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[ 2 ] Week l y Cu r r en t A f f a i r s 1stAp r i l t o 7th Apr i l , 2013

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Week l y Cu r r en t A f f a i r s 1stAp r i l t o 7 th Ap r i l , 2013 [3]

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Programme Assistance:

Email id:[email protected]

Technical Assistance : Sushil Singh

Email id: [email protected]

Call: 9582948810, 9953007628

Mail: [email protected]

Production and productivity, Microirrigation,Urbanization, Government Initiatives......

6th January: Indian Economy Basics, Planning & Trade1. Industry Services, Agriculture, Energy.....2. Balance of Payments. Foreign Direct Investment.......3. Growth, Development and Other Issues.........4. Poverty Estimates, Impact of Poverty........5. Exchange rate. Role of RBI.....6. Nature of Planning - Five Year Plan, Planning after

1991 (LPG), Inflation.....

13th January: Governance and Contemporary PoliticalDevelopments : Development Politics, Political andAdministrative Institutions, Good Governance, InternalSecurity....

SCHEDULE FOR SECTIONAL TESTS(PAPER I & II)

20th January ... Ecology and environment27th January ... Comprehension3rd February .. Polity and Governance10th February. English Language Comprehension

+ Logical Reasoning17th February . Geography24th February. Decision Making and Problem

Solving3rd March ....... General Science and Science and

Technology10th March ..... Mental Ability, Basic Numeracy,

Data Interpretation and DataSufficiency

17th March ..... History24th March ..... Indian Economy

FULL MOCK SCHEDULE

31st March ...... Mock 1 Paper 1, Mock 1 Paper 2

7th April ......... Mock 2 Paper 1, Mock 2 Paper 2

21st April ........ Mock 3 Paper 1, Mock 3 Paper 228th April ....... Mock 4 Paper 1, Mock 4 Paper 2

SCHEDULE FOR GS TOPICAL TESTS

2nd December: Infrastructure & Resources

1. Transportation infrastructure: Road and HighwayNetworks, Mass Transit Systems, Railways,Waterways, Ports....

2. Energy infrastructure:- Thermal Power Generation,Natural Gas Pipelines & Petroleum Pipelines, NuclearEnergy, Renewable Energy......

3. Water management infrastructure:- Drinking water

supply, Sewage Collection and Disposal of Wastewater, Flood Control, Water Harwesting.....

4. Communications infrastructure:- Television andRadio Transmission, Internet, Social Network, SearchEngines, Communications Satellites......

5. Solid Waste Management

6. Economic Infrastructure: Manufacturing Infrastructure,including Industrial Parks and Special Economic zones,Agricultural, Forestry and Fisheries Infrastructure....

7. Resources: Water Resources, Forest Resources, LandResources, Energy Resources, Minerals, ResourceManagement.....

9th December: Demography : Population Composition,Density, Literacy, Sex Ratio...

16th December: Environmental Problems & GlobalEnvironmental Governance : Deforestation, Pollution:Air, Water, Land, Noise, Desertification, BiodiversityDepletion, Global Warming, SD.......

23rd December: Human Development, Social SectorInitiatives and Programmes & Policies

1. Concept of Human Development, Developmentvs. Growth, Human Development Index, MPI,Innovation.....

2. Social Inclusion, Child Welfare, Women Welfare....

30th December: Agriculture, Urbanisation, Health :Agriculture and GDP, Agricultural Regionalization,

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NATIONAL

Armed Forces Tribunal must have civilcontempt powers: Parliamentary panel

The Armed Forces Tribunal Act was enacted in2007 to provide for adjudication or trial by theArmed Forces Tribunal of disputes and complaintswith respect to commission, appointments,enrolment and conditions of service in respect ofpersons subject to the Army Act, 1950, the NavyAct, 1957 and the Air Force Act, 1950 and also toprovide for appeals arising out of orders, findingsor sentences of court martial held under the said

Acts and for matters connected therewith orincidental thereto.

Section 19 of the Armed Forces Tribunal Actenables the Tribunal to punish for criminal contemptonly and not for civil contempt. The aforesaid Act inits present form does not contain any provision forthe execution of the orders finally passed by theTribunal. As a result of which cases involving seriousquestions of law of public importance are to be takento the Supreme Court for appropriate directions. It

is, therefore, proposed to confer powers of civilcontempt to the said Tribunal in addition to theexisting powers of criminal contempt. The proposedamendment would give the same jurisdiction, powersand authority to the said Tribunal in respect ofcontempt of itself as a High Court has and mayexercise and, for this purpose, the provisions of theContempt of Courts Act, 1971, shall have effect subjectto certain modifications mentioned in the Bill.

In the face of stiff resistance from the armedforces, the Parliamentary Committee on Defence has

finally recommended that the Armed ForcesTribunal (AFT) be given powers of civil contemptas many of its orders are not being implementeddespite its having the status of a High Court.

The committee has recommended civil contemptpowers to the AFT in cases involving retired defencepersonnel but refrained from giving such powerswith regard to serving personnel so as to avoiddisturbing the high disciplinary standards of theforces. The forces apprehend that civil contemptwould impinge on operational requirements.Though the MoD was in favour of conferring thesepowers, the committee noted that within theMinistry, the Department of Ex-Servicemen Welfare

raised objections on the grounds that it mightbecome difficult to implement some orders of thetribunal which are against the settled policy of thegovernment. The aggrieved party could alwaysappeal against non-implementation of the order

before the Supreme Court, it said.

In another step, aimed at making the ATF a

strong and independent institution, and to avoidconflict of interest, the panel has recommended that

the administrative control of the tribunal should be

with the Ministry of Law and Justice Ministry rather

than the Ministry of Defence (MoD).

While approving shifting of administrative

control of the AFT to the Law Ministry, the

committee noted that eventually it would comeunder the Central Tribunal Division proposed to be

set up by the Ministry on the advice of the Supreme

Court, for control of all tribunals. The Punjab and

Haryana High Court, in its decision in the public

interest litigation, 'Maj Navdeep Singh vs. Union of

India', has already directed that the AFT be placed

under the Law Ministry, and not the MoD, to ensureits independence and that keeping in view the

separation of powers enshrined in the Constitution,

the government should have a minimal say in its

functioning.

Cash transfer of subsidy could save 60k cr:

Study

A study conducted by CACP revealed that

Direct Transfer of benefits in cash to targeted

beneficiaries of food and fertilizer subsidies could

save an estimated Rs 60,000 crore and help trim

the fiscal deficit which, in turn, may calm

stubbornly high food inflation, a study by a

government wing has shown.

The project was undertaken to identify the causes

for high food inflation and suggest possible remedies.

The report identified three factors which have

contributed to sticky food inflation. It included the

ballooning fiscal deficit, rising farm wages andtransmission of the impact of global food inflation.

The study said the three factors accounted for 98%of the variations in Indian food inflation over the

period 1995-96 to December 2012.


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Suggestions:

The study showed that policies to rein in foodinflation would require winding down of the fiscaldeficit, which has gone above 8% of GDP for Centreand states combined and way beyond the guidelineslaid out in FRBM (Fiscal Responsibility and BudgetManagement) Act, 2003.

The CACP advises the government on pricepolicy for major farm commodities to help maintainthe interest of producers and consumers. This wouldrequire political courage as well as innovative waysto implement direct cash transfers to targeted

beneficiaries through Aadhaar.

The study also recommended mechanization offarms to raise labour productivity, and dovetailingof MGNREGA with farm operations throughpanchayats. This will help in containing 'costpush'

inflationary pressure. And, in order to ensure thatsmall farms are not overcapitalized, raising theircosts of production, land lease markets should befreed to let economically viable size of the holdingsto emerge. Also, custom hiring of capital farmmachinery will have to be developed to containcapital costs.

The study also called for boosting supplyresponse in agriculture and save on large wastagesin the supply chains.

Prime Minister approves expansion of DirectBenefits Transfers (DBT)

Prime Minister Manmohan Singh has approvedthe extension of the Direct Benefits Transfer (DBT)scheme to 78 more districts taking the total numberof districts to be covered under the scheme to 121since January one. The scheme will now cover onefifth of the country. The scheme was launched in 43districts on January one this year.

