Saturday, February 26, 2011

Information Technology (Due Diligence observed by intermediaries guidelines) Rules, 2011

The draft "Information Technology (Due Diligence observed by intermediaries guidelines) Rules, 2011 circulated by the Ministry of Communications and Information Technology on February 10, 2011, address the issue of the liability of internet service providers (ISPs) and other intermediaries

 Following the 2008 amendments, Section 79 of the IT Act, 2000 provides that an intermediary (ISPs) will not be held liable for any third party information, data or communication link made available or hosted by him. However, this exemption will apply only if the following conditions are met.

First, the function of the intermediary must be limited to providing access to a communication system over which information made available by third parties is transmitted or temporarily stored or hosted. Second, the intermediary does not initiate the transmission, select the receiver or select/modify the information contained in the transmission. In other words, the ISP acts like a telephone company and not like a newspaper editor who can select or edit the information provided. The exemption will also not be applicable if the ISP has conspired, aided, abetted or induced the commission of the unlawful act; or upon receiving actual knowledge that any information, data or communication link residing in or connected to a computer resource controlled by the intermediary is being used to commit the unlawful act, the intermediary fails to expeditiously remove or disable access to that material. The last two conditions are similar to those imposed under the DMCA in the U.S.

Furthermore, in order to avail himself of the exemption under Section 79, the intermediary must "observe due diligence" while discharging his duties under the IT Act, 2000 and also observe other guidelines which the Central government may prescribe in this behalf. For the first time, since the 2008 amendments came into force, on February 10, 2011, the Ministry of Communications and Information Technology circulated draft rules regarding due diligence by intermediaries (the "Draft Rules").

Sub-rule (2) of the Draft Rules lists the types of infringing information which should not be transmitted by the intermediary, including information which is
1) abusive, blasphemous, obscene, vulgar etc., 
2) infringing of IPRs, 
3) sensitive personal information, and 
4) information which threatens the unity, security or sovereignty of India.

 However, sub-rule (2) then tries to add in the offences which are the instruments of modern cyber crime. The list includes any information which impersonates another person, that is, identity theft and deceiving or misleading the addressee about the origin of electronic messages more commonly known as phishing. However, this list comprising identity theft and phishing is entirely inadequate as these are only a few methods of modern cyber crime/war. The list ignores, for example, the installation of a program which allows an attacker to remotely control the targeted computer otherwise known as "BOTNETS." Another common tool of cyber crime is the use of a software program or a device designed to secretly monitor and log all keystrokes otherwise known as "keyloggers." However, neither the remote access of a computer nor the secret monitoring of a computer resource is mentioned in sub-rule (2).

The Draft Rules also introduce a definition of "cyber security incident" as any real or suspected adverse event in relation to cyber security that violates an explicitly or implicitly applicable security policy resulting in unauthorised access, denial of service or disruption, unauthorised use of a computer resource for processing or storage of information or changes to data, information without authorisation. In fact, the need to include the concepts of modern cyber crime and a definition as basic and critical as "cyber security incident" in Draft Rules on due diligence by intermediaries shows that there is a fundamental lacuna in the IT Act itself, namely, that it ignores the concepts of modern cyber war altogether and is limited to the outdated concerns of theft of software code through hacking.

The partial attempt to bring in the concepts of modern cyber crime under the purview of the IT Act distracts attention from what is perhaps the main objective of the Draft Rules, that is, to codify the government's position towards service providers such as BlackBerry, Google, Skype, and MSN Hotmail which has recently attracted much attention. Research in Motion (RIM), the Canadian company, which operates BlackBerry, provides its customers with their own encryption key and does not possess a master key. According to RIM, in its system, there is no "back door" through which either RIM or any third party can gain access to the key or the customer's data.

However, the Indian government was concerned that this level of encryption makes it impossible to monitor BlackBerry messages for national security purposes and that BlackBerrry's strong encryption technology could be used for terrorist or criminal activity. As per newspaper reports, on August 31, 2010, the Government of India accepted RIM's proposal for "lawful access by law enforcement agencies" of encrypted BlackBerry data. In December 2010, RIM reportedly provided the government a cloud computing-based system which would enable security agencies to lawfully intercept BlackBerry Messenger (BBM) messages in a comprehensible format but not BlackBerry Enterprise Service, that is, corporate emails.

The Draft Rules incorporate the government's stand vis-à-vis BlackBerry into law because they require an intermediary to provide information to government agencies, which are lawfully authorised for investigative, protective, cyber security or intelligence activity. In sum, the Draft Rules provide the key to the back door long sought after by the government and leave no doubt that security concerns will prevail in law over the interest in privacy through use of encryption by civil society.

BP-Reliance partnership

  • The BP-Reliance Industries (RIL) partnership announced on Monday is significant in many ways. Its very size makes it one of the largest foreign direct investments in the country and by far the largest in the hydrocarbon sector.
  • BP will initially invest $7.2 billion for a 30 per cent stake in each of the 23 blocks of oil and gas controlled by RIL. With performance-related payments of up to $1.8 billion and other investments by BP, the deal could be worth as much as $20 billion. 
  • BP will contribute to a better exploitation of the 23 blocks, only one of which is now in production. All of them lie offshore, mainly off India's east coast and at depths ranging from 400 metres to more than 3,000 metres. BP's proven expertise in deep water exploration, more than its ability to invest huge sums of money, has been the major attraction for RIL. 
  • The BP-RIL partnership also envisages a 50-50 joint venture for the outsourcing and marketing of gas in India. Clearly the focus of the new venture is on supplying the domestic market where natural gas counts for a small but growing share of energy consumption. Reliance, though a strong player in the upstream business, should still benefit from the partnership with BP.
  • For BP, the deal with RIL marks a new stage in its recovery from the Gulf of Mexico oil spill which cost it an estimated $20 billion to settle the clean up and related claims besides being an inestimably large public relations disaster. That, along with a belief that the epicentre of the natural gas industry — both production and consumption — is shifting to the emerging markets, has driven the company to conclude mega deals in these countries with significant domestic players. 
  • The BP-RIL deal closely follows a $16 billion share swap deal with Rosneft, a Russian government-owned company. The investment by BP is a reaffirmation by global investors of India's potential and capacity to grow at a fast pace. Deals such as this should help reverse the recent declining trend in foreign direct investment. India could do even better by infusing consistency and transparency in the regulatory process governing key sectors. Foreign investors are apt to read wrong signals from the stalling of the London-listed Vedanta's efforts to buy the Indian assets of Cairn Energy. Again, it was the opaque pricing policies relating to natural gas that was one of the key factors behind the well-publicised legal battle between the two Ambani brothers.

India- Uruguay Sign MOU for Cooperation in Renewable Energy

Ways and means to promote bilateral cooperation in the field of biomass, solar and wind energy discussed.

The bilateral trade between the two countries has grown from US$ 58 million in 2009 to US$ 83 million in 2010. Indian exports are worth US$ 69 million which includes chemicals, automobile parts, pharmaceuticals, garments and synthetic fibers and Indian imports are worth US$ 14 million which includes wool, leather and wood. 

How U.S. financial sanctions on Libya might work

The United States imposed sanctions on the Libyan government, targeting its longtime leader Muammar Gaddafi, his family and other senior officials.
Following are some questions and answers on how the United States imposes and enforces sanctions, and what legal authorities would be required.

CAN THE U.S. TREASURY FREEZE LIBYAN ASSETS?

Obama's executive order clears the way for the sanctions to be imposed. Various executive orders exist targeting governments that are accused of oppressing their people or that are seen as security threats to the United States, including Iran, Sudan, Zimbabwe and Myanmar. Other executive orders target behaviors such as financing of terrorism, proliferation of weapons of mass destruction or narcotics trafficking.

HOW CAN OBAMA IMPOSE AN EXECUTIVE ORDER?

Based on an assessment of the situation or threat, he has declared a "national emergency" under authorities granted by the National Emergencies Act and the International Emergency Economic Powers Act. This allows an executive order blocking transactions with targeted parties and freezing their assets.

In addition, if the U.N. Security Council were to issue a resolution ordering sanctions on a country, Obama could issue an executive order to implement those sanctions, allowing the Treasury to act.

HOW DO FINANCIAL SANCTIONS WORK?

Once an order is issued, the Treasury's Office of Foreign Assets Control identifies individuals, companies and other entities linked to the targeted regime or that show evidence of engaging in the targeted behaviors. It puts them on a list of "specially designated nationals," which blocks Americans from engaging in transactions with them. Assets they may have under U.S. jurisdiction are frozen. Financial institutions are notified to scrutinize transactions for possible links to the blacklisted individuals or entities. The aim is to deny them access to the international financial system.

HOW EFFECTIVE ARE FINANCIAL SANCTIONS

They have been effective in closing off access to the financial system for certain entities, such as accused terrorist financing networks, but it not clear whether they are effective in changing governments' policies or behavior.

In 2005, the blacklisting of Macau's Banco Delta Asia shut down North Korea's main conduit to the international financial system. Both U.S. and foreign banks declined transactions with the bank, and the action became a major issue in nuclear talks with Pyongyang.

The strengthening of sanctions against Iran last year over its nuclear and missile programs has hurt Iran's economy, cutting off access to imported materials. But there is little evidence it has had any effect on Tehran's nuclear program. Iran has also been adept at creating new shell companies to conceal transactions, Treasury officials say.

But others argue that U.S. sanctions on Libya helped push Gaddafi to renounce his country's programs to develop weapons of mass destruction and open Libyan territory to international weapons inspectors. Washington lifted those sanctions in 2004.

COULD THE U.S. GOVERNMENT SEIZE LIBYAN ASSETS IN COURT?

Yes. The U.S. Justice Department could go to federal court to try to seize any assets, such as money or property, that the government believes are the proceeds from alleged illegal activity. It can be a particularly lengthy process to seize assets, as it is subject to challenges by the owners and appeals. The process, known as civil asset forfeiture, can be undertaken if the funds from illicit activity overseas are found in the United States, either in bank accounts or in the form of property.

