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Weekly Current Affairs update

For the Week: June 12 to 18, 2011

Major news of the week

Section A: INDIA
Civil society, govt. differences over Lok Pal continue Ramdev ends fast, to continue fight India signs agreements with World Bank on Ganga, biodiversity Bengal Assembly passes Singur Bill International Institute of Democracy and Election Management (IIDEM) launched Lawyers can now practice anywhere in the country High Court declines to intervene in TN govts decision to shift State Secretariat CRPF to set up CoBRA hub in Bengal Lok Sabha Speaker returns PAC report on 2G Tuticorin-Colombo ferry service launched CIC directs Presidents Secretariat to make emergency papers public Institute for urban studies coming up in Bangalore Golden Jubilee of Indias 1st fighter plane observed Switzerland sets up science research base in Bangalore Gujarat invites tenders for worlds tallest statue PM of Slovenia visits India Mohta is Indias new ambassador to Poland Mid-Day editor Jyotendra Dey shot dead in Mumbai India ranked 7th in list of unsolved journalists murders Ustad Asad Ali Khan passes away

Section C: AWARDS
Daffern conferred Anuvrat Ahimsa peace award Imprisoned Iranian medics win Jonathan Mann Prize

Section D: ECONOMY & CORPORATE

RBI unveils mid-quarter Monetary Policy review RBI unveils Financial Stability Report Govt extends DEPB scheme validity OECD, Finance Ministry tax conference organised OECD prescribes remedy for tackling corruption in India Handbook on disinvestment unveiled Rupay debit cards launched for no frills account holders India lost $462b to graft post-1947 Global Financial Integrity RIL got huge, undue benefit at KG basin gas fields CAG India to be 3rd largest domestic banking sector by 2050 PwC Farm credit flow at Rs. 4.26 lakh crore during 2010-11 RBI bars NBFCs from opening branches abroad Govt. approves 54% rise in cost strategic crude oil storage NTPC forms JV to set up power exchange India initiates efforts to widen Exclusive Economic Zone Planning Commission sets up working group on boosting exports, FDI Domestic majors keen on passenger plane project Strike at Maruti Suzukis Manesar plant ends Lagarde, Carstens shortlisted to lead the IMF Teledensity at 72.08% TRAI CIL and Sun Pharma enter BSE Sensex India earmarks $100 million each for SAFTA countries for infrastructure Bihar is Best Performing State RBI Study Child labour generates Rs 1.2 lakh crore of black money every year BBA India is 5th in Ernst & Young European Attractiveness Survey India has 62,000 ultra high net worth households Kotak Wealth, CRISIL Research Bill Gammell to step down as Cairn Energy CEO

Section B: WORLD
SM Krishna dismisses reports of Brahmaputra diversion by China India seeks SCO membership at Astana summit UN General Assembly High Level Meeting on AIDS organised Swiss Parliament clears amendments to tax treaties with countries Global labour norms for domestic workers adopted at ILO Conference FAO launches Save and Grow to boost food production India resumes defence exchanges with China India, Russia express intent for CECA Czech Republic pulls out of US missile shield plan China says it would not use force in South China Sea PM Erdogan wins a third term in Turkey Social Democrat party wins polls in Portugal UN Security Council backs second term for Ban Ki-moon UN splits Taliban and al-Qaeda on sanctions blacklist Nepal to provide security for Upper Karnali Project Brazil signs agreement to digitalise Amazonian biodiversity King Mohammed unveils reforms in Morocco Filipino named worlds shortest man

Section E: SPORTS
Rafael Nadal, Li Na win French Open Singles Philipp Kohlschreiber wins Halle Open Murray wins Aegon Tennis title Jenson Button wins Montreal GP India win ODI series in West Indies 3-2 Kerala wins Inter-State Athletics Meet

For the Week: June 12 to 18, 2011

Section A: INDIA
Civil society, govt. differences over Lok Pal continue
Failing to arrive at a consensus on contentious provisions in the proposed Lokpal Bill, the two sides in the joint drafting committee five government ministers and five civil society members led by Anna Hazare on June 15, 2011 agreed to meet again on June 20 and 21 to bridge the strong differences. However, if they fail again in the two proposed meetings, it was decided to send two separate versions of the Bill to the Union Cabinet by June 30, the deadline fixed for the panel to come up with a robust draft anti-corruption law. The issue of inclusion of the Prime Minister and the higher judiciary are still under discussion. The Anna Hazare-led civil society members suggested that the Lokpal be empowered to probe corruption cases against officials, doing away with the existing practice of conducting departmental probes along with a CBI inquiry. The government members rejected this. One of the issues discussed at the meeting of the joint Lokpal Bill drafting committee was the structure of the Lokpal institution. The Hazare team suggested a 11-member independent anti-corruption watchdog body, with subordinates having powers, while the government side differed, arguing that only the 11 members be empowered to take decisions. CENTRE VS CIVIL SOCIETY 11-member Lokpal without any of investigative machinery. 11-member Lokpal with investigative machinery under it. Appointment should not be delinked from government Appointment should be delinked from government control. control. PM, higher judiciary should not be brought under ambit of PM, higher judiciary should be brought under ambit of Lokpal. Lokpal. Only officials at joint secretary and above should come Public servants at all levels should be covered under Lokpal. under Lokpal. Unwilling to bring acts of MPs in Parliament under Lokpal. Wants to bring acts of MPs in Parliament under the Lokpal.

Ramdev ends fast, to continue fight: Yoga guru Ramdev broke his fast on June 12, 2011 in Dehra Dun. Ramdev was
admitted to the hospital after he developed complications at the fasting venue at Patanjali Yogpeeth in Haridwar. His aide Balkrishna, who also broke his fast, read out a statement by Ramdev that said the crusade against corruption and black money would continue as long as the yoga guru lived. Ramdev also demanded that black money be declared a national asset under the Constitution.

India signs agreements with World Bank on Ganga, biodiversity

The Government of India and the World Bank on June 14, 2011 signed three agreements to for cleaning Ganga River and to Strengthen Rural Livelihoods and Biodiversity Conservation in India. The River cleaning project is to the tune of US $ 1 billion (approximately Rs 4,600 crore) loan and credit that will form part of the Banks long-term support for cleaning the Ganga River. Two Biodiversity Conservation agreements are for a credit of US$15.6 million and US$8.14 million grant.

National Ganga River Basin Project

An empowered and collaborative body of the Central and state governments, National Ganga River Basin Authority (NGRBA), will implement the National Ganga River Basin Project with the assistance of the World Bank. The Project will focus on building and strengthening the NGRBAs related institutions at the Central and state level; establishing a world-class Ganga Knowledge Centre; enhancing river basin management; and financing select priority investments to reduce pointsource pollution in a sustainable manner. The Authority has resolved under its Mission Clean Ganga that by year 2020 no untreated municipal sewage or industrial effluents will be discharged into the river. Today, only about one-third of the sewage generated by the towns and cities on the mainstream of the river is treated; and a significant volume of untreated or inadequately treated industrial effluents is also discharged into the Ganga. For the Week: June 12 to 18, 2011

The Project, with an estimated cost of Rs 7,000 crore (approx US$ 1.5 billion), has been approved by the Government of India and the World Bank. The share of the Government of India will be Rs 5,100 crore (approx US$ 1.1 billion) and that of the five state governments (Uttarakhand, Uttar Pradesh, Bihar, Jharkhand and West Bengal) will be Rs 1,900 crore (approx US$ 0.4 billion). The World Bank will support the Government of India by providing technical assistance and financing of US $ 1 billion. The investments will be made in four key sectors: wastewater collection and treatment, industrial pollution control, solid waste management, and riverfront management to reduce pollution in a sustainable manner under finance priority investments

Biodiversity Conservation and Rural Livelihood Improvement Project (BCRLIP)

India is home to 8% of the worlds biodiversity. The challenge is to maintain this rich biodiversity under pressure from increased population and demand on resources. BCRLIP will be implemented at two biodiversity rich landscapes, namely, (1) Little Rann of Kachchh, Gujarat and (2) Askot landscape, Uttarakhand. The project will conserve biodiversity, while improving rural livelihoods by applying culturally appropriate and tested participatory approaches to support opportunities for improving rural livelihoods. The project will last six years with core activities undertaken by communities themselves. Total outlay of the project is US$30.52million (Rs 137.34 crores) and will be funded by GEF (Global Environment Facility) grant and IDA (International Development Assistance) credit.

