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Hello! to new UPSC Aspirants of 2011

UPSC Civil Services Main exams are now over. Many of you have done very well and will
be happy that you are going to crack the biggest challenge of the earth. But many of you
are not sure of the future and few of them are hopeless. Dear friend! We would like to say
that worry is not solution of any problem.
Those must work hard, who are going to appear at personality test; and those, who
are sure that they are not going to qualify for interview, must acknowledged their week
points and prepare for next main examination and at the same time they must also insure
themselves to qualify for mains (written).
We also have something to say about those who have finished all attempts to appear
in the Civil Services examination. They must seriously think about other career option
and overcome from the pain. They must not think that their efforts (time, money and
knowledge) were thrown into dustbin. They must visualise the fact that if they want, they
can utilise their assets in other fields. So prepare for new area and new life.
And now we want to say Hello! to new UPSC Aspirants of 2011.
… "UPSC Portal Magazine" is always here to help you, and we will provide you all suf-
ficient materials for the next preliminary test. We will also provide some exclusive materials
for alternative careers in near future.
In this 19th volume of "UPSC Portal Magazine", you will find article on, Global
Hunger Index 2010, Unique Identification Project – Aadhaar, UN Security Council non-
permanent membership and Caste Census. In the section of Hot Topics Karnataka Crisis,
Last of Chile's 33 miners rescued, ordeal ends and Winners of Nobel Prize 2010 are in-
cluded.
With Current Affairs, Sports and World of Awards you will find a very Special
Study Package as Affairs about You must be aware.
With this We conclude, and hoping that all of you think seriously to face the fu-
ture………….
Ram Kumar Pandey
and
UPSCPORTAL Team

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Global
Hunger
Index
2010
Hunger haunts India
India is among 29 countries with
the highest levels of hunger,
stunted children and poorly fed
women, according to the Interna-
6onal Food Policy Research Ins6-
tute (IFPRI)’s “Global Hunger
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Index 2010” released on Oct 11,
2010. Despite a strong economy
that was last week predicted to
overtake China’s within three
years by The Economist maga-
zine, India ranked 67th among 85
countries in terms of access to
food.
The report points to wide-
spread hunger in a country that is
Featured Article
By - R.K. Pandey
the world’s largest producer of
milk and edible oils, and the sec-
ond-largest producer of wheat
and sugar.
The country has a high
“hunger score” of 24.1 and ranks
behind all its neighbours, barring
Bangladesh. Values between 20
and 29.9 on the index denote an
“alarming” hunger situa6on.
Globally, the world is
nowhere near mee6ng the target
of the UN’s goal of halving the
propor6on of hungry people.
India also runs the world’s
largest free-meal programme for
school-going children. Yet, the
2010 hunger report reveals that
more than 90 per cent of the
world’s stunted children (whose
height is low for their age) live in
Asian countries, such as India and
Bangladesh, apart from some
Africa countries.
The highest regional hunger
indices — sugges6ng the worst
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Featured Article
performers —are almost the
same for South Asian countries,
such as India, and Sub-Saharan
African na6ons, such as Congo.
India is among countries with
“hunger levels considerably
higher that their gross na6onal
income per capita would sug-
gest”. “It’s kind of ironic,” Ashok
Gula6, Asia director of the Wash-
ington-based IFPRI said.
The IFPRI hunger index —
complied in partnership with Ger-
man NGO Welthungerhilfe, and
Concern Worldwide —ranks
countries on three equally
weighted indicators: the propor-
6on of undernourished, the pro-
por6on of underweight children
under five, and the child mortal-
ity rate.
The UN Food and Agriculture
Organisa6on (FAO) defines
hunger as the consump6on of
fewer than 1,800 kilocalories a
day — the minimum required to
live a healthy and produc6ve life.
What is Global Hunger
Index
The Global Hunger Index (GHI) is
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a mul6dimensional sta6s6cal tool
used to describe the state of
countries’ hunger situa6on. The
GHI measures progress and fail-
ures in the global fight against
hunger. The GHI is updated once
a year.
The Index was adopted and
further developed by the Interna-
6onal Food Policy Research Ins6-
tute (IFPRI), and was first
published in 2006 with the
Welthungerhilfe, a German non-
profit organiza6on (NGO). Since
2007, the Irish NGO Concern
Worldwide joined the group as
co-publisher.
The 2009 GHI was calculated
for 121 developing countries and
countries in transi6on, 84 of
which were ranked. Every year,
the GHI report focuses on a main
topic: in 2009 the Index measures
the connec6on between hunger
and gender equality. In addi6on,
the impact of the financial crisis
on the hunger situa6on was ana-
lyzed. In addi6onal to the yearly
GHI, the Hunger Index for the
States of India (ISHI) was pub-
lished in 2008 and the Sub-Na-
6onal Hunger Index for Ethiopia
was published in 2009.
Calculation of the Index
The Index ranks countries on a
100 point scale, with 0 being the
best score ("no hunger") and 100
being the worst, though neither
of these extremes is achieved in
prac6ce. The higher the score,
the worse the food situa6on of a
country. Values less than 4.9 re-
flect "low hunger", values be-
tween 5 and 9.9 reflect
"moderate hunger", values be-
tween 10 and 19.9 indicate a "se-
rious", values between 20 and
29.9 are "alarming", and values
exceeding 30 are "extremely
alarming" hunger problem.
The GHI combines three
equally weighted indicators: 1)
the propor6on of the undernour-
ished as a percentage of the pop-
ula6on; 2) the prevalence of
underweight children under the
age of five; and 3) the mortality
rate of children under the age of
five.
The data used for the 2009
GHI are for the period from 2002
to 2007 – the most recent avail-
able global data for the three
components of the GHI. The data
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on the propor6on of undernour-
ished come from the Food and
Agriculture Organiza6on of the
UN (FAO) and are for 2003-2005.
Data on underweight of children
under 5 are based on data col-
lected by the World Health Or-
ganiza6on (WHO), UNICEF and
MEASURE DHS for the latest year
in the period 2002–07 for which
data are available and data on
child mortality are for 2007 from
UNICEF. The 2009 GHI and the re-
calculated base value of 1990 GHI
are not directly comparable to
previously calculated GHI values.
Global and regional trends
The 2009 GHI report shows how
the hunger situa6on has devel-
oped since 1990 at global, re-
gional, and na6onal levels.
Globally, the GHI fell nearly one
forth from 20 to 15.2 points. Re-
gardless of this posi6ve trend, the
global fight against hunger is
stagna6ng and not reaching its
goals fast enough. The global av-
erages hide drama6c differences
among regions and countries. 29
countries s6ll have an alarming
(20-29.9) or extremely alarming
(≥ 30) hunger situa6on. The 2009
GHI had fallen by 13% in Sub-Sa-
haran Africa compared with the
1990 GHI, by about 25% in South
Asia, and by 32% in the Near East
and North Africa. Progress in
Southeast Asia and La6n America
was especially great, with the GHI
decreasing by over 40%.
Sub-Saharan Africa and South
Asia share the highest regional
GHI scores (22.1 and 23.0 respec-
6vely), but food insecurity in the
two regions stems from different
reasons: In South Asia, the major
problem is a high prevalence of
underweight children under five,
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which is a result of lower nutri-
6on and educa6onal status of
women. In contrast, the high GHI
in Sub-Saharan Africa is due to
high child mortality rates and the
high propor6on of people who
cannot meet their calorie re-
quirements.
Hunger and Conflict
The report shows that conflict
and poli6cal instability and eco-
nomic collapse have increased
hunger in a number of Sub-Saha-
ran African countries and North
Korea.
Hunger and Gender
Inequality
A comparison of the GHI 2009 re-
sults with the respec6ve rankings
in the World Economic Forum’s
2008 Global Gender Gap Index
shows that hunger and gender in-
equality—par6cularly inequali-
6es in educa6on and
health—o'en go hand in hand.
Hunger in India: 'The real cause is
lack of poli6cal will'
The poker is glowing red hot
in the flames of the burning
wood. Suklal Hembrom holds a
leaf against his stomach and war-
ily eyes the
older man sit-
6ng on the
other side of
the fire. Sud-
denly Thakur
Das takes hold
of the poker
and lunges to-
wards the
boy's stomach.
Ev e r y o n e
in the village
knows what
Featured Article
should happen next. The child
will scream loudly as the flesh be-
gins to blister. Held down, he will
writhe in agony. Again and again,
the poker will jab at his belly. The
more the child screams, the hap-
pier everyone will be, because
the villagers of Mirgitand in
India's Jharkhand state believe
the only way they can "cure" the
distended stomachs of their fam-
ished children is by branding
them with pokers.
Das sees nothing wrong with the
procedure. Nor does anyone in
the village – most have scars of
their own. Even though some
children have died, the villagers
con6nue because the alterna6ve
– providing enough nutri6ous
food to sustain their children or
paying for medical treatment – is
simply not an op6on. In common
with millions of others in the
world's 11th largest economy,
they face a daily ba7le to put
even the most basic meal on the
table.
A report out today warns that
even in a fast-growing economy
like India, failure to invest in agri-
culture and support small farms
has le' nearly half the country's
children malnourished, with one
fi'h of the one billion plus popu-
la6on going hungry.
Ac6onAid, which published
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Featured Article
the report ahead of next week's
summit in New York to discuss
progress on the millennium de-
velopment goals, says hunger is
cos6ng the world's poorest na-
6ons £290bn a year – more than
10 6mes the es6mated amount
needed to meet the goal of halv-
ing global hunger by 2015.
India now has worse rates of
malnutri6on than sub-Saharan
Africa: 43.5% of children under
five are underweight and India
ranks below Sudan and Zim-
babwe in the Global Hunger
Index. Even without last year's
disastrous monsoon and the en-
suing drought and crop failures,
hunger was on the increase.
The government has prom-
ised a new food security bill to
provide cheap food for the poor,
but progress has been slow. The
reality is that a country desperate
to take its place at the world's top
table is unwilling to commit to
feeding its own popula6on.
Last month the country's
supreme court cas6gated the
government for allowing 67,000
tonnes of badly stored grain to
rot – enough to feed 190,000
people for a month – and or-
dered it to distribute 17.8m
tonnes in imminent danger of
ro8ng.
India's prime minister, Man-
mohan Singh, protested, saying
the court had crossed the line
into policy-making and warning
that distribu6ng free food to the
es6mated 37% of the popula6on
living below the poverty line de-
stroyed any incen6ves for farm-
ers to produce. The court stood
firm. It was an order, not a sug-
ges6on, the judges said.
According to Ac6onAid,
global hunger in 2009 was at the
same level as in 1990. The charity
urged developed countries to
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make good on £14bn pledge to Molilal Kisku li's his shirt. He is
fight hunger, announced at last five, with a large, distended belly.
year's G8 summit in Italy. There are dark circles on the skin
"On the eve of the most im- from where the poker was ap-
portant development summit for plied. There is not a child un-
five years, a billion people will be scarred.
going to bed hungry," said Manoranjan Mahta, 44, sits
Meredith Alexander, the charity's on a log, watching. He works for
policy head. "Despite promises to the post office, he says: he is an
the contrary, one-sixth of human- educated man. Yet he submi7ed
ity doesn't get enough to eat. But his son, Hemanth, to the process.
we grow enough food to feed "My son had a protruding
every man, woman and child on belly. We went to many doctors,
the planet. The real cause of but they didn't cure it," he says.
hunger isn't lack of food, it is lack
of poli6cal will."
The UN Food and Agricultural
Organisa6on announced today
that the number of hungry peo-
ple worldwide has dropped by 98
million to 925 million in the past
year. However, Oxfam warned
the decline is largely down to
luck, such as two years of
favourable weather pa7erns,
rather than ac6on from world
leaders.
Abandoned to its fate
Mirgitand lies in hills about
195km east of the state capital
Ranchi, at the end of a stony, ver-
6ginous track. It is part of India,
but at the same 6me not part of
it: abandoned to its fate by the
state, in the hands of Maoist Nax-
alite guerillas who hold the secu-
rity forces at bay with apparent
ease.
Das squats next to the fire,
poking it with a s6ck. The poker
lies cooling on the ground. This
6me he did not make contact,
warned in advance that the child
must not be harmed for the
demonstra6on, though he came
worryingly close.
Instead, the villagers instruct
the children to show their scars.
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"In this village when a child has a
big pot belly we put a piece of ba-
nana leaf on the skin and then we
put burning charcoal or a burning
rod on the leaf. If the child is
writhing in pain, the no6on is
that the germs are dying."
But it was Hemanth who suc-
cumbed. The wound became in-
fected and he died on 21
December 2007. He was seven
years old.
Struggle for survival
India may be thriving economi-
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cally but it is s6ll dogged by
poverty and hunger.
A recent Oxford University re-
port found 410 million people
were living in poverty in just eight
Indian states – more than in the
26 countries of sub-Saharan
Africa.
Last year's Global Hunger
Index placed India in the "alarm-
ing" category, ranked 65 out of 84
countries, below even North
Korea. Across the country, hun-
dreds of millions are malnour-
Featured Article
ished. A study released in May
warned that 66% of children
under the age of six in Delhi's
slums were malnourished. The
report noted that the most vul-
nerable sec6ons of society were
not covered under government
schemes which were supposed to
support them.
In Jharkhand state, a study of
20 villages carried out last year
recorded 13 deaths from starva-
6on and 1,000 families suffering
from chronic hunger syndrome. It
is es6mated that each year,
nearly 50,000 children in the
state die before their first birth-
day. It does not help that Jhark-
hand's doctors are among the
most poorly paid in India, earning
barely half what their contempo-
raries in Delhi might earn. This
may explain why 2,200 of the
2,468 doctors recruited by the
state five years ago have moved
on. The state is said to need more
than 800 primary health centres,
although it has just 330.
The situa6on in the central
Indian state of Madhya Pradesh
is, if anything, worse than in
Jharkhand. More than half a mil-
lion children below the age of five
have died in the past five years
and 60% of its children are cate-
gorised as malnourished. The
government es6mates that 37%
of the popula6on subsist on less
than the official poverty line of
327 rupees (£4.57) per month in
rural areas and 570 rupees in
urban areas. In May, television
and newspaper pictures showed
100,000 tonnes of wheat ro8ng
in the open in the state.
And in Ganne, in U7ar
Pradesh, children have resorted
to ea6ng mud. When the reports
began to surface, officials appar-
ently sent some food and told the
villagers to keep quiet.
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Multipurpose
Featured Article
National
Identity Card
P
rime Minister Manmohan
Singh and Congress Presi-
dent Sonia Gandhi
handed out the first set of Unique
Iden6fica6on Number to tribals
in Tembhli village of Maharash-
tra's Nandurbar district on Sep
29, 2010.
Ten tribals from Tembhli vil-
lage got their Unique Iden6fica-
6on Numbers (Aadhaar) from
Singh and Sonia. They were ran-
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domly selected by the Nandan
Nilekani-headed Unique Iden6fi-
ca6on Authority of India.
Aadhaar will help the unem-
ployed poor. UID is a historical
step to help the poor and Tembhli
is the first Aadhaar village.
Unique Iden6fica6on Authority
of India Chairman Nandan
Nilekani said that UID would help
all the ci6zens of India who don't
have any iden6ty card.
Many people in our country
don't have their iden6ty cards.
UID will help them. UID will be
recognised everywhere. One UID
will be issued to one person.
About 1400 villagers have
been enrolled in the inaugural
programme. The Unique Iden6fi-
ca6on Number is a unique 12
digit number that will store infor-
ma6on like an individual's name,
face and biometric scans.
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Unique Identification
Authority of India
The Unique Iden6fica6on Author-
ity of India (UIDAI) is an agency of
the Government of India respon-
sible for implemen6ng the envi-
sioned Mul6purpose Na6onal
Iden6ty Card or Unique Iden6fi-
ca6on card (UID Card) project in
India. It was established in Febru-
ary 2009, and will own and oper-
ate the Unique Iden6fica6on
Number database. The authority
will aim at providing a unique
number to all Indians, but not
smart cards. The authority would
provide a database of residents
containing very simple data in
biometrics.
The agency is headed by a
chairman, holds a cabinet rank.
The UIDAI is part of the Planning
Commission of India. Nandan
Nilekani, a former co-chairman of
Infosys Technologies, was ap-
pointed as the first Chairman of
the authority in June 2009. Ram
Sewak Sharma, an IAS Officer of
Jharkhand Government cadre has
been appointed as the Director
General and Mission Director of
the Authority. He is known for his
best effort in e-Governance proj-
ect for Jharkhand State and work-
ing as an IT secretary he received
a number of awards for best In-
forma6on Technology Trends
State in India.
Launch
UIDAI launched AADHAAR pro-
gram in the tribal village, Tembhli,
in Nandurbar, Maharashtra on
29th September, 2010. The pro-
gram was inaguated by Prime
Minister, Manmohan Singh along
with UPA chairperson Sonia
Gandhi. The first resident to re-
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ceive an AADHAAR was Rajana
Sonawane of Tembhli village.
Coverage, goals and
logistics
It is believed that Unique Na-
6onal IDs will help address the
rigged state elec6ons, wide-
spread embezzlement that af-
fects subsidies and poverty
allevia6on programs such as
NREGA. Addressing illegal immi-
gra6on into India and terrorist
threats is another goal of the pro-
gram.
Most reports suggest that the
plan is for each Indian ci6zen to
have a unique iden6fica6on num-
ber with associated iden6fying
biometric data and photographs
by 2011. However, other reports
claim that obtaining a unique
number would be voluntary, but
those that opt to stay out of the
system "will find it very inconven-
ient: they will not have access to
facili6es that require you to cite
your ID number."
Government issued IDs are frag-
mented by purpose and region in
India, which results in wide-
spread bribery, denial of public
services and loss of income, espe-
Featured Article
cially afflic6ng poor ci6zens. As
the unique iden6ty database
comes into existence, the various
iden6ty databases (voter ID, pass-
ports, ra6on cards, licenses, fish-
ing permits, border area id cards)
that already exist in India are
planned to be linked to it. The Au-
thority is liaising with various na-
6onal, state and local
government en66es to begin this
process. The Union Labor Min-
istry has offered its verified Em-
ployment Provident Fund (EPFO)
database of 42 million ci6zens as
the first database to be inte-
grated into the unique ID system.
Other UID projects implemented
on a smaller scale in India can
also facilitate in the development
of the na6onal project. An exam-
ple is a project developed by Wolf
Frameworks Cloud Compu6ng
vendor and Social Educa6on and
Development Society (SEDS) for
profiling and genera6ng Unique
Iden6fica6on for more than
40,000 members in the Ananta-
pur district of Andhra Pradesh.
The UID will link a person's Pass-
port Number, Driving License,
PAN card, Bank Accounts, Ad-
dress, Voter ID etc and all this in-
forma6on will be checked
through a database. So, if some-
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Featured Article
one has a different addresses on
PAN and driving license, is liable
to get caught. Those who will opt
out of this program will have
much inconvenience in doing
business, opera6ng bank ac-
counts and other offices which
will require a UID.
UIDAI has headquarters in
Delhi and a technology centre in
Bangalore. It also has 6 regional
offices in Chandigarh, Delhi, Luc-
know, Ranchi, Guwaha6, Mum-
bai, Hyderabad and Bangalore.
Name and logo
UID project is known as AAD-
HAAR meaning 'support' or 'foun-
da6on', and its logo is a yellow
sun with a fingerprint embedded
in its centre.
Projected costs and
business opportunities
One es6mate of the cost to com-
pletely roll-out Na6onal IDs to all
Indian residents above the age of
18 has been placed at Indian
rupee 150,000 crore (US$33.15
billion). A different es6mate puts
it at US$ 6 billion. A sum of Indian
rupee 100 crore (US$22.1 million)
was approved in the 2009-2010
union budget to fund the agency
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for its first year of existence. UID
has received a huge boost with Dr
Pranab Mukherjee, Minister of Fi-
nance, alloca6ng Rs 1900 crore to
the Unique Iden6fica6on Author-
ity of India (UIDAI) for 2010-11.
Ini6al es6mates project that
the ini6a6ve will create 1000 new
jobs in the country, and business
opportuni6es worth Indian rupee
6,500 crore (US$1.44 billion) in
the first phase of implementa-
6on.
Criticism
There are many poten6al privacy
fallouts of this project, not the
least of which is triggered by the
Government's official plan to link
the databases together.
Although there is some6mes
a tension between individual pri-
vacy rights and na6onal security,
interna6onal law and India’s do-
mes6c law expressly set a stan-
dard in tort law and through
cons6tu6onal law to protect an
individual’s privacy from unlawful
invasion. Under the Interna6onal
Covenant on Civil and Poli6cal
Rights (ICCPR), ra6fied by India,
an individual’s right to privacy is
protected from arbitrary or un-
lawful interference by the state.
The Supreme Court also held
the right to privacy to be implicit
under ar6cle 21 of the Indian
Cons6tu6on in Rajgopal v. State
of Tamil Nadu. Moreover, India
has enacted a number of laws
that provide some protec6on for
privacy. For example the Hindu
Marriage Act, the Copyright Act,
Juvenile Jus6ce (Care and Protec-
6on of Children) Act, 2000 and
the Code of Criminal Procedure
all place restric6ons on the re-
lease of personal informa6on.
Privacy is a key concern with re-
spect to the MNIC scheme as all
of an individual’s personal infor-
ma6on will be stored in one data-
base where the possibility of
corrup6on and exploita6on of
data is far greater than when hav-
ing the informa6on disbursed.
Risks that arise from this cen-
traliza6on include possible errors
in the collec6on of informa6on,
recording of inaccurate data, cor-
rup6on of data from anonymous
sources, and unauthorized access
to or disclosure of personal infor-
ma6on.Other countries with na-
6onal iden6fica6on systems have
confronted numerous problems
with similar risks such as trading
and selling of informa6on, and
India, which has no generally es-
tablished data protec6on laws
such as the U.S. Federal Privacy
Statute or the European Direc6ve
on Data Protec6on, is ill-
equipped to deal with such prob-
lems. The centralized nature of
data collec6on inherent in the
MNIC proposal only heightens
the risk of misuse of personal in-
forma6on and therefore poten-
6ally violates privacy rights. In
considera6on of the risks in-
volved in the crea6on of a cen-
tralized database of personal
informa6on, it is impera6ve that
such a programme not be estab-
lished without the proper mecha-
nisms to ensure the security of
each individual privacy rights. Un-
fortunately, India’s proposed
MNIC programme lacks any pro-
vision for judicial review at the
present 6me. Without credible
and independent oversight, there
is a risk of ‘mission creep’ for
MNICs; the government may add
features and addi6onal data to
the MNIC database bureaucra6-
cally and reflexively, without
reevalua6ng the effects on pri-
vacy in each instance
. . Vol. - 19
 UN SECURITY
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COUNCIL
NON-PERMANENT
MEMBERSHIP
India elected to UNSC as non-permanent member
A
By : Dr. Sachchidanand
'er a gap of 19 years,
India was elected as a
non-permanent member
of the UN Security Council on 12
Oct, 2010, a posi6on which
would help it push more aggres-
sively for the reform of the world
body's top organ. India secured
an empha6c win, with 187 of the
191 member states in the Gen-
eral Assembly backing its candi-
dature and one member state
abstaining from the vote.
India, which is a founding
member of the UN, has been on
the Council six 6mes earlier, but
not since 1992. In 1996, India lost
to Japan by a huge margin of 100
votes. This 6me, however, it is
taking over the Asia seat from
Japan, being the sole candidate
from the region in the race as
Kazakhstan pulled out earlier this
year.
In the run-up to the vote, Ex-
ternal Affairs Minister S M Kr-
ishna, who was in New York for
10 days last month, met leaders
of a record 56 countries on the
margins of the UN General As-
sembly's annual session.
In February, India's candida-
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ture was en-
dorsed by the
Asian Group but
it s6ll had to get
support of 128
countries, two-
thirds of the
192 members
of the UN Gen-
eral Assembly.
Other "clean
slate" candi-
dates included
South Africa
that got the
Africa seat re-
placing Uganda
with the vote of 182 members in The five new countries will be
its favour, and Colombia, which replacing Austria, Japan, Mexico,
secured the seat for the Group of Turkey and Uganda. The two
La6n American and Caribbean seats for Western Europe and
States, replacing Mexico. Others Group were fought for by
The elected members take their Canada, Germany and Portugal.
spots on January 1, 2011 and will India, which is among the three
serve for two years. largest troop contribu6ng coun-
South Africa has returned to the tries to the UN, has already high-
Council a'er a break of two years lighted the significance of all the
when it had served its first term BRIC na6ons (Brazil, Russia, India
from 2007-2008. Colombia, like and China) being on the Council
India, has previously served six together, which could present a
terms. united front on several con-
ten6ous interna6onal issues.
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It has also underlined that the
IBSA (India, Brazil and South
Africa) will also be on the Council
together. New Delhi, which is
seeking expansion in both the
permanent and non-permanent
categories of the UN Security
Council as part of its reform, is
hoping that change comes in the
next two years while it is already
in the Council.
New Members
Germany, India, South Africa and
Colombia have won two-year
seats on the UN Security Council.
Portugal got the other available
place when Canada withdrew its
bid a'er the second round of vot-
ing at the UN General Assembly
in New York.
China, Britain, France, the US
and Russia are the five perma-
nent members. The 15-seat Secu-
rity Council is one of the most
important UN organs and is
charged with maintaining inter-
na6onal peace and security.
Every year, five of the non-
permanent members step down
a'er comple6ng two years, and
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other countries ba7le to fill the
seats.
India, South Africa and
Colombia all secured their places
in uncontested votes. Among re-
cent calls for reform of UN ins6-
tu6ons, there have been
proposals to expand the number
of permanent members. Brazil,
Germany, India and Japan have
all argued that they should have
a permanent seat on the council.
United Nations Security
Council
The United Na6ons Security
Council (UNSC) is one of the prin-
cipal organs of the United Na-
6ons and is charged with the
maintenance of interna6onal
peace and security. Its powers,
outlined in the United Na-
6ons Charter, include the es-
tablishment of peacekeeping
opera6ons, the establish-
ment of interna6onal sanc-
6ons, and the authoriza6on
of military ac6on. Its powers
are exercised through United
Na6ons Security Council Res-
olu6ons.
The Security Council held its
first session on 17 January
1946 at Church House, Lon-
don. Since its first mee6ng,
the Council, which exists in
con6nuous session, has trav-
eled widely, holding mee6ngs
in many ci6es, such as Paris
and Addis Ababa, as well as at its
current permanent home in the
United Na6ons building in New
York City.
There are 15 members of
the Security Council, consis6ng of
5 veto-wielding permanent mem-
bers (China, France, Russia,
United Kingdom, and United
States) and 10 elected non-per-
manent members with two-year
terms. This basic structure is set
out in Chapter V of the UN Char-
ter. Security Council members
must always be present at UN
headquarters in New York so that
the Security Council can meet at
any 6me. This requirement of the
United Na6ons Charter was
adopted to address a weakness
of the League of Na6ons since
that organiza6on was o'en un-
able to respond quickly to a crisis.
Permanent members
The Security Council's five perma-
nent members have the power to
veto any substan6ve resolu6on:
* China
* France
* Russia
. . Vol. - 19
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* United Kingdom
* United States
The five permanent members
(also known as the P5 or Big 5)
were drawn from the victorious
powers of World War II, and at
the UN's founding in 1946, the
Security Council consisted of
France, the Republic of China, the
United Kingdom, the United
States, and the USSR. There have
been two seat changes since
then, although not reflected in
Ar6cle 23 of the Charter of the
United Na6ons as it has not been
accordingly amended:
* China's seat was originally
filled by the Republic of
China, but due to the stale-
mate of the Chinese Civil War
in 1949, there have been two
states claiming to represent
China since then, and both of-
ficially claim each other's ter-
ritory. In 1971, the People's
Republic of China was
awarded China's seat in the
United Na6ons by UN Gen-
eral Assembly Resolu6on
2758, and the Republic of
China (based in Taiwan) soon
lost membership in
all UN organiza-
6ons.
* Russia, being the
legal successor
state to the Soviet
Union a'er the lat-
ter's collapse in
1991, acquired the
originally-Soviet
seat, including the
Soviet Union's for-
mer representa6on
in the Security
Council.
The five permanent
members of the Secu-
rity Council are also the
only countries recog-
nized as nuclear-
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weapon states (NWS) under the
Nuclear Non-Prolifera6on Treaty.
However, their nuclear weapons
status derives from the fact that
they are the five countries that
tested nuclear weapons before
1967; it is not linked to their
membership of the UN Security
Council and membership of the
UN Security Council is not de-
pendent on nuclear weapons sta-
tus.The Permanent Representa6-
ves of the U.N. Security Council
permanent members are Li
Baodong (China), Gérard Araud
(France), Vitaly Churkin (Russia),
Mark Lyall Grant (United King-
dom), and Susan Rice (United
States).
Non-permanent
Members
Ten other members are elected
by the General Assembly for two-
year terms star6ng on 1 January,
with five replaced each year. The
members are chosen by regional
groups and confirmed by the
United Na6ons General Assem-
Featured Article
bly. The African bloc chooses
three members; the La6n Amer-
ica and the Caribbean, Asian, and
Western European and Others
blocs choose two members each;
and the Eastern European bloc
chooses one member. Also, one
of these members is an "Arab
country," alternately from the
Asian or African bloc.
President
The role of president of the Secu-
rity Council involves se8ng the
agenda, presiding at its mee6ngs
and overseeing any crisis. The
President is authorized to issue
both presiden6al statements
(subject to consensus among
Council members) and notes,
which are used to make declara-
6ons of intent that the full Secu-
rity Council can then pursue. The
Presidency rotates monthly in al-
phabe6cal order of the Security
Council member na6ons' names
in English and is held by Turkey
for the month of September
2010.
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Featured Article
cil, may par6cipate in Security might endanger interna6onal
Council discussions in ma7ers by peace and security. These recom-
Veto power which the Council agrees that the menda6ons are not binding on
country's interests are par6cu- UN members.
Under Ar6cle 27 of the UN Char- larly affected. In recent years, the Under Chapter Seven, the Council
ter, Security Council decisions on Council has interpreted this has broader power to decide
all substan6ve ma7ers require loosely, allowing many countries what measures are to be taken in
the affirma6ve votes of nine to take part in its discussions. situa6ons involving "threats to
members. A nega6ve vote, or Non-members are rou6nely in- the peace, breaches of the peace,
veto, also known as the rule of vited to take part when they are or acts of aggression". In such sit-
"great Power unanimity", by a par6es to disputes being consid- ua6ons, the Council is not limited
permanent member prevents ered by the Council. to recommenda6ons but may
adop6on of a pro-
posal, even if it has
received the required
number of affirma-
6ve votes (9). Absten-
6on is not regarded
as a veto despite the
wording of the Char-
ter. Since the Security
Council's incep6on,
China (ROC/PRC) has
used its veto 6 6mes;
France 18 6mes; Rus-
sia/USSR 123 6mes;
the United Kingdom
32 6mes; and the
United States 82
6mes. The majority of
Russian/Soviet vetoes
were in the first ten
years of the Council's
existence. Since 1984,
China and France
have vetoed three
resolu6ons each; Rus-
sia/USSR four; the
United Kingdom ten;
and the United States
43. Role take ac6on, including the use of
Procedural ma7ers are not sub- Under Chapter Six of the Charter, armed force "to maintain or re-
ject to a veto, so the veto cannot "Pacific Se7lement of Disputes", store interna6onal peace and se-
be used to avoid discussion of an the Security Council "may inves- curity". This was the basis for UN
issue. 6gate any dispute or any situa- armed ac6on in Korea in 1950
6on which might lead to during the Korean War and the
interna6onal fric6on or give rise use of coali6on forces in Iraq and
Status of non-members to a dispute". The Council may Kuwait in 1991. Decisions taken
"recommend appropriate proce- under Chapter Seven, such as
A state that is a member of the dures or methods of adjustment" economic sanc6ons, are binding
UN, but not of the Security Coun- if it determines that the situa6on on UN members.

