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CURRENT AFFAIRS

SEPTEMBER 2014

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TABLE OF CONTENTS

POLITY ...................................................................................................................................................................................... 5

Supreme Court Judgments and Rulings ............................................................................................................................................ 5 SC cancels allocation of 214 coal blocks................................................................................................................................................................................. 5 High Court Expands Governors powers to Suspend PSC Chairman ........................................................................................................................ 5 Supreme Court for Independent Probe into encounters ............................................................................................................................................... 5 Undertrials who have served half their likely term to be released .......................................................................................................................... 6 State legislatures free to add official language: SC ............................................................................................................................................................ 8

Administrative Reforms ........................................................................................................................................................................... 8 Govt readies national e-mail system ........................................................................................................................................................................................ 8 Govt. To train IAS, IPS, IFS officers in dealing with Naxalism ...................................................................................................................................... 9 Allow detainees to vote: Election Commission ................................................................................................................................................................... 9

Legislations and policies .......................................................................................................................................................................... 9 J&K Floods a National Disaster ................................................................................................................................................................................................... 9 Lokpal Search Panel gets freedom of Choice .....................................................................................................................................................................10

ECONOMY ............................................................................................................................................................................. 11

State of Indian Economy ....................................................................................................................................................................... 11 India slips to 71st rank in global competitiveness list ..................................................................................................................................................11 Indian economy poised to grow at 5.6 per cent in 2014: UNCTAD ........................................................................................................................12 Industrial production growth slows to 4-month low ....................................................................................................................................................12 Inflation dip to 5 year low ...........................................................................................................................................................................................................13 Macroeconomic indicators improving, says RBI Governor ........................................................................................................................................13 Analysis of Overall Indicators ...................................................................................................................................................................................................13

Policy Guildlines By RBI ........................................................................................................................................................................ 14 Key conceptual issues on Global Monetary Policy ..........................................................................................................................................................14 Banks to be carefull about Jan Dhan Yojna RBI.............................................................................................................................................................15 Persisting inflation, a major concern: Rajan ......................................................................................................................................................................17

Policy Guildlines by the Government............................................................................................................................................... 17 Centre set to revise GDP measurement next year ...........................................................................................................................................................17 India not to impose anti-dumping duty on solar panels ..............................................................................................................................................18 Government to unveil a new IPR policy ...............................................................................................................................................................................18 Bibek Debroy to chair high-level govt committee on railways .................................................................................................................................19 Governments view on reforming the MSME sector.......................................................................................................................................................20 Centre to spend Rs.33,000 cr on broadband projects ...................................................................................................................................................20

PSU Issues .................................................................................................................................................................................................... 20 Cabinet clears stake sale in Coal India, ONGC and NHPC .............................................................................................................................................20 Hurdles in the process of disinvestment .............................................................................................................................................................................21 Centre to revive five PSUs ...........................................................................................................................................................................................................22 Five States contributed half of PSU investments between 2008 and 2013 ......................................................................................................23

Do not keep taxpayers waiting: CBDT to I-T dept .................................................................................................................... 23

Panel submits report on new gas pricing formula ................................................................................................................... 24

Capital infusion vital for insurance sector: IRDA chief .......................................................................................................... 25

S&Ps rating upgrade to boost foreign investments ................................................................................................................ 25

Pension Reforms ....................................................................................................................................................................................... 26 National Pension Scheme ............................................................................................................................................................................................................27

Informal Economy NSSO Reprot An Analysis ...................................................................................................................... 27

Informal Sector And Need Of Labor Reforms .............................................................................................................................. 28

SOCIAL ISSUES ..................................................................................................................................................................... 31

Government wants clarification on transgenders order ....................................................................................................... 31 Bihar Declares transgenders as Third Gender ..................................................................................................................................................................31

SC Clears 3% reservation for disabled in Jobs ............................................................................................................................ 31

HEALTH ................................................................................................................................................................................................... 33

Greater Transparency needed in organ Donation ................................................................................................................... 33

Ayush Mission to be launched soon ................................................................................................................................................. 33


Plan to reduce infant mortality ......................................................................................................................................................... 33

Gates Foundation to help fight kala Azar in India ................................................................................................................... 34

National Health Assurance Mission ................................................................................................................................................ 34

Poor healthcare amongst Indian Tribes ....................................................................................................................................... 34

EDUCATION ............................................................................................................................................................................................. 36

Issue of Indian students moving abroad for education .......................................................................................................... 36

Higher Education bill to be withdrawn from the parliament ............................................................................................. 36

Free lectures in schools and colleges mandatory for scientists .......................................................................................... 37

Central Government to fund Swacch Vidyalaya Campaign ................................................................................................. 37

Link between Sanitation and schooling ........................................................................................................................................ 37

ENVIRONMENT ................................................................................................................................................................... 39

Gomti to be cleaned on lines of river Ganga ................................................................................................................................ 39

Web portal on Ganga rejuvenation launched............................................................................................................................. 39

Wildlife numbers down by half in 40 years: WWF survey (Living Planet Report) .................................................... 39

Climate Change ......................................................................................................................................................................................... 39 UN climate summit .........................................................................................................................................................................................................................39 Global marches draw attention to climate change ..........................................................................................................................................................40 UN reports largest annual CO2 increase since 1984 ......................................................................................................................................................40 World running out of carbon allowance: study by Global Carbon Project........................................................................................................41

Ozone layer showing signs of recovery: UN ................................................................................................................................. 41

Pusa Hydrogel............................................................................................................................................................................................ 41

Dilution of Forest Rights Act ............................................................................................................................................................... 42

IndARC: Indias Arctic observatory .................................................................................................................................................. 42

Bacteria that may help tackle nuclear waste ............................................................................................................................. 43

GEDI: NASA to map earth forests in 3D ......................................................................................................................................... 43

Global biodiversity prize for Indian ................................................................................................................................................. 43

INDIA AND WORLD ........................................................................................................................................................... 44

India - US ...................................................................................................................................................................................................... 44 Historical Background ..................................................................................................................................................................................................................44 Areas of Cooperation .....................................................................................................................................................................................................................45 Areas of divergent interests .......................................................................................................................................................................................................47 Looking at India-US Relationship in context of China ...................................................................................................................................................50 Recent Development during Prime Ministers USA visit ..............................................................................................................................................51 Challenges in Indo-US relations ...............................................................................................................................................................................................52

India-Bangladesh ..................................................................................................................................................................................... 53 India-Bangladesh Joint Consultative Commission (JCC) meet ..................................................................................................................................53 Bangladesh to restore abandoned rail lines with India ................................................................................................................................................54

lifelong visas for Indian diaspora ..................................................................................................................................................... 54

India, Australia seal civil nuclear deal ........................................................................................................................................... 54

Indian-Israeli PMs meet ........................................................................................................................................................................ 54

GMR to build Nepal's largest hydro power plant ...................................................................................................................... 55

