2 February 2014

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TABLE OF CONTENTS

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

The Whistle Blowers Protection Bill, 2011...................................................................................................................................... 5

Street Vendors (Protection of Livelihood and Regulation of Street Vending) Bill, 2014........................................... 6

The Andhra Pradesh ReorganisationBill, 2014 ............................................................................................................................ 7

Article 3 .................................................................................................................................................................................................................................................. 8 Special Category Status .................................................................................................................................................................................................................. 8

Prevention of Communal Violence (Access to Justice and Reparations) Bill, 2014 ...................................................... 9

Judicial Reforms ........................................................................................................................................................................................... 9

Appointment of Judges ................................................................................................................................................................................................................... 9 JudicialAccountability Bill ...........................................................................................................................................................................................................10

Freedom of Speech................................................................................................................................................................................... 10

SC refers Euthanasia to Constitutional Bench ............................................................................................................................ 11

SC on Capital Punishment .................................................................................................................................................................... 12

SC on Child Adoption by Minorities ................................................................................................................................................. 12

HC on National e-Mail Policy .............................................................................................................................................................. 13

Public Participation in Law Making ............................................................................................................................................... 13

Setting up of CoalRegulator ................................................................................................................................................................ 14

Police Complaint Authority ................................................................................................................................................................. 14

Undertrial Prisoners ............................................................................................................................................................................... 15

News Related to Elections .................................................................................................................................................................... 15

Seeking Vote on Religious Ground ..........................................................................................................................................................................................15 Guidelines on Parties’ Manifestos ...........................................................................................................................................................................................15 A Big Jump in Electoral Size .......................................................................................................................................................................................................16 India’s Missing Women and Elections ...................................................................................................................................................................................16

ECONOMY .......................................................................................................................................... 17

Indian Economy ........................................................................................................................................................................................ 17

CSO Estimates for financial year 2013 ..................................................................................................................................................................................17

LPG Subsidy ................................................................................................................................................................................................ 17

Spectrum Auction .................................................................................................................................................................................... 18

NELP-X .......................................................................................................................................................................................................... 18

Micro Finance Institutions (Development and Regulation) Bill, 2012 ........................................................................... 19

Draft Report on Enabling PKI in Payment System Applications ....................................................................................... 19

Guidelines to deal with distressed assets ...................................................................................................................................... 20

RBI changes loan rate formula .......................................................................................................................................................... 21

FATF money laundering ....................................................................................................................................................................... 21

Housing start up index (HSUI) ........................................................................................................................................................... 22

FDI in Farmland ....................................................................................................................................................................................... 22

National Policy for Farmers, 2007 ..........................................................................................................................................................................................23

NSSO’s 68th Round Highlights on Unemployment ..................................................................................................................... 24

The Global Employment Trends Report 2014 ............................................................................................................................ 25

Empowerment Line ................................................................................................................................................................................. 25

SOCIAL ISSUES ................................................................................................................................. 26

The Rights of Persons With Disabilities Bill, 2014 .................................................................................................................... 26

Discrimination against Northeast People .................................................................................................................................... 27

HLC on Status of Women in India..................................................................................................................................................... 27

Benefits toSenior Citizens ..................................................................................................................................................................... 28

Conditions of Juvenile Homes ............................................................................................................................................................. 28

HEALTH ................................................................................................................................................................................................... 29

Indian Pharma sector ............................................................................................................................................................................ 29

Steps to Fight AIDS .................................................................................................................................................................................. 30

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Human Immunodeficiency Virus Acquired Immune Deficiency Syndrome (Prevention and Control) Bill, 2014 ...........................30

AIIMS under PMSSY ................................................................................................................................................................................ 30

ENVIRONMENT ............................................................................................................................... 31

Field Trials of GM Food Crops ............................................................................................................................................................ 31

Water Crisis across the World ........................................................................................................................................................... 32

Green Energy Corridor .......................................................................................................................................................................... 33

Dams onSiang River ................................................................................................................................................................................ 33

Environmental Performance Index ................................................................................................................................................. 33

INDIA AND WORLD ........................................................................................................................ 35

India – Japan .............................................................................................................................................................................................. 35

India –South Korea ................................................................................................................................................................................ 35

India – Saudi Arabia ............................................................................................................................................................................... 36

Visit of Saudi Arabia’s Prince to India ...................................................................................................................................................................................36 Labour Cooperation Agreement ..............................................................................................................................................................................................36

India –Pakistan ......................................................................................................................................................................................... 37

Commerce Ministers Meet ..........................................................................................................................................................................................................37 Trade across LOC.............................................................................................................................................................................................................................38

India – China .............................................................................................................................................................................................. 38

Year of friendly exchange ............................................................................................................................................................................................................38 Meetings on border issues ..........................................................................................................................................................................................................39

India – Sri Lanka ...................................................................................................................................................................................... 39

India – Maldives ........................................................................................................................................................................................ 40

India – Germany ....................................................................................................................................................................................... 40

India – Italy ................................................................................................................................................................................................. 41

India – USA .................................................................................................................................................................................................. 41

India – Bahrain ......................................................................................................................................................................................... 42

India – Canada .......................................................................................................................................................................................... 42

India – Iran ................................................................................................................................................................................................. 43

India – Venezuela ..................................................................................................................................................................................... 43

India – UAE ................................................................................................................................................................................................. 43

India – Azerbaijan ................................................................................................................................................................................... 44

India - Kyrgyz Republic ......................................................................................................................................................................... 44

India – Oman .............................................................................................................................................................................................. 44

India – Fiji .................................................................................................................................................................................................... 45

BCIM Trade Corridor .............................................................................................................................................................................. 45

Visa on Arrival in India ......................................................................................................................................................................... 46

WORLD AFFAIRS ............................................................................................................................ 47

Ukraine Crisis ............................................................................................................................................................................................. 47

Events in Bangladesh ............................................................................................................................................................................. 48

Elections in Bangladesh ...............................................................................................................................................................................................................48 Bangladesh War Crimes Tribunal ...........................................................................................................................................................................................49 Death Sentence to Paresh Barua ..............................................................................................................................................................................................49

Events in Pakistan ................................................................................................................................................................................... 49

Talks with TTP ..................................................................................................................................................................................................................................49 Relations with China ......................................................................................................................................................................................................................49 Pervez Musharraf to face trial on treason charges .........................................................................................................................................................50

Events in China .......................................................................................................................................................................................... 50

South China Sea air zone..............................................................................................................................................................................................................50 Maritime Silk Road initiative .....................................................................................................................................................................................................51 China-SriLanka Relations ............................................................................................................................................................................................................51

War Crimes in Sri Lanka ....................................................................................................................................................................... 51

US to press Sri Lanka on war crimes allegations at UNHRC .......................................................................................................................................51

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Probe into war crimes in sri lanka ..........................................................................................................................................................................................51

Events in United States .......................................................................................................................................................................... 52

Janet Yellen to head US Federal Reserve .............................................................................................................................................................................52 US – Germany No Spying Talks .................................................................................................................................................................................................52 John Kerry pushes for Israel Palestine Peace Talks .......................................................................................................................................................52

Syria Issue .................................................................................................................................................................................................... 53

Geneva II Conference .....................................................................................................................................................................................................................53 Second Round of Geneva II .........................................................................................................................................................................................................53 Friends of Syria Meet.....................................................................................................................................................................................................................54

P5 +1 and Iran ........................................................................................................................................................................................... 54

Latvia joins Eurozone ............................................................................................................................................................................ 55

Afghanistan likely to join the WTO .................................................................................................................................................. 55

Egypt Issue .................................................................................................................................................................................................. 55

Egypt’s new constitution .............................................................................................................................................................................................................55 Mohd. MorsI Trials .........................................................................................................................................................................................................................55 Political developments .................................................................................................................................................................................................................56

Elections round the world .................................................................................................................................................................... 56

Nepal .....................................................................................................................................................................................................................................................56 South Africa ........................................................................................................................................................................................................................................57 Afghanistan ........................................................................................................................................................................................................................................57 Italy ........................................................................................................................................................................................................................................................57 Madagascar ........................................................................................................................................................................................................................................57 Tunisia ..................................................................................................................................................................................................................................................58

Mt. Kelud volcano erupts ...................................................................................................................................................................... 58

Central African Republic dilemma for France ............................................................................................................................ 58

ALSO IN NEWS ................................................................................................................................. 59

Saching Ramesh Tendulkar ................................................................................................................................................................ 59

Prof. C.N.R. Rao.......................................................................................................................................................................................... 59

Satya Nadella ............................................................................................................................................................................................. 59

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POLITY

THE WHISTLE BLOWERS PROTECTION BILL, 2011

• The Whistle Blowers Protection Bill, 2011 was passed by the Parliament.

• Whistleblowing is the act of disclosing information by an employee or any stakeholder about an illegal or

unethical conduct within an organisation.

• The bill aims to balance the need to protect honest officials from undue harassment with protecting

persons making a public interest disclosure.

IMPORTANT PROVISIONS

• The Bill seeks to protect whistleblowers, i.e. persons making a public interest disclosure related to an act of

corruption, misuse of power, or criminal offence by a public servant.

• It seeks to establish a mechanism to register complaints on any allegations of corruption or wilful misuse of

power against a public servant.

• Any public servant or any other person including a non-governmental organization can file complaint

• Penalties for knowingly making false complaints.

SAFEGUARDS

• It provides safeguards against victimisation of the person who makes the complaint.

• The Vigilance Commission shall not disclose the identity of the complainant except to the head of the

department if he deems it necessary.

• If the Vigilance Commission decides that a complainant ora witness or a person assisting an inquiry needs

protection, it shall issue directions to the concerned government authorities to protect such persons.

EXEMPTS

• Disclosure of proceedings of the Cabinet if it is likely to affect the sovereignty of India, security of the state,

friendly relations with foreign states, public order, decency or morality.

• Armed forces and intelligence agencies. However, on the recommendation of parliament standing

committee, government deleted this exemption from the bill that is now in Rajya Sabha.

PROCEDURE

• The Vigilance Commission has to verify the identity of the complainant, and then conceal his identity (unless

the complainant has revealed it to any other authority). Then it shall decide whether the matter needs to be

investigated based on the disclosure or after making discreet inquiries. If it decides to investigate, it shall

seek an explanation from the head of the concerned organisation.

• After conducting the inquiry, if the Vigilance Commission feels that the complaint is frivolous or there is no

sufficient ground to proceed, it shall close the matter. If the inquiry substantiates allegation of corruption or

misuse of power, it shall recommend certain measures to the public authority (anybody falling within the

jurisdiction of the Vigilance Commission). Measures include initiating proceedings against the concerned

public servant, taking steps to redress the loss to the government, and recommending criminal proceedings

to the appropriate authority

CRITICISM

• Every complaint has to include the identity of the complainant. It is in contrary to the recommendations

made by 2nd ARC and also by Law commission. In UK, USA and Canada, anonymous complaints are also

accepted.

• The CVC was designated to receive public interest disclosures since 2004 through a government

resolution. There have been only a few hundred complaints every year. The provisions of the Bill are

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similar to that of the resolution. Therefore, it is unlikely that the number of complaints will differ

significantly.

• The power of the CVC is limited to making recommendations. Also it does not have any power to impose

penalties.

• The Bill has a limited definition of disclosure and does not define victimisation. Other countries such as US,

UK, and Canada define disclosure more widely and define victimisation.

• Cases older than 7 years are not entertained

RECOMMENDATIONS OF PARLIAMENTARY COMMITTEE

• The Bill should cover members of the Council of Ministers, the Judiciary (including higher judiciary) and

regulatory authorities.

• Wrongful gain accrued to any third party should be included in definition of ‘disclosure’

• There should be a foolproof mechanism to ensure that the identity of the complainant is not compromised.

• Anonymous complaints have supporting documents that substantiates the claims may be investigated.

• Undue burden should not be placed on the complainant to provide proof to substantiate his case. As long as

he is able to make out a prima facie case, the Vigilance Commissioner should follow up on the case.

• There is a high chance of non-compliance of orders of the CVC. Therefore, an effective mechanism needs to

be chalked out to ensure that the orders of the CVC are complied with and stringent action may be taken

for non-compliance.

FAMOUS CASES

• Satyendra Dubey - noble cause of exposing corruption in highway construction.

• Sanjiv Chaturvedi – Indian Forest Service of Haryana cadre. He has exposed various scams. Central

government has supported the cause of officer by negating various steps taken by state government against

him. State government has given him continuously zero performance rating which would impact his

promotion in service.

• Manjunath Shanmugam, an IIM graduate gave his life to the country while trying to expose the corruption in

petroleum marketing.

• Shehla Masood, a 38-year-old businesswoman in Bhopal, used public documents obtained under India’s

Right to Information Act to expose local political corruption after she kept losing on government contracts.

STREET VENDORS (PROTECTION OF LIVELIHOOD AND REGULATION OF STREET

VENDING) BILL, 2014

• Parliament passed the Street Vendors (Protection of Livelihood and Regulation of Street Vending) Bill, 2014,

which later received the assent of President of India.

• The Bill aims to protect the livelihood rights of street vendors as well as regulate street vending through

demarcation of vending zones, conditions for and restrictions on street vending.

• Street Vendors have been defined to include ‘any person engaged in vending of articles, goods, food etc or

offering services to the general public in a street lane, side walk, footpath, pavement, public park, or any

other public or private area. It includes hawkers, peddlers, and squatters.

• The Bill states that the minimum age of a street vendor has to be 14 years.

• Any person intending to take street vending should register with the Town Vending Committee (TVC).

• TVC would be constituted in each local authority for implementing its provisions, survey of all existing street

vendors and subsequent surveys once every five years and issuing certificate of vending to all street

vendors identified in the survey, giving preference to SCs, STs, OBCs, women, persons with disabilities and

minorities.

• The Bill empowers the TVC to cancel or suspend the vending certificate. This may be done if the vendor has

breached the conditions of street vending either under the Bill or under the street vending scheme.

• An appeal can be made to the local authority against the decision of the TVC. The appeal shall be with

respect to (a) decision regarding the grant of registration; or (b) cancellation/suspension of the vending

certificate.

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• A penalty may be imposed on the street vendors if the vendor:

o Does not have a vending certificate; or

o Vends beyond the designated zone or specified timings; or

o Contravenes the vending certificate.

• A maximum penalty of Rs 2000 may be imposed on the street vendor.

• The Bill requires every local authority to frame a street vending plan. The plan has to be reframed every five

years. The plan shall determine the vending zones as (a) restriction-free vending zones; (b) restricted

vending zones; and (c) no-vending zones. The plan should also take into account that the areas available for

street vending is reasonable, does not lead to overcrowding and is consistent with natural markets.

• The Bill empowers the local authority to relocate street vendors. The authority may do so, of the street

vendors are causing a public nuisance or obstructing the movement of the public. A registered street vendor

who has been relocated shall be entitled to new site for vending.

• The appropriate government may provide for credit, insurance and other welfare schemes for the street

vendors.

ANALYSIS

• Considering the significant contribution made by street vendors to the urban society, and to enable them to

earn a decent livelihood through creation of conditions for decent work, without causing obstruction to the

public and to reflect the spirit of the Constitution of India on the right of citizens to equal protection before

the law as well as their right to practice any profession, occupation, trade or business, the Government of

India has revised the National Policy on Urban Street Vendors in 2009 and subsequently introduced a bill in

the parliament.

• Bill was drafted under entries 20 (economic and social planning), 23 (social security and social insurance;

employment and unemployment), and 24 (welfare of labour including conditions of work, provident funds,

employers liability, workmen’s compensation, invalidity and old age pensions and maternity benefits) of List

III of the Constitution. The Bill provides for protection of livelihoods rights, social security of street vendors,

regulation of urban street vending in the country and for matters connected therewith or incidental

thereto.

• With passage of law, some 10 million of the most industrious workers of the country have gained formal

recognition.

• Currently, street vending is regulated under municipal laws enacted by state legislatures. Parliament’s

competence to legislate on this issue depends on whether the Bill is interpreted as substantively addressing

rights and obligations of street vendors (Concurrent List) or relating to municipal zoning (State List).

• The Bill does not specify principles to be followed by governments in issuing vending certificates, allocating

vending zones and the number of vendors per zone. Absence of such norms could defeat the purpose of

enacting a law to ensure uniformity in the legal framework.

• The standing committee suggested reconsidering the non-inclusion of railway lands in the bill.

• Mobile vendors should be provided more than one certificate.

• Local authority has been given power to determine the vending zone. Bill does not specify that local

authority consult TVC and other stakeholders in this process.

THE ANDHRA PRADESH REORGANISATIONBILL, 2014

• The bill has been passed by the Parliament which provides for the reorganisation of the state of Andhra

Pradesh. It creates two states, namely Andhra Pradesh and Telangana.

• The bill envisages Hyderabad as the common capital. The Andhra Pradesh Governor will be Governor for

both successor States of Andhra Pradesh and Telangana.

• The common capital includes the existing area notified as Greater Hyderabad Municipal Corporation. Centre

shall form expert committee to suggest a new capital of Andhra Pradesh within 45 days.

• The Centre will set up an apex council for the supervision of Krishna and Godavari rivers on water sharing.

• 25 Lok Sabha seats to be allocated to residuary Andhra Pradesh and 17 Lok Sabha seats to Telangana.

• Residuary Andhra Pradesh will get 175 Legislative Assembly seats and Telangana 119.

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• Existing admission quotas in all government or private, aided or unaided institutions of higher, technical and

medical education shall continue for 10 years during which common admission process shall continue.

• The Polavaram Irrigation Project will be declared as a national project and the Centre will take under its

control the regulation and development and the Tungabhadra Board will continue to monitor the release of

water to high level canal, low level canal and Rajolibanda diversion scheme.

• The High Court at Hyderabad will be common for both States till a separate High Court is set up for

residuary Andhra Pradesh.

• Any dispute, regarding financial assets and liabilities, shall be settled through mutual agreement failing

which by the Centre’s order on the advice of the Comptroller and Auditor General.

• All properties situated outside existing Andhra Pradesh will be apportioned between the successor States

on the basis of population ratio.

• Greyhound and OCTOPUS forces of the existing Andhra Pradesh will be distributed after seeking opinions

from the personnel and each of these forces.

• The award made by the 13th Finance Commission to the existing State of Andhra Pradesh will be

apportioned between the successor States by the Centre on the basis of population and other parameters.

• The residual state is to get special category status for the purpose of central assistance and its backward

regions will be eligible for a special development package.

• The Union government has put in place an action plan to develop major Tier II and III cities/towns in

Seemandhra region as ‘specialised mini-capitals’. The action plan submitted to the Group of Ministers and

Centre recommends developing Visakhapatnam, Vijayawada, Ongole, Tirupati, Chittoor, Kakinada and

Anantapur as specialised hubs or mini-capitals. Visakhapatnam may turn into the fisheries and sea-food

hub. Kakinada will become the focal point in the development of petrochemical industries. Tirupati or

Chittoor are in the reckoning to turn into agro-based and food-processing hubs etc.

• Criticism

o Special powers given to the Governor under the proposed Act are in contravention of the

provisions of the constitution as law and order is a state subject.

ARTICLE 3

• The bill has been decisively rejected by the Andhra Pradesh legislature. This is the first time that an

amendment Bill been rejected by the State legislature for formation of a new state.

• Article 3 of the Constitution vests Parliament with the power to form a new State, provided that the Bill

creating such a State is introduced on the recommendation of the President and he has referred it to the

legislature of the affected State “for expressing its views thereon.” Article 3 merely gives State Assemblies a

consultative role — their views are not binding on Parliament in any way. Therefore, the formation of a new

state is solely the prerogative of the government of India.

• The current proviso to Article 3 was introduced by the Constitution (Fifth Amendment) Act, 1955. Before

this amendment, the President could only introduce an Amendment Bill in Parliament after referring it to

the State legislatures concerned for their views. This was a time-consuming process, allowing States to

vacillate in responding, thereby frustrating the efforts of the government of India. This amendment was

necessary to lay the groundwork for the smooth passage of the States’ Reorganisation Commission Report.

SPECIAL CATEGORY STATUS

• Centre has decided to give special category status to residual Andhra Pradesh.

• Criteria for Special category states is decided by National Development Council (NDC) and any state must

fulfill following conditions:

o hilly and difficult terrain

o low population density and/or sizable share of tribal population

o strategic location along borders with neighbouring countries

o economic and infrastructural backwardness

o Non-viable nature of State finances.

• Currently, 11 states enjoy special category status which includes – northeastern states including Sikkim,

Jammu & Kashmir, Himachal Pradesh, and Uttarakhand.

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• Residual Seemandhra state after bifurcation would be 12th state to enjoy this status.

• The Central assistance to states enjoying special category status is 90 per cent.

• Various other states such as Bihar, Odisha, Jharkhand and Rajasthan are demanding special category status

from long time.