For example, the Justice Department has sought to seize two properties, including a luxury Manhattan apartment, that are believed to have ties to alleged corrupt activities by the former president of Taiwan and his family.

Phased opening of FDI in multi-brand retail favoured : Economic Survey

The Economic Survey 2010-11 has favoured phased opening of foreign direct investment (FDI) in multi-brand retail to address the concerns of consumers, farmers and declining FDI inflows.

According to the Survey, projects worth Rs. 24,143 crore are expected to be completed adding a capacity of 168.60 lakh sq. ft.

Globally, FDI in retail is permitted in countries such as Brazil, Argentina, Singapore, Indonesia, China and Thailand without any limit on equity participation, while Malaysia has equity caps.

India launches major study for valuation of its Natural Capital & Ecosystem - Green Domestic Product (GDP) to be calculated

The Ministry of Environment and Forests has initiated a major new programme to value the immense wealth of natural resources and biodiversity in India. Collaborating with The
Economics of Ecosystems and Biodiversity (TEEB) study, the Ministry has begun the process of valuating its natural capital and ecosystem services in terms of economic value.

What is TEEB 

TEEB is a study of The Economics of Ecosystems and Biodiversity established by the G8 and developing country environment ministers that studies the economics of biodiversity loss. By providing solutions to environmental degradation, TEEB aims to connect decision-makers in the fields of policy, environment conservation and  business.  It visualizes a new form of economy, which quantifies natural capital and thus makes the ecosystem the supplier of capital, and a new entity in public and private markets.

 TEEB proved that taking this 'natural capital' into account could help countries on a global level, as well as enhancing quality of life and boosting the economy at a local level.  The next logical step is for countries with an interest in utilizing the potential of their natural capital and 'ecosystem services' to conduct studies of their own natural resources and implement new policies that focus on their benefits and use.

 The Wealth of India's Natural Resources

 With only 2.4% of the worlds land area, India accounts for 7 to 8% of the worlds plant and animal species.  It is one of 18 megadiverse countries and contains three global biodiversity hotspots. India shows a high degree of endemism, which is why conserving its biodiversity is essential for the future.  As a developing country, our dependence on natural capital is more than higher-income countries. Transforming these resources into other forms of wealth is essential for our development, but it must be in a  sustainable manner to ensure continued growth and the survival of our resources. Our resources and ecosystem services are often undervalued, and we should tap their potential while they still exist. Studies show that a per capita increase in wealth is a result of an efficient use of produced and natural capital. It is with the twin aims of biodiversity conservation and economic growth that India TEEB is conceived.

Way forward 

The Taskforce will be responsible for the following steps:

• A survey of biodiversity and ecosystem services coming from various biomes to

the socio-economic groups that benefit from them, particularly in terms of

livelihoods, health, food, water and energy.

• A framework of what and how to value natural resources in India.

• Mapping ecosystem services and their values

• Calculating EASDP (Environmental Adjusted State Domestic Product) from

changes in forests, freshwater, agricultural land and carbon sequestration, (percapita Natural Capital) etc.

• This includes calculating 'Green Domestic Product'  and 'Green State Domestic

Product'

• Another GDP to be calculated is the 'GDP of Rural and Forest Dependant Poor"

• These will be expected to be recalculated on a bi-annual basis.



Within the pilot states, the Taskforce will be responsible for six steps:

• Identify specific ecological and economic problems in the state

• Specify the ecosystem services and natural capital that are relevant to state policy

• Select appropriate methods for disseminating information

• Identify and assess policy options

• Assess distributional impacts of policy options

• The capacity-building exercises for economic valuation of natural resources should

be at the most basic organizational level – the results of the valuation process

should be owned by local panchayats and block-level institutions.

Timeline

2012:

• The first phase of the five pilot states is expected to take two years and will be completed to present at the 11th Conference of Parties in 2012, which India will be hosting. In addition, we hope to compile enough successful case studies of local conservation to present at the conference.
• In addition, a model for calculating Green Domestic Product is also expected to be in place by the conference

 2013:

• The final India TEEB report should come out in December, 2013.

2015:

• A final calculation of Green Domestic Product and a framework for state governments to evaluate their own GDP on a bi-annual basis in the future 

Reform Agenda : Economic Survey 2010 - 11

The following reforms have been suggested by Economic Survey 2010-11 for overall growth of economy. 


Better convergence of the Schemes to avoid duplications and leakage and to ensure benefits reach to the targeted groups. 
• Private sector participation in social sectors, such as health and education in the form of public-social-private partnership could be one of the possible alternatives for supplementing the on-going efforts of the Government. 
• Huge capacity addition in infrastructure in a time bound manner. 
• Urgent need to streamline land acquisition and environment clearance for infrastructure projects. 
• Bringing parity between the compensation package admissible under the Land Acquisition Act, 1894 and that applicable to land acquisition under the National Highways Act, 1956. 
• A National Forest Land Bank, with clear paper work and titles to reduce approval time for forest clearance. 
• Investment in building managerial and technical capabilities of executing agencies at par with the private sector is crucial. 
• Second Green Revolution with technological break-through in agricultural sector. 
• Prioritisation of targeted development of rainfed area and effective marketing links be ensured for better returns to the farmers. 
• Further improvements in the Mahatma Gandhi National Rural Employment Guarantee Scheme suggested such as shifting to permanent asset building and infrastructure development activities, reducing transaction costs, better monitoring and extension of the scheme to urban areas. 
• Efficient taxation of goods and services by a new GST. 
• Need to explore avenues for increasing investment in infrastructure through a combination of power investment, PPPs and occasionally exclusive private investment wherever possible. 

Economic Survey 2010-11: Highlights

Following are the highlights of Economic Survey for the fiscal year 2010-11, presented in Parliament on Friday:

* Economy to grow at 8.6 per cent in 2010-11 and 9 per cent in the next fiscal.

* Gross Fiscal Deficit stands at 4.8 per cent of GDP, down from 6.3 per cent last year.

* Inflation expected to be 1.5 per cent higher than what it would be if the economy were not on growth path.

* Economy sees broad-based growth; rebound in farm and continued momentum in manufacturing, private services.

* Fundamentals strong with growing savings and investments, rapid rise in exports.

* Industrial output grows by 8.6 per cent; manufacturing sector registers 9.1 per cent.

* Exports in April-December 2010 up 29.5 per cent; imports up 19 per cent.

* Trade gap narrowed to $ 82.01 billion in April-December 2010.

* Food inflation, higher commodity prices and volatility in global commodity markets cause of concern.

* Inflation continues to be high; need to monitor emerging trends in inflation on a sequential monthly basis.

* To check food inflation, the government should improve delivery mechanisms by strengthening institutions and addressing corruption.

* Savings rate has gone up to 33.7 per cent, while the investment rate is up at 36.5 per cent of GDP.

* Rising food inflation underlines need for larger investment in farming, enroute to Second Green Revolution.

* Net bank credit grows by 59 per cent.

* Social programme spending stepped up by 5 percentage points of GDP over past 5 years.

* Production of foodgrains estimated at 232.1 mn tonnes.

* Forex Reserves estimated at $ 297.3 billion.

* Accelerated investments needed in infrastructure to address delays, cost overruns, regulatory impediments.

* Telecom sector did exceedingly well; role of services sector as the potential growth engine laudable.

* Policies needed to promote new areas such as accounting, legal, tourism, education, financial and other services.

* Economic growth to be faster than ever before in next two decades.

* Need for efficient taxation of goods and services by a new GST regime.

* Improve convergence of social and financial inclusion schemes to check unemployment, poverty and leakages.

* Reform university and higher education; correct demand supply mismatch in job market.

* Meet resource gap in higher education through public private partnership, with regulatory oversight.

Agriculture at ‘crossroads’: Economic Survey

Observing that Indian agriculture is at a "crossroads", the Economic Survey on Friday called for a Second Green Revolution with newer technological breakthroughs and higher investment in the sector, even while projecting 5.4 per cent farm growth this year.

The survey said the agriculture and allied sectors would register 5.4 per cent growth this fiscal due to a good monsoon, compared to a mere 0.4 per cent expansion last year.
But the sector needs to grow at 8.5 per cent next fiscal to achieve the targeted 4 per cent growth in the Eleventh Plan (2007-12).

Pointing out that the technological breakthroughs achieved in the 1960s are gradually waning and no big crop-tech has come up since then, the survey noted, "The need for a Second Green Revolution is being experienced more than ever before."

The survey outlined the special attention that needs to be given to increasing production of nutrition-rich crops like pulses, fruits and vegetables, which remained untouched in the first Green Revolution.

Consequently, it suggested that Indian agriculture should diversify from just crop farming to livestock, fisheries, poultry and horticulture, besides focusing on raising farm productivity with adequate focus on rain-fed areas.

The survey also felt that augmenting farm production still remains a challenge, with stagnation in crop acreage and yields, and prescribed "concerted and focused efforts" to overcome this challenge.

"A holistic approach, simultaneously working on agriculture research, development, dissemination of technology and provision of agricultural inputs and irrigation, would help achieve the critical levels of productivity needed," it said.

It noted that higher farm output is important not only for the country's food security, but also to sustain high growth.

Calling for higher public and private investment in the farm sector, the survey said, "The choice before the nation is clear -- to invest more in agriculture and allied sectors with the right strategies, policies and interventions. This is also a necessary condition for 'inclusive growth'"

Higher level of investments are required for increasing farm productivity and also create infrastructure for transport, storage and distribution of agricultural produce, it added.

"The relatively weak supply responses to price hikes in agriculture commodities, especially food articles, in the recent past brings back in to focus the central question of efficient supply chain management and need for sustained levels of growth in agriculture and allied sectors," it observed.

Can high Current account deficit be good?



