Current Affairs: July 2010

NATIONAL AFFAIRS

1) Business takeover code re-written

The Takeover Regulations Advisory Committee under the chairmanship of C. Achuthan, in its 139-page
report to the Securities and Exchange Board of India (SEBI), has proposed sweeping changes on critical
issues, including the open offer trigger, offer size, indirect acquisitions, exemptions from open offer
obligations, calculating the offer price and competing offers. This comes nearly 16 years after the
guidelines were formally notified for the first time and after 23 amendments to the last major review in
1997.

The takeover panel, formed by SEBI in September 2009, has recommended an increase in the open offer
trigger from 15 per cent to 25 per cent. Further, the open offer has to be made for all the shares of the
target company, instead of the current practice of an offer for acquiring an additional 20 per cent.
Analysts said the proposed rules would raise the financing required for taking over a firm, but would
encourage investors taking strategic stakes in companies.

The panel, which also had Tata Steel Ltd Chief Financial Officer (CFO) Koushik Chatterjee and Larsen &
Toubro Ltd CFO Y M. Deosthalee as members, concluded that since a holding level of 25 per cent
permits the exercise of de facto control over a company, this could be fixed as the appropriate open
offer trigger threshold in the Indian context.

The committee has also noted that the 100 per cent open offer requirement could result in an acquirer
ending in holding beyond the maximum permissible non-public shareholding, which may require the
acquirer to either de-list or bring down his holding to meet the continuous listing requirements. The
panel has recommended that the acquirer may state upfront his intention to de-list if his holding in the
target company were to cross the de-listing threshold, pursuant to the open offer.

In the absence of any such disclosure or when the response to the open offer is below the de-listing
threshold, the acquirer would be required to either proportionately reduce both his acquisitions under
the agreement that triggered the open offer and the acquisitions under the open offer or to bring down
his holding to comply with continuous listing requirements.

The committee has also recommended that a short public announcement should be made by the
acquirer on the date of entering in to an agreement followed by a detailed public statement within five
business days thereafter. The overall time-line for an open offer has been brought down from 97 days to
57 business days.

The committee, in its attempt to enable transparent consolidation by persons already holding in excess
of 25 per cent, has recommended voluntary offers of a minimum size of at least 10 per cent and a
maximum size of such number of shares that would not result in any kind of breach of the maximum
non-public shareholding permitted under the listing agreement. Under the existing regulations, an offer
for a percentage lesser than minimum prescribed percentage can only be by shareholders holding more
than 55 per cent.

The panel has also recommended that creeping acquisition be permitted only for acquirers who hold
more than 25 per cent of the voting capital, subject to aggregate post-acquisition shareholding not
exceeding the maximum permissible non-public shareholding. It has, however, left the annual creeping
acquisition limit unchanged at five per cent.

In another recommendation that is expected to enhance the corporate governance norms, the
committee has made it mandatory for the independent directors of the target company to give their
recommendation on the open offer. Also, no appointment of representatives of the acquirer to the
board of directors of the target company would be permitted unless the acquirer places 100 per cent of
the consideration under the open offer in cash in an escrow account.

Major changes have also been proposed in the manner minimum price payable is calculated. According
to the committee, the offer price would be the highest of (i) market price to be based on 12 weeks
volume weighted average of market prices as against higher of weekly averages of market prices for 26
weeks or 2 weeks; (ii) a qualitative improvement and expansion in the look back provision; (iii) in the
case of indirect acquisitions, ascription of value to the target company under certain circumstances.

Also, any kind of non-compete fee or control premium paid to promoters will have to be factored in
while calculating the open offer price for the minority shareholders.

2) PM’s panel pegs exports at $216 billion

India's exports are projected to grow by about 22 per cent to $216 billion in 2010-11, on the back of
recovery in global trade, according the Prime Minister's Economic Advisory Council.

With contraction in global merchandise demand, India's exports declined by 4.7 per cent to $176.6
billion in 2009-10. However, in the first two months of 2010-11 exports grew by 35.7 per cent.

The International Monetary Fund has projected that exports, at constant price, from emerging and
developing economies would increase by 10.5 per cent in 2010. Exports from the advanced economies
are also expected to rise by 8.2 per cent.

3) India-Iran sign six pacts

In their first interaction after the UN imposed the fourth round of sanctions on Tehran in June 2010 over
its controversial nuclear programme, India and Iran, on July 8, 2010, signed six pacts, including one on
cooperation in new and renewable energy and another on increasing the number of flights between the
two countries. The MOUs were signed at the end of the two-day meeting of the India-Iran joint
commission.
The other four accords were: agreement on transfer of sentenced prisoners; MOU on cooperation in
small-scale industry between the National Small Industries Corporation (NSIC) and the Iranian Small
Industries and Industrial Parks Organisation (ISIPO); programme of cooperation on science and
technology; and MOU on cooperation between the Central Pulp and Paper Research Institute (CPPRI) of
India and the Gorgan University of Agricultural Science and Natural Resources (GUASNR).

The signing of the agreements clearly reflected New Delhi’s intention that it would pursue an
independent policy on Iran, notwithstanding the American pressure on it not to enlarge the area of its
engagement with Tehran.

Although it is committed to abide by the UN sanctions on Tehran, New Delhi maintains that the Iranian
nuclear issue must be resolved through negotiations since the sanctions would only hurt the common
Iranian people. While recognising Iran’s right to develop nuclear energy for peaceful purposes, it has
also advised Iran to strictly abide by the IAEA guidelines while pursuing its nuclear programme.

The two sides also discussed the situation in Afghanistan at length with both of them expressing their
common stakes in the stability of the violence-torn country. New Delhi is believed to have pressed for
structured and regular consultations with Tehran on defeating terrorists in Afghanistan and in the

4) Visit of Myanmar’s military ruler

Ignoring worldwide concerns over human rights violations in Myanmar, New Delhi rolled out a red
carpet welcome for Myanmar military ruler General Than Shwe on July 27, 2010. Top Indian leaders held
wide-ranging talks with him on a plethora of issues, including bilateral ties as well as international
developments.

The increasing Chinese influence in the South East Asian nation is apparently weighing heavily in the
mind of the Indian leadership as it seeks to increase its engagement with Myanmar, particularly in the
vital energy sector and in fighting Indian insurgents operating along the India-Myanmar border.

The two countries signed five accords after talks between Prime Minister Manmohan Singh and the 77-
year-old leader of the military ‘junta’. Simultaneously, the EXIM Bank of India extended a line of credit of
$60 million to the Myanmar Foreign Trade Bank.

The treaty on mutual legal assistance in criminal matters is expected to help the two countries combat
transnational organised crimes, terrorism, drug trafficking, money laundering and smuggling of arms and
explosives. The MoU on Indian grant assistance for implementation of small development projects is
aimed at boosting Indian investments in energy, transport and infrastructure sectors.

Strategic observers say the change in India’s policy towards Myanmar was prompted by China wooing
the military ‘junta’ to make deep inroads into virtually every sphere of Myanmar’s economic activity.
Though China has its own strategic interests in engaging the ‘junta’ in Myanmar, the military rulers are
worried that their image outside the country is sullied because of its poor record in protecting human
rights.
The military ruler wants to correct this image by introducing some kind of democracy. His visit to India
was also aimed at gaining global respectability.

5) Visit of British Prime Minister

British Prime Minister David Cameron came visiting India in July 2010. Talking on terrorism affecting the
region, he said that Pakistan could not be allowed to harbour militants and promote terror against India,
Afghanistan and the rest of the world. On his first visit to India after becoming Prime Minister in May
2010, he laid out the basis for a new “enhanced relationship” with India. Apart from Cameron’s own
tough talk on terrorism, his business minister Vince Cable announced the UK was prepared to export
civil nuclear technology to India, bringing Britain in line with the stance taken by the United States,
Russia and France.

Travelling to Bangalore and then to Delhi, Cameron signed a Rs 5,082 crore agreement for the Indian Air
Force and Navy to buy an additional 57 Hawk Advanced Jet Trainer aircraft from British Aerospace
Systems. India and the UK also made announcements in the field of immigration, education and signed
an agreement on cultural cooperation.

Cameron welcomed India’s support to Afghanistan, Nepal and Bhutan, its “intellectual leadership” at the
G20, and said the time was ripe for India to find a place in the UN Security Council.

6) Unified Command to battle Naxals

In what is a first step at forming a common strategy for States hit by Naxal violence, the Centre
announced, on July 13, 2010, setting up of a Unified Command in Chhattisgarh, Jharkhand, Orissa and
West Bengal. Realising that development and action in Maoist areas should be together, the Centre also
announced that over Rs 1,750 crore would be spent on developmental projects in the four States.

The Chief Secretary of each State will head the Unified Command, which will have a retired Major-
General as its member. The CRPF will depute an IG-level officer for ‘operations’ while an equal rank
officer from the State police force will coordinate the entire effort.

The Home Minister said that there was need for a Unified Command only in these four states and
Andhra Pradesh, Maharashtra and Bihar had been omitted for the time being.

The Centre has also told the States that the Member-Secretary of the Planning Commission will work to
modify existing norms and guidelines to ensure rapid development in the targeted 34 districts: Rs 800
crore will be spent on strengthening police stations and another Rs 950 crore on road connectivity in
these districts. The government will fund the establishment and strengthening of 400 police stations in
affected districts at the rate of Rs 2 crore a police station on 80:20 basis over a period of two years.

The Planning Commission is also considering a special development plan for the affected districts and
States with emphasis on road connectivity, primary education, primary healthcare and drinking water.
Already in force in militancy-hit Jammu and Kashmir and Assam, the Unified Command structure
includes Army, paramilitary and State police, who work in coordination. The Army would not be involved
in anti-naxal operations for now. However, IAF helicopters would be used for supplies and evacuation.

INTERNATIONAL AFFAIRS

1) Cluster ammunition treaty comes into force

A landmark UN-sponsored treaty banning cluster munitions came into force from August 1, 2010, but all
major powers, the US, China, Russia, Israel and India have shunned it. The new instrument is expected
to be a major advance for global disarmament and humanitarian agenda.

The convention has been signed by 107 States and entered into force six months after 37 countries
ratified the treaty, which was concluded in 2008.

Cluster bombs are both air dropped and used by artillery guns, and the shells open before impact and
scatter hundreds of shrapnel, causing widespread casualties over a wide area. Many of such ammunition
fail to explode and lie dormant for years killing or maiming hundreds of civilians, long after the conflicts
have ended.

From Asia only five countries—Afghanistan, Indonesia, Japan, Laos and Philippines—are the signatories.

2) Global community commits to peace initiative in Afghanistan

An international conference on Afghanistan was held on July 20, 2010 in Kabul, Afghanistan. The
international community reiterated its commitment to continue to support peace and reintegration and
said it looked forward to the local peace jirgas that included men and women at district and provincial
level to discuss elements of an enduring peace.

The government of Afghanistan is to engage with the UN Security Council and the international
community for de-listing Taliban elements from the sanctions list in accordance with agreed procedures
and common Afghan and international responsibility.

The international community expressed its support for Karzai’s objective that the Afghan national
security forces should lead and conduct military operations in all the provinces by the end of 2014.

On the issue of security, the meeting recognised that civilian casualty and protection of civilians are of
great concern and noted that most civilian casualties are caused by insurgent attacks. They also
reiterated that the international military forces remain committed to the objective of a steady reduction
in the rate of civilian casualties.

3) Kyrgyzstan vote for parliamentary democracy

In a development that could have far reaching political impact in the region, Kyrgyzstan is all set to
become Central Asia’s first parliamentary democracy, with an overwhelming 90.55 per cent voters
backing a new constitution which strips the President’s wide ranging powers.
After publishing the official results of the June 27 referendum, the Kyrgyz Central Election Commission
(CEC), on July 1, 2010, declared Roza Otunbayeva as the transitional President till December 31, 2011.

It also formally dissolved the Presidential parliament, which was in jeopardy in the wake of violent
ouster of President Kurmanbek Bakiyev’s regime in April 2010.

In line with the new constitution, the 120-strong Kyrgyz Parliament, after October 2010 elections, will
appoint the Prime Minister and the government.

The referendum, the first step towards legitimacy of the present regime, took place in the midst of inter-
ethnic violence in the southern regions of Osh and Jalalabad and exodus of hundreds of thousand
refugees to neighbouring Uzbekistan.

4) Fresh US sanctions on North Korea

US Secretary of State Hillary Clinton announced on july 21, 2010 that Washington would impose new
sanctions on communist North Korea in a bid to stem the regime's illicit atomic ambitions.

The UN Security Council has imposed stiff sanctions on North Korea in recent years to punish the regime
for defying the world body by testing nuclear weapons and long-range missiles, and illegally selling arms
and weapons.

With few allies and diminishing sources of aid, the impoverished North Korea is believed to be turning to
illicit ventures to raise the much-needed cash. Pyongyang also walked away in 2009 from a
disarmament-for-aid pact with five other nations that had provided the country with fuel oil and other
concessions.

5) Pakistan, China ink six pacts

Pakistan and China reiterated their resolve to further strengthen strategic relationship between the two
countries, increase the level of economic cooperation and take concrete measures to further bring their
people closer, during the visit of Pakistan’s President Asif Ali Zardari to China in July 2010. The two
countries pledged to make joint efforts to fight terrorism, and signed six deals of cooperation in the
areas of agriculture, healthcare, justice, media, economy and technology.

6) US slaps toughest sanctions on Iran

On July 1, 2010, even as he signed into law the toughest sanctions against ever passed by the US
Congress at the White House, US President Barack Obama said the doors of diplomacy are still open for
the regime in Tehran.

The Iran Sanctions Act affects the gasoline, financial, insurance and shipping sectors, among others, as it
seeks to impose a heavy economic cost on Iran for continuing with its nuclear programme.
The sanctions bar foreign countries from exporting refined petroleum to Iran, as well as restrict access
to US financial institutions for any entities that help Iran’s Revolutionary Guard Corps.

Also, it prevents investment, transfer of technology and development of Iran’s energy sector, and makes
it easier for States and localities to divest from companies that do business with Iran.

DO YOU KNOW

Apple Computers has emerged as the world’s most valuable brand in the 50 top valuable brand
list of the Forbes magazine. Apple was followed by software major Microsoft, Beverages firm,
Coca Cola and technology giant IBM. Search engine Google was fifth in the ranking. McDonald's,
General Electric, Marlboro, Intel and Finnish handset maker Nokia featured in the top 10 list.

On July 27, 2010, Reserve Bank of India (RBI) announced a 0.25 percentage point hike in the
repo rate (the rate at which it lends to commercial banks), raising it to 5.75 percent, and a 0.50
percentage point hike in reverse repo rate (the rate at which RBI borrows from the commercial
banks), raising it to 4.5 per cent. The trigger for hike was a fresh effort to tame high inflation.
Currency option is a derivative instrument that gives the owner the right, but not the obligation,
to exchange money denominated in one currency into another currency at a pre-agreed
exchange rate on a specified date.

The United Nations decided to observe the first “Nelson Mandela Day” on July 18, 2010, in
honour of the Nobel laureate who is regarded as the father of the new South Africa.

The United Nations decided to observe the first “Nelson Mandela Day” on July 18, 2010, in honour of
the Nobel laureate who is regarded as the father of the new South Africa.
 Current Affairs: June 2010
NATIONAL AFFAIRS

1) Compulsory public float rule issued

On June 5, 2010, the Union government made it mandatory for all listed companies to have a minimum
public float of 25 per cent. Those below this level will have to get there by an annual addition of at least
5 per cent to public holding.The move is expected to result in equity dilution of about Rs 1,60,000 crore
by 179 listed companies. These include Reliance Power, Wipro, Indian Oil Corporation, DLF and Tata
Communications.
According to the notification, ‘public’ will not include the promoter, promoter group, subsidiaries and
associates of a company. ‘Public shareholding’ will mean equity shares of the company held by the
public and not the shares held by the custodian against depository receipts issued overseas.

A company can increase its public shareholding by less than 5 per cent in a year if such increase brings
its public shareholding to the level of 25 per cent in that year. If the public shareholding in a listed
company falls below 25 per cent at any time, the company will have to bring the public shareholding to
25 per cent within 12 months from the date of such fall, compared with the two years allowed at
present.

2) Bhopal Gas Tragedy verdict

On June 7, 2010, nearly 26 years after the world's worst industrial disaster left more than 15,000 dead in
the Bhopal gas tragedy, former Union Carbide India Chairman Keshub Mahindra and seven others were
convicted and sentenced to two years imprisonment.
Chief Judicial Magistrate Mohan P. Tiwari held the 85-year-old non-executive chairman of the Indian
subsidiary of the US-based company and gave them punishment under less stringent provisions of the
Indian Penal Code for causing death by negligence.

The 89-year-old Warren Anderson, the then Chairman of Union Carbide Corporation of USA, who lives in
the United States, appeares to have gone scot free for the present as he is still an absconder and did not
subject himself to trial. There was no word about him in the judgement.

The US based company reacted to the judgement saying neither it nor its officials were subject to the
jurisdiction of the Indian court since they were not involved in the operation of the plant, which was
owned and operated by Union Carbide India Limited.
In his 93-page verdict, Tiwari said the accused were not sentenced under section 304 IPC (culpable
homicide not amounting to murder that provides a maximum of life imprisonment) since they were old
age and were suffering from serious ailments including heart disease.All the convicts applied for bail
immediately after the sentencing and were granted relief on a surety of Rs 25,000 each.
Law Minister M. Veerappa Moily described the verdict as an example of “justice buried” and said there
was need for fast-tracking such cases and ensuring proper investigation.

The BJP termed the order as “painful” and said the prosecution should appeal against the lower
punishment. It also utilised the opportunity to reconsider the provisions of the nuclear liability Bill.

3) ONGC, OIL get freedom to price natural gas

In a significant development, the Union government has given national oil companies, Oil and Natural
Gas Corp (ONGC) and Oil India Ltd (OIL), freedom to price any additional natural gas produced from
blocks given to them on nomination basis at market rates. So far, all gas—current and future—produced
from blocks given to ONGC and OIL was priced at government-controlled rates, called administered
price mechanism (APM).

Even the price of APM gas from June 1 has been more than doubled to $4.2 per million British thermal
units, on a par with the rate at which Reliance Industries sells gas from its eastern offshore KG-D6 fields.

The government has also made a significant departure from the previous practice of pricing natural gas
in rupees and has now decided to price it in US dollars.

State-run ONGC and OIL produce 54.32 million cubic metres of gas per day — about 40 per cent of the
total amount originating from the country — through fields given to them on a nomination basis.

4) Petrol, Diesel prices freed from government control

On June 25, 2010, the Union government announced that prices of petrol and diesel would become
market-driven, in line with the recommendations of a panel headed by former Planning Commission
member Kirit Parikh.

An empowered group of ministers led by Finance Minister Pranab Mukherjee agreed to raise diesel
prices by Rs 2 a litre for now. The fuel will eventually be freed from State control. Petrol has been freed
fully.The panel also increased prices of liquefied petroleum gas (LPG) by Rs 35 a cylinder and of kerosene
by Rs 3 a litre, though both will remain under government control.The decision will help to cut fuel
subsidies and limit losses of State-run refiners.
The market-driven mechanism would mean users would have to pay more whenever international crude
oil prices rise and less when they fall.
The move would bring down the government’s huge subsidy bill and relieve State-owned oil marketing
companies of some of the burden they bear by selling fuels much below the market prices. This burden,
also called under-recovery, is estimated at Rs 215 crore every day.

5) Jharkhand again under President’s rule

On June 1, 2001, Jharkhand came under Central rule with President Pratibha Patil accepting a
recommendation of the Union Cabinet after the Congress and the BJP gave up efforts to form an
alternative government following resignation of Chief Minister Shibu Soren.The State Assembly will be
kept in suspended animation during the President’s rule, which has been imposed for a second time in
two years.

The Soren government was reduced to a minority on May 24 when the BJP, with 18 MLAs and the JD(U)
with two, withdrew support to it. The JMM, with 18 MLAs and having the support of seven other
legislators, was short of the required 42 in the 82-member House. The BJP took the decision after Soren
voted against the cut motions sponsored by the opposition in Lok Sabha on April 27.

Jharkhand has seen seven CMs since its creation on November 15, 2000, came under President’s rule for
the first time on January 19, 2009.

6) India, Canada sign civil nuclear pact

On June 28, 2001, India and Canada signed a civil nuclear cooperation agreement. The pact was signed
during Prime Minister Manmohan Singh’s visit to Canada.

The deal, the ninth signed by New Delhi, significantly alters Canada’s stance towards India. The North
American nation had led the world in pushing for nuclear isolation after the 1974 tests in Pokhran.

The US, France, Russia, Mongolia, Kazakhstan, Argentina, Namibia and Britain are the eight countries
that have already signed similar pacts with India.

Among other things, the India-Canada Agreement for Cooperation in Peaceful Uses of Nuclear Energy
provides for tie-ups in design, construction, maintenance, supply of uranium and waste management.
The two countries can also promote cooperation in the development and use of applications related to
health, industry, environment and agriculture.

7) Visit of South African President

On his maiden visit to an Asian country as the President of South Africa, Jacob Zuma was given a rousing
reception by the Indian leadership on June 4, 2010, as the two countries signed three key pacts,
including one on air services, and agreed to support each other’s candidature for the non-permanent
seat at the UN Security Council for the 2011-2012 term.

A wide range of bilateral issues as well as global developments, including reforms of the UN Security
Council, closer cooperation between the two countries at various international fora, particularly on
climate change, and increasing the volume of bilateral trade, came for discussions during the talks.

Apart from the pact on enhancing air connectivity, the two countries signed an MoU on agriculture
cooperation and another for linkages between the Foreign Service Institute of India and the Diplomatic
Academy of South Africa.

Both India and South Africa are keen to increase the two-way trade, which currently stands at $7.5
billion annually. Zuma said he wanted that to grow to $10 billion by 2012.
 8) Visit of Sri Lankan President

Sri Lankan President Mahinda Rajapaksa visited New Delhi on June 9, 2010. During his talks with Prime
Minister Manmohan Singh, he sought to cool down tempers in India over the plight of Tamils in his
island nation by promising to quickly resettle displaced Tamils and expedite a political solution to the
ethnic issue.

The two countries also signed seven agreements, including a treaty on mutual legal assistance in
criminal matters and an MOU on sentenced prisoners, after wide-ranging talks.
The two countries announced a major initiative to undertake a programme of construction of 50,000
houses for internally displaced persons (IDPs) in Northern and Eastern provinces of Sri Lanka with India’s
assistance. India would also be taking up several projects for the reconstruction of the North and the
East, including rebuilding of railway infrastructure, rehabilitation of Kankesanthurai harbour and Palaly
Airport, construction of a cultural centre in Jaffna and several vocational training centres, renovation of
the Duraiappaj stadium and rehabilitation of war widows.
The two countries also decided to resume the ferry services between Colombo and Tuticoran and
between Thalaimannar and Rameswaram. India would also establish consulates general in Jaffna and
Hambantota. India would also assist the island country in setting up a thermal power plant at
Trincomalee.
At their one-on-one meeting which was followed by delegation-level talks, the Indian PM and the Sri
Lankan President also discussed a wide range of bilateral issues, including the proposed comprehensive
economic partnership agreement (CEPA), as well as international issues. Sri Lanka supported India’s case
for inclusion in an expanded UN Security Council, as well as its candidature for a non-permanent seat for
the 2011-2012 term.
The five other agreements, signed after the talks between the two sides, were: renewal of MoU on SDP
schemes, MoU on setting up of a women’s trade facilitation centre and community learning centre,
renewal of cultural exchange programme, MoU on interconnection of electricity grids and MoU on
Talaimannar-Madhu railway line.

9) Indo-US strategic dialogue

The Strategic Dialogue between India and US is another “milestone” in bilateral relationship with the
Obama Administration. External Affairs Minister S.M. Krishna and US Secretary of State Hillary Clinton
co-chaired the first Cabinet-level Indo-US Strategic Dialogue, which helped to set the pace for the long-
term strategic relationship between the two countries.
INTERNATIONAL AFFAIRS

1) Hatoyama resigns as Japan’s PM

Japanese Prime Minister Yukio Hatoyama, who ended five decades of single-party rule when he swept
to power in August 2009, but stumbled when he confronted a long-time ally, the United States, resigned
on June 2, 2010. Hatoyama quit at a meeting of leaders of the Democratic Party of Japan in Tokyo,
becoming the fourth straight Japanese leader to leave after a year or less in office.

“Since last year’s elections, I tried to change politics in which the people of Japan would be the main
characters,” he said later at a nationally broadcast news conference. But he conceded that his efforts
weren’t understood.
Hatoyama ran for the premiership on a campaign platform of maintaining a more equal relationship
with the United States, which still enjoys enormous support among most Japanese. His decision to
challenge Washington over the details of a massive military base relocation plan on the island of
Okinawa befuddled Japanese and American analysts and government officials alike.
Hatoyama also called for Japan to become more of an “Asian nation,” which sparked concern in
Washington that he wanted to move away from the country’s pro-US stance and closer to China.
Finance Minister Naoto Kan succeeded Hatoyama as the new Prime Minister.

2) Maoists force Nepal PM to resign

Nepal’s Prime Minister announced his resignation on June 31, 2010, bowing to pressure from opposition
Maoists who had been demanding his ouster in Parliament and on the streets. Prime Minister Madhav
Kumar Nepal said in a televised speech that he decided to resign to end political deadlock and shore up
the peace process.
Mr Madhav Kumar had taken over the post in May 2009 after the previous government led by the
Maoists resigned following differences with the President over the firing of the army chief. He had the
support of 22 political parties in Parliament and more than half of the 601 members in the Assembly.
However, the Maoists, who have the largest number of seats in the Assembly, refused to support his
government and instead staged protests to demand disbanding the government.
In May 2010, the Maoists had shut down the nation for more than a week, imposing a general strike.
The protests also delayed the writing of a new constitution, which was supposed to be complete by May
2010. The deadline has now been extended by one year.

3) Landmark US Financial Reform Bill

On July 1, 2010, the US House of Representatives approved a landmark overhaul of financial regulations.
The Bill would impose tighter regulations on financial firms and reduce their profits. It would boost
consumer protections, force banks to reduce risky trading and investing activities and set up a new
government process for liquidating troubled financial firms.
However, the Republicans say the Bill would hurt the economy by burdening businesses with a thicket of
new regulations. They also point out that it ducks the question of how to handle troubled mortgage
finance giants Fannie Mae and Freddie Mac, which Democrats plan to tackle in 2011.

4) Ethic Riots in Kyrgyzstan

Russia sent hundreds of paratroopers to Kyrgyzstan on June 13, 2010 to protect its military facilities as
ethnic clashes spread in the Central Asian State, bringing the death toll from days of fighting to 97.
Ethnic Uzbeks in a besieged neighbourhood of Kyrgyzstan’s second city Osh said gangs, aided by the
military, were carrying out genocide, burning residents out of their homes and shooting them as they
fled. Witnesses saw bodies lying on the streets.
The interim government in Kyrgyzstan, which took power in April 2010, after a popular revolt toppled
President Kurmanbek Bakiyev, appealed for Russian help to quell the riots in the south.
Led by Roza Otunbayeva, the interim government sent a volunteer force to the south and granted
shoot-to-kill powers to its security forces in response to the deadly riots, which began in Osh, before
spreading to Jalalabad.
Renewed turmoil in Kyrgyzstan has fuelled concern in Russia, the United States and neighbour China.
Washington uses an air base at Manas in the north of the country, about 300 km from Osh, to supply its
forces in Afghanistan.

5) G-20 Summit meeting

A Summit meeting of Leaders from the Group of 20 economic powers was held in Toronto, Canada on
June 28, 2010. The leaders have agreed to halve deficits by 2013 and stabilise or reduce the government
debt-to-GDP ratio by 2016. At the same time, the bloc left it to individual countries to decide on levying
taxes on banks or adopting other means to fund future bailouts.
Along the way, the G-20 leaders who completed their fourth meeting since the global financial crisis of
2008, also diluted their position on a number of problems they had decided to fix earlier. For instance,
while reinforcing their desire to move to a more stringent capital structure, the communiqué issued
after two days of discussions said countries would “aim” to put in place a new framework by the end of
2012, which was earlier the target date. Members will also get flexibility in phasing the new rules.
The good news is that once these rules are implemented banks will have more capital to deal with crises
as the ratio of core Tier-I capital of a bank to its risk-weighted assets is expected to double from the
present level of 2 per cent.
On trade, too, there was dilly dallying. The G-20 leaders, who had earlier said that the Doha Round of
trade liberalisation talks should be concluded in 2010, have not mentioned any deadline now. All that
has been said is that they will now deliberate on the ways to take forward the talks when they meet in
Seoul in November 2010.

G-20 members have also decided against erecting any new trade and investment barriers.

The decision to increase the quotas for developing countries in the International Monetary Fund by the
Seoul summit was touted as another gain.
While many elements in the 19-page statement were a reiteration of the earlier pledges, these were at
least two new elements. One of them was a proposal to set up a working group on development. The
other was the desire to focus on issues related to corruption with members urging to ratify and
implement the United Nations Convention against Corruption.

However, the move by some developed countries to insert another new element — a levy on bank
transactions — did not find a mention in the final text as the focus of the deliberations remained on
reducing fiscal deficit levels. A key demand of European countries, was resisted by the US and
developing countries such as India and Brazil.

Along with deficit reduction, G-20 leaders also agreed on ushering in structural reforms by emerging
surplus economies, such as China. These countries, which can tailor their reform moves to strengthen
social safety nets, should increase infrastructure spending and enhance exchange rate flexibility to
reflect underlying economic fundamentals.

6) G-20 meeting of Finance Ministers

Finance Ministers and Central Bank Governors of G-20 countries met in Busan, South Korea on June 4,
2010.

At the top of the agenda was Europe’s debt crisis. The Ministers also discussed medium-term growth
framework and how to solve economic imbalances which caused the global financial crisis. Canada, the
current G-20 President, hopes to secure an agreement in Toronto on the broad suite of policies needed
to reduce these imbalances. Individual countries would then commit themselves to specific policies at
the next G-20 summit in Seoul.

Building on progress to date, the leaders affirmed their commitment to intensify efforts and to
accelerate financial repair and reform. They also agreed that further progress on financial repair is
critical to global economic recovery and requires greater transparency and further strengthening of
banks’ balance sheets and better corporate governance of financial firms.

The leaders also committed to reach agreement expeditiously on stronger capital and liquidity standards
as the core of our reform agenda and in that regard fully supported the work of the Basel Committee on
Banking Supervision.

The leaders also emphasized the need to reduce moral hazard associated with systemically important
financial institutions and reinforced their commitment to develop effective resolution tools and
frameworks for all financial institutions on the basis of internationally agreed principles.