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The UN's role in interna6onal col-
lec6ve security is defined by the
UN Charter, which gives the Secu-
rity Council the power to:
• Inves6gate any situa6on
threatening interna6onal
peace;
• Recommend procedures for
peaceful resolu6on of a dis-
pute;
• Call upon other member na-
6ons to completely or par-
6ally interrupt economic
rela6ons as well as sea, air,
postal, and radio communi-
ca6ons, or to sever diplo-
ma6c rela6ons;
• Enforce its decisions militar-
ily, or by any means neces-
sary;
• Avoid conflict and maintain
focus on coopera6on.
They also recommend the
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new Secretary-General to the
General Assembly.
The Rome Statute of the In-
terna6onal Criminal Court recog-
nizes that the Security Council
has authority to refer cases to the
Court, where the Court could not
otherwise exercise jurisdic6on.
The Council exercised this power
for the first 6me in March 2005,
when it referred to the Court “the
situa6on prevailing in Darfur
since 1 July 2002”; since Sudan is
not a party to the Rome Statute,
the Court could not otherwise
have exercised jurisdic6on.
Responsibility to protect
Security Council Resolu6on 1674,
adopted on 28 April 2006, "reaf-
firms the provisions of para-
graphs 138 and 139 of the 2005
World Summit Outcome Docu-
ment regarding the responsibility
to protect popula6ons from
genocide, war crimes, ethnic
cleansing and crimes against hu-
manity". The resolu6on commits
the Council to ac6on to protect
civilians in armed conflict.
Resolutions
The UN Charter is a mul6lateral
treaty. It is the cons6tu6onal doc-
ument that distributes powers
and func6ons among the various
UN organs. It authorizes the Se-
curity Council to take ac6on on
behalf of the members, and to
make decisions and recommen-
da6ons. The Charter men6ons
neither binding nor non-binding
resolu6ons. The Interna6onal
Court of Jus6ce (ICJ) advisory
opinion in the 1949 "Repara-
6ons" case indicated that the
United Na6ons Organiza6on had
Featured Article
both explicit and implied powers.
The Court cited Ar6cles 104 and
2(5) of the Charter, and noted
that the members had granted
the Organiza6on the necessary
legal authority to exercise its
func6ons and fulfill its purposes
as specified or implied in the
Charter, and that they had agreed
to give the United Na6ons every
assistance in any ac6on taken in
accordance with the Charter.
Ar6cle 25 of the Charter says
that "The Members of the United
Na6ons agree to accept and carry
out the decisions of the Security
Council in accordance with the
present Charter". The Repertory
of Prac6ce of United Na6ons Or-
gans, is a UN legal publica6on
that is published, says that during
the United Na6ons Conference
on Interna6onal Organiza6on
which met in San Francisco in
1945, a7empts to limit obliga-
6ons of Members under Ar6cle
25 of the Charter to those deci-
sions taken by the Council in the
exercise of its specific powers
under Chapters VI, VII and VIII of
the Charter failed. It was stated at
the 6me that those obliga6ons
also flowed from the authority
conferred on the Council under
Ar6cle 24(1) to act on the behalf
of the members while exercising
its responsibility for the mainte-
nance of interna6onal peace and
security.
Ar6cle 24, interpreted in this
sense, becomes a source of au-
thority which can be drawn upon
to meet situa6ons which are not
covered by the more detailed
provisions in the succeeding ar6-
cles. The Repertory on Ar6cle 24
says: "The ques6on whether Ar6-
cle 24 confers general powers on
the Security Council ceased to be
a subject of discussion following
the advisory opinion of the Inter-
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Featured Article
na6onal Court of Jus6ce ren-
dered on 21 June 1971 in connec-
6on with the ques6on of Namibia
(ICJ Reports, 1971, page 16)".
In exercising its powers the
Security Council seldom bothers
to cite the par6cular ar6cle or ar-
6cles of the UN Charter that its
decisions are based upon. In
cases where none are men-
6oned, a cons6tu6onal interpre-
ta6on is required. This
some6mes presents ambigui6es
as to what amounts to a decision
as opposed to a recommenda-
6on, and also the relevance and
interpreta6on of the phrase "in
accordance with the present
Charter".
In the preliminary rulings of
the "Lockerbie" cases the ICJ held
that the provisions of the Mon-
treal Conven6on could be pre-
empted by Security Council
resolu6ons pursuant to Ar6cle 25
and Ar6cle 103 of the UN Charter.
Ar6cle 103 provides that in the
event of conflicts with other
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treaty obliga6ons, the members
obliga6ons under the Charter
prevail. There is consensus that
the treaty-based powers of the
Security Council are limited to
preemp6on of other trea6es. The
UN cannot circumvent peremp-
tory norms and its resolu6ons are
subject to judicial review.
Security Council Resolu6ons
are legally binding if they are
made under Chapter VII (Ac6on
with Respect to Threats to the
Peace, Breaches of the Peace,
and Acts of Aggression) of the
Charter.
There is a general agreement
among legal scholars outside the
organiza6on that resolu6ons
made under Chapter VI (Pacific
Se7lement of Disputes) are not
legally binding. One argument is
that since they have no enforce-
ment mechanism, except self-
help, they may not be legally
binding. Some States give cons6-
tu6onal or special legal status to
the UN Charter and Security
Council resolu6ons. In
such cases non-recog-
ni6on regimes or
other sanc6ons can be
implemented under
the provisions of the
laws of the individual
member states.
The Repertory of Prac-
6ce of United Na6ons
Organs was estab-
lished because
"Records of the cumu-
la6ng prac6ce of in-
t e r n a 6 o n a l
organiza6ons may be
regarded as evidence
of customary interna-
6onal law with refer-
ence to States'
rela6ons to the organ-
iza6ons." The reper-
tory cites the remarks
made by the representa6ve of Is-
rael, Mr Eban, regarding a Chap-
ter VI resolu6on. He maintained
that the Security Council's resolu-
6on of 1 September 1951 pos-
sessed, within the meaning of
Ar6cle 25, a compelling force be-
yond that pertaining to any reso-
lu6on of any other organ of the
United Na6ons, in his view the
importance of the resolu6on had
to be envisaged in the light of Ar-
6cle 25, under which the deci-
sions of the Council on ma7ers
affec6ng interna6onal peace and
security assumed an obligatory
character for all Member States.
The Egyp6an representa6ve dis-
agreed.
Criticism
There has been cri6cism that the
five permanent members of the
United Na6ons Security Council,
who are all nuclear powers, have
created an exclusive nuclear club
. . Vol. - 19
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that only addresses the strategic
interests and poli6cal mo6ves of
the permanent members; for ex-
ample, protec6ng the oil-rich
Kuwai6s in 1991 but poorly pro-
tec6ng resource-poor Rwandans
in 1994. Cri6cs have suggested
that the number of permanent
members should be expanded to
include non-nuclear powers, or
abolishing the concept of perma-
nency altogether.
Another cri6cism of the Secu-
rity Council involves the veto
power of the five permanent na-
6ons; a veto from any of the per-
manent members may cripple
any possible UN armed or diplo-
ma6c response to a crisis. John J.
Mearsheimer claimed that "since
1982, the US has vetoed 32 Secu-
rity Council resolu6ons cri6cal of
Israel, more than the total num-
ber of vetoes cast by all the other
Security Council members." The
prac6ce of the permanent mem-
bers mee6ng privately and then
presen6ng their resolu6ons to
the full council as a fait accompli
has also drawn fire. On the other
hand, a 2005 report by the Amer-
ican Ins6tute for Peace on UN re-
form states that contrary to the
equality of rights for all na6ons
enshrined in the UN Charter, Is-
rael con6nues to be denied rights
enjoyed by all other member-
states, and a level of systema6c
hos6lity against it is rou6nely ex-
pressed, organized, and funded
within the United Na6ons sys-
tem. Since 1961, Israel has been
barred from the Asia regional
group and therefore could not
even theore6cally be a member
of the Security Council. In 2000,
it was offered limited member-
ship in the Western European
and Others Group (WEOG).
Other cri6cs and even propo-
nents of the Security Council
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ques6on its effec6veness and rel-
evance because in most high-pro-
file cases, there are essen6ally no
consequences for viola6ng a Se-
curity Council resolu6on. During
the Darfur crisis, Janjaweed mili-
6as, allowed by elements of the
Sudanese government, commit-
ted violence against an indige-
nous popula6on, killing
thousands of civilians. In the Sre-
brenica massacre, Serbian troops
commi7ed genocide against
Bosniaks, although Srebrenica
had been declared a UN "safe
area" and was even protected by
400 armed Dutch peacekeepers.
Other cri6cs call the UN undemo-
cra6c, represen6ng the interests
of the governments of the na-
6ons who form it and not neces-
sarily the individuals within those
na6ons. The UN Charter gives all
three powers of the legisla6ve,
execu6ve, and judiciary branches
to the Security Council.
Another concern is that the
five permanent members of the
UN Security Council are five of
the top ten largest arms dealing
countries in the world.
The amount of 6me devoted
to the Israeli-Arab conflict in the
UNSC has been described as ex-
cessive by some pro-Israel poli6-
cal organiza6ons and academics,
like United Na6ons Watch, the
An6-Defama6on League, Alan
Dershowitz, Mar6n Kramer, and
Mitchell Bard.
Membership reform
There has been discussion of in-
creasing the number of perma-
nent members. The countries
who have made the strongest de-
mands for permanent seats are
Brazil, Germany, India, and Japan.
Japan and Germany are the UN's
Featured Article
second and third largest funders
respec6vely, while Brazil and
India are two of the largest con-
tributors of troops to UN-man-
dated peace-keeping missions.
This proposal has found opposi-
6on in a group of countries called
Uni6ng for Consensus.
Former UN Secretary-General
Kofi Annan asked a team of advi-
sors to come up with recommen-
da6ons for reforming the United
Na6ons by the end of 2004. One
proposed measure is to increase
the number of permanent mem-
bers by five, which, in most pro-
posals, would include Brazil,
Germany, India, Japan (known as
the G4 na6ons), one seat from
Africa (most likely between
Egypt, Nigeria or South Africa)
and/or one seat from the Arab
League. On 21 September 2004,
the G4 na6ons issued a joint
statement mutually backing each
other's claim to permanent sta-
tus, together with two African
countries. Currently the proposal
has to be accepted by two-thirds
of the General Assembly (128
votes).
The permanent members,
each holding the right of veto, an-
nounced their posi6ons on Secu-
rity Council reform reluctantly.
The United States supported the
permanent membership of Japan
and a small number of addi6onal
non-permanent members. The
United Kingdom and France es-
sen6ally supported the G4 posi-
6on, with the expansion of
permanent and non-permanent
members and the accession of
German, Brazil, India and Japan
to permanent member status, as
well as an increase the presence
by African countries on the Coun-
cil. China supported the stronger
representa6on of development
countries.
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Caste Census
Cabinet clears caste census in 2011
A
'er several delibera6ons
within the government on
the poli6cally-sensi6ve
issue, the Union cabinet decided
to carry out a separate house-to-
house caste enumera6on from
June to September next year
Giving in to demands from al-
most all poli6cal par6es, govern-
ment on Sep 9 2010. decided to
hold caste census next year
under an exercise to be carried
out separately from the enumer-
a6on of popula6on.
A'er several delibera6ons within
the government on the poli6-
cally-sensi6ve issue, the Union
cabinet decided to carry out a
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By : Avadhesh Kumar Pandey
separate house-to-house caste
enumera6on from June to Sep-
tember next year.
According to home minister P.
Chidambaram, a'er considering
various op6ons, the op6on that
we have approved is, based on
the responses of various poli6cal
par6es, that caste must be can-
vassed and the integrity of the
headcount must not be affected.
The caste enumera6on will be
conducted in a phased manner
a'er the popula6on enumera-
6on, which will include biometric
capture and headcount, is com-
pleted by March next year, he
said. He evaded a reply when
asked whether caste enumera-
6on would be merged with the
headcount.
The decision has been taken
a'er considering op6ons sug-
gested by the Group of Ministers
(GoM) set up on the issue and
the consulta6ons that finance
minister Pranab Mukherjee held
with leaders of various par6es.
Par6es like Rashtriya Janata
Dal, Samajwadi Party and Janata
Dal (United) had disrupted pro-
ceedings in Parliament for several
days during the Budget and Mon-
soon sessions while pressing for
caste census.
The Bhara6ya Janata Party,
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which was divided ini6ally, later
decided to support it. The issue
even divided the Congress as well
as the Union cabinet with some
favouring caste census and others
opposing it, promp6ng the gov-
ernment to set up a GoM to con-
sider all aspects related to such a
move.
Chidambaram said a suitable
legal regime for collec6on of data
on castes would be formulated in
consulta6on with the ministry of
law and jus6ce.
There will be an addi6onal
cost for the exercise which will be
assessed at a separate mee6ng.
The office of the Registrar Gen-
eral and Census Commissioner
would conduct the field opera-
6ons of the caste enumera6on.
The Central government will
cons6tute an expert group to
classify the caste/tribe returns
a'er the enumera6on is com-
pleted. The office of the Registrar
General and Census Commis-
sioner would hand over the de-
tails of the castes/tribes returned
in the enumera6on to the pro-
posed expert group.
The last caste-wise census
was held in 1931 and such a prac-
6ce had been given up as a mat-
ter of policy a'er Independence.
In response to the demands
for enumera6ng castes other
than Scheduled Castes and
Scheduled Tribes in the Census
2011 raised inside Parliament as
well as by various groups outside,
the ministry of home affairs sub-
mi7ed a note to the Union cabi-
net in May 2010 pertaining to this
issue.
India launches Census
2011, the biggest-ever in
history
India on Apr 01, 2010 launched
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“Census 2011,'' the biggest-ever ship of mobile phones, comput-
census a7empted in the history ers, internet, having treated or
of mankind enumera6ng the untreated drinking water facility
country's 1.2 billion popula6on and usage of banking services.
and classifying usual residents ac- They will also seek addi6onal in-
cording to their gender, religion, forma6on for the crea6on of
occupa6on and educa6on. NPR. The government has al-
The massive exercise, to be ready said that no informa6on
spread over next 11 months, will will be collected on castes as no
mark a milestone as the first-ever caste-based census has ever been
Na6onal Popula6on Register conducted in independent India.
(NPR) will also be prepared in The second phase, called the
which all persons aged over 15 Popula6on Enumera6on phase,
years will be photographed and will be conducted simultaneously
fingerprinted to create a biomet- all over the country from Febru-
ric na6onal database. With this ary 9 to 28, 2011, and the en6re
India will probably become the exercise would be completed by
first democra6c na6on in the March 5, 2011.
world which would have got its All 640 districts, 5,767 tehsils,
popula6on fingerprinted in a year 7,742 towns and more than six
from now. lakh villages will be covered.
As the first ci6zen of the
country, President Pra6bha De-
visingh Pa6l was the first person What is Census
to be listed in the decennial exer-
cise. She appealed to her compa- The Indian Census is the most
triots to follow her example “for credible source of informa6on on
the good of the na6on.'' Demography (Popula6on charac-
The 15th Na6onal Census ex- teris6cs), Economic Ac6vity, Liter-
ercise, since 1872, will see over acy & Educa6on, Housing &
25 lakh officials
capturing the
socio-economic-
cultural profile of
its ci6zens. It will
cost around Rs.
2,209 crore while
the expenditure on
NPR will be Rs.
3,539.24 crore.
The exercise will
also consume
more than 11 mil-
lion tonnes of
paper.
During the
massive exercise,
the enumerators
for the first 6me
will collect infor-
ma6on like owner-
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Featured Article
Household Ameni6es, Urbaniza-
6on, Fer6lity and Mortality,
Scheduled Castes and Scheduled
Tribes, Language, Religion, Migra-
6on, Disability and many other
socio-cultural and demographic
data since 1872. Census 2011 will
be the 15th Na6onal Census of
the country. This is the only
source of primary data at village,
town and ward level. It provides
valuable informa6on for planning
and formula6on of polices for
Central & State Governments and
is widely used by Na6onal & In-
terna6onal agencies, scholars,
business people, industrialists,
and many more. The delimita-
6on/reserva6on of Cons6tuen-
cies
Parliamentary/Assembly/Pan-
chayats and other Local Bodies is
also done on the basis of the de-
mographic data thrown up by the
Census. Census is the basis for re-
viewing the country's progress in
the past decade, monitoring the
on-going schemes of the Govern-
ment and most importantly, plan
for the future. That is why the slo-
gan of Census 2011 is "Our Cen-
sus, Our Future".
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Na$onal Popula$on
Register
The NPR would be a Register of
usual residents of the country.
The NPR will be a comprehensive
iden6ty database that would help
in be7er targe6ng of the benefits
and services under the Govern-
ment schemes/programmes, im-
prove planning and help
strengthen security of the coun-
try. This is being done for the first
6me in the country.
How will both these exercises be
conducted?
The Census is a statutory exercise
- conducted under the provisions
of the Census Act 1948 and Rules
made there under. The NPR is
being created under the provi-
sions of the Ci6zenship Act and
Rules.
Census Process
The Census process involves vis-
i6ng each and every household
and gathering par6culars by ask-
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ing ques6ons and filling up Cen-
sus Forms. The informa6on col-
lected about individuals is kept
absolutely confiden6al. In fact
this informa6on is not accessible
even to Courts of law. A'er the
field work is over the forms are
transported to data processing
centres located at 15 ci6es across
the country. The data processing
will be done using sophis6cated
so'ware called Intelligent Char-
acter Recogni6on So'ware (ICR).
This technology was pioneered
by India in Census 2001 has be-
come the benchmark for Cen-
suses all around the globe. This
involves the scanning of the Cen-
sus Forms at high speed and ex-
trac6ng the data automa6cally
using computer so'ware. This
revolu6onary technology has en-
abled the processing of the volu-
minous data in a very short 6me
and saving a huge amount of
manual labour and cost.
NPR Process
Details such as Name, Date of
Birth, Sex, Present Address, Per-
manent Address, Names of Fa-
ther, Mother and Spouse etc will
be gathered by visi6ng each and
every household. All usual resi-
dents will be eligible to be in-
cluded irrespec6ve of their
Na6onality. Each and every
household will be given an Ac-
knowledgement Slip at the 6me
of enumera6on. The data will
then be entered into computers
in the local language of the State
as well as in English. Once this
database has been created, bio-
metrics such as photograph, 10
fingerprints and probably Iris in-
forma6on will be added for all
persons aged 15 years and above.
This will be done by arranging
. . Vol. - 19
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camps at every village and at the
ward level in every town. Each
household will be required to
bring the Acknowledgement Slip
to such camps. Those who miss
these camps will be given the op-
portunity to present themselves
at permanent NPR Centres to be
set up at the Tehsil/Town level. In
the next step, data will be printed
out and displayed at prominent
places within the village and ward
for the public to see. Objec6ons
will be sought and registered at
this stage. Each of these objec-
6ons will then be enquired into
by the local Revenue Department
Officer and a proper disposal
given in wri6ng.
Persons aggrieved by such
order have a right of appeal to
the Tehsildar and then to the Dis-
trict Collector. Once this process
is over, the lists will be placed in
the Gram Sabha in villages and
the Ward Commi7ee in towns.
Claims and Objec6ons will be re-
ceived at this stage also and dealt
with in the same manner de-
scribed above. The Gram
Sabha/Ward Commi7ee has to
give its clearance or objec6on
within a fixed period of 6me a'er
which it will be deemed that the
lists have been cleared. The lists
thus authen6cated will then be
sent to the Unique Iden6ty Au-
thority of India (UIDAI) for de-du-
plica6on and issue of UID
Numbers. All duplicates will be
eliminated at this stage based on
comparison of biometrics.
Unique ID numbers will also be
generated for every person. The
cleaned database along with the
UID Number will then be sent
back to the Office of the Registrar
General and Census Commis-
sioner, India (ORG&CCI) and
would form the Na6onal Popula-
6on Register. As the UID system
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works on the basis of biometric
de-duplica6on, in the case of per-
sons of age 15 years and above
(for whom biometrics is avail-
able), the UID Number will be
available for each individual. For
those below the age of 15 years
(for whom biometrics is not avail-
able), the UID Number will be
linked to the parent or guardian.
Will Caste Census in
India Change Anything?
The recent approval by the Gov-
ernment of India for caste based
census has aroused concerns
among poli6cal par6es as well as
social scien6sts and ethnogra-
phers. For the self-proclaimed
‘modernists’ such regressive
measures are likely to heighten
caste consciousness among Indi-
ans. While the pragma6sts argue
that data on caste can help the
government to be7er target affir-
ma6ve ac6on policies and
thereby address caste differences
ra6onally. The fact however is the
that caste as a social reality in
India draws succour from mul6-
ple sources which will remain un-
touched by either the proposed
census or the resultant official
policies. Caste issues influence
everyday life of Indians in count-
less ways.
For those who think that
caste in India is merely a tool of
poli6cal opportunism or a rem-
nant of ancient Hindu culture,
visit to the rural regions of North
Kerala during the winter months
can be surprising and unnerving.
Every year as the winter sets in,
rural areas of North Kerala pre-
pare for a unique transforma6on
of social rela6ons. Theyyam is an
art form where performers, be-
longing to lower castes, are be-
Featured Article
lieved to be incarnated by local
dei6es and members of higher
castes flock to seek their blessing.
For three months of the year indi-
viduals from the lower castes are
elevated to the status of God but
have to live as untouchables once
the Theyyam season culminates.
Numerous rituals and cus-
toms like Theyyam con6nue to
nourish the prac6ce of caste dif-
ferences in India. One only needs
to skim through the matrimonial
columns in leading English dailies
to get a sense that caste is an im-
portant considera6on even for
the ‘modern’ elite segment of the
urban Indian popula6on.
Stephen P. Rosen in his book
Socie6es and Military Power:
India and its Army discuss the
con6nuing salience of caste in
India’s army. Though many would
consider Rosen’s conclusions
somewhat extreme but he does
raise several valid concerns. The
ba7alions in the Indian Army con-
6nue to be organised as the Jat,
Sikh, Dogra or Rajput regiments.
The Poona Pact between Ma-
hatma Gandhi and B.R. Ambed-
kar in 1932 gran6ng reserva6on
for ‘depressed’ classes in the
provincial legislatures was a pre-
cursor for the phenomenal poli6-
cal salience of caste in Indian
poli6cs. From the Backward
Classes Commission’s endeavour
to create a master list of other
backwards classes in 1955 to
KHAM (Kshatriyas, Harijans, Adi-
vasis and Muslims) poli6cs of the
Congress (I) in the 1980s; from
the Mandal Commission uproar
in the 1990s to growing mass ap-
peal of Dalit based poli6cal par-
6es like the Bahujan Samaj Party,
India’s poli6cal arena has wit-
nessed countless caste inspired
s6rrings. No observer of Indian
poli6cs can ignore the role of
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caste in determining electoral
outcomes.
Moreover, even before the
on-going controversy over the
2010 caste census erupted, the
Government of India had been in-
volved in many projects catego-
rizing its popula6on along caste
lines. Despite cri6cisms from his-
torians, poli6cal scien6sts and an-
thropologists the Government of
India did not abandon the colo-
nial state’s prac6se of differen6-
a6ng people along lines of caste
and religion in the People of India
projects. According to Susan
Bayly, in the late 1990s the An-
thropological Survey of India was
undertaking “massive exercise in
caste-based data collec6on- the
People of India Project- with
funding from Planning Commis-
sion. The project has used DNA
sampling to iden6fy difference
between individual castes and
tribes. Readers are told that as
composite ‘type’, the Schduled
Castes have ‘rela6vely broad
noses’; chamars says another
entry are characterized by a ‘long,
narrow head shape and a long
moderately broad nasal shape.”
Such, outrageous dis6nc6ons
based on caste in a report spon-
sored by a State agency had gone
completely unno6ced by the
‘modernists’ and pragma6cs in-
volved in recent debate. Though
previous censuses have not in-
cluded ques6ons of caste directly,
the ethnographic notes in the
census reports have contributed
much to literature on caste in
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India.
According to the pragma-
6sts India cannot simply
assume ‘modernity’ by ig-
noring caste. They see
caste as a form of social
stra6fica6on much like
class in Britain or race in
the U.S. The U.S. census
and job applica6ons have a vol-
untary disclosure segment requir-
ing informa6on about the
individual’s race. Comparing
caste with class and race appears
incorrect if one realises that un-
like other forms of social stra6fi-
ca6ons, caste in India is allegedly
sanc6oned by the sacred scrip-
tures. Even though the scriptural
sanc6ty of caste is open to de-
bate many Indians cite the
Manusmri6 and Bhagavad Gita to
support arguments in favour of
caste. It is much simpler to ad-
dress differen6a6ons based on
skin colour or na6onality than
stra6fica6ons perceived to be or-
dained by religious texts.
Caste based social prac6ces
in India go beyond the more visi-
ble poli6cal and economic dimen-
sions and these subtle aspects
are unlikely to be impacted by
the enumera6on of caste through
the census.
Brief History of Census
The earliest literature 'Rig-Veda'
reveals that some kind of popula-
6on count was maintained in dur-
ing 800-600 BC in India. The
celebrated 'Arthashastr' by 'Kau-
6lya' wri7en in the 3rd Century
BC prescribed the collec6on of
popula6on sta6s6cs as a measure
of state policy for taxa6on. It con-
tained a detailed descrip6on of
methods of conduc6ng popula-
6on, economic and agricultural
censuses. During the regime of
the Mughal king Akbar, the ad-
ministra6ve report 'Ain-e-Akbari'
included comprehensive data
pertaining to popula6on, indus-
try, wealth and many other char-
acteris6cs.
A systema6c and modern
popula6on census, in its present
form was conducted non syn-
chronously between 1865 and
1872 in different parts of the
country. This effort culmina6ng in
1872 has been popularly labeled
as the first popula6on census of
India However, the first synchro-
nous census in India was held in
1881. Since then, censuses have
been undertaken uninterruptedly
once every ten year.
The Census of India 2001 was
the fourteenth census in the con-
6nuous series as reckoned
from1872 and the sixth since in-
dependence. The gigan6c task of
census taking was completed in
two phases. In the first phase,
known as House -lis6ng Opera-
6ons, all building and structures,
residen6al, partly residen6al or
non- residen6al were iden6fied
and listed and the uses to which
they were put recorded. Informa-
6on on houses, household
ameni6es and assets were also
collected. In the second phase,
known as Popula6on Enumera-
6on, more detailed informa6on
on each individual residing in the
country, Indian na6onal or other-
wise, during the enumera6on pe-
riod was collected.
At the Census 2001, more
than 2 million (or 20 lakh) enu-
merators were deployed to col-
lect the informa6on by visi6ng
every household. The Indian Cen-
sus is one of the largest adminis-
tra6ve exercises undertaken in
the world.
. . Vol. - 19
 Karnataka Crisis
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Featured Article

Karnataka chief minister B S Yeddyurappa expectedly

won a vote of confidence in the truncated state As-
sembly, a victory which will depend on the High Court's
decision on the disqualificaon of 16 MLAs.

