CURRENT NATIONAL AFFAIRS
BANKING & FINANCE
RBI monetary policy
As part of its second quarterly review of the monetary policy for 2009-10, the RBI, on October 27, 2009, hiked the Statutory Liquidity Ratio (SLR) for scheduled commercial banks to 25 per cent from 24 per cent of their net demand and time liabilities (NDTL), with effect from November 7, 2009, even as other key rates were left untouched.
RBI Governor D. Subbarao noted that the Indian economy was awash with liquidity and there was possibility of considerable strain in the future from inflationary pressures. However, to keep growth on track, the apex bank left the Bank Rate untouched at 6 per cent while the repo rate under the liquidity adjustment facility (LAF) stay at 4.75 per cent. The reverse repo rate under the LAF, too, remains the same at 3.25 per cent. The cash reserve ratio (CRR) of scheduled banks also has been retained at 5 per cent of their net demand and time liabilities (NDTL).
Mr Subbarao pointed out that the global economy has shown signs of major improvement since the last review in July 2009. However, concerns remained of the recovery being fragile. "Even as output is reviving, unemployment is expected to increase to over 10 per cent. Investment is also expected to remain weak due to ruptured balance sheets, excess capacity and financing constraints. Bank collapses are continuing. World trade still remains below its level a year ago. On balance, while global economic prospects have improved, uncertainties remain about the pace and sustainability of economic recovery," Subbarao said.
The RBI chief also noted that there were concerns of large government market borrowings. "During 2009-10 so far, the Central Government has already completed over 80 per cent (Rs 3,19,911 crore) of its net market borrowing and State governments have mobilised Rs 58,683 crore (net) through the market borrowing programme," he stated.
Highlights
PLANNING & ECONOMY
RBI survey
The Reserve Bank of India has acknowledged the resurgence of the feel good factor in the Indian economy but has said that growth and inflation continue to be a concern.
Maintaining a hawkish stance on inflation, the central bank has highlighted its concern over slowdown in credit off-take and surplus liquidity in the system, giving no clear indication on its rate stance. In its report on Macro and Monetary Developments in Q2 of 2009-10, the Reserve Bank has noted that "The combination of a weak recovery and elevated CPI (consumer price index) inflation has already magnified the complexity of policy challenges, notwithstanding the subdued nature of headline WPI inflation so far."
While premature reversal of the monetary policy stance entails the risk of stifling recovery, persistence of accommodative stance could adversely impact inflation expectations.
However, the results of its survey, based on “assessment for July- September 2009” and “expectations for October-December 2009”, point to a strong momentum in industrial recovery. Both the indices remained above 100 for the second consecutive quarter (100 is the threshold that separates contraction from expansion). According to the RBI analysis, this suggests that the industrial recovery already seen up to August 2009 in terms of trends in IIP growth could gain further momentum.
The outlook for employment is also improving and firms are expected to increase their workforce on the back of expected increase in demand.
Among the positive pointers to the economic recovery include improved financial conditions as reflected in return of capital flows, significant recovery in the stock markets, and better transmission from low policy rates to declining lending rates. The RBI has also said that there should not be any concerns about private credit getting crowded out since over 80.4% of the government borrowing programme has been completed so far as there is adequate liquidity in the system.
But RBI is concerned about the deceleration in private consumption and investment demand that it says needs to be reversed from the low levels seen in the first quarter of 2009-10 for ensuring a sustainable recovery.
Indian economy seen cruising at 6.5% in 2010
A key economic think-tank has made the most optimistic official projection yet for growth in the fiscal to March 2010, flagged rising food prices as a major concern, and suggested that tighter monetary and fiscal policies are unlikely in the coming months.
The Prime Minister’s Economic Advisory Council, headed by former RBI governor C. Rangarajan, said it sees the gross domestic product (GDP) expanding by 6.5% in 2009-10.
In its July 2009 forecast, the RBI had forecast that India’s economy in 2009-10 would grow by 6%, with an upward bias, and the Planning Commission had said in early September that it sees GDP growth at 6.3%. India’s economy expanded by 6.7% in 2008-09 after growing at over 9% for three years.
The improving trend is unlikely to prompt any immediate withdrawal of stimulus measures or a tightening of monetary policy, even though the panel made clear its concern about inflation and fiscal deterioration. It expects the consolidated fiscal deficit of the Centre and States at 10.09% for 2009-10 and sees inflation, imported and local food inflation, as a significant risk for the Indian economy.
EDUCATION
IIMs can now set up campuses abroad
Directors of the prestigious Indian Institutes of Management (IIMs) and members of their boards will eventually be appointed through an independent collegium of industrialists and academics. Also, IIMs can set up campuses abroad, provided they come up with “workable proposals and preferably function together instead of individually”.
"We want to globalise the IIM brand,” said HRD Minister Kapil Sibal. In another major move, the government agreed that a collegium, as mooted for the appointment of vice-chancellors of central universities, would also apply to IIMs, where majority appointments so far are cleared by the HRD ministry, which advertises the positions before short-listing and selecting candidates.
But that is set to change to advance the cause of transparency in appointments to top institutes. IIM boards are also proposed to be restricted in size, with HRD ministry describing them as “unwieldy and huge”. The membership will be limited to 13 (currently over 20 or so.
The boards are proposed to be reconstituted post January 2010, the deadline which the government has given to IIM directors to present their views on the constitution of the collegium, which will be empowered to recommend names of board members and directors to the government for final selection.
For the institutes to beat competition, autonomy is the key, feel the directors. Sibal agrees, but with a rider: “We are for IIM autonomy, for letting go, but let’s not forget that the primary responsibility of all education systems is national.”
ELECTIONS
Congress wins in Haryana, Maharashtra and Arunachal
With a stunning result in the latest political super-bowl, the Congress has fortified its "top dog" status, while pushing the main opposition party, BJP, into its gravest political crisis in over two decades.
Congress survived a scare in Haryana and retained power in the State with the help of independents as well as five Haryana Janhit Congress MLAs, who decided to join the Congress. Congress sailed back in style in Maharashtra and Arunachal Pradesh. All three CMs—Ashok Chavan in Maharashtra, B.S. Hooda in Haryana and Dorjee Khandu in Arunachal—have been renominated by the party leadership.
If the Lok Sabha polls settled the Number One slot for Congress party, the altest verdict confirmed that the gap between Sonia Gandhi’s outfit and BJP is growing. In fact, some political pundits feel Congress could well be on the way to regaining its pre-1996 status when, as the key player in most States, it could be fought only by a united opposition.
Some riders are, however, in order. The win in Maharashtra has been facilitated by Raj Thackeray playing spoiler again—on a bigger scale. In Haryana, the party failed to get a majority despite a three-way split of anti-Congress votes. The resurrection of Chautala shows the resilience of old-fashioned politics and should be sobering for those who feel traditional political tools—caste/community—have lost salience.
Haryana: In Haryana, the Congress vote share fell by a huge 7.4%, from 42.5% to 35.1%. Normally such a big swing away results in the decimation of a party. But Hooda has managed to keep his head above the water, thanks largely to a fractured opposition.
Chautala, too, lost his vote share, but by just 0.7%, while BJP’s share fell by 1.4%. The new political outfit, Kuldip Singh Bishnoi’s HJC, accounted for 7.4% votes.
Maharashtra: In the the lead-up to the Maharashtra polls, many had wondered whether Raj Thackeray would help Congress-NCP in as big a way as he did in the LS polls by eating into the Sena votebank yet again. Indeed, Congress-NCP cruised back to power as Shiv Sena citadels in Mumbai and Thane crumbled under Raj’s assault. In a result, the loser’s story is almost as important as the winner’s. If the ruling combine beat the incumbency blues, the 144-90 scoreline was the clap of doom for the Sena-BJP camp. To add to Sena’s woes, BJP crept ahead with 46 seats to its 44.
The revenge drama saw Raj Thackeray’s Maharashtra Navnirman Sena demolish Sena’s prospects by not only splitting the “Marathi” vote but emerging as the second largest party in Mumbai with six seats and a staggering 23.35% of the city vote.
MNS polled 5.7% of the State’s vote, eating into Sena and possibly NCP bases. While Sena was the worst hit, losing 3.7% of its support since May 2009, the Raj effect may have dented others, particularly NCP, which lost 2.4% of its vote.
