to help determine and validate investment plans and to assess locations for new operations. Governments find important indicators to benchmark their policies against those of other countries, to evaluate performance over time and to learn from the success stories of nations that have improved their competitiveness. The academic world also uses the exceptional wealth of data in the WCY to better understand and analyze how nations (and not only enterprises) compete in world markets.

World Investment Report 2011


The UNCTAD's World Investment Report (WIR) 2011, the FDI inflow to India has taken a nosedive. In this regard, India position has come down from eighth rank in 2009 to the 14th rank in the top-20 league for global FDI inflows in 2010. As per the report, India's FDI inflows in 2008 stood at $42.5 billion. This had come down to $35.6 billion in 2009 and $24.64 billion in 2010. India attracted FDI worth USD 25 billion last year, much lower than the inflows of USD 36 billion seen in 2009. Whereas United States with $228 billion has topped the list; China stood at 2nd position with inflows totalling $106 billion in 2010, and Brazil stood at 5th position with inflows at $48 billion during the last year. In fact, FDI inflows to South, East and South-East Asia rose 24 per cent to $300 billion, nearly one-fourth of the global total of $1.24 trillion in 2010. FDI to South Asia declined to $32 billion, reflecting a 31 per cent slide in inflows to India and a 14 per cent drop in flows to Pakistan. By contrast, inflows to Bangladesh, a rising low-cost production location, increased by nearly 30 per cent to $913 million. FDI inflows in India stood at $ 9.42 billion in 2010-11. SEPTEMBER 2011, XVII Year, Issue No.9
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Competitiveness Factors Economic Performance: Macroeconomic evaluation of the domestic economy, Domestic Economy, International Trade, International Investment, Employment and Prices. Government Efficiency: Extent to which government policies are conducive to competitiveness, Public Finance, Fiscal Policy, Institutional Framework, Business Legislation and Societal Framework. Business Efficiency: Extent to which the national environment encourages enterprises to perform in an innovative, profitable and responsible manner: Productivity and Efficiency, Labor Market, Finance, Management Practices and Attitudes and Values. Infrastructure: Extent to which basic, technological, scientific and human resources meet the needs of business: Basic Infrastructure, Technological Infrastructure, Scientific Infrastructure, Health and Environment and Education. UNEP Report 2011 Investing an additional US$40 billion a year or 0.034 per cent of global Gross Domestic Product (GDP) in the forestry sector could halve deforestation rates by 2030, increase rates of tree planting by around 140 per cent by 2050, and catalyse the creation of millions of new jobs, says a new report launched by the United Nations Environment Programme (UNEP). The report, Forests in a Green Economy: A Synthesis, examines the role of forests in a green economy, and provides policy recommendations to adjust the forest sector in such a way that it can effectively contribute to sustainable development and poverty eradication. The report further highlights that right kind of enabling policies, such as investment equivalent to about 2/ 3 more than what is spent on the sector today, could help in removing an extra 28 per cent of carbon from the atmosphere, thus playing a key role in combating climate change. The report further highlights that more than a billion people around the world depend on forests for incomes and employment. Forests are also a major source to provide nutrition and diminCivil Services

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ish energy scarcity. Besides, forests serve as carbon sinks, regulate water cycles and contribute to the world biodiversity. Thus we can convincingly say that economic progress and human well-being are dependent on healthy forests. Understanding the Concept of Green economy: The concept of Green Economy is an effort to solve the current environmental crisis (dependence on imported oil, carbon emissions, air pollution, etc.) and the current economic crisis (job loss, price of fuel, cost to build new power plants, etc.) together by investing in the clean energy sector and creating jobs in the process. The clean energy sector is comprised of energy efficiency, renewable energy, and alternative fuelled vehicles. To make the concept of Green Economics an effective reality, economists and environmentalists are allies for the first time ever. Thus Green economics is the economics of the real worldthe world of work, human needs, the Earths materials, and how they mesh together most harmoniously. It is primarily about use-value, not exchange-value or money. It is about quality, not quantity for the sake of it. It is about regenerationof individuals, communities and ecosystemsnot about accumulation, of either money or material. Guiding Principles of Green Economy: (a) The Basic Importance Given to Use-value, Intrinsic Value & Quality: This is the fundamental principle of the green economy as a service economy, focused on end-use, or human and environment needs. Matter is a means to the end of satisfying real need, and can be radically conserved. Money similarly must be returned to a status as a means to facilitate regenerative exchanges, rather than an end in itself. (b) Waste Equals Food: In nature there is no waste, as every process output is an input for some other process. This principle implies not only a high degree of organizational complementarity, but also that outputs and by-products are nutritious and non-toxic enough to be food for something. (c) Self-Reliance, Self-Organization, Self-Design: In an economy which moves with ecosystem processes, tremendous scope for local response, SEPTEMBER 2011, XVII Year, Issue No.9
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design and adaptation must be providedalthough these local and regional domains must be attuned to larger processes. Self-reliance is not self-sufficiency, but facilitates a more flexible and holistic interdependence. (d) Following Natural Flows: The economy moves like a proverbial sailboat in the wind of natural processes by flowing not only with solar, renewable and megawatt energy, but also with natural hydrological cycles, with regional vegetation and food webs, and with local materials. As society becomes more ecological, political and economic boundaries tend to coincide with ecosystem boundaries. That is, it becomes bioregional. Conclusion: The concept of green economy will impact the environment in a positive way by investing in the clean energy sector and infrastructure and will improve the economy by not only creating jobs but by creating a clean, affordable, and independent energy future. This concept and related investments, as evidenced by the recent stimulus plan, are certainly hopeful and optimistic but more importantly they are pragmatic efforts to solve problems that have been lingering, festering, and ignored for far too long. UN women Report 2011 UN women has issued a new report on womens access to justice worldwide, Progress of the Worlds Women: In Pursuit of Justice. The report focuses on womens access to justice in every country around the world. The report is a global survey of womens access to justice looking both at legislation passed by governments and the steps taken or not taken to implement those laws. The paradox confronted by the report is that despite the recent and rapid expansion of womens legal entitlements, what is written in the statute books does not always translate into real progress on equality and justice on the ground. The report looks at which countries have passed special legislation on womens political rights and economic opportunities and on womens reproductive health and rights. It looks at which countries have laws against domestic violence, sexual harassment and marital rape. It catalogues data on development indicators related to women, and looks country-by-country 58

at womens participation in politics. Major Highlights of the Report: (a) 139 nations guarantee gender equality, 117 countries have equal pay laws, and 115 countries guarantee womens equal property rights. (b) Globally, 53 per cent of working women are in vulnerable employment and women are paid up to 30 per cent less than men in some countries. (c) 125 countries outlaw domestic violence, but 127 countries do not explicitly criminalise rape within marriage. (d) Around the world, 603 million

Interest Rate Futures


Buying an interest rate futures contract allows the buyer of the contract to lock in a future investment rate; not a borrowing rate as many believe. Interest rate futures are based off an underlying security which is a debt obligation and moves in value as interest rates change. When interest rates move higher, the buyer of the futures contract will pay the seller in an amount equal to that of the benefit received by investing at a higher rate versus that of the rate specified in the futures contract. Conversely, when interest rates move lower, the seller of the futures contract will compensate the buyer for the lower interest rate at the time of expiration. In a nutshell interest rate futures are primarily seen to be of use to those who have a view on how the interest rate would move and wish to benefit from it. It can also be used as a hedging mechanism for anyone who holds a large number of government securities, which largely comprise banks or other such financial institutions. Significance of introduction of interest rate futures trade in India: The introduction of trading in interest rate futures in the country heralds the beginning of a new era in the fixed income derivatives market. The introduction of trading in interest rate futures in India is one more step towards integration of the Indian Securities Market with the rest of the world. In India, it may be seen as a path breaking initiative because it is expected to pave the way for various innovations at the derivatives front in the time to come. Civil Services

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Current Economy

66th round survey of NSSO


The quinquennial 66th round survey in 2009-10 of the National Sample Survey Organisation (NSSO) report has indicated unemployment as a percentage of the overall population, population unemployed, and unemployment as a percentage of the labour force, unemployment rate, declined. The report reveals that unemployment rate under the broadest definition of employment, usual status, declined to 20 per 1000 from 23 per 1000. It says that that about half of Indian workers are now working as wage employees and yet the rate of unemployment among them has dipped as to compare to 2003-04, the year of the previous survey. The report says that the unemployment rate has dipped from 8.2 per cent to 6.6 per cent when measured in terms of current daily status (CDS) the most acceptable measure of employment. In India, there are four standards to measure employment. Of these the CDS is the inclusive measure of unemployment as it captures data about the chronically unemployed. In contrast, the slowest fall in unemployment rate was in the case of the UPSS measure where the rate fell from 2.3 per cent in 2004-05 to 2 per cent in 2009-10. In case of the PS measure the numbers show that the unemployment rate fell a little more sharply from 3.1 per cent to 2.5 per cent while in the case of the CWS also the fall was a little higher with the rate moving from 4.4 per cent to 3.6 per cent. The unemployment rate in 1993-94 was however even lower with the rates being 6 per cent (CDS), 3.6 per cent (CWS), 1.9 per cent (UPSS) and 2.6 per cent (PS), respectively. The 66th round of the survey also shows that 51 per cent of the Indian workers were self-employed with the ratio at a higher 54.2 per cent in rural areas and a lower 41.1 per cent in urban areas. While 51 per cent of the country's total workforces are self-employed, only 15.5 per cent are regular wagers or salaried employees and 33.5 per cent casual labourers. This is a decline since the past survey, but at the same time, the report says that industry and the services sector has not been able to absorb half of the potential labourers available. The current large round will be carried out again, as 2009-10 is considered an 'abnormal' year in the backdrop of the poor rains and the economic recovery post the global financial crises. The survey found that the perday wage rates for casual labourers in works other than public works in rural areas was Rs 93, against Rs 122 in urban areas. In rural areas, male casual labourers engaged in such activities received an average of Rs 102 per day. However, it was only Rs 69 for women. As per the report, women continue to earn less than their male counterparts for doing similar jobs; while the average earnings every day for male workers was Rs 249, it was only Rs 156 for women, indicating a female-male wage ratio of 0.63. The ratio was 0.82 in urban areas, with males earning Rs 377 and women Rs 309. While 41.4 per cent of the urban workforce earned regular wages, it was only 7.3 per cent in rural areas. The difference between the wages for males and females is visible even in projects under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). In public works other than MGNREG, the wages are Rs 98 for males and Rs 86 for females. The survey has further revealed that agriculture continued to be the predominant occupation in urban areas though more women (71 per cent) are dependent on it than men (63 per cent).

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women live in countries where domestic violence is not considered a crime and more than 2.6 billion live in countries where marital rape is not a criminal offence. (e) 61 countries severely restrict womens rights to abortion. (f) 50 countries have a lower legal age of marriage for women than for men. Analysis of the report: The report assumes special significance because justice is central to the effort to help women become equal partners in decisionmaking and development. Without justice, women are disenfranchised, disempowered and denied their rightful place. But with sound legal and justice systems, women can flourish and contribute to the advancement of society as a whole. The report highlights the practical barriers that women particularly the poorest and most excluded face in negotiating justice systems and the innovative approaches that governments and civil society are pioneering to overcome them. It explores the ways in which women are reconciling guarantees of their rights with the realities of living within plural legal systems. About UN Women: In 2010, the United Nations General Assembly created UN Women, the United Nations body for Gender Equality and the Empowerment of Women. UN Women became operational in January 2011. The main functions of UN Women are: (a) Supporting the inter-governmental bodies in formulation of policies, global standards and norms for the benefit and upliftment of women. (b) It assists the member states to implement these standards, and provide them suitable technical and financial support. (c) It works for the elimination of discrimination against women and girls. (d) It formulates policies for the empowerment of women. (e) It strives for achieving equality between women and men. Former President of Chile Michelle Bachelet is the first Executive Director of UN Women.

Banking Sector
Revised Credit Policy Towards conservatism In order to control the inflation, once again the Repo Rate has been revised SEPTEMBER 2011, XVII Year, Issue No.9
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in the July 27, 2011 credit policy. RBI has been decided to increase the policy repo rate under the liquidity adjustment facility (LAF) by 50 basis points from 7.5 per cent to 8.0 per cent with immediate effect. The reverse repo rate under the LAF, determined with a spread of 100 basis points below the repo rate, automatically adjusts to 7.0 per cent with immediate effect. The Marginal Standing Facility (MSF) rate, determined with a spread of 100 basis points above the repo rate, stands recalibrated at 9.0 per cent with immediate effect. Nevertheless, the Bank Rate has been retained at 6.0 per cent. The cash reserve ratio (CRR) of scheduled banks has been retained at 6.0 per cent of their net demand and time liabilities (NDTL). It is expected that these policy actions will: (a) reinforce the cumulative impact of past actions on demand; (b) maintain the credibility of the commitment of monetary policy to controlling inflation, thereby keeping medium-term inflation expectations anchored; and (c) reinforce the point that in the absence of complementary policy responses on both demand and supply sides, stronger monetary policy actions are required. Major Dimensions of the Credit Policy May 2011: (a) CRR (Cash reserve ratio) and the Bank Rate left unchanged at 6 per cent each. (b) Rate of Interest on savings bank deposits increased to 4 per cent from 3.5 per cent. (c) Economic growth projected lower at 8 per cent for FY12. 60

(d) WPI inflation projection lowered to 6 per cent. (e) Favours aligning of fuel rates with international crude prices to avert widening of fiscal deficit. (f) Banks to get a new overnight borrowing window under Marginal Standing Facility at 8.25 per cent. (g) Malegam Committee recommendations on MFI sector broadly accepted. RBI policy to contain inflation will help boost growth in long run: The 50-basis-point increase in repo and reverse repo rates is entirely justified in the current monetary and economic environment. We need to accept the reality that growth may have to be sacrificed in order to control inflation. The current projection of the RBI to lower the economic growth target to 8 per cent for the current fiscal is aimed to scale down the inflation from present 9 per cent to around 6 per cent by March 2012. Controlling inflation at this level will help in maintaining higher growth levels in the long run. The so-called baby steps introduced since January 2010 to contain inflation have proved to be inadequate to contain inflation and ineffective to transmit the monetary policy mechanism the way the Reserve Bank wants. Over a period, the repo rate has been enhanced from 4.75 per cent as on January 31, 2010, to 7.25 per cent as on May 3, 2011, and the reverse repo rate has been revised from 3.25 per cent to 6.25 per cent during the same period. However, the cash reserve ratio (6 per cent) has not been changed to ensure sufficient liquidity in the system, which itself is an indication that the RBI recognizes the need for availability of Civil Services

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funds for genuine productive purposes and, at the same time, funds are made costly to curb speculative tendencies. RBI raises interest rate by 50 bps, yet again: The RBI has recently hiked the shortterm lending and borrowing rates sharply by 50 basis points for the third time in three months to tame high inflation, a move that would make all personal and corporate loans more expensive. With this increase of 0.50 per cent, the short-term lending (repo) rate has been hiked to 8 per cent and the short-term borrowing (reverse repo) rate has also been increased by a similar margin to 7 per cent. The cash reserve ratio (CRR) stands unchanged at 6 per cent. The RBI has also revised the WPI inflation projection for March 2012 from 6 per cent to 7 per cent. However, it has retained the projection of real GDP growth for the current year at 8 per cent. Rate hiked for eleventh time since March 2010: This is the 11th time since March, 2010, that the RBI has raised the interest rate to check inflation, which is currently ruling at over 9 per cent. The RBI has itself admitted that its cumulative decision of past actions to curb demand and anchor medium term inflationary expectations will curtail growth in the near term. RBI Focuses on Inflation: High inflation has been a worry for the RBI for several months. While wholesale price inflation continues to remain above 9 per cent, non-food manufacturing inflation has remained above 7 per cent for months. What is particularly worrying our economy is that inflation is not only coming from supply-side constraints, like international commodity prices, but also from strong demand pressures. A higher interest rate makes money costlier and limits the ability of customers to purchase goods, thereby reducing demand pressures, but RBI does not seem to be very hopeful about inflation coming down anytime soon. International commodity prices, particularly crude prices, remain high and pose a major threat. Understanding Bank Rate: Bank Rate is the rate at which RBI allows finance to commercial banks. Bank Rate is a tool that RBI uses for short-term purposes. Any upward revision in Bank SEPTEMBER 2011, XVII Year, Issue No.9
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Rate is an indication that banks should also increase lending and deposit rates. Understanding Cash reserve Ratio (CRR): Cash reserve Ratio (CRR) is the amount of funds that the banks have to keep with the RBI. If the RBI increases the CRR, the available amount with the banks comes down. The RBI uses the CRR to drain out excessive money from the system. Understanding Reverse Repo rate: Reverse Repo rate is the rate at which

the RBI borrows money from commercial banks for a short-term. Banks are happy to lend money to the RBI since their money is in safe hands and they get good interest. An increase in reverse repo rate can prompt banks to park more funds with the RBI to earn higher returns on idle cash. It is also a tool which can be used by the RBI to drain excess money out of the banking system. Understanding Repo rate: The rate at

Marginal Standing Facility Scheme


The Reserve Bank of India (RBI) has introduced a new Marginal Standing Facility (MSF) scheme, which was announced to be implemented in its Monetary Policy for the year 2011-12. Under the new facility, banks will borrow overnight up to 1 per cent of net demand and time liabilities (NDTL) outstanding at the end of the second preceding fortnight. The MSF will be 100 basis points above the repo rate the rate at which banks borrow from RBI. It needs to be noted that the repo rate has now become the only independent variable policy rate, marking a shift from earlier method of calibrating various policy rates separately. The reverse repo rate the rate at which RBI borrows will be kept 100 basis points lower than the repo rate. All scheduled commercial banks that have current account and subsidiary general ledger (SGL) account with RBI are eligible to participate in the MSF scheme. RBI will receive requests for a minimum amount of Rs 10 million and in multiples of Rs 10 million thereafter. The central bank has the right to accept or reject partially or fully, the request for funds under this facility. Marginal Standing Facility will curb inter-bank lending volatility: The Reserve Bank of Indias new Marginal Standing Facility is expected to curb volatility in the overnight lending rates in the banking system. The banks will use Marginal Standing Facility to borrow overnight money only when they have exhausted all other existing channels like collateralized borrowing and lending obligation (CBLO) and liquidity adjustment facility (LAF). Difference between Liquidity Adjustment Facility-Repo Rate and Marginal Standing Facility Rate: Banks can borrow from the RBI under LAF-Repo Rate, which stands at 7.25 per cent by pledging government securities over and above the statutory liquidity requirement of 24 per cent. Though in case of borrowing from the marginal standing facility, banks can borrow funds up to one per cent of their net demand and time liabilities at 8.25 per cent. However, it can be within the statutory liquidity ratio of 24 per cent. 61 Civil Services

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which the RBI lends short-term money to commercial banks is called repo rate. It is an instrument of monetary policy. Whenever banks have any shortage of funds they can borrow from the RBI. A reduction in the repo rate helps banks get money at a cheaper rate, while an increase in repo rate means that banks will have to borrow at higher rates. Increasing the saving bank rate: The enhancement of savings bank rate was overdue and the RBI has done the right thing by increasing the SB interest rate from 3.5 per cent to 4 per cent. This will benefit a large segment of the population who has only SB accounts. The hike in SB rate can help improve financial inclusion and attract build-up of deposits. Though deregulation of SB interest is highly desirable and a discussion paper has been brought out on this aspect, this needs to be examined thoroughly as banks, particularly public sector ones, which operate in the rural and semi-urban areas comparatively in a big way and enjoy heavy SB deposits will face the risk of high cost of funds and assetliability mismatch in the event of sub-

stantial hike of SB interest rate by private sector banks on deregulation. Should the savings bank be deregulated? Intended Benefits: The deregulation of the interest rate on savings bank accounts would immensely benefit the savers. RBI believes that it would enable lenders to come out with innovative products to attract more funds from low income households. While the RBI deregulated interest rates on fixed deposit schemes in 1997, it continues to fix the rate on savings deposits. Presently, banks pay interest at the rate of 3.5 per cent on saving accounts, which was fixed in 2003. If the SB interest rate is deregulated it will increase the efficacy of monetary policy by improving the correlation between the retail bank deposits and market interest rates. Another major benefit of the deregulation of SB rates is that a market-based savings interest rate will accelerate greater financial inclusion of the un-banked, and also augment a higher savings propensity. In India, where a significant portion of household savings (particularly in

Merger of SBI Commercial with SBI


The Union Cabinet has approved acquisition of the State Bank of India Commercial and International Bank Ltd. (SBICI Bank Ltd.) by State Bank of India (SBI), in terms of sub-section (2) of section 35 of the State Bank of India Act, 1955. SBICI, with two branches in Mumbai, is a wholly owned subsidiary of State Bank of India (SBI) and functions as a private sector bank offering an array of financial products and services. The terms and conditions for the acquisition have been approved by board of directors of both the banks and also by the Reserve Bank of India. It is hoped that the merger would help in eliminating the cost involved in maintaining the administrative structure of SBICI as both the branches of SBICI would be easily absorbed in the operations of the main bank. Significance of the merger by the government: In the overall analysis, continuation of SBICI in its present form would not create a sustainable organization with a separate niche, able to hold on its own in the medium term. As an independent Bank also, SBICI has had to maintain a full-fledged, elaborate administrative setup to conform to regulatory requirements. The cost of maintaining such a structure is disproportionate to the level of operations of the SBICI. The proposed merger would help in eliminating the cost involved in maintaining the administrative structure of SBICI as both the branches of SBICI would be easily absorbed in the operations of the main Bank. While no present beneficiary of the State Bank of India would be affected, the number of beneficiaries would be the clients of SBI Commercial and International Bank Ltd. who will have access to the bigger network of State Bank of India. About SBICI: SBICI Bank Ltd. is a wholly owned subsidiary of SBI, which was set up in 1994 after taking over the Indian operations of the erstwhile Bank of Credit and Commerce International Ltd. (BCCI), which went into liquidation in 1991. SBICI Bank Ltd. has only two branches, both in Mumbai. SEPTEMBER 2011, XVII Year, Issue No.9
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semi-urban and rural areas) is still held in the form of cash, attractive interest rates on savings bank deposits will bring into the banking system a part of the Rs 9.5 lakh crore that households keep with themselves as cash. One can hardly argue against the merits of deregulation that facilitates efficiency and fairness in allocation of resources. We can firmly say that savings rate deregulation will create a win-win situation for both the retail depositor and the banking system, and RBI should fast take the final step towards international best practices. What can cause trouble by deregulation of SB Rates: It can be argued that the initiative will neither help banks nor borrowers since the cost of funds will rise, but it will provide greater scope for product innovation and service excellence. Banks will pass on the rate hike and borrowers will have to pay more. Savers will not gain either because account maintenance and other charges will rise. One of the biggest advantages of deregulation of SB rates, as mentioned in the discussion paper of the RBI, is that it will improve monetary policy transmission. It is also argued that deregulation will lead to product innovation. But one must, however, remember that the savings account is not necessarily an instrument for the transmission of monetary policy actions. The primary objective of a savings bank account is to provide financial services to society. For the middle and lower-middle class, it is always better to have a good rate on the savings account because they do not have enough money to follow other investment options. Does it mean that the deregulation of the savings bank rate will benefit the common man? This is the pertinent question that rises in the mind of every citizen as he starts thinking of higher interest on his saving bank account. One should understand that if the savings deposit rate goes up, maintenance and other charges will also move up. There is no such thing as a free lunch; every debit always has a credit. In our country, the account charges are among the lowest in the world. So, it should not be taken by granted by the common man that he will necessarily gain in a Civil Services

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deregulated environment. Therefore, the RBI should do a careful cost-benefit analysis before it takes the plunge. CAMELS Rating System for Banks CAMELS rating is an international bank-rating system where the central banking authorities of the nation exercise supervisory authority to rate banks in the country according to six factors. The six factors examined are as follows: (a) C - Capital adequacy. (B) A - Asset quality. (C) M - Management quality. (D) E Earnings. (E) L Liquidity. (F) S - Sensitivity to Market Risk. This is CAMELS rating for banks. As per the principles of these ratings, the central banks assign each bank a score on a scale of one (best) to five (worst) for each of the factors. This system helps the central banks to identify least performing banks and prescribe suitable remedies for them to function effectively. CAMEL in Indian Banking System: With the aim of reviewing the banking supervision system, the RBI in

1995 appointed a working group under the chairmanship of S. Padmanabhan. This committee suggested a rating system for our domestic and foreign banks based on the international CAMELS model. It recommended that the banks should be rated on a five point scale (A to E) based on the lines of international CAMELS rating model. The principles involved in CAMELS evaluation process in India is based on the following six parameters:- (I) Capital Adequacy: Capital adequacy is measured by the ratio of capital to risk-weighted assets (CRAR). A sound capital base strengthens confidence of depositors. (II) Asset Quality: One of the indicators for asset quality is the ratio of non-performing loans to total loans (GNPA). The gross non-performing loans to gross advances ratio is more indicative of the quality of credit decisions made by bankers. Higher GNPA is indicative of poor credit decision-making. (III) Management: The ratio of non-interest expenditures to total assets

Self-Help Groups
The RBI has allowed urban cooperative banks (UCBs) to give loans to selfhelp groups (SHGs). This decision by the RBI is definitely going to promote financial inclusion in the nation in addition to expand the scope of UCBs. If the reach of the UCBs is expanded, it will result in promoting financial inclusion. According to the latest guidelines of the RBI, lending to SHGs and JLGs (Joint Liability Groups) would be considered as normal business activity of the bank. UCBs will be required to frame a comprehensive policy on lending to SHGs and JLGs. The maximum amount of loan to SHGs should not exceed four times of the savings of the group. With regard to loans given to JLGs, the guidelines stated that the JLGs were not obliged to keep deposits with the bank and hence the amount of loan granted to them would be based on their credit needs and the banks assessment of the credit requirement. A Brief Definition of Self-Help Group: A Self-Help Group is a small voluntary association of poor people preferably from the same socio-economic back drop. The micro-credit given to them makes hem enterprising; it can be all women group, all-men group or even a mixed group. However, it has been the experience that womens groups perform better in all the important activities of SHGs. In other words we can define the SHGs as a group of micro entrepreneurs with homogeneous social and economic background who voluntarily come together to save small amounts regularly and mutually agree to contribute to a common fund to meet their emergency needs. Defining Joint Liability Groups: A Joint Liability Group (JLG) is an informal group comprising preferably of 4 to 10 individuals coming together for the purposes of availing bank loan either singly or through the group mechanism against mutual guarantee. The JLG members are expected to engage in similar type of economic activities. The management of the JLG is to be kept simple with little or no financial administration within the group. JLGs can be formed primarily consisting of tenant farmers and small farmers cultivating land without possessing proper title of their land. SEPTEMBER 2011, XVII Year, Issue No.9
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(MGNT) can be one of the measures to assess the working of the management. This variable, which includes a variety of expenses, such as payroll, workers compensation and training investment, reflects the management policy stance. (IV) Earnings: It can be measured as the return on asset ratio. (V) Liquidity: Cash maintained by the banks and balances with central bank, to total asset ratio (LQD) is an indicator of banks liquidity. In general, banks with a larger volume of liquid assets are perceived safe, since these assets would allow banks to meet unexpected withdrawals. (VI) Systems and Control. Significance of CAMELS: The major importance of this rating system is to examine the financial and other soundness of the Bank, and alert the top management of the Bank to take timely measures to address any deficiencies and stop the Bank from sliding to the bottom of the heap. The current banking crisis, that shattered the global economy, highlights the importance of regulatory issues and the effects of incompetence in regulatory area. CAMELS, as a rating system for judging the soundness of Banks is a quite useful tool, that can help in mitigating the conditions and risks that lead to Bank failures.

External Sector
$500 billion by 2014-15 The commerce and industry ministry has set a target of achieving $500-billion exports by 2013-14 by strategizing the countrys foreign trade through diversification of products and markets and technological enhancement. It recently floated a strategy paper for this purpose where it had recommended certain specific areas such as skill development; focus on research and development and channelizing incentives in a proper manner. To achieve this target, we need a coordinated approach, and our strategy should be to build on our strength in sectors with great growth potential, promote light manufacturing exports with high-value addition and encourage employment in labourintensive sectors. In order to achieve the target the thrust would remain on high technology exports such as engiCivil Services

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neering, electronics, automobiles, drugs and pharmaceuticals, computer and software-based smart engineering, green technology products and aerospace. Need of New Markets to Achieve the Export Target: Emerging markets in Asia, Latin America, Africa and Middle-East countries would play an important role to achieve this ambitious target. Of the projected $500 billion dollar exports, a major chunk will be contributed by Asia with a share of $230 billion with ASEAN alone importing more than $100 billion from India. India ASEAN Free Trade Agreement will provide an impetus for boosting Indias export to South East Asian region. By the year 2014-15 it is expected that exports to Europe will reach $75 billion while with North America will touch $ 50 billion. Thus market diversification is a key element to the strategy which the government must plan to give more incentives to increase presence in growing markets like Latin America, Africa and Asia. We thus feel that the $500 export target is not an impossible target but the government needs to work on a stable policy regime and reliable infrastructure to achieve the same. FCRA The central government notified the Foreign Contribution Regulation Act, 2010 and it came into force from May, 1, 2011. Salient Features of the Act: (a) Any association granted prior permission or registered with the Central Government under Section 6 or under the repealed FCRA, 1976, shall be deemed to have been granted prior permission or registered, as the case may be, under FCRA, 2010 and such registration shall be valid for a period of five years from the date on which the new Act has come into force. (b) While the provisions of the repealed FCRA, 1976 have generally been retained, the FCRA, 2010 is an improvement over the repealed Act as more stringent provisions have been made in order to prevent misutilisation of the foreign contribution received by the associations. (c) Any organization of a political nature and any association or company engaged in the production and broadcast of audio or audio visual news or current affairs programme have been placed in the cateSEPTEMBER 2011, XVII Year, Issue No.9
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gory prohibited to accept foreign contribution. (d) A new provision has been introduced to the effect that no person who receives foreign contribution as per provisions of this Act,

shall transfer to other person unless that person is also authorized to receive foreign contribution as per rules made by the Central Government. (e) Another new provision has been made

Foreign Currency Convertible Bonds


Foreign Currency Convertible Bonds are debt instruments issued in a currency different than the issuers domestic currency with an option to convert them in common shares of the issuer company. Its a quasi-debt instrument to raise foreign currency funds at attractive rate. FCCB acts like a bond by making regular coupon and principal payments; and also gives the bondholder an option to convert the bond into stock. In other words we can say that, Foreign currency convertible bond (FCCB) is a convertible bond issued by a country in a currency different than its own currency. This is the powerful instrument by which the country raises the money in the form of a foreign currency. The bond acts like both a debt and equity instrument. Like bonds it makes regular coupon and principal payments, but these bonds also give the bondholder the option to convert the bond into stock. Guidelines for issuing FCCBs in India: (a) Any company that requires to raise the foreign funds by issuing FCCB, require prior permission of the Department of Economic Affairs, Ministry of Finance, Government of India. (b) The company issuing the FCCB should have the consistent track record for a minimum period of three years. (c) The Foreign Currency Convertible Bonds shall be denominated in any freely convertible foreign currency and the ordinary shares of an issuing company shall be denominated in Indian rupees. (d) The issuing company should deliver the ordinary shares or bonds to a Domestic Custodian Bank as per regulation. The custodian bank on the other hand instructs the Overseas Depositary Bank to issue Global Depositary Receipt or Certificate to non-resident investors against the shares or bonds held by the Domestic Custodian Bank. Advantages of FCCBs: (a) It is more stable and predictable than domestic currency. (b) It gives issuers the ability to access investment capital available in foreign markets. (c) Companies can use the process to break into foreign markets. (d) The bond acts like both a debt and equity instrument. Like bonds it makes regular coupon and principal payments, but these bonds also give the bondholder the option to convert the bond into stock. (e) It is a low cost debt as the interest rates given to FCC Bonds are normally 30-50 percent lower than the market rate because of its equity component. (f) Conversion of bonds into stocks takes place at a premium price to market price. Conversion price is fixed when the bond is issued. So, lower dilution of the company stocks. Some of the perceived disadvantages of FCCBs: (a) The exchange risk is more in FCCBs as interest on bond would be payable in foreign currency. Thus companies with low debt equity ratios, large forex earnings potential only opted for FCCBs. (b) FCCBs mean creation of more debt and a forex outgo in terms of interest which is in foreign exchange. (c) In case of convertible bond the interest rate is low (around 3-4 per cent) but there is exchange risk on interest as well as principal if the bonds are not converted in to equity. (d) If the stock price plummets, investors will not go for conversion but redemption. So, companies have to refinance to fulfill the redemption promise which can hit earnings. (e) It remains as debt in the balance sheet until conversion. 64 Civil Services

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to the effect that foreign contribution shall be utilized for the purpose for which it has been received and such contribution can be used for administrative expenses up to 50 per cent of such contribution received in a financial year. (f) No funds other than foreign contribution shall be deposited in the FC account to be separately maintained by the associations etc. Every bank shall report to such authority, as may be prescribed, the amount of foreign remittance received, sources and manner and other particulars. (g) Provision has been made for inspection of accounts if the registered person or person to whom prior permission has been granted fails to furnish or the intimation given is not in accordance with law. (h) Any person contravening the provisions of the Act shall be punishable with imprisonment for a term which may extend to five years or with fine or with both. Need and Importance of the FCRA, 2010: The new law has been enforced to make regulations for foreign contributions in the form of gifts, funds and other forms to individuals and social organizations in the wake of

Cairn and Vedanta deal


Nearly 10 months after $9.6 billiondeal was first struck, the government has given its approval to Cairn Energy for selling its Indian unit to Vedanta Resources, subject to the new owner agreeing to share royalty and pay oil cess on mainstay Rajasthan oilfields. The Cabinet Committee on Economic Affairs (CCEA) headed by Indian Prime Minister Manmohan Singh has approved the sale with the preconditions that Cairn or its successor has to treat royalty payments on Rajasthan oilfields as recoverable from oil sales. The CCEA also directed Cairn India to withdraw the arbitration it had initiated disputing its liability to pay Rs. 2500 per ton oil cess on its 70 per cent share in the fields. The CCEAs approval also requires Cairn India to get a NOC from ONGC, which has a stake in all the three oil and gas producing properties of Cairn India. SEPTEMBER 2011, XVII Year, Issue No.9
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changed internal security environment and larger fund flow. The Parliaments approval of the Foreign Contribution (Regulation) Bill, 2010 came against the backdrop of only 18,000 of the over 40,000 organizations which received foreign contribution in the country reporting the inflow of funds and submitting their accounts. Foreign funds have also come under the scanner in the recent years in the wake of suspicions that some of it may have been used for anti-India terror activities. According to the provisions of the Act, if any organization receives funds over Rs 10 lakh, the bank will immediately inform the government to enable the agencies to track the funds. Organizations with fictitious or Benami accounts, have indulged in conversions directly or indirectly, created communal tension, supported sedition or have diverted funds earlier would be barred from receiving foreign contributions. The Act seeks to replace the FCRA Act of 1976 by a new legislation to regulate the acceptance, utilization and accounting of foreign contributions and acceptance of foreign hospitality by a person or an organization. The proposed Act prohibits certain categories of individuals and organizations from accepting overseas funds. These include election candidates, correspondents, editors and publishers of newspapers, judges and government servants, members of legislature and political parties. However, the provisions of the bill will not apply on remittances received from relatives abroad and salaries or wages due from foreign sources. It will also exclude payment for international trade. In case the organizations receiving foreign funds do not file accounts the government will have power to cancel their registration. Limited Liability Partnership Firms The Cabinet Committee on Economic Affairs or CCEA recently approved a proposal to amend the policy on allowing foreign direct investment or FDI in Limited Liability Partnership or LLP firms. The FDI in LLPs will be implemented in a calibrated manner, beginning with open sectors where monitoring is not required. However the Foreign Investment Promotion Boards approval is needed for bring65

ing in FDI in LLPs. FDI will not be allowed in LLPs that operate in agricultural/plantation activity, print media or real estate businesses. Also, LLPs with FDI will not be eligible to make downstream investments. The Indian government has also barred foreign institutional investors and foreign venture capital investors from investing in LLPs. Besides, LLPs will also not be permitted to avail themselves of external commercial borrowings. The move is expected to benefit professionals like architects and advocates and small outfits. At present, there are around 4,500 LLPs firms registered in India. LLPs with FDI will be allowed through the government approval route, in sectors or activities where 100 per cent FDI is allowed through the automatic route and there are no FDI-linked performance related conditions. The decision to allow FDI in LLPs will benefit the Indian economy by attracting greater FDI, creating employment and bringing in international best practices and latest technology in the country. What are LLP: LLP is a hybrid structure that combines the elements of a partnership firm and a company and ensures that liability of the partners is limited. This structure is expected to encourage smaller business entities undertake larger ventures as the liability of the partners is limited. The LLP Act, 2008, was notified in April, 2009. LLP combines the advantages of ease of running a Partnership and separate legal entity status and limited liability aspect of a Company. Here are some of the main features of a LLP: (a) LLP is a separate legal entity separate from its partners, can own assets in its name, sue and be sued. (b) Unlike corporate shareholders, the partners have the right to manage the business directly (c) One partner is not responsible or liable for another partners misconduct or negligence. (d) Minimum of 2 partners and no maximum. (e) Should be for profit business. (f) Perpetual succession. (g) The rights and duties of partners in LLP will be governed by the agreement between partners and the Civil Services

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partners have the flexibility to devise the agreement as per their choice. The duties and obligations of Designated Partners shall be as provided in the law. (h) Liability of the partners is limited to the extent of his contribution in the LLP. No exposure of personal assets of the partner, except in cases of fraud. (i) LLP shall maintain annual accounts. However, audit of the accounts is required only if the contribution exceeds Rs. 25 lakhs or annual turnover exceeds Rs.40 lakhs. A LLP is indeed advantageous because of comparatively lower cost of formation, lesser compliance requirements, easy to manage and run and also easy to wind-up and dissolve, no requirement of minimum capital contributions, partners are not liable for the acts of the other partners. External Commercial Borrowings A high-level coordination committee on external commercial borrowings (ECB), chaired by R Gopalan, has decided to raise the external commercial borrowing limit to $ 30 billion for the financial year 2011-12. The corporates can now borrow more overseas because the government has raised the overall limit for such borrowings substantially from $20 billion to $ 30 billion. It should be noted that the borrowing costs for the industry has gone up with the Reserve Bank of India raising key policy rates to tame the runaway inflation. Perceived Implications of Raising the ECB Limit: The decision to raise the cap of ECB will help the industry fund its capital expenditure through cheaper funds abroad as its becoming difficult to arrange capital in domestic market due to continuous expansion of key policy rates by the RBI. More specifically the companies in services sector IT, hospitals and hotels would get themselves in better position to utilize the additional borrowing limit to fund their equipment purchase. The industry is not going to be the only benefactor by the raising of the ECB limit; the move is also going to benefit the government in longer run. The move will help the government in managing capital flows, needed to finance SEPTEMBER 2011, XVII Year, Issue No.9
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its current account deficit. It is here underlined that the annual cap for external commercial borrowings is fixed every year at the beginning of the financial year taking a stock of overall economic situation, current account deficit and also industrys requirements. Understanding the Macro Economic Parameters of ECBs: (a) The Meaning: ECB cover commercial bank loans, buyers credit, suppliers credit, securitized instruments such as Floating Rate Notes and Fixed Rate Bonds etc., credit from official export credit agencies and commercial borrowings from the private sector window of Multilateral Financial Institutions such as International Finance Corporation, ADB, AFIC, CDC, etc. (b) Use of ECBs in India: In India, External Commercial Borrowings are being permitted by the Government for providing an additional source of funds to Indian corporates and PSUs for financing expansion of existing capacity and as well as for fresh investment, to augment their sources available domestically. ECBs can be used for any purpose (rupee-related expenditure as well as imports) except for investment in stock market and speculation in real estate. (c) Regulator of ECBs: The Department of Economic Affairs, Ministry of Finance, with support of Reserve Bank of India, monitors and regulates Indian firms access to global capital markets. From time to time, they announce guidelines on policies and procedures for ECB and Euro-issues. (d) Current Scenario in ECBs: The cost of funds in the Indian Market has been relatively higher than International Market and there is a growing tendency for Indian Business Houses to raise funds from International Markets. Such financing is arranged for reputed corporate houses on prevalent rates of interest. The interest rates are fixed in terms of Basic rate of LIBOR plus other charges. The Registered Foreign Financial Institutions interested in lending funds to Indian Business Houses can earn handsome interest from Indian Markets. Demand for ECB is rising rapidly in this market and the Government rules have also been relaxed to certain extent. (e) Significance of ECBs: External 66

RIL-BP deal for 21 blocks


The Cabinet Committee on Economic Affairs (CCEA) has approved the $7.2 billion Reliance Industries - BP deal. The deal allows Reliance Industries Ltd (RIL) to offload a 30 per cent stake in its hydrocarbon blocks to London-based BP Plc. While, according to the original contours of the deal, BP is to pay $7.2 billion (Rs.31,970 crore) for a 30% stake in RILs 23 oil and gas blocks, including the D6 one in the Krishna-Godavari (KG) basin, but the CCEA gave its approval for 21 of those blocks. Approval has not been granted in two blocks due to technical reasons. CCEAs approval comes on the back of a nod to the deal by the Home, Finance and Petroleum Ministry. The deal between Europes second-largest oil company BP Plc. and Indias biggest private sector firm Reliance Industries Limited (RIL) was signed in February 2011. BP plans to buy 30 per cent stake in 23 oil and gas blocks of Reliance Industries, including the eastern offshore Krishna Godavari basin KG-D6 fields. Commercial Borrowings (ECBs) occupy a very important position as a source of funds for Corporate. Thus, it is to be maintained within prudent limits for total external borrowings and to provide flexibility to Corporate in external borrowings and that is reflected in its guidelines. However, the main purpose of ECB is to encourage borrowings which provides basis for strongest economy. Hence it is correct to quote Maven: ECB is not only three letter world but lifeline of corporate world. ASBA route: The Central bank has permitted foreign institutional investors (FIIs) for foreign currency-rupee swaps in IPOs made through Application Supported by Blocked Amount (ASBA) route. In an official statement RBI opined that, for initial public offers (IPO) related transient capital flows under the ASBA mechanism, foreign currency-rupee swaps may be allowed to the FIIs. ASBA is an application containing an authorization to block the application money in the Civil Services

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bank account, for subscribing to an issue. If an investor is applying through ASBA, his application money shall be debited from the bank account only if his/her application is selected for allotment after the basis of allotment is finalized, or the issue is withdrawn/failed. The foreign currency rupee swaps for hedging flows under ASBA, which should not exceed the amount proposed to be invested in the IPO, will be available for 30 days. The move is likely to ensure the smooth progress of FII investments under the ASBA route into equity market. The central bank also high-

lighted that the contracts, once cancelled, cannot be rebooked and rollovers under this scheme will also not be permitted. The Securities and Exchange Board of India (SEBI) had introduced ASBA facility for public offers first in September 2008 when retail investors were allowed to use it. The facility eliminates any delays related to refunds for the unallocated shares. Initially, it was offered to retail investors only and was given to other investors in 2009. ASBA is gaining huge popularity among institutional investors, but at the same time retail investors are stay-

ing away. It has been found that around 60 per cent of the qualified institutional buyers (QIB), who are essentially institutional investors, are opting for this mode of application. In contrast, only 6 per cent and 20 per cent of high-networth investors (HNIs) of the retail applications are done through this method, respectively

Corporate sector
M&A rules eased by CCI The government has announced new regulatory framework which makes it mandatory to seek the approval of the Competition Commission of India for all merger and acquisition (M&As) proposals which create joint assets of over Rs 1500 crore and a combined turnover of Rs 4,500 crore or more. Below these levels of assets and turnover, no approval is necessary. The regulations come into effect on June 1. According to the new guidelines 95 per cent of the M&A proposals will be cleared within 30 days and the rest in 180 days. Approval will also be necessary where the assets and turnover of a target company exceed Rs 250 crore and Rs 750 crore, respectively. In other decisions, the commissions clearance will not be required for acquiring stock in trade, raw materials, assets, bonus issues and stock splits by an acquiring company. The commission will vet only those cases where a final decision or execution of binding documents takes place from June 1, 2011. Implications of the new guidelines: The new framework would help push growth and induce investment flows from abroad. The procedures had been simplified and the commissions fees fixed at Rs 50,000, far lower than the Rs 40 lakh proposed earlier. But industry may still have some concerns over the powers of the commission to review acquisitions where control is not acquired and the notifying party or transaction is subject to a possible 180-day review. The focus would now turn to the actual functioning of the commission and how it scrutinized transactions. Takeover: Microsoft buys Skype Microsoft has announced an $8.5 billion acquisition of the Internet teleCivil Services

Credit Default Swap


CDS are a financial instrument for swapping the risk of debt default. Credit default swaps may be used for emerging market bonds, mortgage backed securities, corporate bonds and local government bond. The buyer of a credit default swap pays a premium for effectively insuring against a debt default. He receives a lump sum payment if the debt instrument is defaulted. The seller of a credit default swap receives monthly payments from the buyer. If the debt instrument defaults they have to pay the agreed amount to the buyer of the credit default swap. Process: A CDS contract involves the transfer of the credit risk of municipal bonds, emerging market bonds, mortgage-backed securities, or corporate debt between two parties. It is similar to insurance because it provides the buyer of the contract, who often owns the underlying credit, with protection against default, a credit rating downgrade, or another negative credit event. The seller of the contract assumes the credit risk that the buyer does not wish to shoulder in exchange for a periodic protection fee similar to an insurance premium, and is obligated to pay only if a negative credit event occurs. It is important to note that the CDS contract is not actually tied to a bond, but instead references it. For this reason, the bond involved in the transaction is called the reference obligation. A contract can reference a single credit, or multiple credits. CDS have the following two uses: (a) Hedging: A CDS contract can be used as a hedge or insurance policy against the default of a bond or loan. An individual or company that is exposed to a lot of credit risk can shift some of that risk by buying protection in a CDS contract. This may be preferable to selling the security outright if the investor wants to reduce exposure and not eliminate it, avoid taking a tax hit, or just eliminate exposure for a certain period of time. (b) Speculation: The second use is for speculators to place their bets about the credit quality of a particular reference entity. With the value of the CDS market, larger than the bonds and loans that the contracts reference, it is obvious that speculation has grown to be the most common function for a CDS contract. CDS provide a very efficient way to take a view on the credit of a reference entity. An investor with a positive view on the credit quality of a company can sell protection and collect the payments that go along with it rather than spend a lot of money to load up on the companys bonds. An investor with a negative view of the companys credit can buy protection for a relatively small periodic fee and receive a big payoff if the company defaults on its bonds or has some other credit event. A CDS can also serve as a way to access maturity exposures that would otherwise be unavailable, access credit risk when the supply of bonds is limited, or invest in foreign credits without currency risk. SEPTEMBER 2011, XVII Year, Issue No.9
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phone service Skype Technologies SA from eBay and a group of private equity investors including Silicon Valley heavyweights Silver Lake Partners. The deal is Microsofts largest cash purchase in its 36-year long history. Skype is popular communications software, uses of voice over internet protocol technology that makes international voice and video and video calls cheaper. The combination of Skype and MS will extend Skypes world-class brand and the reach of its networked platform, while enhancing Microsofts existing portfolio of realtime communications products and services. CEO of Microsoft is Steve Ballmer. CEO of Skype is Tony Bates.