The Prime Minister's Economic Advisory Council talks of stabilising the CAD at 2-2 .5% of GDP. But we think even 3% is entirely bearable for an economy growing at over 8%, with exports growing at over 30%, remittances bringing in 4% of GDP, and domestic savings hovering around 35%. 

These factors add up to a dynamic, sustainable macroeconomic situation, notwithstanding long-term worries about the fiscal deficit. FDI is more stable than portfolio investment, so we need a better investment climate to revive FDI, which has fallen this year. 

History shows that running a large current account deficit is dangerous if domestic savings are low and exports are sluggish (Greece, Portugal), or if countries borrow abroad for reckless lending at home (Ireland and Iceland in 2008, Thailand, Indonesia and Korea in 1997). In a crisis, short-term loans cannot be rolled over and hence suck out reserves. Lesson: India should focus on the composition of borrowings more than the current account deficit. 

Forget fears that hot money will rush in and out of the stock market. If FIIs attempt a mass exit from bourses, they will cause a price crash that imposes a huge exit penalty. Bonds too will fall in a panic, and anyway bond inflows are limited by RBI rules. 

Long-term loans are by definition not a short-term problem. History shows that the most lethal problem is short-term borrowing. Its share in India's external debt rose from 18.8% to 22.5% between March and September 2010. This is where the RBI needs to watch and exercise caution. A lot of corporate debt is used to finance foreign takeovers. This constitutes a liability for the country, whereas the assets lie abroad out of the RBI's control. 

The RBI needs to keep an eye on this too. Yet as of now the situation is well under control. A current account deficit of up to 3% of GDP will prove that India has more absorptive capacity than before, and be a sign of health rather than cause for panic. It is the build-up of short-term debt that the RBI and policymakers need to worry about.

Centre hikes election expenditure limit by 60%

  • The Central government has raised the election expenditure limit for both Parliamentary and Assembly constituencies by around 60 per cent with immediate effect. The spending limit for a Parliamentary constituency in major States, now stands at Rs. 40 lakh as against Rs. 25 lakh earlier. The limit for Assembly constituencies in the major States moves from Rs. 10 lakh to Rs. 16 lakh.
  • Poll expense limits are not uniform across the country and vary according to the size, demographics and other factors of the smaller States and Union Territories. Basically, the roughly 60 per cent hike has been applied to whatever were the existing limits in a State. The Union Territory of Puducherry, which also goes to the polls in the same period, will have limits of Rs. 33 lakh for a Parliamentary constituency and Rs. 8 lakh for an Assembly seat.

Highlights of Railway Budget 2011-12

  • No hike in passenger fare and freight rates.
  • Highest ever Plan outlay of Rs. 57, 630 crore proposed for Railways.
  • Rs. 9,583 crore provided for new lines.
  • 1300 km new lines, 867 km doubling of lines and 1017 km gauge conversion targeted in 2011-12.
  • 56 new Express Trains, 3 new Shatabdis and 9 Duronto trains to be introduced.
  • AC Double Decker services on Jaipur-Delhi and Ahmedabad-Mumbai routes.
  • New Super AC Class to be introduced.
  • A new portal for e-ticketing to be launched shortly. Booking charges will be cheaper with a charge of only Rs. 10 for AC classes and Rs.5 for others.
  • Pan-India multi-purpose smart card "Go India" to be introduced.
  • 236 more stations to be upgraded as Adarsh Stations.
  • 47 additional suburban services in Mumbai and 50 new suburban services proposed for Kolkata.
  • Two new passenger terminals in Kerala and one each in Uttar Pradesh and West Bengal proposed.
  • Feasibility study to raise speed of passenger trains to 160-200 kmph to be undertaken.
  • A special package of two new trains and two projects for the States managing trouble free run of trains through out the year.
  • Anti Collision Devise (ACD) sanctioned to cover 8 zonal railways.
  • GPS Based 'Fog Safe' Device to be deployed.
  • All unmanned level crossing upto 3000 to be eliminated.
  • All India Security Help line on a single number set up.
  • All state capitals in the North-East except Sikkim to be connected by Rail in next seven years.
  • A Bridge Factory in J & K and a state-of-art Institute for Tunnel and Bridge Engineering is proposed at Jammu.
  • A Diesel Locomotive Centre will be set-up in Manipur.
  • A Centre of Excellence in Software at Darjeeling proposed under the aegis of CRIS.
  • Rail Industrial Parks at Jellingham and New Bongaigaon proposed.
  • Additional mechanized laundry units to be set up at Nagpur, Chandhigarh and Bhopal.
  • 700 MW gas-based power plant to be set up at Thakurli in Maharashtra.
  • 18,000 Wagons to be procured during 2011-12.
  • A scheme for socially desirable projects, 'Pradhan Mantri Rail Vikas Yojana' with Non-lapsable fund proposed.
  • 10,000 shelter units proposed for track side dwellers in Mumbai, Sealdah, Siliguri, Tiruchirapalli on pilot basis.
  • Concession to physically handicapped persons to be extended on Rajdhani and Shatabdi trains.
  • Concession of 50% to press correspondents with family increased to twice a year.
  • Senior Citizens concession to be hiked from 30 % to 40 %.
  • Medical facilities extended to dependent parents of the Railway employees.
  • Scholarship for Girl child of Group-D railway employees increased to Rs.1200 per month.
  • 20 additional hostels for children of railway employees to be set up.
  • Recruitment for 1.75 lakh vacancies of Group 'C' and 'D' including to fill up backlog of SC/ST initiated, 16,000 ex-servicemen to be inducted by March 2011.
  • A separate sports cadre to be created.
  • 2011-12 declared 'Year of Green Energy' for Railways.
  • Freight loading of 993 MT and passenger growth of 6.4 % estimated for 2011-12.
  • Gross Traffic Receipts at Rs.1,06,239 crore, exceeding one lakh crore mark for the first time estimated.
  • Ordinary Working Expenses assessed at Rs. 73,650 crore.

Friday, February 25, 2011

Setting up of Neutrino Research Centre

  • The Government will establish The India-based Neutrino Observatory (INO) jointly by the Department of Atomic Energy and Department of Science and Technology. A site in Bodi West Hills near T. Pudukottai village of Theni district, Tamilnadu has been identified as a suitable location.
  • The project includes construction of a world-class underground laboratory under a rock cover of 1200 metre from all directions. The underground laboratory will be accessed by 7.5 metre wide tunnel of approximately 2 km in length. The primary goal of INO is to study neutrino properties. Determination of neutrino properties is one of the most significant open problems in physics today. Such studies will help us to understand the interactions among subatomic particles at a very small scale. In this underground laboratory, a massive 50 kton particle detector will be installed to study the cosmic ray produced neutrinos. 
  • In order to minimize the impact on the environment, howsoever small, it is proposed to setup an Environment Monitoring Cell to oversee the implementation of the environmental management plan of INO. Some of the measures that will be implemented are: (i) control blasting and use of new vehicles to reduce the noise level during construction phase; (ii) disposal of rock debris as and when generated; (iii) planting local species and greening; (iv) waste disposal and sanitation etc. 

National Broadband Plan- To connect 160 million homes by 2014

The salient features of the TRAI's recommendations on National Broadband Plan are:

  • A National Broadband Network will be established, which will be an open access optical fibre  network connecting all habitations with population of 500 and above.
  • This Network will be established in two phases.  The first phase covering all cities, urban areas and Gram Panchayats will be completed by the year 2012. Phase II will see the extension of the network of the network to all the habitations having a population more than 500, to be completed by the year 2013.
  • In order to establish this broadband network, National Optical Fibre Agency (NOFA) at the national level and State Optical Fibre Agency (SOFA) at the State level would be formed.  NOFA will establish the networks in all the 63 cities covered under Jawahar Lal Nehru Urban Renewal Mission (JNURM). All the SOFAs, under the overall guidance of NOFA will establish the networks and backhaul in the rural areas and in the urban areas other than those cities covered under Jawahar Lal Nehru Urban Renewal Mission (JNURM).
  • This network which is estimated to cost about Rs.60000 crore, is proposed to be financed by USO fund and the loan given/guaranteed by Central Government.

Project Arrow- Over 3000 Post Offices Computerized and Over 1000 Post Offices Modernised

  • The project has been launched with the objective of modernising departmental post offices across the country in a phased manner with an aim to make visible, tangible and noteworthy difference in post office operations. It aims at comprehensive improvement of the core operations of the post office as well as the ambience in which postal transactions are undertaken.
  •  The IT Modernization Project Phase II of India Post under XIth plan envisages computerization of all the non-computerized Post Offices in the country (Departmental single handed Post Offices) and all Extra departmental Post Offices phased over the financial years 2010-11, 2011-12 and 2012-13.

Review of the Economy 2010-11 - H I G H L I G H T S

  • Economy expected to grow at 8.6 per cent in 2010-11 and 9.0 % in 2011-12
  • Agriculture expected to grow at 5.4% in 2010-11 and 3.0% in 2011-12.
  • Industry expected to grow at 8.1% in 2010-11 and 9.2% in 2011-12.
  • Services expected to grow at 9.6% in 2010-11 and 10.3% in 2011-12.
  •  Slow recovery in global economic and financial situation.
  • Rising domestic savings and investment chief engines of growth
  • Investment rate expected to be 37.0% in 2010-11 and 37.5% in 2011-12.
  • Domestic savings rate expected to be over 34% in 2010-11 and 34.7% in 2011-12.
  • Current Account deficit estimated at 3.0% of GDP in 2010-11 and 2.8% of GDP in 2011-12
Capital Flows can be readily absorbed by financing needs of the high growth of the Indian Economy.

  • Against the level of $47.8 billion in 2009-10, the capital inflows projected to be $ 64.6 billion for 2010-11 and $76.0 billion for 2011-12.
  • Against accretion to reserves of $13.4 billion in 2009-10, projected to be $12.1 billion in 2010-11 and $20.2 billion in 2011-12.

