important reports 2012-13

Press freedom index 2013: India slides to 140thplace

India has dropped nine places to 140 in thelist of 179 countries in the 2013 World PressFreedom Index, which its authors, ReportersWithout Borders, said was the lowest forthe "world's biggest democracy" since 2002.

The report says that in Asia, India (140th, -9) is at its lowest since 2002 because ofincreasing impunity for violence againstjournalists and because Internet censorshipcontinues to grow," Reporters WithoutBorders said.

China (173, +1), had shown no sign ofimproving, as its prisons still hold manyjournalists and netizens, while increasinglyunpopular Internet censorship continues tobe a major obstacle to access to information.

As last year, the list is topped by threeEuropean countries - Finland, Netherlandsand Norway. Turkmenistan, North Koreaand Eritrea continue to be at the bottom ofthe list as has been in the last three years.

The Press Freedom Index published byReporters Without Borders does not takedirect account of the kind of political system,but it is clear that democracies provide betterprotection for the freedom to produce andcirculate accurate news and informationthan countries where human rights areflouted, in dictatorships, news providers andtheir families are exposed to ruthlessreprisals, while in democracies newsproviders have to cope with the media'seconomic crises and conflicts of interest.

Observing that there was a general declinein freedom of information in South Asia,the report said the Indian subcontinent wasthe region in Asia that saw the sharpestdeterioration in the climate forthose involved in news and information in2012.

CHRONICLEIAS ACADEMYA CIVIL SERVICES CHRONICLE INITIATIVE

IMPORTANT REPORTS 2012-13

State of the World's Cities Report: 2012/2013

Delhi, which was not even among theworld's top ten urban sprawls by populationin 1990, is already the second largest behindTokyo and will continue to retain thatposition till 2025. Mumbai, which was at No.5 in 1990, has climbed to the fourth spotand will be No. 3 in the next 13 years.

The projections made in the UN's recentpublication, State of The World's Cities 2012-13, suggests that the Delhi urbanagglomeration will have a population of 28.6million by 2025, still well behind Tokyo's37.1 million. Mumbai will, in the meantime,have reached a population of 25.8 million.

While the report does not indicate exactlywhich areas are included in these urbanagglomerations, comparison of the numbersgiven for 2010 with 2011 census figuresindicates that the relevant area is GreaterMumbai and Delhi plus Gurgaon,Ghaziabad, Noida and Faridabad.

The fastest growing of the mega cities,according to the report, will be Dhaka,which was ranked No. 23 in 1990 and wasat No. 9 in 2010, is projected to be the fifthlargest urban area in the world by 2025.Another city in India's neighbourhood,Karachi, has also been rapidly climbing upthe rankings, from No.21 in 1990 to No.10in 2010 and No.9 in 2025.

Kolkata, which was ranked No.7 in 1990,has been more or less holding on to itsposition, having dropped just one rank till2010 and is projected to hold on to thatposition in 2025. New York and Mexico City,which were the two biggest urbanagglomerations two decades ago, areprojected to drop to the bottom half of thetop 10 list in a little more than a decadefrom now.

For those who worry about these cities

Chronicle IAS Academy [1]

[2] Chronicle IAS Academy

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continuing to grow to unmanageable sizes,there is some reason for hope. Most of thecities at the top of the list are projected tosee their growth rates dropping off. Tokyo,for instance, will be virtually unchangedfrom its current size with zero populationgrowth between 2020 and 2025, while SaoPaulo, Mexico City and New York will allsee single digit percentage increases inpopulation between 2010 and 2025.

Delhi and Mumbai are both projected to seepopulations increasing by 29% over the sameperiod, but even this is a significant dropfrom the rates at which they have grownsince 1990. Dhaka, however, is likely to seeits population grow by 43% over the 15-yearperiod, a rate that will be matched byKarachi while Lagos in Nigeria will see a49% jump in population by 2025, if theprojections come true. There is a need toaddress the ribbon development happeningaround big cities in developing countries,particularly in India. A city or urban areahas to have adequate infrastructure to makethem cities of prosperity.

UNAIDS report: more than 50% drop in newHIV infections across 25 countries

A new World AIDS Day report, by the JointUnited Nations Programme on HIV/AIDS(UNAIDS), shows that unprecedentedacceleration in the AIDS response isproducing results for people. The reportshows that a more than 50% reduction inthe rate of new HIV infections has beenachieved across 25 low- and middle-incomecountries--more than half in Africa, theregion most affected by HIV.

In some of the countries which have thehighest HIV prevalence in the world, ratesof new HIV infections have been cutdramatically since 2001; by 73% in Malawi,71% in Botswana, 68% in Namibia, 58% inZambia, 50% in Zimbabwe and 41% in SouthAfrica and Swaziland.

In addition to welcome results in HIVprevention, sub-Saharan Africa has reducedAIDS-related deaths by one third in the lastsix years and increased the number of peopleon antiretroviral treatment by 59% in thelast two years alone.

According to the report, the pace of progressis quickening, and what used to take a

decade is now being achieved in 24 months.

For example, South Africa increased its scaleup of HIV treatment by 75% in the last twoyears-ensuring 1.7 million people had accessto the lifesaving treatment-and new HIVinfections have fallen by more than 50 000in just two years. During this period, SouthAfrica also increased its domesticinvestments on AIDS to US$ 1.6 billion, thehighest by any low- and middle-incomecountry.

The report also shows that countries areassuming shared responsibility by increasingdomestic investments. More than 81countries increased domestic investments by50% between 2001 and 2011. The new resultscome as the AIDS response is in a 1000 daypush to reach the Millennium DevelopmentGoals and the 2015 targets of the UNPolitical Declaration on HIV/AIDS.