Funds management
Venture Capital Funds An investment fund that manages money from investors seeking private equity stakes in start-up and smalland medium-size enterprises with strong growth potential. These investments are generally characterized as high-risk/high-return opportunities. Venture capital is a type of private equity capital typically provided by outside investors to new businesses. Generally made as cash in exchange for shares in the investee company, venture capital investments are usually high risk, but offer the potential for above-average returns. A venture capitalist is a person who makes such investments. A venture capital fund is a pooled investment scheme that primarily invests the financial capital of third-party investors in enterprises that are too risky for the standard capital markets or bank loans. Venture capital can also include managerial and technical expertise. Most venture capital comes from a group of wealthy investors, investment banks and other financial institutions that pool such investments or partnerships. This form of raising capital is popular among new companies, or ventures, with limited operating history, which cannot raise funds through a debt issue. The drawback of this form of entrepreneurship is that the investors get a say in the management of the company apart from the equity holding. Advantages and Disadvantages of SEPTEMBER 2011, XVII Year, Issue No.9
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Venture Capital: Venture capital provides the funding that a company needs to expand its business. It also offers a number of value added services. The following are the advantage of VC: (a) Mentoring: Venture capitalists provide companies with on-going strategic, operational and financial advice. They will typically have nominee directors appointed to the companys board and often become intimately involved with the strategic direction of the company. (b) Alliances - Venture capitalists can introduce the company to an extensive network of strategic partners both domestically and internationally and may also identify potential acquisition targets for the business and facilitate the acquisition. (c) Facilitate exit - Venture capitalists are experienced in the process of preparing a company for an initial public offering (IPO) of its shares onto the Australian Stock Exchange (ASX) or overseas stock exchange such as NASDAQ. They can also facilitate a trade sale. The following are the disadvantages of the VC: Most venture capitalists seek to realize their investment in a company in three to five years. If an entrepreneurs business plan contemplates a longer timetable before providing liquidity, venture capital may not be appropriate. Entrepreneurs should also consider: (a) Pricing - Venture capitalists are typically more sophisticated and may drive a harder bargain. (b) Intrusion - Venture capitalists are more likely to want to influence the strategic direction of the company. (c) Control - Venture capitalists are more likely to be interested in taking control of the company if the management is unable to drive the business. (d) It injects long term equity finance which provides a solid capital base for future growth. (e) The venture capitalist is a business partner, sharing both the risks and rewards. Venture capitalists are rewarded by business success and the capital gain. (f) The venture capitalist is able to provide practical advice and assistance to the company based on past experience 68

with other companies which were in similar situations. (g) The venture capitalist is capable of providing additional rounds of funding should it be required to finance growth. Risks Associated with Venture Capital: The main risk of venture capital funding is the danger of failure of the companies into which the capital is invested. The risk of investing money as a Limited Partner into a venture capital fund is that the managers of the fund (the General Partners, or venture capitalists) will pick more losing companies to invest in than winning companies, and that over time the total return from the fund will be less than might have been received from alternative investments. Sovereign Wealth Fund Its importance for World Economy Defining SWF: Pools of money derived from a countrys reserves, which are set aside for investment purposes that will benefit the countrys economy and citizens. The funding for a sovereign wealth fund (SWF) comes from central bank reserves that accumulate as a result of budget and trade surpluses, and even from revenue generated from the exports of natural resources. The types of acceptable investments included in each SWF vary from country to country; countries with liquidity concerns limit investments to only very liquid public debt instruments. What role do sovereign wealth funds (SWFs) play in the modern global economy: To begin with, SWFs are a modern iteration of economic power projection by states on the international scene. In one form or another, vehicles resembling SWFs have been around for a long time. Similar entities investing state funds, generated from reserves or trade surpluses (such as from natural resources), or utilizing substantial state support or privilege, could very well include conglomerates such as VOC (the Dutch East India Company) or the British East India Company. Another thing they appear to have in common with modern SWFs is that they were the pioneers in frontier markets, often creating regional trade beyond what the local governments and businesses were able to create. It should not be forgotten, however, that SWFs are ofCivil Services

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ten perceived to be driven by political, rather than economic, considerations. What is the current economic benefit of SWF activity: Before the financial crisis the SWFs were predominantly welcomed as an alternative source of large-scale equity financing that was cheaper and easier to obtain than to go through an IPO. Now they look more and more as the only source of available financing for a cash-starved international financial system. Increased government scrutiny, regulation and participation in the financial system is not likely to be considered an investment incentive by the SWFs in general on the contrary, due to the fact that SWFs have not only business rationale to their activities but also a strategic and geopolitical underpinning, they would be loath to be restrained by what they may consider unfair regulatory shackles. The SWFs would try to fit in the new global regulatory regime that is likely to emerge, but at the same time would want and be able to dictate, to a certain extent, the terms and conditions under which they operate in the global economy. The new role of SWFs as financing sources has already been acknowledged by the G20 and is to be reflected in the new governance arrangements surrounding the IMF and the World Bank. How far these concessions would be accepted by the governments that control the SWFs activities is still a subject to debate, as SWFs and their governments may decide to take a pro-active role in the global market on their own, rather than via the established structures of the IMF and World Bank, as the rules of that game may not be fully to their liking. What current challenges do SWFs face: One of the biggest challenges for SWFs is likely to be the uncertainty surrounding the intended policies of the developed economies towards SWFs. There is little doubt that SWFs are going to face attempts to impose certain curbs on their operations, imposed by the current and prospective market regulators, putting them under increased regulatory scrutiny, in line with the tightening global financial regulations. Even though host governments would welcome long-term inSEPTEMBER 2011, XVII Year, Issue No.9
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Green Bonds
Green Bonds are tax-exempt bonds which are issued by qualified organizations and/or municipalities for the development of brown-field sites. Brownfield sites are areas of land that are under-utilized, have abandoned buildings, or are under developed. They often contain low levels of industrial pollution. Green Bonds are short-hand for Qualified Green Building and Sustainable Design Project Bonds. These bonds are created to encourage sustainability and the development of brown field sites. The tax-exempt status makes purchasing a green bond a more attractive investment when compared to a comparable taxable bond. Green bonds could, in fact, be all of the following: green gilts, green retail bonds and green investment bank bonds. But, there are many more being proposed as well, including: green infrastructure bonds, multilateral development bank green bonds, green corporate bonds, green sectorial bonds, rainforest bonds and index-linked carbon bonds. Green bonds have an important role in helping to raise finance for different parts our low-carbon transition. India Allows Renewable Energy Certificates (REC) Trading: India has also allowed trading of REC; it is one of the key growth drivers for the Renewable energy industry. As of now, the REC is traded in 2 of the major power exchanges: - Indian Energy Exchange (IEX) and Power Exchange India Limited (PXIL). What is REC: World over, Renewable energy is more expensive than traditional forms of energy and the growth of renewable energy has been supported mostly by governments through various policy initiatives like Feedin-Tariffs, subsidies, tax concessions, among others. In order to make the renewable energy sector more sustainable, many countries like Australia, Japan, etc. have put in place a mechanism to trade the renewable energy on platforms similar to stock exchanges. The trade of the energy will be purely based on demand and supply and the only role the government plays is to mandate utility companies to buy a certain part of their power from renewable energy sources. Under the REC Mechanism, when Renewable Energy is generated (solar, wind, biomass, etc.), the energy is divided into two components the physical commodity electricity and a tradable certificate, which is the Renewable Energy Certificate (REC). Corporate Repo Bonds: Banks, corporate and primary dealers pledge corporate bonds with each other to raise short term money. It is similar to banks pledging government securities with the RBI to raise short term money. Unlike pledging of government securities, here the borrower who pledges corporate bonds does not receive the entire value of the bond. Allowing repo in corporate bonds enables mutual funds, insurance firms and non-banking finance firms to borrow money by offering corporate bonds as collateral. In India the RBI guidelines on repo in corporate debt securities came to effect on March 1, 2010. But till date the corporate repo bonds are not much active in India. Only five deals have been reported so far. Companies that have issues corporate bonds in India are REC, PFC, HDFC, and NHB. The corporate repo bonds in India has not grown much because of lenders or issuers maintaining a cautious approach as well as due to lack of proper trade guarantee mechanism. Understanding Repos: Repos, or repurchase agreements, are contract for the sale and repurchase of securities and treasury bills at a future date. In this transaction, the seller repurchases the financial asset at the same price at which it was sold, and pays interest on it. Essentially, repo is a short-term, interest-bearing loan against the collateral of securities. vestments from SWFs, there is a growing popular feeling and political pressure to codify and regulate the global financial system, enhance its surveillance and the interventionist powers 69 of governments. This will inevitably affect how SWFs operate in the developed economies would their governments be happy to have their activities regulated and maybe virtualCivil Services

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Infrastructure Debt Funds


Infrastructure Debt Funds is a debt instrument being set up by the finance ministry in order to channelize long term funds into infrastructure projects which require long term stable capital investment. According to the structure laid out by the finance ministry, after consultations with stakeholders, infrastructure NBGCs, market regulators and banks, an IDF could either be set up as a trust or as a company. IDFs in India: The government of India has unveiled the structure of infrastructure debt funds (IDFs), allowing local infrastructure developers access to money from insurance and pension funds from India and overseas, even as bank lending to roads and power projects is constrained by limits set by the central bank. IDFs are expected to provide long-term, low-cost debt for infrastructure projects. At present, banks are the main source of funding for these projects. Asset-liability mismatches and loan exposure limits to industries set by the Reserve Bank of India (RBI) have made it difficult for banks to provide long-term funding. It is here underscored that the IDF was proposed by in Budget 2011-12. The ultimate aim of the IDFs is to accelerate and enhance the flow of debt for funding the ambitious programme of infrastructure development in the country. The requirement of infrastructure in the 12th Plan has been pegged at $1 trillion. The IDF would help garner resources from domestic and off-shore institutional investors, especially insurance and pension funds. Banks and financial institutions would be allowed to sponsor IDFs. In India the IDFs could be set up by NBFCs or banks, with a minimum capital of Rs 150 crore. Such a fund would be allowed to raise resources through rupee or dollar denominated bonds of minimum five year maturity. These bonds could be traded among the domestic and foreign investors. Company based IDFs would be allowed to fund projects in public-private partnership (PPP) which have completed one year of commercial operations. Potential investors in this category, include off-shore and domestic institutional investors, high net worth individuals and non-resident Indians. If the IDFs are set up as a trust, the fund could be sponsored by a regulated financial sector domestic entity. It would have to invest 90 per cent of its assets in the debt securities of infrastructure companies or SPVs across all infrastructure sectors. Minimum investment by trustbased IDF would be Rs 1 crore with Rs 10 lakh as minimum size of the unit. The credit risks associated with underlying projects will be borne by the investors and not by IDF, but in case of company-based IDF, the fund would bear the risk. ly controlled by foreign states? An additional factor that remains, despite the changing market conditions, is the overall distrust towards SWFs among the governments of the developed economies, and in particular the fact that any major SWF investment can be viewed through the prism of national security. What are the advantages SWFs can bring to the development of the Third World: SWFs are just like any other investor and are interested in returns, reduction of risk and capital growth. Sometimes, however, the long-term or broader view on returns and risks that they take is creating the impression of an agenda, different from that of other investment vehicles and organizations. Yet, at the end of the day, SEPTEMBER 2011, XVII Year, Issue No.9
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the investment decisions and abilities of SWFs depend on the specifics, nature and size of their holdings in particular regions. Some assets are deemed strategic, others temporary, or a building block in a long-term approach. In addition, SWFs have a broader take on investment risks, due to their more long term vision and approach, and are gradually becoming more focused on realizing new opportunities in asset-backed or more traditional sectors in less developed markets. Sovereign wealth fund: Is it right for India: Of late, there has been a unanimous call around the country that India should have a SWF of its own. The primary purpose of setting up a SWF for India is primarily to garner better 70

returns on the existing foreign exchange reserves. Let us the look at the risk and rewards involved: - (a) Oil Companies Want It: Creating a sovereign wealth fund (SWF) will allow Indias forex reserves to be used for investment in oil assets. There are about 37 major sovereign funds worldwide about two-thirds of this money comes from oil and gas revenue. The most successful examples of SWFs are those from Norway, Kuwait and Brunei. This will satisfy the need of our growing economy and to secure the countries future needs. (b) SWF will Stabilize the Economy: It is expected that the SWF will do more than good to stabilize our economy and budget by neutralizing the effects of capital flows to a certain extent. (c) SWF to help in infrastructure development: Creation of SWF is definitely going provide necessary capital required to carry forward our infrastructure projects. The Risks Involved For India: Sovereign Wealth funds are for countries that have trade surplus and no domestic markets. India doesnt have a trade surplus but its domestic markets are deep. So, India can avoid creating a SWF for oil. An overseas acquisition for Indian oil companies has never been a problem due to shortage of cash. Whenever our companies have lost out to Chinese players or other competition, the problem has been the value the Indian oil major was willing to put to the deal. Instead of having a separate SWF, Indian oil companies should be doing this job on their own as they are in a better position to handle it by raising their own funds. Do We Have the Appetite for the Risk? One of the major concerns is the level of risk a government-controlled fund would be able to take. Investments in oil are often high-risk-and-high-return bets. Many of the deep water bets taken by the smartest oil companies in the world have proved to be wrong, sinking millions of dollars. Will an Indian sovereign fund, where every decision has to be cleared by an empowered committee, be able to take these risks? The other problem is the speed of decision making. Government-owned oil companies like ONGC and BPCL already face red-tape and delays in getting clearance, often Civil Services

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resulting in the opportunity being lost. Will it be any different for the sovereign fund? The fund will have to be answerable for its returns.

Industrial Sector
New index for measuring IIP The new index of industrial production or IIP, which will come into force from June 10 with the base year 200405, has been approved by the Committee of Secretaries. Juices and mobile phones will weigh on measuring the pace of industrial production, as per the new index series approved by the government. The IIP would also

include computer stationary, newspapers, chemicals, such as ammonia, ammonia sulphate, electrical products like solder power systems, gems and jewellery and molasses. On the other hand, obsolete articles like typewriters, loud speakers and VCRs would be taken off to make the series representative of the present-day industrial production and demand scenario. The base year for the new series will be changed to 2004-05 from 1993-94. The IIP for April to be released on June 10 would be based on the new model of measuring Indias factory output. The Department of Industrial Promotion and Policy (DIPP) and Central Statistical Organization (CSO) were joint-

ly working on the new index. At present, the IIP basket has 283 items. The industrial output data is released on monthly basis.

Panel
Gopinath panel Recommends holding company model for financial groups A RBI panel headed by Shyamala Gopinath has suggested that financial conglomerates should follow a financial holding company structure to enable better regulation. It also recommended a set of new rules and a separate regulatory framework for such companies, with the Reserve Bank of India as its regulator. This is the second such report on the issue by the central bank since 2007, when the countrys top two lenders, State Bank of India and ICICI Bank Ltd., proposed an intermediate holding structure to meet the high capital requirements of their insurance companies. The banks proposed transferring insurance and asset-management businesses to a holding company, which then could be listed on the bourses to raise capital. In a discussion paper in 2007, the RBI had expressed its concerns over the complexity of the structure. The report also recommended against permitting intermediate holding companies due to their contribution to opacity and complexity in the organizational structure. According to the report the financial holding company should primarily be a non-operating entity and should be permitted only limited leverage as stipulated by the Reserve Bank. Following Indias liberalization and financial sector reforms in 1991, the country saw the emergence of many financial groups operating in multiple sectors including banking, investment banking, asset management, insurance etc. The multiple activities led to the emergence of issues on corporate management, growth and capital requirements of different entities and also possible risk of a contagion spreading from one entity to the other. The latest report suggests a welldiversified ownership structure and a stipulation by the RBI on activities that it can undertake and to what limits. The model can be extended to all large financial groupsirrespective of whether they contain a bank or not. Civil Services

Panel on Black Money


Facing flak from different quarters for not doing enough to deal with the black money menace, the government recently constituted a high-level committee of taxmen to suggest a legal framework for confiscating such wealth by declaring it as national assets. The Government has been facing a sustained onslaught for having taken little action on black money holders within or outside the country. The chorus on the need to tackle black money was so loud that it disrupted Parliamentary proceedings during the Winter Session last year. The Committee headed by Central Board of Direct Taxes (CBDT) Chairman Sudhir Chandra will submit its report in six months. The Committee has been tasked to examine the existing legal and administrative framework to deal with the menace of generation of black money, including, inter alia, declaring wealth generated illegally as national asset and enacting laws to confiscate and recover such assets. The Government had earlier also constituted a committee comprising heads of various probe agencies and specialized departments to monitor the investigation and initiate steps to bring back black money stashed in tax havens. The committee headed by CBDT Chairman has also been asked to examine ways to strengthen laws to stop illegal transfer of black money and its recovery. It will also suggest exemplary penalties. The committee will consult all the stakeholders and submit its report within a period of six months. Government Arms Income Tax Department with Criminal Investigation Wing: The Government has decided to setup of a criminal investigation wing in the income tax department to track and prosecute economic offenders. The announcement to constitute the Directorate of Income Tax (Criminal Investigation) under the Central Board for Direct Taxes (CBDT) comes on the heels of government instituting a national study to quantify unaccounted wealth within and outside the country. The DCI would collect information about persons and transactions connected with criminal activities and initiate prosecution proceedings against them. The DCI will seek and collect information about persons and transactions suspected to be connected with criminal activities having cross-border, inter-state or international ramifications that pose a threat to national security and are punishable under the direct tax laws. The DCI could also hire the services of special prosecutors and other experts for pursuing a prosecution complaint. Apart from agreement with different central or state agencies in India, it could also enter into pacts for sharing of information or cooperation with foreign governments. The setting up of a wing to tackle problems of terror network funding, cross border tax evasion and money laundering cases is the need of the hour and is an extremely welcome move. SEPTEMBER 2011, XVII Year, Issue No.9
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According to the report most of these financial groups have banking as their dominant business and follow a banksubsidiary model, in which the bank is the parent of all the subsidiaries. For groups with a bank at its centre, the RBI should ensure the banking business continues to remain the dominant activity of the group and the growth of banking isnt compromised by these groups. At present, under the bank-subsidiary model, a banks total investment in its subsidiaries is capped at 20 per cent of its net worth. Under the holding company structure, the allocation of equity capital by banking holding companies to nonbanking subsidiaries should also be capped. Also, these groups will need to convert to the financial holding company model once the pre-requisites necessary to make the transition tax-neutral are in place.

GN Bajpai committee on NPS


The committee, headed by G N Bajpai, former chairman of the Securities and Exchange Board of India, set up by the pension regulator to suggest ways to energise the national pension scheme (NPS) has submitted its report. In this report, the committee has proposed a complete change in its incentive and fee structures. To enthuse points of presence (PoPs) to push the NPS, the committee has recommended that PoPs be allowed to charge an ad valorem rate of 0.5 per cent of the subscription amount from subscribers. The committee has further recommended that the Pension Fund Regulatory and Development Authority (PFRDA) should consider bringing down the minimum annual subscription of Rs 6,000 for the NPS to Rs 1,000 per year to expand its reach and coverage. The committee is of the opinion that the existing NPS architecture did not have a 'push factor' and the absolute value of incentives was flawed. It said there was a need to broadbase the network of points-of presence or PoPs, which act as contact centres for potential subscribers across the country. SEPTEMBER 2011, XVII Year, Issue No.9
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Malegam Report The Reserve Bank of India (RBI) in its Monetary Policy Statement for the fiscal 2011-12 decided to accept the broad framework of regulations recommended by the Malegam Committee that submitted its report on the Micro finance institutions (MFIs). It needs to be mentioned here that amidst the Andhra Pradesh micro finance crisis in 2010, there were concerns expressed by various stakeholders and the need was felt for more rigorous regulation of non-banking financial companies (NBFCs) functioning as MFIs. From now onwards bank loans to all MFIs, including NBFCs working as MFIs on or after April 1, 2011, will be eligible for classification as priority sector loans under respective category of indirect finance. However, for this purpose such loans must confirm to certain qualifying conditions. Most of the criteria set by the RBI are same as recommended by the Malegam Committee but the same have been relaxed a bit by the central bank. For instance, the MFI loans are eligible for only household with annual income not exceeding Rs 60,000 in case of rural areas and Rs 1, 20,000 in case of urban areas. Malegam Committee had pegged urban income criteria at Rs 50,000 which was considered insufficient given the rising cost of living. Similarly, the MFIs will face a ceiling of interest rate of 26 per cent compared with 24 per cent recommended by the committee. There are some other conditions involved too like MFI loans must not to exceed Rs 35,000 in the first cycle and Rs 50,000 in subsequent cycles and total indebtedness of the borrower must not to exceed Rs 50,000 at any point. India should have monetary policy committee RBI: D. Subbarao, the governor of the Reserve Bank of India has initiated a debate in the country by citing that the RBI needs a Monetary Policy Committee (MPC) on the lines of the FOMC (Federal Open Market Committee) of the US or the MPC of England- to formulate monetary policies in the country. The governor advised that moving towards a monetary policy committee-style structure, with its majority advice becoming binding should be done in a phased way. The central bank current72

ly has a Technical Advisory Committee on Monetary Policy. It is headed by the governor, who makes all monetary policy decisions. There is no formal committee structure like the FOMC or the MPC of England. The Governor holds consultations with four Deputy Governors and they constitute an informal MPC although a committee structure is not enjoined under the law or the rules. In order to evolve a MPC in India there are some pre-conditions to be met. Firstly, the RBI needs to be given sufficient amount of autonomy to make the MPC structure workable. Secondly, the shift can only come with the deepening of financial markets and improvements in operating procedure. In a situation where inflation dynamics are more often dictated by supply side elements, the central banks ability to control inflation is restricted. An MPC mechanism in current situation will weaken the coordination between the government and the RBI. However, if we deepen our financial markets further, improve our operating procedures and make our monetary transmission more efficient, shifting to MPC system will become a realistic option. Anup K Pujari Committee The commerce ministry has set up a committee to review the deemed export scheme available to suppliers of products to specified projects. The committee headed by Anup K Pujari, the Director General for Foreign Trade will re-examine the very existence of the scheme and also look up whether it is reflecting the government policies properly. The committee also includes representatives from the finance ministry, Reserve Bank of India, Planning Commission and the revenue department. The committee is expected to give its report within three months. Besides harmonizing the customs notifications with the policy (on deemed export scheme), the committee has been asked to improve the drafting of the policy as it exists today so that it is not amenable to multiple interpretations. The move follows the governments attempt to check leakages so that a scheme is not open to misuse. The Deemed exports are those transactions in which goods supplied to the Civil Services

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users do not leave the country and payment for such supplies is received either in Indian currency or in foreign exchange. Supply of goods to exportoriented units, software technology parks or to projects financed by multilateral agencies and to power projects and refineries are treated as deemed exports at present. The benefits include those available under export promotion schemes. Isher Ahluwalia Committee Urban Infrastructure and Services in India A high-powered expert committee on Urban Infrastructure under Isher Ahluwalia has emphasized that Indias economic growth momentum cannot be sustained if urbanisation is not actively facilitated nor can urban poverty be effectively addressed if the needs of the urban poor are isolated from the broader challenges of managing urbanisation. The committee has also projected an investment requirement of Rs. 39.2 lakh crore for our cities and towns for 2012-32. The committee needs to be complimented for the thoroughness with which it has gone about its work. Urban Infrastructure in India: The report focuses on the challenge and opportunities emerging in the urban areas of India for the following infra-

GST panel
The state Deputy Chief Minister and Finance Minister Sushil Kumar Modi has been elected the new Chairman of the Empowered Committee of State Finance Ministers. This Committee is spearheading the implementation of Goods and Services Tax (GST) in the country. Modi has replaced Asim Dasgupta, who had held the post for more than a decade since the body has been formed. In the past, the committee had overseen the implementation of the Value Added Tax (VAT) system across the Indian states. Asim Dasgupta had to quit the post as he lost in the West Bengal Assembly polls in May. One of the major tasks before Modi, as the new chairman, will be to build a consensus on the proposed GST regime, which has been pending for years. SEPTEMBER 2011, XVII Year, Issue No.9
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structural services: (a) Water Supply (b) Sewerage (c) Solid Waste Management (d) Storm Water Drains (e) Urban Roads (f) Urban Transport (g) Street Lighting(h) Traffic Support (i) Infrastructure. Urban Infrastructure Scenario in India: Indias urban population will grow from 26 per cent to 36 per cent of total population by 2012. By 2025, 50 per cent of Indias population will live in cities, half of them in slums. This will place great stress on existing infrastructure for water, power, urban transport, sanitation etc - more infrastructure has to be built and existing infrastructure has to be upgraded. Traditional Model of Urban Governance to Execute Urban Infrastructure Development: Traditionally, the state government had a major influence on urban infrastructure. No clear demarcation of powers existed between state and local (municipal) levels and so state governments ended up taking most of the decisions regarding urban infrastructure. The Central Government also had a role to play, but this role mainly deals with providing tax concessions, training and guidelines and dovetailing central plans such as the National Urban Transport Policy with schemes such as the Jawaharlal Nehru National Urban Renewal mission. Problems with the earlier model: (a) Funding for urban areas comes from the centre or the state. (b) Due to lack of on-the-ground knowledge on the part of these agencies, the wrong groups or wrong projects often get funded. (c) Conflicting programs at the state and central. (d) Level does not align, leading to misdirected flow of funds. (e) Bureaucracy at these levels stymies progress. New Model for Urban Governance: In the earlier model, qualities of services are likely to suffer and a preferable approach would be for Urban Local Bodies (ULBs) or municipalities to make their own decisions based on their needs. ULBs could be democratically elected and could raise their own funds to provide services such as urban planning, water supply, roads, bridges, urban amenities such as parks etc. It is pertinent here to mention the 73

74th Constitutional Amendment here that seeks to devolve more powers to the states. The 74th Amendment gives more power, responsibilities, and the ability to raise funds, to control revenues and to deliver projects, to municipalities. Steps to Improve Urban Infrastructure Development in Cities: The Government of India has taken a number of steps to improve urban infrastructure and basic services. These include the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), which seeks to improve urban infrastructure, housing, transport and urban basic services. In addition to this financial assistance for urban infrastructure is also being provided by the Ministry of Urban Development under the 10 per cent lump sum scheme for the development of North Eastern region including Sikkim, the ADB added North Eastern Region Development Programme and Pilot project on Development of Urban Infrastructure in Satellite Towns around the Seven mega Cities, besides identified metro and other projects. Further the recommendations of the Ahluwalia committee for giving more financial powers to the local bodies and empowering the local bodies to exclusively levy taxes like property, profession and entertainment will do more than good to enhance our urban infrastructure needs. Nandan Nilekani task force Concerned over the misuse of subsidies provided under various schemes, Nandan Nilekani task force on direct cash transfer of subsidy on fuel and fertilizers recently recommended to the government to provide a direct cash subsidy on kerosene and fertilisers to the poor. The recommendations are based on the belief that the direct cash transfer will ensure greater cost efficiency and better delivery for both kerosene and fertilizers and will streamline subsidy pay-out of billions of rupees from government coffers and will empower millions of beneficiaries. The task force also recommended launching a pilot project for direct cash transfer of these subsidies in Tamil Nadu, Assam, Maharashtra, Haryana, Delhi, Rajasthan and Orissa from October this year. The Basic Premises of the RecommenCivil Services

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dations: It is here underscored that currently the government provides kerosene at subsidised rates to families living below the poverty line through the Public Distribution System (PDS) and LPG is provided at a subsidised rate to households. As regards fertilisers, the government provides subsidy to companies so that farm inputs, which include urea and imported fertilisers, can be provided to farmers at cheaper rates. The need to set up the task force arose in view of overwhelming evidence that current policy results in waste, leakage, adulteration and inefficiency and therefore, it is imperative that the system of delivering the subsidised kerosene be reformed urgently. It held that the price of subsidised goods should preferably be the market price or an administered price that is close to market price, thus removing incentives for pilferage. The step towards direct cash transfer can reduce market distortions due to dual pricing, improve productivity of manufacturing and distribution, reduce incentives to pilfer and improve effectiveness of subsidies. To maintain proper accounts on entitlements and subsidies for all beneficiaries a Core Subsidy Management System may be created. The system will provide increased transparency in movement of goods, stocks, prediction and aggregation of demand and identifying beneficiaries. The CSMS will enable the government to transfer cash component of subsidies directly and in real time into bank accounts of beneficiaries. The report has recommended a threephase approach for subsidy transfer in case of LPG and fertilisers by involving concerning central and state departments. For direct transfer of subsidies on kerosene, it suggested wider consultations with states. In its first phase, subsidy on cooking gas would be capped. In phase two, the task force mooted direct transfer of cash to customers bank account and finally it recommended categorising targeted customers, who should be offered subsidised domestic cooking gas. For fertilisers, the panel suggested that in the first phase complete information visibility of the supply chain up to the retailer level should SEPTEMBER 2011, XVII Year, Issue No.9
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be implemented before directly transferring the subsidy to the retailers bank account. While in the third phase, direct transfer of subsidies is recommended to the farmers account. The panel also recommended a transparency portal for fertiliser movement and stocks. Direct Cash Subsidies reasons for adoption and their likely impact: After dithering on the matter for more than a decade, the government has announced that it will provide direct cash subsidy for fertiliser, kerosene and LPG. Though not fool proof, the system of direct cash transfers should prove more efficacious than the governments current subsidy mechanism. The way the government of India currently delivers subsidies (on food, fuel and fertilisers) to its people is riddled with problems. The subsidies are poorly targeted so that, the undeserving corners the benefits while the deserving are deprived of them. Leakages are rampant in the current system. In addition to all these loopholes the subsidy regime places a heavy burden on the governments fiscal situation, which will only get more onerous with time. Let us take a closer look at the problems of the current subsidy mechanism.(a) Poor Targeting - Fudging of the below-poverty-line (BPL) list for cornering benefits is rampant. Lower-level officials often do not issue BPL cards to those at the bottom of the income ladder because the latter cannot afford to pay them bribes.

(b) Leakages: Under the current public distribution system (PDS), subsidised grain is first handed over to ration shop owners who then sell it to BPL households at pre-specified prices. Often these ration shop owners sell the subsidised grains in the open market at higher prices. Then they either turn away the poor or adulterate the PDS grains. (c) Cost Overrun: Subsidies place a heavy burden on the governments fiscal situation. For 2010-11 the government had budgeted Rs. 56, 460 crore for meeting its obligations regarding food subsidy (including storage and warehousing). The proposal and intended benefits: Instead of purchasing grains and supplying them to the poor through PDS shops, the government is now contemplating the feasibility of directly transferring cash to the poor, which the latter can then use to buy food. Then the government would by and large dismantle its elaborate PDS mechanism. The intended benefits of such direct cash transfer will be: (a) Savings: If the government dismantles the PDS system, losses on account of siphoning would disappear. The government also incurs a massive cost on buying grains at the minimum support price (which is higher than the market price) and then in storing it in godowns (where a lot of it rots). If the system of direct cash transfers is implemented, these costs would decline substantially, since the government will then only maintain buffer stocks

Ashok Chawla Panel


The Ashok Chawla panel has recommended that water should be put on the Concurrent List from the State List of the Constitution. One can recall that the Prime Minister had appointed the panel, headed by Ashok Chawla, an ex-finance secretary, to review exploitation of scarce resources like water. The panel said that considering the recent imperatives, it has become necessary for the Union Government to have more effective control over water resources. In this regard, the panel has advised the government to pass a 'hortatory' legislation to regulate use of water across the country, arguing groundwater can be held and regulated as a 'public trust' by the Centre. A hortatory legislation is a law that nudges and pushes people towards a particular action - in this case, more sustainable use of water. Empowered by the Environment Protection Act, now the Central Groundwater Regulatory Authority is the only leverage that the Centre enjoys. Though the Act is powerful, Union governments have always shied away from intervening in a state subject. Further, the panel has also recommended that the government should amend the Easement Act to remove 'water' from the definition of private property under the Constitution. Besides, it has recommended reactivating the River Boards Act that has been lying dormant. 74 Civil Services

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for emergencies (like harvest failures). (b) Empowering People: - Under the cash transfer mechanism, the poor will have the option to buy from any shop instead of only the PDS shops. They will be able to choose the shop that offers them quality grains at attractive prices. Currently the ration shop owner often turns away the poor. Direct cash transfers will mean economic power in their hands. Since the poor will offer cash, private traders will compete for their custom. Possible problems that the direct cash transfer mechanism could run into: (a) Problem in Identification of the Beneficiaries: Identifying the deserving beneficiaries has been the bane of social welfare programmes in India. Despite the UID (which will be backed by sophisticated information technology systems and tools), this problem may not vanish entirely. One will have to wait and see how effective the new mechanism proves to be in reality. Under the new mechanism, beneficiaries will have the UID card, which will allow them to be identified based on some biometric parameter, say, fingerprints. The benefits will be directly transferred into their bank account from where they could withdraw the money by presenting their UID card. To access their money they wont actually have to visit banks; the identity authentication and payment will be possible even at neighbourhood kirana stores (using a fingerprint scanner and a mobile phone). One point is not yet clear. Will beneficiaries (BPL families) be identified using data captured during the survey for UID or will the BPL list be prepared separately via household surveys? In either case, fudging income-related data during these surveys will still be possible. After all, the same official machinery that today refuses to issue BPL cards to the poor will gather the data for UID cards. What is true, however, is that monitoring and reviews will make it easier to identify undeserving beneficiaries. But will such monitoring be carried out with due diligence? (b) Opposition from farmers: The government and civil society at large should be prepared for opposition from powerful farmers lobbies. High minimum support prices, which have been increased regularly and SEPTEMBER 2011, XVII Year, Issue No.9
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quite generously by the government in the past, are among the factors that have contributed to growing rural prosperity. Farmers will be loath to see this benefit disappear overnight if the government dismantles PDS. (c) Chances of misuse of money: One oftstated objection to direct cash transfers is that the poor might misuse the money. Instead of buying food grains, they could spend it on liquor. This objection can, however, be overcome. One way the government could minimize misuse is by handing over the benefits to the woman of the house. Experience in many societies demonstrates that when money is transferred to the woman, the chances of it being misspent get reduced. Another byproduct of this development will be the enhancement of womens status in society. Conclusion: A better strategy to go for: The system of cash transfers may not be entirely fool proof. Even if some leakages continue owing to the identification problem, on balance it does appear to be superior to the existing subsidy-delivery mechanism. The Executive machinery needs to designs an intelligent system that is robust enough to withstand the onslaught that will inevitably come from the corrupt, whether it be the lower bureaucracy or the above-BPL people who want to corner the benefits. One also hopes that the government will be able to muster the political will required to push these momentous changes through. After all, given Indias high current fiscal burden arising from subsidies, not taking any action would be a criminal sin of omission. Panels for Kerala temple treasure A Bench comprising Justices RV Raveendran and AK Patnaik of the Supreme Court has appointed two committees for documenting and preserving the huge treasure found at the Padmanabhaswami Temple at Thiruvananthapuram. A five-member expert committee headed by Director General of National Museum CV Ananda Bose will take care of the documentation and preservation work, while a three-member panel will oversee the entire exercise. The three mem75

ber overseeing committee will consist of retired judge of Kerala High Court, Justice M N Krishnan, the erstwhile Prince of Travancore Marthanda Varma and a government representative of the rank of secretary. The experts committee will report to the apex court only. Ashok Chawla panel on gas trading In order to strike a balance between the state's ownership right over all natural resources in the country and its ability to get economic value for these resources through a professional body, the Ashok Chawla panel on gas trading has recommended that there should be a new public sector company to work as the canalising agency for natural gas in the country. The panel has strongly recommended the creation of a dedicated agency to handle the purchase of all gas produced in the country on behalf of the government. The Chawla panel has suggested that companies like Reliance Industries, ONGC, Essar and Cairn Energy will have to sell their produce to this new company, which in turn will sell it to other industries. The company could either operate as a joint venture between some of the public sector energy units or as a public-private enterprise. At the same time, the panel does not favour price-pooling of gas because it will subsidise one set of industrial gas consumers against the others. On the basis of the recommendations of the expert committee under the Vijay Kelkar committee The Maharashtra government has appointed a 14-member committee headed by the 13th Finance Commission Chairman Vijay Kelkar to suggest multiple instruments and measures for the removal of regional imbalance in order to achieve inclusive growth. The committee would decide indicators to assess disparities in regional development of the state after taking into considerations the state government's direct investments and expenditure and also investments by the private sector in the industrial sector. This is the second such committee, after one chaired by VM Dandekar had submitted its report in 1984. Civil Services

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Planning Commission member Saumitra Chaudhuri, it has been proposed notional price-pooling scheme. Under the scheme, the gas purchase contracts of fertiliser companies with producers like Reliance Industries and ONGC will not change. They will get the price agreed upon in their production-sharing contracts. However, the weighted average price of gas from various sources such as domestic gas, which comes at $4.2-$5.65 per unit, and the far more expensive imported liquefied natural gas (LNG) will be calculated and it will be assigned to all gas consuming companies. As a result, it would lead to slightly higher price for gas to those who get it cheap now, and a lower price for those who currently use LNG, such as Iffco, a fertiliser maker in the co-operative sector. The notional pooling is to be implemented by the fertiliser industry coordination committee, a panel of secretaries led by fertiliser secretary and having members from the department of expenditure, department of industrial policy and promotion and the agriculture department. Rangarajan Committee The committee, headed by the Prime Minister's Economic Advisory Council chairman, C Rangarajan, has strongly recommended to wipeout the distinction between plan and nonplan expenditure. The end of distinction would bring simplicity and instead of three columns at present, Plan, Non-Plan and total, there will be only one column, i.e., expenditure. And moreover, there is no place where such a distinction (Plan and non-Plan) is made. It is, however, not in favour of reclassifying revenue and capital expenditure. The way revenue expenditure (revenex) is classified in the Budget is considered obsolete by many, as the method does not give a true picture of the expense in creating capital assets. It has been argued that if the end-use of funds is for capital creation, it should be classified as capital expenditure (capex). For examples, aid to states for spending on infrastructure development is classified as revenex, though it is in the nature of capex. Infact, Plan expenditure is aimed to measure what is spent on productive asset creation for the govSEPTEMBER 2011, XVII Year, Issue No.9
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ernment's programmes and flagship schemes. Non-Plan expenditure includes defence expenditure, subsidies and devolution to states, forming a major part of total government spending. Naresh Chandra Committee Amidst persisting security threats, the Government of India has decided to conduct an assessment of the countrys defence preparedness for which it has constituted a task force which will pursue recommendations made by the Kargil Review Committee after the 1999 war (headed by strategic affairs analyst, the late K Subrahmanyam). The 14 member task force is headed by Naresh Chandra. The panel is expected to submit its report within 6 months. Along with reviewing the entire security systems, the task force will suggest ways to implement recommendations made by the Kargil report to suit the countrys requirements in present scenario. With the growing arms of terrorism the security challenges in the nation have changed dramatically. The changing times have necessitated looking at the national security situation in the light of challenges ranging from cyber security to energy security. Indias Neighbours Makes it Mandatory to Review its Defence Preparation: The military modernisation programme of China has made it mandatory for India to carry out a comprehensive review of its defence preparedness to remain vigil at all times. India had always desired peaceful relations with all its neighbours Nepal, Sri Lanka, Bangladesh, Bhutan, and Myanmar and is helping in the reconstruction process in Afghanistan, but strategically speaking, the security situation in all these nations is closely linked and determines the internal security of India as well. Given such a unique interconnectivity between our neighbours, security-related challenges and their solutions need a united approach from the entire region. The main challenges for India from its neighbours are terrorism, nuclear proliferation, piracy and smuggling of arms. This issue thus makes it compulsory for India to timely review and reinforce its military preparedness. A Rahmani Panel 76

Nuclear Power Corporation of India has set up a committee under A Rahmani of the Bombay Natural History Society to study on marine ecology and bio-diversity in the 10 kilometre area around the Jaitapur site and to suggest the possible impact of the 9,900-MW nuclear power park at Jaitapur on the ecology and bio-diversity of the area. V K Shunglu committee The V K Shunglu committee was appointed to suggest ways to improve the financial condition of power distribution utilities. The committee has suggested that non-performing power regulators be sacked. The committee has further suggested stern measures because several state power regulators have not been carrying out annual tariff revisions, mandated by the Electricity Act and in this regard the distribution utilities should be heavily penalised if they fail to submit annual revenue requirement and the tariff revision. It has been expected that if the recommendations are implemented, then Rs 70,000 crore loss of power utilities could be stopped.

