weekly 3rd to 9th december 2012 ias

8/22/2019 Weekly 3rd to 9th December 2012 IAS

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3RD DECEMBER 9TH DECEMBER, 2012

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WEEKLY CURRENT

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Week l y Cur r en t A f fa i r s 3rd D ecember 9th D ecember , 2012 [3]

ADM ISS ION OPEN fo r Ch r on i c l e IAS Academy Cu r en t A f f a i r s Spec i a l Ba t ch . Ca l l : 9953120676

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Programme Assistance:

Email id:[email protected]

Technical Assistance : Sushil Singh

Email id: [email protected]

Call: 9582948810, 9953007628

Mail: [email protected]

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

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

1991 (LPG), Inflation.....

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

SCHEDULE FOR SECTIONAL TESTS(PAPER I & II)

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

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

Solving3rd March ....... Mental Ability, Basic Numeracy,

Data Interpretation and DataSufficiency

10th March ..... General Science and Science andTechnology

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

FULL MOCK SCHEDULE

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

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

14th April ....... Mock 3 Paper 1, Mock 3 Paper 221st April ........ Mock 4 Paper 1, Mock 4 Paper 2

SCHEDULE FOR GS TOPICAL TESTS

2nd December: Infrastructure & Resources

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

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

3. Water management infrastructure:- Drinking water

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

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

5. Solid Waste Management

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

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

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

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

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

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

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

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

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[ 4 ] Week l y Cur r en t A f fa i r s 3rd D ecember 9th December , 2012


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Government asks states to ban multi-levelmarketing schemes

The Centre has proposed state governments to

ban all companies running schemes which offermonetary benefits to subscriber for enrollingmembers to their scheme.

The proposal is a part of the centre's effort tocurb the menace of ponzi schemes, which hasflourished in the country due to absence of regulatoryoversight.

After the case of alleged fraud committedby Singapore-based multi-level marketing (MLM)

portal Speak Asia Online, the government startedthe process of reining in such companies whichoffered impossibly high returns in a very short spanor offered huge benefits for enrolling moresubscribers.

An inter-ministerial committee comprisingthe Reserve Bank of India, and ministries of

consumer affairs, corporate affairs, finance and law,was formed to look into the matter. It suggestedsetting up of a central agency to oversee

MLM schemes and also proposed to filter and blockwebsites above a certain number of subscribersto curb such schemes.

The committee is working on bringing inthese companies under the Companies Act. This ispossible under section 583 of the act wheresuch unregistered companies will be considereddeemed registered, thereby will be brought under

the MCA's purview.

The MCA has circulated The State MoneyCirculation Scheme (Banning), 2012, amongstates, where it has also suggested that the nodalpolice authority in the state would beresponsible for interacting with other statesfor information on such companies while thecentral government and concerned departmentswill furnish information regarding these companiesto the Reserve Bank of India. However, other

investigating agencies will also have theauthority to get information from states governmentsand other agencies.

NATIONAL

What are Ponzi Schemes?

A Ponzi scheme is an investment fraudthat involves the payment of purported returnsto existing investors from funds contributed bynew investors. Ponzi scheme organizers oftensolicit new investors by promising toinvest funds in opportunities claimed to generatehigh returns with little or no risk. In many Ponzischemes, the fraudsters focus on attractingnew money to make promised payments toearlier-stage investors and to use for personal

expenses, instead of engaging in any legitimateinvestment activity.

Government eases tourist visa norms

As the India's share of international tourist arrivalsin 2011 was a mere 0.64%, thus in order to increasethe flow of tourists to India the government haseased restrictions on tourist visas which hadmandated a two-month gap between consecutivevisits by foreign nationals.

However, nationals of Afghanistan, China, Iran,Pakistan, Iraq, Sudan, Bangladesh, foreigners ofPakistani and Bangladeshi origin and "statelesspersons" will continue to come under the 60-daygap rule.

The restriction was imposed in 2009 after theMumbai terror attack of November 26, 2008, when itwas found that terrorist David Headley of Pakistan-

based militant group Lashkar-e-Taiba had "grosslymisused" his multiple-entry visa. With the visa, hehad made nine trips to India and prepared footageof attack targets for the group.

A decision to review the visa restrictions wastaken by the Prime Minister's Office (PMO) in

January 2012 after concerns were raised by thetourism ministry that the negative perceptionfollowing the move had affected flow of tourists toIndia. The PMO had asked the ministries of homeand external affairs to review the restrictions,including the possibility of bringing in morecountries under the visa-on-arrival scheme and

improving conditions at major airports.The Indian home ministry, however, made it clear

that any applicant for an Indian visa who has any


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Pakistani lineage, even if it goes two generationsback, must be referred to Delhi by the Indianmissions for prior clearance.

Indian Boxing Federation suspended byAIBA

Amateur boxing's international body has

suspended the Indian Amateur Boxing Federation(IABF) after reports of "manipulation" of the IABFelections.

The decision, taken by the AIBA at a meeting atLausanne, Switzerland, comes two days after theInternational Olympic Committee suspended theIndian Olympic Association, of whom Chautala,former president of IABF, was elected as presidenton Wednesday.

This provisional suspension is also due to the factthat AIBA had learned about possible manipulation

of the recent IABF's election. AIBA will nowinvestigate this election and especially a potentialpolitical link between IOA President, as formerChairman of the IABF, and the IABF election.

2013 will see the Asian Boxing Championships,the venue and dates for which are yet to be decidedand the World Championships in October to be heldin Kazakhstan. Under the ban, the participation ofIndian boxers under the Indian flag becomesuncertain.

Earlier in September this year, the IABF hadelected BJP MLA Abhishek Singh Matoria as itspresident in the Annual General meeting andChautala made a re-entry as 'chairman' of thefederation. The Indian Amatuer Boxing Federationhad at that point amended its constitution toaccommodate Chautala, and had created the post ofthe chairman at the meeting held in Patiala.

With the suspension, the world body can nowhold a meeting with the Indian association and thesuspension could be lifted if the elections are held

again according to the rules, something theymentioned did not happen in September.

Some recent examples are: Earlier in November,AIBA had lifted its provisional exclusion ofRomanian Boxing federation after recognising thatthe federation re-conducted elections under AIBA'ssupervision and held them in accordance with RBFand AIBA statutes. The world body had alsoexcluded the Korean Boxing Federation after theLondon Olympics due to the boycott of various boardmembers of Korean Boxing Federation in its elections.

AIBA also lifted the ban on the Kuwait BoxingFederation imposed in 2010, on Thursday. The AIBAhad banned Kuwait for not allowing autonomy in

the federation and once they allowed autonomy andnew sports legislation, AIBA lifted the ban. Lastmonth, AIBA had first imposed a 3-monthsuspension on USA Boxing and then revoked it afew days later. The suspension was overcontroversial statements by its former president, HalAdonis, but revoked after it was pointed out that

athletes would be adversely affected and Adonisstepped down from his post.

New youth policy launched in Kerala

The Kerala Cabinet has approved a youth policyproposing a five per cent cess on liquor and tobaccoproducts. The cess will be used for youth welfareactivities. The policy also proposes extension ofequivalency examinations at the secondary level tothe higher secondary level. This will help schooldropouts and others to acquire Plus Two certificates.

Youth banks will be started in each district toprovide loans to young entrepreneurs in startingindustrial, business, or agriculture ventures. Groupswill be formed in higher educational institutions topromote entrepreneurship and self-employment. Skilldevelopment centres will be started at the block level.

Further a directory on higher education will bepublished and a help desk set up for students. Aproject will be launched in collaboration with localself-government institutions to achieve total

computer literacy among the youth.

The policy also proposes diversification of servicesprovided by employment exchanges, setting up'youth clinics' to ensure job security and publicationof a higher education directory and online help-deskfor benefit of those pursing higher studies.