Declining new HIV infections in children

The area where perhaps most progress isbeing made is in reducing new HIVinfections in children. Half of the globalreductions in new HIV infections in the lasttwo years have been among newbornchildren. It is becoming evident thatachieving zero new HIV infections inchildren is possible.

State of world population report: 2012

State of world population report for the year2012 was released by the UN in November, 2012.Among many other things it emphasizes on thefollowing issues:

The ability to decide on the number andspacing of one's children is taken for grantedby many in the developed world and amongelites in developing countries. Yet, for amajority of people in developing countries,especially the poorest ones, the power andmeans to determine the size of their familiesare scarce or inadequate.

An estimated 222 million women lack accessto reliable, high-quality family planningservices, information and supplies, puttingthem at risk of unintended pregnancy. Indeveloped countries too, high levels ofunintended pregnancy exist, especiallyamong adolescents, the poor and ethnicminorities.


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The huge unmet need for family planningpersists, despite international agreementsand human rights treaties that promoteindividuals' rights to make their owndecisions about when and how often to havechildren. Today, family planning is almostuniversally recognized as an intrinsic right,affirmed and upheld by many other humanrights.

Because it is a right, voluntary familyplanning should be available to all, not justthe wealthy or otherwise privileged.Shortages of contraceptives are only onereason why millions of people are stillunable to exercise their right to familyplanning.

Access to family planning may also berestricted by forces including poverty,negative social pressures, gender inequalityand discrimination. Ensuring access for allwomen, men and young people requires amultipronged effort: simultaneouslystrengthening health systems, introducingor enforcing laws that protect individuals'rights, reducing poverty, challengingharmful traditional practices, eliminatingchild marriage, ending discrimination,removing logistical impediments andensuring a broad range of supplies. Ensuringuniversal access to voluntary familyplanning is a matter of protecting humanrights.

But it is also a matter of economic and socialdevelopment. Studies have shown thatinvesting in family planning helps reducepoverty, improve health, promote genderequality, enable adolescents to finish theirschooling and increase labour forceparticipation. When a woman is able toexercise her reproductive rights, she is moreable to benefit from her other rights, suchas the right to education.

The results are higher incomes, better healthfor her and her children and greaterdecision-making power for her, both in thehousehold and the community. Whenwomen and men together plan theirchildbearing, children benefit immediatelyand in their long-term prospects.

A study in one community in Bangladeshfound that women who used familyplanning earned wages that were one-thirdhigher than the wages of their counterparts

who had not used family planning. Anotherstudy concluded that spacing pregnanciesby three to five years could reduce infantdeath by 46 per cent in developing countries.And a study in the United States confirmsthat motherhood during adolescence lowersa girl's chances of obtaining a high schooldiploma by up to 10 per cent and reducesannual income as a young adult by as muchas $2,400.

The State of World Population 2012, drawingon the latest research, calls on developing anddeveloped countries, international organizationsand civil society to:

Radically increase financial support andpolitical commitment to ensuring that rights-based family planning is available to all whowant it, when they want it, and that services,supplies and information are of high quality.

Promote family planning as a right, theexercise of which enables the attainment ofa whole range of other rights.

Integrate voluntary family planninginto broader economic and socialdevelopment because family planningenhances both.

Eliminate economic, social, logistical andfinancial obstacles to voluntary familyplanning so that everyone who chooses touse it has access to it.

Reduce the number of unintendedpregnancies and abortions by increasingavailability, reliability and quality of familyplanning supplies and services.

Make family planning programmes availableto the full range of users, includingadolescents, unmarried people, and allothers who need it.

Include emergency contraception in therange of supplies available through familyplanning programmes.

Engage men and boys in family planning,for their own benefit and to support the rightof women and girls to use contraception.

Global Competitiveness Report 2012-13

The Global Competitiveness Report 2012-13,published by the world Economic Forumsays that Switzerland tops again the overallrankings in The Global Competitiveness Report2012-2013.


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Singapore too has retained its secondposition, being the best performer amongthe Asian economies, and Finland hasimproved one rank and is now at third placeby pushing Sweden down to the fourth.Northern and Western European countriesdominate the top 10 with Finland (3rd),Sweden (4th), Netherlands (5th), Germany(6th), and the United Kingdom (8th).

Japan remains the second-ranked Asianeconomy at 10th place, and the United Statescontinues the decline that began a few yearsago, falling two more positions to take 7thplace this year. Although many structuralfeatures continue to make its economyextremely productive, a number ofescalating and unaddressed weaknesseshave lowered the US ranking in recent years.

Germany maintains a strong position withinthe Eurozone, by consolidating its positionto sixth place, while the Netherlands (5th)improves by two positions in the rankings,France drops three places to 21st, and Greececontinues its downward trend to 96th.Although Europe had been recovering fromthe significant difficulties brought about bythe global economic crisis, rising concernsabout the sustainability of sovereign debt inGreece and a number of other Europeancountries continue to raise questions aboutthe viability of the euro.

The results show that while competitivenessin advanced economies has stagnated overthe past seven years, in many emergingmarkets it has improved, placing theirgrowth on a more stable footing andmirroring the shift in economic activity fromadvanced to emerging economies.

The People's Republic of China (29th) haslost 3 places in the ranking, but still retainsits position among the top 30. Among thefour other BRICS economies, South Africa(52nd), Russia (67th) and India (56th) haveseen a slide while Brazil (48th) has movedupwards by 5 places. Brazil has improvedby 10 places in the last two years.