The G-20 was established in 1999, in the wake of the 1997 Asian Financial Crisis, to bring together major
advanced and emerging economies to stabilize the global financial market. Since its inception, the G-20
has held annual Finance Ministers and Central Bank Governors’ Meetings and discussed measures to
promote the financial stability of the world and to achieve a sustainable economic growth and
development.

7) China announces plans to make its currency more flexible

Equity markets across the world made handsome gains on June 21, 2010, after China announced plans
to make its currency, the yuan, more flexible against the dollar. India’s benchmark equity index, the
Sensex, and the broad-based Nifty today touched their highest levels in more than two months.

Market analysts said China’s move would go a long way in lifting the global economic sentiment that
was under the weather due to the Euro crisis. China’s decision would result in a higher growth rate,
especially for countries that have a significant trade relation with the Asian behemoth, as currency
appreciation would make imports comparatively cheaper in China.

According to Barclays Commodities, there is a thinking that a stronger yuan will “increase Chinese
purchasing power” leading to an increase in its “purchases of base metals”. “This coincides with a strong
set of Chinese trade data for May 2010, which showed that the country turned a net importer of
aluminium and lead, while copper and zinc imports remained strong”.

8) UNSC slaps sanctions on Iran

On June 9, 2010, the UN Security Council slapped sanctions on Iran over its controversial nuclear
programme, targeting the powerful Revolutionary Guard, ballistic missiles, and nuclear-related
investments, despite opposition from Brazil and Turkey.

In the 15-member Council, 12 countries, including the US and Britain, voted in favour of the resolution,
with Lebanon abstaining and Brazil and Turkey voting against.
The new resolution, which is fourth against Iran to be adopted by the UNSC, creates new categories of
sanctions like banning Iran's investment in nuclear activity abroad, banning all ballistic missiles activities,
blocking Iran's use of banks aboard and asset freezes for members of the Islamic Revolutionary Guard
Corps.

The resolution blacklists entities that includes 15 enterprises of the Islamic Revolutionary Guards Corps,
three entities owned by the Islamic Republic of Iran Shipping Lines and 23 industrial companies. The
international community accuses Iran of seeking to develop an atomic weapon. But, Tehran has been
maintaining that its uranium enrichment program is for peaceful civilian purposes.
India has been maintaining that it is opposed to such kinds of sanctions as it will affect the common
people more than the establishment. Russia and China, which have previously raised objections against
such sanctions, supported the resolution and said they were happy with the text of the resolution as
long as it did not have any negative impact on the people.

Iran voiced defiance, saying it would not halt uranium enrichment and suggesting it may reduce
cooperation with the UN nuclear agency.
 9) SAARC nations pledge coordinated action to tackle terror

Members of SAARC have pledged to step up coordinated action against the common menace of
terrorism, including steps to apprehend or extradite persons connected with acts of terrorism and
facilitate real-time intelligence sharing.

The meeting of the Interior Ministers of the South Asian Association for Regional Cooperation, held on
June 27, 2010 in Islamabad, Pakistan, also resolved to step up cooperation in real time intelligence-
sharing and to consider Pakistan’s proposal for creation of SAARCPOL, an institution on the lines of
Interpol.

The ministerial statement on cooperation against terrorism adopted at the meeting said the SAARC
member States had underscored their “commitment to apprehend and prosecute or extradite persons
connected, directly or indirectly, with the commissions of acts of terrorism”. They also reiterated their
commitment to strengthen SAARC’s regime against terrorism.

The ministers resolved to ensure that “nationals and entities” of SAARC States who commit, facilitate or
participate in commission of terror acts are “appropriately punished”.

The SAARC members—Afghanistan, Bhutan, Bangladesh, India, Pakistan, Maldives, Nepal and Sri
Lanka—also acknowledged that linkages between terrorism, illegal trafficking of drugs, human
trafficking, smuggling of firearms and threats to maritime security remained a “serious concern” and
said these problems would be addressed in a comprehensive manner.

10) US-Russia ties improve

On June 25, 2010, US President Barack Obama declared he had succeeded in “resetting” the US-Russia
relationship, which he said had reached its lowest point since the Cold War at the end of George W.
Bush’s term in office. Obama was speaking to reporters in the East Room of the White House following
meetings with Russian President Dmitry Medvedev.

Medvedev, meanwhile, agreed to allow a resumption of US poultry exports to his country which Russia
had banned earlier in 201, claiming that a chemical used in the US violated its food safety rules.

But despite the bonhomie between the two leaders, who have met seven times since Obama took
office, both Obama and Medvedev acknowledged that they had differences over certain issues,
including Georgia. Relations between the two countries deteriorated after the Russian invasion of
Georgia in 2008.

The US and Russian Presidents said they had resolved a majority of the obstacles in the path to Russia’s
entry into the WTO. They have instructed their negotiators to work as quickly as possible to wrap up
what Obama said were “difficult issues” that will require “some significant work”, but Medvedev
described as “minor problems”.
The two sides released 11 joint statements at the end of their meeting. These covered promotion and
implementation of open government; Kyrgyzstan; energy efficiency; strategic stability; counter-
terrorism cooperation; inter-country adoption; Afghanistan; people-to-people connections; strategic
partnership in innovation; Russia’s accession to the WTO; US-Russia Presidential Commission.

11) Canada government blamed for Kanishka crash

A long-awaited inquiry into the 1985 Air India Kanishka bombing, which killed 329 persons, mostly of
Indian origin, has blamed the Canadian government for its failure to prevent the tragedy and
recommended the appointment of a powerful security czar to resolve disputes between conflicting
interests among security agencies.

“The government needs to take responsibility to avoid further failure and to prevent a return to a
culture of complacency,” Justice John Major, the head of the Kanishka bombing inquiry commission,
recommended on June 17, 2010, nearly 25 years after Canada's worst terrorist attack.

In the much-awaited final report from the commission that investigated the bombing of Air India Flight
182 on June 23, 1985, he observed that the national security continues to be badly organised between
the RCMP and Canada's spy agency. He also recommended radical transformation in prosecution.

Meanwhile, Candian Prime Minister Stephen Harper assured the family members of the victims of the
1984 Air India Kanishka bombing that the government would respond “positively” to the
recommendations made by an inquiry committee and said compensation would be offered to all.

Years of criminal investigation have yielded just one conviction, for manslaughter, against a British
Columbia mechanic Inderjit Singh Reyat, who assembled bomb components.

12) G-8 leaders drop commitment to complete Doha round in 2010

On June 27, 2010, G-8 leaders met in Totonto, Canada for their annual Summit meeting. The leaders
decided to drop a commitment to complete the troubled Doha trade round in 2010 and vowed to push
forward on bilateral and regional trade talks until a global deal could be done.

In 2009, a G-8 summit in Italy and a Pittsburgh meeting of the Group of 20 both had committed to a
2010 end date that now looks impossible to meet.

Canadian Prime Minister Stephen Harper, who chaired the G-8 summit, said Doha was not dead. “I don't
think we can afford to say that. We’ve got to find a path over time to get to a successful conclusion,” he
told a closing news conference.

Doha round has been dogged by differences among trade powers who want more access to one
another’s markets but have struggled to lower their own trade barriers.
 DO YOU KNOW

An ongoing study by Singapore-based Centre for Liveable Cities to rank 64 cities across the
world has ranked Geneva and Zurich as most liveable places in the world. Singapore is ranked
third. None of the six Indian cities that were included in the study—Delhi, Mumbai, Bangalore,
Chennai, Ahmedabad and Pune—find mention in the top 20, either in the global or Asian list.

From July 1, banks will move to a new, more transparent regime of loan pricing. They will
jettison the Benchmark Prime Lending Rate (BPLR) and price loans off a ‘base rate’. Unlike the
BPLR that was set somewhat arbitrarily by banks, the base rate will follow an explicit formula
that factors in a bank’s cost of deposits, operating costs (expenses of running its branches, for
instance), the cost of statutory drafts on bank funds imposed by the Reserve Bank of India (the
Cash Reserve Ratio and Statutory Liquidity Ratio) and the profit margin. The base rate will help
borrowers to compare interest rates offered by various banks and make the process of how
banks arrive at interest rates for loans more transparent. RBI has stipulated that banks cannot
charge below the base rate for most loans. (There are a couple of exceptions like agricultural
loans and export credit.) While the new model will ensure greater transparency, it need not
mean lower lending rates for borrowers.

The finance ministry has asked Insurance Regulatory and Development Authority (IRDA) to make
following changes to ULIPS: Minimum risk cover is to be of times (against 5 times). Pension
products to come with guarantee. Minimum lock-in raised to five years and minimum life cover
to Rs one lakh.

Indian consumers are the greenest in the world, according to a global survey of 17 countries.
Brazil is ranked number 2, while US consumers are ranked last, just below Canada. The survey
uses an index of consumption habits and their environmental impact in five categories: goods,
food, housing, transport and attitudes. India’s proclivity for small cars, its relatively low vehicle
density (India has 12 vehicles per 1,000 people; the US has 765 per 1,000), the penchant Indians
have for fruits and vegetables and locally grown foods over imports these contribute to the
score.

Municipal Corporation of Delhi (MCD) has become the first municipal body of India to cash in on
cutting down carbon emissions warming the planet. A municipal compost plant in south Delhi,
run by the private sector ILFS group, generated a first modest cheque of Rs 5 lakh in carbon
emission reduction (CER) credits for its plan to keep more than 9,000 tonnes of carbon over the
next 10 years by stopping methane leaks from garbage.

World Environment Day is celebrated on June 5.

World Day against Child Labour is observed on June 12.

World Blood Donor Day is observed on June 14.

Vaxiflu-S is India’s first indigenous vaccine to counter influenza-A H1N1, also known as swine flu.

India is ranked a lowly 128 on 2010 Global Peace Index. Pakistan (145) is placed among the five
 countries that were least peaceful. India had ranked 122 in 2009. New Zealand was ranked the
most peaceful, followed by Iceland and Japan.

Shyam Saran Negi, resident of the remote Kalpa village in Kinnaur district of Himachal Pradesh,
was the first to cast his vote in independent India’s first elections on October 23, 1951. Elections
in snow-bound Kinnaur region were held ahead of other places in India, where the elections
were held in January and February of 1952.

The world's largest gold coin, "Maple Leaf 2007" has been sold at an auction for $4.03 million.
Measuring 53 centimetres in diameter and with a purity of 99.999 per cent, it is listed in the
2010 edition of the Guinness Book of World Records as the world’s biggest gold coin. The front
side of the coin displays Queen Elizabeth II and the reverse shows three maple leaves, the
national symbol for Canada. There are five Maple Leaf 2007 coins worldwide. One is owned by
Queen Elizabeth II, two belong to unidentified investors in Dubai and the whereabouts of the
fifth are unknown.

Tobin Tax is a levy on all spot conversions of one currency into another. It is imposed to prevent
fluctuations in the market due to excessive capital inflows.

The Union government has approved infusing of Rs 6,211 crore into five public sector banks—
Union Bank of India, Bank of Maharashtra, IDBI Bank, UCO Bank and Central Bank of India.
 Current Affairs: May 2010

NATIONAL AFFAIRS

1) RBI measures to boost liquidity

The Reserve Bank of India (RBI) has announced special measures to provide liquidity in the system,
which may face a cash crunch because of huge outgo on third generation (3G) telecom spectrum
licences and payment of advance tax by companies.
On May 27, 2010, RBI allowed banks to avail of additional support under the liquidity adjustment facility
(LAF). Till July 2, banks have been permitted to avail of support of up to 0.5 per cent of their net demand
and time liabilities, which will provide an additional liquidity support of over Rs 20,000 crore.
In addition, RBI said that as an ad hoc measure, banks can seek a waiver for any shortfall in maintenance
of the prescribed 25 per cent statutory liquidity ratio (SLR) while availing the temporary facility.

2) Decks cleared for first Defence University

More than 40 years after it was mooted, the Union Cabinet, on May 13, 2010, gave its approval to set up
the nation’s first defence university at Binola, around 20 km from Gurgaon. It would aim at imparting
education on strategic challenges to armed forces officials, bureaucrats, academicians, parliamentarians
and trainees at military academies.
To be established at an estimated Rs 300 crore, the institute would come up on an area of about 200
acres. A sum of Rs 100 crore has been earmarked for land acquisition. The existing defence educational
institutions like the National Defence College, New Delhi, College of Defence Management,
Secunderabad, National Staff College, Wellington, and National Defence Academy, Pune, would also be
affiliated to the INDU. At present, these institutions are attached to various universities across the
country.
The proposed university, which would be fully autonomous and constituted under an Act of Parliament,
would promote policy-oriented research on all aspects of national security as part of the strategic
national policy-making. The university was first mooted in 1967 and the matter was accorded all
seriousness after the 1999 Kargil conflict.

The government had set up a Kargil Review Committee, headed by strategic expert K. Subrahmanyam,
which had recommended establishment of such a university to exclusively deal with defence and
strategic matters. It will encourage awareness of national security issues by reaching out to scholars and
an audience beyond the official machinery.
 3) No law practice without clearing exam

From September 2010, law graduates will have to clear an entry-level exam to be eligible for legal
practice. In a widely anticipated move, the Bar Council of India—the regulator for the legal profession—
has decided to implement its decision of making aspiring lawyers walk the extra mile.
Till now, a law degree from a recognised university or a law institute was the sole eligibility criterion for
getting registered as a lawyer.

4) Emissions up, but way lower than US, China

Driven by higher industrial growth, energy production and transport, an environment ministry report
says the annual GHG (greenhouse gas) emission of India increased by around 58 per cent from 1994 to
2007, but per capita emissions were still much less than those of US or China. Greenhouse gas emissions
per unit of the GDP, however, declined by more than 30 per cent during 1994 and 2007, says the
country’s updated emission inventory “India: Greenhouse Gas Emissions 2007”.
The country’s net GHG emissions in 2007 were 1.9 billion tonnes compared to 1.2 billion tonnes in 1994.
However against 1.5 tonnes of CO2 per capita in 1994, the per capita GHG emission was estimated to be
1.7 tonnes of CO2 in 2007.
Even though India is ranked fifth in aggregate GHG emissions after US, China, the European Union and
Russia in its contribution to global warming, emissions of US and China are almost four times that of
India.
China and the US are the world's top emitters of greenhouse gases and disagreement between the two
on slashing their carbon dioxide output was a major cause of the failure of the UN-sponsored climate
change talks in 2009. At the Copenhagen Summit, India announced its intent to further reduce the
emission intensity of the GDP by 20-25 per cent between 2005 and 2020 even as it pursues the path of
inclusive growth.

5) No lie detector tests: SC

In a verdict expected to weaken cases against terrorists, other dreaded criminals and high-profile
offenders, the Supreme Court has cited “mental privacy” to rule that police and other prosecuting
agencies cannot forcibly conduct lie detector tests—narco-analysis, polygraph or brain electrical
activation profile (BEAP, popularly known as brain mapping)—on accused, suspects or witnesses.

“Compulsory administration of any of these techniques is an unjustified intrusion into the mental
privacy of an individual. It would also amount to cruel, inhuman or degrading treatment with regard to
the language of evolving international human rights norms,” a Bench comprising Chief Justice K.G.
Balakrishnan, R.V. Raveendran and J.M. Panchal held.

Further, placing reliance on the results gathered from these techniques would come into conflict with
the right to fair trial. “Invocations of a compelling public interest cannot justify the dilution of
constitutional rights such as the right against self-incrimination” guaranteed under Article 20(3) of the
Constitution, the Bench said in the 251-page verdict.
The apex court also observed that the scientific validity of the techniques “has been questioned and it is
argued that their results are not entirely reliable…empirical studies suggest that the drug-induced
revelations need not necessarily be true”.

The Bench said that before arriving at the conclusion it also assessed the “tensions between the
desirability of efficient investigation and the preservation of individual liberties” and the reasoning that
these techniques “are a softer alternative to the regrettable and allegedly widespread use of third
degree methods by investigators”.

At the end, the apex court made it clear that the eight-point guidelines issued by the National Human
Rights Commission in 2000 for conducting narco-analysis tests should be strictly adhered to. Among the
guidelines were: No lie detector tests should be administered except on the basis of consent of the
accused. If the accused volunteers for a lie detector test, he should be given access to a lawyer and the
physical, emotional and legal implication of such a test should be explained to him by the police and his
lawyer. The consent should be recorded before a judicial magistrate.

6) OECD warns inflation will remain high

The Organisation for Economic Cooperation and Development (OECD) has argued that the Reserve Bank
of India’s (RBI’s) process of raising policy interest rates is “still very low by historical standards”.

In a global economic outlook report, the Paris-based grouping warned: “With inflation remaining
elevated and the recovery appearing to have taken root, there is a risk that price increases for inputs will
flow through to second-round increases and that inflationary expectations will become destabilised. To
mitigate this risk, sizeable further monetary tightening will be required through 2010 and into 2011.”

OECD projected the inflation rate to be 7.7 per cent in 2010 and 6.1 per cent in 2011. It expected the
consumer price index rise to be at 10.2 per cent in 2010 and still hovering at 6.3 per cent in 2011. The
trade deficit has been projected at $80 billion (imports of $405 billion) in 2010 and going up to $101
billion (imports of $478 billion up 13.1 per cent from 2010) in 2011 and real GDP growth in 2010 at 8.3
per cent and at 8.5 per cent in 2011.

OECD Chief Economist Pier Carlo Padoan said: “The outlook for inflation remains the main downside
risk, especially if monsoonal rainfall is again deficient. In that case, food inflation would likely begin to
risk anew. More generally, the strong state of domestic demand could lead to persistently higher
inflation and an upward drift in inflationary expectations.”

Adding the context of anticipated deficit reduction being underpinned on “expected revenue growth,
asset sales and some more modest tax measures”, Padoan added “the expected rebound in agricultural
activity should help limit further increase in food prices, which have been a major contributor to high
inflation. However, underlying inflationary pressures are likely to persist given the strong outlook for
demand. Timely policy action to limit the scope for second-round price increases is, therefore, required.
Monetary policy normalisation is also important in the light of relatively modest fiscal consolidation”.
 7) National Water Mission gets Cabinet nod

The Prime Minister's Council on Climate Change has approved the National Water Mission, focusing on
making water conservation a peoples' movement in the country.

Prime Minister Manmohan Singh, who chaired the meeting of the Council, highlighted the need to
create a general consciousness of the need to use water in the most sustainable manner in view of its
scarcity and assess the impact of climate change on water.
The Council felt that to make the Mission a peoples' movement it was essential to make available all
data on water in the public domain, to be able to mobilise citizens, local bodies and State governments
for focused action on water conservation and augmentation.

Members felt incentives should be provided for using water in a sustainable manner and that the
Research and Development requirements of the mission should be focused upon.

Water Mission is one of the eight missions in the National Action Plan on Climate Change launched by
the Prime Minister in 2009 to tackle the threats of global warming.
The government has already launched Energy Efficient and Solar Mission while a draft of Green Mission
has been prepared for public consultation.

8) Economic growth better than expected

The Indian economy roared past estimates to post a whopping growth rate of 8.6% in the January-
March quarter of 2010. The quarter's strong showing also helped India end the fiscal year with 7.4%
growth, beating the earlier estimate of 7.2%. Manufacturing led the way, with a whopping 16.3% growth
in the quarter and 10.8% overall, while even agriculture, which was expected to decline, ended with
marginal growth of 0.2% year-on-year after growing 0.7% in Q4.

The GDP growth rate had slowed to 6.7% in 2008-09 following the global economic crisis, after topping
9% in the previous three years.

The first quarter growth in the gross domestic product (GDP) is better than expected. In February, the
Central Statistical Organisation (CSO) had estimated that the Indian economy would grow at 7.2% in
2009-10, with growth of 7.7% in the fourth quarter. But the unexpectedly strong performance in the
fourth quarter helped boost the final figure to 7.4%.

The fourth-quarter showing is particularly commendable in the light of a sudden dip in the third quarter
to 6.5% from 8.6% in the second quarter due to the impact of a drought-like situation in the country.

China is the only large economy with a higher growth rate at 11.9% in the January-March quarter. The
rest of the world is witnessing a fragile recovery, which is now under threat due to the brewing Euro-
zone crisis. The sixteen developed countries in the Euro-zone expanded by just 0.2% in the quarter. At
the same time, the Organisation for Economic Cooperation and Development (OECD)—a grouping of
mostly developed countries including Europe that account for over 60% of the global economy—grew at
only 0.7% in the quarter, against 0.9% in the previous quarter. US and Japan grew at 0.8% and 1.2%,
respectively.

The 7.4% growth in 2009-10 also showed that stimulus provided by government yielded results.

9) Visit of President Patil to China

Indian President Pratibha Patil visited Beijing from May 27, 2010. She is the first Indian Head of State to
visit China in a decade. She had been invited by her Chinese counterpart Hu Jintao and her trip coincided
with the 60th anniversary of the establishment of diplomatic relations between India and China.

During her visit, Patil inaugurated China’s first Indian-style Buddhist temple in Luoyang city in Henan
province.

Skirting contentious issues, she held discussions with the top Chinese leadership. Controversial issues
such as Chinese border incursions, stapled visas for Kashmiris, Indian visas for Chinese telecom
companies and Sino-Pak ties did not figure in the discussions. Patil sought Chinese support for New
Delhi's permanent membership of the UNSC during talks. The Chinese leaders supported India's
aspirations for UNSC permanent seat and assured the Indian leader that Beijing would back India’s bid in
2011’s election for a non-permanent membership of the UNSC.

10) Rs 67,000 crore 3-G bonanza for government

The bidding frenzy for third generation (3-G) spectrum came to an end on May 19, 2010, with leading
operators Bharti Airtel, Reliance Communications and Aircel winning licences for 13 circles each. This
was the 34th day of the auction and it saw the price of a pan-India, or nationwide, licence touching Rs
16,828 crore, nearly five times its base price. No single operator could garner enough cash to win bids
for all the 22 circles that went under the hammer.The government emerged as the biggest winner. The
sale of wireless airwaves would make it richer by at least Rs 67,719 crore, the double of what it had
targeted in the Union Budget 2010 and about 1 per cent of the country’s gross domestic product.

The proceeds from the sale of 3G and BWA spectrum will together help the government plug its fiscal
deficit, projected at 5.5 per cent of GDP in the Budget. The winning operators said if the government
allots them spectrum as promised, by September 1, they will be able to roll out 3G services in four to six
months.Seventy per cent of the revenue for spectrum comes from only six circles, while locations such
as West Bengal, Himachal Pradesh, Assam and Jammu and Kashmir saw licences being awarded at
virtually the base price. The surprise package was Bihar where the bids closed at Rs 203.46 crore, seven
times its base price.
 11) Ajmal Kasab convicted of 26/11 attacks

On May 3, 2010, a Mumbai court found 22-year-old Pakistani national, Mohammad Ajmal Kasab, guilty
of mass murder and waging war against India, while acquitting two other accused, Fahim Ansari and
Sabahuddin Ahmed for want of evidence, in the November 26, 2008 attacks on the city. Kasab is the
lone surviving gunman from the attacks that killed 166 people. He has been given the death sentence.

“It was not a simple act of murder. It was war,” judge M.L. Tahiliyani said in a summary of the 1,522
page judgement. “This type of preparation is not made by ordinary criminals. This type of preparation is
made by those waging war.”

The court also held 20 other accused, including Lashkar-e-Tayiba founder Hafiz Saeed, its operations
chief Zaki-ur-Rehman Lakhvi and Abu Hamza, guilty of conspiracy.

12) Pakistan withdraws objection to J-K power projects

In a significant development, Pakistan, on May 30, 2010, withdrew its objection to construction of Uri-II
and Chutak hydel power projects in Jammu and Kashmir. At the Indus Water Commissioner-level talks in
New Delhi, the Pakistani side said it had no objection to the designs of the two power projects after the
Indian side provided details of these.

Pakistan had earlier raised objections over the 240 MW Uri-II project being constructed on Jhelum river
in Kashmir valley and the 44 MW Chutak plant being built on Suru, a tributary of Indus river in Kargil
district of Jammu and Kashmir's Ladakh province. Pakistan had claimed that the projects would deprive
it of its share of water.

INTERNATIONAL AFFAIRS

1) Hung House in Britain after 36 years

On May 7, 2010, Britain woke up to a hung Parliament, an election outcome that this country last
experienced in 1974 when the then Prime Minister Edward Heath tried and failed to persuade the
Liberal Party to join him in a coalition.

The Conservatives under David Cameron emerged as the single largest party with 306 seats in the 650-
member House of Commons, while Labour bagged 258 and Lib Dems 57.

Eight NRIs won elections, four each from the Labour Party and the Conservatives. Likewise four
Pakistani-origin MPs, Sadik Khan, Khalid Mahmood, Anas Sarwar and a woman lawyer Shabana
Mahmood, were successful on behalf of the Labour Party.

The LibDems play an extremely important role in the formation of the next government, although they
have not been able to attract as many votes as they hoped for. They were expecting to win more than
100 seats, but they had to be satisfied with less than 60. However, despite the poor show, they still hold
the trump card and are destined to play the role of king-makers.
On May 11, Conservative leader David Cameron (43), who favours a ‘new special relationship’ with
India, took charge as Britain’s youngest Prime Minister in nearly 200 years, heading a coalition with the
support of centrist LibDems, and vowed to put aside party differences and provide a strong and decisive
government. He made Liberal Democrats leader Nick Clegg Deputy Prime Minister.

2) EU steps to halt economic crisis

On May 10, 2010, European policy makers unveiled an unprecedented loan package worth almost $1
trillion and a program of bond purchases to stop a sovereign-debt crisis that threatened to shatter
confidence in the euro. Following the announcement, stocks surged around the world, the Euro
strengthened and commodities rallied.

The 16 Euro nations agreed in a statement to offer as much as 750 billion Euro ($962 billion), including
International Monetary Fund backing, to countries facing instability and the European Central Bank said
it will buy government and private debt. The rescue package for Europe’s sovereign debtors came little
more than a year after the waning of the last crisis, caused by the US mortgage-market collapse, which
wreaked $1.8 trillion of global credit losses and write-downs. Under US and Asian pressure to stabilise
markets, Europe’s governments bet their show of force would prevent a sovereign-debt collapse and
muffled speculation the 11-year-old Euro might break apart.

The new war chest would be used for countries like Portugal or Spain in case their finances buckle.
Deficits are set to reach 8.5 percent of gross domestic product in Portugal and 9.8 percent in Spain in
2010, above the Euro region’s 3 percent limit. Both countries pledged “significant” additional budget
cuts in 2010 and 2011.

The vow to push budget shortfalls below the Euro's 3 percent limit echoes promises that have been
regularly broken ever since governments in 1999 set a three-year deadline for achieving balanced
budgets. The Euro region’s overall deficit is forecast at 6.6 percent of gross domestic product in 2010
and 6.1 percent in 2011.

Britain, the EU’s third-largest economy, won’t contribute to a Euro rescue fund, though it backs efforts
to restore stability.

3) Now Spain struggles

Spain’s socialist government is seeing its political power erode as it struggles to chart a path out of deep
financial trouble, failing so far to satisfy conflicting demands to cut its budget and stimulate job creation.

The coming months could bring far more problems as Prime Minister Jose Luis Rodriguez Zapatero
reforms the country’s labour market, risking national strikes and the loss of support from trade unions, a
core source of his centre-left party’s strength.
Zapatero’s minority government is already running into serious trouble, although there appears to be no
immediate threat of it falling. A package of austerity measures was passed by only one vote in the
Parliament’s lower chamber on May 27, 2010. Opposition parties have called for new elections.

The austerity package aims to cut spending by Euro 15 billion ($18.4 billion) over two years by freezing
pensions and cutting civil servants’ wages. But investors and lenders such as the International Monetary
Fund are demanding that Spain reform its labour market, overhauling hiring and firing rules and moving
to find jobs for the long-term unemployed and the young. Europe’s top job creator only two years ago,
Spain now has the highest unemployment rate—just over 20 per cent—of the 16 nations that share the
Euro currency.

The resulting austerity package, nicknamed the “scissors action” by Spanish media, was welcomed by
the European Union and the IMF, which said Spain’s “ambitious fiscal consolidation is under way to
reach the three percent GDP deficit target by 2013”.

4) US asks Pak, China to follow NSG rule

The US administration has said that civil nuclear cooperation between Pakistan and China must be in
compliance with rules of the Nuclear Suppliers Group (NSG) if China proceeds with plans to set up two
new nuclear reactors in Pakistan.

China’s decision to sell nuclear reactors to Pakistan, which has not signed the nuclear Non-Proliferation
Treaty, is proving to be a litmus test for President Barack Obama, who has championed the cause of
curbing the spread of nuclear technology.China has helped Pakistan set up nuclear reactors since 1991
when China National Nuclear Corporation (CNNC) entered into a contract with the Pakistan Atomic
Energy Commission (PAEC) to build Chashma-1, a 325 MW nuclear power reactor. When it joined the
NSG in 2004, China cited a Sino-Pakistan framework agreement that committed it to set up a second
reactor, Chashma-2, for Pakistan. CNNC and PAEC have also worked out a deal to set up two separate
650 MW reactors—Chashma-3 and Chashma-4.

Analysts say the Obama administration is reluctant to press China on the matter in case Beijing responds
by dropping its tentative support for sanctions on Iran.NSG rules prohibit the sale of sensitive nuclear
technology and materials to nations that have not joined the Nuclear Non-Proliferation Treaty (NPT) and
do not allow international monitoring of their nuclear activities.

Daryl Kimball, executive director of the Arms Control Association, says the agreement between China
and Pakistan is “deeply troubling because we have China engaging in civil nuclear trade with a country
that does not meet the requirements of the NSG for such trade.” He said the Obama administration
should insist at the NSG that the Chashma -3 and -4 projects be discussed and it be determined that they
not be permitted.
 5) Iran ready for nuke fuel swap

It’s being regarded as a major diplomatic coup that could spell the beginning of the end of the isolation
of Iran from world affairs. On the sidelines of the G-15 summit in May 2010, Iran dramatically
announced that it has arrived with Brazil and Turkey a deal that could possibly break the nuclear
stalemate, stave off sanctions being contemplated by the UN and the US against Iran and bring the
contentious issue back to the negotiating table.

Under the agreement Tehran will ship 1,200 kg of low-enriched uranium (LEU) to Turkey in exchange for
fuel for a research reactor. Turkey will keep Iran’s LEU and the IAEA and Iran can monitor the fuel.

Iran is a signatory to the Nuclear Non-Proliferation Treaty regime (NPT) which had enabled it to received
nuclear technology for civilian use from other NPT signatories, including the US in return for committing
that it would not be diverted or misused for military purposes. In 2002, Iran was discovered to have
clandestinely set up a uranium enrichment plant and a heavy water unit without informing the IAEA.
Since then major powers led by the US have got the UN to impose severe sanctions and refuses to lift
them till Tehran's comes clean and puts an end to all clandestine use.