Bamiyan to be SAARC cultural capital for 2015 ....................................................................................................................... 55

Security Issues ........................................................................................................................................................................................... 56 Al-Qaeda announces India wing...............................................................................................................................................................................................56

WORLD AFFAIRS ................................................................................................................................................................ 57

Airstrikes on IS .......................................................................................................................................................................................... 57 China slams U.S. broad coalition approach to counter IS .........................................................................................................................................57

Ukraine crisis ............................................................................................................................................................................................. 58 Cause of the crisis............................................................................................................................................................................................................................58 Ukraine, pro-Russian rebels sign ceasefire deal ..............................................................................................................................................................58 EU imposes new sanctions on Russia over Ukraine .......................................................................................................................................................58

Chinas Silk Road to counter Washingtons FTA move ........................................................................................................... 59


Sri Lanka ...................................................................................................................................................................................................... 59 Chinese President Xi Jinpings visit ........................................................................................................................................................................................59 Sri Lanka to sign FTA with China.............................................................................................................................................................................................59

Afghanistan................................................................................................................................................................................................. 60 Afghanistans presidential rivals sign power deal ..........................................................................................................................................................60 U.S. forces to remain in Afghanistan past end of 2014 .................................................................................................................................................60

Fiji coup leader sworn in as PM ........................................................................................................................................................ 60

Scotland referendum for independence ........................................................................................................................................ 61

SCIENCE & TECH ................................................................................................................................................................. 62

Indias Mars Orbiter Mission (MOM) .............................................................................................................................................. 62 Scientific Instruments ...................................................................................................................................................................................................................62 Liquid Apogee Motor (LAM)/ 440 Newton engine .........................................................................................................................................................63 Issues .....................................................................................................................................................................................................................................................63

NASA's Maven explorer ......................................................................................................................................................................... 64

Rosetta (robotic space probe) ............................................................................................................................................................ 64

Mars Curiosity rover reaches its primary destination ............................................................................................................ 65

NASA to make ISS an Earth-observing platform ....................................................................................................................... 65

NASA submarine to explore oceans in space ............................................................................................................................... 65

Laniakea ....................................................................................................................................................................................................... 65

National Cyber Security and Coordination Centre (NCSC) .................................................................................................. 66

Controlling electron movement key to low-energy computers .......................................................................................... 66

IISc develops molecular "sniffer dog" to detect explosives ................................................................................................... 66

Bash threat ............................................................................................................................................................................................... 67

Facebook to test Internet beaming drones .................................................................................................................................. 67

IISc: novel membrane to filter water and kill bacteria .......................................................................................................... 67

Synthetic Biology...................................................................................................................................................................................... 67

Manjul Bhargava gets Fields Medal, 2014 ................................................................................................................................... 68

Indian born scientist wins prestigious US award ...................................................................................................................... 68


POLITY

SUPREME COURT JUDGMENTS AND RULINGS

SC CANCELS ALLOCATION OF 214 COAL BLOCKS

In an order with far-reaching implications, the Supreme Court has cancelled all but four of the 218 coal block

allocations declared arbitrary and illegal by it in an August 25 judgment.

The decision comes as a windfall for the government as the court has ordered the owners of the cancelled

coal blocks to cough up Rs. 295 as compensation for every tonne of coal they extracted illegally, to make up

for the loss to the exchequer

The government is expected to get Rs. 8,000- 10,000 crore this way. The government is also free to auction

the cancelled blocks.

HIGH COURT EXPANDS GOVERNORS POWERS TO SUSPEND PSC CHAIRMAN

Expanding the powers of Governors, the Karnataka High Court has declared that Governors will get the power

to suspend the chairman or members of a the State Public Service Commission (PSC) soon after making

recommendations to the President for their removal, by making reference to the Supreme Court.

In a first-of-its-kind interpretation on the Governors powers on suspending a PSC chairman or members, the

court made it clear that the starting point of the Presidential reference for their removal will begin with the

Governor making a recommendation to the President, and not from the date of the President making the

actual reference to the Supreme Court based on the Governors recommendation.

Article 317 (2) states that the Governor can suspend a chairman or any member of the PSC in respect of

whom a reference has been made to the Supreme Court under clause (1) until the President has passed

orders on receipt of the report of the Supreme Court on such reference.

But the court said the expression has been made cannot be interpreted to mean a past event but has a

connotation of a continuous circumstance or contemporaneity, the starting point of which is when the

Governor makes a request to the President to make a reference to the Supreme Court for the removal of a

chairman or a member of the PSC.

If held otherwise, the court said , the whole object of suspending power of the Governor would be set at

naught and hence the words has been made cannot be given a past continuous connotation, but must be

read as a present continuous circumstance.

In circumstances such as arrest of a chairman or member of a PSC or malpractices committed during the

process of selection of public servants, the court said, may call for an immediate suspension, and any lapse of

time in suspending the chairman or members of the PSC in such a situation and by allowing them to continue

in the post, could be detrimental to the PSC.

SUPREME COURT FOR INDEPENDENT PROBE INTO ENCOUNTERS

The Supreme Court has ruled that an independent and thorough investigation should be held into encounter

deaths to restore the faith of the public in the police force.

Passing the judgment, a three-judge Bench said the right to live with dignity applied to all and the state had

no right to take the law in its hands by way of extra-judicial killings.

The court noted that policemen would not be excused for committing murder in the name of encounter on

the pretext that they were carrying out the orders of their superior officers or politicians.

SUMMARY OF COURT DIRECTIONS

The court laid down the law on police behaviour in case of encounter deaths through a series of procedural

requirements to be followed strictly. Among these, the court held that no police officer should be given out-

of-turn promotion or gallantry award immediately after an encounter death but only after the gallantry was

proved beyond doubt.


An independent investigation into the encounter death should be done by the CID or officers from another

police station who were not involved in the incident. The probe should be scientific, well-documented and

provide a decisive finding on the nature of death in question.

The probe should be open to a magisterial inquiry and any dissatisfaction about its fairness could be

challenged before a sessions judge, the court held.

Procedural rules also include recording of intelligence tip-off, registering of FIR and providing immediate

medical aid to the suspect shot or inform his family in case of death. State Directors-General of Police would

have to report encounter deaths before the National Human Rights Commission every six months.

ANALYSIS

Killings in police encounters require independent investigation. The killings affect the credibility of the rule of

law and the administration of the criminal justice system.

There is no doubt that police in India have to perform a difficult and delicate task, particularly, when many

hardcore criminals, extremists, terrorists, drug peddlers, smugglers who have organised gangs, have taken

strong roots in the society. But then, such criminals must be dealt with by the police in an efficient and

effective manner so as to bring them to justice by following the rule of law

UNDERTRIALS WHO HAVE SERVED HALF THEIR LIKELY TERM TO BE RELEASED

The Supreme Court has ordered the release of all undertrial prisoners who have already served half the term

of sentence, had they been convicted of the offence for which they were being tried.