State of Food Insecurity in the World 2012

The State of Food Insecurity in the World2012, published by FAO, presents new estimatesof undernourishment based on a revised andimproved methodology. The new estimatesshow that progress in reducing hunger during

the past 20 years has been better than previouslybelieved.

given renewed efforts, it may be possible toreach the MDG hunger target at the globallevel by 2015. However, the number of peoplesuffering from chronic undernourish-mentis still unacceptably high, and eradicationof hunger remains a major global challenge.

This year's report also discusses the role ofeconomic growth in reducingundernourishment. Sustainable agriculturalgrowth is often effective in reaching the poorbecause most of the poor and hungry livein rural areas and depend on agriculture fora significant part of their livelihoods.However, growth will not necessarily resultin better nutrition for all. Policies andprogrammes that will ensure "nutrition-sensitive" growth include supportingincreased dietary diversity, improving accessto safe drinking water, sanitation and healthservices and educating consumers regardingadequate nutrition and child care practices.

Economic growth takes time to reach thepoor, and may not reach the poorest of thepoor. Therefore, social protection is crucialfor eliminating hunger as rapidly as possible.Finally, rapid progress in reducing hungerrequires government action to provide keypublic goods and services within agovernance system based on transparency,participation, accountability, rule of law andhuman rights.

World Report on Disability 2011

The World report on disability is the firstdocument to give an extensive global picture ofthe situation of people with disabilities, theirneeds, and the barriers they face to participatingfully in their societies. The aim of the report isto support the implementation of the Conventionon the Rights of Persons with Disabilities(CRPD). Published by the World HealthOrganization (WHO) and the World Bank, theReport assembles the best available scientificinformation on disability. The Report is relevantto the fields of public health, human rights anddevelopment, and the intended audience ispolicy-makers, service providers, professionals,and advocates for people with disabilities andtheir families. It was developed with the fullparticipation of people with disabilities and theirorganizations, as well as other relevantstakeholders.


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More than 1 billion persons in the worldhave some form of disability. Thiscorresponds to about 15% of the world'spopulation. Between 110-190 million peoplehave very significant difficulties infunctioning.

People with disabilities are more likely tobe unemployed than non-disabled people.In Organization for Economic Cooperationand Development countries, theemployment rate of people with disabilities(44%) is slightly over half that for peoplewithout disabilities (75%).

People with disabilities often do not receiveneeded health care. Half of disabled peoplecannot afford health care, compared to athird of non-disabled people. People withdisabilities are more than twice as likely tofind health-care providers' skills inadequate;nearly three times more likely to be deniedhealth care; and four times more likely toreport being treated badly than non-disabledpeople.

Children with disabilities are less likely toattend school than non-disabled children.Education completion gaps are found acrossall age groups in all settings, with the patternmore pronounced in poorer countries. Evenin countries where most non-disabledchildren go to school, many children withdisabilities do not go to school. For examplein Bolivia about 98% of non-disabledchildren go to school, but under 40% ofdisabled children attend school. InIndonesia, over 80% of non-disabledchildren go to school, but less than 25% ofchildren with disabilities go to school.

People with disabilities experience increaseddependency and restricted participation intheir societies. Even in high-incomecountries, 20-40% of people with disabilitieslack the help they require to engage ineveryday activities. In the United States ofAmerica, 70% of adults with disabilities relyon family and friends for assistance withdaily activities

Global Hunger Index 2012

The Global Hunger Index (GHI) is amultidimensional statistical tool used to describethe state of countries' hunger situation. The GHImeasures progress and failures in the global fightagainst hunger. The Index was adopted and

further developed by the International FoodPolicy Research Institute (IFPRI), and was firstpublished in 2006.

World hunger, according to the 2012 GlobalHunger Index (GHI), has declinedsomewhat since 1990 but remains "serious."The global average masks dramaticdifferences among regions and countries.

Regionally, the highest GHI scores are inSouth Asia and Sub-Saharan Africa. SouthAsia reduced its GHI score significantlybetween 1990 and 1996-mainly by reducingthe share of underweight children-but couldnot maintain this rapid progress.

Though Sub-Saharan Africa made lessprogress than South Asia in the 1990s, ithas caught up since the turn of themillennium, with its 2012 GHI score fallingbelow that of South Asia.

From the 1990 GHI to the 2012 GHI, 15countries reduced their scores by 50 percentor more. In terms of absolute progress,between the 1990 GHI and the 2012 GHI,Angola, Bangladesh, Ethiopia, Malawi,Nicaragua, Niger, and Vietnam saw thelargest improvements in their scores.

Twenty countries still have levels of hungerthat are "extremely alarming" or "alarming."Most of the countries with alarming GHIscores are in Sub-Saharan Africa and SouthAsia (the 2012 GHI does not, however,reflect the recent crisis in the Horn of Africa,which intensified in 2011, or the uncertainfood situation in the Sahel).

Two of the three countries with extremelyalarming 2012 GHI scores-Burundi andEritrea-are in Sub-Saharan Africa; the thirdcountry with an extremely alarming scoreis Haiti. Its GHI score fell by about one quar-ter from 1990 to 2001, but most of this impro-vement was reversed in subsequent years.

The devastating January 2010 earthquake,although not yet fully captured by the 2012GHI because of insufficient availability ofrecent data, pushed Haiti back into thecategory of "extremely alarming." In contrastto recent years, the Democratic Republic ofCongo is not listed as "extremely alarming,"because insufficient data are available tocalculate the country's GHI score. Currentand reliable data are urgently needed toappraise the situation in the country.


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As per the report, India instead of its fastpaced economic growth in past two decadeshas lagged behind in improving its recordin Global Hunger Index chart. In the list of79 countries in the global Hunger Index,India was ranked 65th behind China thatwas placed at 2nd place position, Pakistanat 57th and Sri Lanka at 37th position.