As part of the policy, government would promoteformation of co-operatives of young Non-ResidentKeralites (NRKs) to mobilise their funds, expertiseand experience to start business and industrial

enterprises for the youth in the state, the policydocument, released today said.

Giving emphasis on developing the sporting talent

and health care, play grounds and swimming pools

would be built in all village panchayats as commonfacilities.

The policy promises playgrounds and swimming

pools in all grama panchayats. Cycle riding will be

encouraged. Local bodies will ensure 30 per cent

representation for youths in all popular committees.

They will be directed to set apart a certain amount

of funds for a component plan for the youth in theirannual plans.


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A consolidated fund will be formed for providingscholarships and other assistance to poor studentstaking up higher studies.

Voluntary contributions will be soughtand credited to the fund, besides revenues from theyouth cess.

Counselling centres will be started for helpingyouths suffering from mental problems. Pre-marriagecounselling will be promoted for wider reach. Theyouth will be organised for disaster management,providing first aid to victims of road accidents, foranti-liquor campaigns, and environmental protection.

A committee chaired by the Chief Minister willbe formed for implementation of the policy.

Transparency International's 2012Corruption Perception Index (CPI).

India has been ranked 94th out of 176 countriesin Transparency International's 2012 CorruptionPerception Index (CPI). Last year, India was ranked95 out of 183 countries that were studied.

In this year's CPI, India earned a very low scoreof 36 on a scale from 0 (most corrupt) to 100 (leastcorrupt). Transparency International India attributedthe low score to the recent scams and incidents ofcorruption in the public sector involving governmentofficials, private officials and private companies.

Two-thirds of the 176 countries recorded a CPIscore below 50. Denmark, Finland and Switzerlandtopped the index with a score of 90 followed bySweden with a score of 88. Afghanistan, North Koreaand Somalia were perceived as the most corruptcountries scoring just 8 out of 100.

India has been ranked below neighbours Sri Lanka

and China, while it fared better than Iran, Nepal,Pakistan and Bangladesh.

The CPI is a combination of surveys andassessments of corruption that was collected byvarious reputed independent institutions. Theranking is based on ten independent data sourcesspecialising in governance and business climateanalysis such as the World Bank, the World EconomicForum and Economist Intelligence unit country risksrankings.

Each country's CPI score is made up of a differentset of data sources. For a country to be scored andranked on the index, there must be at least threedata sources available for that country.

From this year, the CPI methodology has beenupdated allowing for year-over-year comparisonsfrom 2012 onwards. India was ranked 72 among 180countries in 2007 and since then the country's rankingfell to 87 in 2010 and 95 in 2011.


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INTERNATIONAL

UN environment agency launches initiativeto help Africa adapt to impacts of climatechange

The United Nations launched a new initiative tosupport communities across Africa in adapting tothe impacts of climate change which, if leftunaddressed, could have major consequences forlives and livelihoods on the continent.

The information portal known as the AfricaAdaptation Knowledge Network (AAKNet),

launched by the UN Environment Programme(UNEP), will serve as a hub for knowledge, research,successful initiatives and collaborative partnershipson climate change adaptation.

It builds on ongoing efforts around the continentto mobilize existing knowledge and provide robustsolutions to the major impact of climate change onlives and livelihoods in Africa.

Disasters such as severe droughts in the Sahel in2012 and the Horn of Africa in 2011, noted UNEP,have brought into sharp focus the serious impactson water, land, soil and other resources linked toclimate change on the continent, and the need to

build resilience to such pressures. Global warmingis expected to pose serious challenges to sustainabledevelopment, particularly as most African economiesdepend on climate-sensitive sectors such as water,agriculture, fisheries, energy and tourism. Furtherthe region lacks the capacity and resources neededto face the challenges of climate change - a problemthat could have major economic consequences.

The AAKNet aims to support climate changeadaptation in Africa by providing services such asaggregating knowledge in addressing pertinentclimatic risks and sharing information across regionsand countries, and providing tailored support tocountries in developing strategic planning processesfor climate change adaptation.

It also seeks to build partnerships withgovernments, research bodies, non-governmentalorganizations and others, with the aim of supportingclimate change response. To reach those directly

affected by climate change, the AAKNet initiativewill also conduct workshops with communityorganizations, farmers, and other groups, to shareknowledge and practical advice.

New UN flagship report urges farmer-centred approach to investment in

agriculture

A new United Nations report calls for greaterinvestments in agriculture, stressing that it is one ofthe most effective ways to reduce hunger and povertywhile safeguarding the environment, and for creatingmore favourable investment climates for farmers.

'The State of Food and Agriculture 2012,' theannual flagship report of the UN Food andAgriculture Organization (FAO), says that theworld's more than one billion farmers must be centralto any agricultural investment strategy, given thatthey are the biggest investors in this sector.

A new investment strategy is needed that putsagricultural producers at its centre and the challengeis to focus the investments in areas where they canmake a difference.

New data show that farmers in low- and middle-

income countries invest more than $170 billion a yearin their farms - about $150 per farmer.

This is three times as much as all other sources ofinvestment combined, four times more thancontributions by the public sector, and more than 50times more than official development assistance tothese countries, FAO noted. The report states thatinvesting in agriculture is clearly paying off. Overthe last 20 years, for example, the countries with thehighest rates of on-farm investment have made themost progress in halving hunger, to meet the first of

the anti-poverty targets known as the MillenniumDevelopment Goals (MDG).

The eight MDGs - which range from halting thespread of HIV/AIDS to providing universal primaryeducation, all by the target date of 2015 - form a

blueprint agreed to by world leaders and institutionsat a UN summit in 2000. The first MDG aims toeradicate extreme hunger and poverty with a targetof halving, between 1990 and 2015, the proportionof people whose income is less than $1 a day. The

regions where hunger and extreme poverty are mostwidespread - South Asia and sub-Saharan Africa -have seen stagnant or declining rates of agriculturalinvestment over three decades.


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Recent evidence shows signs of improvement,but eradicating hunger in these and other regions,and achieving this sustainably, will requiresubstantial increases in the level of farm investmentin agriculture and dramatic improvements in boththe level and quality of government investment inthe sector.

It cites a number of factors that reduce theincentive for farmers to invest, including poorgovernance, absence of rule of law, high levels ofcorruption, and insecure property rights.

Smallholders face specific, severe constraints, oftenincluding extreme poverty, weak property rights, andpoor access to markets and financial services. Thereport recommends focusing on a number of areasto foster smallholder investment, including helpingsmallholders mobilize their own savings and gain

improved access to credit.Noting that national governments are the second

largest source of investment in agriculture, the reporturges governments and donors to channel theirlimited public funds into areas that have been provento be strongly supportive of agricultural growth andpoverty reduction, such as agricultural research anddevelopment, rural infrastructure and education.

The report also calls on governments, internationalorganizations, civil society and corporate investorsto ensure that large-scale investments in agriculture,like the acquisition of land by private companiesand funds, are transparent, accountable, socially

beneficial and environmentally sustainable.

Israel to advance East Jerusalem building

Following the last week's U.N. recognition of astate of Palestine - in lands Israel occupied in 1967- as a non-member observer in the General Assembly,Israel retaliated for U.N. recognition of Palestine inthe West Bank, Gaza and east Jerusalem by

announcing plans to build 3,000 homes for Jews inthe West Bank and east Jerusalem, as well aspreparations for construction of an especiallysensitive project near Jerusalem, known as E-1.

U.N. recognition could enable the Palestinians togain access to the International Criminal Court andseek war crimes charges against Israel for itsconstruction of settlements on occupied lands.

Israel also said it is withholding some $US100million ($A96.37 million) in tax rebates and other

fees it collects on behalf of the Palestinians. Themonthly transfer of the funds is vital for keepingafloat Abbas' Palestinian Authority, the self-rulegovernment in the West Bank.

Israeli settlement construction lies at the heart ofa four-year breakdown in peace talks, and was amajor factor behind the Palestinians' UN statehood

bid. Since 1967, half a million Israelis have settled inthe West Bank and east Jerusalem.