Phase II of the scheme will include:

a) DBT will now be expanded to NPR states wherebiometrics are being collected under the NationalPopulation Register. These include Odisha, WestBengal, UP, Uttarakhand, Bihar andChhattisgarh. The collection biometrics inselected districts here will be accelerated to havea coverage of 70-80% by June 2013 and DBT will

be rolled out from 1.7.2013.

b) DBT now covers 26 schemes. The three PensionSchemes managed by MoRD (old age, disabilityand widows) will now be covered under DBT

in all the covered districts. DBT for pensionschemes would be introduced from 1.7.2013along with the rollout of Phase-II.

c) DBT will be expanded to include Post Officesand schemes run through Post Office accountsfrom 1 October 2013. By this time, the PostOffices will have the core banking system in 51districts. They will accelerate CBS in otherdistricts as well.

d) The government has decided to transfer cash

subsidy to domestic cooking gas (LPG)consumers under its ambitious Direct BenefitTransfer (DBT) scheme from next month. LPGconsumers will get about Rs 4,000 per annum in

cash from the government, and they will haveto then buy LPG at a market price of Rs 901.50per 14.2-kg cylinder. Currently, each consumeris entitled to get 9 cylinders of 14.2-kg each atsubsidised price of Rs 410.50. On each of thesecylinders, the government bears a subsidy Rs435. Beginning next month, consumers in selectdistricts will get this subsidy amount transferred

into their bank accounts. Once they get thesubsidy, they will have to buy LPG at marketprice.

e) Departments will start the process of digitisationin all districts, irrespective of the rollout of DBTas this is a critical activity which need not waitand can be done in parallel.

f) A full fledged DBT Mission Directorateconsisting of a Mission Director assisted by other

officers is being created to have aninstitutionalized administrative arrangement toenable smooth rollout, early identification of

bottlenecks, and resolution of bottlenecks andhandholding of Ministries / departments

wherever necessary. To facilitate a nationwiderollout of DBT, the Prime Minister has approvedthe creation of a post of Mission Director forDBT.

National Higher Education Qualification

Framework for Mobility of Students in Higher

Education

The government has proposed a National HigherEducation Qualification Framework (NHEQF) toaddress the issue of compatibility and seamlessrecognition of qualification across all higher

education institutions.

With the present system being unique to thecountry with range of complexities and divergencesacross levels, the framework would seek to provide

a comprehensive definition of a single system oflevels for all qualifications offered by a variety ofhigher educational institutions across discipline.


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The final decision will be taken by CentralAdvisory Board on Education (CABE).

The Central Advisory Board on Education statedthat a CABE Committee will be constituted toexamine the formulation of a National HigherEducation Qualification Framework (NHEQF). It willsubmit its recommendations within a period of six

months. The CABE has appreciated the proposal todevelop a National Higher Education QualificationFramework which would facilitate the mobility ofstudents in higher education.

The essential purpose of the NHEQF is toprovide the broad framework within which

universities and other degree-awarding educationalinstitutions could develop the syllabi that theyconsider relevant thereby using their academicautonomy to the fullest extent in a responsible

manner and without adversely affecting thehorizontal and vertical mobility of students.

The NHEQF may provide a comprehensiveindicator of all learning achievements within andacross different disciplines and shall represent aconsensus of views of all stakeholders. Accordingly,it shall provide a basis for monitoring and regulating

the quality and compatibility of higher educationacross institutions. It may thus become a singlesystem of levels for all qualifications offered byhigher educational institutions across all disciplines

thereby making higher education qualificationcomparable nationally and internationally.

Another distinctive feature of the NHEQF ismaking the programmes of studies modular, therebypermitting accreditation or certification of acomponent, part of the larger qualification. Thus,the NHEQF would serve as an unequivocal

description of higher education qualification at thenational level with the aim that the higher educationsystem of the country is internationally understood.

CRPF launches a soft offensive to win over

villagers

The CRPF's Chhattisgarh Operations Sector andthe All-India Institute of Medical Sciences (AIIMS)have launched a "telemedicine facility for more than100 locations."

The initiative will cover personnel posted inremote areas and "hundreds of villages located nearthe camps". Twenty thousand CRPF personnel arestationed in seven districts of south Chhattisgarh,where Maoists run eight divisions with several area

committees and at least 10 companies of People'sLiberation Guerrilla Army (PLGA).

The CRPF camps are located in the remotest

areas, hundreds of miles away from the district

headquarters. Reaching these areas is difficult mainly

because of lack of motorable roads and a

geographically hostile terrain.

Thus to address this issue a panel of specialist

doctors of the AIIMS shall hold teleconferencing

twice a week with the CRPF locations. Theconferencing shall be done on Skype or on the phone

wherever these are available, and through digital

satellite phone terminals where neither phone nor

the Internet works.

The CRPF will inform the villagers of the place

designated for teleconferencing with doctors. On the

basis of medical advice, the CRPF paramedics will

hand out medicines to the villagers from their stock

and shift the patients [to a proper hospital], if

required."Furthermore, the doctors will visit the camps,

initially in accessible areas, and "soon the remote

locations."

Centre proposes measures to strengthen SC/

ST Act

Imposing a social or economic boycott on persons

from a reserved caste or tribe, parading them naked,

preventing them from entering a place of worship

or employing them as manual scavengers - suchoffences will now be dealt with more severely and

in a time-bound manner, as the Union Ministry of

Social Justice and Empowerment has recommended

measures to strengthen the Scheduled Castes and

Scheduled Tribes (Prevention of Atrocities) Act, 1989,

and Rules 1995.

The recommendations include newer forms of

offences and bring within the purview of the Act

relevant IPC Offences that attract penalties of less

than 10 years. The Ministry is also keen on having

dedicated special courts and a 30-day trial to deal

with complaints.

The time taken to file a complaint and then to

address it is a crucial aspect of the complaint redress.

There are designated courts and special public

prosecutors appointed to ensure speedy trial, but a

review of trials under the Act has shown that all

witnesses are not given adequate notice, not briefed

appropriately, and not apprised of time, place and

status of the case. In all, there is undue delay in

disposing of these cases, leading to loss of confidenceamong the victims in the criminal justice system,"

the official said.


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Now, the Ministry has recommended that the

Act include provisions like appointment of special

public prosecutors to try cases exclusively, all cases

be disposed of within three months from the date of

filing of charge sheet and cases under the Act be

given priority in appeals.

Offences that are well documented, but not

within the ambit of the Act, such as obstructing theuse of common property resources, causing physicalharm or death on the allegation of practisingwitchcraft or abetment should be brought withinthe purview of the Act, the Ministry has said.

"Another important recommendation isexpanding the scope of presumption whether theperpetrator had knowledge of the (SC/ST) identityof the victim while committing the offence. We founda shortcoming in the reading of the Act: theemphasis on establishing that the offence wascommitted on ground that the victim was SC or ST.There are numerous cases of the police refusing toregister complaints under the Act unless thecomplainant could establish that the identity of thevictim was in fact the ground for committing theoffence; in some cases, the police refuse to registera case because the perpetrator did not overtly usethe terms of caste abuse while committing theoffence. We have called for tweaking the Act in sucha way that the police and the judiciary do not place

the onus on the complainant or the prosecution toprove that the accused acted on the basis of caste ortribal identity," the official said.

CCI providing Environment clearance forprojects worth Rs. 45,000 crore

The Cabinet Committee on Investment (CCI)seems to be helping to pass infrastructure projectswhich are awaiting environment clearances, till nowmore than Rs. 45,000 crore worth of projects has

been passed in its first two months of existence.

In the next few months, the CCI expects to spurrevisions in clearance provisions for high-rises, SEZsand roads, and form a new panel to appraiseapplicants from the mining sector.

Since it was set up by the Union Cabinet lastDecember, the CCI has successfully prodded theMinistry of Environment and Forests to implementa slew of measures aimed at streamlining clearanceprocedures. Those include such controversial movesas the delinking of environment and forestclearances for linear projects like roads, railwaysand transmission lines, and the exemption of suchprojects from getting gram sabha consent, whichface vociferous opposition from forest and tribalrights activists.

The CCI was set up after Ms. Natarajan's strongobjections to the initial proposal of a NationalInvestment Board which could have over-ruled herMinistry's clearance decisions. The revised proposalapproved by Cabinet said the CCI, chaired by thePrime Minister and including administrative

Ministries, would only prescribe time limits forclearance decisions and facilitate the removal ofbottlenecks and delays.


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UN General Assembly approves global armstrade treaty

The United Nations General Assembly hasapproved a global arms trade treaty. Its adoptionimplies a major step forward in controlling the $70-

billion flow of arms across borders, particularlyrestricting its movement to and from areas wheregroups are suspected of violation of human rights.