F
acing the second trial of
strength in four days, Yed-
dyurappa's mo6on ex-
pressing confidence in his council
of ministers was carried by 106
votes suppor6ng it and 100
against.
The BJP had the support of
105 MLAs and an Independent
MLA, while Congress had 73,
JD(S) 27 in a house of 206.
The proceedings were or-
derly and the vote was taken
through head count unlike the
pandemonium that surrounded
controversial vote that was de-
clared passed by a voice vote.
One Independent MLA, who was
with the Opposi6on, sided with
the Government.
Earlier, Speaker K G Bopaiah
rejected a plea of the Leader of
Opposi6on Siddaramaiah for
postponing vote in view of the
hearing on disqualifica6on pe6-
6ons by the Karnataka High
Court. The House was adjourned

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Featured Article
sine die later.
Two MLAs-- Manappa Vajjal
from BJP and M C Ashwath of
JD(S) were absent from the
House, which brought down the
effec6ve strength of the 224-
member assembly to 206.
Sixteen MLAs, 11 from BJP
and five Independents -- were
disqualified under an6-defec6on
law on October 10 by the Speaker
ahead of the Monday's vote
which has been challenged in the
High Court.
The court has reserved its or-
ders on the plea of the BJP MLAs
for quashing the Speaker's or-
ders, while it adjourned hearing
on the plea of the Independent
MLAs.
Yeddyurappa was forced to
go in for the second trial of
strength a'er Governor H R
Bhardwaj rejected the result of
the vote as "farce" and gave him
another chance on, which the BJP
accepted.
Governer Bhardwaj had rec-
ommended to the Centre imposi-
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6on of President's means of two mo6ons:
rule in Karnataka Mo6on of confidence: A mo-
holding that the Con- 6on of confidence is a mo6on of
s6tu6on machinery support proposed by the govern-
had broken down. ment in Parliament or other as-
The High Court sembly of elected representa6ves
also did not provide to give the Members of Parlia-
interim relief to dis- ment (or other such assembly) a
qualified MLAs and chance to register their confi-
with the number dence in the government.
favouring him in the The mo6on is passed or re-
assembly, Yeddyu- jected by means of a parliamen-
rappa accepted the tary vote (a vote of confidence).
Governor's offer to No confidence mo6on: A mo-
take the floor test, 6on of no confidence (also vote
the second 6me of no confidence, censure mo-
trust vote. 6on, no-confidence mo6on, or
confidence mo6on) is a parlia-
mentary mo6on tradi6onally put
What is a trust before a Parliament by the Oppo-
vote? si6on in the hope of defea6ng or
weakening a government, or,
A "trust vote" is a rarely by an erstwhile supporter
process by which the council of who has lost confidence in the
ministers establishes that it en- government.
joys the confidence of the major- The government proposes a
ity of the House of the People i.e. mo6on of confidence, whereas
the Lok Sabha. It is done by the the Opposi6on proposes a no
Prime Minister moving a resolu- confidence mo6on.
6on seeking support for his gov- Defeat of a Mo6on of Confi-
dence in the Parliament generally
requires one of two ac6ons:
• The resigna6on of the gov-
ernment, or
• A request for a parliamentary
dissolu6on and the calling of
a general elec6on.
ernment. A trust vote would
generally be by way of a mo6on
(of confidence or no confidence
as the case may be). If the mo6on
(for confidence) is carried, it is
called a trust vote.
Trust vote is a generic term
used to check the confidence en-
joyed by the government in Par-
liament. It is generally tested by
. . Vol. - 19
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Who ini$ates the
trust vote?
If the mo6on is a confidence mo-
6on, the government proposes it
and if it's a no-confidence mo-
6on, it's proposed by the Opposi-
6on.
What is a whip?
It is a vo6ng instruc6on issued to
the members of a poli6cal party
by the leadership. Since legisla-
tures typically only require a ma-
jority of the quorum in
a7endance, a majority party can
be outvoted if a large number of
its legislators are absent and the
Opposi6on is in full a7endance.
An important part of a govern-
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ment whip's job is to ensure that
this situa6on never arises.
What if an MP goes
against the whip?
If a party member violates the
whip, he may be disqualified. It
usually happens in case of a trust
vote. For example, the total num-
ber of seats in the Lok Sabha is
543 and majority is needed at
272. Every party issues a whip to
their members. Now if 10 mem-
bers of the Opposi6on go against
the whip and vote against the in-
struc6ons of the party, it be-
comes easier for the government
to survive. It wins the trust vote.
But the respec6ve party may take
ac6on against the guilty mem-
bers and they may be disquali-
Featured Article
fied.
In another case, if members
abstain even a'er the whip is is-
sued, the total becomes 533. The
majority required in this case be-
comes 267. Thus, the number
needed to save the government
is reduced and if it secures the re-
quired seats, the government is
safe.
If there isn't any whip?
Then it is not absolutely essen6al
for all the members present to
vote. Some may choose to ab-
stain or stay away. So, if some
members don't come or don't
vote or ensure that their votes
are invalidated, then too the out-
come is valid.
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Featured Article

Last of Chile's 33
miners rescued,
ordeal ends
All of Chile's 33 trapped miners

F
Luis Urzua, 54, who was
leading the shi' at the
6me of the collapse, was
the last of the miners to travel
through 2,050 feet (625 meters)
of rock to the surface in a capsule
barely wider than a man's shoul-
ders.
Celebra6ons erupted across
the country as he emerged to a
hero's welcome above the San
Jose gold and copper mine in
Chile's northern Atacama desert,
wearing his hard-hat and dark
shades to protect his eyes a'er
spending 69 days in a dimly-lit
were rescued from the bowels of the
earth in a special capsule on October
14, 2010 as an extraordinary two-
month survival story many call a
miracle triggered wild celebrations.
tunnel. Urzua beamed as an opened the capsule door and
elated crowd chanted, yelled, hugged Urzua, who had insisted
sobbed and waved red, white and throughout that he would not
blue Chilean flags. leave the tunnel un6l all the
The miners have set a new world other miners were safely evacu-
record for survival trapped un- ated. They are now all safe,
derground. Rescue workers thanks to a me6culously-planned

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to the surface in the metal cap-
sule, named Phoenix a'er the
mythical bird that rose from the
ashes.
Church bells rang out in Chile
when the first miner was extri-
cated and Chileans were glued to
their televisions, proud of their
na6on's ability to save the men in
a world class rescue opera6on.
Euphoria
Euphoric rescuers, rela6ves and
friends broke into cheers -- and
tears -- as the miners emerged to
breathe fresh air for the first 6me
since the mine caved in on Aug 5.
They were all ini6ally believed to
be dead but rescue teams found
the men 17 days a'er the col-
lapse with a bore hole the width
of a grapefruit.
The 6ny hole then became an
umbilical cord used to pass hydra-
6on gels, water and food to keep
them alive during one of the
rescue oper-
a6on that
went quicker
and more
smoothly
than anyone
dared to be-
lieve.
Now the res-
cue workers
who traveled
the down
the sha' to
help evacu-
ate them will
themselves
be winched
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world's most ambi6ous rescue
opera6ons. Their story of survival
captured global a7en6on.
Some 1,500 journalists were
at the mine to report on the res-
cue opera6on, which was broad-
cast live around the world,
including drama6c live images of
the miners hugging rescuers who
traveled down the sha' to their
refuge deep in the mine.
The flawless rescue was a big
success for Chilean President Se-
bas6an Pinera, who waited at the
mouth of the sha' through the
night and day to greet and hug
the men as they emerged from
the red, white and blue capsule -
- the Chilean colors.
Pinera, a billionaire entrepre-
neur who took office in March,
ordered an overhaul of Chile's
mine safety regula6ons a'er the
accident. His popularity ra6ngs
have surged and his government
has won praise for its handling of
the crisis.
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Among millions of people
who watched television coverage
of the rescue of the first miner
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was US President Barack Obama,
who hailed the opera6on as an
inspira6on to the world.
Thirty-two of the
miners are Chilean but
one is from neighbor-
ing Bolivia and the res-
cue has helped
improve 6es between
the two countries,
locked in a bi7er dis-
pute for more than a
century over Bolivia's
demands for access to
the Pacific. Bolivia's
President Evo Morales
was at the mine to
welcome the Bolivian
miner, Carlos Mamani,
as he was li'ed to
safety and he thanked
Pinera and his govern-
ment for rescuing him.
Chile will con6nue to
shut old, decrepit
mines a'er the min-
ers' saga, but the
clampdown is unlikely
to hit output in the
world's top copper
producer, industry in-
siders say. The mining
industry has played a
central and o'en
tragic role in La6n
American history,
star6ng with the
hunger for gold and
silver that drove the
Spanish conquest and
led to the enslave-
ment of indigenous
peoples.
For centuries,
condi6ons in La6n
American mines were
miserable but they
have improved dra-
ma6cally in recent
decades and the in-
dustry has over the
last 10 years helped fuel a boom
in some of the region's
economies, including Chile.
. . Vol. - 19
 Winners
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Featured Article
speech as well as amount of money that comes

of
freedom of assem- with it.
bly. This year there China is of course angry at
were a record num- the Nobel commi7ee for award-
ber of nomina6ons ing the pres6gious award to Liu
for the Nobel Peace Xiaobo. Obama has called on the

Nobel
Prize at a staggering chine government to release the
two hundred and prisoner.
thirty seven. Last
year President Bar-

Prize
rack Obama won a The Nobel Prize in
Nobel Peace Prize Physics 2010
for his extraordi-
nary efforts in The Nobel Prize in Physics 2010

2010
strengthening inter- was awarded jointly to Andre
na6onal diplomacy.
The Nobel Peace
Prize awarded to Liu
Xiaobo is the fi'h

Nobel Peace Prize

Winner 2010 :
Liu XiaoboI
In Oslo, it was announced that
Chinese ac6vist and writer Liu Xi-
aobo has won a Nobel Peace
Prize. It has been reported that
the writer and ac6vist was cho-
sen for the award because of his
constant ba7le for human rights.
The commi7ee who chose the
winners of the awards stated that
there is a close connec6on be-
tween peace and human rights,
hence Liu being awarded the cov-
eted prize which is worth one
point five million dollars.
The Nobel Prize winner is cur-
rently serving an eleven year
prison sentence for inci6ng sub-
version of state power in China.
The commi7ee chairman, Thorb-
jorn Jagland said that China was
in breach of several interna6onal
conven6ons such as freedom of
award in two thousand and ten.
The other awards which are for
medicine, physics, chemistry, and
literature were announced to the
public earlier on in the week.
There are usually many nomina-
6ons for Nobel Peace Prizes each
year, but this year it was more
than most, as men6oned above.
Those lucky enough to win not
only have the privilege of winning
the award, but also the huge
Geim and Konstan6n Novoselov
"for groundbreaking experiments
regarding the two-dimensional
material graphene"
Nobel Prize for medicine
The intensely modest Bri6sh sci-
en6st who pioneered IVF has
been honoured with a ‘long over-
due’ Nobel prize for medicine.
Just seven years ago Robert
Edwards joked that he wasn’t
bothered about being overlooked
for a knighthood, but a Nobel
would be nice.
Professor Edwards, emeritus
professor of human reproduc6on
at Cambridge University, was her-

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alded as the creator of modern
reproduc6ve medicine.
His work with gynaecologist and
fellow Briton Dr Patrick Steptoe
led to the birth in July 1978 of
Louise Brown, the world’s first
‘test tube baby’.
Their research came against a
backdrop of significant opposi-
6on from the medical and reli-
gious establishments. They
persevered, however, and in vitro
fer6lisa6on – whereby human
eggs are fer6lised outside the
body and then implanted in the
womb – has since resulted in
4.3million births worldwide.
The Nobel prize commi7ee in
Stockholm said Professor Ed-
wards’s ‘achievements have
made it possible to treat infer6l-
ity, a medical condi6on afflic6ng
a large propor6on of humanity’.
Nobel Literature Prize
Peruvian writer Mario Vargas
Llosa has won the 2010 Nobel
prize for literature. The Nobel
Prize commi7ee said in a state-
ment Vargas Llosa received the
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award "for his cartography of
structures of power and his
trenchant images of the individ-
ual's resistance, revolt and de-
feat".
The 74-year-old writer is the
first South American to win the
Nobel since Colombian magic-re-
alist innovator Gabriel Garcia
Marquez in 1982. Mexico's Oc-
tavio Paz won the prize in 1990.
Like Paz and many other La6n
American authors, Vargas Llosa
has dabbled in poli6cs over the
years. He even ran, unsuccess-
fully, for the the Peruvian presi-
dency in 1990.
From the publica6on of his
first novel, 1963 -- The Time of
the Hero, based on his experi-
ences at a Peruvian military acad-
emy, Vargas Llosa is recognized as
a leading figure in the La6n Amer-
ican literature in the second half
of the 20th century.
He has wri7en essays, non-
fic6on, and fic6on in a wide vari-
ety of genres and styles. The
Green House is widely considered
among his best works. It is a non-
chronological account of unrest
in Peru centered on the desert
brothel of the 6tle.
The bi7er 1969 novel Conver-
sa6ons in the Cathedral embeds
a cri6que of the dictatorship of
Peruvian president Manuel Odria
in the story of one man's search
for the truth about his minister
father's role in the murder of a
notorious underworld figure.
In the 2000 novel The Feast
of the Goat (published in the U.S.
in 2002), Vargas Llosa makes a
startlingly unsympathe6c, Shake-
speare-worthy villain of Rafael
Trujillo, the real-life military des-
pot who ruled the Dominican Re-
public from 1930-61.
Many Americans may know
Vargas Llosa best for his 1977
comic novel, Aunt Julia and the
Screenwriter, which was adapted
into American director Jon
Amiel's widely praised movie
Tune in Tomorrow, starring Peter
Falk as a larger-than-life creator
of radio soap operas who manip-
ulates the May-December rela-
6onship of a young aspiring
writer (Keanu Reeves) and his
older, twice-divorced aunt by
marriage (Barbara Hershey).
(EW's Owen Gleiberman said the
film "crackles with roman6c
heat.")
Nobel Prize in Chemistry
Two Japanese scien6sts and an
American researcher won the
Nobel Prize in Chemistry for de-
veloping chemical reac6ons that
help create large quan66es of or-
ganic substances that can be used
for medicine.
Richard F. Heck of the Univer-
sity of Delaware in Newark,
Delaware, Akira Suzuki, 80, of
Hokkaido University in Sapporo,
Japan, and Ei-Ichi Negishi, 75 of
Purdue University in West
. . Vol. - 19
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Lafaye7e, Indiana, will share the
10 million-kronor ($1.5 million)
award, the Royal Swedish Acad-
emy of Sciences said at a press
conference in Stockholm.
Last year’s prize in chemistry
went to Venkatraman Ramakrish-
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nan, of the United Kingdom;
Thomas A. SteitzThomas A.
Steitz, of the United States; and
Ada E. Yonath, of Israel, for their
work on how the DNA code is
translated into life, findings that
have been used to fight infec6ous
disease.
Nobel Economic Prize
Peter Diamond, Dale Mortensen
Dale Mortensen and Christopher
Pissarides won the 2010 Nobel
Prize in Economics Sciences.
Peter Diamond, Dale Mortensen
and Christopher Pissarides re-
ceived the 2010 Nobel Prize in
Economics Sciences for their re-
search on efficacy of service and
compensa6on model. Peter Dia-
mond had also made contribu-
6ons to the labor-market
considera6ons along with the
other two scien6sts that finally
led them to win the Nobel Prize
for Economic Sciences 2010.
Now that Peter Diamond
marked his name on the Nobel
Prize in economics Shelby must
rethink his objec6on. Shelby, in
fact, by no means said that Peter
Diamond was not a good econo-
mist. He actually held that Peter
Diamond has no idea of mone-
tary economics. That too is a fool-
ish idea in itself.
“Peter Diamond has analyzed
the founda6ons of search mar-
kets. Dale Mortensen and
Christopher Pissarides have ex-
panded the theory and have ap-
plied it to the labor market. The
laureates’ models help us under- Peter Diamond is seventy
stand the ways in which unem- years old. Peter Diamond is an
ployment, job vacancies, and economics professor at the Mas-
wages are affected by regula6on sachuse7s Ins6tute of Technol-
and economic policy”, said the ogy. Peter Diamond has
Royal Swedish Academy of Sci- conducted many researches on a
ences. wide range of topics.
. .
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Current Affairs
India & World
India commi1ed to en-
suring safety of sea lanes
Indian Defence Minister AK
Antony said the country was
commi7ed to figh6ng the "seri-
ous challenge" of piracy and
called for "coopera6ve ap-
proaches" for ensuring the secu-
rity of sea lanes in the Asia-Pacific
region - "one of the most impor-
tant drivers of global economic
growth".
Addressing the first Associa-
6on of Southeast Asian Na6ons
plus eight (Asean+) defence min-
isters' mee6ng in this Vietnam
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capital, Antony said piracy was "a address piracy," he said.
serious challenge for the world He said the security of sea
community". lanes was "important for the
"The security of sea lanes of Asia-Pacific region, which is now
communica6on is vital in today's one of the most important driv-
world. It is in the common inter- ers of global economic growth".
est of na6ons to keep sea
lanes open, secure and free
for naviga6on, trade and en-
ergy supplies.
"The Indian Navy is ac-
6vely engaged in providing
an6-piracy patrolling and es-
cort opera6ons in the Gulf of
Aden for over two years
now. India is commi7ed to
working together with other
countries in the efforts to
. . Vol. - 319
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"Through the Regional Coop-
era6on Agreement on Comba6ng
Piracy and Armed Robbery
against Ships in Asia (ReCAAP)
and the Malacca Straits mecha-
nisms, we are partnering with
other countries in the region to
improve the safety of naviga6on
in the region," he said.
The Asean+ defence minis-
ters' mee6ng, which has no for-
mal name yet, is the crea6on of
the South East Asian forum that
brings together all the 10 South
East Asian countries and their key
dialogue partners - Australia,
China, India, Japan, New Zealand,
Russia, South Korea, and the US.
Antony also affirmed India's
"strong commitment" to the
forum for "peace and stability" in
the region. Antony is accompa-
nied by Defence Secretary
Pradeep Kumar on his visit to
Vietnam.
India closes in on free
trade deal with Japan
India moved one step closer to
signing a free trade agreement
with Japan as the cabinet cleared
a deal which could increase bilat-
eral commerce tenfold between
the two Asian powers.
"The cabinet has cleared it,"
government spokesperson Nee-
lam Kapoor, adding the deal was
expected to be finalised when
Prime Minister Manmohan Singh
visits Japan later in October.
The pact is one of several
India, with its economy growing
at 8.5 percent or more this year
and its poten6al customer base
of 1.2 billion, is nego6a6ng.
Asia's third-largest economy
wants to sharply increase its
share of global trade, currently
less than two percent, in line with
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its rising global he&. A similar
deal with the European Union,
India's largest trade partner, may
also be concluded soon.
Trade between India and
Japan in 2009 was 940 billion yen
($11 billion), about 4 percent of
Japan's trade with China, Japan-
ese government figures show.
The Japanese Foreign Minis-
ter has said the deal, which will
eliminate tariffs on 94 percent of
bilateral trade flows in 10 years,
could increase trade tenfold. The
pact follows years of wrangling
over issues such as tariffs on
Japanese car parts and tough
checks on Indian pharmaceu6cal
goods.
India-Japan Strategic
Dialogue
On August 21, 2010, visi6ng
Japanese Foreign Minister Kat-
suya Okada held the fourth round
of strategic dialogue with Exter-
nal Affairs Minister S.M. Krishna.
The two sides discussed the nu-
clear pact, comprehensive eco-
nomic partnership agreement
(CEPA), other bilateral and inter-
na6onal issues, including UN re-
forms and the situa6on in
Featured Article
Afghanistan and Pakistan.
However, the focus was
clearly on the nuke deal, the dis-
cussions on which the two coun-
tries propose to conclude as
quickly as possible without set-
6ng any 6me-line.
Addressing a joint press con-
ference with Krishna a&er the
three-hour talks between the two
sides, Okada candidly admi7ed
that ini6a6ng nego6a6ons with
India on the nuclear pact was the
toughest decision he had taken
during his stewardship of the
Japanese Foreign Ministry, given
the fact that India was not a sig-
natory to the NPT. He also ac-
knowledged that the proposal for
a nuclear agreement with India
was facing sharp cri6cism back
home, since Japan is the only
country to have experienced a
nuclear a7ack.
He also told the Indian side
that the philosophy of nuclear
disarmament and non-prolifera-
6on must be incorporated in the
proposed accord on nuclear co-
opera6on.
Asked if Japan had advised
India against detona6ng another
nuclear device, Okada said: “I
don’t think we can suggest to
India to refrain from conduc6ng a
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Featured Article
test…but if such a thing were to
happen, we shall have no op6on
but to suspend our coopera6on
with India (in the field).”
The two countries will con-
6nue and enhance consulta6ons
within the G-4 process for re-
forms of the UN, including the Se-
curity Council. They also
welcomed the inclusion of the US
and Russia in the East Asia Sum-
mit (EAS).
Gas pipeline agreement
The Gas Pipeline Framework
Agreement (GPFA) for the Turk-
menistan-Afghanistan-Pakistan-
India (TAPI) pipeline has been
signed in Ashkhabad.
A&er signing the GPFA, the
four countries are planning to
enter another round of nego6a-
6ons to finalise the Gas Sales Pur-
chase Agreement during a
proposed TAPI summit in the
Turkmenistan capital itself.
The TAPI pipeline project en-
visages transpor6ng natural gas
from Turkmenistan through
Afghanistan to Pakistan and India.
India is a late entrant as the other
three countries had signed the
Inter Governmental Agreement
in 2002. For the induc6on of
India, a revised GPFA was ini6-
ated in 2008, the Ministry state-
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ment said
The 1,680 km long pipeline is
expected to carry 3.2 billion cubic
feet per day (bcfd) gas from Turk-
menistan. It will deliver 0.5 bcfd
to Afghanistan and 1.35 bcfd to
Pakistan and to India.
Doha Round to miss
deadline
The conten6ous
Doha Round of trade
talks of the World
trade Organiza6on
(WTO) will miss the
2010 deadline due to
domes6c compul-
sions of U.S. that has
made the agreement
almost impossible.
Speaking at a
seminar organised by
the Confedera6on of
Indian Industry on the issue,
Commerce Secretary Rahul
Khullar said the global trade
agreement would not happen
this year as was originally envis-
aged in the Delhi declara6on
adopted in September last year.
“The deal is not going to get done
in 2010,'' Mr. Khullar said.
The U.S. demand for en-
hanced access to Chinese, Indian
and Brazilian markets, while at
the same 6me stepping up pro-
tec6ve trade measures, had fur-
ther mired the already stalled
Doha trade nego6a6ons.
The mul6lateral
trade agreement under
nego6a6ons among 153
members of the WTO
since 2001 was to be
concluded in 2004. Since
then, it has missed sev-
eral deadlines in the face
of differences between
developing and devel-
oped countries on giving
commitments on market open-
ing.
The U.S. is not ready yet,
whatever be the compulsion, po-
li6cal or economic or very high
unemployment. Right now, it is
not happening. At this point of
6me we should primarily be fo-
cussing for the best in 2011,'' he
said.
He expressed hope that seri-
ous nego6a6ons might begin
only from January 2011. With
Congress elec6ons in November,
poli6cal rhetoric in the U.S. in
favour protec6onism had in-
creased in the last few weeks
leading to several protec6onist
measures including ban by Ohio
on outsourcing.
India exhorts G-20
na0ons to coordinate
policies
India exhorted the G-20 member
countries to work together to
. . Vol. - 19
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support a well-func6oning inter-
na6onal economy by coordinat-
ing their policy ac6ons in a
manner that can ensure strong,
sustainable and balanced growth.
Delivering his keynote ad-
dress at a conference on ‘Interna-
6onal coopera6on in 6mes of
global crisis: Views from G-20
countries' here, Finance Minister
Pranab Mukherjee pointed out
that the financial and economic
crisis of 2007-09 had not only ex-
posed the fragility of exis6ng
global financial and economic in-
s6tu6ons and the limita6ons of
exis6ng macro-economic policy
tools but had also provided an
opportunity to the world for new
thinking in the world of finance
and globalisa6on.
Why the penchant for
Swiss accounts?
The recent protocol amending
the Double Taxa6on Avoidance
Agreement (DTAA) between India
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and Switzerland has probably
raised expecta6ons in certain
quarters as to the imminent avail-
ability of details of Swiss bank ac-
counts allegedly opened by
Indians to evade taxes or for any
other purpose not quite legal in
India.
The Finance Minister has clar-
ified that the protocol, while im-
proving upon certain key
provisions of the agreement, will
not be binding on past transac-
6ons. The revised pact seeks to
bring exchange of informa6on
between the two countries —
now confined to taxa6on ma7ers
only — on a par with interna-
6onal standards.
Even this limited enhance-
ment of the protocol is seen as a
major step forward by experts in
the field. But to those who are
convinced that astronomical
sums are hidden in Swiss ac-
counts, which the government of
the day is loathe to iden6fy, leave
alone lay its hands on, the official
clarifica6on would be seen as an-
other one in a long
line of explana6ons
that jus6fy the gov-
ernment's inability
or inac6on. The term
Swiss account has
become generic for
bank accounts in 70-
odd financial centres
around the world,
which like Switzer-
land promise a high
degree of banking
secrecy.
The issue of ‘re-
covering' money al-
legedly stashed
away by Indians in
secret Swiss bank ac-
counts has fasci-
nated several
genera6ons of peo-
Featured Article
ple. Governments of the day,
whatever be their poli6cal hues,
have been defensive. There are
strong grounds to believe that
large sums of money have been
deposited in these secret ac-
counts and the trend is con6nu-
ing.
President Pra0bha
visit to Laos
India will provide the Lao Peo-
ple's Democra6c Republic the
first tranche worth $72.55 million
for two power projects as part of
a package of monetary and tech-
nical assistance in areas ranging
from power and irriga6on to cul-
ture.
The agreements commi7ed
to cover several areas. In the field
of culture, a cultural exchange
programme has been signed for
2011-2013, the centre piece of
which is a project for the Archae-
ological Survey of India (ASI) as-
sistance in the restora6on of the
6th century temple complex of
Vat Phou in the province of
Champassak.
This pre-Ankorian site, estab-
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Featured Article
lished by the Khmer rulers, was
designated a Unesco World Her-
itage Site in 2001.
Work on the complex that
was started by the ASI in 2009
will be resumed under the pres-
ent agreement. At the talks, Ms.
Pa6l informed her Laos' counter-
part that with the approval of the
Nalanda University Bill by Parlia-
ment, India was looking forward
to receiving students from the As-
socia6on of Southeast Asian Na-
6ons (Asean) countries including
Laos.
India, Poland to
strengthen 0es
India and Poland discussed ways
to strengthen bilateral rela6on-
ship, especially in defence, trade
and investment, during delega-
6on-level talks between Prime
Minister Manmohan Singh and
his visi6ng Polish counterpart,
Donald Tusk.
Defence coopera6on with
Poland surged in the Cold War
era from the early 70s when
much of the Indian defence
equipment was of Soviet origin
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and has con6nued, albeit at a low
key since.
India is at present looking to
Poland for maintenance of So-
viet\Russian equipment, includ-
ing aircra& and for the supply of
auxiliary equipment such as tank
recovery vehicles.
India –US Civil Liability for
Nuclear Damage Bill, 2010
In its final form as legislated, the
Civil Liability for Nuclear Damage
Bill, 2010 represents an improve-
ment over the government's ini-
6al and intermediate dra&s.
Weaknesses remain but Parlia-
ment has done well to exclude
private nuclear operators from
the ambit of the law, widen the
scope of the operator's right of
recourse against suppliers, and
raise the liability cap of an opera-
tor in the event of an accident to
Rs.1,500 crore.
The earlier limit of Rs.500
crore was woefully inadequate.
Even though the new cap will not
cover the scale or extent of nu-
clear damage in the event of a se-
rious accident, the law at least
allows future governments to
raise the cap.
The most important change
introduced is, of course, in Sec-
6on 17(b), dealing with the right
of recourse. The first dra& al-
lowed the operator to recover
damages from a supplier in the
event an accident was caused by
gross negligence on the la7er's
part.
Under pressure from foreign
companies and governments, the
United Progressive Alliance gov-
ernment tried to delete this sec-
6on or nullify its significance by
linking its opera6on to the exis-
tence of a contract or to mens rea
on the part of the supplier. Even-
tually, however, it was forced to
swallow the strengthening of this
provision. The operator will now
have a right of recourse against
the supplier if a nuclear accident
is caused by equipment with la-
tent or patent defects or by sub-
standard services.
Predictably, foreign and In-
dian private sector lobbyists like
the U.S.-India Business Council
and various chambers of com-
merce have launched a campaign
against 17(b). They say the sec-
6on is inconsistent with interna-
6onal norms and will lead to a
collapse of the Indian nuclear in-
dustry because private vendors
won't supply equipment for fear
of being held liable.
These arguments are unten-
able. Interna6onal ‘norms' in
such ma7ers do not fall from the
skies but are the product of mar-
ket condi6ons. With India looking
to buy as many as 40 large reac-
tors over the next decade or so, it
has every right to expect that
suppliers shoulder at least the li-
ability burden from an accident
caused by defec6ve products.
Moreover, the operator will
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be able to make a claim only if it
can prove in court that an acci-
dent for which it has paid com-
pensa6on was actually caused by
an act of the supplier. If some pri-
vate lobbyists are worried about
the supplier being held liable
a&er “80 years” for products sold
now, they should at least concede
that the operator will not find it
easy to establish fault liability
eight decades on. In any event,
with operator (and hence sup-
plier) liability capped around
$320 million for a plant likely to
be sold for more than $5 billion,
the insurance burden will be far
from onerous — especially if it is
set against the human lives, wel-
fare, and futures at stake.
India to raise Ohio
outsourcing ban issue at
Trade Policy Forum
India will formally convey its dis-
appointment to the U.S. over the
ban imposed by the State of Ohio
on offshore outsourcing at the
high-level bilateral Trade Policy
Forum (TPF) mee6ng in Washing-
ton later this month.
Mr. Sharma and U.S. Trade
Representa6ve Ron Kirk will co-
chair the September 21 mee6ng
of the TPF, which is the principal
trade dialogue between the U.S.
and India.
Obama raises pitch
against outsourcing
US President Barack Obama once
again targeted the outsourcing of
jobs overseas by American com-
panies, increasing the pressure
on local firms in an a7empt to se-
cure some benefit in the polls
ahead of the crucial November
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elec6ons in his country.
Obama’s party, the Democ-
rats, faces a hugely disillusioned
and angry electorate on Novem-
ber 2, and is widely expected to
lose control of the House of Rep-
resenta6ves. The US president
has spent the last few days trying
to rally his base with promises to
protect jobs and spur economic
growth.
His reference to ending tax
breaks does not mean that US
companies get tax breaks for
shipping jobs overseas. Instead,
the US tax code allows them to
keep the income they earn over-
seas without incurring a tax liabil-
ity. In order to encourage more
local hiring, Obama also gave a
speech in January this year where
he suggested a $5,000 credit for
every job a company created (net
new job) and an overall limit of
$500,000 credit per company for
availing such benefits.
While there is s6ll no specific
proposal elabora6ng how Obama
plans to end the tax breaks, such
measures could mean that large
outsourcing customers such as
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GE and Ci6bank might have to
pay certain taxes on their income
from interna6onal markets, mak-
ing it less a7rac6ve for customers
to send IT projects to cheaper off-
shore loca6ons such as India. To
this end, Obama is proposing re-
forming the taxa6on of the over-
seas income of mul6na6onal
corpora6ons. Under current law,
firms don’t pay taxes to the US
government on income earned
abroad un6l they bring the
money back to the United States.
Many experts say that ending
these tax breaks will not stop out-
sourcing. The economic logic of
sending jobs to low-cost centres
is so compelling that companies
will keep doing it.
Ohio bans off shoring of
IT projects by govt depts
The US state of Ohio has banned
outsourcing of government IT
and backoffice projects to off-
shore loca6ons such as India,
raising fears of similar moves by
other American states struggling
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to cope with high unemployment
rates.
The move is yet another blow
to the Indian IT industry, which is
facing higher visa costs and rising
protests against outsourcing in
other US states. Offshoring work
to India is a $50-billion industry,
and the Indian tech industry has
benefi7ed immensely from
American firms wan6ng to take
advantage of its low wages and
top-quality skills. The industry
employs about three million peo-
ple across India and has largely
been responsible for the sea
change in the West’s percep6on
about the country.
Last month, the US Congress
passed a controversial legisla6on
increasing visa fees for funding
the country’s Mexico Border Se-
curity program. States such as
Virginia are facing a massive
backlash against outsourcing that
could further affect the prospects
of Indian IT firms. Last week, the
West Virginia Public Workers
Union filed a lawsuit against pro-
posed outsourcing of IT jobs by
the state’s office of technology.
Though Indian companies
largely rely on private companies
for the bulk of their business and
orders from state governments
are rare, that approach has slowly
been changing.
Nasscom, on its part, said at
a 6me when top American firms
such as IBM and Accenture are
gaining more business from the
Indian government’s IT spend,
such measures by US states are
discriminatory.
Govt may ease norms
to infuse funds into core
sector projects
The finance ministry has sought a
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lower credit ra6ng threshold for
investment in infrastructure sec-
tor by insurance companies to fa-
cilitate greater flow of the
long-term savings into crea6on of
physical assets.
According to government es-
6mates, infrastructure sector
needs over $1 trillion funds in the
12th Five-Year Plan period begin-
ning 2012.
The current rules allow insur-
ance companies to invest only in
AAA or AA credit-rated debt
paper. Moreover, at least 75% of
investment in debt instruments
for every fund in the case of life
insurers and investment assets of
general insurers should have a
AAA ra6ng.
These restric6ons has meant
that though life insurance compa-
nies are required to put at least
15% of their funds from tradi-
6onal policies into infrastructure
and housing, the actual alloca6on
is a lot less.
At the end of March 2009,
less than 9% of life insurer’s fund
from tradi6onal products were
invested in the housing and infra-
structure products.
The Deepak Parekh commit-
tee on infrastructure financing
had gone a step ahead and sug-
gested that insurance companies
be allowed to invest in secured
debt with a BBB ra6ng, usually
considered investment grade.
Physical infrastructure has
emerged as the single biggest
constraint to the country’s at-
tempts to achieve 9%-plus eco-
nomic growth. Channelling
long-term insurance funds to the
infrastructure sector has become
par6cularly important as banks
cannot meet the needs given the
asset-liability mismatch such
lending causes. Banks’ deposit
funds that typically have a 3-5
year maturity and providing long-
term loans from such fund opens
them to risks if they are not able
to replace the deposits at the
same costs. Banks also have re-
stric6ons on how much they can
lend to an individual project. Pen-
sion and insurance funds have no
such constraints as their invest-
ments are also long-term.
India-U.S. discussions in
full swing prior to
Obama visit
In an unmistakable indica6on of
backroom discussions shi&ing up
a gear before U.S. President
Barack Obama's India visit in No-
vember, the State Department
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announced on that United States
Na6onal Security Adviser General
Jim Jones met with Foreign Sec-
retary Nirupama Rao to “con-
6nue prepara6ons for the
President's upcoming visit.”
Ms. Rao is in Washington
principally to keep the discus-
sions moving forward and it has
been announced that next week
Industry Minister Anand Sharma
will be in town to similarly add
momentum to bilateral trade pol-
icy discussions.
The visi6ng Indian officials
were said to be holding mee6ngs
with senior U.S. counterparts, in-
cluding Under Secretary for Poli6-
cal Affairs William Burns, Under
Secretary for Defence Michèle
Flournoy, Under Secretary of the
Commerce Department's Bureau
of Industry and Security Eric
Hirschhorn, and Chairman of
House Foreign Affairs Commi7ee
Howard Berman.
While it would appear that
the U.S. has in general had a pos-
i6ve a8tude towards the bilat-
eral rela6onship, the Indian side
has been pressing for further
progress with issues such as the
H1-B visa fee hike, India's interest
in securing U.S. support for a per-
manent seat on the U.N. Security
Council and its hope that export
control restric6ons would be
eased. According to sources,
counter-terrorism, in par6cular
its cross-border aspects including
infiltra6on, has been an impor-
tant component of the ongoing
talks between the two countries.
So has the civil nuclear liabil-
ity bill, even if progress on the
ground in this area was expected
to be gradual. In this sphere, the
main argument that India has
sought to convey to the U.S. was
that the liability bill passed in the
Indian Parliament did not contain
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provisions that were addi6onal to
what already existed in common
law and did not contradict the
Conven6on on Supplementary
Compensa6on for Nuclear Dam-
age.
Nuclear bill must be
compa0ble with global
standards, says U.S.
A senior United States official
once again raised Washington's
discomfiture with the Nuclear
Limited Liability Bill approved by
Parliament last month and felt
India should harmonise it with in-
terna6onal laws.
“India has to make its own
decision but in making decisions,
it will be wise for India to look at
the prac6ces of other countries
and ensure that its regula6ons
and its laws are consistent with
those of other countries,” said
U.S. Under Secretary of State for
Economic, Energy and Agricul-
tural Affairs Robert Hormats. He
was speaking to journalists a&er
an interac6ve session on India-
U.S. bilateral economic rela6on-
ship organised by the
Confedera6on of Indian Industry
and the Aspen Ins6tute.
Featured Article
The government here, on the
other hand, claims that the legis-
la6on is compa6ble with interna-
6onal standards.
The Nuclear Liability Bill ran
into objec6ons from the U.S.
soon a&er it was passed on Au-
gust 30. The first off the block
was the U.S.-India Business Coun-
cil (USIBC), which suggested the
next day that the Indian law ap-
peared to be incompa6ble with
the Conven6on on Supplemen-
tary Compensa6on (CSC).
Indo-Nepal rela0ons
The Indian Embassy in Kath-
mandu is in the middle of a con-
troversy. It stands accused, yet
again, of ‘gross interference' and
‘a7acking press freedom in an-
other country', and faces censure
from a parliamentary commi7ee,
poli6cians across the spectrum,
and civil society groups.
sec6ons of the media, re-
cently including Kan6pur televi-
sion which is a part of the larger
Kan6pur group, reported that a
product of Dabur Nepal was sub-
standard and contained harmful
substances. On August 27, the
embassy said, “Indian joint ven-
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tures have informed the embassy
they have been approached by
such media houses for adver6se-
ment and are being threatened
with nega6ve publicity if those
requests are not met.” It termed
the news reports as ‘baseless ad-
verse publicity against products
of such ventures' and said such
allega6ons in the past had proven
to be false.
Marked by hos6lity-The pres-
ent spat is essen6ally a reflec6on
of the hos6le rela6onship be-
tween the Indian government
and the Kan6pur group — the
biggest media house in Nepal.
The Hindu has been able to piece
together the broader context
based on conversa6ons with all
stakeholders, who wished to re-
main anonymous for obvious rea-
sons. Earlier this year, Indian
officials concluded that Kan6pur's
coverage — repor6ng and edito-
rial line — was ‘dis6nctly an6-In-
dian' and ‘insensi6ve to security
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concerns'. Several stories appear
to have contributed to this per-
cep6on.
Jamim Shah, a Nepali entre-
preneur reported to have deep
links with the underworld and
Dawood Ibrahim, was shot in
broad daylight in February this
year. Kan6pur news reports al-
luded to the possibility of Indian
agencies being involved in the in-
cident. It also republished a re-
port from more than a decade
ago when a poli6cal figure, Mirza
Dilshad Beg, with links to Ibrahim,
was shot dead — the specula6on
then was similar about how In-
dian security agencies may have
encouraged other underworld
groups, par6cularly Cho7a Rajan,
to plan the killing. A few months
later, Kan6pur reported exten-
sively on the localised clashes in
Meghalaya which resulted in the
killings of some Nepali na6onals.
Indian officials felt the reports on
the incidents were ‘grossly exag-
gerated' to stoke ‘an6-Indianism'.
The passport issue-Kan6pur
was also at the forefront of op-
posing a government decision to
award contracts to supply ma-
chine readable passports to India.
A parliamentary commi7ee, sec-
6ons of the ruling alliance, and
the Maoists had opposed the
move, claiming the Indian bid
was higher and would ‘harm
Nepal's security'. Kan6pur pub-
lished a le7er — which was
leaked — wri7en by Indian Am-
bassador Rakesh Sood to the
Nepali Foreign Minister Sujata
Koirala in which he requested the
government to cooperate be-
cause among other reasons, this
involved ‘India's security inter-
ests'. The domes6c backlash
forced the Nepal cabinet to re-
voke the decision. Addi6onally,
while India was a firm backer of
the Madhav Kumar Nepal gov-
ernment and sought to isolate
the Maoists, Kan6pur adopted an
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Featured Article
editorial stance asking for Prime Kan6pur's an6-India 6lt, with Mr. Dabur controversy erupted.
Minister Nepal's resigna6on for Sirohiya saying there was no such Some other media houses — a
the sake of consensus. deliberate design and the em- tabloid paper and a television
Adver6sements, newsprint- bassy had never conveyed these channel — had been wri6ng on
All of this seems to have fuelled concerns to them. A broad agree- the issue of Dabur's alleged sub-
the Indian percep6on — which ment was struck where Kan6pur standard products since the end
had first taken root a&er a change is understood to have assured of May. The company's represen-
in top editorial staff in Kan6pur India that it would be more ‘sen- ta6ves had refuted these reports
publica6ons last year — that the si6ve' in its coverage while India — it issued public interest no-
media house, through ‘baseless agreed to release newsprint. 6ces, co-operated with the cer6-
and unsubstan6ated repor6ng' India did gradually resume fica6on authori6es, and wrote to
was targe6ng India's ‘core inter- newsprint supply and Kan6pur's the press council asking it to cen-
ests', stoking ‘ultra na6onalism', editorial tone underwent a subtle sure ‘baseless reports'.
and ‘favouring the Maoists'. shi&. It began to report less on The 6ming of Kan6pur's dis-
India first stopped providing India-related ma7ers with some covery of the issue appears to be
embassy adver6sements to Kan- cri6cal ar6cles being kept out. directly related to the group los-
6pur. It then decided, some6me But the issue of adver6sements ing pa6ence in its talks with In-
in May, to ratchet up the pressure remained unresolved. The em- dian officials, and feeling
and coordinated with other agen- bassy line to the joint ventures insecure. It seems to have con-
cies back home, especially the did not change, even as Kan6pur cluded that its ‘silence' over the
Department of Revenue Inves6- waited for the adver6sements to past two months was being con-
ga6on and customs, to stop resume and asked embassy offi- strued as a ‘sign of weakness',
newsprint imported by Kan6pur cials for help. Meanwhile, some and so thought that ratche6ng up
from South Korea at the Kolkata of these adver6sements were the pressure by targe6ng compa-
port. Simultaneously, Indian offi- shi&ing to its arch-rivals in nies and building public opinion
cials are learnt to have showed Nepal's increasingly compe66ve could challenge the Indians and
files of Kan6pur's ‘an6-India re- media market. force it to change its posi6on. But
por6ng' to Indian joint venture It is in this context that the going public could well have the
representa6ves in Nepal and
asked them to stop all adver6se-
ments in Kan6pur television, the
Kan6pur daily, and The Kath-
mandu Post. The corporate
houses complied.
In the third week of June,
Kan6pur went public accusing
India of deliberately blocking
newsprint at Kolkata. The Em-
bassy called the allega6ons base-
less, and a7ributed the delay to a
‘rou6ne administra6ve inves6ga-
6on'. Poli6cal par6es, media or-
ganisa6ons and civil society
expressed solidarity with Kan-
6pur.
Soon a&er, Ambassador Sood
and Kan6pur's owner Kailash
Sirohiya met for almost two
hours at the embassy. Sources
say the ‘open discussions' cen-
tred on Indian percep6ons about