Bengal Assembly passes Singur Bill

The historic Singur Land Rehabilitation and Development Bill, 2011 was passed in the West Bengal Assembly on June 14, 2011. The Bill proposes to return land to the unwilling farmers of Singur in equivalent quantum of land as the land by virtue of this Act will stand transferred to and vest in the state government, free of any lease or allotment. The Bill mentions noncommissioning and abandoning of the project by Tata Motors and goes on to state that no employment generation and socio-economic development has taken place and people in and around the area have not benefited in any manner The small car Nano project that was slated to come up at Singur, 45 kms from Kolkata was withdrawn by Tata Motors on the back of persistent agitation by unwilling farmers demanding the return of 400 acres, backed by the Banerjee and her party, the Trinamool Congress.

The Singur Story

Allegations made by West Bengal govt No small car unit commissioned even after four years Tatas abandoned the site; reiterated in their letters Firm shifted the plant from the said land to another state No job creation or socio-economic development Tata Motors clarifications Operations for setting up of the plant were conducted under very difficult conditions An appeal was made on August 22, 2008, which was rebuffed with an escalation of hostilities Tata Motors had to reluctantly close operations on October 3, 2008, and eventually move out Tata Motors invested Rs. 1,800 crore in establishing the plant 767 individuals were trained, 102 health clinics were run till the activity was forcibly stopped The plant would have initially directly employed 2,000 persons, and later created employment in excess of 10,000 jobs

International Institute of Democracy and Election Management (IIDEM) launched: The Election Commission of India on June 17, 2011 launched the India International Institute of Democracy and Election Management- an advanced resource centre of learning, research, training and extension for participatory democracy and election management in New Delhi. IIDEM has four components. These are Training and Capacity Development, Voter Education and Civic Participation, Research, Innovation and Documentation and International Projects and Technical Collaboration. The Institute will be a national and international hub for exchange of good practices in election management. The Institute is being developed in collaboration with the Government of India, United Nations, the Commonwealth and inter-governmental organisations like
For the Week: June 12 to 18, 2011

Sweden based International Institute of Democracy and Electoral Assistance (IDEA). The 54 member Commonwealth group has proposed to set up a resource centre for its member nations at IIDEM. IIDEM will work for promoting democratic values and practices, enhancing voter education and awareness and developing human resource and capacities for efficient conduct of free and fair elections in India and for developing mutually beneficial partnership as well as collaborations with other countries.

Lawyers can now practice anywhere in the country: Now, lawyers can practise, as a matter of right, in all courts and
forums, including tribunals or any quasi-judicial authority. Fifty years after the Advocates Act, 1961, came into force, the Centre has notified Section 30 of the Act with effect from June 15, 2011 to enable advocates to practise anywhere fulfilling a long-pending demand of lawyers. This provision was not notified when the Act was added to the statute book. As a result, in certain courts and tribunals, lawyers could appear only if they were permitted by the presiding officer. The government issued the Gazette Notification on June 9. It said: The Central government hereby appoints June 15, 2011 as the date on which Section of the Advocates Act shall come into force.

High Court declines to intervene in TN govts decision to shift State Secretariat: The Madras High Court on
June 15, 2011 said it is for the government to decide as to which building would be comfortable for establishing the State Secretariat. The First Bench consisting of Chief Justice M.Y. Eqbal and Justice T.S. Sivagnanam made the observation while dismissing a writ petition seeking to forbear the authorities from re-shifting the Secretariat and the Tamil Nadu Assembly from the new Rs.1100-crore Secretariat building at the Government Estate to Fort St. George. The new Secretariat complex was opened on March 13 last year. On June 2, the Legislative Assembly Hall at the old Secretariat was allotted for use of a library. The AIADMK government decided to shift the Secretariat from the Government Estate on Anna Salai to its original place (Fort St. George).

CRPF to set up CoBRA hub in Bengal: A hub of the Central Reserve Police Forces CoBRA (Commando Battalion for Resolute Action) and a training centre are being set up at Salboni in Paschim Medinipur district of West Bengal. The area falls within the Maoist-affected Jangal Mahal region that spans parts of three districts in southwest West Bengal. The hub will be spread over 143 acres, Alok Raj, Inspector-General (Operations), CRPF, said in Kolkata on June 14, 2011. Lok Sabha Speaker returns PAC report on 2G: Lok Sabha Speaker Meira Kumar on June 14, 2011 returned the Public Account Committees report on the 2G spectrum allocation issue back to its chairman Murli Manohar Joshi, indicating that it cannot be tabled in Parliament as it has not been adopted by the committee members. The voluminous report which created a furore after 11 of the 12 PAC members rejected it and which Dr. Joshi nevertheless submitted to the Speaker had been lying with the Speaker since April 30. The PAC Chairman had on May 1 said he expected the Speaker to allow the report to be tabled in Parliament, though other members belonging to the United Progressive Alliance said the report had no sanctity or validity as it was rejected by the majority of the PAC members. Tuticorin-Colombo ferry service launched: Union Minister of Shipping G. K. Vasan on June 13, 2011 launched the passenger ferry service between Tuticorin and Colombo from the V.O. Chidambaranar Port in Tuticorin. Freedom fighter V. O. Chidambaram Pillai had launched the maiden service in June 1907 but it was stopped abruptly by the British. As many as 201 passengers boarded Scotia Prince, a ship on lease promoted by Flemingo Duty Free Shops. The government is also working on resuming the Rameshwaram-Talaimanar ferry service which was discontinued in the 1980s. CIC directs Presidents Secretariat to make emergency papers public: Terming the imposition of Emergency in 1975 as a challenge to Indias commitment to democracy, the Central Information Commission on June 15, 2011 directed the Presidents Secretariat to make public all documents on the Emergency by then President Fakhruddin Ali Ahmed, including communications from the then Prime Minister Indira Gandhi. Information Commissioner Shailesh Gandhi, however, exempted any advice by Gandhi to Ahmed on the imposition of Emergency as it would be a privileged document under Article 74 of the Constitution which cant be made public. Institute for urban studies coming up in Bangalore: Touted as the countrys first university, dedicated exclusively to Urban Studies, the Indian Institute of Human Settlements (IIHS) is setting up its 58-acre campus in south-west Bangalore. Currently offering week-long courses, the IIHS hopes to be formalised under the proposed Innovation Universities Bill. The IIHS on June 13, 2011 said it had started recruiting faculty for its Masters in Urban Practice (MUP) programme. It is slated to
For the Week: June 12 to 18, 2011

commence in July 2012. Leading entrepreneurs and professionals, including Nandan Nilekani, Shirish Patel, Rakesh Mohan, Deepak Parekh, Vijay Kelkar and Jamshyd Godrej and Xerxes Desai will be working with the institute. So far, the IIHS has conducted a seven-day course on Re-imagining the world-class city. The institute proposes to offer a four-year bachelors and two-year masters degree in Urban Practice, doctoral and applied research programmes.

Golden Jubilee of Indias 1st fighter plane observed: On June 17, 2011, Hindustan Aeronautics Ltd celebrated the
golden jubilee of the fighter plane it built 50 years ago. The Marut or the `spirit of tempest, first took to air on June 17, 1961 and served the nation for two decades until it was taken off in the 1990s. It was used in the 1971 war with Pakistan to liberate what is today Bangladesh. It was taken off service in the 1990s mainly for want of a powerful engine. The fighter spawned squadrons that had daring names such as Lions, Desert Tigers and Daggers and made its last sortie in October 1984. Designed by German aircraft designer Dr Kurt Tank, the indigenous fighter project was taken up by HAL (then Hindustan Aircraft Ltd) in 1957.