The court relied on Section 436A of the Criminal Procedure Code, 1973 (CrPC) to direct all States

The order is likely to benefit thousands of undertrials who are languishing in jails across the country, as they

are unable to pay sureties and bail bond to get out.

The ruling, however, does not apply to those who have been awarded the death sentence.

The court ordered judicial officers across the country to visit prisons in their district over the next two months

to identify the undertrials.

The CJI said the situation demanded immediate action as 66 per cent of the prisoners were undertrials, many

too poor to raise bond money for bail.

The Chief Justice said delays in criminal trials worsened matters for undertrials. They languish in jails

because courts are not enabled to take up their cases. Many States have no finances for courts. There is no

infrastructure, no courtrooms,

BASIC PREMISE BEHIND THE RULING

The primary constitutional and moral concern with undertrial detention is that it violates the normative

principle that there should be no punishment before a finding of guilt by due process. So, undertrial

detention of those suspected, investigated or accused of an offence effectively detains the innocent.

However, all criminal justice systems across the world authorise limited pretrial incarceration to facilitate

investigation and ensure the presence of accused persons during trial. So, the critical challenge in this area is

to identify the normatively optimal and necessary level of pretrial incarceration and then design a criminal

justice system to achieve this.

ANALYSIS OF PROBLEM IN INDIA

The Indian debate on the undertrial problem begins with the empirical claim that the proportion of

undertrials to convicts in our prison system is too high. In 2012, undertrials comprised 66 per cent of the

prison population, and in the period 2001-2010 this rate has on average been a stubborn 67 per cent.

However the question to be asked if this high proportion of undertrials normatively undesirable or a sign of a

pathological criminal justice system.

A high undertrial proportion in the prison population may be the result of too many arrests during the

investigation and trial process or too few convictions at the end of trial. India has an exceptionally low rate of

incarceration which is defined as the number of persons in prison per 1,00,000 population. The International


Centre for Prison Studies (ICPS) points out that at 30 (2012) the Indian incarceration rate is among the 10

lowest rates in the world.

In absolute numbers, in 2013, there were around 2,49,800 undertrials in India and they formed roughly 70

per cent of the prison population. In the U.S., in the same year, there were more than double that number of

remand non-convicted prisoners (4,75,692). Yet they formed only 21.2 per cent of the prison population.

If our conviction rate improves, then the proportion of undertrials will drop. Taken alone, the high proportion

of undertrials in India is a sign of a pathological criminal justice system. Unless we can show that current

undertrial detention is for excessively long periods or disproportionately targets the poor and the

marginalised, the proportion by itself is not the core problem that we need to focus on.

WHY 436A NOT A SOLUTION

Section 436A was introduced into the CrPC in 2005 to mandatorily release on bail all undertrials who have

already served half the period of their sentence if convicted. The Supreme Court, in its recent order, and civil

society groups have invoked Section 436A of the CrPC as the primary strategy to reduce the undertrial

population. This strategy would work if undertrials are in fact detained for inordinately long periods of time.

However, the National Crime Records Bureau (NCRB) data on prisons shows that between 2001 and 2010, on

average around 40 per cent of undertrials incarcerated in the country spent less than three months in prison;

the largest single category among periods of detention. Further, during the same period, over 60 per cent of

undertrials on average were detained for less than six months. If we include the percentage of undertrials

detained for over six months but less than a year, we find that on average over 80 per cent of undertrials in

India spent less than one year in prison during the years under consideration.

The offences for which these undertrials are being investigated or tried make the futility of a Section 436A

strategy apparent. The single largest category of undertrials by offence was that of murder, which accounted

for close to 22 per cent of all undertrials on average each year. Hence, relatively short periods of undertrial

detention for an overwhelming majority of undertrials than is commonly assumed, together with the long

sentences attached to the offences undertrials are investigated or accused of leads inevitably to the

conclusion that very few undertrials may benefit from Section 436A.

The enactment of Section 436A in 2005 had little impact on the composition of the prison population

thereafter. The new enthusiasm to implement this provision is welcome but is unlikely to be a substantive

solution to the undertrial problem. If undertrial detention numbers are a problem, we must re-articulate

what is the normatively acceptable length of pretrial detention.

THE REAL PROBLEM

Irrespective of the length of undertrial detention, the core of the undertrial problem may be its disparate

social, economic and religious impact.

While existing data sources are inadequate, some preliminary research suggests that the illiterate, lower

castes and members of religious minorities are over-represented in the undertrial population.

In 2012, close to 74 per cent was either illiterate (30 per cent of the undertrial population but only 18 per

cent of the Indian population) or had studied below Class 10 (43.3 per cent of the undertrial population).

A policy response that assumes that the disproportionate numbers of socially and economically

disadvantaged people are subject to unnecessary undertrial detention calls for a focussed Centrally

sponsored public defender programme to replace the ham-handed legal aid services currently administered.

WAY AHEAD

Legal and public policy responses to the undertrial problem should not proceed solely on the proportion of

undertrials in the prison population. Arguably, the high proportion of undertrials is a reflection of the

pathological failure of the criminal justice system to successfully convict and thereby secure peace and

security.

This failure must be resolved by focussing on systematic institutional reform of the investigation and

prosecution of offences. Second, our current legal strategy assumes inordinately long periods of undertrial

detention and we show that a Section 436A-focussed strategy will have minimal impact on the undertrial

population overall.


New rules mandating release on the filing of a charge sheet barring limited exceptional circumstances

along with a Centrally sponsored public defenders programme that weeds out the overt or structural

discrimination in the criminal justice system is the best bet for a targeted intervention to reduce the length

and eliminate the disparate impact in undertrial detention in India.

STATE LEGISLATURES FREE TO ADD OFFICIAL LANGUAGE: SC

The Supreme Court has held that there is no bar against a State Legislature declaring a language used in the

State as an official language for the convenience of its citizens.

This means that a widely-used language in a State, once declared an official language by the State Legislature,

would find a place in official communications, advertisements and even signposts.

BACKGROUND

The court passed the order on a petition by U.P. Hindi Sahitya Sammelan against the 1989 amendment to the

Uttar Pradesh Official Language Act, 1951.

The U.P. Legislature introduced Urdu as the second official language of the State, besides Hindi, in the

interest of the Urdu-speaking people.

The Bench upheld the 1989 amendment and declared Urdu as the States second official language. The

Benchs judgment focussed on the question of law as to whether a State Legislature is precluded from

adopting another language used in the State if Hindi has already been declared the official language

CONSTITUTIONAL PROVISION

Article 345 of the Constitution says the Legislature of a State may by law adopt any one or more of the

languages in use in the State or Hindi as the language or languages to be used for all or any of the official

purposes of that State.

The court said that the separate mention of Hindi in the Article was only meant to promote Hindi among

the States. This cannot be taken to mean that the particular State Legislature must sacrifice its power in

promoting other languages within the State.