Congress may have raised its tally of seats in the 288-member Maharashtra Assembly from 69 in 2004 to 82 this time round, but the party’s vote share has never been lower in any Vidhan Sabha election in the State, except in 1978. Yet with 21% of votes, Congress has a distinct edge over the other big parties, NCP having won just 16.4%, Shiv Sena 16.3% and BJP 14%. That also means that the combined vote shares of the big four is down by 5.9% from five years ago. This almost exactly matches the 5.7% won by MNS in these elections.
Independents have won 15.5% votes. In other words, despite the existence of two long-standing coalitions in the fray, roughly one in every three Maharashtra voters did not vote for either of them. That is perhaps the clearest indication that this verdict is not so much a positive one for UPA as one it has got by default because of the absence of credible alternatives.
Arunachal Pradesh: The electorate in Arunachal Pradesh returned Congress to power with an overwhelming majority but rejected the man, Gegong Apang, who not only nurtured the party but also ruled the State for over 22 years.
The Congress romped home with 42 of the 60 Assembly seats even as Apang (60) bit the dust at the hands of Alo Libang, a political greenhorn from NCP.
Dorji Khandu had come to power in April 2007 after Congress dissidents revolted against Apang. Like in the last two elections, Khandu has again won from Mukto in Tawang unopposed.
With five seats each, NCP and Trinamool Congress emerged as the main Opposition, followed by People’s Party of Arunachal (four) and BJP (three). In 2004, the BJP had won nine seats against Congress’s 34.
EC announces five-phase polls in Jharkhand from Nov 27
Election Commission has announced five-phase Assembly polls in Jharkhand, spread over November-December 2009. Faced with a serious threat of Maoist violence, five-phase election for 81 assembly constituencies will take place on November 27, December 2, 8, 12 and 18. Results will be announced on December 23.
Jharkhand has 1.8 crore voters and 23,944 polling stations. While photo electoral rolls have been prepared in the case of 74.19% voters, 77.63% voters have electoral photo identity cards.
Admitting that conducting election in Jharkhand could be a problem due to the Maoist menace, Chief Election Commissioner Navin Chawla said home ministry has agreed to provide sufficient central paramilitary forces.
Jharkhand, which has seen four Chief Ministers and six governments in the nine years of its short existence, will be looking for political stability at the end of the Assembly election.
The State was placed under President’s Rule in January 2009 but the then Governor, Syed Sibte Razi, was shifted out following allegations of misuse and corruption. A hung House following the last Assembly election—the State’s first—in 2005 had led to a string of unholy alliances in which Independent MLAs and fringe political parties with one or two members in the Assembly called the shots. The period had also seen an Independent MLA, Madhu Koda, becoming the Chief Minister.
Since then, two former ministers of the State have been arrested and sent to jail in disproportionate assets cases, while the Enforcement Directorate has instituted an adverse preliminary report against Koda and two other former ministers in the State for alleged violation of foreign exchange rules and hawala transactions.
As many as seven MLAs in the 81-member House were disqualified in August under the Anti-Defection Act while three members chose to quit the House, which had been kept under suspended animation.
The election will put the Bharatiya Janata Party to yet another severe test. BJP had emerged as the single largest party in the House with 30 seats after the last Assembly election, though the majority eluded it. It also bagged eight out of the 14 Lok Sabha seats from the State in May 2009. But with most of the party stalwarts in the Lok Sabha and the party riven by factionalism, it faces an uphill task to put its act together.
Congress is trying to revive its fortune in the State where it was virtually marginalised, managing to secure just nine seats in the Assembly in 2005. Even in the general election held in May 2009, the party had managed to win only one of the 14 Lok Sabha seats. A weak organisation and absence of leaders with acceptability throughout the State are handicaps which the party hopes to overcome through campaigning by Rahul Gandhi and others.
The election is also crucial for the Jharkhand Mukti Morcha, which campaigned for separate Statehood but which never managed to get anywhere close to securing the majority in the State Assembly. The virtually one-man party is still a force to reckon with in Santhal Pargana region and the party chief, Shibu Soren, is still a big draw among Santhals. But the JMM, which has declared its intention to contest the election alone, may find the going tough in other parts of the State without the support of its old ally, the Congress.
ENVIRONMENT
Ganga clean-up
Twenty two years and Rs 960 crore later, the government plans to spend another Rs 15,000 crore over the next 10 years to make the Ganga river pollution free. This decision was taken at the meeting of the first National Ganga River Basin Authority, chaired by Prime Minister Manmohan Singh, on October 5, 2009.
It has been decided to take up the cleaning of the Ganga river on a mission mode. Mission Clean Ganga will ensure that by 2020 no untreated municipal sewage and industrial effluents flows into Ganga. At present, the sewage treatment capacity is about 1,000 mld, against 3,000 mld sewage being generated in the towns along Ganga. Nearly 75% of the pollution in the Ganga is on account of municipal waste.
The costs will be borne by both the Centre and the States. There were disagreements over the sharing, with States asking for 100% central funding. An alternate funding pattern of 70% by the Centre and 30% by the States has been suggested. A final decision on the sharing ratio will be worked out by the Planning Commission, in consultation with the States and Central government.
In the meantime, the World Bank has offered a loan of $1 billion for the mission.
JUDICIARY
Vision Statement to cut delays
The Union government has suggested a drastic dilution of the judiciary's role in the appointment of Judges in the "Vision Statement" for cutting down delays and banishing cases pending for more than three years.
"The Executive and the Legislature must take initiative in recommending the best possible talent for selection to the judiciary," Law Minister V. Moily said in the 32-page document presented to Chief Justice K.G. Balakrishnan. The "government should also be given the power to suggest outstanding lawyers and jurists as Judges," the Minister said in the statement, which was discussed threadbare at a conference aimed at "strengthening the judiciary towards reducing pendency and delays."
Moily's proposals have come in the wake of the crisis-like situation that has arisen following allegations of judicial misconduct against a number of Judges—Karnataka High Court Chief Justice P.D. Dinakaran and Judges Soumitra Sen of Calcutta High Court and Nirmal Yadav of Punjab and Haryana High Court. The custodial death of Ashutosh Asthana, the prime accused in the Uttar Pradesh PF scam, which reportedly involves several Judges, has cast a further shadow on the judiciary.
Styled as "National Consultation," the conference was attended by Supreme Court Judges and Chief Justices of High Courts, including Justice Dinakaran, and top judicial luminaries from across the country.
Both the Law Commission, headed by Justice A.R. Lakshmanan, and the Parliamentary Standing Committee report have recommended reverting to the pre-1993 system which involved appointment of High Court and Supreme Court Judges through consultation between the Chief Justice of India and the government-primarily the Prime Minister and the Law Minister.
In all, Moily has suggested five "improvements" in the present system of appointment. The other three are: There should be lucid and comprehensive guidelines which the Collegium should follow in the matter of selection of judges. The Collegium should be given a timeline to clear the backlog in vacancies. The government and the Collegium should work "hand in hand while appointing Judges."
NUCLEAR ENERGY
India notifies N-separation plan
India has notified its separation plan in the IAEA, which formally separates India’s civilian and military nuclear establishments. The plan, which was announced in March 2006, has passed muster at IAEA and India’s safeguards agreement is now officially operational.
This is likely to help in the negotiations for the reprocessing agreement that is currently under way between India and US. But more than that, this will silence many non-proliferation critics in the new Obama-led US administration who had been looking at the delay in notifying the safeguards agreement as an example of Indian dithering.
FOREIGN RELATIONS
India slams OIC over J&K envoy
Pakistan has succeeded in its efforts to compel the Organisation of Islamic Conference (OIC) to appoint a special envoy for Jammu and Kashmir. At its meeting in New York earlier in first week of October 2009, the OIC also stated that it supported people of Jammu and Kashmir in realisation of their legitimate right to self-determination in accordance with relevant UN resolutions and aspirations of the Kashmiri people.
A fuming India reacted sharply to the OIC action, dubbing it as interference in the internal affairs of this country. “Jammu and Kashmir is an integral part of India and it is our firm position that the OIC has no locus standi in matters concerning India’s internal affairs,” the External Affairs Ministry said in a statement.