Israel withdrew settlers and soldiers fromGaza in 2005, but continues to restrict access to

the territory. It says the fate of settlements shouldbe decided in negotiat ions and notes thatprevious rounds of talks continued whileconstruction went on.

Russia, 5 CIS countries to cut dollardependence

Russia and five other ex-Soviet States have agreedto reduce their dependence on the dollar, andpromote payments in national currencies. At asummit of the Commonwealth of Independent States

(CIS) in Ashgabat, Turkmenistan, Russia, Armenia,Belarus, Kazakhstan, Kirgizstan and Tajikistan signedan agreement to set up an integrated currency marketfor CIS member States.

The agreement is designed to cut the use of thedollar and euro and facilitate transactions in nationalcurrencies in foreign trade and financial services. Itwill, above all, promote the use of the Rouble as areserve currency given the dominant position of theRussian economy in the former Soviet Union.

Two years ago, Russia, Belarus and Kazakhastanestablished a customs union and last year proclaimedthe goal of creating a Eurasian Union, a closeeconomic and political alliance that would embracemore erstwhile Soviet States.

2012 Global Terrorism Index

The Institute for Economics and Peace (IEP) hasreleased their newest report entitled "2012 GlobalTerrorism Index" (GTI). This report "is acomprehensive body of work which systematically

ranks the nations of the world according to theirterrorist activity" over the past ten years.

The official definition of terrorism used by theGTI is "the threatened or actual use of illegal forceand violence by a non-state actor to attain a political,economic, religious, or social goal through fear,coercion, or intimidation." While the authorsrecognize that defining terrorism is a controversialsubject, this definition was utilized to ensureconsistency in data gathering.

Overall, the report found that global terrorismhas been "plateauing rather than decreasing" after itexperienced a significant spike from 2002-2007 andthen fell to 2006 levels in 2011. While these rates are


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lower than they have been in the last few years, theauthors warn that "the deteriorating situation in Syriaand other future possible conflicts in the Middle Eastcould reverse the situation."

A new index states that India, Pakistan andAfghanistan were among the nation most impacted

by terrorism in 2011.

According to the figures put out by the institute,there had been 529 incidents of terrorism in India in2011 that had taken the lives of 402 people andinjured 687. India's high numbers come in the period2006-2010 when the casualty figures averaged morethan 600 per year, peaking at 735 in 2009 and 772 in2010. However, in terms of public perception thereis little doubt that 2008, the year in which the IndianMujahideen carried out a number of bombing attacksacross the country, and the Lashkar-e-Tayyeba (LeT)strike in Mumbai would have been the deadliest year

for the country.

In 2011, the Middle East, India, Pakistan andRussia were the areas most impacted by terrorism.India's GTI rank was 4 out of the 159 countriessurveyed. While Iraq stood at number 1, Pakistan atnumber 2, Afghanistan at number 3 and Yemen wasnumber 5.

Overall, there were 7,473 fatalities in 2011 due toterrorism, which is 25 per cent less than in 2007. Theindex shows that global terrorism only started to

increase after the escalation of the Iraq war. Thiswas subsequently followed by further increasingwaves of terrorism in Afghanistan and then inPakistan 18 months later.

Only 31 of the 159 countries ranked have notexperienced a terrorist attack since 2001.

In analyzing the potential causes of recentterrorism incidents, the report released findingsrelated to both political and economic development.The GTI concludes that "hybrid regimes are the mostlikely form of government in which terrorist attackswill take place," and that "the ten nations mostimpacted by terrorism did all score significantly

below the global average on political corruption." Interms of economic development, the data suggeststhat countries with low-medium income levels havethe highest rates of terrorist attacks, as these ratesare 50% higher than low income countries. Accordingto this data, the authors stress that poverty is not aprimary driver of terrorism.

The GTI report ends by stressing the importanceof using documents such as this to "inform a strategicand intergenerational approach to addressing rootcauses of terrorism," especially by "importantgovernments and policymakers." This is vitallyimportant to both "peace building and state building"initiatives that prevent "the creation of attitudeswhich are susceptible to exploitation by terrorists."


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[ 1 0 ] Week l y Cur r en t A f fa i r s 3rd D ecember 9th December , 2012


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Ministries Seek Aviation Fuel To FallUnder 'Declared Goods' Status

In a bid to bring down the cost of air operations,

Civil Aviation and Petroleum ministries would make

a joint representation to the Finance Ministry to

notify jet fuel as a 'declared good', enabling levying

of a flat 4 per cent tax on it. At present, sales tax on

aviation turbine fuel (ATF) ranges from 4 to 35 per

cent, varying from State to State.

In India, ATF is sold at around 50%-60% higherprice as compared to the international markets such

as Bangkok, Singapore or Dubai due to an additional

4%-34% state sales tax.

The Indian airlines, which have a combined

debt of around $20 billion, are fighting to survive

amid stiff competition and rising fuel cost as the

jet fuel alone constitutes over 40% of an airline's

operating costs.

It was also said that foreign airlines operating to

India picked up jet fuel at concessional rates due to

international agreements, rates which are far below

those paid by Indian airlines for the same amount

of fuel. The two ministers also agreed on a proposal

to put ATF under the Petroleum and Natural Gas

Regulatory Board (PNGRB), in a bid to check

cartelisation amongst oil companies. But the issue

had to be decided by the Finance Ministry.

The aviation minister also suggested moving to

the Mean of Platts Arab Gulf (MoPAG) pricingmechanism for jet fuel, instead of the import parity

pricing that oil firms followed presently.

The adoption of the MoPAG model would bridge

the huge price differential in ATF pricing that airlines

face Maintaining that the government did not

regulate air fares.

India to give 11,295cr to IMF

India will provide Rs 11,294.6 crore to the

International Monetary Fund's New Arrangementsto Borrow (NAB) facility as the government has

got the parliamentary clearance related to that. Last

ECONOMY

year also India provided over $2 billion to the IMF'sfund to help bailouts in Europe and other parts of

the world.

As part of efforts to overcome the global financial

crisis, in April 2009, the Group of Twenty (G-20)

industrialized and emerging market economies

agreed to increase the resources available to the

IMF by up to $500 billion (which would triple the

total pre-crisis lending resources of about $250

billion) to support growth in emerging market and

developing countries.

This broad goal was endorsed by the

International Monetary and Financial Committee

(IMFC) in its April 25, 2009 communiqu. The

increase was made in two steps:

a) First, through bilateral financing from IMF

member countries;

b) Second, by incorporating this financing into an

expanded and more flexible NAB. On September

25, 2009 the G-20 announced it had delivered onits promise to contribute over $500 billion to a

renewed and expanded NAB.

Currently, the Fund has sixteen active bilateral

loan agreements worth about $200 billion and two

active bilateral note purchase agreements for about

$60 billion. For NAB participants with bilateral credit

lines, these credit lines do not add to the total

resources available to the Fund under their NAB

credit arrangements.

Panel slashes base price by 30 % for unsold

spectrum

The panel of ministers on spectrum has reduced

the base price for unsold airwaves in four regions -

Delhi, Mumbai, Karnataka and Rajasthan - by 30%,

and approved the telecom department's plan to

simultaneously sell these airwaves along with a

portion of spectrum held by incumbent operators

before March 31. Compared to the 3G auction, which

lasted 35 days and got Rs 67,719 crore, the latestround of 2G spectrum auction held in November

lasted just two days.


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The Centre had failed to attract even a single bid

for 2G airwaves in the 1800 MHz band in these four

regions in the recently concluded sale process. The

auctions turned out to be a damp squib, with the

Centre getting less than a fourth of its revenue target

of 40,000 crore as there were no takers for about 57%

of the airwaves put on sale. The government would

hold another round of auctions in the currentfinancial year, where unsold 2G airwaves in the four

regions, as well as airwaves held by incumbents in

the 900 MHz band in Delhi, Mumbai and Kolkata,

would be sold simultaneously.