PREVENTION OF COMMUNAL VIOLENCE (ACCESS TO JUSTICE AND

REPARATIONS) BILL, 2014

• It was introduced in Rajya Sabha but was deferred on the very first day of last session of the 15th Lok Sabha

• The Bill defines communal violence to include any act of series of acts, whether spontaneous or planned,

resulting in injury or harm to the person or property knowingly directed against any person by virtue of his

or her religious or linguistic identity.

• Dereliction of duty will invite a punishment with imprisonment ranging from two years to five years and

breach of command with imprisonment of up to 10 years.

• Earlier the power of intervention of the Center in event of riots was unilateral, that is, central could send

paramilitary forces without consulting the state governments. This has been amended and now the State

governments will have discretion in deciding whether the assistance of the Center is needed or not.

• The new bill makes bureaucrats and public servants accountable for any acts of commission and omission

while handling communal violence. However bureaucrats who refuse to obey unlawful orders of their

superiors during communal situations cannot be held responsible for willful neglect of duty.

• The Bill provide compensation of 7 lakh rupees to the next kin of those killed in communal violence, 5 lakh

rupees for rape, 3 lakh rupees to 5 lakh rupees for disability and 2 lakh rupees for grievous injury.

JUDICIAL REFORMS

APPOINTMENT OF JUDGES

WHY IN NEWS?

• The Supreme Court’s collegium withdrew from the law ministry the names of 12 persons recommended by

the collegium for elevation as judges of the Madras High Court.

• In the present case, it was alleged that there is lack of transparency in the selection process. But many

argue that the real issue lies in the casteism. It cannot be a coincident where certain castes are not at all

represented in the Madras High Court.

ANALYSIS

• The Supreme Court’s proposal to create a “forum to address the grievances of lawyers” on judicial

appointments is a small step towards greater transparency in the functioning of the collegiums.

• The SC, notably, withdrew its nomination and returned the list to the Madras HC. But its reason for doing so

— that the Madras HC had a new chief justice and therefore the list had to be considered afresh — skirts

the real problem of lack of accountability in judicial collegiums.

• The collegium system — a creation of the SC itself — comprises the chief justice and the senior-most judges

of a high court or the SC and is not answerable to any constitutional functionary for its decisions.

• A judicial appointments commission is in the works, but it is unclear when Parliament will legislate it into

existence by way of a constitutional amendment. The proposed commission, which would replace the

collegiums, would still have some discretion in the appointment process.

• Meanwhile, till the commission is institutionalised, the apex court should nudge the appointments process

towards greater transparency. The SC could prescribe eligibility criteria for selection to the higher judiciary,

beyond the basic requirements in the Constitution. It could exhort high courts to make the shortlist of

candidates public. The SC could disclose why it has chosen to nominate judges from the short list to the

Union government.

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• The appointment process should also take on board diversity concerns. Higher courts will indeed invite

criticism upon disclosing the rationale behind judicial appointments but that would arguably be a small price

to pay to shore up public confidence in the judiciary while retaining its independence.

JUDICIALACCOUNTABILITY BILL

• The bill has been lapsed, but still the bill constitutes one of the important Judicial Reforms. The Bill seeks to:

o Lay down judicial standards

o Provide for the accountability of judges

o Establish mechanisms for investigating individual complaints for misbehaviour or incapacity of a judge

of the Supreme Court or High Courts.

o Also provides a mechanism for the removal of judges.

• The procedure of removal of judges is presently regulated by the Judges (Inquiry) Act,1968. The Bill seeks to

repeal the Act.

• The Bill requires judges to practise universally accepted values of judicial life such as allowing family

members who are members of the Bar to use the judge’s residence for professional work, hearing or

deciding matters in which a member of the judge’s family or relative or friend is concerned, declare their

assets and liabilities etc.

• The Bill establishes two authorities to investigate complaints against judges. The Two authorities are:

o National Judicial Oversight Committee; and

o Scrutiny Panel.

• Initial complaints will be made to the Oversight Committee, and they will be referred to the Scrutiny Panel.

• Frivolous or vexatious complaints may be penalised by the Oversight Committee

• If the charges against a judge are proved, the Oversight Committee may recommend that judicial work shall

not be assigned to the judge. It may also issue advisories and warnings if it feels that the charges proved do

not warrant the removal of the judge. If the Committee feels that the charges proved merit the removal of

the judge, it shall request the judge to resign voluntarily, and if he fails to do so, (b) advise the president to

proceed with the removal of the judge. In such a case, the President shall refer the matter to Parliament.

• The Bill exempts documents and records of proceedings related to a complaint from the purview of the

Right to Information Act, 2005. The reports of the investigation committee and the order of the Oversight

Committee shall be made public.

EXISTING MECHANISM

• There is an In-House procedure to deal with complaints against judges of the Supreme Court and the High

Courts. Complaints received by the Chief Justice of India are examined and ultimately if it is found that a

deeper probe is required into allegations, a three-member committee is constituted for a fact-finding

inquiry.

• If the committee reports that the misconduct disclosed is so serious as to call for initiation of proceedings

for removal of the judge concerned, the Chief Justice of India may advise the judge concerned to resign or

seek voluntary retirement or withdraw himself from judicial work, and the government may be intimated

that this has been done since allegations are so serious as to warrant initiation of proceedings for removal

of the judge concerned. A copy of the report is furnished to the judge concerned.

• Subordinate judiciary is under the control of respective High Court. Different High Courts have, over the

years, evolved procedures for exercising control over the subordinate courts.

FREEDOM OF SPEECH

WHY IN NEWS?

Penguin India withdraw American Indologist Wendy Doniger’s book ‘The Hindus: An Alternative History’ from

the Indian market following an out-of-court settlement with Delhi-based complainants.

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ANALYSIS

• The Indian law makes it a criminal rather than civil offence to publish a book that offends any group of

citizens, a law that jeopardises the physical safety of any publisher, no matter how ludicrous the accusation

brought against a book.

• Penguin India says that Section 295A of the Indian Penal Code (IPC) makes it difficult for any Indian

publisher to uphold international standards of free expression. 295A section talks about deliberate and

malicious acts intended to outrage religious feelings of any class by insulting its religion or religious beliefs.

• Section 295A was not part Indian Penal Code of 1860 in its original form. It was added much later in 1927.

The debates on the proposed amendment in the assembly make it abundantly clear that the provision was

viewed as a somewhat retrograde step. It was argued that amendment is a “death-blow to religious and

historical research.”

• The petitioner had argued that the book was inaccurate, presenting a “shallow, distorted, non-serious

presentation of Hinduism filled with heresies.” Ultimately it was about lowering of Hindu culture and

cultural identity.

• However, protestors are criticized on picking up isolated passages in the book that can be twisted into

controversies rather than genuine concern for cultural integrity.

• It would be failure of democracy if whimsical decisions of the majority are allowed to override the most

fundamental rights enjoyed by the citizens.

• One sided information, disinformation, misinformation and non-information, all equally create an

uninformed citizenry which makes democracy a farce. Freedom of speech and expression includes the right

to impart and receive information which includes freedom to hold opinions. After all, critical arguments

have always broadened the scope of the religion.

OTHER SIMILAR CASES

• The Salman Rushdie affair for his novel, “The Satanic Verses” became the most important free speech

controversy of modern times. And yet, except where there were state bans, Penguin refused to withdraw

the book. This previous stand of Penguin is in complete contrast to current stand of Penguin India.

• The Maharashtra government banned “Shivaji: Hindu King in Islamic India”.

• More recently, cartoon depictions of B.R. Ambedkar had to be withdrawn from NCERT text-books.

• Bloomsbury India’s decision to withdraw “The Descent of Air India” book after a complaint for defamation

filed by Mr. Praful Patel.

SC REFERS EUTHANASIA TO CONSTITUTIONAL BENCH

• A five-judge constitutional bench would decide whether dying with dignity a fundamental right for

terminally ill patients or not.

• According to one argument a terminally ill person should be given the right to refuse the life support system

when a medical expert says she/he has reached a point of no return.

• The SC referred to an earlier Constitution Bench judgment which, in the Gian Kaur case, “did not express

any binding view on the subject of euthanasia; rather it reiterated that the legislature would be the

appropriate authority to bring change.”

• Though that judgment said the right to live with dignity under Article 21 was inclusive of the right to die

with dignity, it did not arrive at a conclusion on the validity of euthanasia, be it active or passive.

• The only judgment that holds the field with regard to euthanasia in India is the ruling in the Aruna Shanbaug

case (2011), which upholds the validity of passive euthanasia and lays down an elaborate procedure for

executing the same on the wrong premise that the Constitution Bench in Gian Kaur had upheld the same.

• The Bench said that in view of the inconsistent opinions rendered in the Aruna Shanbaug case and the

important question of law involved, it was extremely important to have a clear enunciation of the law.

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SC ON CAPITAL PUNISHMENT

[Please also refer to the Current Affairs notes of January 2014, for the news related to the SC judgment on Capital

Punishment.]

ANALYSIS

• The commutations of death sentences, in Shatrughan Chauhan v. Union of India, were primarily ordered on

grounds of delays by the President in disposing of petitions filed by felons praying for mercy. Supreme Court

held that to execute a person who has been kept on death row for years on end with no answer to his or

her plea for clemency is an act of torture that violates the prisoner’s fundamental right to life.

• The Supreme Court ruled that inordinate delay or mental illness constituted “supervening circumstances”

requiring the President or the Governor to exercise their constitutional duty in grating pardon under article

72 or 161. When they fail to do so, it becomes incumbent upon the Court to intervene in the interests of

preserving the due process of law.

• The legal issue at stake in Chauhan was simple: are the powers of pardon vested in the President and the

Governors under Articles 72 and 161 of the Constitution amenable to judicial review? The Court held that

these powers carried with them a concomitant constitutional duty for the authorities exercising the powers

to conform to due process. Therefore, in exceptional cases, where the authority concerned may have

abdicated its responsibility in acting contrary to requirements of due process, its decisions would be

amenable to judicial scrutiny. The judgment emphasises the need for accountability in exercising

constitutionally enshrined powers in a responsible manner.

• This case also makes the important point that an inordinate and inexplicable delay in execution would

preclude carrying out the sentence even in cases where the convict in question had committed an offence

of terrorism. In so deciding, the Court has overruled its own recent decision in Devender Singh Bhullar v.

State of NCT Delhi. In Bhullar, decided in May 2013, a two-judge bench had ruled that a delay in disposing of

a mercy petition was, by itself, insufficient ground for commuting the sentence of those convicted to death

under anti-terrorism statutes.

• In correcting this anomaly, Chauhan reiterates a long-standing constitutional value: the Constitution

demands that the state treats all those subject to its powers as having equal status; when there is no

constitutional basis for differentiating between convicts found guilty of offences such as murder and

convicts found guilty of terrorism offences, any delay in execution is to be treated equally, as a violation of

due process, irrespective of the offence committed.

• As the Court rightly held in Chauhan, the right to life and personal liberty guaranteed by Article 21 includes

within it a right to be treated with a certain dignity, even if you are a convict on the death row. Article 21 —

which now by interpretive design recognises a right to due process — is applicable not merely to you, me

and every other average citizen, but also to those condemned to the gallows. Any inordinate, unexplained

delay in determining the merits of a mercy petition filed by a convict on the death row would be an

infraction of that right.

• It is easy to wonder why the most brutal of men and women deserve the protection of the law; but when

due process is disregarded for monstrous criminals, it also becomes simpler to disregard it for the rest of us.

SC ON CHILD ADOPTION BY MINORITIES

• The Supreme Court said that religious minorities have legal right to adopt children, even if it contradicts

personal laws, under Juvenile Justice (care and Protection of Children) act, 2000.

• The Supreme Court has affirmed that under the Juvenile Justice (Care and Protection of Children) Act

amended in 2006, adopted children have the same “rights, privileges and responsibilities” as biological

children, and Indian citizens of any religion can legally adopt them.

• So far, Muslims, Christians, Parsis and Jews were allowed to be guardians, not legal parents, and their

children could not inherit property.

• The judgment has clarified that personal laws cannot override civil laws and the rights they guarantee.

“Personal beliefs and faiths, though must be honoured, cannot dictate the operation of the provisions of an

enabling statute,” said Supreme Court.

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• It is seen as a step towards uniform civil court which is mentioned under article 44 of Directive Principles of

State Policy (DPSP).

• Apart from pressing for formal rights, there is also a need to stress on internal reforms.

HC ON NATIONAL E-MAIL POLICY

• The Delhi High Court has pulled up the Central Government for its alleged failure to frame a national e-mail

policy for online communication of official records.

• The continuous use of private e-mail ids like Yahoo and Google, which have servers outside the country, by

government departments is in violation of the Public Records Act, 1993.

• The Act prohibits sending of official records outside the country by exchanging communication of official

records through private e-mail service providers.

• In August 2013, Government announced that the national e-mail policy would be released to protect

privacy of email users in India.

PUBLIC PARTICIPATION IN LAW MAKING

• Cabinet Secretary-led committee recently took decision to institutionalise public participation in the law-

making process. This will apply not only to legislation, but also the rules and regulations that will govern the

act, the administrative working manuals.

• The decision requires every Central government department to publicise the details of a proposed

legislation on the Internet and other media before being introduced in Parliament.

• Under the decision, draft bills must be accompanied with an explanatory note outlining the essential

provisions of the bill and its impact on the environment and lives of affected people.

• The public must then be given at least 30 days to comment.

• Following publication, these comments are to be submitted to the relevant parliamentary standing

committee examining the bill.

ANALYSIS

• It is uncontroversial that pre-legislative scrutiny enhances democratic governance. It has been done in a

number of other countries well accustomed to transparent legislative processes.

• Right to Information act, Sexual harassment at workplace bill, the model police act and the land acquisition

bill are being recent example of public participation in law-making process.

• Common sense dictates that people who are potentially affected by a proposed legislation — whether

adversely or favourably — should be able to have a say in the law-making process at an early stage.

• Appropriate subject matter experts should also have an opportunity to inform and refine draft bills.

• Especially in a country as diverse as India, transparent and inclusive law-making is more likely to reflect the

will of the people.

• That said, while India has seen some good examples, often the only forum for inputs for legislation is behind

the closed doors of a parliamentary committee.

• Too often, laws are made in haste to please a particular interest group or as knee-jerk reactions to public

outcry, without the balance of competing views.

• Too often, the impact on the lives of the vulnerable is thrown out of the window.

• Public participation in law making would take India from a “representative democracy to a participatory,

deliberative democracy.”

• However, the mode of consultation must be made well-known, and the instruments for consultation will

have to go beyond the Internet and electronic media. Needless to say, in a country where Internet

penetration and literacy rates are low, publicising information through written and electronic means will

effectively shut out a large per cent of the population.

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KERALA’S EXAMPLE

• A robust model of pre-legislative consultation was carried out by Kerala in relation to police legislation in

2011. Draft bill was placed on Kerala police’s website with proper feedback channels available via email etc.

Suggestions were incorporated into the draft.

• Different groups were allowed to consult MLAs on the contents of the Bill

• The 19-member Select Committee, headed by the then Home Minister and comprising MLAs from almost

every party, decided to tour the State and hold district-wide town hall meetings.

• Town hall meetings were held in all 14 districts of the State. At least 400-500 people attended every

meeting.

• Notices were placed in leading newspapers publicising the committee, its visit and its mandate.

• Result was that the select committee suggested 790 amendments to the original Bill introduced in the

House and in the end 240 amendments – many based on public’s feedback – were accepted and passed in

the legislature.

SETTING UP OF COALREGULATOR

• Centre has decided to set up a coal regulator through executive order.

• Coal regulatory authority (CRA) bill is still pending in the parliament. Regulator would act as a substitute for

statutory authority.

• Without a legislative mandate, the regulatory body will simply serve as an advisor to PSUs in the coal sector.

Coal India Limited would still have the final say in important decisions like pricing as well as the allocation of

coal blocks

• The regulator will be empowered to specify principles and methodology for determination of price of raw

coal and washed coal and any other by-product generated during washing.

• It would also regulate methods for testing for declaration of grades or quality of coal, specify procedure for

automatic coal sampling and adjudicate upon disputes between parties besides monitoring closure of mines

and approval of mining plans.

• The regulator will have no decisive role in the cancellation or suspension of mining licences.

• Having a regulatory authority in this field could bring in much-needed checks and balances in the process of

determining the sale of a scarce and valuable national resource. But if its recommendations have no legal

bearing on executive decisions, the coal regulator will not have any tangible effect on arbitrary or corrupt

practices.

POLICE COMPLAINT AUTHORITY

WHY IN NEWS?

• Maharashtra is planning to come up with a police complaint authority (PCA).

ANALYSIS OF PCA

• Ideally, the PCA should be a powerful body of independent people able to help the police weed out bad

individuals and bad practices, and to help the public trust the police.

• PCAs are already in existence in 11 States/UTs. They face following challenges:

o Fractured mandates

o Improper compositions – appointments are made from serving or retired police or civil

administration.

o Inadequate staffing

o Few financial resource

o Little investigating capacity

o Non-cooperation and outright defiance from the police

• Police officers have strong resistance to such bodies. They argue that there is already an internal

mechanism as well as human rights commissions, anti-corruption bodies and courts to which the police

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must answer. The police must not be demoralised by yet another body’s finger pointing. Outside agencies

interfere with the police’s disciplinary function. No one understands the pressures under which the police

work.

• On contrary, crime is on the rise in every state. Public satisfaction levels with policing have also dropped

steadily. Death and violence in custody, corruption and connections with malefactors and mafia abound,

and rapes by police personnel are on rise continuously.

• Strong accountable machinery is required in India as it exist world over. It is because the police have the

power to take away life and liberty, and to use coercive force.

• PCAs at the state and district levels create local spaces for people’s complaints. They are not forced to go to

distant, already overburdened bodies like the human rights commissions or the courts with their achingly

slow process.

UNDERTRIAL PRISONERS

• Indian jails are full of undertrial prisoners. Alone in Tihar jail of Delhi, around 75 per cent inmates are

undertrial.

• Under section 436A CrPC – an amendment in the CrPC Amendment Act 2005 – an undertrial, other than

someone accused of an offence for which the death penalty is prescribed, has to be released if he/she has

been in detention for more than half the prescribed period of imprisonment.

• Tihar Jail authorities have started identifying those who have served their half or more than half term but

are still lodged in the complex.

NEWS RELATED TO ELECTIONS

SEEKING VOTE ON RELIGIOUS GROUND

• A seven-judge Bench of the Supreme Court will pass a ruling on the interpretation of Section 123 (3) of the

Representation of the People Act, deciding on whether an appeal for vote in the name of religion will come

within the ambit of ‘corrupt practice’.

• Section 123 (3) of the Representation of the People Act defines corrupt practice as “the appeal by a

candidate or his agent or by any other person with the consent of a candidate or his election agent to vote

or refrain from voting for any person on the ground of his religion, race, caste, community or language or

the use of, or appeal to religious symbols or the use of, or appeal to, national symbols, such as the national

flag or the national emblem, for the furtherance of the prospects of the election of that candidate or for

prejudicially affecting the election of any candidate.”

• In elections in Maharashtra after the 1992-93 Mumbai riots, Shiv Sena leader Manohar Joshihad promised

to turn Maharashtra into India’s first Hindu State. The Bombay High Court nullified Mr. Joshi’s election as by

seeking vote in the name of religion he violated the constitutional commitment to secularism.

• However, the former Chief Justice of India, J.S. Verma, heading a three-judge Bench of the apex court,

overturned the High Court verdict.

• Subsequently, a five-judge Bench also held that a candidate would not be guilty of a corrupt practice if

he/she appealed to persons to vote or not to vote on grounds of religion as long as it was not his/her

religion.

GUIDELINES ON PARTIES’ MANIFESTOS

• Supreme Court has directed the election commission of India to ask political parties to explain the rationale

behind the promises

• The Supreme Court said that though promises made in manifestos could not be construed as corrupt

practices as per law, the distribution of freebies of any kind “influences” all people. It would be helpful in

creating a level-playing field before elections.

• Subsequently, the Election Commission has issued fresh, comprehensive guidelines for political parties on

their conduct and manifestos, cautioning them against making tall promises because in reality distribution

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of freebies of any kind “influences all people” and “shakes the root of free and fair elections to a large

degree.”

• Parties’ manifestos, as per the election commission’s direction, must reflect the rationale for the promises

and broadly indicate the ways and means of meeting the financial requirements.

A BIG JUMP IN ELECTORAL SIZE

• India’s electorate for the upcoming general election will be 81.5 crore which is almost five times what it was

when India first voted, over 60 years ago.

• The EC has added nearly 10 crore new voters to the rolls between 2009 and 2014, one of the largest-ever

such increases between two elections.

• Over 52 per cent of the electorate is male, an electoral sex ratio that has remained unchanged over time. It

has skewed a little towards men in the last decade.

• Around 98 per cent people of age 18 or above are there in the electoral list.

• Election commission has performed a rigorous exercise of identifying what populations were being excluded

and then focused our efforts on enrolling them.