Cyber Law Panel Considering the security threat of the country, the Cyber Law Panel of India has recommended that none of the 15 mediums of digital communication used in the country, including Gmail, BlackBerry, Nokia, and Skype, can be banned for posing security threats because they cannot be monitored by law enforcement agencies. And as a solution, there is a need to install a Central Monitoring System (CMS) which is capable of intercepting any form of communication service offered within the country. Besides that the committee has recommended that India raise its encryption levels from 40 bits to the US-standard 256 bits. The country currently legally disallows encryption beyond 40 bits so that its security agencies can monitor communications on the Internet. Moreover, the ultimate solution should involve intelligence agencies building up capabilities indigenously to monitor and intercept these technologies Home Ministry. Civil Services

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Appointment
Ashok Parija The Bar Council of India has been elected senior advocate Ashok K. Parija from Orissa as its chairman to succeed the former Solicitor-General, Gopal Subramaniam. Senior advocate and Bar Council member from Madhya Pradesh Zafar Ahmed Khan has been elected as vice-chairman. The newly elected Chairman and Vice Chairman shall continue in office along with the other office bearers till April 2012. Rohinton Nariman Senior Supreme Court lawyer Rohinton Nariman has been appointed the Solicitor General of India, the second topmost government lawyer. Rohinton Nariman, son of eminent jurist Fali S. Nariman, succeeds Gopal Subramanium who resigned in the wake of a controversy over Communications Minister Kapil Sibal opting for Nariman to represent him in the apex court in a case seeking probe against him for allegedly favouring a telecom operator. Rohinton Nariman was the youngest lawyer to be designated a senior advocate at the age of 37 years, in 1993. One of the recent significant cases that Nariman Jr handled was the gas sharing dispute between Mukesh Ambani-led RIL and Anil Ambani-led ADAG. Gopal Subramanium had served as a government law officer for six years first as an Additional Solicitor General from 2005 to 2009, and was later elevated as Solicitor General in 2009. He has said that he had taken the extreme step to protect the dignity of his post. Attorney General and Solicitor General: The attorney general of India is the Indian governments chief legal adviser, and its primary lawyer in dealing with the Supreme Court of India. The attorney general for India is appointed by the President under Article 76(1) of the Constitution. The solicitor general of India is appointed to assist the attorney general along with four additional solicitors general. The Solicitor General is assisted by seven Additional Solicitors General for India. Unlike the Attorney General, the Solicitor General does not tender legal advice to the Government of India. His workload is confined to SEPTEMBER 2011, XVII Year, Issue No.9
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appear in courts on behalf of the Union of India. Peter Thomson The Assembly of the International Seabed Authority (ISA) has elected Fijis permanent representative to the United Nations, Ambassador Peter Thomson, as its President for the ISAs annual session. The Assembly is the supreme body of the ISA, consisting of delegations from 161 member states. It is here mentioned that ISA was established by the United Nations Convention on the Law of the Sea held in the year 1982 and Fiji became the first nation to sign the convention in 1982. The International Seabed Authority is an autonomous international organization, to which state parties to the Convention are given the responsibility of organising, controlling and administering the resources of the international seabed beyond the limits of national EEZs. Ban Ki-moon The United Nations General Assembly has voted unanimously to elect Ban Ki Moon for a second term as Secretary-General and praised him for strengthening the world bodys role and visibility in difficult circumstances. The second term of the South Korean will start from January 1 2012 and run through 2016. Harish Manwani Unilever Plc, the worlds second largest consumer goods company has appointed Harish Manwani its new chief operating officer (COO). Manwani is currently chairman of the AngloDutch companys Indian unit, Hindustan Unilever Ltd, and president of its operations in Asia, Africa, and Central and Eastern Europe. Jos Graziano da Silva Jos Graziano da Silva of Brazil was elected director-general of the UN Food and Agriculture Organisation (FAO). Graziano da Silva received a total of 92 votes out of 180 votes cast, winning over former Spanish foreign minister Miguel ngel Moratinos Cuyaub, who received 88 votes. There were no abstentions. Since 2006, he has served as FAO assistant director-general and regional representative for Latin America and the Caribbean. As Brazils Extraordinary Minister of Food Security and Fight Against Hunger he was responsible for implement77

ing the countrys highly-successful Zero Hunger programme, in whose design he also played a leading role. The programme helped lift 24 million people out of extreme poverty in five years and to reduce undernourishment in Brazil by 25 per cent. Graziano da Silva is FAOs eighth director-general (he succeeds Senegals Jacques Diouf) and his term will start on January 1, 2012, and run through July 31, 2015. Ranjan Mathai The Appointments Committee of the Cabinet (ACC) has been approved the appointment of Ranjan Mathai, IFS (1974), as Foreign Secretary, for a term of two years. On 1st August, he has replaced Nirupama Rao, IFS, on her retirement on July 31. Mathai was Indias Ambassador to France in Paris. He has been serving as Indias ambassador to France since January 2007. Vinay Mittal A 1975 batch officer of Indian Railway Traffic Service, is the new chairman, Railway Board and ex-officio principal secretary to the Government of India. Mittal has replaced Vivek Sahai who retired on June 30, 2011. Prior to this appointment, Mittal was serving as General Manager, South Eastern Railway for nearly five months. He was a member of the Indian delegation which visited USA and China in 2005-06 in connection with wagon designs and freight operations. He is credited with improvements in freight

Nirupama Rao
Foreign Secretary Nirupama Rao has been appointed as the next Ambassador of India to the United States of America. She has succeeded Meera Shankar who will take up her new assignment shortly. She has been succeeded as Foreign Secretary by Ranjan Mathai, who was Indias Ambassador to France. Nirupama Rao is a 1973 batch IFS officer; she had been Indias Ambassador to Peru and China and has also served as the Indian High Commissioner to Sri Lanka. She has also held the position of Minister in the Indian Embassy in Washington. When she took charge of her current post in 2009, she was only the second woman to serve as Foreign Secretary (first woman foreign secretary was ChokilaIyer). Civil Services

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loading and punctuality performance in Central Railway and North Western Railway. Christine Lagarde The International Monetary Fund board recently elected French Finance Minister Christine Lagarde, a former Chicagoan, as the new managing director of the global lender. Lagarde becomes the first woman to head the IMF. It is here mentioned that Lagarde succeeds Dominique Strauss-Kahn, who resigned from the IMF in May to defend himself against charges of sexual assault against a New York hotel maid. Earlier Lagarde left her post as chairman of law firm Baker & McKenzie in Chicago in 2005 to serve as former French President Jacques Chiracs trade minister. She is the first woman to serve as finance minister of a G8 country and also leads the G20 council of finance ministers. Her immediate concern is to oversee the efforts being made by the IMF and the EU to head off a Greek default that could touch off an international crisis. IMF and a Unique French Connection: Christine Lagarde has been elected to the post of IMF chief for a period of 5 years. By the time her tenure ends in June 2016, the French will have led the IMF for 31 years out of the previous 38, following Pierre-Paul Schweitzer (1963-1973), Jacques de Larosire (1978-1987), Michel Camdessus (1987-2000) and Strauss-Kahn (2007-2011). Only two other nationalities have headed the IMF for brief periods since 1978: Horst Khler of Germany from May 2000 to March 2004, and Rodrigo de Rato of Spain from June 2004 to November 2007. V.S. Hegde V.S. Hegde, an expert in remote sensing applications has been appointed as the chairman of Antrix Corporation, Indian Space Research Organizations commercial arm. Hegde, currently working as scientific secretary at the Indian Space Research Organization (ISRO), becomes the first official to hold the post in the relatively independent corporation (he is first-full time chairman and managing director of Antrix); and the first non-Chairman of ISRO to head it. Ever since Antrix was formed in 1992, successive ISRO Chairmen, who are also Secretary of the DoS and Chairmen of the SEPTEMBER 2011, XVII Year, Issue No.9
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elite Space Commission, have headed Antrix. It functioned under an Executive Director (there were three EDs so far). The previous one, K.R. Sridhara Murthy, was promoted as Managing Director until he superannuated in September 2010. The Antrix board currently includes Ratan Tata, chairman of Tata Sons; J N Godrej, MD of Godrej and Boyce and P Ravindra Reddy MD of Hyderabad-based nuclear and defence components manufacturer MTAR Technologies, apart from senior Isro scientists. Antrix has earned revenue of R1023 crore in 2010-2011 as against Rs 883 crore in 2009-2010. It is primarily engaged in the leasing of ISROs satellite transponders and marketing its space products including data from earth observation satellites and the building and launching of satellites for global customers. With the launch of GSAT-12, Antrix expects that it would have around 200 transponders by mid-2012, besides 86 currently on lease from foreign operators. Yudhishthir Khatau Yudhishthir, vice-chairman and managing director of the Mumbai-based Varun Shipping Company has been elected as the 41st President of the Baltic and International Maritime Council, popularly known as BIMCO. He is the first president of BIMCO from India. Khatau succeeds German shipowner, Robert Lorenz-Meyer, who has completed his two-year time in office at BIMCO. Varun Shipping is the largest LPC tanker operator in the country. About BIMCO: It is an independent global shipping association founded in 1905, with a membership composed of ship owners, managers, brokers, agents and many other stakeholders in the shipping industry. BIMCO is accredited as a Non-Governmental Organization (NGO) with all relevant United Nations organs. Prakash Bakshi The Centre has been appointed Prakash Bakshi as the new chairman of the National Bank for Agriculture and Rural Development (NABARD). Prior to his elevation as Chairman, Dr Bakshi was the Executive Director of Nabard. He will be at the helm till October 2013. Nabard has got an insider heading the organisation after eight years. The previous three chair78

persons Ms Ranjana Kumar (commercial banker), Dr YSP Thorat (central banker), and Mr UC Sarangi (bureaucrat) were from outside Nabard. Pradeep Kumar Defence Secretary Pradeep Kumar has been appointed as the next CVC (Chief Vigilance Commissioner). He was chosen CVC by consensus by a panel comprising Prime Minister Manmohan Singh, Home Minister P Chidambaram and Leader of Opposition in Lok Sabha Sushma Swaraj. He is a Haryana cadre IAS officer of the 1972 batch, and was Secretary, Defence Production, before becoming the Defence Secretary. His appointment comes in the wake of former CVC PJ Thomas appeal to President for not appointing a CVC till the court has decided on his petition. It needs to be remembered that he had filed a writ petition in the Delhi High Court saying the new CVC should be appointed only after a decision is taken on his March application. The apex court had earlier held Thomas was an accused in the palmoline export scam in Kerala. The Supreme Court said that the high-powered committees recommendation on appointment of Thomas does not exist in law. The Supreme Court also held that the PMs selection committee had not considered the relevant documents for his case, and that it had ignored earlier recommendations for action against him listed by the De-

Harun Rashid Khan


The Government has appointed Harun Rashid Khan as Deputy Governor of Reserve Bank of India. Harun Rashid Khan fills the vacancy created due to the superannuation of Ms Shyamala Gopinath. Following this appointment, the RBI now has four Deputy Governors. Besides Mr Khan, the other Deputy Governors are Dr K.C. Chakrabarty, Dr Subir Gokarn and Anand Sinha. Prior to being appointed as the Deputy Governor, he was Executive Director of RBI since October 2007. RBI deputy governor is appointed for a maximum of five years with the retirement age of 62. Khan will hold the post for three years, as he will retire in 2014. Civil Services

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partment of Personnel and Training. Nishi Vasudeva Nishi Vasudeva has become the first woman to join the board of the state owned oil company, HPCL. She has joined the board of HPCL, a Navratna PSU, as Director (marketing). She was selected for the board job at HPCL by government headhunter - Public Enterprise Selection Board in December last year. Recently the Cabinet Committee on Appointments (ACC) gave its consent to her appointment. The post of Director (Marketing) in HPCL fell vacant following the appointment of incumbent Subir Roychowdhry as the Chairman and Managing Director of the company. Narayana Murthy The founder of Infosys N.R. Narayana Murthy, has been chosen to head the Public Health Foundation of India (PHFI). He has succeeded former McKinsey chief Rajat Gupta, after the US Securities and Exchange Commission named him a co-conspirator in an insider trading scam along with billionaire Raj Rajaratnam of the Galleon Group, USA in March 2011. He will lead a governing council comprising Montek Singh Ahluwalia, Amartya Sen, Shiv Nadar, T K Nair, Y V Reddy, AK Shiva Kumar and Mirai Chatterjee among its members. PHFI is basically meant to redress the limited institutional capacity in India for strengthening, training, research and policy development in the area of public health. The charter of PHFI includes establishing five-seven new institutes of public health over the next six years, establishing a strong national research network of public health and allied institutions that would undertake policy and programme rele-

vant research that will advance public health goals in prioritized areas. Mario Draghi Bank of Italy Governor Mario Draghi has been appointed as head of the European Central Bank at a Brussels summit of European Union heads of government. Draghi will succeed France's Jean-Claude Trichet on Nov 1 and will be president until 31 October 2019. It has to be noted that the Greek crisis is looming large and has threatened the stability of entire Europe.

Removed
Maulana Ghulam Mohammad Vastanvi The 'Mohtamim' (Vice-Chancellor) of Darul Uloom, Deoband, has been removed by the Majlis-e-Shoora, the powerful governing body of the institution. And in his place, Maulana Abul Qasim Nomani of Kanpur has been appointed the Vice-Chancellor. His removal has taken place after the report of the committee found him guilty. One can note that the committee was constituted on February 23, 2011, to investigate charges against Maulana Vastanvi, who had sparked a controversy by praising Gujarat Chief Minister Narendra Modi, after he took over on January 10, 2011, following the death of Maulana Marghoobur Rahman. Basically Dar-ul Uloom was founded in 1866 by Maulana Muhammad Qasim Nanautwai to teach Islamic law (Shariah), Islamic jurisprudence (fiqh) and traditional Islamic spirituality (tasawwuf). It was based on a syllabus known as Dars-eNizami.

Death
M.F. Hussain Maqbool Fida Husain, one of Indias best-known artists, has died due to complications caused by lung congestion in London. He was 96. He was described as the Picasso of India, was one of the subcontinents best known painters. His influence on contemporary South Asian art was enormous. Husain painted an estimated 25,000 works. His epic Mahabharata: The Battle of Ganga and Jamuna was sold for $1.6 million in 2008, setting a world record at Christies South Asian Modern and Contemporary Art sale. Angered by Hindu hardliners, he left 79

Hina Rabbani Khar


Hina Rabbani Khar has been appointed as the foreign minister of Pakistan, with this she becomes the first Pakistani woman to be appointed to the position. She was earlier the Minister of State for Foreign Affairs. Her appointment comes ahead of crucial peace talks with India. She was administered the oath of office at the Aiwan-e-Sadr or presidency by Acting President Farooq H Naik as President Zardari was away on a visit to Afghanistan. SEPTEMBER 2011, XVII Year, Issue No.9
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India in 2006 and later became a citizen of Qatar. M. F. Husain also directed few films. In 1967, Husains first film, Through the Eyes of a Painter, won a Golden Bear at the Berlin Film Festival. He was also honoured with the prestigious Padma Shree, Padma Bhushan and Padma Vibhushan. Suresh Tendulkar Professor Suresh D. Tendulkar, a noted economist and a member of the Central Board of Directors of the Reserve Bank of India expired recently. Most known for his extensive work on poverty, Prof. Tendulkar was Professor of Economics at the Delhi School of Economics, University of Delhi, India, from 1978 until 2004, where he also served a term as the Executive Director of the Centre for Development Economics. He had served as the chairman of the Prime Ministers economic advisory council and was also a former part-time chief of the National Statistical Commission (2000-01), the first Disinvestment Commission (1996-99), and the Fifth Central Pay Commission (1994-97) appointed by the Government of India. Some of books written by Suresh. D. Tendulkar (a) India: Industrialisation in a Reforming Economy (b) Understanding Reforms: Post 1991 India (c) Reintegrating India with the World Economy. Yelena Bonner The Russian rights activist and widow of the Nobel peace prize winner Andrei Sakharov died recently. Bonner grew famous through her marriage to Sakharov, the Soviet Unions leading dissident, but she carved out her own reputation as a tireless human rights campaigner in the face of relentless hostility from Soviet authorities. Bonner spent the last years of her life in the United States after becoming disillusioned with modern Russia, horrified first by the brutality of the war in Chechnya and later by vanishing freedoms under the rule of Vladimir Putin, whose resignation she demanded last year in an open letter to the government titled Putin Must Go. BSS Rao An art critic and secretary of the Sri Lalithakala Academy Foundation, died at the age of 82. He was a patron of classical arts and music, and was Civil Services

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nominated as a member of the South Zone Cultural Centre, Thanjavur, by the Karnataka government in 2010 in recognition of his yeoman services to performing arts. Sadhanatai The 85-year-old, widow of the late social worker Baba Amte, died at Anandwan, their home for the leprosy-affected at Warora in Chandrapur district. Sadhanatai has been credited with being an equal partner in their service of the leprosy-affected people during the 61 years of their companionship, as well as his Knit India mission for peace in Punjab, and during the lonely seven-year stay on the banks of Narmada during the Narmada Bachao Andolan. Dr. Jack Kevorkian Known for his lifelong crusade to legalize physician-assisted suicide, Dr. Jack Kevorkian died recently due to pulmonary thrombosis, a complication of a kidney-related ailment. He was dubbed Dr. Death for his role in assisting the suicides of more than 100 terminally ill people. Albertina Sisulu Albertina Sisulu, considered by many to be the mother of South Africas liberation struggle, a woman who was hounded and jailed by the apartheid government but who lived to see her children assume leadership roles in a democratic nation, died recently. A humble but forceful woman, Mrs. Sisulu was the widow of Walter Sisulu, one of Nelson Mandelas earliest political mentors. Nasser Hejazi Legendary Iranian goalkeeper and football coach Nasser Hejazi passed away recently. Hejazi was goalkeeper of Iran national football team in 1960s and 1970s. Hejazi had won the AFC Asian Cup twice. The keeper played for Iran in the 1976 Olympic Games and 1978 FIFA World Cup in 2000, the Asian Football Confederation had ranked him the second best Asian goalkeeper of the 20th century behind former Saudi Arabia keeper Mohamed Al-Deayea. Nataraja Ramakrishna Popular Kuchipudi classical dancer, well known for introducing the dance form of Perini, Nataraj Ramakrishna died recently. Ramakrishna was also instrumental in the revival of Andhra SEPTEMBER 2011, XVII Year, Issue No.9
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Natyam, a temple dance tradition performed in the state. His Bhaama Kalaapam earned him followers from across the world. Amy Winehouse Amy Winehouse, the Grammy Award-winning singer/song writer with a well-documented history of drug and alcohol abuse problems, was found dead at the age of 27 in London. She entered the music scene in 2003 with her debut album "Frank" and her second album "Back to Black" became a hit. The album became famous for songs like "You Know I'm No Good" and "Rehab," and "Rehab" won the artist three Grammy Awards in 2008 including Record of the Year, Song of the Year and Best Female Pop Vocal Performance and made Winehouse the first British singer to win five Grammys, including three of the "Big Four": Best New Artist, Record of the Year and Song of the Year. The album was nominated for Album of the Year and won Best Pop Vocal Album. Winehouse also won a Grammy for Best New Artist, bringing her win total to five and setting a record for most Grammys won by a British female performer. In May 2007 in Miami, she married music industry hanger-on Blake Fielder-Civil and divorced in 2009. Dr Majid Shahriari A member of the nuclear engineering department of Shahid Beheshti University in northern Tehran was killed and Iran has accused Israel for this incident. One can recollect that Shahriari was "one of the few specialists who can separate isotopes" and has been a "member of the Revolutionary Guards since the revolution" in 1979. The second blast seriously wounded the nuclear physicist Fereidoun Abbasi who was also a professor at Shahid Besheshti University.

Mani Kaul
Noted film maker Mani Kaul, who was considered one of the pioneers of new Indian cinema, died recently. He was ranked among the film makers who contributed to new Indian cinema with their exemplary movies. Mani Kaul began his career with Uski Roti in 1969 which won him the Filmfare Critics Award for best movie and his other movies like Ashad Kaek Din, Duvidha and Idiot also got awards. His most notable work, however, was his documentary Siddheshwari which won the National Award for Best Documentary film in 1989. fairs, and her son, Arsene Ntahobali, a former militia leader, were both found guilty of genocide, war crimes and crimes against humanity, including rape. It is here underscored that the International Criminal Tribunal for Rwanda was formed in 1994 with the mandate to try the masterminds of Rwandas genocide in which some 800000 people, mainly the Tutsis were killed. Talmiz Ahmad Talmiz Ahmad, Indias Ambassador to Saudi Arabia has become the first Indian diplomat to be conferred the King Abdulaziz Medal of First Class for his contribution to the promotion of bilateral relations. Ahmad is the first Indian diplomat to be conferred such an honour by Saudi Arabia. The main reason for giving this honour to Talmiz Ahmad is the key role played by him in raising the Indo-Saudi relations to a strategic level. Ahmad was first appointed Indias ambassador to Saudi Arabia in January 2000. He also became the ambassador to Oman in July 2003. Ahmad has also served in several countries of the region including the United Arab Emirates (UAE), Kuwait, Iraq and Yemen. K. Srinath Reddy Currently president of the Public Health Foundation of India and a former head of the Department of Cardiology at the All-India Institute of Medical Sciences in New Delhi has been awarded an honorary degree of Doctor of Science by Scotland's Aberdeen University for his pioneering work in the field of public health. Civil Services

Newsmakers
Pauline Nyiramasuhuko U.N. Court trying suspects of the 1994 Rwanda genocide has found a female former government minister and her son guilty of war crimes and gave them life sentences, this makes Pauline Nyiramasulmko the first ever woman to be convicted of genocide. Pauline Nyiramasuhuko, Rwandas former minister for family and women af80

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INS Godavari damaged INS Godavari has been damaged after PNS Babur brushed past it. The incident happened when a Pakistani ship PNS Babur which was escorting Egyptian merchant vessel m.v. Suez, moved close to INS Godavari and damaged INS Godavari. World's 1st Lung Transplant A team of British surgeons at the University Hospital of South Manchester have successfully carried out the world's first lung transplant on a 20year-old Becky Jones who was suffering from multi-resistant Aspergillus, a common airborne fungus, and multiple fungal balls in her old lungs. Jones first developed aspergillosis because she has cystic fibrosis and became allergic to the Aspergillus. As she needed special drugs to improve her breathing, the fungus grew in her damaged airways to form large fungal balls, known as aspergillomas. Varyag China's first aircraft carrier, Varyag a remodelled Soviet-era vessel - was unveiled, amid escalating tensions in the South China Sea. The ship is currently based in the northeast port of Dalian. It needs to mention here that the recent past has witnessed escalating tensions between Beijing and other rival claimants to the strategically vital South China. China has claimed mineral rights around the disputed Spratly Islands in the South China Sea,

and argued that foreign navies cannot sail through the area without Beijing's permission. In September, 2010 Japan and China had also clashed over the disputed Senkaku Islands, known as the Diaoyu Islands in China, located in the East China Sea. But Chinese maintains that its first aircraft carrier would not pose a threat to other nations, in accordance with Beijing's defensive military strategy. The carrier would be used for training and as a model for a future indigenous-built ship. The Varyag was originally built for the Soviet navy but construction was interrupted by the collapse of the Soviet Union in 1991. The PLA - the largest army in the world - is hugely secretive about its defence programs, which benefit from a large military budget boosted by the nation's runaway economic growth. J.J. Irani Dr Jamshed J Irani has resigned from the board of Tata Steel after serving the company for over four decades at the age of 75. Irani had joined Tata Iron and Steel Company (rechristened Tata Steel) in 1968. Irani began his career in 1963 as a Senior Scientific Officer at the BISRA, Sheffield, where he rose to the position of Head, Physical Metallurgy Division. On his return to India, he joined the Tata Iron and Steel Company.

Awards
INSEAD Award The renowned business school and research institution, INSEAD, has selected Sunil Mittal, the founder and chief of Bharti Enterprises with the Business Leader for the World Award. Beside Mittal, McKinsey and Company Global MD Dominic Barton has also bagged the award for their contribution to business and societal growth. It needs to be mentioned here that, business leaders who have set new standards in building successful, sustainable, global enterprises that span multiple cultures, embrace diversity and contribute to economic and social prosperity, have been honoured with this award. Dipak C. Jain is the Dean of INSEAD. Ramon Magsaysay Award The six Award recipients in 2011 enlarge the community of Magsaysay laureates to 290 individuals and orga81

Jiaozhou Bay Bridge


China has inaugurated the world's longest cross-sea bridge. The Jiaozhou Bay Bridge, which is the world's longest over-water bridge at 26.4 miles, also opened today. This bridge connects the port city of Qingdao to the suburban Huangdao on the other side of the bay. China, with the world's largest population, deals with often-crippling transportation congestion issues, so the government has spent billions of dollars in recent years to alleviate these issues. The bridge supported by more than 5,000 pillars was built in four years. Guinness World Records says the previous record holder for a bridge over water is the Lake Pontchartrain Causeway in Louisiana. The Chinese bridge is more than 2.5 miles (4 kilometres) longer. SEPTEMBER 2011, XVII Year, Issue No.9
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nizations spread across twenty-two countries of Asia. The award is named after famous Philippine president who died in a plane crash in 1957. This year "five remarkable individuals and one exceptional organization, from Cambodia, India, Indonesia, and the Philippines will receive Asia's highest honor, the 2011 Ramon Magsaysay Award. The Awardees are: 1.Alternative Indigenous Development Foundation, Inc. (AIDFI), from the Philippines. The organization is being recognized for "their collective vision, technological innovations, and partnership practices to make appropriate technologies improve the lives and livelihoods of the rural poor in upland Philippine communities and elsewhere in Asia." 2. The 44-year-old Harish Hande, from India, runs his own solar electric light company that has lit up over 120,000 households, to emerge as India's leading solar technology firm. He is being recognized for "his passionate and pragmatic efforts to put solar power technology in the hands of the poor, through a social enterprise that brings customized, affordable, and sustainable electricity to India's vast rural populace, encouraging the poor to become asset creators." He founded the company SELCO-India with Neville Williams in 1995. A doctorate in energy engineering (solar specialty) from University of Massachusetts (Lowell) and a IIT Kharagpur passout, Hande revolutionised use of solar energy by developing equipment tailor-made for the needs of rural Indians. 3. Hasanain Juaini, from Indonesia. He is being recognized for "his holistic, community-based approach to pesantren education in Indonesia, creatively promoting values of gender equality, religious harmony, environmental preservation, individual achievement, and civic engagement among young students and their communities." 4. Koul Panha, from Cambodia. He is being recognized for "his determined and courageous leadership of the sustained campaign to build an enlightened, organized and vigilant citizenry who will ensure fair and free elections - as well as demand accountable governance by their elected officials Civil Services

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- in Cambodia's nascent democracy." 5. Nileema Mishra, a lender to the poor in Maharashtra, is being recognized for "her purpose-driven zeal to work tirelessly with villagers in Maharashtra, India, organizing them to successfully address both their aspirations and their adversities through collective action and heightened confidence in their potential to improve their own lives." The 29-year-old has worked for empowerment of women in Jalgaon district of Maharashtra and has formed self help groups of over 2,000 women in 15 villages to provide them livelihood avenues. 6. Tri Mumpuni, from Indonesia. She is being recognized for "her determined and collaborative efforts to promote micro hydropower technology, catalyze needed policy changes, and ensure full community participation, in bringing electricity and the fruits of development to the rural areas of Indonesia." World Food Prize 2011 John Kufuor of Ghana and Luiz Inacio Lula da Silva of Brazil have been awarded this years World Food Prize for cutting hunger in half while serving as President of their nations. It was the first time the award; created 25 years ago by Nobel Peace Prize winner Norman Bourlag, recognized the seminal role of national leaders in fighting hunger (both have been presidents of their respective nations). It should be noted that some 925 million people, roughly one-in-seven worldwide, are chronically hungry. Contribution by Lula da Silva: With his Zero Hunger program, Lula gave top priority to combating hunger and poverty in Brazil, a rising economic power of 203 million people, while president from 2003 to 2010. His programs included cash aid to poor families, food purchases from small-scale farmers and a school meals program. Contribution by John Kufuor: Kufuor, president of Ghana from 2001-09, used public- and private-sector initiatives to improve food security and reduce poverty. They included a program to provide one meal a day to schoolchildren and educating farmers on best farming practices. Ghana, with 25 million citizens, was the first nation in sub-Saharan Africa, to cut hunger in half. SEPTEMBER 2011, XVII Year, Issue No.9
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About the award: The World Food Prize was created in 1986 by Nobel Peace Prize Laureate Norman Borlaug with the help of General Foods, and since 1990 has been sponsored by businessman and philanthropist John Ruan. The award recognizes the achievements of individuals who have advanced human development by improving the quality, quantity or availability of food in the world. Previous winners In 1987, M.S. Swaminathan of India In 1988, Robert F. Chandler of USA In 1989, Verghese Kurien of India In 1990, John Niederhauser of USA In 1993, He Kang of China In 1994, M. Yunus of Bangladesh In 1996, Henry Beachell and Gurdev Khush of USA and India respectively. In 1998, B.R. Barwale of India In 2000, Dr. Evangelina Villegas and Dr. Surinder K. Vasal of USA and India respectively. In 2005, Modadugu Vijay Gupta of India In 2011, John Agyekum Kufuor and Luiz Incio Lula da Silva of Ghana and Brazil respectively. 'Krishi Karman' Awards The newly instituted 'Krishi Karman' awards have been conferred to ten states for best performance towards raising production of food grains. Three awards are being given for total food grain production and four awards for production of rice, wheat, coarse cereals and pulses - the crops that constitute the food grain basket. Punjab and Uttar Pradesh are the joint winners of the Krishi Karman award in the category of states with overall food grain production of more than 10 million tonnes recorded in the last five years. Assam and Orissa get the award in the category of states with overall food grain production of between one and 10 million tonnes. Tripura is the sole winner in the category of states with overall food grain production of less than one million tones. In the second set of four awards, being given for individual crops and crop groups, the award for rice goes to Chhattisgarh, wheat to Haryana, pulses to Maharashtra and Rajasthan, 82

and coarse cereals to Karnataka. Betty Trask award Author Anjali Josephs debut novel Swarasati Park has created a splash in the literary circles by winning the Betty Trask award, in addition to this she has also won the Desmond Elliot Prize. The novel is about a Mumbai housing complex and the lives of its inmates. About Betty Trask Award: The Betty Trask Award is given to a first novel written by authors under the age of 35 who reside in a current or former Commonwealth nation. The award was established in 1984 by the Society of Authors at the behest of Betty Trask, a reclusive author of 30 romantic novels. About Desmond Elliot Prize: The Desmond Elliott Prize is an annual award for a first novel written in English and published in the UK. The award was established in the year 2007. The inaugural Desmond Elliott Prize was awarded in 2008 to Nikita Lalwani for Gifted. In the year 20009, the award was given to Edward Hogan for Blackmoor. About Anjali Joseph: Anjali Joseph was born in Bombay in 1978. She read English at Trinity College, Cambridge, and has taught English at the Sorbonne. More recently she has written for the Times of India in Bombay and been a Commissioning Editor for ELLE (India). She graduated from the MA in Creative Writing at the University of East Anglia with distinction in 2008. Saraswati Park is her first novel. Commander danslOrdre des Palmes Academiques Renowned economist and Planning Commission member Narendra Jadhav has been honoured with the Commander danslOrdre des Palmes Academiques (Commander of the Order of Academic Palms) award one of the oldest French civil distinctions.A former vice chancellor of Pune University, Jadhav is also a member of the National Advisory Council, an academician and a writer. He is the first Indian to be accorded the honour originally founded by Napoleon Bonaparte in 1808. In 1955, it was established as an order and awarded to eminent academicians, authors, artists, scientists and professionals for their contribution in various fields. Civil Services

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Mercy Ravi Award The first Mercy Ravi Award for Woman of Substance has been given to Delhi Chief Minister Sheila Dixit for her meritorious service to the people. The award has been instituted by Mercy Ravi Foundation, in memory of Congress leader late Mercy Ravi, wife of Union Minister for Civil Aviation and Indian Overseas Affairs Vayalar Ravi. Ordre National du Merite Amna Imran Khan a female Pakistani DMG officer has been awarded the prestigious French knighthood for distinguished and extra ordinary services for strengthening and promoting cooperation between the Law Enforcement Agencies of Pakistan and France. Amna Imran Khan, a DMG Officer, was conferred the Ordre National du Merite by President Nicholas Sarkozy of France. Dan Ordre Des Arts Et Des Letters Superstar Aishwarya Rai Bachchan has been honoured with the prestigious Officer Dan Ordre Des Arts Et Des Letters by the French Government in New Delhi. It is the second highest civilian award in France and is an equivalent of the Padma Vibhushan award bestowed by the Indian government. (She is already a Padma Shree winner). This distinction is conferred by the French government on persons who have distinguished themselves by their creativity in the field of arts, culture or literature. Previous winners include Robert Redford, George Clooney, Meryl Streep and Shah Rukh Khan. Aishwarya is the first Asian actress and the youngest Indian to win the honour. Crans Montana Forum Award Art of Living founder Sri Sri Ravi Shankar became the first Indian to receive the Crans Montana Forum Award. Since 1989, the Crans Montana Forum has been awarding individuals who fight for peace, democracy and liberty. Several Presidents and Prime Ministers have received this award. President of the United States of America, Barack Obama; Former Prime Minister of Portugal and current President of the European Commission, Jos Manuel Barroso; Current President of Finland, Tarja Halonen; Current President of the African Development SEPTEMBER 2011, XVII Year, Issue No.9
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Bank, Donald Kaberuka; Current Chancellor of Germany, Angela Merkel are some of the previous recipients of this award. International Merlin Award The worlds largest magicians organisation, the International Magicians Society (IMS) of USA, has selected noted illusionist and stunt performer Gopinath Muthukad of Kerala for this years prestigious International Merlin Award. With this Magician Gopinath Muthukad becomes only the 2nd Indian magician to receive the coveted International Merlin Award, the Oscar of Magic. The first Indian to receive this award was P.C. Sorcar Jr. IMPAC Dublin Literary Award Irish writer Colum McCanns Let The Great World Spin, a novel set in the shadow of Philippe Petits 1974 tightrope walk between the twin towers of the World Trade Centre, has won the 2011 International IMPAC Dublin Literary Award, one of the worlds most lucrative book prizes. The prize is worth 100,000. Past winners of the award include Michel Houellebecq, Orhan Pamuk, and Gerbrand Bakker, who won last year for The Twin. Sangeet Natak Akademi Fellowships and Akademi Awards for 2010 The Vice-President of India has conferred the prestigious Sangeet Natak Akademi Fellowships and Akademi Awards for 2010. Four eminent personalities were conferred the Akademis Fellowships, while thirty-six artists and two scholars received the Akademi Awards for 2010. The highest honour of Akademi Fellowship (Akademi Ratna Sadasyata) was conferred on eminent vocalist Girija Devi, renowned dance guru Nataraja Ramakrishna, Dhrupad maestro Rahim Fahimuddin Dagar, and Mridangam vidwan T. K. Murthy. They received purse money of Rupees three lakh, besides an angavastram and a tamrapatra. The Fellowship of the Akademi is a rare honour, which is bestowed on a very limited number of artists and scholars at a given time. The eminent representatives of music, dance and theatre honoured with the Sangeet Natak Akademi Award for 2010 received purse money of Rupees one lakh, an angavastram and tamrapatra. The Akademi Fellowship (Akademi 83

Ratna Sadasyata) and Akademi Award (Akademi Puraskar) are the most coveted national honours conferred on performing artists, gurus and scholars of the performing arts. These honours are decided by the Akademis General Council, the apex body consisting of eminent artists, scholars and nominees of the Government of India and of different States and Union Territories of the country. Sangeet Natak Akademi, established by the Government of India on 31 May 1952, is the National Academy of Music, Dance and Drama. Arjuna Awards On the basis of the recommendations the selection panel for the awards was headed by P T Usha and comprised, among others, tennis ace Leander Paes, hockey icon Ashok Kumar, ace woman boxer M C Mary Kom, shooter Anjali Bhagwat and national squash coach Cyrus Poncha. sns & agencies, the following names are recommended for the various awards: 1. Rajiv Gandhi Khel Ratna Award 2011: Gagan Narang for Shooting. He has won the World Cup gold twice as well as the gold in the World Cup Finals. 2. Arjuna Awards 2011: Apart from Zaheer Khan for Cricket, tennis star Somdev Devvarman, archer Rahul Banerjee, shooter Tejaswini Sawant,

Bangladesh Swadhinata Sammanona


The Bangladesh government recently decided to confer the highest state honour for 1971 foreign friends on Indias assassinated Prime Minister Indira Gandhi for her tremendous contribution to its Liberation War 40 years ago. The Bangladesh cabinet decided to confer Bangladeshs highest honour Bangladesh Swadhinata Sammanona upon former Indian Prime Minister Indira Gandhi. It is here underscored that Indira Gandhi was Indias premier in 1971 when she travelled across the world to mobilise support for Bangladeshs Liberation War against Pakistan while her government provided food and makeshift shelter to an estimated one crore or 10 million people who fled their home to evade atrocities by the Pakistani troops. Civil Services

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athlete Preeja Sreedharan, Ravi Kumar Katulu (Weightlifting), Jwala Gutta (Badminton), Tejaswini Bai (Kabaddi), Rakesh Kumar (Kabaddi), footballer Sunil Chettri, hockey player Rajpal Singh, boxer Suranjoy Singh, Sandhyarani (Ushu), Prashant Karmakar (Disabled Sports) and gymnast Ashish Kumar have also been recommended for the Arjuna Award. 3. Dhyan Chand Award 2011: Former Indian captain Shabbir Ali has become the first footballer to be named for the Dhyan Chand Award for lifetime achievement. He is the only footballer after P.K. Banerjee and Syed Nayeemuddin, both Arjuna Award winners, to have excelled as a player and coach. 4. Five coaches chosen for the Dronacharya award were Ram Phal (wrestling), Devendra Kumar Rathore (gymnastics), I. Venkateswara Rao (boxing), Rajender Singh (hockey) and Kunthal Kumar Roy (athletics). Rajiv Gandhi Khel Ratna Award is given to only one sportsperson in a year. Arjuna Award is given to not more than 15, Dhyan Chand Award to not more than 3 and Dronacharya Award to not more than 5 persons. The Dinesh Khanna-led Arjuna award panel had recommended increasing the number of Arjuna awards to 19 instead of the normal 15. Apart from a medal and a citation, Rajiv Gandhi Khel Ratna Awardee will receive a cash prize of Rs.7.5 lakh. Arjuna, Dhyan Chand and Dronacharya Awardees will receive statuettes, citations and cash prize of Rs.5 lakh each. The recipients of Rashtriya Khel Protsahan Puruskar will receive trophy and citation.

Books in News
1. Book The Age of Deception: Nuclear Diplomacy in Treacherous Times is written by Mohamed Elbaradei. He is ex-director of the UNs International Atomic Energy Agency. For the first time, the Nobel Prize laureate and man in the middle of the planets most explosive confrontations speaks outon his dealings with America, negotiations with Iran, reform and democracy in the Middle East, and the prospects for a future free of nuclear weapons. 2. Book River of Smoke is written by Amitav Ghosh. SEPTEMBER 2011, XVII Year, Issue No.9
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3. Book India- A Portrait is written by Patrick French. The author has written a thoroughly insightful and engrossing account of India. It shows how some of the events have shaped the current socio-economic-political environment of India and what makes it tick. Patrick French is an England based writer and historian. He is the author of (a) Young-husband: The Last Great Imperial Adventurer, which won the Somerset Maugham Award and the Royal Society of Literature W.H Heinemann Prize, (b) Liberty or Death: Indias Journey to Independence and Division, (c) Tibet: A Personal History of a Lost Land and, (d) The World Is What It Is: The Authorized Biography of V.S. Naipaul, which won the National Book Critics Circle Award and the Hawthornden Prize. 4. Book Wular Kinarey (On the banks of Wular) is an autobiographical writing by Syed Ali Geelani, of Huriyat Conference. 5. Book The Wizard of Lies: Bernie Madoff and the Death of Trust is written by Diana B. Henriques. 6. Book Living My Dreams is written by Joseph Reds Perreira (with Catherine Atkinson). Joseph Reds Perreira is one of the premier cricket commentator from Guyana. 7. Book His Majestys Opponent is written by Sugata Bose. The book mentions the plot to assassinate Subhas Chandra Bose by the British SOE. 8. Book The Man Who Owns the News: Inside the Secret World of Rupert Murdoch is written by Michael Wolff. 9. Book Does He Know A Mothers Heart: How Suffering Refutes Religions is written by Arun Shourie. 10. Book The Last Man in Tower is written by Aravind Adiga. 11. Book The Artist of Disappearance is written by Anita Desai. 12. Book There but for the is written by Ali Smith.

Sports
Badminton Indonesia Open, 2011 Defending champion Saina Nehwal faltered at the final hurdle, and failed to complete the hat-trick of titles at the Indonesia Open Super Series after losing to Chinese world number three 84

Yihan Wang21-12, 21-23, 14-21 in the final. Fourth-seed Saina was a point away from clinching her third successive Indonesia Open title but she squandered a match point at 20-19. Indonesian Open: The Indonesia Open in an annual badminton tournament organized by Indonesia since 1982. It became part of the BWF Super Series tournament in 2007 and got the Premier Super Series status in 2011. Badminton World Federation (BWF) The Badminton World Federation (BWF) is the international governing body for the sport of badminton. It was founded in 1934 and was then known as the International Badminton Federation. Initially it had only nine member nations (Canada, Denmark, England, France, Ireland, Italy, Netherlands, New Zealand, Scotland and Wales) but now it comprises of 165 member states. In the year 2006 its name was changed to Badminton World Federation (BWF). The headquarters of BWF is situated in Kuala Lumpur, Malaysia. Its current president is Kang Young Joong. Boxing Wladimir Klitschko Wladimir Klitschko of the Ukraine has emerged as the undisputed world heavyweight champion by defeating Great Britain's David Haye on a unanimous points decision. Klitschko now holds the IBF, WBO and WBA belts after being awarded the fight by the three judges 117-109, 118-108, 116-110 to claim victory over Haye, the former WBA champion. With this, Klitschko is the WBA, IBF, IBO, WBO and Ring Magazine Champion. His older brother Vitali Klitschko is the current WBC champion. Klitschko is the longest reigning Heavyweight Champion in history for the IBF, WBO & IBO heavyweight titles, both in measurements of defenses and time. It is important to refer that Klitschko won the IBF belt against Chris Byrd in 2006 and added the WBO title two years later, while Haye had been the WBA champion since 2009. At the same time, it was the first heavyweight unification bout since Klitschko took the WBO belt from Sultan Ibragimov at Madison Square Garden in 2008 and the biggest title fight since Mike Tyson was beaten by Lennox Lewis in 2002. Civil Services

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Chess J.C.D. Prabhakar J.C.D. Prabhakar of Chennai and Bharat Singh Chauhan of Delhi were recently elected as president and secretary respectively of the All-India Chess Federation. For the period 2011-2014, the office bearers of All India Chess Federation (AICF) are (a) President: J.C.D. Prabhakar (Tamil Nadu). (b) Vice-Presidents: G. Bhasker (Andaman and Nicobar), DibyenduBarua (Jharkhand), Shekar Chandra Sahu (Orissa), A. Bakthavachalam (Puducherry), A. Narasimha Reddy (Andra Pradesh), Pradeep Jain (Uttaranchal). (c) Secretary: Bharat Singh Chauhan (New Delhi). Cricket Claire Taylor The England cricketer Claire Taylor has announced her retirement from international cricket. The 35-year-old represented England in 15 Tests, 126 one-day internationals and 27 Twenty20 matches during her 14 years with the England team and was the first woman to be named one of Wisdens five cricketers of the year. Taylor also holds the record for the highest ODI score at Lords by a man or women an unbeaten 156 against India in 2006. Football 15th Copa America Uruguay won the Copa America for a record 15th time after beating Paraguay 3-0. Two goals from Diego Forlan and another from Luis Suarez helped Uruguay beat Paraguay. The victory gives Uruguay its first Copa America title since 1995. Paraguay had won Copa America titles in 1979 and 1953 and reached the quarterfinals at the 2010 World Cup. It is here mentioned that top teams like Argentina and Brazil were upset again in the quarterfinals of this tournament. Uruguay ousted Argentina on penalties and Paraguay eliminated Brazil, also in a shootout. It is here underscored that Argentina has won the title 14 times and Brazil eight times. Brazil had won four of the past five titles. About Copa America: The Copa America was earlier known as South American Championship. It is an international football competition for national teams of South America. The competition is organized by CONMEBOL, South Americas football governing SEPTEMBER 2011, XVII Year, Issue No.9
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body. It is the oldest international continental football competition. This year, the 43rd edition of the tournament was held in Argentina. Uruguay has now won the Copa America 15 times, Argentina 14, Brazil 8 and Paraguay 2 times. FIFA Womens World Cup Japan has won the final of the Womens World Cup in Frankfurt beating the USA on penalties 3-1 after a hotly disputed match that saw each side score twice. With this win Japan became the first Asian nation to win the Womens World Cup. The Japanese denied the U.S. team the chance to become the first nation to lift the cup three times. Sweden finished third and France ended fourth in the current championship. About FIFA Womens World Cup: The FIFA Womens World Cup is an international association football competition organized by FIFA. The championship has been awarded every four years since the inaugural tournament in 1991 held in China. The inaugural championship was won by USA. The world cup 2011 was held in Germany. The next World Cup will be hosted by Canada in 2015. The best performing nations are the USA and Germany; both have won the championship twice. Records of the 2011 World Cup Record Winner Golden Ball Homare Sawa, Japan Silver Ball Abby Wambach, USA Bronze Ball Hope Solo, USA Golden Shoe Homare Sawa, Japan Golden Glove Hope Solo, USA Fair Play Award Japan Golf British Open Northern Irelands Darren Clarke has won the British open golf, with this victory he became the oldest winner of the Open since Argentinas Roberto de Vicenzo had won at the age of 44 in 1967. It is here underscored that recently Rory McIlroy of Northern Ireland became the youngest US Open winner since 1933. US Open 2011 Golf Tournament Rory Mcllroy of Northern Ireland re85

cently won the 2011 US Open Golf Tournament. With this win, Mcllroy become the youngest US open winner since Bobby Jones in 1923. This is the first major title won by Mcllory in his carrier till date. Hockey Michael Jack Nobbs Australian Michael Jack Nobbs has been appointed as the new coach of Indian hockey team and his tenure will lasts till the 2016 Rio de Janeiro Olympics. Nobbs piped renowned coach Roelant Oltmans of the Netherlands to the post. A committee comprising officials of Hockey India (HI), the Sports Authority of India (SAI), government representatives and Olympians finalised Nobbss name. Womens Champions Trophy, 2011 The Netherlands won the womens field hockey Champions Trophy 6-5 on penalties by defeating Argentina. The 2011 Womens Hockey Champions Trophy was the 19th edition of the Hockey Champions Trophy for women, it was held in Amstelveen, Netherlands. The womens Champions trophy will be remembered for the controversy regarding the fight for the spot in the final match. After the preliminaries were over, the final originally was scheduled to be played between the Netherlands and South Korea, but the Argentine side protested against the second round standing in which they were ranked third behind Korea based on goals scored in that round. After a second appeal by the Argentine team, the final day schedule was changed, since the regulations stated that in case of a draw in points in the second round, the total points in the tournament should be the next tie-breaker. Racing British GP Spains Fernando Alonso has won the British Grand Prix for Ferraris first victory of the season on the 60th anniversary of their first success in Formula One. The win was gifted to him by Red Bull after world champion Sebastian Vettel was slowed by a wheel nut problem at his second pit stop. This was 27th win Alonsos career and lifted him level with the great Jackie Stewart in fifth position in the all-time lists. Moto GP Civil Services

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Australian Casey Stoner regained the lead in the Moto GP world championship after winning the British Grand Prix at Silverstone. He defeated the defending champion Jorge Lorenzo. Following his fourth victory of the season, Stoner now has 116 points in the standings. Tennis Wimbledon 2011 Mens Single: Serbias Novak Djokovic has won his first Wimbledon title and proved himself the best player in the world with a stunning win over Spains Rafael Nadal. Djokovic came through 6-4 6-1 1-6 6-3 to end Nadals reign as Wimbledon champion. With this victory Djokovic became number one overtaking Nadal. It was his 50th win in 51 matches and his fifth win over Nadal this year. He becomes the first Serbian man to win Wimbledon, his third Grand Slam title after two Australian Open victories. Womens Single: Petra Kvitova of Czech Republic won her first Grand Slam title by beating Maria Sharapova (Russia) 6-3, 6-4 in the Wimbledon final, 2011. Kvitova was playing in her first major final. The 21-year-old Kvitova is the first left-handed woman to win the Wimbledon title since Martina Navratilova in 1990. Mens doubles: American twins Bob and Mike Bryan won a record-tying 11th Grand Slam mens doubles title together by beating Robert Lindstedt of Sweden and HoriaTecau of Romania 6-3, 6-4, 7-6 (2) in the Wimbledon final. The Bryans have now equalled Todd Woodbridge and Mark Woodfordes record of 11 Grand Slam team titles. This is their 2nd Wimbledon title, they won their first Wimbledon title in 2006 to complete a full set of the four Grand Slam titles. They have won the Australian Open five times, the U.S. Open three times and lifted the French Open trophy in 2003. Womens doubles: In womens double event Kvta Peschke of Czech Republic and Katarina Srebotnik of Slovenia defeated Sabine Lisicki of Germany and Samantha Stosur of Australia. This is their first grand slam title in Womens Doubles and first Wimbledon title. Mixed doubles: Iveta Benesova of the Czech Republic and Jurgen Melzer of Austria won the mixed doubles final SEPTEMBER 2011, XVII Year, Issue No.9
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at Wimbledon, beating Elena Vesnina of Russia and Mahesh Bhupathi of India 6-3, 6-2. About Wimbledon: Wimbledon is the worlds oldest and, to many, most prestigious tennis tournament. It has been held at the All England Club in the London suburb of Wimbledon since 1877. Wimbledon is the only Major still played on grass, the games original surface, which gave the game of lawn tennis its name. The other major grand slams are: Australian Open (hard court, Plexicushion), French Open (clay court) and US Open (hard court, Deco Turf). ITF juniors Fifteen-year-old tennis player Ambika Pande has won the Canadian U-18 juniors world ranking tournament in Vancouver. Ambika beat Canadas third seeded Gloria Liang 6-4 4-6 76(5) in the final to win the ITF juniors U-18 event. With this win she became the first Indian ever to win the Canadian U-18 ITF Junior World Ranking Championship.