ADMINISTRATIVE REFORMS

GOVT READIES NATIONAL E-MAIL SYSTEM

The government is working on India's own e-mail service.

The Department of Electronics and Information Technology (DeitY) is working hard to put in place an e-mail

service that will ensure government communications and data are effective and unhackable.

The new email service will have smart features, and has been modeled on the lines of Gmail and Yahoo to

make it user-friendly.

LAUNCH IN PHASES

The new Made in India e-mail service will be first rolled out for the use of the Central government after which

it will be extended to state governments. In the final phase it will also be made available to all Indian citizens

for their interaction with the government. "The new set-up will be backed by enhanced bandwidth and

improved servers positioned in India.

ANALYSIS

Although the government has invested more than Rs.800 crore on modernising its existing National

Informatics Centre (NIC) to ensure effective communication between departments and to have a system that

cannot be hacked, the exercise has not been very successful.

The nic.in network being used now by the government lacks sufficient bandwidth as a result of which it does

not support larger files and makes downloading very slow. This has forced officials to switch to private e-mail


accounts such as Gmail or Yahoo even for official work, making the nation's decision making system

vulnerable to hacking. As the servers for these e-mail services are in other countries, usually the United

States, communications passing through them are vulnerable and open to misuse and data theft.

The problem has assumed such proportions that security agencies have been regularly issuing guidelines on

Internet usage to all ministries and government departments for fear that the use of Gmail, Hotmail or other

such accounts for internal communication can expose them to interception by networks with servers outside

India.

The Wikileaks revelations concerning India's diplomatic, political and other developments was another

eyeopener.

The purpose behind having an effective and secure e-mail service is to ensure that the information and data

is not leaked.

The new government e-mail service will enhance security of government communications and official data.

GOVT. TO TRAIN IAS, IPS, IFS OFFICERS IN DEALING WITH NAXALISM

The Department of Personnel and Training (DoPT) has written to chief secretaries of eight states seeking

nomination of at least three officers each from Indian Administrative Service (IAS), Indian Police Service (IPS)

and Indian Forest Service (IFS) for the course.

The nominated officers will be trained by armed forces personnel in Chhattisgarh Academy of Administration,

Raipur during October 15-17.

The basic objective of the programme is to increase exposure of IAS, IPS, IFS and other civil services officers

to the military, so as to effectively handle unforeseen situations at short notice.

This, in the long run, is expected to help them to combat future challenges to national security in an

organised manner.

ALLOW DETAINEES TO VOTE: ELECTION COMMISSION

The Election Commission of India has written to the Chief Secretaries of the two States (Maharashtra and

Haryana) to make arrangements for those under preventive detention to exercise their franchise through

postal ballot.

The Election Commission pointed out that sub-section (5) of Section 62 of the Representation of the People

Act, 1951, confers voting rights on electors subjected to preventive detention. And Rule 18 of the Conduct

of Elections Rules, 1961, states that such detainees are entitled to cast their vote through postal ballot.

Under Rule 21(1) of the Conduct of Elections Rules, the appropriate government has to intimate Returning

Officers of the names of voters under preventive detention.

LEGISLATIONS AND POLICIES

J&K FLOODS A NATIONAL DISASTER

Prime Minister Narendra Modi has announced a special assistance of Rs 1,000 crore for the flood-affected

state and declared the calamity as a national disaster

Centre kept a constant touch with state government. Army, Air force and NDRF have been the coordinating

relief operations in the region

WHAT IS A NATIONAL DISASTER

A particular event/calamity when declared a national disaster results in the State getting additional central

assistance.

Once the government declares the disaster of 'severe nature', the state will qualify for immediate relief and

additional assistance from NDRF

Under the existing NDMA Act, if government doesn't declare any calamity as of a 'severe nature', the state

will have to carry out rehabilitation work with the balance available in its own State Disaster Response Fund


(SDRF) which has shares from both the centre and respective states. The state in that case will not be able to

get fund from the NDRF.

LOKPAL SEARCH PANEL GETS FREEDOM OF CHOICE

The Department of Personnel and Training has notified amendments giving autonomy to the Lokpal search

committee to shortlist and recommend names independently for selection of Chairman and members of the

anti-corruption body.

The amendments act as a course correction after the former Supreme Court judge Justice K.T. Thomas opted

out from heading the search committee in March 2014, citing lack of autonomy.

Eminent jurist Fali Nariman too had turned down the post of a member of the panel for that reason.

Justice Thomas had objected to the provision that the search committee should only shortlist candidates

from a list provided by the department.

The amendment made in Rule 10 of the Search Committee Rules removed this roadblock by omitting the

words from among the list of persons provided by the Central Government in the Department of Personnel

and Training.

**For more on the Lokpal controversy refer to our previous current affairs notes

JUSTICE K.T THOMAS NOT SATISFIED

The former Supreme Court judge Justice K.T. Thomas, has said that the amendments were a progressive

departure and a step in the right direction from the earlier version. But he said the amendments still only

addressed half the concerns raised by him.

Justice Thomas said though the Search Committee was free to shortlist names for Lokpal, its

recommendations could still be vetoed by the Selection Committee.

He was referring to a proviso to Section 4 (3) of the Lokpal Act, allowing the Selection Committee to consider

any person other than the persons recommended by the Search Committee.

Justice Thomas said a statutory amendment was required to correct this.

As per him the Search Committee needs to have some value. The committee searches out and recommends

names, but these names can be vetoed by the Selection Committee. If this proviso continues, the Search

Committee continues to be a mute spectator.

He said the law should prescribe the Selection Committee to put on record the reason for vetoing names

suggested by the Search Committee.


ECONOMY

STATE OF INDIAN ECONOMY

INDIA SLIPS TO 71ST RANK IN GLOBAL COMPETITIVENESS LIST

Weighed down by challenging economic conditions for most part of the past year, India has slipped to 71st

position - the lowest among BRICS countries - in an annual global competitiveness list, with Switzerland

claiming the top spot.

The annual list, released by Geneva-based World Economic Forum (WEF), comes at a time when the new

Indian government has completed 100 days in power and has promised further steps to revive its economy

and the ease of doing business in the country.

Continuing its downward trend and losing 11 places, India ranks 71st. The countrys new government faces

the challenge of improving competitiveness and reviving the economy, which is growing at half the rate of

2010, WEF said.

As per the Global Competitiveness Report 2014-15, Switzerland is the most competitive economy, followed

by Singapore.

China, which has improved its position by one place to 28th spot, leads the BRICS grouping, among which

India has the least ranking. Russia is ranked at 53rd position, followed by South Africa (56) and Brazil (57).

Indias decline of 11 places to 71st, set against the gains of the ASEAN 5 countries, suggests that the

competitiveness divide South and Southeast Asia is becoming more pronounced, WEF said.

Besides India, WEF said that some of the worlds largest emerging market economies continue to face

difficulties in improving competitiveness. These include Saudi Arabia (24th rank), Turkey (45), Mexico (61),

Nigeria (127th), South Africa and Brazil - all of them have slipped in their rankings.