Condemning the OIC move, New Delhi said inherent in its statements and actions on the issue of Jammu and Kashmir was a complete inability to understand India’s position.
The appointment of a Saudi national, Abdullah Bin Adbul Rahman Al Bakr, by the OIC as its envoy on Kashmir is being seen as a move initiated by Pakistan as part of its attempts to internationalise the Kashmir issue.
India has time and again told the international community, including major world powers, that Jammu and Kashmir is a bilateral issue between India and Pakistan and there is no room for third party intervention.
Under pressure from Pakistan, the OIC has at all its meetings adopted resolutions on Jammu and Kashmir, prompting New Delhi to condemn 57-member body’s action every time. Privately, however, many of the Islamic nations have repeatedly assured India that they are not in agreement with OIC resolutions on Kashmir but had to support them for the sake of unanimity and to keep Pakistan in good humour.
Well aware that its action would draw a strong response from India, the OIC is now trying to play down the appointment of the special envoy.
OIC Secretary General Ekmeleddin Ihsanoglu was quoted as saying that the appointment would help bridge the gap between India and Pakistan and address the issue of minorities in India.
India, Argentina sign N-accord
On October 14, 2009, India signed an agreement for civil nuclear cooperation with Argentina, making it the seventh nation to ink such an accord with this country after New Delhi secured a waiver from the nuclear suppliers’ group (NSG) to undertake nuclear commerce.
The agreement for cooperation in the peaceful uses of nuclear energy was among the 10 accords signed by the two countries following wide-ranging talks between Prime Minister Manmohan Singh and visiting Argentine President Cristina Fernandez de Kichner, during which they desired to establish strategic partnership between their two nations. The two leaders discussed a wide range of bilateral, regional and global issues of mutual interest.
A joint statement issued by India and Argentina after the visiting dignitary concluded her talks with Indian leaders said the two sides shared the view that civil nuclear energy could play an important role as a safe, sustainable and non-polluting source of energy in meeting rising global demands for energy.
The other nine accords signed between the two sides include: exchange of letters for business visa providing for five years multiple entry gratis visa for a single stay of 90 days; programme of cooperation in science and technology for 2009-11; MOU between ONGC Videsh Limited and ENARSA; MOU on sports cooperation; MoU on cooperation in the field of trade promotion and technology transfer in international trade; and agreement on outer space.
The two sides also agreed on the need to give a new impulse to multilateral negotiations in the area of disarmament, especially weapons of mass destruction.
India-China talks
Without getting into the recent spat over Arunachal Pradesh, Prime Minister Manmohan Singh and Chinese Premier Wen Jiabao talked peace and harmony on October 24, 2009, in a meeting on the sidelines of the India-ASEAN summit in Thailand.
The visit of the Dalai Lama to Arunachal also did not figure in the discussions between the two leaders who instead focused on the positives in the relationship and agreed that "differences" should not impede cooperation between the two countries.
In an effort to ameliorate the recent strain on the bilateral relationship, Prime Minister Manmohan Singh even proposed that the two countries observe the 60th anniversary of the establishment of diplomatic ties in a "fitting manner". He also put stress on the trade and economic relations, calling it a "vital pillar" in the bilateral relationship.
This exchange at the highest political level came after an escalation in the rhetoric between the two sides over the border issue. China had objected to Mr Singh’s trip to Arunachal Pradesh for the Assembly elections. This had elicited a strong reaction from New Delhi which had reminded Beijing that Arunachal remained an integral part of the country. New Delhi had further pointed out that in the democratic system leaders visited States where elections are taking place. This was further followed by India protesting against China’s involvement in projects in Pakistan Occupied Kashmir, which New Delhi pointed out was also disputed territory. New Delhi had earlier also objected to Beijing’s practice of issuing visas to people from Jammu and Kashmir on loose sheets.
Chinese Prime Minister Wen recalled Mr Singh’s remark about both sides having enough space to develop and cooperate and added that there are sufficient areas in the world for India and China to enhance such cooperation. The Chinese premier further suggested that the Joint Economic Group should hold early consultations and that China would work with India to handle the matter of the growing trade deficit.
India also rejected China’s objections to Dalai Lama’s Arunachal visit in November while making it clear that the Tibetan spiritual leader was not allowed to indulge in political activities on the Indian soil. The issue figured when Prime Minister Manmohan Singh and his Chinese counterpart Wen Jiabao were seated next to each other at a gala dinner hosted by the Thailand Prime Minister for leaders attending the ASEAN and East Asia summits.
India, China ink pact on climate change
Amidst tension over political issues, India and China have signed an agreement to cooperate on ways to fight climate change. Moving closer, at least on an issue concerning the entire world, the two neighbours announced setting up of a Joint Working Group (JWG) to exchange views concerning international negotiations on global warming. The memorandum of agreement (MoA) assumes significance in the run-up to the Copenhagen climate summit. Developed and developing countries are at loggerheads over who should reduce emissions of greenhouse gases that are causing climate change.
India and China are in the same bloc as the Group of 77 countries in climate negotiations.
The MOA acknowledges that climate change and its adverse effects are a common concern of mankind and need to be addressed through international co-operation. It emphasises that the UNFCC and its Kyoto Protocol were the most appropriate framework for addressing climate change.
The agreement also reaffirms the principle of common but differentiated responsibilities, in particular that developed countries should take the lead in reducing their greenhouse gases and providing financial resources, technology transfer and capacity building support to developing countries.
Egypt offers special industrial zone to India
Egypt has invited India to build a ‘India industrial zone’ in the Suez development area for setting up joint ventures with Egyptian companies. Egypt’s Prime Minister Ahmed Nazif, in his meeting with commerce and industry minister Anand Sharma in Cairo, offered to designate an area for setting up of the zone exclusively for Indian companies.
India could gain significantly from the offer as it would give it easier entry to the European and African markets, since Egypt has preferential access to both.
The Suez development area, located on the north-west coast of the Gulf of Suez, has lower bureaucratic barriers to business formation and provides tax incentives. The law gives more incentives for priority areas, such as infrastructure, auto parts, software, oil field services, tourism and manufacturing. The terms and conditions of investing in the proposed India zones and the tax benefits to industry are to be worked out.
Indian companies have, till now, invested about $750 million in 40 projects in Egypt. India has a significant presence in the IT and automobile sector with companies like Wipro, Satyam, Mahindra and Tatas having invested in the country.
Olive branch to Pak with rider
In a speech delivered at the inauguration of the Anantnag-Qazigund rail link in Anantnag, Prime Minister Manmohan Singh focused largely on ties with Pakistan and the earlier success of cross-LoC initiatives. Targeting domestic audience and also sending out a message to Pakistan, Mr Singh prefixed his offer of peace with the rider that Islamabad must bring perpetrators of terror attacks to justice and destroy terror camps. "For a productive dialogue it is essential that terrorism must be brought under control," he said.
Mr Singh said India would put pressure on Pakistan to curb the activities of the elements engaged in terrorism against India. "If they are non-State actors, it is the solemn duty of the government of Pakistan to bring them to book, to destroy their camps and to eliminate their infrastructure. The perpetrators of the acts of terror must pay the heaviest penalty for their barbaric crimes against humanity," he said.
With Pakistan now being targeted by terrorism, Mr Singh said there could be no compromise with the ideology of terror. "It is a misplaced idea that one can reach a compromise with the ideology of the terrorists or that they can be used for one’s own political purpose. Eventually, they turn against you and bring only death and destruction. The real face of the terrorists is clear for the people of Pakistan to see with their own eyes," he said.
He maintained that India was ready to discuss humanitarian issues whose “resolution requires the cooperation of Pakistan”. "We are ready to discuss these and other issues with Pakistan. I hope that, as a result, things will be made easier for our traders, divided families, prisoners and travelers," he said.
President Pratibha Patil’s visit to UK and Cyprus
President Pratibha Patil visited UK and Cyprus from October 27 to 31, 2009. During her visit to UK she received the Baton of the Commonwealth Games from the Queen of England at a ceremony in the Buckingham Palace in London on October 29.