World Development Report 2013: Jobs

The World Development Report (WDR) isan annual report published since 1978 by theWorld Bank. Each WDR provides in-depthanalysis of a specific aspect of economicdevelopment.

The World Development Report 2013concentrates on Jobs. Jobs statistical tablesprovide national level data on a broad rangeof issues related to labor force participation,employment structure, wage inequality,skills and productivity, youth idleness andunemployment, social cohesion, migration,and core labor conventions.

The World Development Report 2013 Surveyon Good Jobs was conducted in 4 countries(China, Columbia, Egypt, and Sierra Leone).

The survey gathers data on perceptions ofjobs and how they vary with wealth, gender,income, labor status, sector of employment,experience and education level, constraintsto accessing good jobs within the localcontext, barriers to labor market entry(which includes wage employment and self-employment in non-farm and farm activities)and potential solutions for these barriers(causes of joblessness/unemployment).

It also gathers data on the valuation of thetrade-off of various job characteristics (e.g.,stability of income versus level of income,social insurance versus level of income) andhow individuals view good jobs at a moreaggregate level (the role of jobs in thecommunity, society).

The WDR2013 Occupational Wages aroundthe World database contains occupationwage data for 161 occupations in 171countries from 1983 to 2008. The occupationwage data are derived from the ILO OctoberInquiry database by calibrating the data intonormalized wage rate for each occupation.

The normalized wages refer to averagehourly or monthly wage rates for adultworks.

Doing Business 2013: Doing Business in a MoreTransparent World

Tenth in a series of annual reports comparingbusiness regulation in 185 economies, DoingBusiness 2013 measures regulations affecting 11areas of everyday business activity:

Starting a business

Dealing with construction permits

Getting electricity

Registering property

Getting credit

Protecting investors

Paying taxes

Trading across borders

Enforcing contracts

Closing a business

Employing workers

The report updates all indicators as of June1, 2012, ranks economies on their overall "easeof doing business", and analyzes reforms tobusiness regulation - identifying whicheconomies are strengthening their businessenvironment the most.

Some important findings of the report are asfollows:-

Poland was the global top improver in thepast year. It enhanced the ease of doingbusiness through four institutional orregulatory reforms, making it easier toregister property, pay taxes, enforcecontracts, and resolve insolvency.

Besides Poland, nine other economies arerecognized as having the most improvedease of doing business across several areasof regulation as measured by the report: SriLanka, Ukraine, Uzbekistan, Burundi, CostaRica, Mongolia, Greece, Serbia, andKazakhstan.

Worldwide, 108 economies implemented 201regulatory reforms in 2011/12 making iteasier to do business as measured by DoingBusiness. Reform efforts globally havefocused on making it easier to start a newbusiness, increasing the efficiency of taxadministration and facilitating trade acrossinternational borders.


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Singapore topped the global ranking on theease of doing business for the seventhconsecutive year, followed by Hong KongSAR, China; New Zealand; the United States;and Denmark. Georgia was a new entrantto the top 10.

India ranks 132 in the index while China isat 91st rank. Sri Lanka (81), Pakistan (107),Nepal (109), Bangladesh (129) haveperformed better as compared to India inthe report.

The State of the World's Children 2012: Childrenin an Urban World

The State of the World's Children report 2012has been published by UNICEF, and its themeis children in an urban world.

The reports highlights that, the experienceof childhood is increasingly urban. Over halfthe world's people -including more than abillion children - now live in cities andtowns. While cities have long beenassociated with employment, developmentand economic growth, hundreds of millionsof children in the world's urban areas aregrowing up amid scarcity and deprivation.

The State of the World's Children 2012presents the hardships these children faceas violations of their rights as well asimpediments to fulfilling the MillenniumDevelopment Goals.

The report examines major phenomenashaping the lives of children in urbansettings, including migration, economicshocks and acute disaster risk. Progress ispossible. The State of the World's Children2012 provides examples of efforts to improvethe urban realities that children confront andidentifies broad policy actions that shouldbe included in any strategy to reachexcluded children and foster equity in urbansettings riven by disparity.

Every year, the world's urban populationincreases by about 60 million. By 2050, 7 in 10people will live in cities and towns. Most urbangrowth is taking place in Asia and Africa.

Migration from the countryside has longdriven urban expansion and remains a majorfactor in some regions. But the lastcomprehensive estimate, made in 1998,suggests that children born into existingurban populations account for around 60 percent of urban growth.

Humanitarian Action for Children: 2013 Report

The Humanitarian Action for Childrenreport, previously known as HumanitarianAction Report is an annual publication byUNICEF which details the situation for childrenand women affected by emergencies around theglobe. Each edition gives an overview of theemergencies and crises in regions and countriesin that year, funding requirements for the currentyear, stories of individual experiences, a reviewof emergency funding in the previous year aswell as PDF versions of the Report, multimediacontent and more.

UNICEF's Humanitarian Action for Children2013 highlights the humanitarian situationfaced by millions of children and womenand the support required to help their fam-ilies, communities and national institutionsmeet their basic needs, promote their well-being and provide them with protection.

UNICEF is appealing for almost US$1.4billion to assist millions of children, womenand men by providing them with nutritionalsupport, health care, water, sanitation,learning spaces and materials, protectionservices, shelter and information.

This support is not only to provide lifesavingemergency interventions, but also tostrengthen national preparedness systemsand build resilience at community, subregional and national levels, so thatavoidable illnesses and deaths are preventedand those affected are able to recover.