Places
Pyeongchang city The International Olympic Committee has chosen Pyeongchang city of South Korea to host the 2018 Olympic Winter Games. The other two bid cities were Munich, Germany, and Annecy, France. Pyeongchang narrowly failed in its bids for 2010 and 2014, losing by three votes to Vancouver, Canada, for last years event and by four votes to Sochi, Russia, for the 2014 event. South Korea has never hosted the Winter Games, though the capital city of Seoul hosted the 1988 Summer Games. Had it won, Munich would have been the first city to host both

the summer and Winter Olympics. The city attracted the Summer Games in 1972. The Winter Games have been staged twice in Asia, both times in Japan Sapporo in 1972 and Nagano in 1998. About Winter Olympics: The Winter Olympic Games are held every four years. The first celebration of the Winter Olympics was held in Chamonix, France, in 1924.Some of the competitions held at winter Olympics include: - alpine and cross-country skiing, figure skating, ice hockey, Nordic combined, ski jumping, and speed skating etc. The Winter Olympics have been hosted on three continents, but never in a country in the southern hemisphere. The United States has hosted the Games four times; France has been the host three times. In 2014 Sochi will be the first Russian city to host the Winter Olympics. In 2018 Pyeongchang, South Korea, will be the third Asian city to host the Winter Olympics. Padmanabhaswamy Temple Padmanabhaswamy Temple is one of the most famous Lord Vishnu Temples in Kerala, South India. It is also known as Sree Ananda Padmanabhaswamy Temple. The shrine is currently run by a trust headed by the royal family of Travancore. References to the temple can be found in the Divya Prabandha canon of literature written by Tamil Alwar. Alvars were the Tamil Saint poets who lived between the sixth and ninth centuries AD. References to Sri Padmanabha Temple is also said to have in the Brahma Purana, Padma Purana, Varaha Purana, and Vayu Purana. The temple is one of 108 Divya Desams - principal centres of worship of the deity in

Western Ghats
The Karnataka government has said that it is not interested in the UNESCO tag for the Western Ghats. It is believed that the UNESCO tag will mean a nogo area for people, including tribals living in the forests of the Western Ghats. A large population resides in the Western Ghats regions, spread across 10 districts - Shimoga, Dakshin Kannada, Udupi, Chikmagalur, Uttara Kannada, Hassan, Belgaum, Dharwad, Hubli and Uttara Kannada. Of the 176 revenue taluks in the State, the Western Ghats forests are spread across 59 taluks. It is not possible for the Government to force the people out of these regions." Of the 39 forests for nomination from the Western Ghats in Kerala, Karnataka, Tamil Nadu, Goa and Maharashtra, there are 10 forest zones in Karnataka for which the UNESCO tag is being sought. These include the wildlife sanctuaries at Pushpagiri, Brahmagiri, Talacauvery and Someshwara, apart from the Kudremukh national park. 86 Civil Services

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Vaishnavism. The temple was constructed in the Dravidian style of architecture, is glorified in the Divya Prabandha, the early medieval Tamil literature canon of the Tamil Alvar saints (6th-9th centuries CE), and with structural additions to it made throughout the 16th century CE, when its ornate Gopuram was constructed. The principal deity of the temple is Padmanabhaswamy, it is enshrined in the "Anantha-sayanam" posture (in the eternal sleep of Yoga-nidra on the serpent Ananta). Major Renovation of Temple by Marthanda Varma: It is believed that Sree Padmanabhaswamy Temple and its properties were maintained by Ettuveetil Pillamar - the eight powerful Nair feudal lords of ancient Travancore. Later Marthanda Varma suppressed the Ettuveetil Pillais and his

Puyehue-Cordon Caulle Volcano


A volcano in the Caulle Cordon of southern Chile erupted recently, shooting out pumice stones and pluming a cloud of ash 10 kilometres high and five kilometres wide. Puyehue and Cordn Caulle are two coalesced volcanic vents that form a major mountain massif in Puyehue National Park in the Andes of Ranco Province, Chile. In volcanology this group is known as the PuyehueCordnCaulle Volcanic Complex (PCCVC). Four different volcanoes constitute the volcanic group or complex, the Cordillera Nevada caldera, the Pliocene Mencheca volcano, CordnCaulle fissure vents and the Puyehuestrato volcano. The volcanic complex is responsible for shaping the local landscape and producing a huge variety of volcanic landforms and products over the last 300,000 years. CordnCaulle is notable for having erupted following the 1960 Valdivia earthquake, the largest recorded earthquake in history. Apart from this, the PuyehueCordnCaulle area is one of the main sites of exploration for geothermal power in Chile Geothermal activity is manifested on the surface of Puyehue and CordnCaulle as several boiling springs, solfataras and fumaroles. SEPTEMBER 2011, XVII Year, Issue No.9
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cousins and took over the control of the temple. Marthanda Varma had done a major renovation to the temple and it is said that the current structure of Padmanabhaswamy temple was made by him. Marthanda Varma introduced the Murajapamand Bhadra Deepam festival in the temple. Murajapam, which literally means continuous chanting of prayers, is still conducted in the temple once in 6 years. Sri Padmanabhaswamy Temple was in the news on account of the vast treasure found in its secret vaults. It is natural for everyone to get curious about the temple and its invaluable treasure which was lying unknown to the world all these days. Two committees appointed by Supreme Court to supervise temple treasure: The Supreme Court recently appointed two committees to supervise the discovery and protection of the huge wealth recently uncovered in the vaults of the Sree Padmanabhaswamy Temple. One of the committees, a fivemember panel would be headed by C.V. Ananda Bose, Director-General of the National Museum. The other three member panel is headed by Justice M.N. Krishnan, retired High Court judge. Both committees are to cooperate with each other. The apex court also directed the Kerala government to provide adequate security on the temple premises to protect the assets. It also directed the panel to sort the assets into three categories - those with heritage value, those which can be used for regular worship in the temple and those having no monetary value. Goa's Mhadei sanctuary Over 35 tigers have been found residing in Mhadei Wildlife Sanctuary situated in Sattauri Taluk of north Goa, about 60 to 90 kms from hot tourism hot spot beaches such as Anjum, Bombolin and Colva. Mhadei sanctuary is a contiguous tiger landscape with tiger areas in Karnataka. Olkiluoto 3 Olkiluoto 3 which is on the shore of the Gulf of Bothnia in the municipality of Eurajoki in western Finland. would be the first operational plant using Areva's EPR technology. The Olkiluoto plant consists of two Boiling Water Reactors (BWRs) with 860 MWe each and the unit 3 is based on EPR technology. Finland's Radiation 87

and Nuclear Safety Authority (STUK) has assured India to assist with its experience in the case of Jaitapur. Quazigund to Banihal By 2016, Asia's longest all-weather two twin tunnels being built on the NH-1A, which connects Jammu with Srinagar would reduce the distance between the two towns by almost 51km, lessening travel time will be reduced to 5-6 hours from the current 8-10 hours. The tunnels are being constructed by the National Highways Authority India (NHAI) at two points - Quazigund to Banihal and Chenani to Nishri, which are part of the widening of the Jammu-Srinagar highway project. Two parallel 8.5km tunnels between Quazigund to Banihal are being built by Indian infrastructure major Navayuga Engineering Co. at 1,790m above the sea level. The second twin 8.9km tubes built through the Patnitop hills are being built between Chenani and Nashri at 1,300m above the sea level by Australian infrastructure major, Leighton. Both the Quazigund-Banihal and Chenani-Nashri tunnels are built with the help of New Australian Tunneling Method (NATM) technique, where a portion of the rock is cut and explosives are fixed. Then, controlled explosions are carried out to hollow out rocks for laying the road. Mount Lokon volcano Indonesias Mount Lokon erupted and threw hot lava and volcanic ash as high as 1,500 metres (5,000 feet) in the north of Sulawesi Island. The eruption set ablaze the forests around the crater. It is here underscored that Indonesia, the worlds fourth most populous country, is on the Pacific Ring of Fire and is frequently prone to natural disasters such as earthquakes, volcanoes, tsunami and floods. About Mount Lokon: Mount Lokon, together with Mount Empung, is a twin volcano situated in the northern Sulawesi, Indonesia. Both rise above the Tondano plain and are among active volcanoes of Sulawesi. Mount Lokon has a flat and craterless top. Lokonwas formed during a period of andesitic volcanism on ring fractures resulting from the Tondano calderas early to mid-Pleistocene collapse. Mount Lokon is one of about 129 active volcanoes in Indonesia. Civil Services

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What Causes Volcanoes: The earth has three main layers: the crust, the mantle and the core. The crust is made up of solid rock and varies in thickness. It is more than 60km thick under mountain chains like the Alps and Himalayas, but just 5km under the oceans. The mantle is a thick layer of molten rock (called magma), and the core is made up of an outer liquid layer and a solid centre. Temperatures inside the earth are very high over 5000C in the core. This means that the earth is like a huge fiery ball of hot molten rock, surrounded by a few kilometres of relatively cool, hard rock the crust. Because heat rises, the magma in the earths mantle has to find a way to raise upwards though the crust above it, rather like the way that hot air rises. A volcano erupts when magma escapes from inside the earth. As the magma is escaping from a confined space, a lot of energy is released with it, as happens with any other explosion. This is why many eruptions also produce huge quantities of gases and dust. Magma sometimes rises under enormous pressure, so it not only finds cracks in the earths crust, it can also create them. When magma reaches the earths surface it is called lava. Why Indonesia has the most volcanoes: Because Indonesia is located on the rim of two tectonic plates: the Indian and Asian plates. The Indian plate is moving northward pushing against the Asian plate. Part of the Indian plate plunged into the earth and part of the Asian plate move upward and forming the Himalayan Mountain. Another reason for such volcanic activities in Indonesia is its location on the Pacific Ring of Fire. The Pacific Ring of Fire: More than half of all the worlds volcanoes are found in the Pacific Ring of Fire. This area forms a circle stretching down the eastern side of the Pacific Ocean, from Alaska in the north, through the Rocky Mountains of Canada and the USA, to the Andes Mountains of South America. It loops back around the western side of the Pacific, up through New Zealand, Indonesia and Japan. Many of the worlds most famous volcanoes are found in this Ring of Fire, for example, the Cotopaxi in Ecuador, Mount St Helens in the USA, and Krakatoa in Indonesia. SEPTEMBER 2011, XVII Year, Issue No.9
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Rajasthan Vijayee Bhava A six-day joint exercise of the Indian Army and the Air Force was held in the deserts of Bikaner and Suratgarh near the Pakistan border in order to boost the synergy between the defence forces. Exercise Vijayee Bhava (blessed to win) is the first amongst a series of Western Command routine annual summer exercises. Vijayee Bhava involved tank-to-tank wars, helicopter operations and others. Battlefield tactics for warfare were practised in the exercise that aimed at fine-tuning the concept of Cold Start doctrine. The manoeuvres were conducted in North Rajasthan to test the operational and transformational effectiveness of the Ambala based Kharga Corps as well as validates new concepts which have emerged during the transformation studies undertaken by the Army. Basic objectives: The Indian Army is working towards a capability based approach, and has embarked on a series of transformational initiatives spanning concepts, organizational structures and absorption of new age technologies, particularly in the fields

of precision munitions, advance surveillance systems, space and networkcentricity. During the conduct of the exercise, combat decisions taken at each level of command are analyzed for their ability to synergize the application of state-of-the-art weapon platforms, to achieve optimum results. Such routine exercises with troops are conducted during the training cycles of formations. Himachal Pradesh Indias first carbon credit deal World Bank recently signed an agreement with Himachal Pradesh government for what is tipped to be the worlds largest and Indias first clean development mechanism (CDM) project. Under the Emission Reduction Purchase Agreement, the World Bank will buy carbon credits from the new forests being developed on degraded lands under a watershed management programme. The agreement would be in force till December 2018. The project would impact an area of 4,003.07 hectares. The figure for the area surpasses the 3,500 hectares for CDM project of China, to make it the largest project of its kind in the world. With the signing

Jammu and Kashmir


Job-linked programme for 1 lakh youth The Cabinet Committee on Economic Affairs (CCEA) has approved a proposal to provide job-linked skill training to one lakh youth in Jammu and Kashmir over the next five years under a centrally sponsored scheme. The training will be provided under Skill Empowerment and Employment Special Scheme for J&K, which will be 100 per cent centrally assisted and cost the exchequer Rs 235.3 crore. The scheme is a placement linked, market driven skill training programme for J&K youth. The placements will be in the private sector both within and outside J&K. The scheme will commence from June-July this year and cover youth from both Below Poverty Line and non-BPL categories. In the first year, 15,000 youth will receive training for salaried and self-employment opportunities. A recommendation in this regard had been made by a committee headed by former RBI Governor C Rangarajan. The panel was set up by Prime Minister Manmohan Singh to suggest measures to enhance employment opportunities in the state and formulate a plan involving both private and public sectors.Intended benefits for the Youth of the Valley: The scheme assumes significance, as the state of Jammu and Kashmir is grappling with the unemployment problem with the number of educated and skilled and unskilled youth increasing every year. Though the state government has taken several initiatives to tackle with the problem yet the absence of adequate industrial sector and corporate sector the youth mainly look towards the government for white collar jobs. The decision is expected to give a boost to bring the youth of the valley into mainstream because the scheme guarantees 75 per cent of placement in various industry and other offices throughout the nation. Under the scheme, different training strategies will be used for diverse groups of youth - school dropouts, dropouts of XII class level, and those who have had college education. 88 Civil Services

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of this agreement, there are now 18 World Bank-supported carbon revenue programmes underway worldwide. This places India on the global map of a future economy largely to be measured in terms of accruing carbon credits. One tonne of carbon dioxide converted into biomass under new plantations is counted as one credit. Besides being the first pilot project for India; it would be the worlds first carbon credit project that is linked to an on-going watershed management programme. The broad objective of the bio-carbon CDM project is to sequester greenhouse gases by expanding forestry plantations on mostly degraded lands apart from creating a carbon sink. Besides China, other countries where CDM projects are underway include Honduras, Kenya and Ethiopia.Spread over 11 watershed divisions in 177 gram panchayats across 10 districts under the mid-Himalayan watershed development programme, the CDM agreement is estimated to fetch carbon revenue of at least Rs 20 crore for the first crediting period of 20 years. The carbon revenues have been calculated at a modest US $5 per tonne of carbon dioxide accumulated in tree biomass, above as well as under the ground. The carbon revenue will primarily go to the village community and provide an incentive to protect watershed and forests.

Programmes and Policies


Uttar Pradesh

NATGRID project The Cabinet Committee on Security (CCS) headed by Prime Minister has given in-principle approval to the NATGRID project. The project will network the entire database in the nation that contain vital information and intelligence and enable security agencies to meet the challenge of terrorism better. It needs to be mentioned here that the Ministry of Home Affairs provided the CCS a detailed briefing and presentation about the NATGRID project, along with safeguards and oversight mechanisms. The data gathered with the help of NATGRID project will facilitate robust information sharing among law enforcement agencies to combat terror threat at home and abroad more efficiently. Importance of NATGRID: One of the weaknesses in the Indian internal security system is the fact that each database stands alone, without being able to talk to another. The owner of one database is unable to access another database in India. As a consequence, crucial information that is available in one database was not available to another agency. The NATGRID project seeks to remedy this deficiency. The NATGRID will have access to about 21 categories of database like railway and air travel, income tax, bank account details, credit card transactions, visa and immigration records. As per the initial plan, access to the combined data will be given to 11 agencies, which include various central intelligence agen-

Apex court on Ayodhya dispute The Bench of Justices Aftab Alam and R M Lodha of the Supreme Court has found it "strange and surprising" that the Allahabad High Court took upon itself to "partition" the Ramjanmabhoomi-Babri Masjid site, leaving a onethird slice for Ram Lalla. The apex court has questioned that how the wisdom of the three judges had divided the disputed site without the litigants having ever asked for such "relief". A Bench of Justices S U Khan, Sudhir Agarwal and D V Sharma (since retired) of Allahabad High Court in the 60-year-old Ayodhya dispute had ruled in a majority judgment of 2:1 for a three-way division of the "roughly 15,000 square feet site" occupied by the mosque before its demolition on December 6, 1992 - one-third for the Sunni Waqf Board, one-third for the Nirmohi Akhara and one-third to the party for Ram Lalla. As a result of this observation of the apex court, status quo would be maintained and this would mean that a lone pujari can conduct worship in the makeshift temple built at the site - a custom legitimised in the Ayodhya Act of January 7, 1993. The Bench banned any mode of activity in the 67 acres acquired by the government following apex court orders of March 13 and 14, 2002. SEPTEMBER 2011, XVII Year, Issue No.9
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cies and the National Investigation Agency among others. Important Facts about NATGRID: (a) The Natgrid is the brainchild of Home Minister P. Chidambaram after the 26/ 11 Mumbai terror attacks. (b) Raghu Raman, who was in the private sector earlier, is the CEO of the project. He was hired for a period of 18 months to finalize the project but the government has given him six-month extension till Nov 2011 to complete the project. DGCA stripped of investigative powers Acting strongly on the Faridabad air crash that claimed 10 lives, the government created an independent panel to probe major aviation accidents, separating the role of a regulator and an investigator which was being performed by the DGCA alone so far. From now onwards the Directorate General of Civil Aviation (DGCA) will no longer be the three-in-one investigator-prosecutor-judge combine when it comes to investigating serious air mishaps. In order to effectively investigate any serious air crash the government has now established an independent Accident Investigation Committee. The Committee will investigate all aircraft accidents in country in accordance with the Standard and Recommended Practices (SARPs) of the International Civil Aviation Organisation. The newly establish committee will work under the supervision of the Ministry of Civil Aviation. The five-member committee, will be headed by director of air safety, and will draw all its members from the Directorate general of civil aviation. It would identify the causes of accident in an independent manner and assist the formal probe panels like Courts or Committees of Inquiry. The Accident Investigation Committee shall have following function and responsibilities: (a) Draw up a formal procedure for the notification of an accident or serious incident as per ICAO Annex 13. (b) Assist Ministry of Civil Aviation in the formation of Court of Inquiry and Committee of Inquiry in case of major accidents. (c) Carry out investigation of aircraft accident and serious incident and nominate teams/ groups for the purpose. (d) Coordinate and provide support for the working of Court of inquiry and Committee of Civil Services

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Inquiry. (e) Follow-up/monitor the compliance of the recommendation made in the Accident and Serious Incident Investigation Reports. (f) It shall review periodic report of all occurrences for classification and further action required. ADBs North Easter n States Roads Investment Programme The Cabinet Committee on Economic Affairs recently approved the project proposal titled ADB assisted North Eastern State Roads Investment Programme (NESRIP), a centrally sponsored scheme of the Ministry of Development of North Eastern Region to construct / upgrade/ improve a total of 433 km long roads in six NE States at an estimated cost of Rs. 1353.83 Crore to be implemented over a period of 5 years i.e. 2011-2016. The State wise road lengths to be undertaken under the project are: Assam 74.70 km, Meghalaya 93.40 km and Sikkim 34.20 km in Tranche-I and Assam 62.90 km, Manipur 93.20 km. Mizoram 55.00 km and Tripura 20.30 km in Tranche-II. It is here underscored that the Ministry of Development of North Eastern Region is the Executing Agency for the project and is responsible for overall coordination with ADB and participating States and monitoring the progress of the project. The project is going to benefit the large population living in the North-East with lower transportation costs, faster transit and encouragement of livelihood opportunities in the region. National Environmental Appraisal and Monitoring Authority The Government of India recently announced the setting up of the National Environmental Appraisal and Monitoring Authority, a professional, science-based autonomous body, as part of efforts to bring in institutional reforms and to improve environmental governance in India. Once appraised by NEAMA, the environment related projects would be sent with a recommendation to the Minister of Environment and Forests for approval. NEAMA will be a full-time body of professionals for environmental appraisals against the current system of appraisals done by environmental committees that are ad hoc and meet once in a month. It will maintain its own realSEPTEMBER 2011, XVII Year, Issue No.9
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time and time-series databases on pollution loads across the country. The body will also ensure compliance with the conditions imposed on new projects that are granted environmental clearance. Need for NEAMA: The need for a body like NEAMA arises from the rapid industrial and infrastructural development in the last decade, which has exerted tremendous pressure on environment. The number and complexity of the projects being processed for environmental clearance has increased multi-fold whereas the capacity and resources available with MoEF and its agencies have remained limited. The body was earlier proper to be established as NEPA (National Environmental Protection Authority), but with a modified scope of the organization, it is now named National Environment Assessment and Monitoring Authority to reflect the scope of its operation. Fundamental Principles for working of NEAMA: (a) Independence of appraisal and approval process. (b) Objectivity/predictability in the appraisal process through use of authenticated, reliable and valid scientific data procured through independent agencies, institutional memory and permanence in the Appraisal committees. (c) Transparency in the process and outcomes of appraisal and monitoring. (d) The body should have a statutory foundation to ensure autonomy. Haathi Mere Saathi Campaign for elephants With the aim to reach out to people and to improve conservation and welfare prospects of the elephant - Indias

National Heritage Animal, the Ministry of Environment and Forests (MoEF) in partnership with the Wildlife Trust of India (WTI) recently launched the nationwide Haathi Mere Saathi campaign. The initiative was launched on the occasion of Elephant-8 Ministerial Meeting held recently in New Delhi. The eight participating countries at the Elephant-8 ministerial meet were Botswana, Congo, India, Indonesia, Kenya, Sri Lanka, Tanzania and Thailand. The participating nations decided to lead their efforts in their respective regions to ensure the long-term survival of the elephant and its habitat. This is being seen as a major step forward in securing the long term future of the elephant in all elephant range countries, through collaborative global action. The Haathi Mere Saathi initiative is aimed at increasing awareness among people and developing not just friendship but also companionship between people and elephants. It should be noted that unlike the tiger, which faces threat of extinction, the elephant faces threats of attrition. The elephant numbers have not increased or decreased drastically, but there is increasing pressure on the elephant habitats and it is a serious concern that we will try and address by involving people in elephant conservation and welfare through this campaign. The Haathi Mere Saathi Campaign is the brain child of the Elephant Task Force (ETF) constituted by the Ministry last year. The campaign to take Gajah (the elephant) to Prajah (the people) aims to spread awareness and encourage peoples participation in elephant con-

Janani Shishu Suraksha Karyakaram


UPA chairperson Sonia Gandhi recently unveiled the Janani-Shishu Suraksha Karyakram an ambitious national healthcare programme aimed at providing free child delivery and neonatal care services across the country. Inaugurated at Mandikhera village located in the relatively backward and predominantly Muslim Haryana district of Mewat, the scheme is expected to bring safe medical services to more than one crore rural and urban families every year. This scheme will give right to all pregnant women to have free delivery in government health organisations. It is here underlined that the ambitious scheme of the Centre, to be implemented under the National Rural Health Mission (NRHM), has been patterned on the Haryana Governments scheme Janani Suraksha Yojana, and would cost Rs 1100 crore per month. Under the programme, expecting mothers would get care and treatment, including medicines, food and testing facilities free of cost in all government hospitals and dispensaries, she said. They would also be provided, if needed, blood and transport facility to the hospital for delivery free of cost, and the mother-child duo would be transported back home. 90 Civil Services

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servation and welfare. India has about 25,000 elephants in the wild. Despite this seemingly large number, the elephant, particularly the tuskers, in India is as threatened as the tiger. There are just about 1200 tuskers left in the country. Moreover, elephants being large-bodied have much larger range and resource requirements; destruction of their habitat can have drastic effects on this species, and these can only be addressed with peoples participation. National Rural Livelihood Mission The UPA chairperson, Sonia Gandhi has launched the National Rural Livelihoods Mission (NRLM), a re-christened version of the on-going Swarn Jayanti Gram Swarozgar Yojana from Banswara, Rajasthan. National Rural Livelihoods Mission (NRLM) is one of the major new initiatives under the Ministry of Rural Development to bring the poorest of the poor above the poverty line by ensuring viable livelihood opportunities to them. The NRLM recognizes the potential that the poor have to come out of poverty with proper handholding, training and capacity building and credit linkage and that they have multiple livelihoods wage employment and self-employment. It will stabilize and enhance incomes from both the livelihoods and promote diversification of livelihoods. The role of Banks will be of prime importance under NRLM as a source of credit for the poor at reasonable rates. NRLM will focus on getting banks to

lend to the poor by making them bankable clients through smart use of subsidy. NRLM will have special focus on the poorest households, who are currently dependant on MGNREGA. These families will be supported to broaden their livelihoods through assets and skill acquisition which will enhance the quality of their livelihoods significantly. NRLM will focus on women and on vulnerable sections such as scheduled tribes, scheduled castes, minorities, women headed families, etc. The second focus of NRLM would be rural youth of the country who are unemployed. They will be supported through placement linked skill development projects through which their skills will be upgraded through short term training courses in sectors which have high demand for services. In addition to funds and efficient governance structure, following factors are equally important to realize the visible impacts of project: (a) Increasing the awareness of programmes and access of rural poor to avail the benefits. (b) Social mobilization for collective action and economies of scale. (c) Replication of successful experiments on mass scale. (d) Introduction of appropriate technologies and involvement of experts. (e) Removing the design defects of various schemes and programmes based on earlier experiences. (f) Availability of timely and adequate

IIDEM Launched
The Election Commission of India has launched the India International Institute of Democracy and Election Management. It is an advanced resource centre of learning, research, training and extension for participatory democracy and election management. IIDEM has four components: (a) Training and Capacity Development. (b) Voter Education and Civic Participation (c) Research, Innovation and Documentation. (d) International Projects and Technical Collaboration. What the institute intends to promote: The Institute will be a national and international hub for exchange of good practices in election management. The Institute is being developed in collaboration with the Government of India, United Nations, the Commonwealth and inter-governmental organizations like Sweden based International Institute of Democracy and Electoral Assistance (IDEA). The Institute will make efforts to enhance the potential and capacity of the Election Commission so that it carries out its functions in more effective and professional manner. It carries the goal of meticulous, accurate, voter friendly implementation of election processes by committed, competent, credible and skilled managers and associated groups. The institute will strive to promote democratic values and practices, promoting awareness among voters. SEPTEMBER 2011, XVII Year, Issue No.9
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credit at low cost. (g) Emphasis on strengthening forward and backward linkages. (h) Transparency and accountability of implementing structure. (i) Coordination with other Ministries and convergence of their programme. Socio-Economic and Caste Census 2011 The first ever post-independence Socio-Economic and Caste Census 2011 to identify people living Below Poverty Line (BPL) began from Sankhola village of Hazemara block in West Tripura District. This below poverty line (BPL) census will be conducted by state governments/union territory administrations with the technical and financial support of the Ministry of Rural Development. This gigantic exercise will pave the way to identify the households living below the poverty line in rural and urban areas of the country. The entire process will be completed by end of 2011-12. The results relating to the identification of poor households would be utilized in the 12th Five Year Plan (2012 to 2017). The Census would be based on a self-declaration model of the respondents. The information would be verified and approved by the Gram Sabha. Low cost hand held device will be used for collection of data in Socio Economic Census 2011. It would reduce the time required in processing the data after collection in the field. Bharat Electronic Ltd. (BEL) is involved in the production of this device on large scale. The management of information system (MIS) for the census will be developed by the national informatics centre (NIC). Household without shelter, destitute, manual scavengers, primitive tribal groups and legally released bonded labourers will have the highest priority for inclusion in the BPL list. The census is aimed at identifying BPL households that can benefit from Centres welfare schemes. NHRC international accreditation status The National Human Rights Commission of India has retained the top grading in a review by a global panel of rights bodies, which set aside a plea from some civil society groups for its downgrading. The Accreditation SubCommittee of the International Coordinating Committee of National Human Rights Institutions (ICC-NHRIs) Civil Services

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has recommended that the NHRC India be re-accredited with A status. The NHRC continues to hold A status with ICC since 1999. This status is given to the NHRIs which are fully compliant with the Paris Principles towards promotion and protection of human rights. It should be noted that a group of NGOs under the banner of All India Network of NGOs and Individuals (AiNNI) had asked the international committee to downgrade NHRC, claiming it was beset with corruption. With NHRC retaining its A status, its reputation has been protected before the international community. About International Coordinating Committee of National Human Rights Institutions: The International Coordinating Committee of National Human Rights Institutions is a world-wide network of National Human Rights Institutions (NHRIs) - set up to promote, protect and monitor human rights in their respective nation. This international body is unique, because it is the only non-UN body whose internal accreditation system, based on compliance with the 1993 Paris Principles, grants access to UN committees. Institutions accredited by the ICC with A status, meaning full compliance with the Paris Principles, are accorded speaking rights and seating at human rights treaty bodies and other UN organs. The International Coordinating Committee of National Human Rights Institutions is a non-profit entity, and

has one member of staff representing it at the United Nations Office at Geneva. Secretariat support is provided to it by the National Institutions and Regional Mechanisms (NIRM) Unit of the Field Operations and Technical Cooperation Division of the Office of the United Nations High Commissioner for Human Rights (OHCHR). Quota for women in Panchayats The Cabinet has given its nod to the proposal (110th Amendment Bill, 2009) for increasing reservation for women in Panchayats from the existing 33 per cent to 50 per cent for all seats filled through direct election, office of chairpersons and of offices reserved for Scheduled Castes and Scheduled Tribes. The proposal aims to amend Article 243(d) of the Constitution, which provides for one-third reservation for women in panchayats, and increase the quota to 50 per cent. It needs to be mentioned here that Bihar, Uttarakhand, Himachal Pradesh, Gujarat and Maharashtra have already made suitable amendments to increase reservation for women in Panchayats from 33 to 50 per cent. The decision of the cabinet assumes significance since women suffer multiple deprivations of class, caste and gender, enhancing reservation in panchayats and urban local bodies would lead to more women entering the public sphere. This would lead to further empowerment of women and make panchayats more inclusive institutions, improve governance and public service delivery. At present,

Age limit for pension plans reduced


The government has approved a plan to lower the age limit to be eligible for a pension plan for the poor and extend medical facilities to workers in the beedi industry under a government health insurance scheme. In addition to this the government cut the age limit for the Indira Gandhi National Old Age Pension Scheme (IGNOAPS) to 60 years from 65 years, increasing the number of people that are eligible to benefit from the programme. This decision of the government is going to benefit an additional 7.23 million people living below the poverty line. The government has also increased the pension for 80-year-olds and above to Rs. 500 from Rs. 200. The eligibility criteria for widow pension under the Indira Gandhi National Widow Pension Scheme and disability pension under the Indira Gandhi National Disability Pension scheme has also been revised from 40-64 years to 40-59 years and from 18-64 years to 18-59 years, respectively. The government has extended medical facilities under the Rashtriya Swasthya Bima Yojana (National Health Insurance Scheme), which provides protection to BPL households from health hazards that involve hospitalization, to workers in the beedi industry and their families. SEPTEMBER 2011, XVII Year, Issue No.9
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out of the total elected representatives of panchayats numbering approximately 28.1 lakhs, 36.87 per cent are women. With the proposed constitutional amendment, the number of elected women representatives is expected to rise to more than 14 lakhs. The amendment would cover all states and union territories except Nagaland, Meghalaya, Mizoram, tribal areas of Assam, Tripura and hill areas of Manipur. Maheshwar dam The government has given its conditional approval to 400 MW Maheshwar dam in Madhya Pradesh, 14 months after the work was stopped for poor relief and rehabilitation work. The government has now allowed constructing the last five spill gates, necessary to make the dam functional, but has also directed the dam authorities that the gates should not be lowered until satisfactory completion of relief and rehabilitation (R&R) work. Twenty two gates have already been constructed of the project which got environment clearance in 1994. About Maheshwar Dam: The Maheshwar Dam is countrys first privately financed hydro-electricity project and is being constructed by Shree Maheshwar Hydel Power Corporation, which is promoted by S. Kumars. The 400 mw run-off-the river project is located on the river Narmada near Indore. The project has constantly been under the scanner of the environment ministry for failing to ensure recommended environmental conditions and other rehabilitation and resettlement facilities. Analyzing the Social and Environmental Impacts of Large Dams in India: Dams have both intended and unintended impacts, which can be positive or negative. It is unlikely to find intended negative impacts, though positive impacts can be both intended and unintended. Each of these types of impacts can be inevitable in their entirety, reducible or totally avoidable. Social Impacts: (a) Beneficial Social Impacts upstream of the dam: One major beneficial impact upstream of the dam is the added biomass, enhanced water availability, income and ecological security, and restored micro-climatic conditions for local communities from the restoration of degraded catchments. (b) Impacts at the dam/reservoir: The reservoirs created Civil Services

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by large dams often become tourist attractions. As per the data available, there are at least 50 reservoirs that have also been declared national parks or sanctuaries and, consequently, not only contribute to wildlife conservation but also serve as tourist resorts. Though the profile of fisheries might change because of the creation of a reservoir, efforts to stock commercially valuable fish in these reservoirs has often led to an increase in fisheries (catch and income) in the reservoir area. (c) Downstream impacts: Dams, by intent or otherwise, sometimes play the role of regulating floods. In areas that are water deficient, the provision of surface water and the enhancement of groundwater because of canals can significantly improve water availability, sanitation and hygiene. Adverse Social Impacts: (a) Impacts of Displacements: Among the most significant adverse social impacts of dams are those that result from forceful (or involuntary) displacement of human populations from their homes, fields, towns and regions. (b) Loss of common property resources: Rarely are attempts made to compensate for the loss of common property resources. Most displaced populations rely on free access to water, grasslands, forests, wetlands, riverbed land, fish, etc. They derive their income and subsistence from a host of natural resources, many of which may be unavailable at the rehabilitation site. (c) Loss of cultural sites: Displacement causes psychological trauma due to the severing of cultural and religious links with ancestral surrounds. (d) Loss of preferred livelihoods: The forced change of occupation resulting from displacement can be a source of significant trauma as people are forced to adopt a profession that they are not trained or suited for. (e) Impacts on health: The change in climate, water, food and sanitary conditions, etc. can affect the health of displaced persons. In the case of the Pong, Bhakra and Pandoh dams, people living in the hills of Himachal Pradesh were to be relocated to the Rajasthan desert. Similarly, people displaced by the Tehri dam have been shifted from the hills of Garhwal to the hot plains of Uttar Pradesh. Environmental impacts: Beneficial environmental impacts: (a) SEPTEMBER 2011, XVII Year, Issue No.9
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Catchment benefits: For most recent projects, the environmental clearance conditions include treatment of the catchment area. Where this treatment is adequately undertaken and results in the regeneration of natural forests and other ecosystems in the catchment area, there are significant benefits to the environment. (b) Impacts of the reservoir: The creation of a reservoir provides a habitat for wetland species, especially water birds. The reservoir can also be a source of water to animals and plants in the adjoining areas and, where such areas have become unnaturally dry, this can be a significant environmental benefit. Adverse Environmental Impacts: (a) Impacts of the dam on the catchment: The construction of a dam itself can contribute to the degradation of its catchment. For example, extraction of

pacts of mining and quarrying for construction materials: The soil, stones and sand required for the construction of dams and canals are often mined and quarried from around the dam or canal site. Such extraction can also have adverse environmental impacts, especially by aggravating dust pollution, disturbing wildlife and destroying vegetation. (c) Impacts of backwater build-up: When a free flowing river meets the relatively static reservoir, there is a build-up of back-pressure and a resultant backwater. This can destroy the upstream ecology and cause damage to property. Backwaters can also build up due to the deposition of sediments and silt upstream of the reservoir as backwater deposits. (d) Impacts on aquatic ecosystems: Construction activities, including the diversion of the river through a tunnel, have

cooking fuel by the labour force and improved access to the forests, both during and after dam construction, degrades catchment forests. The construction of roads and other infrastructure and the enhanced activities in the area also put an additional pressure on the forests. This results in greater silt flows into the reservoir, thereby reducing the life of the dam and also posing a threat to its safety and to its equipment and machinery. Degraded catchments also result in erratic water flows resulting not only in dry season shortages but also a surplus during heavy rainfall and cloudbursts, threatening the safety of the dam. The degradation of the catchments also adversely affects the biodiversity value and other ecological functions of the forests upstream. (b) Im93

major adverse impacts on the aquatic ecosystem. Vulnerable species, with either limited distribution or low tolerance, could become extinct even before the dam is completed. The blocking of a river and the formation of a lake significantly alters the ecological conditions of the river, adversely impacting species and the ecosystem. (e) Impact on terrestrial fauna and flora: The disturbance caused by construction activities, including noise and movement, building of roads, extraction of stone and soil, construction of buildings, etc. also negatively impact the fauna and flora at the dam site. As impoundment starts, the reservoir invariably submerges large tracts of forests and other ecosystems, including grasslands and wetlands. Civil Services

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Questioning internal security

Salwa Judum Questioned

By Aneesh Sarkar

he Salwa Judum, which literally means Peace march or Purification hunt in Gondi language has of late been the subject of much debate and controversy, with the Supreme Court of India in a recent judgement ruling it as unconstitutional. The roots of Salwa Judum go back to the early 1990s when the Naxalite movement was making rapid progress in the remote districts of Dantewada and Bastar in the Indian state of Chhattisgarh. The mineral rich, thinly populated area, where poverty is a way of life had provided fertile ground for the ultra- Left Naxals, who found ready support amongst the poverty- stricken and deprived Gond tribal population of the region. As the Naxals spread their tentacles and established firm grip over the populace, they turned more and more exploitative using force more than anything else to maintain their control. Development work began to be hampered and the region, which along with parts of The controversy Maharashtra, Orissa and Andhra Pradesh came to began when the be known, in Naxal terminology as the DandakaranChhattisgarh ya region, slowly began to get out of bounds of the government state and central governments. With the high- handbegan to provide edness of the Naxals on the rise and with virtually arms training to no help from the government forthcoming, the lothe SPOs and cal traders and businessmen, who bore the brunt of began to arm the Naxal onslaught started a movement known as them with firethe Jan Jagran Abhiyan in 1991 with the help of a arms purportedly local tribal leader named Mahendra Karma. The for their selfmovement was not very successful and soon totdefence. The tered to its fall with its main leaders and particigovernments pants seeking police protection to save their lives notion was that even as they featured on the hit list of the Naxals. the SPOs, being The consolidation of the Naxal organizations and locals were the formation of the CPI (Maoist) as the umbrella aware of the local organization of all ultra- Left leaning armed insurterrain and could gent groups in September 2004 led to rapid spread identify Maoist of the Naxal movement in its modern day avatar, activists who tend the Maoist movement, especially in the less develto remain mingled oped Central and Eastern hinterlands of India. As with the local instances of Maoist violence began to increase and populace and are became particularly intense in the Southern Chhatotherwise difficult tisgarh districts and the government failed to rein for the normal in such unchecked violence, public desperation prepolice and cipitated in the form of the Salwa Judum, which paramilitary originated as a public resistance movement against forces to identify. the Maoists in June 2005. It traced its origins as an uprising of the local people, many of whom had been on the receiving side of Maoist brutalities. Mahendra Karma, in a sense the forefather of the movement once again jumped into the fray and ensured that the movement got bi- partisan support. Being a Congress MLA, he managed to convince the BJP- led state government of the utility of Salwa Judum in tackling the Maoist menace. The state government soon gave official support to the movement and began recruiting its members as well as former Naxalites as Special Police Officers or SPOs. So far so good. The controversy began when the Chhattisgarh government began to provide arms training to the SPOs and began to arm them with firearms purportedly for their selfdefence. The governments notion was that the SPOs, being locals were aware of the local terrain and could identify Maoist activists who tend to remain mingled with the local populace and are otherwise difficult for the normal police and paramilitary forces to identify. SEPTEMBER 2011, XVII Year, Issue No.9
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This would make the SPOs valuable informants as well as guides for the security forces and thus make the antiMaoist operations more surgical, precise and effective causing minimal collateral damages and harassment for the local population. However, given the extreme hatred that the Maoists nurse towards police informants, it was felt that the SPOs would soon become prime targets of the Maoists and hence the need to provide them with guns to enable their self- defence was felt. The state government soon went on a recruitment spree and set up Salwa Judum camps which according to statistics were nearly 23 in number as on 2008 and were housing no less than 50,000 tribals from almost 600 villages (official figures suggested a lesser number). The term Salwa Judum for all practical purposes became synonymous with the terms SPO and Koya Commandos. The critics of the Salwa Judum may be many, with the latest being no less a Constitutional authority than the Supreme Court of India, but to understand why the Salwa Judum phenomenon ever occurred it is necessary to first understand the merits of this so- called militia. The votaries of Salwa Judum, which include the Chief Minister of Chhattisgarh, Raman Singh have put up the following arguments in its favour: 1. The Maoist movement comprises an internal rebellion which has swept large swathes of Indias hinterland and continues to spread to wider areas. The agenda of the Maoists is to capture power by the barrel of the gun. The gun culture is inherent in the Maoist ideology and their politics is non- existent without the gun. In Chhattisgarh itself, the regular Peoples Liberation Guerrilla Army (PLGA), the name given to the military wing of the CPI (Maoist), consists of no less than 7000 armed cadres, who are in possession of firearms, much of which are sophisticated such as AK-47, INSAS, SLR, Light Machine Gun (LMG), Carbine, Rocket Launchers, Grenades and even mortars. Apart from these, the Gana militia of the Maoists which consists of men and women who carry traditional weapons like bows, arrows, spears etc and sometimes even country made fireCivil Services

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arms also number about 7000 to 8000 if not slightly more. The Maoist military is organized into platoons, companies and battalions, the way in which the national army or the paramilitary are organized. The figures, which are for the state of Chhattisgarh only and does not include the rest of India very clearly paints a grim picture. It states in no uncertain terms that the Maoist rebellion is brewing quite a storm and lends credence to Prime Minister Dr. Manmohan Singhs assertion that the Maoists pose the single largest internal security threat for India. To fight the Maoists, who have declined to give up their arms and so far shunned most serious efforts for talks, the Central and different state governments have pumped in security forces and Special Forces, trained in jungle and guerrilla warfare into the inaccessible jungles of Chhattisgarh and other similarly affected states in India. However the very nature of guerrilla warfare, in which the Maoists specialize and in which they deliberately engage the security forces, makes the fight a protracted one. It is one in which the guerrillas seldom fight face to face with the security forces. They make full use of the difficult terrain and their knowledge of it and engage the forces in armed combat only when they are in an advantageous position. The near inaccessible jungles and hills act as force multiplier for the guerrillas and hamper the fighting capabilities of the security forces. The dense jungles of Bastar and Dantewada, as well as other similar jungle patches, allow visibility to the forces not beyond 10 to 20 meters in daytime, what to say at night. The jungles stretch for miles and getting reinforcement becomes impossible. Security forces have to walk for days to reach the target area of their operations and are often compelled to conduct operations spanning for days. The mental and physical hardships that they have to undergo during such operations, where food and water are limited, and where simply going and coming back alive and safe are considered achievements themselves, are tremendous. The Maoist activist is like a fish in the water, to quote a term from Mao Tse Tung himself. The waSEPTEMBER 2011, XVII Year, Issue No.9
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ter here means the local population which supports the Maoist activist either out of fear or genuine liking, and provides him with food and shelter, little realizing what he stands for. The greatest strength of a Maoist is his ability to mingle with the local population and give the forces that are on his lookout the false impression that he is a common adivasi or villager. The biggest difficulty for the forces is to identify who is a Maoist and who is not. Developing an intelligence network in the Maoist badlands where few people venture to tread in is next to impossible. Given the low levels of penetration by intelligence agencies and security forces, it The greatest strength of a Maoist is his ability to mingle with the local population and give the forces that are on his lookout the false impression that he is a common adivasi or villager. The biggest difficulty for the forces is to identify who is a Maoist and who is not. Developing an intelligence network in the Maoist badlands where few people venture to tread in is next to impossible. becomes very difficult to conduct meaningful operations with little intelligence inputs. Besides the perils involved in anti- Maoist operations are very high. The hit and run tactics employed by the Maoists allow them to always maintain the element of surprise. With the local people by their side, getting information about the movement of the security forces from time to time is not a problem for them. This in turn, gives them the frequent opportunity of springing deadly surprises upon the forces in the form of lethal ambushes and booby traps, many of which have claimed the lives of numerous security personnel. The killing of 74 CRPF personnel, including a Deputy Commandant and several Assistant Commandants, in Dantewada is perhaps the most glaring example of the ability of the Maoists to butcher the security forces at will in the hostile jungles of Chhattisgarh. The recruitment of the SPOs must be seen in the light of all these factors. Not only do they become the eyes and ears of the security forces during op95

erations, they also act as early warning systems, alerting the security forces of possible camp attacks and booby traps. They together comprise a massive human intelligence network of localites who not only help in identifying known and unknown Maoists but also guide the forces during operations by pointing out little known jungle tracks and helping them find their way through dense jungles and steep hilly slopes. Dismantling the Salwa Judum would essentially mean dismantling this entire source network and thus killing off the channels of information regarding Maoists. It is something that will hit the Indian state hard and will without doubt severely handicap the fight against the Maoists. 2. The anti- Maoist strategy which the Central government in consultation with the state governments has come up with is based on the twin pillars of 1) intensive policing to flush out the Maoists, followed by 2) rapid development of areas wrested away from the Maoists. While, generally speaking, it is commonly agreed in government circles that policing and development should take place simultaneously, such an approach is impractical mainly because the Maoists have over the past proved themselves to be the biggest impediment to development. Without clearing a region of the Maoists, development is unviable, mainly because the agents of development tend to be threatened and intimidated and sometimes even abducted and assaulted. The recent abduction of a District Collector in Orissa by the rebels is a case in point. To carry out the twin pillar policy, the Union Home Ministry came up with the strategy of capture, hold, and develop. The strategy entailed carrying out operations in a Maoist infested area with the purpose of freeing it of the rebels, then consolidating hold over that area by setting up camps and thereafter, as the forces maintain their hold, to develop the area so that it becomes permanently free of Maoists. Development of a Maoist infested area is a key ingredient of this strategy since underdevelopment is a breeding ground for Maoism. While security forces are expected to capture an area under Maoist control and the different govCivil Services