Inflation rate projected at 7.0 % by March 2011

  •  The declining trend in food prices particularly that of the vegetables will result in lower food inflation.
  • Manufactured goods inflation has remained low. Considerable care from the policy side has however to be taken to ensure that the manufactured goods inflation remains below 5 per cent in 2011/12.
Monetary Policy to complete the process of exit and operate with bias toward tightening.

  • Liquidity conditions are taut enough for monetary policy signals to be appropriately transmitted to the financial sector.
  • Monetary and fiscal policies have to be appropriately tight to protect the economy from inflation.
  • Monetary policy has an important role to play even in situations where inflation is triggered by supply constraints.
Current year fiscal adjustment may not be a problem, the challenge is of adhering to the Finance Commission's targets with credible expenditure management.
  • Total Central revenues registering an increase of 62.9 per cent in (April –Dec) 2010-11 over the corresponding period last year.
  • Capital Expenditure registered a sharp increase of 64.6 per cent (April –Dec) in 2010-11.
  • Fiscal deficit outcome for 2010-11 could be marginally better than the budget estimates.
  • The consolidated fiscal deficit is likely to be 7.5 to 8 per cent of GDP for 2010-11. 
  • There is considerable urgency in the implementation of goods and services tax (GST).
  • Budgeted level of Fiscal Deficit and Revenue Deficit still beyond comfort zone.
 To sustain a growth rate of 9.0 per cent, steps required are:

  •  Containing inflation by focusing both on monetary and fiscal policies and supply side management.
  • The pace of infrastructure creation has to be stepped up with renewed focus on the power sector
  • Continue efforts to contain Current Account Deficit (CAD) at 2-2.5 per cent of GDP and in parallel encourage flow of external investments into the country.
  • Greater attention to agriculture including on seed development, management of water and soil fertility and improving delivery system.

National Green India Mission approved by the Prime Minister

  • The National Mission for a Green India has been approved by the Prime Minister's Council on Climate Change. The Mission is one of eight missions under India's National Action Plan on Climate Change (NAPCC). The Mission aims to increase the quantity and quality of 10 million ha. of forest area, achieving an annual CO2 sequestration of 50 to 60 million tonnes by 2020.
  • The Mission will also focus on improvement of ecosystem services, including biodiversity, hydrological services and carbon sequestration, and aim to increase forest-based livelihood incomes for 3 million forest dependent families. 
  • In terms of carbon sequestration, the mission aims to reach an annual CO2 sequestration of 50 to 60 million tonnes by 2020, which will increase the share of green house gas (GHG) emissions offset by India's forest and tree cover to around 6 percent as compared to 4.5 percent that would have been offset in the absence of the Mission.  
  • Several key innovations have been proposed in this  Mission that mark a major change in approach from the traditional focus of forestry programmes in the past: 
  1.  Focus on quality of forests: an emphasis on the density of forest cover. 
  2.  Emphasis on Ecosystem services:  non-carbon services like biodiversity, water and improved biomass are recognized as key benefits, along with carbon sequestration 

 Decentralization: 

At a local level, the Gram Sabha will be responsible for facilitating the Mission 

 Landscape-based approach: 
The Mission will tackle forest and non-forested areas at the same time, in areas of 5000 to 6000 hectares at a time. 

palliative

pal·li·a·tive
adj.
1. Tending or serving to palliate.
2. Relieving or soothing the symptoms of a disease or disorder without effecting a cure.

It is contended that the sale of government assets cannot solve fiscal problems of a structural kind, it can only be a palliative

pusillanimous

pu·sil·lan·i·mous
adj.
Lacking courage; cowardly.

One area in which 'small-ticket' reform has clearly been a blessing for the economy is disinvestment of public sector undertakings (PSUs). Successive governments were panned for being pusillanimous on privatisation

FDI in 2010 dips by 22 per cent to $ 21 bn

  • India received foreign direct investment (FDI) worth $ 21 billion (Rs. 96,104 crore) in the calendar year 2010, a decline of 22 per cent over the year ago period, a latest industry ministry data said.
  • The country had attracted FDI valued at $ 27 billion (Rs. 130,980 crore) in 2009.

According to experts, foreign investors are cautious due to the fragile global economic recovery specially in Europe.

Countries, including Mauritius, Singapore, the U.S., U.K., Netherlands, Japan, Germany and UAE are the major investors in India.

G-20 ministers reach compromise deal to correct economic flaws

  • After two days of hard bargain by their finance ministers, major economies faced with uneven recovery and downside risks reached a text on guidelines for removal of structural flaws in the global economy.
  • G20 finance ministers have reached a compromise deal to correct global economic imbalances and expressed concern over excessive commodity price volatility impacting the world food security, an issue pressed by India.
  • The finance ministers and central bank chiefs, who could not reach a broad consensus on framing rules for current account deficit and real exchange rate and reserves, said "our aim is to agree, by our next meeting in April," on a set of indicative guidelines to ensure orderly economic growth.
  • However, the document did not talk about an issue of much interest to India. New Delhi wanted that G20 should urge all jurisdictions to conclude Tax Information Exchange Agreements so that menace of black money in tax havens can be tackled.
  • This issue seems to have been put on back seat as a lot of time was spent on reaching an agreement with China, which was opposed to inclusion of foreign exchange reserves and its exchange rate among the guidelines. China is sitting on a $ 2.8 trillion forex reserves and is accused by the US of manipulating its currency yuan.
  • The ministers agreed on a plan to strengthen the international monetary system (IMS) with regard to disruptive capital flows and disorderly movement in exchange rates, a matter of great concern to India.
  • The document also expressed its worries on the impact of rising oil prices which have exceeded $ 100 per barrel.

The communique instead said that indicative guidelines, without targets will be used to assess:

i) Public debt and fiscal deficit; private savings and private debt 
ii) external imbalances composed of trade balance and net investment income flows and transfers, taking into due consideration of exchange rate, fiscal, monetary and other policies.

In the financial sector, the ministers committed themselves to "regulating and oversight of the shadow banking system to efficiently address the risks, notably of arbitrage associated with the shadow banking."

The shadow banking system or the shadow financial system consists of non-depository banks and other financial entities (investment banks, hedge funds, and money market funds).

Thursday, February 24, 2011

Jamia Millia declared minority institution

  • In a historic order, the National Commission for Minority Educational Institutions (NCMEI) on granted minority institution status to Jamia Milia Islamia University. This will allow Jamia Millia — started in 1920 and declared a Central University by an Act of Parliament in 1988 — to reserve up to 50 per cent seats for Muslims.
  • Grant of minority status would mean that Jamia Millia Islamia will no longer have to give reservation to Scheduled Castes and Scheduled Tribes students. The petition had been moved before the quasi-judicial body by Jamia Students' Union, Jamia Old Boys' Association, and Jamia Teachers' Association in 2006.
  • The Union Human Resource Development Ministry had opposed the move on the ground that a petition challenging the minority status of the Aligarh Muslim University was pending in the Supreme Court and its judgment would have a bearing on the Jamia case.
  • The order can only be challenged in the High Court through a writ petition or in the Supreme Court.


Section 2(o) of the Jamia Millia Islamia Act, 1988, acknowledges it in no uncertain terms that Jamia was founded by the leaders of the Khilafat movement.
It is well known that the Khilafat movement was spearheaded by Maulana Shaukat Ali and Maulana Mohd. Ali Jauhar, and that the Khilafat movement gave birth to the non-cooperation movement launched by Gandhiji.

On the minority status case of Aligarh Muslim University pending in the Supreme Court, it said: "It has to be borne in mind that according to Azeez Basha's case the Muhammedan Anglo-Indian College had lost its identity by its conversion into the AMU, which was established by the AMU Act,1920. In the instant case, the Jamia never lost its identity till enactment of the Act."

Security Council condemns Libya crackdown

  • The United Nations Security Council further isolated Libyan leader Muammar Qadhafi on Tuesday, condemning his regime's crackdown on anti-government protesters and demanding that violence against civilians end immediately.
  • A press statement agreed by all 15 members of the U.N.'s most powerful body expressed "grave concern" at the situation in Libya, "deplored the repression against peaceful demonstrators, and expressed deep regret at the deaths of hundreds of civilians."
  • The council called for an "immediate end to the violence and for steps to address the legitimate demands of the population, including through national dialogue."
  • It came hours after Mr. Qadhafi vowed in a television address to keep fighting to his "last drop of blood" and urged his supporters to take to the streets, setting the stage for even more deadly violence.
Libya gained independence as the Kingdom of Libya in 1951. Libya has been ruled from 1969 to the present by Muammar al-Gaddafi, who rose to power in a military coup. In February 2011 mass protests and demonstrations broke out across Libya against Gaddafi's government. The Libyan opposition is reported to be in control of several towns and cities in eastern Libya. As of 23 February 2011, it is reported that the Gaddafi government now only controls a few parts of Tripoli and the southern desert town of Sabha.

Monday, February 21, 2011

New CPI series to reflect prices at macro-level

  • India on Friday adopted the new Consumer Price Index (CPI) that will reflect the actual movement of prices at the micro-level. As per the new series, the CPI has increased to 106 in January from a base of 100 in 2010 (inflation of 6 per cent), but the government has chosen not to mention the inflation figure, pointing out that the exact level could be arrived only next year.
  • The initial data showed that retail inflation stood at 6 per cent in January this year. However, inflation, as measured by the Wholesale Price Index — which remains the top benchmark — stood at 8.23 per cent in January. India is one of the few countries in the world using the WPI as benchmark. Experts say the new CPI is likely to help policymakers like the Reserve Bank of India in better framing of decisions.
  • The consumer indices have been released for five major groups — food, beverages and tobacco; fuel and light; housing; clothing, bedding and footwear; and miscellaneous.
  • As per the new data, food, beverages and tobacco went up to 108 on a national basis in January, while fuel and light were at 106. Clothing, bedding and footwear in the month under review stood at 107 while housing remained constant at 100. The miscellaneous items went up by six points to 106.