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effect of strengthening the
‘tough' approach within the In-
dian establishment that had ad-
vocated such a course of ac6on in
the first place.
Introspec6on-While Kan-
6pur's dilemmas are understand-
able, its recent coverage does
have traces of na6onal chauvin-
ism and appears opportunis6c,
linked to the adver6sement em-
bargo. While keeping big busi-
ness — both domes6c and Indian
— to account, it should be careful
and responsible enough not to
tarnish companies whose contri-
bu6on to manufacturing, trading,
employment, and revenue is im-
portant to the Nepali economy.
But it is the Indian govern-
ment that needs to do a serious
review. First, there is the ethical
propriety of using such strong-
arm tac6cs against the media in a
country where India claims to be
‘suppor6ng democra6c forces'.
But then there are real pragma6c
issues. The Indian state used In-
dian big business opera6ng in
Nepal for ques6onable poli6cal
purposes. The companies be-
came willing pawns in the bigger
game; this has boomeranged and
joint ventures are paying the
price.
India is now ranged against
not only the country's biggest po-
li6cal party, the Maoists, but also
its biggest media house, Kan6pur.
It has opened up mul6ple fronts
at the same 6me in Nepal, all in
the name of ‘na6onal security',
and stands exposed, with even its
tradi6onal allies finding it hard to
defend India in public. Delhi may
be smug about Nepal's over-
whelming structural dependence
on India, but it underes6mates
the depth of resentment against
India in Nepal at its own peril.
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Russia complains of
‘harsh' treatment to
overstayers
Senior Russian Embassy officials
met their Ministry of External Af-
fairs counterparts here to under-
stand why their na6onals,
accused of overstaying, were
being treated harshly by the po-
lice.
In par6cular the Embassy has
flagged the case of two Russians
in Goa who have been sentenced
to one year's imprisonment and
fined Rs. 10,000 each for over-
staying. There is also the case of
Olga Timoshik who is in custody
at a police sta6on in Ropar, Pun-
jab. In all Russia has submi7ed a
list of 15 who, it feels, are being
treated rather harshly when they
had only overstayed and not
commi7ed any other crime.
Fencing along Manipur-
Myanmar border pro-
gressing well, says police
official
The erec6on of an insurmount-
able fence along an eight km long
stretch of the Manipur-Myanmar
border is progressing sa6sfacto-
rily.
Disclosing this to journalists
here on Monday, Major General
C.A. Krishanan, Inspector General
of Assam Rifles (South), said the
work would be completed on
schedule. The fence, once com-
pleted, will help State and secu-
rity forces to check the free
movement of rebels and their
new recruits to their base camps
on no man's land.
‘G-20 must surmount ef-
fects of economic crisis'
Rajya Sabha Deputy Chairman K.
Rahman Khan has advocated
greater coordina6on and effort
among the G-20 countries to
overcome the effects of the
global economic crisis.
Taking part in a G-20 Speak-
ers' Consulta6on at O7awa, Mr.
Khan felt the central problem was
how to ensure sustained global
recovery at a 6me when markets
had become very nervous about
debt sustainability, the Rajya
Sabha Secretariat said in a re-
lease here on Monday.
Prudent policies-Referring to
India, he said prudent policies
that prevented financial ins6tu-
6ons from taking excessive risks
went a long way in maintaining fi-
nancial stability at the 6me of
global crisis.
Coordina6on between the
Government of India and the Re-
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serve Bank of India in making the
right mix of monetary and fiscal
policies, significant domes6c sav-
ings, plus domes6c reforms of the
produc6ve sectors, were among
the other factors behind it.
India's commitment-Mr. Khan
reiterated India's commitment to
the wellbeing of people, espe-
cially the poor and the deprived.
He referred to Mahatma Gandhi's
talisman to policy makers, which
read: ‘whenever you are in
doubt, recall the face of the poor-
est and the weakest man whom
you may have seen and ask your-
self, if the step you contemplate
is going to be of any use to him'.
Highligh6ng the need to build
a sustainable development
model based on Gandhian ap-
proach of enlightened unselfish
ethical life of plain-living and high
thinking, he emphasised need for
the advanced world to reduce
consump6on and simplify life.
The G-20 Speakers' Consulta-
6on - Presiding Officers of the
Upper and Unicameral Houses of
the G-20 was held from Septem-
ber 2 to 5.
Caste discrimina0on -
U.K. Dalits win the
argument, nearly
There's a palpable mood of op6-
mism among Britain's 2,00,000-
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strong Dalit community as it
waits for the Government to take
a decision on its long-standing
campaign for caste discrimina6on
to be recognised as racism. The
buzz is that, barring a last-minute
hiccup, Britain could soon be-
come the first European, indeed
Western, country to declare caste
prejudice unlawful under its race
laws — a move which will not
please New Delhi which has con-
sistently opposed caste being
clubbed with race.
Britain's new Equality Act al-
ready empowers the Govern-
ment to declare “caste to be an
aspect of race” without seeking
fresh parliamentary approval.
Clause 9 of the Act says: “The
fact that a racial group comprises
two or more dis6nct racial groups
does not prevent it from cons6-
tu6ng a par6cular racial group. A
Minister of the Crown may by
order — (a) amend this sec6on so
as to provide for caste to be an
aspect of race …”
China to work with India
on curbing 0ger
poaching
India and China this week agreed
to cooperate in sharing intelli-
gence on illegal trade in 6ger
parts between the countries,
which conserva6onists say is se-
riously endangering India's 6ger
popula6on.
Chinese officials in the State
Forestry Administra6on told vis-
i6ng Indian counterparts in talks
that they were open to exchang-
ing ac6onable intelligence on
wildlife crimes, also acknowledg-
ing that poaching and illegal traf-
ficking were “the biggest threat”
to wildlife conserva6on in the re-
gion.
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The two countries have
agreed to set up nodal officers to
facilitate the sharing of real-6me
informa6on, as well as ini6ate
collabora6ve inves6ga6ons into
“the backward and forward link-
ages of wildlife crimes” and or-
ganised criminal syndicates
opera6ng in the region.
No troops deployed in
Gilgit-Bal0stan, says
China
China denied the presence of its
troops in Gilgit-Bal6stan, but
voiced support to Islamabad's
claims on the disputed region by
describing it in a statement as “a
northern part of Pakistan.”
India views the region as an
integral part of Jammu and Kash-
mir that is under illegal occupa-
6on. China has, in the past,
refrained from voicing its support
to either Indian or Pakistani
claims to the disputed region.
India monitoring China's
inten0on in Indian
Ocean, says Krishna
India on Tuesday said it was
closely monitoring China's inten-
6on as it was showing “more
than the normal interest” in the
Indian Ocean affairs.
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“The Government of India
has come to realise that China
has been showing more than the
normal interest in the Indian
Ocean affairs. So we are closely
monitoring the Chinese inten-
6ons,” External Affairs Minister
S.M. Krishna said in the Lok
Sabha.
Responding to queries during
a call-a7en6on mo6on on “The
situa6on arising out of the recent
a7acks on Indian fishermen by
the Sri Lankan Navy,” Mr. Krishna
assured the House that “appro-
priate ac6on and measures”
would be taken to safeguard the
country's territorial integrity and
the welfare of its fishermen.
Ini6a6ng the mo6on, Dravida
Munnetra Kazhagam leader T.R.
Baalu said that when the Indo-Sri
Lanka agreement was signed on
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the Katchatheevu islands in 1974,
the then External Affairs Minister,
Swaran Singh, had said that fish-
ing and naviga6on rights had
been safeguarded for the future.
Under the agreement on the is-
land, which falls in the Sri Lankan
territory, Indian fishermen can
rest and dry their nets during
fishing in interna6onal waters.
Mr. Baalu asked the Centre to
revisit the agreement and in-
crease patrolling in the waters to
protect the fishermen.
Mr. Krishna, however, ruled it
out, saying: “We cannot go back
on the solemn agreement be-
tween two governments.” India
and Sri Lanka were discussing,
through the Joint Working Group
— cons6tuted to deal with issues
related to fishermen and to work
out bilateral ins6tu6onal arrange-
ments for ensuring the safety and
security of the fishermen of both
countries — and addressing such
issues in a humane and prac6cal
way.
Sri Lanka is a friendly country,
an aspect that is needed to be
kept in mind, the Minister said,
adding that Foreign Secretary
Nirupama Rao is currently in
Colombo discussing such ma7ers.
Mr. Krishna said he was planning
to travel to Colombo in October,
when issues related to fishermen
would be discussed further.
India had consistently taken
up issues rela6ng to incidents of
firing on or apprehension of fish-
ermen with the Sri Lankan gov-
ernment to ensure that its Navy
acted with restraint and our fish-
ermen were treated in a humane
manner.
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Unhappy over the reply, All-
India Anna Dravida Munnetra
Kazhagam members, led by M.
Thambidurai, staged a walkout,
while Mr. Baalu raised several
other ques6ons.
The Minister said that a&er
the October 2008 understanding
between the two countries on
fishing arrangements, incidents
of apprehension and firing on In-
dian fishermen in the waters be-
tween India and Sri Lanka had
come down significantly.
In 2008, a total of 1,456 In-
dian fishermen were appre-
hended by the Sri Lankan Navy,
while in 2009, the number had
come down to 127 fishermen,
and 6ll July this year, only 26 fish-
ermen were apprehended.
India announces $20m
more aid for Pakistan
India has announced an addi-
6onal monetary assistance of $20
million to Pakistan to help it
tackle the worst-ever floods wit-
nessed in recent past.
Making the announcement in
the Lok Sabha, External Affairs
Minister S.M. Krishna said the de-
cision followed Pakistan's willing-
ness to accept India's ini6al offer
of $5 million, to be routed
through the United Na6ons. He
made a similar announcement in
the Rajya Sabha.
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Of the total money, $20 mil-
lion would go to the ‘Pakistan Ini-
6al Floods Emergency Response
Plan' through the U.N. Office for
the Coordina6on of Humanitar-
ian Efforts. The rest would be
contributed to the U.N. World
Food Programme. Mr. Krishna re-
called that India offered $5 mil-
lion, when he spoke on the
telephone to his Pakistan coun-
terpart Shah Mehmood Qureshi
on August 13. On August 19,
Prime Minister Manmohan Singh
told his Pakistan counterpart
Yusuf Raza Gilani that India was
ready to do more.
Ini6ally, Pakistan was reluc-
tant to accept the aid, but agreed
a&er the U.S. intervened. How-
ever, Pakistan asked India last
week to route the aid through the
U.N.
Why is ASEAN dragging
its feet on RTA for serv-
ices with India?
Most countries in the powerful
economic bloc fear “being
swamped” with professionals
from the country, especially in
areas such as educa6on, health,
IT and accountancy. New Delhi
feels the Associa6on of South
East Asian Na6ons (Asean) is get-
6ng panic a7acks in the midst of
Featured Article
trade talks aimed at opening up
its services segment to players
from India.
Experts watching the situa-
6on say Indian nego6ators made
a big mistake by entering into a
deal on goods before signing a
pact on services. They add that
while Asean stood to gain a lot
from the agreement already
signed, India s6ll awaits a break-
through in talks to sign a services
deal, which will be manna for its
services industry.
Gi! to Germany’s far-
Right
Senior figures in central banks
rarely hit the headlines but Thilo
Sarrazin of the German central
bank, the Bundesbank, has done
just that. His recent book on Ger-
man society has been a7acked
for xenophobia, racism, and seri-
ous factual errors.
Senior poli6cians, including
Chancellor Angela Merkel, have
condemned Mr. Sarrazin.
He has apologised for wri6ng
passages on a “Jewish gene,” and
faces expulsion from the Social
Democra6c Party. It is clear how-
ever that he has tapped into a
vein of deep disquiet.
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UID Project
Prime Minister Manmohan Singh
and Congress President Sonia
Gandhi handed out the first set
of Unique Iden6fica6on Number
to tribals in Tembhli village of Ma-
harashtra's Nandurbar district on
Sep 29, 2010.
Ten tribals from Tembhli vil-
lage got their Unique Iden6fica-
6on Numbers (Aadhaar) from
Singh and Sonia. They were ran-
domly selected by the Nandan
Nilekani-headed Unique Iden6fi-
ca6on Authority of India.
"It is our ambi6ous project.
Every Indian should get an iden-
6ty. It will empower Schedule
Castes and Schedule Tribes and
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all under privileged sec6ons. Aad-
haar covers various rural develop-
ment programmes. I congratulate
Nandan Nilekani for this. He has
achieved it in just 14 months,"
said Singh while launching the
project.
"Aadhaar will help the unem-
ployed poor. UID is a historical
step to help the poor and Tembhli
is the first Aadhaar village," said
Sonia.
Unique Iden6fica6on Author-
ity of India Chairman Nandan
Nilekani said that UID would help
all the ci6zens of India who don't
have any iden6ty card.
"Many people in our country
don't have their iden6ty cards.
UID will help them. UID will be
recognised everywhere. One UID
will be issued to one person," he
said.
About 1400 villagers have
been enrolled in the inaugural
programme. The Unique Iden6fi-
ca6on Number is a unique 12
digit number that will store infor-
ma6on like an individual's name,
face and biometric scans.
Nilekani plans to cover 60%
of the people in the country in
the next three years. The project
will be launched in Karnataka in
October.
Hidden language discov-
ered in Northeast
A "hidden" language spoken by
only about 1200 people has been
discovered by researchers in a re-
mote corner of Arunachal
Pradesh, the home to diverse
ethnic tribes and the cauldron of
language diversity.
Koro, a Tibeto-Burman lan-
guage on the verge of ex6nc6on,
has been discovered recently in
West Kameng district during a
Na6onal Geographic expedi6on
for its 'Enduring Voices' project.
According to researchers, he
Northeast is known as a hot spot
of language diversity.
Confirming the existence of
such a language, Director of Re-
search Tage Tada said, "Arunachal
with diverse ethnic tribes has
many languages s6ll undiscov-
ered. We are undertaking re-
search works on lingua-franca of
different major tribes in the
state...Since the language is spo-
ken by a handful of people from
Aka and Miji communi6es, we
have not carried out any research
work on Koro."
The three-member linguists'
comprising two researchers from
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Na6onal Geographic and one
from Ranchi University said Koro
is spoken by a handful of people
from Aka and Miji communi6es.
"Culturally, Koro speakers are
part of the Aka community and
both groups merely considered it
a dialect of the Aka language.
However, Koro has en6rely differ-
ent vocabulary and linguis6c
structure," linguist K David Harri-
son, a member of the research
team, had said in Washington on
Tuesday.
Even the Koro speakers did
not realise they had a dis6nct lan-
guage. But researchers studying
the groups found they used dif-
ferent words for body parts,
numbers and other concepts, es-
tablishing Koro as a separate lan-
guage, he said.
"Koro is quite dis6nct from
Aka...It is a distant sister lan-
guage," linguist Gregory Ander-
son, another member of the
research team said.
According to linguists,
Arunachal hosts a rich diversity of
languages, many unwri7en,
which are li7le studied or docu-
mented.
"Koro brings an en6rely dif-
ferent perspec6ve, history,
mythology, technology and gram-
mar to what was known before.
Surprisingly, it has been main-
tained within the Aka community,
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even though there is inter-mar-
riage and the groups share vil-
lages, tradi6ons, fes6vals and
food," Harrison wrote in his book
'The Last Speakers'.
"The Koro speakers consider
themselves to be a part of Aka,
though linguis6cally they are
Koro. It's an unusual condi6on,
such arrangement does not usu-
ally allow for maintenance of the
minor language," Anderson said.
The researchers hoped to fig-
ure out how Koro managed to
survive within the Aka commu-
nity.
Na0onal Innova0on
Council
Prime Minister Manmohan Singh
has approved the se8ng up of a
Na6onal Innova6on Council to
prepare a road map for the
'Decade of Innova6on 2011-
2020'. Sam Pitroda, adviser to the
Prime Minister on public informa-
6on infrastructure and innova-
6ons, will head the Na6onal
Innova6on Council.
The Council has been given
the mandate to evolve an Indian
model of innova6on focussing on
inclusive growth and crea6ng an
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appropriate eco-system con-
ducive to fostering inclusive inno-
va6on.
It will delineate appropriate
policy ini6a6ves within the gov-
ernment required to spur innova-
6on. It will also promote the
se8ng up of sectoral innova6on
councils and state innova6on
councils.
While encouraging all impor-
tant sectors of the economy to in-
novate, the NIC will take special
efforts to facilitate innova6on by
micro, small and medium enter-
prises.
Innova6on in public services
delivery and encouraging mul6-
disciplinary and globally compe6-
6ve approaches for innova6ons
would be focused on by the coun-
cil.
Foreign Contribu0on
Regula0on Bill
Organisa6ons of poli6cal nature
and those involved in religious
conversions will henceforth be
barred from accep6ng foreign
funds. Also, persons holding po-
li6cal posi6ons like MPs and
MLAs can no longer enjoy foreign
hospitality and must in6mate the
government of their visits
abroad, personal or official.
A&er le8ng private organisa-
6ons bring in unaccounted for-
eign remi7ances for 34 years, the
government has brought to the
Lok Sabha the Foreign Contribu-
6on Regula6on Bill, 2010, to reg-
ulate the acceptance and
u6lisa6on of foreign contribu6on
of hospitality by certain individu-
als or associa6ons and to prohibit
such acceptances for ac6vi6es
detrimental to na6onal interest.
The Lower House passed the Bill,
which the Rajya Sabha had al-
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ready cleared.
At the root of the law is the
concern that out of 40,173 NGOs
(in 1993 there were just 1,500)
accep6ng foreign funding, only
18,796 have submi7ed their au-
dited accounts. For the rest, the
government doesn’t know the
source of funding.
So far, Rs 12,000 crore has
“officially” come through the for-
eign route, of which 60 per cent
has come from religious organisa-
6ons, some from countries as
small in popula6on as Canada,
Mauri6us and Luxembourg.
The government’s data
shows that in 2005 and 2006,
there were over 32,144 organisa-
6ons taking foreign funds in
India. Only 18,000 declared their
funding. In 2005-2006, of the Rs
7,000 crore that came from for-
eign sources, Rs 3,075 crore came
for religious organisa6ons. This
explains why the new law (which
replaces the 1976 legisla6on)
bans foreign funds for conversion
purposes.
Significant amounts (to the
tune of Rs 7,229 crore) have also
come in for educa6on, with no
monitoring. In the run-up to the
new FCR Bill 2010, the govern-
ment banned 41 ou5its from tak-
ing foreign remi7ances; sealed
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accounts of 11 and asked 45 to
take permission first.
With the new law, the gov-
ernment has also capped admin-
istra6ve expenses at 50 per cent
of all inflows to NGOs (India has
about 20 lakh).
Nuclear Liability Bill
On August 25, 2001, the UPA gov-
ernment successfully shepherded
the Civil Liability for Nuclear
Damage Bill, 2010, through the
Lok Sabha, with ac6ve support
from the BJP and strategic ab-
sence of some fence-si7ers such
as the Samajwadi Party.
Quashing opposi6on from
the Le& Bloc and other cri6cs,
Prime Minister Manmohan Singh
denied that the Bill was rail-
roaded through the House to
serve US interests. “This Bill is a
comple6on of a journey to end
the nuclear apartheid, which the
world had imposed on India in
the year 1974,” he said.”
The government managed to
bring the BJP on board in return
for accep6ng amendments to the
controversial Clause 17(b) and
dropping the word “intent”. The
new formula6on of 17(b), now
states that suppliers would be li-
able where “the accident has re-
sulted as a consequence of an act
of a supplier or his employees,
done to cause nuclear damage,
and such act includes supply of
equipment or material with
patent or latent defects or sub-
standard services”.
While his government
achieved what appeared even a
few months ago to be an impossi-
ble task—ge8ng the Lok Sabha
to pass the Bill— Manmohan
Singh announced that the gov-
ernment would give safety issues
top priority. “Concern about nu-
clear safety is one, which I fully
share. I assure (you) we will do
everything to strengthen the Nu-
clear Regulatory Board to ensure
that safety concerns receive the
a7en6on that they must, if we
are to use nuclear power as a
major source for genera6ng and
mee6ng India’s need for energy,”
he said.
The key points of the Bill are:
• Controversial Clause 17(b)
amended by dropping the
word ‘intent’.
• Compensa6on cap to be paid
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by the operator at Rs 1500
crore provided in the Bill is
not the ‘limit’.
• Compensa6on will be de-
cided by the Claims Commis-
sioner and the operator will
have to pay.
• Government assumes full lia-
bility for even a plant not op-
erated by it.
• The Bill is necessary for full
implementa6on of civil nu-
clear deal signed with the
USA in 2006.
Bill to provide women
equal guardianship
rights
A Bill paving way for the women
to get equal rights in guardian-
ship and adop6on of children has
been passed by the Rajya Sabha.
The Personal Laws Amend-
ment Bill seeks to amend the
Guardians and Wards Act, 1890
and the Hindu Adop6ons and
Maintenance Act, 1956. It also
seeks to allow the mother, along
with the father, to be appointed
as a guardian, making the process
gender-neutral.
Besides, it aims at removing
hurdles in the way of a married
woman to adopt. She can give a
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son or daughter for adop6on.
For adop6on and guardian-
ship, under the exis6ng Act, only
the father is considered to be the
natural guardian of the child in a
Hindu family and only unmarried,
divorced women and widows are
allowed to adopt a child. Women
separated from their husbands
and engaged in lengthy divorce
ba7les cannot adopt a child.
Cabinet agrees for giving
statutory powers to
UIDAI
The government on Friday
cleared the decks for the forma-
6on of a statutory body to be
christened — Na6onal Iden6fica-
6on Authority of India (NIAI), in
order to give collec6on of data
for alloca6ng unique id numbers,
a legal sanc6on. The approval by
the cabinet paves way for intro-
duc6on of the NIAI Bill 2010, in
winter session of the Parliament.
The legal sanc6on is for collec6on
Featured Article
of private data of ci6zens and
makes it difficult to challenge in a
court of law. The sanc6on is
needed as the government plans
to allocate the first set of num-
bers to ci6zens in a few weeks in
Maharashtra. In 2009, the Unique
Iden6fica6on Authority of India
(UIDAI) had already made it clear
that an Act of Parliament will set
it up as a statutory body. But, al-
ready many NGOs are planning to
challenge the proposed Bill.
Once passed, the NIAI Act
2010 will contain a prescrip6on
against collec6ng any other infor-
ma6on than the informa6on per-
mi7ed, with specific prohibi6ons
against collec6on of informa6on
regarding religion, race, ethnicity
and caste. It will also contain
penal provisions against persons
employed by, or associated di-
rectly or indirectly with, the data
repository, registrars, enrolling
agencies and other service
providers for failing to comply
with the direc6ons issued under
the Act.
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Featured Article
The Ayodhya-Babri
Masjid dispute
The longest-running legal ba7le
in India is a dispute over the 60 sq
feet by 40 sq feet land in Ayodhya
where Babri Masjid stood 6ll Dec
6, 1992. Since 1950, five 6tle suits
were filed in the Allahabad HC,
staking claim to the 6tle of the
plot of land of the Babri Masjid.
Of these, four are to be decided
by the Lucknow bench of HC.
The bench comprising Jus-
6ces S U Khan, Sudhir Agarwal
and D V Sharma will give its ver-
dict on the following ques6ons:
Did a temple exist at the dis-
puted site before 1528 when Mir
Baqi constructed the Babri
Masjid?
Was the suit filed by Sunni
Waqf Board in 1961 barred by
6me limita6on?
Was Ayodhya Lord Ram’s
birth place & is there evidence to
show that Hindus have been wor-
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shipping at this place for a long
6me?
Two separate civil suits were
filed in 1950 by Hindu Ma-
hasabha member late Gopal
Singh Visharad and the
Paramhansa Ramchandra Das,
keeper of the Digambar Akhada
in Ayodhya, seeking permission
for pooja at the disputed site
The second suit was filed by
Paramhans Ramchandra Das, also
in 1950, seeking the same injunc-
6on but this suit was later with-
drawn
The third suit was filed in
1959 by the Nirmohi Akhara,
seeking direc6on to hand over
charge of the disputed site from
the receiver
The fourth suit was filed in
1961 by the UP Sunni Central
Board of Waqfs for declara6on
and possession of the site
The fi&h suit was moved in
1989 in the name of Bhagwan
Shree Ram Lalla Virajman for dec-
lara6on and possession
However, one suit was with-
drawn and the others were pend-
ing with the Faizabad civil court
6ll 1989, when they were trans-
ferred to the Allahabad high
court
The first suit dates back to
1885, when Mahant Raghubar
Das filed a 6tle suit in a Faizabad
court to build a chabutra on the
outer courtyard of the mosque
structure. It was dismissed on the
ground that the alleged demoli-
6on of an original Ram temple in
1528 had occurred over 350
years ago, and so it was “too late
now” to remedy the grievance
However, in December 1949
some people broke open the
structure’s locks and installed a
Ram statue and ar6cles of wor-
ship, and the administra6on or-
dered status quo
Some details about
the rehashed land
acquisi0on bill
The Land Acquisi6on (Amend-
ment) Bill sets aside three cate-
gories of projects for which the
government can acquire 100%
land. These include establish-
ment of installa6ons pertaining
to na6onal security, infrastruc-
ture and facili6es designated as
“social infrastructure,” such as
health, educa6on and space re-
search.
For any project other than
the above, land could be ac-
quired in the 70:30 ra6o, with the
company planning to set up the
facility on that land being asked
to purchase 70% of it. The state
government would step into the
picture only a&er the private
player had done its bit, by agree-
ing to take over the remaining
30% if it felt the project fell in the
“public purpose” domain.
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On the compensa6on pack-
age, the Rese7lement and Reha-
bilita6on Bill wanted the
displaced persons to be granted
60% sola6um over and above the
market rate of the land being
taken over. Market rate was de-
fined as the average of the high-
est transac6ons in the last three
in the same area on a similar tract
of land.
Even these highly liberalised
provisions are not going to con-
vince the Trinamool Congress as
it has been saying that it is op-
posed to the governments -- ei-
ther at the Centre or at the State
level having anything to do with
land acquisi6on.
IITs to offer medical
courses
IITs will now be able to offer med-
ical educa6on, permanent faculty
posi6ons to foreign na6onals and
admit foreign students at the
post-graduate level. These deci-
sions were taken at a mee6ng of
the IIT Council headed by human
resource development minister
Kapil Sibal on Friday. The Ins6tute
of Technologies Act will have to
be amended to enable IITs to
offer medical courses.
The health ministry has been
opposed to the idea of IITs se8ng
up their own medical schools. It
asked that the engineering
schools start courses on health
informa6on technology, biomed-
ical engineering and e-health
rather than running a hospital or
star6ng MBBS courses.
At present, only IIT Kharagpur
has expressed an interest in set-
6ng up a full fledged medical
school. IIT Kharagpur has argued
that there are no hospitals or
medical colleges in the area and
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that it would actually be address-
ing a need.
A bit of history about
Periyar and the move-
ments led by him
Periyar is known for his an6-Brah-
min movement in Tamilnadu.
The seeds of the movement were
sown in 1925 when EV Ra-
masamy Naicker, known as Peri-
yar, or the elder, walked out of
the Indian Na6onal Congress con-
ven6on a&er the then Brahmin-
dominated party refused to
consider a resolu6on seeking pro-
por6onal representa6on. Peri-
yar’s reasons for seeking change
were strong. In 1914, of the of
the 650 graduates in then Madras
Province, 452 were from the
Brahmin community. Of the 15
elected for the All India Congress
Commi7ee, 14 were Brahmins.
Periyar led the Self-Respect
and the An6-Hindi movements of
the aristocrats-led Jus6ce Party
formed to further the non-Brah-
min interests in the four southern
states. The party was renamed
Dravidar Kazhagam in 1944 with
ra6onalism and atheism as its
main planks and Karunanidhi and
his mentor CN Annadurai among
the top leadership.
Karunanidhi, Jayalalithaa and
Ramachandran have their roots
Featured Article
in the Dravidian Movement.
Country's new Central
Vigilance Commissioner
Former telecom secretary P J
Thomas was sworn in as the new
Central Vigilance Commissioner
(CVC).
BJP objected to the choice in
the light of he being under a
cloud in the palmolein scam in
Kerala in the early 90s and al-
leged that it was a “cover up” for
the 2G spectrum scam.
Govt rot earns Supreme
Court's wrath
The Centre’s failure to prevent
wastage of millions of tonnes of
grain stored in godowns invited
the Supreme Court’s ire. In a
s6nging indictment, the Supreme
Court charged the government
with a callous approach and sug-
gested remedial measures.
The court said it was con-
cerned the government was al-
lowing ro8ng of grain when
millions in the country were
going without two square meals
a day. A Bench comprising Jus-
6ces Dalveer Bhandari and
Deepak Verma, who subjected
Mr Sharad Pawar to some verbal
caning, said the food ministry
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was not serious about handling
the peculiar situa6on of over-
flowing granaries and hungry
stomachs.
Prime Minister's remarks
termed “an0-poor”
The steering group of the Right to
Food Campaign expressed its
“shock” at Prime Minister Man-
mohan Singh's statement asking
the Supreme Court not to inter-
fere with policy and said it
showed how “completely an6-
poor” the government was.
The Campaign — a conglom-
era6on of rights and civil society
groups — said that when, under
the Cons6tu6on, people had the
Right to Life as well as the right to
approach courts, “the statement
showed that the head of the Ex-
ecu6ve, does not want the Fun-
damental Right of the people to
be realised, and worse, interferes
with their right to get jus6ce.”
Kanishka bomb-maker
Reyat found guilty of
perjury
Inderjit Singh Reyat, the sole per-
son convicted in the 1985 bomb-
ing of Air India's Kanishka flight
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that killed 329 people, has been
found guilty of perjury by a Cana-
dian court for lying under oath
during the trial of the world's
deadliest airline bombing.
Reyat (58), who had earlier
confessed to helping make the
bomb that destroyed the Air
India Flight 182, showed li7le
emo6on as the verdict was read
in a Vancouver courtroom on Sat-
urday a&er jurors deliberated for
more than 20 hours.
Husain's works fetch
Rs.11.69 crore
Fi&een works of art by painter
M.F. Husain, including a canvas
work he gi&ed to Italian film di-
rector Roberto Rossellini and his
Indian wife, have fetched
Rs.11.69 crore at a Sotheby's auc-
6on here.
The highlight of the South
Asian Art sale was undoubtedly
Cinq Sens (Five Senses) by Hu-
sain, who celebrated his 95th
birthday on September 16. The
large canvas, painted at the Ital-
ian home of Rossellini and his
wife Sonali Sen Roy Dasgupta in
1958, went for Rs.3.6 crore.
Husain spent an extended pe-
riod of 6me in Italy with the
Rossellinis during the late 1950s
and gi&ed this pain6ng to the
couple, from whom it was ac-
quired by the current owner.
Stray 0gress caught in
the Sunderbans
A 6gress that had strayed into a
village and taken shelter in a hut
in the Sunderbans created panic
before it was tranquillised and
caught by the authori6es of the
Tiger Reserve early Sunday morn-
ing.
The 6gress had strayed into a
village near Budhbarer Bazaar at
Kumirmari in South 24-Parganas
district on Saturday night. Vil-
lagers found that it had taken
shelter in a hut and informed the
Reserve authori6es at 5 a.m.,
Subrat Mukherjee, STR field di-
rector, told The Hindu over tele-
phone.
Naga blockade of
Manipur resumes
The United Naga Council, (UNC),
a frontal organisa6on of the Na-
6onal Socialist Council of Nagalim
(Isak-Muivah group), imposed an
indefinite blockade against Ma-
nipur from Saturday morning.
This follows the expiry of the 113-
day blockade spread over three
phases.
In a press release, the UNC
said the blockade would con6nue
6ll the demands rela6ng to the
Naga issues were conceded. It
said the Autonomous District
Council elec6ons in the hill dis-
tricts were held against the
“wishes” of the tribals. The ADCs
would not be allowed to func6on
in the “Naga areas.”
AFPSA related AFSPA
dilu0on postponed
The Cabinet Commi7ee on Secu-
rity (CCS) put off plans to par6ally
revoke the Armed Forced Special
Powers Act (AFSPA), following
fresh violence in the Kashmir Val-
ley over alleged desecra6on of
Koran in the US.
It was of the view that larger
consensus was required on the
‘way forward’ and the govern-
ment announced convening of an
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all-party mee6ng in the Capital
on Wednesday.
The proposal for a makeover
for AFSPA s6ll looks a tough task
as the Army con6nues to main-
tain that “special laws are needed
to tackle a special situa6on.”
With paramilitary forces and the
police failing to contain the situ-
a6on that seems to be going
worse, a sec6on of the CCS was
of the view that the government
should not do anything that
would sap the morale of the
Army. “The Army is needed to
maintain some semblance of
order in the chaos-ridden Valley,”
said a leader during the mee6ng.
AFSPA, Cri0cism & Need
The Armed Forces (Special Pow-
ers) Act has come in for wide-
spread cri6cism in Jammu and
Kashmir, Manipur and other parts
of the northeast because of the
human rights abuses that have
come to be associated with its
opera6on.
So strong is the sen6ment
against AFSPA in Kashmir that in
recent months Prime Minister
Manmohan Singh, Union Home
Minister P. Chidambaram and
Jammu and Kashmir Chief Minis-
ter Omar Abdullah have all spo-
ken of the need to re-examine
the law. The Army, on the other
hand, says this is unnecessary.
The Army Chief, General V.K.
Singh, has gone so far as to say
that the demand for the dilu6on
of AFSPA is being made for “nar-
row poli6cal gains.”
On paper, AFSPA is a decep-
6vely simple law. First passed in
1958, it comes into play when the
government declares a par6cular
part of the northeast (or Jammu
and Kashmir under a parallel
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1990 law) a “disturbed area.”
Within that area, an officer of the
armed forces has the power to
“fire upon or otherwise use force,
even to the causing of death,
against any person who is ac6ng
in contraven6on of any law or
order for the 6me being in force
in the disturbed area prohibi6ng
the assembly of five or more per-
sons or the carrying of weapons
or of things capable of being used
as weapons or of fire-arms, am-
muni6on or explosive sub-
stances.”
Cri6cism- giving soldiers the
“right to kill” , support- AFSPA's
principal flaw. A&er all, if a ‘law
and order' situa6on has arisen
which compels the government
to deploy the Army, soldiers have
to be allowed to use deadly force.
Even a private ci6zen has the
right to kill someone in self-de-
fence, though the final word on
the legality of her or his ac6on
belongs to the courts. Similarly, a
civilised society expects that the
use of deadly force by the Army
must at all 6mes be lawful, nec-
essary and propor6onate.
Here, the Act suffers from
two infirmi6es: the requirement
of prior sanc6on for prosecu6on
contained in Sec6on 6 o&en
comes in the way when ques6ons
arise about the lawfulness of par-
6cular ac6ons. Second, AFSPA
does not dis6nguish between a
peaceful gathering of five or
Featured Article
more persons (even if held in
contraven6on of Sec6on 144 of
the Criminal Procedure Code)
and a violent mob. Firing upon
the la7er may some6mes be jus-
6fied by necessity; shoo6ng into
a peaceful assembly would surely
fail any test of reasonableness.
Leaving this issue aside, how-
ever, it is important to recognise
that AFSPA does not give an offi-
cer the unqualified right to fire
upon and cause the death of any
person in a Disturbed Area.
At a minimum, that person
should have been carrying
weapons or explosives. The
shoo6ng of an unarmed individ-
ual, and the killing of a person in
custody, are not acts that are per-
missible under AFSPA. Force is al-
lowed in order to arrest a suspect
but the fact that the Act autho-
rises the use of “necessary”
rather than “deadly” force in such
a circumstance means the tests
of necessity and propor6onality
must be met.
Over the years that AFSPA
has been in opera6on, the Army
has opened fire countless 6mes
and killed hundreds, if not thou-
sands, of people. Whenever
those killed have been armed in-
surgents or terrorists, there has
been li7le or no public clamour
against the Act. It is only when
the armed forces violate the pro-
visions of the law and indulge in
the unlawful killing of persons —
especially unarmed civilians —
that voices get raised against
AFSPA. The protests in Manipur in
2004 reached a crescendo be-
cause of the death in custody of
Th. Manorama and scores of oth-
ers like her. In Kashmir, sen6-
ments against the Armed Forces
Act got inflamed because of fake
encounter incidents like Pathribal
and Macchhil.
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Indian industrial output
growth slows to 15-
month low
India's industrial output grew
5.6% year-on-year in August, its
slowest rate for 15 months, as
capital goods output shrank dur-
ing the month. The growth figure
marked a decline from the re-
vised 15.2% increase seen in July,
government figures showed.
Output of capital goods,
which includes everything from
heavy machinery to cabling, con-
tracted 2.6% in August a&er
growing a revised 72% in July. The
sector's vola6lity has led some to
ques6on the reliability of the
data.
The overall growth figure was
much lower than expected. Ana-
lysts had forecast growth of 9.9%.
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amounted to 4.5 per cent of the
India's imports of sensi- country's total imports during the
0ve items up 21 pc period, against 4.6 per cent in the
previous year, the statement said.
India's imports of sensi6ve items The gross import of all com-
went up by 21.8 per cent to Rs
23,039 crore during the April-July
period of the current fiscal as
against Rs 18,916 crore in the
year-ago period, government an-
nounced on Oct 7.
Import of milk and dairy
products soared to Rs 370.4 crore
during the first four months of
2010-11 from a meagre Rs 3.5
crore, while that of foodgrains
went up to Rs 111.7 crore from Rs
87.3, data released by the Com-
merce Ministry said.
The rise in imports of fruit
and vegetables was 10.8 per cent
to Rs 2,178.3 crore and of edible
oil by 18.9 per cent to Rs 8,763.7
crore, according to the data. modi6es during the current pe-
Inward shipments of automo- riod was Rs 3,15,302 crore in
biles, alcoholic beverages and these four months as against Rs
rubber also increased by 87.4 per 2,56,739 crore in the same period
cent, 85.2 per cent and 41.6 per last year.
cent, respec6vely. Items such as foodgrains,
However, imports of pulses, milk and beverages fall in the sen-
co7on and silk contracted by 10 si6ve category and these imports
per cent (Rs 2,485.2 crore) and are monitored by the govern-
16.6 per cent (Rs 658.1 crore) ment to see if there is any ad-
during the period under review. verse impact on the domes6c
Import of sensi6ve items industry.
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ICAI inks pact with
United Stock Exchange
for training
The Ins6tute of Chartered Ac-
countants of India (ICAI) has
signed an agreement with United
Stock Exchange for training in
currency deriva6ves. As part of
memorandum of understanding
(MoU), members of ICAI will be
educated by United Stock Ex-
change through seminars, panel
discussions and workshops on fi-
nancial markets and corporate
governance.
ICAI, the second largest ac-
coun6ng body in the world, will
provide ins6tu6onal support and
facilitate interac6ons with its
members wherein United Stock
Exchange would impart relevant
knowledge in currency deriva-
6ves.
"The MoU has been signed
for a term of three years and