Apart from curbs on banking and trade, heavy sanctions had been imposed on some key public sector
enterprises of Iran and the Iranian Revolutionary Guard Council, the striking arm of the current regime.

Currently Iran is estimated to have 1,500 kg of 3.5 per cent (low) enriched uranium. For running
research reactors like the Tehran facility for medical purposes, the uranium needs to be medium
enriched to 20 per cent. According to a deal, Iran would swap 1,200 kg of its stockpile of low-enriched
uranium in exchange for 120 kg of medium-enriched uranium that is to be supplied by the Vienna
Group.For making weapons grade material, uranium has to be enriched to at least 90 per cent. At least
300 kg of this highly enriched uranium is needed to develop an atom bomb. By keeping Iran’s low
enriched uranium stockpiles to around 3,000 kg, the world hopes that it would prevent it from crossing
the threshold of nuclear material needed to make a bomb.

Reacting to the Iran’s deal with Brazil and Turkey, the US pointed out that Tehran’s decision to continue
with some enrichment of nuclear fuel is a direct violation of UN Security Council and that the details of
the agreement must be conveyed to the International Atomic Energy Agency before it can be considered
by the international community.UK responded by saying that Iran’s actions remain a serious cause for
concern. “There is a need for a continued effort to impose sanctions.”

EU responded by saying that “this is a right direction but it does not answer all the concerns raised over
Iran’s nuclear programme.
 6) Tension between Koreas escalates

On May 24, 2010, South Korea announced steps to tighten the vice on the North’s already stumbling
economy in punishment for sinking one of its navy ships, with both sides stepping up their war-like
rhetoric. The United States, which backs Seoul, warned that the situation was “highly precarious”. China,
the North’s only major ally, urged calm. The mounting tension followed report by international
investigators accusing the North of torpedoing the Cheonan corvette in March 2010, killing 46 sailors in
one of the deadliest clashes between the two since the 1950-53 Korean War.

The United States, which has 28,000 troops on the peninsula, threw its full support behind South Korea
and said it was working hard to stop the situation from escalating.Few analysts believe either Korea
would dare go to war. The North’s military is no match for the technically superior South Korean and US
forces. And for the South, conflict would put investors to flight.

DO YOU KNOW

India scores poorly among the middle-income countries when it comes to health care and well-
being of mothers. The country is ranked 73 in the list of 77 nations rated for the “best place to
be a mother”, according to a report by child rights organisation Save the Children. What is more
shocking in the “State of the World's Mothers 2010” report is that India is rated much lower
than a host of conflict-ridden African countries like Kenya and Congo. China is at 18th place, Sri
Lanka at 40, while Pakistan lags behind India at 75th place. Bangladesh, featured in the list of 40
least developed countries, is ranked 14. The report analysed a total of 166 countries, among
which Sweden is placed at the top while Afghanistan is at the bottom.

A depository receipt is a type of negotiable financial security that is traded on a local stock
exchange but represents a security, usually in the form of equity that is issued by a foreign
publically listed company.

A survey of slums in cities and towns with a population of over one lakh as per the 2001 Census,
says there are 189 cities and towns in India with big slums. Andhra tops the list—it has 36 cities
and towns with a slum population of 50,000 and above. It is followed by Maharashtra with 26,
Uttar Pradesh (25), West Bengal (21) and Madhya Pradesh (15). Other States with a sizable slum
population in its cities are Haryana (8), Chhattisgarh (6) and Gujarat and Rajasthan (5 each). Goa
and Kerala and north-eastern States, barring Meghalaya, are the only States where slums are
non-existent.

The Centre has launched two programmes to improve the living conditions of slum-dwellers
across the country. Jawaharlal Nehru National Urban Renewal Mission (JNNURM) provides funds
to States for creating housing and infrastructural facilities for the urban poor in 65 cities,
including Mumbai, under the Basic Services to Urban Poor Programme (BSUP). For the
remaining 124 towns, the Integrated Housing and Slum development Programme (IHSDP) has
been introduced. The components for assistance include provision of basic services to the slum
dwellers, whom the government prefers to call urban poor.

The world's first gold vending machine has been set-up in a hotel in Abu Dhabi in the UAE. The
'Gold To Go' machine gives out 1, 5 and 10 gram gold bars as well as gold coins.

Spectrum is radio frequencies used to transmit voice, video and data. 2-G and 3-G are second
generation and third generation spectrum, respectively. The fourth generation is being tested.
3-G facilitates high-end use and faster transmission of video images and data etc. 2-G spectrum
is used only for voice transmission.

National Technology Day is observed on May 8.

In a rating of 423 cities, done by the Union Urban Development Ministry—to check their access
to proper sanitation facilities, how the solid waste is managed and quality of drinking water—
Chandigarh has been ranked on the top of the list, followed by Mysore, Surat, New Delhi,
Tiruchirrapalli and Jamshedpur. Charu (Rajasthan), Lakhimpur (UP), Pilibhit (UP) and Srinagar
(J&K) were listed among the bottom ten. The survey found 190 cities on the brink of public
health and environmental emergency.

Vienna has retained its ranking as the place offering the best quality of living in the world in an
annual survey which was dominated by European cities. The survey, by management
consultancy Mercer, said Western European cities had fared well despite the global economic
downturn, with Zurich coming in second place, followed by Geneva in third position. In Asia,
Singapore remains the highest-ranking city at 28, followed by Japanese cities Tokyo (40), Kobe
and Yokohama (both at 41), Osaka (51) and Nagoya (57). Baghdad retained its position at the
bottom of the list as the place offering the worst quality of life. Bengaluru remains the best
placed among Indian cities in the global list at 140th rank. New Delhi climbed to 143 rank from
145th slot in 2009. Mumbai moved up four places to 144th rank.

Sahara India has won the sponsorship rights of Indian cricket team till 2013.

The 11th International Indian Film Academy (IIFA) awards were held in Sri Lanka.

India observed May 21 as Anti-Terror Day to mark former Prime Minister Rajiv Gandhi’s
assassination on May 21, 1991.

The per capita income of India grew by 10,5 per cent to Rs 44,345 in 2009-10, against Rs 40,141
in 2008-09. The per capita income (at 2004-05 prices) stood at Rs 33,588 in 2009-10, against Rs
31,821 a year ago. Per capita income means income of each Indian if national income is evenly
divided among the country’s population of 117 crore. The size of the economy rose to Rs
62,31,171 crore in 2009-10, up 11.8 per cent over previous year.

The Reserve Bank of India has decided to increase the cash withdrawal limit for ATMs to Rs one
lakh in a single day.
 Current Affairs: April 2010
NATIONAL AFFAIRS

1) RBI hikes key rates to tame inflation

On April 20, 2010, the Reserve Bank of India announced a 25 basis points increase in repo and reverse
repo rates as part of monetary tightening measures to rein in inflation. The apex bank also announced a
25 basis points increase in the Cash Reserve Ratio (CRR) for banks. Following the hikes, the CRR now
stands at 6 per cent while the repo and reverse repo rates stand at 5.25 per cent and 3.75 per cent,
respectively. The RBI expected the hike in CRR to absorb Rs 12,500 crore from the banking system. The
apex bank said it was tightening liquidity in a bid to rein in inflation which was hovering in double digits.
The RBI, however, expected inflation to remain at 5.5 per cent during FY 11 with the GDP growing at 8
per cent.

2) FDI on Tobacco banned

On April 8, 2010, the Union government notified the ban on Foreign Direct Investment (FDI) in cigarette
manufacturing. Manufacturing of cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco
substitutes have been put under the list of sectors where FDI is prohibited.

The government took the decision to enhance public accountability towards proliferation of the anti-
smoking regime in the country. The decision to ban FDI is the latest in the government's long-standing
drive against smoking. In 2008, the government had banned smoking at public places and put a curb on
tobacco advertisements.

Earlier, 100 per cent FDI was permitted in cigarette manufacturing, but an industrial licence was needed
and the proposals required to be approved by the Foreign Investment Promotion Board (FIPB).

3) New foreign investment policy document

The Union government has launched a new policy document consolidating the plethora of rules and
norms governing foreign investment in the country under one comprehensive document. The move is
aimed at making available all information on FDI policy in one place.
It will lead to simplification of the policy; greater clarity of understanding of foreign investment rules
among foreign investors and sector regulators, as also predictability of policy direction.
Having a single policy platform that would subsume the 178 press notes would also ease the regulatory
burden for government; it will be updated every six months. This consolidated press note will be
superseded by a press note to be issued on September 30, 2010 to ensure that the framework
document on FDI policy is kept updated.
 4) Chinese hackers crack India’s top defence secrets

The computer systems of scores of Indian embassies, military establishments and corporate bodies, as
well as the email account of the Dalai Lama, were hacked by a Chinese cyber spy ring between
September 2009 and April 2010. Hundreds of documents, including classified files, were stolen, says a
Canadian cyber-security team that monitored the ring—the Shadow Network—for eight months.
The Shadow Network focussed on India, especially its military. The Canadians, in effect, hacked the
hackers and saw many documents themselves.
The Chinese hackers stole foreign ministry reports on India’s policy in West Africa, Russia and West Asia.
They got National Security Council secretariat assessments of security situations in Assam, Nagaland,
Tripura and Manipur, as well as the Maoist problem.
The penetration of India’s defence establishments was remarkable. Three air force bases, two military
colleges and an array of military institutes like the Army Institute of Technology, Pune, were broken into.

The hackers seemed interested in any defence information they could find: from sensitive issues like live
fire exercises and Project Shakti—the army’s artillery command system—to more innocuous material
like personnel files.
“This is a very serious, broad spectrum assault,” said strategic technology expert Ajay Lele, whose own
agency, the Institute for Defence and Security Analysis (IDSA), was robbed of 180 documents.
The ring is believed to be based in Chengdu, in China’s Sichuan province. The cyber-sleuths, based at the
University of Toronto’s Munk School of Global Affairs, avoided saying this was government-approved
but did say it was “possible”.

The Indian security establishment has little doubt the Shadow Network is cast by Beijing. Says K.
Santhanam, former IDSA head: “These rings are normally consortia in which Chinese academia,
intelligence and military work together.”

5) Education becomes a basic right

The Right of Children to Free and Compulsory Elementary Education Act came into force in the country
from April 1, 2010, amid an emotional appeal of collective effort by Prime Minister Manmohan Singh
and loads of applauses for the government from various parties, including those in the Opposition—the
BJP and the Left.

Prime Minister Manmohan Singh recalled the 100-year old resolve of Gopal Krishna Gokhale, who urged
the Imperial Legislative Assembly to confer on the Indian people the Right to Education.

With the RTE Act coming into force, the fundamental right to education as incorporated in the
Constitution under Article 21 A also became operative.

Right to Education (RTE) Act has, however, come into force amid a whopping shortage of 5.3 lakh school
teachers. Add to this, an additional seven lakh teachers that would be required for proper
implementation of the Act that gives a three-year window period to States to make education a
fundamental right of children in 6-14 age group and mandates setting up of neighbourhood schools with
full infrastructure.Uttar Pradesh tops the list, contributing 32 per cent of all existing teachers’ vacancies
in the country. Next is the Left Front-ruled West Bengal, where 53,000 posts were lying vacant, as per
MHRD records. Bihar has 51,000 vacancies, the figure for Chattisgarh and Orissa, the other educationally
backward States, is 37,000.Single-teacher schools are another big challenge for the RTE law. Currently, 9
per cent (about one lakh) of the total 12 lakh schools at primary level have only one teacher, whereas
the RTE Act specifies that any school with enrollment of up to 60 students must have at least two
teachers.

6) Union Budget passed after Rs 400 crore tax relief

On April 29, 2010, Finance Minister Pranab Mukherjee announced changes in tax proposals that will
benefit coffee growers, new hospitals and construction sector while making it clear that service tax on
domestic travellers would be Rs 100 per domestic journey and a maximum of Rs 500 for international
travel.

Mukherjee announced these concessions that would cost the exchequer Rs 300-400 crore a year but did
not touch the demand for rolling back the hike in petroleum and fertiliser prices on which the entire
opposition walked out before Lok Sabha passed the Finance Bill, 2010.

Explaining the reasons for his inability to concede the opposition's demand, he said the financial position
was such that oil marketing companies faced an under recovery of Rs 85,000 crore in 2010, apart from
heavy outgo on account of subsidies, interest and other payments.

7) Five years of National Rural Health Mission

As India celebrated completion of five years of National Rural Health Mission on April 12, 2010, Assam
won the best performing State award among the north-eastern State category for implementing the
programme well.

Rajasthan was adjudged the best performing State among the high-focus areas, while Tamil Nadu
claimed the award in the category of non-focus States.

Claiming credit for arresting the infant mortality rate (down to 53 in 2008 from 58 in 2005 when NRHM
started) and maternal mortality rate (down to 254 in 2004 as against 301 in 2003), Health Minister
Ghulam Nabi Azad said the government was in the process of designing a comprehensive programme on
population stabilisation in consultation with the State governments.

For the record, India has missed the goal of reaching 2.1 total fertility rate by 2010, as envisaged in the
National Population Policy of 2000. For the future, five challenges have been listed for NRHM—
transition from curative to preventive health care, human resource management, setting of output and
outcome targets, convergence and inclusive growth and approaches to public health that look at the
different stages of health transition at State and district levels so that appropriate strategies can be
adopted.
 8) SC quashes expulsion of Amarinder Singh by Punjab Assembly

In what is being viewed as a major political victory for former Punjab Chief Minister and Congress leader
Capt Amarinder Singh, the Supreme Court has ruled that his expulsion from the State Assembly on
September 10, 2008 was “constitutionally invalid” and ordered restoration of his membership.

If Amarinder had committed any irregularities in the allotment of land to a private builder when he was
Chief Minister during the tenure of the 12th House of the Vidhan Sabha, the proper course of action for
the State government should have been to move the criminal law machinery, a five-member
Constitution Bench headed by Chief Justice K.G. Balakrishnan held.

Further, the alleged improper exemption of land from the Amritsar Improvement Scheme “was an
executive act” in his capacity as Chief Minister which “did not distort, obstruct or threaten the integrity
of legislative proceedings in any manner”, the apex court ruled.

Also, the exemption had taken place during the 12th term of the Vidhan Sabha, whereas the
constitution of the Special Committee to inquire into it took place during the 13th term. “It was not
proper for the Assembly to inquire into actions that took place during its previous term, especially when
there was no relatable business that had lapsed from the previous term.”
The court clarified that its judgment would not act as a hurdle against the investigation, if any, into the
alleged role of Amarinder Singh in the Amritsar Improvement Scheme notified on January 13, 2006.

9) Visit of Afghan President Karzai

Afghan President Hamid Karzai, during his two-day trip to New Delhi on April 26, 2010, sought to allay
India’s concerns over the proposed re-entry of the Taliban in the Afghanistan government. Karzai
indicated that his government would enter into a power-sharing arrangement with those elements of
Taliban who had accepted the country’s constitution and were not part of the Al Qaida.His meeting with
Prime Minister Manmohan Singh came in the backdrop of moves being initiated by the Afghan
government to enter into a power-sharing arrangement with the so-called “moderate” elements of the
Taliban. New Delhi is worried that such a development will lead to the increased influence of Pakistan in
Afghanistan.

In a statement issued after the meeting, Karzai said they had discussed the upcoming Afghanistan peace
consultative jirga that, he explained, should “comprise people of Afghanistan, those from all walks of life
to advise on how to move forward for reintegration and reconciliation of those elements of Taliban and
others who have accepted the Constitution and are not part of the Al Qaida or any terrorist network.”

The Afghan President also requested Prime Minister Singh to send representatives to the follow-up to
the London conference in Kabul so that “India can participate once again in Afghanistan’s
reconstruction”.
India was forced to backtrack on the Taliban issue after the US and other European countries
encouraged Karzai to do business with the Taliban at the London conference held in early 2010. While
the US and NATO countries are looking for an exit route from war-ravaged Afghanistan, India is worried
that that this will have an adverse impact on the security and stability of the region.

10) Bangladesh lifts ban on Indian films

On April 24, 2010, Bangladesh announced that it has lifted an almost four-decade ban on Indian films in
a bid to boost attendances at cinemas. The move, however, drew loud complaints from local actors and
directors. Films produced by Bollywood were banned from cinemas in Bangladesh since the country’s
independence in 1972 in a bid to protect the local movie industry. The lifting of the ban comes amid
warming relations between India and Bangladesh after ties worsened between the neighbours when an
Islamist-allied government was in power in Dhaka from 2001 to 2006.But not everyone supports the
move. “Indian films will completely destroy our film industry and our culture. At least 25,000 people will
be jobless,” said Masum Parvez Rubel, a leading star and a co-coordinator of a front against Indian films.

11) India, China Prime Ministers to connect via hotline

On April 7, 2010, India and China signed an agreement to establish a hotline between Prime Ministers of
the two countries, as External Affairs Minister S.M. Krishna and his Chinese counterpart Yang Jiechi
resolved to take the bilateral relationship to new heights.

The agreement, under which dedicated phone lines will be set up in the Prime Minister's office of the
two countries, was signed by Krishna and Yang after their talks in Beijing. This would enable Prime
Minister Manmohan Singh and his Chinese counterpart Wen Jiabao to hold direct conversations
whenever they want.

This is the first time in recent years that India has established a dedicated hotline facility with any
country. The two countries also decided to strengthen their cooperation in regional forums and on
addressing issues like global financial crisis and climate change.

12) Summit meeting between India-Pak Prime Ministers

On April 29, 2010, Prime Minister Manmohan Singh and his Pakistani counterpart Yousaf Raza Gilani
held their first bilateral meeting in nine months to end the diplomatic stalemate in ties between their
two nations since the 26/11 Mumbai terror attacks.

At their hour-long meeting, described as an “exercise in soul searching” by Indian officials, the two
leaders decided to upgrade the bilateral dialogue to the political level, something which Islamabad had
been insisting upon for months. After the Pakistani premier assured Manmohan Singh that his
government would not allow the misuse of the Pakistani territory for launching terror attacks in India,
the two PMs instructed their foreign ministers and foreign secretaries to meet “as soon as possible” to
work out the modalities to pave the way for a “substantive dialogue” on all issues of mutual concern to
restore trust and confidence in the relationship. Political analysts, however, pointed out that this was
not the first time that the Pakistani leadership has promised not to allow the misuse of the country’s soil
for anti-India activities. This commitment has been given to India time and again by Islamabad since
January 2004 when Pervez Musharraf was at the helm of affairs.

The two PMs did agree that there was lack of mutual trust that was impeding the normalisation process
and it was time to think afresh on the way to move forward.

13) ISI mole in MEA held

Madhuri Gupta, a promotee officer of the Ministry of External Affairs who was posted as Second
Secretary at the Indian mission for the last three years, was arrested by Delhi police on April 25, 2010,
on the charge of passing sensitive information to her contacts in Pakistan’s ISI. “We have reasons to
believe that an official at the High Commission of India in Islamabad had been passing information to
Pakistan intelligence agencies. The matter is under investigation. The official is cooperating with our
investigations and inquiries,’’ MEA spokesman Vishnu Prakash.

Fifty three-year-old Madhuri, who is a spinster, was summoned to New Delhi on the pretext of
discussions on the SAARC Summit when she was taken into custody.

14) Medical Council Chief held for taking bribe

The Central Bureau of Investigation (CBI) has arrested Medical Council of India (MCI) president Ketan
Desai in Delhi on charges of corruption.Desai and an associate, J.P. Singh, were picked up for allegedly
demanding Rs 2 crore for granting recognition to a private medical college in Punjab. It is the MCI’s
responsibility to maintain standards in medical education and in the profession.Desai is also accused of
granting recognition to several colleges that didn’t meet required criteria. In 2001, he had stepped down
as MCI president after the Delhi High Court indicted him on corruption charges.

15) Meghalaya gets its 9th CM in 12 years

Meghalaya Chief Minister D.D. Lapang submitted his resignation to Governor R.S. Mooshahary on April
19, 2010, paving the way for his deputy Mukul M. Sangma to take charge.Sangma, elected as leader of
the Congress Legislature Party (CLP), was sworn in as the 25th CM since Meghalaya acquired Statehood
in April 1970.Political instability in Meghalaya has seen eight CMs coming and going in the past 12 years.
Only two CMs have completed five-year terms since the State was formed.

The Congress-led ruling alliance has a comfortable majority of 44 in the 60-member Assembly, though
the Congress has 28 MLAs of its own. Its partners are the United Democratic Party with 10 MLAs and six
others, including three Independents.

Sangma, known to be a Lapang loyalist, is a four-time MLA from Ampatigiri Assembly constituency.
More importantly, he is believed to be the counter of Congress to Nationalist Congress Party veteran
and former Lok Sabha Speaker Purno A. Sangma in the Garo Hills half of Meghalaya. This Garo tribe-
inhabited half has a traditional ambivalent relationship with the other half dominated by Khasi-Jaintia
tribes.
Trouble began for Lapang after some Congress MLAs wanted him to drop three Independents and the
lone regional party (KHNAM) MLA from the Cabinet. Lapang declined, saying he could not betray
“friends” who helped him form the Congress-led Meghalaya United Alliance (MUA) government.

The Independents and some regional party MLAs had broken away from the NCP-backed Meghalaya
Progressive Alliance to help Lapang cobble together the MUA government on March 19, 2008, after
voters delivered a fractured verdict in the Assembly elections that year.

16) Naxals kill 73 security personnel in the deadliest attack ever

In the biggest Naxal strikes in the country, the Left-wing extremists killed 76 jawans of the Central
Reserve Police Force (CRPF) and critically wounded eight others in the restive Dantewada district of
Chhattisgarh on April 6, 2010.The rebels had meticulously planned the entire operation; inviting security
personnel to walk into the trap laid on the Chintalnaar-Tademetla road, about 100 km from the district
headquarters and some 540 km south of the State capital.The Naxalites, who were reportedly 1,000 in
number, had planted landmines and created temporary bunkers on the hilltops to easily target the
jawans. The kaccha road where the incident took place had been surrounded by hilly terrains and dense
forests.

The CRPF jawans did not get much time to take position and retaliate. The Naxalites opened
indiscriminate fire from the bunkers located at strategic points and detonated a series of landmines.

A key reason for the CRPF’s dismal response to the Naxal attack has been their lack of training. As CPO
units poured into Chhattisgarh for Operation Green Hunt, 5 battalions of the Border Security Force
(BSF), 5 battalions of the Indo-Tibet Border Police (ITBP) and 2 battalions of the Sashastra Seema Bal
(SSB) were all put through jungle warfare orientation courses at Chhattisgarh’s well-reputed Jungle
Warfare College in Kanker. The CRPF, inexplicably, refused to undergo this training. Training at the
Jungle Warfare College, as every organisation except the CRPF seems to have known, has underpinned
anti-Naxal operations in Chhattisgarh since 2005, when the college was set up with the help of the
Indian Army. Over the last five years, Chhattisgarh has trained 12,700 policemen (including 3700 from
other States) at this institution. The college’s credo: Fight the guerrilla like a guerrilla.

Instead of providing adequate training to each battalion that is sent into counter-insurgency operations,
the CRPF has relied heavily for success on “elite” units, like its feared “Naga Battalion” which was based
in Bastar for several years before being pulled out. In 2008, the Home Ministry authorised the CRPF to
raise 10 COBRA (Commando Battalions for Resolute Action) units, for counter-Naxal operations. But the
regular battalions remain largely untrained, pushed at will from election duty, to counter-insurgency, to
patrolling riot-affected areas, to anti-Naxal operations. The Home Ministry’s approach has always
centred on getting the CRPF to the trouble-spot. After that, it is left to the harried battalion or company
commander to deliver the goods. The answer clearly lies in carefully training CPOs, especially before
they go into counter-insurgency operations.
 17) New strategy to counter Naxals

The Union government is tweaking its strategy to deal with Naxals. The list of changes includes:
segregation within the CRPF to have specialist anti-insurgency units, which will be trained to “attack
first”; introduction of unmanned aerial vehicles (UAVs) for surveillance; more choppers; and re-training
of men on the pattern of Indian Army before induction.

“Operations will go on…rather they are still on,” said well-placed sources, adding that 10 such battalions
had been trained specially for the “attack first” policy which is the dictum of the Army and the BSF in
dealing with adversaries.

The training will include ramping up of infrastructure with firing ranges and also the use of the existing
training facilities of the Army in Jungle warfare. The Army’s jungle warfare expertise is such that even
the Chinese Army conducted a joint exercise with India in 2009.

For effective use, the CRPF—comprising 2.30 lakh personnel—will be segregated into two parts. One will
help the State governments in maintaining law and order duties, while the other, comprising younger
men, will deal with insurgents.The CRPF has also made it clear that the State governments have to start
raising special operations groups of its local policemen, like in Andhra Pradesh and J&K. The local boys
know the population and glean out good information from villagers which comes handy.

INTERNATIONAL AFFAIRS

1) Interim government formed by Opposition in Kyrgyzstan

Opposition alliance headed by former Foreign Minister Ms Roza Otunbayeva formed an interim
government in Kyrgyzstan on April 8, 2010, dissolving Parliament and asked the toppled President
Kurmanbek Bakiyev to quit as they shored up global diplomatic support for the new regime.

Announcing that they would run the turbulent Central Asian nation for six months, Ms Otunbayeva said
the new alliance proposed to hold new elections within this period. In her first action, Ms Otunbayeva,
designated the head of the interim government, said that a US airbase outside the capital Bishkek, which
is seen vital to the NATO campaign in nearby Afghanistan would remain open despite the shift in power.

2) Historic Bill to clip powers of Pakistan’s President

On April 19, 2010, President Zardari signed into law sweeping constitutional reforms relinquishing key
powers designed to bolster parliamentary democracy weakened by military rule. The 18th Amendment
had earlier been cleared by Pakistan’s Parliament and sent to him for his signature.The amendment
removes the head of State’s power to sack the Prime Minister and dissolve Parliament. It also removes
many of the sweeping powers amassed by military dictators Pervez Musharraf and Zia-ul-Haq. The Bill
also abolishes a clause barring the election of a Prime Minister for more than two terms. This would
allow the Nawaz Sharif, who was toppled by Musharraf in 1999, to become Prime Minister again.
The amendment effectively makes the President of Pakistan a titular head of State who can only
formally appoint heads of the armed forces, dissolve the National Assembly and appoint Provincial
Governors on the advice of the Prime Minister. The law also takes away the President’s power to
appoint and dismiss the heads of the Election Commission and the Public Service Commission.

3) UPFA returns to power in Sri Lanka

President Mahinda Rajapaksa's UPFA impressively returned to power on April 9, 2010, bagging 117 of
225 seats in the first post-LTTE era Parliamentary polls in Sri Lanka, with its closest rival UNF securing
just 46 and detained ex-army chief Sarath Fonseka's DNA failing to touch even a double digit mark.

In Sri Lanka, the general elections directly decide 196 seats while the remaining 29 members are chosen
based on the percentage of votes secured by each party.The UPFA, which campaigned to get a two-third
majority in the House, fell short of just six members to get the magic figure which is needed to bring
about constitutional changes that the President wants to put in place. These changes include the scaling
down of the executive powers vested with the President, as well as a change in the country’s
proportional representation (PR) system of elections.The main opposition United National Party (UNP)
saw much of its voter base eroded in the poll, the first since the defeat of the Tamil Tigers, winning only
60 seats, down from the 82 it had won in the 2004 general election.

A third party led by detained former Army Commander Sarath Fonseka won seven seats, including one
for the retired general, while the majority of the seats in the north and east were won by the Tamil
National Alliance.

4) Civil strife in Bangkok

Thailand has been sliding to anarchy for the last few months with the capital Bangkok turning out to be a
virtual battlefield. The current violence is the culmination of a political strife that has been brewing ever
since Prime Minister Thaksin Shinawatra was overthrown in a military coup in September 2006.

The protests looked like they had ended when Democrat Party leader Abhisit Vejjajiva became the Prime
Minister in December 2008. But in March, the pro-Thaksin group launched a new wave of protests to
bring down the government. The tension has escalated in recent months as the protesters laid siege to
the capital Bangkok. As security forces launched a crackdown, violence escalated, leaving many dead.

Apart from the pro-Thaksin angle, the protests are also seen as an initiative to bring in more
participation for the common people—read rural mass—in government formation.In the December
2007 elections, held 18 months after the coup, Thaksin's vote bank remained loyal, though he was in
exile. His allies came to power but fell following sustained protests by Yellow Shirts and unfavourable
court rulings. In March 2009, Thaksin's supporters in red shirts poured into the streets of Bangkok,
forming the United Front for Democracy Against Dictatorship.
Though it was mostly made of the rural poor, students and pro-democracy activists joined them.
Claiming that the judiciary was biased against Thaksin, they question the legitimacy and credibility of the
current government. What began as innocuous sit-in protests outside government offices quickly turned
violent when they stormed the venue for ASEAN summit, forcing its cancellation.

The Yellow Shirts, called the Peoples' Alliance for Democracy, who are bitterly opposed to Thaksin, were
behind the street protests that led up to the military coup of September 2006. They were also
instrumental in forcing Thaksin's allies out of power in 2008.

If the Red Shirts are mostly rural poor, the Yellow Shirts comprise royalists, businessmen and the urban
middle-class. They wear yellow because it is the Thai King's colour. Media-baron Sondhi Limthongkul
and General Chamlong Srimuang are seen as the leaders of this outfit. In 2006, as the Yellow Shirts shut
down the capital, the army ousted Thaksin.

5) US, Russia ink pact to cut N-arsenal

On April 8, 2010, the United States and Russia signed a landmark strategic nuclear disarmament treaty.
Presidents Barack Obama and Dmitry Medvedev signed the pact at a ceremony in the mediaeval Prague
Castle after talks that covered nuclear security, Iran's atomic programme and an uprising in the Central
Asian State of Kyrgyzstan, where both major powers have military bases.

The treaty will cut strategic nuclear arsenals deployed by the former Cold War foes by 30 per cent within
seven years, but leave each with enough to destroy the other.Obama said the agreement had “ended
the drift” in relations between Moscow and Washington and sent a strong signal that the two powers
that together possess 90 per cent of all atomic weapons were taking their disarmament obligations
seriously.

6) Icelandic Volcano causes air travel mess in Europe

Europe saw air traffic chaos in April 2010 as a plume of ash from the Icelandic volcano that erupted
under the Eyjafjallajokull glacier, made northern Europe a no-fly zone. An estimated 63,000 flights were
cancelled, effecting more than five million passengers who were trying to get in and out of major cities
of Europe. The eruption of the volcano caused the greatest air travel chaos since the Second World War
II.