It was passed in the General Assembly with 154members voting 'Yes'; three - Iran, Syria and NorthKorea - voting no; and 23, including India,

abstaining. The treaty's passage came afternegotiations failed last July when the U.S. pulledout abruptly. In addition to India, the nations thatabstained included China, Egypt, Myanmar, Russia,Saudi Arabia and Sri Lanka. Pakistan voted in favourof the treaty though its representative expressedconcerns over the imbalance in obligations betweenarms exporters and importers.

The treaty regulates all conventional arms withinthe following categories: battle tanks, armouredcombat vehicles, large-calibre artillery systems,

combat aircraft, attack helicopters, warships, missilesand missile launchers, and small arms and lightweapons. The treaty prohibits countries that ratifyit from exporting conventional weapons if theyviolate arms embargoes, or if they promote acts ofgenocide, crimes against humanity or war crimes,or if they could be used in attacks against civiliansor schools and hospitals.

According to the UN Office for DisarmamentAffairs, the treaty will not do any of the following:interfere with domestic arms commerce or the right

to bear arms in Member States; ban the export ofany type of weapon; harm States' legitimate right toself-defence; or undermine national arms regulationstandards already in place.

The adoption of the treaty was welcomed byseveral UN officials, including Secretary-GeneralBan Ki-moon, who hailed it as a powerful newtool in efforts to prevent grave human rightsabuses, and added that it will provide much-neededmomentum for other global disarmament and non-proliferation efforts. The text draws a link with

the presence of weapons across the developingworld, especially in conflict-affected areas, with thechallenge of sustainable development andsafeguarding human rights.

INTERNATIONAL

The treaty will be open for signature on June 3and will enter into force 90 days after the 50thsignatory ratifies it.

Developed world refuses to commit for climate

fund

More than 190 countries decided it would buildup to a $100 billion kitty by 2020 to fight climatechange globally but the Green Climate Fund looksset to remain an empty pot as the US and otherdeveloped countries have refused to commit the

needed money or even set timelines forcontributions.

In a meeting of the UN fund held in Berlin, theUS and other developed countries refused to discussa burden-sharing formula for contributions or setany calendar to schedule the initial funding. ByDecember 2012, only $5.7 million was committed bythe rich world to the fund. India was represented atthe meeting by Dipak Dasgupta, principle economicadvisor to the finance ministry. During the meet

Indian representative stated that the fund was not adonor programme or a charity but a commitmentmade under the UN climate change convention. Hewarned that there could not be a voluntary approachto contributions.

But the developed countries preferred to not bebound by a time-table or a target, suggesting that atpresent the fund should depend upon only ad hocpledges. They demanded that the business model ofthe fund be developed before monies are committed.

The purpose of the fund is to fight climate changeglobally and help developing countries cutgreenhouse gas emissions

The Green Climate Fund (GCF) is a fund within the

framework of the UNFCCC founded as a mechanism

to transfer money from the developed to the

developing world, in order to assist the developing

countries in adaptation and mitigation practices to

counter climate change.

New Zealand troops begin withdrawal from

Afghanistan

New Zealand troops began their withdrawalfrom their base in Bamiyan at Afghanistan to markthe end of a 10-year involvement in the war.


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The government announced the earlywithdrawal last year, with the New Zealandcontingent originally scheduled to remain untilSeptember 2014.

145 New Zealand troops working on provincialreconstruction had a significant impact on the region.The hospital has been rebuilt and new health centres

have opened in all seven districts. Mortality ratesfor children have plummeted, and the same hashappened to maternal death rates.

New Zealand will continue to station 27 planningand intelligence personnel in Kabul.

Ten New Zealand soldiers have died inAfghanistan over the past decade eight in Bamiyanand two in Kabul.

UK eases immigration rules for elite overseasgraduates

Britain eased immigration rules for a section offoreign students, including Indians, who wish to stayand work in the country, in a bid to attract the"brightest and the best" global talent.

Changes to the "Graduate EntrepreneurProgramme" will allow up to 1,000 internationalgraduates with masters degrees in businessadministration to stay on in Britain to work for 12months after they finish their course.

The new rules follow ongoing criticism overtougher student visa norms putting off foreign

students from applying to study in Britain.The number of students coming from India to

study at UK universities registered a fall of nearly23.5 per cent last year, including a 28 per cent dropat post-graduate level.

US issues fresh waiver to Pakistan

For the second time in six months, the US hasissued a waiver for sale of major defence equipmentto Pakistan likely to be worth over USD 2 billion,citing national security interests.

In September last year, the US had waivedconditions that would have halted USD 2 billion inaid to Pakistan, which was slammed for not makingprogress in fighting terrorism. Pakistan has receivedUSD 7.9 billion worth of military equipment fromthe US since 2001.

"Major Defence Equipment," means any USmanufactured defence article whose export iscontrolled by US Munitions List which has anonrecurring research and development cost of more

than USD 50,000,000 or a total production cost ofmore than USD 200,000,000. These items requireCongressional notification.

Under the Kerry-Lugar-Berman bill the US can'tapprove sale of major defence equipment to Pakistanunless the Secretary of State either gives a waiverunder national security interests or certifies that

Pakistan is continuing to cooperate US to dismantlesupplier networks relating to the acquisition ofnuclear weapons-related materials, and hasdemonstrated a sustained commitment to and ismaking significant efforts towards combatingterrorist groups.

The bill requires the Secretary of State to certifythat Pakistan is taking steps to prevent al-Qaeda,the Taliban and associated terrorist groups, such asLashkar-e-Taiba and Jaish-e-Mohammed, fromoperating on its soil, including carrying out cross-

border attacks into neighboring countries.

Private dailies allowed in Myanmar

Privately owned daily newspapers hitMyanmar's streets for the first time in decades underfreedoms that represent a revolution for a mediashackled under military rule.

Four Burmese-language titles - The Voice , TheGolden Fresh Land , The Union and The StandardTime - made the transition from weekly as new rulescame into effect that swept away state media's long

monopoly on daily printing.The country's military rulers seized control of

private daily papers in 1964. Myanmar's quasi-civilian government took power in early 2011 afterthe military dictatorship relinquished a half-centurystranglehold on the former Burma. It embarked onmedia reforms as part of its democratisationprogramme in August 2012, when it relaxeddraconian censorship.

A total of 16 weekly news journals were allowedto become dailies under the new rules but logistical

challenges such as distribution, poor infrastructure,outmoded printing equipment and staffing issuesare some of the stumbling blocks for mediaorganisations wanting to expand into dailies..

Myanmar jumped to 151st out of 179 in ReportersWithout Borders' 2013 World Press Freedom Index

because of "dramatic changes" that includedscrapping harsh pre-publication scrutiny regime -until last year imposed on everything fromnewspapers to fairytales.


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Novartis loses patent battle in SCThe Supreme Court has dismissed Novartis AG's

appeal for patent protection of its anti-cancer drug,Glivec, putting an end to a seven-year battle betweenthe Swiss drug maker, several domestic genericmanufacturers, as well as patient groups fightingfor affordable medicines.

At the heart of the dispute was the Indiangovernment's contention that Glivec, which treatsmyeloid leukaemia and some gastrointestinal

cancers, is simply a retooled avatar of a pre-existingdrug - Imatinib. However, Novartis argued ImatinibMesylate was a new salt form of an older medicine,Imatinib, and the new version represented a 30 percent increase in the bioavailability of the medicine.

A Bench of judges Aftab Alam and RanjanaDesai ruled out that the Novartis version of thedrug was not "an invention as understood in thelaw of patent in India" and, therefore, not entitledto get patent for the improved version of its cancerdrug, Glivec.

The court clarified in this judgment that it didnot apply to all improvements in products. It said ithad not barred patent protection "for all incrementalinventions of chemical and pharmaceuticalsubstances." It would be a "grave mistake" to readthis judgment to mean that it prohibited allfundamental changes in a product, the verdict said.

While the verdict might make multinationals likeNovartis more wary of the Indian market, it could

boost prospects of domestic companies, such as

Natco, Cipla and Ranbaxy, manufacturing genericversions of the medicine.

According to the Novartis about 16,000 patientsin India use Glivec, a vast majority of whom receiveit for free. By contrast, according to industry reports,the generic Glivec is used by a little more than300,000 patients.

Its generic version of the drug is priced at Rs9,600 for a month's therapy as against Rs 1,10,000for Novartis' Glivec.