REASONS FOR THE SLIDE

According to the report, Indias slide in the competitiveness rankings began in 2009, when its economy was

still growing at 8.5 per cent (it even grew by 10.3 per cent in 2010).

Back then, however, Indias showing in the Global Competitiveness Index (GCI) was already casting doubt

about the sustainability of this growth.

Since then, the country has been struggling to achieve growth of 5 per cent. The country has declined in

most areas assessed by the GCI since 2007, most strikingly in institutions, business sophistication, financial

market development, and goods market efficiency, it added.

As per the report, there is uneven implementation of structural reforms across different regions and levels

of development as the biggest challenge to sustaining global growth.

Further, The strained global geopolitical situation, the rise of income inequality, and the potential

tightening of the financial conditions could put the still tentative recovery at risk and call for structural

reforms to ensure more sustainable and inclusive growth, WEF Founder and Executive Chairman Klaus

Schwab said.

FURTURISTIC MEASURES

WEF further said that India needs to create a sound and stable institutional framework for local and foreign

investors as well as improve connectivity.

Talent and innovation are the two areas where leaders in the public and private sectors need to collaborate

more effectively in order to achieve sustainable and inclusive economic development, it added.

The leading economies in the index all possess a track record in developing, accessing and utilising

available talent, as well as in making investments that boost innovation.

These smart and targeted investments have been possible thanks to a coordinated approach based on

strong collaboration between the public and private sectors, the report said

Noting that improving competitiveness would yield huge benefits for India, WEF said it would help re-

balance the economy and move the country up the value chain ensuring more solid and stable growth.


This in turn could result in more employment opportunities for the countrys rapidly growing population,

it added.

BACKGROUND

The rankings are based on WEFs GCI which is based on scores covering 12 categories.

They are institutions, infrastructure, macroeconomic environment, health and primary education, higher

education and training, goods market efficiency, labour market efficiency, financial market development,

technological readiness, market size, business sophistication and innovation.

INDIAN ECONOMY POISED TO GROW AT 5.6 PER CENT IN 2014: UNCTAD

The Indian economy will grow at a rate of 5.6 per cent in 2014 while developing economies as a whole will

see between 4.5 and 5 per cent rise in economic expansion, a report by the United Nations Conference on

Trade and Development (UNCTAD) said.

The UNCTAD Trade and Development report 2015 forecasts that developing economies as a whole are likely

to repeat the performance of previous years, growing at between 4.5 and 5 per cent. It forecasts Chinas

economy to grow by 7.5 per cent in 2014.

Improved performance of mining, manufacturing and services sector pushed Indias economic growth rate

to two-and-a-half- year high of 5.7 per cent in the April-June quarter.

Futher, speaking at the report launch, Jawaharlal Nehru University Professor and economist Jayati Ghosh,

however, said expectations might need to be tempered.

This recent (domestic GDP) growth that everyone is getting excited about it, that there is possibility for 7 or

8 (per cent), yes it is possible but what are we seeing so far, we are seeing another bubble being

generated,

It is not growth based on sustained foundations and the bubble will again be associated with construction,

house prices and the like rather than sustained demand of basic needs, basic infrastructure and so on. So, I

am a little wary of this recent recovery.

Expressing concern over power sector issues, Ms. Ghosh said, There are at least 16 and I think possibly 25

major power investments that are half complete, and are possibly never to be completed, all of which have

taken public sector loans which are paid for finally by all of our money and which are never going to repay.

The UNCTAD report forecasts that growth will exceed 5.5 per cent in Asian and sub-Saharan countries, but

will remain subdued at around 2 per cent in North Africa and Latin America and the Caribbean. Meanwhile,

transition economies are expected to further dip to around 1 per cent, from an already weak performance

in 2013.

INDUSTRIAL PRODUCTION GROWTH SLOWS TO 4-MONTH LOW

Slowing for the second consecutive month, industrial output grew barely 0.5 per cent in July against 3.4 per

cent in June. Factory output had grown 2.6 per cent in July 2013.

Weaker manufacturing growth and sliding consumer durables contributed to the sluggishness.

However, the cumulative growth for April-July is 8.5 per cent against 1.4 per cent in the year-ago period.

ANALYSIS

Cumulative industrial growth during April-July remains higher at 3.3 per cent against a contraction of -1 per

cent in April-July 2013.

The manufacturing sector contracted by -1 per cent as against a growth of 2.3 per cent during the same

period in 2013, according to official data released on the Index of Industrial Production (IIP)

The noticeable contraction in the growth of capital goods output has raised concerns over the hope that

was being expressed on a revival in the investments cycle.

The sectors registering positive growth include mining output of which rose 3.3 per cent during April-July as

against a contraction of -0.1 per cent in the same period last year.

Growth in manufacturing also remained positive at 2.3 per cent compared with a decline of -0.1 per cent

due to the low base effect.


Electricity generation boosted the growth rate, rising 11.4 per cent against 3.9 per cent last year.

In all, 15 industries recorded positive cumulative growth with the highest growth industry being electrical

machinery & apparatus that grew 33.3 per cent.

INFLATION DIP TO 5 YEAR LOW

The Wholesale Price Index inflation fell from 5.2% in July 2014 to 3.7% in August 2014. This is driven by a

decline in food inflation and fuel inflation.

The Consumer Price Index inflation decreased from 8% in July to 7.8% in August. However, food inflation

increased marginally from 9.1% to 9.2%

Softening prices of food items, including vegetables, pulled down the Wholesale Price Index-based (WPI)

inflation to five-year low of 3.74 per cent in August, but it may not bring relief to the industry as the

Reserve Bank of India (RBI) is insisting that there is no point in cutting interest rates to see prices go up

again.

The August WPI inflation is the lowest since October, 2009, when it stood at 1.8 per cent.

According to official data released, inflation in the food segment saw a significant decline to 5.15 per cent in

August from 8.43 per cent in July.

With WPI inflation coming down to five-year low level, India Inc has raised the pitch for lowering of interest

rate to boost industrial output that slipped to four month low of 0.5 per cent in July.

The retail inflation, measured on Consumer Price Index, (CPI) had also eased to 7.8 per cent in August from

7.96 per cent in July.

MACROECONOMIC INDICATORS IMPROVING, SAYS RBI GOVERNOR

The Reserve Bank of India (RBI) Governor Raghuram Rajan, said that the macro-economic indicators were

improving and inflation had been coming down in line with the central banks expectation.

We are in the process of picking up growth, even if the journey is likely to be bumpy at times. Inflation is

coming down, consistent with our forecasts, said Dr. Rajan while addressing the FICCI-IBA annual banking

conference here.

However, he said, inflation is high, and the best solution for the country is to bring it down. I have no

desire to keep interest rates higher than they should be. I want to bring down interest rates when feasible.

The RBI Governor said there was no point in cutting interest rates to see inflation pick up again.