Civil servants to get incentives on performance

  • The aim is to improve governance, increase efficiency, transparency and accountability
  • Six weeks or so from now, civil servants in Central ministries and departments that signed on to the Results Framework Document (RFD), initiated by the Cabinet Secretariat, will, for the first time, begin receiving performance-related incentives, government sources indicated. These annual performance-related incentives will, of course, depend on whether the concerned civil servants have scored well over 70 per cent in the evaluation scheme, and there could be as much as 40 per cent increase of the basic pay for the top scorers, it is learnt. However, the payments will not require any additional financial allocations as they will come out of the savings made by the ministry or department itself.
  • When the scheme starts rolling later this year, it will be 22 years after the Fourth Pay Commission first made such a promise. The reason why it was not possible to implement this before, government sources said, was because there was no way to measure performance before the RFD scheme was designed. The RFD initially met with a great deal of resistance from the civil service as it would entail listing goals, then working towards achieving them and at the end of the year quantifying how those goals had been achieved through a weighted system evolved by the ministry or department concerned. Finally, the secretary of that department will have to justify the evaluation before a panel of experts before it is finalised.
  • Interestingly, when the government launches the scheme in the coming financial year, officials of some key ministries will be excluded from the possible benefits, because they have not as yet signed on to the RFD. These include the Prime Minister's Office, the Ministries of Finance, Home, Defence and External Affairs, among others. Government sources said they hoped that once the incentives began to be paid, these ministries and departments too would sign up.
  • The RFD's objective is to improve governance, increase efficiency, transparency and accountability — especially the last two, given the spate of financial scandals in the government recently — and the Performance Management Division of the Cabinet Secretariat will write to all ministries and departments to list three potential areas of corruption in the schemes they implement or areas they work in, as well as identify the discretionary powers that are enjoyed by the Minister or secretary concerned.

Bangladesh makes notable growth in primary healthcare

  • Bangladesh has achieved the Millennium Development Goal (MDG) on maternal health.
  • Bangladesh focussed strongly on the disadvantaged section of society, particularly women, in the past three decades that led to employment, availability of micro-credit, education and overall empowerment. These were the building blocks of good health in the country," according to Timothy G. Evans, Dean of James P. Grant School of Public Health at the BRAC University in Dhaka.

LOW-COST INTERVENTIONS

Citing examples of low-cost effective interventions, Dr. Evans said oral rehydration therapy (ORT) was one such method that was promoted to prevent diarrhoea, which was a major cause of infant mortality. It was the group of non-governmental organisations under the BRAC that popularised the ORT with remarkable results.

Another challenge the country faced was improving the pre-natal and post-natal healthcare for women. This was done by entrusting the NGOs to get expectant mothers into the formal system of healthcare to ensure the safety of both the mother and the child. "The interventions proved extremely helpful and effective wherever healthcare was inaccessible or technology was not available," Dr. Evans said.

NGO health workers in Bangladesh worked almost on the same pattern as the Accredited Social Health Activists (ASHAs) under the National Rural Health Mission (NRHM). Dr. Evans said if implemented in right earnest, the NRHM could do wonders. But the results would be visible only after some years when the programme became fully operational and adequate funds and skilled health workers were available. "The NRHM will eventually reduce the burden on secondary and tertiary healthcare facilities."


Bangladesh was also working towards a universal health insurance scheme. "People in Bangladesh, just like Indians, spend a huge amount from their pockets on healthcare, which leaves people impoverished. Healthcare has to be funded publicly through taxation because it cannot be left to market forces that would make it further inaccessible to a majority of the poor population," he said.

India “wants” thousands of extra EU visas under trade deal

  • India is reported to be demanding thousands of extra visas for its workers under a multi-billion pound trade deal it is negotiating with the European Union (EU).
  • According to media reports, India wants up to 50,000 extra visas a year spread across EU's 27 member-States under the proposed India-EU free trade agreement with Britain said to be under pressure to cough up 20,000 of these.
  • The Sunday Telegraph claimed that India was "lobbying" for between 15,000 and 20,000 extra British, 7000 German and 3,000 French visas for its citizens.
  • "In return for the visas, the trade deal put forward by the Indian government is expected to be worth at least £4 billion a year to the EU. Britain is expected to win about half that trade, providing a significant boost to exports," the newspaper said.
  • If the deal went through, it would be the first time that any country would have access to a fixed number of British visas every year.

Govt sets up high-level panel to examine Lokpal Bill

  • Faced with a rash of scams, the government is going proactive on the Lokpal Bill and has set up a high-level panel to consider giving more teeth to the anti-graft mechanism.
  • The Committee of Secretaries on Lokpal Bill, headed by the Cabinet Secretary, met recently to consider suggestions to provide more teeth to the proposed legislation
  • Sources in the government said the meeting considered suggestions by private individuals and NGOs to make the mechanism more effective.
  • One of the criticisms is that the Lokpal will not have any power to either initiate action suo motu in any case or even receive complaints of corruption from general public. The public will make complaints to the Lok Sabha Speaker or Rajya Sabha Chairperson. Only those complaints forwarded by them would be investigated by the Lokpal. This, some feel, will severely restrict the functioning of the Lokpal.
  • Some NGOs have also objected to the restriction of the three-member panel of Lokpal to retired judges and want eminent people from other walks of life to be a part of the panel.

Vicious crackdown in Bahrain

  • Bahrain's sectarian divide deepened on Friday with a loyalist demonstration for the ruling Sunni royalty and vicious crackdown by the police on the majority Shia community demonstrating at the famous Pearl Roundabout, now a visible symbol of revolt in the shadow of Cairo's Tahrir Square.
  • Eyewitnesses said security forces on Friday fired at hundreds of mourners heading towards the Pearl Roundabout, sending them scurrying for cover. It is not clear whether live rounds were fired. A list of casualties has not emerged so far.
  • However, it is clear that the Bahraini government, does not want protesters to reoccupy Pearl Roundabout, preventing the structure from becoming the rallying point of a full blown pro-democracy movement.
  • Though tiny in size, Bahrain is a major factor in international geopolitics, being home to the American navy's fifth fleet, and on account of its proximity to the Shia-dominated oil-bearing eastern provinces of the kingdom of Saudi Arabia.
  • As protests intensified, Kuwait on Friday emerged, as the second frontier in the pro-democracy campaign in the Gulf.
  • At least five people, including a security officer, were injured, during clashes between Kuwaiti riot police and stateless Arabs, demanding rights.

India to resume rare earth exports after seven years

  • India is set to export about 6,000 tonnes of rare earth chloride to a Japanese company, marking its first entry into the rare earth exporters club, which is now totally dominated by China.
  • The decision to enter into such a partnership was taken during a summit meeting between Prime Minister Manmohan Singh and his Japanese counterpart, Naoto Kan, in Tokyo last year. Indian Rare Earths Limited, a public sector undertaking under the Nuclear Power Corporation of India Limited (NPCIL), will make the supplies of rare earth chloride to Toyota Tsusho.
  • The Indian move to enter the rare earth exports market comes at a time when China is cutting down export quotas to ensure that its industry moves up the value chain instead of simply selling raw material for value addition by other companies and countries. India had stopped producing rare earths for exports in 2004 but is now confident of exporting it at good prices due to firming up of prices in the international market.
  • India and Japan are now looking at the possibility of a joint venture between IREL and Toyota Tsusho though the issue of environmental clearances for the proposed plant in Orissa could be a major issue to be sorted out.
  • Is it a right move? While China itself is cutting down export quotas why should India step it up?

State Council of Educational Research & Training

  • The SCERTs are as an apex government organization at the state level. It is not an autonomous body. 
  • Its roles and functions are primarily concerned with ensuring quality in respect of planning, management, research. evaluation and training at the school level. with a view to effecting suitable changes in policy formulation and policy implementing strategies, the SCERT has been identified as a lead institution.
  •  The principal areas of its preoccupations center on the overall improvement of the policies and programmes of school education in general and the elementary education in particular.
  • objective of achieving universalization of elementary education and congruent with it the various action programmes become a significant and critical domain of the projects and activities of the SCERT. This goal is accomplished through its various organizational units. 
  • The State Council of Educational Research & Training, provides academic support to the District Primary Education Programme intended primarily to accelerate the processes of pedagogical renewal in the state. The thrust areas include (a) development of curriculum, review and revision of text books, (b) preparation of teachers support material e.g. teacher edition of textbooks, teacher guides, (c) capacity building at different levels, development of training packages for teachers, Para-teachers and ECCE functionaries and their training programme, and (d) assessment of learning levels of students for bench marking purpose.

Sunday, February 20, 2011

High Court can suo motu question sessions judge's unjustified order :SC

  • If a sessions judge passes an erroneous or patently unjustified order, the High Court concerned can suo motu question its correctness by an administrative decision, the Supreme Court has held.
  • A Bench of Justices J.M. Panchal and H.L. Gokhale was dismissing a special leave petition filed by a retired additional sessions judge against an Orissa High Court order, which rejected his contention that the High Court could not suo motu initiate action against him by an administrative decision for the discharge of his judicial duties.
  • R.S. Mishra, while being an additional sessions judge, discharged an accused in a criminal case for an offence of murder under Section 302 of the Indian Penal Code. Instead, he was tried for a lesser offence under Section 304 (culpable homicide not amounting to murder) and awarded five-year imprisonment. A judge of the High Court, during an inspection, found out this erroneous order, but the accused had completed his term by then.
  • Therefore, the judge made certain observations against Mr. Mishra for not framing the charges under Section 302, though the material on record warranted it. As he was not considered for the selection grade, Mr. Mishra took voluntary retirement and challenged the order, pleading for expunction of the remarks. The High Court rejected his petition.
  • Dismissing the appeal against this order, the Supreme Court said: "In the instant case, a young person had been killed. It was not a case of grave and sudden provocation. The material on record showed that there was an injured eyewitness, and there was the supporting medical report. The material on record could not be said to be self-contradictory or intrinsically unreliable. Thus, there was a prima facie case to frame the charge under Section 302 of the IPC. The reason given for dropping the charge under Section 302 was totally inadequate and untenable, and showed non-application of mind by the appellant to the statements in the charge sheet and the medical record."