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ernment departments are expected to bring about development, it is holding an area cleared of Maoists which tends to pose problems. For this, it is important to understand the nature and tactics of guerrilla warfare, which the Maoists employ. Mao had famously remarked that when the enemy advances, the guerrilla must retreat; when the enemy retreats, the guerrilla must advance and when the enemy halts, the guerrilla must harass. This itself suggests that the capture and holding of an area is not as easily understandable as is the case in conventional warfare. When the security forces move into rebel territory, the latter may willfully move back without much resistance as part of their tactics. Such tactical retreat certainly does not mean retreat for good, as may be comprehended by the forces. It only means that the Maoists are allowing their enemies to settle down only to harass them subsequently and engage them in a protracted war of attrition with the intention of wearing them down. Harassment of the forces may be in the form of stray firing by the Maoists in the vicinity of the forces camp, orchestrating frequent gheraos of camps by the local people backed by the Gana militia, causing landmine blasts close to the camps just to create a sense of panic amongst the forces etc. Planned camp attacks resulting in deaths of the inmates and the looting of their arms and ammunition is a major plank of the Maoist guerrilla tactics. Such tactics are intended at forcing the security forced to withdraw from the area and dismantle their camp. What is even more important is the fact that when the forces move out of their camps for conducting operations in their Area of Responsibility (AOR), the Maoists shift their location to avoid detection by the forces, only to come back once the forces go back to their camps. This means that the setting up of camps does not automatically guarantee a flushing out of the Maoists. The latter rather maintain their sway over the area despite the presence of the forces. Given the fact that in the districts of Dantewada and Bastar the road network is poor and camps are situated at a minimum of nearly 15 to SEPTEMBER 2011, XVII Year, Issue No.9
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20 km from each other, capturing and holding an area becomes all the more difficult. In such a scenario, just defending the camp without going out for operations is considered a tough job. The utility of the Salwa Judum or the SPOs must be analyzed in this context. Salwa Judum recruits act as force multipliers for the security forces. When the security forces conduct operations in a particular area and return thereafter, the SPOs can actually set up a camp in that area and thus help in holding the area and preventing the Maoists from returning back and reclaiming the same. Being locals, the SPOs are more familiar with the terrain and the local people and setting up their camps in Maoist- prone area after a successful flush- out operation can actually help in reducing Maoist influence in such areas. Thus with the SPO camps available, it becomes that much easier for the security forces to retain control over the jungles even with their far flung camps in hostile terrain. The SPO camps maintain vigil and thus act as an early warning system for the forces, alerting them about possible Maoist attacks. 3. The Salwa Judum movement and its initial spontaneous nature was a clear indicator that not all within the tribal population When the security in the remotest parts of India were in favor of the forces conduct Maoists. There has been a general perception operations in a amongst sections of the Indian intellectual class particular area and that the Maoists are fighting on behalf of the poor, return thereafter, deprived tribals and against exploitative industrithe SPOs can alists and businessmen who have government actually set up a backing and who are out there to loot Indias rich camp in that area mineral wealth at the expense of the tribals. Such and thus help in thinking has gained wide credence in the cultural holding the area discourse on Maoism and simply overlooks the and preventing the exploitative and extortionist nature of the Maoist Maoists from movement itself. It also wishes away the fact that returning back and the Maoists themselves have committed numerreclaiming the ous atrocities against tribal people including mursame. Being ders, rape, arson etc. Salwa Judum originated as a locals, the SPOs genuine uprising of the tribal people against the are more familiar ways of the Maoists. In a sense it punctured the with the terrain notion that the Maoists enjoy wide support and the local amongst the tribals and was a pointer to the fact people and setting that much of the support garnered by them was up their camps in through the fear of the gun. Maoist- prone area 4. The government of Chhattisgarh has put forafter a successful ward the argument that the concept of SPOs has flush- out operaprovided employment to a large number of othertion can actually wise unemployed tribal youths. This in turn has help in reducing prevented them from joining the Maoist moveMaoist influence in ment in the lure of quick money. The argument is such areas. a contentious one but has nonetheless been backed by the Chhattisgarh government. 5. The history of insurgency and the fight against it has shown that formation of local resistance groups is indeed an effective strategy. This is because it is not possible for the security forces to be everywhere and all the time. Involving the local population in the fight against insurgency is perhaps also the key to limiting if not eliminating it. By its very definition, insurgency means an armed uprising of the populace. If sections within the same populace are engaged in fighting the insurgency, then it is exceedingly likely that the insurgency is dealt a speedy death. During insurgencies in Mizoram, Manipur, Nagaland and other parts of the North- East, the security forces did employ the strategy of arming local resistance groups and village defence groups so as to enable them to successfully resist the rebels. Chhattisgarh is not the only Maoist infested state which has recruited SPOs. The idea of SPOs in fact is an old one and finds mention even in the Indian Police Act, 1861. Thus it is not the sole creation of the Chhattisgarh government. Other states 96 Civil Services

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fighting Maoists also have their own versions of the Salwa Judum, albeit with different names. The concept of SPOs has even found credence in the Central government, with none other than the Union Home Minister, P. Chidambaram praising the role of the Salwa Judum in taking on the red guerrillas. 6. While its critics accuse it of perpetrating violence, there are others who insist that by fighting the Maoists, who are the real messiahs of violence, the Salwa Judum has actually helped in bringing about peace. Some are even willing to go to the extent of saying that the Salwa Judum has fought the Maoists in the Gandhian way. Such notions however are rather far- fetched. Whatever may be its utility and benefits in the red battle- zone, there is little denying the fact that the Salwa Judum has earned for itself quite a bad name in recent times. Part of the virulent criticism heaped upon it has to do with the successful propaganda done against it by Maoist frontal organizations and their puppet intellectuals and human rights activists who never tire to malign it while conveniently forgetting the crimes committed by the Maoists. Nonetheless, the concept of Salwa Judum and its transformation into a gun- totting militia has thrown up questions that beg answers and the answers may not be comfortable either for the government of ChhatSome of these tisgarh or for the government of India or for that questions were matter any other government within whose jurisdealt with by the diction such militias have mushroomed. Some of Supreme Court of these questions were dealt with by the Supreme India in the Court of India in the Nandini Sundar and Others Nandini Sundar vs. State of Chhattisgarh case. In its judgement, and Others vs. the apex declared that the Salwa Judum is unconState of Chhattisstitutional and illegal, much to the chagrin of the garh case. In its state government. As the court ordered the govjudgement, the ernment to dismantle its force of SPOs it made apex declared comments that nearly suggested its conviction with that the Salwa the arguments of the pro- Maoist groups. ConsidJudum is unconer the strong rhetoric of the court when it attacked stitutional and what it felt was the states amoral economic polillegal, much to icies and its culture of unrestrained selfishness the chagrin of the and greed spawned by modern neo- liberal ecostate government. nomic ideology. By making such ideology laden As the court statements, the court may have earned temporary ordered the praise from the people who proclaim themselves government to as the champions of the anti- neo-liberal movedismantle its force ment and who have somehow managed to find of SPOs it made positive correlations between the spread of neocomments that liberal ideology and the rise of Maoism, but it has nearly suggested at the same time stepped precariously close to the its conviction with thin line separating the jurisdictions of the executhe arguments of tive and the judiciary as laid down by the Constithe pro- Maoist tution. Its rhetoric loaded statements apart, the groups. apex court has raised certain vital issues of law and governance and has come up with a judgement that is likely to be considered landmark in the future. Through its decision, the court has also challenged the state governments arguments justifying the Salwa Judum and has brought out serious demerits of the same. The demerits of the Salwa Judum are enlisted herewith: 1. The Salwa Judum has been accused of perpetrating gross violation of human rights. Though the state government has insisted that the Salwa Judum consists of SPOs who act as informers to the security forces and that the arms given are only meant for self- defence, critics insist that the Salwa Judum, consisting of armed young tribals has become a type of state- backed militia which is involved in razing down villages and committing crimes on ordinary villagers. To counter the Maoist problem, the SPOs raid villages with or without the security forces and allegedly torture villagers who are seen as sympathetic towards the Maoists with the intention of forcefully weaning SEPTEMBER 2011, XVII Year, Issue No.9
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them away from the guerrillas. But in the process they cause collateral damages and also commit violations of human rights. There are some who believe that the best way to fight Maoist terror is to create an even greater terror. The logic behind this autocratic thinking is that the tribal villagers will be inclined to support those whom they fear the most. So the best way to tackle Maoists is to go a step further in terrorizing the local people and thus compelling them to support the anti- Maoist forces. Violations of human rights are inevitable if such approaches are adopted and there is justification in what human rights activists say about the SPOs. The hard reality is that there is no better short- term motivator than fear in the Maoist badlands. It is a motivator that is used by the Maoists to the full and to counter that the Salwa Judum does commit excesses at times, or so the allegations go. 2. Another scathing criticism of the Salwa Judum is that it employs children below the age of 18, who can thus be termed as child soldiers. Though the government of Chhattisgarh has denied this, numerous human rights and civil rights organizations have reported the presence of minors in the force of SPOs. A primary survey by the Forum for Fact- finding Documentation and Advocacy (FFDA) found that over 12,000 minors were used by the Salwa Judum in Dantewada. Similar findings were voiced by agencies like the Asian Center for Human Rights (ACHR) and the Coalition to Stop the Use of Child Soldiers, with the latter reporting such shocking information in Child Soldiers Global Report 2008India. The issue of child soldiers and the need to prevent involvement of children in armed conflicts is something which has found world-wide acceptance. When children are pushed into taking up arms, not only do they lose their childhood and are deprived of their right to education and also the right to play and enjoy life, but a society also sacrifices its future. Involving children in warfare only pushes future generations into strife for the scars of conflicts leave an indelible mark on the impressionable psyche of children, something from Civil Services

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which they struggle hard to come out and more often than not, fail. No matter how grave the security threat, children have to left alone and spared the involvement in things which should be dealt with by their elders. No democracy and much less a vibrant one like India can afford to engage its children in armed warfare, that too as a matter of state policy. 3. In its zeal to vigorously fight Maoists, the Chhattisgarh government has almost inadvertently created an armed militia, the likes of which are in existence in ill- governed, autocratic or civil war prone countries in Africa, Arabia or Latin America. It cannot be denied that the initial effort to create a network of informers from amongst natural opponents of Maoists has slowly culminated into the creation of a militia which more often than not is used as the frontline foot soldiers in the fight against the Maoists. In the Nandini Sundar case the Supreme Court has actually raised the issue of violation of human rights of the very people who comprise the Salwa Judum apart from those who are at their receiving end. The court noted with anguish that the state was using ill- trained young tribal boys as cannon fodders for an armed conflict. Such boys are used as shields for the more trained security forces more often than not, thus putting their lives in danger, all for a paltry sum of a few thousand rupees. The court was hardly impressed with the state governments argument that it was providing employment to the SPOs and frowned at the contention of involving tribal youths in war in return for monetary benefits observing that it cannot comprehend how involving ill-equipped, barely literate youngsters in counter- insurgency activities, wherein their lives are placed in danger, could be conceived under the rubric of livelihood. It should be pointed out that despite the state governments denial; the SPOs do perform functions of a police force and yet get a paltry sum in return. This effectively is a violation of Article 14 of the Indian Constitution which guarantees equality and equal protection of law for all citizens. The court also felt that the state showed insensitivity by putting the lives of the young SPOs in SEPTEMBER 2011, XVII Year, Issue No.9
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danger without giving them adequate training, thus violating the right to life guaranteed in Article 21 of the Constitution. 4. Though the Salwa Judum, as its name suggests, was visualized as a peace movement, the fact remains that its creation has only intensified the bloodbath in the Maoist infested areas. This is due to the series of assaults and counter- assaults between the Maoists and the Salwa Judum. There have been instances wherein Salwa Judum camps have been overrun by the Maoists. Apart from this, the intensification of the battle between the reds and the anti- reds has resulted in numerous hardships for the ordinary people, who have found themselves caught in the cross-fire. It has led to a scenario wherein very few people can afford to stay aloof of the two warring sides. Consequently, people have been forced to flee their homes and have found themselves being converted into refugees in their own land. The humanitarian plight has been highlighted by human rights organizations such as the Human Rights Watch which The humanitarian plight has been highlighted by human rights organizations such as the Human Rights Watch which reported large-scale displacement of civilians to neighboring states so as to avoid being caught in the Maoist- Salwa Judum conflict. reported large-scale displacement of civilians to neighboring states so as to avoid being caught in the Maoist- Salwa Judum conflict. While the statistics quoted by certain human rights organizations tend to be exaggerated at times, the fact remains that the displacement of civilians in large numbers is an undisputable fact. 5. The existence of the Salwa Judum and its supposed atrocities has provided staple propaganda material for the Maoists and its frontal organizations. Thus, in a queer sense, the Salwa Judum has actually helped the Maoist movement, though unwittingly. The Maoists and their sympathizers have often justified the atrocities that they have committed as a reaction to those committed by the Salwa Judum. 6. The protection of Salwa Judum 98

camps has become a security related concern for the state government given the fact that these have frequently been targeted by the Maoists. Many companies of the Shasastra Seema Bal (SSB) have been pumped into the districts of Dantewada and Bastar only for the purpose of protecting Salwa Judum camps. Thus there is now a peculiar situation wherein the operational forces in Chhattisgarh need support from the Salwa Judum which in turn needs protection from other security forces. The protection of the SPOs, needless to say, is likely to put pressure on the state exchequer. 7. The creation of the Salwa Judum has raised questions relating to the extent of legislative power that can be delegated by the legislature to the executive. Though the Indian Police Act, 1861 allows the creation of SPOs, the Chhattisgarh government rather than invoking this act actually took recourse of the Chhattisgarh Police Act, 2007 while appointing its army of SPOs. This particular act did not clearly lay down any educational qualification, type of training or the maximum number of SPOs that can be appointed at a time, leaving it to the executive to decide on these vital questions. This was a case of excessive delegation of legislative power to the executive, leading to misuse, felt the apex court in the Nandini Sundar case. The state act also did not provide any safeguards which however have been incorporated in the national act; for instance the Indian Police Act requires that the appointment of SPOs is approved by a magistrate. It can be concluded by saying that the prerogatives of the Judges who decide on questions of law and the Constitution are very different from those of the commanders and generals of the security forces who fight the Maoists on the field. Hence, it is likely that their outlooks will be different. For all practical purposes, the voices of those, who risk their lives as they comb dense, inaccessible jungles looking for those who pose the biggest internal security threat to the nation, are seldom heard in the courtroom where legal battles bearing tremendous significance for the jungle battles are fought. Civil Services

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Science and Technology


Environment and Ecology
Clean Tech Report A report commissioned by the World Wildlife Fund for Nature says that, in terms of percentage contribution to the national GDP, China ranks 2, while the US ranks 17. Denmark, expectedly, leads the table, thanks to its efficient power grid driven primarily by windmills. Chinas annual earnings from clean tech is valued at $64 billion, or 1.4 per cent of the GDP, while that of the US stands at $45 billion, or 0.3 per cent of the GDP. Denmark lands a $9.4 billion (or Euro 6.5 billion) from clean technologies such as renewable energy and energy efficiency hardware, which amounts to a staggering 3.1 per cent of the GDP. Chinese green technologies have grown by an astounding 77 per cent annually, according to a report by the World Wildlife Fund (WWF). WWF attributes this to the political decisions being made in China relating to the environment. Many coal pits have been closed; oil digging has been made more efficient and sincere effort has been made to decrease the carbon footprint, especially due to automobiles in major cities. Stringent legisCleantech, also lations also help the cause. China has been aggresreferred to as sively trying to capture as much of the clean tech clean technology, market as possible in the last few years. They are and often used pushing hard on self-reliance and leadership in sointerchangeably lar and wind energy production. Following Denwith the term mark and China, other nations in the top five cleangreentech, has tech producers, in terms of per cent of GDP are Geremerged as an many, Brazil and Lithuania. umbrella term About Clean Technologies: Cleantech, also referred encompassing the to as clean technology, and often used interchangeinvestment asset ably with the term greentech, has emerged as an class, technology, umbrella term encompassing the investment asset and business class, technology, and business sectors which insectors which clude clean energy, environmental, and sustainable include clean or green, products and services. Clean technology energy, environincludes recycling, renewable energy (wind powmental, and er, solar power, biomass, hydropower, and biofusustainable or els), information technology, green transportation, green, products electric motors, green chemistry, lighting, and and services. many other appliances that are now more energy efficient. It is a means to create electricity and fuels, with a smaller environmental footprint and minimize pollution. Clean Technology and India: Every disaster is a Change. When Wallace Broecker of Columbia University coined the term Global Warming, he might not have anticipated the birth of a booming industry where the attempt to reverse or at least curb this issue, called the clean technology would be born. This also included the growing energy crunch. The conventional energy resources are poised to many threats and security issues due to which now it is the time to not think but implement alternate energy resources. India has taken continuous R&D for balancing clean technology. Though India is a developing country it has attracted huge investments in clean technology sector and shows promise that she will be an emerging power in the clean technology sector soon. The clean tech future is vivid and the scope will be stupendous. Actually India needs more initiatives like clean technology to adapt the climate change phenomenon. It is really appreciable that India is becoming a hub for clean tech. Many industry bigwigs already announced their expansion plans to India. The central government has announced some subsidiaries to the solar industry. However we need a national level policy for clean technology. The state governments should setup a technology cell within the Industries department or Information Technology department to provide information and othSEPTEMBER 2011, XVII Year, Issue No.9
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er support on clean technologies. Undoubtedly we can say that clean technology is one of the emerging sectors in India. The overall level of awareness for doing more with resources as well as creating alternative sources of energy is high. There is a considerable push from the central government in terms of incentives, resources and subsidies to the sector which makes more capital efficient.

IT and Telecommunications
4G Phones Being the successor to the 3G and 2G, the 4g is the fourth generation of cellular wireless standards which are IP packet switched networks with increased data speeds for a faster network. Some of the features of 4G mobile phones are: 1. Higher connection speeds from an average of 100 MB per second wireless signal sharing to Wi-Fi enabled devices 2. Increased convenience and aesthetic appeal 3. Video calling and numerous other applications 4. Improved camera placement and quality 5. Better coverage areas 6. Multitasking capabilities for simultaneously running multiple applications 7. Higher battery capacity. Bendable paper phone Canadian Researchers have recently developed a prototype mobile phone made from electronic paper. The Paper phone uses a flexible display that can be bent in different ways to execute a series of actions, otherwise known as bend sensing or bend gesture input recognition. The phone is made from a 3.7-inch Bloodhound flexible electrophoretic display, created by the Arizona State University Flexible Display Centre, and a layer of five two-inch Flex point bidirectional bend sensors. It is powered by the E Ink Broadsheet AM 300 Kit, including a Gumstix processor. The researchers chose six bend gesture pairs from a total of 87 identified by participants of their study. These are similar to touch screen gestures like pinching the screen, but foCivil Services

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cus on bending or flexing the phones thin surface to perform an action. The six gestures include bending the side of the display up or down, the top corner up or down, and the bottom corner up or down. The possibilities for the technology are broad. It could be used in place of a standard smart phone, or a kind of electronic pocketbook could be made available, where different infor-

mation and bend actions pertaining to that information is available on a unique page. Japanese K Computer The Fujitsu-designed K Computer, was recently announced the winner of the biannual Top 500 supercomputer list at the International Supercomputing Conference (ISC) held in Hamburg. It is three times faster on the

Linpack high-performance computing (HPC) benchmark than last winner, the Tianhe-1A. K Computer is capable of over eight quadrillion calculations per second with an Rmax score of 8.16 petaflops. This makes it more powerful than the next five systems in the top 10 combined. Unlike previous winners, K Computer does not use graphical processing units (GPUs),

Cloud Computing
Cloud computing is a comprehensive solution that delivers IT as a service. It is an Internet-based computing solution where shared resources are provided like electricity distributed on the electrical grid. Computers in the cloud are configured to work together and the various applications use the collective computing power as if they are running on a single system. The flexibility of cloud computing is a function of the allocation of resources on demand. This facilitates the use of the systems cumulative resources, negating the need to assign specific hardware to a task. Before cloud computing, websites and server-based applications were executed on a specific system. With the advent of cloud computing, resources are used as an aggregated virtual computer. This amalgamated configuration provides an environment where applications execute independently without regard for any particular configuration. Thus Cloud computing is a paradigm for large-scale distributed computing that makes use of existing technologies such as virtualization, service-orientation, and grid computing. It offers a different way to acquire and manage IT resources on a large scale. A simple example of cloud computing is webmail. The webmail provider maintains the server space and provides access; the webmail user just plugs a web address into a browser and submits user information to access an account. Benefits of the Cloud Computing: (a) Reduced cost: Cloud computing can reduce both capital expense and operating expense costs because resources are only acquired when needed and are only paid for when used. (b) Refined usage of personnel: Using cloud computing frees valuable personnel allowing them to focus on delivering value rather than maintaining hardware and software. (c) Robust scalability: Cloud computing allows for immediate scaling, either up or down, at any time without long-term commitment. Reason for adopting Cloud Computing by Organisations Availability: Users have the ability to access their resources at any time through a standard internet connection. Collaboration: Users begin to see the cloud as a way to work simultaneously on common data and information. Elasticity: The provider transparently manages a users resource utilization based on dynamically changing needs. Lower Infrastructure Costs: The pay-per-usage model allows an organization to only pay for the resources they need with basically no investment in the physical resources available in the cloud. There are no infra-structure maintenance or upgrade costs. Mobility: Users have the ability to access data and applications from around the globe. Risk Reduction: Organizations can use the cloud to test ideas and concepts before making major investments in technology. Problems in Adoption of Cloud Computing The following table highlights the concerns related in adoption of cloud computing: Concern: It can act as a barrier to cloud computing adoption Interoperability: A universal set of standards and/or interfaces have not yet been defined, resulting in a significant risk of vendor lock-in. Latency: All access to the cloud is done via the internet, introducing latency into every communication between the user and the provider. Platform or Language Constraints: Some cloud providers support specific platforms and languages only. Regulations: There are concerns in the cloud computing community over jurisdiction, data protection, fair information practices, and international data transfermainly for organizations that manage sensitive data. Security: The main concern is data privacy: users do not have control or knowledge of where their data is being stored. Relationship of Cloud Computing and Grid Computing: A grid is a system that uses open, general-purpose protocols to federate distributed resources and to deliver better-than-best-effort qualities of service. Although the distinction with cloud computing is not clear, one differentiator is that grid computing relates exclusively to infrastructure services. A grid infrastructure provides a set of abstractions and interfaces for access to, and management of, shared resources. Conclusion: In this revolutionary new era, cloud computing can provide organizations with the means and methods needed to ensure financial stability and high quality service. Of course, there must be global cooperation if the cloud computing process is to attain optimal security and general operational standards. With the advent of cloud computing it is imperative for us all to be ready for the revolution. SEPTEMBER 2011, XVII Year, Issue No.9
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such as those made by Nvidia, nor does it use x86 processors from Intel and AMD; instead, it is based on Fujitsu-designed Sparc processors. K Computer is based at the independent Riken research lab in Japan. Riken caries out research in physics, chemistry, medical science, biology and engineering. It needs to be noted here that Japan was last home to the worlds most powerful Top 500 system in 2004, with the 36-teraflop Earth Simulator. In the new Top 500 list, Tianhe-1A of China came second and US Oak Ridge National Labs Jaguar came third. What is Linpack high-performance computing (HPC) benchmark: LINPACK is a software library for performing numerical linear algebra on digital computers. It was written in FORTRAN by Jack Dongarra, Jim Bunch, Cleve Moler, and Gilbert Stewart. LINPACK makes use of the BLAS (Basic Linear Algebra Subprograms) libraries for performing basic vector and matrix operations. The LINPACK Benchmarks are a measure of a systems floating point computing power. ICANN In one of the historic decisions, the ICANNs Board of Directors recently approved a plan to usher in one of the biggest changes ever to the Internets Domain Name System. The ICANNs Board had approved a plan to allow an increase in the number of Internet address endings - called generic toplevel domains (gTLDs) - from the current 22, which includes such familiar domains as .com, .org and .net. With their introduction, any organization, company, government, or even individual with enough resources would be able to select their own characters to use at the end of a URL. So, for example, we could see domains such as .pepsi, .gap, .google, and endless others. New gTLDs will change the way people find information on the Internet and how businesses plan and structure their online presence. Virtually every organization with an online presence could be affected in some way. With the introduction of gTLDs internet address names will be able to end with almost any word in any language, offering organizations around the world the opportunity to market their brand, products, community or cause in new and innovative ways. SEPTEMBER 2011, XVII Year, Issue No.9
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National Optical Fibre Network


The Telecom Commission has recommeneded the Scheme for creation of National Optical Fiber Network (NOFN) for providing Broadband connectivity to Panchayats. The objective of the scheme is to extend initially the existing optical fiber network which extends upto districts HQ's/Block HQ's level upto the Gram Panchayat level by utilizing Universal Service Obligation Fund (USOF) .The cost of the initial phase of the NOFN scheme is likely to be in the region of RS 20,000 crore. Similar amount of investment is likely to be made by private sector complementing the NOFN infrastructure while providing services to individual users. A High Level Committee (HLC) to steer and coordinate all activities related to the creation and implementation of NOFN was earlier constituted by DOT on 26th April 2011 under the CoChairmanship of Sam Pitroda, Adviser to PM on Public Information, Infrastructure and Innovation and Nandan Nilekani, Chairman, UIDAI. The HLC has already held 3 meetings and has initiated steps to put the implementation on a fast track. A Special Purpose Vehicle (SPV) will assume the responsibility for execution of the project after approval of the scheme by the cabinet. The SPV will be finally owned by the Government/USOF. The BSNL has been entrusted with the task of undertaking the preparatory activity for project execution and establishment of the SPV Benefits: 1. In economic terms, the benefits from the scheme are expected through additional employment, e-education, e-health, e-agriculture etc. and reduction in migration of rural population to urban areas. 2. As per a study conducted by World Bank, with every 10 per cent increase in broadband penetration, there is an increase in GDP growth by 1.4 per cent. It will also facilitate the Government to implement its various e-governance initiatives such as e-health, e-banking, e-education etc. thereby facilitating inclusive growth. 3. It will also provide a network for electronic delivery of services to citizens apart from enabling various services to citizen services. 4. The proposed NOFN will enable effective and faster implementation of various mission mode e-governance projects amounting to approx Rs 50,000 cr. initiated by Department of Information Technology as well as delivery of a whole range of electronic services. Hurdles in creating gTLDs: Creating a gTLD will not be simple or cheap. Registering one of the existing 22 TLDs can be done online with a credit card for a few dollars. A gTLD requires the owner to setup and look after the domain meaning serious investment in hardware and infrastructure to support it. Therefore gTLDs will be limited to those with the resources to implement such a system and the funds to keep it operating. In addition to these hurdles the gTLD also has to receive approval from ICANN after they have checked to see if you are capable of running it. Fact Box ICANN: The Internet Corporation for Assigned Names and Numbers (ICANN) is an internationally organized, non-profit corporation that has responsibility for Internet Protocol (IP) address space allocation, protocol identifier assignment, generic (gTLD) and country code (ccTLD) Top-Level Domain name system 101 management, and root server system management functions. It was created in 1998 to oversee a number of Internet-related tasks previously performed directly on behalf of the US government by other organizations, notably the Internet Assigned Numbers Authority (IANA). The headquarters of the ICANN is located in Marina Del Rey, California, United States. Rod Beckstrom is the President and Chief Executive Officer of ICANN and Stephen Crocker is the Chairman of ICANNs Board of Directors. Understating Domain Name System: The Domain Name System (DNS) helps users find their way around the Internet. Every computer on the Internet has a unique address called its IP address (Internet Protocol address). Because IP addresses (which are strings of numbers) are hard to remember, the DNS allows a familiar string of letters (the domain name) Civil Services

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to be used instead.

Energy Sector
Renewable energy: IPCC study Renewable energy could account for almost 80 per cent of the worlds energy supply within four decades - but only if governments pursue the policies needed to promote green power, according to a landmark report of the UNs IPCC. The Intergovernmental Panel on Climate Change, the body of the worlds leading climate scientists convened by the United Nations, said that if the full range of renewable technologies were deployed, the world could keep greenhouse gas concentrations to less than 450 parts per million, the level scientists have predicted will be the limit of safety beyond which climate change becomes catastrophic and irreversible. But generation of renewable to this extent would require an investment of about 1 per cent of global GDP annually. It is here mentioned that renewable energy is already growing fast of the 300 giga-watts of new electricity generation capacity added globally between 2008 and 2009, about 140GW came from renewable sources, such as wind and solar power. Future Perspectives for Renewable Energy in India: India faces an acute energy scarcity which hampers its industrial growth and economic progress. Setting up of new power plants is inevitably dependent on import of highly volatile fossil fuels. Thus, it is essential to tackle the energy crisis through judicious utilization of abundant the renewable energy resources, such as biomass energy, solar energy, wind energy and geothermal energy. Apart from augmenting the energy supply, renewable resources will help India in mitigating climate change. India is heavily dependent on fossil fuels for its energy needs. Most of the power generation is carried out by coal and mineral oil-based power plants which contribute heavily to greenhouse gases emission. Energy is a necessity and sustainable renewable energy is a vital link in industrialization and development of India. A transition from conventional energy systems to those based on renewable resources is thus necessary to meet the ever-increasing demand SEPTEMBER 2011, XVII Year, Issue No.9
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Green Growth
The government of India recently announced the setting up of a high-level expert group to assess the impact of economic growth on environment. The expert group has been constituted under environment economist Partha Dasgupta to provide a roadmap for Green National Accounting System (GNA) to evaluate impact of economic growth on environment by 2015. The group is set up jointly by the Planning Commission and Ministry of Environment. The panel will also include distinguished economists Nitin Desai, Vijay Kelkar and Kirit Parikh. The committee has been mandated to evaluate the environmental and ecological implications of high GDP growth on ecology and biodiversity. Elaborating Economic Growth and Environment: The model of economic growth which we follow provides a basis on which sustainable environmental improvements can and often do occur. The Kuznets Curve suggests a bell-shaped relationship between the concentration of certain pollution emissions and per-capita real GDP. As lower-income countries industrialize, intensive burning of relatively dirty fossil fuels initially fuels production and consumption and causes some of the worlds worst urban air pollution in low-income countries. As per capita incomes rise, a share of the new wealth can be used to buy cleaner fuels like natural gas and to develop more energy-efficient technologies. About Green Growth: Green Growth is a policy focus that emphasizes environmentally sustainable economic progress to foster low-carbon, socially inclusive development. Need for Green Growth: We are at the forefront of the 21st century surge in economic growth, a situation driven primarily by exports and which has led to expanded production requirements needed to fuel an ever increasing amount of trade. This has significantly compounded our environmental carrying capacity. We are now shouldering an increasingly greater share of regional and global environmental production-related burdens. Coupled with evolving production patterns, these impacts are driving changes in consumption patterns in our country and policies are needed to ensure that these developments will be environmentally sustainable. The past axiom of grow first, clean up later, cannot apply in our country that has such a limited natural resource base and a rapidly growing population directly dependent on natural resources. In light of the recent fuel, food and financial crisis, it is now imperative for us to reassess our development paths. Means to achieve Green Growth: In order to achieve Green Growth it is crucial to change development approaches from grow first, clean up later to a more responsible long-term attitude. Governments can promote this by encouraging economic growth with an emphasis on environmental and social concerns. It is imperative that we modify our economic growth model to alleviate poverty and to achieve social progress. However, increased environmental degradation, climate change and diminishing natural resources require an unconventional approach to support the export-driven economic activities. for energy and to address our environmental concerns. The available renewable energy sources in India: (a) Solar Energy- It is a clean renewable resource with zero emission, has got tremendous potential of energy which can be harnessed using a variety of devices. With recent developments, solar energy systems are easily available for industrial and domestic use with the added advantage of minimum maintenance. Solar energy could be made financial102 ly viable with government tax incentives and rebates. (b) Wind Energy: Wind power is one of the most efficient alternative energy sources. There has been good deal of development in wind turbine technology over the last decade with many new companies joining the fray. Wind turbines have become larger, efficiencies and availabilities have improved and wind farm concept has become popular. It could be combined with solar, especially for a total self-sustainability Civil Services

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Largest water mass


Two teams of astronomers has discovered the largest and farthest reservoir of water ever detected in the universe. The water, equivalent to 140 trillion times all the water in the worlds ocean, surrounds a huge, feeding black hole, called a quasar, more than 12 billion light-years away. A quasar is powered by an enormous black hole that steadily consumes a surrounding disk of gas and dust. As it eats, the quasar spews out huge amounts of energy. Both groups of astronomers studied a particular quasar called APM 08279+5255, which harbours a black hole 20 billion times more massive than the sun and produces as much energy as a thousand trillion suns. Astronomers expected water vapour to be present even in the early, distant universe, but had not detected it this far away before. Theres water vapour in the Milky Way, although the total amount is 4,000 times less than in the quasar, because most of the Milky Ways water is frozen in ice. Water vapour is an important trace gas that reveals the nature of the quasar. In this particular quasar, the water vapour is distributed around the black hole in a gaseous region spanning hundreds of light-years in size. Its presence indicates that the quasar is bathing the gas in X-rays and infrared radiation, and that the gas is unusually warm and dense by astronomical standards. The discovery was made with a spectrograph called Z-Spec operating in the millimetre wavelengths (between infrared and microwave) at the Caltech Sub-millimetre Observatory, a 10-meter telescope near the summit of Mauna Kea, on the big island of Hawaii. Z-Specs detectors are cooled to within 0.06 degrees Celsius of absolute zero in order to obtain the exquisite sensitivity required for these measurements. The head of the team that made the discoveries were Matt Bradford, a scientist at NASAs Jet Propulsion Laboratory and DariuszLis, senior research associate in physics at Caltech and deputy director of the Caltech Sub-millimetre Observatory. Significance of the Discovery: The discovery highlights the utility of the millimetre and sub-millimetre band for astronomy, which has developed rapidly in the last two to three decades. To achieve the potential of this relatively new spectral range, astronomers, are now designing CCAT, a 25meter telescope for the high Chilean Atacama desert. With CCAT astronomers will discover some of the earliest galaxies in the universe, and will be able to study their gas content via measurements of water as well as other important gas species. project. (c) Bio-mass Energy: Biomass energy can play a major role in reducing Indias reliance on fossil fuels by making use of thermo-chemical conversion technologies. In addition, the increased utilization of biomass-based fuels will be instrumental in safeguarding the environment, creating new job opportunities, sustainable development and health improvements in rural areas. Biomass energy could also aid in modernizing the agricultural economy. (d) Waste-To-Energy: Waste-to-energy plants offer two important benefits of environmentally sound waste management and disposal, as well as the generation of clean electric power. Waste-to-energy facilities produce clean, renewable energy through thermo-chemical, biochemical and physicochemical methods. Moreover, waste-to-energy plants SEPTEMBER 2011, XVII Year, Issue No.9
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are highly efficient in harnessing the untapped sources of energy from a variety of wastes. Conclusion: There is an urgent need for transition from petroleum-based energy systems to one based on renewable resources to decrease reliance on depleting reserves of fossil fuels and to mitigate climate change. In addition, renewable energy has the potential to create many employment opportunities at all levels, especially in rural areas. An emphasis on presenting the real picture of massive renewable energy potential, it would be possible to attract foreign investments to herald a Green Energy Revolution in India. 600 MW turbo generators Bharat Heavy Electricals Limited (BHEL) has successfully manufactured and tested the countrys first large ca103

pacity new series Turbo Generator of 600 MW rating. The generator shall be supplied and installed at the upcoming North Chennai Thermal Power Project of Tamil Nadu Electricity Board (TNEB). With the successful testing of the generator, a new benchmark has been set by BHEL with respect to indigenous manufacture of thermal sets with supercritical parameters. Several sets of 600 MW, 660 MW, 700 MW and 800 MW ratings are presently under various stages of manufacture at BHELs Haridwar plant. The facility for assembly and testing of this series of Generators has been designed and engineered in-house at BHELs Haridwar plant. The new facility has the capability to manufacture and test Turbo Generators of up to 1,000 MW rating and has test pits for assembly of two generators simultaneously. 25th nuclear power plant India is moving forward with nuclear power generation despite worldwide concerns about the safety of civilian nuclear power electricity generation after the March disaster in Japans Fukushima complex. India recently began construction of its 25th atomic power plant and announced to build four more indigenous 700 MW units than planned earlier. The first pour of concrete for the 700 MW indigenous Pressurized Heavy Water Reactor (PHWR), the seventh nuclear plant at the Rajasthan Atomic Power Station (RAPS), took place about 65 km from Kota. RAPS currently operate six PHWRs at the facility, five of which are producing more than 1,180 MW, Indias largest nuclear power electrical generation from a single facility. The new complex will be RAPS seventh nuclear power plant built at the Rajasthan site. The 700-megawatt PHWR was designed by NPCIL by scaling up the design of its 540-megawatt PHWRs operating at Tarapur since 2005. The new RAPS facility is expected to be completed by 2016. Indias civilian nuclear program is contentious because the country has never signed the Nuclear Non Proliferation Treaty, which guarantees signatories the option to approach providers of nuclear technology worldwide for assistance in constructing NPPs. As India isnt a signatory of the NPT, development of its civilian inCivil Services

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dustry to construct NPPS was hampered until 2008, when the Nuclear Suppliers Group, the oversight organization that controls global nuclear commerce, granted India a waiver on for the transference of sensitive potential dual use nuclear technologies, whose end by products might be used to fuel covert military nuclear programs. The RAPS construction highlights Indias determination to embrace nuclear power generation as a cost-effective solution despite the chilling worldwide effect of the March nuclear debacle at Japans Fukushima nuclear complex. Tummalapalle It is expected that Tummalapalle mine in the Cuddapah district in Andhra Pradesh could have one of the largest uranium reserves in the world. On preliminary estimation it has been indicated that it could have a reserve of 1.5 lakh tonnes of the scarce material. It would be enough to feed an 8,000 megawatt nuclear power plant until year 2047. Nevertheless, the studies have already shown that the area had a confirmed reserve of 49,000 tonnes and recent surveys indicate that this figure could go up even threefold. India has estimated reserves of about 175,000 tonnes of uranium. It is important to note that India is planning to set up some 30 reactors over as many years and get a quarter of its electricity from nuclear energy by 2050. New deposits have, however, been found in Meghalaya, Andhra Pradesh and Karnataka. The AMD has also identified about 4,000 tonnes of uranium deposits at Gogi in Gulbarga district of Karnataka, which is a very rich ore. At the Tummalapalle mine, UCIL would start a mill to process the uranium ore into yellow cake by 2012. The ore in yellow cake form is converted into fuel bundles and fed into the nuclear power reactor. The Rawatbhata nuclear power plant, home to six rectors of 220 MW capacity each, will now get two 700 MW reactors by 2016. Uranium was discovered by German chemist Martin Klaproth in 1789. It is named after the planet Uranus. It is important to refer that uranium is the world's only naturally occurring fissionable element. Under Fission, or splitting of the nucleus into smaller SEPTEMBER 2011, XVII Year, Issue No.9
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neutrons, releases a chain reaction of tremendous energy and more neutrons. In this process, a vast quantity of heat released which is used in modern nuclear reactors to generate electricity.

Solar Plane
The Solar Impulse, the first plane in the world to be powered entirely by the sun, recently completed its first international flight from Payerne, Switzerland to Brussels, Belgium. After a flight lasting 12 hours 59 minutes, using no fuel and propelled by solar power alone, the Solar Impulse HB-SIA landed safely with pilot Andr Borschberg at the controls. The objective of the mission was to demonstrate the technical abilities of the plane and what we can do with existing technology in terms of renewable energy and energy savings. Beyond the challenging goal of flying a solar airplane around the world, the Solar Impulse has a social mission to promote the maximum use of renewable energies in order to safeguard the sustainability of our planet. The plane, which requires 12,000 solar cells, embarked on its first flight in April 2010 and made history three months later by flying continuously for 26 hours. This ground-breaking overnight flight proves that it is possible to store and utilize solar energy even when the sun isnt shining. (f) Used properly, methadone is generally safe and nontoxic, with minimal side effects. ICMR clears MMT Project for India: The ICMR and Drugs Controller General (India) recently cleared the MMT project for India on a pilot basis. Methadone, a synthetic opioid used as maintenance anti-addictive, will be tried at five centres across the country. The project is being funded and technically supported by United Nations Office on Drugs and Crime (UNODC). Super-Sticky Ultra-Bad Cholesterol Scientists from the University of Warwick recently discovered why a newly found form of cholesterol seems to be ultra-bad, leading to increased risk of heart disease. The discovery could lead to new treatments to prevent heart disease particularly in people with Type 2 diabetes and the elderly. The research, funded by the British Heart Foundation (BHF), found that ultra-bad cholesterol, called MGmin-low-density lipoprotein (LDL), which is more common in people with type 2 diabetes and the elderCivil Services

Public Health and Medicine


Methadone Maintenance Treatment Addiction to heroin and other opioids poses serious problems for communities, families, and individuals. Solutions sometimes seem uncertain, difficult, and controversial. During more than 40 years since its development, methadone maintenance treatment (MMT) has helped millions of persons in recovery from opioid addiction; allowing them to improve their health, redeem their family and social lives. Beneficial effects of Methadone for Opioid addiction: Methadone was developed by German scientists in the late 1930s. It was approved by the U.S. Food and Drug Administration (FDA) in 1947 as a painkiller, and by 1950 oral methadone also was used to treat the painful symptoms of persons withdrawing from opioids, usually heroin. MMT was viewed as corrective therapy, rather than as a cure for opioid addiction, and it had no or only limited efficacy in treating dependence on other substances of abuse. Following are the benefits of the MMT: (a) An adequate maintenance dose of methadone does not make the patient feel high or drowsy, so the patient can generally carry on a normal life. Daily drug-seeking to feed a habit ceases. (b) Methadone can be taken once daily by mouth without the use of injection needles, which limits exposure to diseases like hepatitis and HIV. (c) Methadones gradual, long-lasting effects eliminate drug hunger or craving. (d) There is little change in tolerance to methadone over time, so it does not take more of the drug to achieve the same results. (e) Euphoria-blocking effects of methadone make taking illicit opioids undesirable 104

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ly, appears to be stickier than normal LDL. This makes it more likely to attach to the walls of arteries. When LDL attaches to artery walls it helps form the dangerous fatty plaques that cause coronary heart disease (CHD). The researchers made the discovery by creating human MGminLDL in the laboratory, then studying its characteristics and interactions with other important molecules in the body. They found that MGmin-LDL is created by the addition of sugar groups to normal LDL a process called glycation making LDL smaller and denser. By changing its shape, the sugar groups expose new regions on the surface of the LDL. These exposed regions are more likely to stick to artery walls, helping to build fatty plaques. As fatty plaques grow, they narrow arteries reducing blood flow and they can eventually rupture, triggering a blood clot that causes a heart attack or stroke. The discovery might also explain why metformin, a widely prescribed type 2 diabetes drug, seems to lead to reduced heart disease risk. Metformin is known to lower blood sugar levels, and this new research shows it may reduce the risk of CHD by blocking the transformation of normal LDL to the more sticky MGmin-LDL.

Space Technology
Space shuttle Endeavour The space shuttle Endeavour has glided home for its final landing and the conclusion of the next to last mission of the 30-year-old US shuttle program. STS-134 was the last mission for the youngest of NASAs space shuttle fleet. Since 1992, Endeavour flew 25 missions, spent 299 days in space, orbited Earth 4,671 times and travelled 122,883,151 miles. Mark Kelly commanded the last flight and was accompanied by Pilot Greg H. Johnson and Mission Specialists Mike Fincke, Drew Feustel, Greg Chamitoff and the European Space Agencys Roberto Vittori. In its final mission, Endeavour delivered the Alpha Magnetic Spectrometer-2 (AMS), beginning a scientific voyage of discovery to our solar system and beyond from the International Space Station. By measuring SEPTEMBER 2011, XVII Year, Issue No.9
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cosmic rays, AMS is designed to help researchers understand the origin of the universe and search for evidence of dark matter, strange matter and antimatter. In addition to this the final flight delivered the Express Logistics Carrier-3, a platform carrying spare parts that will sustain space station operations once the shuttles are retired from service. The astronauts performed four spacewalks to maintain station systems and install new components. Factual Data about Endeavour: Space Shuttle Endeavour-105 was authorized by the US Congress in 1987 as a replacement for the Space Shuttle Orbiter, Challenger. Endeavour was named after a ship chartered to traverse the South Pacific in 1768 and captained by 18th century British explorer James Cook, an experienced seaman, navigator and amateur astronomer. Endeavour first flew in May 1992 on mission STS-49. One of Endeavours primary assignments was to capture INTELSAT VI, an orbiting, but not functioning, communications satellite, and replace its rocket motor. The final flight of Endeavour, the STS-134 mission, originally thought as the final mission of the Space Shuttle program but the proposed STS-135 mission was approved, and now Atlantis will be the final Space Shuttle to fly in the month of July. Retirement of Space Shuttle and its Replacement: Its no secret that NASA needs a replacement for the aging STS

Space Transport System or more commonly, the Space Shuttle. The shuttle program has been the most costly space program in history. Despite huge investments in improvements and upgrades for safety, it has proven to be dangerous and ineffective for its intended missions namely space science and construction of the Space Station now on hold. It has had its successes the Hubble repairs in 1993, 1997 and 1999 and dozens of successful placements of important military and communications satellites. First Challenger and then Columbia accidents have placed a dark shadow on the whole program. The last launch showed the safety fixes inadequate. The shuttle still has serious problems with the ceramic tiles that form the re-entry heat shield, i.e. they come unglued and fall off and are susceptible to damage from falling debris during launch. In addition to all these technical hiccups, with the final launch of STS-134 mission by Endeavour, NASA is now in serious mood of finding the most suitable replacement for its space shuttle programme. NASA has already planned an ambitious plan to have a replacement spacecraft ready by 2013. This is two years earlier than NASAs previously stated goal of getting the next generation Orion Crew Exploration Vehicle and the Ares I and Ares V rockets ready by 2015.The Ares rocket contains features from both the current shuttle and the old Saturn rockets

E. coli Infection
E. coli stands for Escherichia coli bacteria (germs) that cause severe cramps and diarrhoea. E. coli is a leading cause of bloody diarrhoea. The symptoms are worse in children and older people, and especially in people who have another illness. E. coli infection is more common during the summer months and in northern states. Symptoms of E. coli Infection: (a) bad stomach cramps and belly pain. (b) Vomiting. (c) Diarrhoea, sometimes with blood in it. Complications related to E. coli: The most common complication is called haemolytic uremic syndrome. People with this problem get haemolytic anaemia (which is a low red blood cell count), thrombocytopenia (which is a low platelet count) and renal failure (which is kidney damage). Haemolytic uremic syndrome is more common in children. It can cause acute renal failure in children. This problem starts about 5 to 10 days after the diarrhoea starts. Recent Outbreak of E. coli: A new strain of E. coli containing gens from two distinct groups of enters aggregative E. coli (EAEC) and enter haemorrhagic E. coli (EHEC) has hit European nations. This outbreak of E. coli linked to contaminated salad vegetables had caused at least 22 deaths and hundreds of infections in Germany, Sweden and other countries. 105 Civil Services

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that carried the Apollo astronauts to the Moon. Ares I is a two-stage rocket designed to loft NASAs new capsulebased vehicle, Orion, into orbit. Its larger, cargo-only counterpart is Ares V, which will be the most powerful rocket ever built and capable of carrying five to six times more payload than the shuttle. Orion will replace the shuttle as NASAs vehicle to ferry astronauts to the International Space Station, and it will also be the vehicle the agency plans to use to return to the Moon in 2020. Atlantis Returns The 135th, and final, space-shuttle mission was completed recently with the safe return of Atlantis back to earth after making resupplies to the International Space Station and deliver an experiment intended to help develop a refuelling system for telecommunications satellites. The STS-135 crew consisted of Commander Chris Ferguson, Pilot Doug Hurley, Mission Specialists Sandra Magnus and Rex Walheim. They delivered more than 9,400 pounds of spare parts, spare equipment and other supplies in the Raffaello multi-purpose logistics module - including 2,677 pounds of food - that will sustain space station operations for the next year. The 21foot long, 15-foot diameter Raffaello brought back nearly 5,700 pounds of unneeded materials from the station. Atlantis will now become a museum piece, on display at the space centre. STS-135 was the 33rd and final flight for Atlantis, which spent 307 days in space, orbited Earth 4,848 times and travelled 125,935,769 miles. The end of the shuttle programme, which leaves America without the ability to launch people into orbit for the first time since 1962, has been the subject of much controversy between those who think manned space flight a waste of money and those who see space as the countrys manifest destiny and the final frontier of human exploration. Alternative systems for launching humans, employing singleshot rockets, are under development by several American companies. In the meantime, American astronauts bound for the space station will have to hitch a lift with the Russians. The End of the Shuttle Programme: What Next: With the space shuttle AtSEPTEMBER 2011, XVII Year, Issue No.9
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lantis completing its last mission, the 30-year space shuttle program officially comes to an end. Like the other retired shuttles, Atlantis will be shipped off to a museum, leaving NASA without any vehicles for human spaceflight. With the Shuttle Program ending, it should be considered that its the end of NASAs manned spaceflight program. But the reality is that its quite the opposite: Not only will manned spaceflight continue, but

NASA is also receiving a budget increase. The reality is that the Space Shuttle is simply being replaced by safer and more efficient means. The options being explored by NASA are as follows: (a) Russia and NASA Deal: NASA recently signed a deal with Russia for $753 million to provide NASA with 12 round trips to the International Space Station at a cost of about $62.7 million per seat.