7) Goldman Sachs, another US financial behemoth in trouble

Goldman Sachs, the most profitable securities firm in Wall Street history, released more than 70 pages
of email and other documents on April 25, 2010, ahead of a US Senate sub-committee hearing on the
firm’s actions throughout the mortgage meltdown. The firm disputes the US Securities and Exchange
Commission’s (SEC’s) claim that Goldman Sachs misled investors in a 2007 collateralised debt obligation
(CDO) about the role played by hedge fund Paulson & Co, which bet the CDO would collapse.
SEC has accused Goldman Sachs of “making materially misleading statements and omissions” in
connection with a synthetic collateralised debt obligation (CDO)—Abacus—that the firm structured and
marketed to investors.Goldman Sachs is said to have created marketing material about Abacus and
invited its clients—investment managers of banks, insurance companies, pension funds, etc—to invest
in the CDO. It is said to have given an impression to the investors that the residential mortgage-backed
securities that made up the CDO were hand-picked by ACA Management—then seen as a reputable
fund manager, looking after dozens of CDOs. Goldman clients invested in the CDO, believing these loans
were of good quality.

SEC claims Goldman deliberately hid from its clients John Paulson’s involvement, which was a huge
conflict of interest. Since Paulson was looking to short the sub-prime market, he was most likely to have
picked the worst possible bonds.Within a year, 99 per cent of the assets within Abacus were
downgraded. Paulson, who was by this time betting against Abacus by buying $15 million worth of credit
default swaps (CDS) on Abacus, earned around $1 billion from the trade.

8) Bonn climate talks

Delegates to the first UN climate talks after Copenhagen met in April 2010 in Bonn and agreed to
intensify their negotiations on curbing greenhouse gases before 2010’s decisive ministerial conference
in Cancun. As representatives of the 192 countries that are party to the UN Framework Convention on
Climate Change (UNFCCC), they had a messy task. In the end, the parties to the UNFCCC merely “noted”
the existence of the accord, as some were utterly opposed to it.

The aim of the negotiators was to pick up the broken pieces of the Danish meeting and see what could
be salvaged and turned into a proper global agreement at the next UNFCCC conference, in Cancun,
Mexico in December 2010.The United States seems to be the only country that still sees the
Copenhagen accord as having a life of its own. Almost all the rest, including countries that have
“associated” themselves with the accord have insisted that the UNFCCC remains the only agreed
decision-making forum. Hence the discussions in Bonn revolved around which bits of the accord could
be brought into the UNFCCC and how.The Bonn talks were mainly about procedures—for example,
which texts to start with, how many meetings to hold before Cancun, whether to mandate the chair to
prepare draft text, and so on—but there was also much informal stock-taking about which pieces could
be put together by Cancun.

While some countries continued to call for an all-or-nothing approach, most feel that it is more realistic
to aim for a number of less ambitious, partial agreements on several elements. These include ways to
transfer climate-friendly technologies and funds for adaptation to climate change from rich to poorer
countries, as well as a deal that would compensate countries for keeping their forests intact.

This would mean delaying the more difficult decisions on ambitious targets for countries to reduce their
greenhouse gas emissions, and an overall legally binding agreement to the conference in South Africa at
the end of 2011 or beyond.
 9) Over 110 nations back Copenhagen climate deal

More than 110 nations, including top greenhouse gas emitters led by China and the United States, back
the non-binding Copenhagen Accord for combating climate change, according to a first formal UN list.

The list, of countries from Albania to Zambia, helped to end weeks of uncertainty about support for the
deal, agreed at an acrimonious summit in the Danish capital in December 2009. The list was compiled by
the UN Climate Change Secretariat.The accord, falling short of a binding treaty sought by many nations,
sets a goal of limiting global warming to below 2 degrees Celsius. But, it does not spell out what each
nation has to do. It also promises almost $10 billion a year in aid for poor nations from 2010-12, rising to
at least $100 billion from 2020, to help them slow emissions growth and cope with impacts such as
floods, droughts and rising sea levels. Apart from China and the United States, the list also includes top
emitters such as the European Union, Russia, India and Japan.

The accord was merely “noted” by the 194-nation summit after objections by a handful of developing
nations, including Venezuela, Nicaragua, Cuba and Sudan. The United Nations then asked all countries to
say if they wanted it to be listed. Many big emerging economies were initially reluctant to sign up after
the deal failed to gain universal support, even though the original text was worked out by President
Barack Obama with leaders of China, India, Brazil and South Africa.Nations not on the list include many
Organization of Petroleum Exporting Countries nations such as Saudi Arabia, which fear a loss of oil
revenues if the world shifts to renewable energies, and some small island States which fear rising sea
levels.

10) BASIC countries seek environment treaty by 2011

India, China, Brazil and South Africa, jointly called BASIC countries, have said that the legally binding
climate treaty on reduction of carbon emission should be finalised latest by 2011 as the “world could
not wait indefinitely”. The third meeting of BASIC ministers concluded in Cape Town April 25, 2010.

The statement also said that the developing countries strongly support international legally-binding
agreements, as the lack of such agreements hurts developing countries more than developed nations.

The ministers said that negotiations should follow a two-pronged approach. One track is on long-term
cooperative action to combat climate change. The other is for developed countries to commit to what
extent they will reduce their greenhouse gas emissions after 2012, when the current commitment
period of the Kyoto Protocol runs out. The next BASIC ministerial meeting will be held at the end of July
2010 in Brazil, followed by one hosted by China at the end of October 2010.

11) International Conference on Nuclear Disarmament

Iran hosted an international conference on nuclear disarmament on April 17, 2010. Delegates from
more than 60 countries, including as many as 25 foreign ministers or deputy foreign ministers, attended
the conference, ignoring attempts by the West to dissuade them from attending the meet.
The presence of so many countries came as a pleasant surprise to Iran itself. Iranian Foreign Minister
Manouchehr Mottaki said the response to the conference was overwhelming. He said the conference
would go a long way in achieving the goal of nuclear disarmament and presenting to the international
community the true nature of his country’s nuclear programme.

Even as the US was making a strong pitch for further sanctions against Iran, China and Russia, two
permanent members of the UN Security Council, attended the meet. India, another key global player,
was also present at the conference, though it was only represented by the Joint Secretary
(Disarmament) in the External Affairs Ministry.Iran showcased the two-day event to demonstrate that
its nuclear programme was aimed at meeting its growing energy needs and that it has no military
agenda.

Iran moots establishment of independent global group under the UN to plan nuclear disarmament and
suspension of membership of the US and others which from the board of governors.India opposes
sanctions against Iran and feels that Tehran should enjoy all rights to develop N-energy for peaceful
purposes.

12) Plot to sell Uranium foiled by Georgia

Georgian security forces have foiled a criminal plot to sell weapons-grade uranium in the black market,
the country’s President told a gathering of world leaders on April 13, 2010. The revelation brought a
sense of urgency to the Washington summit on nuclear security, where Barack Obama called on the rest
of the world “not simply to talk, but to act” to destroy vulnerable stockpiles of nuclear material, or to
safeguard them against theft by terrorists.Georgian sources said the highly-enriched uranium HEU was
intercepted in a sting operation carried out by the Tbilisi authorities in March 2010. They said the
uranium was more than 70 per cent enriched and appeared to have been pure enough to use in a crude
nuclear weapon.The amount seized was small, but Georgian officials said the gang was offering the HEU
as a sample of a bigger quantity available for purchase.

“The Georgian ministry of interior has foiled eight attempts of illicit trafficking of enriched uranium
during the last 10 years, including several cases of weapons-grade enrichment. Criminals associated with
these attempts have been detained,” the Georgian President said.

13) Visit of Chinese President to USA

Chinese President Hu Jintao, during his visit to USA in April 2010, told US President Barack Obama that
their two nations should defuse economic strains through negotiations, but neither leader touched on
the yuan dispute. Hu also covered the Iran nuclear dispute and China’s demands over Tibet and Taiwan,
two areas that recently flared as sore-spots in US-China relations.

The potentially touchy issue of China’s currency, the yuan, did not appear in either country’s public
account of the chat. Domestic US political pressure has been building on the Obama administration to
label China a “currency manipulator”.
The relationship between Beijing and Washington has been dragged down in recent months by disputes
spanning China’s currency and internet controls, US arms sales to the self-ruled island of Taiwan, and
Obama’s meeting with exiled Tibetan spiritual leader the Dalai Lama.Both leaders agreed to work hard
to ensure positive results at a second round of their Strategic and Economic Dialogue in May.

The United States welcomed Hu’s decision to attend the nuclear security summit, saying it would allow
them to address a “shared interest in stopping nuclear proliferation and protecting against nuclear
terrorism”.

14) SAARC Summit, 16th

The 16th SAARC summit began at Thimpu, Bhutan, on April 28, 2010, with India’s Prime Minister
Manmohan Singh and leaders of seven other member nations pledging to combat extremism and
terrorism, launch joint initiatives to deal with climate change and boost intra-regional trade.

The Summit ended on April 29, 2010, with leaders adopting the ‘Thimphu statement’ on climate change,
signing an agreement on trade in services and expressing their firm resolve to stamp out terrorism from
the region. The next summit would be held in the Maldives in 2011.

Facing criticism for the slow pace of development in the region, the SAARC leaders reiterated their
commitment to implement the South Asian Free Trade Agreement (SAFTA) in letter and spirit to boost
intra-regional economic cooperation for the prosperity of their people. The closing ceremony of the
summit was attended by leaders from all the eight SAARC countries—India, Pakistan, Bangladesh, Nepal,
Afghanistan, Bhutan, Sri Lanka and the Maldives. Representatives of nine observer countries—
Mauritius, South Korea, China, Japan, Iran, the US, the EU, Australia and Myanmar—were also present.

The seven-page ‘Thimphu Silver Jubilee Declaration-Towards a Green and Happy South Asia’’
emphasised the importance of reducing dependence on high-carbon technologies for economic growth
and hoped promotion of climate resilience will promote both development and poverty eradication in a
sustainable manner.

In line with India’s position, the SAARC countries underlined that global negotiations on climate change
should be guided by the principles of equity, and common but differentiated responsibilities and
respective capabilities as enshrined in the UN framework convention and conducted in an open,
transparent and inclusive manner. They also underscored the need to initiate the process to formulate a
common SAARC position for the Mexico conference on climate change in December.

The SAARC leaders agreed to establish an inter-governmental expert group to develop clear policy
directions for regional cooperation as envisaged in the SAARC Plan of Action on Climate Change. The
leaders directed the SAARC Secretary-General to commission a study aimed at accreditation of SAARC
with the Kyoto Protocol’s Adaptation Fund as a regional entity for undertaking adaptation projects in
South Asia.
 15) IBSA Summit

The 2nd India-Brazil-South Africa (IBSA) Summit was held in Brasilia on April 15, 2010. Speaking at the
Summit, Prime Minister Manmohan Singh said the grouping of leading developing economies must
speak against the protectionist policies, “which are only short-sighted and self-defeating in the long
run”. IBSA can contribute to the shaping of the global agenda and highlighting the issues of concern to
developing countries, he added. Underlining that the world must ensure that “we do not repeat the
mistakes of the past”, the Prime Minister said for the global economic recovery to be sustainable, it
must be anchored in the real economy.

He also underlined the need for the IBSA to coordinate its positions in the G-20 and continue to pursue
the early conclusion of the Doha round of trade negotiations “because a fair and rule-based multilateral
trading system is in our interest”.

16) Nuclear Security Summit

World leaders, including Indian Prime Minister Dr Manmohan Singh, attending the Nuclear Security
Summit in Washington D.C., on April 12, 2010, set a stiff four-year target to secure all vulnerable nuclear
material in the world to prevent terrorists from laying their hands on any of them.

In a communiqué issued at the end of the summit, the leaders emphatically stated: “Nuclear terrorism is
one of the most challenging threats to international security” and agreed that “strong nuclear security
measures are the most effective means to prevent terrorists, criminals or other unauthorised actors
from acquiring nuclear material.” Another summit would be held in 2012 in South Korea to review the
progress.

At a press conference after the summit, US President Barack Obama, under whose initiative the summit
was convened, acknowledged that the task was tough but had to be done. Obama said: “This is an
ambitious goal, and we are under no illusions that it will be easy. But the urgency of the threat, and the
catastrophic consequences of even a single act of nuclear terrorism, demand an effort that is at once
bold and pragmatic. And this is a goal that can be achieved.”

Indian Prime Minister Dr Manmohan Singh said he was satisfied with the outcome of the summit and
that it had endorsed what India had been pressing for at various international forms in the past several
years. The summit also recognised that even as nations fulfil their national responsibilities these could
not addressed by countries working in isolation. What was needed was a sustained, effective
programme of international cooperation. The leaders agreed that at the international level the need
was for compliance with existing key conventions and initiatives.
 DO YOU KNOW

In an indication of sustained economic growth, the per capita income in Delhi has increased
to Rs 78,690 in the financial year 2007-08 as against the national figure of Rs 33,283. Delhi's
per capita income is the third highest in the country with Chandigarh having per capita
income of Rs 110,676 topping the list and closely followed by Goa at Rs 105,582.

The Unique Identification (UID) project of India has been renamed as ‘Aadhaar’.
India has achieved the Millennium Development Goal (MDG) for drinking water by
providing 84 per cent of its rural population with access to improved sources of water.

With the Right to Education Act coming into force, India has joined the league of 135
countries that have legal guarantee to provide free and compulsory education to children.

BPL Studylite is India’s first eco-friendly rechargeable light-emitting diode (LED) study
lamp. It has bagged the Red Dot Product Design Award in the Lighting category, one of the
most prestigious international product design awards.

World Book Day is observed on April 23.

Oil India Limited has been granted the coveted ‘Navratna’ status by the government, a
move that will empower the board of the compant.

A unique coincidence was created when General V.K. Singh took over as Chief of Indian
Army on March 31, 2010. All the three serving Chiefs (Army, Air Force and Navy) are from
the same squadron of the National Defence Academy (NDA).

The 37th National Games will be hosted by Chattisgarh.

The tiny north-eastern state of Mizoram recently set a Guinness World Record for the
“largest and longest dance”. A 10-minute performance of its colourful traditional bamboo
dance, Cheraw, saw an astounding 10,736 dancers in 671 groups set a record in the heart of
Aizawl.

World Health Day is observed on April 7.

Prime Minister Manmohan Singh, cricketer Sachin Tendulkar and economist Amartya Sen
are among nine Indians figuring in the Time magazine’s annual list of 100 most influential
people.

Oil and Natural Gas Corporation (ONGC) has added 83 million tonnes (mt) of oil and gas
reserves in 2009-10, the highest in two decades. The reserve had gone up due to
Kasomarigaon discovery in Assam, South Mahadevpatnam and Pennugonda in Krishna-
Godavari onland, GK-28-1 in Kutch offshore and PER-1 in Mumbai offshore. The company
produced 24.858 million tonnes of crude oil in the 2009-10 fiscal, lower than the target of
25.764 million tonnes. Gas production at 23.1 billion cubic metres was higher than 22.24 bcm
target.

India's say in the World Bank has increased a bit after member nations approved a shift in
voting rights, while its peer China's voice in the funding agency has grown louder than that
 of Germany, France and the UK. Both India and China hitherto enjoyed an identical 2.8 per
cent voting rights. India’s voting power stands increased to 2.9 per cent and that of China
leaped to 4.4 per cent— placing it third overall. India is now the seventh largest member in
terms of voting power, with United States leading the table with 15.9 per cent, Japan (6.8 per
cent), China (4.4 per cent), Germany (4.0 per cent), France (3.8 per cent) and the UK (3.8 per
cent).

A non-government organisation, Aranyak, has found that the Kaziranga National Park in
Assam has 32 tigers per 100 sq km, as compared to Corbett National Park, Uttarkhand,
which has 20 tigers for the same area.

The Indian Air Force has laid the groundwork for operationalising its latest fighter base at
Phalodi in Rajasthan.
 Current Affairs: March 2010
CURRENT NATIONAL AFFAIRS

BANKING & FINANCE

1) RBI raises repo, reverse repo

On March 19, 2010, the Reserve Bank of India (RBI) surprised banks and money market players by
raising key policy rates 25 basis points. The move, aimed at taming inflation and anchoring inflationary
expectations, marked a reversal in the easy monetary policy regime amid signs of strong economic
revival.The central bank said the repo rate, or the rate at which banks borrow from RBI, is being
increased 25 basis points to 5 per cent. Similarly, the reverse repo rate, or the rate at which surplus cash
is parked with the central bank, was increased to 3.5 per cent, from 3.25 per cent earlier.This was the
second action since January 2010, when RBI announced a 75-basis point rise in the cash reserve ratio
(CRR) to 5.75 per cent.

But, unlike CRR, which is used to manage liquidity in the system, an increase in the repo and reserve
repo rates is aimed at signalling an increase in interest rates.RBI joined central banks in Australia and
Malaysia, which raised rates in March, while Norway and Israel did so at the end of 2009. The US Federal
Reserve and the European Central Bank are among those waiting for evidence of a more concrete
recovery before they unwind record low borrowing costs.

DEFENCE

2) Delhi High Court orders for Permanent Commission for Women Officers

On March 12, 2010, in a path-breaking judgement, the Delhi High Court has directed the Centre to offer
within two months Permanent Commission (PC) to Short Service Commissioned (SSC) women officers of
the Air Force and the Army at par with male SSC officers with all consequential benefits, including
promotion.At present, the Indian Army offers permanent commission to women after 10 years of SSC.
This is applicable to those who were recruited after March 2009 and that too only in two streams — the
Judge Adjutant General (JAG) branch and the Education corps. Women are also recruited in Signals,
Engineers, Ordnance and Air Defence but are not eligible for PC. In the IAF, women are offered a
permanent option in the Legal, Accounts and Education corps. Women chopper and transport pilots,
engineering corps, Logistics and Meteorological streams are not eligible for permanent commission. At
present, there are about 1,050 and 827 women officers in the Army and the IAF, respectively.
Separately, the Navy has 280 women. The benefit would be extended to women officers recruited prior
to change of policy (March 2009) and the PC shall be offered to them after completion of five years.
However, these benefits would be available only to women officers in service or who approached the HC
but retired when the case was pending in the court, the Bench clarified.
The court made significant remark on having women in combat roles saying “the claim of absorption in
areas of operation not open for recruitment of women officers cannot be sustained being a policy
decision.”

3) Live-in not an offence: SC

The Supreme Court has opined that a man and woman living together without marriage cannot be
construed as an offence. “Living together is not an offence. It cannot be an offence,” a three judge
bench of Chief Justice K.G. Balakrishnan, Deepak Verma and B.S. Chauhan observed.

The court said even Lord Krishna and Radha lived together according to mythology. The apex court
made the observation while reserving its judgement on a special leave petition filed by noted south
Indian actress Khusboo seeking to quash 22 criminal cases filed against her after she allegedly endorsed
pre-marital sex in interviews to various magazines in 2005.The judges grilled the counsel for some of the
complainants in the case and repeatedly stressed that the perceived immoral activities cannot be
branded as offence.The apex court further said the views expressed by Khusboo were personal. “How
does it concern you. We are not bothered. At the most it is a personal view. How is it an offence? Under
which provision of the law ?” the bench asked the counsel.Khusboo had approached the apex court
after the Madras High Court in 2008 dismissed her plea for quashing the criminal cases filed against her
throughout Tamil Nadu.

4) Promotion fundamental right: SC

The Supreme Court has ruled that governments at the Centre and States should “act as model
employers” and that all eligible employees virtually had a “fundamental right” to promotion as
guaranteed under Article 16 of the Constitution.A Bench comprising Justices R.V. Raveendran and Asok
Kumar Ganguly made the clarification while directing the Centre and the Union Public Service
Commission to grant promotion with retrospective effect to members of the Uttar Pradesh State Civil
Service (SSC) who had been affected by a delay of more than two years in the cadre review following the
creation of Uttaranchal (now Uttarakhand) in 2000.

The Centre and the UPSC contended that the statutory mandate of a cadre review exercise every five
years “is qualified by the expression ordinarily” and as such it was not necessary to undertake it every
five years. The Bench, however, did not buy this argument. “We hold that the statutory duty which is
cast on the State government and the Central government to undertake the cadre review exercise every
five years is ordinarily mandatory subject to exceptions which may be justified in the facts of a given
case.

“Surely, lethargy, inaction, an absence of a sense of responsibility cannot fall within the category of just
exceptions,” the apex court ruled, obviously indicting the UP government for not responding to the
Centre’s reminders.
The court accepted the government’s arguments that Rule 4(2) did not have retrospective effect, but
refused to interfere with the Delhi HC order which had, by using its special power under Article 142 of
the Constitution, directed the Centre to “mitigate the hardship and denial of legitimate rights of the
employees” in view of the “facts and circumstances of the case.”

5) Foreign Education Bill

After several years of debate, the Union Cabinet, on March 15, 2010, unanimously approved a Bill that
would allow foreign education providers to set up campuses in India and offer degrees. A Bill to this
effect was first introduced in the Rajya Sabha in August 1995. The new one is expected to be introduced
in Parliament and be voted into law by the monsoon session of 2010.

This is a milestone which will enhance choices, increase competition and benchmark quality. A larger
revolution than even in the telecom sector awaits us,” said Kapil Sibal, Union Minister for Human
Resource Development (MHRD).The Foreign Educational Institutions (Regulation of Entry and
Operations, Maintenance of Quality and Prevention of Commercialisation) Bill will allow foreign
universities to invest at least 51 per cent of the total capital expenditure needed to establish the
institute in India. Such institutes will be granted deemed university status under Section 3 of the
Universities Grants Commission (UGC) Act, 1956.

The Bill aims to regulate the entry, operation and maintenance of quality assurance and prevention of
commercialisation by foreign educational institutions, besides protecting the interest of the student
community from sub-standard and ‘fly by night’ operators.The Bill is aimed at not only bringing in
investment in the education sector, but also draw in foreign students, besides helping check the flight of
Indians to study (then work and settle) abroad.

6) India’s food security goals in danger

An alarming new report by the World Bank has shown that an increasing number of aquifers in India are
reaching unsustainable levels of exploitation, endangering long-term food security goals. If current
trends continue, in 20 years about 60 per cent of all aquifers in the country will be in a critical condition,
putting at risk over a quarter of the harvest, concludes the report “Deep Wells and Prudence: Towards
Pragmatic Action for Addressing Groundwater Overexploitation in India”.

The report rings alarm bells for policy makers, warning them against status quo. A rainfall deficit in
1963-66 had decreased India’s food production by 20 per cent, but a similar drought in 1987-88 had very
small impact on food production due to widespread prevalence of groundwater, which is now declining.

India is the largest groundwater user in the world, exploiting 230 cubic kilometres of groundwater every
year—over a quarter of the global total. Today, groundwater supports 60 per cent of irrigated
agriculture and more than 80 per cent of rural and urban water supplies.

Even though there is a major dependence of many sectors on groundwater and it is being overexploited,
there is little investment in its management. This inaction has arisen mainly because the solutions often
proposed for groundwater management are very controversial, including “command-and-control”
regulation of wells and curbing the supply of free or cheap power for groundwater irrigation.

7) India to sign extradition treaties with Iran, Sri Lanka, Brazil, France & Israel

After signing extradition treaties with Saudi Arabia and South Korea, India has finalised draft agreements
with five more nations—Iran, Sri Lanka, Brazil, France and Israel. The government is now working out
the dates on which the treaties can formally be signed.The treaty with Saudi Arabia was signed in
February, during Prime Minister Manmohan Singh’s visit to Riyadh. Another such treaty was signed with
South Korea when its President, Lee Myung-Bak, visited New Delhi in January 2010.

With bilateral cooperation in security and counter-terrorism measures assuming significance, India has
stepped up efforts to formalise agreements with other nations so suspects can be brought back to the
country to be tried under Indian laws. Indian government is giving extradition treaties the utmost
importance as intelligence inputs suggest that some nations could be used as safe heavens by terrorists
and the underworld.India has extradition treaties with several countries, including Nepal, Belgium,
Netherlands, Canada, UK, Switzerland, Bhutan, USA, UAE and the Russian Federation.

8) Loan agreement with Japan

India has signed an agreement for Rs 10,500 crore (Yen 215.611 billion) Official Development Assistance
(ODA) from Japan. This includes Rs 1,648.36 crore for the second phase of Delhi mass rapid transport
system project (DMRTS), Rs 4,422.83 crore for the dedicated rail freight corridor and Rs 2,933 crore for
Chennai metro.

Six projects will be covered under the loan, including Sikkim Biodiversity Conservation and Forest
Management Project, Kolkata East-West Metro Project (II) and Rengali Irrigation Project (III). With this,
the cumulative commitment of ODA from Japan has reached Rs 15,5840 crore.

9) Visit of Prime Minister Putin of Russia

Russian Prime Minister Vladmir Putin’s one-day visit New Delhi on March 13, 2010, has gone some
distance in adding a strong economic dimension to ties between the two nations. The visit helped in
building a roadmap to strengthen economic ties, including in the pharmaceutical sector, getting Russian
investments in infrastructure projects and accessing Russian markets for Indian services.

Demonstrating the solidity of their strategic relationship to the world, India and Russia sealed multi-
billion dollars deals in key areas like defence, nuclear energy, diamond, petroleum and aviation as
Russian Prime Minister Vladimir Putin reaffirmed Moscow’s support to Delhi in its fight against
terrorism.

The visit is noted for the success in taking this vital strategic partnership forward, giving the much
needed economic impetus. A host of steps aimed at scaling up the current $7.5 billion bilateral trade to
$20 billion by 2015 were set in motion.
Besides agreement on nuclear reactors, an MoU for cooperation in Russia’s satellite navigation system
was also agreed upon during the visit.Russia announced its readiness to build 16 nuclear reactors for
power stations in India. An important agreement was the umbrella pact between the National Power
Corporation of India Limited (NPCIL) and the Atom Stroy for Kudankulam III and Kudankulam IV nuclear
reactors as part of the nuclear cooperation accord between the two sides. The agreement on peaceful
uses of nuclear energy is expected to open more avenues of nuclear cooperation between the two
countries. The two sides also signed a pact on serial construction of Russian designed nuclear reactors.

The most significant accords between the two sides were on the Admiral Gorshkov aircraft carrier that
was approved by the Union Cabinet for the purchase of the vessel at $ 2.33 billion and the supply of 29
MIG 29K—the sea variant of the fighter used by the IAF—valued at $ 1.5 billion.

10) India-USA agree on N-reprocessing

India and the United States have reached a deal on reprocessing American-origin spent nuclear fuel to
be supplied to India under the landmark civil nuclear agreement signed in September 2008.

The talks were wrapped up well before the August deadline. The US statement noted that these
arrangements will enable Indian reprocessing of US-obligated nuclear material under IAEA safeguards.
Completion of these arrangements will facilitate participation by US firms in India’s rapidly expanding
civil nuclear energy sector.The reprocessing arrangements were negotiated pursuant to Article 6 (iii) of
the US-India civil nuclear cooperation agreement, also called the 123 Agreement. Under the 123
Agreement, India will construct new facilities dedicated for reprocessing the safeguarded nuclear
material under IAEA safeguards.

The advanced consent agreement is only the third of its kind ever undertaken by the US. The US has
such agreements with the European consortium EURATOM and Japan. China, Brazil, Indonesia, South
Korea, which have 123 Agreements with the US, do not have such agreements.

11) SC okays quota for Andhra Muslims

On March 25, 2010, the Supreme Court okayed religion-based reservation in government jobs and
educational institutes in Andhra Pradesh but referred the matter to a constitution bench to decide on its
constitutional validity.

In an interim order, a bench headed by Chief Justice K.G. Balakrishnan extended the benefit of four per
cent reservation in jobs and education to 14 other backward classes of Muslims in the State. In the
process, it stayed the February order of the State High Court that had quashed the Andhra Pradesh
Reservation for Socially and Educationally Backward Classes of Muslims Act, 2007.

But the apex court refused to grant quota benefit to a 15th category of Muslims mentioned in the Act as
the social groups were not specified. It also made it clear this was a temporary measure. The
constitution bench is expected to take up the case in August 2010.
According to Andhra government, the reason for giving four per cent quota to backward Muslims was
because they constitute 5-6 per cent of the State's population. The creamy layer—those who earn over
Rs 4 lakh annually, children of class-I officers working with the State/Central governments and those
who hold constitutional posts—are not entitled. All parties barring the BJP welcomed the decision.

12) Rajya Sabha passes historic Women’s Reservation Bill

Fourteen years after it was envisaged, the Rajya Sabha, on March 10, 2010, passed the landmark
Women’s Reservation Bill that will pave the way for reserving 33 per cent seats for women in Parliament
and State Assemblies. But prior to that, the legislation has to be seen through in the Lok Sabha.

Of the 186 members present in the Rajya Sabha, 185 voted in favour of the Bill. Barring the parties from
the Hindi-belt—Samajwadi Party, Rashtriya Janata Dal and BSP—all other parties that included the
constituents of Congress-led UPA and BJP-led NDA supported the Bill that was to carry out the 108th
amendment to the Constitution for enabling reservation. The Congress-led UPA, the BJP-led NDA and
also the Left parties were on the same side as the Parliament authored the “historic move”, which could
upstage several well ensconced politicians but ensure proper representation of women, which
languishes at 11 per cent in Lok Sabha. SP and RJD MPs walked out even before the discussion began.
BSP’s leader in Upper House Satish Chandra Misra walked out after expressing his party’s point of view:
“We support the cause of reservation, however, oppose the Bill in its present form.”

The proposed legislation to reserve 33.3 percent seats in Parliament and State Legislatures for women
was drafted first by the H D Deve Gowda-led United Front government. The Bill was introduced in the
Lok Sabha on September 12, 1996. Though it has been introduced in Parliament several times since
then, the Bill could not be passed because of lack of political consensus.

Main points of the legislation

a) Seeks to reserve one-third of seats for women in Lok Sabha and State Assemblies.
b) Allocation of reserved seats shall be determined by the authority prescribed by the Parliament.
c) One-third of the total seats reserved for SCs and STs shall be reserved for women from these
groups in LS and Assemblies.
d) Reserved seats may be allotted by rotation to different constituencies in the State or Union
Territory.
e) Reservation of seats for women shall cease to exist 15 years after the commencement of the
Act.

13) Union Cabinet okays tougher laws to deal with hijackers

With terror threats in the aviation sector looming large, the Union government has decided to make the
Anti-Hijacking Act of 1982 tougher by including death sentence as a punishment for hijacking a plane
with intention of creating a terror strike.
A cabinet meeting headed by Prime Minister Manmohan Singh approved the amendments to be
incorporated in the existing Act, which at present only provides for life imprisonment and fine. The anti-
hijack policy that was revised and approved by the Cabinet Committee for Security in 2005 could not be
made a law primarily due to lack of consensus on the punishment for the hijacker, having intent of
creating terror strike and caught alive.