The CDMA auctions in the 800 MHz band were

cancelled after both potential bidders, Tata

Teleservices and Videocon, withdrew their

applications, citing the high reserve price. The

minimum price for these airwaves had been set at

1.3 times that of GSM spectrum in the 1800 MHzband.

Further the inter-ministerial panel would seek the

Cabinet's approval on the reduced base price for

unsold airwaves in Delhi, Mumbai, Karnataka and

Rajasthan. Mobile operators warned that there would

be no takers for airwaves in these four regions despite

a 30% cut in the base price.

The mobile phone permits of incumbents in the

four metros - Delhi, Mumbai, Kolkata and Chennai- are up for renewal in 2014, and the EGoM had

recently endorsed sector regulator TRAI's

recommendation that airwaves held by these

companies in the 900 MHz be 'refarmed', or

reallocated, through an auction process 18 months

prior to their renewal date. The panel had earlier

decided that companies such as Bharti Airtel, Idea

Cellular and Vodafone could retain 2.5 MHz of

airwaves in the more efficient 900 MHz frequency

band if they agreed to pay double the pricediscovered at the recently concluded auctions, and

the remaining frequencies would be put up for sale.

The telecom department suggested the EGoM

that the best option was to combine the sale of

the 900 MHz band held by incumbents with the

second round of auctions to find bidders for

unsold spectrum.

Cheque bounce cases may move to 'Lok

Adalat type' redress mechanism

To cut down the number of cheque-dishonour

cases, the Finance Ministry is looking at an alternative

dispute resolution mechanism, such as a Lok Adalat.

The idea is to consider prosecution under Section

138 of the Negotiable Instruments (NI) Act only if

the alternative mechanism too fails. Presently under

Section138, the drawer of the cheque, which has been

returned unpaid by a bank because money in the

account is insufficient, is deemed to have committed

an offence that is punishable with imprisonment upto two years, or with fine that may be up to twice

the amount of the cheque, or both.

Bankers, however, feel that Section 138 has served

them well and there is no need to amend it as the

existing provisions which make cheque bouncing an

offence facilitates recovery of loans and help in

reducing bad loans of banks. Most cases under

Section 138 relate to recovery of loan defaults that

are less than Rs 10 lakh. For the purpose of recovery

of such loans civil suits have to be filed by banks.Since the judicial proceedings take a long time,

initiating action and proceedings under the Section

is facilitating speedy recovery.

RBI, Bank of Mauritius sign pact to

cooperate

The Reserve Bank of India (RBI had entered intoan agreement with the Bank of Mauritius forcooperation and exchange of information.

Earlier, RBI had entered into similar agreementswith China Banking Regulatory Commission,Dubai Financial Services Authority, Jersey FinancialServices Commission, Financial Services Authority,the UK and Central Bank of Russian Federationamong others.

Mauritius is an important source for foreigninvestments into India with over 40 per cent ofFDI coming from the island nation. The twocountries are also in process of negotiation to

update their bilateral double taxation avoidancepact to include exchange of banking informationand other provisions.

FIPB nod for FDI in domestic pharma

units must

The government has decided that all foreigninvestments in existing domestic pharma firmsshould be allowed only after clearance by the Foreign

Investment Promotion Board (FIPB), amid mounting

concerns over availability of affordable essentialdrugs in the wake of multinationals acquiring localcompanies.


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The decision was taken at a meeting called by

Prime Minister Manmohan Singh on Monday to

formalize norms for pharma foreign direct

investment (FDI) policy, according to sources.

Finance Minister P Chidambaram, Commerce and

Industry Minister Anand Sharma and Health

Minister Ghulam Nabi Azad, among others, were

present at the high-level meeting, they said.

The meeting was called to decide on two

important issues in the pharma FDI policy - the limit

to which foreign companies will be allowed to

acquire shares in a domestic company and the role

of Competition Commission of India (CCI) in

mergers and acquisitions.

While the finance ministry wants only those cases

involving FDI beyond 49 per cent in units to be

considered by FIPB, commerce ministry favours all

foreign investments in pharma units to be approved

by FIPB.

The issue was taken up by the government after

the acquisition of big Indian companies - includingRanbaxy, Shanta Biotech and Piramal Health Care's

health unit - by foreign companies. The domestic

industry is apprehensive that the entry of foreign

players in the Indian market may impact the

availability of generic medicines as the overseas

companies would focus on costly patented medicines.


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INDIA AND THE WORLD

Director General Level talks between Indiaand Pakistan to Discuss the issue of DrugMenace

The Ninth Director General level talks betweenNarcotics Control Bureau, India and Anti NarcoticsForce, Pakistan on drug trafficking and relatedmatters were held at New Delhi.

Narcotics Control Bureau (NCB) is the nationalnodal agency looking after the drug related mattersin the country. NCB has been mandated to enhance

international cooperation including coordinatedactions of various organizations.

During the meeting, both sides shared a mutualconcern regarding menace of drugs and resolved thatcoordinated approach will be the key to combat thisproblem. Both sides exchanged/updated theoperational level contacts for sharing of real timeinformation/intelligence. During the meeting, it wasalso agreed that the effectiveness of cooperation ondrug matters largely depends on frequency ofinteraction. It was agreed to hold the next DG level

talks in Pakistan on a mutually convenient date.

During these talks, issues such as exchange ofintelligence/information on drug trafficking, trendsand modus operandi of drug trafficking across the

border, smuggling of narcotics across the border, bestpractices adopted in the field of combating drugtrafficking and drug menace were discussed.

The last DG level talks between NCB and ANFwas held in Islamabad, Pakistan on 13 - 14thSeptember, 2011. During these talks a Memorandum

of Understanding on "Drug Demand Reduction andPrevention of Illicit trafficking in Narcotic Drugs,Psychotropic Substances and Precursor Chemicalsand Related Matters" was signed between both thecountries. During the meeting it was also agreed thatthe effectiveness of cooperation on drug matterslargely depends on frequency of interaction.Accordingly, it was agreed to hold DG level talksannually.

UAE declared amnesty scheme

About 45,000 Indians staying illegally in theUnited Arab Emirates have been permitted to leavethe country by the UAE Government under theamnesty scheme without payment of any penalty.

The amnesty period has been declared fromDecember 4 to February 3. Once amnesty is declared,Indians staying illegally would report to the IndianEmbassy in Abu Dhabi or Consulate in Dubai fortaking Emergency Certificates (ECs) as most of themwould not have their passports.

Union Minister for Overseas Affairs Vayalar Ravi,on being informed by the Indian Mission in UAEabout the amnesty scheme, has written to the Stategovernments, including Andhra Pradesh, to makeprovision for free air tickets to the needy and

deserving workers hailing from the respective States.

The Overseas Affairs Ministry had created theIndian Community Welfare Fund (ICWF) and placedit at the disposal of Indian Mission but it would not

be sufficient to meet the demand from large numberof needy Indians.

Amnesty is generally declared for two to threemonths and is subsequently extended by anothercouple of months. Earlier the UAE Governmentextended amnesty in 1996, 2003 and 2007.

The efforts made by the State for repatriation ofworkers from UAE during the last amnesty in 2007included the formation of a special team headed byMinister, Minority Welfare and officials was deputedfor handling repatriation then to the UAE. The teamalong with embassy officials, concerned NGOs, localmedia, strove to reach the immigrants and facilitatedair travel of the immigrants unable to purchase theirair tickets. Otherwise, they would have been jailed

by the UAE Government.

Similarly it is proposed to depute an advance teamheaded by Minister for NRI Affairs D. Sridhar Babuand three officers to interact with Indian Embassy,local media, NGOs for initiating the process forrepatriation and assess the number of migrants whoneeded free air tickets. In 2007, the State Governmenthelped 1,243 migrants to fly back and it had paid Rs.59 lakh to Air India.