Switzerland sets up science research base in Bangalore: Bangalore has been chosen as the fifth global location for Switzerlands science and technology initiative Swissnex on June 17, 2011. Swissnex is an initiative of science education and research of Swiss Ministry of Home Affairs and the Swiss Ministry of Foreign Affairs. Switzerland has set up similar institutions Boston, San Francisco in the United States, Shanghai in China, and Singapore. The objective is to explore the potential of co-operation between Switzerland and the respective host countries in the fields of higher education, research, technology, innovation and culture and to promote Switzerland as one of the leading countries in those domains. Gujarat invites tenders for worlds tallest statue: Gujarat on June 17, 2011 invited bidders from around the world to build the worlds tallest statue. The latest issue of the Economist magazine has a full-page advertisement inviting tenders for the project. At 182m statue would be a memorial to Indias first Home Minister and Deputy Prime Minister Sardar Vallabhbhai Patel and twice as high as New Yorks Statue of Liberty. The tallest statue in the world is Chinas Spring Temple Buddha at 128m. Sardar Patel, generally called the Iron Man of India, played a major role in the countrys fight for independence from British rule. PM of Slovenia visits India: Several agreements on bilateral cooperation were signed during the India visit of the Prime Minister of the Republic of Slovenia, Borut Pahor in New Delhi on June 14, 2011. Air India signed a Memorandum of Understanding (MoU) with Slovenias Adria Airways and Aerodrome Ljubljana in a bid to get access to the East European market. Mohta is Indias new ambassador to Poland: Monika Kapil Mohta was on June 16, 2011 appointed Indias new ambassador to Poland. Mohta was the Director of the Nehru Centre and Minister, Culture in the Indian High Commission at London for the last four and a half years. Mid-Day editor Jyotendra Dey shot dead in Mumbai: Jyotendra Dey, Editor, Special Investigations, MiD Day, was shot dead in a Mumbai suburb on June 11, 2011. Dey, 50, was a well-known name in the citys media, police and political circles. He reported extensively on crime, notably on Mumbais underworld. In his long career, Dey worked with many publications, and had a brief stint in the television media. He authored Khallaas - an A to Z Guide to the Underworld and Zero Dial - The Dangerous World of Informers. He began his career as a freelance photographer. Between 1996 and 2005, he worked with The Indian Express, then for three years with Hindustan Times, and later joined MiD Day. He has done many reports on underworld dons Dawood Ibrahim and Chhota Rajan. India ranked 7th in list of unsolved journalists murders: India on June 12, 2011 earned the dubious distinction of
being listed in the 2011 Impunity Index prepared by an international media watchdog on the basis of unsolved murders of scribes - an issue that has again come to the fore after the killing of a senior reporter in Mumbai. Only 13 countries -- with five or more unsolved cases of murder of journalists from January 1, 2001 to December 31, 2010 -- have been included on the index. India is at the 13th spot with seven such instances, or 0.006 unsolved journalist murders per one million inhabitants, according to the report of Committee to Protect Journalists (CPJ). The index calculated the number of unsolved journalist murders as a percentage of each countrys population

For the Week: June 12 to 18, 2011

Ustad Asad Ali Khan passes away: Rudra Veena exponent Ustad Asad Ali Khan, one of the last existing advocate of
the Khandarbani dhrupad school, passed away on June 14, 2011 at the age of 74. The classical musician represents the 12 generation of Jaipurs Beenkar Gharana.

Section B: WORLD
SM Krishna dismisses reports of Brahmaputra diversion
The Minister of External Affairs S.M. Krishna on June 16, 2011 said that the dam at Zangmu being built by China in the middle reaches of the Yarlung Tsangpo (as the Brahmaputra is called in Tibet) is a run-of-the-river hydro-electric project, which does not store water and will not adversely impact the downstream areas in India. He was responding to speculation about China diverting the Brahmaputra waters away from India. The minister explained that the media reports about Chinese plans to construct a dam on the Brahmaputra and possibly divert the river waters to northern China were not new but based on previously known facts. Experts have warned that the Brahmaputra River, which is the lifeline for the vast majority of people living in Arunachal Pradesh and Assam, could go dry if China went ahead with its plans of building a dam on this river before it enters these states. The people in these states depend on the river to meet their irrigation, fishing and for transportation of goods. There is no pact between India and China on the sharing of river waters, unlike the Indo-Pak Indus Waters Treaty of 1960. Media reports suggest that China is planning to build 55 reservoirs on rivers flowing from the Tibetan plateau. Meanwhile the Chinese government on June 14 indicated it would not divert the waters of the Brahmaputra river, saying it would take into full consideration the interests of downstream countries in taking forward any development projects on the river. Foreign Ministry spokesperson Hong Lei said in response to a question on Indias concerns about a diversion plan that China adopted a responsible attitude towards the development of cross border water resources.

India seeks SCO membership at Astana summit

India on June 15, 2011 sought a larger and deeper role in the Shanghai Cooperation Organisation (SCO), saying it would like to bring to the table its technical expertise, markets and financial commitment. Ten years since its founding, the SCO faces a historic moment. Like other successful multilateral organisations, it must choose the path of its evolution, External Affairs Minister S M Krishna said at the 11th Summit of the SCO at Astana, the capital of Kazakhstan. He said India would strive to play a larger and deeper role in the SCO when the rules and criteria for full membership are clear. The SCO is a security bloc grouping Russia, China and four ex-Soviet Central Asian states. Apart from regional heavyweights China and Russia, the SCO also includes the mostly Muslim ex-Soviet Central Asian states of Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. Iran, Pakistan, India and Mongolia have observer status. Meanwhile, Russia won the backing of China and other members of SCO in criticising US plans for a missile shield, saying it could undermine global security. The United States says its planned shield is meant to reduce the threat of a missile attack by Iran. Moscow says it fears the true aim is to neutralise Russias own nuclear arsenal. US officials say the proposed shield could not neutralise Russias vast arsenal, so Moscow has nothing to fear.

UN General Assembly High Level Meeting on AIDS organised

For the Week: June 12 to 18, 2011

The UN General Assembly High Level Meeting on AIDS was organised at the UN in New York from June 8-10, 2011. The Meeting took stock of the progress and challenges of the last 30 years and shape the future AIDS response. The Political Declaration on HIV/AIDS: Intensifying our Efforts to eliminate HIV/AIDS was adopted by the General Assembly on June 10. New targets set by world leaders at the Meeting include: To make efforts towards reducing sexual transmission of HIV and halving by 2015 HIV infection among people who inject drugs To eliminate new HIV infections among children in the next five years To increase the number of people on life-saving treatment to 15 million To reduce tuberculosis-related deaths in people living with HIV by half in the same time period. To increase AIDS-related spending by 2015 to reach between $ 22 billion and $ 24 billion in low-and middle-income countries The declaration notes that the HIV prevention strategies inadequately focus on populations at higher risk specifically men who have sex with men, sex workers and people who inject drugs, and calls on countries to focus their response based on epidemiological and national contexts.

Swiss Parliament clears amendments to tax treaties with countries

The Swiss Parliament on June 17, 2011 gave its approval for amendments to tax treaties with countries, including India, making it easier for them to access information about illegal funds held by their nationals in private banks in this country. The Upper House endorsed amendments to double-taxation avoidance agreements (DTAAs) in line with internationally applicable standards. Governments which have signed the DTAAs can now secure easy legal assistance and information as well as identify an account-holder from their territories by providing an IBAN number or social security number. The Swiss Parliament approval comes at a time when the Indian government is facing intense pressure from the Opposition, the Supreme Court and civil society to bring back black money stashed away in tax havens. In January this year, a Swiss Parliamentary panel gave the go-ahead for the revised tax treaty with India. As per the revised treaty, India can get information on secret bank accounts from Swiss authorities for cases dating from January 2011. Meanwhile, Swiss Ambassador to India Philippe Welti said New Delhi could get banking details of Indian citizens in tax frauds and evasion cases once the Swiss Parliament ratified the revised DTAA between the two nations. Coming under intense pressure from the Paris-based Organisation for Economic Cooperation and Development and G-20 leaders, the Swiss authorities have begun a process of simplifying their tax laws. Switzerland was initially included in the OECDs blacklist for following banking secrecy and client-confidentiality rules.

Global labour norms for domestic workers adopted at ILO Conference

Countries around the world, including India, have adopted a set of international standards aimed at improving the working conditions of millions of domestic workers worldwide. The decision was taken by the Government, worker and employer delegates at the 100th annual Conference of the International Labour Organisation (ILO) in Geneva on June 17, 2011. The conference adopted the Convention on Domestic Workers (2011) by a vote of 396 to 16, with 63 abstentions and the accompanying recommendation by a vote of 434 to 8, with 42 abstentions. Around 83 per cent of these workers are women or girls and many are migrant workers. We are moving the standards system into the informal economy for the first time, and this is a breakthrough, said Juan Somavia, ILO Director-General, in a release. The ILO is the only tripartite UN organisation, and each of its 183-member States is represented by two Government delegates, one employer and one worker delegate, with an independent vote. According to the new standards, domestic workers who care for families and households, must have the same basic labour rights as those available to other workers reasonable hours of work, weekly rest of at least 24 consecutive hours, a limit on in-kind payment, clear information on terms and conditions of employment, as well as respect for fundamental principles and rights at work including among others freedom of association and the right to collective bargaining. For the Week: June 12 to 18, 2011

FAO launches Save and Grow to boost food production

Nearly half a century after the 1960s Green Revolution, the United Nations body FAO on June 13, 2011 launched a major initiative to produce more food for surging world population in an environmentally sustainable way. To feed a world population projected at 9.2 billion in 2050, which involves meeting double the demand for food in developing countries, there is no option but to further intensify crop production, said the Food and Agricultural Organisation (FAO). It added that food production needs to increase by 70 per cent in the world and 100 per cent in developing countries to eradicate hunger and meet demand by 2050. The FAOs call for sustainable crop production intensification, is contained in a new book, Save and Grow published by FAOs Plant Production and Protection Division. The new approach calls for targeting mainly smallholder farmers in developing countries. Helping low-income farm families in developing countries on reducing the cost of production and building healthy agro ecosystems will enable them to maximise yields and invest the savings on their health and education, the world body said. The save and grow approach draws partly on the conservation agriculture techniques which do away with or minimise ploughing and tilling, thus preserving soil structure and health. Other techniques developed by FAO include precision irrigation, which delivers more crop for the drop, and precision placement of fertilisers, which can double the amount of nutrients absorbed by plants.