GSAT-12
The Indian Space Research Organisation has successfully launched a Polar Satellite Launch Vehicle (PSLV-C-17), placing the GSAT-12 (it is Indias largest communication satellite) satellite into orbit. GSAT-12 is a 1,410 kilogram satellite, constructed by the Indian Space Research Organisation (ISRO), it will be operated as part of the Indian National Satellite System, or INSAT. Based upon the I1K satellite bus, GSAT-12 carries twelve transponders and is expected to operate for seven years. It is the second I1K-based satellite to fly, the first being the Kalpana-1 weather satellite. Kalpana-1 was launched in September 2002 as Metsat-1, before being renamed after astronaut Kalpana Chawla, who was killed in the Columbia accident in 2003. GSAT-12 was injected into an elliptical Transfer Orbit of 284 km perigee (closest point to Earth) and 21,000 km apogee (farthest point to Earth). Subsequently, the onboard Liquid Apogee Motor would be used to place the satellite in a circular orbit. GSAT-12, aimed at augmenting the capacity in the INSAT system for various communication services like tele-education, tele-medicine and Village Resource Centres, would be co-located with INSAT-2E and INSAT-4A satellites. GSAT-12 will replace INSAT-3B, which was the first third-generation INSAT spacecraft to be launched. INSAT-3B was launched by an Ariane 5G rocket on 21 March 2000, and has already exceeded its ten year design life. About GSAT: The GramSat (GSAT) series of satellites began in 2001, with the launch of GSAT-1. Launched on the maiden flight of the GSLV, it was placed into a lower than planned orbit, and did not have sufficient fuel on board to reach its intended geostationary orbit. GSAT-2 was successfully launched on 8 May 2003, also using a GSLV. GSAT-3, also known as EduSat, was also launched successfully aboard a GSLV, on 20 September 2004. The fourth GSAT spacecraft, GSAT-4, was launched on the first GSLV Mk.II on 15 April 2010. The rocket featured a new Indian-built cryogenic upper stage; however the launch ended in failure after this stage failed to ignite. A fifth satellite, GSAT5P, was also lost in a launch failure when the GSLV Mk.I carrying it went out of control and was destroyed by range safety on 25 December last year. About PSLV-C17: The launch of GSAT-12 was the nineteenth flight of the PSLV, with flight number C17. The launch used the PSLV-XL configuration, which features six PS0M-XL boosters with S-12 solid rocket motors in place of the six regular PS0M boosters with S-9 motors used by the standard PSLV. This was the second flight of the PSLV-XL configuration, which was previously used in the launch of Chandrayaan-1 in November 2008. It is currently the most powerful PSLV variant in service. PSLV-C17 measuring 44.5 m height, with a lift off weight of 320 tonnes has four stages of solid and liquid propulsion systems alternately. Salient feature of Mission: (a) For the first time, use of indigenously designed and developed On-Board computer (OBC) with Vikram 1601 processor in both primary and redundant chains of the vehicle. The OBC performs the functions of Navigation, Guidance and Control processing for the vehicle. (b) Use of extended solid strap-on configuration. (c) Satellite injection in elliptical transfer orbit sub-Geosynchronous Transfer Orbit (GTO). 106 Civil Services

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This signals an 8.5 per cent increase; however, statistically speaking, the Soyuz spacecraft is one of the safest spacecrafts ever created, and is safer than NASAs Space Shuttle. (b) The Atlas V and the Delta IV: The Atlas V and the Delta IV are currently the two most probably alternatives that NASA may use to carry astronauts into space. In fact, both the Atlas and the Delta rocket families were being considered as replacements before NASA took on the Constellation Program. The Atlas V and the Delta IV could be human-rated (i.e. able to support manned spaceflight) with certain modifications. Additionally, the Atlas family already has a history of human spaceflight with the Atlas LV-3Bthe same vehicle which was used to send astronauts to low Earth orbit for Project Mercury.

(c) Falcon 9 and Falcon Heavy: The Falcon Heavy, created by SpaceX, is apparently the most powerful rocket in the world, with a lift capacity of over 117,000 poundstwice the payload of the next closest vehicle. The Falcon Heavy provides a number of benefits including huge cost savings. NASA has awarded a contract of $75 million to SpaceX for the supply and use of its rockets in future. (d) Other Alternatives: There are dozens of other private space companies that are trying to develop launch vehicles for both unmanned and manned flight. Some of these companies are already in the testing phases of their space vehicles. (I) Blue Origin, founded by Jeff Bezos, the founder of Amazon.com is trying to create a commercial suborbital tourist service. (II) Space Adventures, the only private

company to have actually sent private citizens to space on orbital missions (7 times), now plans to send man to the moon. (III) XCOR Aerospace, a spaceflight company utilizing the space plane design builds rocket engines and plans to send man to space on suborbital missions.

Defence sector
IAF MMRCA deal The Defence Ministry had asked Euro fighter and French Dassault Aviation to extend validity of their commercial bids for the multi-billion dollar contract for 126 combat aircraft. Eurofighter is built by a consortium of four countries-UK, Italy, Spain and Germany - whereas the Rafale is a French aircraft developed by Dassault Aviation. Along with these two fighters, four other aircraft-the American F-16 and F/A-18, Russian MiG 35 and Swedish Saab Gripen- vied with each other in the five-year long tender for the much awaited deal. After the finalization of Eurofighter and Dassault the remaining four companies will now not be allowed to extend the validity of their offers and their bids stands expired. Indo-US relations may feel the heat of MMRCA deal: As India rejects U.S. bids from Boeing and Lockheed Martin for the multi-billion dollar order of Fighter Jets; it has now Rafale, Eurofighter to fight it out over IAF MMRCA order. Indias decision to exclude two American companies, Boeing and Lockheed Martin , from its estimated $ 11 billion 126 fighter jet deal is seen in some quarters as strategically shortsighted that can cause a setback to Indo-US ties. If India had decided upon American made jets, the choice would have furthered US-India military ties and manufacturing collaborations and would have taken the bilateral trade between the two to a much higher platform. But had the deal gone further, there would have always been uncertainty about the American supply as USA is not a trustworthy; it has been known to stop supply of parts if the buyer does not adhere to American terms and conditions. Going by the strategically important relation between India and US, we can emphatically conclude that our relation go much beyond few dollars of military Civil Services

Remote Sensing Data Policy 2011


The government has announced a forward looking and new data sharing policy for India's Remote Sensing satellites. The new policy effectively breaks the monopoly that Indian Space Research Organisation (ISRO) had on the remote sensing sector. The policy makes it clear that now agencies other than ISRO can also be 'nodal agencies' for remote sensing. It is clear that the immediate beneficiary will be the military, but it also leaves a door open for private agencies to own remote sensing satellites soon, if they desired. The new Remote Sensing Data Policy 2011 (RSDP 2011) has replaced the 2001 policy which allowed all data of resolutions up to 5.8 metres to be distributed on non-discriminatory and "as requested" basis. The RSDP 2011, apart from opening up the remote sensing sector, will remove certain restrictions to facilitate more users to access high resolution data for developmental activities. The RSDP however with a view to protect national security interests states that all data of better than 1 meter resolution shall be screened and cleared by the appropriate agency prior to distribution. The policy adds that government users namely, ministries, departments, public sector, autonomous bodies, government research and development institutions, government educational, academic institutions, can obtain the data without any further clearance. But private sector agencies which support developmental activities will need the recommendation at least by one government agency. According to the RSDP 2011, the National Remote Sensing Centre (NRSC) will be vested with the authority to acquire and disseminate all satellite remote sensing data in India both from Indian and foreign satellites for development purposes. Further, the government reserves the right to impose control over imaging tasks and distribution of data from Indian remote sensing satellite. The RSDP-2011 comes into effect immediately, and may be reviewed from time-to-time-by the government. SEPTEMBER 2011, XVII Year, Issue No.9
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and aeronautical hardware. Hence, the Indian decision should not be viewed as an offence by the American side. Rational behind choosing Eurofighter and French Dassault: We need to keep in consideration that the decision of the defence ministry was largely determined by technical consideration. The Rafale and Typhoon were shortlisted only after putting them through an intense schedule of technical evaluations lasting over several months. The factors that appear to have favoured them are clearly the offer of an equal partnership between the vendor and the buyer, perceptible technology transfer, existing industrial linkages and their superior performance. Further, the infrastructural and logistical support for maintenance and spares of these aircraft would be much easier to acquire. Project 'SANGAM' A software project 'SANGAM' for defence pensioners has been launched. The project 'SANGAM' will provide useful Management Information System (MIS) to the financial planners in the Ministry of Defence. Project 'SANGAM' is a software which will facilitate issuance of corrigendum pension payment orders. This will address the demand from the ex-servicemen for issue of individual corrigendum pension payment order consequent to implementation of recommendations of Sixth Central Pay Commission (6th CPC). This software project is one step forward from the project 'SUVIGYA' which was launched in October last year on the occasion of Defence Account Department Day and is very popular among defence pensioners. There are about 18 lakh defence pensioners who will be benefitted with the launch of project 'SANGAM' in the long run. It will also help in grievance redressal of pensioners with regard to the correctness of payment of pension. Rani Rashmoni Hindusthan Shipyard Ltd (HSL) has launched a patrol vessel, Rani Rashmoni, for the Indian Coast Guard, the fifth and the last in the series. HSL had so far launched 118 vessels from its slipways, including Rani Rashmoni, and it had built 164 vessels of various types including 11 well-head platforms. It had achieved turnover of Rs 662 crore and profit after tax of Rs 56 crore. SEPTEMBER 2011, XVII Year, Issue No.9
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C-17 Globemaster III The Indian government has cleared the country's largest defence deal with the US so far. Long expected, the Cabinet Committee on Security approved a $4.1-billion deal for 10 Boeing C-17 Globemaster-III heavy transport aircraft. The CCS meeting chaired by Prime Minister cleared the proposal for purchase of the planes from the US through the Foreign Military Sales (FMS) route. The deal is expected to hold options for six more aircraft. The

deal includes $1.12-billion in offsets, which reportedly includes a high-altitude engine test facility and trisonic wind tunnel facility for India's Defence Research and Development Organisation. Under the deal, the US defence major Boeing, the manufacturer of the aircraft, will have to invest 30 per cent of the contract amount for setting up defence facilities in India. As per the defence procurement procedure in India, offsets clause entails that a vendor winning a defence deal worth over

Prahar Missile
India has successfully conducted the first test-fire of its indigenously developed supersonic short-range with 150 km, quick reaction, tactical surface-tosurface missile 'Prahar meaning "to strike" ' from the Integrated Test Range off Orissa coast. It is a single stage missile and is fuelled by solid propellants and It is a 7.3-m long missile with a 420 mm diameter. It weighs 1280 kgs and goes to a height of 35 kms . The uniqueness of the missile system is that in one salvo, six missiles can be fired with multiple targets. It fills the vital gap between multi barrel rockets and medium range ballistic missiles. It is hoped that it will be helpful in filling gaps between Pinaka multi-barrel rockets with 40 km range and Prithvi ballistic missiles with ranges between 250-350 kms. and it can be compared to the Army Tactical Missile System (ATACMS) of the United States. The missile was developed by the DRDO scientists with the support of Missile System and Quality Assurance Agency (MSQAA). It's development involves several private players such as Tata and Larsen & Toubro (L&T). This missile is a part of Indian Army's 'Cold Start' doctrine, which envisions a rapid thrust by armored regiments into Pakistan in the event of a provocation. Advantages: 1. The missile is equipped with state-of-the art high accuracy navigation, guidance and electro mechanical actuation systems. The missile has a quick reaction time, that is, it can be launched within a few minutes. Equipped with state of the art high accuracy navigation, guidance and electro mechanical actuation systems with latest onboard computer, it achieved terminal accuracy of less than 10 meters. 2. The major advantage of the missile is that it can carry a payload of 200 kgs and it can fire six miles at multiple targets in all directions. The missile is developed by the DRDO and it will help our army get a cost effective, all weather and all terrain high accurate battle field support system. 3. It can carry different types of conventional warheads. Six Prahaar missiles can be launched in salvo mode in different directions. It will be able to carry up to 400 AT/AP bomblets, scatterable mines, antirunway munitions and similar loads, making it effective for a wide number of targets. 108 Civil Services

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Rs. 300 crore has to reinvest at least 30 per cent of the deal amount in Indian defence, homeland security or civilian aerospace sectors. Boeing C-17 to give India unique capability: The $ 4.1 billion Boeing deal to buy 10 C-17 transport aircraft is indicative of growing Indo-US defence and humanitarian ties and would give India a unique airlift capability for humanitarian operations. The capabil-

ities of the Boeing C-17 are pretty unique and it's a significant step forward for India's military organisation. Reasons for Choosing C 17 Globemaster III: India has shortlisted the Boeing C 17 Globemaster III as its new Very Heavy Lift Transport Aircraft (VHTAC) after a thorough study of its capability to take off and land on short runways with heavy loads, longrange, and ease of operation. The C-17 will

Prithvi II
India has achieved yet another success in missile technology as it successfully test-fired the Prithvi-II nuclear capable missile, which hit the target with very high accuracy of around 10 meters. The missile was flight tested from the Integrated Test Range at Chandipur in Balasore district of Orissa. The indigenously developed sophisticated missile has a capability to hit a target at a distance of 350 kms carrying both conventional as well as nuclear warheads up to 500 kg. The test firing of the surface-to-surface missile, which has already been inducted into Indian armed forces, was a routine trial conducted by the personnel of strategic force command (SFC). The sleek missile once again proved its accuracy when the user tried it in a salvo mode on March 27 and June 18, 2010 from ITR, Chandipur. It was the fourth successful Prithvi-II flight within a period of eight months. With a striking range of 250 to 350 km, Prithvi-II missile is capable of carrying a pay-load of 500-1000 kg warhead. It is here underscored that Prithvi is the first ballistic missile developed under the countrys prestigious Integrated Guided Missile Development Programme (IGMDP), it is propelled by liquid propulsion twin engine. With a length of nine meter and one meter diameter, Prithvi-II uses an advanced inertial navigation system with manoeuvrings trajectory. About Prithvi Missile System: The Prithvi was Indias first indigenously developed ballistic missile produced by the Integrated Guided Missile Development Program (IGMDP). It is a road-mobile, short range ballistic missile (SRBM) powered by a single-stage, two engines, and liquid-fuel. Development of the Prithvi began in 1983, and it was first tested fired on February 25, 1988. The three versions of the Prithvi have been tested twenty times since. The Prithvi is not a particularly sophisticated missile, incorporating propulsion technology derived from the Soviet SA-2 surface-to-air missile. The Prithvi is Indias only deployed nuclear capable missile. Two versions are now in service and a third is under development. (a) Prithvi-I has a 150 km range and a 1,000 kg payload. It has been in army service since 1994. (b) Prithvi-II has a 250 km range and a 500-750 kg payload. It is currently in Air Force service. It was first test-fired on January 27, 1996. (c) Prithvi-III, which has a 350 km range and a 1,000 kg payload, is currently under development. It is a longer-range, naval version of the Prithvi and is also referred to as the Dhanush. Prithvi-III was first successfully tested September 21, 2001. SEPTEMBER 2011, XVII Year, Issue No.9
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be the second American airlifter in the IAF transport fleet, which was inducted the C-130 J Super Hercules. The four-engine C-17 aircraft can lift two T-90 tanks and artillery guns and are used for rapid strategic airlift of troops and cargo to operating bases throughout the world. It can also perform tactical airlift, medical evacuation and airdrop missions. The aircraft has the capacity to carry over 130 fullyequipped combat ready troops. The C 17 is the mainstay of the US forces for worldwide deployment and can be refuelled mid-air. It is in fact the lifeline of US and NATO troop's deployment in Afghanistan and Iraq. Hence the IAF found it perfectly suitable to be inducted into its arsenal.

Explosives
Agent Orange Agent Orange was the code name for an herbicide that was used during the Vietnam conflict, between 1962 and 1971. The name Agent Orange was a military code name that described the orange-striped 55-gallon drums that the herbicide was shipped in. The purpose of Agent Orange was to deny enemy cover and concealment in dense terrain by defoliating trees and shrubbery where the enemy could hide. In addition to being a highly effective herbicide, Agent Orange has turned out to have a number of alarming health effects which have made it into a very controversial subject. Major manufacturers of Agent Orange, such as Dow Chemical and Monsanto, have contended with lawsuits and considerable public outrage as a result of their roles in the production of this chemical. Problems related with Agent Orange: The Agent Orange used in Vietnam was later found to be extremely contaminated with a dioxin. The dioxin found in Agent Orange is thought to be harmful to humans, and it has been determined that it may pose health problems. Although, there has been a great deal of debate over the risks of dioxin exposure, many believe that it is dangerous to humans. Understanding Dioxin: Dioxin is a byproduct of the manufacture, moulding, or burning of organic chemicals and plastics that contain chlorine. It is the nastiest, most toxic man-made organic chemical. Dioxin provokes canCivil Services

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cers, foetal malformations, and skin diseases. It also affects the immune system, the reproductive system and the nervous system. Ammonium Nitrate Ammonium nitrate, the nitrate of ammonia (NH4NO3), is a white crystalline solid at room temperature and standard pressure. It is commonly used in agriculture as a high-nitrogen fertilizer, and it has also been used as an oxidizing agent in explosives, includ-

ment agencies track the use and transit of this chemical that is routinely used in terror attacks in India. The government has also agreed to include ammonium nitrate in the list of explosives covered by the Explosives Act 1884. Usages of Ammonium Nitrate: There are two basic uses for ammonium nitrate. (a) First, its a good fertilizer. Farmers like it because its really easy to spread, its stable and it gives crops nitrogen. (b) The other use is as a component in the worlds cheapest mining explosive. Ammonium nitrate is about five sixths as powerful as TNT and has a slightly greater density as such is quite popular as an industrial explosive.

sized robots that can directly monitor nuclear reactors and pinpoint corrosion. These robots are underwater patrollers, equipped with cameras and it can withstand a reactors extreme radioactive environment-transmitting images in teal time from within. Currently, plant inspectors use indirect methods to monitor buried piping, ultrasound for instance, to screen lengths of pipe for cracks, or dig them up a costly and time consuming operation. Harry Asada and his group presented details of their latest prototype at the 2011 IEEE International Conference on Robotics and Automation.

Technology
Alachlor Alachlor is an odourless, white solid. The major use of alachlor is as an herbicide for control of annual grasses and broadleaf weeds in crops, primarily on corn, sorghum and soybeans. Alachlor is the second most widely used herbicide in the United States. What are alachlors health effects: People who drink water containing alachlor well in excess of the maxi-

Robotics and AI
ing improvised explosive devices. It is the main component of ANFO, a very popular explosive. It is used in instant cold packs, as hydrating the salt is an endothermic process. Ammonium nitrate is so popular with terrorists: Ammonium nitrate, the substance more commonly attached to agriculture has now become an object of terror. It is now confirmed that ammonium nitrate, a widely available fertilizer, was used in the serial blasts in Bangalore and Ahmedabad and more recently in Mumbai. Ammonium nitrate is converted into a powerful explosive when it is mixed with fuel as was done in the serial blasts in Mumbai recently. Ammonium nitrate produces gas in quick time. As the gas expands it causes an explosion. Ammonium nitrate acts as an accelerant which in turn speeds up the rate at which the fuel burns, producing a huge explosion. Secondly ammonium nitrate is easily available in the market. Transportation of ammonium nitrate doesnt raise suspicion unlike RDX as the chemical is not a banned substance. Need to regulate the uses of ammonium nitrate: The increased use of ammonium nitrate as an explosive has raised the question of regulating the availability of ammonium nitrate in the country. The government of India needs to classify ammonium nitrate as an explosive to help law enforceSEPTEMBER 2011, XVII Year, Issue No.9
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Robotics in nuclear reactors As workers continue to grapple with the damaged Fukushima Daiichi nuclear power plant in Japan, the crisis has shown a spotlight on nuclear reactors around the world. Recently Harry Asada, professor of Mechanical Engineering AT Massachusetts Institute of Technology demonstrated egg

Spintronics
Spintronics is new emerging field of basic and applied research in physics and engineering where neglected magnetic degree of freedom of an electronits spinis envisaged to be exploited for classical an quantum information processing. In other words it a form of electronics which uses the magnetic state (spin) of electrons to encode and process data, rather than using electric charge. Technically, spin is a quantum property, closely related to but not exactly the same thing as magnetism. Spintronics is therefore sometimes regarded as exploiting quantum effects. Spintronics is also known as magneto electronics, and it has the potential to become the ideal memory media for computing. The spintronic memory or MRAM (Magneto resistive Random Access Memory) has the potential to achieve the speed of SRAM (Static RAM), the density of DRAM (Dynamic RAM), and the non-volatility of flash memory. Non-volatility means that the data is still encoded when the power is shut off. The first widely acknowledged breakthrough in spintronics was the exploitation of giant magneto resistance, or GMR, a technology now employed in the read heads of most hard drives. GMR and other spintronics can be used to detect extremely small magnetic fields by using a nonmagnetic material. GMR can be 100 times stronger than ordinary magneto resistance. 110 Civil Services

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mum contaminant level (MCL) for many years could have problems with their eyes, liver, kidneys, or spleen, or experience anaemia, and may have increased risk of getting cancer. This health effects language is not intended to catalogue all possible health effects for alachlor. Rather, it is intended to inform consumers of some of the possible health effects associated with alachlor in drinking water when the rule was finalized. Major source of alachlor release to the environment and its impact: The major source of environmental release of alachlor is through its manufacture and use as an herbicide. If released to soil, alachlor can be broken down by bacteria and sunlight, usually within two months. However, alachor does not bind to most soils very well and may either evaporate or leach into ground water. Sunlight and bacterial action are also important for degrading alachlor in surface water, but evaporation generally does not occur. Once

tration of alachlor in aquatic organisms is not important. Any alachlor taken up by plants or animals is quickly eliminated. Carbon Fibres Carbon fibres are a new breed of highstrength materials. Carbon fibres have been described as a fibre containing at least 90 per cent carbon obtained by the controlled pyrolysis of appropriate fibres. The existence of carbon fibre came into being in 1879 when Edison took out a patent for the manufacture of carbon filaments suitable for use in electric lamps. However, it was in the early 1960s when successful commercial production was started, as the requirements of the aerospace industry - especially for military aircraft - for better and lightweight materials became of paramount importance. In recent decades, carbon fibres have found wide application in commercial and civilian aircraft, recreational, industrial, and transportation markets. Carbon fibres are used in composites

with a lightweight matrix. Carbon fibre composites are ideally suited to applications where strength, stiffness, lower weight, and outstanding fatigue characteristics are critical require-

Graphene
IBM researchers has made the first graphene circuit in which all of the circuit elements are integrated on a compact single chip. The new circuit is another important step forward for graphene-based electronics and potential applications include wireless communications and amplifiers. The graphene-based circuit that the team built is a broadband radio-frequency transmitter, found in radios. Made as a proof-of-concept that graphene circuits can work, the transmitter can handle frequencies up to 10GHz, though the researchers say the technology has much higher potential. For the transistors themselves, graphene designs have been shown to go as high as 300GHz. Further, it has been revealed that electrons - subatomic particles that result in electricity - travel many times faster than in silicon, the basis of all modern computer chips. As a result of this, it may be possible to create a new generation of super-fast mobile phones and computers based on graphene. Why its difficult to make a Graphen based circuit: Graphene is inherently difficult to work with, as its a highly conductive lattice of carbon molecules thats just a single atom thick. But putting it in a circuit introduces more problems. First, many of the circuit components in the transmitter are made from metal, which doesnt adhere to graphene very well. On top of that, the material can be damaged easily damaged by standard semiconductor etching. Significance of the research: The recent work done by IBM researchers assumes significance because they addressed the fragility problem by protecting the graphene with a polymer but also coating it with a material that was sensitive to electron lithography. That way, they could protect the graphene and still remove it in specific places. SEPTEMBER 2011, XVII Year, Issue No.9
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ments. They also can be used in the occasion where high temperature, chemical inertness and high damping are important. The following table describes the characteristics and applications of Carbon Fibres: Characteristics: Physical strength, specific toughness, light weight. Applications: Aerospace, road and marine transport, sporting goods Characteristics: High dimensional stability, low coefficient of thermal expansion, and low abrasion Applications: Missiles, aircraft brakes, aerospace antenna and support structure, large telescopes, optical benches, waveguides for stable high-frequency (GHz) precision measurement frames Characteristics: Good vibration damping, strength, and toughness Applications: Audio equipment, loudspeakers for Hi-fi equipment, pickup arms, robot arms Characteristics: Electrical conductivity Applications: Automobile hoods, novel tooling, casings and bases for electronic equipment, EMI and RF shielding, brushes Characteristics: Biological inertness and x-ray permeability Applications: Medical applications in prostheses, surgery and x-ray equipment, implants, tendon/ligament repair Characteristics: Chemical inertness, high corrosion resistance Applications: Chemical industry; nuclear field; valves, seals, and pump components in process plants Characteristics: Electromagnetic properties Applications: Large generator retaining rings, radiological equipment. Civil Services

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India and Pakistan relations

Post Osama equations


The Home/Interior Secretary meeting between India and Pakistan on 28th and 29th March 2011 provided much needed oxygen to bilateral relations between the two neighbors, which had all but become the most serious casualty of the 26/11 Mumbai terrorist attacks in which India had found clear fingerprints of members of the Pakistani military and intelligence community. The need for talks were realized albeit after some prodding from the USA, but this time both countries realized the folly of making big announcements which seldom live up to expectations. So the new and arguably more effective approach was to sit on the talking table and getting themselves to talk to one another even if

that meant stating already stated positions. The idea, this time has been to concentrate on confidence- building measures and trust boosting initiatives which may create a climate wherein discussions on more sensitive and perhaps core issues may take place. Politicians, statesmen, bureaucrats and analysts of both countries are fully aware that disputes between India and Pakistan, most of which are historic in nature, are going to take a long, long time to be resolved. Hence, the more enlightened ones among them understand that while such disputes will linger on, there is no reason why these should hold hostage the yearnings of the common Indians and Pakistanis who want to meet each other, visit old native places long lost to the Partition and rekindle the friendship which once existed between them but which was rudely smothered by the Two Nation Theory. The meeting between the Home Secretary of India and the Interior Secretary of Pakistan was the first resolute step towards resumption of talks. That was soon followed up by a number of Secretary level talks on a variety of issues which have been plaguing Indo- Pakistan relations, such as the Wular barrage project and the Sir Creek issue. Meetings between working groups looking to ease up procedural bottlenecks with respect to people- to- people contacts as well as ways and means to improve commerce have also taken place within a short span of time. Apparently, the focus has been on those issues which are comparatively minor in importance and where some sort of flexibility can be expected. Success in reaching an understanding in these matters can help to bring SEPTEMBER 2011, XVII Year, Issue No.9
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back that much elusive trust, without which no two countries can ever live in peace. While the shadow of terrorism and Kashmir continue to loom large over relations, the attempt has been to keep those two major issues aside for a while and try and negotiate on those matters where sentiments run less high and where stated positions are not as rigid as a rock. And yet, the T and the K word continue to haunt relations time to time. While on the one hand, the sporadic war of words continues between the two countries, on the other hand they have learnt to engage themselves though often at subliminal levels of public perceptions. The March talks was soon followed by a meeting of the India Pakistan Judicial Committee on Prisoners, which in fact was the fourth such meeting to be held between the countries. The issue of inadvertent boundary crossers had been discussed when the Home/ Interior Secretaries had met and the visit of the Committee to the jails of Karachi, Rawalpindi and Lahore was a follow- up to that. As had been pointed out earlier, fishermen of both countries have often found themselves arrested when they mistakenly crossed the border. The release of such fishermen whose credentials are genuine on humanitarian grounds was discussed by the Home/ Interior Secretaries. So during the visit of the committee, the Pakistani side showed a list of Indian fishermen and civilians languishing in Pakistani jails. While consular access was provided on the spot to some, the possibility of providing the same to others by the second week of May 2011 was explored. Pakistan has recently released 89 Indian fishermen, while on the other hand India has released 1 Pakistani fisherman and 44 civilians. Not only were these steps appreciated by the committee but the suggestion in the March talks to task the Coast Guard of India and the Pakistan Maritime Security Agency with the establishment of a suitable mechanism to prevent inadvertent boundary crossovers was also praised. The committee further recommended the facilitation of the verification of nationality of the prisoners and suggested that those persons whose travel documents have been furnished and who have Civil Services

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served their terms be repatriated back to their nations without further delay. In saying this, the committee has simply echoed the words said by the Home/ Interior Secretaries a month back. In particular, the committee urged more humane treatment of women and juvenile prisoners, terminally ill prisoners or those suffering from serious illness, physical disability or mental disability apart from the fishermen. Prisoners trapped in a hostile country tend to be treated as enemies deserving no legal aid. In light of this the committee recommended that such prisoners be given legal aid at every stage of their case by the respective governments. The next visit of the committee will likely be to India where it will possibly visit Indian prisons and see conditions therein. Trade and commerce have often helped countries with political differences overlook if not overcome their differences. India and Pakistan have tried to follow the same path without much success. However trade and commerce was given emphasis when the Commerce Secretaries of the two countries met in Islamabad on 27th and 28th April for the 5th round of talks on Commercial and Economic cooperation. It was agreed in principle that there was a lot of untapped trade potential between the two countries and efforts to tap such potential would not only benefit both countries economically and help in their development but would also help in creating an environment of mutual trust which in turn can facilitate talks on other more knotty problems. A number of decisions were taken in the meeting, which are as follows: 1. It was felt that in order to create an environment of trust wherein misunderstandings are removed; the governments of the two countries must support business communities so as to promote bilateral trade. Further efforts are needed for making the bilateral trading environment more conducive to business. Given that information gaps continue to exist with respect to economic opportunities and trade environment, it is necessary for the governments to take steps to plug such gaps through more outreach activities. 2. It was decided that the promotion SEPTEMBER 2011, XVII Year, Issue No.9
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of trade requires the minimization of trade and non- trade barriers (NTB). In order to address and resolve clearly- identified sector- specific barriers to trade, the two sides agreed to set up a Working Group, which would comprise of technical experts and regulatory body representatives dealing with identified sector wise trade barriers. It was further agreed that the first meeting of the Working Group will be within September 2011. 3. Physical infrastructure being a major stimulant for trade, both sides appreciated the significant progress made in developing physical infrastructure along the Wagah- Attari land route. Further development of the route, such as the opening of a second gate and new dedicated roads for passenger and freight traffic would require greater cooperation. To facilitate such cooperation between the two sides, it was decided that the Joint Technical Group for the promotion of trade and travel would meet in June 2011 and every month thereafter till October 2011 by which time the Indian side expects to make its new Integrated Check Post fully functional. 4. The ways explored to increase trade along the Wagah- Attari border were a) increasing trade hours taking benefit of the new infrastructure made functional, b) expediting the clearance of cargo and c) facilitating the movement of large vehicles and containerized cargo. 5. The two sides agreed that Pakistan would do away with its barriers to trade by land as soon as the infrastructure to facilitate mutual trade is put in place. October 2011 has been fixed as the deadline for this whole process. 6. An informal Customs Liaison arrangement is already operational in the Wagah- Attari route. In light of the effectiveness of such arrangement, it was decided to formalize it. Accordingly a Customs Liaison Border Committee has been formed, which will meet at least once every two months to deal with any operational issue that may arise at the ground level. 7. It was decided that a Sub Group on Customs Cooperation would meet in New Delhi before 15th June 2011 to harmonize customs procedures, facilitate trade consignments and exchange trade related data and information. 113

Nodal officers who will look after customs cooperation related issues would also be fixed up by 15th May 2011. 8. Trade in electricity between the countries has been identified as a new area of bilateral trade. To initiate such trade which will be beneficial to both countries, and in particular to India, suffers as it does from electricity deficits which in turn is a hindrance to its growth, the Secretaries agreed to name a group of experts from either side who would examine the feasibility, scope and modalities of such trade. The group may be given the liberty to look into suitable sites and routes for

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transmission lines, funding mechanisms and other related issues. The composition of the group will be finalized soon and it will start its meetings from October 2011. 9. Petroleum products are a much prized as well as highly priced commodity in the modern world of energy thirsty nations, India in particular being one such nation and Pakistan expected to follow suit soon. Trade in petroleum products thus invariably becomes valuable for both countries. This realization prompted the two sides to set up a group of experts who would explore ways to expand trade in all types of petroleum products as well as discuss trade arrangements, building of cross- border pipelines something which can be extended to third parties also, and use of rail and road routes, including the MunabaoKhokrapar route. The first meeting of the group, it was decided, would be before September 2011. 10. The two sides identified trade in Bt Cotton seeds as a new area of bilateral trade. Such trade, it was appreciated would not only help in increasing the yield of Pakistani cotton farmers thereby raising their incomes, but would also help the countrys textile industry. It was also agreed to further the trade by establishing business to business contacts and smoothening government regulatory clearances. 11. Cooperation in information technology through better engagement of the private sector IT companies was agreed upon. 12. While India had granted Most Favored Nation (MFN) to Pakistan the latter has not extended the same status to the former. In principle it was acknowledged that bilateral trade relations will witness an expansion if Pakistan were to grant MFN status to India. The two countries also agreed to remove NTBs and other restrictive practices which hamper trade. 13. Undoubtedly much of the barriers to Indo- Pakistan trade have been created by Pakistan. Recognizing this fact, the Pakistanis informed the Indian side that they would take necessary steps immediately to ensure that a non- discriminatory trade regime is operationalized at the earliest. Consultations necessary for putting in place such a regime are already unSEPTEMBER 2011, XVII Year, Issue No.9
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derway and necessary information are being gathered from all possible stakeholders such as trade bodies and business chambers so as to replace the Negative list with a Positive list. The whole process would be completed by October 2011. 14. Taking another bold step forward, the countries decided to explore the idea of entering into a mutually agreed preferential trade arrangement wherein tariff concessions would be extended to products which are of mutual export interest. 15. Curtailing procedural bottlenecks with respect to granting of business visas is another important step in expanding bilateral trade. In the meeting between the Home/ Interior Secretaries of India and Pakistan in March 2011 it was decided to put in place a Joint Working Group to look into the aspect of simplifying the visa regime. The JWG would act as an information gathering machinery geared at making the availability of visas easier. In this respect, the two sides decided to explore the idea of involving the private sector through officially recognized joint chambers. 16. In order to increase businessto- business contacts between India and Pakistan, which again is the key to expanding trade ties, both sides agreed to form officially recognized Chambers of Commerce and Industry at the apex and regional levels. Regular interactions between such chambers will markedly improve the business climate, it was felt. 17. Both sides expressed willingness to increase bilateral investments and remove impediments therein. 18. Noting the importance of bank branches of each country in the other, both sides agreed to fast- track the process of opening bank branches. 19. The apex trade promoting/ developing authorities in the two countries, namely the India Trade Promotion Authority (ITPO) and the Trade Development Authority of Pakistan (TDAP) will collaborate amongst themselves on trade promotional activities. Further, it was decided that the TDAP will send a proposed draft Memorandum of Understanding (MoU) for possible approval to the 114

ITPO by June 2011. For the purpose of implementing the decisions as mentioned above, the two sides decided to create a suitable mechanism in the form of a Joint Working Group on Economic and Commercial Cooperation and Trade Promotion headed by the Joint Secretaries of the Departments of Commerce of the two governments. The JWG was also given the mandate to review trade promotion issues that may come up from time to time. The task of overseeing the functioning of the group was assigned to the Commerce Secretaries. The construction of the Wullar barrage, which is also known as the Tulbul navigation project, on river Jhelum has been a long- standing matter of contention between India and Pakistan. India started the construction of the barrage on Lake Wullar at the

mouth of river Jhelum in 1984. The objective behind the construction was the navigability of the river during the summer season. Besides, it was also assessed that the water stored by the barrage would help in hydel power projects like Uri I and Uri II. Pakistan however had apprehensions that Indias real intention in constructing the barrage was more geo- political in nature than anything. It felt that the barrage would be used as a weapon of war by India whereby it would regulate the waters of Jhelum and cause droughts and floods in Pakistan at its own will. Even as India began construction work, Pakistan insisted that Civil Services

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the project was a violation of the Indus Water Treaty 1960 which was signed after international negotiations. Another concern for Pakistan was that the Tulbul project would disrupt its triple canal project of Upper Jhelum Canal, Upper Chenab Canal and Lower Bari Doab Canal. It took the matter to the Indus Water Commission in 1986 which however failed to provide a solution. Before the matter could be taken to the International Arbitral Court, India stopped construction on its own. Several rounds of bilateral talks have been held ever since, the latest being on 12th and 13th May 2011 when delegations from either side led by their respective Water Resources Secretaries met in Islamabad. The two sides revealed little about the contents of their talks except that they were held in an environment of cordiality. While reaffirming their commitment to the Indus Water Treaty 1960, they reiterated their stated positions. Both sides emphasized the need for early resolution of the Wullar barrage/ Tulbul navigation project. Any solution to the problem would involve a meeting of minds on technical matters and keeping this in view, the Indian side agreed to forward comprehensive technical data to their Pakistani counterparts within a month. The Pakistanis will then go through such data and furnish their views thereon by 15th September 2011. Further discussions will then take place in the light of such technical consultations between the two countries within the framework of the Indus Water Treaty. The dialogue process between India and Pakistan includes the issue of Sir Creek which is a dispute over a 96km thin strip of water in the marshlands of the Rann of Kutch separating the Indian state of Gujarat from the Pakistani province of Sindh. The dispute relates to the interpretation of the maritime boundary dividing the two countries. The Pakistani interpretation is that the boundary line lies on the eastern flank of the creek, which essentially implies that the whole creek belongs to Pakistan. To back its claim, Pakistan cites paragraphs 9 and 10 of the Bombay Government Resolution, 1914 signed between the Government SEPTEMBER 2011, XVII Year, Issue No.9
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of Sindh and Rao Maharaj of Kutch. This resolution which demarcated the two provinces included the entire Sir Creek within the Sindh province. India, on the other hand claims that the boundary line should be interpreted as lying in the middle of the strip of water. In backing its interpretation of the maritime boundary, India has taken resort of the Thalweg Doctrine in international law. According to this doctrine, river boundaries between two states may be divided by the middle stream provided the states agree to such division. India relies on a map of the creek drawn up in 1925. Without disputing the 1925 map, Pakistan has pointed out that the Thalweg Doctrine is only applicable to water bodies which are navigable, whereas the creek concerned is not navigable. India has disputed this by maintaining that the creek is navigable in high tide. It is the economic value of this narrow stretch of water that makes it a bone of contention between the two neighboring countries. The sea bed below Sir Creek is believed to have large quantities of hydrocarbons which make water-body potentially valuable from the energy point of view. Several rounds of talks have been held to resolve the Sir Creek issue but all of them have ended in virtual stalemate. There have been rumours that the two nations came close to thrashing out a solution to the problem a few times, but such reports have turned out to be misleading. The latest meeting took place in Rawalpindi on 20th and 21st May 2011 and the two sides did not go an inch beyond discussing their mutually stated positions and exchanging non- papers in order to take discussions forward with the objective of agreeing to a solution acceptable to both. Indian and Pakistani armed forces have fought several intermittent battles in the Siachen glacier, often referred to as the worlds highest battlefield. The Shimla Agreement 1972 was silent as to who possessed the glacier. It probably did not appear at that time that Siachen, given its extremely difficult terrain would awaken any interest in the minds of the political and military leadership either in India or Pakistan, much less give them the idea of capturing it. However 12 years af115

ter the Shimla Agreement, India made the first move by launching Operation Meghdoot and forcing the Pakistanis out of the glacier and pushing them to the west of the Saltoro ridge. Thereafter military skirmishes over the glacier took place from time to time with Pakistan trying to establish foothold over the glacier and employing military as well as diplomatic means to withdraw Indian forces from Siachen. India however has not budged an inch and maintains its dominant military presence on the glacier despite the huge financial cost for the same. Pakistan too has a military presence near the glacier. Both sides have lost more men due to the bitter and inhospitable weather conditions than to armed warfare. Withdrawal of forces from the Siachen will spare the exchequer of the two nations a sizeable burden and will also undoubtedly generate huge sighs of relief from the soldiers languishing in that high altitude, but once again the main issue is that of trust. Both sides fear that the other will encroach into the area from which it withdraws its forces, and hence the problem continues. The highest battleground of the world that it is, the glacier provides the obvious strategic

advantage of height to anyone that controls it. Hence the Indian reluctance to relinquish control over it. Talks so far have not borne fruit. The latest round of talks took place in New Delhi on 30th and 31st May 2011 when delegations led by the respective Defence Secretaries met each other. Both sides acknowledged the fact that the Civil Services

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ceasefire on the Actual Ground Position Line (AGPL) was continuing since November 2003 and welcomed this trend. Both sides put forward their viewpoints and discussed ways to solve the Siachen problem. Pakistan presented a non- paper on the matter to India. In pursuance of the decision taken at the Home/ Interior Secretary level talks, the Joint Working Group (JWG) on visa matters met in Islamabad on 2nd and 3rd June 2011, the first such meeting and discussed the modalities for streamlining visa procedures and finalizing the draft Bilateral Visa Agreement. The basic focus of the talks was to make travel across the border easier for citizens of both countries. Discussions were also held on possible amendments in the existing visa agreement. It was agreed that discussions on a new visa agreement would be furthered in the next JWG in New Delhi to be held before end August 2011. Perhaps the most significant Secretary level talks following the Home/ Interior Secretary level talks took place in Islamabad where Indian Foreign Secretary, Smt. Nirupama Rao met her Pakistani counterpart Salman Bashir on 23rd -24th June 2011. In a sense the bilateral meeting between the Foreign Secretaries was the culmination of the Secretary level talks which took place since March 2011. All these talks touched upon the various issues included in the composite dialogue process which was initiated between the then Indian PM, Atal Bihari Vajpayee and Pakistani President, General Pervez Musharraf. After the resumption of the dialogue process, most of the components of the dialogue were dealt with by the concerned Secretaries and in a way the Foreign Secretary level meeting not only did stock- taking of the talks held in the last 3 to 4 months but also served to pave the way for the Ministerial level meetings likely to take place in the days to come. The two Secretaries revealed little to the media after the three rounds of talks they held, possibly keeping in mind the forthcoming Foreign Minister level meeting where most of the decisions taken are likely to be announced. The Secretaries primarily discussed Peace and Security including various Confidence- Building Measures (CBMs), SEPTEMBER 2011, XVII Year, Issue No.9
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Jammu and Kashmir and other friendly exchanges relating to the promotion of peace. An interesting feature of the talks was the reference to nuclear CBMs. The implementation of not only conventional but also nuclear CBMs were noted and it was decided to convene separate Expert level meetings to discuss the implementation of both nuclear and conventional CBMs and also work out means to strengthen the existing arrangements as well as consider mutually acceptable additional measures to build trust and confidence and promote peace and security. Terrorism undoubtedly is the thorniest issue in India- Pakistan relations. The joint statement was thus expectedly quite guarded in its comments on terrorism. While noting that terrorism posed a continuous threat to peace and security, the two officials reiterated their countrys firm commitment to fight and eliminate terrorism in all its forms and manifestations. They also agreed on the need to strengthen cooperation on counter- terrorism. It is pertinent to point out here that this statement is likely to be interpreted differently in the two countries. India is essentially concerned with terrorism targeted at it by terror groups which enjoy substantial support from the Pakistani state and which Pakistan obliquely refers to as freedom struggle and backs politically, financially and morally. Much of such terrorism represented by groups like Lashkar-e-Toiba operates from Pakistani soil though Pakistan remains in a state of denial regarding their presence. Pakistan, on the other hand is being ravaged by terrorism spread by groups like the Taliban and Al Qaeda, which the country was forced to fight ever since the 9/11 attacks on US soil and the subsequent coercive diplomacy adopted by the US on Pakistan, which till then had shared a cozy relation with such groups. The recent terror attacks in the heart of Pakistan have come in the form of reprisals by such groups. On Jammu and Kashmir, which has 116

often been highlighted by Pakistan as the root cause of all disputes with India, the Foreign Secretaries exchanged views and agreed to continue discussions in a purposeful manner so as to find a peaceful solution by narrowing divergences and building convergences. Focusing on the people- to- people and business- to- business contacts, the two sides decided to convene a meeting of the Working Group on CrossLOC CBMs so as to recommend measures to streamline the existing travel and trade arrangements across the LOC and propose modalities for ad-

ditional cross- LOC CBMs. The Working Group is all set to meet in July 2011. The need to promote friendly exchanges between the countries was acknowledged by both sides and the joint statement had a word in it for the progress made towards finalization of the Visa Agreement, which will make contacts between the common people of both countries easier by making the visa regime more liberal. The importance of enhancing people- to- people ties was further elaborated by the Secretaries who had no hesitation in agreeing that the people of the two countries are at the heart of the bilateral relationship and hence humanitarian issues should be accorded priority and treated with requisite sensitivity. There was discussion on the promotion of cooperation in various fields including, but not restricted to, facilitating visits to religious shrines, media exchanges, holding sports tournaments and perhaps most importantly, stopping negative propaganda against each other. Why Pakistan is important for USA? After devastating floods last year, Civil Services