INDIA’S MISSING WOMEN AND ELECTIONS

• According to an estimate, more than 65 million women (approximately 20 per cent of the female

electorate) are missing in India and, therefore, these elections reveal the preferences (or the will) of a

population that is artificially skewed against women.

• The phrase “missing women” was coined by Amartya Sen when he showed that in parts of the developing

world, the ratio of women to men in the population is suspiciously low. He estimated that more than 100

million women were missing due to gender discrimination.

• In the last 50 years of Indian democracy, the absolute number of missing women has increased fourfold

from 15 million to 65 million. As a percentage of the female electorate, missing women have gone up

significantly — from 13 per cent to approximately 20 per cent. Hence, fewer female voters will voice their

opinions through elections. Political decisions which are based on election outcomes therefore under-

represent the female population. They are not a true reflection of the female policy preferences.

• India remains one of worst performers with a rank of 133 out of 146 countries in the Gender Inequality

Index (GII) which captures the loss in achievement within a country due to gender inequality and is based on

measures of health, labour force participation and empowerment.

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ECONOMY

INDIAN ECONOMY

CSO ESTIMATES FOR FINANCIAL YEAR 2013

• Year • GDP Growth

• 2012-13 (Final data) • 4.5% (revised down from earlier

advanced estimates of 5%)

• 2013-14 (Advanced estimates) • 4.9%

• GDP =1.7 trillion US dollars.

• Per capita income = 75,500 rupees.

• Sector-wise growth:

o Agriculture and Allied activities sector = 4.6% (against 1.4 per cent last fiscal.)

o Manufacturing sector = - 0.2% (contraction )

o Mining sector = - 1.9% ( contraction)

o Services sector (including finance, insurance, real estate and business services) = 11.2 per cent

(compared with 10.9 per cent in 2012-13)

o Electricity, gas and water production = 6 per cent(up from 2.3 per cent)

• Other Miscellaneous observations:

• Decrease in:

o Household savings

o Corporate savings

o gross fixed capital formation (GFCF)

• Increase in:

o Cost of energy has increased

o Reason for the same: Stalled Coal Mining projects owing to lack of clearances which has led to a

spurt in import of coal. Also, rise in Imported coal prices owing to export country’ local reasons

(flood in Australia)

ANALYSIS

• In 2012-13, the economy grew at 4.5 per cent, the lowest in a decade.

• Since the growth during April-September 2013 was 4.6 per cent, a full-year CSO estimate of 4.9 per cent

implies that the economy is expected to grow at just under 5.4 per cent during the second half of 2013-14

• It shows the worst may be over and the economy will bounce back in the second half of the current fiscal.

LPG SUBSIDY

• The Cabinet approved raising the quota of subsidised LPG to 12 cylinders annually from 9. Also it decided to

put on hold linking the Aadhaar platform to the subsidy scheme.

• Direct Benefit Transfer for LPG (DBTL) scheme, where consumers in as many as get 289 districts in 18 states

get the subsidy amount in their bank accounts so that they could buy cooking gas at market rate, has been

put on hold.

• Raising the LPG quota will cost Rs. 5,000 crore in additional subsidy annually.

ANALYSIS

• Arguments against DBT (LPG)

o Logistic problems

o DBT requires three mandatory things:

� Aadhar number

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� LPG connection number

� Bank account number

o Problem is that not everyone has all or any of the three numbers with them at the same time.

For example according to Census 2011, only 54% rural and 67% urban families have bank

accounts

o Legal Problems

� Supreme Court said Aadhar card is not mandatory to claim benefits under government

schemes.

• Arguments against increasing the limit from 9 cylinders to 12 cylinders

o Goes against the logic of benefiting common man

o Sample this: According to statistics, ~90% families can survive with 9 cylinders per year. Only

bigger families or commercial enterprises would need 12 or more cylinders.

o Also, This will increase black marketing activity as this will lead to diversion of excess cylinders

from households to commercial enterprises

o Further, cancelling DBT plan would lead to continued leakage of funds

o Imprudent consumption would be another as a result of freebie in form of subsidy.

SPECTRUM AUCTION

• Second generation (2G) spectrum auction in 900 MHz and 1,800 MHz airwaves ended after 68 rounds of

bidding.

• Rs.61, 162.22 crore were reaped in by the government.

• Total spectrum on offer was 46 MHz in 900 MHz band (only Delhi, Mumbai and Kolkata) and 385 MHz in

1,800 MHz band (all 22 circles) simultaneously.

ANALYSIS

• Concerns have been raised vis-a-vis:

• The impact of the auctions on the National Telecom Policy (NTP) 2012 objectives especially related to rural

penetration, broadband for all, internet access, etc.

• It remains to be seen if the operators will have the financial resources to invest in networks and marketing

after bearing the high spectrum costs

• Impact of the spectrum price will pass on to tariff in the future. If the input price goes upwards that will

naturally mean there will be upward pressure on the tariff rates, which the consumers will be expected to

pay.

NELP-X

• 46 blocks were to be put for offering in NELP-X. However, they were delayed owing to Gujarat government

withdrawing clearance for the nine areas falling in the state that were part of the offerings under NELP-X

• These blocks are made up of 17 on land areas, 15 shallow water and 14 deep sea blocks. Of the 17 on land

blocks, nine are in Gujarat.

• This was to be the first auction round in two years.

• NELP-X is to be done under the Uniform Licensing Policy regime -explorers can look for all kinds of resources

- oil, gas, coal-bed methane or shale, without having to get separate license for each work

• The auctions were being done according to Rangarajan Committee recommendation

• The Committee had recommended Revenue Sharing Model, wherein Contractor needs to start sharing

profit with government as per productions immediately. It doesn’t matter when his ‘investment’ is

recovered.

ANALYSIS

• What the Gujarat State Govt. wants:

o Gujarat wants a share of revenues that the Centre will earn from the oil and gas produced.

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o This share of the Centre’s revenue is additional to the royalty at the rate of 12.5 per cent of price

realised on sale of crude oil and 10 per cent for natural gas that currently flows to the state

government.

• However it doesn’t stand the test of legality:

o As per the Constitution of India, Union government owns all the hydrocarbon resources in India

(both offshore and inland)

o Hence only union can ‘auction’ the exploration rights to private companies.

o This is done by New Exploration Licensing Policy (NELP). Total nine rounds since 1999.

MICRO FINANCE INSTITUTIONS (DEVELOPMENT AND REGULATION) BILL, 2012

• Parliament’s standing committee on finance is going to reject this bill. However these were the main

provisions of the bill -

• The Bill seeks to provide a statutory framework to regulate and develop the micro finance industry.

• The Reserve Bank of India (RBI) shall regulate the micro finance sector; it may set an upper limit on the

lending rate and margins of Micro Finance Institutions (MFIs).

• MFIs are defined as organisations providing micro credit facilities up to Rs 5 lakh, thrift collection services,

pension or insurance services, or remittance services.

• The Bill provides for the creation of councils and committees at central, state and district level to monitor

the sector.

• The Bill provides for a Micro Finance Development Fund managed by RBI; proceeds from this fund can be

used for loans, refinance or investment to MFIs.

• The Bill requires the RBI to create a grievance redressal mechanism.

CRITICISM

• Not strong enough to curb the menace of private money lenders.

• There are major contradiction between the statement of objects and the title of the Bill. While the former

provides for promotion, development, regulation and orderly growth of MFIs, the latter is confined to their

development and regulation.

• Using the Malegam committee’s findings, one can say that insistence of guarantee or security on

borrowings will go against the poor borrowers.

• Also, by not defining terms such as financial inclusion, micro finance and poor households, the Bill indicated

lack of focus on facilitating financial inclusion

• Against the federal principles

• Doesn’t help in financial inclusion

• Gives supervisory powers to RBI but RBI already overburned with so many things. Therefore, Microfinance

matter should be completely handed over to SIDBI or NABARD.

DRAFT REPORT ON ENABLING PKI IN PAYMENT SYSTEM APPLICATIONS

• A draft technical report on making payment system effective was released by Reserve Bank of India

recently.

• Objective of PKI system is to ensure a safe, secure, efficient, robust and sound payment system in the

country.

• Salient points of the Report:

• Report brings out few statistics about current prevalence of PKI in the financial system:

• For the year 2012-13:

o The non-PKI enabled payment system like clearing of MICR/Non MICR, electronic credit system,

credit card and debit cards contributed to 75 percent, which in value terms is only 6.3 percent.

o The payment systems enabled on non-PKI, MICR clearing and non-MICR clearing contributed to

37 percent and 10 percent in volume terms and 69 percent and 25 percent in value terms.

• The report in its highlights has also included security features in existing payment system applications and

feasibility in implementing PKI in all payments system applications.

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• The Group has also recommended that banks may carry out in phases PKI implementation for

authentication and transaction verification.

• The report has also mentioned that the issuing banks will also have to convert the older credit or debit cards

with the magstripe into EVM chip and pin-enabled ones.

WHAT IS PKI?

• Public-key cryptography is a cryptographic technique that enables users to securely communicate on an

insecure public network, and reliably verify the identity of a user via digital signatures.

• A public-key infrastructure (PKI) is a system for the creation, storage, and distribution of digital

certificates which are used to verify that a particular public key belongs to a certain entity. The PKI creates

digital certificates which map public keys to entities, securely stores these certificates in a central repository

and revokes them if needed.

• A PKI consists of:

o A certificate authority (CA) that both issues and verifies the digital certificates

o A registration authority which verifies the identity of users requesting information from the CA

o A central directory—i.e., a secure location in which to store and index keys

o A certificate management system

o A certificate policy

• Public Key Infrastructure enabled electronic payment systems that has been introduced by the RBI are

o RTGS

o NEFT

o CBLO

o FOREX Clearing

o Government Securities Clearing

o Cheque Truncation System (CTS)

• The systems of payment are subjected to various financial risks like

o Credit risk

o Liquidity risk

o Systemic risk

o Operational risk

o Legal risk

• The need to recognise the security and safety to be robust was needed following the increase in the

adoption of electronic payment products and delivery channels for transactional needs.

GUIDELINES TO DEAL WITH DISTRESSED ASSETS

• The Reserve Bank of India (RBI) issued guidelines for revitalizing distressed assets

• Salient points of the guidelines:

• Before a loan account turns into a NPA, banks are required to identify incipient stress in the account by

creating three sub-categories under the Special Mention Account (SMA1) category. SMA Sub-categories.

o SMA-0: Account will fall in this category if the Principal or interest payment not overdue for

more than 30 days but account showing signs of incipient stress.

o SMA-1: If the Principal or interest payment overdue between 31-60 days

o SMA-2: If the Principal or interest payment overdue between 61-90 days

• RBI to set up a Central Repository of Information on Large Credits (CRILC) to collect, store, and disseminate

credit data to lenders

• The RBI suggested infusion of more equity into their companies by promoters and transfer of their holdings

to a security trustee or an escrow arrangement till the turnaround of the company.

• Forming of Joint Lenders Forum (JLF)

o Banks are advised that as soon as an account is reported by any of the lenders to CRILC as SMA-

2, they should mandatorily form a committee to be called Joint Lenders’ Forum (JLF) if the

aggregate exposure (AE) of lenders in that account is 1000 million rupees and above.

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o The Indian Banks’ Association (IBA) would prepare a master JLF agreement and operational

guidelines for JLF which could be adopted by all lenders.

o While JLF formation and subsequent corrective actions would be mandatory in accounts having

AE of 100 crore rupees and above, in other cases also the lenders would have to monitor the

asset quality closely and take corrective action for effective resolution as deemed appropriate.

• Adoption of Corrective Action Plan (CAP)

• For accounts with AE of 500 crore rupees and above, the techno-economic viability study and restructuring

package would have to be subjected to an evaluation by an independent evaluation committee (IEC)

o The IEC would be required to give its recommendation in these cases to the JLF within 30 days.

o Thereafter, considering the views of IEC, if the JLF decided to go ahead with the restructuring,

the restructuring package, including all terms and conditions as mutually agreed upon between

the lenders and the borrower, would have to be approved by all the lenders and communicated

to the borrower within next 15 days for implementation.

RBI CHANGES LOAN RATE FORMULA

• In 2014 Raghuram Rajan has come up with a new formula for MFI-loan rates. Methodology for calculating

rate is

• First we need to arrive at two figures: A and B

o A = Cost of fund (i.e. how much did it cost to the MFI, to arrange that loan money) plus margin

(12%)

o B = Average base rate of five largest commercial banks (like SBI, ICICI etc) multiplied with 2.75%

• The minimum amidst A and B would give the final rate

• It will be equal to the Maximum interest rate, an MFI can charge on his borrower.

• System will be effective from FY14 (i.e. 1st April, 2014.)

BACKGROUND

• Till 2010, very high interest rates were charged by microfinance companies.

• Many poor in Andhra commit suicide because of Microfinance loan-recovery agents.

• Then RBI creates new category under NBFC: “NBFC-MFI”

• Therein RBI ordered that MFI cannot have more than 12% profit margin on their loan products.

BENEFITS FROM THE CHANGE

• The new norm will bring in dynamic pricing that reflect the true cost of funds.

• The benefit of reduction in costs will have to be passed on to the customer.

FATF MONEY LAUNDERING

• 5 countries have been reported under the Report which tracked instances where diamond prices were

overvalued for purposes of laundering and suspected financing:

o Israel, Belgium, Canada, US and India

• It’s mainly done through over-valuation of diamonds. These are then shipped at a value that is tens of

millions of USD higher than the real value.

• Reason for Diamond Industry being prone to it:

o level of manipulation which may be done through the diamond trade is due to its specific

characteristics, such as the very high value and the lack of known and stable prices which allow

for the manipulation of price

o The report said as there were no set standards of diamond pricing in the country and as a result

agents were overvaluing the costly and prized gemstones

• The report also puts forth its findings which comprises enhancement of regulatory mechanism to combat

and control laundering and financial crimes in this trade worldwide.

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HOUSING START UP INDEX (HSUI)

• Housing start up index is a joint initiative by RBI and National Sample Survey Organisation.

• It would be an indicator of volume of construction in the housing sector during a certain period

• It would be covering 27 cities across the country.

• It’s a first-of-its-kind initiative in the country

• To measure housing growth in various cities of India. It found that

o Housing declined in big cities like Kolkata, Chennai and Bangalore

o But, showing growth in small cities like Dehradun, Bhopal and Hubli.

ANALYSIS

• Housing sector contributes ~10% GDP.

• It will help both the private and government sector in assessing the economic activities in the region. It will

also benefit consumers and promoters.

• It is critical indicator of economic growth relating to various sectors such as banking, mortgage, labour,

steel, cement and paint.

• Internationally, only six developed countries — Canada, USA, Japan, France, Australia and New Zealand —

are having housing start up index on a regular basis and India has become the seventh country to have such

an exercise.

• Such trends are useful indicators of the pattern of development in our country, which is turn helps policy

makers and administrators understand the future focus and thrust areas not only in terms of housing

provision, but all the associated infrastructure and civic amenities required.

FDI IN FARMLAND

[Please also refer to the January 2014 current affairs notes, for the news related to this issue]

ANALYSIS

• Currently, Foreign Exchange Management Act regulations prohibit the use of FDI funds to buy farmland.

However, real estate companies have tried to bypass these restrictions.

• The Ministry of Urban Development now wants to ease these restrictions, and the government has

constituted a three-member Cabinet committee to consider Foreign Direct Investment (FDI) in agricultural

land bought for real estate purposes.

• The reasoning behind this move is that 100 per cent FDI is already permitted in developing townships,

housing and other infrastructure projects. Hence, it would be only logical to extend it and allow the

purchase of agricultural land for construction purposes.

• The other arguments are that restrictions create bottlenecks and delay projects, and that buying of

agricultural land on the outskirts of a city is inevitable and necessary.

• On the face of it, relaxing FDI norms may appear to be a rational step, but in the absence of a clear-cut land

use policy and plans, it will hasten unrestricted acquisition and unplanned conversion of farmland and lead

to hoarding of land.

• In 2013, the Ministry of Rural Development published a draft National Land Utilisation Policy. It convincingly

argued that the shrinkage of per capita ownership of agricultural land and the demand to produce more

food necessitates the protection of fertile land.

• The National Policy for Farmers, announced in 2007, insisted that the government conserve productive land

and allow any change in use only under “exceptional circumstances.”

• These two policies make no distinction between foreign and local investment.

• The government has not acted on a recommendation to revive land use boards, which could provide

guidelines to State governments. Nor has it implemented the idea of delineating and integrating land

utilisation zones under the development plans.

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• These measures are necessary to map the availability of land and coordinate demands for it. It is imperative

to correct any institutional deficiencies and strengthen local level land-management plans to ensure an

orderly process of urban development and prevent detrimental effects on agriculture and environment.

NATIONAL POLICY FOR FARMERS, 2007

• Human Dimension: Focus to be on the economic well-being of the farmers than just on production and

productivity and this is to be the principal determinant of Farmers policy.

• Definition of Farmers: Expanded to include all categories of persons engaged in the sector so that they can

be extended the benefits of the Policy.

• Asset Reforms: To ensure that every man and woman, particularly the poor, in villages either possesses or

have access to a productive asset.

• Income Per Unit of Water: The concept of maximizing yield and income per unit of water would be adopted

in all crop production programmes, stress on awareness and efficiency of water use.

• Drought Code, Flood Code and Good Weather Code: To be introduced in drought prone areas, flood prone

areas and in arid areas respectively so as to maximize the benefits of monsoon and to be prepared for likely

contingencies.

• Use of Technology: New technologies which can help enhance productivity per unit of land and water are

needed. Biotechnology, information and communication technology (ICT), renewable energy technology,

space applications and nano-technology to provide opportunities for launching an “Evergreen Revolution”

capable of improving productivity in perpetuity without harming the ecology.

• National Agricultural Bio-security System: To be set up to organize a coordinated agricultural bio-security

programme.

• Inputs and services-Soil Health: Good quality seeds, disease free planting material, including in-vitro

cultured propagules and Soil health enhancement hold the key to raising small farm productivity. Every

farm family to be issued with a Soil Health Passbook.

• Support Services for women: When women work in fields and forests the whole day, they need appropriate

support services like crèches, child care centers and adequate nutrition.

• Credit & Insurance: Credit counseling centers to be established where severely indebted farmers can be

provided a debt rescue package to help them out of debt trap. Need for both credit and insurance literacy in

villages, Gyan Chaupals to help in the task.

• Setting up of Farm Schools in the fields of outstanding farmers to promote farmer to farmer learning and to

strengthen extension services.

• Gyan Chaupals to be established in as many villages as possible to harness the help of Information and

Communication Technology.

• A comprehensive National Social Security Scheme for the farmers for ensuring livelihood security by taking

care of insurance needs on account of illness, old age, etc.

• Minimum Support Price (MSP) mechanisms to be implemented effectively across the country so as to

ensure remunerative prices for agricultural produce.

• Market Intervention Scheme to be strengthened to respond speedily to exigencies, specific crops to be

identified.

• Community Foodgrain Banks: To be promoted to help in the marketing of unutilized crops.

• Single National Market: To develop a Single National Market by relaxing internal restrictions and controls.

• Expanding Food Security Basket to include nutritious crops like bajra, jowar, ragi and millets mostly grown in

dryland farming areas.

• Farmers of the future: Farmers may adopt cooperative farming, create service cooperatives, undertake

group farming through self-help groups, establish small holders’ estates, adopt contract farming and create

farmers’ companies. This is expected to increase productivity, efficiency of small farmers and would create

multiple livelihood opportunities through crop livestock integrated farming systems as well as agro

processing.

• A Cabinet Committee on Food Security is to be constituted.

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NSSO’S 68TH ROUND HIGHLIGHTS ON UNEMPLOYMENT

• The recently released Employment and Unemployment Situation in India report of the NSS 68th round

(2011-12) highlights some sobering facts.

• Labour force participation rate decreased for rural males by 1 per cent between 1993-94 and 2011-12 and

increased by a meagre 2 per cent for urban males.

• Women’s participation rates declined across both rural and urban areas.

• The unemployment rate among the “youth” (15 to 29 years) is significantly higher — 5 and 8 per cent for

rural and urban males respectively — than the overall rate

• Unemployment among “educated youth” — 8.1 and 11.7 per cent for rural and urban males respectively —

is even higher.

ANALYSIS

• India adds one million people to its working-age population every month. Labour force participation is

around 58 per cent — this means, of every 10 lakh persons between the age of 15 and 59, only 5.8 lakh will

actually seek a job every month. Rest would be studying or working at home. With these numbers, India is

required to create 51 million jobs by 2018-19.

• Creating tens of millions of jobs, especially in non-agricultural sector will be a stiff task for policymakers with

current rate of growth.

• If India is unable to generate the required number of new jobs, its much-vaunted demographic dividend will

morph into its bugbear.

• India’s growth prospects as well as its ability to translate growth into employment have been curbed in

recent years. According to a CRISIL study, 52 million jobs were added in last seven years. Compare to that,

only 38 million jobs can be added between 2011-12 and 2018-19 in non-agricultural sector.