India resumes defence exchanges with China: India and China are all set to resume defence exchanges after about a
year, and a major general serving in J&K is leading a group of delegates to China from June 20. Major General Gurmeet Singh, the commander of the Delta Force, a part of the specialized anti-insurgency Rashtriya Rifles deployed in J&K, is leading an eight-member delegation to China from June 20-24. India had put bilateral defence exchanges with China on hold since last July after Beijing refused a proper stamped visa to the then northern army commander Lt Gen BS Jaswal.

India, Russia express intent for CECA: India and Russia on June 16, 2011 expressed the political intent to move towards a Comprehensive Economic Cooperation Agreement (CCEA) during the bilateral meeting between the Union Minister of Commerce and Industry Anand Sharma and the Minister of Economic Development of the Russian Federation Elvira Nebullina at St Petersburg. The target is to achieve USD 20 billion in trade by 2015. NMDC, Indias largest iron ore producer and Russian steel maker OJSC Severstal will invest a total of Rs 9,000 crore in setting up a two million tonnes a year steel plant near Bellary in Karnataka. Furthermore, it was agreed to form six working groups under India Russia Working Group on Trade and Economic Cooperation (IRWGTEC) with Government and private participation on IT, Pharma, Banking and finance modernization, precision engineering and nano technology. Czech Republic pulls out of US missile shield plan: Czech Republic on June 15, 2011 said it will no longer take part in US missile defence plans. The Bush administration first proposed stationing 10 interceptor missiles in Poland and an advanced radar in the Czech Republic. But Russia objected and warned that it would station its own missiles close to Poland if the plan went through. In September 2009, the Obama administration shelved that plan and offered a new, reconfigured phased program with a smaller role for the Czechs, who were offered an early warning centre that would gather and analyse information from satellites to detect missiles aimed at NATO territory. China says it would not use force in South China Sea: China on June 14, 2011 said it would not resort to the use of force in the tense South China Sea, after its neighbours expressed concern about its more assertive maritime posture. Vietnam on June 13 staged live-fire exercises following recent confrontations at sea with China which reignited a longstanding dispute over the sovereignty of two potentially oil-rich archipelagos, the Paracels and Spratlys. China insisted Vietnam was to blame for the recent flare-up, sparked by a confrontation between Chinese surveillance vessels and a Vietnamese oil survey ship. PM Erdogan wins a third term in Turkey: The Justice and Development Party (AKP) of Prime Minister Recep Tayyip
Erdogan has won a third term after winning 50% of the vote and 326 seats in the 550-member Grand National Assembly in the general election held on June 12, 2011. The AKPs majority is 41 seats short of the two-thirds majority needed to amend the countrys constitution unilaterally. From the time it first came to power in 2002, the conservative AKP, with a vision rooted For the Week: June 12 to 18, 2011

in political Islam, made clear it did not embrace the strict secularism bequeathed by Turkeys founder Attaturk Mustapha Kemal. The secular Republican Peoples Party (CHP) had 26% of vote (135 seats) and the far-right Nationalist Movement Party (MHP) 13% (53 seats). Choosing to field independent candidates, the pro-Kurdish Peace and Democracy Party (BDP) managed to win a respectable 35 seats an achievement that is likely to put pressure on the AKP-led government to address Kurdish demands. Despite failing to secure a large-enough majority, the AKP leadership has not given up on a new Constitution, based on a national consensus.

Social Democrat party wins polls in Portugal: Portugals new Prime Minister Pedro Passos Coelho on June 18, 2011 unveiled a slimmed-down cabinet and appointed seasoned bank policymaker Vitor Gaspar finance minister to tackle the debt crisis. The 11-member cabinet includes four members of centre-right Social Democrat party (PSD), the winner of June 5 polls, three from junior coalition partner CDS-PP and four independents, the presidency announced. The new cabinet was sworn in by President Anibal Cavaco Silva. UN Security Council backs second term for Ban Ki-moon: The UN Security Council on June 17, 2011 unanimously recommended Secretary General Ban Ki-moon for a second five-year term. With no rival for the post, the former South Korean foreign minister is almost certain to be re-elected. The 67 year old has been criticised for being too deferential to major powers and for being too timid to confront human rights abusers. But he has won praise for his commitment to climate change, nuclear disarmament and womens issues, and for his encouragement of the pro-democracy protests which have swept the Middle East and North Africa. UN splits Taliban and al-Qaeda on sanctions blacklist: The United Nations on June 18, 2011 split a sanctions blacklist for the Taliban and al-Qaeda to encourage the Taliban to join reconciliation efforts in Afghanistan. Until now, both organisations have been handled by the same UN sanctions committee. The UN Security Council says it is sending a signal to the Taliban that now is the time to join the political process. Diplomats say the move recognises that the two groups have different goals. Al-Qaeda is seeking worldwide jihad (holy war) while the Taliban are involved in an insurgency focused in Afghanistan. The council unanimously passed two resolutions - one to set up a new blacklist of individuals and groups accused of links to al-Qaeda and a second for those linked to the Taliban militia. The US Ambassador to the UN, Susan Rice, said in a statement that the move sent a clear message to the Taliban that there is a future for those who separate from alQaeda, renounce violence and abide by the Afghan constitution Nepal to provide security for Upper Karnali Project: Nepal on June 16, 2011 decided to deploy Army personnel for the security of 900 MW Upper Karnali Hydropower Project, which is being developed by Indias energy consortium GMR. The decision comes in the wake of frequent attacks and threat issued by the cadres of UCPN-Maoist on the project site citing that the project does not fulfill Nepals national interest. During his visit to Nepal recently, Indias External Affairs Minister S M Krishna had raised concern for the security of Indian joint ventures operating in Nepal. Brazil signs agreement to digitalise Amazonian biodiversity: The Brazilian government signed a partnership
agreement with IBM on June 15, 2011 to digitalise information on Amazonian biodiversity with the help of the U.S. Company. The project, called Wikiflora, aims to allow the research community such as scientists and teachers to share knowledge and findings on biological diversity by the model of citizen science, similar to Wikipedia.

King Mohammed unveils reforms in Morocco: Moroccos monarch King Mohammed unveiled major reforms aimed at quelling dissent on June 17, 2011. The king said the measures would entrench democratic institutions and protect rights, though he confirmed that he will retain some key powers. The reforms would give the prime minister and parliament more executive authority and make Berber an official language in Morocco, alongside Arabic. The proposals will be put to a referendum on 1 July. The king promised in March to introduce comprehensive constitutional reform after anti-government protests inspired by those elsewhere in the region. Moroccos 400-year-old monarchy has a long history of enacting superficial reforms. Morocco has been facing severe economic challenges with high unemployment and rising levels of poverty. King Mohammed, 47, acceded to the throne in 1999 following the death of his father, Hassan II, and now heads the Arab worlds longest-serving dynasty. Filipino named worlds shortest man: Junrey Balawing of Sindangan, Philippines was named worlds shortest man on
his 18th birthday on June 12, 2011. Balawing measures 23.6 inches tall. The previous record-holder, Nepals Khagendra For the Week: June 12 to 18, 2011

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Thapar Magar, is 26.3 inches tall and held the title for about eight months. Although the shortest living man, Balawing missed the title of shortest man in history, which is held by Gul Mohammed of India, who was 22.5 inches tall and died in 1997.