UNICEF focus on treatment of HIVpregnant mothers to curb AIDS

With over 14,000 children getting infected withHIV in 2011 and there being over 10,000 deaths ofchildren up to four years of age during the year, theUnited Nations Children's Fund (UNICEF) has noted


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in its latest report that while "new HIV infections inchildren are down, reaching the goal of an AIDS-free generation requires that more HIV positivepregnant women receive anti-retroviral treatment todecrease the risk of infection for their babies."

The total number of people living with HIV inthe country has seen a decline from approximately

2.3 million to 2.1 million. The drop has been muchhigher among men (16 per cent) than among women(2.6 per cent)."

Acknowledging that much progress has beenmade in the field of treatment, UNICEF has notedthat in low and middle income countries, coverageof effective antiretroviral treatment for preventingmother-to-child transmission (MTCT) reached 57 percent in 2011. The Report indicates that in India thetreatment coverage has increased over the years butusing a single dose of Nevirapine as the more

effective treatment used globally, as per guidelinesprovided by the World Health Organisation (WHO)for prevention of MTCT, is still to be scaled upnationwide. Regarding access to treatment ofchildren in need, it increased from 6 per cent in 2006,when the paediatric HIV programme was launchedin India, to 34 per cent in 2011.

Thus UNICEF India will continue to focus onpreventing parent-to-child transmission andeliminating new HIV infections among children.

Home Minister Level talks between Indiaand Bangladesh

At the end of Home Minister level talks betweenUnion Home Minister Shri Sushilkumar Shinde andMinister for Home Affairs of Bangladesh, Dr.Muhiuddin Khan Alamgir India and Bangladeshagreed that an extradition treaty, which is under theconsideration of the two governments, would befinalised at an early date and signed in January 2013along with the Revised Travel Agreement (RTA)

Further both leaders reiterated their commitmentto further expand and strengthen mutual cooperationin the security and border related issues andreaffirmed their commitment not to allow theterritory of either country to be used for any activityinimical to each other's interests.

It was agreed to enhance cooperation to addressthe security concerns and also to implement theCoordinated Border Management Plan (CBMP)

signed between the two countries to control theillegal cross border activities. Both sides reviewedthe functioning of the nodal points for sharing ofinformation on security related matters andexpressed satisfaction at its working.

The nations also agreed to allow developmentwork within 150 yards of zero line.

Both sides agreed to further enhance the level ofcooperation and vigilance to control the smugglingof fake Indian currency notes. Both sides alsodiscussed the urgency of stopping the smuggling ofnarcotics and psychotropic substances.

India, Japan ink USD 15 bn currency swaparrangement

A bilateral swap arrangement (BSA) has beensigned between the Reserve Bank of India and the

Bank of Japan which will enable both countries toswap their local currencies either Japanese yen orIndian rupee against US dollar for an amount up toUSD 15 billion. The BSA was signed by GovernorMasaaki Shirakawa of the BOJ and Governor D.Subbarao of the RBI.

The arrangement aims at addressing short-termliquidity difficulties and supplementing the existinginternational financial arrangements.

The arrangement to be effective from 4thDecember 2012 would be for a three year period.

Earlier, both countries had a similar arrangementfor an amount of up to USD 3 billion for a period of3 years between June 2008 and June 2011.

This enhancement of the BSA will furtherstrengthen economic and financial cooperation

between the two countr ies and accordinglycontribute to ensuring financial market stability.

Bilateral Swap Arrangement is an agreementbetween two parties to exchange two currencies

at a certain exchange rate at a certain time in thefuture. For example, if a company knows that itwill need British pounds in the future andanother company knows that it will need U.S.dollars, they agree to swap the two at the agreed-upon exchange rate. This eliminates the risk thatthe exchange rate will change in a way that isdisadvantageous to one party or the other. Theyare also called currency swaps.


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UN Climate Conference at DohaNearly 200 countries that took part in United

Nations climate talks in Doha have agreed to extendthe Kyoto Protocol through 2020. The 1997agreement, which requires industrialized nations tocut greenhouse gas emissions, had been set to expireon December 31.

Parties agreed to extend for another eight yearsto 2020 with this second commitment period startingin January 2013. This is the only legally binding

component of the United Nations FrameworkConvention on Climate Change (UNFCCC). Withinthe Protocol developed countries set emissionreduction targets. Several key countries have recentlydropped out of the mechanisms (notably Canada,

Japan, New Zealand and Russia) and those thatremain represent just 15% of global emissions.However this is a substantive decision and sends asignal that at least some developed countries arecommitted to reduce their carbon emissions.

Also countries agreed in Doha that in 2014 KyotoProtocol countries would review their emissionsreduction targets in line with the 25-40% range by2014 at the latest. While it could have been stronger,the decision reinforces a clear moral obligation forcountries to increase their emission reductiontargets prior to 2020 and provides opportunitiesfor them to do so. These loopholes essentially create'hot air' and weaken carbon market mechanisms,with countries such as Poland who have not emittedas much as they expected in the previous period,

being allowed to trade these permits in the future.Markedly Australia, EU, Japan, Lichtenstein,Monaco, Norway and Switzerland providedpolitical declarations (essentially promises) that theywould not purchase these emission allowances carryovers (so called AAUs).

But to move forward not only more ambitiousemission reduction targets are needed but alsofinance. At the climate negotiations in Copenhagenin 2009 countries pledged to mobilize $100 billion

by 2020 to mitigate and adapt to climate change. For

the 2010-2012 period approximately $30 billion hasbeen found. The Doha decision asks for submissionsfrom governments on long term finance pathways,

SCIENCE & TECHNOLOGY

calls for public funds for adaptation but does notmention a figure, and encourages developedcountries to maintain funding at existing levelsdependent on their economies. It does not provideany pre-2020 targets that could have served to instillheightened ambition.

On climate change adaptation, an importantoutcome emerged on 'loss and damage'. The workprogramme on loss and damage has been given newtasks to inform the establishment of an institutionalarrangement, such as an international mechanism,

in order to give this urgent issue the politicalrecognition that it deserves - the impacts arehappening now.

On efforts to reduce emissions from deforestation,a mechanism known as REDD+, decisions on howto measure, report and verify emissions reductions,set baselines against which to measure actions andhow to finance results-based actions, were pushedto next year. However, countries did agree to discussnext year the role that forests play in providing

benefits beyond carbon reduction, including forestbiodiversity, which is essential for the conservationof natural forests.

A spate of scientific reports released during thetwo-week meeting provided compelling newevidence that the Earth's climate is warming. Theyalso predicted dire consequences - from rising sealevels to more severe droughts, floods and storms -unless action is taken to reduce climate-changingcarbon dioxide and other greenhouse gas emissions.

Global Carbon Project Report

The industrial revolution in the 18th century andthe human activities such as burning of fossil fuelsand deforestation have disturbed the natural

equilibrium of the carbon cycle by adding 10 percentto the emissions. Apart from this, According to areport released by the World MeteorologicalOrganization (WMO), in 2011 the amount of heattrapping carbon dioxide in the atmosphere hadreached a record of 391 parts per million. But as per

the new statistics produced by the Global CarbonProject, the emissions are set to rise again in 2012

reaching a record high of 35.6 billion tonnes.


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The new figures indicate that global emissionsfrom burning fossil fuels are now 58 percent above1990 levels, which was the baseline year used in theKyoto Protocol. That is the only global agreement inplace that contains mandatory emissions reductionsrequirements. However, developing countries suchas China and India do not have mandatory reductions

under that agreement.Some industrialized countries such as the U.S.

have slowed, and in some cases reversed, theiremissions growth recently due to the economicdownturn and the increased use of natural gas forgenerating electricity (natural gas emits fewergreenhouse gases than coal-fired power plants). Butthose trends have been more than offset by the rapidgrowth in emissions from developing countries. InChina, emissions grew by 9.9 percent in 2011, and inIndia emissions rose by 7.5 percent. That compares

to an emissions decrease of 1.8 percent in the U.S.,and 2.8 percent in the E.U. during the same period.