The case has an acrimonious history. Novartishad filed for a patent in 1998, which was denied in2006. Then, in 2007, the Madras High Court alsorejected Novartis' plea against the 2006 order. The

ECONOMY

company also lost the case at the IntellectualProperty Appellate Board, which rejected thecompany's appeal in 2009. Novartis then decided totake the case to the country's highest court.

With this landmark judgment coming throughin favour of generics, many are also concerned thatit might shunt multinationals from making furtherinvestments and launching innovative medicines inthe country.

Foreign investment in Government Securities

and Corporate Bonds Rationalized

The Central Government in consultation withReserve Bank of India (RBI) and SEBI has beenprogressively liberalizing/rationalizing the schemefor foreign investment in G-Secs and Corporate

bonds keeping in view the evolving macroeconomicscenario and financing needs of the economy.

Till now FIIs were permitted to invest USD 25billion in G-Secs (Comprising of two sub-limits ofUSD 10 billion and USD 15 billion), USD 26 billion

in General Corporate bonds (comprising of USD 25billion limit for FIIs and USD 1 billion limit for QFIs)and USD 25 billion in Long-term infra bonds(comprising of USD 10 billion limit for IDFs, USD12 billion limit for FII investment in long-term infra

bonds and USD 3 billion limit for QFI investment inMutual Fund Debt schemes which invest inInfrastructure sector). The various sub-limits statedabove were subject to different sets of conditions interms of original maturity, lock-in period andresidual maturity restrictions.

On review, it was observed that the existingframework of various debt sub-limits and associatedconditions with respect to each sub-limit led tocomplexity and inflexibility for investors andhampered investment in debt securities. Therefore,in order to encourage greater foreign investments inINR denominated debt instrument, it was decidedin consultation with RBI and SEBI to simplify theframework of FII debt limits, the allocationmechanism of these debt limits and also lay downa perspective plan for enhancement of these debtlimits in the future.

The new policy has been put in place with effectfrom 1st April 2013.


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The sali ent featur es of th e new appr oach are as

fol lows:

a) The existing debt limits will be merged intofollowing two broad categories:

I. Government securities of US$ 25 billion(by merging Government Securities oldand Government Securities long term) and,

II. Corporate bonds of US $ 51 billion dollars(by merging US $ one billion for QFIs, US$ 25 billion dollars for FIIs in corporate

bonds and US $ 25 billion for FIIs in longterm infra bonds).

b) The entire limit in both the Government securitiesand Corporate bonds categories will be madeavailable to all eligible classes of foreign investors,including FIIs, QFIs, and long term investors suchas Sovereign Wealth Funds (SWFs), PensionFunds, Foreign Central Banks etc.

c) Out of USD 25 billion limit for GovernmentSecurities, a sub limit of US $ 5.5 billion has

been provided for investment in short termpapers such as treasury bills.

d) Similarly in case of USD 51 billion limit forcorporate bonds, a sub limit of US $ 3.5 billionhas been provided for investment in short termpapers such as commercial papers.

e) These sub-limits have been carved out based onthe current holdings of such short term instruments

by FIIs and have been provided so that existinginvestments are not adversely affected.

f) Because of the room created by unifyingcategories, the current SEBI auction mechanismallocating debt limits for corporate bonds will

be replaced by the 'on tap system' currently inplace for infrastructure bonds.

g) In order to allow large investors to plan theirinvestments, the Government will review theforeign investor limit in corporate bonds when80% of the current limit is taken up. Further, it

will also enhance the limit on governmentbond s as and when nee de d, bas ed onutlilisation levels, demand from foreigninvestors, macro-economic requirements and aprudent off shore: on shore balance.

h) To provide a guide to investors, it has beendecided that the annual enhancement of theGovernment bond limit will remain within 5%of the gross annual borrowing of the CentralGovernment excluding buy backs.

These measures will simplify the norms for

foreign investment and are likely to encouragegreater capital inflows, enhance the flow of resourcesto the Indian economy and encourage developmentof the debt market in India.

GOI formed 2k cr pool to cover Iran oil

The government is setting up an Indian Energy

Insurance Pool of Rs 2,000-cror, to back Indian firms

that insure domestic refineries processing Iranian

crude oil. Indian insurance firms depend on large

European counterparts to reinsure their risks as they

would otherwise end up in deep financial trouble in

case of large payout.The problem has arisen since under the US and

the European Union (EU) sanctions, global insurers

have added a "sanctions clause" in their contract

that limits the amount to be paid in case of a claim.

That is why domestic insurance companies have

refused cover to refineries processing Iranian oil as

they could not get reinsurance from their European

counterparts. Reinsurance makes up for 90% of the

insurance cover.

Because of these criteria's refining at MangaloreRefinery & Petrochemicals Ltd and Essar Oil Ltd

were under threat as the two buy 1,00,000 barrels of

oil a day from Iran.

The Department of Financial Services will create

the fund within a month, with INR10 billion of its

fund to come from the reinsurance premium paid to

Indian insurers by the refiners and an equal amount

from the Oil Industry Development Board, which

collects taxes on crude oil. For claims beyond Rs

2,000 crore, the Central government would extendsovereign guarantee up to Rs 10,000 crore.

These contributions are proposed to run for the

next three years to eventually build a corpus of

INR60 billion. State-run Oriental Insurance and New

India Assurance will be the initial contributors as

they underwrite risks of government-run MRPL and

private Essar Oil. Private insurers will also have the

option to participate in the EIP fund.

The proposal is an outcome of a meeting chaired

by the National Security Advisor to establish amechanism so that Indian insurers would no longer

require reinsurance coverage from much larger

European counterparts.

Unsecured Exposure Norms for UCBs released

by RBI

In order to promote lending to priority sectors

and to provide impetus to the objective of financial

inclusion it has been decided that urban co-operative

banks (UCBs) fulfilling the following conditions may,

with the prior approval of the Reserve Bank, grant

unsecured loans (with or without surety) upto 25%

of their total assets.


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The UCBs need to fulfill criterion such as,coverage of the entire loan portfolio of the bankunder priority sector and that all loans to besanctioned as small value loans of up to Rs 20,000 ina single amount.

Besides, they should have assessed CRAR(Capital to Risk Assets Ratio) of 9 percent and have

assessed gross NPAs at less than 10 percent of grossadvances.

Financial parameters for the above purposesmay be considered as on March 31 of the previousyear. Assessed CRAR and gross NPAs would beas assessed by the latest inspection carried out bythe RBI.

Further UCBs desiring to grant unsecured loansin excess of 10 percent of total assets may approachthe Regional Office of UBD (Urban BanksDepartment) for permission.

The term Urban Co-operative Banks (UCBs)

refers to primary cooperative banks located in

urban and semi-urban areas. These banks, until

1996, could only lend for non-agricultural

purposes.

However, today this limitation is no longer

prevalent. While the co-operative banks in rural

areas mainly finance agricultural based activities

including farming, cattle, milk, hatchery,

personal finance, et cetera, along with some small

scale industries and self-employment drivenactivities, the co-operative banks in urban areas

mainly finance various categories of people for

self-employment, industries, small scale units

and home finance.

Co operative Banks in India are registered

under the Co-operative Societies Act. The

cooperative bank is also regulated by the RBI.

They are governed by the Banking Regulations

Act 1949 and Banking Laws (Co-operative

Societies) Act, 1965.These banks provide most services such as

savings and current accounts, safe deposit

lockers, loan or mortgages to private and

business customers. For middle class users, for

whom a bank is where they can save their money,

facilities like Internet banking or phone banking

is not very important.

Cabinet gives approval to decontrolling sugarsector

The cabinet committee on economic affairs(CCEA) has decided to do away with the regulatedrelease mechanism and the obligation of levy on

sugar mills, leaving the call on cane area reservation,minimum distance criteria and adoption of the caneprice formula to state governments. The levy-sugarmechanism mandates mills to sell 10 per cent oftheir annual produce to the government at cheaprates for sale through ration shops whereas theregulated release mechanism gave the Centre the

power to fix the amount that sugar mill owners couldrelease in open market.

Now, consumers could face a greater fluctuationin sugar prices through the year with thegovernment deciding to partially decontrol the Rs80,000 crore sugar trade.

The move is also going to lead to an additionalsubsidy burden on the government of Rs 3,100 crore,leading to an overall bill of Rs 5,300 crore annuallyat present rates and volumes of supply. Thegovernment will bear the difference between the ex-

mill price of Rs 32 per kg and retail sugar price ofPDS at Rs 13.50 per kg.