India and Malaysia Signs CECA - Bilateral Trade to Touch US $ 15 Billion by 2015

  • The India-Malaysia CECA is a comprehensive and ambitious agreement that envisages liberal trade in goods and services and a stable and competitive investment regime to promote foreign investment between the two countries. 
  • The goods package under the CECA takes the tariff liberalization beyond the India-ASEAN FTA commitments on items of mutual interest for both the countries. Under the agreement, India will get market access in the Malaysian market for goods including fruits such as mangoes, banana and guava, basmati rice, two wheelers and cotton garments. At the same time, protection continues to be provided for the sensitive sectors. Under the services agreement, India and Malaysia have provided commercially meaningful commitments in sectors and modes of interest to each other which should result in enhanced services trade. Sectors such as accounting and auditing, architecture, urban planning, engineering services, medical and dental, IT & ITES, Management Consulting Services etc. would get Malaysian market access.
  • Malaysia has offered comparatively higher level of FDI in key sectors of interest to India such as construction services (51%), computer and related services (100%), management and consultancy services (100%). This is a breakthrough in investments, given that Malaysia has a Bhoomiputra policy which mandates 30% equity participation by local companies. 
  • Malaysia is the 3rd largest trading partner of India amongst the ASEAN (Association of South East Asian Nations) countries.
  •  India-Malaysia trade increased from US $ 3.52 billion to US $ 9.03 billion between 2005 and 2010 after reaching a peak of US $ 10.65 billion in 2008.

Friday, February 18, 2011

Nandan Nilekani to head the task force on direct subsidies

  • In a bid to check wasteful fuel and fertiliser subsidy and reach it to the intended beneficiaries, the government has set up a task force to  suggest a suitable mechanism of direct transfer of subsidy to the consumers. 
  • The task force will be headed by Nandan Nilekani, Chairman, Unique  Identification Authority of India (UIDAI) and has been asked to submit  an interim report within four months. Based on the interim recommendations, a six month pilot scheme will be run and the learnings  from that will be go into the final report. 
  • The task force will design IT systems, align it with the UID numbers, and  also suggest changes in the administration and supply chain management.

India set to gain freer access to the services domain in Malaysia

  • Malaysia is likely to allow equity holdings from India, ranging from 49 to 100 per cent, in 91 sub-sectors of the services domain.
  • Under the India-Malaysia Comprehensive Economic Cooperation Agreement (CECA), ready for signature on Friday (February 18), New Delhi has agreed to make a reciprocal gesture to Malaysia in 84 sub-sectors under the rubric of services. The CECA, which took just about a year to finalise, will be signed by Commerce and Industry Minister Anand Sharma and his Malaysian counterpart in Putrajaya, administrative capital outside Kuala Lumpur.
  • The CECA, which would come into effect on July 1 upon being signed on Friday, would cover a wide spectrum of services, including those of a highly technical nature. "It is still early days for Malaysia" in the services domain, compared to India, but 'an opportunity' was being provided 'to review and make the deal better' for both sides.

India-Japan Sign CEPA -Bilateral trade to Touch US $ 25 Billion by 2014

  • This Agreement is the most ambitious agreement signed by India so far and covers trade in goods, services and investment under its ambit. This Agreement follows from the commitment of the two Prime Ministers in October, 2010. India stands to gain significantly through this Agreement and 90% of tariff lines are covered while Japan has covered 5% more lines than India. 
  • The Agreement has ensured that the sensitive sectors for India are fully protected including agriculture, fruits, spices, wheat, basmati rice, edible oils, wines and spirits and also certain categories of industrial products such as auto and auto parts. 
  • The Agreement will ensure access to a highly developed Japanese market for the pharmaceutical sector and for the first time ever Japan has committed to give the same treatment for Indian generics as their domestic industry. Apart from this, Indian agricultural produce including instant tea, seafood will find their way in the Japanese market. The textile products including readymade garments stand to gain significantly in terms of market access. The Japanese side have also lowered their tariffs for petrochemicals and chemical products, jewellery and cement. 
  • In the services sector India has obtained considerable concessions including commitments for providing greater access for contractual suppliers, professionals such as accountants, researchers, tourist guides and management consultants who will now be able to provide their services in Japan. Japan has also committed to cover not only computer engineers but whole range of engineering services such as mechanical, electrical, construction, industrial, design engineers and project management specialists. For the first time ever, Japan has agreed to grant additional category of instructors for yoga practitioners, classical musical and dance practitioners, chefs and English language teachers. 
  • The Agreement also envisages the conclusion of a social security agreement within three years and the negotiations have commenced in Jan, 2011. The negotiations are also on for creating greater openings for Indian nurses and care givers. For bilateral investment, India has committed to the current national policy on foreign investment and this signals the greater participation of Japanese investors into Indian economy. Similarly the Agreement also covers intellectual property rights for the first time and the parameters of our commitments on these are circumscribed by national legislation and agreement in trips. 

Free education is part of right to life: court

  • Providing free and compulsory education is intended to allow all children in the age group 6-14 live with dignity, which is a facet of "right to life' under Article 21 of the Constitution, the Supreme Court said
  • A three-judge Bench of Chief Justice S.H. Kapadia and Justices K.S. Radhakrishnan and Swatanter Kumar was hearing arguments on petitions challenging the validity of the Right to Education Act, under which every child aged 6-14 shall have free and compulsory education in a neighbourhood school till the completion of elementary education.
  • Senior counsel Vikas Singh argued that the Act directing schools to provide free and compulsory education to 25 per cent students violated the petitioners' fundamental right to establish and administer the educational institution. The Act was violative of the fundamental right of private, unaided schools enshrined in Article 19(1)(g) — right to profession.
  • The CJI told counsel that the right to education should not be read in isolation; it should be tested on the touchstone of Articles 14 (right to equality), 19 (1) (g) and 21.
  • When counsel argued that unreasonable restrictions had been imposed on educational institutions, the CJI said, "What we are concerned [with] here is egalitarian equality and not formal equality."
  • When Justice Kapadia asked whether the legislature could restrict the age to a particular group, counsel said it had such a power. The CJI then pointed out that similarly the legislature in its wisdom had carved out a particular class of disadvantaged people to provide free elementary education. "Can we not say that this is a reasonable classification within Article 14 itself?"
  • The 'Right to life' had undergone a sea change; it would include the right to education and the right to proper health care and "when you test the legality of the law, you have to test the inter-relationships with reference to the Directive Principles of State Policy also. If the object of the Act was to provide inter-generational equality, it would come under right to life," the CJI said.
  • Justice Kapadia further said: "When the state says that by providing free elementary education we want every child to live with dignity, can you say that access to education is an unreasonable restriction imposed by the state."

Japan to extend Rs. 2,557-crore aid to India

  • Japan is to extend an aid of Rs.2,557 crore (Yen 46.401 billion) to India for three projects through its Overseas Development Assistance (ODA) window. The projects pertain to cleaning the Yamuna in the national capital, crop diversification promotion in Himachal Pradesh and biodiversity conservation and greening in Tamil Nadu.
  • Under the Yamuna action plan project, the aid is to be utilised to improve the water quality of by augmenting sewage treatment capacity through renovation, rehabilitation and replacement of the sewerage system.
  •  As for the Tamil Nadu biodiversity conservation and greening project, the soft loan has been extended to improve ecosystem and tree plantation outside the recorded forest areas while the assistance for the Himachal Pradesh project is to promote sustainable crop diversification in the state by development and rehabilitation of minor irrigation facilities and access farm roads.
  • The current aid quantum is part of the 2010 Japan International Cooperation Agency (JICA) ODA loan package.

Cairn-Vedanta deal to be referred to Cabinet

  • Union Petroleum and Natural Gas Minister Jaipal Reddy on Tuesday said his Ministry had decided to refer to the Vedanta Resources' buyout of Cairn India to the Union Cabinet to resolve the dispute over the deal.
  • Mr. Reddy said the $9.6-billion deal was going to the Cabinet Committee on Economic Affairs (CCEA) because of a standoff over the excess royalty Oil and Natural Gas Corporation (ONGC) pays on Cairn India's oilfields in Rajasthan
  • ONGC not just pays royalty on its 30 per cent share of oil from the Rajasthan block but also on partner Cairn India's 70 per cent share, making the nation's largest on land fields a losing proposition for it.
  • Cairn has asserted that ONGC is also contractually bound to pay Rs.2,500 a tonne cess on all of the 12 million tonnes of projected crude oil output from the fields in the 3,111-sq. km block.
  • The Petroleum Ministry wants the twin liability of Rs.21,800 crore on ONGC to be addressed before giving nod to Vedanta buying most of 62.4 per cent stake held by U.K.'s Cairn Energy in Cairn India. However, Cairn and Vedanta have strongly opposed the proposal to make partners share the levies equitably.