The RBI remains committed to the dis-inflationary path of taking retail inflation to 8 per cent by January,

and further to 6 per cent by January 2016.

Dr. Rajan said that the banking sector was facing a lot of challenges. According to him, public sector banks

must have the independence to take commercial decisions.

However, he told bankers to ensure quality and effectiveness of bank boards. Bank boards have to be more

empowered to hold the bank management accountable, he said. The recent scandals called for better

internal evaluation of lending process, he added.

ANALYSIS OF OVERALL INDICATORS

If there is one clear signal that comes out of the latest set of economic data released on inflation, industrial

growth and trade, it is this: the recovery process is on but it is uneven and still in first gear.

Wholesale price inflation was down at a five-year low of 3.7 per cent in August but retail price inflation,

which is the benchmark for the Reserve Bank of India, is still sticky at 7.8 per cent.

Industrial output growth was almost flat at 0.5 per cent in July after a 3.9 per cent rise in June, while export

growth fell to a five-month low of 2.35 per cent in August.

The see-saw in industrial output, especially of consumer durables and capital goods, clearly shows that the

recovery is tentative as yet.

Of course, the crucial automobiles sector is beginning to show firm signs of a turnaround with passenger car

manufacturers seeing a return of demand.

The positive impulses from the auto industry are encouraging because it can have a cascading impact on

downstream industries such as ancillaries that host thousands of jobs.


Yet, it is worrying that the capital goods industry is still not seeing a viable change in its fortunes. If

anything, this indicates that companies are still not willing to commit investment in fresh capacities.

This fact is also borne out by the poor credit offtake from banks.

Despite the RBIs efforts to free up funds through the two cuts made in statutory liquidity ratio over the last

few months, banks have not seen any increase in lending, which is something that RBI Governor Raghuram

Rajan alluded to a few weeks ago.

What lends confidence are two factors the favourable show by the monsoon in the later half and the

downtrend in global commodity prices, notably crude oil.

The latter is bound to have a salutary impact on inflation and the fiscal deficit; diesel subsidy, for instance,

has already been wiped out.

With the next monetary policy announcement of the RBI close at hand, pressure is rising on the central

bank to review its hawkish stance now that retail inflation is close to its benchmark of 8 per cent by January

2015.

Dr. Rajan, of course does not seem to be in the mood to oblige, going by his remarks a couple of days ago,

and rightly so.

There is little point in tinkering with rates unless the downtrend in inflation is clearly established, which is

not the case now.

The approaching festival season will be crucial for industrial growth as purchases of durables and

automobiles generally picks up during this period.

That may well determine the robustness of the ongoing economic recovery.

POLICY GUILDLINES BY RBI

KEY CONCEPTUAL ISSUES ON GLOBAL MONETARY POLICY

Reserve Bank of India Governor Raghuram Rajan, who had predicted the 2008 financial meltdown, has said

that abrupt reversal of low interest rates globally could create substantial amounts of damage and that it

should be done in a predictable and careful way.

He was also worried that altering the price of capital for substantial period of time distorted investment

decision and the nature of the economies.

To a question that whether quickly reversing low rates could backfire, he said that Were in the hole we are

in. To reverse it by changing abruptly would create substantial amounts of damage. So Im with (U.S.

Federal Reserve) officials in saying that as we get out of this, lets get out of this in a predictable and careful

way, rather than in one go,

Asked whether super easy money has led to misallocation of capital, he said his greater worry was that by

altering the price of capital for a substantial period of time, are we also, in a sense, distorting investment

decisions and the nature of economy we will have.

Have we artificially kept the real rate of interest somehow below what should be the appropriate natural

rate of interest today and created bad investment that is not the most appropriate for the economy?

To a question whether long-term low interest rate mean trouble, Dr. Rajan said his sense was that monetary

policy could do only so much, and beyond a certain point, it did more damage than good.

A number of years over central bankers had convinced markets that they would continuously come to their

rescue and would keep rates really low for long that had pushed asset prices beyond fundamentals and

made markets much more vulnerable to adverse news, Mr. Rajan said.

Asked about the lack of coordination in the global financial system led by the U.S., he said the U.S. should

recognise that actions of emerging economies to protect themselves over the long run had come back to

affect the U.S.

He said there was room for greater dialogue on how these policies should be conducted not just to be nice

but because in the medium run it was in the U.S. own self-interest.

If you are not careful about the volatility you create, others will have to respond, and everybody is worse

off, Mr. Rajan said.


BANKS TO BE CAREFULL ABOUT JAN DHAN YOJNA RBI

The Reserve Bank warned the banks to be more careful while opening accounts under the Jan-Dhan Yojana,

saying that a single individual could open multiple accounts in the lure of Rs 1 lakh insurance cover.

Challenges to JAN DHAN YOJNA

People could open accounts in different banks using different identity documents like PAN card, Aadhar

among others in the lure of getting insurance cover of Rs 1 lakh from all the banks.

The banks should have a single information sharing system by which this possible misuse could be stopped.

Another possible threat was smurfing, the RBI official said.

In this case, hawala operators would spilt the whole amount into several small units beyond the threshold

using several bank accounts and send money overseas.

The last was money mules by which an individual would operate through another persons bank account.

Earlier this week, RBI Governor Raghuram Rajan had cautioned banks on the risks involved in just hunting

for numbers with regards to Jan Dhan scheme, asking them not to compromise on core objectives of the

programme.

The scheme can be a waste if it leads to duplication of accounts, if no transaction happens on the new

accounts and if the new users get bad experiences, he had added.

JAN DHAN YOJNA AN ANALYSIS

The Narendra Modi governments Pradhan Mantri Jan Dhan Yojana (JDY), an ambitious scheme for financial

inclusion aimed at creating 7.5 crore new bank accounts in the banking sector by January 26, 2015, has its

sceptics and critics. There is more than a fair chance that they will be proved wrong.

Nationalisation of Banks in 1969

Think back to the last comparable attempt at financial inclusion Indira Gandhis bold move to nationalise

14 banks in 1969 (with another six being nationalised in 1980). We heard pretty much the same arguments

then.

Bank nationalisation was denounced as populist, a socialist gimmick, politically-motivated and worse.

Today, not many would question the beneficial impact nationalisation had on banking and the Indian

economy. To put JDY in perspective, it is useful to see what bank nationalisation achieved.

Bank nationalisation saw a huge expansion in branches into the hinterland. The expansion of the branch

network, in turn, caused money kept under the mattress to be swept into the banking system.

Cash under the mattress may be savings for an individual but these do not translate into saving for the

economy.

Saving, in economic terms, is whatever is available for lending or investment, that is, savings that come

into the financial system.

Bank nationalisation caused the saving rate to go up from 12 per cent of GDP in 1968-69 to 20 per cent in

1979-80.

The rise in saving facilitated a commensurate rise in the investment rate from 13 per cent to 21 per cent.