This was the third State visit by an Indian President to the UK. The first was by President S. Radhakrishnan in 1963 and the second by President R. Venkataraman in 1990. This was also the first State visit after the commencement of the strategic partnership between India and the UK in 2009.
During her visit, President Patil interacted with Queen Elizabeth of England as also met Prime Minister Gordon Brown, leader of the opposition David Cameron and leader of the Liberal Democratic Party Nick Clegg.
She also addressed in London a business meeting organised by the UK India Business Council.
Gandhi letters handed By UK to President Patil: Mahatma Gandhi won’t receive letters not bearing stamps as a matter of principle. But he chose to write back and inform sender Hamdiullah Afsar, a contemporary poet of those times, of his decision. These and many such aspects of Gandhi’s personality come out in a set of letters presented by Curry King Ghulam Noon and NRI from London Nat Purie, who bought some of the memorabilia associated with Mahatma Gandhi in an auction in London and presented them to President Pratibha Patil at the India House.
The memorabilia, consisting of a piece of khadi cloth, ostensibly spun by Gandhi bearing his signatures along with those of Sarojini Naidu, Gandhi’s disciple Meerabai, secretary Pyare Lal and some other blurred signs are part of the package bought by the NRI duo that was handed over to the President.
Gandhi’s letters written in Urdu to his disciple Maulana Abdul Bari and a lesser known Urdu poet of those times, Hamidullah Afsar, are a study in contrast. These letters bring out the difference between those who were close Gandhi’s freedom movement and those who tried to intrude upon his privacy.
The President visited Cyprus on an invitation of the then President of Cyprus Papadopoulus who visited India in April 2006. The last time an Indian President visited Cyprus was 21 years ago, again R. Venkataraman, whereas all former Cyprian Presidents have visited India during their term of office.
Cyprus has always supported India on all crucial issues and expressed its understanding on our nuclear tests in 1998 and supported Indian position during Kargil war, too.
India is planning a major headway in generating energy through solar sources. It has approached Cyprus which has made considerable headway in that direction to develop solar power plants ranging between one MW and 50 MW. An MoU was signed in the presence of visiting Indian President Pratibha Patil for providing solar power to India.
The MoU states that NORASCO, UPTURN of DALCO company and CASE NEUBERG of the CASE group of companies will supply solar photovoltaic systems, kits and technology for solar energy projects in India. It also states that CASE will be Indian technology and engineering partners for setting up turnkey solar energy plants in India and NORASCO will provide project finance and investments of EURO 50 million in solar energy sector in India between 2010 and 2015. The Photovoltaic Technology Group of University of Cyprus (PVT Group) also signed an MoU with NORASCO whereby PVT Group will act as a technology consulting partner for developing solar energy projects and solar energy education in India.
RESERVATIONS
Cabinet OKs 50% quota for women in civic bodies
Women will soon occupy half the seats in urban local bodies with the Union cabinet on Thursday clearing a proposal for raising reservation for them in municipalities from 33% at present. This provision will apply to the total number of seats to be filled by direct election, offices of chairpersons and seats and offices of chairpersons reserved for SCs and STs.
The increased representation of women is likely to have significant benefits in terms of higher priority to women’s issues in critical areas of urban governance and service delivery such as water supply, sanitation, education and health.
SCANDALS
Former Jharkhand CM Koda booked for graft
Jharkhand presents an example where lack of political stability was allegedly exploited by a group of legislators led by former Chief Minister Madhu Koda to fatten themselves. The Enforcement Directorate, on October 9, 2009, slapped charges under Prevention of Money Laundering Act (PMLA) on the former Jharkhand CM and three of his former Cabinet colleagues for allegedly amassing assets running into several hundred crores—between Rs 700 and 800 crore according to the preliminary estimate.
Koda, the first Independent to become Chief Minister and now a member of Lok Sabha supporting UPA government, has been charged with having business interests of diverse kinds—cement, steel, auto, power, agro and tourism. His alleged investments, estimated at Rs 300-400 crore, are just as widely spread—from Singapore to Thailand to Dubai to Liberia.
His former colleagues who have also been booked under PMLA include Bhanu Pratap Shahi, Bandhu Tirkey and Kamlesh Singh. Though they did not prosper as much as Koda, the trio, according to ED, made personal fortunes ranging from Rs 20 crore to Rs 50 crore.
Koda and his associates milked their success in 2005 Jharkhand polls. The election threw up a hung House, enabling them to play kingmaker with remorseless agility. Shibu Soren, who was sworn in as Chief Minister of Jharkhand when he lacked majority support, had to resign when the group refused to rescue his aspirations. They helped Arjun Munda of BJP become the Chief Minister and were rewarded with 'plum' portfolios as part of deal. The arrangement, however, did not last long. The group ditched BJP after UPA agreed to propel Koda to Chief Ministership. Others in the group, naturally, held on to their portfolios.
The tenure was marked by allegations of corruption, particularly allegedly dubious decisions on mining leases to big industrial houses. Later on, with the stink rising to embarrassing levels, Congress wanted to dissociate itself from the arrangement, but allies RJD and Jharkhand Mukti Morcha prevailed. The import of allegations of the ED begin to sink in deeper when two other factors are considered. First, the last five years have seen Maoists rapidly expanding their influence in Jharkhand, turning huge swathes into "liberated Red zones". Also, the office of the Governor also came under a cloud, with CBI raiding two close aides of Governor Syed Sibte Razi.
TERRORISM; LAW & ORDER
New anti-Naxal policy
The Centre’s plans to take the battle to Naxalites hinge on a strategy that will see Central and State forces acting in concert to first wrest control of areas long considered “Red” zones and then facilitate expeditious restoration of civil administration. The Cabinet Committee on Security (CCS) has okayed a comprehensive approach to Maoist extremism with a "clear and hold" doctrine at the centre of the anti-Naxal "action plan". Moving from the current largely reactive stance which saw occasional jabs into Maoist hinterland, forces will pro-actively engage the ultras.
Recognising that draining Maoist swamps would also require restoration of rule of law and demonstrable development, the government has decided that the forces used in anti-naxal operations will not pull out after an operation. Rather, reinforcements will beef up security and set the stage for the civil bureaucracy to get to work. The developmental aspect of the plan is crucial to denying Maoist ranks of fresh recruits and addressing the argument that exploitation and abysmal conditions in tribal areas in far-flung areas has led to "popular" support for the Red insurgency. Fixing things and making them work was important in showing the state could deliver.
The view in government is that the offensive cannot be delayed much further. With alarming signs of an emboldened Maoist leadership targetting urban areas beyond their known forest hideouts—arrested politburo member Kobad Gandhy was incharge of operations in cities like Delhi, Mumbai and Pune—the government is gearing for action and bracing for casualties.
The strategy for acting on intelligence tip-offs and hitting at naxal bases deep in Red "liberated" zones was put to trial in September 2009 in Chhattisgarh’s Dantewada. The Maoists were routed but the hazardous forests and complete lack of infrastructure underlined how difficult it would be for a force to operate "behind the lines". It is felt that the surge in Central and State forces after the Assembly elections in Haryana, Arunachal Pradesh and Maharashtra can be sustained if the local population is convinced that Maoists can be defeated and that the forces will not leave in a hurry. This would strengthen intelligence collection and provide the administration with valuable allies as even fence sitters opt for the winning side.
The Centre plans to deploy 70,000 paramilitary personnel—drawn from CRPF, ITBP, BSF, SSB, CoBRA and Nagaland Armed Police—in States like Jharkhand, Chhattisgarh, Orissa, Bengal, Bihar, Maharashtra and Andhra.
Maoists step up the gore, behead police officer
On October 5, 2009, in a barbaric, Taliban-style execution, Maoists beheaded special branch inspector Francis Indwar and threw his body on a slip road leading to National Highway 33 that connects Patna to Jamshedpur. The officer was abducted and held hostage by Naxalites demanding a swap for arrested Maoist ideologues Kobad Ghandy in New Delhi, Chhatradhar Mahato in Kolkata and another captured leader Chandrabhushan Yadav.
BANKING & FINANCE
RBI monetary policy
As part of its second quarterly review of the monetary policy for 2009-10, the RBI, on October 27, 2009, hiked the Statutory Liquidity Ratio (SLR) for scheduled commercial banks to 25 per cent from 24 per cent of their net demand and time liabilities (NDTL), with effect from November 7, 2009, even as other key rates were left untouched.