Emissions per person in China of 6.6 tonnes ofCO2 were nearly as high as those of the EuropeanUnion (7.3), but still below the 17.2 tonnes of carbonused in the U.S. Emissions in India were lower at 1.8tonnes of carbon per person.

Although CO2 is still the most significant long-lived greenhouse gas, levels of other heat-trappinggases have also climbed to record levels, according

to the report. Methane, for example hit 1,813 partsper billion (ppb) in 2011, and nitrous oxide rose to324.2 ppb. The amount of excess heat prevented fromescaping into outer space was 30 percent higher in2011 than it was as recently as 1990.

During the 2009 U.N. climate negotiations inCopenhagen countries committed to a non-bindingtarget of keeping global warming to under 2C, or3.6F, compared to the pre-industrial levels. However,as the World Bank Report noted and the Global

Carbon Project report also said, current emissionstrends indicate that the world is on track for far morewarming than that, perhaps as much as 7F ofwarming by 2060. According to the climate scientists,the worst consequences of global warming may beunavoidable, such as several feet of sea level risedue to rapid melting of the Greenland and Antarcticice sheets, along with more extreme weather eventsand harm to ocean ecosystems due to oceanacidification.

The Global Carbon Project was formed to assist

the international science community to establish acommon, mutually agreed knowledge basesupporting policy debate and action to slow the rate

of increase of greenhouse gases in the atmosphere.The Global Carbon Project is responding to thischallenge through a shared partnership between theInternational Geosphere-Biosphere Programme(IGBP), the International Human DimensionsProgramme on Global Environmental Change(IHDP), the World Climate Research Programme

(WCRP) and Diversitas. This partnership constitutesthe Earth Systems Science Partnership (ESSP).

Infant star may explain how our solarsystem formed

For the first time, a 'baby' star has been capturedjust before 'birth' by astronomers - a breakthroughscientists believe could hold clues as to how oursolar system formed. The discovery provides themissing link in understanding how giant gas cloudscollapse to form fully fledged stars.

The infant is just 300,000 years old at most -compared to the 4.6-billion-year age of our Sun andits planets - and is more than 450 light-years fromEarth in the constellation Taurus.

Currently about one-fifth the mass of the Sun, itis expected to pull in material from its surroundingsto eventually match it. The disk surrounding theyoung star contains at least enough 'stuff' to makeseven Jupiters - the largest planet in our solar system.

Called L1527 IRS, the young star resides in a

stellar nursery known as the Taurus Cloud and isone of the closest examples of the earliest stage ofstar formation. Astronomers detected both dust andcarbon monoxide around the object.

By measuring radio waves coming from carbonmonoxide in the disk they were able to show therotation speed changes with the material's distancefrom the star in the same fashion the orbital speeds

of planets change with distance from the Sun.

Kudankulam plant gets nod for second

heat-up

The Atomic Energy Regulatory Board on gave itsclearance for the second heat-up of the first unit ofthe 2,000-MW Kudankulam nuclear power plant inTamil Nadu, raising expectations that it could gocritical (begin the fission process) around December24, when Russian President Vladimir Putin is due toarrive here for the 13th annual India-Russia summit.

The second heat-up of the unit, an important

step towards its commissioning, would involveelaborate checking of the performance of varioussystems. The entire process could take 7-10 days.


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mThe procedure would be followed by preparationsfor the first approach to criticality, which couldcommence a week later.

Achievement of criticality is the major penultimatestep before a nuclear power plant goes on stream.After the achievement of criticality, some more testswould be conducted and then the plant would be

ready to start generating power. Generation wouldbe stepped up in phases interspersed with tests.

The plant, with two units of 1,000 MW each, hasbeen built with Russian collaboration. It will use lightwater both as coolant and moderator. Russia hasprovided all equipment including the reactorpressure vessel, steam generators and turbines, andwill supply the fuel for the entire life of the reactors.

The first unit was earlier scheduled to go on streamabout a year ago. But, the process was halted after the

Tamil Nadu government asked the Centre to suspendall operations until after local residents, who hadlaunched a protest on safety aspects, were reassuredthat the plant would pose no danger to them.

Work was resumed in March this year after theState gave its nod following a series of meetings andreports by experts committees.

Mechanical heart implant device launchedin India

A mechanical heart implant device has beenlaunched in India.

Unlike the first generation pulsatile pumps onpneumatic drive, which have been associated with

valve failure, this device is a rotary-assist pump thatprovides continuous blood flow once placed just

beneath the diaphragm. One end is connected to theleft ventricle and the other to the aorta, the mainartery carrying oxygenated blood to the entire body.The ensemble also has an external controller unitworn under clothing.

The device having survival rate of ten years ormore is better than the gold standard of heart

transplants and almost replicates the natural survival

phenomena.

However, there are downsides too, such as the

exorbitant cost (upwards of Rs. 50 lakh), the

discomfort of wearing the power source under

clothes and the pre-requisite of a functional right

ventricle for this assist device to work.

In spite of the high cost of the imported device,doctors believe that there could be a pool of patients

who could afford to benefit from the LVAD as it

offers a viable alternative to a heart transplant. An

estimated 1.5 million new cases of heart failure

emerge every year in India and 50 per cent of them

die within five years, making survival rates for the

disorder much worse than even cancer. Mortality

risks for advanced heart failure are more acute with

90 per cent of patients dying in two years.

The device could meet a largely unmet demand

in a country like India, which only does about 2,000

heart transplants a year due to donor organ shortage.


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2 - MARKERS

Indian Air Force Enters into MOU withConfederation of Indian Industry forTraining and Placement of Retiring Airmenin Civil Industries

With an aim to equip the Airmen with requisiteskill sets enabling them to seek sustainable and

befitting career prospects in civil industry sector postretirement, Indian Air Force (IAF) in collaborationwith Confederation of Indian Industry (CII) hasembarked on a project of setting up a Vocational

Training Centre (VTC) named "Happy Landings".This project is one of the many HR initiativesundertaken by the IAF to ensure the well being ofAir Warriors and address their professional andpersonal aspirations. According to the MoU, CII willtrain Airmen due for retirement in the near future,focusing on bridging the gap between existing skillspossessed by the airmen and those required by thecivil industry and also facilitate suitable placementsfor the personnel in civil sector.

HRD Ministry gave approval for

Establishment for Indira Gandhi Centre forSustainable Development at University ofOxford

The Minister for Human Resource DevelopmentDr M M Pallam Raju has announced the Ministry's'in-principle' approval for setting up the IndiraGandhi Centre for Sustainable Development at theSomerville College, University of Oxford.

The Indira Gandhi Centre will honour the lateIndian Prime Minister's legacy to the world byaddressing key issues of sustainable developmentand will result in building up India's intellectualcapital and expertise in the area. The proposed Centrewill enhance scholarship opportunities at Oxford forthe bright and talented students from India in thefield of sustainable development. It will invest inintellectual capital and build a platform forstrengthening partnerships with Indian scholars andleading institutions thereby creating a communityof alumni engaged in lifelong learning.

The Centre is aimed at having a transformationalimpact on the lives of future leaders, who will helpto direct a new paradigm of Sustainable Developmentin India and beyond.

There will be three core activities under the centre:a) Support talent and leadership development: the

establishment of graduate/Ph.D. scholarshipsavailable specifically to Indian students atOxford, with a cohort of Indian graduatestudents participating directly in research ofrelevance to India.

b) Advance sustainability research: the Centre willstrengthen interdisciplinary and pioneeringresearch into food security, environmental

sustainability and international governance byestablishing post-doctoral positions andfellowships;

c) Build an inspirational research facility on theUniversity of Oxford's new campus: The IndiraGandhi Centre building will be designed to housean innovative "incubator" environment, fosteringnew thinking and robust solutions to thechallenges facing India and South Asiancommunities today.

Within each Impact Theme, the Indira GandhiCentre will develop its activities around three coreactivities: research, talent, and collaboration.