In partnership with national governments,civil society organizations and other UnitedNations agencies, UNICEF works in someof the most challenging environments in theworld to deliver results for millions ofchildren and women threatened by naturaldisasters or complex emergencies. Despitechallenges and constraints, sustainedadvocacy, political and financialcommitment, and collaboration in 2012resulted in achievements that need to bebuilt upon and continued into 2013.

According to UNICEF, the past year sawthe combined and cumulative effects ofarmed conflict, civil and political unrest,erratic and severe weather patterns, seismicactivity, disease outbreaks and the globaleconomic crisis lead to the death, illness,deprivation, displacement and distress of a


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significant number of children, women andmen across the globe.

The same factors caused the destruction orfurther degradation of homes, hospitals,schools, roads and other public and socialinfrastructure, services and networks,preventing millions of children fromreceiving treatment for illness, drinking safewater, going to school or even playing.

In order to prevent, address or overcomesome of the consequences of thesenatural and man-made disasters in 2012,UNICEF initially appealed forUS$1,284,358,000.

During the course of the year, as new crisesoccurred and ongoing situationsdeteriorated or improved, the overallrequirements were revised, and by the endof October had increased by 14 per cent toUS$1,472,172,823. As of 31 October,US$664,475,807, or 45 per cent of therequired funds, had been mobilized. Inaddition, UNICEF received US$19,573,247from the Central Emergency ResponseFund (CERF) and other funding sources toaddress the unforeseen needs for countriesthat were not part of the HumanitarianAction for Children 2012, appeal, bringingthe total of funding mobilized toUS$684,049,044

Committee for Corporate Governance

Ministry of Corporate Affairs in March 2012set up a committee under the leadership of AdiGodrej; chairman Godrej Group to bring out aformal policy document that will initiateenlisting of diverse elements of corporategovernance under a single national corporategovernance policy.

The members of the committee includedKiran Mazumdar Shaw, CMD of Biocon Ltd;former ONGC chairman RS Sharma; formerICAI chairman G Ramaswamy; CMD L&TFinance Holdings YM Deosthalee; SBalasubramanian, ex-chairman companylaw board; former SAIL chairman SKRoongta; Zia Mody of AZB and partners,and representatives from the institute ofcompany secretaries and cost and worksaccountants.

The Committee specified followingprinciples:

1. Protection and facilitation ofshareholders' rights

2. Equitable treatment of all shareholders3. Draft policy/procedure to facilitate

shareholders to obtain effectiveredress

4. Recognized rights of stakeholders incorporate governance

5. Timely and accurate disclosure of allmaterial information

6. Diversity of thought, experience,knowledge, understanding, perspective,gender and age in the Board

7. Induction / on - boarding program incompanies

8. Lead independent director9. Direct conversations between the

independent directors10. Explicitly record dissenting opinions11. Continuing Board training and education12. Board evaluation framework13. Effective whistle - blower mechanism14. Strategic guidance by board15. Corporate culture and the values16. Boards ability to 'step back' to assist

executive management17. Rightly encouraging positive thinking

but not over - optimism18. Balance performance with compliance19. Right mix of skill at top management20. Place relevant information immediately/

periodically before Board21. Operational Transparency to

stakeholders22. Plan for orderly succession for

appointments23. Risk / crisis Management Plan24. Due and reasonable care, skill and

diligence by directors25. Incentive based on remuneration

based on long term interest of thecompany

26. Facilities for independent directors

Panel to Update Priority Sector Lending Norms

RBI had, on April 25th 2011, formed acommittee to re-examine the existingclassification and suggest revised guidelines forpriority sector lending.


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The committee was headed by Union Bankof India CMD, MV Nair. While Nupur Mitra,ED, Indian Overseas Bank, Rajiv Sabharwal,ED, ICICI Bank and V. Ramakrishna Rao,ED, NABARD were amongst the other ninemembers in the committee.

The committee, in July 2012, proposed thatthe target (priority sector) for foreign banksbe increased to 40 per cent of net bank creditfrom the current level of 32 per cent withsub-targets of 15 per cent for exports and 15per cent for the MSE sector, within which 7per cent may be earmarked for microenterprises.

The target of domestic scheduledcommercial banks for lending to the prioritysector may be retained at 40 per cent of netbank credit. The committee suggested thatthe sector 'agriculture and allied activities'may be a composite sector within the prioritysector, by doing away with the distinctionbetween direct and indirect agriculture.However, the targets for agriculture andallied activities would be at 18 per cent.

A sub-target for small and marginal farmerswithin agriculture and allied activities isrecommended, equivalent to 9 per cent,which would be achieved in stages by2015-16.

The MSE sector may continue to be underthe priority sector. Within the MSE sector, asub-target for micro enterprises isrecommended, equivalent to 7 per cent,which would also be achieved in stages by2013-14.

The loans to housing and education maycontinue to be under the priority sector.Loans for construction or purchase of onedwelling unit per individual up to Rs.25lakh; loans up to Rs.2 lakh in rural and semiurban areas and up to Rs.5 lakh in othercentres for repair of damaged dwellingunits may be granted under the prioritysector.

To encourage construction of dwelling unitsfor economically weaker sections and lowincome groups, housing loans granted tothese individuals may be included in theweaker sections category.

All loans to women under the prioritysector may also be counted under loans toweaker sections.

The limit under the priority sector for loansfor studies in India may be increased to Rs.15lakh and Rs.25 lakh in case of studies abroad,from the existing limit of Rs.10 lakh andRs.20 lakh, respectively.

The committee recommended allowing non-tradable priority sector lending certificateson a pilot basis with domestic scheduledcommercial banks, foreign banks andregional rural banks as market players.