• Aggravating the slowdown is the sharp decline in the employment elasticity of the GDP. It is defined as the

percentage increase in employment for every percentage point increase in the GDP. The number

deteriorated sharply to 0.38 per cent between 2004-05 and 2011-12, from 0.52 per cent in the five

preceding years, for the non-agricultural sector.

• Two factors were responsible for this “jobless” nature of growth.

• The growth in the GDP has been driven by the services sector, which is less labour-intensive - finance, real

estate and business services, including information technology and information technology enabled

services. In 2011-12, these services, which account for 19 per cent of the GDP, employed only 3 per cent of

the workforce. These sectors grew at over 11 per cent per year.

• Labour-intensive services such as health, education and recreation services grew at less than 7 per cent. The

ability of labour-intensive sectors such as manufacturing to absorb workers has declined considerably.

Inflexible labour laws and increasing automation have resulted in the large-scale substitution of labour by

capital.

• Government is required to arrest the pace of decline in employment elasticity apart from pushing for

growth. It will have to raise the labour dependency of the manufacturing sector by simplifying labour laws

and encouraging the growth of labour-intensive industries such as textiles, gems and jewellery, handicrafts

and food processing.

• There is an emerging export opportunity in some of these low-cost/ labour-intensive sectors, such as

textiles, as wages in China rise and businesses there start exiting these segments. Bangladesh is a good

example of its low-cost structure and developed its textile sector.

• Government should also focus on developing the health and education sectors. This will not only create jobs

as they are labour-intensive services, but also raise India’s growth potential by making the workforce

healthy, skilled and educated

• There is a need to focus on physical infrastructure and the construction sector. This sector not only has high

employment elasticity but can also absorb low-skilled labour from the agricultural sector.

• Construction has the highest employment elasticity among non-agricultural sectors. More than 65 per cent

of the labour force used in construction is unskilled or semi-skilled — a key characteristic of people coming

out of agriculture. A fast-growing construction sector can therefore create significant employment

opportunities for low-skilled surplus labour in agriculture.

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• Other roadblocks to employment generation that lie in areas such as infrastructure, finance and the myriad

interactions of the state with firms are need to be removed.

• Millions of small and medium-sized firms across the country need to be encouraged to grow, to be part of

the organised sector, access formal finance and adopt modern technologies.

• Power, water, roads, ports and airports are all of vital importance to the growth of firms. The growth of

firms translates into the growth of employment in an economy, and not just of large manufacturing firms.

THE GLOBAL EMPLOYMENT TRENDS REPORT 2014

• The ILO report on The Global Employment Trends 2014 says that 1 million young people join the ranks of

the jobless in 2013. It is mainly due to continued impact of the 2007-08 financial and economic crises.

• The ILO report says that employment will continue to expand at a slower pace than the labour force,

resulting in a shortfall of some two million jobs annually over the next five years.

• One comparison in the report is instructive where monetary stimulus in the aftermath of the crisis induced

aggregate demand, a rising share of the additional liquidity has not been feeding into the real economy.

• The 13.1 per cent rate of unemployment in the 15-24 years age-group globally is more than twice that

among the adult population. This is concerning India where people below 25 years of age constitute more

than 50 per cent of the population.

EMPOWERMENT LINE

• It measure the minimum economic cost for a household to fulfill eight most basic needs - food, health care,

education, sanitation, water, housing, fuel, and social security — and “others’ that included entertainment

and clothing.

• It is developed by a global research organization – McKinsey Global Institute (MGI).

• 680 million Indians or 56 per cent of the population falls under this empowerment line. It is nearly 1.5 times

the number of people that India’s official poverty line classifies as poor.

• Empowerment line comes out as average Rs. 1,544 per capita per month.

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SOCIAL ISSUES

THE RIGHTS OF PERSONS WITH DISABILITIES BILL, 2014

• The bill was introduced in the Rajya Sabha in this session and will be pending for the next Lok Sabha. [Please

also refer to the Current Affairs notes for December 2013 for the provisions of this bill.]

• The Bill expands the definition of disabilities to include 19 physical and mental disabilities as opposed to

seven under the 1995 Persons with Disabilities Act. The definition of disability in the Bill is a big departure:

it means all long-term physical, mental, intellectual and sensory impairments which, in interaction with

barriers in the environment, hinder persons’ effective participation in society on an equal basis.

• It provides for a 5 per cent reservation in government jobs and reservation in higher educational institutions

from existing 3 per cent.

• Penal provisions to ensure accountability for law enforcement — a lacuna in the current law — could

potentially bridge the gap between professed intentions and practice.

CRITICISM

• The critics says that the Bill is “regressive and retrograde,” and does not adopt the United Nations

Convention on the Rights of Persons with Disability (UNCRPD) in its true spirit, which India ratified in 2007

• Section 109 of the Bill provided that its provisions shall be in addition to, and not in derogation of, the

provisions of any other law in force, which effectively meant that all laws which actively discriminated

against persons with disabilities remained untouched. This violates the U.N. convention to take all

appropriate measures, including legislation, to modify or abolish laws, regulations, customs and practices

that constituted such discrimination.

• According to the UNCRPD, state parties are to grant an unconditional right to equality and non-

discrimination to all persons with disabilities, on a par with others. In this Bill, the Right of Equality is

curtailed under Section 3(3), which says the right against discrimination exists ‘unless it can be shown that

the impugned act or omission is a proportionate means of achieving a legitimate aim.’” The terms

“proportionate means” and “legitimate aim,” are highly subjective and can perpetuate discrimination.

• The Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995

(PWD act) which is currently in force, defines a person with disability as someone who has 40 per cent or

more of any of the seven enumerated disabilities — blindness, low vision, hearing impairment, locomotor

disability, mental illness, mental retardation and leprosy. It leaves people with disabilities at the mercy of

the state because they have to obtain a disability certificate verifying that they are more than 40 per cent

disabled. The new RPD bill unfortunately reproduces this medical model of disability in its definition.

• The world over, most progressive laws have adopted definitions of disability that stem from social models

that define it as any long-term physical, mental, intellectual or sensory impairment, which in interaction

with various other barriers may hinder participation in society on an equal footing with others. The bill

adopts this definition selectively — for clauses related to non-discrimination — but where positive benefits

are involved, such as reservation in education and employment, a medical definition of “benchmark

disabilities” is used. The bill has expanded the number of benchmark disabilities from seven to 18 and has

retained the 40 per cent requirement.

• The Bill does not provide for reservation of jobs in the private sector. Though parliamentary committee

recommended job reservation in both public and private establishments. Presently, even the 3 per cent

reservation in public sector jobs is not being implemented. Increasing it to 5 per cent is merely lip service.

• Recognition of legal capacity of persons with disabilities, a major feature of the UN convention on Rights of

persons with Disabilities is diluted.

• Sections of the most vulnerable groups, children and women with disabilities are missing.

• The bill denies people with psychosocial disabilities the right to make their own life decisions, by permitting

plenary guardianship

• The bill allows discrimination on grounds of disability if it is appropriate to achieve a legitimate aim

• There are gaps in identification and recognition of jobs. Bill runs counter to the Supreme Court’s own

decision by returning to the concept of “identified posts” for reservation in employment.

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DISCRIMINATION AGAINST NORTHEAST PEOPLE

WHY IN NEWS?

• Nido Tania, the 19-year-old boy from Arunachal Pradesh, died after being attacked allegedly by shopkeepers

at Lajpat Nagar, Delhi.

ANALYSIS

• Such incidents bring into sharp focus the fact that racist and discriminatory attitudes are rampant.

• While racism occasionally manifests itself in the form of hate crime it is felt most acutely as an everyday

phenomenon in the form of snideness, smirks

• Such incidents create genuine apprehension in their minds that their lives would not be protected in other

parts of the country.

• Discrimination takes place in various forms such as landlords refusing accommodation, shopkeepers refusing

service, abuses hurled on the streets, a rigid distance maintained by older inhabitants of the city.

• Lack of assimilation is a threat to cultural integrity.

• Poor awareness of the cultural heritage and unique identity of Northeastern States makes people in North

India discriminate against peoples belonging to these states.

• The cultural ignorance and prejudices have always existed in India - all South Indians are “Madrasis” and

those living north of the Vindhyas are clubbed “Punjabis.”

• Most often, northeastern people have to prove their identity that they are Indian too. Many times, these

people are confused with Tibetans residing in Indian cities.

• There is a need to move from the idea of northeast just a territory of India to the people who inhabit it.

WAY FORWARD

• The Union government, constituted a committee under the chairmanship of M.P. Bezbaruah, a retired IAS

officer, to look into the problems faced by people from the northeast living in other parts of the country,

especially in metropolitan cities, and suggest remedial measures. Mandated to examine various kinds of

concerns, including those of security, the committee will examine the causes behind the violence and

discrimination against people from the Northeast. It would suggest measures and legal remedies to be taken

by the government.

• The Delhi High Court directed the Delhi police to take on deputation police officers belonging to the

Northeast to act as an interface with the people of that region staying in the Capital.

• The Delhi police announced the constitution of a Special Cell to monitor cases involving residents of

northeast.

• The Delhi police should recruit more people of northeast origin at lower constabulary level.

• The police, for one, must show zero tolerance for incidents of hate crime, and be prompt in registering

complaints as well as taking action against the accused.

• Mainstream celebrities can also being roped in to spread awareness on the issue.

• There is a need of more state support such as state bhawans, counseling centres.

• The Centre should give their culture a place in the NCERT syllabus. Apart from it, space should be created in

the media, and showing their unique culture through events etc.

• There is a need to sensitize the police and localities, especially where these people have larger population.

• There is lack of educational and economic opportunities in the northeast region that forces youth to migrate

to other parts of the India. There is a need to develop the regional economically and link it with rest of the

country and neighbouring countries also.

HLC ON STATUS OF WOMEN IN INDIA

• The government had in February 2012 set up a High Level Committee to undertake a comprehensive study

to understand the status of women and evolve appropriate policy interventions based on a contemporary

assessment of women’s needs.

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• The 14-member committee, headed by Pam Rajput, submitted report in Feb, 2014 with the following

recommendations -

• 50 per cent reservation for women in all decision-making bodies and an overhaul of the criminal justice

system to ensure justice for women.

• A separate panel be appointed by the government to study the status of Muslim women in the country

• Upgrade the Minister of Women and Child Development to Cabinet rank would reflect the government’s

concern on women’s issues.

• The Parliamentary Committee on the Empowerment of Women must examine the gender implications of all

proposed legislation

• The National Commission for Women, as an apex body responsible for and answerable to 50 per cent of the

population, must go beyond ‘reactive interventions’ to fulfill the proactive mandate of studying,

recommending and influencing policies, laws, programmes and budgets to ensure full benefits to the

stakeholders.

BENEFITS TOSENIOR CITIZENS

• The population of senior citizens is expected to rise to 12.4 per cent by 2026 against 7.5 per cent in 2001.

• The standing committee of Parliament suggested following benefits to senior citizens.

o Special concessions for destitute widow and widowers who enter into matrimonial alliance after

60 years

o raising the retirement age from 60 to 65 years

o tax exemptions.

o setting up a directorate of employment and rehabilitation for senior citizens.

o the senior citizens should get a pension of at least Rs. 1,000 per month.

o old-age homes be set up in all districts.

CONDITIONS OF JUVENILE HOMES

• There are no proper rooms but only long dormitories. This leads to mixing up of all kind of offenders, as

they all end up staying in a single room. Ideally, the serious offenders should be kept separate from the

first-timers.

• There is no space for recreation for juveniles lodged in these homes. They need to engage in positive

activities like sports and vocational activities to keep their mind off from crime

• Guidelines of Juvenile Justice Board are not followed fully. As per the board guidelines, the inmates need

to be educated, taught to stay hygienic, imparted professional skills and should be given good food.

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HEALTH

INDIAN PHARMA SECTOR

• US Food and Drug Administration (FDA) commissioner Margaret Hamburg came to India for inspection

purposes of:

o Ranbaxy, Wockhardt and other pharma companies.

o Spices processing companies in Kochi.

• US FDA has already banned production in Ranbaxy’s factory in Toansa, Punjab.

• They have turned down Ranbaxy Laboratories' plea to allow drugmakers to continue exporting from

banned manufacturing facilities while they take remedial measures to rectify the issues

• Ranbaxy had last year paid a $500-million fine in the US and pleaded guilty to charges of falsifying data and

distributing 'adulterated' drugs, as part of a settlement with US authorities.

• Ranbaxy is not the only Indian drugmaker to invite the censure of the FDA. Many facilities of other Indian

drug firms such as Wockhardt, Strides Arcolab and RPG Life Sciences have been red-flagged by the US

regulator for violations last year and Indian drugmakers accounted for over half of the warning letters

issued by it in 2013.

• In response to the FDA’s monitoring of Indian firms, the Central Drugs Standards Control Organisation

(CDSCO) fought for the right to check manufacturing facilities abroad, apparently to make sure that drugs

coming into India meet quality standards.

INDIAN STAND

• US is settling scores for reasons both within and outside pharma sector:

o Outside pharma sector - US wants to retaliate for the Devyani Khobragade issue.

o Within Pharma sector - US Pharma sector is lobbying against the Pharma sector-

� India is the largest producer generic drugs.

� We’re second largest drug supplier to US and Canada

� India is a major supplier of low cost medicines for Cancer, AIDS and Malaria to Africa and

Latin America which has resulted into profit losses which was hitherto windfall for US

companies.

• Data suggests that this is not mere routine exercise. This is a sharp spike compared to preceding years, and

FDA is increasing its workforce as well as upping its vigilance in India, the second-largest exporter of generic

drugs to the US.

USA STAND

• As per FDA Commissioner, “Inspections are routine part of our regulatory process. So what happens in

India, is consistent with what happens within the US and throughout the world”

ANALYSIS

• While India does have economic interests in the success of this $15 billion export industry, it needs solid

regulation to ensure this success is sustainable.

• CDSCO had not been much successful in its functioning — a parliamentary standing committee on health in

last year laid out the remarkable chaos in domestic drug regulation, even in terms of granting licences.

• Manufacturing laxity aside, it found that many drugs were being marketed before being put through the

required clinical trials and drugs banned in other markets were available here. Regulatory dossiers were

missing for several drugs, and in many cases, approvals were granted by non-technical staff. Expert

testimonials were suspiciously similar in many cases. State issued licences operated in their own orbit, and

these authorisations were not sent back to the central regulator. [Please refer to the Current Affairs notes of

September, 2013 for more details about this issue.]

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• The Centre has moved a new drugs and cosmetics amendment bill, which conceives of a professionally

managed Central Drugs Authority like the FDA, to swallow the existing CDSCO. [Please refer to the Current

Affairs notes of July, 2013 and September, 2013 for more details about this bill.]

• But it will take more than surprise inspections to change this regulatory culture — it will involve breaking

the collusion between certifiers and companies, and more than anything, it will require greater investment.

• The US FDA has a strength of some 14,000 people, while the Indian regulator had 327 in 2012. While the

pharma industry is exploding, and the CDSCO’s workload is growing by 20 per cent every year, it lacks the

staff and infrastructure, advisors and independent testing labs to do its job. That needs to change first, if we

want to see a regulatory overhaul.

STEPS TO FIGHT AIDS

• India launched third-line drug therapy, sometimes called salvage or rescue therapy, for people living with

HIV/AIDS and extended free anti-retroviral therapy (ART) to more of them by revising the eligibility norm.

[Please refer to the current affairs notes of January, 2013 for more details about ART.]

• The third-line therapy is prescribed for people who have limited drug options left — after the failure of at

least two drug regimens and with evidence of HIV resistance to at least one drug in each line or the latter

cause alone. The highly expensive therapy will be provided free.

• For receiving free ART, the minimum CD4-count limit had been reduced from 500 to 350. The count is a

measure of the viral load.

HUMAN IMMUNODEFICIENCY VIRUS ACQUIRED IMMUNE DEFICIENCY SYNDROME

(PREVENTION AND CONTROL) BILL, 2014

• Human Immunodeficiency Virus Acquired Immune Deficiency Syndrome (Prevention and Control) Bill, 2014,

introduced in Rajya Sabha, seeks to prevent the spread of HIV/AIDS and protect the human rights of people

living with it.

• The Bill seeks to prohibit any kind of discrimination against the infected person — for instance, denial or

termination of employment or occupation, unfair treatment, denial of access to any sector and forcible HIV

testing.

• At present, India is estimated to have 2.39 million people living with HIV/AIDS.

AIIMS UNDER PMSSY

• Rishikesh AIIMS becomes functional and is the first among the six AIIMS established under the Pradhan

Mantri Swasthya Suraksha Yojana (PMSSY) to start.

• The PMSSY scheme was approved in March 2006.

• PMSSY aims at correcting the imbalances in the availability of affordable healthcare facilities in the different

parts of the country in general, and augmenting facilities for quality medical education in the under-served

States in particular - Bihar (Patna), Chhattisgarh (Raipur), Madhya Pradesh (Bhopal), Orissa (Bhubaneswar),

Rajasthan (Jodhpur) and Uttaranchal (Rishikesh).

• These States have been identified on the basis of various socio-economic indicators like human

development index, literacy rate, population below poverty line and per capital income and health

indicators like population to bed ratio etc.

• 13 existing medical institutions spread over 10 States will also be upgraded

• In the second phase of PMSSY, the Government has approved the setting up of two more AIIMS-like

institutions, one each in the States of West Bengal and Uttar Pradesh and upgradation of six medical college

institutions.

• Third phase includes only upgradation of various existing medical institutions.

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ENVIRONMENT

FIELD TRIALS OF GM FOOD CROPS

WHY IN NEWS?

• The Environment and Forests ministry has approved field trials of GM food crops on a conditional basis.

These include consent from the statutory appraisal committee i.e. Genetic Engineering Appraisal Committee

(GEAC), and from respective state governments.

• The ministry’s decision was based on the approval by GEAC in March 2013 to allow about 200 successful

gene modification trials. Only those were approved which GEAC had sanctioned and which had been

pending decision for almost a year.

• The decision would allow field trials of many varieties, including in rice, wheat, maize, castor and cotton.

• Earlier the ministry had taken the view that it was not prudent to go ahead with the trials while the

Supreme Court was hearing a case on the subject of field trials and the regulatory regime for GM

technology in India. However, now the ministry says that the apex court had not explicitly ordered any stay

against clearing field trials while the case went on.

OPINION

• In technologies which share benefits and risks, it is important to have regulatory mechanisms which can

help to analyse risks and benefits in an impartial and professionally competent manner.

• The government had introduced a Biotechnology Regulatory Authority Bill in Parliament. Unfortunately, the

validity of this Bill has now expired with the conclusion of the 15th Lok Sabha.

• Earlier, the Agricultural Biotechnology Committee (2004) had recommended a Parliament approved

regulatory agency as well as the necessary infrastructure for conducting all India coordinated trials with

genetically modified organisms (GMO).

• There must be a trial and safety assessment system which answers the concerns of anti-GMO non-

governmental organisations.

• As agriculture is a state subject, State agricultural universities and State departments of agriculture should

be involved in the design and implementation of field trials. It takes nearly 10 years time for a new variety

to be ready for recommendation to farmers. Therefore, speed is of the essence in organising field trials and

getting reliable data on risks and benefits.

• The present moratorium on field trials with recombinant DNA material is a handicap as well as a

disincentive in harnessing the benefits of the wide array of transgenic material available with various

research organisations and universities. Many of the GMOs in the breeders’ assembly line have excellent

qualities for resistance to biotic and abiotic stresses as well as improved nutrition. Much of this work has

been done in institutions committed to public good. Also, much of the work has been done by young

scientists, discouraged now because of the lack of a clear official signal on the future of genetic

modification.

• There is need for a pan-India political support to promote genetic engineering research. Every research

institution should have a project selection committee to examine whether recombinant DNA technology is

necessary to achieve the desired breeding goal. In many cases, marker assisted selection would be adequate

for developing a variety with the necessary characters. Recombinant DNA technology should be resorted to

only when there is no other way of achieving the desired objective.

• Translational research needs greater attention for converting scientific know-how into farmers’ do-how.

• Krishi Vigyan Kendras should have the capability of offering scientifically credible advice to farmers on

GMOs. Media resource centres should be set up to give up-to-date scientific information to media

representatives. Village knowledge centres should be utilised for spreading correct information on GMOs.

• There is a need to set up two committees — on the public understanding of science and the political

understanding of science — on the pattern of such committees set up by the Royal Society of London.

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• Countries like the United States have effective regulatory mechanisms supported by scientific

infrastructure. It is time that we also have a professionally managed and coordinated efficient regulatory

mechanism.

WATER CRISIS ACROSS THE WORLD

WHY IN NEWS?

• California currently is reeling under its worst drought in modern times.

OPINION

• The struggle for water is exacerbating impacts on the earth’s ecosystems. Degradation of water resources

has resulted in aquatic ecosystems losing half their biodiversity since just the mid-1970s.

• Groundwater depletion, for its part, is affecting natural stream-flows, groundwater-fed wetlands and lakes,

and related ecosystems.