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America gave Pakistan $690m, 28 per cent of all international aid. Chinas contribution was a mere $18m. Pakistan is a major non-NATO ally of the United States and despite growing India-US ties, India was not accorded this status. Between 2001 and 2008, the United States has provided Pakistan with $1.6 billion through the foreign military financing (FMF). From 2002 to 2010, the United States gave $13.3 billion in security-related aid to Pakistan, and $6 billion for economic assistance. More than $3 billion was requested for 2011. Recent developments: Pakistan had termed the US commando operation in Abbottabad that killed Laden an unauthorised, unilateral action without its knowledge. PM Gilani said in Pakistan Parliament any attack against Pakistans strategic assets whether overt or covert will find a

matching response. Pakistan reserves the right to retaliate with full force. No one should underestimate the resolve and capability of our nation and armed forces to defend our sacred homeland. There are of course legal and moral issues that relate to the question of sovereignty. In a generic sense this is a question that continues to vex the international community as a whole. The Security Council while exhorting UN member states to join their efforts against terrorism has repeatedly emphasized that this be done in accordance with international law, human rights and humanitarian law. But the United States has said that they will not apologise to Pakistan for its unilateral military action against alSEPTEMBER 2011, XVII Year, Issue No.9
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Qaeda chief Osama bin Laden at his hideout in that country. The condemnation by army chief General Ashfaq Kiyani of a deadly American drone attack has introduced a new element of complexity in the ties. One can recall that President Obamas new policy known as AfPak, the Kerry-Lugar Act (the legislation provides Pakistan with large sums of non-military financial aid to assist it in combating the rising tide of terrorism within its borders and outside of them and provides financial assistance of around $1.5 billion per annum until 2013 to Pakistan to tackle its growing insecurity), and other U.S. initiatives adopted since 2009 has mainly focused to help in stabilizing the situation in South Asia. AfPak has emphasized on a substantive change in U.S.-Pakistani relations and is indicative of U.S. impatience with Pakistans failure to deal with extremism and terrorism. Why Pakistan important? 1. US feels that there is great role of geo-strategic location of Pakistan in fighting against terrorism in the region. 2. Pakistan possesses a coastline on the Arabian Sea and common borders with Iran, Afghanistan, China, and India, and is only a few miles from Tajikistan. 3. US feels that Pakistan has a major role to play in controlling both India and Russia. 4. Basically, US interests in the regions is driven by three important factors: to contain the growing China, nuclear Iran, terrorist Afghanistan, and to benefit from the market of India. 5. US has four military bases in Pakistan. They are under permanent US control. The US has been using the Shamsi Air Base in Balochistan province to station unmanned Predator drones that have been used to attack terrorist targets inside Pakistans tribal areas. Shamsi airfield, also called Bandari, is a small airfield and air station located about 200 miles southwest of Quetta near the town of Washki. 6. Pakistan is a nuclear-armed state with missiles capable of delivering nuclear weapons. With more than 180 million people, it is one of the larg117

est Muslim countries in the world and has five times the population of Afghanistan. Final statement after Osama As per the expectations, US Secretary of State Hillary Clinton opined that US was even more committed to Pakistan after Osama bin Ladens killing, but said the country needed to do more in its battle with Islamist militants. At the same time, USA has given a clean chit to the Pakistani Government about their obliviousness on the hiding of Osama in Pakistan. Clinton said the United States had absolutely no evidence that anyone at the highest level of the Pakistani government knew where bin Laden was and said she would return to Washington ever more committed to the relationship. This statement indicates the gro-strategic relevance of Pakistan for USA. Analyzing trade relations

MFN status
Once again India-Pakistan relations has suffered a major jolt after the killing of Al Qaeda chief Osama bin Laden in Abbottabad in Pakistan mansion, just kilometres from a Pakistani military academy. The talks which resumed after a gap of almost two years seems to be in jeopardy and the Pakistani proposal to accord MFN status to India in October 2011 remain uncertain. The entire focus of diplomacy has shifted to track down the possible outcome of the killing of Osama. On the foreign policy front India should harness the opportunity to shift the world focus on Pakistan and re-energize the world to make united efforts to overcome terrorism in its neighbour by eliminating the safe havens of terrorist there. The Pakistani policy of giving shelter to terrorist has been thoroughly exposed before the world and this has given credence to Indian belief that the perpetrators of the 2008 Mumbai attack must also be given safe heaven by Pakistan. India has started to use its full diplomatic force to pressurize Pakistan to arrest militants. Indian Prime Minister has already visited Afghanistan to assess the changing impact of the killing of Osama in the region. Ever since the US gained a foothold in AfghaniCivil Services

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stan in 2001, India has been relegated to a role of building roads and infrastructure. Only now is the government talking of building a more stra-

tegic relationship. The killing of Osama would provide an opportunity to India to convince big powers about the evil designs of Pakistan. Continuing its pressure on Pakistan to act against 50 which includes 31 Indians and 19 Pakistanis, of India most wanted based in the neighbouring country, India has made public the complete list of fugitives including Dawood Ibrahim and Lashkar founder Hafiz Saeed, wanted for a spate of terror acts. The terrorists and criminals on the list include those wanted for the 26/11 attack, 1993 Mumbai serial blasts, IC-814 hijacking, 2001 Parliament House attack and a number of terror attacks in Punjab, Jammu & Kashmir and in other Indian cities over the years. The latest list has in fact swelled from 20 in 2001 to 50 in 2011 - in the span of 20 years, a clear indication of the ease with which those tormenting India can find shelter in Pakistan. Pakistan has tried to mitigate the adverse implications at two levels: firstly, they have blamed intelligence failure for the six-year-stay of Osama in Pakistan and secondly at the diplomatic level, President Zardari visited Russia, first official visit to Russia by any President of Pakistan in more than 30 years. Pakistan also highlighted their friendly ties with China by calling them all-weather friend with the purpose of reminding USA about Pakistani option of shifting loyalties. The coming years of diplomacy is bound to be challenging for both India and Pakistan to maintain their respective position and presence at the SEPTEMBER 2011, XVII Year, Issue No.9
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global level with definitely India having an edge over Pakistan. Delinking trade with politics? The Pakistani government had offered a major proposal to rectify the anomalies of the trade relations. At the conclusion of a two-day meeting, the Pakistani delegation, headed by Commerce Secretary Zafar Mahmood, had assured the Indian Government that the most favoured nation (MFN) status would be granted by October, 2011. Besides that Pakistan had also agreed to negotiate a bilateral preferential treaty by reducing customs duties on products of export interest of both countries. It has to be pointed out that both sides consciously avoided the contentious issues during the fifth round of talks on commercial and economic cooperation and in this process Pakistan was not willing to discuss Indias trade with Afghanistan that passes through Pakistan whereas India was unwilling to discuss its opposition to trade concessions by the European Union to Pakistan. Currently, India has already conferred MFN status to Pakistan but Pakistan has yet to reciprocate. But during this process, the Pakistani Government had contradicted their old stance by saying that Pakistan had never linked MFN with political issues, including Kashmir, in the past. It can be recalled that the former commerce secretary Tasneem Noorani, who had initiated talks on trade under the composite dialogue with India in 2004-05, had categorically told the media that the MFN had been linked at that time with progress on political issues and elimination of barriers by the Indian government. In fact, MFN status would lead to the country getting the same treatment as other countries in terms of allowing exports. At present, Pakistan has allowed exports from India on the basis of a small positive list of items instead of trading the normal way using a negative list of excluded items. 118

Why Pakistan is willing? 1. The liberalization of the trade regime with India would boost Pakistans economic growth. 2. After according MFN status to India, Pakistani businessmen would get cheaper raw material which could help increase exports. 3. Exports of Bt cotton will benefit farmers and consumers in Pakistan and will help in gap in cotton production. Trade contentions 1. Pakistan had identified 27 barriers in 2007 which hindered its exports to India but on the other hand India feels that there is no barrier from Indian side. 2. Pakistan is of the opinion of keeping a negative list with India to protect the interest of domestic industry. Pakistan was trading on preferential lines with China, but its industry was not facing any problem. 3. Pakistan has said that at WTO India had raised objections to European Unions decision to provide dutyfree access to Pakistani goods. 4. Currently, Pakistan has a list of 1,946 items that it allows imports of from India. Moving to a negative list would prohibit a specific number of items and permit everything else, expanding the scope of trade with India. India has a sensitive list of 850 items that it restricts trade in. Recent initiatives 1. The joint statement of the 5th round of talks on commercial and economic cooperation provides a clear roadmap for enhancing trade and economic relations between the two countries. Both India and Pakistan have agreed that a group of experts from the two countries would examine the feasibility of trading electricity. The expert group will address issues like suitable routes for transmission lines and funding mechanism. The creation of the joint working group was cited as an indication of the institutionalization of trade talks. 2. Further, the expert would discuss trade arrangements, building of cross-border pipelines and use of road/rail route, including that of Munabao-Khokrapar. Cross Line of Control (LOC) Trade from both Salamabad on the Srinagar-MuzafCivil Services

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farabad Highway and Chakkan-dabagh on the Poonch Rawalkot axis from J&K on the Indian side to Chakoti and Rawalkote on the Pakistani side commenced from 21st October, 2008. A list of 21 items for trade was approved for trade from both sides. All these items have been allowed duty free passage. Indias trade with Pakistan has increased substantially from US$868.79 million in 2005-06 to US$1849.26 million in 2009-10. 3. Both sides agreed to form a working group to identify sector-specific barriers to trade. Its first meeting will be held by September 2011. 4. Both countries have agreed to open a second gate at the opened on the Wagah-Attari border, including an integrated check-post (IPC) and new dedicated roads for passenger and freight traffic. The government has invested Rs 150 crore so far to build the 120-acre sprawling ICP. Both countries are also expecting bilateral trade to touch double digits from $2 billion at present with the opening of this route that would be dedicated only for trade. 5. Pakistan has agreed to remove restrictions on land route trade with India before October 2011. Nevertheless, according to the World Trade Organisation (WTO) rules, it is the fundamental right of a country to get MFN status from another member country. Grant of MFN status by Pakistan would expand the number of products to be traded in positive list of commodities that are exported by India. India has made clear that after the grant of MFN status by Pakistan, it will be easier for India to get the necessary approvals from the Trade and Economic Relations Committee (TERC) to initiate talks on having an exclusive trade pact with Pakistan. It is to be noted that the TERC, headed by Prime Minister Manmohan Singh, looks into various issues concerning promotion trade and bilateral relations with India. Relation between EU proposal and MFN India had blocked a $900-million European Union (EU) proposal at the World Trade Organization to give duty-free access to the textile exports from Pakistan. One can recollect that in the wake of the severe floods that SEPTEMBER 2011, XVII Year, Issue No.9
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devastated Pakistan in 2010, the EU had proposed duty-free access to 75 export items from Pakistan, 64 of these textiles, for three years. India argued at WTO that the package would affect the exports of competing countries that would have to continue to pay 6 per cent-12 per cent import duties on textiles in the EU. India was supported by Bangladesh, Peru and Vietnam supported India at the Council. The propsoal has to be endorsed by other members of the WTO as the multila-

tral trading rules require all countries be treated equally. India categorically said that the package would only help the textile industry and not the flood victims. EU textile and clothing body Euratex, too, is opposed to the waiver, claiming that there was no economic or even humanitarian reason to give these concessions. During the visit of PM Gilani at Mohali to watch India-Pakistan match, Gilani told the PM of India that if India dropped its objections to the EU proposal, it would have a hugely salutary effect on the bilateral relationship. He pointed out that Bangladesh, Peru and other objectors had already indicated they would go along with Indias decision. It has been analysed that Pakistans postponement of MFN status was an implied quid pro quo for India lifting its objections on the EU proposal. They said India had understood the connection, which is why no one raised the matter. Overall trade scenario There is no doubt that trade and economic relations between India and 119

Pakistan have tremendous potential and even the two-way trade could reach $10-20 billion. However, this potential was never realised as nontrade issues have always undermined the trade relations. As a result, actual trade between the two countries has never exceeded $2.2 billion, which it did in 2007-08. Lately, there are signs that the two-way trade is on course to scale a new high: in the first nine months of 2010-11, India-Pakistan trade had already exceeded $2 billion. Indias exports to Pakistan grew 9.3 per cent to $1.57 billion, while imports contracted by 25 per cent to $276 million in 2009-10, according to the latest data available.Besides that for long, Dubai and Singapore have been being used as the third countries through which India and Pakistan have been trading. According to a study by Indian Council for Research on International Economic Relations (ICRIER), the potential of India, Pakistan trade is $14.3 billion with India exporting goods of about $11 billion and importing $3 billion. According to Federation of Indian Export Organisations (FIEO) the bilateral trade will cross $10 billion in next three years, as focus of the joint communique is on the removal of non-tariff barrier which is key to trade expansion. FICCI has pointed out potential sectors for trade are agriculture, textiles, surgical goods, and plastics. Despite the current tension between the countries, the trends of trade and commerce have improved. Since Pakistan has an overall trade deficit, the proposal allows it to frame bilateral safeguard measures to protect domestic industry from getting impacted. India has shown interest in having a Free Trade Agreement with Pakistan. India has assured to eliminate all para-tariff and non-tariff barriers in a time-bound manner. The broad contours of the proposed FTA focus on providing real market access to Islamabad, removal of Tariff Rate Quota and state-specific taxes and non-tariff barriers on imports from Pakistan. In fact, India has also open to importing all agricultural products despite public sector agencies in India having the exclusive right to such trade. The proposed FTA has to be completed in Civil Services

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phased manner. In the initial phase, the proposed FTA would cover goods, to be followed up by an agreement on trade in services and investments and later, on comprehensive economic cooperation in a phased manner. India is, however, keen that Pakistan shifts to a negative list of imports from India from the positive list operational now. The negative list could be reviewed every two years. As of now, there are only 1,938 items covered under the positive list, greatly limiting the number of items that can be exported from India. But after the Mumbai-attack the proposed FTA with Pakistan has definitely suffered a setback. As part of Confidence Building Measures with Pakistan, Cross LoC trade on the Srinagar-Muzaffarabad and Poonch-Rawalakot routes commenced from 21st October 2008. Twenty-one items for trade have been identified for duty-free passage. Items to be traded from Salamabad to Chakoti and Chakandabagh to Rawalakot are carpets, rugs, wall hangings, shawls and stoles, fresh fruits and vegetables, aromatic plants, dry fruits including walnuts, Kashmiri spices, spring rubberised coir/foam mattresses, furniture including walnut furniture etc. Similarly, items to be traded from Chakoti to Salamabad and Rawalakot to Chakandabagh are rice, precious stones, dry fruits including walnuts, medicinal herbs, fresh fruits and vegetables, furniture including walnut furniture, carpets and rugs, embroidered items, foam mattresses, shawls and stoles. Headley and ISI link Pakistani-American David Coleman Headley on the Tahawwur Rana , a Canadian of Pakistani origin, trial in the Chicagos Dirksen Federal Court has testified that he received espionage training against India from Pakistani spy agency Inter Services Intelligence (ISI). Headley also admitted that while he was training with Pakistan based terror group Lashkare-Taiba (LeT). The court has also been informed that Headley aka Daood Gilani also visited a nuclear power plant in India in April 2008 at the direction of his ISI handler in Pakistan, Major Iqbal, who also gave him Indian currency notes for his operation SEPTEMBER 2011, XVII Year, Issue No.9
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in India. These revelations are bound to further damage the Indo-Pak relations but India must keep one thing in mind that the talks must go on and one day the whole world would know the sinister designs of some section of Pakistani officers and politicians to thrive on the debris of IndoPak relations. Trilateral Relations

India, China and Bhutan


The unresolved border disputes going back centuries are the main bone of contention between China and Bhutan. In fact Bhutan had traditional trade relations with Tibet, but Bhutan closed its northern borders with China after an influx of Tibetan refugees in 1960. The redistribution phase started in 1996, when China for the first time as part of the resolution package offered Bhutan a package deal. In 1998, Bhutan and China had signed an Agreement to Maintain Peace and Tranquility on the BhutanChina border but this has not yet yielded any significant breakthrough in this regard. Instead Bhutan had to face a number of Chinese incursions which are also close to the strategic Chumbi Valley - another vital junction between India, Bhutan and China. Chumbi valley has two important factors; as firstly it is a vital tri-junction between Bhutan, India and China border, is significant as it is 500 km from Siliguri corridorthe chicken neck which connects India to North East India and Nepal to Bhutan and secondly it is of geostrategic importance to China because of its shared borders with Tibet and Sikkim. It seems that the growing Chinese intrusions in Bhutan are more governed by the motives of Chinese evil design against India than Bhutan itself. It has been believed that Bhutans border problem will be settled once the border dispute between India and China is resolved. In November 2007, Chinese forces had dismantled several unmanned Indi120

an forward posts near two military bunkers in the border region of Bhutans Dolam Valley. This created a strong amongst the Bhutanese over the fact that they are paying the price for the closeness with India. This created a strong notion in Bhutan that Thimphu is becoming a buffer state between India and Bhutan. In the meantime, on 14th January 2010, Bhutan and China concluded the 19th round of border talks. China was represented by Assistant Foreign Minister Hu Zhengyue while the Bhutanese delegation was led by Minister of Economic Affairs Khandu Wangchuk. Both sides agreed to meet again to carry out a joint field survey of the disputed territories in the north, which comprise 4 areas amounting to a total of 764 sq km. The disputed areas that China claimed covered a total of 764 square kilometres covering the North West (269 sq km) and Central parts of Bhutan (495 sq km). While the North West part constitutes the Doklam, Sinchulung, Dramana and Shakhatoe in Samste, Haa and Paro districts, the Central parts constitute the Pasamlung and the Jakarlung valley in the Wang-

due Phodrang district. The Bhutanese government is firmly committed to the one-China policy and is willing to work with China to push forward exchanges and cooperation in all fields. But in this regard Bhutan should be made more self-sufficient in terms of border surveillance so that security cooperation with India can be further strengthened. Bhutan and Bangladesh Bangladesh has agreed to provide transit facilities to Bhutan, by opening up its Mongla port. Meanwhile Banglabandha land port will be used as an entry and exit point for Bhutanese transit goods. Bhutan has also agreed to export around 1000 MW of power to BangCivil Services

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ladesh. India could be benefited by this Sub-regional diplomacy and could utilize this opportunity to initiate a grid linking plan engaging all the concerned countries. Indian defence strategy to counter China: 1. In in 2008 to station frontline Sukhoi-30MKI fighters at four IAF bases in northeast India - Tezpur, Bagdogra, Chhabua and Hashimara close by the Sino-Indian border. 2. The recent purchases like the C130J Super Hercules and C-17 Globemaster III transport aircraft; the P8I Poseidon Multi-mission Maritime Aircraft; ultralight howitzers and light tanks for hilly terrain - also beef up Indias abilities against China. 3. Several disused border airfields have been refurbished to allow operations by the IAFs AN-32 transporters. 4. An ongoing Rs 1,000-crore scheme to transform 30 IAF air bases into world-class fighter facilities - termed the Modernisation of Airfield Infrastructure (MAFI) plan - would also be extended to Nyoma. Before settling on Nyoma, the IAF had evaluated several other potential air bases in Ladakh. But Daulat Beg Oldi was too high (16,200 feet); Chushul was too close to the border; and Fukche could not have its runway extended because of water bodies at both ends. Trilateral Relations

Pakistan, China and India


Pakistani Prime Minister Yousuf Raza Gilanis visit to China on May 17, 2011

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After killing of Osama at Pakistan, China has officially put that any planned attack of US on Pakistan will be interpreted as an act of aggression against Beijing and not only this China has announced the transfer of 50 state-of-the-art JF-17 fighter jets to Pakistan, immediately and without cost. Pakistan believes that China is the only country that has taken a sympathetic stand for Pakistan after the bin Laden operation. This indicates the growing nexus between the two countries beyond a level of normal bilateral ties. China is the main arms supplier to Pakistan, which sees Beijing as an important counter-balance to India - which has recently vastly improved its ties with the United States. China has always outrightly given support to Pakistan and China does not recognize the thesis of cross-border terrorism, especially in south Asian context. This has given boost to the terrorist activities inside Pakistan. It has been also believed that China is convinced that Pakistan will increase its influence in Afghanistan by 2015, taking advantage of the planned withdrawal of US troops in 2014. This will complete Chinese design to encircle India through its policy of string of pearls. Besides these facts China also needs Pakistans cooperation in stemming potential terrorist threats in its mainly Muslim region of Xinjiang, which borders Pakistan. China has also planned to transport oil from the Middle East in a pipeline linking Xinjiang to the Arabian Sea through Baluchistan. It is important to note that Pakistan has also always supported Chinas sovereignty and territorial integrity in major issues related to the Taiwan region, Tibet Autonomous Region and the Xinjiang Uygur Autonomous Region. Recent China-Pakistan hiccups: The recent terror attack in China's Xinjiang region has indicated that the terrorists were trained in Pakistan. In this attack more than people were killed and more than 40 were wounded. The investigations have shown that Uighur separatists who 121

had learned skills of making explosives and firearms in overseas camps of the terrorist group East Turkistan Islamic Movement (ETIM) in Pakistan. ETIM is a small Uighur group that advocates independence for Xinjiang. One can recollect that in 2009, in Xinjiang's capital, Urumqi nearly 200 people were killed, many of them members of China's majority ethnic group, the Han, a focus of Uighur resentment. The Muslim Uighur have felt that due to the influx of Han Chinese, they feel they are being turned into a minority in their own land and that their culture is under attack. Trilateral Relations

India, China and Nepal


The traditional Sino-Nepal relation was cordial and stable. Initially, China was interested in Nepal to its concerns over Tibet, which has been ruled by China since 1950; but in course of time, the diplomacy was also geared towards thwarting Indian presence in the country. India had successfully managed its presence in Nepal through their diplomatic relations and political compatibility. But during the period of political instability in which the Maoists, who fought a decade-long civil war against the state before transforming themselves into a political party and winning a 2008 election, hold the largest number of seats in parliament, China got the opportunity to influence some section of Nepali political parties through their aggressive foreign policy. India had to face great dilemma to choose between issue-based diplomacy and value-based diplomacy. Ideally, India never prefers to intervene in the internal affairs of any country and this policy, unfortunately, did not work in the changing Nepali political scenario. Recently, China has sent multiple high-level delegations, both political and military. The number of Chinese joint ventures here has exponentially increased. In fact, the numbers of Chinese joint ventures in 2010 were higher than the number of Indian joint ventures. Chinese companies are aggressively pursuing lucrative deals to tap Nepals glacial rivers for hydroCivil Services

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power. Besides that China has installed its communication network tele-communcation equipment company Huawei Technologies - in the entire Nepal. China is deriving two benefits out of it; firstly, Nepali citizens would talk at cheaper rates and thus earn goodwill in each and every Nepali household, and secondly China would have the data of telephonic conversations of all important officers, political leaders and corporate houses in Nepal. Alarmingly, China has thrown educational net to give impetus to Maoists agitation in Nepal and India. The main agitators of both the countries are being taught Chinese language in the hilly area of Nepal. As the Maoists step up their anti-India campaign - their latest target of attack being the Indian priests at Pashupatinath Temple despite a forewarning from the Indian Embassy - China is moving at a fast and uninterrupted pace to cash in on this sentiment and replicate arrangements similar to what exist between India and Nepal. It is believed that the Chinese side, which is keen to put in place some permanent institutional arrangement to prevent Tibetans from using Nepal as a staging point, zeroed in on the India model. A high-level delegation headed by Zhang Gaoli, the powerful Central Politburo member of the Communist Party of China, paid official visit to Nepal and announced several scholarships and made numerous goodwill gestures. Nepal once again assured the delegation on Tibet and even confirmed commitment to building the Lhasa-Kathmandu railway line. With India increasingly focusing its assistance on the Terai region, China will be looking at areas close to its border on Nepals northern side while building infrastructure projects there like power plans and roads. The cheque-book diplomacy of China could be easily seen in Nepal. It should be referred that India had provided development assistance of Rs. 100 million for the remote hill region of Mustang. China immediately provided financial assistance worth Rs. 10 million for construction of a library, science laboratory and school building with computers in Chhoser village (adjoining Jhongwasen disSEPTEMBER 2011, XVII Year, Issue No.9
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trict of Tibet) in the same region to counter Indian influence. China, meanwhile, recently increased its annual aid to Nepal by 50 per cent to about $22 million. At the political level, Prachanda has already said that China will not remain a silent spectator if any country intervened in the affairs of Nepal. He has often accused New Delhi of interfering in Nepalese affairs and dictating to its leadership. The Maoists have demanded for abrogation of all unequal treaties signed with India, including the landmark Peace and Trilateral Relations

Friendship Treaty of 1950 and opposed alleged border encroachments by India. Trilateral Relations

India, Myanmar and China


Myanmar is strategically important for China as it provides China the shortest land route access to the northern Indian Ocean. Besides that China has signed a long-term agreement with Myanmar for the exploitation of its hydrocarbon reserves and for the

Pakistan, Afghanistan and India


The resignation of Mushraff and restoration of democracy in Pakistan and the killing of Osama in Pakistan has given a new hope to the hopeless situation. But the internal politics of the FATA is not going to help out the situation. The triangle would always be a troubled one. Apart from the superpower and quasi-superpower (Russia), there are others (China and Iran) which have their fingers in the pie. These relations cannot be treated in isolation. 1. Afghanistan stood out as the sole country that voted against Pakistans entry into the United Nations in 1947. 2. Afghanistan became closer to India than Pakistan. In order to balance, Pakistan played a cold war game by cultivating Afghanistans Pashtun

tribes (that are close to Pakistans Pashtuns) and created a lobby of their own. Pashtuns form about ten percent of Pakistans 165 million people. 3. In 1956 Pakistans Jalalabad consulate was set on fire by Afghan mobs. Pakistan enjoys a degree of advantage because of affinities between Afghan and Pakistani Pashtuns. 4. Without Pakistans willing support, the Karzai government cannot consolidate itself, nor can it adequately defend Afghanistan from renewed attacks by the Taliban. 122 Civil Services

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transportation of oil and gas through a 1,100 km overland pipeline from Kyaukryu port in Myanmar to the border city of Ruili in Yunnan. This pipeline is likely to reduce the distance by 1,200 km and at the same time this will make China less dependent on the Malacca Straits. It has been reported that in order to track down and monitor Indian mis-

sile tests, China has erected radars on the western coast of Myanmar. On the western coast, China has already developing Sittwe as a commercial port and it can be further anticipated that Chinese naval activity in the Bay of Bengal will be more enhanced in coming period of time. It has been also found that Myanmar has tried to acquire nuclear technolo-

India and Malaysia FTA


The free trade agreement (FTA) between India and Malaysia has come into force from July 1, 2011. The Indian Government has assured that sensitive sectors like agriculture, fisheries, textiles, chemicals and automobiles have been given protection from imports without duty or with significant cuts. India-Malaysia CECA is Indias fourth bilateral Comprehensive Economic Cooperation Agreement, after Singapore, South Korea and Japan. The India-Malaysia CECA also facilitates cross-border investments between the two countries. It aims to promote investments and create a liberal, facilitative, transparent and competitive investment regime. The CECA creates an attractive operating environment for the business communities of both countries to increase bilateral trade and investment. Benefits: 1. This FTA is likely to provide greater opportunity to Indian professionals professionals in commercially meaningful sectors including accounting and auditing, architecture, urban planning, engineering services, medical and dental, nursing and pharmacy, Computer and Related Services (CRS), and Management Consulting Services to have access to the key South-East Asian nation and render their services to them. 2. Besides that like basmati rice, mangoes, eggs, trucks, motorcycles and cotton garments, will attract lower or no duty in Malaysia with the implementation of the Comprehensive Economic Cooperation Agreement (CECA) and therefore would have better access in Malaysian markets. 3. Further, the CCEA would facilitate temporary movement of business people, including contractual service suppliers and independent professionals in accounting, architecture, engineering services, medical and dental, nursing and pharmacy, computer services and management consulting. 4. It has been expected that the agreement will also help boost crossborder investment between the two countries, which achieved bilateral trade of USD 10 billion in the fiscal year of 2010-11, an increase of 26 per cent from the previous year. With the implementation of this agreement the bilateral trade is likely to touch US$15 billion by 2015. SEPTEMBER 2011, XVII Year, Issue No.9
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gy from North Korea through the help of Pakistan and China. The Chinese National Petroleum Corporation has offered aid worth $6 million to Myanmar for building hospitals. The main motive is to speed up laying the planned 878 km-long crude pipeline and to secure Chinas access to Myanmars oil reserves. At the same time, a 2,389 km pipeline from Kyakphu in Myanmar to Chinas Yunnan province is also being pursued. According to reports, PetroChina is constructing a four billion cubic meter gas depot at Hutubi in the border province of Xinjiang to make the most of gas piped from Myanmar. China has pushed ahead with the re-building of the historic Stillwell Road12. 61 kms of the stretch lies in India, 1,033km falls in Myanmar and 632 km in China and at the same time, China has already begun work on the 194 mile stretch from Myitkyina in Myanmar to the Pangsau Pass in Arunachal Pradesh, close to the Indian border. Trilateral Relations

India, Bangladesh and Myanmar


The dispute between the two countries erupted in November 2008. In December 2009, the Bangladesh government had accepted the jurisdiction of the International Tribunal for the Law of the Sea (ITLOS) to settle the maritime boundary dispute with Myanmar. In the meantime, the Myanmar Government has started to trace the background history of the Bangladesh-owned island of St. Martin, called as Coconut Island, which is located at the mouth of the Naff River in the Bay of Bengal off the Rakhine coast. On the other hand, Bangladesh is also preparing to resolve the maritime dispute with Burma by hiring lawyers led by the US-based firm Foley Hoag. An ITLOS bench comprising 23 judges will deliver the verdict after hearing both sides. The tribunal will decide the direction of delimitation lines on Talpatti point and St. Martin point. The bone of contention was over the fact that Bangladesh wanted to delimit the Bay of Bengal on an equity basis, while Myanmar wanted to delimit Civil Services

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the waters on an equi-distant basis. Talpatti is the furthest southwest point and St. Martin is the furthest southeast. The coastline distance between Talpatti and St. Martin is 700 kilometers, and Bangladesh has claimed over 900 kilometers to the outer limit of the continental shelf in the Bay of Bengal. The disputed water is very important source for oil and gas exploration and may prove very beneficial for that country which will have access to these sources of energy. One can refer that in 2003, Daewoo had discovered large gas stores in Myanmars A-1 block, just offshore its Rakhine state coast near Sittway and east of the contested maritime border zone. India is facing a lot of difficulties in piping gas to West Bengal because for efficient delivery require negotiating transit rights through Bangladesh, and the transit rights is not possible till the present crisis is not solved between Myanmar and Bangladesh.

India and Maldives


Why Maldives is important? 1. The geostrategic location of Maldives could provide immense support to India against sea pirates and controlling terrorists attack through the sea route. Besides that trade in minerals and energy, worth many billions of dollars annually, passes near the Maldives, which is strategically located astride the major sea lanes in the Indian Ocean. 2. India must strive hard to make diversified presence in Maldives to neutralize the adverse impact of the Chinese efforts to establish close strategic relations with Indias neighbours including Burma, Pakistan and Bangladesh. The Maldives received more than 65,000 Chinese tourists in the first five months of this year, a 56.7 percent increase over the same period of 2010, according to the latest figures. This is an alarming information for India, A part from this in 2010, bilateral trade between both countries reached US$64 million, a reported increase of nearly 56 percent from 2009. Concessional loans provided by China, such as to build the 1000 Housing Units Project, have served to furSEPTEMBER 2011, XVII Year, Issue No.9
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ther expand goodwill and cooperation. In 2012, both China and Maldives will celebrate the 40th anniversary of diplomatic relations. On October 14, 1972, the Peoples Republic of China and the Republic of Maldives established diplomatic relations. Maldives has always held a principled stand and supported the One-China policy. In May 2011, the Chairman of the Standing Committee of the National Peoples Congress of China Wu Bangguo paid an official visit to the Maldives on an invitation of Speaker of the Peoples Majlis Abdulla Shahid. Wu said that the Chinese government will provide a grant aid worth 100 million Yuan (US$15 million) to the Maldives for its development. 3. The proximity of the country to the Indian island cluster of Lakshadweep makes it important for coastal security, in light of the 26/11 attacks on Mumbai. The Maldivian government has found it impossible to police its own waters. Out of 1192 tiny islands, only 200 of which are inhabited, with just under 400 miles separating the northernmost island from its most southerly. India must ensure safety to those regions to avaiod any organised planning to attack on its coastal areas. 4. Maldives has more than 1,100 islands can offer India logistics support and perhaps even a base of operations and hence extend the Indian naval footprint. The government is determined to fulfill all its electoral pledges and had made huge strides in connecting hundreds of islands of the nation through ferries and brought affordable housing to people and India must capitalise these opportunities. 5. The Maldives, by offering their facilities, can extend the Indian maritime airspace surveillance capability.

services and customs. It would give a boost to the more than USD 10 billion bilateral trade. Presently India has a negligible share of 0.85 per cent. China is the top-most apparel supplier of South Korea, with a share of 69.64 per cent; followed by Vietnam with a share of 6.82 per cent. The CEPA is similar to a free trade agreement (FTA), with a comprehensive coverage of trade in goods and services and investments, as well as intellectual property rights. Under the CEPA, India will eliminate duties on 75 percent of products imported from South Korea on a custom-value basis during the eight years after the CEPA becomes effective. South Korea will remove duties on 93 percent of products from India

India and South Korea


CEPA signed A Comprehensive Economic Partnership Agreement (CEPA) between India and Republic of Korea was signed on 7th August, 2009. The CEPA comprises six agreements relating mainly to opening up of trade in goods, 124

during the same period. The CEPA has come into force from 1st January, 2010. The India-Korea CEPA (IKCEPA) also has the distinction of being Indias first FTA with an OECD country, and the second comprehensive agreement signed by India, after the 2005 IndiaSingapore CECA. From the Korean perspective, however, the FTA with India is the seventh bilateral trade deal signed since 2004, when its first FTA with Chile was implemented (the US-Korea agreement is awaiting ratification). The impact of CEPA will be very productive and will encourage collaboration between small and medium size Korean companies to synergize with Indian SMEs in the areas of semiconductors, plastics, auto parts, agricultural instruments, textiles, multimedia, ceramic products etc. The agreement which proposes bilateral economic cooperation in 13 areas, such as audio-visual content, energy, information and communications technology, and science and technology, will strengthen economic coopCivil Services

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eration and both countries will benefit immensely. India with a better access to South Korean market, through CEPA, can increase its share to at least 10 per cent within the next five years. India-Korea bilateral two-way trade has increased three-fold in the past five years, up from $5.48 billion in 2004 to $15.56 billion in 2008, a little over half of which consists of trade in crude and refined petroleum products. India has consistently had a bilateral trade deficit vis-a-vis South Korea; the non-oil bilateral trade deficit of India in the nine months of 2008-09, the period for which official data is available, is around $3.9 billion. It has been estimated that this has the potential to double the twoway trade in the next decade, albeit from a low base. India is still expected to boost bilateral trade by up to $3.3 billion, up from the 2008 total of $15.56 billion. India and Bangladesh

muniqu. As per the communiqu, India had offered Bangladesh a US $1million Line of Credit. During the visit of Mr. Krishna, the projects being undertaken under the Line of Credit were reviewed and found to be under implementation. India and Bangladesh have made substantial progress in cooperation in the power sector. Bangladesh has set up grid connectivity up to 500 MW with India, of which 250 MW is at a preferential rate. The near future of power sector cooperation lies in the establishment of joint projects. Bangladesh has requested India to set up a high technology joint venture thermal power plant of 1320 MW capacity in Khulna, Bangladesh. India has reIndia and Myanmar

sponded positively to such request and has already completed a feasibility study of the proposed project. The two countries are working together on several projects aimed at improving trade infrastructure and connectivity. In this respect, the new Land Customs Station (LCS) opened at Fulbari- Banglabandh in January 2011 is noteworthy. Among other significant efforts include the seven Integrated Check Posts which the Indian government has undertaken to establish. Also border haats in Meghalaya, where India shares its borders with Bangladesh, will be opened in July 2011. Key to the expansion of trade ties between the two countries is the improvement of exports from Bang-

Indias approach towards Suu Kyi


Initially India had supported Nobel Laureate Suu Kyis National League for Democracy and one has to recall the story of operation leach in Adman islands that revealed that India was officially supplying arms to the pro democratic forces in Myanmar to carry out the struggle for freedom. But in early 1990s India shifted its strategy because of growing Chinese influence in Myanmar and due to the Look East Policy and need for coordinated effort with to develop Indias northeast region compelled India to extend support to the military regime. But in this process India has always requested the junta to induce democratic environment in their country. Myanmar is strategically very important for India, which shares a 1,640km (1,000-mile) border with Myanmar, is the countrys fourth largest trading partner. In order to support junta India had refused to heed calls from other international democratic nations to exert pressure on the military regime. In 2009, India refused to support International Labour Organisation (ILO) criticisms of forced labour in Myanmar, while in 2007, then-Foreign Minister Pranab Mukherjee had appeared to ignore widespread protests and the tough military crackdown in the country by repeating word-for-word the same speech on the need for closer ties he had delivered in 2010. On the eve of the release of Suu Kyi, after 15 years, India adopted a word of caution and the statement read Government of India welcomes the release. Release will lead to more inclusive approach to political reform. We hope this will be the beginning of process of reconciliation in Myanmar. Recent elections are important step in the direction of national reconciliation. India have always encouraged this as a close neighbour of Myanmar we are confident that the release will contribute the efforts for more inclusive effort in political reforms. 125 Civil Services

Visit of S M Krishna
The Indian External Affairs Minister, S.M. Krishna paid a visit to Bangladesh in the first week of July during which he held discussions with his Bangladeshi counterpart, Dr. Dipu Moni. The visit came at a time when relations between the two neighbors are relatively on a high as compared to what it was during the regime of Khaleda Zia. The Sheikh Hasina government has always been friendlier towards India than the Khaleda Zia government and the External Affairs Minister took the improved bilateral relations environment as an opportunity to further make progress in relations. It has been acknowledged by both sides that they have recently embarked on comprehensive, forward- looking, pragmatic and mutually beneficial projects and initiatives. The signing of the India- Bangladesh Joint Communiqu during the visit of Prime Minster Sheikh Hasina to India was a watershed event in bilateral relations and one of the mandates of the two Foreign Ministers was to review the progress made in the same. Both Ministers noted with satisfaction that considerable progress had been made in implementing the Joint ComSEPTEMBER 2011, XVII Year, Issue No.9
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ladesh to India. Presently the bilateral trade is skewed in favor of India and such a scenario needs to be addressed. The good thing is that the constant interaction between the business communities of the two sides has helped in establishing a number of joint venture agreements for export oriented manufacturing activities in Bangladesh. Indian investments in Bangladesh are not only expected to promote bilateral trade but also provide jobs to countless Bangladeshis. The Bilateral Investment Promotion and Protection Agreement (BIPPA) is likely to open the floodgates of two way investment flows. Exports from Bangladesh to India have witnessed a healthy 56 per cent increase in the first ten months of 2010-11 but there is scope for more. Another positive development in the area of trade is that the annual duty free quota for export of garments from Bangladesh to India has been raised from 8 million pieces to 10 million pieces. All these measures are geared up to increase the quantum of Bangladeshi exports to its bigger and economically stronger neighbor. Cooperation to upgrade the BSTI is also progressing well. Sharing of water resources has been a thorny issue in Indo- Bangladesh relations in the past. The manner of interim sharing of the waters of the Teesta and the Feni rivers is also being presently negotiated by the two sides. The work on river bank protection and construction of embankment along common rivers is going on quite satisfactorily. Dredging of river Ichamati is almost nearing completion. While Indias border related disputes with Bangladesh are hardly as bitter and acrimonious as those with Pakistan, they are nonetheless very much existent. The two countries had already established a Joint Boundary Working Group (JBWG) to look into the border issues. The meetings of the JBWG, the last of which was held in November 2011, provides a process whereby a comprehensive resolution of outstanding land boundary related issues can be thrashed out. With respect to the shared concerns of insurgency, militancy and terrorism, the two countries agreed not to allow their respective territories to be used for the purpose of carrying SEPTEMBER 2011, XVII Year, Issue No.9
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out activities inimical to the other. They also agreed that it was important to cooperate in the field of security to weed out the triple menaces as mentioned above. Cooperation in the fields of culture, education and training is expanding at a brisk pace. Gurudev Rabindranath Tagore, the great Indian poet, credited with penning the national anthems of both the countries, is a symbol of the cultural commonality between India and Bangladesh. The joint celebration of the 150th Birth Anniversary of Tagore is going on well in the capitals of both countries. A Tagore Chair has been set up at Dhaka University. At the same time, a Parliamentary Friendship Group with Bangladesh has been established in the Indian Parliament. India and New Zealand

Towards FTA
India- New Zealand relations known in the public sphere mostly for cricketing ties got a boost when the Prime Minister of New Zealand, John Key paid a state visit to India from 26th to 30th June at the invitation of Indian Prime Minister, Manmohan Singh. Key was accompanied by the Kiwi Trade Minister Tim Groser and a high level business delegation, clearly indicating that the focus of the visit was to concentrate on trade and economic relations. Another person included in the delegation was MP Kanwaljit Singh Bakshi. The presence of the Indian origin Kiwi parliamentarian was perhaps to emphasize the growing clout of the Indian community in New Zealand and the importance accorded by both sides to their role in improving bilateral relations. Four major factors that buttress IndiaN e w Zealand relations are: (a) the shared heritage of the Commonwealth; (b) the values of democracy; (c) people - to - people ties; and (d) sporting relations, especially cricket and more recently hockey. 126

Apart from these the two countries are engaging themselves on a wide range of subjects which include science and innovation, education and defence. The leaders of the countries acknowledged that while there is substantial strength in their ties, there is huge scope for further growth in relations. The city of Christchurch in New Zealand was rocked by a devastating earthquake on 22nd February 2011. The government of India, during New Zealands time of crisis had provided that country and the residents of Christchurch with its support and sympathy, which was warmly appreciated by the New Zealand PM. In this context, and given the fact that the Indian Ocean region and Oceania are susceptible to frequent seismic activities which surface in the forms of earthquakes and tsunamis, the two countries affirmed the need for better cooperation on disaster preparedness and emergency response management systems. One way of enhancing such cooperation is by working together in regional forums like the East Asian Summit, of which both countries are members. Cooperation on disaster management may including sharing of data regarding seismic activity, early warning to the other side in case of any adverse environmental forecasts etc. Trade and investment flows to and fro between India and New Zealand have witnessed increase in the recent years. The two PMs welcomed this trend while noting that there was potential for further growth in trade and investments between the countries. Free Trade Agreement (FTA) negotiations are going on between India and New Zealand and going on well. Noting this, the leaders of the two nations reiterated their commitment to the early conclusion of the FTA negotiations. They agreed that if a high quality, comprehensive FTA is put in place, it would lead to a qualitative and quantitative leap in economic interactions which will be beneficial economically for both the countries. Civil Services

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This is more so because the key exports of India and New Zealand are complementary in nature. That in turn would mean a minimum list of items excluded from the FTA. Also with the FTA in place, key exports of each country would be able to access the market of the other quite easily. This in turn would increase the volume of bilateral trade. Also, the enhanced bilateral trade and the mutual sharing of expertise between the countries can help in ushering food security in the future. New Zealand is home to many exotic locations, some of which have been captured in popular Hindi movies in India, which also have sizeable global audiences, including in New Zealand. In the light of this, the two governments have rightly perceived modern cinema as a means of enhancing cultural as well as economic ties by strengthening the bonds between the film industries of their respective countries. To build on the already existing links between the film industries, an Agreement on Audio- Visual Co- productions was signed by the High Commissioner of New Zealand to India, Mrs. Jan Henderson and the Information and Broadcasting Secretary, Raghu Menon in the presence of the two PMs. The agreement is expected to encourage cooperation at the industry level, help in sharing creative talent and support the vibrant film industry in both countries. Students from India regularly flock to Universities in Australia and New Zealand for higher studies. In fact, statistics suggest that the countries in Oceania have attained greater popularity than even the USA and the UK as viable educational destinations for Indian students. Thus, education was identified as a suitable area of cooperation between the two governments. The two PMs announced a new Education Cooperation Initiative. The initiative is going to be jointly funded by the countries and it will be worth NZ $1 million (Rs.3.6 crore approximately) annually. The funding will be shared equally by the two countries. The initiative will promote partnerships in two important areas, namely- 1) higher education and research, and 2) skills and vocational education. It will also concentrate on SEPTEMBER 2011, XVII Year, Issue No.9
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the following areas- 1) academic and student exchanges, 2) joint research activities, and 3) industry collaborations. Sports scholarships are also to be included within the ambit of the initiative. Both India and New Zealand have sizeable tribal and indigenous populations who have distinctive cultures of their own. India is presently facing a severe internal security threat from the Maoists who enjoy reasonable support from the tribals. Many thinkers and analysts feel that studies and research needs India and New Zealand

to be undertaken to understand tribal cultural traits and plan developmental interventions to ensure that their sense of alienation is stemmed. New Zealand with its indigenous population shares with India similar challenges though no rebellion is brewing within its territory. In the light of facing similar developmental challenges with respect to their native populations, it was decided that the Education Cooperation Initiative should provide opportunities to share expertise and experience in

Major Outcomes of Keys visit


The Prime Minister of New Zealand John Key has paid a state visit to India. Commonwealth ties, shared democratic values, people-to-people and sporting links underpin the vibrant bilateral relationship between India and New Zealand. The visit by the New Zealand prime minister is expected to strengthen the ties between both the nations. Both the nations expected to enhance engagement across a range of trade and economic sectors, including science and innovation, education and defence. During the bilateral summit, both the nations affirmed the importance of cooperation on disaster preparedness and emergency response management systems, a shared area of focus for the two countries working together in regional forums such as the East Asia Summit. Economic Relations: The past decade has witnessed increased trade and investment flows between India and New Zealand, but there still exists potential to expand bilateral trade significantly. Both the nations are sincere in their commitments to conclude the Free Trade Agreement (FTA) negotiations by March 2012. Successful conclusion of a high quality and comprehensive FTA would provide the platform for stronger economic interaction to the benefit of both economies. It is here underscored that at present the India-New Zealand bilateral trade is small, totalling around $1 billion, if the FTA was signed by 2012, bilateral commerce would treble to $3 billion by 2014. Agreement on Audio-Visual Co-Productions: Both the nations also signed an Agreement on Audio-Visual Co-Productions. This Agreement will allow both sides to encourage industry level cooperation, share creative talent, and support the vibrant film industry in both countries. A New Education Cooperation Initiative launched: This jointly-funded Initiative, worth Rs 3.6 crores will be shared equally by New Zealand and India. It is expected to promote partnerships in two key streams; higher education and research, and skills and vocational education. The Initiative will focus on areas such as academic and student exchanges, joint research activities, and industry collaborations. The Initiative also includes sports scholarships and provides opportunities to share expertise and experience in tribal and indigenous higher education. A Joint Education Council will be established to implement the Prime Ministers Initiative. 127 Civil Services