RBI Governor D. Subbarao noted that the Indian economy was awash with liquidity and there was possibility of considerable strain in the future from inflationary pressures. However, to keep growth on track, the apex bank left the Bank Rate untouched at 6 per cent while the repo rate under the liquidity adjustment facility (LAF) stay at 4.75 per cent. The reverse repo rate under the LAF, too, remains the same at 3.25 per cent. The cash reserve ratio (CRR) of scheduled banks also has been retained at 5 per cent of their net demand and time liabilities (NDTL).
Mr Subbarao pointed out that the global economy has shown signs of major improvement since the last review in July 2009. However, concerns remained of the recovery being fragile. "Even as output is reviving, unemployment is expected to increase to over 10 per cent. Investment is also expected to remain weak due to ruptured balance sheets, excess capacity and financing constraints. Bank collapses are continuing. World trade still remains below its level a year ago. On balance, while global economic prospects have improved, uncertainties remain about the pace and sustainability of economic recovery," Subbarao said.
The RBI chief also noted that there were concerns of large government market borrowings. "During 2009-10 so far, the Central Government has already completed over 80 per cent (Rs 3,19,911 crore) of its net market borrowing and State governments have mobilised Rs 58,683 crore (net) through the market borrowing programme," he stated.
Highlights
- Repo rate retained at 4.75 pc
- Reverse repo rate at 3.25 pc
- Cash Reserve Ratio kept at 5 pc
- Bank rates same at 6 pc
- Provisioning requirement for realty up at 1 pc from 0.40 pc
- Retains GDP growth projection for FY'10 at 6 pc
- Industrial production may revive further in coming months
- Ups inflation projection to 6.5 pc by March-end, from 5 pc
- Third quarterly review in January.
PLANNING & ECONOMY
RBI survey
The Reserve Bank of India has acknowledged the resurgence of the feel good factor in the Indian economy but has said that growth and inflation continue to be a concern.
Maintaining a hawkish stance on inflation, the central bank has highlighted its concern over slowdown in credit off-take and surplus liquidity in the system, giving no clear indication on its rate stance. In its report on Macro and Monetary Developments in Q2 of 2009-10, the Reserve Bank has noted that "The combination of a weak recovery and elevated CPI (consumer price index) inflation has already magnified the complexity of policy challenges, notwithstanding the subdued nature of headline WPI inflation so far."
While premature reversal of the monetary policy stance entails the risk of stifling recovery, persistence of accommodative stance could adversely impact inflation expectations.
However, the results of its survey, based on “assessment for July- September 2009” and “expectations for October-December 2009”, point to a strong momentum in industrial recovery. Both the indices remained above 100 for the second consecutive quarter (100 is the threshold that separates contraction from expansion). According to the RBI analysis, this suggests that the industrial recovery already seen up to August 2009 in terms of trends in IIP growth could gain further momentum.
The outlook for employment is also improving and firms are expected to increase their workforce on the back of expected increase in demand.
Among the positive pointers to the economic recovery include improved financial conditions as reflected in return of capital flows, significant recovery in the stock markets, and better transmission from low policy rates to declining lending rates. The RBI has also said that there should not be any concerns about private credit getting crowded out since over 80.4% of the government borrowing programme has been completed so far as there is adequate liquidity in the system.
But RBI is concerned about the deceleration in private consumption and investment demand that it says needs to be reversed from the low levels seen in the first quarter of 2009-10 for ensuring a sustainable recovery.
Indian economy seen cruising at 6.5% in 2010
A key economic think-tank has made the most optimistic official projection yet for growth in the fiscal to March 2010, flagged rising food prices as a major concern, and suggested that tighter monetary and fiscal policies are unlikely in the coming months.
The Prime Minister’s Economic Advisory Council, headed by former RBI governor C. Rangarajan, said it sees the gross domestic product (GDP) expanding by 6.5% in 2009-10.
In its July 2009 forecast, the RBI had forecast that India’s economy in 2009-10 would grow by 6%, with an upward bias, and the Planning Commission had said in early September that it sees GDP growth at 6.3%. India’s economy expanded by 6.7% in 2008-09 after growing at over 9% for three years.
The improving trend is unlikely to prompt any immediate withdrawal of stimulus measures or a tightening of monetary policy, even though the panel made clear its concern about inflation and fiscal deterioration. It expects the consolidated fiscal deficit of the Centre and States at 10.09% for 2009-10 and sees inflation, imported and local food inflation, as a significant risk for the Indian economy.
EDUCATION
IIMs can now set up campuses abroad
Directors of the prestigious Indian Institutes of Management (IIMs) and members of their boards will eventually be appointed through an independent collegium of industrialists and academics. Also, IIMs can set up campuses abroad, provided they come up with “workable proposals and preferably function together instead of individually”.
"We want to globalise the IIM brand,” said HRD Minister Kapil Sibal. In another major move, the government agreed that a collegium, as mooted for the appointment of vice-chancellors of central universities, would also apply to IIMs, where majority appointments so far are cleared by the HRD ministry, which advertises the positions before short-listing and selecting candidates.
But that is set to change to advance the cause of transparency in appointments to top institutes. IIM boards are also proposed to be restricted in size, with HRD ministry describing them as “unwieldy and huge”. The membership will be limited to 13 (currently over 20 or so.
The boards are proposed to be reconstituted post January 2010, the deadline which the government has given to IIM directors to present their views on the constitution of the collegium, which will be empowered to recommend names of board members and directors to the government for final selection.
For the institutes to beat competition, autonomy is the key, feel the directors. Sibal agrees, but with a rider: “We are for IIM autonomy, for letting go, but let’s not forget that the primary responsibility of all education systems is national.”
ELECTIONS
Congress wins in Haryana, Maharashtra and Arunachal
With a stunning result in the latest political super-bowl, the Congress has fortified its "top dog" status, while pushing the main opposition party, BJP, into its gravest political crisis in over two decades.
Congress survived a scare in Haryana and retained power in the State with the help of independents as well as five Haryana Janhit Congress MLAs, who decided to join the Congress. Congress sailed back in style in Maharashtra and Arunachal Pradesh. All three CMs—Ashok Chavan in Maharashtra, B.S. Hooda in Haryana and Dorjee Khandu in Arunachal—have been renominated by the party leadership.
If the Lok Sabha polls settled the Number One slot for Congress party, the altest verdict confirmed that the gap between Sonia Gandhi’s outfit and BJP is growing. In fact, some political pundits feel Congress could well be on the way to regaining its pre-1996 status when, as the key player in most States, it could be fought only by a united opposition.
Some riders are, however, in order. The win in Maharashtra has been facilitated by Raj Thackeray playing spoiler again—on a bigger scale. In Haryana, the party failed to get a majority despite a three-way split of anti-Congress votes. The resurrection of Chautala shows the resilience of old-fashioned politics and should be sobering for those who feel traditional political tools—caste/community—have lost salience.
Haryana: In Haryana, the Congress vote share fell by a huge 7.4%, from 42.5% to 35.1%. Normally such a big swing away results in the decimation of a party. But Hooda has managed to keep his head above the water, thanks largely to a fractured opposition.
Chautala, too, lost his vote share, but by just 0.7%, while BJP’s share fell by 1.4%. The new political outfit, Kuldip Singh Bishnoi’s HJC, accounted for 7.4% votes.
Maharashtra: In the the lead-up to the Maharashtra polls, many had wondered whether Raj Thackeray would help Congress-NCP in as big a way as he did in the LS polls by eating into the Sena votebank yet again. Indeed, Congress-NCP cruised back to power as Shiv Sena citadels in Mumbai and Thane crumbled under Raj’s assault. In a result, the loser’s story is almost as important as the winner’s. If the ruling combine beat the incumbency blues, the 144-90 scoreline was the clap of doom for the Sena-BJP camp. To add to Sena’s woes, BJP crept ahead with 46 seats to its 44.
The revenge drama saw Raj Thackeray’s Maharashtra Navnirman Sena demolish Sena’s prospects by not only splitting the “Marathi” vote but emerging as the second largest party in Mumbai with six seats and a staggering 23.35% of the city vote.