The government has decided that the stategovernments will be asked to purchase theirrequirement of sugar for the PDS from open marketand would be reimbursed by the centre for thedifference in prices based on their existing share inthe levy sugar supply.

The government's decision comes after acommittee under C Rangarajan, chairman of theEconomic Advisory Council to the Prime Minister,

submitted its report recommending that sugar tradebe put completely to market forces.

Government releases latest edition ofconsolidated FDI policy

The Department of Industrial Policy andPromotion (DIPP) released the latest edition ofconsolidated FDI policy incorporating the changesmade in the regulations over the past one year. TheDIPP is the nodal agency on FDI related matters.With a view to make Indias FDI regime simple and

easy to under stand for investors, the departmenthad compiled all the related policies into a singledocument.

This is the sixth edition of consolidated FDIpolicy and will be effective from April 5.

The guidelines incorporated changes with regardto inflows in multi brand retail and allowingPakistan nationals and companies to invest in thecountry.

Besides, it has included policy changes in sectorslike single brand retail, asset reconstructioncompanies (ARCs), power exchanges, civil aviation,

broadcasting and non-banking financial companies(NBFCs).


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Last year, amid opposition from some of its keyallies and state governments, the Centre permitted51 per cent FDI in multi-brand retail sector. Thegovernment also allowed foreign airlines to pick 49per cent stake in the cash-strapped domestic carriers.

Similarly, it has raised FDI cap to 74 per cent invarious services of the broadcasting sector. The

foreign investment ceiling in ARCs has also beenincreased to 74 per cent from 49 per cent, a moveaimed at bringing more foreign expertise in thesegment.

It has said that the total shareholding of anindividual FII in an ARC shall not exceed 10 percent of the total paid-up capital.

Further, it has incorporated the changes madewith regard to FDI from Pakistan. Now, a Pakistanicitizen or an entity can invest in the country underthe government approval route.

With regard to issue price of shares, a newparagraph has been added.

Under this, where a non-residents includingNRIs are making investments in an Indian firm incompliance with the provisions of the CompaniesAct, 1956, by way of subscription to itsMemorandum of Association, "such investmentsmay be made at face value subject to their eligibilityto invest under the FDI scheme".

The government has permitted foreigninvestment of up to 49 per cent in the power tradingexchanges in the country.

The policy has also listed as many as eightmandatory conditions and one optional clause withregard to conversion of a company with FDI into aLimited Liability Partnerships (LLPs) firm.

In the first 10 months of current financial year,foreign direct investment (FDI) contracted by 33 per

cent to USD 21 billion against USD 31 billion in thesame period last year due to the global economicuncertainties.

Core sector output contracts 2.5 % in Feb

The output of eight core sector industriescontracted 2.5 per cent in February, against a growth

of 3.1 per cent in January and 7.7 per cent growth inFebruary 2012.

This is the weakest performance for the eightcore industries - that have a 37.9 per cent weightagein the Index of Industrial Production (IIP) - sincethe new series started in April 2005.

The January 2013 output figure has also beensharply revised downwards to 3.1 per cent, from 3.9per cent earlier.

On a cumulative basis, the eight core industries'output grew 2.6 per cent in April-February 2013,

lower than the 5.2 per cent growth recorded in sameperiod last year.

All this is a pointer to weak industrial growthfor February 2013, official data for which is expectedto be released on April 12. The February performanceof eight core industries was hit by contraction in asmany as five of the eight industries.

The five sectors that saw a decline in output arecoal (8 per cent), crude oil (4 per cent), natural gas(20 per cent), fertilisers (4 per cent) and electricity

(4.1 per cent). The other three core industries -cement (3.9 per cent), steel (0.5 per cent) and refineryproducts (4.3 per cent) recorded growth in outputduring February 2013.

The weak core sector performance for Februarycoupled with the sharp fall in India's manufacturingPurchasing Managers' Index (PMI) for March (from54.2 to 52) is a signal that growth recovery may befurther delayed economy.


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INDIA AND THE WORLD

India and Azerbaijan Sign Treaty on Legal andJudicial Cooperation in Civil and Commercial

Matters

India and Azerbaijan has signed a treaty to

cooperate with each other in dealing with various

crimes, including terrorism.

The treaty on Mutual Legal Assistance inCriminal Matters was signed by Home Minister

Sushilkumar Shinde with Azerbaijan Minister of

Justice Fikrat Mammadov.

The pact is one of the significant legalinstruments to improve and facilitate effectiveness

of the contracting states in investigation and

prosecution of transnational crime including

terrorism by providing the necessary legal

framework for rendering or receiving legal assistance

in criminal matters.

Further Dr. Ashwani Kumar, Union Minister of

Law & Justice and Shri Fikrat Mammadov, Minister

of Justice of Republic of Azerbaijan has signed a

Treaty on Legal and Judicial Cooperation in Civiland Commercial Matters.

The Treaty between the two countries in Civil

matters is a comprehensive agreement for

reciprocal arrangement with foreign countries for

service of summons, for issuing Letters of Request,

for taking of evidence, for execution of civil

decrees and for enforcement of arbitral awards.

As per provisions of the Treaty, requests for legal

assistance shall be made through the Central

Authorities of the Contracting Parties. In India, the

Central Authority is the Ministry of Law and Justice

and in the Republic of Azerbaijan, the Central

Authority is the Ministry of Justice.

The Treaty aims to benefit the citizens of the

respective States seeking Legal Assistance in Civil

and Commercial Matters in the requested State

irrespective of any gender, class or income bias. This

Treaty will open the avenues of cooperation between

both the countries in other sectors/spheres also.

Similar Treaties on Civil and Commercial Matters

have already been signed with France, U.A.E.,

Russia, Bahrain, Kuwait, Mongolia, Bulgaria andKazakhstan.

India and Singapore Sign MoU on Air ServicesIndia and Singapore signed a new Memorandum

of Understanding (MoU) on bilateral air servicesarrangement in the presence of Civil AviationMinister, Shri Ajit Singh and Minister of Transportof Singapore, Mr Lui Tuck Yew.

It rationalizes the capacity entitlements of bothcountries in terms of seats per week in each directionwith a route specific cap for Singapore on each route.The MoU also enhances, by 10%, the capacityentitlement with India now entitled to operate 29,400

weekly passenger seats from India to Singapore andthe designated airlines of Singapore entitled tooperate 28,700 weekly passenger seats fromSingapore to India. No additional point of call has

been given to Singapore. India also did not agree tothe demand of Singapore for additional point of callsfrom Pune and Madurai.

The common pool rights to the extent of 5160seats earlier available to Singapore, which providedgreater operational flexibility to Singapore carriersat major metro centres viz Chennai, Delhi andMumbai, have now been withdrawn. The designatedairlines of Singapore can operate with any aircrafttype except A-380.

Both the sides, while expressing satisfaction ongrowing trade and economic co-operation, felt thatthere was a need to foster greater co-operation inthe area of airport development and airportmanagement. Besides, institutional- level co-operation is needed in the areas of training inaviation skill development, maintenance repairs and

overhaul services, aviation safety and exchange oftechnology transfer in air space management andair navigation services. They have agreed to reviewand update the air services agreement and meetevery two years to discuss various air servicesmatters.

Steel Minister Strengthens Ties with Tanzania

A Letter of Intent (LoI) was signed betweenGovernment of India and the Government ofTanzania for cooperation in the field of steel. The

LoI was signed in the presence of the Union Ministerof Steel, Shri Beni Prasad Verma and Prof. SospeterMuhongo, the Minister of Energy and Minerals,United Republic of Tanzania.


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The LoI aims to promote and expand bilateralrelations between the two countries in the mineralsector with focus on strengthening supply chainfor growth of the steel industry in both thecountries. It aims to encourage investmentopportunities in India and Tanzania in the iron &steel related businesses, facilitates exchange oftechnical know-how in developing iron and steelproduction and other steel related raw materials,including pelletisation plants and other associatedindustries. LoI aims that both the Governments

jointly work for developing the steel industry andexchange technically qualified manpower forsustainable growth of iron & steel industry.

The visit will not only strengthen relationsbetween India and Tanzania. It will also give addedthrust to the possibility of exploration anddevelopment of mineral assets in the country.