'Life of Pi' Bags National Tourism Awards

Recently released feature film 'Life of Pi' has beengiven two National Tourism Awards by theMinistry of Tourism, Government of Indiarecognizing the impact it has had in promotingIndia as a tourism destination, especiallyPuducherry and Munnar (Kerala).

This will go a long way in encouraging more andmore Film producers from abroad to shoot their filmsin India. Every year, the Ministry of Tourismrecognizes various stakeholders, including filmmakers and writers for their contribution inpromoting India Tourism by conferring NationalTourism Awards.

The Ministry of Tourism has identified 'FilmTourism' as a Niche Tourism product. It hasrequested the State Governments and Union

Territory Administrations to recognize the potentialof Film Tourism and constitute special bodies/cellsto facilitate filming in their respective States/UnionTerritories.


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Supervisory college for SBI, ICICI Bankset up

The Reserve Bank of India (RBI) has set up asupervisory college for State Bank of India (SBI) andICICI Bank. The move is aimed to deal withsupervisory issues revolving around these banks, andestablish a co-operation mechanism for cross-border

supervision. This mechanism was developed withthe aim of reducing supervisory overlap, and fillingin supervisory gaps for better supervisory co-operation enunciated in Basel II framework.

Shakti Bhatt Prize

Naresh Fernandes has won the 2012 Shakti BhattFirst Book Prize for Taj Mahal Foxtrot: The Story ofBombay's Jazz Age, which gives the reader anengaging account of the city's thriving music scene

between the 1930s and 1960s.

Mr. Fernandes is also the co-author of BombayThen and Mumbai Now, a historical narrative, andco-editor of Bombay Meri Jaan.

The other shortlisted books were: Tamasha inBandargaon by Navneet Jagannathan, The PurpleLine by Priyamvada Purushottam, The King in Exile

by Sudha Shah, The Inexplicable Unhappiness ofRamu Hajjam by Taj Hassan and Calcutta Exile byBunny Suraiya.

Argentine honour for Peter Hassan

Honorary Consul for Russian Federation(Hyderabad), Peter Toghrille Hassan, who is alsoAdviser, Strategy and Planning, FICCI, has beenchosen for the 'Order de Mayo-Officer of the Order',the highest Civilian Award of the Republic ofArgentina. He has significantly contributed tostrengthening Indo-Argentine economic and cultural

ties, which have helped both the countries to enhancetheir trade activities.

The 'Order de Mayo' is given to selected anddistinguished awardees for exemplary work andexpert consultant and is named after the MayRevolution that led to the birth of the Republic ofArgentina.

Parthasarthi Shome

Renowned tax expert Parthasarathi Shome hasbeen appointed adviser to Finance Minister PChidambaram. Shome had held the same post fromOctober 2004 to January 2008. Even then, he wasadviser to Chidambaram. In that stint, he played acrucial role in facilitating state-level value-addedtax and initial discussions on goods and servicestax. Known for tax reforms, Shome was the brain

behind then fringe benefit tax and banking cash

transaction tax.Later, he joined Her Majesty's Revenue & Customs

in the UK as chief economist from January 2008 toJanuary 2011. Then, he moved to the Indian Councilfor Research on International Economic Relations.Shome was professor of economics at AmericanUniversity, Washington, from 1975 to 1983. He alsoworked with the International Monetary Fund from1983 to 2004 in various capacities. He has providedtechnical assistance to about 30 countries in Africa,Asia, Europe and Latin America and been credited

with tax reforms in Brazil. Shome is a PhD. fromSouthern Methodist University, has Masters degreesfrom University of Rochester (1973) and DelhiUniversity (1972).

His latest work includes a book, Tax Shastra,which is a comparative account of the taxadministrations of three countries - India, the UKand Brazil.


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EDITORIALS

Dealing with Pakistan's brinkmanship

During the past decade, there have been notable

shifts in Pakistan's nuclear doctrine, away from

minimum deterrence to second strike capability and

towards expanding its nuclear weapons arsenal to

include both strategic and tactical weapons.

Islamabad has described these developments as

"consolidating Pakistan's deterrence capability at all

levels of the threat spectrum." These shifts are

apparent from the following developments:

(1) There is a deliberate shift from the earlier

generation of enriched uranium nuclear weapons

to a newer generation of plutonium weapons.

(2) This shift has enabled Pakistan to significantly

increase the number of weapons, which now

appears to have overtaken India's nuclear weapon

inventory and, in a decade, may well surpass

those held by Britain and France.

(3) Progress has been made in the miniaturisation of

weapons, enabling their use with cruise missiles,both air and surface-based (Ra'ad or Hatf VIII

and Babur or Hatf-VII respectively) as also with

a new generation of short range and tactical

missiles (Abdali or Hatf II with a range of 180

km and Nasr or Hatf-IX with a range of 60 km).

(4) Pakistan has steadily improved the range and

accuracy of its delivery vehicles, building uponthe earlier Chinese models (the Hatf series) and

the later North Korean models (the No-dong

series). The newer missiles, including the Nasr,are solid-fuelled, which are quicker to launch than

the older liquid-fuelled versions.

Not under safeguards

This rapid development of its nuclear weapon

arsenal has been enabled by the setting up of two

plutonium production reactors at Khusab with a third

and fourth under construction. These have been built

with Chinese assistance and are not under

safeguards. The spent fuel from these reactors is

reprocessed at the Rawalpindi New Labs facility,

where there are reportedly two plants each with a

capacity to reprocess 10 to 20 tonnes annually.

Olli Heinonen, a former Director of Safeguards atthe IAEA has observed: "Commissioning of

additional plutonium production reactors and further

construction of reprocessing capabilities signify that

Pakistan may even be developing second-strike

capabilities".

These developments are driven by a mix of old

and new set of threat perceptions and, equally,

political ambitions. The so-called existential threat

from India continues to be cited as the main driver

of Pakistan's nuclear compulsions. The rapid increasein the number of weapons is justified by pointing to

India having a larger stock of fissile material available

for a much more numerous weapons inventory,

thanks to the Indo-U.S. civil nuclear agreement.

Tactical nuclear weapons are said to be a response

to India's so-called "Cold Start" doctrine or its

suspected intention to launch quick response

punitive thrusts across the border in case of another

major cross-border terrorist strike.

Pakistan's strategic objective has been expandedto the acquisition of a "full-spectrum capability"

comprising a land, air and sea-based triad of nuclear

forces, to put it on a par with India.

However, the focus on India has tended to obscure

an important change in Pakistan's threat perception

which has significant implications. The Pakistani

military and civilian elite is convinced that the United

States has also become a dangerous adversary, which

seeks to disable, disarm or take forcible possession

of Pakistan's nuclear weapons.

This threat perception may be traced to the

aftermath of 9/11, when Pakistan, for the first time

in its history, faced the real prospect of a military

assault on its territory by U.S. forces and the loss of

its strategic assets. In his address to the nation on

September 15, 2001, President Pervez Musharraf

justified his acquiescence to the U.S. ultimatum to

abandon the Taliban and support U.S. military

operations in Afghanistan, on account of four over-

riding and critical concerns - "our sovereignty, secondour economy, third our strategic assets and fourth

our Kashmir cause." Pakistan once again became a


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"front-line state," this time in the U.S. war on

terrorism in Afghanistan in contrast to the U.S.-led

war against the Soviet forces in that country in the

1980s. But this time round, Pakistan became an ally

by compulsion rather than by choice.

While the immediate threat to its strategic assets

passed, Pakistan's suspicions of U.S. intentions in

this regard did not diminish and have now risen to

the level of paranoia. The American drone attacks

against targets within Pakistani territory and, in

particular, the brazenness with which the Abbotabad

raid was carried out by U.S. Navy Seals in May 2011

to kill Osama bin Laden, have only heightened

Pakistan's concerns over U.S. intentions. These have

overtaken fears of India, precisely because the U.S.

has demonstrated both its capability and willingness

to undertake such operations. India has not.