would be renewed subsequently
on mutual consent," the state-
ment said.
United Stock Exchange of
India, the country's newest stock
exchange for currency deriva-
6ves, offer a pla5orm for the
companies to manage currency
risks.
India's hotel industry focusing
on next-genera6on technologies
India has emerged as an a7rac-
6ve tourist des6na6on with an in-
creasing number of mul6-na6o-
nal hospitality companies invest-
ing in India.
There has been a steep in-
crease in hotel occupancy levels,
with the industry expected to
grow at 15 percent per year. To
sustain its growth and con6nue
to a7ract overseas travelers to
India, the industry is exploring
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the latest customer-centric next
genera6on technologies.
According to sources, India's
hotel pipeline is the second
largest in the Asia-Pacific region
and the industry is set to be the
second largest employer in the
world by 2019. It is also es6-
mated that the hospitality indus-
try in India will contribute 187.3
billion dollars to the GDP by 2019.
Today's guests arrive at a
hotel with a high level of expec-
ta6ons - a hotel room needs to be
their home away from home, and
offer new services. The industry's
biggest challenge currently is
maintaining a balance of achiev-
ing a healthy bo7om line while
enhancing the guest experience,
crea6ng guest loyalty and a7ract-
ing new guests.
The key to crea6ng the new
guest-centric environment is to
integrate the right technologies in
the right way to create a ubiqui-
tous and efficient network that
can support guest services and
hotel opera6ons.
In a recent survey conducted
by IQPC, it was found that over 50
percent of respondents were
Featured Article
spending the majority of their IT
budgets on in-room entertain-
ment as a way to stay ahead of
their compe6tors.
In an effort to contribute to
the growth of the hotel industry
in India and drive innova6on,
IQPC will launch Hotel Technol-
ogy India 2010, the Indian edi6on
of its global hotel technology con-
ferences.
The event which will take
place on November 11 and 12 in
Goa aims to provide a pla5orm to
explore latest technologies for
the hotel industry in order to
maximise revenue and enhance
guest experience.
Hotel Technology India 2010,
will bring together experts from
across the globe to discuss new
strategies and trends to imple-
ment state-of-the art solu6ons.
One of the a7endees of
IQPC's hotel technology events,
the CIO of Movenpick Hotels and
Resorts Management said that
"Hotel Technology 2010 is an ex-
cellent forum for informa6on ex-
change and to keep up to date
about hotel technology chal-
lenges".
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Featured Article
Hotel Technology India 2010
will also feature some of the lead-
ing solu6on providers like AGC
Networks and MSR IT Solu6ons
who specialise in solu6ons for al-
levia6ng the challenges facing the
industry over two days of incisive
learning and excessive knowl-
edge exchange.
Haryana becomes first
state to use treated seed
Haryana achieved yet another
milestone as the state becomes
the first state to use only the
'treated seed'. The decision to
permit only treated seed in the
state to provide protec6on
against the three prevalent dis-
eases was taken at a mee6ng
held under the chairmanship of
Chief Minister Bhupinder Singh
Hooda here today.
In a major farmer-friendly ini-
6a6ve, Mr Hooda directed for
treatment of seeds in totality and
to provide effec6ve protec6on
against three diseases. The deci-
sion would also help in lowering
the usage of pes6cides and re-
duc6on in the produc6on cost for
the farmers. Now even the pri-
vate producers would also have
to get their seeds treated. It
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would be comprehensive treat-
ment against three diseases.
He asked the officers to get
the seeds treated as per the lat-
est technical and scien6fic know-
how. "We should go by the
technical exper6se and take such
decisions only which are in the
best interest of the farmers", he
said.
"My concern is for my farmer
and to give them the best seed",
he added and asked the Haryana
Seed Development Corpora6on
(HSDC) to not to charge extra
money for further treatment of
the seeds as the state govern-
ment would provide the neces-
sary subsidy.
Mr Hooda directed the offi-
cers to assure quality checking
and sale of treated seeds only in
the state. He also asked them to
ensure sufficient supply of seeds
for the farmers.
India set to grow at 9.7
percent: IMF
Even as the world slowly recovers
from its worst economic crisis in
decades, the Interna6onal Mon-
etary Fund (IMF) on Oct 6 raised
India's projected growth to 9.7
percent in 2010 and 8.4 percent
in 2011, led increasingly by do-
mes6c demand.
"India's macroeconomic per-
formance has also been vigorous,
with industrial produc6on at a
two-year high," it said raising In-
dian growth es6mate by 0.3 per-
centage points in its latest World
Economic Outlook (WEO) ahead
of the annual mee6ngs of the
IMF and the World Bank Group
here over the weekend.
"Leading indicators - the pro-
duc6on manufacturing index and
measures of business and con-
sumer confidence - con6nue to
point up" in India, said the WEO
while around the world "thus far,
economic recovery is proceeding
broadly as expected, although
downside risks remain elevated".
With most advanced and a
few emerging economies s6ll fac-
ing major adjustments and the fi-
nancial sector s6ll vulnerable to
shocks, IMF said "global ac6vity is
forecast to expand by 4.8 percent
in 2010 and 4.2 percent in 2011,
with a temporary slowdown dur-
ing the second half of 2010 and
the first half of 2011."
While output "of emerging
and developing economies is pro-
jected to expand at rates of 7.1
percent and 6.4 percent in 2010
and 2011, respec6vely", in ad-
vanced economies, however, it
projected growth to be only 2.7
percent and 2.2 percent, respec-
6vely.
In the case of India "robust
corporate profits and favourable
external financing will encourage
investment", the IMF said no6ng
recent ac6vity (10 percent year-
over-year growth in real GDP at
market prices in the second quar-
ter) was driven largely by invest-
ment.
But the contribu6on from net
exports is projected to turn nega-
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6ve in 2011, as the strength in in-
vestment further boosts imports,
it said no6ng "that the rapid pace
of domes6c ac6vity, evidenced by
rapidly rising infla6on, led the
central bank to increase the repo
policy rate, in steps, by a cumula-
6ve 125 basis points".
Growth in emerging Asia as a
whole reached about 9.5 per-
cent, as robust domes6c demand
spread from China, India, and In-
donesia to other Asian
economies, the IMF said.
A number of emerging
economies have effected mone-
tary 6ghtening, with rate hikes
(Brazil, India, Malaysia, Peru), in-
creased cash reserve require-
ments (China, India, Turkey), or
direct limits on credit growth
(China).
The 6ghtening is expected to
proceed at a gradual pace, as in-
fla6on is generally projected to
be contained. The more pressing
concern in a few economies is
high credit growth for real estate
purchases, IMF said.
Infla6on is projected in gen-
eral to stay low amid con6nued
excess capacity and high unem-
ployment. The recovery of com-
modity prices, however, has
raised the level of consumer
prices during 2010, it said.
With market indicators sug-
ges6ng that commodity prices
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should remain stable and with
downward pressure on wages
gradually diminishing, headline
and core infla6on in advanced
economies should converge to
about 1.25 percent in 2011 and in
emerging and developing
economies to about 5 percent.
Among some major emerging
economies, capacity constraints
are beginning to boost prices:
Brazil, for example, has experi-
enced gradual increases in infla-
6on pressure, while India has
seen a sharp rise in infla6on.
Stressing the need to strike a
balance between suppor6ng a
self-sustained recovery in private
ac6vity over the near and
medium term and avoiding fiscal
risk or overhea6ng pressure, the
IMF suggested: "Fiscal policy - in
par6cular the unwinding of s6m-
ulus -needs to be carefully cali-
brated."
Global Hunger Index
2010
India is among 29 countries with
the highest levels of hunger,
stunted children and poorly fed
women, according to the Interna-
Featured Article
6onal Food Policy Research Ins6-
tute (IFPRI)’s “Global Hunger
Index 2010”. Despite a strong
economy that was predicted to
overtake China’s within three
years by The Economist maga-
zine, India ranked 67th among 85
countries in terms of access to
food.
The report points to wide-
spread hunger in a country that is
the world’s largest producer of
milk and edible oils, and the sec-
ond-largest producer of wheat
and sugar.
The country has a high
“hunger score” of 24.1 and ranks
behind all its neighbours, barring
Bangladesh. Values between 20
and 29.9 on the index denote an
“alarming” hunger situa6on.
Globally, the world is nowhere
near mee6ng the target of the
UN’s goal of halving the pro-
por6on of hungry people.
India also runs the world’s
largest free-meal programme for
school-going children. Yet, the
2010 hunger report reveals that
more than 90 per cent of the
world’s stunted children (whose
height is low for their age) live in
Asian countries, such as India and
Bangladesh, apart from some
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Featured Article
Africa countries.
The highest regional hunger
indices — sugges6ng the worst
performers —are almost the
same for South Asian countries,
such as India, and Sub-Saharan
African na6ons, such as Congo.
India is among countries with
“hunger levels considerably
higher that their gross na6onal
income per capita would sug-
gest”. “It’s kind of ironic,” Ashok
Gula6, Asia director of the Wash-
ington-based IFPRI said.
The IFPRI hunger index —
complied in partnership with Ger-
man NGO Welthungerhilfe, and
Concern Worldwide —ranks
countries on three equally
weighted indicators: the propor-
6on of undernourished, the pro-
por6on of underweight children
under five, and the child mortal-
ity rate.
The UN Food and Agriculture
Organisa6on (FAO) defines
hunger as the consump6on of
fewer than 1,800 kilocalories a
day — the minimum required to
live a healthy and produc6ve life.
India signs pact with
Bermuda on exchange of
tax informa0on
India and Bermuda on Oct 7
signed a Tax Informa6on Ex-
change Agreement (TIEA). The
agreement was signed by S. S.
Palanimanickam, Minister of
State for Revenue in the Ministry
of Finance from Indian side and
Dr. Ewart Brown, Premier of
Bermuda from Bermuda side.
This is the first TIEA being signed
by India.
Under the agreement, both
countries can share details on
banking, ownership and past in-
forma6on in tax ma7ers.
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Informa6on must be relevant
to the administra6on and en-
forcement of the domes6c laws
of the Contrac6ng Par6es con-
cerning taxes covered by the
agreement.
The reques6ng State has to
provide some minimum details
about the informa6on requested
in order to jus6fy the relevance
criteria.
The agreement also provides
for disclosure of informa6on to
any other person or en6ty or au-
thority or any other jurisdic6on
with the wri7en consent of the
competent authority of the re-
quested Party.
There is a specific provision
that the requested Party shall use
its informa6on gathering meas-
ures to obtain the requested in-
forma6on even though that Party
may not need such informa6on
for its own tax purposes.
The agreement also allows
exchange of past informa6on in
criminal tax ma7ers.
Govt approves 6 FDI
proposals
The government on Oct 7 said it
has approved six proposals
amoun6ng to Rupees 5.46 crore
of foreign direct investment (FDI).
Based on the recommenda-
6ons of Foreign Investment Pro-
mo6on Board (FIPB), the
government has given green sig-
nal to Praxair India Pvt Ltd,
Newedge Broker India Pvt Ltd,
What's On India Media Pvt Ltd,
Hay House Publishers Pvt Ltd, Zee
Entertainment Enterprises Ltd
and Asergis Telecom Services Pvt
Ltd.
However, the government re-
jected five proposals of Samir V
Mehta, Shriram Capital Ltd, CNI
Enterprise (India) Pvt Ltd, Quan-
6um Solu6ons Interna6onal Pte
Ltd and Dudheshwar Nath Steel
Pvt Ltd.
The seven companies, whose
proposals were deferred, were
Falcon Tyres Ltd, Jet Airways India
Ltd, GMR Airports Holding Ltd,
GMR Airports Holding Ltd, South-
ern CNG Automobiles India Pvt
Ltd, Telecordia Technologies Inc
and Flagship Infrastructure Pvt
Ltd.
India's proposal for
transparency gets nod of
WTO's body
Transparency mechanism for
preferen6al trade arrangements
(PTAs) seemed set to get World
Trade Organisa6on's nod a&er
the global trade body's Commit-
tee on Trade and Develop-
ment(CTD) approved a proposal
made by India, China, Brazil, and
the United States.
The CTD, which cleared the
proposal on Monday, will now
send it to the general council of
the WTO for adop6on, a WTO re-
lease said today.
The transparency mechanism
lays out a procedure for the con-
sidera6on of PTAs in the CTD. To
assist the Commi7ee in its con-
sidera6on of each PTA, the no6-
fying member is to submit
detailed informa6on, and the
WTO secretariat is to prepare a
factual presenta6on of the PTA.
Meanwhile, three emerging
economies -- India, Brazil and
China -- reported on their pro-
grammes to provide duty-free,
quota-free market access to
least-developed countries (LDCs).
India said 18 LDCs now bene-
fit from its duty-free tariff prefer-
ence scheme for LDCs. China said
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that since July 1, 2010 it had been
gran6ng zero-tariff treatment on
4,762 tariff lines for products ex-
ported by 33 LDCs. Brazil said it
has set up an inter-ministerial
working group to discuss legal
procedures for working out its
scheme, which it said would
eventually cover 100 per cent of
tariff lines. The European Union
said it was working to simplify the
rules of origin for its generalised
system of preferences (GSP)
scheme, which would par6cularly
benefit LDCs, the WTO release
added.
Annual Supplement to
Foreign Trade Policy
2009-14
The government has extended
sops worth Rs 1,052 crore to ex-
porters, par6cularly for the
labour-intensive tex6le, handi-
cra&s and leather sectors, to help
them see through the fragile eco-
nomic recovery globally. The rev-
enue implica6on of these
measures would be Rs 1,052
crore. The government also made
it clear that the popular Duty En-
6tlement Pass Book (DEPB)
scheme, which has been in vogue
for over a decade, is being ex-
tended for the last 6me.
Experts said drawing the cur-
tains on the DEPB scheme was in-
evitable as it was considered
incompa6ble with the global
trade rules under WTO.
A number of addi6onal prod-
ucts from sectors like engineer-
ing, leather, tex6les and jute have
also been added to the exis6ng
two per cent interest subven6on
scheme. Handloom, handicra&s,
carpet and the SMEs have been
ge8ng this facility, which will
now be available 6ll March 31,
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2011.
The government also ex-
tended the zero-duty Export Pro-
mo6on Capital Goods (EPCG)
scheme by one year to March 31,
2012. The scheme, which was an-
nounced in August 2009, was to
expire on March 31, 2011. Steps
to reduce transac6on cost of ex-
ports too were announced in the
policy.
NACO signs MoU with
Global Trust Fund on
HIV/AIDS preven0on
India and the Global Fund to fight
AIDS, Tuberculosis and Malaria
(GFATM) have signed a three-year
grant agreement for $128.4 mil-
lion or Rs.609.9 crore to support
the con6nua6on of flagship pro-
grammes of the Na6onal AIDS
Control Organisa6on (NACO).
The agreement was signed on
Wednesday between NACO di-
rector-general K. Chandramouli
and GFATM execu6ve director
Michel Kazatchkine.
The programmes covered
under the grant agreement in-
clude Integrated Counselling and
Tes6ng Services (ICTS), Preven-
6on of Parent to Child Transmis-
sion (PPTCT) services and HIV-TB
collabora6ve services.
India emerges as
shale gas hub
India could soon turn into a po-
ten6al shale gas des6na6on. Even
though the work has just begun
in India, ini6al studies by state-
owned Oil and Natural Gas Cor-
pora6on of India (ONGC) on
reserve es6ma6on of shale gas in
some of the country's sedimen-
tary basins such as Damodar and
Featured Article
Cambay basin have revealed a re-
source poten6al of about 35 and
90 trillion cubic feet of gas.
This, when compared with
the exis6ng gas resources in
India, such as the one from the
country's largest gas field of Re-
liance Industries in the KG
basin—es6mated to hold some
10 tcf of gas—is indeed a massive
reserve of gas.
ONGC, which took the ini6a-
6ve some five years back to ex-
plore shale gas, said shale
sequences in well explored basins
are found to be promising in
Damodar, Cambay, Krishna Go-
davari and Cauvery basins.
In the US, shale gas con-
tributes nearly 14 per cent of the
total gas produc6on.
Shale gas is natural gas
trapped under rocks. Its extrac-
6on involves tapping natural gas
trapped between layers of shale
rock, similar to the extrac6on of
gas from between coal seems in
India.
US has the largest shale gas
resource and China comes sec-
ond. India is es6mated to be one
of the biggest holders of shale
gas. Large deposits are located in
the Gange6c plain, Assam, Ra-
jasthan and the country’s exten-
sive coastline.
Experts are of the view that
shale gas promises to transform
the energy landscape by making
available clean gas to supplement
other energy sources.
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Pak Cabinet approves
transit trade agreement
with Afghanistan
On Oct 7, Pakistan's federal cabi-
net has approved the Pakistan-
Afghanistan Transit Trade
Agreement, according to which,
while Afghan trucks would be al-
lowed access up to the Wagah
border, they could carry only Pak-
istani export goods back to their
country.
Briefing media persons fol-
lowing the cabinet mee6ng
chaired by Prime Minister Yousuf
Raza Gilani, Informa6on Minister
Qamar Zaman Kaira stated that
although Afghan trucks were al-
lowed up to the Torkham border
since 1980, under the new agree-
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ment they would be allowed ac-
cess up to Wagha.
"In return, Pakistani trucks
would be allowed to go through
Afghanistan to the Central Asian
Republics and Iran," he said.
"The trade between
Afghanistan and India is already
taking place under the 1965
agreement and since 1980,
Afghanistan is expor6ng through
the Wagha border between Pak-
istan and India," Kaira noted,
adding, "The new agreement ap-
proved by the cabinet does not
allow export of Indian goods to
Afghanistan through the Wagha
border."
To curtail the menace of
smuggling, it has also been men-
6oned in the agreement that fi-
nancial guarantees equal to the
amount of import
levies of Pakistan
will have to be de-
posited by autho-
rised brokers or
customs clearing
agents to check
unauthorised
trade, and these
deposits will be re-
leased a&er the
goods exit the
country.
However, in case the goods
do not exit the country within the
specified 6me, the customs au-
thori6es will confiscate the guar-
antees.
The agreement was signed
between Pakistan Commerce
Minister Makhdoom Amin Fahim
and his Afghan counterpart, Dr
Anwar-ul-Haq Ahady, in the pres-
ence of Gilani and US Secretary of
State Hilary Clinton on July 18 this
year.
China overtakes Japan as
second-largest economy
A&er three decades of spectacu-
lar growth, China has passed
Japan in the second quarter of
2010 to become the world’s sec-
ond-largest economy behind the
United States. The milestone,
though an6cipated for some
6me, is the most striking evi-
dence yet that China’s ascen-
dancy is for real and that the rest
of the world will have to reckon
with a new economic super-
power.
The recogni6on came on Au-
gust 16, 2010, when Tokyo said
that Japan’s economy was valued
at about $1.28 trillion in the sec-
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ond quarter, slightly below
China’s $1.33 trillion. Japan’s
economy grew 0.4 percent in the
quarter, substan6ally less than
forecast. That weakness suggests
that China’s economy will race
past Japan’s for the full year.
Experts say unsea6ng
Japan—and in recent years pass-
ing Germany, France and Great
Britain—underscores China’s
growing clout and bolsters fore-
casts that China will pass the
United States as the world’s
biggest economy as early as
2030.
For Japan, whose economy
has been stagna6ng for more
than a decade, the figures reflect
a decline in economic and poli6-
cal power. Japan has had the
world’s second-largest economy
for much of the last four decades,
according to the World Bank. And
during the 1980s, there was even
talk about Japan’s economy
someday overtaking that of the
United States. But, while Japan’s
economy is mature and its popu-
la6on quickly aging, China is in
the throes of urbaniza6on and is
far from developed, meaning it
has a much lower standard of liv-
ing, as well as a lot more room to
grow.
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China is already a major
driver of global growth. The
country’s leaders have grown
more confident on the interna-
6onal stage and have begun to
assert greater influence in Asia,
Africa and La6n America, with
things like special trade agree-
ments and mul6-billion dollar re-
source deals. Beijing is also
beginning to shape global dia-
logues on a range of issues; for in-
stance, in 2009 it asserted that
the dollar must be phased out as
the world’s primary reserve cur-
rency.
While the United States and
the European Union are strug-
gling to grow in the wake of the
worst economic crisis in decades,
China has con6nued to climb up
the economic league tables by in-
ves6ng heavily in infrastructure
and backing a $586 billion s6mu-
lus plan.
There are huge challenges
ahead, though. Economists say
that China’s economy is too heav-
ily dependent on exports and in-
vestment and that it needs to
encourage greater domes6c con-
sump6on—something China has
struggled to do. The country’s
largely state-run banks have re-
cently been cri6cized for lending
Featured Article
far too aggressively in 2009, while
shi&ing some loans off their bal-
ance sheet to disguise lending
and evade rules meant to curtail
lending growth.
China is also locked in a fierce
debate over its currency policy,
with the United States, European
Union and others accusing Beijing
of keeping the Chinese currency,
the renminbi, ar6ficially low to
bolster exports—leading to huge
trade surpluses for China but
major bilateral trade deficits for
the United States and the Euro-
pean Union. China says that its
currency is not substan6ally un-
dervalued and that it is moving
ahead with currency reform.
Regardless, China’s rapid
growth suggests that it will con-
6nue to compete fiercely with
the United States and Europe for
natural resources but also offer
big opportuni6es for companies
eager to tap its market.
US ends combat mis-
sion in Iraq
On August 31, 2010, US President
Barack Obama announced an end
to the US combat mission in Iraq,
not with a declara6on of victory
but rather a sombre admission
that the US had paid a “huge
price.”
Announcing an end to Oper-
a6on Iraqi Freedom in a na6on-
ally televised speech from the
White House, the President said
the Iraqi people now have lead
responsibility for the security of
their country.
But as US troops roll out of
Iraq, the country con6nues to be
locked in a poli6cal stalemate
with disagreement over who will
lead it, a&er elec6ons failed to
throw up a clear winner.
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Featured Article
Obama urged Iraq’s leaders to
“move forward with a sense of
urgency to form an inclusive gov-
ernment that is just, representa-
6ve, and accountable to the Iraqi
people.” “And when that govern-
ment is in place, there should be
no doubt: The Iraqi people will
have a strong partner in the
United States. Our combat mis-
sion is ending, but our commit-
ment to Iraq’s future is not,” he
added.
Anthony Cordesman of the
Center for Strategic and Interna-
6onal Studies said while US
troops may have withdrawn, the
Iraq war is not over, it is not
“won,” and any form of stable
end state in Iraq is probably im-
possible before 2020.
A transi6onal US force will re-
main in Iraq with a mission of ad-
vising and assis6ng Iraq’s security
forces, suppor6ng Iraqi troops in
targeted counter-terrorism mis-
sions, and protec6ng US civilians.
Mid-East Summit
US President Barack Obama
waded into a new round of Mid-
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dle East diplomacy September 1,
2010, seeking momentum for re-
vived peace talks clouded by a
flare-up of West Bank violence
and a deadlock over Jewish set-
tlements.
Obama met Israeli Prime Minister
Benjamin Netanyahu as he
launched a series of one-on-one
mee6ngs with Middle East lead-
ers a7ending a US-led peace
summit that culminated with the
first direct Israeli-Pales6nian talks
in 20 months.
With Obama's peace bid fac-
ing broad skep6cism and the
clock 6cking toward the Septem-
ber 26, 2010 expira6on of an Is-
raeli se7lement construc6on
freeze, Israel's defence minister
sounded a conciliatory note
about the prospects for sharing
Jerusalem, an issue at the heart
of the decades-old conflict. But
big obstacles remain to Obama's
quest for a peace deal that
eluded so many of his predeces-
sors.
Hamas militants declared war
on the talks even before they
began, killing four Jewish se7lers
in the occupied West Bank, vow-
ing more a7acks and underscor-
ing the threat hard-liners pose to
the fragile peace process.
The summit marked Obama's
riskiest plunge into Middle East
diplomacy, not least because he
wants the two sides to forge a
deal within 12 months, a target
many analysts call a long shot.
Cricket shamed again
Yet another match-fixing scandal
rocked Pakistan cricket on August
29, 2010, engulfing its captain
Salman Bu7, brilliant pace duo of
Mohammad Asif and Moham-
mad Amir and four other players,
leading to the arrest of a bookie
in London and ques6oning of the
players by the Scotland Yard a&er
a tabloid s6ng.
The ‘News of the World’
tabloid alleged that a Pakistani
man Mazhar Majeed had paid
bribes to the players to bowl no-
balls in the series and the Lord’s
Test. The video evidence that the
tabloid has presented also shows
Majeed talking about his links
with Indian bookies.
The two Pakistanis who
bowled no-balls allegedly on di-
rec6ons from Majeed were Asif
and Aamir. Both bowlers deliv-
ered three no-balls during the
Lord’s Test.
. . Vol. - 19
 Science-Technology &
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Environment
Wheat genome code
cracked
Bri6sh scien6sts have decoded
the genome of wheat, in a break-
through research that will prove
valuable to crop breeders in
countries like India, in increasing
the yield of the staple food crop.
Wheat produc6on worldwide is
under threat from climate change
at a 6me when there is an in-
crease in demand from a growing
human popula6on.
Scien6sts at the University of
Liverpool, in collabora6on with
the University of Bristol and the
John Innes Centre, have se-
quenced the en6re wheat
genome and will make the DNA
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data available to crop breeders to
help them select key agricultural
traits for breeding.
Scien6sts have analysed the
wheat genome, which is five
6mes larger than the human
genome and is the largest
genome to be sequenced 6ll
date.
Scien0sts discover rich-
est planetary system yet
Astronomers have discovered a
planetary system containing at
least five planets and which orbit
a Sun-like star, HD 10180. They
said there was evidence of two
more planets in the same system,
which would make it similar to
our solar system in terms of the
number of planets and their
arrangement.
The planets and their sun-like
star are about 127 light years
from Earth, astronomers with the
European Southern Observatory
said. The system is one of only 15
known to have more than three
worlds.
The five planets circle their
parent star in a regular pa7ern
like the planets of our solar sys-
tem, only in a more compact
arrangement, the researchers
said. The confirma6on of the
extra planets would make it the
highest tally of alien worlds ever
spo7ed around a single star.
Of the two poten6al addi-
6onal planets that may be pres-
ent, one may have a mass that is
the closest to Earth's, if it is con-
firmed, they added.
The planet would be rocky,
like Earth, but probably far too
hot to sustain life. With at least
five Neptune-sized planets cir-
cling inside an orbit equivalent to
that of Mars, the HD 10180 sys-
tem has a more populated inner
region than our solar system.
The five strongest signals cor-
respond to planets with Nep-
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Featured Article
tune-like masses—between 13
and 25 Earth masses—which
orbit the star with periods rang-
ing from about 6 to 600 days.
These planets are located be-
tween 0.06 and 1.4 6mes the
Earth-Sun distance from their
central star.
Among the other two planets
that could exist, one would be a
Saturn-like planet (with a mini-
mum mass of 65 Earth masses)
orbi6ng in 2200 days. The other
would be the least massive exo-
planet ever discovered, with a
mass of about 1.4 6mes that of
Earth.
So far, astronomers know of
15 systems with at least three
planets. The last record-holder
was 55 Cancri, which contains
five planets, two of them being
giant planets.
It took astronomers six years
to study it using a planet-finding
instrument called the HARPS
spectrograph, a7ached to ESO's
3.6 metre telescope at La Silla,
Chile.
Census of the seas
First global count of marine life
logs 230,000 species—but scien-
6sts warns of mass ex6nc6ons. It
has been the biggest and most
comprehensive a7empt ever to
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answer that age-old ques6on—
how many fish are there in the
sea? A 10-year study of the diver-
sity, distribu6on and abundance
of life in the world’s oceans at-
tempts just that.
The Census of Marine Life es-
6mates there are over 230,000
species in our oceans.
A team of over 360 scien6sts
around the world surveyed 25 re-
gions, from the Antarc6c through
the temperate and tropical seas
to the Arc6c.
Over fishing, degraded habi-
tats, pollu6on and the arrival of
invasive species are major threats
to the marine life. But more prob-
lems are around the corner: rising
water temperatures and acidifi-
ca6on thanks to climate change
and the growth in areas of the
ocean that are low in oxygen and,
therefore, unable to support life.
Among the major findings are:
• A fi&h of the world’s marine
species are crustaceans such
as crabs, lobsters, krill and
barnacles. Add in molluscs
(squid and octopus) and fish
and that accounts for nearly
half the species in world’s
seas.
• Species o&en used in conser-
va6on campaigning—whales,
sea lions, turtles and sea
birds—account for less than
2% of the species in the
oceans.
• Enclosed seas such as the
Mediterranean, Gulf of Mex-
ico, China’s shelves, Bal6c,
and the Caribbean are having
the most threatened biodi-
versity.
• The most diverse regions are
around Australia and south-
east Asia.
• Australian and Japanese wa-
ters contain more than
30,000 species each and are
among the most biologically
diverse in the world.
• The manylight viperfish
(Chauliodus sloani) is the
most “cosmopolitan” marine
creature with a presence in
around a quarter of the
world’s seas.
• The number of marine fish
species known to science
stood at 16,764, and was
growing at around 100 a year.
There are believed to be
22,000 fish species in the
world.
Saturn's rings formed by
destruc0on of Titan-
sized moon
A new study has suggested that
Saturn's rings may have been
formed a&er the death of an
early Titan-sized moon whose
upper layers were ripped off as it
spiralled into the infant Saturn.
Planetary scien6st Robin Canup
of the Southwest Research Ins6-
tute said that one of the prob-
lems in working out where
Saturn''s rings came from is their
composi6on, reports Nature.
The rings are 90 percent-95
percent water ice—odd because
the primordial solar system
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would have been comprised of
about equal parts ice and rock.
Furthermore, the rings have been
collec6ng interplanetary dust
ever since they were formed. "So
they must have formed as essen-
6ally pure ice," she said.
Prior theories suggested that
the rings were produced by the
break-up of a small moon that fell
too far into Saturn''s mammoth
gravity or by the breakup of a
very large comet that suffered
the same fate.
Canup''s hypothesis is that
the rings were formed when a
Titan-sized moon with a rocky
core and an icy mantle spiralled
into Saturn early in solar system
history.
Tidal forces ripped off part of
the icy mantle, distribu6ng it into
what would become the rings.
But the rocky core was made of
tougher stuff.
"It hits the planet''s surface
before it disrupts. The end result
is a pure ice ring," she said. A&er-
ward, some of that ice recon-
densed into new moons, she
added.
But due to changes in the
evolving Saturn system, these
"spawned" moons now spiralled
outward rather than inward.
Joseph Burns, a planetary sci-
en6st from Cornell University
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said: "It is a very clever new idea.
One of the things it can do is pro-
duce rings made out of quite
pure water ice, which has been a
problem in the past."
If Canup''s theory is correct,
Saturn would originally have had
a ring much more massive than it
is now. That would mean the ring
contained enough material to
spawn icy moons like Enceladus,
Dione and Tethys.
The findings were presented
at a mee6ng of the American As-
tronomical Society''s Division for
Planetary Science in Pasadena,
California.
Google Cars Drive
Themselves
Google researchers have created
cars that can drive on public high-
ways without a human at the
wheel.
Using technology developed
through par6cipa6on in a series
of autonomous vehicle races
sponsored by the Defense Ad-
vanced Research Projects Agency
(DARPA), Google's self-driving
Toyota Prius has already logged
140,000 hours on roads between
the company's Mountain View,
Calif., headquarters and its office
in Santa Monica, Calif., with min-
imal human interven6on.
The robot cars resemble
Google's Street View vehicles. In-
stead of a camera on the roof, the
autonomous cars have an op6cal
LIDAR (Light Detec6on And Rang-
ing) sensor on top, with addi-
6onal radar sensors mounted on
chassis.
The researchers involved in
Google's project par6cipated in
DARPA's challenges. They in-
clude: Chris Urmson, a Carnegie
Mellon robo6cs scien6st, Mike
Featured Article
Montemerlo, senior research en-
gineer in Stanford's Ar6ficial In-
telligence Lab, and Anthony
Levandowski, a product manager
at Google who's noted for modi-
fying a Prius so that it can deliver
pizza without a person inside.
Google is pursuing self-dri-
ving cars to save us from our-
selves and to help the
environment. No6ng that as
many as 1.2 million people are
killed every year as a result of
road accidents, Thrun suggests
that automated vehicle technol-
ogy has the poten6al to reduce
car-related mortality by as much
as 50%. (The technology could
also reduce movie budgets by
making car chases too boring to
film.)
Beyond increasing road usage
and fuel efficiency through the
crea6on of "highway trains" --
closely coordinated lines of au-
tonomous vehicles -- Thrun says
that self-driving cars would allow
people to be more produc6ve by
working rather than driving dur-
ing their commutes, which aver-
age 52 minutes per day,
according to the U.S. Department
of Transporta6on.
Before such futuris6c scenar-
ios can really be considered, how-
ever, there will have to be
changes in the legal system. Nei-
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Featured Article
ther Google nor automakers will
want to offer automated cars if
they're held liable accidents.
There will also have to be
changes in the American psyche.
Cars have long been associated
with independence and personal
iden6ty in the U.S., and else-
where. It will take a major social
shi& before most people will ac-
cept Google as their driver.
Indian warship INS
Shak0 launched in Italy
A new warship built for the Indian
Navy has been launched at an
Italian shipyard in a ceremony
that included the recita6on of
Vedic hymns and the breaking of
a coconut.
Italian shipbuilder Fincan6eri
launched the INS Shak6 tanker at
the Sestri Ponente yard in Genoa.
This is the second of the two
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tankers built at the Italian ship-
yard.
INS Deepak was the first to
be designed and built in Italy and
is in an advanced stage of trials
before being delivered to the In-
dian Navy by year-end. Fin-
can6eri had signed a 300 million
euro contract in April 2008 to
build the two vessels. INS Shak6
was launched by Homai Saha, the
wife of India's Ambassador to
Italy Debabrata Saha, with the
"recita6on of Vedic hymns and
the breaking of a coconut", the
official said. The christening cer-
emony also included smashing a
bo7le of champagne against the
ship's bow.
INS Shak6 is expected to be
commissioned within two years.
Trials will start in December. Both
the INS Shak6 and the INS
Deepak have been built with dou-
ble hulls to provide greater safety
and prevent oil spillage.
Navy’s fast a1ack cra!
Kalpeni commissioned
The indigenous Water Jet Fast At-
tack Cra& (FAC) Kalpeni was com-
missioned by Chief Jus6ce of
Kerala Jas6 Chelameswar at a for-
mal ceremony held at the South-
ern Naval Command here on
October 14, 2010. INS Kalpeni is
the seventh of the 10 new gener-
a6on Car Nicobar class FACs de-
signed and built by Garden Reach
Shipbuilders and Engineers
(GRSE), Kolkata.
Jus6ce Chelameswar, in his
address, pointed out that it was
as important to develop the capa-
bility to indigenously build mod-
ern vessels as to equip the forces
with modern weapons. “Tradi-
6onally, India is a peace-loving
country, but even a peace lover is
required to be always prepared
. . Vol. - 19
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to exert pressure,” he said. The
acquisi6on of modern technology
and hardware, he hoped, would
be an incen6ve for younger gen-
era6ons to join the services.
Kalpeni, propelled by three
powerful water jets, can achieve
speeds in excess of 35 Knots.
Based at the Southern Naval
Command, it will bolster the ca-
pabili6es of the command in
coastal surveillance and search
and destruc6on of fast moving
targets. The main armament of
the ship is a 30mm CRN-91 Gun
with an Optronic Pedestal Sight
as its director. In addi6on, the
ship has been fi7ed with 11 ma-
chine guns of various types and
shoulder-fired IGLA Surface-to-
Air Missiles (SAM) to thwart aer-
ial threats. Commanded by
Lieutenant Commander Subhal
Nathan, it has a crew of 3 officers
and 38 sailors.
Tailored therapy a cure
for breast cancer
With the increasing prevalence of
breast cancer, doctors are now
resor6ng to a newer form of
treatment - individualisa6on of
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breast cancer treat-
ment, popularly
termed as 'tailored
therapy'.
Recent research
conducted by a
team of oncologists
at the Na6onal Can-
cer Ins6tute, United
States, came up
with a finding that
adding chemother-
apy to hormone
therapy in the adju-
vant (a&er surgery)
treatment of
women with breast
cancer has shown to
reduce the risk of breast cancer
recurrence.
Dr Ni6 Narang, HoD, breast
oncology, HCG Hospital, said,
"Through this tailored therapy,
maximum result can be achieved.
Based on evidence and guidelines
and ongoing research carried out
in India and America, we proceed
with the treatment."
About the working of tailored
therapy, she says, "Based on the
age group, gene profiling and
hormonal suitability we plan the
treatment."
"A&er a thorough checkup,
we categorise the pa6ents under
high risk group or low risk groups.
Since pa6ents under high risk
group have a higher chance of re-
Featured Article
currence, we have to deal very
carefully. For pa6ents, especially
under the high risk group, tai-
lored therapy is best suited.
Treatment is mainly with surgery
breast conserving or mastectomy,
radia6on therapy, chemotherapy
and hormonal therapy," she said.
Earlier, most of the pa6ents
with breast cancer used to be
aged 40 years and above, nor-
mally a&er their menopause. But,
of late, even girls in their teens
and 20s are affected. "Women,
especially those with a family his-
tory of breast cancer are at a
higher risk. The number seems to
be high among urban women and
this is basically because of change
in lifestyle. Use of alcohol and
smoking are among other con-
tributory factors," she says.
At the same 6me, awareness
level seems to be increasing, as
many of those affected are com-
ing for treatment at an early
stage, opines Dr Ni6.
Says another specialist, Dr
Poonam Pa6l, HoD and consult-
ant medical oncologist, Manipal
Hospital, "Tailored therapy, a
treatment designed for the
breast cancer pa6ents based on
the individual risk criteria, is a
new trend. Compared to the gen-
eral treatment available, tailored
therapy is yielding be7er results."
Sashi Venkat, a breast cancer sur-
vivor from city, says, "Tailored
therapy I believe is the right op-
6on for those suffering from
breast cancer. For me, I did not
want surgery. According to the in-
forma6on gathered from the In-
ternet and doctors, treatment
was designed accordingly for me.
I went through chemotherapy,
cyber knife procedure, followed
by vaccina6on. Till date I have
had no sideeffects and I am re-
covering."
. .
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S
P
O
R
T
S
FOOTBALL twice as Bengal made a spectacu-
lar comeback to beat Punjab 2-1,
ending their 11 years 5tle
drought in the Na5onal Football
Santosh Trophy, 2010 Championship for Santosh Tro-
phy.
Kerala lad Denson Devdas struck