India to set up Food processing units in Africancountries

Ministry of Food Processing Industries hasdecided to establish Food Testing Labs (FTL) andFood Processing Business Incubation Centres(FPBIC) in the African Union countries. Each FTLwill be established at an estimated cost of Rs. 10crore in Zimbabwe, Gambia, The Republic of Congo,Rwanda and Nigeria.

Similarly, the FPBICs would be established in

Uganda, Cameroon, Ghana, Mali and Angola at anestimated cost of Rs. 7.3 crore. Medak-basedInternational Crops Research Institute for Semi-AridTropics (ICRISAT) has already initiated the feasibilitystudy and preparation of business plans towardsthe establishment of FTLs. ICRISAT has also beenselected by the Government of India as theimplementation agency for FPBICs.

A food processing cluster can process about 2.5lakh tonnes of raw material per year will come upin one of the AU nations at an estimated cost of Rs.

117 crore. The project would be completed in threeyears after selection of location.

FTLs would play key role in maintaining thequality of food. Further the training programmewould be helpful in addressing poverty, hunger,malnutrition and environmental degradation in dryland tropics.

Indian, Chinese varsities sign agreement

The Beijing Institute of Technology, agovernment-run research university known for its

work on China's space programme, on Wednesday

signed a first of its kind Memorandum ofUnderstanding (MoU) with Karnataka-basedManipal University paving the way for closercollaboration on joint research projects.

The MoU says both universities will take forwardexchanges of students and faculty, and issue dualdegrees. They will also undertake cooperative

research and development activities."This shows that China, under the newleadership, has understood the importance of Indiaas a high technology partner," said Madhav DasNalapat, Honorary Director of Department ofGeopolitics, Manipal University, who signed theMoU with Wang Ying, director, InternationalStudent Centre of BIT.

Manipal University also signed an MoU withBIT's sister university, the Nanjing University ofAeronautics and Astronautics in southern Jiangsu

province. Both universities have ties to China's spaceprogramme, and also run research and developmentprogrammes related to defence projects.

BIT has a research budget in the range of $500million, and is among the top five Chineseuniversities in terms of allocations it receives. Unlikeother universities, it is run by the Ministry ofIndustry and Information Technology, and not theEducation Ministry.

Visa-on-arrival for senior Pakistanis

India has started the 'visa on arrival' facility forsenior citizens from Pakistan. The facility, which wassupposed to start on January 15 as part of the newliberalised visa pact between the two neighbours,was suspended following the killing of two Indiansoldiers along the Line of Control (LoC) andsubsequent heightened tensions in bilateral relations.

The visas are valid for Pakistani citizens whoare above the age of 65.

However, no decision has been taken on thestalled group tourist visa facility to Pakistani

nationals. The two countries had agreed tooperationalise the group tourist visa facility to beoffered to each other's citizens from March 15.

The new visa agreement was signed lastSeptember to ease cross-border travel as part of anumber of Confidence Building Measures (CBMs).Some clauses of the relaxed visa regime like multiple-entry and reporting-free visas for businessmen andallowing them to travel to five cities instead of theearlier three were operationalised when Pakistan'sInterior Minister Rehman Malik visited New Delhi

in December.


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India calls for major scaling up of response toNon-communicable diseases

Government of India called for a major scalingup of attention to address the increasing burden ofnon-communicable diseases (NCDs) such as suchas cardiovascular disease, diabetes, chronicobstructive pulmonary disease, and cancers in India.

High blood pressure is a leading risk factor forcardiovascular disease; in 2008, 24% of all deaths inIndia were from cardiovascular diseases. The needis to address the major risk factors such as unhealthydiet, physical inactivity, tobacco intake, harmful useof alcohol by creating awareness on promotion ofhealthy lifestyle and habits among the community.The theme of the World Health Day 2013 is strongerfocus on high blood pressure, as part of acomprehensive approach to NCDs.

Thus the Government is planning to scale upthe response to the NCDs epidemic by expandingthe National Programme for Prevention and Controlof Cancer, Diabetes, Cardiovascular Diseases and

Stroke (NPCDCS) from 100 districts at present tocover all districts in the country during the 12thFive Year Plan. Under the NPCDCS, about 1.76crores persons aged 30 years and above have beenscreened for diabetes and hypertension, out of which7.22% were suspected of having diabetes and 6.59%hypertension.

Coordination between the health sector, food andagriculture sector and other relevant stakeholdersfor the reduction of salt intake in food was cited asone of the best buys for the reduction of

hypertension and related cardiovascular diseases.

It may be mentioned that the Government ofIndia has been a key player in WHO processestowards the production of draft global and regionalaction plans for 2013-2020 to address NCDs, as wellas the creation of a draft global monitoringframework for the prevention and control of NCDs.The monitoring framework has the overarchinggoal of a 25% reduction in premature mortalityfrom NCDs by 2025. All countries are being

encouraged by WHO to create national monitoringframeworks, drawing from the global one, whichis expected to be approved by the World HealthAssembly in May 2013.

SCIENCE & TECHNOLOGY

The goal of Worl d Healt h Day 2013 is toreduce hear t at t acks and st rok es. Spec i f i c

object iv es of t he campaign are to:

Raise awareness of the causes and

consequences of high blood pressure;

Encourage people to change behaviours that

can lead to hypertension;

Persuade adults to have their blood pressure

checked regularly;

Increase the number of health facilities

offering blood pressure checks; and

Encourage national and local authorities to

create enabling environments for healthy

behaviours.

All about H7N9 bird flu

Influenza A H7 viruses are a group of influenza

viruses that normally circulate among birds. The

influenza A(H7N9) virus is one subgroup among

the larger group of H7 viruses. Although some H7

viruses (H7N2, H7N3 and H7N7) have occasionallybeen found to infect humans, no human infections

with H7N9 viruses have been reported until recent

reports from China.

Symptoms include fever, cough and shortness

of breath. However, information is still limited about

the full spectrum of disease that infection with

influenza A(H7N9) virus might cause.

Although both the source of infection and the

mode of transmission are uncertain, it is prudent to

follow basic hygienic practices to prevent infection.They include hand and respiratory hygiene and food

safety measures.

Hand hygiene: Wash your hands before, during,

and after you prepare food; before you eat; after

you use the toilet; after handling animals or animal

waste; when your hands are dirty; and when

providing care when someone in your home is sick.

Hand hygiene will also prevent the transmission of

infections to yourself (from touching contaminated

surfaces) and in hospitals to patients, health careworkers and others. Wash your hands with soap

and running water when visibly dirty; if not visibly


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dirty, wash your hands with soap and water or use

an alcohol-based hand cleanser.

Respiratory hygiene: Cover your mouth and

nose with a medical mask, tissue, or a sleeve or

flexed elbow when coughing or sneezing; throw the

used tissue into a closed bin immediately after use;

perform hand hygiene after contact with respiratory

secretions.

Currently, no vaccine exists for H7N9, but

antigenic and genome sequencing suggests that

H7N9 is sensitive to neuraminidase inhibitors.

The Centers for Disease Control and Prevention

(CDC) has begun sequencing and development of

a vaccine as routine procedure for any new

transgenic virus.The CDC and vaccine

manufacturers are developing a candidate virus to

be used in vaccine manufacturing if there is

widespread transmission.

Preliminary tests have shown the virus would

react to existing antiviral drugs like Tamiflu,

according to the WHO.

New Radiation therapy developed to curecancer

Scientists have developed a new form ofradiation therapy that successfully put cancer intoremission in mice, without producing harmful side-effects of conventional chemo and radiation cancertherapies. Scientists from the University of Missourifound that mice treated with the radiation therapyshowed no signs of cancer afterwards.

Cancer cells grow faster than normal cells andin the process absorb more materials than normalcells. Hawthorne's team took advantage of that fact

by getting cancer cells to take in and store a boronchemical designed by Hawthorne. When those

boron -i nf us ed cancer cel ls were expose d toneutrons, a subatomic particle, the boron atomshattered and selectively tore apart the cancer cells,sparing neighbouring healthy cells. The physicalproperties of boron made Hawthorne's technique

possible. A particular form of boron will split whenit captures a neutron and release lithium, heliumand energy. The helium and lithium atomspenetrate the cancer cell and destroy it from theinside without harming surrounding tissues.


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2 - MARKERS

ICSI National Awards for Excellence inCorporate Governance - 2012

Indian Oil Corporation Limited; and HCL

Technologies Limited have received the National

Award for Excellence in Corporate Governance 2012

of the Institute of Company Secretaries of India (ICSI)

for excellence in corporate governance.