The increase in the investment rate set the stage for the growth rate of the economy to shift from the

much-derided Hindu rate of 3.5 per cent up to the 1970s to 5.5 per cent in the 1980s.

It was the first shift in trajectory in Indias economic growth in the post-Independence period.

Other banking reforms

Financial inclusion benefited not just the economy but also the public sector banks (PSB) despite initial

setbacks.

Investments in branches and the servicing of millions of small accounts pushed up operational costs in

nationalised banks. Combined with bad loans, the investment resulted in the net worth of public sector

banks turning negative by the early 1990s.

However, the infusion of capital by government was modest by international standards less than 2 per

cent of GDP, compared to anywhere between 5-60 per cent elsewhere.


Bank recapitalisation was part of a larger package of banking sector reform.

Another key reform was the listing of PSBs which subjected them to market discipline. At the same time,

Indias economic growth began to accelerate in the 1990s.

In these new conditions, the long-run benefits of financial inclusion began to kick in. Inclusion not only

increases deposits, it brings in low-cost deposits through savings and current accounts.

For PSBs, the high proportion of low-cost deposits in total deposits turned out to be a source of competitive

advantage.

Their financial performance improved through the 1990s and the noughties and even after the financial

crisis of 2007 until the problems in the infrastructure sector came to the fore.

Judged over some three decades, bank nationalisation proved a winner with financial inclusion being a key

driver of success.

JDY has the potential to have a similar impact. It could see the household saving rate go up and boost the

overall saving rate.

And it could impart a shot in the arm to PSBs which have been losing market share to new private sector

banks. Financial inclusion entails upfront costs but begins to pay off once a certain scale has been reached.

Direct Benefit Transfer (DBT)

Critics of the scheme contend that merely scaling-up will not help the banks or the economy. They say that

many of the new accounts created by inclusion initiatives in recent years have low balances or remain

inoperative.

They overlook a crucial change in the situation: large amounts are poised to flow into bank accounts, thanks

to the direct benefit transfer scheme (DBT) rolled out in January 2013.

Right now, DBT covers 28 schemes, mostly payment of pensions and scholarships. It will soon cover

payment of subsidies as well as wages under the Mahatma Gandhi National Rural Employment Guarantee

Act (MGNREGA).

Payment of subsidies is scheduled for the first phase of financial inclusion, that is August 2014-August 2015.

Once this happens, PSBs will have substantial float funds (on which they pay zero interest) in the accounts

they have opened.

These are equivalent to low-cost deposits and should compensate for high operational costs. Over time,

banks should have in place the infrastructure and the processes to make loans to the new account holders.

Small loans have been freed from interest rate regulation and we know from the experience of micro-

finance institutions that they can be hugely lucrative. Then, there is the fee income from selling insurance

products.

The add-ons

There are details that need to be worked out.

Every account under the scheme comes with a RuPay debit card and Rs.5,000 overdraft facility in the first

phase.

In the second phase, a Rs.1 lakh accident insurance facility and a Rs.30,000 life insurance facility will be

added.

How exactly the premia on the insurance facilities will be paid for has not been spelt out. Some reports

indicate that the premia will come out of charges levied on RuPay card transactions. Will the volume of

RuPay transactions be large enough to pay for the premia?

Banks need to have an idea of the fee income they can hope to generate from the accounts. If the insurance

premia involve any subsidy, the government must bear the cost.

The Rs.5,000 overdraft facility has given rise to concerns about another loan mela. This would amount to

Rs.37,500 crore for 7.5 crore account holders. These concerns are overblown.

Banks will provide the overdraft facility only after watching the account holders record for six months.

There is an incentive for repayment, which is that the account holder can avail of the facility as often as he

likes. It should be possible to contain losses at an acceptable level.


Public sector bank-centric

Two aspects of JDY are worth highlighting. First, it is an initiative that combines inclusiveness with the

potential to boost growth could turn out to be spot on.

Second, the government has decided that financial inclusion is best pursued through PSBs.

This is rather different from the view implied by the decision of the Reserve Bank of India (RBI) to use new

institutions, such as payment banks and small banks, to push inclusion.

The RBI seemed to have concluded that not much could be expected of PSBs. If JDY works out as planned,

one wonders whether there will much space left for payment banks.

Why would a customer go to a payment bank that only provides deposit and payment services when he has

access to a full-scope bank?

The governments reliance on PSBs makes sense and not just because there is an enormous

infrastructure that can be readily tapped. Where regulation is weak and contracts ill-developed, it is best to

use public institutions to attain larger objectives, instead of relying on regulation or public-private

partnerships.

It is easier for the government to enforce its writ through institutions that it directly controls.

The reassuring message in JDY is that in pursuing its economic objectives, the government wants to accord

an important role to the public sector even while relying on market mechanisms.

PERSISTING INFLATION, A MAJOR CONCERN: RAJAN

The Reserve Bank of India (RBI) Governor, Raghuram Rajan reiterated that persisting inflation is a major

concern and it has to be contained.

The real problem is inflation that is persistent. We have been emphasising again and again in order to

break the back of inflation, we got to break this persistence, said Dr. Rajan

He said that once inflation is contained, the RBI will be in a much more comfortable position.

According to Dr. Rajan in the last few years, food inflation has been the most significant aspect of inflation

and that there may be a link between Minimum Support Price (MSP) and inflation.

The central bank is also working on a producer price index, said Dr. Rajan. We still dont have a proper

producer price index. It is extremely important to understand the differences between retail and wholesale

prices. Those are things to worry about. We are trying to get this data and hope to receive it relatively

soon,

Further he said that there is a need to improve the quality, quantity and timeliness of GDP data.

He also emphasized on the importance of getting data on construction sector as quickly, capture and get

comprehensive data on consumption.

We need to improve the quality, quantity and scope of our data. We are working on it. We certainly need

timely information on employment We need to get comprehensive data perhaps at a monthly level In

many other countries, the employment data forms the basis for a number of decisions on the monetary

policy, said Dr. Rajan.

POLICY GUILDLINES BY THE GOVERNMENT

CENTRE SET TO REVISE GDP MEASUREMENT NEXT YEAR

The Centre will soon revise the way it measures the gross domestic product to reflect under-represented

and informal economic sectors, two government sources said, in an initiative that is expected to show the

economy is larger than previously thought.

The government usually revises the method of calculating national accounts and other macro data every

five years, bringing in a newer base year and adjusting for changes in the economy.

The new government of Prime Minister Narendra Modi, which is committed to raising economic growth and

slashing the fiscal deficit, plans to adjust the measurement early in 2015, a senior official at the Ministry of

Statistics said.


We plan to release GDP data based on the 2011-12 base year by early next year, that could theoretically

revise up the growth estimates, the official said, requesting anonymity as he was not authorised to speak

to media.

The Ministry now takes 2004-05 as the base. Indias informal economy and service sector accounts for over

three-fifths of its $1.8 trillion economy. But precise data are unavailable for these segments, and the

government relies on surveys and samples to calculate their growth.