• If resources like water are degraded and depleted, environmental refugees will follow. Sana'a city in Yemen

risks becoming the first capital city to run out of water. If Bangladesh bears the main impact of China’s

damming of the Brahmaputra, the resulting exodus of thirsty refugees will compound India’s security

challenges. Internal resource conflicts are often camouflaged as civil wars. Sudan’s Darfur conflict, for

example, arose from water and grassland scarcity.

• The United Nations in 2010 recognised access to safe, affordable water and sanitation as a human right. Yet

the reality remains stark: More than half of the global population currently lives under water stress — a

figure projected to increase to two-thirds during the next decade.

• The risks of overt conflicts over water are increasing. Water wars in a political and economic sense are

already being waged in several regions, including by building dams on international rivers and by resorting

to coercive diplomacy to prevent such construction. Examples include China’s frenetic upstream dam

building in its borderlands and downriver Egypt’s threats of military reprisals against the ongoing Ethiopian

construction of a large dam on the Blue Nile.

• A report reflecting the joint judgment of U.S. intelligence agencies has warned that the use of water as a

weapon of war or a tool of terrorism would become more likely in the next decade.

• Decisions in many countries on where to set up new manufacturing or energy plants are increasingly being

constrained by inadequate local water availability. Where availability is already low, a decision to establish a

new plant often triggers local protests because it is likely to spur greater competition over scarce water

resources. One such example is the POSCO steel plant in Odisha.

• The seriously water-stressed economies, stretching from South Korea and India to Iran and Egypt, are

paying a high price for their water problems. The yearly global economic losses from water shortages are

conservatively estimated at $260 billion.

• Water is a renewable but finite resource. But the human population has doubled since 1970 alone, while

the global economy has grown even faster.

• Major increases in water demand, however, are being driven not merely by economic and demographic

growth but also by energy, manufacturing, and food-production needs to meet rising human-consumption

levels. Lifestyle changes, for example, have spurred increasing per capita water consumption in the form of

industrial and agricultural products.

• Globally, consumption growth is the single biggest driver of water stress. Rising incomes, for example, have

promoted changing diets, especially a greater intake of meat, whose production is notoriously water-

intensive.

• The only silver lining for India’s dismal water situation is the fact that its per capita meat consumption

remains the lowest in the world, with a large segment of its population vegetarian.

• Compounding the diet-change impacts on the global water situation is the increasing body mass index (BMI)

of humans in recent decades, with the prevalence of obesity doubling since the 1980s. Heavier citizens

make heavier demands on natural resources, especially water and energy. They also cause much greater

greenhouse-gas emissions through their bigger food and transport needs.

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• This background helps explain why water is becoming the world’s next major security and economic

challenge. Averting water wars demands rules-based cooperation, water sharing and dispute-settlement

mechanisms. However, most of the world’s transnational basins lack any cooperative arrangement, and

there is still no international water law in force.

• Looking ahead, water shortages are not only going to intensify and spread, but users also will have to

increasingly pay more for their water supply.

• This double whammy can be mitigated only by smart water management and sustainable use of scarce

water resources. New and emerging technologies ought to be leveraged to innovatively manage resources

and develop non-traditional supply sources, including through public-private partnerships. Water, food and

energy must be integrated in a holistic policy framework.

• Addressing this core problem holds the key to dealing with other challenges because of water’s nexuses

with global warming, energy shortages, stresses on food supply, population pressures, pollution,

environmental degradation, global epidemics and natural disasters. Effective water management can help

transform economies and power security.

GREEN ENERGY CORRIDOR

• ‘Green energy corridor’ project is to facilitate the flow of renewable energy into the national grid. Project is

aimed at synchronising electricity produced from renewable sources, such as solar and wind, with

conventional power stations in the grid.

• Currently, the grid faces difficulty in absorbing renewable electricity because of varying voltage and supply.

• The project would be split into intra- and inter-State. At present (2013), India has 27,541.71 MW of installed

renewable capacity excluding hydro power stations.

• India is planning to set up green energy corridor with the technical as well as financial cooperation of

Germany who is leader in renewable energy.

• After having decided to shun nuclear power, Germany developed expertise in renewable energy. More

importantly, it was able to transport this energy from southern Germany to the northern parts with

minimum transmission loss.

• This is something Germany will seek to bring to India through a financial-technical agreement that is at an

advanced stage of discussion.

DAMS ONSIANG RIVER

• A report commissioned by the Central Water Commission has recommended scrapping of 15 of the 44 dams

planned across the Siang river in Arunachal Pradesh.

• Report argues that the proposed 44 dams, meant to establish a capacity of 18,293 MW, will affect the river

ecology and biodiversity and the region all the way down to Assam.

• Cumulatively, the projects will impact more than 500 km of river stretch. More than 18,000 hectares of

forests will be impacted.

• The report only asks for the smaller capacity dams, with a total capacity of 473.5 MW, to be done away

with.

• The report suggests for free stretches/tributaries, no further hydropower projects should be

planned/allotted in the entire Siang basin even if they are small (less than 25 MW).

ENVIRONMENTAL PERFORMANCE INDEX

• India has been ranked 155 out of 178 countries on the 2014 Environmental Performance Index (EPI) released

by the Yale University.

• Despite an improvement in overall performance, India comes out worst among other emerging economies,

including China, in efforts to address environmental challenges, with dramatic declines on air quality.

• India ranks worst among other emerging economies including, China, which ranks 118th, Brazil, at 77th,

Russia, at 73rd, and South Africa at 72nd.

• Switzerland, Luxembourg, Australia, Singapore and Czech Republic round out the top five positions of the

Index.

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• The EPI ranks how well countries perform on high priority environmental issues in two broad policy areas:

protection of human health from environmental harm and protection of ecosystems. Within these two policy

objectives, the EPI scores country performance in nine issue areas comprising 20 indicators. Indicators in the

EPI measure how close countries are to meeting internationally established targets or, in the absence of

agreed targets, how they compare relative to the best performing countries.

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INDIA AND WORLD

INDIA – JAPAN

• Japanese Prime Minister Mr. Shinzo Abe was the Chief Guest at the Republic Day celebrations this year. His

visit, together with the visit of the Emperor and Empress of Japan to India in December, exemplifies the

momentum in the Indo-Japan strategic and global partnership.

• The summit meeting between the Prime Ministers of India and Japan reflected the efforts towards forging

closer security, political and defence ties. However, the talks between Manmohan Singh and Shinzo Abe also

reflected the existing gaps on the nuclear issue.

• In regards to nuclear deal, India and Japan are in negotiations on whether to keep the ‘termination clause’ in

the main text of the proposed civil nuclear cooperation agreement or in the annexure. The clause allows the

proposed deal to be terminated if either side conducts a nuclear test. The deal is important as many critical

equipments for the newly built nuclear plants by Areva are to be imported from Japan and any delay in deal

will delay the setting up of the nuclear plants.

• The two countries signed eight pacts, including power generation, culture, education and tourism, of which

half were connected with Japanese aid to India which reflects that soft loans and outright grants will continue

to remain an integral component of Tokyo’s strategy of reaching out to New Delhi.

• Japan also promised for more aid out of which 70 per cent,of about 200 billion yen, will go for implementing

phase-III of the Delhi Metro project.

• On the defence side, the two countries decided to make joint naval exercises a permanent feature. India had

earlier invited Japan to join the Indo-U.S Malabar series in 2007 but the presence of Japan and Australia in

the Malabar series had fuelled protests at home and from China leading to the dropping of the duo from

subsequent chapters.

• Japan has also offered to sell hi-tech US-2 amphibious aircraft to India. This is the first time Japan has offered

to sell a plane which has military uses as well.

• The two countries have decided to hold politico-security consultations on a regular basis besides stepping up

the pace of meetings between the Defence Ministers.

• Japan has also lowered non-tariff barriers to import of shrimps that will help Indian fishermen.

• Visa regime have been relaxed by both sides to increase people to people contact and in that effort, the

Japanese Overseas Cooperation Volunteer scheme would be expanded to uncovered sectors.

• The countries have also signed an agreement for promoting tourism between the two countries and

improvement in the civil aviation links. [Also refer to December 2013 Current Affairs notes for a detailed

analysis of India-Japan relationships.]

INDIA –SOUTH KOREA

• South Korean President Park Geun-hye visited India on a four day state visit, accompanied by a high level

delegation which included the foreign, trade, ICT and science ministers.

• The talks between the leaders concentrated on three elements as a common vision: stronger high level

political cooperation, open economic and trade environment and deeper cultural understanding.

• India and South Korea have signed nine pacts which are aimed at imparting forward momentum to their

bilateral ties that have seen intensification over the past four years.

• These pacts included agreements in the field of defence, space co-operation, science and technology, cultural

exchange programs, MoU on establishment of Nalanda University, co-operation in field of Information and

Communication Technology, MoU between Indian Computer Emergency Response Team (Cert-In) and Korea

Computer Emergency Response Team Coordination Center (Krcert/Cc) in the field of cyber security.

• During the talks, India assured that work on the India’s single largest FDI project (approx 12 billion dollars)

Posco steel plant in Odisha would start in the coming weeks. Not much progress could be achieved in past

few years due to several factors like environmental clearance, delay in land procurement and popular

protest.

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• The bilateral trade between India and South Korea has amounted to over $18 billion in 2012, with a

favourable balance for South Korea. In order to offset this imbalance, India needs to explore ways to increase

exports in the field of pharmaceutical and IT industries.

• The two countries have signed the Agreement on the Protection of Classified Military Information, which

would boost defence engagement and take it beyond the purchase of South Korean defence equipments.

• There is proposal for exploring the possibility of setting up a Korean Industrial Park in India.

• The two sides have also announced the conclusion of negotiations for revision of the existing Double Taxation

Avoidance Convention which will also provide with new ideas for deepening economic collaborations. They

have also agreed to establish a Joint Trade and Investment Promotion Committee at the cabinet level.

• In the field of Science and Technology, both countries have decided to build on the experience of working on

many practical projects financed through a $10 million Joint Fund by inking a MoU on Joint Applied Research.

• Indian Government has also decided to extend a ‘tourist visa on arrival facility’ to South Korean nationals.

• India’s growing emphasis on its ‘Look East Policy’ and South Korea’s ‘New Asia Diplomatic Initiative’ has

helped elevate the relationship between the two countries to that of ‘strategic partnership.’

INDIA – SAUDI ARABIA

VISIT OF SAUDI ARABIA’S PRINCE TO INDIA

• Prince Salman bin Abdulaziz al Saud, the crown prince to the kingdom of Saudi Arabia, visited India with the

deputy- prime minister and the defence minster of Saudi Arabia.

• During the visit, India and Saudi Arabia signed a Memorandum of Understanding (MoU) on Defense

Cooperation on Wednesday in New Delhi. The MoU will allow exchange of defense-related information,

military training and education as well as cooperation in areas varying from hydrography and security to

logistics.

• Meanwhile, Indian and Saudi companies signed four agreements to jointly promote and facilitate investments

and trade.

• During the meeting, the leaders pointed out that the two countries have taken a number of steps to promote

bilateral investments, but taxation issue remains one of the major hurdles. Steps have been taken to explore

the possibilities of easing the regulations.

• It has also been decided that the Indian labour force will be roped in for the Haramain High Speed Railway

project — Saudi Arabia’s plan to connect the two cities by high speed trains. The rails for the tracks will also

be supplied by Indian companies.

• The cornerstone of the strategic partnership between India and Saudi Arabia has been the 2010 Riyadh

Declaration. Signed between King Abdullah and Indian Prime Minister Manmohan Singh, the declaration set

forth a roadmap for a closer Saudi-Indian bilateral relationship. The Riyadh Declaration built on the 2006

Delhi Declaration which was signed during King Abdullah’s trip to New Delhi. The Delhi Declaration was the

first major bilateral interaction between India and Saudi Arabia; both sides acknowledged it to herald a “new

era” in Indo-Saudi ties.

• Saudi Arabia is the 4th largest trading partner for India: The value of the two-way trade between the two

countries in 2012-13 exceeded USD 43.78 billion and USD 32.7 billion during April – November 2013. The

import of crude oil by India forms a major component of bilateral trade with Saudi Arabia being India’s largest

supplier of crude oil, accounting for almost one-fifth of its needs.

• For Saudi Arabia, India is the 5th largest market for its exports, accounting for 8.3% of its global exports. In

terms of imports by Saudi Arabia, India ranks 7th and is source of around 3.4% of Saudi Arabia’s total imports.

LABOUR COOPERATION AGREEMENT

• India has signed a labour cooperation agreement with Saudi Arabia that would cover about a quarter of the

28 lakh Indian expatriates working there. It is also seen as a stepping stone for a more comprehensive pact

covering all Indian workers in the Gulf Kingdom.

• The Agreement on Labour Cooperation for Domestic Service Workers Recruitment was inked by Overseas

Indian Affairs Minister Vayalar Ravi and Saudi Arabian Labour Minister Adel bin Mohammed Fakeih. The

agreement will be monitored by a committee of senior officials.

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• Salient Features of the Agreement are:

o It aims to protect the right of both the employers and domestic service workers and regulate the

contractual relation between them.

o It endeavors to control recruitment costs in both countries.

o It ensures authenticity and implementation of employment contract between the employer and the

domestic workers and provides for legal measures against recruitment agencies in violation of the

laws of either country.

o It ensures that recruitment agencies and the employer shall not charge or deduct from the salary of

the domestic worker any cost attendant to his/her recruitment and deployment and makes sure that

recruitment agencies and the employer do not impose any kind of unauthorized salary deduction.

o It works towards fostering a harmonious relationship between the employer and the domestic

workers.

o It endeavors to establish a mechanism to provide 24 hours assistance to the domestic sector workers.

o It facilitates the issuance of exit visas for the repatriation of domestic sector workers upon contract

completion or in any emergency situation or as the need arises.

o A standard employment contract would be finalized that would provide minimum wage, working

hours, paid holidays and dispute settlement mechanism.

• Saudi Arabia had passed the Nitaqt law last year which had severely curtailed the job opportunities for Indian

working the country. But later after negotiations, out of 28 lakh expatriates, about 1.41 lakh Indians had to

return home especially from Kerala.

• Recently, Union Finance Minister Shri P. Chidambaram visited Kingdom of Saudi Arabia to co-chair the 10th

India-Saudi Arabia Joint Commission Meeting. The two countries decided to work towards strengthening of

cooperation in accordance with the Delhi Declaration and Riyadh Declaration.

• In the meeting, the two sides reviewed the progress in various sectors including Trade and Investment; Oil

and Gas; Pharmaceuticals, Higher Education; Civil Aviation; Tourism and Media and Culture; Security Affairs;

Information and Communication Technology, Vocational and Technical Training; Textiles, Engineering Affairs,

Health & Family Welfare; Agriculture Research and SMEs.

• The bilateral trade between India and Saudi Arabia stood at US $ 43 billion in 2013 and the two sides aimed

to double the trade within the next five years.

• During the Joint Commission Meeting, the Indian side proposed cooperation in (i) Development of IT Parks;

(ii) Development of Telemedicine network, similar to the Pan-African project, in knowledge sharing,

consulting in super specialty Medicare from premium Indian hospitals; and (iii) Promotion of Indian ICT

products and services. Both sides also decided to explore the possibility of setting up of a Business SME Task

Force to come up with concrete suggestions to promote SME cooperation. Both sides also discussed the

proposal of Saudi Council of Engineers exchange information and experience with the Indian side on (i)

Accreditation System for engineers; (ii) Training and development of engineers; (iii) Licensing of engineering

and consultation offices; and (iv) Engineering Arbitration and disputes solving.

INDIA –PAKISTAN

COMMERCE MINISTERS MEET

• There is a growing consensus in India and Pakistan that a healthy relation is must for peace and progress of

both the countries.

• Amidst the fragility of relationships, both countries are still committed to move on a fast track at least on

matters of commerce.

• The commerce ministers of India and Pakistan met in New Delhi and took important decisions to establish

normal trading relations and undertake liberalisation and facilitation measures. Important decisions among

these were –

o To keep the Wagah-Attari border functional round the clock,

o To introduce containerisation of cargo and

o To provide Non-Discriminatory Market Access on a reciprocal basis to each other.

• The provisions of Non-Discriminatory Market Access (NDMA) are seen as a measure to overcome the

psychological barrier associated with the Most Favoured Nation (MFN) status.

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• The trade volume between the two countries has reached the figure of $2.5 billion. Pakistan’s major exports

to India include fresh fruit, cotton, cement, copper waste, gypsum, ferrous waste of iron and steel, woven

cotton fabric, electro medical apparatus, raw hides and skins, leather and inorganic chemicals etc. However,

the total share of Pakistan’s exports to India is just 1.4 percent.

• The two countries have decided to expedite the process of giving bank licenses so that Indian and Pakistani

banks to operate in the other country to facilitate trade.

• They have also decided to organize the meetings of the technical working groups of customs, railways,

banking, standards organizations and energy.

TRADE ACROSS LOC

• India and Pakistan have agreed to resume trade across the Line of Control (LoC) after the issue was resolved

by the officials from foreign ministries of the two countries. Trade across the LoC was disrupted last month

after officials recovered 110packets of brown sugar from a truck coming from Pakistan occupied Kashmir at

Salamabad Trade Centre.

• After the arrest, trade across the LoC was suspended from Uri and Poonch. About 48 trucks were stranded

on the Indian side while 27 Indian trucks were held back, as Pakistan demanded that the driver be handed

over so that the case could be investigated. It was argued that the driver could not be arrested given the

terms of the trade and the fact that he enjoyed diplomatic immunity.

• At the session of the Joint Working Group on Cross-LoC Confidence Building Measures (CBMs), the two sides

discussed the streamlining of standard operating procedures and introduction of scanners, and a suggestion

that all stakeholders should be present at the loading and unloading points. The introduction of banking

facilities was also suggested as it would help in easing the trade, which is now conducted on barter basis.

The bus service between the two sides of Kashmir had been resumed earlier on humanitarian grounds to

avoid inconvenience to the people, even as the standoff continued.

• Cross-LoC trade had began in 2008 through Salamabad in Uri and Chakan-da-Bagh in Poonch district with

two trade facilitation centers and is an important part of CBMs for the two country. For the CBM to work

there is a need to ensure the smooth flow of goods and also create an atmosphere conducive to the building

of trust. If trucks and people from either side are treated with suspicion, it defeats the very purpose of a

confidence building measure. Scanning the goods and initiating a joint mechanism to check them at crossing

points, as has been proposed during the meeting of the JWG, would help.

• India is likely to press for permits for people from either side for religious tourism besides opening up of

Gilgit -Skardu and Jammu-Sialkote roads for greater people-to-people contacts and giving a boost to trade.

• It is also proposed that India and Pakistan will sign an agreement in March 2014 to open bank branches in

Mumbai and Karachi. The much-awaited banking links will give a boost to trade and commerce.

• Official trade between India and Pakistan has crossed $2.6 billion. India’s exports to Pakistan are $2.1 billion

while Pakistan’s exports to India are just $500 million. The bilateral trade has recorded a net increase of

$410 million from April 2012 to March 2013, up 20%. Pakistan’s exports to India grew 28% while Indian

exports to Pakistan increased 19% during this period. Both countries have repeatedly pledged to remove

non-tarrif barriers which are hampering trade. Pakistan has so far given Indian the Most Favoured Nation

status and pledged to work towards freer trade.

INDIA – CHINA

YEAR OF FRIENDLY EXCHANGE

• The Year 2014 has been designated by the Governments of India and China as the Year of Friendly

Exchanges. The Vice President of India Shri M. Hamid Ansari launched the “India-China Year of Friendly

Exchanges” at a function in New Delhi.

• The programme aims to forge a closer and stronger relationship between India and China.

• There are plans to highlight Indian culture in China through a programme entitled ‘Glimpses of India’.

• The programme also aims to encourage the Chinese companies to establish production and supply chains in

India which will link the two economies. This will also ensure a more balanced trade between our two sides.

Another idea, being looked at carefully is of a dedicated Chinese Industrial Park in India.

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• The prior task for both China and India is to develop the economy and improve people’s living standard. Both sides

should explore complementary cooperation in the major fields of infrastructure, construction, manufacturing, service,

IT, telecommunication, investment, pharmaceutical and industrial parks.

• In the year 2013, India’s trade deficit with its largest trading partner China has reached a humongous $ 31.42 billion as

the bilateral trade fell by 1.5% in 2013, recording a declining trend for the second consecutive year.

• Chinese exports to India rose slightly to stand at $ 48.44 billion for the 2013, whereas Indian exports to China decreased

by around 10% to $ 17 billion, causing a trade deficit of $ 31.42 billion to India.

• Both the countries have set a trade target of $100 billion to be achieved by 2015.

• Besides, there was an agreement on the fact that India and China must throw their doors wide open for people-to-

people contacts as a “meeting of minds” would help build solid and friendly bilateral ties.