ATHLETICS
Na-onal Athle-c
Meet, 50th
Kerala, Punjab and Haryana stood
overall first, second and third, re-
spec5vely, in the Na5onal Ath-
le5c Senior Championship held at
NIS Pa5ala.

4 . - 18
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GAMES
Youth Olympic Games
Singapore hosted the first Youth
Olympics from August 14 to 26,
2010. A total of 3,531 athletes
between 14 and 18 years of age
from 204 Na5onal Olympic Com-
mi6ees (NOCs) competed in 201
events in 26 sports.
The opening ceremony of the
Games was held on 14 August at
The Float@Marina Bay, a floa5ng
stage near downtown Singapore.
Approximately 27,000 spectators
a6ended the event, which took
place against a backdrop of the
city's skyline.
Lyo and Merly were the offi-
cial mascots. The duo ere made
up of a red male lion and a blue
female Merlion. A contest held to
name the two mascots was won
by two Singaporeans. It took de-
signers from Cubix Interna5onal
about six months to complete de-
signing the mascots.
China topped the medals tally
with 30 gold medals, followed by
Russia (18) and South Korea (11).
India was ranked 58 with 6 silver
medals and 2 bronze medals in its
ki6y.
It was during the 119th ses-
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Featured Article
sion of the Interna5onal Olympic
Commi6ee (IOC) in Guatemala
City on the July 5, 2007 when the
when he won the Wyndham Golf
Championship.
HOCKEY
IOC decided to create Youth
Olympic Games (YOG). The vision
of the innova5ve concept for the
new sport event is to inspire
young people all around the
world to par5cipate in sport and Champions Trophy, 2010
Australia won their third succes-
sive Champions Trophy, and 11th
in all, with a comprehensive 4-0
win over England. Netherlands
secured the third place. The
championship was held at
Monchengladbach, Germany.
adopt and live by the Olympic val-
ues (excellence, friendship, re-
spect).
Innsbruck and Seefeld will
SHOOTING
host the first Winter Youth
Olympic Games from January 13-
22, 2012.
GOLF
Tejaswini becomes first
Indian woman to win
gold at World Champi-
onships
Atwal first Indian to win
US PGA -tle
Arjun Atwal has become the first
Indian ever to win a US PGA 5tle
Tejaswani Sawant scripted history
by becoming the first Indian
woman shooter to clinch a gold
medal at the World Champi-
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Featured Article
onships, with a world-record
equalling score in 50m Rifle
Prone event in Munich, Germany.
Pakistan overcame a late bat-
5ng collapse to beat England by
four wickets in the third Test.
England batsmen Jonathan

CRICKET
Sri Lanka-New Zealand-
India One-Day Tri-series
Sri Lanka rode on Tillakaratne Dil-
shan’s century to clinch the tri-se-
Tro6 and Stuart Broad set a world
record eighth wicket partnership
when they extended their stand
to 332 on the third day of fourth
Test. The record was earlier held
by Pakistan’s Wasim Akram and
Saqlain Mushtaq.
Earlier, in the first Test, James
Anderson took ten wickets in a
Test for the first 5me to help Eng-
land crush Pakistan by 354 runs. capped Test cricketer (169 Test
In their second innings, Pakistan matches). This feat was achieved
were bundled out for just 80 in the third and final Test against
runs, their lowest total against Sri Lanka, played in August 2010.
England, replacing the 87 they Steve Waugh (168 Test matches)
made at Lord’s in 1954. of Australia had held the record
earlier.