This is combined with actual output numbers for mainstream industry to produce the GDP data.

In March, 2010, when the government last revised the national accounts, annual economic growth

estimates were upwardly adjusted by 0.8 to 1.7 percentage points for four years, allowing the previous

government to take credit for the countrys highest-ever stretch of economic growth.

Pronob Sen, former chief statistician and current chair of the National Statistics Commission, said the

planned adjustment would likely reveal that the Asias third-largest economy is bigger than previously

reckoned in absolute numbers.

Basically, we have an upward revision because some sectors are not included in the current data, he said,

mentioning higher productivity among informal manufacturing and services firms as well as the advent of

new sectors.

The 2010 revision almost doubled the estimated contribution to the economy made by coaching and tuition

and gave substantially more weight to the construction, trade and hotel industries. The importance of

beauty salons, communication and railways declined.

An upward revision would be a big boost for Mr. Modi and his Finance Minister Arun Jaitley, who is trying to

meet a fiscal deficit target of 4.1 per cent of the GDP and convince global rating agencies to upgrade Indias

sovereign ratings.

Further, The planned adjustment will likely reveal that the Asias third-largest economy is bigger than

previously reckoned in absolute numbers

INDIA NOT TO IMPOSE ANTI-DUMPING DUTY ON SOLAR PANELS

Side-stepping a Commerce Ministry investigation, the Finance Ministry did not notify its recommended anti-

dumping duty on imports of solar panels from four countries, including the U.S. and China.

Owing to the Finance Ministrys inaction, the window that was available to India for slapping these

restrictive duties aimed at protecting the struggling domestic industry has lapsed.

There was no notification. We allowed it to lapse, State Minister for Commerce and Industry

(Independent Charge) Nirmala Sitharaman said.

The Commerce Ministrys quasi-judicial ruling had to be published by the Finance Ministry for which it had a

stipulated timeframe of 3 months.

Following a three-year long investigation, the Commerce Ministry had proposed to the Finance Ministry in

May restrictive anti-dumping duties in the range of $0.11-0.81 per watt on solar cells imported from the

U.S., China, Malaysia and Chinese Taipei.

The investigation had upheld the Indian solar panel manufacturers contention that the subsidies the U.S.

and Chinese competitors receive from their governments allowed them to dump their products in India at

artificially low prices.

Power Minister Piyush Goyal and Road Transport and Highways Minister Nitin Gadkari had both opposed

the Commerce Ministrys recommendation.

Mr. Goyals opposition was on the ground that the domestic solar equipment manufacturing capacity was

insufficient to meet the governments ambitious targets for power generation from green energy sources.

GOVERNMENT TO UNVEIL A NEW IPR POLICY

Days before Prime Minister Narendra Modis visit to the US, the government announced it would roll out a

comprehensive intellectual property rights (IPR) policy soon.

We will come up with a policy on IPR and patent rights We are strong in IPR and we will protect our

national interest.


IPR has been hanging for a very long. There has always been a factor of national interest. We are not going

to be regressed or restrictive. India has a well-established IPR regime, but it is important to spell out a

policy, Commerce and Industry Minister Nirmala Sitharaman told the media.

Asked why the government had suddenly

decided to roll out a policy in this regard, she

said it was imperative for India to have an

overarching policy on intellectual property for

a legitimate fight with countries that raised

questions on the IPR regime here.

She added in the absence of a formal policy,

India hadnt been able to move in a forceful

way in dealing with IPR issues. When there is

a policy, there is consistency and more rigour

to move ahead.

Amitabh Kant, secretary, Department of

Industrial Policy and Promotion, said the

government was keen on upgrading the IPR

regime and the patent office. We will be

clearing the backlog and the pending patent applications. The filings have gone up substantially, he added.

The Centre is planning to bring out a draft IPR policy within four months. Debates and discussions on this

will be carried out for two months, after which a formal policy will be unveiled.

The commerce ministry will also set up a think tank on IPR issues.

India and the US have been engaged in a bitter row over IPR and patents, especially in the pharmaceuticals

sector.

While successive Indian governments have reiterated that the countrys IPR laws are compliant with trading

rules under the World Trade Organization, the US has been vociferous in saying the patent laws here are in

violation of global norms.

In its annual index, the Global Intellectual Property Centre of the US Chamber of Commerce ranked India

the lowest, accusing it of having the weakest IP environment.

BIBEK DEBROY TO CHAIR HIGH-LEVEL GOVT COMMITTEE ON RAILWAYS

Objective - In its first attempt at restructuring the railways, the Government has set up a high level

committee to reconfigure the railways board as well as suggest steps for resource mobilisation for major

railway projects, such as tracks to coal bearing areas and increasing line capacity on trunk routes.

Constituents - To be headed by economist Bibek Debroy, the other members are former Cabinet Secretary

K M Chandrashekhar, former National Stock Exchange Managing Director Ravi Narain, Dr. Debroys

colleague in Centre for Policy Research Partha Mukopadhyay and former Procter & Gamble CMD Gurcharan

Das. The sixth member will be a nominee from the Finance Ministry of Finance.

The Government had set up several committees to suggest improving railway functioning since

liberalisation began in the early nineties.

But each time a report was submitted, the Government preferred to cherry-pick a few income generating

recommendations while shelving those relating to changing the department based structure of the Indian

Railways.

As pointed out by Railway Minister D V Sadananda Gowda while presenting the Railway Budget this July,

``funds to the tune of Rs. 50,000 crores per year are required for the next 10 years for ongoing projects

alone.

Further on in his Budget speech, the Minister indicated the Modi Governments priorities``the Railway

Board due to overlapping roles of policy formulation and implementation, has become unwieldy. Therefore

I propose to separate these two functions.

Among others, some sort of revamp of the railways in the last two decades has been suggested by

committees headed by D M Nanjundappa, Prakash Tandon, Anil Kakodkar, Rakesh Mohan and Sam Pitroda.


GOVERNMENTS VIEW ON REFORMING THE MSME SECTOR

The MSME Ministry is in talks with public sector banks to extend loans to micro, small and medium

enterprises at base rate to help the sector access vast capital from financial institutions at lower costs,

Union Minister said.

Besides, he said the government plans to open 500 district-level incubation centres across the country to

train youth to become entrepreneurs and revitalise the micro, small and medium enterprises (MSME)

sector.

We have drawn up an ambitious plan to open Incubation Centres in 500 districts across the country from

the viewpoint of livelihood.

We will also open 100 high-technology incubation centres. We want to instill confidence among

unemployed youth so that they can become independent, Mr. Mishra said on the sidelines of a PHD

Chamber event in New Delhi.

The Minister also said the government will revise the definition of MSMEs to provide for a higher capital

ceiling, and the new policy should be out in a months time.

We are drafting the new revised MSME policy. It should be out within a months time. Under the new

policy, we will redefine the MSMEs and introduce a new capita

vision ias current affair 2015

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