Recent Shi ft s

Thus the recent shifts in Pakistan's nuclear

strategy cannot be ascribed solely to the traditional

construct of India-Pakistan hostility. They appear

driven mainly by the fear of U.S. assault on its

strategic assets. The more numerous and compact

the weapons, the wider their dispersal and the

greater their sophistication, the more deterred the

U.S. would be from undertaking any operations to

disable them or to take them into its custody. The

U.S. finds it as difficult to acknowledge this reality

as it has, until recently, Pakistan's complicity in

terrorism directed against its forces in Afghanistan.

This permits putting the onus on India to reassure

Pakistan through concessions rather than admitting

that the problem lies elsewhere. There is also a strong

non-proliferation lobby in the U.S. which believes it

could leverage the threat of an India-Pakistan nuclear

exchange to reverse some of the concessions made

to India in the civil nuclear deal. More recently, it is

being argued that since the U.S. is finding it difficultto get its promised share of the civil nuclear business

in India due to concerns over the country's Nuclear

Liability legislation, a major rationale behind the

agreement no longer exists. And meanwhile, it is

further claimed, the civil nuclear agreement has only

heightened the danger of India-Pakistan nuclear war

by feeding into Pakistani fears of India's enhanced

nuclear capabilities.

In this context, I wish to recall an exchange over

dinner hosted by President George Bush for PrimeMinister Manmohan Singh in November 2008 in

Washington. The then Secretary of State Condoleezza

Rice remarked that after the "heavy lifting" the U.S.

had done to get the nuclear deal through, she hoped

India would ensure that U.S. companies got a share

of the orders for new reactors. Before our Prime

Minister could reply, Mr. Bush stated categorically

that he was not bothered if India did not buy even

a single reactor from the U.S., since he regarded the

agreement as confirming India as a long-termstrategic partner rather than a mere customer for

U.S. reactors.

Pakistan encourages the arguments of the U.S.

non-proliferation lobby since this keeps the pressure

on India and enables the camouflage of Pakistan's

real motivations. It would not wish to project, as an

adversary, a much more powerful U.S., and lose out

on the economic and military support it receives,

however transactional these deals may have become.

The impl icati ons

What are the implications of these recent developments?

One, it is not through "strategic restraint" or

security assurances by India that Pakistan would be

persuaded to change its behaviour and revise its

strategy. India and Pakistan have some nuclear CBMs

in place and India would be prepared to go further.

The main levers for such persuasion lie in

Washington and in Beijing, not in New Delhi.

Two, whatever sophistry Pakistan may indulge

in to justify its augmented arsenal and threatened

recourse to tactical nuclear weapons, for India, the

label on the weapon, tactical or strategic, is irrelevant

since the use of either would constitute a nuclear

attack against India. In terms of India's stated nuclear

doctrine, this would invite a massive retaliatory

strike. For Pakistan to think that a counter-force

nuclear strike against military targets would enable

it to escape a counter-value strike against its cities

and population centres, is a dangerous illusion. TheU.S. could acquaint Pakistan with NATO's own Cold

War experience when tactical nuclear weapons were

abandoned once it was realised that use of such

weapons in any conflict would swiftly and inexorably

escalate to the strategic level. Instead of urging India

to respond to Pakistani nuclear escalation through

offering mutual restraint, the U.S. should convince

Islamabad that a limited nuclear war is a

contradiction in terms and that it should abandon

such reckless brinkmanship. The U.S. knows thatIndia's nuclear deterrence is not Pakistan-specific.

Any misguided attempt to constrain Indian


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capabilities would undermine, for both, the value of

Indo-U.S. strategic partnership in an increasingly

uncertain and challenging regional and global

security environment.

Three, Pakistan is no longer India's problem. Its

toxic mix of jihadi terrorism and nuclear

brinkmanship poses a threat to the region and to

the world. Even China, whose culpability in

continuing to assist Pakistan in developing its

nuclear and delivery capabilities is well

documented, is not exempt. It needs to reassess its

own policies. An apparently low-cost and proxy

effort to contain India may well become China's

nightmare, too, in the days to come.

Source: The Hindu

Cash transfers, a potential game-changer

The government has announced that direct cash

transfer of subsidies to the bank accounts of the

recipients would start in 51 out of India's 659 districts

from January 2013 and would be gradually extended

to the rest of the country by April 2014.

What NREGS was for UPA-1, direct cash transfer

of subsidies is expected to be for UPA-2. The question

is: Is it going to be the "game changer" as projected

by the UPA spokespersons?

The two main pillars on which the scheme standsare the UID or Aadhaar biometric identity card and

financial inclusion.

It is proposed that the cash equivalent of all

subsidies, such as kerosene, LPG cooking gas, food,

fertiliser, scholarships, old-age pensions, NREGS

(there are some 42 government schemes), would be

eventually transferred directly to the Aadhaar-based

bank accounts of all the recipients.

M iddl emen Elim inat ed

What are the possible benefits? This should

reduce, if not totally eliminate, the enormous

leakages by getting rid of ghost and duplicate ration

cards and layers of middlemen who siphon off a

part of the subsidy by taking 'cuts' at different levels.

Therefore, even if the same amount of subsidy is

paid out ('revenue-neutral') by the government, the

final targeted recipient should get more.

The disbursement should also be quicker and not

depend on the physical availability of subsidisedkerosene, food or fertiliser in the PDS or government

shops. The cash can be used to buy kerosene or food

or fertiliser at market prices from private traders.

This would mean less scope for local corruption as

the local boss can no longer decide who will get

subsidised kerosene or fertiliser in short supply.

Under the existing system, the recipient has to

establish his/her eligibility many times by producing

documents which then have to be verified by the

multiple authorities.

With an Aadhaar-based centralised data base,

which can be accessed by different government

agencies, the cost of duplication of efforts by both

the recipients and the government agencies can be

avoided.

Buying kerosene and LPG at market prices would

also reduce the incentive to adulterate diesel/petrol

with (cheap) kerosene and diversion of (subsidised)

domestic LPG cylinders to commercial use.

This would save money for the oil companies

while reducing the pollution caused by

adulterated fuel.

Ant icipati ng Problems

What are the possible pitfalls? Possibly the biggest

problem is how to change the cash subsidy amount

when the market prices of grains or kerosene or

cooking gas or fertiliser change. The market price

can also be manipulated by collusion, especially inareas where only a very small number of private

sellers exist. The same cash amount would buy less

if prices go up.

Can the government bureaucracy change the cash

subsidy amount quickly enough?

Another fear is that the cash to buy food can be

used for other purposes, such as entertainment or

liquor.

The purpose of the subsidy, tackling malnutrition,for instance, would then be defeated.

One may take the position that if a family

decides to spend its entitlement this way, why should

others object.

This argument would not be valid if the decision

is taken by, say, the male head of the family without

considering the welfare of the wife and the children

who have no voice in the decision-making process.

The spread of education, the awareness of therights of women and children and the role of social

activists would be crucial here.


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Studies undertaken by organisations such as

SEWA in areas where cash subsidy has already

replaced kerosene subsidy (in pilot projects) indicate

that the instances of cash being blown up in liquor

is almost non-existent.

The availability of banks or ATM nearby is also

a big problem for people in remote rural areas, even

when they are able to open a no-frills bank account.

The cost of visiting the bank to withdraw money

may eat up a large part of the subsidy, which

amounts to another form of 'leakage'.

This can be tackled by the use of the bank

correspondents (or commission agents from banks),

who would regularly visit the villages with their

hand-held machines linked to banks which would

transact both authenticated deposits and withdrawals

with proper receipts. But this needs to be

implemented before the cash subsidy replaces the

existing system.

In distant tribal areas with scattered populations,

no private shop to sell grains or kerosene may exist.

Moreover, the chances of one or two sellers

manipulating

weekly 3rd to 9th december 2012 ias

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