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tribal and indigenous higher education. For the purpose of implementing the initiative, a Joint Education Council will be established as per the agreement. Science and technology is another area where the two sides are trying to expand and improve their relationship. A Science and Innovation Protocol for Cooperation was signed and it is expected that the protocol will provide a framework for future scientific exchanges and research collaboration. The first joint science initiative between the two countries, the Science Research Workshop on Food Technologies and Research, which was recently held at the Riddet Institute / Massey University and the Lincoln University in New Zealand, was welcomed by both the PMs. It is a pioneering step towards future cooperation, something which was long due given the scientific prowess of the two nations. The two countries are developing healthy relations in the field of civil aviation, a sector which has grown rapidly in India and still has a lot of potential. Within the civil aviation sector, there are a number of sub- sectors where cooperation can be explored, one such sub- sector being that of training. With the shortage of welltrained pilots and other airline staff in India, caused largely by the fact that the growth of trained manpower in the aviation sector has failed to keep pace with the exponential growth of the sector itself, training in this sector does provide huge opportunities for bilateral cooperation. Indias defence cooperation with major powers in the Pacific Ocean is witnessing a gradual increase. The nation has conducted naval war games with the dominant powers of the region in recent times. An improvement of defence ties with the Kiwis was very much on the cards in the present visit of the New Zealand PM to India. In order to strengthen bilateral defence ties, PM Key announced the proposed appointment of a Defence Advisor to India. The main task of the Defence Advisor would be to facilitate New Zealands defence relations with India. Safety and security of important sea lanes such as the Malacca Straits is crucial for both countries as well as for SEPTEMBER 2011, XVII Year, Issue No.9
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the regional and world economy as much of the cargo of the world passes through these lanes. Piracy continues to remain a problem for ships passing through sea lanes in the Indian Ocean as well as through the seas adjacent to the South East Asian countries. Also ships are particularly vulnerable near the Gulf region where they fall prey to the notorious Somali pirates. Both countries agreed that regional and global cooperation to ensure maritime security must continue. The leaders also acknowledged that ship visits and staff college visits between the countries had deepened bilateral defence cooperation to the benefit of both sides. Reforms in the United Nations and especially in its Security Council have been a major agenda item for India both in bilateral as well as multilateral forums. The matter expectedly was brought up during the PM level talks. Though PM Key announced his countrys support for Indias membership in a reformed Security Council, including in any expansion of permanent membership, he remained noncommittal as to whether such possible membership should be with or without veto powers. Both PMs however highlighted the need for general reforms in the UN so as to ensure that it reflects the realities of the 21st century rather than that of the immediate postWorld War II scenario. With respect to nuclear weapons, both sides agreed that they share the vision of a nuclear weapons free world. Perhaps the manner in which such a world should be created is where the two countries may agree to disagree. So far, New Zealands response to the India- US nuclear agreement has been guarded. While it has not been overtly effusive in its praise of the deal, it 128

has nonetheless not shown any major signs of rigidity in its stance regarding Indias inclusion in the nuclear club. New Zealands support in the Nuclear Suppliers Group remains critical for ensuring the necessary waivers for India regarding export of nuclear materials and technology. While remaining largely noncommittal regarding the relaxation of rules of the multilateral export control regimes for India, as a special case, the New Zealand side welcomed Indias increased engagement with such regimes. India and New Zealand cooperate in a number of regional organizations, the primary among them being the East Asian Summit, the ASEAN Regional Forum, the ASEAN Defence

Ministers Meeting Plus and the Asia Europe Meeting (ASEM). The leaders of the two nations reaffirmed the importance of these organizations and forums in improving regional security, economic partnerships and political linkages. They also agreed to work together to further the Comprehensive Economic Partnership under the East Asian Summit. The two sides felt that the back- bone of bilateral relations continued to be the people- to- people contacts. Strengthening such contacts lay at the heart of strengthening and rejuvenating bilateral relations. Sir Edmund Hillary, a prominent Kiwi, who made history by being the first man in the Civil Services

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world to scale Mount Everest, the worlds highest peak remains etched till this day in the hearts and minds of numerous Indians. It was decided by the two governments to create a fellowship in his name, which will be known as the Sir Edmund Hillary Fellowship so as to facilitate a deeper understanding amongst the people about each others country. PM Key announced that the recipient of the fellowship for 2011 will be a prominent Indian businessman. The Indian community in New Zealand is an increasingly vibrant one. It was felt that this community has provided a platform for the two way flow of visitors, migrants and students between the countries. In a major boost for the Indian community in New Zealand, the Pravasi Bharatiya Samman Award (PBSA), which is the highest honor given by the Indian government to its overseas citizens, for 2011 was conferred upon the Governor- General of New Zealand in the month of January. Both sides felt that this unique honor to the head of state in New Zealand would help strengthen people- topeople ties. Sporting ties between India and New Zealand are quite strong, particularly in the games of cricket and hockey. While cricket is part of the two nations shared colonial heritage, hockey is Indias national sport and it also enjoys wide support in New Zealand. Cricket was pointed out as an example not only of the countries shared heritage, but also of their close sporting ties and bilateral friendship. The PM of New Zealand congratulated India on its successful hosting of the recently concluded 2011 World Cup along with Sri Lanka and Bangladesh, as well as for winning the coveted trophy. The two leaders looked forward to the next World Cup, to be held in 2015 and to be hosted by New Zealand and Australia. They also agreed to work together to strengthen sporting ties as a means for promoting people- to- people links. Why India abstained at Libya? Brazil and Germany abstained from voting on the UN resolution 1973 and India, China and Russia opposed it. The US, France and Britain were among 10 countries that voted in SEPTEMBER 2011, XVII Year, Issue No.9
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favour of the resolution. India has not supported western intervention under the leadership of NATO in Libya and has emphasized on the decisions relating to Africa should be left to the Africans. India wants (a) All the actions and decisions would be taken by the leaders of the African Union (AU) and India feels that any outside intervention would be tantamount to infringement of sovereignty. AU has been maintaining that only a political solution will make it possible to promote peace in a lasting manner in Libya. The AU has been working on a ceasefire plan that involves in dialogue between all Libyan parties. (b) India wants peace and tranquility to return to Libya. India favours a swift resumption of the political process in the country. In this India will support the position taken by the African Union. (c) The political situation of Libya would be dealt on the lines adopted by the Ababa declaration. (d) Despite divergent political systems in the BRICS, the Sanya declaration was unequivocal in criticising the recent no-fly-zone and military action by the NATO forces in Libya and suggested that the UN Charter respecting the sovereignty of the member states should be respected. Indian companies, especially in sectors like hydrocarbon, power, construction and information technology have several ongoing projects in Libya. Abou 18,000 people of Indian origin are working in Libya. While Indias oil import from Libya is just one million tonnes out of the annual import of 160 million tonnes, many Indian workers are engaged in Libya in construction and petroleum sector jobs. India and Kyrghyzstan

Research Development Organisation and the National Centre for Cardiology and Internal Medicine, Kyrgyzstan. The Kyrgyz-Indian Mountain Biomedical Research Centre (KIMBMRC) will carry out research on the mechanism of short-term and long-term high altitude adaptation. The centre will also study high altitude acclimatisation and find measures to provide succour for maladies at high altitudes. It will also mobilise and synchronise the expertise of the two countries in the area of high altitude research. The benefits of these studies will apply to a large population across the globe, as more and more people travel to the mountains every year. The centre has a field station at Tuya Ashu, located at a height of 3,200 metre. Akpay Sarybaev, a leading cardiologist and expert in mountain medicine, has been nominated as the centres director. India wants strategic hold in Kyrgyzstan: In a move that will strengthen Indias strategic foothold in Kyrgyzstan, India recently concluded talks with Kyrgyzstan to train its forces for UN missions. The step is significant because Kyrgyzstan is the only

Bio-medical research centre


India has opened a mountain biomedical research centre in, Bishkek, the capital city of Kyrgyzstan to help better the lives of both military personnel and civilians, making it the first such joint project India has had with any country. The unique institution has been established jointly by the Defence 129

nation that hosts both American and Russian military bases. India plans to dispatch a training team to Kyrgyzstan which will also help Kyrgyz soldiers hone their English skills, as part of an overarching plan to step up defence cooperation with the Central Asian nation, bordering China. Indias current level of military engagement with Kyrgyzstan is a bit limited and there is need and potential to expand the scope to military training, defence research and development and production of armaments. India is also plans joint research and development in non-defence sectors such as physiology, medicine, animal husbandry and nutrition with Kyrgyzstan. Roza Otunbayeva is the president of Kyrgyzstan; she is also the first female president of Kyrgyzstan. Civil Services

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India and Turkey

Joint Naval Exercises in A. Sea


The Indian Navy and the Turkish Navy have participated in a joint naval exercise off the Mumbai coast in the Arabian Sea. This joint exercise was the first of its kind between the two navies and its major aim was to build up capabilities related to antipiracy operations, disaster relief operation and rescue missions. Three frigates and tanker including TCG Barbaros, TCG Gelibolu, Gemlik and Gungor participated from Turkeys side while INS Mumbai, INS Betwa, INS Brahamaputra and one submarine besides some maritime reconnaissance aircraft participated from the Indian contingent. Significance of the exercise: With growing threat perception in maritime security globally, the recent naval drill with Turkeyis of great value as it promotes solidarity and global security measures to counter global unrest caused by piracy. Indian Navy feels that Turkey has a strong shipping industry and there is great potential for partnership between the two countries in areas of shipbuilding. Besides, Turkey is a rising regional player with whom India would like to foster greater ties. India can take advantage of Turkeys influence in Asia and Europe by building ties with Turkey. India and Colombia

Signed double tax avoidance treaty


In an effort to rationalize bilateral taxation and stem the flow of illicit transactions, India has signed a double taxation avoidance agreement (DTAA) with the South American country of Colombia. The agreement with Colombia to avoid double taxation among the two nations has been signed and it aims to prevent fiscal evasion with respect to taxes on income. The agreement will also provide impetus in the fight against illicit financial transactions like stashing of black money in exchange of financial information, including banking details. The provisions under the SEPTEMBER 2011, XVII Year, Issue No.9
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agreement provide for rationalized taxation system in which business transactions between companies of both sides including subsidiaries would be taxed only once, thus providing an impetus to trade between both countries. According to the provisions of the DTAA, any branch, factory, profits of a construction, assembly or installation projects will be taxed in the state of source if the project continues in that state for more than six months. Further, any taxes on transportation of goods and passengers through aerial or maritime routes would be collected in the country where the company has been incorporated in, but the dividends, interest and royalty income of the company is liable to be taxed in both the countries. The maximum rate of tax to be charged in the country of source will not exceed five percent in the case of dividends and 10 percent in the case of interest and royalties. Major Benefits under the DTAA: The Agreement incorporates provisions for effective exchange of information and assistance in collection of taxes between tax authorities of the two countries in line with internationally accepted standards including exchange of banking information and incorporates anti-abuse provisions to ensure that the benefits of the Agreement are availed of by the genuine residents of the two countries. The Agreement will provide tax stability to the residents of India and Colombia and facilitate mutual economic cooperation as well as stimulate the flow of investment, technology and services between India and Colombia. Understanding Double Taxation Avoidance Agreements (DTAA): Fiscal jurisdiction is often the most aggressively guarded jurisdiction of any nation. As a consequence, even in times when economies are going global and borders fading, leading to liquid movement of goods, services and capital, double taxation is still one of the major obstacles to the development of inter-country economic relations. Nations are often forced to negotiate and accommodate the claims of other nations within their heavily guarded fiscal jurisdiction by the means of double taxation avoidance agreements, in order to bring down the barriers to 130

international trade. The Fiscal Committee of OECD in the Model Double Taxation Convention on Income and Capital, 1977, defines the phenomenon of international juridical double taxation as the imposition of comparable taxes in two or more states on the same tax payer in respect of the same subject matter and for identical periods. Therefore, the basic cause of international multiple taxation is the exercise by sovIndia and US Relations

Aviation safety agreement (BASA)


India and US has linked a bilateral aviation safety agreement (BASA). BASA will facilitate reciprocal airworthiness certification of civil aeronautical products imported/ exported between the two nations. The major benefit to India is that Indian standards would be comparable to global standards and its aeronautical products would be accepted by the US. The agreement will also improve passenger safety and therefore caps the success of the 2005 Open Skies Agreement, which opens more routes, includes more airlines, and greatly improves the

ability for companies to engage in commerce between the US and India. It is also believed that a BASA between both countries would help India upgrade its technology to world-class standards and harmonize its regulatory and monitoring systems with international best practices. The agreement gives an opportunity to India to develop reciprocal acceptances of certain aviation articles and will also promote the burgeoning civil aviation partnership emerging between both the nations. Finally, the agreement allows aviation authorities such as the FAA and the Indian Directorate General of Civil Aviation (DCGA) to certify aeronautical products and systems to be introduced in American and Indian markets. Civil Services

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ereign states of their inherent right to levy tax extra-territorially. Most of the countries subject their residents to tax, on the basis of personal jurisdiction, on their global income including income arising or having its source in foreign countries. Double tax treaties comprise of agreements between two countries, which, by eliminating international double taxation, promote exchange of goods, persons, services and investment of capital. These are bilateral economic agreements where the countries concerned evaluate the sacrifices and advantages which the treaty brings for each contracting state, including tax forgone and compensating ecoIndia and Sri Lanka

Re-building Kankesanthurai port


India and Sri Lanka recently signed a Memorandum of Understanding to develop the Kankesanthurai (KKS) port, the first such deep water facility being re-built in the

northern peninsula. The KKS port was rendered useless after the LTTE repeatedly attacked it when the outfit controlled the surrounding areas. The port was important in connecting the Jaffna peninsula with the rest of Sri Lanka and also regional destinations, particularly India. Importance of the Kankesanthurai (KKS) port: After its development the KKS will open the northern Sri Lanka to the whole world and establish regional and domestic connectivity. The Port will significantly lower the transit time of goods from and to India, Bangladesh, and the neighbourhood, and increase economic activity in the north, a region that is trying to find its feet after about three decades of civil war. SEPTEMBER 2011, XVII Year, Issue No.9
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nomic advantages. The interaction of two tax systems each belonging to different country, can result in double taxation. Every country seeks to tax the income generated within its territory on the basis of one or more connecting factors such as location of the source, residence of taxable entity, maintenance of Permanent Establishment and so on. Double Taxation of the same income in the hands of same entity would give rise to harsh consequences and impair economic development. Double Taxation Agreements between two countries therefore aim at eliminating or mitigating the incidence of double taxation. Classification of DTAA: Double taxation avoidance agreements, depending on their scope, can be classified as Comprehensive and Limited. Comprehensive Double Taxation Agreements provide for taxes on income, capital gains and capital, while Limited Double Taxation Agreements refer only to income from shipping and air transport, or estates, inheritance and gifts. Comprehensive agreements ensure that the taxpayers in both the countries would be treated equally and on equitable basis, in respect of the problems relating to double taxation. Objectives of DTAA: The object of a Double Taxation Avoidance Agreement is to provide for the tax claims of two governments both legitimately interested in taxing a particular source of income either by assigning to one of the two the whole claim or else by prescribing the basis on which tax claims is to be shared between them. The objectives of double taxation avoidance agreements can be enumerated in the following words: First, they help in avoiding and alleviating the adverse burden of international double taxation, by a) Laying down rules for division of revenue between two countries; b) Exempting certain incomes from tax in either country c) Reducing the applicable rates of tax on certain incomes taxable in either country. Secondly, and equally importantly tax treaties help a taxpayer of one country to know with greater certainty the potential limits of his tax liabilities in the other country. Still another benefit from the tax-pay131

ers point of view is that, to a substantial extent, a tax treaty provides against non-discrimination of foreign tax payers or the permanent establishments in the source countries vis--vis domestic tax payers. Analyzing Indian policy with respect to double taxation avoidance agreements: Following points will best describe the policy stance adopted by the Indian government while entering DTAAs: (a) Trading with India should be relieved of Indian taxes considerably so as to promote its economic and industrial development. (b) There should be co-ordination of Indian taxation with foreign tax legislation for Indian as well as foreign companies trading with India. (c) The agreements are intended to permit the Indian authorities to co-operate with the foreign tax administration. (d) Tax treaties are a good compromise between taxation at source and taxation in the country of residence. Sub-regional organisation

BCIM
BCIM, the forum of Bangladesh, China, India and Myanmar recently had their 9th meeting at Kunming city of Yunnan province in China. The initiative to explore potential opportunities of cooperation in this sub-region, known as Kunming Initiative, has so far been a track-II diplomacy endeavour 1; it was launched in the year 1999. The major objective of this initiative is to promote economic cooperation among the countries of this sub-region by making best use of their comparative advantages. The Ninth meeting of the BCIM concluded on the note to improve the cooperation mechanism, which would feature a multi-track initiative with track I coordination, to promote regional prosperity and harmony. The recently concluded meet of the BCIM also agreed to rename the Forum of Bangladesh, China, India and Myanmar on Regional Economic Cooperation as Bangladesh China India and Myanmar Regional Cooperation Forum. The joint statement of the meet agreed to focus on improved regional connectivity and establishing the Kunming-Mandalay-Dhaka-Kolkata economic corridor. Civil Services

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India and Poland Relations

Towards better governance

Visit of Radoslaw Sikroski


The Minister of Foreign Affairs of Poland, Radoslaw Sikroski, was recently on an official visit to India. This was his first visit to a country outside Europe after Poland assumed Presidency of EU on 1st July, 2011. It is to be mentioned that Poland became a member of EU in 2004 and of NATO in 1999. During his visit to India both the nations observed that their relations are rooted in history and have traditionally been characterized by goodwill and cooperation. In the field of defence cooperation Poland hopes that India will appreciate Polish arms industry products which are passing the test in Afghanistan which would boost bilateral trade. It should be noted that India has a multifaceted mutually beneficial relationship with Poland and both nations share a common outlook on a number of matters of common interest. Poland has always supported India's candidature for a permanent

Changing facets of Judicial Activism in India


"Judicial activism is a necessary adjunct of the judicial function because the protection of public interest, as opposed to private interest, is the main concern of all the democratic governments." racing the roots of the Concept of Judicial Activism: According to Merriam-Webster's Dictionary of Law, judicial activism is "the practice in the judiciary of protecting or expanding individual rights through decisions that depart from established precedent or are independent of or in opposition to supposed constitutional or legislative intent". Thus it can be asserted that judicial activism is another name for innovative interpretation; the concept was born in 1804 in the United States of America when Chief Justice Marshall, the greatest Judge of the English-speaking world, decided Marbury v. Madison case. Marbury was appointed Judge under the Judiciary Act of 1789 by the U.S. Federal Government. Though the warrant of appointment was signed it could not be delivered. Marbury brought an action for issue of a writ of mandamus. By then, Marshall became the Chief Justice of the Supreme Court having been appointed by the outgoing President, who lost the election. Justice Marshall faced the imminent prospect of the Government not obeying the judicial fiat if In a rare display of judicial statesmanship asthe claim of Marbury was to be upheld. In a serting the power of the rare display of judicial statesmanship assertCourt to review the acing the power of the Court to review the actions of the Congress and tions of the Congress and the Executive, Chief the Executive, Chief JusJustice Marshall declined the relief on the tice Marshall declined the ground that Section 13 of the Judiciary Act of relief on the ground that 1789, which was the foundation for the claim Section 13 of the Judimade by Marbury, was unconstitutional since ciary Act of 1789, which it conferred in violation of the American Conwas the foundation for stitution, original jurisdiction on the Supreme the claim made by Court to issue writs of mandamus. He observed Marbury, was unconstituthat the Constitution was the fundamental and tional since it conferred paramount law of the nation and "it is for the in violation of the Americourt to say what the law is". He concluded that can Constitution, original the particular phraseology of the Constitution jurisdiction on the Suof the United States confirms and strengthens preme Court to issue the principle supposed to be essential to all writwrits of mandamus. ten Constitutions. That a law repugnant to the Constitution is void and that the courts as well as other departments are bound by that instrument. If there was conflict between a law made by the Congress and the provisions in the Constitution, it was the duty of the court to enforce the Constitution and ignore the law. The twin concepts of judicial review and judicial activism were thus born. Conceptualizing Judicial Activism: The government is divided into three wings: (a) Legislative; (b) Executive; and (c) Judiciary. All the three branches have separate functions. The legislative performs the functions of law making, the executive enforces those laws and the judiciary performs the function of interpretation and analysing the validity of laws. This was the original conception of the functions of the judiciary. But with the fast changing socio-economic and administrative functions in the society, it is not possible for the legislature to 132 Civil Services

membership of UNSC. During the visit of Polish Foreign Minister it has been agreed to consider the issue of grant of visa exemption for diplomatic passport holders. Both the nations also expressed desire to speed up negotiations of all other pending matters as well. Relations between India and Poland encompass cooperation in areas like Trade and Investment, Energy, Science & Technology, Culture, Security and Defence and both the nations want to increase the flow of funds to further enhance bilateral cooperation in these sectors. SEPTEMBER 2011, XVII Year, Issue No.9
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foresee every possible situation that may arise in the future and frame laws for every possible situation. In such a case our judiciary steps in to play its most important role, it comes in and it interprets the laws in such a manner as to apply the existing laws to the existing laws to the new situation that has arisen. The judiciary uses its creativity to solve the existing societal problems, thus bridging the gap between the law and social conditions. This creativity of judiciary is termed as judicial activism. In other terms we can affirmatively say that judicial activism refers to court decisions that arguably go beyond applying and interpreting the law and extend into the realm of changing or creating laws, or going against legal precedents. The scope of judiciary review is basically extended to three areas: (a) Judicial review of legislative action. (b) Judicial review of the executive or administrative action. (c) Judicial review of the judicial action. Thus we can say that our judiciary not only has to deal with the issues of resolving the inter-se disputes but it is also supposed to act as a balancing mechanism between the conflicting pulls and pressures operating in the society. Judicial activism acts as an important for testing the validity and constitutionality of the actions of the legislature and the executive. Judicial Activism in India: (a) Public Interest Litigation: Judicial activism was made possible in India, thanks to PIL (Public Interest Litigation). Generally speaking before the court takes up a matter for adjudication, it must be satisfied that the person who approaches it has sufficient interest in the matter. This is intended to avoid unnecessary litigation. The legal doctrine 'Jus tertii' implying that no one except the affected person can approach a court for a legal remedy was holding the field both in respect of private and public law adjudications until it was overthrown by the PIL wave. PIL, a manifestation of judicial activism, has introduced a new dimension regarding judiciary's involvement in public administration. The sanctity of locus standi and the procedural complexities are totally sidetracked in the causes brought before the courts through PIL. Thus PIL is one SEPTEMBER 2011, XVII Year, Issue No.9
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of the important principles that our judicial set up has given to the country. PIL is one of the three contours of judicial activism that are developed by our judicial setup. The other two are the broader interpretation given to fundamental rights and the accountability of our administration. (b) Judicial Activism and constitutional amendments: The Indian Constitution provides sufficient provisions for the amendment of the constitution. The power to amend the constitution lies with the legislature and in order to amend out constitution, the bill amending the constitution must be passed by a majority of two third of the strength. Since the enforcement of our constitution, our legislative has used its power to amend the constitution several times. Simultaneously our judiciary from the beginning of the constitution had to deal with many challenges that were raised due to the amendments made to the constitution by the parliament. Taking for example the controversy over Article 13 of the constitution, it says that any law which violates the fundamental rights of the citizen would be void. There were various examples given as to what constitutes law under this article and the constitutional amendments have not been included in it as a law. This provision of the Article 13 was challenged in the court just after the commencement of the constitution. In the case of Shankari Prasad vs. Union of India, the Supreme Court held that the word "law" as used in the article 13 doesn't include the constitutional amendments. This decision showed Thus we can say that our the positive approach of the courts, giving the judiciary not only has to power to legislature to amend the constitudeal with the issues of tion affecting the fundamental rights of the resolving the inter-se people. This positive approach of the court disputes but it is also continued until Justice Hidayatullah pointed supposed to act as a balout in Sajjan Singh vs. State of Rajasthan, that ancing mechanism bethe fundamental rights should not be left at tween the conflicting the discretion of the legislature. The court again pulls and pressures opchanged its attitude in the Golaknath vs. State erating in the society. Juof Punjab case, when it upheld that the constitudicial activism acts as an tional amendment would also be included unimportant for testing the der Article 13. This was an excellent example validity and constitutionwhen our judiciary showed its active role in ality of the actions of the interpretation of our constitutional provisions legislature and the exin the light of the changing circumstances. ecutive. (c) Emergency and after: Judicial activism or we can properly say that the role of judiciary underwent magnificent changes in India after the era of emergency. To begin with, the court, the court did this with respect to article 21. In its original form the article 21 deals with right to life. However, after the emergency period the courts started to look it in a broader manner. In Menaka Gandhi vs. Union of India the court laid down a seminal rule of constitutional interpretation. It said that there was a greater need to look at the meaning of the words in the constitution. Thereafter article 21 was used by the courts in various cases for the purpose of providing basic human rights to the citizen. It clearly shows the pro-active role displayed by the courts while interpreting the constitution. The period after the infamous emergency drastically changed the way judicial activism was exercised in India. In this period judicial activism was inspired by the philosophy of constitutional interpretation. During this time the courts looked at the constitution not as a set of rules, but as a principles of constitutional governance. (d) Recent Instances of Judicial Activism: The recent past had witnessed varying ideological wordings from the Supreme Court that questioned the functioning and service delivery mechanism of our legislative and executive branches. For example, the SC brought in CNG issue, set emission standards for 133 Civil Services

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vehicles, set norms for organ transplant and so on. More recently the SC issued a very unique order when it directed a Special Investigating Team be set up to monitor the investigation into the issue of black money. This is the most recent example of judicial creativity displayed by our courts. In another judgment recently which gave blow to both the centre and the Chhattisgarh Government, the SC declared as illegal and unconstitutional the deployment of tribal youths as Special Police Officers or Salwa Judum or any other force - in the fight against the Maoist insurgency and ordered their immediate disarming. Other recent issues where Judiciary recently acted are: 1. SC suggested/ordered government to distribute grain under public distribution policy to the poor instead of letting it rot inside godowns. 2. SC ordered government to Delhi to not demolish the night shelters made for homeless people. 3. Recent brawl of appointment of CVC PC Thomas. These are just the few major examples where our judicial setup had shown its pro-active approach in dealing with the emerging socio-economic issues. Reasons for Rising Instances of Judicial Activism in India: The growing awareness among the citizen and the change in the way of functioning of the civil society of the nation has given a fillip to the creative working of our judicial setup. Constitutional Court has to continuously strive to sustain its own social legitimacy. Through impartial and principled decisions, it sustains people's faith in it. The failure of our executive branch in the implementation of programmes and policy formulation is another major reason why the courts are being compelled to jump into the domain of executive territory. The rising cases of corruption in our political establishment and accelerating electoral mismanagement which has resulted in un-deserving candidates getting the tickets for the parliament is one of the prominent reasons for rising instances of judicial activism in India. The development in the field of information technology has created SEPTEMBER 2011, XVII Year, Issue No.9
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immense awareness among the people at grass root level. People are more concerned about their rights and obligations of the government now; they are not ready to compromise their rights and basic amenities which are guaranteed by our constitution. In case of minor breach of promises by the government, the citizen do not hesitate to reach the courts for the protection of their rights and due obligations. All these have given more teeth to our judicial setup; it is now more than ready to come to the rescue of the citizen in case of violation of their rights and any negligence in policy and law formulation by the government. Judicial Activism in India - Is it a Necessary Evil? Judicial activism has always been a source of heated debate, especially in the light of recent developments in this regard. Over the last few years with various controversial decisions, judges of the Supreme Court as well as various High Courts have once again triggered off the debate that has always generated a lot of heat. The Indian Constitution provides for separation of powers between all the three branches of the government and hence demarcates the powers and areas of all these three machineries. However sometimes with the failure of the legislature and the executive, the separation of power remains a theory only in the text book and the third wing of governance, the judiciary assumes powers unprecedented for under the name and guise of judicial activism, which is a very basic feature of the Constitution of India. The Indian Constitution The Indian judiciary has taken upon itself the provides for separation task of ensuring maximum freedom to the of powers between all masses and in the process, to galvanize the the three branches of the executive and the legislature to work for pubgovernment and hence lic good. However, this changing stance of the demarcates the powers judiciary from moderate to active role has inand areas of all these vited wrath from some sections of the society, three machineries. Howcriticism from some others and support and ever sometimes with the cheers from still other sections. The promifailure of the legislature nent question which arises is whether judicial and the executive, the activism is right or wrong. Here are some separation of power reviews which postulate judicial activism as a mains a theory only in the wrong practice: (a) The first notion is that, jutext book and the third dicial activism will have a detrimental effect wing of governance, the on our democratic order. It is firmly believed judiciary assumes powthat the citizens are losing faith in the political ers unprecedented for leadership, bureaucracy and governmental under the name and mechanism. No one is spared of a serious susguise of judicial activism, picion, not even our judiciary, so judicial acwhich is a very basic feativism may cause further harm to our demoture of the Constitution of cratic setup. (b) The loopholes in our judicial India. system are the second reason for criticizing the concept of judicial activism. It is charged by many critics that judicial activism is the outcome of the judiciary's zeal to be in the limelight. Moreover, there are similar flaws and shortcomings in judicial administration as in other administrative systems. (c) Another major criticism against judicial activism arises from the danger of abuse of PIL. Even the Chief Justice of the Supreme Court has cautioned the legal community against misuse of PIL and emphasized the need for its proper regulation. (d) A common criticism levelled against judicial activism is that in the name of interpreting the provisions of the Constitution and legislative enactments, the judiciary often rewrites them without explicitly stating so and in this process; some of the personal opinions of the judges metamorphose into legal principles and constitutional values. (e) One 134 Civil Services

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other facet of this line of criticism is that in the name of judicial activism, the theory of separation of powers is overthrown and the judiciary is undermining the authority of the legislature and the executive by encroaching upon the spheres reserved for them. It is here underscored that the Constitution provides for checks and balances in order to pre-empt concentration of power by any branch not confided in it by the Constitution. The Need is to adopt Positive Approach - Judicial Self Restraint: Judicial activism has served many goods for our politico-administrative system, but in addition to exercising activism, the judiciary also need to exercise selfrestraint in certain matters. Judicial selfrestraint can be defined as any limitation on the judicial decision making, other than those expressly imposed by the constitution or any statue. There are three areas in which judicial self-restrain is noticed: (a) Legislative powers. (b) Political questions. (c) Discretionary powers of the administration. Conclusion: Recently the country has seen instances of beneficial judicial Gorkhaland agreement inked

activism to a great extent. Whatever be the criticisms against judicial activism, it cannot be disputed that judicial activism has done a lot to ameliorate the conditions of the masses in the country. The arguments that can be given to counter the drawbacks of judicial activism are: (a) Firstly, it has become crystal clear that not only has judicial activism activated the judiciary but has activated the executive and the legislature too. Several new legislations have appeared on the scene after judiciary's efforts and directions for example, The Consumer Protection Act, 1986, The Environmental (Protection) Act, etc. Judicial activism has also unearthed several scams and scandals (e.g. Hawala Scam, Fodder Scam, St. Kits Scam, Illegal Allotment of Government Houses and Petrol Pumps, Fertilizer Scam etc.). (b) The judiciary, like the legislature, is also manned by human beings who come from the same social milieu and are subject to same human frailties and social constraints. No institution has monopoly rights to weaknesses or to making mistakes. Therefore the excep-

tional cases of judicial misadventure should be avoided and the positive side of the judicial creativity must be looked at. (c) Another positive aspect of judicial activism is the development of PIL movement in India. This has assisted the common man to a greater extent. Now any member of the society can move to the court taking his grievances for redresal. Taking recourse of judicial activism our courts have set right a number of wrongs committed by the states as well as by individuals. The common people are very often denied the protection of law due to delayed functioning of the courts, also called judicial inertia or judicial tardiness. The values of our democratic polity can be furthered only by honest and forthright judicial activism and not by running down the judiciary in the eyes of the public. The greatest asset and the strongest weapon in the armoury of the judiciary is the confidence it commands and the faith it inspires in the minds of the people in its capacity to do even-handed justice and keep the scales in balance in any dispute. Gorkha Hill Council, formed in 1988. In this regard, the GTA will have full control over Tourism, Agriculture and Public Health. GTA will also have full control over the school and college teachers commissions which deal with appointments. (b) The area of GTA shall comprise the areas of entire subdivisions of Darjeeling, Kalimpong with extended areas of Kurseong.

Darjeeling Hills get more power


historic pact for autonomy for Darjeelings districts was signed be tween the Centre, West Bengal and the Gorkha Janmukti Morcha (GJM). The agreement was signed by Home Secretary of West Bengal Government GD Gautama, Joint Secretary of Union Home Ministry KK Pathak and the General Secretary Gorkha Janmukti Morcha Roshan Giri at the Pintail village, about 8 km from Siliguri in the presence of Union Home Minister P Chidambaram, West Bengal Chief Minister Mamata Banerjee and GJM Chief Bimal Gurung and the BJP MP from Darjeeling Jaswant Singh. The agreement aims to create an elected autonomous body - the Gorkhaland Territorial Administration (GTA) - a hill council armed with more powers than its predecessor Darjeeling Gorkha Hill Council (DGHC) formed in the late 1980s, to administer the three hill sub-divisions of Darjeeling, Kalimpong and Kurseong. Salient features of tripartite agreement on Darjeeling: (a) The autonomous Gorkhaland Territorial Administration to be formed through direct elections as per an agreement between the three parties by keeping on record the GJMs demand for a separate state of Gorkhaland. The GTA will be conferred with more powers compared to the older Darjeeling SEPTEMBER 2011, XVII Year, Issue No.9
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(c) In regard to the transfer of additional areas of Siliguri, Terai and Dooars to the new body, a high-power committee will be formed comprising four representatives of GJM, three representatives of state government (one from home department, the District Magistrate of Darjeeling, the District Magistrate of Jalpaiguri), the director of the census operation representing the government of India, apart from the chairman of the committee to be appointed by the state government. The chairperson of the board of administrator of Darjeeling Gorkha Hill Council will be the convenor of the committee. (d) The committee will look into the question of identification of additional areas of Siliguri, Terai and Dooars that may be transferred to the new body having regard to their compactness, contiguity, homogeneity, ground level situation and other relevant factors. (e) The committee will be expected to give its recommendation within a short period, preferably within six months of its constitution. (f) The central government to give a financial package of Rs.600 croreRs.200 crore per annum for three years for projects to develop socio-economic infrastructure in the GTA in addition to the normal plan assistance to West Bengal. (g) Elected House of the Territorial Administration to be called Sabha, which will have a five-year term with its proceedings to be conducted by a chairman and deputy chairman. (h) Composition of the Sabha: total elected members 45. Five members will be nominated by the Governor to give representation to Scheduled Castes, Scheduled Tribes and Minority Communities. The MPs, MLAs and chairpersons of municipalities shall be ex-officio GTA Sabha members. (i) Three-tier panchayat to be constituted in the GTA region. Will the accord succeed in its aims? The newly signed accord is a milestone in the history of Gorkha communitys political struggle. The accord has been made clear that there can be an agreement for a bigger, more powerful body to replace the Darjeeling Gorkha Hill Council as the new setup would have full administrative, finanSEPTEMBER 2011, XVII Year, Issue No.9
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cial and executive powers and would be given more autonomy than the DGHC. The agreement provides for the setting up of a new, autonomous hill council, the Gorkhaland Territorial Administration (GTA). The accord aims to give greater autonomy to the Gorkha community. It is important to refer that the regions have 42 tribal communities of which four are Gorkha tribes Tamang, Limbu, Sherpa and Galmo and four are nonGorkha tribes of Mongoloid stock: Bhutia, Drukpa, Tibetan and Lepcha. The rest, Adivasis working in tea gardens, are either from Chhotonagpur or originally hail from these regions. The GJM is vigorously demanding for constitutional status for Gorkha tribes so that they have the same rights Scheduled Castes and Tribes. The accord was signed due to the revived agitation for the Gorkhaland. The critics of the agreement believe that it concedes too much and others angry that it gives too little. The critics are unhappy with the nomenclature of Gorkhaland which they insist, will encourage the Gorkhas to press for Gorkha homeland. On the other hand, NSG Guidelines

the hardliners among the Gorkha community, including the Jana Jagaran and the Jana Chetana, still hold that they will settle for nothing less than a separate state carved out of West Bengal. The GJM has said that if Telengana is granted statehood, it will press for statehood too. The success or failure of the agreement depends on the will to implement the agreement by all the parties in their true spirit. The West Bengal government must take necessary follow up actions to ensure that the future development projects in the Hills gives locals a vested interest in remaining part of West Bengal. If the future developmental prospects and the participation of locals in neglected the accord will fall like ashes very soon. As for Gorkha politicians, the agreement presents them with an opportunity to bring peace and development to their people. If they fail to grasp it, they run the risk of being marginalized by hardliners who are looking for a chance to stoke discontent and to return to armed struggle. They must not be allowed to succeed.

Jeopardizing Indian prospects

he NSG has adopted new guidelines at Noordwijk, the Netherlands, where the 46-nation grouping held its 2011 plenary meeting, on transfer of sensitive nuclear technology. The new guidelines makes it clear that the group will exclude those nations which are not signatories to the Nuclear Non-Proliferation Treaty and which do not have a full scope safeguards agreement allowing international inspections of all their nuclear facilities. The most significant impact of this decision by NSG has been on India because it effectively nullifies the clean waiver that India received from the cartel in 2008 as far as the import of enrichment and reprocessing equipment and technology is concerned. One can refer that the only additional requirement for ENR exports was enshrined in paragraphs 6 and 7 of the guidelines under which the suppliers were asked to exercise restraint and to ensure that any supplied equipment or technology not be used to enrich uranium beyond 20 per cent. But adopting a new paragraph 6 specifying objective and subjective criteria a recipient country must meet before an NSG member can sell ENR to it and amongst the new stipulated provisions the very first of these is NPT membership. Nevertheless, the revised NSG guidelines, known as the clean text, have not been adopted yet largely because a number of the 46-nation cartels members have been objecting to some of the other proposed restrictions such as the requirement that recipient states adhere to an Additional Protocol. 136 Civil Services

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The change in guidelines puts at stake Indias ability to buy enrichment and reprocessing technology and equipment (ENR) from NSG members. Under the terms of a landmark September 2008 agreement, the NSG waived its catch-all requirement of full-scope safeguards as a condition for supply in exchange for a concrete set of nonproliferation commitments by the Indian side. This agreement means NSG members are allowed to sell any nuclear equipment and material they want, including ENR, to India despite the fact that it does not allow international supervision over all its nuclear activities and is not a party to the Nuclear Non-Proliferation Treaty. Impact on India: Since paragraph 4 prohibits all nuclear exports to the only other countries outside the NPT - Israel, Pakistan and North Korea and therefore, the provisions in the guidelines was expressly designed to target India, to which the restrictions of that paragraph no longer apply. The fear of change in stance of the Nuclear Suppliers Group shifting the goalposts after getting India to agree to its tough conditions by compromising national strategic interests for what was touted in 2008 as a clean waiver of guidelines appear to be slowly but surely coming true. This is evident from the recent change in guidelines by the NSG on supplying fuel enrichment and reprocessing equipment. This is definitely going to impact India adversely, whenever we wish to acquire ENR technology. It is underscored here that establishing of nuclear power plants is meaningless in the absence of enrichment and reprocessing technology. The signing of Indo-US nuclear deal was touted as end of our isolation but that claim now stands in disarray. Though the new guidelines have not been made public yet, the draft text makes it clear that the group will exclude nations which are not signatories to the NPT and to which India is not a signatory. Though the US still says that nothing about the new enrichment and reprocessing (ENR) transfer restrictions agreed to by NSG members should be construed as detracting from the unique impact and importance of the US-India agreement on full civil nuclear cooperation. The main discomfiture of India is not reSEPTEMBER 2011, XVII Year, Issue No.9
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garding new ENR guidelines because we do not require these technologies right now. But India majorly objects the spirit of the new guidelines that violates the entire spirit of the NSG waiver and promises of full nuclear commerce. Indian reaction: India has opined that the proposed restrictions on transfer of sensitive nuclear items are derogation, rollback of U.S. commitments. India says that U.S. policy is not consistent with their view of assurances provided during the 123 Agreement negotiations. About Nuclear Suppliers Group (NSG): The Nuclear Suppliers Group is a group of nuclear supplier countries that seeks to contribute to the nonproliferation of nuclear weapons through the implementation of two sets of Guidelines for nuclear exports and nuclear-related exports. The NSG first met in November 1975 in London, and is thus popularly referred to as the London Club. Members of NSG: The 46 supplier states under NSG are: Argentina, Australia, Austria, Belarus, Belgium, Brazil, Bulgaria, Canada, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Kazakhstan, Republic of Korea, Latvia, LAquila Summit, July 9, 2009

Lithuania, Luxembourg, Malta, Netherlands, New Zealand, Norway, Peoples Republic of China, Poland, Portugal, Romania, Russian Federation, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Switzerland, Turkey, Ukraine, United Kingdom, and United States. The European Commission is the permanent observer of the NSG. Aims and Objectives: The major aim of the NSG members is strict adherence to the NSG guidelines that are adopted by consensus on the issues of nuclear proliferation. It is here mentioned that there are two sets of NSG guidelines. The first set of guidelines governs the export of items that are especially designed or prepared for nuclear use. The second set of NSG Guidelines governs the export of nuclear-related dual-use items and technologies (items that have both nuclear and non-nuclear applications), which could make a significant contribution to an unsafeguarded nuclear fuel cycle or nuclear explosive activity. Thus the guidelines of the NSG are aimed at ensuring that nuclear trade is done for peaceful purpose and it doesnt contribute to the proliferation of nuclear weapons, while not hindering international trade and cooperation in the nuclear field.

LAquila Statement on Non-Proliferation


To reduce the proliferation risks associated with the spread of enrichment and reprocessing facilities, equipment and technology, we welcome the progress that continues to be made by the Nuclear Suppliers Group (NSG) on mechanisms to strengthen controls on transfers of such enrichment and reprocessing items and technology. While noting that the NSG has not yet reached consensus on this issue, we agree that the NSG discussions have yielded useful and constructive proposals contained in the NSGs clean text developed at the 20 November 2008 Consultative Group meeting. Pending completion of work in the NSG, we agree to implement this text on a national basis in the next year. We urge the NSG to accelerate its work and swiftly reach consensus this year to allow for global implementation of a strengthened mechanism on transfers of enrichment and reprocessing facilities, equipment, and technology. 137 Civil Services

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India and Mauritius

on revised DTAA
Due to growing internal pressure, India has started to request Mauritius to review of Indias 30-year-old double tax avoidance agreement (DTAA). Both sides have indicated a positive signal to review the operations of the Joint Working Group (JWG), which was set up in 2006 to strengthen the mechanism for exchange of information under the India-Mauritius tax treaty, besides putting in place adequate safeguards to prevent misuse of the DTAA between them.India assured the investors that the revised DTAA would not affect foreign direct investment inflows to the country in the long run. One can note that Mauritius has accounted for about 42 percent or $54.22 billion of the total $130 billion worth of foreign direct investment in the country since April 2000 and about 40 per cent FII fund flow into India is routed through Mauritius and amongst them large majority of them are third country investors, who use the DTAA for saving capital gains tax. As per the present DTAA, capital gains from sale of shares by residents of Mauritius in India would be liable to tax only in that country. As Mauritius does not have capital gain tax, there is no burden on investors routing money to India through circuitous route. Although the Mauritian government had tried to placate India by tightening issuances of certificates of residence and issuing it one year at a time and at the same time it has also tightened the issuance of licence applications for collective investment schemes. But these measures have yielded nothing significant and proved too little to control such misuse. SEBI has brought in various rules to tighten KYC norms for issuing P-notes, for registering subaccounts and has improved disclosures made by FIIs. Impact of old DTAA: 1. India has witnessed huge generation of black money due to the existing provisions and both Mauritius and Switzerland have become a source for money laundering. 2. It is a matter great concern on the investments from Mauritius as investment route from Mauritius is misused. Mauritius is a leading offshore financial centre (OFC) with all the characteristics of a typical OFC such as very low taxes, relatively light financial regulation, banking secrecy and no requirement for a substantive local presence. 3. The DTAA has caused great loss to Indian exchequer and it has been estimated that India loses over $600 million a year in revenues on account of the double tax avoidance treaty with Mauritius. 4. The Supreme Court has addressed this issue in its ruling in the famous Union of India vs Azadi Bachao Andolan case. The apex court had ruled that it was the sovereign right of countries to enter into DTAAs and if residents of a third contracting state qualify for a benefit under a Treaty, they cannot be denied the benefit on a theoretical ground that treaty shopping is unethical and illegal. The SC held that softer a State, greater would be the unholy nexus between the law makers, the law keepers, and the law breakers - observed the Supreme Court (SC) in a strongly worded order laced with anxiety. Possible impact of revised DTAA: 1. The revised DTAA may back fire and the flow of both FDI and FII can feel the heat if capital gains tax is imposed. Both FDI and FII inflow is inevitable for the growth and employment to India. 2. But at the same time, it also believed that revised DTAA would not have any significant impact on the FDI and FII inflows. It has been anticipated because FDI flows from Mauritius have also been declining of late. In April 2011, India received more FDI from Singapore (Rs 5,214 crore) than from Mauritius (Rs 4,332 crore). Suggestion: It has been suggested that with the introduction of source-based taxation of income earned by companies based in Mauritius may bring about some equity in taxation, prevent loss of revenue and curb treaty shopping. By and large there is an anti treaty shopping provision is normally inserted in a Double Taxation Avoidance Agreement by a limitation on benefits clause. For example, such a clause exists in the Indo-US Double Taxation Avoidance Agreement as Article 24 which per-mits a non-individual person to avail of treaty benefits only if more than 50 percent beneficial interest therein is owned by indvidual residents of a contracting state. It has been also felt that from April 2012, a modified GAAR (general anti-avoidance rule) would come into existence. A GAAR is a set of broad and general principles-based rules enacted in the tax code aimed at counteracting avoidance of tax. The Direct Tax Code (DTC) seeks to enact General Anti-Avoidance Rules (GAAR) which would empower the tax administration to declare a transaction as an impermissible avoidance arrangement if it is not at arms length and lacks commercial substance. This would be a powerful provision to check the misuse of DTAA. SEPTEMBER 2011, XVII Year, Issue No.9
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