ICSI bestows this award every year to those it

considers the two best governed companies in India,

underlining its commitment to good corporate

governance. This is considered among the mostprestigious corporate governance awards in India.

ICSI Life Time Achievement Award for the year

2012 was presented to Shri Deepak S. Parekh,

Chairman, Housing Development Finance

Corporation Ltd. for translating excellence in

Corporate Governance into reality.

Tagore Centre for Global Thought set up in

London

The Tagore Centre for Global Thought has beenofficially inaugurated at King's College London.

It has been established to engage audiences with

India's intellectual traditions whilst addressing a

number of contemporary global questions and

dilemmas. The Centre was founded in partnership

with the Ministry of Culture, Government of India

as part of celebrations to mark the 150th anniversary

of Tagore's birth, taking inspiration from his work

to enhance academic, intellectual and philosophical

work globally.

The Tagore Centre at King's will provide two

PhD scholarships for students from India over the

next three years. It will host a series of public

lectures, discussions and film screenings based on

Tagore's writing and a number of high-profile Tagore

Fellows, the first of which is Gopalkrishna Gandhi

- former Governor of West Bengal and grandson of

Mahatma Gandhi.

The Tagore Centre is expected to become a

vibrant intellectual hub in the field of arts and culture

and build on King's extensive cultural links in the

capital and beyond. It will not only promote and

support research studies inspired by Tagore's work

in art, music, education and traditional literature,but focus on studies of Indian intellectual traditions

in global perspective.

Central Press Accreditation Committee

reconstituted

The Ministry of Information & Broadcasting

has reconstituted the Central Press Accreditation

Committee (CPAC). The CPAC functions as a

body to approve applications for accreditation

from the media, both Indian as well as foreign.

The tenure of the committee shall be two years

from its first meeting.

IAF gears up for US combat exercise

The IAF will send eight Sukhoi-30MKIs, two C-

130J Super Hercules tactical airlift planes, two IL-78

mid-air refuelling tankers and one IL-76 heavy-lift

aircraft, along with over 150 personnel, for the

mother of all air combat exercises: the Red Flag

exercise held at the Nellis US Air Force (USAF) base

in Nevada, northwest of Las Vegas.

The network-centric exercise will not only

provide an opportunity for IAF pilots to match their

combat skills with the USAF and its allies, but also

serve to establish the force's capability to project air

power by deploying a trans-continental task force

across the globe.

This will be the second time IAF will take

part in the complex air combat manoeuvres of

the Red Flag.

Kris Gopalakrishnan

Kris Gopalakrishnan, Co-Founder and

Executive Co-Chairman of Infosys, has been

elected as the President of the industry body CII

for the year 2013-14. He succeeds Adi Godrej,

Chairman of the Godrej Group.

Gopalakrishnan was recently voted as the top

CEO (IT services category) in Institutional Investor's

inaugural ranking of Asia's Top Executives, and

selected as one of the winners of the second AsianCorporate Director Recognition Awards by

Corporate Governance Asia.


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Ruth Prawer Jhabvala

Ruth Prawer Jhabvala, the German-born

screenwriter and novelist who, as the writing

member of the Merchant Ivory filmmaking team,

won two Academy Awards for adaptations of

genteel, class-conscious E. M. Forster novels, died at

the age of 85. Jhabvala wrote a dozen novels, 23

screenplays and eight collections of short stories and

was made a CBE in 1998 and granted a joint

fellowship by BAFTA in 2002 with Ivory and

Merchant. She is the only person to ever have won

both a Booker Prize and an Oscar.


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EDITORIALS

India must look North-EastThe reason w hy t he legendary freedom- fi ghter

from M eghalaya, U K iang Nanbah, is an unknown

fi gure for t he rest of t he count ry is t hat w e are so

poorly informed about t he history and cult ure of

t he Seven Sist ers.

At the first instance, the name struck as perhapsone of some South East Asian political leader. Itwas later one realised that he was one of the greatestfreedom-fighters this country has produced.Unfortunately, not only in the rest of the country

but even in his own native Meghalaya, U KiangNanbah is not a well-known figure, thanks to apolicy of sheer indifference successive CentralGovernments have adopted towards the history andculture of the people of the North-East,

Remembering Nanbah now assumes all the moresignificance as 2013 marks 150 years of his executionat the hands of the British rulers. Not much isknown about his early days except that he was achild when the British annexed the Jaintia kingdomin 1835. He had no royal lineage whatsoever andwas born in an ordinary peasant family, but whatignited the spirit of patriotism in the young Nanbahwas the high-handedness of the alien rulers andthe daredevil exploits of his maternal uncle U KsanSajar Nangbah, who fought against the invaders ata place called Chanmyrsiang.

Like in other places, the British initially adopteda policy of least interference in the internal affairs ofthe newly annexed kingdom, but gradually startedimposing taxes and restrictions on the religious

beliefs and cultural practices of the locals, whichwas resisted by Nanbah and his many compatriots.

The movement against the aliens intensified afterthey set up a police station at Jwai in 1855 to establish"Government authority" over the hills. Theestablishment of the military outpost near thecremation grounds of the Dkar clan and ordersrestricting the burning of the dead was seen asinterference in religious beliefs and fuelled popularresistance against the British.

The establishment of a missionary school, the

destruction of weapons ahead of a traditionalceremony and attempts by British-supportedmissionaries to slam the beliefs of the locals assuperstitions added fuel to fire. U Kiang emerged

as the leader of the resistance movement and ledthe attacks on the Jwai Police Station, which wastotally destroyed. Subsequently, the group burntdown the Christian settlement and besieged themilitary post. The resistance was so fierce thatthe British had to rush in reinforcements andlaunch full-scale military operations against UKiang and his men. Unfortunately, U Kiang fellill and was finally nabbed after stiff resistance,with the help of informers.

This revolutionary leader was put on mock trial

and was sentenced to death within three days of hiscapture, before the very eyes of the locals, to sendacross a tough message that any resistance to theBritish rule would not be tolerated and would besuppressed with an iron hand.

However, as he was being taken to the gallowson the evening of December 30, 1862, U Kiang saidsomething prophetic, "Brothers and sisters, pleaselook carefully on my face when I die on the gallows.If my face turns towards the east, my country will

be free from foreign yoke in the next 100 years and

if it turns west, it will remain in bondage for good."In less than a century, India became independent.

Like the native American Indians, U Kiang foughtfor the rights of the people in the face of impositionof an alien way of life and values. People of Khasiand Jaintia Hills have since lost much of theirtraditional culture. In fact, not many in the youngergeneration even remember U Kiang Nanbah.

The ignorance about U Kiang Nanbah is areflection on the Government's education policy,which has totally neglected the history of the North-East. Forget Nanbah, most history textbooksprescribed by the Central Board of SecondaryEducation do not have any reference to the history,culture or traditions of the region. It seems as iftheir history begins with the British annexation oftheir territories. A serious attempt was made in thisdirection under the leadership of the then NationalCouncil of Educational Research and TrainingDirector, JS Rajput, during the NDA regime, buthundreds of textbooks prepared during the timewere later thrown into the dustbin under the garbof preventing 'saffronisation' of education.

Even 65 years after independence, people fromthe North-East continue to be clubbed together and


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singled out, and that too for their racial features.Often, they are mistaken as Chinese, Nepalese orfrom South East Asia, and referred to even by theeducated as 'Chinkies' because of their Mongoloidfeatures. Forced to migrate from their idyllic butunderdeveloped States for education and jobopportunities, these people, mostly women andyoungsters, are not only discriminated against butalso have often been victims of eve teasing,molestation and rape. What's more, they also findthemselves at the receiving end of the utterlyinsensitive law enforcement agencies. This has ledto a sense of alienation among these people, manyof whom have become susceptible and vulnerableto propaganda by the separatists.

While sociologists, politicians and commentatorshave been attributing it to factors including theinsensitivity and conservatism of the North to thelack of infrastructure and employment opportunities

as also massive corruption in the North-East, resultingin migration, the fact remains that the widecommunication gap between the peoples of the regionand the rest of India, as well as ignorance about eachother, have significantly contributed to this crisis.

Not that have there not been efforts to buildbridges of understanding between the North-Eastand the other parts of the country, but the fewattempts that have been made are few and far

between. Few Gandhians, some Hindi activists,initiatives such as Ekal Vidyalaya, Vanvasi Kalyan

Ashram, Ramakrishna Mission, cultural centres of theUnion Government and even State-controlled media,have been contributing their bit in this direction.