• To introduce Chinese language in the middle schools in India. Recently, 22 Chinese teachers have come to teach at

selected C.B.S.E. schools across the length and breadth of our country.

MEETINGS ON BORDER ISSUES

• The Fifth Meeting of the Working Mechanism for Consultation and Coordination on India-China Border

Affairs reviewed recent developments in the India-China border areas especially in the Western Sector. The

meeting held in New Delhi aimed at resolving operational issues on the border, especially when troops come

face to face with each other in areas claimed by both countries.

• Consultation and Coordination Mechanism Working Group was established two years ago with the aim of

improving communication and addressing on-the-ground issues along the border.

• Implementation of the Border Defence Cooperation Agreement (BDCA), additional confidence building

measures and further steps for maintaining peace and tranquility were also discussed. The BDCA was signed

late last year and attempts were made to enhance coordination and iron out possibilities of

misunderstanding between the armies along the disputed Line of Actual Control.

• In an another India-China meeting - the 17th Round of India – China Special Representatives (SR) Talks

between the Indian delegation led by National Security Advisor Shivshankar Menon and the Chinese

delegation by State Councilor (and former Foreign Minister) Yang Jiechi, there were discussions to settle the

entire boundary issue through consultations. There were also discussions on bilateral, regional and

international issues of mutual interests.

• The boundary question was among the three sensitive issues as far as India-China relations are concerned.

The other two are the issue of trans-border rivers and China-Pakistan relations.

• Besides, India and China are poised to begin a bilateral dialogue on maritime security, one of the most high-

profile subject areas in the growing Asian rivalry. Both governments believe the common maritime interests,

such as the uninterrupted supply of hydrocarbons for both countries' energy security, outweigh any naval

rivalry.

INDIA – SRI LANKA

• Sri Lanka has decided to open a new consulate in Thiruvananthapuram, Kerala. It is expected to play a 'crucial'

role in repairing bilateral ties due to the growing bonhomie between Sri Lanka and China. The consulate is

slated to start functioning from the middle of next month.

• As of now, only Russia and the Maldives have consulates in Thiruvananthapuram.

• The International Maritime Boundary Line (IMBL) in the Palk Bay has been turned into a sensitive and volatile

space in recent times. There have been cases of pelting of stones at a boat carrying Indian fishermen injuring

20 of them on December 22, 2013 by Sri Lankan Navy and detention of 25 fishermen on January 3, 2014.

• Colombo views the act as not only being illegal but depriving them of their marine wealth and also causing

damage to the coral reefs in the region. The frequent arrests of Tamil fishermen by the Sri Lankan Navy for

maritime violations have been a bone of contention between the centre and the state and have also

threatened to strain India-Sri Lanka relations.

• Later, India and Sri Lanka have decided to immediately free all fishermen in their respective custodies and to

release their vessels. The agreement was worked out after a meeting between agriculture minister Sharad

Pawar and Sri Lankan minister of fisheries and aquatic resources Rajitha Senaratne.

• India has launched the third phase of the housing project in Sri Lanka by expanding the category of

beneficiaries to include Indian origin Tamils who are settled in the central part of the country as plantation

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laborers. The second phase was completed with successful construction of 10 thousand houses in the North

and Eastern parts of the country for the internally displaced people who were affected by the civil war.

• The Indian Housing project for constructing 50 thousand houses is the single largest full grant assistance

programme of Indian government anywhere in the world. Under the beneficiary driven model, 2 lakh 55

thousand rupees are transferred to the selected beneficiaries and the construction is done by internationally

chosen agencies who work under the supervision of the beneficiary themselves. The beneficiaries are

selected on basis of clearly laid down criteria in consultation with the government of Sri Lanka.

INDIA – MALDIVES

• Maldivian President Mr. Abdulla Yameen visited New Delhi and held talks with the Indian Prime Minister Mr.

Manmohan Singh. This was the first visit to India of the newly elected president after the November election.

• Three MoUs have been signed between the two countries of which two are related to health and human

resource development and one on the diplomatic front.

• The two countries have also agreed to "amicably resolve" all differences, including over cancellation of Indian

company GMR's contract to run Male International Airport. The previous government of President

Mohammed Waheed had cancelled the $500 million contract with GMR for the airport in December 2012,

leading to strain in ties.

• India also extended a standby credit facility of $25 million to the Maldives for imports from India and agreed

to meet the requirement of petroleum products in the island nation. Agreements have been made to boost

security and maritime cooperation, people-to-people contacts and air connectivity.

• Both sides also agreed to address visa and consular concerns. India has agreed to allow visa-free entry for

people from the Maldives for medical purposes and removal of the restriction on re-entry within two months,

which the Maldives president expressed appreciation of.

• India has been concerned over the growing proximity between Maldives and China in a number of strategic

areas including on security issues. But Maldivian President Abdulla Yameen tried to pacify India by describing

the island nation's relationship with China as "very close" but that with India are "far more precious".

• The two leaders have agreed on initiatives to strengthen bilateral defence and security cooperation through

training, supply of equipment, capacity building, joint patrolling and aerial and maritime surveillance. They

decided to deepen trilateral maritime security ties with Sri Lanka.

INDIA – GERMANY

• German President Joachim Gauck paid six-day state visit to India in February 2014. He was accompanied by a

high-level delegation, including ministers, members of Parliament and business leaders.

• The president of India, Mr. Pranab Mukherjee, said that India-Germany strategic partnership is based on

shared values and India considers Germany as a long standing and good friend.

• Germany is the most important economic partner of India in Europe. In 2012 bilateral trade between India

and Germany was Euro 17.5 billion. But there is much more potential to enhance commerce between the

two countries.

• The German president led threads of discussions on the setting up a green energy corridor in India. Earlier,

Dr. Manmohan Singh and Dr. Merkel had described cooperation in renewable energy as a major focus of

bilateral cooperation.

• In a joint statement, the two leaders had said that: “The integration and evacuation of renewable energy

into their respective national grids plays a pivotal role with major technological and physical challenges. To

support India in addressing these challenges, the German government expresses its intention to assist the

establishment of ‘Green Energy Corridors’ in India through technical as well as financial development

cooperation”. Germany will seek to bring this technology to India through a financial-technical agreement of

Euros 1 billion. The discussions related to the matter are in advanced stage.

• India and Germany also signed two umbrella agreements for financial and technical co-operation, under

Indo German bilateral Development Cooperation framework. The Umbrella Agreements were signed by

Finance Minister P Chidambaram and German Federal Minister for Economic Cooperation and Development

Gerd Mueller.

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• The Umbrella Agreement on Financial Cooperation pertains to concessional loans from Government of

Germany for nine projects namely Himalaya Hydropower Programme (HPPCL), Green Energy Corridors,

Promotional Programme for Energy Efficient New Residential Housing-II (NHB), Energy Efficiency in Thermal

Power Plants (WBPDCL), Affordable Housing Programme (NHB), New Approaches in Microfinance and

Microenterprise Finance (SIDBI), Missing Middle Programme (SIDBI), Madhya Pradesh Urban Sanitation and

Environment Programme and Himachal Pradesh Forest Ecosystems Climate Proofing Project. The Umbrella

Agreement for technical cooperation pertains to thirteen projects in Energy, Environment and Sustainable

economic development sectors.

• Energy, Environment and Sustainable Economic Development are priority sectors under bilateral

development cooperation between India and Germany, which now spans over a period of more than fifty

years.

INDIA – ITALY

• Italy has recalled its Ambassador to India, Mr. Daniele Mancini, for consultation, in an escalation of the

diplomatic row over the prosecution of two marines, Salvatore Girone and Massimiliano Latorre, charged

with shooting dead fishermen off the Kerala coast in 2012.

• Daniele Mancini was ordered to return home immediately for consultations after the Supreme Court of India

adjourned hearings on the case by a week on 18th February — a delay Rome said displays “India’s obvious

incapacity to manage the situation.”

• Basant Gupta, India’s ambassador to Rome, was also summoned to the Foreign Office, and formally

conveyed Foreign Minister Emma Bonino concerns.

• Earlier, Italy had warned India over a move to invoke anti-piracy law against its marines.

• The government of Italy said that a move to prosecute Salvatore Girone and Massimiliano Latorre under the

Suppression of Unlawful Acts (SUA) maritime security law was "absolutely disproportionate and

incomprehensible".

• Italy had also approached the European Union to pressurize India to deal with the matter quickly. Jose

Manuel Barroso, the president of the European Commission, said: “This issue has also a bearing on the

global fight against piracy, to which the European Union is strongly committed. But the European Union is

opposed to the use of the death penalty in all cases and under any circumstances. It would bring about

negative consequences in relations with Italy and the European Union.”

• The two Italian marines — Salvatore Girone and Massimiliano Latorre — are facing trial for murder in India.

The two were detained in February 2012 when they shot dead two Indian fishermen while guarding an

Italian oil tanker off Kerala, mistaking the fishermen for pirates.

• The legal process has been delayed, initially on the question of jurisdiction and later on whether the Centre

should allow the National Investigation Agency to proceed against the marines under the Suppression of

Unlawful Acts against Safety of Maritime Navigation and Fixed Platforms on Continental Shelf Act, 2002 —

which prescribes the death penalty for those causing death during an act of violence against any ship or

vessel.

INDIA – USA

• India – US relations have witnessed a spike in tensions over a World Trade Organization (WTO) dispute

pertaining to India’s National Solar Mission (NSM).

• US complained that the domestic content requirements [in NSM Phase II] discriminate against U.S. exports

by requiring solar power developers to use Indian-manufactured equipment instead of U.S. equipment. They

refer to these requirements as “unfair” and militated against WTO rules.

• If the matter is not resolved through such consultations within 60 days of the request, the U.S. might ask the

WTO to establish a dispute settlement panel.

• It is the second time in a year that Washington has sought a consultation at the WTO - the first stage in a

dispute process that can lead to sanctions - over India's Jawaharlal Nehru National Solar Mission.

• Meanwhile, New Delhi has said that there is clear evidence of 13 U.S. states which follow equally restrictive

policies against India.

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• The ongoing trade spat between the two allies follows the recent arrest and strip search of a female Indian

diplomat in New York in connection with visa fraud charges. The arrest sparked fury in India, prompted

retaliatory measures against U.S. diplomats there and plunged U.S.-India relations to their lowest point since

India tested a nuclear device in 1998.

• There are 14 past or current WTO cases between India and the United States, whose bilateral trade in goods

measured $63.7 billion last year

• To worsen the situation, The Office of the US Trade Representative - the body which regulates US trade in

the world - held a hearing on 24 February to consider calls to put India on a watch list of worst offenders for

alleged violations of American patents. It has accused the country of "rampant piracy and counterfeiting" to

benefit its own industries. There is a deepening economic spat over cheap drugs and pirated software made

in India.

• India is also concerned about the proposed visa immigration overhaul which could tighten visa rules on high-

tech firms. The Senate bill, while increasing the overall number of H-1B visas available, would hike fees and

restrict additional H-1B visas for companies considered dependent on such foreign workers. The move came

after complaints by US companies and labor groups that Indian tech firms bring in their own, lower-paid

employees rather than hiring Americans.

INDIA – BAHRAIN

• India and Bahrain have signed three agreements to expand cooperation in key areas, including trade and

business. The agreements were signed in the presence of Prime Minister Manmohan Singh and King Hamad

bin Isa Al Khalifa.

• The leaders reviewed bilateral trade, and agreed to boost economic cooperation in diverse sectors. Bahrain

has been seeking investments from Indian firms in various sectors.

• Memorandum of Understanding (MoU) signed between India and Bahrain covered the following areas:

o To strengthen bilateral cooperation through institutional exchanges particularly through exchange of

youth and sports teams in various disciplines.

o On the establishment of a “High-level joint commission” for bilateral cooperation to replace the

Joint Committee for Technical and Economic Cooperation established in 1981. The ‘High Joint

Commission’, to be chaired by the Foreign Ministers, will serve as an umbrella framework for all

cooperation between the two countries.

o Another MoU signed between the Foreign Service Institute and the Diplomatic Institute of Bahrain’s

Ministry of Foreign Affairs to promote cooperation between the two organizations.

• King's visit to India was meant to re-affirm Bahrain's interest to boost its deep-rooted ties with India which

boasts of a strong economy and a great number of investors who can take advantage of Bahrain's strategic

location and investment incentives to enter the USD 1.5 trillion Gulf Cooperation Council (GCC) market.

• Bahrain is an important trading partner for India with non-oil bilateral trade in 2012-13 exceeding USD 1.3

billion.

INDIA – CANADA

• Canadian Governor General Mr. David Johnston came to India on a week-long state visit from February 22 to

March 2. He was joined by parliamentarians and an accompanying delegation of Canadians who would

enhance business, academic, cultural and people-to-people ties with their Indian counterparts.

• Both the countries are committed to strengthening our partnership and co-operation and signed 3 pacts for

cooperation in health sector, audio-visual co-production and skill development. These pacts included-

o In the field of health, The Grand Challenges Canada and Department of Biotechnology will work together

to address the global health challenges especially for women and child health care. It was signed by Dr.

T.S. Rao, Senior Advisor to Department of Biotechnology and Peter Singer, CEO of Grand Challenges

Canada.

o The secretary of information and broadcasting, Mr. Bimal Julka and Mr. Stewart Beck (High

Commissioner of Canada to India) signed an agreement on the audio visual cooperation. This MoU will

enable Indian and Canadian film producers to utilize a platform for collaboration on various facets of film

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making. The agreement is expected to deepen the engagement between the critical sectors of the film

industries of both countries there by, providing a new chapter of collaboration.

o In field of skill development, the National Skill Development Corporation (NSDC) from India and

Association of Canadian Community College (ACCC) from Canada will work in skill development segment

and to have best practices in training, transnational standards, and certification, which will go a long way

in creating a workforce that, can serve global needs.

• Mr. David Johnston also inaugurated an office of the Consulate General of Canada in Bangalore. The office

will house a Visa and Immigration Service point serving the entire south India. The Consulate General’s office

in Bangalore, which will be third one in India apart from the offices functioning in Mumbai and Chandigarh.

• Earlier in September 2013, the Nuclear Cooperation Agreement between India and Canada came into force.

Under this agreement, companies in both countries can export controlled nuclear materials, equipment and

technology for peaceful purposes.

INDIA – IRAN

• His Excellency Dr. Mohammad Javad Zarif, Minister for Foreign Affairs of the Islamic Republic of Iran visited

India from February 27-28, 2014. There were discussions with the External Affairs Minister Salman Khurshid

on a range of bilateral, regional and international issues.

• Talks covered discussions on regional and international issues including developments in Afghanistan,

combating violence and extremism, as well as the expansions of trade and economic ties with India.

• Besides, there were discussions on Iran’s crude oil exports. India has significantly reduced its imports from

Iran since the West imposed harsh economic sanctions on Tehran over its controversial nuclear drive in

2012.

• India is scheduled to conduct a dry run study in March 2014 on International North-South Transport Corridor

(INSTC), through Nhava Sheva (Mumbai)- Bandar Abbas (Iran)- Tehran-Bandar Anzali (Iran)-Astrakhan

(Russia).

INDIA – VENEZUELA

• India and Venezuela signed a programme on cultural exchanges in the fields of publication, film and media,

image and space arts, stage and music arts. The programme will last for three years and will be renewed

automatically thereafter.

• The programme was signed by the Secretary, Ministry of Culture, Government of India, Shri Ravindra Singh

and Minister of State for the Promotion of Cultural Economy, Ministry of People’s Power for Culture,

Venezuela Mr Javier Sarabia after delegation level talks between the two countries.

• According to the Programme of Cultural Exchange both the countries have decided to promote the exchange

of bilingual publications (traditional and contemporary stories). There will be participation of the Republic of

India in the Venezuela’s International Book Fair on a reciprocal basis. It was decided to encourage the

participation of Venezuelan and Indian poets and writers in the literature festivals organized by both

countries. It has been decided to publish an issue of the magazine ‘’Actualidades” (a CELARG publication) on

the Republic of India or on Indian writers.

• There will also be exchanges between theatre groups, film makers and representatives from both countries,

among other things.

INDIA – UAE

• India and the United Arab Emirates (UAE) have signed an agreement to enhance cooperation in renewable

energy, especially in the areas of solar and wind power.

• Both the countries have also agreed to form a Joint Working Group for better coordination through joint

research on subjects of mutual interest, exchange and training of scientific and technical personnel, exchange

of available scientific and technologies information and data.

• India and the UAE had recently signed the Bilateral Investment Promotion and Protection Agreement (BIPPA).

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INDIA – AZERBAIJAN

• Meeting of India-Azerbaijan Intergovernmental Commission on Trade and Economic, Science and Technology

Cooperation took place in New Delhi on February 24-25, 2014.

• India and Azerbaijan propose to constitute a joint working group in the field of hydrocarbon. Both the sides

agreed to explore opportunities for participation in renewable energy sector, energy efficiency and various

upcoming projects in oil and gas, petro-chemicals, pipelines, etc. in Azerbaijan or India or third countries in

collaboration or joint venture. India showed keen interest in acquiring stakes into producing assets in

Azerbaijan.

• The National Hydroelectric Power Corporation Ltd has expressed interest in the development of hydro

power plant in Azerbaijan. Besides, India has also assured Azerbaijan of easier access of Pharma products in

Azerbaijan. It was also assured that the issues relating to registration and re-registration of Indian Pharma

products by the Ministry of Health, Azerbaijan, will also be looked into.

• Both sides reiterated there is potential to cooperate with each other in various sectors of trade like

investment, transport, energy, fertilizers, financial services, aviation, tourism, culture, pharmaceuticals,

health, agriculture & animal products, information and communication technology, chemicals, science,

education, visa & consular matters etc.

• India will also undertake a pilot project in March 2014 on International North-South Transport Corridor,

through Nhava Sheva (Mumbai)-Bandar Abbas (Iran)- Tehran-Bandar Anzali (Iran)-Astrakhan(Russia).During

the meeting, both side reviewed the status of the construction of Gazvin-Rasht-Astara (Iran)-Astara

(Azerbaijan) railway route for connecting the railway lines of International North-South Transport Corridor.

• India also called for investment in the field of hotel industry tourism and infrastructural development as

India allows 100 per cent foreign direct investment (FDI) in hospitality sector on automated basis.

• The total trade between India and Azerbaijan rose from $ 565.98 million in 2011-12 to $ 608.55 million in

2012-13.

INDIA - KYRGYZ REPUBLIC

• The Foreign Minister of the Kyrgyz Republic, Mr. Erlan Abdyldaev paid the state visit to India on 13-15

February, 2014 at the invitation of Shri Salman Khurshid, External Affairs Minister of India. The ministers

reviewed the significant progress made in the bilateral relations and noted common positions on current

international and regional issues.

• After the talks, the sides exchanged documents operationalizing a bilateral treaty on mutual legal assistance

in criminal matters – an exchange of instrument of ratification and an agreement on visa free travel for

diplomatic, official and service passport holders.

• The sides agreed to intensify parliamentary exchanges in this context and the Indian side welcomed the

proposed visit of a Kyrgyz Parliamentary delegation to India later this year.

• Both countries observed that trade levels were well below potential and agreed to take steps to stimulate

bilateral trade. They also noted the scope of cooperation in mining, pharmaceuticals, textiles and garment

industries, transport and communication, education, health and tourism, as priority sectors for promoting

bilateral investment.

• The Indian side expressed appreciation at the visit of a Kyrgyz cultural troupe to India and emphasised the

importance of bilateral cultural exchanges. The sides also discussed cooperation in film making and the

Kyrgyz side proposed joint theatrical production of the epic 'Manas'.

INDIA – OMAN

• His Excellency Yousuf bin Alawi bin Abdullah, Minister Responsible for Foreign Affairs, Sultanate of Oman

paid an official visit to India on February 28, 2014 to discuss bilateral, regional and other issues of mutual

interest.

• The two countries held dialogues on security matters and aimed at conducting regular Naval and Air

exercises.

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• There are more than 1500 Indo-Omani joint ventures with the total investment of more than USD 7 billion.

However, there is scope for enhancement of bilateral trade, which is approximately USD 5 billion per

annum.

• India also discussed the possibility of reviving a project for a deep sea pipeline connecting Oman and Iran to

India. The pipeline would be mutually advantageous for Iran and India, with the former having a massive

surplus of gas and the latter having high energy needs. Iran-Oman-India pipeline would source its gas from

Iran's South Pars oil and gas fields located in the Arabian Gulf. The pipeline would be 1,400 kilometers long

and could transfer 31 million cubic meters of gas per day to India. It is proposed that even Turkmenistan and

Azerbaijan energy can feed the pipeline for an ever-growing Indian market.

• Oman had invested $90 million on this project over a decade ago, but it got no traction then. But now, the

technology has come of age, with pipelines being built under the Mediterranean Sea from Algeria to Italy,

and under the Black Sea from Russia to Germany. Abdullah suggested the pipeline could transport gas from

Iran.

• India’s close and friendly relationship with Oman is based on historical people to people contacts. Oman is

an important trading partner of India in the Gulf with two- way trade exceeding US$4.6 billion in 2012-13.