Section C: AWARDS
Daffern conferred Anuvrat Ahimsa peace award: Rajasthan Chief Minister Ashok Gehlot gave away the Anuvrat
Ahimsa international peace award to noted Gandhian philosophy exponent Thomas Clough Daffern at Anuvibha Kendra, Jaipur on June 14, 2011. Dr. Daffern, Director of London-based International Institute of Peace Studies and Global Philosophy, received a memento, a cheque for Rs.1 lakh and a certificate of merit. The institute works across several academic fields for study and application of peace and philosophy to various spheres of life.

Imprisoned Iran medics win Jonathan Mann Prize: Two Iranian doctors imprisoned for allegedly plotting to overthrow the government have been awarded the Global Health Councils Jonathan Mann Award for Global Health and Human Rights on June 17, 2011. Kamiar and Arash Alaei were arrested in June 2008 and accused of communicating with the US to unseat the regime of Iranian President Mahmoud Ahmadinejad. The brothers began treating patients with HIV in the late 1990s, and developed a three-pronged program that integrated prevention, care and social support.

Section D: ECONOMY & CORPORATE

RBI unveils mid-quarter Monetary Policy review
HIGHLIGHTS Repo rate hiked by 50 basis points to 7.5 percent Reverse repo automatically revised upwards to 6.5 percent Marginal standing facility rate increased to 8.5 percent No change in other statutory rates Deceleration in some interest-sensitive sectors such as automobiles, no evidence of any sharp or broad-based slowdown Baseline projection for GDP growth for 2011-12 maintained at around 8 percent Domestic inflation remains high and much above the comfort zone of the Reserve Bank Non-food manufactured products inflation is a matter of particular concern, suggesting generalised inflationary pressures Impact of the recent monetary policy actions is still unfolding RBI says rate hike will contain inflation by reining in demand side pressures and anchor inflation expectations RBI says actions expected to mitigate the risk to growth from potentially adverse global developments RBI will persist with its anti-inflationary stance of monetary policy Although global commodity prices have moderate they still pose a risk to both domestic growth and inflation The RBI raised the repo rate (at which banks borrow from it) by a quarter per cent to 7.5 per cent in its mid-quarter monetary policy review on June 16, 2011. The reverse repo rate (the interest RBI pays banks for parking their surplus funds) will go upto 6.5 per cent. GDP growth decelerated to 7.8 per cent in Q4 of 2010-11 from 8.3 per cent in the previous quarter and 9.4 per cent in the corresponding quarter a year ago. For the year as a whole, GDP growth in 2010-11 was 8.5 per cent. While private consumption was robust, investment activity moderated in Q4 of 2010-11. Going forward, notwithstanding both signs of moderation in commodity prices and some deceleration in growth, domestic inflation risks remain high. Against this backdrop, the monetary policy stance remains firmly anti-inflationary; recognising that, in the current circumstances, some short-run deceleration in growth may be unavoidable in bringing inflation under control.

For the Week: June 12 to 18, 2011

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Domestic inflation remains high and much above the comfort zone of the Reserve Bank. Particularly, non-food manufactured products inflation rose in May 2011 after showing some moderation in April 2011. Domestic fuel prices do not yet reflect the current trends of global prices. Although global commodity prices moderated in recent weeks, it is too early to downgrade this as a risk factor. The headline WPI inflation rate was 9.7 per cent in March 2011. In April 2011, it was 8.7 per cent and rose to 9.1 per cent in May 2011. Thus, the headline WPI inflation rate remains elevated, consistent with the projections made in the Annual Policy Statement of May 3. The main drivers of WPI inflation in April-May 2011 were non-food primary articles, fuel group and nonfood manufactured products. The consumer price inflation for industrial workers (CPI - IW) rose from 8.8 per cent in March 2011 to 9.4 per cent in April 2011. Non-food manufactured products inflation was 8.5 per cent in March 2011. Provisional data indicate that it increased from 6.3 per cent in April to 7.3 per cent in May 2011, numbers much above its medium-term trend of 4.0 per cent. The challenge of containing inflation and anchoring inflation expectations persists. Thus, while the Reserve Bank needs to continue with its anti-inflationary stance, the extent of policy action needs to balance the adverse movements in inflation with recent global developments and their likely impact on the domestic growth trajectory.

RBI unveils Financial Stability Report

The rebound in credit growth in 2010-11 was a necessity for a developing economy like India for sustaining high GDP growth. But underwriting standards would need to be tightened to ensure that the quality of credit does not deteriorate. This was one of the observations made by the Reserve Bank of India in its Financial Stability Report released on June 14, 2011. The credit portfolio of commercial banks was well diversified across industries, geographies and sectors. However, during the last few years, incremental credit growth was observed to be mainly propelled by few sectors, namely, retail, commercial real estate, and infrastructure. In March 2011, these sectors accounted for 19 per cent, 4 per cent and 13 per cent, respectively, of the gross advances of commercial banks.

Real estate: The incremental share of real estate in both credit and impaired assets remained large. Real estate loans
constituted 17.7 per cent of gross advances in March 2011. Credit to the sector grew by 24.6 per cent, that is, faster than the overall credit growth of 22.6 per cent. The rate of growth of NPAs (non-performing assets) in this segment at 19.8 per cent was also higher than the overall NPA growth rate of 14.8 per cent. The real estate sector posed some concerns given the large and growing share of these loans in the credit portfolios of banks, its NPAs witnessing higher than system level NPAs growth and potential of greater slippages into NPAs, the RBI said.

Retail credit: Retail loans grew by 19 per cent and credit to this sector accounted for 18.5 per cent of gross advances as at end-March 2011. The bulk of the increase was attributable to the personal loans segment, which primarily comprised riskier, unsecured loans. As on March 31, 2011, 31 per cent of retail loans were unsecured. The unsecured retail loans grew by 24.9 per cent during the year. The robust rebound in retail loans witnessed during recent quarters warrants close monitoring as the asset quality of such loans could come under pressure given the increasing interest rate environment, the RBI said. Infrastructure sector: Advances to infrastructure grew by more than 40 per cent and the share of infrastructure in total
advances increased to 12.9 per cent in the last fiscal. There was an increase of 42.5 per cent in impaired infrastructure loans. However, the gross NPA ratio for such loans continued to be low at around 0.5 per cent. But the increased exposure to this segment could heighten asset-liability management risks for banks, especially given the probability of projects getting delayed. All this underscores the urgent need for evolving a long term funding market for infrastructure projects, the RBI said.

Priority sector: Another area of concern is the priority sector. Credit to this sector grew by 21 per cent, as against which its impaired assets increased by 28 per cent. This asset quality of exposures to the priority sector, especially agriculture, continued to compare unfavourably with the overall NPA ratio of the banking sector, the RBI said. Stability assessment
The incremental share of real estate in both credit and impaired assets remained large.

For the Week: June 12 to 18, 2011

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The bulk of the increase in retail credit attributable to personal loans segment, which primarily comprised riskier, unsecured loans Urgent need for evolving a long term funding market for infrastructure projects

Govt extends DEPB scheme validity

3 month extension: The government has decided to extend the validity of the Duty Entitlement Pass Book (DEPB) scheme for three months till September 30. The DEPB is a reimbursement of basic and special Customs duty paid by an exporter on an imported input used in the export product. The benefit is given by way of a grant of duty credit against the export product at specified rates. The government had lost revenue of around Rs 8,000 crore under the DEPB scheme, said finance and revenue secretary Sunil Mitra on June 14, 2011. The scheme is also considered to be against the World Trade Organisation rules, as it is a direct subsidy. To be replaced with duty drawback scheme: The government is planning to replace DEPB with the duty drawback scheme. The main difference between DEPB and the duty drawback schemes is that DEPB is disbursed in the form of DEPB scrip, while the drawback is taken as cash. Further, DEPB is administered by the commerce and industry ministry, while the drawback is administered by the revenue department under the finance ministry. The 14-year DEPB scheme is popular among exporters, covering nearly 52 per cent of exports. The duty drawback, which reimburses the customs duty component, covers 15-20 per cent of exports. Some major beneficiaries are engineering products, chemicals, plastics, leather, sports goods, food products, handicrafts, electronics and textiles.

OECD, Finance Ministry tax conference organised

A two-day high level international seminar on Adopting Tax System and International Tax Rules to the New Global Environment: a Shared Challenge for India and the OECD was organised on June 13-14, 2011 in New Delhi. Union Finance Minister Pranab Mukherjee called for strong measures to reverse the ongoing trend of illicit outflows from developing countries and exploitation of their natural resources through abusive transfer pricing schemes in his inaugural address at the conference. He said that these challenges of new global environment will have to be addressed through bilateral and multi-lateral cooperation. India has also decided to strengthen ongoing cooperation on tax related issues with OECD through a three year partnership programme. The emphasis of cooperation would be on professional and skill up-gradation both in tax administration and in industry. OECD Secretary-General, Angel Gurria, said India was impacted by some of its citizens using other countries to park their money to avoid paying taxes in the country.