The policy also has provision for immobilisation of the plane and disallowing it to take off, if the hijack
occurs on the Indian soil. Notably, during the Kandahar hijack in December 1999, in which passengers
and crew members were exchanged for four dreaded terrorists, security forces had failed to immobilise
the plane when it had landed at the Amritsar airport. The CCS, in August 2005, had cleared the proposal
to shoot down a commercial plane if it was hijacked. It also strictly ruled out any negotiations with
hijackers on meeting any of their demands.

According to the policy, if a rogue aircraft paid no heed to ATC warnings and deviated from its specified
path or headed towards any strategic spot, a decision on shooting it down would come into play. In case
of an emergency situation, the shoot down orders could be given by the Prime Minister, the Defence
Minister or the Home Minister, whoever could be contacted first.

CURRENT INTERNATIONAL AFFAIRS

1) Law on healthcare passed

On March 23, 2010, US President Barack Obama signed into law the landmark Health Care Bill that
introduces sweeping reforms in the USA’s healthcare system, capping a historic legislative victory that
had eluded several of his predecessors. It will take four years to implement fully many of the reforms.

Obama said that henceforth insurance companies will no longer be able to drop people's coverage,
when they get sick or they won't be able to place lifetime limits or restrictive annual limits on the
amount of care they can receive.The President said once this reform is implemented, health insurance
exchanges will be created, a competitive marketplace, where uninsured people and small businesses will
finally be able to purchase affordable quality insurance.

Obama said this legislation will also lower costs for families and for businesses and for the federal
government, reducing deficit by over $1 trillion in the next two decades.

2) IMF paints grim picture of fiscal tightening needs

Developed countries with big budget deficits must start now to prepare public opinion for the belt-
tightening that will be needed starting 2011, says John Lipsky, the International Monetary Fund’s first
deputy managing director. He added that the scale of the adjustment required was so vast that it would
have to come through less-generous health and pension benefits, spending cuts and increased tax
revenues.
Policy-makers should already be making it clear to their citizens why a return to prudent policies is a
necessary condition for sustained economic health, Lipsky said.The IMF estimates that, by raising real
interest rates, maintaining public debt at its post-crisis levels could reduce potential growth in advanced
economies by as much as half a percentage point annually.Second, fiscal institutions must be
strengthened to withstand adjustment fatigue. Options include reinforcing fiscal responsibility
legislation and improving tax collection.Third, entitlement reforms such as increases in the retirement
age would have favourable long-term fiscal effects but do little near-term damage to aggregate demand.

3) RBI to buy IMF notes worth $10 bn

The Reserve Bank of India (RBI) has signed an agreement with the International Monetary Fund (IMF) to
purchase notes worth up to $10 billion to improve the ability of the international lender to provide
timely and effective balance-of-payment assistance to member countries. IMF will issue the notes in the
special drawing rights (SDR)-denominated form. The pact is a temporary bilateral arrangement for one
year, which might be extended to two years.

The pact is part of the international effort to support IMF’s lending capacity following the decision of the
Group of 20 nations at its London Summit (held in April 2009) to treble IMF’s resources to $750 billion.

Generally, IMF will give a five-day notice to RBI about its intention to issues notes, including the amount.
It will restrict issuance to a principal amount not exceeding SDR 500 million in any calendar week.At the
beginning of each quarter, IMF will also provide estimates for the amount for which notes will be issued
during a three-month period.Permanent increases in IMF’s resources are expected to take place through
an increase in quotas and standing borrowing arrangements currently under negotiation.

4) India and China Okay Copenhagen Pact

On March 9, 2010, India and China formally backed the Climate Change Accord hammered out in
Copenhagen in 2009, calling for voluntary cut in greenhouse gas emissions. Both the countries
submitted official letters to the UN Climate Change Secretariat saying that they agreed to being listed in
the preamble of the Accord, subject to certain conditions.

India made it clear, however, that the accord is a political document and not a legally binding one.

5) Google leaves China

Late on March 23, 2010 night, the Internet giant Google shut its Chinese website and shifted its search
engine services to uncensored Hong Kong after two months of confrontation with Beijing over
censorship and alleged hacking attacks. But those re-routed to Hong Kong still couldn’t access sensitive
websites as these were blocked by Chinese filters.

Google’s bold censure of the business environment in the world’s number three economy—and the
biggest online market of 384 million netizens— had left the fate of its future China operations in doubt.
Soon after Google’s announcement, Beijing lashed out by calling the action “totally wrong” and saying it
“violated the written promise” it made four years ago, when it arrived, promising to self-censor online
services as required by Chinese law. Chinese Foreign Ministry spokesman Qin Gang said the exit would
not affect Sino-US relations unless someone politicised the issue.

China believes its citizens need strict censorship. It blocked YouTube after the Tibet riots in March 2008,
fearing the spread of mass unrest through the Internet. Facebook and Twitter were blocked after the
Xinjiang riots in July 2009.

6) US President Obama’s visit to Afghanistan

On March 28, 2010 US President Barak Obama sneaked into Afghanistan under the cover of darkness, to
avoid being targeted by militants. This was his first visit to the country since taking office. For security
reasons, the trip was cloaked in secrecy.Obama met Afghan President Karzai in the palace’s outdoor
grounds and stood under a pavilion for a brief welcoming ceremony. The President spent roughly six
hours in the country.During their meeting the Afghan leader was invited to the White House on May 12,
2010. Mr Obama also tackled Mr Karzai on his failure to make any meaningful reforms since he narrowly
won a second term in fraud-ridden polls in 2009.

Mr Karzai made grandiose promises in his inauguration speech but so far he has failed to deliver. At the
time, US officials said he had six months to reform or risk losing American support. Mr Obama also
addressed 2,500 US troops at Bagram air force base, nine miles from Kabul. He praised them for their
courage, sacrifice and focus, and warned of tough days ahead.

7) US, Russia seal N-arms cut deal

US President Barack Obama and Russian President Dmitry Medvedev sealed a landmark arms-control
treaty on March 28, 2010 to slash their countries’ nuclear arsenals by a third. After months of deadlock
and delay, a breakthrough deal on a replacement for the Cold War-era START pact marked Obama’s
most significant foreign policy achievement since taking office and also bolsters his effort to “reset” ties
with Moscow.

Russia made clear, however, that it reserved the right to suspend any strategic arms cuts if it felt
threatened by future US deployment of a proposed Europe-based missile defence system that Moscow
bitterly opposes.The agreement replaces a 1991 pact that expired in December 2009. Each side would
have seven years after the treaty takes effect to reduce stockpiles of their most dangerous weapons—
those already deployed—to 1,550, from the 2,200 now allowed, and also cut their numbers of launchers
to half.

8) Chechen insurgency re-surfaces in Russia

During the six years since the last suicide bomb attack on the Moscow subway, Muscovites came to
think of themselves as insulated from the guerrilla warfare. Terror, however, returned to the heart of
Russia on March 30, 2010, with two deadly suicide bombings on the Moscow subway at rush hour,
including an attack at the station beneath the headquarters of the secret police. At least 40 people were
killed and more than 60 wounded in the blasts.

Russian police had killed several Islamic militant leaders in the North Caucasus recently, which raised
fears of retaliatory strikes and escalating bloodshed by the militants. The bombings showed that the
beleaguered rebels are still strong enough to inflict harm on an increasingly assertive Russia, and they
followed a warning in February 2010 from Chechen rebel leader Doku Umarov that “the war is coming
to their cities.”

Prime Minister Vladimir Putin, who built much of his political capital by directing a fierce war against
Chechen separatists a decade ago, promised to track down and kill the organizers of what he called a
“disgusting” crime.

9) Headley pleads guilty to all 12 charges

In a volte-face, Pakistani-American LeT operative David Coleman Headley, accused of plotting the 26/11
Mumbai terror attacks and conspiring to target a Danish newspaper, has pleaded guilty before a US
court. Charged on 12 counts, he admitted guilty in all of them.Headley (49), who was arrested by FBI's
joint terrorism task force on October 3, 2009, told US District Judge Harry Leinenweber that he wanted
to change his plea to guilty, in an apparent bid to get a lighter sentence than the maximum death
penalty.Headley, son of a Pakistani diplomat and a Philadelphia socialite, admitted to using his friend
Tahawwur Rana's immigration company as a cover for surveillance activities in India and Denmark on
behalf of Pakistan-based terrorist groups, including LeT.

Headley admitted guilty in all six counts of conspiracy involving bombing public places in India,
murdering and maiming persons in India and providing material support to foreign terrorist plots and
LeT; and six counts of aiding and abetting the murder of US citizens in India.

DO YOU KNOW

In an indication of sustained economic growth, the per capita income in Delhi has increased
to Rs 78,690 in the financial year 2007-08 as against the national figure of Rs 33,283. Delhi's
per capita income is the third highest in the country with Chandigarh having per capita
income of Rs 110,676 topping the list and closely followed by Goa at Rs 105,582.

India has signed an agreement for Rs 10,500 crore Official Development Assistance from
Japan. This includes Rs 1,648 crore for the second phase of Delhi Metro project.

World Water Day is observed on March 22 every year to focus attention on the importance
of fresh-water and advocating for the sustainable management of fresh-water resources.

Asian Forum of Parliamentarians on Population and Development (AFPPD) hosted a

conference in Manila, Philippines, in March 2010, on indigenous peoples, climate change and
rural poverty.

From April 1, 2010 consumers in 13 cities of India, including Delhi and Mumbai, shifted to
use of environment friendly Euro-IV complaint petrol and diesel.

According to the Liveability Index 2010, prepared jointly by the CII and the Institute for
Competitiveness, Delhi is the best city to live in, followed by Mumbai. A liveable city,
according to the report, is not just an urbanised area in an urbanised region defined by the
presence of a municipality. Liveability refers to an urban system that contributes to the
physical, social and mental well being and personal developments of all its inhabitants.

The ceiling for payment of gratuity to private sector employees has been raised from Rs 3.5
lakh to Rs 10 lakh.

The Union Cabinet has approved the proposal to declare Andaman and Nicobar set of Ports
as a major port and establish the Andaman and Nicobar Port Trust with its HQ at Port
Blair.

The UAE has become the world’s fourth biggest weapons importer. China, India and South
Korea are the top three arms importers, in that order.
 Current Affairs: February 2010
CURRENT NATIONAL AFFAIRS

1) Scientists slam study behind Bt Brinjal ban

A vital study cited by Environment Minister Jairam Ramesh to justify his decision to disallow the
commercial cultivation of Bt brinjal in India is flawed, claim top European scientists. Mr Ramesh had
referred to the findings of France-based Caen University professor Gilles-Eric Séralini and his team,
which had branded Bt brinjal—India’s first genetically modified (GM) food crop—“unsafe”.

Experts claim that Séralini was unduly influenced by the renowned international NGO Greenpeace—
with its aggressive green agenda—which sponsored the study, and never carried out a peer-reviewed
laboratory study on GM crops he called hazardous, including Bt maize and Bt brinjal, its gene or seeds.

The European Food Safety Association, a risk assessment body, has trashed Séralini’s findings on
Monsanto’s MON 863, a variety of Bt maize.On February 9, 2010, the Union government decided to
freeze the introduction of Bt Brinjal in India till independent scientific studies established health and
environment safety of the product to the satisfaction of both public and experts.

Bt Brinjal is a genetically modified vegetable that is infused with Cry1Ac gene from a bacterium, bacillus
thuringiensis, to make the plant resistant to fruit and shoot borers and certain pests.The Environment
Ministry has appointed a Genetic Engineering Approval Committee (GEAC) to regulate research, testing
and commercial release of genetically modified crops, foods and organisms. The GEAC had cleared Bt
Brinjal for commercial release in October 2009. According to GEAC Bt Brinjal would reduce farmers’
dependence on pesticides and enable higher yields.

2) Uniform Math and Science content for Class 11 and 12

From the 2011 academic session, students of Classes XI and XII across the country will study a uniform
science and math curriculum. Currently, course content of these critical subjects varies with the State
school board an institution is affiliated to.The idea is to have for every student a level playing field for
entry to professional colleges. The government has also received the approval of all school boards—
including State boards—to work towards a single, national-level entrance exam for all engineering and
medical courses in India from 2013. Gradually, such an exam would be extended for entry to colleges of
other disciplines, such as law.

One test would mean the end of plenty like IIT-JEE, AIEEE and State exams for engineering colleges and
various State-level PMTs, beside national level PMT, which the CBSE conducts. This, the Human
Resource Development (HRD) Ministry believes, would lessen the burden on students, who have to
prepare for different exams, which bring their own levels of stress.
 3) India to launch mission to cut emissions

India will spare no efforts to contribute to the success of post-Copenhagen process, Prime Minister
Manmohan Singh declared on February 6, 2010, as he announced the launch of a National Mission on
Enhanced Energy Efficiency, aimed at cutting carbon emissions by 99 million tonnes. Within the ambit of
our National Action Plan on Climate Change, India has already unveiled one of the world's most
ambitious plans for promoting solar energy, targeting an installed capacity of 20,000 MW by the year
2022. The initiative is expected to lead to avoidance of capacity addition of nearly 20,000 MW and
reduce carbon dioxide emissions of almost 99 million tonnes.

4) Courts do not need nod for CBI probe: SC

On February 17, 2010, the Supreme Court upheld the constitutional validity of courts’ powers to order
CBI probe without the consent of State governments but with a rider: the powers should be used
cautiously and sparingly. The five-judge Constitution Bench, headed by Chief Justice K.G. Balakrishnan,
said that such powers have to be used sparingly in exceptional and extraordinary circumstances in cases
having national and international ramifications. Otherwise, the CBI will be flooded with such directions
in routine cases. Such powers are vested with the apex court and High courts to ensure protection of
fundamental rights of citizens under Article 21 of the Constitution, it said.

5) Judicial Standards and Accountability Bill

The proposed Judicial Standards and Accountability Bill, which will replace the four decade-old Judges
Inquiry Act, has laid down 14 guidelines for judges. These guidelines will be called judicial standards.

Major highlights of the Bill are:

a) No judge shall give an interview to the media in relation to any of his judgement delivered, or
order made, or direction issued, by him in any case adjudicated by him.
b) No judge shall enter into a public debate or express his views in public on political matters,
except views expressed by a judge in his individual capacity on issues of public interest, other
than as a judge during a private discussion or at an academic forum.
c) The Bill bars the judges from allowing any member of his family, who is a practising lawyer, from
using the residence in which the judge actually resides or use of any other facilities provided to
the judge, for professional work of any family member.
d) The proposed law expects judges not to delay delivering a judgement beyond three months
after conclusion of arguments and have bias in judicial work or judgements on the basis of
religion, race, caste, sex or place of birth.
e) Any wilful breach of judicial standards could be treated as misbehaviour and lead to a
disciplinary panel initiating proceedings against the erring judge.
f) A complaint alleging misbehaviour or corruption would be referred to a scrutiny panel
comprising three judges. If the panel finds merit in any complaint, it would be forwarded to an
Oversight Committee, which after investigating the matter can refer it to the President for
initiating action against the judge.
 6) N-liabilities Bill

In an important step towards the implementation of the Indo-US civilian nuclear deal, the Union
government is to introduce a Bill to facilitate the entry of American companies in the nuclear sector. The
Civil Liability for Nuclear Damage Bill, 2009 is commonly known as the nuclear liability Bill.

The Bill aims at limiting the liability of a nuclear plant operator to Rs 300 crore in the eventuality of an
accident and provides for appointing a claims commissioner with powers of a civil court to arbitrate such
cases. It also provides for the penalty to be paid by the operator and not the supplier companies, which
would mainly be American in this case.

The operator would not be liable for any nuclear damages if the incident is caused by “grave national
disaster of exceptional character”, armed conflict or an act of terrorism and is suffered by the person on
account of his own negligence.

The Bill also provides for the establishment of the Nuclear Damage Claims Commission, which will have
one or more claims commissioners for a specified area. The claims commissioner shall have all the
powers of a civil court for the purpose of taking evidence on oath, enforcing attendance of witnesses,
compelling the discovery and production of documents and other material objects.

Environment activists have described the attempt to cap the level of compensation for victims of a
nuclear accident as a violation of fundamental rights. Currently, the Atomic Energy Act, 1962, allows the
government-owned Nuclear Power Corporation of India to operate nuclear power plants in the country.

7) Union Budget, 2010

On February 26, 2010, Finance Minister Pranab Mukherjee presented a Budget that broadly focused on
fiscal stabilization. The Union Budget was presented at a time when the Indian economy was on the
path of revival and almost all demand indicators had turned significantly positive. Investment and
consumption demand was also on a revival mode. The buoyancy in the manufacturing sector and up-tick
in import and export were also working well for economic growth prospects. In the current economic
scenario, what was required from the Budget was a further push for consumption and investment. The
Budget announcements tried to do just that.

Highlights:

i. Additional Rs 1,65,000 cr for bank re-capitalisation

ii. Rs 3000 cr for agricultural impetus
iii. Farm loan payments to be extended for six months
iv. Fertilizer subsidy to be reduced
v. Rs 100 cr woman farmer fund scheme
vi. Coal regulatory authority to be set up
vii. Clean energy fund to be established
viii. Interest subvention of 2% to be extended for handicrafts and SMEs
ix. Rs 200 cr for Tamil Nadu textile sector
 x. Interest subvention for housing loans up to 1 lacs
xi. Allocation to defence raised to Rs 1.47 lakh cr
xii. Defence capex raised to Rs 60,000 cr
xiii. Divestment target of Rs 25,000 cr
xiv. Rs 1200 cr assistance for drought in Bundelkhand
xv. Rs 48000 cr for Bharat Nirman
xvi. NREGA scheme allocation raised to Rs 41,000 cr
xvii. Allocation to health Rs 22,300 cr
xviii. Allocation for school education up from Rs 26,800 cr to Rs 31036 cr
xix. Allocation to power sector at Rs 5130 cr
xx. Rs 10,000 cr allocated for Indira Awaas Yojna
xxi. Social Security Fund to have corpus of over Rs 1000 cr
xxii. Rs 2400 cr for MSMEs
xxiii. Government to contribute Rs 1000 per month for pension security
xxiv. Rs 5400 cr allocated for urban development
xxv. Rs 66100 cr allocated for rural development
xxvi. Rs 1900 cr allocated for UID project
xxvii. Gross tax receipts Rs 7.46 lakh cr
xxviii. Government to set up National Mission for delivery of justice
xxix. 15% rise in planned expenditure
xxx. Fiscal deficit target of 5.5% in FY11
xxxi. Excise on all non smoking tobacco raised
xxxii. Televisions to be costlier
xxxiii. Mobile phones to become cheaper
xxxiv. Cement to be costlier
xxxv. Refrigerators to be costlier
xxxvi. Jewellery to be more expensive
xxxvii. Monorail granted project import status
xxxviii. CDs to be cheaper
xxxix. Excise duty on CFL halved to 4%
xl. Bank farm loan target: Rs 3.75,lakh crore
xli. Nutrient based fertiliser subsidy scheme to come into force from April 1, 2010
xlii. To build 20 km of highway every day
xliii. Income tax on income upto Rs 1.6 lakh: Nil
xliv. Income tax on income above Rs 1.6 lakh and upto Rs. 5 lakh: 10 per cent
xlv. Income tax on income above Rs.5 lakh and upto Rs. 8 lakh: 20 per cent
xlvi. Income tax on income above Rs. 8 lakh: 30 per cent

Economic Survey 2010

i. Economy likely to grow by up to 8.75 per cent in 2010-11.

ii. Full recovery; return to 9 per cent growth in 2011-12.
 iii. Broad recovery gives scope for gradual stimulus roll back.
iv. High double-digit food inflation in 2009-10 major concern.
v. Signs of food inflation spreading to other sectors.
vi. Farm & allied sector production falls 0.2% in 2009-10.
vii. Need serious policy initiatives for 4% agriculture growth.
viii. Moots direct food subsidy via food coupons to households.
ix. Favours making available food in open market.
x. Favours monthly ration coupons usable anywhere for poor.
xi. Gross fiscal deficit pegged at 6.5 pc of GDP in 2009-10.
xii. India 10th largest gold holding nation at 557.7 tonnes.
xiii. Exports in April-December 2009 down 20.3 per cent.
xiv. Imports in April-December 2009 down 23.6 per cent.
xv. Trade gap narrowed to USD 76.24 bn in April-December.
xvi. 32.5% savings & 34.9% investment (of GDP in 2008-09) put India in league of world's fastest
growing nations.
xvii. Government initiates steps to boost private investment in agriculture.
xviii. Wants credit available at reasonable rates on time for private sector to invest in agriculture.
xix. Slowdown in infrastructure that began in 2007, arrested.
xx. Domestic oil production to rise 11 per cent in 2009-10.
xxi. Gas output up 52.8 per cent to 50.2 billion cubic meters with RIL starting production.
xxii. India world's 2nd largest wireless network with 525.1 million mobile users.
xxiii. Virtually every second Indian has access to phone.
xxiv. Auction for 3G spectrum to provide existing and foreign players to bring in new technology and
innovations.

8) Railways Budget, 2010

Union Railways Minister Mamata Banerjee presented the Railways Budget, 2010, on February 24. No
change in passenger fares was announced—Planning Commission was pitching for a hike—and the
freight rates on select, but significant items such as kerosene and food grains, were cut to keep prices
down.

54 new trains, including 10 Durantos, were announced. The Minister also promised to construct over
1,000 km of new rail lines over next one year.

The operating ratio, proportion of expenses to earnings, which was a healthy 75 per cent in 2007-08,
was up to 94.7 per cent in 2009-10. The Railways hope to bring it down to 92.3 per cent in 2010-11.
Though the budget proposes to raise net surplus from Rs 951.03 crore in 2009-10 to Rs 3,173 crore in
2010-11, these figures were called “peanuts” by experts when compared to the figures of some years
ago.Only Rs 373.09 crore was provided for new projects. Many projects come with riders: they’re either
proposed in the public-private partnership (PPP) mode or are “subject to sanction by the Finance
Ministry and Planning Commission”.
Highlights:

i. No increase in passenger fares.

ii. Rs.100 reduction in freight per wagon for fertilisers and kerosene.
iii. Free travel for cancer patients in 3rd AC classes.
iv. Cost-sharing in public-private-partnership (PPP) mode in some gauge-conversion projects.
v. Further extension of Kolkata Metro on priority basis; stations to be named after Bahadur Shah
Zafar, Tagore family.
vi. Karmabhoomi trains to be introduced for migrant labour.
vii. New Janmabhoomi train between Ahmedabad and Udhampur.
viii. Special 'Bharat Teertha' train to be run around India to commemorate Rabindranath Tagore's
150th birth anniversary. A special train to be run from West Bengal to Bangladesh to
commemorate the anniversary.
ix. Railway line to be extended from Bilaspur in Himachal Pradesh to Leh in Jammu and Kashmir.
x. Andaman and Nicobar Islands to get railway line from Port Blair to Diglipur.
xi. Sikkim capital Gangtok to be connected by rail from Rangpo.
xii. Impact of Sixth Pay Commission recommendations placed at Rs.55,000 crore.
xiii. Gross earnings in 2009-10 estimated at Rs.88,281 crore.
xiv. Working expenditure in 2009-10 estimated at Rs.83,440 crore.
xv. Expenses during 2010-11 estimated at Rs.87,100 crore.
xvi. Thrust on expansion in 2010-11 with allocation of Rs.4,411 crore.
xvii. Net profit of Rs.1,328 crore in 2009-10.
xviii. Ten automobile ancillary hubs to be created.
xix. Policy decision to employ one member of family whose land is requisitioned for railway projects.
xx. North-south, east-west dedicated freight corridors to be created.
xxi. Centre for railway research to be established with Indian Institutes of Technology and Defence
Research and Development Organisation.
xxii. Design, development and testing centre for railway wheels at Bangalore.
xxiii. Five sports academies to be set up; astroturf to be provided for development of hockey;
employment opportunities for sports persons.
xxiv. Railways to be lead partner for Commonwealth Games.

9) 13th Finance Commission

The Union government has accepted most of the recommendations of the Thirteenth Finance
Commission headed by former Finance Secretary Vijay Kelkar.

The Commission has told governments at the Centre and States to set their fiscal house in order, even as
it raised the share of taxes that the States would be entitled to receive over the next five years by 1.5
percentage points.In addition, the Commission, a Constitutional body that is appointed every five years
to recommend a tax-sharing formula between the Centre and States, has suggested a roadmap for the
introduction of a single-rate goods and services tax (GST), the key indirect tax reform to create a
common market in India.Its stringent new roadmap for fiscal responsibility suggests, among other
things, that the overall debt of the Centre and States be capped at 68 per cent of gross domestic product
(GDP) from the current 82 per cent, and 75 per cent recommended by the Twelfth Finance Commission.

The Finance Commission has recommended that the Centre reduce debt to 45 per cent of GDP by March
2015, against 54.2 per cent at present. For States the reduction in debt is recommended at 2 percentage
points to 25 per cent. The relatively less stringent condition for States comes with the rider that the
Fiscal Responsibility and Budget Management Act allows the Centre to borrow on behalf of the States to
help them counter macro-economic shocks. During the financial crisis, the Centre had relaxed the cap on
the fiscal deficit.The Finance Commission has said the Centre should transfer 32 per cent of the taxes it
collects to States, against 30.5 per cent at present. The overall ceiling— including transfers to local
bodies—on transfers from the Centre’s gross revenue has been raised from 38 to 39.5 per cent.

Among proposals that provide a thrust to fiscal federalism, the commission has recommended that local
bodies receive up to 2.5 per cent of the divisible tax pool. Of this, up to 1 per cent can be incentive-
linked.

While there is more reason for the States to cheer since the commission proposes an increase in grants,
much of it is tied to specific spending programmes such as those for elementary education and
environment. There is, however, a performance incentive of Rs 1,500 crore for Assam, Sikkim and
Uttarakhand and a grant of Rs 51,800 crore to meet the deficits of Jammu & Kashmir, Himachal Pradesh
and the north-eastern States (excluding Assam).

Like its predecessor, the Thirteenth Finance Commission has recommended a debt relief scheme for the
States. The first element is to cap the interest rate on a part of the loans from the National Small Savings
Fund at 9 per cent from up to 10.5 per cent. This will translate into a benefit of Rs 28,360 crore to the
States. In addition, there is a Rs 4,506 crore benefit with the government accepting the suggestion to
write off central loans that are not administered by the finance ministry but were outstanding at the end
of 2009-10.Including the higher grants-in-aid, Madhya Pradesh, Uttar Pradesh and Maharashtra would
be the biggest beneficiaries in terms of share of transfers. Himachal Pradesh, Uttarakhand and Jammu
and Kashmir would be the top losers.The Finance Commission has projected that tax receipts would see
a compounded annual growth rate of over 17 per cent between March 2010 and March 2015, while
nominal GDP growth is estimated at 13.2 per cent.

Prescribing a zero revenue deficit as the golden rule, the Commission has recommended that the
endeavour for all States should be to reach that level by 2014-15.

10) Union Cabinet raises Urea prices

On February 18, 2010, the Union government decided to raise urea prices by 10 per cent. It also allowed
the industry to fix retail prices of other subsidised fertilisers, while limiting the government’s subsidy
burden under a new policy that will determine the subsidy on phosphorus and potash based on their
nutrients.
The decision, to take effect from April 1, 2010, will help the government reduce its fertiliser subsidy bill,
estimated at Rs 50,000 crore for 2009-10. But, the move will hit farmers, even as fertiliser companies
will stand to gain. The latest decision does away with the practice of government fixing a maximum
retail price and aims at replacing the current system of giving subsidy to the industry with direct
assistance to farmers.The switch to the nutrient-based fertiliser plan is significant as companies will now
be able to change retail prices of only nutrient-based fertilisers (nitrogen, phosphorus, potash and
sulphur), which will help the government cap the subsidy on these fertilisers. The move is also expected
to attract fresh investment in the fertiliser industry.

The government’s annual subsidy bill on fertilisers in 2008-09 was estimated at Rs 75,849 crore, which
was expected to be brought down to Rs 49,980 crore in 2009-10. The bulk of the increase in the fertiliser
subsidy is on account of the sale of decontrolled fertiliser with concession to farmers. Urea accounts for
about 30 per cent of the total fertiliser subsidy burden.

11) Justice Srikrishna committee to look into formation of Telangana

The Union government has set-up a five-member committee headed by Justice B.N. Srikrishna to look
into the modalities of forming the separate State of Telangana. The committee has been given time till
December 31, 2010 to consult all sections of the society and submit report. The terms of reference of
the committee are:

I. Examine the situation in Andhra Pradesh with reference to demand for separate Telangana
State, as well as the demand for maintaining the present status of a united Andhra Pradesh.
II. Review developments in the State since its formation and their impact on the progress and
development of different regions of the State.
III. Examine the impact of recent developments in the State on different sections of people such as
women, children, students, minorities, OBCs, SC and STs.
IV. Consult all sections of people, especially political parties and elicit their views on a range of
solutions that would resolve the present difficult situation.
V. Identify the key issues that must be addressed.
VI. Consult organisations of other civil societies such as industries, trade unions, farmer
organisations, women students.
VII. Make any other suggestion and recommendations that the committee may deem appropriate.
VIII. The protagonists of separate State, however, rejected the terms of reference of the Justice
Srikrishna committee and vowed to intensify their agitation. The Telangana Rashtra Samithi
(TRS), which has been spearheading the statehood agitation, struck a belligerent note and
announced that its MPs, MLAs and MLCs would resign in protest.
IX. Rejecting the terms of reference and the ten-month time frame given for the committee, the
TRS chief said the Centre had once again cheated the people of Telangana by backtracking on its
December 9, 2009 statement announcing initiation of the process for formation of separate
State.
X. Taking serious objection to the inclusion of the demand for continuation of united Andhra
Pradesh among the terms of reference, he said: “what is the point in looking into the demand
 for united Andhra Pradesh when it already exists now? There is only one popular movement
going on in the State and that is for separate Telangana State.”

XI. However, the leaders from coastal Andhra and Rayalaseema regions found comfort in the open-
ended nature of the panel’s terms. “We welcome the terms of reference, which are fairly
balanced. It will give an opportunity for a thorough assessment of the ground situation,” a ruling
Congress MP from coastal Andhra region said.

12) Asian group endorses seat to India in UN Council

India's candidacy for a non-permanent seat in the Security Council has been endorsed by all 53 member
States of the Asian group in the UN General Assembly. Nineteen countries, including Nepal, Sri Lanka,
Afghanistan and Bangladesh, spoke in favour of giving India a slot on the Security Council table from
January 2011.

In January 2010, India's path to a non-permanent seat got cleared after its sole competitor from Asia,
Kazakhstan, backed out of the race.