MNS polled 5.7% of the State’s vote, eating into Sena and possibly NCP bases. While Sena was the worst hit, losing 3.7% of its support since May 2009, the Raj effect may have dented others, particularly NCP, which lost 2.4% of its vote.
Congress may have raised its tally of seats in the 288-member Maharashtra Assembly from 69 in 2004 to 82 this time round, but the party’s vote share has never been lower in any Vidhan Sabha election in the State, except in 1978. Yet with 21% of votes, Congress has a distinct edge over the other big parties, NCP having won just 16.4%, Shiv Sena 16.3% and BJP 14%. That also means that the combined vote shares of the big four is down by 5.9% from five years ago. This almost exactly matches the 5.7% won by MNS in these elections.
Independents have won 15.5% votes. In other words, despite the existence of two long-standing coalitions in the fray, roughly one in every three Maharashtra voters did not vote for either of them. That is perhaps the clearest indication that this verdict is not so much a positive one for UPA as one it has got by default because of the absence of credible alternatives.
Arunachal Pradesh: The electorate in Arunachal Pradesh returned Congress to power with an overwhelming majority but rejected the man, Gegong Apang, who not only nurtured the party but also ruled the State for over 22 years.
The Congress romped home with 42 of the 60 Assembly seats even as Apang (60) bit the dust at the hands of Alo Libang, a political greenhorn from NCP.
Dorji Khandu had come to power in April 2007 after Congress dissidents revolted against Apang. Like in the last two elections, Khandu has again won from Mukto in Tawang unopposed.
With five seats each, NCP and Trinamool Congress emerged as the main Opposition, followed by People’s Party of Arunachal (four) and BJP (three). In 2004, the BJP had won nine seats against Congress’s 34.
EC announces five-phase polls in Jharkhand from Nov 27
Election Commission has announced five-phase Assembly polls in Jharkhand, spread over November-December 2009. Faced with a serious threat of Maoist violence, five-phase election for 81 assembly constituencies will take place on November 27, December 2, 8, 12 and 18. Results will be announced on December 23.
Jharkhand has 1.8 crore voters and 23,944 polling stations. While photo electoral rolls have been prepared in the case of 74.19% voters, 77.63% voters have electoral photo identity cards.
Admitting that conducting election in Jharkhand could be a problem due to the Maoist menace, Chief Election Commissioner Navin Chawla said home ministry has agreed to provide sufficient central paramilitary forces.
Jharkhand, which has seen four Chief Ministers and six governments in the nine years of its short existence, will be looking for political stability at the end of the Assembly election.
The State was placed under President’s Rule in January 2009 but the then Governor, Syed Sibte Razi, was shifted out following allegations of misuse and corruption. A hung House following the last Assembly election—the State’s first—in 2005 had led to a string of unholy alliances in which Independent MLAs and fringe political parties with one or two members in the Assembly called the shots. The period had also seen an Independent MLA, Madhu Koda, becoming the Chief Minister.
Since then, two former ministers of the State have been arrested and sent to jail in disproportionate assets cases, while the Enforcement Directorate has instituted an adverse preliminary report against Koda and two other former ministers in the State for alleged violation of foreign exchange rules and hawala transactions.
As many as seven MLAs in the 81-member House were disqualified in August under the Anti-Defection Act while three members chose to quit the House, which had been kept under suspended animation.
The election will put the Bharatiya Janata Party to yet another severe test. BJP had emerged as the single largest party in the House with 30 seats after the last Assembly election, though the majority eluded it. It also bagged eight out of the 14 Lok Sabha seats from the State in May 2009. But with most of the party stalwarts in the Lok Sabha and the party riven by factionalism, it faces an uphill task to put its act together.
Congress is trying to revive its fortune in the State where it was virtually marginalised, managing to secure just nine seats in the Assembly in 2005. Even in the general election held in May 2009, the party had managed to win only one of the 14 Lok Sabha seats. A weak organisation and absence of leaders with acceptability throughout the State are handicaps which the party hopes to overcome through campaigning by Rahul Gandhi and others.
The election is also crucial for the Jharkhand Mukti Morcha, which campaigned for separate Statehood but which never managed to get anywhere close to securing the majority in the State Assembly. The virtually one-man party is still a force to reckon with in Santhal Pargana region and the party chief, Shibu Soren, is still a big draw among Santhals. But the JMM, which has declared its intention to contest the election alone, may find the going tough in other parts of the State without the support of its old ally, the Congress.
ENVIRONMENT
Ganga clean-up
Twenty two years and Rs 960 crore later, the government plans to spend another Rs 15,000 crore over the next 10 years to make the Ganga river pollution free. This decision was taken at the meeting of the first National Ganga River Basin Authority, chaired by Prime Minister Manmohan Singh, on October 5, 2009.
It has been decided to take up the cleaning of the Ganga river on a mission mode. Mission Clean Ganga will ensure that by 2020 no untreated municipal sewage and industrial effluents flows into Ganga. At present, the sewage treatment capacity is about 1,000 mld, against 3,000 mld sewage being generated in the towns along Ganga. Nearly 75% of the pollution in the Ganga is on account of municipal waste.
The costs will be borne by both the Centre and the States. There were disagreements over the sharing, with States asking for 100% central funding. An alternate funding pattern of 70% by the Centre and 30% by the States has been suggested. A final decision on the sharing ratio will be worked out by the Planning Commission, in consultation with the States and Central government.
In the meantime, the World Bank has offered a loan of $1 billion for the mission.
JUDICIARY
Vision Statement to cut delays
The Union government has suggested a drastic dilution of the judiciary's role in the appointment of Judges in the "Vision Statement" for cutting down delays and banishing cases pending for more than three years.
"The Executive and the Legislature must take initiative in recommending the best possible talent for selection to the judiciary," Law Minister V. Moily said in the 32-page document presented to Chief Justice K.G. Balakrishnan. The "government should also be given the power to suggest outstanding lawyers and jurists as Judges," the Minister said in the statement, which was discussed threadbare at a conference aimed at "strengthening the judiciary towards reducing pendency and delays."
Moily's proposals have come in the wake of the crisis-like situation that has arisen following allegations of judicial misconduct against a number of Judges—Karnataka High Court Chief Justice P.D. Dinakaran and Judges Soumitra Sen of Calcutta High Court and Nirmal Yadav of Punjab and Haryana High Court. The custodial death of Ashutosh Asthana, the prime accused in the Uttar Pradesh PF scam, which reportedly involves several Judges, has cast a further shadow on the judiciary.
Styled as "National Consultation," the conference was attended by Supreme Court Judges and Chief Justices of High Courts, including Justice Dinakaran, and top judicial luminaries from across the country.
Both the Law Commission, headed by Justice A.R. Lakshmanan, and the Parliamentary Standing Committee report have recommended reverting to the pre-1993 system which involved appointment of High Court and Supreme Court Judges through consultation between the Chief Justice of India and the government-primarily the Prime Minister and the Law Minister.
In all, Moily has suggested five "improvements" in the present system of appointment. The other three are: There should be lucid and comprehensive guidelines which the Collegium should follow in the matter of selection of judges. The Collegium should be given a timeline to clear the backlog in vacancies. The government and the Collegium should work "hand in hand while appointing Judges."
NUCLEAR ENERGY
India notifies N-separation plan
India has notified its separation plan in the IAEA, which formally separates India’s civilian and military nuclear establishments. The plan, which was announced in March 2006, has passed muster at IAEA and India’s safeguards agreement is now officially operational.
This is likely to help in the negotiations for the reprocessing agreement that is currently under way between India and US. But more than that, this will silence many non-proliferation critics in the new Obama-led US administration who had been looking at the delay in notifying the safeguards agreement as an example of Indian dithering.
FOREIGN RELATIONS
India slams OIC over J&K envoy
Pakistan has succeeded in its efforts to compel the Organisation of Islamic Conference (OIC) to appoint a special envoy for Jammu and Kashmir. At its meeting in New York earlier in first week of October 2009, the OIC also stated that it supported people of Jammu and Kashmir in realisation of their legitimate right to self-determination in accordance with relevant UN resolutions and aspirations of the Kashmiri people.