Bahrain’s Pearl Square becomes the new Tahrir

  • Thousands of protesters took over a main square in Bahrain's capital on Tuesday — carting in tents and raising banners — in a bold attempt to copy Egypt's uprising and force high-level changes in one of Washington's key allies in the Gulf.
  • The move by demonstrators capped two days of clashes across the tiny island kingdom that left at least two people dead, Parliament in limbo by an opposition boycott and the king making a rare address on national television to offer condolences for the bloodshed.
  • Security forces — apparently under orders to hold back — watched from the sidelines as protesters gathered at Pearl Square chanted slogans mocking the nation's ruling sheiks and called for sweeping political reforms and an end to monarchy's grip on key decisions and government posts.
  • The unrest in Bahrain, home to the U.S. Navy's 5th Fleet, adds another layer to Washington's worries in the region. In Yemen, police and government supporters battled nearly 3,000 marchers calling for the ouster of President Ali Abdullah Saleh in a fifth straight day of violence.
  • Yemen is seen as a critical partner in the U.S. fight against a network inspired by al-Qaeda. The Pentagon plans to boost its training of Yemen's counterterrorism forces to expand the push against the al-Qaeda in the Arabian Peninsula faction, which has been linked to attacks including the attempted airliner bombing in December 2009 and the failed mail bomb plot involving cargo planes last summer.
  • The key demands — listed on a poster erected in the square — included the release of all political prisoners, more jobs and housing, an elected Cabinet and the replacement of the longtime Prime Minister, Sheik Khalifa bin Salman Al Khalifa.
  • Bahrain's leaders have for years granted citizenship to Sunnis from across the region to expand their base of loyalists and try to gain demographic ground against Shias, about 70 per cent of the population of some 500,000. Many of the Sunnis — Jordanians, Syrians and others — receive police jobs or other security-related posts.
  • Bahrain is one of the most politically volatile nations in West Asia's wealthiest corner despite having one of the few elected Parliaments and some of the most robust civil society groups.
  • The nation's Shias have long complained of discrimination. A crackdown on perceived dissent last year touched off weeks of riots and clashes in Shia villages, and an ongoing trial in Bahrain accuses 25 Shias of plotting against the leadership. The detainees allege they have been tortured behind bars.
  • Bahrain is also an economic weakling compared with the staggering energy riches of Gulf neighbours such as Saudi Arabia and Qatar, which can afford far more generous social benefits. Bahrain's oil reserves are small and its role as the region's international financial hub have been greatly eclipsed by Dubai.

Japan to take part in India-U.S. naval exercises again

  • The Japanese Navy will take part, for the second year running, in the joint naval exercises by India and the United States. These will be held off the Okinawa coast, which has the highest concentration of U.S. Marines in the region.
  • The Malabar series of exercises, from April 2 to 10, will include Japanese ships, in keeping with the growing proximity, in a wide variety of spheres, between New Delhi and Tokyo, said government sources.
  • Japanese interest in developing a robust defence cooperative arrangement with India comes even as a National Defence Programme Guidelines, released recently, mentions three countries as rising powers. Japan has a tense relationship with China and is still negotiating a peace treaty with Russia. India is the only country with which it does not have security issues.
  • The sources also drew attention to the greater importance to be given to India — as was reflected in two key speeches, made by Japanese Prime Minister Naoto Kan, on diplomacy, and Minister for Foreign Affairs Seiji Maehara's address to the Diet. In Mr. Kan's speech, India figured in four out of Japan's five foreign policy pillars while in Mr. Maehara's address, India, though mentioned, was ranked below several other countries with whom Japan wants to strengthen relations.
  • According to the U.S. Navy, the aim of the exercise is to "strengthen the stability of the Pacific Region," but India denies this, deeming it simply as a learning exercise for the Indian Navy. The Navy will concentrate on aspects such as anti-submarine warfare, surface warfare, air defence, live-fire gunnery training, and visit, board, search and seizure (VBSS) operations

Thursday, February 17, 2011

EPFO for 9.5% interest on PF

The EPFO on Tuesday stuck to its decision that about 4.71 crore subscribers of the pension fund get 1 per cent increase in interest on their deposits for 2010-11, pegging the rate of interest at 9.5 per cent.

IGI rated 14th best globally

  • Delhi's IGI Airport has been rated the 14th best airport in the world in the Airports Council International's airport service quality survey for 2010. In the category of 25-40 million passengers per annum, the airport has been rated fourth, behind only Seoul's Incheon, Singapore's Changi and Shanghai Pudong. 
  • Hyderabad's Rajiv Gandhi Airport retained its top position in the category of airports with 5-15 mppa. However, its rating on the general list slipped from the 4th to 9th

Government agrees to set up JPC on 2G

After resisting the Opposition demand for over three months, the government has finally agreed to constitute a Joint Parliamentary Committee to probe the 2G spectrum allocation issue

Tuesday, February 15, 2011

Scope for generating 68,000 MW of green power: World Bank report

  • The World Bank has stated in its latest report that India can generate 68,000 MW of power, costing less than Rs.6 a unit from renewable energy sources, a step that can address the country's energy security concerns.
  • The report released here by the multilateral funding agency on Friday said the 68,000 MW of wind, hydro and biomass energy can be harnessed at less than Rs.6 a unit. "Developing indigenous renewable energy sources, which have low marginal costs of generation, are more economically viable in the long run,'' the study — Potential of renewable energy in India — has stated.
  • India's electricity demand is expected to grow at an average annual rate of 7.4 per cent in the next 25 years. The generation capacity will have to increase five-fold to keep pace with the growth of demand.
  • At present, the installed capacity of the country stands at about 1.70 lakh MW from all sources of energy, as per official data.
  • The report also suggested that renewable energy development can be an important tool for regional economic development within the country. Himachal Pradesh, Jammu and Kashmir and Uttarakhand have 65 per cent of India's small hydro power resources. Much of the economically attractive wind potential in Orissa or the biomass potential in Madhya Pradesh lies largely undeveloped, the report adds.
  • The report emphasises that coal, gas and oil have witnessed considerable price volatility in recent years, renewables are the only free hedging mechanism against price volatility of fossil fuels. The risk-adjusted cost of renewable energy is lower than that of fossil-based fuels, and their use enhances the price certainty of the portfolio and increases energy security, the report says.
  • The entire renewable potential, including solar, is less expensive than diesel, where the existing 20,000 MW of diesel based installed capacity points to innovative possibilities of scaling up renewable in a big way, according to N. Roberto Zagha, World Bank Country Director in India.
  • The government has set an ambitious target of installing at least 44,000 MW of additional capacity of renewables in the next 10 years.

inimical

in·im·i·cal
adj.
1. Injurious or harmful in effect; adverse: habits inimical to good health.
2. Unfriendly; hostile: a cold, inimical voice.

The linkage between the farmer and the consumer that exists now is not only inefficient and wasteful and subject to abuse and manipulation but also inimical to boosting production.

TATA fellowship for Ajay Parida

Ajay Parida, Executive Director, M. S. Swaminathan Research Foundation, has been selected for the prestigious TATA Innovation Fellowship of the Department of Biotechnology, Government of India. The award is to honour and encourage translational scientists dedicated to finding solutions by innovative scientific knowledge and platform technologies.

Selected through a highly competitive process, Dr. Parida has been awarded the fellowship for his research contribution in the area of basic and applied sciences in developing novel genetic combinations for abiotic stress and nutritional enhancement using advanced biotechnological tools.

Nuclear pact with South Korea

  • India will soon sign its ninth civil nuclear agreement with its negotiators having finalised the text with South Korea
  • The countries with which India has signed similar pacts are Russia, the United States, France, Mongolia, Argentina, Kazakhstan, the United Kingdom and Canada. Some are pure fuel supplies pact while others include all aspects of the relationship such as fuel supply, R&D and setting up of civil nuclear plants. The pact with South Korea will focus on the last two aspects.
  • South Korea recently joined the ranks of civil nuclear power exporters when it bagged $20 billion worth of orders from the United Arab Emirates beating stiff competition from the French company Areva for building four nuclear plants
  • The civil nuclear pact was a result of the all-round comprehensive relationship being forged by India with East Asian and South East Asian countries. India has signed a Comprehensive Economic Cooperation Agreement (CEPA) with South Korea which, in the first full year of operation in 2010, led to a 46 per cent growth in trade.
  • Interestingly, the growth rate of both South Korean and Indian exports were the same during this period.

Agreement with Japan?

With the civil nuclear agreement in the bag and CEPA showing good results, India is all set to sign a similar agreement with Japan following the arrival of Commerce & Industries Minister Anand Sharma in Tokyo. He will call on Prime Minister Naoto Kan on Tuesday to discuss ongoing cooperation in infrastructure projects.

MoEF clears UMPP Bedabahal power project, but there's a catch

MoEF had given the green signal for the 4,000-MW Ultra-Mega Power Project (UMPP) at Bedabahal in Orissa, the clearance has come with a catch. The MoEF has imposed "stringent conditions'' for coal mining including scrapping another proposed power project and rejection of mining in a coal block allotted to NTPC Ltd.

Now the MoEF has laid down that mining will be allowed in only 65 hectares of the total 265-ha area. "They [project developers] will have to leave out 200 hectares and mining will be allowed in the Bedabahal coal block of the "no go area'' only in the remaining [area],'' Minister of State for Environment and Forests Jairam Ramesh told The Hindu when asked about Mr. Shinde's claim.

As a result of clearance in the Bedabahal coal block, NTPC would have to give up mining in the Dulanga block. Similarly, he said, the proposed power project by Orissa PGL would not be allowed to come up.

The Bedabahal UMPP is situated close to two projects — one being implemented by NTPC and the other by the Orissa government — which under the MoEF conditions, if adhered to, will not come up.

The MoEF had put three coal blocks allotted for the project — Meenakshi, Meenakshi B and the dipside of Meenakshi — in "no-go" areas. This means mining cannot take place in these areas, as it may cause damage to the environment.