Malegam Committee on Microfinance

In the wake of the Andhra Pradesh microfinance crisis in 2010, concerns were expressedby various stakeholders and the need was feltfor more rigorous regulation of non-bankingfinancial companies (NBFCs) functioning asmicro finance institutions (MFIs). As indicatedin the Second Quarter Review of November 2010,a Sub-Committee of the Central Board of theReserve Bank (Chairman: Shri Y. H. Malegam)was constituted to study issues and concerns inthe MFI sector.

The Committee submitted its report inJanuary 2011, which was placed in publicdomain. The Committee, inter alia,recommended:

(i) Creation of a separate category of NBFC-MFIs;

(ii) A margin cap and an interest rate cap onindividual loans;

(iii) Transparency in interest charges;

(iv) Lending by not more than two MFIs toindividual borrowers;

(v) Creation of one or more creditinformation bureaus;

(vi) Establishment of a proper system ofgrievance redressal procedure by MFIs;

(vii) Creation of one or more "social capitalfunds"; and

(viii) Continuation of categorisation of bankloans to MFIs, complying with theregulation laid down for NBFC-MFIs,under the priority sector.

The recommendations of the Committeewere discussed with all stakeholders, includingthe Government of India, select State Govern-ments, major NBFCs working as MFIs, industryassociations of MFIs working in the country,


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other smaller MFIs, and major banks. In the lightof the feedback received, it has been decided:

To accept the broad framework ofregulations recommended by theCommittee;

The bank loans to all MFIs, including NBFCsworking as MFIs on or after April 1, 2011,will be eligible for classification as prioritysector loans under respective category ofindirect finance only if the prescribedpercentage of their total assets are in thenature of "qualifying assets" and they adhereto the "pricing of interest" guidelines to beissued in this regard;

A "qualifying asset'' is required to satisfythe criteria of (i) loan disbursed by an MFIto a borrower with a rural household annualincome not exceeding Rs. 60,000 or urbanand semi-urban household income notexceeding Rs.1,20,000; (ii) loan amount notto exceed Rs. 35,000 in the first cycle andRs. 50,000 in subsequent cycles; (iii) totalindebtedness of the borrower not to exceedRs. 50,000; (iv) tenure of loan not to be lessthan 24 months for loan amount in excessof Rs.15,000 without prepayment penalty;(iv) loan to be extended without collateral;(v) aggregate amount of loan, given forincome generation, not to be less than 75per cent of the total loans given by the MFIs;and (vi) loan to be repayable by weekly,fortnightly or monthly instalments at thechoice of the borrower;

The banks should ensure a margin cap of 12per cent and an interest rate cap of 26 percent for their lending to be eligible to beclassified as priority sector loans;

The loans by MFIs can also be extended toindividuals outside the self-help group(SHG)/joint liability group (JLG)mechanism; and

The bank loans to other NBFCs would notbe reckoned as priority sector loans witheffect from April 1, 2011.

Report of the Task Force on MSME

The report of the Task Force on MSMEprovides a roadmap for the development andpromotion of the Micro, Small and MediumEnterprises (MSMEs). The Report was presentedto the Prime Minister by its Chairman, ShriT.K.A.Nair. Present on the occasion were the

Minister for Micro, Small and MediumEnterprises, Shri Dinsha Patel, Secretary(MSME), Shri Dinesh Rai, Member PlanningCommission, Shri Arun Maira as well asmembers of the Task Force

Report of the Task Force on Micro, Small andMedium Enterprises:

The role of micro, small and mediumenterprises (MSMEs) in the economic andsocial development of the country is wellestablished. The MSME sector is a nurseryof entrepreneurship, often driven byindividual creativity and innovation.

This sector contributes 8 per cent of thecountry's GDP, 45 per cent of themanufactured output and 40 per cent of itsexports. The MSMEs provide employmentto about 60 million persons through 26million enterprises.

The labour to capital ratio in MSMEs andthe overall growth in the MSME sector ismuch higher than in the large industries.The geographic distribution of the MSMEsis also more even. Thus, MSMEs areimportant for the national objectives ofgrowth with equity and inclusion.

The MSME sector in India is highlyheterogeneous in terms of the size of theenterprises, variety of products and servicesproduced and the levels of technologyemployed.

While one end of the MSME spectrumcontains highly innovative and high growthenterprises, more than 94 per cent of MSMEsare unregistered, with a large number estab-lished in the informal or unorganized sector.

Besides the growth potential of the sectorand its critical role in the manufacturing andvalue chains, the heterogeneity and theunorganised nature of the Indian MSMEsare important aspects that need to befactoredinto policy making and programmeimplementation.

Major issues concerning the MSME sector

Although Indian MSMEs are a diverse andheterogeneous group, they face some commonproblems, which are briefly indicated below:

Lack of availability of adequate and timelycredit;


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High cost of credit;

Collateral requirements;

Limited access to equity capital;

Problems in supply to governmentdepartments and agencies;

Procurement of raw materials at acompetitive cost;

Problems of storage, designing, packagingand product display;

Lack of access to global markets;

Inadequate infrastructure facilities, includingpower, water, roads, etc.;

Low technology levels and lack of access tomodern technology;

Lack of skilled manpower formanufacturing, services, marketing, etc.;

Multiplicity of labour laws and complicatedprocedures associated with compliance ofsuch laws;

Absence of a suitable mechanism whichenables the quick revival of viable sickenterprises and allows unviable entities toclose down speedily; and

Issues relating to taxation, both direct andindirect, and procedures thereof.

The Task Force classified the commonissues into 6 major thematic areas andconstituted separate Sub-Groups for detailedexamination.

These thematic areas covered

Credit,

Marketing,

Labour,

Rehabilitation and exit policy,

Infrastructure, technology and skilldevelopment and

Taxation.