India has been the topmost destination for Omani non-oil exports. Our two-way bilateral investments have

reached over US$7.5 billion.

• The contribution of over 700,000 strong vibrant Indian community in the progress and development of

Oman is well acknowledged and appreciated.

INDIA – FIJI

• Mr. Ratu Inoke Kubuabola, Minister for Foreign Affairs and International Cooperation of Fiji, came for a state

visit to India from 10 – 12 February for the biennial India-Fiji Foreign Office Consultations.

• During the ministerial meeting, there were wide ranging discussions on bilateral, regional and international

issues of common interests to the two countries. Minister Kubuabola provided an update on the political

developments in Fiji in its preparations for democratic elections that will take place by September and also

discussed the positive reforms that Government has put in place since in came into power in its efforts to

build a better Fiji for all. The two sides commented on their common interest and expressed that Fiji’s

commitment to its bilateral relations with India as a long-term one, which is underpinned by historical

cultural ties and enriched through good understanding and mutual respect.

• The two countries signed three MOUs on renewed development cooperation, water resource management

and trade measurements and standards, which would foster greater cooperation between the two

governments in these respective areas.

• Besides, there were discussions related to improving trade and relations in the fields of sugar industry, youth

and sports, reciprocal visa on arrival arrangements, capacity building programs, and modern technological

advances in agricultural productivity, defence, Barefoot College for women and pharmaceuticals.

• India had signed a Double Taxation Avoidance Agreement (DTAA) with the Government of Republic of Fiji for

the avoidance of double taxation and for the prevention of fiscal evasion with respect to taxes on income in

January 2014. The negotiations for the DTAA between both the countries were completed in 2011. The DTAA

will provide tax stability to the residents of India and Fiji and facilitate mutual economic cooperation as well

as stimulate the flow of investment, technology and services between India and Fiji. It also incorporates

provisions for an effective exchange of information and assistance in collection of taxes between tax

authorities of the two countries including exchange of banking information. There are provisions of

incorporating anti-abuse provisions to ensure that the benefits of the Agreement are availed of only by the

residents of the two countries and to prevent any abuse of treaty.

BCIM TRADE CORRIDOR

• India, China, Bangladesh and Myanmar held the first ever official-level discussions on the ambitious BCIM

economic corridor to link India and China with Bangladesh and Myanmar. The meeting was held in China.

• The economic advantages of the BCIM trade corridor are to move towards an approach to numerous markets

in Southeast Asia with improvement of transportation infrastructure and creation of industrial zones.

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• Currently, the four nations have raised an ambitious proposal that included developing multi-modal

transport, such as road, rail, waterways and airways, joint power projects, telecommunication networks, etc.

• Over the next six months, each country would come up with a joint study report proposing concrete projects

and financing modalities before the next meeting of the four nations in June this year in Bangladesh.

• The corridor, it was agreed, will run from Kunming to Kolkata, linking Mandalay in Myanmar as well as Dhaka

and Chittagong in Bangladesh.

VISA ON ARRIVAL IN INDIA

• The Government of India approved the plan to extend visa-on-arrival facility to almost all countries (180

countries) barring a handful categorized as “sensitive” due to the security risk they pose. Pakistan, Sudan,

Afghanistan, Iran, Iraq, Nigeria, Sri Lanka and Somalia are eight countries that have been kept out of the list.

• At present, India extends visa-on-arrival facility to 11 countries including New Zealand, Japan and Vietnam.

The new facility is expected to be function from the next tourist session beginning October.

• The model, likely to be put in place, will do away with the need to visit an Indian mission but will require

tourists to make an online application before their departure. The Bureau of Immigration will set up a

website for this and upon submission of an application, it will email an electronic visa/travel authorization

within 2-3 days, allowing the tourist to enter India and also facilitate easier verification at airports.

• The electronic visa-on-arrival would be available at 26 major airports in India and would be valid for 30 days

from the date of the tourist's arrival in India.

• As per the UNWTO World Tourism Barometer, December 2013, India’s rank in the World Tourism Receipts

during 2012 was 16th and rank in international tourist arrivals was 41. The rank of India was 7th among Asia

& the Pacific Region in terms of tourism receipts during 2012.

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WORLD AFFAIRS

UKRAINE CRISIS

• The ongoing crisis in Ukraine is one of the most serious crisis the world has faced in recent years. The

confrontation between President Viktor Yanukovych and the growing popular protest movement has lurched

back and forth since late November, with violent episodes punctuated by truces, talks and attempts at

mediation.

• The original cause for the protests, i.e. the suspension of talks on an association with the EU, became less

and less important with time. Demands that the EU negotiations be reinstated and the closer relationship

with Russia, which the president had embraced, be repudiated were eclipsed by an insistence that the

president and all his people step down and the corrupt, coercive and quasi-criminal system through which

they were said to be ruling be dismantled.

• The death of many protestors in Kiev, followed by a crackdown on so-called terrorism across the country and

allegations that a coup was under way, had caused irreparable damage and had taken the Ukrainian

government, the formal opposition and the protest movement beyond the point of no return.

• A look at the timeline of the event –

o 2010: Victor Yanukovych is elected as president of Ukraine with 48.95 per cent of the vote. He

overturns a government dominated by factions from the pro-Western "Orange Revolution" of 2004,

who had proved quarrelsome and ineffective in office.

o November 21, 2013: At a summit in Lithuania, Mr Yanukovych unexpectedly abandons plans to sign

a long-awaited trade deal with Brussels, which would have put Ukraine firmly in Europe's orbit. It

triggers widespread protests, amid claims that Russia put pressure on Mr. Yanukovych, prompting

pro-European opposition groups to call for protests.

o December 1, 2013: After a week of smaller demonstrations, a crowd of up to 500,000 gathers on

Independence Square in Kiev, setting up camp and building barricades.

o December 17, 2013:President Viktor Yanukovych travels to Moscow, where he secures a $17 billion

bailout deal and a huge price cut for Russian gas. Vladimir Putin, the Russian president, says that

Moscow will buy $15 bn of Ukrainian bonds, in what is widely seen as a blandishment for Ukraine to

remain in the Kremlin's sphere of influence.

o January 19, 2014: Dozens are wounded in bloody clashes between police and protesters in Kiev after

200,000 defy new restrictions on protests.

o January 25, 2014: Mr. Yanukovych offers opposition leaders Arseniy Yatsenyuk and Vitali Klitschko

entry to the government, but they decline.

o January 28, 2104: Prime Minister Mykola Azarov resigns, parliament scraps the anti-protest laws.

o January 29, 2014: Parliament passes an amnesty bill, but the opposition rejects its conditions

o February 2, 2014: Mr. Yatsenyuk and Mr. Klitschko call for international mediation and Western

financial aid in front of more than 60,000 demonstrators in Kiev.

o February 3, 2014: The EU says that it is mulling, alongside Washington and the IMF, economic

assistance, but only once Kiev embarks on political reforms.

o February 7, 2104: Mr Yanukovych meets his ally, Russian president Vladimir Putin, on the sidelines

of the opening ceremony of the Winter Olympic Games in Sochi.

o February 14, 2014: All 234 protesters who have been arrested since December are released but

charges against them remain.

o February 16, 2014: Protesters evacuate Kiev city hall after occupying the building since December 1,

along with other public buildings in the regions. A day later arrested protesters are granted amnesty.

o February 18, 2014: At least 26 people, including 10 policeman, are killed in the bloodiest day of

clashes in nearly three months of protests. Protesters take back control of Kiev's city hall. Riot police

encircle Independence Square, where some 25,000 protesters remain after the expiry of a

ultimatum from security forces demanding calm be restored.

o February 19, 2014: President Viktor Yanukovych agrees to a "truce" with opposition leaders and a

start to negotiations to prevent further bloodshed. Opposition leader Arseniy Yatsenyuk announces

that a planned raid of Independence Square will not take place. EU leaders call an emergency

meeting expected to consider laying sanctions.

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o February 21, 2014: Mr. Yanukovych and opposition leaders sign a deal aimed at ending the

bloodshed. The deal calls for presidential elections by December, the formation of a national unity

government and constitutional changes to reduce the president's powers.

o February 22, 2014: Ukrainian politicians vote to remove Mr. Yanukovych from power. Opposition

leader Yulia Timoshenko freed from jail.Ukrainian parliament elects Oleksander Turchinov as its

interim speaker.

o February 24, 2014: Ukraine issues an arrest warrant for Mr. Yanukovych and launches a probe into

the "mass murder" of protestors in Kiev.

o February 26, 2014: Russian president Vladimir Putin orders an urgent drill to test the combat

readiness of the nation's armed forces in the western Russia. This includes army, navy and air force

troops. Moscow grants Mr Yanukovych refuge

o March 1, 2014: Mr. Putin asks the Russian parliament to approve the use of military force in Ukraine,

which the parliament grants. US president Barack Obama warns Russia "there will be costs" for any

military intervention in Ukraine.

OPINION

• The result is a deepening of the crisis that will affect not only the fate of Ukraine, but that of Russia, the

European Union and the United States. Early elections might represent a way out, but it is hard to imagine

the regime, having chosen the path of repression, making such a concession.

• At stake for Russia is Mr. Putin's credibility, and that of his own system, not so very different in some

respects from Mr. Yanukovych. Although there is much Russian popular support for him on the Ukraine

issue, this might well erode if the situation there slipped into wider violence or even into something akin to

civil war.

• At stake for the EU, already weakened by the euro crisis and by its own internal divisions, is its weight in

international affairs and in its own continent.

• At stake for the United States is its already prickly relationship with Russia. That has implications for arms

control and for American diplomacy on Syria and Iran. Co-operation between America and Russia has slipped

badly, but what remains is still a requirement for an orderly world.

EVENTS IN BANGLADESH

ELECTIONS IN BANGLADESH

• Sheikh Hasina was sworn as the Prime Minister of Bangladesh for the second time in succession on January,

12, 2014 after the January 5 elections.

• This was the 10th general election to be held in the 42 years of Bangladesh history.

• Elections were held for only 147 constituencies out of the 300 seats for the Bangladesh Jatiyo Sangsad — The

Bangladesh Parliament — of which 153 seats have returned winners without contest.

• Awami League won two-third majority in the elections which were held amid massive violence and boycott by

the opposition parties.

• The Khaleda Zia-led opposition alliance had called a 48-hour fresh back-to-back countrywide hartal from

Monday to demand Sunday’s general elections be scrapped.

• There were many incidents of opposition activists setting on fire as many as 100 polling stations. The voter

turnout was considerably lower due to fear factor among voters with estimates of the turnout just 22-30% of

the voting population.

• Most of the attacks took place in the minority dominated villages where Hindus, in particular, were targeted

by the majority. Bangladesh Government has decided to setup special tribunals under an anti-terror law to

punish the perpetrators of violence aimed at the minority community.

• While India has backed the poll, there has been very little support in international arena. The United States,

United Kingdom, Australia and European Union has called for another poll at the earliest.

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BANGLADESH WAR CRIMES TRIBUNAL

• In what seems to be a desperate move to conclude business, the International War Crimes Tribunal has

convicted yet another member of opposition party for crimes against humanity, killing and genocide

committed during 1971 war of independence.

• Abdul Alim, an octogenarian politician and former minister is the eighth such person to be so convicted.

• The International Crimes Tribunal was set up in December 2008 after Awami League won the elections. By

2012, nine leaders of Jamaat-e-Islami were indicted as suspects and the first person convicted was Abul

Kalam Azad (Bachchu), tried in absentia as he had left the country; he was sentenced to death in January

2013.

DEATH SENTENCE TO PARESH BARUA

• Paresh Barua, chief of the breakaway United Liberation Front of Asom faction, was awarded death penalty in

connection with an arms haul in 2004.

• Investigations revealed that the weapons were manufactured in China and were being shipped to the ULFA.

• Police had seized 10 trucks carrying weapons and ammunition from the state-owned Chittagong Urea

Fertilizer Ltd.

EVENTS IN PAKISTAN

TALKS WITH TTP

• The Pakistan government has decided to hold peace talks with Tehreek-e-Taliban Pakistan (TTP) with two

teams being nominated to chart a roadmap for talks.

• The move to hold talks came as a surprise when the Prime Minister, Nawaz Sharif, named a team to begin

dialogue with the militants, who have been waging a violent insurgency since 2007.The TTP has said in the

past that it opposes democracy and wants Islamic sharia law imposed throughout Pakistan, while the

government has stressed the country's constitution must remain paramount.

• The government team consists of senior journalists Irfan Siddiqui and Rahimullah Yusufzai, former diplomat

Rustam Shah Mohmand and retired major Mohammad Aamir, formerly of the Inter Services Intelligence

agency.The Taliban side includes Maulana Sami-ul-Haq, a hardliner cleric known in the west as the "Father of

the Taliban", as well as the chief cleric of Islamabad's Red Mosque and two other religious party leaders. The

TTP had asked cricketer-turned-politician Imran Khan to be part of their team but he declined.

• The TTP had proposed the following fifteen points for keeping the peace talks going. These are- The points

are:• Stop drone attacks • Introduce Sharia law in courts • Introduce Islamic system of education in both

public and private educational institutions • Free Pakistani and foreign Taliban captured in jails • Restoration

and remuneration for damage to property during drone attacks • Hand over control of tribal areas to local

forces • Withdrawal of army from tribal areas and close down check posts • All criminal allegations held

against the Taliban to be dropped • Prisoners from both sides to be released • Equal rights for all, poor and

rich • Families of drone attack victims to be offered jobs • End interest based banking system • Stop

supporting the US on the war on terror • Replace the democratic system of governance with Islamic system•

Break all relations with the US.

• However, Pakistani negotiators had to cancel the meetings in Mid-February with the Taliban after the

insurgents claimed they had killed 23 soldiers kidnapped by them in 2010, dealing a severe blow to the

fledgling peace process. On the other hand, the TTP has lamented that on the one hand the government has

initiated the process of talks, while on the other it has continued to target TTP members.

RELATIONS WITH CHINA

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• Pakistan and China have signed an agreement of “early harvest projects” in the economic corridor during the

Pakistani President Mamnoon Hussain visit to Beijing. Under the agreement, Beijing will provide more than

$20 billion for projects to generate over 20,000MW of electricity and other crucial infrastructure projects.

• The talks focused on a new China-Pakistan Economic Corridor. The projects will include the Karakoram

Highway up to Islamabad, Karachi-Lahore Motorway, new Gwadar Airport and economic zones. Besides,

China has also agreed to finance projects in Pakistan in energy, transport, and rail and road links.

• Oil and gas pipelines are also part of the economic corridor over the long run, which is expected to provide a

much-needed boost to economic activities in insurgency-hit Baluchistan.

• China has completed constructing one of its longest tunnels which will help it build a rail link with Pakistan.

The completed tunnel runs 22.24 km in the mountainous Xinjiang Uygur Autonomous Region and will reduce

the distance between Turpan with Korla in southern Xinjiang by 122 km. At present the distance between

these two points on the Nanjiang Railway is 334 km. It has also announced plans for building the world's

longest undersea tunnel measuring 123 km to link two major cities.

• However, Chinese firms are still cautious about the investment deals in Pakistan due to terror activities in

these regions.

PERVEZ MUSHARRAF TO FACE TRIAL ON TREASON CHARGES

• Pervez Musharraf has been charged with treason. The treason charges relate to his decision in 2007 to

suspend the constitution and impose emergency rule. He also faces separate charges of murder and

restricting the judiciary.

• He is the first Pakistani former military ruler to face trial for treason. If found guilty, he could be sentenced to

death or life in prison. Mr. Musharraf, 70, denies the charges and says all the accusations against him are

politically motivated.

• However, his lawyers have said that Musharraf cannot get a fair trial in Pakistan because of his history of

disputes with the judiciary and the involvement of Prime Minister Nawaz Sharif whom he once overthrew in

a coup.

• The trial opened on December 24 but was immediately suspended after Musharraf did not appear because a

bag of explosives was found on his route to the court.

• However, Musharraf has not appeared in court on medical grounds till now.

EVENTS IN CHINA

SOUTH CHINA SEA AIR ZONE

• News from the Chinese territory shook the world when news came out of establishing a new air defence

zone in South China Sea. The disclosure was enough to provoke Vietnam, the Philippines, Malaysia, Brunei

and Taiwan, all of whom claim sovereignty over parts or all of the disputed territory, which includes

hundreds of islands, cays, shoals and reefs.

• However, China later said that there was no need for such a zone in the South China Sea, where China,

Vietnam, Malaysia, Brunei, the Philippines and Taiwan all have competing claims.

• In November, China established its first Air Defence Identification Zone (ADIZ) over parts of the East China

Sea, amid an increasingly tense stand-off with Japan over the disputed Diaoyu/Senkaku islands.

• An Air Defence Identification Zone is a defined area in international airspace within which countries monitor

and track aircraft heading towards their territory.

• The setting up of the ADIZ heightened tensions with Japan, as it overlapped with Japan’s zone and included

the disputed islands. China at the time defended the move, pointing out that Japan had established its own

ADIZ in 1969.

• China-Japan relations have soured over the past year over the disputed islands, and issues relating to

wartime history and the Japanese occupation of China during the Second World War. China was especially

angered by a visit by the Japanese Prime Minister Shinzo Abe to the controversial Yasukuni war shrine — a

memorial for Japanese who died during the war that also enshrines 14 Class-A war criminals — which was

the first by a Japanese leader in seven years. The rising tensions with Japan have coincided with an apparent

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diplomatic outreach by China to other Asian countries. [Also refer to the November 2013 Current Affairs

notes for more details about this issue.]

MARITIME SILK ROAD INITIATIVE

• China has taken a new initiative to build a Maritime Silk Road which it says is aimed at improving

connectivity and trade among Asian nations through the sea on the lines of ancient Silk Route.

• China has also invited India to be part of this new initiative.

• The Maritime Sea Route (MSR) was mooted last year with countries of Southeast Asia by President Xi Jinping

during his visit to Indonesia and Malaysia where he stated that the MSR would help turn the "Golden

Decade" between China and Southeast Asian Countries into "Diamond Decade".

• Simultaneously, China also worked to revive the ancient Silk Route which existed 2,000 years to with a host

of Central Asian states. Besides MSR, China has proposed the Bangladesh, China, India and Myanmar (BCIM)

corridor to improve trade and businesses among all the four countries.

• Under the new scenario, New Delhi is likely to be torn between two competing ideas—one is working

together with China in the maritime domain and the other is the long-standing goal of limiting Beijing’s

influence in the Indian Ocean.

CHINA-SRILANKA RELATIONS

• China plans to take forward plans to boost maritime connectivity with Sri Lanka, where it is already building

a major port project, with both countries agreeing to deepen their economic links and sign a landmark Free

Trade Agreement (FTA).

• China is now the biggest provider of loans to Sri Lanka, overtaking countries such as India and Japan that had

earlier been the largest source of financing for infrastructure projects.

• China has been among the most vocal backers of the Sri Lankan government amid increasing international

criticism of the post-war reconciliation process and the human rights situation. It has continuously opposed

any move against Sri Lanka in the UNHRC.

• The growing relations between China and Sri Lanka are a concern for India as India wants to keep Sri Lanka

under its sphere of influence.

WAR CRIMES IN SRI LANKA

US TO PRESS SRI LANKA ON WAR CRIMES ALLEGATIONS AT UNHRC

• The United States has said that it will sponsor a resolution at the U.N. Human Rights Council (UNHRC)which

could call for an international investigation into allegations of war crimes during the island nation's civil

conflict.

• Meanwhile Sri Lanka has tried to persuade US administration that it is on a path toward national

reconciliation, nearly five years after crushing a quarter-century rebellion by ethnic Tamil fighters.

• A U.N. report previously said that as many as 40,000 Tamil civilians died, mostly in government attacks, but

Sri Lanka denies such a high toll and has repeatedly denied it deliberately targeted civilians.

• The Sri Lankan government is planning to move a counter resolution at the UNHRC in March this year to

probe possible human rights violations, crimes against humanity and possible war crimes since 1975.

• In order to avoid hurting Tamil sentiment ahead of elections, the Indian government has refused to commit

Sri Lanka any support against a US-sponsored UN resolution accusing its military of committing war crimes. At

the same time, New Delhi also wants to keep Colombo as an ally amid the Chinese making inroads into Sri

Lanka.

PROBE INTO WAR CRIMES IN SRI LANKA

• The United Nations Human Rights Commissioner Navi Pillay has called for an international probe into war

crimes committed in Sri Lanka during the final stages of its ethnic conflict. In her report the Sri Lankan

government recently, she had recommended for setting up of an international inquiry mechanism to further

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investigate the alleged violations of international human rights and humanitarian law and monitor any

domestic accountability process.

• The report also reiterates concerns about the continuing trend of attacks on freedom of expression, peaceful

assembly and association; rising levels of religious intolerance; and continued militarization.

• She has set a March 2014-deadline for the government to engage in a credible national inquiry into reported

cases of violations of international human rights and humanitarian law failing which the international

community would establish its own inquiry mechanism.