A fuming India reacted sharply to the OIC action, dubbing it as interference in the internal affairs of this country. “Jammu and Kashmir is an integral part of India and it is our firm position that the OIC has no locus standi in matters concerning India’s internal affairs,” the External Affairs Ministry said in a statement.
Condemning the OIC move, New Delhi said inherent in its statements and actions on the issue of Jammu and Kashmir was a complete inability to understand India’s position.
The appointment of a Saudi national, Abdullah Bin Adbul Rahman Al Bakr, by the OIC as its envoy on Kashmir is being seen as a move initiated by Pakistan as part of its attempts to internationalise the Kashmir issue.
India has time and again told the international community, including major world powers, that Jammu and Kashmir is a bilateral issue between India and Pakistan and there is no room for third party intervention.
Under pressure from Pakistan, the OIC has at all its meetings adopted resolutions on Jammu and Kashmir, prompting New Delhi to condemn 57-member body’s action every time. Privately, however, many of the Islamic nations have repeatedly assured India that they are not in agreement with OIC resolutions on Kashmir but had to support them for the sake of unanimity and to keep Pakistan in good humour.
Well aware that its action would draw a strong response from India, the OIC is now trying to play down the appointment of the special envoy.
OIC Secretary General Ekmeleddin Ihsanoglu was quoted as saying that the appointment would help bridge the gap between India and Pakistan and address the issue of minorities in India.
India, Argentina sign N-accord
On October 14, 2009, India signed an agreement for civil nuclear cooperation with Argentina, making it the seventh nation to ink such an accord with this country after New Delhi secured a waiver from the nuclear suppliers’ group (NSG) to undertake nuclear commerce.
The agreement for cooperation in the peaceful uses of nuclear energy was among the 10 accords signed by the two countries following wide-ranging talks between Prime Minister Manmohan Singh and visiting Argentine President Cristina Fernandez de Kichner, during which they desired to establish strategic partnership between their two nations. The two leaders discussed a wide range of bilateral, regional and global issues of mutual interest.
A joint statement issued by India and Argentina after the visiting dignitary concluded her talks with Indian leaders said the two sides shared the view that civil nuclear energy could play an important role as a safe, sustainable and non-polluting source of energy in meeting rising global demands for energy.
The other nine accords signed between the two sides include: exchange of letters for business visa providing for five years multiple entry gratis visa for a single stay of 90 days; programme of cooperation in science and technology for 2009-11; MOU between ONGC Videsh Limited and ENARSA; MOU on sports cooperation; MoU on cooperation in the field of trade promotion and technology transfer in international trade; and agreement on outer space.
The two sides also agreed on the need to give a new impulse to multilateral negotiations in the area of disarmament, especially weapons of mass destruction.
India-China talks
Without getting into the recent spat over Arunachal Pradesh, Prime Minister Manmohan Singh and Chinese Premier Wen Jiabao talked peace and harmony on October 24, 2009, in a meeting on the sidelines of the India-ASEAN summit in Thailand.
The visit of the Dalai Lama to Arunachal also did not figure in the discussions between the two leaders who instead focused on the positives in the relationship and agreed that "differences" should not impede cooperation between the two countries.
In an effort to ameliorate the recent strain on the bilateral relationship, Prime Minister Manmohan Singh even proposed that the two countries observe the 60th anniversary of the establishment of diplomatic ties in a "fitting manner". He also put stress on the trade and economic relations, calling it a "vital pillar" in the bilateral relationship.
This exchange at the highest political level came after an escalation in the rhetoric between the two sides over the border issue. China had objected to Mr Singh’s trip to Arunachal Pradesh for the Assembly elections. This had elicited a strong reaction from New Delhi which had reminded Beijing that Arunachal remained an integral part of the country. New Delhi had further pointed out that in the democratic system leaders visited States where elections are taking place. This was further followed by India protesting against China’s involvement in projects in Pakistan Occupied Kashmir, which New Delhi pointed out was also disputed territory. New Delhi had earlier also objected to Beijing’s practice of issuing visas to people from Jammu and Kashmir on loose sheets.
Chinese Prime Minister Wen recalled Mr Singh’s remark about both sides having enough space to develop and cooperate and added that there are sufficient areas in the world for India and China to enhance such cooperation. The Chinese premier further suggested that the Joint Economic Group should hold early consultations and that China would work with India to handle the matter of the growing trade deficit.
India also rejected China’s objections to Dalai Lama’s Arunachal visit in November while making it clear that the Tibetan spiritual leader was not allowed to indulge in political activities on the Indian soil. The issue figured when Prime Minister Manmohan Singh and his Chinese counterpart Wen Jiabao were seated next to each other at a gala dinner hosted by the Thailand Prime Minister for leaders attending the ASEAN and East Asia summits.
India, China ink pact on climate change
Amidst tension over political issues, India and China have signed an agreement to cooperate on ways to fight climate change. Moving closer, at least on an issue concerning the entire world, the two neighbours announced setting up of a Joint Working Group (JWG) to exchange views concerning international negotiations on global warming. The memorandum of agreement (MoA) assumes significance in the run-up to the Copenhagen climate summit. Developed and developing countries are at loggerheads over who should reduce emissions of greenhouse gases that are causing climate change.
India and China are in the same bloc as the Group of 77 countries in climate negotiations.
The MOA acknowledges that climate change and its adverse effects are a common concern of mankind and need to be addressed through international co-operation. It emphasises that the UNFCC and its Kyoto Protocol were the most appropriate framework for addressing climate change.
The agreement also reaffirms the principle of common but differentiated responsibilities, in particular that developed countries should take the lead in reducing their greenhouse gases and providing financial resources, technology transfer and capacity building support to developing countries.
Egypt offers special industrial zone to India
Egypt has invited India to build a ‘India industrial zone’ in the Suez development area for setting up joint ventures with Egyptian companies. Egypt’s Prime Minister Ahmed Nazif, in his meeting with commerce and industry minister Anand Sharma in Cairo, offered to designate an area for setting up of the zone exclusively for Indian companies.
India could gain significantly from the offer as it would give it easier entry to the European and African markets, since Egypt has preferential access to both.
The Suez development area, located on the north-west coast of the Gulf of Suez, has lower bureaucratic barriers to business formation and provides tax incentives. The law gives more incentives for priority areas, such as infrastructure, auto parts, software, oil field services, tourism and manufacturing. The terms and conditions of investing in the proposed India zones and the tax benefits to industry are to be worked out.
Indian companies have, till now, invested about $750 million in 40 projects in Egypt. India has a significant presence in the IT and automobile sector with companies like Wipro, Satyam, Mahindra and Tatas having invested in the country.
Olive branch to Pak with rider
In a speech delivered at the inauguration of the Anantnag-Qazigund rail link in Anantnag, Prime Minister Manmohan Singh focused largely on ties with Pakistan and the earlier success of cross-LoC initiatives. Targeting domestic audience and also sending out a message to Pakistan, Mr Singh prefixed his offer of peace with the rider that Islamabad must bring perpetrators of terror attacks to justice and destroy terror camps. "For a productive dialogue it is essential that terrorism must be brought under control," he said.
Mr Singh said India would put pressure on Pakistan to curb the activities of the elements engaged in terrorism against India. "If they are non-State actors, it is the solemn duty of the government of Pakistan to bring them to book, to destroy their camps and to eliminate their infrastructure. The perpetrators of the acts of terror must pay the heaviest penalty for their barbaric crimes against humanity," he said.
With Pakistan now being targeted by terrorism, Mr Singh said there could be no compromise with the ideology of terror. "It is a misplaced idea that one can reach a compromise with the ideology of the terrorists or that they can be used for one’s own political purpose. Eventually, they turn against you and bring only death and destruction. The real face of the terrorists is clear for the people of Pakistan to see with their own eyes," he said.
He maintained that India was ready to discuss humanitarian issues whose “resolution requires the cooperation of Pakistan”. "We are ready to discuss these and other issues with Pakistan. I hope that, as a result, things will be made easier for our traders, divided families, prisoners and travelers," he said.