A separate Sub-Group was also constitutedto look into the development of MSMEs in theNorth-East and Jammu & Kashmir. Each of theSub-Groups examined the specific issues over aseries of meetings, and after detaileddeliberations with all the stakeholders, includingMSME Associations, submitted their reports tothe Task Force. The recommendations of the

previous Committees, Working Groups andStudy Groups, which are relevant in the currentcontext, have been taken into consideration bythe Task Force and its sub-groups.

Summary of Recommendations

The following measures are suggested toprovide relief and stability to MSMEs, especiallyin the aftermath of the recent economicdownturn.

A. Measures that need immediate action

The government should extend, for a furtherperiod of one year, beyond March 31, 2010,the components of the 'stimulus package'which are specific to MSMEs.

The government should ensure strictadherence to the stipulated targets by thecommercial banks for the micro enterprises(viz. 20% year-on-year growth for micro andsmall enterprises lending with 60%apportionment for micro sector).

A separate fund may be created with SIDBI,using the shortfalls, if any, against the MSEcredit targets set for the commercial banks.This fund named 'Special Fund for MicroEnterprises' should be utilized exclusivelyfor lending to the micro enterprises.

A Public Procurement Policy for MSMEs asenvisaged in the Micro, Small and MediumEnterprises Development Act, 2006 may beintroduced at the earliest. The policy mayset a goal for government departments andPSUs to reach, over a stipulated period, atarget of at least 20% of their annual volumeof purchases from micro and smallenterprises (MSEs), and mandate them toreport their achievements in this regard inthe annual reports.

The Offset policy of the government,particularly in the defence and aviationsectors, should give priority to MSMEs. Apermanent guidance mechanism under theRaksha Utpadan Rajya Mantri (RURM) withSecretaries of Defence Production, MSMEand Civil Aviation and CEOs of DefencePSUs should be considered for this purpose.

The government should earmark additionalpublic spending to the tune of Rs.5,000 -5,500 crore over the next 3-5 years tospecifically target deficiencies in the existinginfrastructure and institutional set up.


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The government should take steps to createan overall enabling environment usingappropriate legal and fiscal instruments, toincentivize the transition of MSMEs fromthe unorganized to the organized sector aswell as for their corporatization as entities.It should also encourage higher investmentsfor innovative and knowledge basedventures as well as for research anddevelopment through greater partnershipbetween the industry and academicinstitutions.

The ongoing exercise to introduce a newDirect Tax Code and GST should specificallyseek to achieve these policy objectivesthrough appropriate provisions for gradedcorporate tax structure, tax pass through forangel and venture capital funds andincentives for R&D.

B. Medium Term Institutional Measures

The overall approach suggested aboveshould be accompanied by institutional changesand detailing of programmes, to be achievedwithin a year or so. These include:

Government should set up an independentbody at the national level for the promotionand development of MSMEs. This body mayprovide financial and managerial supportfor setting up of industrial estates/commonfacilities in partnership with the privatesector, administer schemes for the unorgani-zed sector, promote technology development(including clean technologies), providemarketing support and coordinate &disseminate information relevant to MSMEs.

A Standing Review Committee underMember (Planning Commission) should beset up to monitor flow of credit to MSMEsector and its apportionment to the morevulnerable sections like micro enterprisesand the unorganized sector.

Government should encourage MicroFinance Institutions (MFIs) to form self-helpgroups and finance micro enterprises inunbanked/identified excluded rural/semiurban areas at reasonable rates.

Banks may also be encouraged to formulateschemes for refinancing loans taken by theMSEs from non-institutional sources/moneylenders. Financial outreach is likelyto prove an effective means to formalize the

unorganized sector. Suitable incentives,including tax concessions, should beextended to MFIs to encourage them to workas business correspondents and businessfacilitators for banks to service microenterprises.

The District Industries Centres (DICs)should be strengthened with provision ofmodern IT-enabled communication facilitiesand re-training of human resources availablewith these institutions.

As the DICs form the bedrock of MSMEpromotion, they should be urgentlystrengthened, revitalized and transformedto play a more active role in advocacy andcapacity building for potential and existingentrepreneurs. Wherever viable, activeinvolvement of the private sector forrevamping the DIC network should beconsidered. Such re-engineering of the DICsmay be supported by the CentralGovernment.

States should be supported by the CentralGovernment to set up Rehabilitation Fundsand operationalise appropriate schemes forthe rehabilitation of units temporarilyrendered sick due to circumstances beyondtheir control. It is recommended that thestate governments may establish amechanism at the district level, in the DICs,to reexamine the viability of sick units incoordination with the banks and implementrehabilitation packages in a time boundmanner.

The government should infuse industrialestates which are currently in a state ofdecay and neglect, with fresh capital andupgrade them to 'Industrial Townships'. Thelatter concept has constitutional recognition.This will permit effective municipaladministration and a single-stop mechanismfor theprovision of municipal services.

New clusters for MSEs should be created tomeet the requirements of planneddevelopment and growth, consistent withthe policy of progressively organizing theMSEs. Development of new infrastructurefor the MSME sector should be substantiallyaugmented with the government steppingin with viability gap funding to encourageprivate sector participation.


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Government should consider earmarkingfunds to the tune of Rs. 1500 crore, withinthe enhanced investment package to supportclean technology initiatives of differentMinistries involved with MSME growth,particularly in the context of the NationalAction Plan for Climate Change (NAPCC).

The concept of business incubators ineducational institutions of repute should beencouraged by setting aside Rs.1000 crorewithin the overall package set out in legaland regulatory structures and provisions.

The legal and regulatory structures andprovisions affecting the MSME sector that shouldbe taken up in the medium term (1-3 years) areas follows.