Sri Lanka-India India v Australia Test

ries 5tle with an empha5c 74-run
win over India, ending M.S.
Dhoni’s sequence of four consec-
u5ve series triumphs on Sri Lanka
soil.
England-Pakistan
Test series
England crushed Pakistan by an
innings and 225 runs to win the
fourth and final Test at Lord’s,
London. England ended up win-
ning the series 3-1.
Test Series
Veteran V.V.S. Laxman cracked a
figh5ng unbeaten 103 as India
pulled off a five-wicket win in the
third Test to level the three-Test
series 1-1. Laxman was adjudged
the man of the match while
Virender Sehwag was adjudged
man of the series.
Cricket Series
1st Test, Mohali, Oct 1-5
VVS Laxman struck a superb
unbeaten 73 as India fought back
from the brink of defeat to beat
Australia by one wicket in a
thrilling first Test in Mohali. Lax-
man, ba7ng with a runner due to
a back injury, was ably assisted by
tail-ender Ishant Sharma as India
rallied from 124-8 to within sight
of victory. Sharma made 31 be-
fore being trapped leg before

Tendulkar becomes
most-capped player
Iconic Indian batsman Sachin Ten-
dulkar has become the most-

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Featured Article
wicket by Ben Hilfenhaus. With
11 s5ll needed, Laxman was
joined by last-man Pragyan Ojha
and they got India home in a nail-
bi5ng finish.
This was India's first one-
wicket victory in Tests. The 81-run
partnership for the ninth wicket
between VVS Laxman and Ishant
Sharma was the second-highest
against Australia, behind the 89-
run stand between Harbhajan
Singh and Irfan Pathan in 2004.
IND v AUS, Mohali Test: India
405 (Tendulkar 98, Raina 86,
Johnson 5-64) and 216 for 9 (Lax- losses - in Mohali last week and The loudest cheers of the day
man 73*, Hilfenhaus 4-57, Bangalore - to Mahendra Dhoni's were heard when the Master
Bollinger 3-32) beat Australia 428 men. reached another milestone as he
(Watson 126, Paine 92, Zaheer 5- IND v AUS, Bangalore Test: punched Hauritz off the Back-foot
94) and 192 (Watson 56, Ishant 3- India 495 and 207 for 3 (Pujara to the covers boundary to reach
34, Zaheer 3-43) by 1 wicket 72, Tendulkar 53*) beat Australia 14,000 runs in test cricket.
2nd Test, Bangalore, Oct 9-13 478 and 223 (Pon5ng 72, Zaheer
First innings double century- 3-41, Ojha 3-57) by 7 wickets
maker Sachin Tendulkar scored
the winning runs in India's seven- 14,000 Runs in Test
wicket victory over Australia to Cricket for Sachin Ten-
take the two-test series 2-0. It dulkar
was India's first victory at the M.
Chinnaswamy stadium in 15 Sachin Tendulkar became the first
years. batsman in history of test cricket
Australia was bowled out for to score 14, 000 runs on day two
223 earlier, se7ng India a target of the second test against Aus-
of 207 to win. Tendulkar, who tralia at the Chinnaswamy Sta-
scored 214 in the first innings, dium on 10 October 2010.
took his series aggregate to 403
runs, at an amazing average of
134.5. Rahul Dravid, who shared
in a 61-run unbroken fourth-
wicket partnership with Ten-
dulkar, remained unbeaten on 21.
Playing his first test and pro-
moted to bat at No. 3,
Cheteswara Pujara set the pace
of the innings with a 72 with
seven boundaries.
With this win, India have con-
solidated their posi5on at the top
of the ICC Test Championship
table, while Australia have
dropped behind England to fi%h
posi5on a%er racking up two

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Featured Article

During Financial Year 2009- with The Golden Peacock award

Business India's '
Best Bank' Award
Bank of Baroda (BOB) was pre-
sented the 'Business India Best
Bank 2010' award by Union Min-
ister for Road Transport and High-
ways, Kamal Nath at a func5on in
the Mumbai on Oct 7. M D
Mallya, Chairman and Managing
Director, Bank of Baroda, ac-
cepted the Award on behalf of
the bank.
BOB has entered new ver5-
cals like insurance and invest-
ment banking. Its recent foray,
into the insurance space resulted
in over 100,000 policies sold in
nine months of opera5on, and
plans to collect new business pre-
mium of Rs 700 crore, in the first
year of opera5on. BOB Capital,
the investment banking arm, has
also been revived. Refurbished
branches under 'BarodaNext' are
expected to touch 34 na5onwide.
10, the bank was fourth biggest in
India by total assets, fourth most
profitable, third by total business,
and fourth by advances. All its
3,200 branches are core banking
solu5on-enabled, with plans to
add another 350 branches by
March 2011.
Golden Peacock Award
IBM India has been conferred
2010 for its Corporate Social Re-
sponsibility (CSR) ini5a5ves in
India on Oct 7.
IBM India is the first IT Com-
pany to win this award since its
incep5on in 2002. The company
was also been rated as the 'first
among equals' for its CSR prac-
5ces amongst other recipients of
the award this year.
IBM's BPO arm in India, IBM
Daksh was also recognized with a
'Special Commenda5on' for the
Golden Peacock Environment
Management Award for this year
at the 2010 Global Sustainability
Summit.
IBM spends US Dollar 150
million annually on CSR ini5a5ves
worldwide and con5nues to chal-
lenge itself to find be6er and
more impac4ul ways to con-
tribute to society. IBM's CC and
CA are on constant lookout for

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new areas where they can make a
difference.
The Golden Peacock is a very
pres5gious and well-known
award in the field of CSR in India.
We are privileged to receive this
award.
Maulana Abul Kalam
Azad Trophy for Sports
The Punjabi University and Guru
Nanak Dev University have been
awarded the trophy for academic
session 2008-09 and 2009-10, re-
spec5vely.
Gallantry Awards, 2010
Ashok Chakra: Major Laishram Jy-
o5n Singh, an unarmed army
doctor serving in Kabul, who took
on a suicide bomber and killed
him, has been awarded Ashok
Chakra (posthumously), the high-
est peace5me gallantry award.
Kir5 Chakra: Captain Davin-
der Singh Juss of the Parachute
Regiment and Vinod Kumar
Choubey, SP, Chha7sgarh, have
been awarded India’s second
highest peace 5me gallantry
award. Juss killed a foreign terror-
ist in February 2010 during an en-
counter in J&K and Choubey
fought against more than 300
naxalites.
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Tendulkar is
Cricketer of Year
Sachin Tendulkar became only
the second player from India
a%er Rahul Dravid, winner of the
inaugural edi5on in 2004, to
claim the Sir Garfield Sobers Tro-
phy. Tendulkar beat back the
challenge of Hashim Amla, Viren-
der Sehwag -- who was crowned
the Test Player of the Year -- and
English off-spinner Graeme
Swann.
This was probably the
only individual trophy
missing from Tendulkar’s
cabinet, and a%er an
even4ul season during
which period he stacked
up runs in tons both in
Tests and one-dayers, the
Mumbaikar bagged the
top honours. Tendulkar
amassed 1064 runs in Tests at an
average of 81.25 and notched up
914 (65.29 average) runs in one-
day interna5onals, including an
incredible 200 not out against
South Africa in Gwalior earlier
this year. The performances of
players between August 24, 2009
and August 10, 2010 were taken
Featured Article
into account whilst deciding the
awards.
It’s a way of apprecia5ng
one’s performances,” observed
the right-hander, who also found
places in both the One-day and
Test teams of the years. Ten-
dulkar was also in race for the
One-day Player of the Year, which
went to South African AB de Vil-
liers.
India’s cup of joy fairly over-
flowed. Sehwag was declared the
Test Cricketer of the Year while
Dhoni was named the skipper of
the Test team of the Year, voted
by a 25-person independent
panel comprising former players,
cricket journalists, ICC match ref-
erees and umpires’ representa-
5ves, and chairman of the ICC’s
Cricket Commi6ee, Clive Lloyd.
During the awards period, Se-
hwag stacked up 1282 runs in 12
Tests.
Australian skipper Ricky
Pon5ng was named the captain
of the One-day team of the year,
while Pakistan’s Aleem Dar was
adjudged the umpire of the year
for the second 5me in succession.
Australian Shelly Nitschke took
home the Women’s Cricketer of
the Year honours.
. .
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Featured Article

Award Winners

• Cricketer of the Year : Sachin Tendulkar (India).

• Test Player of the Year : Virender Sehwag (India).
• ODI Player of the Year : AB de Villiers (South Africa).
• Emerging Player : Steven Finn (England).
• Azsociate and Affiliate Player of the Year : Ryan ten Doeschate (Netherlands).
• Twenty20 Interna-onal Performance of the Year : Brendon McCullum (New Zealand) for his un-
beaten 116 in 56 balls against Australia on Feb 28.
• Woman Cricketer of the Year : Shelly Nitschke (Australia).
• Umpire of the Year: Aleem Dar (Pakistan).
• Spirit of Cricket : New Zealand.
• People’s choice award : Sachin Tendulkar.
• Test team of the Year : Mahendra Singh Dhoni (capt), Virender Sehwag, Simon Ka5ch, Sachin Ten-
dulkar, Hashim Amla, Kumar Sangakkara, Jacques Kallis, Graeme Swann, James Anderson, Dale Steyn,
Doug Bollinger.
• One-day team of the Year: Ricky Pon5ng (capt), Sachin Tendulkar, Shane Watson, Michael Hussey,
AB de Villiers, Paul Collingwood, Mahendra Singh Dhoni, Daniel Ve6ori, Chris Broad, Doug Bollinger,
Ryan Harris.
• ICC Hall of Fame inductees: Joel Garner, Courtney Walsh (both West Indies), Ken Barrington and
Rachael Hayhoe Fint (both England).

2010 Nobel Prizes Announcements

Physiology or Medicine : Chemistry : Peace :

• Robert G. Edwards • Richard F. Heck • Liu Xiaobo
• Ei-ichi Negishi
Physics : • Akira Suzuki Economic Sciences :
• Andre Geim • Peter A. Diamond
• Konstan5n Novoselov Literature : • Dale T. Mortensen
• Mario Vargas Llosa • Christopher A. Pissarides