President Pratibha Patil’s visit to UK and Cyprus
President Pratibha Patil visited UK and Cyprus from October 27 to 31, 2009. During her visit to UK she received the Baton of the Commonwealth Games from the Queen of England at a ceremony in the Buckingham Palace in London on October 29.
This was the third State visit by an Indian President to the UK. The first was by President S. Radhakrishnan in 1963 and the second by President R. Venkataraman in 1990. This was also the first State visit after the commencement of the strategic partnership between India and the UK in 2009.
During her visit, President Patil interacted with Queen Elizabeth of England as also met Prime Minister Gordon Brown, leader of the opposition David Cameron and leader of the Liberal Democratic Party Nick Clegg.
She also addressed in London a business meeting organised by the UK India Business Council.
Gandhi letters handed By UK to President Patil: Mahatma Gandhi won’t receive letters not bearing stamps as a matter of principle. But he chose to write back and inform sender Hamdiullah Afsar, a contemporary poet of those times, of his decision. These and many such aspects of Gandhi’s personality come out in a set of letters presented by Curry King Ghulam Noon and NRI from London Nat Purie, who bought some of the memorabilia associated with Mahatma Gandhi in an auction in London and presented them to President Pratibha Patil at the India House.
The memorabilia, consisting of a piece of khadi cloth, ostensibly spun by Gandhi bearing his signatures along with those of Sarojini Naidu, Gandhi’s disciple Meerabai, secretary Pyare Lal and some other blurred signs are part of the package bought by the NRI duo that was handed over to the President.
Gandhi’s letters written in Urdu to his disciple Maulana Abdul Bari and a lesser known Urdu poet of those times, Hamidullah Afsar, are a study in contrast. These letters bring out the difference between those who were close Gandhi’s freedom movement and those who tried to intrude upon his privacy.
The President visited Cyprus on an invitation of the then President of Cyprus Papadopoulus who visited India in April 2006. The last time an Indian President visited Cyprus was 21 years ago, again R. Venkataraman, whereas all former Cyprian Presidents have visited India during their term of office.
Cyprus has always supported India on all crucial issues and expressed its understanding on our nuclear tests in 1998 and supported Indian position during Kargil war, too.
India is planning a major headway in generating energy through solar sources. It has approached Cyprus which has made considerable headway in that direction to develop solar power plants ranging between one MW and 50 MW. An MoU was signed in the presence of visiting Indian President Pratibha Patil for providing solar power to India.
The MoU states that NORASCO, UPTURN of DALCO company and CASE NEUBERG of the CASE group of companies will supply solar photovoltaic systems, kits and technology for solar energy projects in India. It also states that CASE will be Indian technology and engineering partners for setting up turnkey solar energy plants in India and NORASCO will provide project finance and investments of EURO 50 million in solar energy sector in India between 2010 and 2015. The Photovoltaic Technology Group of University of Cyprus (PVT Group) also signed an MoU with NORASCO whereby PVT Group will act as a technology consulting partner for developing solar energy projects and solar energy education in India.
RESERVATIONS
Cabinet OKs 50% quota for women in civic bodies
Women will soon occupy half the seats in urban local bodies with the Union cabinet on Thursday clearing a proposal for raising reservation for them in municipalities from 33% at present. This provision will apply to the total number of seats to be filled by direct election, offices of chairpersons and seats and offices of chairpersons reserved for SCs and STs.
The increased representation of women is likely to have significant benefits in terms of higher priority to women’s issues in critical areas of urban governance and service delivery such as water supply, sanitation, education and health.
SCANDALS
Former Jharkhand CM Koda booked for graft
Jharkhand presents an example where lack of political stability was allegedly exploited by a group of legislators led by former Chief Minister Madhu Koda to fatten themselves. The Enforcement Directorate, on October 9, 2009, slapped charges under Prevention of Money Laundering Act (PMLA) on the former Jharkhand CM and three of his former Cabinet colleagues for allegedly amassing assets running into several hundred crores—between Rs 700 and 800 crore according to the preliminary estimate.
Koda, the first Independent to become Chief Minister and now a member of Lok Sabha supporting UPA government, has been charged with having business interests of diverse kinds—cement, steel, auto, power, agro and tourism. His alleged investments, estimated at Rs 300-400 crore, are just as widely spread—from Singapore to Thailand to Dubai to Liberia.
His former colleagues who have also been booked under PMLA include Bhanu Pratap Shahi, Bandhu Tirkey and Kamlesh Singh. Though they did not prosper as much as Koda, the trio, according to ED, made personal fortunes ranging from Rs 20 crore to Rs 50 crore.
Koda and his associates milked their success in 2005 Jharkhand polls. The election threw up a hung House, enabling them to play kingmaker with remorseless agility. Shibu Soren, who was sworn in as Chief Minister of Jharkhand when he lacked majority support, had to resign when the group refused to rescue his aspirations. They helped Arjun Munda of BJP become the Chief Minister and were rewarded with 'plum' portfolios as part of deal. The arrangement, however, did not last long. The group ditched BJP after UPA agreed to propel Koda to Chief Ministership. Others in the group, naturally, held on to their portfolios.
The tenure was marked by allegations of corruption, particularly allegedly dubious decisions on mining leases to big industrial houses. Later on, with the stink rising to embarrassing levels, Congress wanted to dissociate itself from the arrangement, but allies RJD and Jharkhand Mukti Morcha prevailed. The import of allegations of the ED begin to sink in deeper when two other factors are considered. First, the last five years have seen Maoists rapidly expanding their influence in Jharkhand, turning huge swathes into "liberated Red zones". Also, the office of the Governor also came under a cloud, with CBI raiding two close aides of Governor Syed Sibte Razi.
TERRORISM; LAW & ORDER
New anti-Naxal policy
The Centre’s plans to take the battle to Naxalites hinge on a strategy that will see Central and State forces acting in concert to first wrest control of areas long considered “Red” zones and then facilitate expeditious restoration of civil administration. The Cabinet Committee on Security (CCS) has okayed a comprehensive approach to Maoist extremism with a "clear and hold" doctrine at the centre of the anti-Naxal "action plan". Moving from the current largely reactive stance which saw occasional jabs into Maoist hinterland, forces will pro-actively engage the ultras.
Recognising that draining Maoist swamps would also require restoration of rule of law and demonstrable development, the government has decided that the forces used in anti-naxal operations will not pull out after an operation. Rather, reinforcements will beef up security and set the stage for the civil bureaucracy to get to work. The developmental aspect of the plan is crucial to denying Maoist ranks of fresh recruits and addressing the argument that exploitation and abysmal conditions in tribal areas in far-flung areas has led to "popular" support for the Red insurgency. Fixing things and making them work was important in showing the state could deliver.
The view in government is that the offensive cannot be delayed much further. With alarming signs of an emboldened Maoist leadership targetting urban areas beyond their known forest hideouts—arrested politburo member Kobad Gandhy was incharge of operations in cities like Delhi, Mumbai and Pune—the government is gearing for action and bracing for casualties.
The strategy for acting on intelligence tip-offs and hitting at naxal bases deep in Red "liberated" zones was put to trial in September 2009 in Chhattisgarh’s Dantewada. The Maoists were routed but the hazardous forests and complete lack of infrastructure underlined how difficult it would be for a force to operate "behind the lines". It is felt that the surge in Central and State forces after the Assembly elections in Haryana, Arunachal Pradesh and Maharashtra can be sustained if the local population is convinced that Maoists can be defeated and that the forces will not leave in a hurry. This would strengthen intelligence collection and provide the administration with valuable allies as even fence sitters opt for the winning side.
The Centre plans to deploy 70,000 paramilitary personnel—drawn from CRPF, ITBP, BSF, SSB, CoBRA and Nagaland Armed Police—in States like Jharkhand, Chhattisgarh, Orissa, Bengal, Bihar, Maharashtra and Andhra.
Maoists step up the gore, behead police officer
On October 5, 2009, in a barbaric, Taliban-style execution, Maoists beheaded special branch inspector Francis Indwar and threw his body on a slip road leading to National Highway 33 that connects Patna to Jamshedpur. The officer was abducted and held hostage by Naxalites demanding a swap for arrested Maoist ideologues Kobad Ghandy in New Delhi, Chhatradhar Mahato in Kolkata and another captured leader Chandrabhushan Yadav.
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