Sharing of data not retrospective

India has made a strong pitch to end banking secrecy and sought more teeth in multilateral measures to deal with abusive transfer pricing. Some countries had agreed to end banking secrecy only from a prospective date and were unwilling to share information on past bank transactions. The Finance Minister said that this raises questions about the efficacy of existing legal provisions for exchange of banking information. India is currently negotiating banking information exchange agreements with no-tax or low-tax countries to help it check tax crimes. The Finance Minister stressed on the need to revisit the existing legal framework developed by the OECD in this regard.

Tackling bribery in private sector

On bribery in the private sector, the minister said a law to tackle it would be introduced in the monsoon session of Parliament. India must introduce such a law as it has ratified the UN convention against corruption. The Prevention of Bribery of Foreign Public Officials and Officials of Public International Organisations Bill, 2011 prohibits accepting and giving ratification to or by foreign public officials.

Transfer Pricing
For the Week: June 12 to 18, 2011

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Transfer pricing continues to be an important tax issue due to high increase in cross border trade taking place within multinational enterprises located in developed, developing and undeveloped countries. The Finance Minister sought stiff measures to check illicit outflows from developing countries and exploitation of their natural resources through transfer pricing schemes. Transfer pricing refers to the pricing of assets, tangible and intangible, services, and funds transferred within an organisation in a cross-border transaction. Misuse of this system by companies often leads to loss of revenue from natural resources for developing nations. He said India had already overhauled its transfer pricing administration and tightened the procedures provisions to check misuse to shift profit to another country. India has also decided to strengthen ongoing cooperation on tax related issues with OECD through three year partnership programme. The emphasis of cooperation would be on professional and skill up-gradation both in tax administration and in industry. The fight against illicit flows: Illicit Flows on the rise: A report by Global Financial Integrity pegs total illicit flows at $462 billion It found high net-worth individuals and private companies to be the primary drivers of illicit flows out of the country, especially. to tax havens with banking secrecy The share of OFC (offshore financial centres) deposits increased from 36.4% in 1995 to 54.2% in 2009 The govt has formulated a five-pronged strategy to tackle the menace: It has constituted a study to estimate black money Set up a panel to suggest ways to tackle black money Amended tax treaties and signed tax information exchange agreements with tax havens But, India wants changes in tax treaty framework: Some countries are not willing to share past information hence there is need for new framework India has finalised tax agreements with 14 countries and completed double taxation talks with 36 countries

OECD prescribes remedy for tackling corruption in India: The Organisation for Economic Co-operation and Development (OECD) wants India to have transparency in involving the private sector in areas where government licensing and regulation are required. In all areas of the economy, and especially those that depend on government licensing and regulation, it is crucial that private sector involvement takes place transparently and on a level playing field in order to avoid high-level corruption, OECD said in its Economic Survey of India, 2011 unveiled on June 15, 2011. The survey said India needed to strengthen its anti-corruption agency through an independent appointment mechanism for its head. It said public sector governance should be made more transparent and accountable by separating operational and regulatory functions in the provisions of public services. India is not a part of OECD, a grouping of mostly developed nations and members of the bloc account for over 60 per cent of the global economy.

Handbook on disinvestment unveiled

A handbook that can act as a ready guide for future divestments in CPSEs through the public offering route was released by the Finance Minister, Pranab Mukherjee on June 17, 2011. The Handbook on Disinvestment through Public Offerings is a step-by-step guide to the entire disinvestment process starting from seeking Government approval to the final listing on stock exchanges. It compiles together in one place the processes and procedures required for a public offering. This should be useful to all parties involved in a Government divestment like the officials of the Central Public Sector Enterprises (CPSEs), administrative ministries and the Department of Disinvestment.

For the Week: June 12 to 18, 2011

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In the last two financial years (2009-10 and 2010-11), the Department of Disinvestment had overseen 11 public offerings, including that of Coal India, which is the largest in the history of the Indian capital market. The experience gained by the Department of Disinvestment from these 11 public offerings finds reflection in the Handbook. The Centre has since November 2009 adopted a policy of disinvestment through minority share sale. The Disinvestment Department also intends to regularly update the online version of the Handbook.

Rupay debit cards launched for no frills account holders

Rupay, dubbed as Indias answer to MasterCard and Visa, was unveiled on June 19, 2011 when Bank of India gave the first batch of automated teller machines (ATM)-cum-debit cards to Unique Identification (UID) number holders in Pagdha village of Maharashtras Thane district. The card, which will be given to no frills account holders, can be used to withdraw cash from ATMs as well as from microATMs, the hand-held devices with the banks business correspondents. However, for swapping the card in point-of-sale terminals at merchant establishments, customers will have to wait till the year-end. RuPay card will have two identification features. The cardholder will have to provide the UID number for biometric identification for using micro-ATMs, while the PIN will be required for transactions via ATMs. To start with, banks are targeting semi-urban areas for RuPay card. To make these cards functional, one needs data connectivity which is not available in rural areas, so banks are starting out with semi-urban areas for now, said A P Hota, managing director and chief executive officer, National Payments Corporation of India (NPCI). Backed by NPCI, RuPay card is a payment gateway and an alternative to the global real-time payment processing firms like Visa and MasterCard. Since these cards are being issued to no frills account holders for now, the limits for withdrawal and transactions will be in line with terms and conditions laid down by the banks on their respective no frills accounts.

India lost $462b to graft post-1947 Global Financial Integrity

India lost a staggering $462 billion in illicit financial flows due to tax evasion, crime and corruption post-Independence, according to a report released by Washington-based Global Financial Integrity released recently. The document on the Survey on Bribery and Corruption was released at the first annual fraud conference on June 17, 2011. The report indicated that deregulation and trade liberalisation actually contributed to or accelerated the transfer of illicit money abroad. Reports about wealth stashed in offshore destinations and tax havens indicate the extent of the problem. India has been facing governance challenges from within at various levels for a long time. Rigid bureaucracy, complex laws and long-drawn judicial process deter people from considering legal recourse in corruption cases. India has around 35 million court cases pending. Besides lack of manpower and poor infrastructure, other factors hindering the anticorruption drive include lack of teeth in the legal framework, the study said. A large number of organizations pay bribes to win and retain businesses, overlooking the implications of encouraging these practices and focusing only on short term benefits. They fail to realize that what has worked in their favour could also lead to adverse consequences for them later, the report said. The study noted that another key area where business is impacted is mergers and acquisitions. Corruption could impact the valuation of a company thereby denying shareholders of a fair price. Moreover, it could also make it difficult for them to find a suitable business partner, thereby seriously impacting the growth prospects of the business, the study said.

RIL got huge, undue benefit at KG basin gas fields CAG

RIL paid less royalty to the government by showing artificially higher expenses in developing Krishna Godavari basin gas fields RIL was allowed to retain potential oilfields even though it was unable to develop them within the stipulated time For the Week: June 12 to 18, 2011

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The Comptroller and Auditor General (CAG) on June 13, 2011 indicted the Petroleum and Natural Gas Ministry for allowing irregularities and bending rules to oblige Reliance Industries Ltd. (RIL) in the Krishna Godavari basin gas fields, leading to a massive and as yet unquantifiable loss to the national exchequer. The CAG has charged RIL with inflating project cost to show higher expenses leading to a large revenue loss for the government. The also says the government allowed RIL to retain offshore acreage it had not developed in the stipulated time. In its 193-page Draft Report on production sharing contracts (PSCs) in the oil and gas field, the CAG exposes the close nexus between RIL and the bureaucrats working in the Petroleum Ministry as well as its Directorate General of Hydrocarbons (DGH). This allowed Reliance to retain its entire offshore acreage, rather than surrendering those areas where it had not found oil or gas so that the government could invite fresh bids from other companies. Also, RIL was uncritically allowed to hike the capital expenditure for developing Dhirubhai-1 and 3, the largest of 18 gas finds in the KG Basin, popularly known as the KG-D6 block, by a whopping 117 per cent though this meant a revenue loss for the exchequer. This unvalidated cost inflation allows RIL to get away with paying less royalty to the government, the CAG notes. The increase in cost from $2.39 billion in the Initial Development Plan to $5.196 billion in the Addendum to the Initial Development Plan is likely to have a significant impact on the Government of Indias financial take. However, at this stage, based on the information provided, we are unable to comment on the reasonableness, or otherwise, of the increase in cost, both overall and in respect of individual line items, the CAG stated in its report that has been sent to the Petroleum Ministry for comments.