The Security Council is made up of 15 States—five permanent members who have the veto power and
15 non-permanent members elected for a two-year term. To win, India needs two-thirds of the General
Assembly vote, which adds up to about 128 counties saying yes to India's presence in the Council.

Running after more than a decade, India orchestrated a year-long campaign led by India’s envoy to the
UN Hardeep Singh Puri, who campaigned in New York and at multilateral events at the United Nations.

The last time India had a seat at the Council was in 1992. In 1996, Japan won with India trailing behind
with approximately 40 votes.

13) Visit of Nepalese President

President of Nepal Ram Baran Yadav visited New Delhi from February 15, 2010. In an effort to make the
visit a truly successful event, India offered a 250-million dollar soft loan through EXIM Bank and signed
four major accords with the Himalayan nation.India also offered to supply 50,000 tonne of wheat,
20,000 tonne of rice and 10,000 tonne of yellow peas to its neighbour. An additional 2,000 tonne of
wheat would be provided to Nepal, if required.The four accords signed by the two countries are: new air
services agreement, MOU on development of railway infrastructure at five border points, MOU on
development of India-Nepal friendship polytechnic at Hetavda in Makwanpur district of Nepal; and MOU
on establishment of India-Nepal friendship convention centre at Birgunj in Nepal.

During the delegation-level talks, the Indian Prime Minister hoped that the peace process and drafting
of the constitution would be completed in Nepal as per the schedule. Sixty-two-year-old India-educated
Yadav expressed his gratitude to the Indian leadership for assisting his country in its economic
development.
The Presidential visit came on the eve of a new constitution the Nepal government has pledged to
promulgate in May 2010. Nepal's fragile peace process that began after a decade of insurgency is
expected to be consolidated by the new statute. However, hiccups continue, with the Maoists now
saying they will agree to the rehabilitation of their guerrilla army, the People's Liberation Army (PLA),
only after the new statute came into effect.

14) Talks with Pakistan end without much headway

A breakthrough eluded India and Pakistan at the Foreign Secretary-level talks with New Delhi rejecting
Islamabad’s plea for the resumption of the composite dialogue process (CDP) and handing over three
fresh dossiers to the neighbouring country linking elements in Pakistan, including JuD chief Hafiz Saeed,
with terrorist activities on the Indian soil.

At the first official dialogue between the two countries after a 14-month hiatus, on February 25, 2010,
India focused on terrorism emanating from the Pakistani territory, while Pakistan raised the Kashmir,
water and Baluchistan issues.

The three-hour talks, seen by diplomatic observers more as an exercise in scoring brownie points by the
two sides, ended with Foreign Secretary Nirupama Rao and her Pakistani counterpart Salman Bashir
announcing at separate press briefings that they would remain in touch and continue endeavours to
restore trust in the relationship. However, it was quite clear from the statements of the two top
diplomats that they would have to cover a lot of distance in putting the peace process between the two
neighbours back on track.

15) Prime Minister Manmohan Singh’s visit to Saudi Arabia

On February 26, 2010, Prime Minister Manmohan Singh became the first Indian Prime Minister in 28
years to visit Saudi Arabia. During the visit, Saudi Arabia expressed concerns over extremism in Pakistan
as New Delhi and Riyadh firmed up a strategic partnership.

Prime Minister Manmohan Singh unveiled a roadmap for comprehensive economic partnership as he
addressed captains of industry from both the countries.

Foreign Minister Prince Saud al-Faisal, who had a discussion with Singh, later spoke of the “dangerous
trend” of extremism in Pakistan and made it clear that Riyadh had nothing to do with the Taliban. Saudi
Arabia and Pakistan were among the few countries that had recognised the Taliban regime in
Afghanistan.The Saudi minister said, “Pakistan is a friendly country. Therefore, any time one does see
dangerous trends in a friendly country, one is not only sorry but worried. And it is indeed the duty of all
political leaders in Pakistan to unite to see that extremism does not find a way to achieve its aim in the
country and this can only happen with united political leadership in Pakistan. This, we hope, Pakistan
will possibly achieve.”
India sees Saudi Arabia as a strategic partner for promoting peace, stability and economic development.
Such a partnership will bring benefits not only to the two countries but to the region. After discussions
between Mr Singh and King Abduallah, the two sides signed the Riyadh declaration.

The Delhi Declaration, signed during the historic visit of King Abdullah to India in 2006 as the chief guest
on India's Republic Day, had charted out a new path of cooperation between India and Saudi Arabia
across a range of fields including security, bilateral trade and investment, culture, science and
technology. According to the new declaration, keeping in view the development of relations between
the two countries, and the potential for their further growth, the two leaders decided to raise their
cooperation to a strategic partnership covering security, economic, defence and political areas.

16) Visit of President of Turkey

The Turkish President, Abdullah Gul, visited India on February 9, 2010 and held wide-ranging talks with
Prime Minister Manmohan Singh on all issues of mutual interest, including the international situation.
Apart from the declaration on terrorism, the two countries issued a document on cooperation in the
field of science and technology.

Days after keeping New Delhi out of the Istanbul conference on Afghanistan at the instance of Pakistan,
Turkish President Abdullah Gul sought to placate India by strongly endorsing its position on the issue of
terrorism.

Turkey is the first Organisation of Islamic Conference (OIC) member to support India’s call for early
conclusion of a comprehensive convention on international terrorism, which finds a mention in the joint
declaration on terrorism. Turkey’s position is being seen as a major departure from that of OIC, which is
not willing to exclude armed forces from the purview of the convention.

On Afghanistan, the Turkish President praised the role being played by India in the reconstruction plan
in the embattled nation.

17) India, UK ink N-pact

On February 11, 2010, India signed a civil-nuclear cooperation declaration with Britain, making it the
eighth country to sign such a pact with New Delhi after India secured approval of the Nuclear Suppliers’
Group (NSG) to undertake nuclear commerce in September, 2008. It is a general umbrella agreement on
civil-nuclear cooperation between the two countries.

India has already signed nuclear deals with France, the USA, Russia, Kazakhstan, Namibia, Mongolia and
Argentina. A nuclear agreement between India and Canada has also been finalised. Germany and South
Korea have also expressed their desire to cooperate with India in the field of civil-nuclear energy.

The pact is expected to provide legal framework to British companies to export components and
products.
 18) Andhra HC quashes quota for Muslims

In a major setback to the Andhra Pradesh government’s Muslim reservation policy, the High Court, on
February 8, 2010, struck down a legislation providing four per cent quota for the minority community in
jobs and educational institutions.A seven-member constitutional bench headed by Chief Justice A.R.
Dave found fault with the way the survey was conducted by the Backward Classes Commission, whose
recommendations had formed the basis for quota policy.

The State Assembly had passed the legislation in July 2007 providing four per cent reservation for
socially and educationally backward Muslims by including them among backward classes. The quota was
made applicable to 15 Muslim groups identified by the Andhra Pradesh Backward Classes Commission as
socially and educationally backward. These were categorised as BC-E Group for the purpose of providing
reservation.Acting on a bunch of writ petitions filed by several individuals and organisations challenging
the legislation, the court—in a majority verdict—termed the commission’s survey as “irrational and
unscientific” and held the legislation as “unsustainable”.

19) Maharashtra, West Bengal ‘poor performers’ in fight against naxalites

Maharashtra and West Bengal, which have been hit by terrorist and Maoist violence, are among the
seven States that have fared poorly in modernising their police force. According to official documents,
put together by the Home Ministry, Maharashtra and West Bengal have been labelled as “poor
performing States” as they failed to use the funds sanctioned to them by the Centre for upgrading their
police force and intelligence apparatus. The Centre earmarked Rs 1,230 crore for 2009-10 for the
scheme for modernisation of the State police forces (MPF), which is meant primarily to equip State
governments to deal with emerging challenges to internal security like terrorism and naxal violence.

The poor performing States have outdated and obsolete weapons and even the extremist-prone police
stations are often not supplied with modern weapons, and even when it is supplied police personnel are
not trained to use them. Their police communication network does not function efficiently, they do not
have enough vehicles and their forensic laboratories lack proper infrastructure.

CURRENT INTERNATIONAL AFFAIRS

1) Chile hit by 8.8 magnitude earthquake

On February 27, 2010, more than two million people were affected in some way and more than 300
people were killed as an 8.8-magnitude earthquake hit coastal Chile. Santiago, capital of Chile, is 200
325 km northeast of the epicentre.

The quake was 700 to 800 times stronger, but at a greater depth—35 km—compared to the shallow 14
km depth of the Haiti quake, which contributed towards much of the damage there.

Coastal Chile has a history of deadly earthquakes, with 13 quakes of magnitude 7.0 or higher since 1973.
As a result, experts said that newer buildings are constructed to help withstand the shocks. Still, the
damage from Chile's earthquake was widespread. A 15-story high rise near the southern city of
Concepción collapsed; the country's major north-south highway was severed at multiple points; and the
capital city's airport was closed after its terminal sustained major damage.

The epicentre was just a few kilometres north of the largest earthquake recorded in the world: a
magnitude 9.5 quake in May 1960 that killed 1,655 and unleashed a tsunami that crossed the Pacific.

2) US Fed signals end to emergency liquidity

On February 20, 2010, the US Federal Reserve Board sent its most explicit signal yet that the emergency
supply of liquidity to financial markets is done and the most aggressive monetary policy easing in its 96-
year history will eventually reverse. Chairman Ben S Bernanke and his colleagues at the Board of
Governors raised the rate charged to banks for direct loans by a quarter-point to 0.75 per cent. It was
the first increase in the discount rate since June 2006.

The Fed portrayed the decision as a “normalization” of lending that would have no impact on monetary
policy. The assurances didn’t stop investors from increasing bets that the Fed would tighten policy in the
fourth quarter. The dollar rose and US stock futures fell after the announcement.

US central bankers closed four emergency lending facilities in February 2010 and are preparing to
reverse or neutralize the more than $1 trillion in excess bank reserves they have pumped into the
banking system. The discount-rate increase will encourage banks to borrow in private markets rather
than from the Fed. In any case, financial institutions have reduced their reliance on the Fed window.
Banks had borrowed $14.1 billion as of February 17, 2010, representing less than 1 per cent of the
central bank’s $2.28 trillion in total assets. A year ago, borrowing stood at $65.1 billion.

3) Greek debt crisis tests euro zone

The euro, the single currency that 16 EU (European Union) countries share, is usually highlighted as one
of the main achievements of the European project; a rare example of “success” in what has increasingly
become a beleaguered tale of EU infighting and lack of vision. But, a threatening debt crisis, with Greece
as the main offender, has put the euro-zone to test like never before in its 11-year-long history.
February 2010 saw the euro coming in for a pummelling, sending ripple across global markets.

However, it is the political crisis that is posing a question mark before the very future of the EU. The
result is a monetary union that features a common currency without a matching fiscal or political union.
Thus, although the European Central Bank sets interest rates for the euro-zone, it does so in a vacuum,
with constituent governments retaining control over fiscal and economic policy.

The large disparities between euro-zone nations have been thrown into sharp relief by the global
economic crisis. On the one hand, you have the unflatteringly named PIGS (Portugal, Ireland, Greece and
Spain), all of whom are finding accruing debt increasingly expensive, leading to the spectre of State
bankruptcy. The worst of the lot is Greece. Its economy shrank by 1.2 per cent in 2009. Having been
found out to be cooking its books for years, Greece’s public debt is expected to break 120 per cent of
output.The poor economic condition of the PIGS, in particular Greece, has thrown up a conundrum for
the large, surplus economies of the euro-zone like France, Germany and the Netherlands.
There are three options on the table, none of which are finding immediate takers. The first is to issue a
common euro-zone bond, which would be placed at Greece’s disposal. But countries with good credit,
like Germany, are opposed to the idea because of the higher interest rates that would result.

An alternative is giving bilateral financial aid with economically healthy countries in the euro-zone taking
out loans on the financial market at good rates and passing these on to Greece.

The final option is an old-style IMF bailout, perhaps the most sensible of the choices. But, for the IMF to
come to Greece’s rescue would be a slap in the face of EU, implying that it cannot take care of its own
house and requires an institution that has always been sceptical of the euro to act as saviour.

4) Basic Capabilities Index 2009

The Basic Capabilities Index (BCI), 2009, has found that South Asia will get 80 points on the index by
2015, 10 points higher than the present value of 70. India received 68 points in the index, an increase of
meagre four points since 2004.

The global NGO Social Watch’s index of 130 countries says 100 points defines well-being of the citizens
based on children getting education till primary level, child mortality rate and percentage of births
attended by skilled labourers. The BCI does not use income as an indicator.

According to the index, South Asia, a region with worst BCI in 2004, has been making fast progress, but
the situation is still “extremely critical”. Since 2004, the report said, one-third of the countries failed to
raise their BCI value by more than one per cent and only one out of six countries showed significant
progress.

The index also tells about the increasing gap in living standards of rich and poor in the world. The
highest BCI is 97 of Iran and lowest is 44 of Chad in Africa, followed by Afghanistan, Ethopia, Bangladesh
and Nepal.

5) Japan still world’s second largest economy

Retaining its position as the world's second largest economy, the Japanese economy grew at a faster-
than-expected pace of 1.1 per cent in the last three months of 2009.

China, the fastest-growing large economy, clocked a growth of 10.7 per cent in the December 2009
quarter, bringing it at a sniffing distance to surpass Japan as the second largest economy in the world.

Japan’s economy, which is primarily exports-driven, rose 1.1 per cent in the fourth quarter of 2009. On
an annual basis, GDP expanded a much higher pace at 4.6 per cent. For the whole of 2009, the Japanese
economy shrank 5 per cent and is valued at 474.92 trillion yen (about $5.1 trillion). The better-than-
expected Japanese growth in the December 2009 quarter was mainly driven by better exports and
effects of stimulus measures. To bolster the recession-hit economy, Japan had unveiled stimulus
measures worth over $130 billion.
 6) Iranian President declares Iran a nuclear State

Iranian President Mahmoud Ahmadinejad declared on February 11, 2010, that Iran had produced its first
batch of 20 per cent enriched uranium, amidst a growing view in the West that Tehran is bluffing. “Iran
was now a nuclear State,” Ahmadinejad told a huge rally of supporters on the 31st anniversary of the
Islamic Revolution. Experts say that once Iran can enrich uranium to 20 per cent it should move
relatively quickly toward 90 per cent purification, weapons-grade fuel.Former U.S. officials and
independent nuclear experts say continued technical problems could delay—though probably not halt—
Iran’s march towards achieving nuclear-weapons capability, giving the US and its allies more time to
press for a diplomatic solution. While Iran says its nuclear program is entirely peaceful, Western nations
suspect that the country is intent on developing an atomic bomb.

DO YOU KNOW

“Exercise Milan” was the largest naval war game hosted by India, in February 2010, with
the participation of 12 navies of the Asia-Pacific region.It was in India that letters were
taken by air for the first time in the world. The historic event took place in Allahabad on
February 18, 1911, coinciding with Kumbh Mela in that year.

The Rail Coach Factory (RCF) at Jalandhar has developed India’s first air-conditioned,
double-decker prototype coach. The Railways has decided to introduce these coaches on the
‘yuva’ trains.

Indian Standard Time (IST) is set in accordance with the 82.5 degree East longitude. While
India has just one time zone, Russia has 11 times zones, USA 10, Australia 9, and Canada 6.
France and its dominions have 12 time zones and UK and its overseas territories use 8 time
zones.

Under Project Saraswati, which is the first of its kind in India, ONGC proposes to dig
deep—more than half a kilometre—into aquifers along the path the ancient Saraswati river
is once believed to have taken.

The fifth global steel summit was held in Goa in February 2010 to serve as a forum to
strengthen ties between steel makers and miners.

South Africa will host the Champions League Twenty20 cricket tournament in September
2010. In 2009 India had hosted the tournament. The tournament will feature 12 teams,
including three from 2010 IPL.

Vancouver, Canada has been named as the world’s most liveable city. Delhi and Mumbai
are placed at 113th and 117th, respectively, in the survey conducted by Economist
Intelligence Unit (EIU). Among the top ten are four Australian cities—Sydney, Melbourne,
Perth and Adelaide. Zimbabwe’s Harare is lowest ranked.

Morarji Desai holds the record of presenting the Union Budget in the Lok Sabha ten times.
Yashwant Sinha has presented seven Budgets and C.D. Deshmukh and P. Chidambaram
have done it six times.

The first 600 MW unit of the prestigious Rajiv Gandhi Thermal Power project at Khedar,
 near Hisar, Haryana became operational on February 10, 2010. The coal handling capacity
of the plant, at 2,400 tonnes per hour, is the highest in India.

The per capita income of India in 2009-10 was Rs 43,749 according to the advance estimates
of Central Statistical Organistation. It was Rs 40,141 in 2008-09. After taking inflation into
account, per capita income isc estimated to grow by 5.4 per cent at Rs 33,540 in 2009-10,
against Rs 31,821 during 2008-09.

Contribution of exports to the economic expansion during 2009-10 is estimated to fall to

18.6 per cent from 23.5 per cent in 2008-09.

CSO estimates that the population of India will go up from 1.15 billion to 1.17 billion
during 2009-10, registering an annual increase of 1.38 per cent.
 Current Affairs: January 2010
CURRENT NATIONAL AFFAIRS

1) Bt Brinjal controversy

Faced with vehement protests by farmer groups and the green lobby, as also some States, the Union
government has decided to freeze the introduction of Bt Brinjal in the country till independent scientific
studies established health and environment safety of the product to the satisfaction of both public and
experts.Although India’s biotechnology regulator, the Genetic Engineering Approval Committee (GEAC),
has cleared Bt brinjal for regular agriculture purposes, the detractors say that the variety may have
passed the yield test and the pest-resistance analysis, but its edibility is yet to be confirmed.

Three major brinjal producing States, West Bengal, Bihar and Orissa, which account for nearly 60 per
cent of the produce, have also refused to endorse the product. The governments of Madhya Pradesh
and Chhattisgarh also specified that they would not have Bt Brinjal in their States.

The variety has been developed by Maharashtra Hybrid Seeds. It has been created by inserting gene
from the soil bacterium bacillus thuringiensis into brinjal, which is said to give the plant resistance
against insect pests.

2) RBI monetary policy review

There is a shift in RBI’s monetary policy stance to managing the revival of the economy from managing
the crisis. In its review on January 29, 2010, the central bank has accepted a 7.5% growth with 8.5%
inflation. RBI is worried about the high inflation rate but its governor D. Subbarao pointed out that it is
mainly on account of supply side constraints. The condition could further deteriorate. "With growth
accelerating in the second half of 2009-10 and expected to gain momentum over the next year, capacity
constraints could potentially reinforce supply side inflationary pressure," the review document said.

Therefore, the Reserve Bank's new shift in the policy stance from managing the risk to managing the
recovery made it to take a relatively milder action to increase the cash reserve ratio by 0.75 percentage
point to take out Rs 36,000 crore from the system. Besides that, it did not take any harsh measure. On
the food inflation front, the central bank pinned its hope on good rabi crop and good monsoon in 2010.
Assuming a normal monsoon, it expected inflation to moderate from July 2010 onward. At the same
time, RBI expressed its worry over the industrial growth, as it is not broad based, and underlined the
need for consolidating it. The RBI's document on macro-economic development showed that while
industries like food products, beverages, tobacco and related products showed a negative growth,
industries like basic metals & alloys and paper & paper products were still decelerating. On the other
hand, the RBI document showed industries like transport equipment, rubber, petroleum, textile
products and a host of other industries were growing.
 3) Rural poor estimated at 42%

Agriculture sector in India continues to suffer, save for sharp growth in some years. The expert group to
review the methodology for estimation of poverty, chaired by Suresh Tendulkar, has now suggested that
the poverty ratio at the all India level was actually 37.2% in 2004-05.

Rural poverty was projected at 41.8% and urban at 25.7% by the committee, as against official estimates
of 28.3% and 25.7% for rural and urban population, respectively. In the past, the poverty line was
defined in terms of per capita consumer expenditure at 1973-74 market prices and adjusted over time
and across States for changes in prices keeping unchanged the original 1973-74 reference poverty line
baskets of goods and services. The all-India rural and urban poverty line baskets were derived
separately, assuming per capita daily calorie intake of 2,400 for rural people and 2,100 for urban
population. The Tendulkar panel has made four major departures from the past practices. It moved
away from the calorie intake criteria for determining poverty line. Instead, it tests for adequacy of actual
food expenditure near the poverty line to ensure aggregate nutrition, rather than just calories.

Two, it has recommended adoption of uniform PLB for the urban and rural population, breaking away
from the past practice of two separate baskets. This has been done to get rid of the problem of
outdated PLB, a major criticism of the existing poverty line. Three, it has suggested a new price
adjustment procedure based in the same data set as the one used for poverty estimation, rejecting the
earlier practice of using price indices that are generated externally, specific to population segments and
were outdated. And four, it incorporates explicit provision in the price expenditure on health and
education, which in any case has been rising. The official poverty estimate, in contrast, assumes basic
health care and education services would be provided by the State, and although the 1973-74 base
takes note of the private expenditure on these items, it does not take into account the increase in the
proportion for total expenditure over the years.

The Tendulkar panel has also recommended that 365-day mixed reference period be used to collect
data instead of the past practice of using 30-day uniform reference period. The advantage of using MRP
is that data integrity is better when respondents are asked about their expenditure in the 365 days prior
to the survey, particularly on items of low frequency consumption such as clothes, footwear and
durables, than when they are questioned on expenditure on the preceding 30 days.

4) Nutrient-based subsidy policy cleared

The Union government has approved the Nutrient Based Fertiliser Subsidy (NBS) plan with effect from
April 1, 2010. This is likely to have positive sentimental impact on share prices of fertiliser companies.
Under the new policy, the companies can fix retail fertiliser prices. However the urea prices will be
increased by Rs 483 per tonne or 10 per cent.“The hike in urea prices is not going to impact the bottom-
line or EPS of fertiliser companies as extra 10 per cent will go from farmer’s pocket directly. However,
looking at the shift in policy, it’s a big positive for the industry,” said an analyst.Fertilisers are sold at
government-fixed prices, which are lower than their costs of production or import. The difference is met
through subsidy. The NBS does away with maximum retail price. It proposes to replace the current
system of giving subsidy to the industry with direct assistance to farmers.
 5) Solar Mission launched

Prime Minister Manmohan Singh launched India’s Solar Energy Mission (named Jawaharlal Nehru
National Solar Mission) on January 11, 2010. The main aim of the mission is to help generate 20,000 MW
of solar power by 2022. The Prime Minister urged the industry to create ‘Solar Valleys’ on the lines of
Silicon Valleys and asked business houses to view the Solar Energy Mission as a business opportunity. He
added that the success of the mission had the potential of transforming India’s energy prospects while
contributing to national and global efforts to combat climate change.The solar mission assumes
important because it holds the centre-stage of the country’s activities to combat climate change. The
mission is an important part of the country’s National Action Plan on Climate Change and is trying to
establish the country as a global leader in solar energy, not just in terms of solar power generation but
also in solar manufacturing and generation of this technology.

The mission targets 1,100 MW grid solar power, 7 million sq meter solar collectors and 200 MW off grid
solar applications in first phase by 2013, and 20,000 MW grid solar power, 20 million sq m solar
collectors and 2,000 MW off grid solar applications by the year 2022.

6) New adult literacy mission gets under-way

The Union government has chosen 19 States to start adult literacy classes under the all-new Sakshar
Bharat Mission, which the Prime Minister launched in September 2009.

The mission, with a whopping budgetary support of $1 billion, seeks to educate 70 million illiterates by
2012; 60 million being women. Its first phase began on January 15, 2010 in 167 districts of 19 States,
which have, in the past, displayed commitment to adult literacy.The selected States are the ones that
continued to stress adult literacy even after the old National Literacy Mission (NLM) was disbanded.
Some States like Punjab and Himachal neglected the sector, with none having any ongoing adult literacy
component or programme. The mission aims to achieve 100 per cent literacy in 365 low literacy districts
where adult female literacy rate is 50 per cent less as per the 2001 census. The final goal, however, is to
take national literacy level from 64 per cent to 80 per cent by 2017, and reduce the gender gap from 21
to 10 per cent. In the first phase, Rajasthan has clinched the maximum number of projects for 31
districts. Close behind is Uttar Pradesh with projects for 26 districts, Andhra Pradesh 18, Gujarat 13 and
Uttarakhand five.The focus will be on learning beyond reading, writing and arithmetic to include life
skills and employment as part of adult literacy. The idea is to retain learners and not lose them to lack of
post-literacy avenues.

Another thing that sets the Sakshar Bharat Mission apart from the NLM is its complete ownership with
the Gram Panchayat. The past programme was controlled by districts, which used to get certificates for
compliance. Now the programme will be run and monitored by Panchayats and learners will be the king.
 7) Social Situation Report

With over 40 per cent of people in India still living on less than $1.25 (around Rs 60) a day, India now
stands third in terms of the highest proportion of extremely poor people in South Asia, next only to
Nepal and Bangladesh, with corresponding percentages at 54.7 and 50.5, respectively. The latest UN
Report on the World Social Situation 2010, places India below Pakistan, Myanmar and Sri Lanka in terms
of extreme poverty. Pakistan is the only nation in the sector to have achieved the Millennium
Development Goal (MDG) of cutting poverty by half between 1990 and 2015. It had 73 per cent of the
people in ‘extreme poverty’ 15 years ago; it now has 22.6 per cent as against its MDG target of 29.3 per
cent.India is lagging on the front, and must have an annual poverty reduction rate of 4.7 per cent
(between 2005 and 2015) against 1.4 between 1990 and 2005 if it wants to meet the MDG target of 27
per cent; so far it has touched only 41.6 per cent. Rural India has 43.8 per cent of the people in extreme
poverty as against 36.2 per cent in urban areas. This underlines the need for inclusive growth in India, as
stated by the UN report, which credits China, and to some extent India, for reduced global poverty in the
past two decades when the number of people living on less than $1.25 a day came down from 1.9 billion
to 1.4 billion.

8) Forty four deemed universities to be de-recognised

The HRD Ministry has decided to de-recognize as many as 44 "Deemed Universities", spelling
uncertainty for nearly two lakh students who are enrolled with them. The Ministry's decision amounts to
an acknowledgement of irregularities in conferring the "deemed" tag to these institutions under the first
UPA government in which Arjun Singh was the HRD minister.These deemed Universities were found
deficient on many grounds—ranging from lack of infrastructure to lack of evidence of expertise in
disciplines they claim to specialize in.The HRD Ministry emphasized that the affected students would be
taken care of. The Ministry's task force has recommended that institutions not found fit for deemed
University status "revert to status quo ante as an affiliated college of the State University of jurisdiction
so that students would be able to complete their ongoing courses and obtain degree from the affiliating
University." Similarly, medical and dental colleges not found suitable can affiliate to State University or
State medical University. In case, the institution is unable to obtain affiliation, efforts would be made to
facilitate the migration/re-enrolment of the affected students in other institutions. Doctoral students
will have to re-register in affiliating Universities and those in distance education should either go to
IGNOU or State open Universities. While these safeguards have been recommended, the students are
nonetheless likely to go through a phase of uncertainty as they move from one University to another.

Tamil Nadu has the distinction of having 16 of the 44 de-recognized deemed Universities, 15 of them
private and one government-sponsored. Karnataka has six de-recognized deemed Universities; Uttar
Pradesh four; Haryana, Uttarakhand, Rajasthan and Maharashtra three each; Gujarat, Orissa, Andhra
Pradesh, Delhi, Bihar, one each. The three government-run institutions to be de-recognized are: Nava
Nalanda Mahavira in Bihar, Rajiv Gandhi National Institute of Youth Development, Tamil Nadu, and
National Museum Institute of the History of Art, Conservation and Musicology, New Delhi.
 9) National Knowledge Network

The Union government has approved the setting up of a National Knowledge Network (NKN) that will
connect all major educational institutions like the IITs, the IIMs and top universities for exchange of
information and research. One of the important recommendations of the National Knowledge
Commission (NKC) is to inter-connect all knowledge institutions through high speed data communication
network. This would encourage sharing of knowledge, specialised resources and collaborative research.
The government’s decision to set up such a network was announced in 2008-09 and an initial amount of
Rs.100 crore was allocated to the Department of Information Technology, Ministry of Communications
and IT for this. The architecture of the NKN will be scalable and the network will consist of an ultra-high
speed core (multiples of 10Gbps and upwards) to provide a nationwide ultra high-speed data-network
highway. The IT mesh will connect around 1,500 institutions and the setting up of core network is
expected to be completed in a span of two years. The network will enable scientists, researches and
students from diverse spheres across the country to work together for advancing human development
in critical and emerging areas. Health, education, grid computing, agriculture and e-governance are the
main applications identified for implementation and delivery on NKN.

10) Model rules for RTE Act

On January 30, 2010, the Union government approved model rules for the Right to Education Act 2009,
which requires State governments to make free and compulsory elementary education a right of every
child between 6 and 14 years of age. The model rules, list priorities for States, which would have to
conform to the standards under the Act within three years of its commencement; non-conformation
could bring de-recognition. The Act, passed by the Parliament in August 2009, is yet to be officially
notified though. To begin with, the rules ask school management committees or the local authorities to
identify children, who have never been to school or not managed to complete elementary education,
and arrange for their special training in appropriate classes so that they can ultimately be integrated into
the system. Any child above 6 years of age will be entitled to free special training either at school or
residential facility, before he/she is ready to enter school at a convenient level. Such children would be
allowed to complete elementary education even after they have attained 14 years, for the obvious
reasons that they enter the school late.

At least one primary school (class I to V) must be located within a km of walking distance of the
neighbourhood; for schools with classes VI to VIII, this distance would be three km. States need to
provide more neighbourhood schools in highly populated areas and ensure safety of students in areas
with tough terrains.But before a school comes up, the States would have to undertake a mapping to
identify all children in remote areas, including those from disadvantaged groups. This must be done in a
year and the data updated every year.

For the first time, the law mandates maintenance of records of all children from birth to 14 years of age
through a household survey to be updated every year. The rules further prescribe strict norms for non-
segregation of students and safe transport for disabled children to ensure that they attend school.
Also, there is flexibility on birth certificate for admission. If formal birth record is not available, an
affidavit would suffice, so would a hospital/ANM or anganwari record.

Adequate qualification for teachers has been stressed upon, with the academic authority (to be set up
under the Act) to enlist the qualifications for teachers, who would get five years to upgrade their skills.
An important part of the rules pertains to specifications on recognition of elementary level schools. The
Act will, for the first time, mandates recognition of such schools within three years of the
commencement.