Japan loses No. 2 economy spot to China

  • Japan's gross domestic product fell an annualised 1.1 per cent in the fourth quarter in 2010, marking the first decline in five quarters due to a drop in exports, diminishing government stimulus programmes and weak consumer consumption
  • According to the data, Japan has now relinquished its position as the world's second largest economy to China.
  • Japan's nominal GDP, before adjustments for prices, totalled $5.47 trillion in 2010, lower than China's figure of nearly $5.8 trillion. Japan has held the title of world's second largest economy for 42 years.
  • Economists said slowing demand from emerging economies, particularly in Asia, coupled with a strong yen, which reached a 15-year high against the U.S. dollar during the period, weighed heavily on Japanese exports.
  • Analysts and government officials have predicted, however, that Japan will continue on a growth path in the January-March quarter as an upturn in the U.S. economy and demand for Japanese goods from the U.S. and its Asian neighbours had shown signs of increasing.
  • Many analysts such as those at the World Bank and Goldman Sachs have been quoted as saying that in their opinion China may overtake the United States as the number one economy by 2025

U.K. to allow gay couples to marry

  • Gay couples in Britain are to be allowed to "marry" and given the right to hold traditional weddings under unprecedented reforms that would end the historic legal definition of marriage.
  • The current ban on same-sex "civil partnership" ceremonies being conducted in churches and other places of worship would be lifted under plans expected to be unveiled by Equalities Minister Lynne Featherstone.
  • Such ceremonies could also be allowed to have a religious element such as including hymns or readings from the Bible, according to The Sunday Telegraph. "It is understood that they could also in future be carried out by priests or other religious officials," it said.

Monday, February 14, 2011

Protests spread in Yemen and Algeria

  • YEMENI police armed with sticks and knives repelled thousands of chanting protesters marching through the capital in the third day of demonstrations calling for political reforms and the resignation of the country's US-allied president.
  • The protests, inspired by the Tunisian uprising that overthrew president Zine El-Abidine Ben Ali, have grown since the departure of Egypt's Hosni Mubarak at the weekend.
  • Uniformed police used truncheons to stop protesters, many of them university students, from reaching the capital's central Hada Square. Witnesses said plainclothes police carrying knives and batons joined security forces in driving back protesters.
  • Much is at stake in troubled Yemen if the pressure on the President further erodes stability. The US is most worried about an al-Qa'ida offshoot that has grown in Yemen's mountain areas in recent years, using the haven as a base to plot attacks beyond the country's borders, including the failed attempt to blow up a US-bound airliner in December 2009.
  • Mr Saleh, who has been in power for three decades, is co-operating with the US in efforts to battle the al-Qa'ida group, but his government has limited control in the tribal areas beyond the capital. The country's security forces are already stretched on two other fronts -- since 2004, they have struggled to contain a serious rebellion in the north by members of the Zaidi sect of Shia Islam who complain of neglect and discrimination. At the same time, police and army forces are clashing with a secessionist movement in southern Yemen, which was a separate country until 1990.

  • Meanwhile in Algeria, opposition leaders emboldened by the uprisings in Tunisia and Egypt, yesterday announced a second protest march in the capital despite the longstanding ban on demonstrations there.
  • The US and Germany called for restraint from the authorities, a day after a large security operation prevented 2000 protesters from marching in Algiers.
  • The National Co-ordination for Change and Democracy, a coalition of opposition parties, rights groups and unofficial unions, wants the end of President Abdelaziz Bouteflika's regime, citing the same problems of high unemployment, poor housing and soaring costs that inspired the uprisings in Tunisia and Egypt.

Inflation down to 8.23%

  • Inflation declined marginally to 8.23 per cent in January from 8.43 per cent in the previous month, as prices of certain commodities like wheat, pulses and sugar eased, although essential items like onion and other vegetables continue to remain dearer.
  • The headline inflation, based on wholesale prices, has remained above 8 per cent—mark since January 2010.
  • The fall in inflation has been mainly on account of declining prices of sugar (down 14.99 per cent), pulses (12.78 per cent), wheat (4.94 per cent) and potato (1.21 per cent).
  • However, vegetable and fruits continued to remain expensive. On an annual basis, vegetable prices rose by 65 per cent, and onion prices nearly doubled. Also, fruits became costly by 15.01 per cent and egg, meat and fish by 15.09 per cent.
  • Prices of fuel and power shot up by 11.41 per cent, with petrol rising 27.37 per cent on an year-on-year basis
  • However, among manufactured items, sugar prices fell by 15 per cent, while edible oils turned costlier by 7.16 per cent.
  • The inflation number for November has also been revised upwards to 8.08 per cent from 7.48 per cent, according to government data released on Monday.
  • It may be recalled, the food inflation, which accounts for over 14 per cent in the overall Wholesale Price Index (WPI) inflation, has remained high since December scaling up to 18.32 per cent.

Tribal institute bags e-governance award

  • A project on the use of geoinformatics in the implementation of the Forest Rights Act, 2006 in Maharashtra by the Tribal Research and Training Institute (TRTI), Pune has been given the National e-Governance award, 2010-11 (Silver). Even though Maharashtra has a poor track record of granting forest rights, the award recognises the exemplary re-use of Information Communication Technology (ICT)-based solutions
  • The project relates to the implementation of the Act and attempts to address the issue of fairness and transparency in the grant of forest rights. It enables District level Committees to take decisions in favour of genuine cases. The area coverage of the project consists of more than 14,000 villages, which are in and around forests and quite remote. The number of claims targeted for processing is more than 3.3 lakh. About 1.6 lakh cases have already been measured by the Global Positioning System (GPS) instruments at the village level. A total of 1.05 lakh cases have been decided.
  • There are 110 uploading centres mostly in tribal areas. There are 200 report viewing centres, with one monitoring centre at TRTI. It segregates the ineligible claimants on the basis of satellite imagery of 2005, which is the cut-off year and promotes an approach that supports genuine cases, a senior official said. It provides for online monitoring of the various stages of implementation of the Act. A website has been developed to manage information regarding claimants, land measurement, verification process, decisions regarding forest rights claims to prevent further encroachment of forest land. The project has demonstrated the efficacy of IT and GIS-based systems to the tribal and rural populations which is unique in the country, sources added.
  • The system allots every Forest Rights claimant a 13 digit ID. It links forest rights holders with the protection and management of forestry resources.

Indo-UAE Trade Registers Growth of 300% in Last Five Years

  • Commerce Minister said that bilateral trade between India and UAE has registered an increase over 300% in the last five years.
  •  He said that UAE is the topmost trading partner of India representing about 60% of India's export to GCC countries 2009-10. Shri Sharma said that there is lot of business and investment potential which can be further exploited to mutual advantage of both the countries. India-UAE Trade Policy Forum set up by the two countries to facilitate bilateral trade which needs to be further strengthened, he said. 
  • During the interaction, both sides felt that tourism sector is one the areas that has good potential for future growth, especially medical tourism. Another area with considerable scope for cooperation in tourism is construction and maintenance of hotels. Shri Sharma informed his counterpart that there is a good scope for UAE to invest in overall tourism sector in India which would help for both the countries to enhance tourist arrivals. 
  • Shri Sharma said that since UAE is focusing on knowledge based industries and with India emerging as world leaders in space, agriculture, pharmaceuticals, and bio-technology, there is considerable scope for co-operation in technology transfer, research and development and for joint-venture. India has a vast market and UAE investors would find industrial partners in India to set up mutually advantageous industrial complexes in the Gulf as well as in India and third countries to cater to the markets worldwide, he added
  • The total trade has increased from US $ 12,945.87 million in 2005-06 to US$ 43,469.50 million in 2009-10. The exports from India, up from US$ 8,591.79 million in 2005-06 to US$ 23,970.40 million in 2009-10. Similarly imports from UAE, up from 4,354.08 in 2005-06 to US$ 19,499.10 million in 2009-10. 
  • The top five exportable items from India to UAE are Gems & Jewellery; Petroleum (crude & Products); Rice-Basmati; Machinery and Instruments; and Manufactures of Metals. Similarly top five importable items from UAE to India are Petroleum (crude & Products); Gold; Pearls Precious & Semi-precious stones; Metaliferrous Ores & Metal Scrap; and Non-Ferrous Metals. 

Is GNP growth enough for a country?

Amartya Sen compares India-China and India-Bangladesh explaining what should be priorities of Indian leadership. Very nicely written

http://www.thehindu.com/opinion/op-ed/article1451973.ece

India's GDP deficit can be below 5 percent

  • Global investors have expressed worries about India's high inflation, wide current account deficit and rising corruption. But India's fiscal performance this year has been a big positive surprise. The April-December data have revealed a fiscal deficit that is just 44.8% of the corresponding figure last year. 
  • Against the budgeted 5.5% of GDP, the actual fiscal deficit may well fall well below 5.0% in 2010-11 , thanks to the remarkable rise in nominal GDP and unanticipated rise in government receipts, both tax and non-tax
  • The fiscal deficit level could dip further, to something close to 4% next year. So flush with funds is the government that it has drained bank liquidity, and so the RBI has been put in the embarrassing position of having to inject ever more liquidity into financial markets even as it tries to curb inflation. After telecom spectrum sales fetched a whopping . 1,05,000 crore, the resultant high government balances with the RBI were thought to be a temporary blip, which would be reversed as the government spent its windfall. But booming tax revenues have meant that, despite additional demands for grants and higher oil under-recoveries , the government's coffers remain pretty full. The primary deficit — the fiscal deficit less interest payments — has dropped to 0.3% of GDP. 
  • The spectrum bonanza took government non-tax revenue in April-December to 130% of the annual budgeted sum. But tax revenue boomed, too: it was up 27% against the budgeted 17.9%. In April-December , Plan spending and revenue spending were 67% and 73.1%, respectively , of the annual budgeted amount, while revenue was 85.6% of the target. This suggests that spending is more or less on track, while revenue has vastly exceeded expectations . 
  • This may herald a structural shift to a higher tax/ GDP ratio, which may cross 12% of GDP this year and set a new record. This augurs well for the future. No doubt, there remain fiscal dangers like a huge rise in oil prices, and financial panic if the march to democracy in the Arab world turns chaotic in the short run. Indian populist measures have the potential to swallow up the revenue boom. Nevertheless, India is currently in a sweet fiscal spot. The lesson is that rapid growth can mitigate, if not cure, a thousand ills. The point is to sustain that growth.