India to be 3rd largest domestic banking sector by 2050 PwC

According to a PriceWaterhouseCoopers report titled Banking In 2050, India could become the third largest banking sector by 2050 after China and US, leaving Japan, UK and Germany behind. Indian banking sector in general and the Reserve Bank of India were applauded post financial crisis for fiscal prudence. The report unveiled in June 2011 says that post downturn, Indian banks have become more efficient due to tighter credit assessment and disbursals and improvements in their cost to income ratio. Indias largest private sector bank, ICICI Bank improved its cost to income ratio from 53 per cent in 2007 to 38 per cent in 2010, owing to shift in strategy from aggressive growth to cost rationalisation. The report includes 22 countries segregating them into G7 (US, Japan, Germany, UK, France, Italy and Canada), E7 (China, India, Brazil, Russia, Mexico, Indonesia and Turkey), other developed economies (Australia, S Korea, and Spain), newly emerging economies (Argentina, Vietnam, Nigeria, Saudi Arabia and South Africa). According to the report, the financial crisis has brought about an acceleration in the shift of economic power from the developed to the emerging economies. China could overtake US in 2023 and India could overtake Japan in 2033. Indias domestic banking assets are expected to grow to $38,484 in 2050 from $945.

Farm credit flow at Rs. 4.26 lakh crore during 2010-11: Farm credit flow has registered a quantum jump during 201011. Credit institutions disbursed Rs. 4,26,531 crore during the year against the target of Rs. 3,75,000 crore. Agency-wise, Commercial Banks with disbursal of Rs. 3.14 lakh crore are on the top followed by Cooperative Banks with Rs. 69 thousand crore and Regional Rural Banks with Rs. 43 thousand crore. The credit flow target for the current financial year (2011-12) has been fixed at Rs. 4.75 lakh crore. In the current financial year (2011-12), the government is providing interest subvention by 3%, thus bringing down the effective rate of interest to 4% per annum. This interest subvention is provided to those farmers who repay their short term crop loans on time. 2009-10 Target 45,000 2010-11 Achievement Target 63,497 55,000 For the Week: June 12 to 18, 2011

Name of agency Coop Banks

Achievement 69,076

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Commercial Banks RRBs Total

2,50,000 30,000 3,25,000

2,85,000 35, 217 3,84,514

2,80,000 40,000 3,75,000

3,14,182 43,273 4,26,531

RBI bars NBFCs from opening branches abroad: Non-bank financial companies (NBFCs) will not be permitted to open branches abroad, the Reserve Bank of India said on June 15, 2011. However, NBFCs which already have branches abroad, will be allowed to continue those operations, subject to their compliance with the revised guidelines. Govt. approves 54% rise in cost strategic crude oil storage: The government on June 16, 2011 approved over 54 per cent increase in cost of the nations first strategic crude oil storage being built as insurance against supply disruptions. India, which is 75 per cent import dependent to meet its crude oil needs, is building under-ground storages at Visakhapatnam in Andhra Pradesh and at Mangalore and Padur in Karnataka to store about 5.33 million tons of crude oil. This is enough to meet nations oil requirement of 13-14 days. India Strategic Petroleum Reserves Ltd (ISPRL) is building the Visakhapatnam storage. The cost of storage at Visakhapatnam has been revised to Rs 1,038 crore from Rs 671.83 crore primarily due to increase in cavern capacity from 1 million tons to 1.33 million tons, an official statement issued after a meeting of the Cabinet Committee on Economic Affairs (CCEA), which approved the revised cost estimates, said. NTPC forms JV to set up power exchange: NTPC on June 15, 2011 formed a joint venture company, National Power Exchange Ltd (NPEX), to set up a power exchange. It will be a third exchange after Power Exchange India Ltd (PXIL) and India Energy Exchange and is expected to be operational within a year. The joint venture with NHPC, Power Finance Corporation (PFC) and Tata Consultancy Services (TCS), has already received in-principle approval from the Central Electricity Regulatory Commission (CERC) to begin. The exchange will have to compete in a market where there are already two players and the total power purchase from the exchanges account for four per cent of the total consumption. The longterm objective of exchanges is to drive the Indian power sector towards true competition-based pricing, as against scarcitybased pricing. India initiates efforts to widen Exclusive Economic Zone: Union Minister of State for Earth Sciences Ashwani Kumar on June 11, 2011 expressed confidence that the United Nations Commission on the Law of the Sea would soon accept its claim of almost doubling its Exclusive Economic Zone (EEZ), which could give it access to a larger wealth of oil, natural gas and other off-shore resources. India last year submitted to the Commission its claim to extend its coastal EEZ from 200 nautical miles to 350 nautical miles. The Minister was interacting with the media on the sidelines of an event at the National Centre for Antarctic and Ocean Research (NCAOR) in Goa. Under a provision of U.N. Convention on the Law of the Sea, a coastal country can seek an extension of its EEZ beyond the approved 200 nautical miles if it can demonstrate that the continental shelf of the country extends beyond that distance. The approval can be given up to a maximum of 350 nautical miles. India produced data spanning over 6,000 pages, which were collected over almost a decade. Planning Commission sets up working group on boosting exports, FDI: The Planning Commission on June 14, 2011 constituted a working group to suggest government policies to enable the private sector to meet the targeted increase in exports. The group, headed by Commission member Saumitra Chaudhuri, will also identify policy measures to attract more foreign direct investment (FDI), particularly into manufacturing and infrastructure. It would also assess existing schemes for export promotion, to explore what to do to further boost private players. The group will take a view on the experience with Special Economic Zones and other special trade facilitating measures.

Domestic majors keen on passenger plane project: Prominent domestic players have shown interest in taking part in the national civil aircraft development programme. Formal expressions of interest will be sought in the coming months for a joint venture partner, according to the Chairman of the High Powered Committee (HPC) for the project, G. Madhavan Nair on June 11, 2011. The HPC includes Kinetic Engineerings Dr Arun Firodia, and former UTI chief, Mr M. Damodaran. The feasibility report submitted for Government approval has put the cost of developing the countrys own passenger plane at Rs 7,555 crore. Of this, the committee has sought a funding for the design and development cost of Rs 4,300 crore or about 58 per cent of the project from the Government. The remaining of around Rs 3,200 crore would be raised as equity from the industry partner who would manufacture the planes, and as debt. National Aerospace Labs (NAL) is the nodal agency for the project. NAL is partnering Mahindra & Mahindra on the latters five-seater aircraft. For the Week: June 12 to 18, 2011

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Strike at Maruti Suzukis Manesar plant ends: Maruti Suzuki India (MSI) announced the end of 13-day long strike by workers at its Manesar plant on June 17, 2011. As part of the agreement signed between the management and the representatives of the striking workers, MSI will reinstate all the sacked 11 employees and take a lenient approach on enforcing no-work-no-pay rule of eight days salary cut for every single day of the stir. The agreement, which was brokered by the Haryana government, however, did not make a mention on the main demand of formation of a union, thereby leading to the workers and the management making counter claims. Unlike Marutis Gurgaon plant where most of the workers are permanent and have a legally recognised trade union, the Manesar plant runs on contract labour. So workers at two different plants doing the same work are treated differently. The Manesar workers see this as unfair and launched an agitation. The striking workers had been demanding recognition of a new union Maruti Suzuki Employees Union (MSEU) independent of the existing one that is dominated by workers of the Gurgaon plant. Lagarde, Carstens shortlisted to lead the IMF: Frances Christine Lagarde and Mexicos Agustin Carstens were on June 14, 2011 shortlisted to lead the International Monetary Fund (IMF). The new managing director would be announced by June 30, the IMF said in a statement. While Lagarde, a French national, is Minister of Economy, Industry and Employment of France; Carstens is Governor of the Bank of Mexico. Teledensity at 72.08% TRAI: Telecom operators in the country added 15.34 million mobile subscribers in April this year
2011, taking the total number of telephone users to 861.48 million, sectoral regulator TRAI said on June 14, 2011. With this, the overall teledensity (telephones per 100 people) in India reached 72.08 per cent. However, the number of active mobile subscribers, according to the visitor location register (VLR) data, during April was only 583.22 million. VLR numbers provide details on active customers at any given point of time, excluding switched-off and out-of-the- coverage area customers.