There have been some citizen-driven initiativessuch as My Home India, run by Mumbai-based socialactivist Sunil Deodhar, which seeks to bridge thechasm by helping students and others from NorthEastern region in metropolises such as Mumbai andDelhi, in their hour of need. "We not only strive tohelp the people from the North-East but also sensitiselocals about the beautiful region", says Deodhar.

Nevertheless, this sensitisation has to begin fromthe school level itself, and that can be made possibleonly by incorporating the history, culture andtraditions of the North-East in social studiestextbooks taught across the country. There cannot

be a greater and better opportunity to reach out tothe people of the North-East than by observing the150th anniversary of U Kiang Nanbah's martyrdom.This can be done with the active involvement of thepeople of the region and by educating the rest ofthe country about the contributions made by the

freedom-fighters, intellectuals, artists andsportspersons from the North-East towards thebuilding of a modern India.

Source: The Poineer

Implement guidelines to curb money-laundering

Recent media reports outlining the scale of money-laundering activity have jolted the financial servicesindustry. Many observers believe that organised crimeis of sufficient scale and power not only to influencefinancial institutions but also to exert control over

large sections of the economy. If left unchecked ordealt with ineffectively, the ramifications for theIndian society are potentially severe.

Indeed, some commentators estimate thatmoney-laundering accounts for about 4- 5% of theglobal domestic product. India is a member of theFinancial Action Task Force (FATF) - an inter-governmental body that seeks to combat money-laundering and terrorist-financing.

In February 2012, the FAFT issued a revised setof international standards to combat money-

laundering and the financing of terrorism. Therevised recommendations merged nine previouslyiterated special recommendations relating toterrorist-financing with more generalrecommendations and an extended coverage toinclude proliferation-financing. The Prevention ofMoney Laundering Act 2002 (PMLA), which becameeffective on July 1, 2005, was amended last year tomake it more robust and comprehensive.

Section 3 of the PMLA clearly states that anyonewho, directly or indirectly, is involved in any

process/activity connected with the proceeds ofcrime, including its concealment, possession,acquisition or use and projecting it as untaintedproperty, is guilty of money-laundering.

"Proceeds of crime" encompasses any propertyobtained, directly or indirectly, by any person as aresult of criminal activity relating to a scheduledoffence or the value of any such property.Importantly, "directly" and "indirectly" widen thescope of moneylaundering to include, for example,

back-office employees who knowingly process illicit

transactions.One might think that it is a privilege to work in

the financial sector but it comes with responsibilityand accountability. It requires extra caution as thepunishment for money-laundering is also high wherethe terms of imprisonment shall not be less thanthree years but which may extend to seven yearsand shall also be liable to a fine. Burden of proof ison the accused under section 24 of the Act.

Regulators, namely, the Reserve Bank of India,the Securities Exchange Board of India, and the

Insurance Regulatory and Development Authorityhave all issued detailed KYC/AML/CFT guidelinescovering the areas of customer acceptance, customeridentification, monitoring of transactions and risk


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management. Rigorous implementation of theseguidelines by the reporting entities creates deterrenceto the use of legitimate channels for illegal money.Entities with reporting obligations under the PMLAinclude: banks; financial institutions like insurancecompanies, housing finance companies, non-bankingfinance companies, chit fund companies, paymentsystem operators, authorised money changers;casinos and intermediaries of the securities markets.The number of entities operating in the financialsector in India is huge and it is a real challenge toengage them and make them comply with thereporting obligations.

The "train the trainer" programme conducted oncea year by Financial Intelligence Unit (FIU-IND) hasenhanced AML/KYC awareness. Data suggests thatthose persons who underwent training, in turn,imported training to a large number of employees intheir respective organisations. The phenomenon isevidenced by a sharp increase in SuspiciousTransaction Reporting (STR). STR increased by 1,470%from 4,409 between 2008 and 2009 to 69,224 in 2011and 2012. Similarly, public sector banks account for67% of all large Cash Transaction Reporting (CTR).Unfortunately, a meager 8% contribution comes fromco-operative banks, which are more vulnerable to beexploited by money launderers.

Of course, it is a Herculean task to implementstandard procedures at more than 81,000 bank

branches across India. However, the FIU-IND andother regulators have had significant success. Thesedays, RBI is also taking stern action by penalising

banks for non-adherence to the AML/KYC norms.With a robust legal framework in place, it is theresponsibility of the management of financial entitiesto ensure integrity at the grassroot level. Financialorganisations should take a zero tolerance approachwhen it comes to executives who act without integrity.

Source: Economic Times

Food inflation: Blame the fisc, not privatetrade

The fiscal deficit is the single biggest cause offood inflation.

To rein in food inflation, generally, policy makersand governments supplement the supply side. Thisis because attempts at demand compression couldeither be difficult or politically unpopular.

Traditional interventionist steps include releaseof buffer stocks, more imports, banning or restricting

exports, imposing stock limits on private trade,subsidising domestic and imported goods, blamingor banning future exchanges in order to curbspeculation, and providing doles or increasing wages.

All these steps - except offloading inventoriesand increasing imports - prove counterproductiveand distort markets. They collectively create aparallel, covert market, because official interventionsand notifications end up confirming that "shortages"are around the corner. This stimulates hidden or

benami stocking, buying subsidised food and sellingin the open market at a premium; vayda (futures)and hazr (spot) markets go underground.

Free supply of food or cash militates againstnational work culture and spirit of human dignity.

Indeed, all these actions are exercises in futilityin India. According to a recent discussion paper,Taming food inflation in India, by Ashok Gulatiand Shewata Saini of the Commission forAgricultural Costs and Prices (CACP), the nuisancelies elsewhere.

The paper states that "Three factors stand out in

this regard: the ballooning/monetised fiscal deficit,rising farm wages, and transmission of the globalfood inflation; together they explain 98 per cent ofthe variations in Indian food inflation over the period1995-96 to December, 2012".

The prescription given is "Policies to rein-in foodinflation will foremost require winding-down fiscaldeficit, which has gone (at above 5 per cent of GDP)way beyond the guidelines laid out in FRBM (FiscalResponsibility and Budget Management Act, 2003".All "market interventionist" measures have little or

no relevance, when the malaise is financialmismanagement.

With the Centre's fiscal deficit alone at around 5per cent of GDP (against a 3 per cent ceiling underFRBM), a 10 per cent average rate of food inflationshould not come as a surprise. Why harass and

blame private trade for food inflation?

The fiscal deficit is set to increase, once theFood Security Bill (FSB) approved by the Cabinet,comes into effect. It will enhance the fiscal deficit(by about Rs 30,000 crore), which will bloatannually when MSP is hiked. This running FSBexpenses exclude extra storage and distributioncost, amounting to 25-30 per cent of acquisitioncost, and additional outlay on infrastructure. So,the foundation of higher inflation in food items is

being laid by FSB, even as official promises arebeing made to lower them! Prudent suggestionsby the Agriculture and Finance Ministers were alsoignored by the majority in the Cabinet.

RISING FARM WAGES

On farm wages - the report notes that "during2007-08 to 2011-12, nominal wages increased at amuch faster rate, by close to 17.5 per cent per annum.


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For the period since the 1990s, on an average,the money supply (measured by M3) has increased

by 18 per cent, and this is combined by an agricultureGDP growth rate of 3 per cent".

Open-ended procurement for rice and wheatcontinues at a higher MSP each year, despite surplusinventory, that will touch around 95 million tonnes

by July 2013.Too much money chasing too few goods will

continue to push up farm prices.

A consistent long-term OGL import/exportpolicy (rather than the ad-hocism of the past), whichmight be regulated with 5-10 per cent duty inexceptional circumstances, is suggested in thisdocument. Neither is there any need to interfere withtrade in cotton, sugar, edible oil and pulses.

Exports of rice, maize and soyameal handled by

private trade have touched, respectively, 10 milliontonnes, 3.5 million tonnes and 4 million tonnes lastyear - totalling Rs. 55,000 crore ($10 billion).

This is likely to be repeated this year with a 10-15 per cent variation either way.

However, wheat exports from FCI stocks aretightly regulated by PSUs and Governmentcommittees. Shipments were limited to 3 milliontonnes in 2012-13, while shipments of 10 milliontonnes in 2013-14 will b

weekly 01april to 07 april 2013

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