11) India submits proposed carbon cuts to UN

On January 30, 2010, India submitted its proposed emission intensity cut targets by 20-25 per cent by
2020 to the UN, a day before the world body’s January 31 deadline for submitting the climate change
mitigation steps under the Copenhagen Accord.However, it made it clear to the Secretariat of the
United Nations Framework Convention on Climate Change (UNFCCC) that all its domestic mitigation
actions were entirely voluntary in nature and not legally binding, a position India had maintained at
Copenhagen Summit in Denmark.Though agriculture sector contributes around 14 per cent of the total
GHG emissions, India has kept it out of the purview of the mitigations actions in its blueprint submitted
to the UN to ensure food security.

12) CJI comes under RTI ambit, says Delhi HC bench

In an unusual display of checks and balances within the judiciary, the Delhi High Court, on January 12,
2010, rejected the contention of the Supreme Court that the office of the Chief Justice of India was
beyond the ambit of the Right to Information Act.A full bench of the High Court, comprising Chief Justice
A.P. Shah, Justice Vikramjit Sen and Justice S. Muralidhar, unanimously dispelled the fear raised by the
apex court that the extension of RTI to the CJI’s office would undermine judicial independence.Referring
to a resolution adopted by Supreme Court judges in 1997, a resolution adopted by a conference of Chief
Justices in 1999 and the UN-sponsored 2001 Bangalore principles of judicial conduct, the HC said, ‘‘Well
defined and publicly known standards and procedures complement, rather than diminish, the notion of
judicial independence.’’

The HC verdict came in the context of the prolonged controversy over whether the declarations of
assets made by judges should be put in the public domain.

13) Free to criticize religions but without hate

In a significant ruling, a three-judge bench of the Bombay High Court has held that in India criticism of
any religion—be it Islam, Hinduism, Christianity or any other—is permissible under the fundamental
right to freedom of speech and that a book cannot be banned on those grounds alone.However, the
criticism must be bona fide or academic, said the Court, as it upheld a ban issued in 2007 by the
Maharashtra government on a book titled “Islam—A Concept of Political World Invasion by Muslims.”
The book contained an “aggravated form of criticism made with a malicious and deliberate intention” to
outrage the feelings of Muslims, the Court said.Delivering the landmark verdict, the Court upheld the
State’s ban on a book but at the same time brought joy to civil rights activists when it held that, “in our
country, everything is open to criticism and religion is no exception. Freedom of expression covers
criticism of religion and no person can be sensitive about it.”

The Court also found “totally unacceptable” the author’s argument that banning the book in the age of
the internet is passe and pointless.

14) India-ASEAN trade treaty gets operational

The Union government has notified the rules to operationalise the India-ASEAN free trade agreement,
which came into effect from January 1, 2010. The rules specify that products having more than 35 per
cent of local content will get preferential tax treatment under the free-trade treaty.The rules also
specify the methodology for calculation of the cost of products to be traded between India and the
Association of South East Asian Nations (ASEAN).New Delhi had signed the an agreement on August 13,
2009, in Seoul with ASEAN for duty-free import and export of as many as 4,000 products ranging from
steel to apparel to sugar and tobacco over a period of eight years.While the pact opens the 1.7-billion
consumer market to each other, it also eliminates duties on 80 per cent of goods traded between the
two regions by 2016.

15) Visit of Bangladesh Prime Minister

On January 11, 2010, India committed one billion dollars line of credit for developmental projects in
Bangladesh and transformed its bilateral ties by signing five accords, including three key security pacts
to expand counter-terror cooperation, during the visit of Bangladesh Premier Sheikh Hasina. “This visit
has opened a new chapter in India-Bangladesh relations, reflecting the unity of minds and hearts,”
Manmohan Singh told Sheikh Hasina. The one-billion dollar line of credit is the largest ever one-time
bilateral financial assistance India has provided to any country. This will be used for construction of
railway bridges and lines, supply of coaches and locomotives and buses, and assistance in dredging, an
issue of pressing concern to Dhaka.

India also agreed to supply 250 MW of electricity through its central grid. The two sides also took major
steps to improve connectivity, including the start of the Akhara-Agartala rail link. The ties between the
two nations had suffered under the previous regime in Dhaka over a host of tricky issues, including the
alleged sheltering of insurgents from India’s north-eastern States in Bangladeshi territory.

The three security-related pacts signal a major step forward in expanding counter-terror cooperation
and in addressing India’s concerns over this issue that had earlier strained their ties. The pacts will help
New Delhi press Dhaka for the extradition of suspected insurgents from its north-eastern States who
have taken shelter in Bangladeshi territory over the years. During her visit, Sheikh Hasina was also
conferred the prestigious Indira Gandhi Prize for Peace, Disarmament and Development.

16) Visit of Prime Minister of Malaysia

On January 20, 2010, India and Malaysia y signed an extradition treaty and two other accords during the
visit of Malaysian Prime Minister Mohd Najib Tun Abdul Razak. The extradition treaty will enable India to
seek the transfer from Malaysia of Indians who commit crime on the Indian soil and take refuge in the
South East Asian nation. A Malaysia-India capital market collaborative agreement was signed between
the Securities and Exchange Board of India (SEBI) and the Security Commission of Malaysia. The third
agreement was in the field of higher education.

Prime Minister Manmohan Singh and the Malaysian leader discussed a wide range of issues, including
bilateral ties as well as international developments. India’s ties with ASEAN were also discussed at
length. Mr Razak strongly pitched for the early conclusion of a Comprehensive Economic Cooperation
Agreement (CECA) between the two countries.With bilateral trade exceeding $10.5 billion in 2008-09,
Malaysia is India’s second largest trading partner (after Singapore) among the 10 ASEAN members.
Infrastructure, IT, biotechnology, energy and education have emerged as promising areas of cooperation
between the two countries.

17) Nepal assures of no anti-India activity from its soil

Indian External Affairs Minister S.M. Krishna visited Kathmandu on January 15, 2010. During his
meetings with his counterpart Sujata Koirala he gave positive gesture to Nepal to the latter’s long-
standing proposal to review the Nepal-India Peace and Friendship Treaty-1950.In return, Nepal sought
to address India's concerns with regard to fake currency being smuggled from here, pledging that it
would not allow its territory to be used against its neighbour.

India and Nepal also agreed to “cooperate closely” to end the menace of terrorism and extremism,
including human trafficking, smuggling of arms and fake Indian currency.During the meeting, Nepal
raised serious concerns over the highly controversial issues on border encroachment from the Indian
side whereas the Indian officials urged Nepal to cooperate with India by signing the much-awaited
Extradition Treaty that Nepal had been dilly dallying to sign. Five MoUs regarding the construction of
Terai roads with Indian assistance at an estimated cost of Rs 805 crore, a project worth Rs 9.2 crore for
the Nepal Stock Exchange Ltd and Central Depository Services (India) Ltd, Rs 6.3-crore electrification
project, and construction of a Science Learning Centre with India’s assistance of Rs 16.6 crore, were
signed during the visit.

During his meeting with Unified Communist Party of Nepal-Maoists chairman Pushpa Kamal Dahal, alias
Prachanda, Mr Krishna expressed disappointment on their ongoing anti-India movement. However, just
a day after he met with Krishna when he had said he received positive response from him to address
their concerns, Prachanda, in his address to party cadres in Khotang district, criticised India and said it
has played negative role by backing up other political parties to uphold civilian supremacy in Nepal.

18) Visit of Korean President

Cooperation in the civilian nuclear energy field was high on the agenda during the meeting between
Prime Minister Manmohan Singh and South Korean President Lee Myung-bak, on January 25, 2010.
Presdent Myung-bak was also the chief guest at the Republic Day. During the visit the two countries
signed accords in diverse areas, including IT and civilian space, following the talks between the two
leaders. President Lee Myung-bak began his four-day visit to India with a visit to the Hyundai factory
near Chennai to meet Korean businessmen living in the city before reaching New Delhi.

Regional and global issues, including the intensification of economic ties and cooperation in sphere of
civilian nuclear cooperation and space technologies, figured prominently during talks between the two
sides. Closer cooperation in combating global financial recession was also discussed in the context of the
G-20 summit to be held in Seoul later in 2010. Apart from the civilian nuclear sector, the two sides also
agreed to look at the possibility of joint venture co-operation in research and development, and
manufacture of military equipment including through transfer of technology, the joint statement said.
The two leaders also agreed to work towards a revised double taxation avoidance convention before the
end of 2010.The Posco steel project in Orissa was also discussed with both sides agreeing that there was
a need to expedite the project, which has been facing delays for three years. The two leaders also
recognised the need to expedite the implementation of the POSCO project in Orissa,’’ the joint
statement said. The Indian side assured South Korea the government is doing its best to expedite the
project, which continues to be entangled in land acquisition issues. The Indian side further hoped that
South Korean investment would expand in the infrastructure and manufacturing sectors.

CURRENT INTERNATIONAL AFFAIRS

1) Commonwealth Speakers’ Conference, 20th

The 20th Commonwealth Speakers’ Conference was held in New Delhi from January 5, 2010. It was
inaugurated by Prime Minister Manmohan Singh. Describing the growth of regional parties as a
challenge for governance and conduct of parliamentary democracy, Mr Manmohan Singh said: “Though
the aspirations of smaller parties may often be anchored in narrow considerations, they carry great
weight for their constituents. In the end, democracy must respond to everyday concerns of the common
man and Parliament should be the forum to address such concerns.” The remark was in obvious
reference to the growing influence of sub-regional parties in coalition politics and Parliament.

Presiding officers from 42 Commonwealth nations were present (some in traditional Speaker robes). The
Conference discussed, among other things, the Speaker’s role as a mediator and administrator of
Parliament and use of technology in disseminating information on Parliamentary proceedings.

The forum also saw India voicing the aspirations of developing nations on climate change.

2) London Declaration

A one-day international conference on Afghanistan was held on January 27, 2010 in London. Seventy
Foreign Ministers and officials of international organisations attended the convention at the 185-year-
old Lancaster House.British Prime Minister Gordon Brown, hosting the conference with Afghan
President Hamid Karzai and UN Secretary General Ban Ki Moon, announced in his opening address the
establishment of a $500 million 'trust fund' to buy "peace and integration" with warriors who are
engaged in violence for economic rather than ideological reasons. A whopping $140 million has been
pledged already for 2010. During his pre-conference discussion with the British Foreign Secretary David
Miliband, External Affairs Minister of India, S.M. Krishna, specifically said, “there should be no
distinction between a good Taliban and a bad Taliban.” But this clearly fell on deaf ears. The participants
rejected India's argument that there were no degrees of Talibanism.

It was also unclear whether remnants of Afghanistan's Northern Alliance, once cultivated by India,
would be accommodated in any way. There was also no reference to the erstwhile Foreign Minister,
Abdullah Abdullah, who put up a spirited fight in the first round of the recent controversial Presidential
election and exposed fraud before withdrawing from the contest.Pakistan supports a differentiation
between Taliban segments, including being generally soft towards the Afghan Taliban, which was
sponsored by the Pakistani Army's Inter-Services Intelligence.

As a goodwill gesture, the conference was preceded by a lifting of United Nations sanctions on five
leaders of the obscurantist Taliban regime, which was ousted by armed forces led by the United States
after the 9/11 attack on New York by the Afghanistan-based Al Qaida. Among the beneficiaries is a
former foreign minister Wakil Ahmad Muttawakil.In keeping with United States President Barack
Obama's plan to start withdrawing American troops in a little over 18 months, Brown also declared that
to fill the breach the strength of the Afghan army would be increased to 134,000 by October 2010 and
to 171,600 by October 2011. Corresponding enlargements would also occur in respect of the Afghan
police. The template for Afghanistan is similar to the one utilised in Iraq.

The Taliban central leadership rejected the London declaration on Afghanistan while several top
Pakistani leaders said they support dialogue with the Taliban to end the conflict. The statement by the
Leadership Council of the Islamic Emirate of Afghanistan issued in Pashto said: “The US and its allies
should have freed all prisoners from jails in Guantanamo Bay, Afghanistan, Pakistan and elsewhere,
removed the names of all Taliban members from the UN ‘blacklist’ and refrained from sending more
troops if they really meant to take the proper steps for ending the Afghan conflict.”

The statement argued that the ‘Mujahideen’ were not fighting for money or to grab power. Describing
as baseless that most Taliban fighters were not ideologically committed, it claimed that nobody
compelled the ‘Mujahideen’ to take up arms and fight the invaders.Accusing President Obama and
Prime Minister Brown of trying to deceive their people by organising conferences on Afghanistan like
the one in London to win public support for a failed war, the statement reminded that such conferences
did not work in the past and would not succeed this time as well. Arguing that the only solution of the
conflict was the withdrawal of foreign forces from Afghanistan, the Taliban statement also tried to
reassure the West and rest of the world about their future plans in case they returned to power.

3) Rajapaksa re-elected President

On January 27, 2010, Mahinda Rajapska emerged victorious in the bitterly-fought first post-LTTE era
Presidential elections. He won fighting against former army chief Sarath Fonseka, securing nearly 60 per
cent of the total votes polled.On 59-year-old Fonseka's charges of poll rigging, the sources said it was
"absolutely untrue" and pointed out that even former Prime Minister and opposition UNP chief Ranil
Wicremasinghe had given a clean chit on the issue.
 4) Biodiversity protocol divides rich and developing world

An international protocol on biodiversity has become the new bone of contention between the
developed and developing countries. The rich countries are opposing an international legal framework
for use of biological resources.The agreement will deal with the issue of bio-piracy, which is a cause of
concern for countries like India. Negotiations are on to finalise the protocol that is expected to be
adopted at Nagoya, Japan, in October 2010.India and other developing countries are pushing for a
protocol on access and benefit sharing (ABS). Bio-piracy is an important issue for India, which is keen on
the adoption of the Nagoya Protocol.

The Convention on Biological Diversity, adopted at the Earth Summit in Rio de Janeiro in 1992, is the first
comprehensive global agreement addressing all aspects of biodiversity. The convention reaffirms
sovereign rights of nations over their biological resources. It has three main goals — the conservation of
biological diversity, sustainable use of its components and fair and equitable sharing of the benefits
from the use of genetic resources. While an international legal framework appears to be a distant
possibility, India has been taking steps at the national and bilateral level to protect its biodiversity.
Besides the Biological Diversity Act, 2002, and the national Biodiversity Authority, India has also put in
place a traditional knowledge database — the Traditional Knowledge Digital Library (TKDL). Managed by
the CSIR, TKDL is a computerised database of documented information available in Indian texts, relating
to Indian systems of medicine. Over 10 years, more than 2 lakh formulations of Ayurveda, Siddha, Unani
and Yoga have been documented under the TKDL.

5) Natural disasters not linked to global warming

The United Nations climate science panel, Intergovernmental Panel on Climate Change (IPCC), faces a
new controversy for wrongly linking global warming to a rise in natural disasters such as hurricanes and
floods. It based the claims on an unpublished report that had not been subjected to routine scientific
scrutiny and ignored warnings from scientific advisers. The report's author later withdrew the claim
because the evidence was too weak.

The link was central to demands at Copenhagen climate summit by African nations for compensation of
$100 billion from the rich nations blamed for creating the most emissions. According to The Sunday
Times the IPCC knew in 2008 that the link could not be proved but did not alert world leaders. The latest
criticism came less than a week after IPCC was forced to retract claims that the Himalayan glaciers
would be largely melted by 2035. It turned out the claim had been lifted from a news report published in
1999 by New Scientist magazine.Two scientific reviewers who checked drafts of the IPCC report urged
greater caution in proposing a link between climate change and disaster impacts, but were ignored.

The paper at the centre of the latest questions was written in 2006 by Robert Muir-Wood, head of
research at Risk Management Solutions, a London consultancy, who became a contributing author on
the IPCC report on climate change impacts. In the research, Muir-Wood looked at a wide range of
hazards, including tropical cyclones, floods and hurricanes. He found from 1950 to 2005 there was no
increase in the impact of disasters once growth was accounted for. For 1970 to 2005 he found a 2%
annual increase that "corresponded with a period of rising global temperatures," but said almost all of it
was due to strong hurricane seasons in 2004 and 2005. Despite such caveats, the IPCC report used the
study in its section on disasters and hazards, but cited only the 1970-2005 results.

6) Google, China face-off over Internet

On January 13, 2010, Google threatened to shut down its operations in China after uncovering “highly
sophisticated” hacking attempts into e-mail accounts of Chinese human rights activists.

“These attacks and the surveillance they have uncovered, combined with the attempts over the past
year to further limit free speech on the web, have led us to conclude that we should review the
feasibility of our business operations in China,” David Drummond, senior V-P of corporate development
and chief legal officer, said in a blog post.

“We have decided we are no longer willing to continue censoring our results on Google.cn, and so over
the next few weeks we will be discussing with the Chinese government the basis on which we could
operate an unfiltered search engine within the law, if at all,” he said.Evidence indicated that the
attackers were trying to get access to mail accounts of Chinese human rights activists, according to
Drummond. At least 20 other large companies, including finance, Internet, media and technology were
similarly attacked, according to Google.

7) Taliban attack on match in tribal Pakistan

A northwest Pakistani village that tried to resist Taliban infiltration mourned on January 2, 2010 the
victims of an apparent revenge suicide bombing that killed 96 residents during a volleyball game. The
attack on the outskirts of Lakki Marwat city was one of the deadliest in recent Pakistani history and sent
a bloody New Year’s message to Pakistanis who dare take on the armed Islamic extremists.

Lakki Marwat district is near South Waziristan, a tribal region where the army has been battling the
Pakistani Taliban since October 2009.Across Pakistan’s north-west, where the police force is thin,
underpaid and under-equipped, various tribes have taken security into their own hands over the past
two years by setting up citizen militias to fend off the Taliban. The government has encouraged such
“lashkars”, and in some areas they have proven to be a key to reducing militant activity. Still, tribal
leaders who face off with the militants do so at high personal risk. Several suicide attacks have targeted
meetings of anti-Taliban elders, and militants also often go after individuals. One reason militancy has
spread in Pakistan’s semi-autonomous tribal belt is because insurgents have slain dozens of tribal elders
and filled a power vacuum.

8) Af-Pak strategy unveiled

In a candid assessment of the fragile relationship of USA with Pakistan, a US State department policy
paper has admitted that there is a degree of mistrust between Washington and Islamabad, but
democratic rule in Pakistan has created a window of opportunity. The report makes a point of noting
that while the US military presence in the region is not open-ended, its non-military commitment would
be a long-term one. Secretary of State Hillary Clinton unveiled the Obama administration's strategy to
stabilise Pakistan and Afghanistan, noting that the challenge in both countries is immense.
US officials have expressed concern over Pakistan's selective war on extremists within its borders, noting
the Pakistani army's offensive ignores deadly terrorist groups such as the Haqqani network, responsible
for attacks against US troops in Afghanistan.

The State department report outlines US objectives in Pakistan and Afghanistan. "While our combat
mission in Afghanistan is not open-ended, we will remain politically, diplomatically and economically
engaged in Afghanistan and Pakistan for the long-term to protect our enduring interests in the region,"
it says. On Pakistan, it lays out the intention of USA to lead the international community in helping
Pakistan overcome the political, economic and security challenges that threaten its stability, and in turn
undermine regional stability. "And we seek to build a long-term partnership with Pakistan based on
common interests, including a recognition that we cannot tolerate, a safe haven for terrorists whose
location is known and whose intentions are clear," it added.

"Achieving progress will require continued sacrifice not only by our military personnel, but also by more
than the 1,500 US government civilians serving in Afghanistan and Pakistan," Clinton said, pointing out
that for the first time since this conflict began, the US has a true whole-of-government approach. She
said the Obama administration's policy, rather than being an exercise in nation-building, was aimed to
achieve realistic progress in critical areas, and that Afghan and Pakistani governments had endorsed this
strategy.

9) Asia free-trade zone

On January 1, 2010, China and 10 South-east Asian nations ushered in the world’s third-largest free-
trade area. While many industries are eager for tariffs to fall on things as diverse as textiles, rubber,
vegetable oils and steel, a few are nervously waiting to see whether the agreement will mean boom or
bust for their businesses.Trade between China and the 10 countries that make up the Association of
Southeast Asian Nations, also known as ASEAN, has soared to $192.5 billion in 2008, from $59.6 billion
in 2003. The new free-trade zone, which will remove tariffs on 90% of traded goods, is expected to
increase that commerce still more.

The zone ranks behind only the European Economic Area and the North American Free Trade Area
(NAFTA) in volume. It encompasses 1.9 billion people. The free-trade area is expected to help ASEAN
countries increase exports, particularly those with commodities that resource-hungry China desperately
wants.The China-ASEAN free trade area has faced less vocal opposition than the European and North
American zones, perhaps because tariffs were already low and because it was unlikely to alter
commerce patterns radically. However, some manufacturers in Southeast Asia are concerned that cheap
Chinese goods may flood their markets, once import taxes are removed, making it more difficult for
them to retain or increase local market shares.
 DO YOU KNOW

Decline in oilseeds production, appreciation of rupee against dollar and zero import duties
during most of 2009 has made India the largest edible oil importer in 2009, a slot it took
surpassing China. Import of crude edible oil to India saw a huge jump of 35% to a record 8.4
million tonne (mt) in 2009. India's edible oil imports comprise almost 80% of palm oil.

Reserve Bank of India, along with the Securities and Exchange Board of India (SEBI) has
allowed recognised stock exchanges to launch futures currency trading in euro-rupee, pound
sterling-rupee and yen-rupee. Futures trading in dollars-rupee was already allowed.

With an economic freedom score of 53.8, India has been rated the 124th freest economy in the
world, according to the 16th Annual Index of Economic Freedom, released by The Heritage
Foundation and The Wall Street Journal. Hong Kong and Singapore finished 1st and 2nd in
the rankings for the 16th straight year. With Australia in 3rd place and New Zealand
moving up to number 4, the Asia-Pacific region boasts a clean sweep at the top. Europe
registered three top 10 placements: Ireland, Denmark and Switzerland. The United Kingdom
dropped out of the top 10 for the first time in Index history. The United States also dropped
significantly, to 8th place.

The fiscal deficit for 2009-10 was budgeted at a 16-year high of 6.8% of GDP. The high fiscal
deficit is blamed on the measures the government took to address the demand slump that
followed the global financial crisis. The high fiscal deficit is a concern as high government
borrowing to meet the expenditure in excess of revenues creates competition for funds and
interest rates going up due to this. High interest rates hurt rate sensitive sectors such as
autos, real estate and consumer goods. Investment activity also then slows down,
depressing the overall economy. At macro level, inflation goes up, currency weakens and
growth is depressed. Increased interest payments leave less money with the government to
make productive expenditure.

He Pingping of China, at 2 feet 5 inches is the world’s shortest man and Sultan Kosen of
Turkey, at 8 feet 1 inches is the tallest man.

The International Lunar Geographic Society, a New York-based organization devoted to the
study of the moon, has declared that a lunar crater in the moon's Sea of Tranquillity has
been christened after Shah Rukh Khan. This has been approved by the International
Astronomical Union, which has a final say with regard to the naming of craters on the
moon. With a crater named after him, Shah Rukh now joins the ranks of eminent
personalities like Nobel laureate C.V. Raman, father of the Indian space programme Vikram
Sarabhai, father of the Indian nuclear programme Homi Bhabha and other luminaries like
Meghnad Saha after whom craters have been named.

India and China rank 123rd and 121st in pollution control, respectively, reflecting the strain
rapid economic growth imposes on the environment, according to the 2010 Environmental
Performance Index (EPI). Iceland leads the world in addressing pollution control and
natural resource management challenges, according to the index produced by a team of
environmental experts at Yale University and Columbia University. The EPI ranks 163
countries on their performance across 25 metrics aggregated into ten categories including
environmental health, air quality, water resource management, biodiversity and habitat,
forestry, fisheries, agriculture, and climate change. Occupying the bottom five positions are
Togo, Angola, Mauritania, the Central African Republic, and Sierra Leone—countries that
 lack basic environmental amenities and policy capacity. The US ranks 61st, significantly
behind other industrialised nations like Britain (14th), Germany (17th), and Japan (20th).

President of South Korea Lee Myung-bak was the Chief Guest of the Republic Day, 2010.

The Pravas Bharatiya Divas was celebrated in New Delhi on January 6, 2010. The theme
this year was: “Engaging the Diaspora: The way forward”.

Ashok Leyland has launched India’s first electric plug-in CNG hybrid bus, named Hybus.

Recovery from the global economic downturn is faster in India compared with other
countries in the world as consumers here are more willing to spend, according to the Nielsen
Global Consumer Confidence survey. India ranked second with 117 points in the fourth
quarter of 2009, behind Indonesia, which has 119 points. Globally consumer confidence has
remained stable at 87 per cent. Apart from India and Indonesia, Hong Kong, China,
Singapore and Brazil are where recovery is accelerating. About 17 per cent Indians think
that job prospects in the country would be 'excellent' and 66 per cent think that it would be
'good' in the next 12 months.

Jawaharlal Nehru National Solar mission has been set-up to create an enabling policy
framework for the deployment of 20,000 MW of solar power in 2020. The other objectives
are: (a) Promote programmes for off-grid applications, reaching 1000 MW by 2017 and 2000
MW by 2020; (b) to create favourable conditions for solar manufacturing capability for
indigenous production and market leadership; (c) to achieve 15 million sq metres solar
thermal collector area by 2017 and 20 million by 2022; (d) to deploy 20 million solar lighting
systems for rural areas by 2022.

Army Day is celebrated on January 15.

India’s human and gender development record is improving, with the latest government
report showing a significant increase in country’s position on human (HDI) and gender
related development indices. India’s HDI, which was 0.530 in 1996, rose to 0.605 in 2006,
while GDI score improved from 0.514 in 1996 to 0.590 a decade later. A concern, however, is
the country’s Gender Empowerment Measure (GEM) score, which judges women’s
participation in politics and decision-making, their representation in Parliament and
legislatures and their control over economic resources. Gendering Human Development
Index in India, released by Women and Child Development Ministry, claims GEM score of
0.497 in 2006 against 0.416 in 1996. Delhi has the highest GEM score and Nagaland the
lowest. The highest GEM scorers in India are Andaman and Nicobar, Puducherry, Goa,
Andhra and Himachal. The best performers on political participation of women are Punjab,
Andaman and Nicobar, Himachal and Haryana. On economic empowerment of women,
Chandigarh, Goa, Delhi and Punjab are the best, but in terms of control of economic
resources, Meghalaya stands on top.

The Indian School of Business (ISB) is the only one from India to find a place on the list of
top 20 B-schools in the world, published by the Financial Times. ISB has improved its
position to bag the 12th spot on the list of top 100 B-Schools across the globe in 2010. The
London School of Business topped the list, followed by the University of Pennsylvania and
Harvard Business School. Stanford University GSB and Insead have been ranked at the
fourth and fifth positions, respectively.

The revised estimates of the national income that took into account 2004-05 prices have
calculated the per capita income of India at Rs 40,14,1 in 2008-09. The old method of income
calculation had pegged per capita at 37,490 for 2008-09. On an annual basis the new per
capita income rose 13.3 per cent compared to the previous year (2007-08). The new series of
calculating the national income changed the base year to 2004-05 from 1999-2000 earlier.
 Current Affairs: December 2009
CURRENT NATIONAL AFFAIRS

1. Army doctrine being reviewed

The Army’s military doctrine is being reviewed and it will now include an added thrust in five key areas
that will propel the doctrine. This includes wars in faraway lands, besides strategy on how to face future
challenges posed by China and Pakistan. The key areas include preparation for a two-pronged war with
China and Pakistan. Both countries will have to be looked at separately and also collectively. The nature
of conflict, if ever, with both countries will vary greatly in terms of terrain and use of weapons and fire-
power. The Army, which is involved in fighting insurgency in J&K and the North-East, is also looking to
optimise capabilities to fight asymmetric war waged by both State and non-State actors, such as terror
attacks and proxy wars. This will include cyber and electronic warfare. The doctrine will look at ways to
enhance the strategic reach of the Army and joint operations with the Navy and the Air Force. Countries
like the USA already have airborne division while China has capability of rapid induction of troops. The
reviewed doctrine will also touch upon space-based capability and methods to achieve technological
edge over the enemy. The doctrine is reviewed every five years by the Army’s Shimla-based Training
Command.

2. 13th Finance Commission Report

The 13th Finance Commission, which makes recommendations on sharing of tax revenues by the Centre
and States, has suggested a new path for fiscal prudence in its report submitted to President Pratibha
Devi Singh Patil on December 30, 2009. The Commission was headed by Vijay Kelkar. Other members of
the Commission were B.K. Chaturvedi, Indira Rajaraman, Atul Sarma and Sanjiv Misra.

The government had consigned the Fiscal Responsibility and Budget Management (FRBM), the self-
imposed fiscal prudence guidelines, to the back-burner in 2008 when it stepped up official spending
beyond its means in order to insulate the economy from the global financial meltdown. The country’s
fiscal deficit, a reflection of government borrowings, is estimated to touch 6.8 per cent in 2009-10, up
from 6.2 per cent in the previous fiscal, mainly on account of the stimulus measures.

The recommendations of the 13th Finance Commission, Finance Minister Pranab Mukherjee said “would
get reflected in the 2010-11 Budget”. The report, Kelkar said, dealt with the sharing of tax revenue
between the Centre and States, distribution of funds among States and support to local bodies. The
Finance Commission report assumes significance in view of the ongoing reforms in indirect and direct
taxes, which will have a bearing on the tax collections.

Currently, the States and Union Territories get Rs 1.64 lakh crore in a year, or around 30 per cent of the
shareable taxes collected by the Centre. The 12th Finance Commission had recommended that 30.5 per
cent of the shareable Central taxes should be shared among the States and Union Territories. The
shareable central taxes include corporation tax, income tax, wealth tax, customs, excise duty and service
tax. Among other things, the Commission has suggested steps to deal with the growing off-budget
expenditure, especially, oil bonds. The report is based on the 2008-09 tax collections and does not talk
on post-GST scenario. However, implementation of the new indirect tax regime in 2010 would not be a
concern as suggestions are based on revenue neutral rates.

3. China’s iron ore find can hit India’s exports

China has found a one-billion tonne iron ore deposit, which is the biggest discovery of the mineral since
1980’s. This is bound to cause some worries in India as iron ore accounts for nearly half of Indian exports
to China. The latest discovery is a 6-km long deposit with thickness ranging between 41.43 and 108.95
meters. It lies 100 to 600 meters deep underground in Luannan County in the northern province of
Hebei. It will be some time before the new deposit will begin to yield iron ore, but the discovery will
definitely enable China to make long-term plans on steel production and strengthen its hands in price
negotiations. The discovery gives a new boost to China’s ongoing efforts to reduce its dependence on
major world suppliers and avoid getting caught in price fluctuations of the spot market. Indian suppliers
mostly deal in the spot market and refuse to enter into long-term supply contracts.