CIL and Sun Pharma enter BSE Sensex: The Index Committee of the Bombay Stock Exchange on June 17, 2011 removed the Anil Ambani group stocks Reliance Communication and Reliance Infra for the first time from the prestigious BSE Sensex 30 scrips. Coal India and Sun Pharma have been included in the place of ADAG stocks. The market capitalisation of Reliance Communications (RCom) has come down from a high of over Rs 1 lakh crore to Rs 20,000 crore, while Reliance Infra has a market cap of just Rs 15,000 crore. India earmarks $100 million each for SAFTA countries for infrastructure: The Minister of Commerce & Industry, Government of India Anand Sharma urged the member states of SAARC to bring down protectionist trade barriers to achieve regional economies of scale at a much greater pace at the fifth meeting of SAFTA Ministerial Council in Male on June 13, 2011. He also announced that India has earmarked US$100 million each for its neighboring countries to undertake developmental work in basic infrastructure projects. The Ministerial was attended by Trade & Commerce ministers of Afghanistan, Bangladesh, Bhutan, Maldives and Sri Lanka. Bihar is Best Performing State RBI Study: A Reserve Bank sponsored study on June 17, 2011 said Bihar
(including Jharkhand) was the best performing state during 1980-2004, while Tamil Nadu lagged behind in terms of TFPG, a parameter that measures productivity of the organised manufacturing sector. Although Bihar did well in terms of TFPG (total factor productivity growth), it faltered on employment generation, the study on Productivity, Efficiency and Competitiveness of the Indian Manufacturing Sector, conducted by the Development Research Group (DRG), a research wing of the RBI said. The inter-state performance of TFPG of organised manufacturing sector indicates that Bihar (including Jharkhand) is the best performing state while Tamil Nadu is the worst performing state, it said. Jharkhand was carved out of Bihar in November 2000.

Child labour generates Rs 1.2 lakh crore of black money every year BBA: A child rights outfit on June 12,
2011 claimed that child labour generates Rs 1.2 lakh crore of black money every year in India. According to a report Capital Corruption: Child Labour in India prepared by Bachpan Bachao Andolan (BBA), the figure was arrived at by calculating the number of child labourers, the income earned by them and the illicit profits being generated by employers by not appointing adult workers.

India is 5th in Ernst & Young European Attractiveness Survey: Despite regulatory hurdles, India continues to be
among the preferred destinations for FDI due to the countrys high economic growth, with both Mumbai and Delhi being For the Week: June 12 to 18, 2011

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touted as among the cities likely to produce the next Microsoft or Google, according to the 9th Annual European Attractiveness Survey by Ernst & Young unveiled on June 6, 2011. The Survey says India will rank fifth among the most attractive destinations for European firms within the next three years, mainly on account of Indias perceived specialisation as a hub for low cost outsourcing business.

India has 62,000 ultra high net worth households Kotak Wealth, CRISIL Research: India has 62,000 ultra high
net worth households, with an average net worth of Rs 75 crore. In five years, the number of such households would more than treble to 219,000, each with a net worth of about Rs 100 crore. According to a study by Kotak Wealth and Crisil Research released on June 7, 2011, the number of ultra wealthy households remains a mere 0.03 per cent of the total households in the country. The report titled Top of the Pyramid, defined ultra high net worth households as those with a minimum net worth of Rs 25 crore. The study identifies three distinct profiles of ultra high net worth individuals (UHNIs) in India the inheritor, the self-made and the professional. While real estate has been the most preferred investment avenue, alternate asset classes are also likely to gain popularity.

Bill Gammell to step down as Cairn Energy CEO: A major overhaul of top management at Edinburgh-based Cairn
Energy got under way on June 16, 2011 as Simon Thomson, the current legal and commercial director of the firm, was named as the companys new Chief Executive. As of July, he will replace Sir Bill Gammell, the companys founder, who in turn will become Chairman of both the group and remain as Chairman of Cairn India, with responsibilities for the Vedanta transaction.

Section E: SPORTS
Rafael Nadal, Li Na win French Open Singles
Chinas Li Na made sporting history at the French Open when she became the first Asian to win a Grand Slam singles title on June 4, 2011. The 29-year-old Na defeated defending champion 30-year-old Francesca Schiavone of Italy 6-4, 7-6(0). Rafael Nadal won a 10th Grand Slam title, and equalled Bjorn Borgs record of six French Open titles, when he defeated Roger Federer 7-5, 7-6(7), 5-7, 6-1 in the final on June 5. Top seed Nadal, who was also champion in 2005, 2006, 2007, 2008 and 2010, took his overall Paris record to 45 wins against just one defeat. It was the 25-year-old Spaniards 17th win over Federer in 25 meetings and fourth in a Roland Garros final. This was also Nadals sixth win in eight Grand Slam final meetings with Federer. Meanwhile, Daniel Nestor of Canada and Max Mirnyi of Belarus won their first Grand Slam title together by defeating Eduardo Schwank of Argentina and Juan Sebastian Cabal of Colombia 7-6(3), 3-6, 6-4 in the Mens doubles final on June 4. Womens Doubles was won by Andrea Hlavackova and Lucie Hradecka of Czech Republic who defeated Indias Sania Mirza and Elena Vesnina of Russia in straight sets, 64, 63 on June 3. Casey Dellacqua (Australia) and Scott Lipsky (USA) defeated the reigning champions Katarina Srebotnik (Slovenia) and Nenad Zimonjic (Serbia) 76, 46 in the final on June 2 to take the 2011 French Open mixed doubles title. Winners of both Singles titles received 1,200,000 while winners of Mens and Singles doubles got 330,000. Mixed doubles winner received 100,000. Runners-ups got half in all categories.

Philipp Kohlschreiber wins Halle Open: Germanys Philipp Kohlschreiber won the Gerry Weber Open grasscourt tournament in Halle, Germany on June 12, 2011 after compatriot Philipp Petzschner was forced to retire hurt with a back injury while trailing 7-6(5), 2-0. Indias Rohan Bopanna and Pakistans Aisam-ul-Haq Qureshi won the doubles title beating Dutch-Canadian team of Milos Raonic and Robin Haase 7-6(8), 3-6, 11-9 in the final. Meanwhile, in Copenhagen, Denmarks Caroline Wozniacki won the Copenhagen Open with a 6-1, 6-4 victory over Lucie Safarova of Czech Republic in the final on June 12.
For the Week: June 12 to 18, 2011

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Murray wins Aegon Tennis title: Andy Murray clinched the Aegon Tennis title with a 3-6, 7-6(2), 6-4 victory over JoWilfried Tsonga in the final at Queens Club, London on June 13, 2011. Doubles title was won by Mike Bryan & Bob Bryan who beat the Indian pair of Leander Paes & Mahesh Bhupathi 7-6(2), 6-7(4), 6-10. In Aegon Womens Classic in Sabine Lisicki beat Daniela Hantuchova 6-3, 6-2 to win the title. Jenson Button wins Montreal GP: McLaren driver Jenson Button beat Red Bulls Formula One World champion Sebastian Vettel to win the Canadian Grand Prix at Circuit Gilles Villeneuve, Montreal on June 12, 2011. Mark Webber of Red Bull finished third. India win ODI series in West Indies 3-2: The West Indies defeated India by seven wickets with eight deliveries remaining at the Sabina Park, Kingston, Jamaica on June 16, 2011 and reduced the visitors series victory margin to 3-2. Batting first, India was all out for 251 in 47.3 overs. Virat Kohli (run out) 94 (104b, 10x4) and Rohit Sharma 57 (72b, 2x4, 1x6) were top scorers for India. Andre Russell (8.3-0-35-4 wickets) was the best bowler for West Indies. In reply, WI reached the target in 48.4 overs. Ramnaresh Sarwan (retd. hurt) 75 ( 94b, 5x4, 1x6) and Darren Bravo 86 ( 99b, 3x4, 6x6) were the top scorers for WI. Rohit Sharma was adjudged Player of the Series. Andre Russell was named Man of the Match. Kerala wins Inter-State Athletics Meet: Kerala annexed the mens, womens and the overall team honours and extended its domination to the individual best athlete with Sajeesh Joseph (800 metres gold) and Mayookha Johny (long jump gold with a New Meet record) winning the best men and womens awards, respectively at the Inter-State Athletics Meet that concluded at the at the Sree Kanteerava stadium in Bangalore on June 14, 2011. Kerala with 13 golds (four men and nine women) finished ahead of Punjab with six gold medals (three men, three women).

For the Week: June 12 to 18, 2011