• The report also says that the Sri Lankan government has taken no significant steps to implement the

recommendations on accountability of its own Lessons Learnt and Reconciliation Commission.

• The Sri Lankan government has not yet officially responded to the report.

• The Human Rights Watch (HRW) has also backed the UN rights chief’s recommendation for an international

inquiry into alleged war crimes committed in Sri Lanka during the final phase of battle with the LTTE.

EVENTS IN UNITED STATES

JANET YELLEN TO HEAD US FEDERAL RESERVE

• Janet Yellen was confirmed as next head of the US Federal Reserve by the US senate to succeed outgoing Fed

chairman Ben Bernanke who has served for 8 years.

• She would be the first woman to lead the central bank in its 100 year history.

• She was nominated by U.S. President Barack Obama for the post in October and would be the first Democrat

to serve the job since 1987.

US – GERMANY NO SPYING TALKS

• In August, 2013, US and Germany had announced to negotiate a deal not to spy on each other after

revelations about the US' National Security Agency (NSA) surveillance.

• This was compounded by allegations the US had monitored Merkel's mobile phone and European interest in

the claims of the former NSA intelligence contractor Edward Snowden, who has temporary asylum in

Moscow.

• Amidst the reports that the talks are going no-where, the interior minister of Germany claimed that the talks

are progressing.

• It was the attempt by both countries to restore the relations between the nations which were at all time low

due to the spying revelations.

JOHN KERRY PUSHES FOR ISRAEL PALESTINE PEACE TALKS

• John Kerry, US Secretary of State, has held talks with Israel and Palestine to establish “fixed, defined

parameters” for a permanent peace deal held at the beginning of the new year.

• Amidst the attempt to establish peace, Israeli Prime Minister Benjamin Netanyahu has accused Palestine of

helping to incite violence by recent spate of terrorist attacks.

• The meeting is aimed at establishing a framework that would act as a guideline for reaching a full peace

treaty between Israel and Palestine in April, in which Israel would exist peacefully alongside a new Palestinian

state; as aimed by the two-state solution.

• However, no significant outcomes could come out from the talks held in January.

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SYRIA ISSUE

GENEVA II CONFERENCE

• Geneva II international conference was held to find a political solution to the conflict in Syria, which begun in

Switzerland on 22nd January, 2014. Its main aim was to discuss how to implement the Geneva Communiqué

of 30 June 2012, to end the war, and start a process toward a New Syrian republic

• It was in May 2013 when US Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov agreed

for the first time to try to "bring both sides to the table" to end the bloodshed.

• Talks were held amidst the Syrian government announcement that it would not hand over power to anyone

during the talks.

• Iran, a crucial ally of Syrian President Assad, was also invited to join the start of the Geneva II conference

which was accepted by Iran with an aim to be part of the solution to the Syrian crisis. However, the invitation

was later withdrawn by UN after the Syrian opposition threatened to boycott the conference if President Iran

took part.

• The first round of talks ended on 31 January without yielding any tangible result. The second round of

negotiations is scheduled to take place on 10-15 February 2014.

SECOND ROUND OF GENEVA II

• The second round of Geneva II peace talks continued in February 2014 with the warring sides blaming each

other for escalating violence and difficulties. The talks were initiated by the U.N. and Arab League mediator

Lakhdar Brahimi.

• Meanwhile, Russia has accused the West of trying to derail the Syria peace talks and revert to the military

scenario of regime change in the violence-torn country. Russia has also opposed a Western-backed draft

resolution in the U.N. Security Council on the humanitarian crisis in Syria as “absolutely one-sided and

detached from reality.” Over the past two years Russia has blocked three Western-backed resolutions

censuring the Syrian government.

• The conflict will soon enter its fourth year on March 15; it has so far killed 136,000 people and displaced over

two million amid atrocities by all involved.

• The Syrian situation has been called a proxy war involving the West, Saudi Arabia, and Qatar on the

opposition side, and Russia and Iran plus the Hezbollah on the regime’s side, but certain opposition leaders

resent being used thus, and government officials speak of being treated like vassals by Iran, Russia, and the

Hezbollah. In addition, the al Qaeda-linked faction, the Islamic State of Iraq and al Shams (ISIS), holds the

provincial capital of Rakka in central Syria, and serves a purpose both for Damascus, which tells the West that

if the government fell al Qaeda would win, and for the SNC, which submerges its internal differences to fight

ISIS.

• In a landmark decision, the United Nations Security Council (UNSC) has passed a unanimous resolution on the

delivery of humanitarian aid to Syria — the decision flowing from a consensus that the government and the

armed opposition would be held responsible for providing relief to the people entangled in the bloody

conflict. The UNSC called for an immediate end to all forms of violence in the country and strongly

condemned the rise of al-Qaeda-affiliated terror. The resolution was backed by Russia when the resolution

was passed without fixing responsibility on either side.

• Also to make the matters worse, Moscow has warned Riyadh not to try and change the balance of power in

Syria, by supplying Pakistan-made shoulder-fired anti-aircraft weapons to the armed opposition.

• The only glimmer of hope in all this is that since October 2013, opposition and government members have

been meeting privately at the Château de Bossey in Switzerland. As the United States and Russia will almost

certainly back any agreement they reach, it is imperative that those involved continue talking and that all

others stay away.

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FRIENDS OF SYRIA MEET

• Foreign ministers of “The Friends of Syria” met in Paris. The Group of Friends of the Syrian People, or “Friends

of Syria”, is an international collective meeting outside the UN Security Council over the Syrian crisis. Started

by then French President Nicolas Sarkozy, the group by this time includes eleven core members with the US,

Britain, France, Germany, Turkey, Qatar and Saudi Arabia among them.

• It supported the Geneva II Conference and stated that the only way for a political solution to end the Syrian

war is for peace talks in Geneva to take place.

• The core group also urged the National Coalition to respond positively to the invitation to set up the Syrian

opposition delegation sent by the UN Secretary General and come to table for talk on the issue.

• As per the joint statement, the core group concluded that “Removing Assad from Syria for the future has now

been clearly established in a unanimous decision adopted by the group without the possibility for ambiguity”.

P5 +1 AND IRAN

• Iran has halted its most sensitive nuclear program under a preliminary deal with world superpowers (P5+1

country) by completing the dilution process for 20 percent enriched uranium.

• This action of Iran will bring some relief from economic sanctions imposed on the Islamic republic from the

west. As per the official reports, Iran would receive the first $550 million installment of a total of $4.2 billion

in frozen overseas funds on or around February 1. It will be followed by two payments in March, two more in

April, one in May, one in June and the last $550 million payment on or around July 20.

• Iran will be able to resume trade in petrochemicals, gold and other prestigious metals.

• United States has asked Iran to include its ballistic missile programme within the ambit of the ongoing nuclear

dialogue, signaling a tussle between the two countries to draw maximum political advantage out of the talks.

• However, Iran has rejected any such claim and has said that ballistic missile program shall not be discussed

during Tehran’s nuclear dialogue.

• A nuclear deal, signed in November 2013, resulted in the commencement of a dialogue between Iran and its

interlocutors — United States, Russia, China, Britain, France and Germany — which envisions lifting of all

sanctions against Tehran within six months, provided it could be verifiably ascertained that Iran was not in

pursuit of atomic weapons.

• Iran and the International Atomic Energy Agency (IAEA) reached a seven-point agreement entailing practical

steps that Tehran would undertake prior to May 15 deadline, in order to build confidence about its nuclear

intentions.

• The deal includes plan to increase transparency, including a pledge by Iran to provide “information and

explanations for the Agency to assess Iran’s stated need or application for the development of Exploding

Bridge Wire detonators”.

• Besides, talks in Vienna have also begun between Iran and the five permanent members of the U.N .Security

Council plus Germany (P5+1 member). The Vienna talks between Iran and the E3/EU+3 group, acting for the

P5+1, have reached a constructive conclusion. The parties had identified all the issues necessary for a long-

term deal and have agreed on the framework for a “comprehensive and final agreement.” The next round of

talks is to start on March 17, in Vienna.

• Under the interim agreement, Iran will stop producing uranium enriched to nearly 20 per cent, will dilute half

the stockpile it has already enriched to the same level, and will continue converting the rest to a form

unsuitable for further enrichment. In addition, Tehran will not enrich uranium in about half the centrifuges at

Natanz and three quarters of those at Fordo. It will manufacture equipment only to repair existing machines,

and will put the Arak heavy-water reactor on indefinite hold. It will not build any more enrichment facilities.

Furthermore, the International Atomic Energy Agency will be able to inspect Natanz and Fordo on a daily

basis, and the Arak reactor at least on a monthly basis.

• On the other side, the western countries in particular have undertaken not to impose further nuclear-related

sanctions if Iran fulfils its Vienna commitments; they will also pay Iran a total of $4.2 billion in oil revenues,

allow Iran to resume exporting precious metals, suspend sanctions on Iran’s petrochemical exports, and

permit the Islamic Republic to import goods and services for automobile manufacturing plants. In addition,

they will maintain their current levels of crude oil imports from Iran, and will allow Iran’s civil airlines to

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acquire spare parts and services.[Please also refer to the November 2013 Current Affairs, for more details

about this issue.]

LATVIA JOINS EUROZONE

• Latvia becomes the 18th country to adopt Euro as its currency.

• The people bade farewell to their old currency Lats, which was first introduced in 1922.

• The Lats was the fourth-highest-valued currency unit after the Kuwaiti dinar, Bahraini dinar, and the Omani

rial at end of circulation.

• A two week transition period during which the Lats was in circulation along with the euro ended on 14

January 2014.

• The transition leaves Lithuania as the lone Baltic nation still outside the currency bloc.

• Apart from Lithuania, which is expected to join Euro in 2015, the prospect of Euro zone into the rest of the

bloc of 28 countries is extremely remote.

• The transition was not smooth as half the population opposes the third currency switch in just over two

decades, fearing price hikes and infuriated by the draconian austerity cuts made to get the country into the

club.

AFGHANISTAN LIKELY TO JOIN THE WTO

• Officials at the Ministry of Commerce and Industries of the Afghan Government have announced that

preparations for Afghanistan to join the World Trade Organization (WTO) are in final stage and in next three

months, Afghanistan will be a member of WTO.

• In order to be member of WTO, Afghanistan must need to sign bilateral trade agreements with the EU,

Turkey and Taiwan, out of the eight negotiating members of World Trade Organization.

• If Afghanistan becomes a member of the World Trade Organization, the trade, commerce and investment in

the country is likely to go up in coming years.

• Currently 160 nations of the world are members of the WTO.

• But economic analysts have maintained that the yield of membership in the WTO will ultimately come down

to the economic management of the government and the quality improvement of Afghan products

EGYPT ISSUE

EGYPT’S NEW CONSTITUTION

• The Egyptian Constitution of 2014 was passed in a referendum in January 2014.The constitution took effect

after the results were announced on 18 January 2014.

• The proposed new Egyptian constitution has been backed by 98.1% of people who voted in a referendum.

• The draft constitution replaces one introduced by Islamist President Mohammed Morsi before he was ousted.

• Under the newly proposed draft:

o The president may serve two four-year terms and can be impeached by parliament.

o Islam remains the state religion - but freedom of belief is absolute, giving some protection to minorities.

o The state guarantees "equality between men and women".

o Parties may not be formed based on "religion, race, gender or geography".

o Military to appoint defence minister for next eight years.

• The document also guarantees an absolute freedom of expression that is subject to broad exceptions.

MOHD. MORSI TRIALS

• Mohd. Morsi, Egypt’s first freely elected president faces charges of inciting his supporters to kill 10

protesters demonstrating near the presidential palace on December 10, 2012. The trial was scheduled to be

held in February.

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• But the trial got delayed because despite a heavy security presence outside court, a lawyer representing

Morsi was mobbed by anti-Morsi protesters as he arrived. The defence lawyers have staged a walk out since

then.

• Also, Morsi's legal team was angered by the use of a soundproof glass cage installed in the dock to contain

the former leader and his co-defendants. Mr. Morsi was not able to listen to the court proceedings as a

consequence of being kept inside the soundproof chamber.

• Besides, other charges are:

o Conspiring with foreign organisations to commit terrorist acts, with prosecutors accusing Mr. Morsi

of forming an alliance with the Palestinian militant group Hamas and Lebanon's Hezbollah

o Murdering prison officers in a jailbreak in 2011 during the uprising against the then-President Hosni

Mubarak

o Insulting the judiciary

• Besides, Prosecutors have also accused deposed president Mohamed Morsi of leaking state secrets to Iran’s

Revolutionary Guards as part of a plot to destabilise Egypt.

POLITICAL DEVELOPMENTS

• Interim President Adly Mansour has issued a decree on January 26 stating that presidential elections could

get started as early as mid-February and no later than April 18, following the approval of the country's

newly-amended constitution.

• Meanwhile Egypt's Defence Minister, Field Marshal Abdel Fattah el-Sisi has said he will run in the

presidential elections. With no obvious candidates so far competing in the race, Sisi’s chances of becoming

the country’s next president are high.If he wins, he will be the sixth general to rule Egypt, with Morsi being

the only civilian to have filled the post.

• In a strange turn of events, Russia’s President Vladimir Putin has made a startling intervention in Egypt’s

political turmoil by backing Abdel el-Sisi for the presidency, even before an election has even been declared.

The declaration came during the 2+ 2 meeting between Russia and Egypt held in Moscow.

• Ties between Russia and Egypt appeared visibly on the upswing, after the United States announced that it

was holding back on the delivery of the $1.3 billion annual military aid to Cairo following Mr. Morsi exit. The

talks are also significant as they are being pursued in the backdrop of Moscow’s deep engagement with the

government in Syria, which is in the cross-hairs of the U.S. and its Gulf allies.

• In order to run for president, El-Sisi would need to resign from his position as head of the armed forces, and

the associated role of minister of defence, as police and military personnel are forbidden from running for

office in the Egyptian law.

ELECTIONS ROUND THE WORLD

NEPAL

• The Nepali Congress (NC) and the Communist Party of Nepal (CPN-UML) signed a seven-point agreement

which has paved the way for Mr. Sushil Koirala as the new Prime Minister. The Nepali Congress president,

who was the only candidate, secured 405 of 553 MPs' votes, after the Communist Party of Nepal (UML)

agreed to back him.

• The new prime minister takes over from Chief Justice Khilraj Regmi, who has led a caretaker government

since March last year.

• As per the agreement between the two parties, there would be no election for the post of President and

Vice-President for now.

• The government is scheduled to prepare the draft of the Constitution in six months and promulgate in a

year.

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SOUTH AFRICA

• General elections in South Africa are set to take place on 7th May, 2014.The electoral term of the present

government will come to an end on 22ndApril, 2014.

• The elections mark the 20th

anniversary of the end of the white minority rule in South Africa.

• It is expected that the African National Congress (ANC) is likely to easily extend its two-decade rule, despite

rising discontent among its poverty-stricken grassroots supporters.

• However, there is growing dissent considering the fact that unemployment in South Africa is running at

around 25 percent and growth in Africa's biggest economy has slowed sharply to about 2 percent in 2013,

disrupted by the global slowdown and labor unrest.

AFGHANISTAN

• Presidential elections in Afghanistan are scheduled to be held on 5thApril 2014. Current president Mr. Hamid

Karzai will not be able to run for the post due to term limits.

• The elections are also significant as they take in the year when the international security forces are planning

to leave the country by the year end.

• After the scrutiny of the nominations, 11 candidates are in contention for the post.

• Presidential candidates in Afghanistan began two months of campaigning starting in February.

• The Taliban have rejected the April 5 election and have already stepped up attacks to sabotage it. The

militants will also be looking to capitalize if the vote is marred by rigging and feuding between rivals seeking

to replace President Hamid Karzai.

• It is observed that while Afghanistan has no majority community, ethnic Pashtuns are considered the largest

community and ethnicity will play a big role in deciding the next president.

• There are two types of candidates: technocrats and former warlords. Each has weaknesses as well as

strengths. On the one hand, technocrats may be far more motivated to improve Afghanistan's corrupt and

ineffective government, but they may have a harder time implementing policies because of their weak

power base. On the other hand, former warlords have widespread and complex networks, giving them far

more capacity to implement policy than technocrats have.

ITALY

• Italian Prime Minister Enrico Letta has submitted his resignation after his Democratic Party backed a call for

a new administration. Mr. Matteo Renzi, who was elected party leader in December, has been nominated as

the new prime minister of the country.

• At 39, Mr. Renzi will be Italy’s youngest-ever prime minister, a refreshing change from the country’s usual

tired gerontocrats. He is an energetic and forceful outsider who is not tainted by long association with the

discredited Italian political class.

• Renzi espouses market-friendly policies like reducing public spending and taxes, cutting red tape and easing

firing restrictions. He has also said that while pursuing structural reforms Italy should allow its budget deficit

to exceed European Union limits. He is backed by a large part of Italy's industrial and financial elite, though

he has no experience of national government.

• He has moved fast to try to broker a cross-party deal on a reform of electoral rules blamed for Italy's chronic

political instability.

MADAGASCAR

• Hery Rajaonarimampianina was declared President of Madagascar following elections to restore democracy

on the island nation.

• The elections were held on December 20, 2013 after four years when Mr. Rajoelina seized power in the 2009

coup. The results were declared on January 18, 2014.

• Proxy candidates ran in the vote, after the two rivals were prevented from running under international

pressure. Hery Rajaonarimampianina was the former Finance Minister backed by Andry Rajoelina.

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• The coup brought political instability to the tropical island off East Africa and saw foreign aid slashed and the

economy nosedive.

TUNISIA

• Elections are scheduled in Tunisia in 2014 and Tunisia’s Constitutional Assembly has appointed a new

commission to oversee elections in 2014, paving the way for the resignation of the current Islamist prime

minister.

• The Tunisian assembly is also in final stage of approving a new constitution.

• Tunisia’s Islamist Prime Minister Ali Larayedh stepped down 9th January, upholding a pledge aimed at

breaking a political stalemate and paving the way for new elections in the country where the Arab Spring

began.

• Tunisia is approaching the third anniversary of the overthrow of longtime despotic leader Zine al Abidine ben

Ali, an uprising that triggered a series of regional revolts against longtime authoritarian leaders, including

Egypt’s Hosni Mubarak.

• Power has been handed over to a technocrat administration under caretaker prime minister, Mehdi

Jomaa, that will assume stewardship until new elections later this year.

• The change of government was the last piece of a negotiated transition to resolve five months of political

deadlock after the assassination of the leftist politician Mohamed Brahmi in July.

MT. KELUD VOLCANO ERUPTS

• More than 76,000 people fled their homes and flights were grounded across most of Indonesia's densely

populated island of Java after the eruption of the volcano Mt. Kelud. The volcanic eruption sent a huge

plume of ash and sand upto 17 km (10 miles) into the air.

• Mount Kelud is one of 130 active volcanoes in Indonesia which sits along the "Ring of Fire" volcanic belt

around the shores of the Pacific Ocean.

• The volcano last erupted in 1990, killing dozens of people. A powerful eruption in 1919 killed around 5,000

people.

CENTRAL AFRICAN REPUBLIC DILEMMA FOR FRANCE

• After the French intervention in the civil war in the Central African Republic (CAR) in December, 2013, France

now faces an increasingly difficult predicament. It entered the war under the United Nations authority.

• France now faces several constraints, such as local conditions, French public reluctance to commit more

troops, and the unwillingness of the European Union and the United States to help.

• These conditions are making it more likely that CAR will collapse into what a U.N. official has called ethnic-

religious cleansing, even though the country has no history of religious strife. Half of CAR’s 4.6 million

people are Christians, and 15 per cent, or about 700,000, are Muslims.

• The fighting has taken at least 2,000 lives and displaced about a million people, many of whom are barely

surviving in terrible conditions; 80,000 Muslims have reportedly fled the north to Chad and the east to

Cameroon.

• The concerns are raised that the failure of political will in France, the EU, and the United States could make

CAR yet another target for what could well be externally-funded Islamist extremists.

Besides, the aid agencies in the Central African Republic have another moral dilemma - should they evacuate

endangered Muslims to safer areas, or encourage them to stay put? If they get involved in evacuations, they

risk being accused of complicity with ethnic or religious "cleansing." But the alternative might be letting

civilians fall victim to large-scale massacres.

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ALSO IN NEWS

SACHING RAMESH TENDULKAR

• He received bharata ratna. He is the first sportsperson and sitting Rajya Sabha MP to receive the highest

civilian award.

PROF. C.N.R. RAO

• He is the third scientist after C.V. Raman and A.P.J. Abdul Kalam to receive the prestigious bharata ratna

award. His contribution is recognized by most major scientific academics across the world by way of

memberships and fellowships and numerous national and international awards.

SATYA NADELLA

• Indian-born technocrat was appointed as CEO of Microsoft. He is known to be strong in

technology. Previously, he was executive vice president of Microsoft's Cloud and Enterprise group.

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2 February 2014

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