4. Scholarship scheme for minority students

The Union government has launched the Maulana Abul Kalam Azad National Fellowship Scheme for
minority students and another one to computerise State Wakf Boards. Under the scheme, 756
fellowships (30 per cent to be reserved for women) will be offered per year to minority students wishing
to pursue higher studies. The objective is to grant integrated five-year fellowships in form of financial
assistance to students from minority communities as notified by the Central government to pursue
MPhil and PhD. The scheme will cover all universities or institutions recognised by the UGC under
Section 2 (f) and Section 3 of the UGC Act and will be implemented by the Ministry of Minority Affairs
through UGC for students belonging to minorities. The fellowships will be on the pattern of UGC
fellowships awarded to research students pursuing regular and full time MPhil and PhD courses. Holders
of the new fellowship will be called MoMA scholars.

5. Jharkhand Assembly ‘Safe Haven’ For Criminals

The politician-criminal nexus in India is alive and kicking. Proof of this was provided by the profile of the
newly elected MLAs in Jharkhand. As many as 31 of the 45 legislators backing the JMM-BJP-AJSU
coalition government have criminal cases pending against them. Its not just the ruling coalition which is
afflicted with this malaise. The Opposition benches in the State too have several MLAs with criminal
antecedents, making it clear that the process of criminalisation of politics is proceeding unhindered.
Chief Minister Shibu Soren, who had to quit the Union Council of Ministers a few years ago after being
convicted in a murder case, leads the contingent. Besides him, 16 of the 18 JMM MLAs have criminal
cases against them. The only party MLA who starts with a clean slate is Sita Soren, daughter-in-law of Mr
Shibu Soren and widow of the late Durga Soren.

BJP and AJSU have eight and four MLAs, respectively, with criminal cases against them. One JD(U)
legislator and the lone JJM legislator Bandhu Tirkey also has criminal cases against him. Mr Tirkey, a
former minister, in fact, is presently languishing in jail as he’s one of the key accused in the great
Jharkhand loot undertaken by the Madhu Koda government. JMM’s Dumri MLA Jagannath Mahato has
been booked in 14 criminal cases while Mr Shibu Soren’s son Hemant has six cases against him. BJP’s
Jharkhand unit president Raghubar Das also has criminal cases against him while C.P. Singh, the fourth-
term MLA from Ranchi, has nine cases against him. As many as 11 of the 14 Congress MLAs also have
cases against them, while eight JVM (P) and four RJD MLAs have cases lodged against them.

6. Gujarat Assembly passes mandatory voting Bill

The Gujarat Assembly has passed a landmark Bill which makes, for the first time in the country, voting
mandatory in local body polls. The Gujarat Local Authorities Laws (Amendment) Bill, 2009, which also
seeks to raise the reservation of seats for women in local self governance bodies from 33 to 50 per cent,
was passed by voice vote. Under the Bill, if a voter fails to vote for the reasons other than prescribed in
the rules, he may be declared a “defaulter voter” and would face consequences for which rules will be
framed and placed before the Assembly for its approval later.

7. Authors can now claim royalty

Authors of musical, cinematographic and literary works may now be entitled to royalty in case their
works are used for commercial purposes, a benefit denied to them so far. This can be possible because
of certain amendments in the Copyright Act of 1957, which has been approved by the Union Cabinet for
introduction in Parliament. The amendment is proposed to give independent rights to authors of literary
and musical works in cinematography of films, which were hitherto denied and wrongfully exploited by
producers and music companies. Another amendment ensures that the authors of the works,
particularly songs included in the cinematography of films or sound recordings, receive royalty for
commercial exploitation of such work. The News Broadcasters Association had been apprehensive about
the amendments and asked the government to ensure that nothing was done to hurt the “well-
established and understood rights of broadcasters to fair use of material, including broadcast
reproduction rights”.

8. India-Bangladesh pacts to tackle terrorism

On December 2, 2009, India expressed its gratitude to Bangladesh for taking speedy action to foil a
conspiracy by the LeT to attack the Indian mission in Dhaka recently as the two countries finalised three
key agreements to combat terrorism. The agreements were signed during the visit of Bangladesh Prime
Minister Sheikh Hasina to New Delhi. The two sides arrived at an agreement on: Mutual legal assistance
in criminal matters, combating international terrorism, organised crime and illicit drug trafficking; and
agreement on transfer of sentenced persons. However, the two sides have not yet been able to resolve
differences over a bilateral extradition treaty. The finalisation of the three accords marks a major
confidence-building measure (CBM) to address the issue of Indian insurgents taking shelter in
Bangladesh, which had marred ties between the two nations in recent years. New Delhi, however, is
quite happy over the manner in which the Sheikh Hasina government has been cooperating with it in
checking the activities of these insurgents.
 9. Visit of Bhutanese King

Increasing the pace of cooperation in the hydro-power sector, India and Bhutan have signed four
agreements to conduct technical surveys for hydro-power projects. The four MoUs related to the hydro-
power sector were part of 12 agreements that were signed after discussions between Prime Minister
Manmohan Singh and visiting Bhutanese King Jigme Khesar Namgyel Wangchuck, who was on his first
foreign visit in December 2009, since his coronation in 2008.

India and Bhutan have decided to prepare detailed project reports for the Kuri Gongri, Chamkharchhu-1
and Kholongchhu hydro-power projects and Amochu reservoir project. The Kuri Gongri project is
proposed to generate 1,800-mw power, the Chamkharchhu-1 670 mw and the Kholongchhu 670 mw.
Further, the two sides have also agreed to conclude implementation agreements for Punatsangchhu-2
project . Bhutan uses 400 mw and has an installed capacity of 1,500 mw of power. The entire surplus
comes to India which is helping Bhutan increase its capacity to 10,000 mw till 2020.

Apart from the MoUs on the hydro-power projects, the two sides also signed eight other agreements in
areas ranging from agriculture to health to civil aviation. The two sides also signed an agreement to set
up the Bhutan Institute of Medical Sciences in Thimphu and an agreement on an IT project, which plans
to make nearly half of Bhutan’s population e-literate.

10. Visit of Japanese Prime Minister

Prime Minister Yokio Hatoyama of Japan visited New Delhi in end-December 2009. During the high-level
talks, Japan urged India to sign the Comprehensive Test Ban Treaty (CTBT), but Prime Minister
Manmohan Singh put the onus for its ratification on China and the US. The issues of nuclear
disarmament and non-proliferation were discussed with both sides agreeing to the need for an early
start to the Fissile Material Cut-off Treaty negotiations. But on the issue of the non-proliferation treaty
both sides agreed that there was a difference of perception. Mr Singh reiterated that India is “deeply
interested in working with Japan and other like-minded countries to promote the cause of universal,
verifiable and non-discriminatory disarmament”. Even though Mr Singh highlighted India’s “impeccable
record” in non-proliferation and explained the country’s nuclear history, the Japanese Prime Minister
remained non-committal on civilian nuclear cooperation between India and Japan. Keeping the matter
pending, Mr Hatoyama said nuclear energy would be an item on the agenda for future discussions.

In the absence of an agreement on nuclear cooperation, the Japanese Prime Minister, however,
indicated that Japan is willing to relax restrictions on hi-tech trade and said there was a “positive
conclusion” on the issue of hi-tech trade. During talks, Mr Singh assured his Japanese counterpart that
Indian companies would not divert hi-tech imports from Japan for weapon’s purposes or to a third
country and sought liberalisation in this area. The economic partnership, however, remained the
“bedrock” of relationship, with both sides discussing a range of economic issues, including Japanese
investment and trade agreement. The two Prime Ministers have decided to push their negotiators to
expedite negotiations into the comprehensive economic partnership agreement. Mr Hatoyama pointed
out that bilateral trade between India and Japan is far less than that between Japan and China. Mr
Singh, however, said he had conveyed to the Japanese Prime Minister that India welcomes Japanese
investments into the country and pointed out that India’s growing economy offers huge opportunities
for Japan. The two sides also discussed the liberalisation of visa regime on both sides, with the Japanese
Prime Minister raising the issue saying that it was important as there were several major projects being
undertaken in India for the benefit of both countries. The two leaders also vowed to push for an early
conclusion of an economic partnership agreement to scale up trade and investment and cooperate on a
range of global issues, including the UN reforms, climate change and nuclear disarmament

India, Japan sign agreements on Rs 360-kcr DMIC project: India and Japan signed two agreements on
December 28, 2009 for implementing the ambitious Rs 3,60,000-crore Delhi-Mumbai Industrial Corridor
(DMIC) project that seeks to create integrated investment regions and industrial areas across six States.
The agreements include collaborating in the development of eco-cities, that is cities that are
environmentally and ecologically sustainable, along the corridor and setting up of a project
development fund to undertake activities like master planning and feasibility studies, preparing project
reports and obtaining approvals and bid process management for projects.

The Delhi-Mumbai Industrial Corridor Development Cooperation has signed the memorandum of
understanding with Jetro (in cooperation with Japan Bank for International Cooperation) for facilitating
collaboration between Japanese and Indian companies from environment-related sectors and providing
expertise in development and promotion of DMIC projects. The DMIC project development fund will be
set up with equal contribution from the governments of India and Japan. India has approved a grant of
Rs 330 crore (approximately $75 million) as the country’s contribution. The Japanese component of $75
million is being provided in the form of untied loan from JBIC.

11. Visit of Prime Minister Manmohan Singh to Russia

On December 7, 2009, during the visit of Prime Minister Manmohan singh to Moscow, relations
between India and Russia experienced more than a thaw on a range of interests encompassing N-trade,
shared Af-Pak perceptions and a plan to boost commerce to $20 billion by 2015. The discussions
between Prime Minister Manmohan Singh and Russian President Dmitri Medvedev yielded a rich cache
of agreements which included establishing a credit line of $100 million and a nuclear agreement that
allows India to reprocess fuel and virtually guarantees unhindered supply of nuclear fuel. Prime Minister
Manmohan Singh, after signing a crucial nuclear deal with Russia, said there would be an addition to the
two reactors being developed at Kudankulam in Tamil Nadu, while a site was being considered at
Haripur in West Bengal. Meanwhile, Russian President Medvedev stressed that Moscow did not support
any addition to the club of N-weapon States, which has implications on the country’s position in Iran,
and that N-weapons should not be "held hostage to terror", in a fairly direct reference to Pakistan.

Medvedev also made it clear that the G-8 statement at La Aquila did not impact on ENR (enrichment
and nuclear reprocessing) related agreements with India.

The continuing global slowdown and a decline in oil prices have made Russia more open to reaching out
to an old friend while the change of guard in US has seen India reaffirm ties, with Singh describing Russia
as a “global world power”. The two nations also share concerns over the rise of China.
With the meeting with Medvedev having set the mood, Manmohan Singh’s interaction with Prime
Minister Putin, still very much the “real” power centre in Moscow, saw a detailed exchange of
assessments. The two sides signed a total of six agreements but the Russians were clearly pleased with
the civil nuclear cooperation pact. The reactors, which cost about $1.5 billion each, will certainly be
welcome for a Russian economy that is simply not doing too well. India and Russia signed a path-
breaking broad-based agreement in civil nuclear field that will ensure transfer of technology and
uninterrupted uranium fuel supplies to its nuclear reactors and inked three pacts in the defence sector.

The Indo-Russian pact on atomic cooperation is a significant document and goes much further than the
123 agreement between India and the US. The pact also has provisions for transfer of enrichment and
nuclear technology, which is denied in the 123 agreement with the US. The two countries also reviewed
their cooperation in the United Nations and in multilateral fora and their role towards successful
conclusion of the Copenhagen Summit on climate change.

12. Ranganath Commission report on Religious and Linguistic Minorities

Two years after it was submitted to the government, report of the National Commission on Religious
and Linguistic Minorities is ready to be tabled in the Parliament. Constituted to assess the status of
minorities and suggest ways of improving their lot, the Commission, headed by Justice Ranganath Misra,
has recommended 15 per cent reservation in non-minority educational institutions and Central and
State government jobs for all religious and linguistic minorities. Out of the 15 per cent earmarked seats
in education institutions, Muslims should be given 10 per cent reservation (commensurate with their 73
per cent share in the total minority population in India) and the remaining 5 per cent to other minorities,
states the report. It adds that if Muslim candidates are not available to fill 10 per cent seats, the
remaining vacancies should go to other minorities and in “no case to the majority community.”On
employment front, the report argues that since the minorities, especially Muslims, are much under-
represented in government jobs, “we recommend they should be regarded as backward in this respect
within the meaning of that term as used in Article 16 (4) of the Constitution.” Accordingly, the
recommendation is to reserve 15 per cent of posts in all cadres and grades under the Central and State
governments for the religious and linguistic minorities. Of this, 10 per cent quota is recommended for
Muslims and the rest for other minorities. The report, co-authored by Tahir Mahmood, also
recommends the inclusion of Muslim and Christian Dalits in SC list, something the National Commission
for Minorities has also been supporting.

13. ULFA chief held in Bangladesh

In the most serious setback that has been suffered by the banned United Liberation Front of Assam
(ULFA) in recent times, its chairman Arabinda Rajkhowa was arrested by Bangladeshi agencies
somewhere near Dhaka in Bangladesh on December 2, 2009. The arrest which came close on the heels
of November 5 arrest of another two top leaders of the outfit, Sashadhar Choudhury and Chitrabon
Hazarika, in Dhaka indicated that the outfit’s sanctuary in Bangladesh was in serious danger.
With Rajkhowa’s arrest, only two major leaders of the outfit, self-styled commander-in-chief Paresh
Barua and deputy commander in chief Raju Baruah, are now at large. Another top leader, general
secretary Anup Chetia, alias Golap Barua, is lodged in a jail in Bangladesh. Arabinda Rajkhowa (53)
whose real name is Rajib Rajkonwar, has been the chairman of the ULFA since early 1980s and was one
of the founder leaders of the ULFA. He studied up to Class XII, and is the second of three sons of
freedom fighter Umakanta Rajkonwar who passed away three years ago at the age of 101 years. He hails
from Lakwa in Sivasagar district of Upper Assam. Rajkhowa also has an Interpol red corner notice against
him, issued on June 4, 1997 for his involvement in several heinous crimes. Out of India since 1992,
Rajkhowa is known to keep travelling to Myanmar, Bhutan, Thailand, Bhutan, Pakistan and other
countries on fake identity and fake passports. He was trained under Kachin Independence Army in
Myanmar and National Socialist Council of Nagaland (NSCN). He can handle all types of arms. He is also
the vice-president of the Indo-Burma Revolutionary Front (IBRF).

CURRENT INTERNATIONAL AFFAIRS

PAKISTAN

1. Law catches up with leadership

On December 16, 2009, the Supreme Court of Pakistan declared the National Reconciliation Order (NRO)
null and void. Lawyers termed the decision as a landmark judgement and demanded that President Asif
Ali Zardari step down from his post. The Court ruled that the decree protecting Zardari and his allies
against charges of corruption was illegal and against the constitution. The Supreme Court further ruled
that all cases under investigation or pending enquiries and which had either been withdrawn or where
the investigations or enquiries had been terminated on account of the NRO shall also stand revived and
the relevant and competent authorities shall proceed in the matter in accordance with law.The NRO,
issued by former President Pervez Musharraf, had scrapped all corruption cases against politicians and
bureaucrats filed between January 1986 and October 1999, on the grounds that they may have been
politically motivated. The ordinance had allowed Benazir Bhutto and her husband Zardari to return to
Pakistan. In the first fallout of the Supreme Court ruling arrest warrants were issued against Pakistan
Interior Minister Rehman Malik and Defence Minister Chaudhry Ahmed Mukhtar on December 18, 2009.
Both were also barred from going abroad on an official visit. The National Accountability Bureau,
Pakistan’s main anti-corruption agency, also banned 250 other officials from going abroad following the
order.

INTERNATIONAL ECONOMY

2. Japan unveils new $81 billion stimulus plan

Japan’s government has unveiled $81 billion of new stimulus spending to keep the world’s second-
biggest economy from lurching back into recession. Despite shrinking tax revenue, Prime Minister Yukio
Hatoyama and his Cabinet agreed to 7.2 trillion yen ($80.6 billion) in new spending after days of
negotiations with coalition partners. The largesse underlines that the world’s biggest economies are still
too fragile to get by without government life support even as a recovery from the global recession takes
shape. In export-reliant Asia that’s partly because demand from Europe and the US is improving only
tepidly and efforts to reduce dependence on trade by boosting consumer spending will take several
years to fully bear fruit. Japan also faces falling prices while brand-name exporters like Toyota Motor
and Sony are losing record amounts of money as a galloping yen adds to their woes.

3. A face-saver in Copenhagen

The Copenhagen Accord, the first global agreement of the 21st century to comprehensively influence
the flow and share of natural resources, was agreed upon by 26 most influential countries in the wee
hours of December 19, 2009, in the capital of Denmark. The US led the pack of architects with the BASIC
four—China, India, Brazil and South Africa (in that order)—working as sometimes reluctant and
sometimes willing, but always key partners in framing the agreement. The accord demands that increase
in global temperatures be kept below 2 degrees on the basis of equity. It requires global emissions as
well as all national emissions to peak at a certain time but is mindful of concerns of economic
development. It asks industrialized countries, except the US, to take emission cuts in future, but not
necessarily under the Kyoto Protocol. It lays out up to $30 billion of quick-start finance and $100 billion
starting 2020, using all the routes of transfer possible. It requires mitigation actions from developing
countries for the first time to be listed in an international agreement. The rules of multilateral
engagement got re-written as new alignments created a coterie of the powerful that brokered deals in
closed rooms: each working at the end to preserve, if not improve its immediate economic status.

The pact they forged did cause heartburn as less powerful economies felt left out. Tuvalu and Sudan
said it was too weak, while Venezuela and Bolivia were upset because it had not been negotiated in the
open by all the 192 countries attending the UN Framework Convention on Climate Change (UNFCCC)
conference. The low-ambition deal was seen as a triumph of the US which defied estimates to influence
the outcome. But the negotiations also saw the Chinese leveraging their clout in the resource-rich
African continent, at a multilateral forum. For India though, the Accord came out of hard bargaining
lasting almost 20 hours among Heads of governments of some of the most influential countries in the
world. At the end of the day, when the battle was over, India appeared to have ceded ground on some
issues but blocked intrusion on other red lines. With stakes too high and the rich countries making
abjectly clear that they were not playing to the rules, but to change the rules altogether, the four
emerging economies decided to instead scratch up a low-ambition deal—a pact that would lower the
pressure on them by lowering the demands off the rich countries in parallel. Finally the Copenhagen
Accord take a morphed form of the US-backed schedules approach of ‘pledge and review’. The
Copenhagen Accord is not what the US or Europe would have wanted it to be, but it still contains some
elements India would have to, at best, fight to defend again in coming years or those that could be titled
a lost battle by the end of the talks. India, along with the other three emerging countries, fought hard
and won the battle to retain the reference principle of common but differentiated responsibility which
creates the firewall between the commitments of the rich countries and the actions of rest. India was
also able to wrest the creation of a green climate fund as well as fight back the attempt to force
emission cuts through the back-door.
But fighting a defensive battle, evidently wanting not to be labelled obstructionist by the US, India, along
with the other three partners loosened up its stance on some key issues. This loosening of stance may
not hit home immediately but it left the window open for growing inequitable burden falling on India’s
head to prevent climate change.

Major Highlights

I. The final draft after the Copenhagen summit has agreed to cuts in emissions and hold increase
in global temp below 2°C.
II. A proposal attached to the accord calls for a legally binding treaty by the end-2010.
III. Developed countries to provide adequate financial resources and technology to support
developing countries. A goal of mobilizing $100 billion a year by 2020 to address the needs of
developing countries has been set.
IV. Details of mitigation plans are included in separate annexure, one for developed countries and
one for voluntary pledges from developing countries. These are not binding, and describe the
current status of pledges—ranging from ‘under consideration’ for the United States to ‘adopted
by legislation’ for the European Union.
V. Emerging economies have been asked to monitor their efforts and report the results to the
United Nations every two years, with some international checks to meet transparency concerns
of West but ‘ensure that national sovereignty is respected’.
VI. The accord agrees to provide positive incentives to fund afforestation with financial resources
from developed world
VII. Carbon Markets are mentioned in the accord, but not in detail. The deal promises to pursue
various approaches, including opportunities to use markets to enhance the cost-effectiveness
and promote mitigations actions.

4. US takes giant leap on climate

The US Environmental Protection Agency has cleared the way for regulation of greenhouse gases
without any new laws being passed by Congress, reflecting President Barack Obama’s commitment to
act on climate change. The agency can now begin to make rules to regulate emissions from vehicle
tailpipes, power utilities and heavy industry under existing laws. The EPA ruling applies to six gases
scientists say contribute to global warming, including the main one, carbon dioxide. The UN climate
summit finally passed the Copenhagen accord Saturday after two days of intense negotiations and back-
room manoeuvres. The accord, proposed by India and four other countries, is now “operational”, a
relieved UN chief, Ban Ki-Moon, said. The accord that is meant to be a first step towards fighting the
climate change that is affecting millions worldwide was still held up for hours by four countries.
INTERNATIONAL RELATIONS

5. Siberia pipeline to reach APAC markets

Russian Prime Minister Vladimir Putin inaugurated the East-Siberia-Pacific Ocean oil pipeline on
December 28, 2009, which will enable Moscow to enter markets in Asia- Pacific region and reduce
dependency on European customers. The project is designed to pump up to 1.6 million barrels (220,000
tonnes) of crude per day from Siberia to Russia’s far east and then on to China and the Asia-Pacific
region. The project’s first leg envisages the construction of a 2,757-kilometre section with annual
capacity of 220.5 million barrels of crude. It will link Taishet, in East Siberia’s Irkutsk Region, to
Skovorodino, in the Amur Region, in Russia’s far east. The second stretch will run 2,100 kilometres from
Skovorodino to the Pacific Ocean. Currently the crude beyond Skovorodino goes by rail to China and the
Pacific coast.

6. India moots trans-SAARC container train

India has floated a concept paper among the SAARC countries to start a container train on a pilot basis,
running from Bangladesh to Pakistan via India and Nepal, in a bid to give a big boost intra-regional trade.
The possible corridor for running the train is from Chittagong Port in Bangladesh to Katihar in India,
Birgunj in Nepal and to Lahore in Pakistan. The proposal being considered could unify the entire region
and will lead to a seamless, border-less trade. At present, India operates one passenger train each to
Pakistan and Bangladesh for the benefit of the citizens on the either side of the border. While the train
to Pakistan operates between Delhi and Lahore, the other to Bangladesh operates between Kolkata and
Dhaka.

INTERNATIONAL TERRORISM

7. FBI indicts Headley for 26/11

David Coleman Headley aka Daood Gilani, has been formally charged for conspiracy in the 26/11 terror
attacks in Mumbai in 2008. After an intensive probe, the FBI has said that Headley delivered, placed,
discharged and detonated explosives and other lethal devices in, into, and against places of public use in
India.

The FBI has indicted Headley on six counts. Significantly, the FBI has also formally charged a retired
Major of the Pakistan army, Abdur Rehman Hashim Syed, for the plot against a Danish newspaper that
Headley wanted to attack for the publication of cartoons of Prophet Mohammad. Indian officials said
Rehman was closely linked to the ISI. He has been arrested by Pakistan; if the charges are upheld during
the trial, it would be the first smoking gun that the ISI is involved in exporting terror.

8. New Af-Pak policy of USA

US President Barack Obama, who unveiled his administration’s Af-Pak policy on December 2, 2009,
ordered a surge of 30,000 US troops in Afghanistan and a “transfer of forces out” to begin in July, 2011.
The strategic and security communities are uneasy over the President’s withdrawal plans. While The
Washington Post called it a “surge, then leave” policy, security experts are of the view that withdrawal
decisions must be determined by the conditions on the ground and not by arbitrary deadlines. “The
Obama administration has no exit strategy, it has only exit timeline,” said Republican opponents. As the
speech clearly rejected the counter-insurgency principle of “clear, hold and build,” there are fears that
any setback would only invigorate the jihadist cause and put untenable pressure on Pakistan and India.
But President Obama appears to be keen on winding down the war when he enters the political build up
to the 2012 Presidential election.

In his address, President Obama described Pak-Afghan border as the epicentre of the violent extremism
practised by Al-Qaeda. “It is from here that we were attacked on 9/11, and it is from here that new
attacks are being plotted as I speak. “The people and governments of both Afghanistan and Pakistan are
endangered. And the stakes are even higher within a nuclear-armed Pakistan, because we know that Al
Qaeda and other extremists seek nuclear weapons, and we have every reason to believe that they
would use them.”

In his address, President Obama said the US will deny Al Qaeda a safe haven and will reverse the
Taliban’s momentum and crush its ability to overthrow the government. “We’re in Afghanistan to
prevent a cancer from once again spreading through that country. But this same cancer has also taken
root in the border region of Pakistan. That’s why we need a strategy that works on both sides of the
border,” he said justifying inclusion of Pakistan in his Afghan policy.

Stating that this was an international effort, President Obama sought the same war escalation measures
from his allies. “Some have already provided additional troops, and we are confident that there will be
further contributions in the days and weeks ahead. Our friends have fought and bled and died alongside
us in Afghanistan. Now, we must come together to end this war successfully. For what’s at stake is not
simply a test of NATO’s credibility; what’s at stake is the security of our allies, and the common security
of the world,” he said.

9. Scare aboard Delta Airliner

On December 27, 2009, US Federal officials brought criminal charges against a Nigerian man suspected
of trying to destroy a Northwest Airlines aircraft on December 25, 2009 as it approached the airport in
Detroit, Michigan. The US Department of Justice said that Umar Farouk Abdulmutallab, 23, had boarded
the plane in Amsterdam, Netherlands, and tried near the end of the nine-hour-flight to set off an
explosion using PETN, also known as pentaerythritol, a high explosive. Fellow passengers rushed to
subdue the terror suspect after they heard popping sounds and saw smoke and fire coming from
Abdulmutallab's seat. Even though the US authorities are yet to confirm the Yemen connection of the
23-year-old Nigerian man's plot to blow up a Detroit-bound airliner on Christmas Day, they see Umar
Farouk Abdulmutallab's account that Al-Qaida had supplied explosive powder to him in Yemen "highly
plausible." The suspect, reportedly, told US investigators that he had obtained explosive chemicals and a
syringe that were sewn into his underwear from a bomb expert in Yemen associated with Al-Qaida, as
part of a "mission to bring down a jet on US soil".
 10. London: Terror capital of the West?

Britain has now emerged as the "terror capital of the West" as whenever a major terrorist attack is
attempted, suspicion swings on this country, according to a media report.

“It comes as no surprise to learn that the Nigerian accused of blowing up the US airliner is said to have
been living here. We have become the number one source of terrorism in the Western world. We
shelter foreign jihadis, and even grow our own… For years now, Islamic extremists wanted on terror
charges in their own country have taken sanctuary in Britain… Our judges (not our politicians) say it
would be cruel to send them back to their own countries, in case they're tortured,” the 'News of the
World' quoted the Editor of Spectacle, Fraser Nelson, as saying.

Years ago, the CIA had a name for it: "Londonistan".

DO YOU KNOW

India’s total external debt rose by 8.1% to $242.8 billion at the end of September 2009, from
$224.6 billion at March-end 2009. The long-term debt increased by 10.6% to $200.4 billion,
while short-term debt declined by 2.3% to $42.4 billion. Most of the increase in the debt ($8.3
billion or 45.6%) is due to depreciation of dollar against major global currencies, out of
total increase of $18.2 billion, according to a Finance Ministry statement.

There are 12 full moons most years but every two or three years there is an extra full moon
which is called a “Blue moon”.

Year 2009 was designated by UN as the International Year of Astronomy, to commemorate

400 years of Galileo’s theory about the solar system.

Government of India has introduced for the first time ‘visa on arrival’ scheme for tourists
from five countries—Singapore, Finland, New Zealand, Luxembourg and Japan.

The Clementiny is the world’s smallest citrus fruit with size of 4 cm wide and 2 cm high.

East and South-East Asian countries have decided to launch a $120-billion emergency fund
in March, 2010, the first such alliance in the region, to shield themselves from a financial
crisis. Under the scheme— known as the Chiang Mai Initiative Multilateralization
(CMIM)—Japan, China, South Korea, Hong Kong and the 10 members of the Association of
Southeast Asian Nations (ASEAN) can swap their own currency into US dollars in case of a
liquidity crunch.

India’s share in the global flow of FDI almost doubled to 2.45% in 2008 compared to the
previous year, according to Union Commerce Minister Anand Sharma. Among developing
countries, India ranked fourth in terms of FDI inflows in 2008 as per figures published in
UNCTAD World Investment Report (WIR) 2009. During 2008-09, India attracted FDI
inflows worth $35.17 billion.

Financial Action Task Force (FATF) was founded by the G-7 countries in 1989 to develop
and promote national and international policies to combat money laundering and terror
financing. The membership of the FATF is limited to 35 countries at present. India has an
observer status. India is a member of the Asia-Pacific Group, a FATF-style regional body.
Membership of FATF will allow India easy access to real-time information on money
laundering and terror financing and help to raise the diplomatic pitch against perpetrators.
It will also make India more attractive in the eyes of global investors.

Every third Indian is living below poverty line, says an expert group headed by Suresh
Tendulkar, former chairman of PM’s Economic Advisory Council. The report puts the
incidence of poverty in India at a high 37% of population, 10 percentage points more than
estimated earlier. Among the States, Orissa and Bihar are at the bottom, while Nagaland,
Delhi and J&K have the least number of poor. As much as 41.8% of the rural population
survives on a monthly per-capita consumption expenditure of Rs 447, spending only so much
on bare necessities such as food, fuel, light, clothing and footwear. Among urban population,
25.7% are poor, who spend only Rs 578.8 on essential needs. The expert group was set up
following criticism of the existing official estimates of poverty released by the Planning
Commission in 2007.

India's Nobel Peace Prize winner Mother Teresa will be honoured on a US postage stamp on
her birth centenary. The postage stamp honouring Mother Teresa is scheduled to go on sale
on August 26, 2010, on the occasion of her 100th birthday.

With a sale of 107 million newspapers daily, India is the biggest newspaper market in the
world. Together with China and Japan, it accounts for over 60 per cent of the global
newspaper sales. Interestingly, the USA accounts for only 14 per cent of the total newspaper
sales. Globally, 1.9 billion people read newspaper every day, which is 34 per cent of the
world population, while 24 per cent use the Internet. The WAN-IFRA survey showed that
newspaper circulation grew, on a global scale, by 1.3 per cent in 2008 and almost 9 per cent
over five years. The data shows consistent newspaper growth in Africa, Asia and South
America, and a long-term slowdown in the US and European markets.