Government should expedite theestablishment of a SME Exchange which isalready under consideration.

Workable legal options should be developedfor the securitization of trade creditreceivables and for the promotion offactoring services.

Wide publicity should be given to newformats like Limited Liability Partnershipsand Single Person Companies, whichprovide MSMEs with an interim solution inthe move from the informal to the formaleconomy.

The insolvency legislation should becomprehensively reviewed in recognition ofthe reality of the global market whereenterprises continuously get created anddestroyed.

Labour laws should be simplified, especiallythose applicable to enterprises in the MSMEsector, since the transaction costs forcomplying with these laws isdisproportionately high for these units.

While some steps have been taken by theLabour Ministry in this regard, it recommendthat a single and comprehensive legislation forMSEs with 40 workers may be worked out. Atthe same time, keeping in view the large size ofthe unorganized sector within MSMEs, thelabour related issues for this sector should befocused more on welfare rather than legislationby, inter alia, use of the recently promulgatedUnorganised Workers Social Security Act,2008.

The Sam Pitroda Committee Report onRailways

The Sam Pitroda Committee, which wastasked to recommend ways and means tomodernize the Indian Railways hassuggested a total funding of Rs5,60,396crores in the next five years and hasadvocated a 'mission mode' approach forfocus areas.

The committee, its report to railway ministerand it has recommended levying a moderni-sation surcharge on passengers and dives-tments of railway PSUs to generate funds.

The committee has recommended thatRs2,50,000 crores be raised from grossbudgetary support, Rs2,01,805 crores frominternal generation, Rs1,01,000 crores fromleasing/borrowings, Rs2,29,024 crores frompublic-private partnership,

Rs24,000 crores from dividend rebate andRs16,842 crores from Road Safety Fund.

Tracks and bridges, signalling, rolling stock,stations and terminals, land, dedicatedfreight corridors, high speed trains, reviewof existing and proposed projects, ICT,indigenous development, safety, funding,human resource and organisation are the 15focus areas for which theimplementation of'mission mode' approach has been favouredby the committee.

Shome Committee recommends forpostponement of GAAR application

The committee, appointed by Prime MinisterManmohan Singh in July when he was holdingthe finance portfolio, on the crucial General AntiAvoidance Rules proposed in the Budget 2012-13, in its draft report to the finance ministryrecommended a series of steps which areexpected to allay investor concerns.

The Shome Committee recommeded-

Retrospective application of tax should occurin exceptional or rarest of rare cases andwith particular objectives

It should not be done to expand the tax base,nor done without stakeholder consultations

The retrospective amendments in finance act2012 - relating to indirect transfers, are notclarificatory and instead an effort to widenthe tax base


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These amendments should be appliedprospectively after introducing cleardefinitions

If the government must impose themretrospectively then they should apply onlyto the seller and not to the buyer & nointerest should be charged nor penaltylevied

The committee has also maderecommendations on what types of indirecttransfers should be taxed, whetherretrospectively or prospectively; for instance

Only those transactions where at least 50%of the underlying assets are in India shouldbe considered

Only capital gains attributable to the Indiaassets should be taxed

Transactions involving the transfer of lessthan 26% voting power should not beconsidered

Foreign companies listed on a recognisedstock exchange and whose shares arefrequently traded should be exempt

FII and some types of private equitytransactions should be exempt

And treaty exemptions should be respected

Justice Verma Committee report on reform inanti-rape laws

The Justice J S Verma committee which wasset up to suggest ways to make rape lawsstronger in the country (after the gruesome gangrape of a trainee physiotherapist in Delhisubmitted its report recently. Some of the keyrecommendations of the report are as follows:-

New offences have been created and stifferpunishment has been suggested. The newoffences include disrobing a woman,voyeurism, stalking and trafficking.

It has recommended enhancing the durationof punishment to up to 20 years in jail forrape leading to death or the victim beingreduced to a vegetative state and life forgang rape. In case of gang rape leading todeath, the person should be imprisoned forlife. The present law provides forimprisonment to rapists ranging from sevenyears to life.

The panel sought amendments to Section100 of the Indian Penal Code dealing withthe right of private defence, which extendsto causing death.

The committee rejected the suggestion ofchemical castration of rapists as it consideredhanding down such a punishment wouldviolate human rights and that mutilation ofthe body is not permitted under theConstitution.

The committee has also touched uponmarital rape and safety of women in conflictzones suggesting a review of the ArmedForces Special Protection Act (AFSPA) thatcan be used by the forces for exploitingwomen in areas of conflict.

According to the report the judiciary hasthe primary responsibility of ensuringfundamental rights through constitutionalremedies. The CJI can take suo motucognizance; social activists should assist thecourt. The Chief Justice of the high court ofevery state should device appropriatemachinery for administration andsupervision of these juvenile homes inconsultation with experts in the field.

All marriages in the country -- irrespectiveof the personal laws under which suchmarriages are solemnised -- shouldmandatorily be registered in the presenceof a magistrate and the magistrate willensure that the marriage has beensolemnised without any demand for dowryhaving been made and that the marriagehas taken place with the full and free consentof both partners.

Medical examination of victims of sexualassault which were prepared on the basis ofthe best practices advised by global expertsin the field of gynaecology and psychology.

Trafficking of minor children must be madea serious offence. Trafficking must bepunished with rigorous imprisonment for aterm which shall not be less than sevenyears, but which may also extend to 10 years.

There is also a suggestion to bar electedrepresentatives from holding office or forcandidates to file nomination for election ifa court has taken cognizance of the charge-sheet filed by the investigating agency.

important reports 2012-13

Documents