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Special Study Package
Affairs about You must be aware
World Trade
Organiza1on
The World Trade Organiza5on
(WTO) is an organiza5on that in-
tends to supervise and liberalize
interna5onal trade. The organiza-
5on officially commenced on Jan-
uary 1, 1995 under the
Marrakech Agreement, replacing
the General Agreement on Tariffs
and Trade (GATT), which com-
menced in 1948. The organiza-
5on deals with regula5on of
trade between par5cipa5ng
countries; it provides a frame-
work for nego5a5ng and formal-
izing trade agreements, and a
dispute resolu5on process aimed
at enforcing par5cipants' adher-
ence to WTO agreements which
ar signed by representa5ves of
member governments and ra5-
fied by their parliaments. Most of
the issues that the WTO focuses
on derive from previous trade ne-
go5a5ons, especially from the
Uruguay Round (1986-1994).
The organiza5on is currently
endeavoring to persist with a
trade nego5a5on called the Doha
Development Agenda (or Doha
Round), which was launched in
2001 to enhance equitable par-
5cipa5on of poorer countries
which represent a majority of the
world's popula5on. However, the
nego5a5on has been dogged by
"disagreement between ex-
. .
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porters of agricultural bulk com-
modi5es and countries with large
numbers of subsistence farmers
on the precise terms of a 'special
safeguard measure' to protect
farmers from surges in imports.
At this 5me, the future of the
Doha Round is uncertain."
The WTO has 153 members,
represen5ng more than 97% of
total world trade and 30 ob-
servers, most seeking member-
ship. The WTO is governed by a
ministerial conference, mee5ng
every two years; a general coun-
cil, which implements the confer-
ence's policy decisions and is
responsible for day-to-day admin-
istra5on; and a director-general,
who is appointed by the ministe-
rial conference. The WTO's head-
quarters is at the Centre William
Rappard, Geneva, Switzerland.
ITO and GATT 1945
The WTO's predecessor, the Gen-
eral Agreement on Tariffs and
Trade (GATT), was established
a%er World War II in the wake of
other new mul5lateral ins5tu-
5ons dedicated to interna5onal
economic coopera5on — notably
the Bre6on Woods ins5tu5ons
known as the World Bank and the
Interna5onal Monetary Fund. A
comparable interna5onal ins5tu-
5on for trade, named the Interna-
5onal Trade Organiza5on was
successfully nego5ated. The ITO
was to be a United Na5ons spe-
cialized agency and would ad-
dress not only trade barriers but
other issues indirectly related to
trade, including employment, in-
vestment, restric5ve business
prac5ces, and commodity agree-
ments. But the ITO treaty was not
approved by the U.S. and a few
other signatories and never went
into effect.
In the absence of an interna-
5onal organiza5on for trade, the
GATT would over the years
"transform itself" into a de facto
interna5onal organiza5on.
GATT rounds of nego1a-
1ons
The GATT was the only mul5lat-
eral instrument governing inter-
na5onal trade from 1948 un5l
the WTO was established in 1995.
Despite a6empts in the mid
1950s and 1960s to create some
form of ins5tu5onal mechanism
for interna5onal trade, the GATT
con5nued to operate for almost
half a century as a semi-ins5tu-
5onalized mul5lateral treaty
regime on a provisional basis.
From Genève to Tokyo
Seven rounds of nego5a5ons oc-
curred under the GATT. The first
.
Downloaded From: http://www.upscportal.com
Featured Article
real GATT trade rounds concen-
trated on further reducing tariffs.
Then, the Kennedy Round in the
mid-six5es brought about a GATT
an5-dumping Agreement and a
sec5on on development. The
Tokyo Round during the seven5es
was the first major a6empt to
tackle trade barriers that do not
take the form of tariffs, and to im-
prove the system, adop5ng a se-
ries of agreements on non-tariff
barriers, which in some cases in-
terpreted exis5ng GATT rules,
and in others broke en5rely new
ground. Because these plurilat-
eral agreements were not ac-
cepted by the full GATT
membership, they were o%en in-
formally called "codes". Several
of these codes were amended in
the Uruguay Round, and turned
into mul5lateral commitments
accepted by all WTO members.
Only four remained plurilateral
(those on government procure-
ment, bovine meat, civil aircra%
and dairy products), but in 1997
WTO members agreed to termi-
nate the bovine meat and dairy
agreements, leaving only two.
Uruguay Round
Well before GATT's 40th anniver-
sary, its members concluded that
the GATT system was straining to
adapt to a new globalizing world
economy. In response to the
problems iden5fied in the 1982
Ministerial Declara5on (structural
deficiencies, spill-over impacts of
certain countries' policies on
world trade GATT could not man-
age etc.), the eighth GATT round
— known as the Uruguay Round
— was launched in September
1986, in Punta del Este, Uruguay.
It was the biggest nego5a5ng
mandate on trade ever agreed:
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the talks were going to extend
the trading system into several
new areas, notably trade in serv-
ices and intellectual property, and
to reform trade in the sensi5ve
sectors of agriculture and tex5les;
all the original GATT ar5cles were
up for review. The Final Act con-
cluding the Uruguay Round and
officially establishing the WTO
regime was signed during the
April 1994 ministerial mee5ng at
Marrakesh, Morocco, and hence
is known as the Marrakesh Agree-
ment.
The GATT s5ll exists as the
WTO's umbrella treaty for trade
in goods, updated as a result of
the Uruguay Round nego5a5ons
(a dis5nc5on is made between
GATT 1994, the updated parts of
GATT, and GATT 1947, the original
agreement which is s5ll the heart
of GATT 1994). GATT 1994 is not
however the only legally binding
agreement included via the Final
Act at Marrakesh; a long list of
about 60 agreements, annexes,
decisions and understandings
was adopted. The agreements fall
into a structure with six main
parts:
• The Agreement Establishing
the WTO
• Goods and investment — the
Mul5lateral Agreements on
Trade in Goods including the
GATT 1994 and the Trade Re-
lated Investment Measures
• Services — the General
Agreement on Trade in Serv-
ices
• Intellectual property — the
Agreement on Trade-Related
Aspects of Intellectual Prop-
erty Rights (TRIPS)
• Dispute se6lement (DSU)
• Reviews of governments'
trade policies (TPRM)
Ministerial Conferences
The topmost decision-making
body of the WTO is the Ministe-
rial Conference, which usually
meets every two years. It brings
together all members of the
WTO, all of which are countries or
customs unions. The Ministerial
Conference can take decisions on
all ma6ers under any of the mul-
5lateral trade agreements. The
inaugural ministerial conference
was held in Singapore in 1996.
Disagreements between largely
developed and developing
economies emerged during this
conference over four issues ini5-
ated by this conference, which
led to them being collec5vely re-
ferred to as the "Singapore is-
sues". The second ministerial
conference was held in Geneva in
Switzerland.
The third conference in Seat-
tle, Washington ended in failure,
with massive demonstra5ons and
police and Na5onal Guard crowd
control efforts drawing world-
wide a6en5on. The fourth minis-
terial conference was held in
Doha in the Persian Gulf na5on of
Qatar. The Doha Development
Round was launched at the con-
ference. The conference also ap-
proved the joining of China,
which became the 143rd mem-
ber to join. The fi%h ministerial
conference was held in Cancún,
Mexico, aiming at forging agree-
ment on the Doha round. An al-
liance of 22 southern states, the
G20 developing na5ons (led by
India, China, Brazil, ASEAN led by
the Philippines), resisted de-
mands from the North for agree-
ments on the so-called
"Singapore issues" and called for
an end to agricultural subsidies
within the EU and the US. The
talks broke down without
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progress.
The sixth WTO ministerial
conference was held in Hong
Kong from 13-18 December
2005. It was considered vital if
the four-year-old Doha Develop-
ment Agenda nego5a5ons were
to move forward sufficiently to
conclude the round in 2006. In
this mee5ng, countries agreed to
phase out all their agricultural ex-
port subsidies by the end of
2013, and terminate any co6on
export subsidies by the end of
2006. Further concessions to de-
veloping countries included an
agreement to introduce duty
free, tariff free access for goods
from the Least Developed Coun-
tries, following the Everything but
Arms ini5a5ve of the European
Union — but with up to 3% of tar-
iff lines exempted. Other major
issues were le% for further nego-
5a5on to be completed by the
end of 2010. The WTO General
Council, on 26 May 2009, agreed
to hold a seventh WTO ministe-
rial conference session in Geneva
from 30 November-3 December
2009. A statement by chairman
Amb. Mario Matus acknowl-
edged that the prime purpose
was to remedy a breach of proto-
col requiring two-yearly "regular"
mee5ngs, which had lapsed with
the Doha Round failure in 2005,
and that the "scaled-down"
mee5ng would not be a nego5at-
ing session, but "emphasis will be
on transparency and open discus-
sion rather than on small group
processes and informal nego5at-
ing structures". The general
theme for discussion was "The
WTO, the Mul5lateral Trading
System and the Current Global
Economic Environment"
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Doha Round
The WTO launched the current
round of nego5a5ons, the Doha
Development Agenda (DDA) or
Doha Round, at the fourth minis-
terial conference in Doha, Qatar
in November 2001. The Doha
round was to be an ambi5ous ef-
fort to make globaliza5on more
inclusive and help the world's
poor, par5cularly by slashing bar-
riers and subsidies in farming.
The ini5al agenda comprised
both further trade liberaliza5on
and new rule-making, under-
pinned by commitments to
strengthen substan5al assistance
to developing countries.
The nego5a5ons have been
highly conten5ous and agree-
ment has not been reached, de-
spite the intense nego5a5ons at
several ministerial conferences
and at other sessions. Disagree-
ments s5ll con5nue over several
key areas including agriculture
subsidies.
Func1ons
Among the various func5ons of
the WTO, these are regarded by
analysts as the most important:
• It oversees the implementa-
5on, administra5on and op-
era5on of the covered
agreements.
• It provides a forum for nego-
5a5ons and for se6ling dis-
putes.
Addi5onally, it is the WTO's duty
to review and propagate the na-
5onal trade policies, and to en-
sure the coherence and
transparency of trade policies
through surveillance in global
economic policy-making. Another
priority of the WTO is the assis-
Featured Article
tance of developing, least-devel-
oped and low-income countries
in transi5on to adjust to WTO
rules and disciplines through
technical coopera5on and train-
ing.
The WTO is also a center of
economic research and analysis:
regular assessments of the global
trade picture in its annual publi-
ca5ons and research reports on
specific topics are produced by
the organiza5on. Finally, the WTO
cooperates closely with the two
other components of the Bre6on
Woods system, the IMF and the
World Bank.
Principles of the trading
system
The WTO establishes a frame-
work for trade policies; it does
not define or specify outcomes.
That is, it is concerned with set-
5ng the rules of the trade policy
games. Five principles are of par-
5cular importance in understand-
ing both the pre-1994 GATT and
the WTO:
1. Non-Discrimina1on. It has
two major components: the most
favoured na5on (MFN) rule, and
the na5onal treatment policy.
Both are embedded in the main
WTO rules on goods, services,
and intellectual property, but
their precise scope and nature
differ across these areas. The
MFN rule requires that a WTO
member must apply the same
condi5ons on all trade with other
WTO members, i.e. a WTO mem-
ber has to grant the most favor-
able condi5ons under which it
allows trade in a certain product
type to all other WTO members.
"Grant someone a special favour
and you have to do the same for
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all other WTO members." Na-
5onal treatment means that im-
ported goods should be treated
no less favorably than domes5-
cally produced goods (at least
a%er the foreign goods have en-
tered the market) and was intro-
duced to tackle non-tariff barriers
to trade (e.g. technical standards,
security standards et al. discrimi-
na5ng against imported goods).
2. Reciprocity. It reflects both
a desire to limit the scope of free-
riding that may arise because of
the MFN rule, and a desire to ob-
tain be6er access to foreign mar-
kets. A related point is that for a
na5on to nego5ate, it is neces-
sary that the gain from doing so
be greater than the gain available
from unilateral liberaliza5on; re-
ciprocal concessions intend to en-
sure that such gains will
materialise.
3. Binding and enforceable
commitments. The tariff commit-
ments made by WTO members in
a mul5lateral trade nego5a5on
and on accession are enumerated
in a schedule (list) of concessions.
These schedules establish "ceiling
bindings": a country can change
its bindings, but only a%er nego5-
a5ng with its trading partners,
which could mean compensa5ng
them for loss of trade. If sa5sfac-
5on is not obtained, the com-
plaining country may invoke the
WTO dispute se6lement proce-
dures.
4. Transparency. The WTO
members are required to publish
their trade regula5ons, to main-
tain ins5tu5ons allowing for the
review of administra5ve deci-
sions affec5ng trade, to respond
to requests for informa5on by
other members, and to no5fy
changes in trade policies to the
WTO. These internal trans-
parency requirements are sup-
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plemented and facilitated by pe-
riodic country-specific reports
(trade policy reviews) through
the Trade Policy Review Mecha-
nism (TPRM). The WTO system
tries also to improve predictabil-
ity and stability, discouraging the
use of quotas and other meas-
ures used to set limits on quan5-
5es of imports.
5. Safety valves. In specific
circumstances, governments are
able to restrict trade. There are
three types of provisions in this
direc5on: ar5cles allowing for the
use of trade measures to a6ain
noneconomic objec5ves; ar5cles
aimed at ensuring "fair compe5-
5on"; and provisions permi7ng
interven5on in trade for eco-
nomic reasons. Excep5ons to the
MFN principle also allow for pref-
eren5al treatment of developing
countries, regional free trade
areas and customs unions.
Organiza1onal structure
The General Council has mul5ple
bodies which oversee commit-
tees in different areas, and they
are the following:
Council for Trade in Goods
There are 11 commi6ees under
the jurisdic5on of the Goods
Council each with a specific task.
All members of the WTO par5ci-
pate in the commi6ees. The Tex-
5les Monitoring Body is separate
from the other commi6ees but
s5ll under the jurisdic5on of
Goods Council. The body has its
own chairman and only 10 mem-
bers. The body also has several
groups rela5ng to tex5les.
Council for Trade-Related As-
pects of Intellectual Property
Rights
Informa5on on intellectual
property in the WTO, news and
official records of the ac5vi5es of
the TRIPS Council, and details of
the WTO’s work with other inter-
na5onal organiza5ons in the
field.
Council for Trade in Services
The Council for Trade in Serv-
ices operates under the guidance
of the General Council and is re-
sponsible for overseeing the
func5oning of the General Agree-
ment on Trade in Services (GATS).
It is open to all WTO members,
and can create subsidiary bodies
as required.
Trade Nego1a1ons
Commi2ee
The Trade Nego5a5ons Commit-
tee (TNC) is the commi6ee that
deals with the current trade talks
round. The chair is WTO’s direc-
tor-general. The commi6ee is
currently tasked with the Doha
Development Round.
The Service Council has three
subsidiary bodies: financial serv-
ices, domes5c regula5ons, GATS
rules and specific commitments.
The General council has several
different commi6ees, working
groups, and working par5es.
There are commi6ees on the fol-
lowing: Trade and Environment;
Trade and Development (Sub-
commi6ee on Least-Developed
Countries); Regional Trade Agree-
ments; Balance of Payments Re-
stric5ons; and Budget, Finance
and Administra5on. There are
working par5es on the following:
Accession. There are working
groups on the following: Trade,
debt and finance; and Trade and
technology transfer.
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Vo1ng system
The WTO operates on a one
country, one vote system, but ac-
tual votes have never been taken.
Decision making is generally by
consensus, and rela5ve market
size is the primary source of bar-
gaining power. The advantage of
consensus decision-making is
that it encourages efforts to find
the most widely acceptable deci-
sion. Main disadvantages include
large 5me requirements and
many rounds of nego5a5on to
develop a consensus decision,
and the tendency for final agree-
ments to use ambiguous lan-
guage on conten5ous points that
makes future interpreta5on of
trea5es difficult.
In reality, WTO nego5a5ons
proceed not by consensus of all
members, but by a process of in-
formal nego5a5ons between
small groups of countries. Such
nego5a5ons are o%en called
"Green Room" nego5a5ons (a%er
the colour of the WTO Director-
General's Office in Geneva), or
"Mini-Ministerials", when they
occur in other countries. These
processes have been regularly
cri5cised by many of the WTO's
developing country members
which are o%en totally excluded
from the nego5a5ons.
Richard Harold Steinberg
(2002) argues that although the
WTO's consensus governance
model provides law-based ini5al
bargaining, trading rounds close
through power-based bargaining
favouring Europe and the U.S.,
and may not lead to Pareto im-
provement.
Dispute se2lement
In 1994, the WTO members
agreed on the Understanding on
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Rules and Procedures Governing
the Se6lement of Disputes (DSU)
annexed to the "Final Act" signed
in Marrakesh in 1994. Dispute
se6lement is regarded by the
WTO as the central pillar of the
mul5lateral trading system, and
as a "unique contribu5on to the
stability of the global economy".
WTO members have agreed that,
if they believe fellow-members
are viola5ng trade rules, they will
use the mul5lateral system of set-
tling disputes instead of taking
ac5on unilaterally.
The opera5on of the WTO
dispute se6lement process in-
volves the DSB panels, the Appel-
late Body, the WTO Secretariat,
arbitrators, independent experts
and several specialized ins5tu-
5ons. Several commentators
have pointed out the prac5cal dif-
ficulty in establishing legal ele-
ments required to bring trade
remedy claim under WTO law.
Accession and
membership
The process of becoming a WTO
member is unique to each appli-
cant country, and the terms of ac-
cession are dependent upon the
country's stage of economic de-
velopment and current trade
regime. The process takes about
five years, on average, but it can
last more if the country is less
than fully commi6ed to the
process or if poli5cal issues inter-
fere. As is typical of WTO proce-
dures, an offer of accession is
only given once consensus is
reached among interested par-
5es.
Accession process
A country wishing to accede to
the WTO submits an applica5on
Featured Article
to the General Council, and has to
describe all aspects of its trade
and economic policies that have
a bearing on WTO agreements.
The applica5on is submi6ed to
the WTO in a memorandum
which is examined by a working
party open to all interested WTO
Members.
A%er all necessary back-
ground informa5on has been ac-
quired, the working party focuses
on issues of discrepancy between
the WTO rules and the applicant's
interna5onal and domes5c trade
policies and laws. The working
party determines the terms and
condi5ons of entry into the WTO
for the applicant na5on, and may
consider transi5onal periods to
allow countries some leeway in
complying with the WTO rules.
The final phase of accession
involves bilateral nego5a5ons be-
tween the applicant na5on and
other working party members re-
garding the concessions and com-
mitments on tariff levels and
market access for goods and serv-
ices. The new member's commit-
ments are to apply equally to all
WTO members under normal
non-discrimina5on rules, even
though they are nego5ated bilat-
erally.
When the bilateral talks con-
clude, the working party sends to
the general council or ministerial
conference an accession package,
which includes a summary of all
the working party mee5ngs, the
Protocol of Accession (a dra%
membership treaty), and lists
("schedules") of the member-to-
be's commitments. Once the gen-
eral council or ministerial
conference approves of the terms
of accession, the applicant's par-
liament must ra5fy the Protocol
of Accession before it can be-
come a member.
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Members and
observers
The WTO has 153 members (al-
most all of the 123 na5ons par5c-
ipa5ng in the Uruguay Round
signed on at its founda5on, and
the rest had to get membership).
The 27 states of the European
Union are represented also as the
European Communi5es. WTO
members do not have to be full
sovereign na5on-members. In-
stead, they must be a customs
territory with full autonomy in
the conduct of their external
commercial rela5ons. Thus Hong
Kong (as "Hong Kong, China"
since 1997) became a GATT con-
trac5ng party, and the Republic
of China (ROC) (commonly known
as Taiwan, whose sovereignty has
been disputed by the People's
Republic of China or PRC) ac-
ceded to the WTO in 2002 under
the name of "Separate Customs
Territory of Taiwan, Penghu, Kin-
men and Matsu" (Chinese Taipei).
A number of non-members
(30) are observers at WTO pro-
ceedings and are currently nego-
5a5ng their membership. As
observers, Iran, Iraq and Russia
are not yet members. Russia is
the biggest economy outside
WTO and a%er the comple5on of
Russia's accession, Iran would be
the biggest economy outside the
WTO. With the excep5on of the
Holy See, observers must start ac-
cession nego5a5ons within five
years of becoming observers.
Some interna5onal intergovern-
mental organiza5ons are also
granted observer status to WTO
bodies. 14 states and 2 territories
so far have no official interac5on
with the WTO.
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Agreements
The WTO oversees about 60 dif-
ferent agreements which have
the status of interna5onal legal
texts. Member countries must
sign and ra5fy all WTO agree-
ments on accession. A discussion
of some of the most important
agreements follows. The Agree-
ment on Agriculture came into ef-
fect with the establishment of the
WTO at the beginning of 1995.
The AoA has three central con-
cepts, or "pillars": domes5c sup-
port, market access and export
subsidies. The General Agree-
ment on Trade in Services was
created to extend the mul5lateral
trading system to service sector,
in the same way the General
Agreement on Tariffs and Trade
(GATT) provides such a system for
merchandise trade. The Agree-
ment entered into force in Janu-
ary 1995. The Agreement on
Trade-Related Aspects of Intellec-
tual Property Rights sets down
minimum standards for many
forms of intellectual property (IP)
regula5on. It was nego5ated at
the end of the Uruguay Round of
the General Agreement on Tariffs
and Trade (GATT) in 1994.
The Agreement on the Appli-
ca5on of Sanitary and Phytosani-
tary Measures — also known as
the SPS Agreement was nego5-
ated during the Uruguay Round
of the General Agreement on Tar-
iffs and Trade, and entered into
force with the establishment of
the WTO at the beginning of
1995. Under the SPS agreement,
the WTO sets constraints on
members' policies rela5ng to
food safety (bacterial contami-
nants, pes5cides, inspec5on and
labelling) as well as animal and
plant health (imported pests and
diseases). The Agreement on
Technical Barriers to Trade is an
interna5onal treaty of the World
Trade Organiza5on. It was nego-
5ated during the Uruguay Round
of the General Agreement on Tar-
iffs and Trade, and entered into
force with the establishment of
the WTO at the end of 1994. The
object ensures that technical ne-
go5a5ons and standards, as well
as tes5ng and cer5fica5on proce-
dures, do not create unnecessary
obstacles to trade". The Agree-
ment on Customs Valua5on, for-
mally known as the Agreement
on Implementa5on of Ar5cle VII
of GATT, prescribes methods of
customs valua5on that Members
are to follow. Chiefly, it adopts
the "transac5on value" approach.
Cri1cism of the World
Trade Organiza1on
The stated aim of the World
Trade Organiza5on (WTO) is to
promote free trade and s5mu-
late economic growth. The ac-
5ons, method, and fundame-
ntalism, of the World Trade Or-
ganiza5on evokes strong an-
5pathies. Among other things,
the WTO is accused of widening
the sociological gap between rich
and poor it claims to be fixing.
Developing countries
Cri5cs contend that small coun-
tries in the WTO wield li6le influ-
ence, and despite the WTO aim
of helping the developing coun-
tries, the poli5cians represen5ng
the most influen5al na5ons in the
WTO (and within those countries
or between them, influen5al pri-
vate business interests) focus on
the commercial interests of
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profit-making companies rather
than the interests of all. Mar5n
Khor argues that the WTO does
not manage the global economy
impar5ally, but in its opera5on
has a systema5c bias toward rich
countries and mul5na5onal cor-
pora5ons, harming smaller coun-
tries which have less nego5a5on
power. Some examples of this
bias are:
• Rich countries are able to
maintain high import du5es
and quotas in certain prod-
ucts, blocking imports from
developing countries (e.g.
clothing);
• The increase in non-tariff bar-
riers such as an5-dumping
measures allowed against de-
veloping countries;
• The maintenance of high pro-
tec5on of agriculture in de-
veloped countries while
developing ones are pressed
to open their markets;
• Many developing countries
do not have the capacity to
follow the nego5a5ons and
par5cipate ac5vely in the
Uruguay Round; and
• The TRIPs agreement which
limits developing countries
from u5lizing some technol-
ogy that originates from
abroad in their local systems
(including medicines and
agricultural products).
Khor argues that developing
countries have not benefited
from the WTO Agreements of the
Uruguay Round, and, therefore,
the credibility of the WTO trade
system could be eroded. Accord-
ing to Khor, "one of the major cat-
egories of 'problems of
implementa5on of the Uruguay
Round' is the way the Northern
countries have not lived up to the
spirit of their commitments in im-
plemen5ng (or not implement-
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ing) their obliga5ons agreed to in
the various Agreements." Khor
also believes that the Doha
Round nego5a5ons "have veered
from their proclaimed direc5on
oriented to a development-
friendly outcome, towards a
'market access' direc5on in which
developing countries are pres-
surised to open up their agricul-
tural, industrial and services
sectors." Jagdish Bhagwa5 as-
serts however that there is
greater tariff protec5on on man-
ufacturers in the poor countries,
which are also overtaking the rich
na5ons in the number of an5-
dumping filings.
Labour and environment
Other cri5cs claim that the issues
of labor and environment are
steadfastly ignored. Steve
Charnovitz, former Director of
the Global Environment and
Trade Study (GETS), believes that
the WTO "should begin to ad-
dress the link between trade and
labor and environmental con-
cerns." He also argues that "in
the absence of proper environ-
mental regula5on and resource
management, increased trade
might cause so much adverse
damage that the gains from trade
would be less than the environ-
mental costs." Further, labor
unions condemn the labor rights
record of developing countries,
arguing that to the extent the
WTO succeeds at promo5ng
globaliza5on, then in equal meas-
ure do the environment and
labor rights suffer. On the other
side, Khor responds that "if envi-
ronment and labor were to enter
the WTO system, it would be
conceptually difficult to argue
why other social and cultural is-
Featured Article
sues should also not enter." He
also argues that "trade measures
have become a vehicle for big
corpora5ons and social organiza-
5ons in promo5ng their inter-
ests."
Bhagwa5 is also cri5cal to-
wards "rich-country lobbies seek-
ing on imposing their unrelated
agendas on trade agreements."
According to Bhagwa5, these lob-
bies and especially the "rich char-
i5es have now turned to agita5ng
about trade issues with much en-
ergy understanding." Therefore,
both Bhagwa5 and Arvind Pana-
gariya have cri5cized the intro-
duc5on of TRIPs into the WTO
framework, fearing that such
non-trade agendas might over-
whelm the organiza5on's func-
5on. According to Panagariya,
"taken in isola5on, TRIPs resulted
in reduced welfare for developing
countries and the world as a
whole." Bhagwa5 asserts that
"intellectual property does not
belong in the WTO, since protect-
ing it is simply a ma6er of royalty
collec5on. The ma6er was forced
onto the WTO's agenda during
the Uruguay Round by the phar-
maceu5cal and so%ware indus-
tries, even though this risked
turning the WTO into a glorified
collec5on agency."
For a discussion on the incor-
pora5on of labor rights into the
WTO, see The Recogni5on of
Labour Standards within the
World Trade Organiza5on.
Decision making
Other cri5cs have characterized
the decision making in the WTO
as complicated, ineffec5ve, un-
representa5ve and non-inclusive;
more ac5ve par5cipants, repre-
sen5ng more diverse interests
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and objec5ves, have complicated
WTO decision-making, and the
process of "consensus-building"
has broken down. They argue
that the GATT decision making
worked in the past because there
were fewer countries ac5vely en-
gaged and there was no compul-
sion for all countries to adhere to
the results. They have thus pro-
posed the establishment of a
small, informal steering commit-
tee (a "consulta5ve board") that
can be delegated responsibility
for developing consensus on
trade issues among the member
countries. The Third World Net-
work has called the WTO "the
most non-transparent of interna-
5onal organisa5ons", because
"the vast majority of developing
countries have very li6le real say
in the WTO system".
Many non-governmental or-
ganiza5ons, such as the World
Federalist Movement, are calling
for the crea5on of a WTO parlia-
mentary assembly to allow for
more democra5c par5cipa5on in
WTO decision making. Dr Caro-
line Lucas recommended that
such an assembly "have a more
prominent role to play in the
form of parliamentary scru5ny,
and also in the wider efforts to re-
form the WTO processes, and its
rules". However, Dr Raoul Marc
Jennar argues that a consulta5ve
parliamentary assembly would
be ineffec5ve for the following
reasons:
• It does not resolve the prob-
lem of "informal mee5ngs"
whereby industrialized coun-
tries nego5ate the most im-
portant decisions;
• It does not reduce the de
facto inequality which exists
between countries with re-
gards to an effec5ve and effi-
cient par5cipa5on to all
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ac5vi5es within all WTO bod-
ies;
• It does not rec5fy the mul5-
ple viola5ons of the general
principles of law which affect
the dispute se6lement mech-
anism.
The lack of transparency is
o%en seen as a problem for
democracy. Poli5cians can nego-
5ate for regula5ons that would
not be possible accepted in a
democra5c process in their own
na5ons. "Some countries push
for certain regulatory standards
in interna5onal bodies and then
bring those regula5ons home
under the requirement of harmo-
niza5on and the guise of mul5lat-
eralism." This is o%en referred to
as Policy Laundering.
Globaliza1on
The human society around the
world, over a period of 5me, has
established greater contact, but
the pace has increased rapidly
since the mid 1980’s.The term
globaliza5on means interna5onal
integra5on. It includes an array of
social, poli5cal and economic
changes. Unimaginable progress
in modes of communica5ons,
transporta5on and computer
technology have given the
process a new lease of life.
The world is more interde-
pendent now than ever before
.Mul5na5onal companies manu-
facture products across many
countries and sell to consumers
across the globe. Money, technol-
ogy and raw materials have bro-
ken the Interna5onal barriers.
Not only products and finances,
but also ideas and cultures have
breached the na5onal bound-
aries.
Laws, economies and social
movements have become inter-
na5onal in nature and not only
the Globaliza5on of the Economy
but also the Globaliza5on of Pol-
i5cs, Culture and Law is the order
of the day. The forma5on of Gen-
eral Agreement on Tariffs and
Trade (GATT), Interna5onal Mon-
etary Fund and the concept of
free trade has boosted globaliza-
5on.
Globaliza1on in India
In early 1990s the Indian econ-
omy had witnessed drama5c pol-
icy changes. The idea behind the
new economic model known as
Liberaliza5on, Priva5za5on and
Globaliza5on in India (LPG), was
to make the Indian economy one
of the fastest growing economies
in the world. An array of reforms
was ini5ated with regard to in-
dustrial, trade and social sector to
make the economy more com-
pe55ve. The economic changes
ini5ated have had a drama5c ef-
fect on the overall growth of the
economy. It also heralded the in-
tegra5on of the Indian economy
into the global economy. The In-
dian economy was in major crisis
in 1991 when foreign currency re-
serves went down to $1 billion
and infla5on was as high as 17%.
Fiscal deficit was also high and
NRI's were not interested in in-
ves5ng in India. Then the follow-
ing measures were taken to
liberalize and globalize the econ-
omy.
Steps Taken to Globalize
Indian Economy
Some of the steps taken to liber-
alize and globalize our economy
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were:
1. Devalua1on : To solve the
balance of payment problem
Indian currency were devalu-
ated by 18 to 19%.
2. Disinvestment : To make the
LPG model smooth many of
the public sectors were sold
to the private sector.
3. Allowing Foreign Direct In-
vestment (FDI): FDI was al-
lowed in a wide range of
sectors such as Insurance
(26%), defense industries
(26%) etc.
4. NRI Scheme : The facili5es
which were available to for-
eign investors were also
given to NRI's.
Merits and Demerits of
Globaliza1on
The Merits of Globaliza1on are
as follows:
• There is an Interna5onal mar-
ket for companies and for
consumers there is a wider
range of products to choose
from.
• Increase in flow of invest-
ments from developed coun-
tries to developing countries,
which can be used for eco-
nomic reconstruc5on.
• Greater and faster flow of in-
forma5on between countries
and greater cultural interac-
5on has helped to overcome
cultural barriers.
• Technological development
has resulted in reverse brain
drain in developing countries.
The Demerits of Globaliza1on
are as follows:
• The outsourcing of jobs to
developing countries has re-
sulted in loss of jobs in devel-
oped countries.
• There is a greater threat of
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spread of communicable dis-
eases.
• There is an underlying threat
of mul5na5onal corpora5ons
with immense power ruling
the globe.
• For smaller developing na-
5ons at the receiving end, it
could indirectly lead to a sub-
tle form of coloniza5on.
Summary
India gained highly from the LPG
model as its GDP increased to
9.7% in 2007-2008. In respect of
market capitaliza5on, India ranks
fourth in the world. But even
a%er globaliza5on, condi5on of
agriculture has not improved. The
share of agriculture in the GDP is
only 17%. The number of landless
families has increased and farm-
ers are s5ll commi7ng suicide.
But seeing the posi5ve effects of
globaliza5on, it can be said that
very soon India will overcome
these hurdles too and march
strongly on its path of develop-
ment.
Economy of India
Post Independence
The post independence period of
economy of India was a litmus
test for the economic planners.
Having come out of the shadow
of colonial rule, the na5on had a
huge challenge of undoing the
exploita5on of colonial era. The
founding fathers had to use eco-
nomic upli%ment as a tool for na-
5on building. The economy then
was backward in nature.
Industry was characterized by
ill equipped technology and un-
Featured Article
scien5fic management. Agricul-
ture was s5ll feudal in nature and
characterized by low produc5vity.
Transport and communica5on
systems were not properly devel-
oped, educa5onal and health fa-
cili5es insufficient and the
complete absence of social secu-
rity measures.
Poverty was visible and un-
employment widespread, result-
ing in a low standard of living. To
guide the Indian economy to-
wards a path of growth and de-
velopment, the economic
planners decided to adopt a
course of mixed economy, assign-
ing a vital role to public sector en-
terprises and economic planning.
Private enterprise par5cipa5on
was negligible. A system of Li-
cense Raj developed, by which
entrepreneurs had to seek per-
mission from government to set
up manufacturing units. The gov-
ernment effec5vely controlled
everything. During this period the
banks were na5onalized between
late 1960's and early 1970's. India
resorted to economic planning by
the way of five year plans for eco-
nomic development.
Crisis in the Economy
By the beginning of 1990’s, the
Indian Economy was under great
crisis and faced its s5ffest chal-
lenge. India faced a serious bal-
ance of payment problem and
foreign exchange reserves were
at record low. That is when the
government decided to alter the
course of the Indian economy.
Post Reforms
The introduc5on of reforms in
1991 resulted in sweeping
changes in the Indian Economy.
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Featured Article
The reforms process consisted of
three processes, liberaliza5on,
priva5za5on and globaliza5on
(LPG model). Under liberaliza5on
markets were deregulated, under
priva5za5on private par5cipa5on
was encouraged and many a pub-
lic sector undertaking (PSU) were
priva5zed and under globaliza-
5on restric5ons on foreign invest-
ments were removed. The Indian
economy moved away from its
isola5on, to be integrated with
the global economy and to com-
pe55vely u5lize its advantages to
make rapid strides in terms of
growth.
In India today 60% of the
popula5on is dependent directly
and indirectly on agriculture and
agriculture contributes 17% of
GDP.
The Industrial sector has wit-
nessed massive restructuring by
the way of mergers and acquisi-
5ons, process reengineering, for-
eign joint ventures, technological
up grada5on. Certain sectors like
cement, steel, aluminium, phar-
maceu5cals, and automobiles
have been witnessing unprece-
dented growth.
The service sector has been
one of the major beneficiaries of
the economic boom. The out-
sourcing industry comprising of IT
and ITE’S became the new poster
boy of the Indian economy. The
huge pool of engineering talent
was absorbed by the IT industry,
while graduates could carve out a
career in the ITE'S industry. The
purchasing power of the boom-
ing middle class was enhanced,
who went on a consump5on
spree, which in turn allowed the
retail sector to flourish. The
booming economy also created a
wave of real estate boom across
the country.
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The supply of money into the
economy has increased steadily
due to FDI’s. (Between April 2008
and January 2009, India received
total foreign investments of US $
15,545 million).The Foreign Ins5-
tu5onal Investors (FII’s) have in-
vested heavily in the stock
market, resul5ng in a con5nual
bull run for an extended period of
5me. The BSE indices scaled a
new peak of 21,000 in January
2008.
Summary
To summarise, post liberaliza5on
the Indian economy is one of the
fastest growing economies in the
world. It can also be said that the
Indian economy has coped well
to the pressures of the global re-
cession, far be6er than most
other na5ons. The future looks
posi5ve for India and one can ex-
pect the na5on to progress
strongly in the path of develop-
ment.
Indian Currency
Currency System From The An-
cient Times To The Bri5sh Period
Ever since the dawn of civiliza-
5on, man has been trading with
each other. In the ancient 5mes
when there was no concept of
money, people used barter sys-
tem. In this system goods were
exchanged with each other in-
stead of paying money. Gradually,
with development, metals were
used to cast coins.
In India, during the rule of the
slave dynasty, silver coins known
as tanka and copper coins known
as jintal were introduced by Iltut-
mish. During his brief rule, Sher
Shah Suri introduced a silver coin
known as Rupiya. Mughal
coinage highlighted originality
and innova5ve skills. Earliest is-
sues of paper rupees were by
Bank of Hindustan (1770-1832)
and Bengal Bank (1784-91). Dur-
ing the Bri5sh rule, and even in
the first decade of independence,
rupee was divided into 16 annas,
which was divided into 4 paisa.
Currency System
A"er
Independence
Pre Decimal Issues
(1950 - 57)
The first coins were introduced in
1950's. They were 1 paisa, 1/2, 1
and 2 annas, 1/4, 1/2 and 1 rupee
denomina5ons.
Decimal Issues
(1957 - 1ll date)
The first decimal issues of India
consisted of 1,2,5,10,25 and 50
paisa along with 1 rupee. The 1
naya paisa was made of bronze
while the 2, 5 and 10 naya paisa
was of cupro-nickel. The 25 and
50 naya paisa and the 1 rupee
were made of nickel. In 1964, the
term naya was eliminated from
all coins. In 1964 and 1967, alu-
minum 1,2,3,5 and 10 paisa were
introduced.
In 1968, nickel brass 20 paisa
was introduced which was re-
placed by aluminum coins in
1982. In 1982, cupro nickel 2
rupee coins were introduced. In
1988, stainless steel 10, 25 and
50 paisa were introduced, fol-
lowed by 1 rupee coins in 1992.
In 1992 5 rupee coins were also
introduced.
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Bank Notes before In-
dependence
The Reserve bank of India began
produc5on of notes in 1938, issu-
ing 2, 5,10,1000 rupee notes,
while the government of India
con5nued to issue 1 rupee notes.
Bank Notes a"er
Independence
A%er independence the govern-
ment introduced new designs in
bank notes. In 1970s, 20 and 50
rupee notes were introduced. In
1987, 500 rupee note was rein-
troduced followed by 1000 rupee
in 2000. The language panel on
the Indian rupee banknotes has
15 of the 22 na5onal languages
of India.
Conver1bility
The Indian Currency has a market
determined by the exchange
rates. The Reserve Bank of India
trades ac5vely in the INR/USD to
have effec5ve rates.
Finance Commission
of India
The Finance Commission of India
came into existence in 1951. The
Finance commission is estab-
lished under ar5cle 280 of the In-
dian Cons5tu5on of India by the
President of India. The Indian Fi-
nance Commission Act was
passed to give a structured for-
mat to the Finance Commission
of India as per the world stan-
dard. The need for the Finance
Commission was felt by the
Bri5sh for guiding the finance of
India. The structure of the mod-
ern Act was laid in the early
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1920's. The Finance Commission
is formed to define the financial
rela5ons between the centre and
the state. The Finance Commis-
sion Act of 1951 tells about the
qualifica5on, appointment, term,
eligibility, disqualifica5on, powers
etc of the Finance Commission.
Func1ons of the Finance
Commission
The Finance Commission's duty is
to recommend to the President
as to-
• The distribu5on of net pro-
ceeds of taxes between the
Union and the States.
• To evaluate the increase in
the Consolidated Fund of a
state to affix the resources of
the Panchayat in the state.
• To evaluate the increase in
the Consolidated Fund of a
state to affix the resources of
the Municipali5es in the
state.
Implementa1on of the
Recommenda1on of
Finance Commission
The recommenda5on of the Fi-
nance Commission are imple-
mented
• By an order of the President
or by execu5ve orders.
Powers of the
Commission
The Finance Commission has the
following powers:
• The Commission shall have all
the powers of the Civil Court
as per the Code of Civil Proce-
dure, 1908.
• It can call any witness, or can
Featured Article
ask for the produc5on of any
public record or document
from any court or office.
• It can ask any person to give
informa5on or document on
ma6ers as it may feel to be
useful or relevant.
• It can func5on as a civil court
in discharging its du5es.
Qualifica1ons for appointment
and the manner of selec1on:
The Chairman of the Finance
Commission is selected among
persons who have had the expe-
rience of public affairs, and four
other members are selected
among persons who
• Are, or have been, or are
qualified as judges of High
Court, or
• Have knowledge of finance,
or
• Have vast experience in fi-
nancial ma6ers and are in
administra5on, or
• Have knowledge of econom-
ics
Term of Office of the members:
Every member of the commission
shall be in the office as specified
by the President. He can also be
reappointed, provided that he
has already addressed a le6er to
the President for his resigna5on.
Condi1ons of service and
salaries and allowance of mem-
bers:
• Each member should provide
whole 5me or part 5me serv-
ice to the Commission as the
President with respect to
each case might specify.
• Each member shall receive
salaries according to the pro-
visions made by the central
government.
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Featured Article
Disqualifica1on
A member may be disqualified if:
• He is of unsound mind.
• He is involved in a vile act.
• If his interests are likely to af
fect the smooth func5oning
of the Commission.
GDP of India
The Indian economy is the 12th
largest in USD exchange rate
terms. India is the second fastest
growing economy in the world.
India’s GDP has touched US$1.25
trillion. The crossing of Indian
GDP over a trillion dollar mark in
2007 puts India in the elite group
of 12 countries with trillion dollar
economy. The tremendous
growth rate has coincided with
be6er macroeconomic stability.
India has made remarkable
progress in informa5on technol-
ogy, high end services and knowl-
edge process services.
However cause for concern
would be this rapid growth has
not been an inclusive in nature, in
the sense it has not been accom-
panied by a just and equitable
distribu5on of wealth among all
sec5ons of the popula5on. This
economic growth has been loca-
5on specific and sector specific.
For e.g. it has not percolated to
sectors were labor is intensive
(agriculture) and in states were
poverty is acute (Bihar, Orissa,
Madhya Pradesh and U6ar
Pradesh).
Though India has the second
highest growth rate in the world,
its rank in terms of human devel-
opment index (which is broadly
used has a measure of life ex-
pectancy, adult literacy and stan-
dard of living) has gone down to
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128 among 177 countries in 2007
compared to 126 in 2006.
Indian GDP –Trend of Growth
Rate
1960-1980 : 3.5%
1980-1990 : 5.4%
1990-2000 : 4.4%
2000-2009 : 6.4%
Contribu1on of Various Sectors
in GDP
The contribu5ons of various sec-
tors in the Indian GDP for 1990-
1991 are as follows:
Agriculture - 32%
Industry - 27%
Service Sector - 41%
The contribu5ons of various sec-
tors in the Indian GDP for 2005-
2006 are as follows:
Agriculture - 20%
Industry: - 26%
Service Sector - 54%
The contribu5ons of various sec-
tors in the Indian GDP for 2007-
2008 are as follows:
Agriculture - 17%
Industry - 29%
Service Sector - 54%
It is great news that today the
service sector is contribu5ng
more than half of the Indian GDP.
It takes India one step closer to
the developed economies of the
world. Earlier it was agriculture
which mainly contributed to the
Indian GDP.
The Indian government is s5ll
looking up to improve the GDP of
the country and so several steps
have been taken to boost the
economy. Policies of FDI, SEZs
and NRI investment have been
framed to give a push to the
economy and hence the GDP.
Finance Commission of
India
The Finance Commission of India
came into existence in 1951. The
Finance commission is estab-
lished under ar5cle 280 of the In-
dian Cons5tu5on of India by the
President of India. The Indian Fi-
nance Commission Act was
passed to give a structured for-
mat to the Finance Commission
of India as per the world stan-
dard. The need for the Finance
Commission was felt by the
Bri5sh for guiding the finance of
India. The structure of the mod-
ern Act was laid in the early
1920's. The Finance Commission
is formed to define the financial
rela5ons between the centre and
the state. The Finance Commis-
sion Act of 1951 tells about the
qualifica5on, appointment, term,
eligibility, disqualifica5on, powers
etc of the Finance Commission.
Func1ons of the Finance
Commission
The Finance Commission's duty is
to recommend to the President
as to-
• The distribu5on of net pro-
ceeds of taxes between the
Union and the States.
• To evaluate the increase in
the Consolidated Fund of a
state to affix the resources of
the Panchayat in the state.
• To evaluate the increase in
the Consolidated Fund of a
state to affix the resources of
the Municipali5es in the
state.
Implementa1on Of The
Recommenda1on Of Fi-
nance Commission
The recommenda5on of the Fi-
nance Commission are imple-
mented
• By an order of the President
or by execu5ve orders.
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Powers of the
Commission
The Finance Commission has the
following powers:
• The Commission shall have all
the powers of the Civil Court
as per the Code of Civil Proce-
dure, 1908.
• It can call any witness, or can
ask for the produc5on of any
public record or document
from any court or office.
• It can ask any person to give
informa5on or document on
ma6ers as it may feel to be
useful or relevant.
• It can func5on as a civil court
in discharging its du5es.
Qualifica1ons for
appointment and the
manner of selec1on
The Chairman of the Finance
Commission is selected among
persons who have had the expe-
rience of public affairs, and four
other members are selected
among persons who
• Are, or have been, or are
qualified as judges of High
Court, or
• Have knowledge of finance,
or
• Have vast experience in finan-
cial ma6ers and are in admin-
istra5on, or
• Have knowledge of econom-
ics
Term of Office of the
members
Every member of the commission
shall be in the office as specified
by the President. He can also be
reappointed, provided that he
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has already addressed a le6er to
the President for his resigna5on.
Condi1ons of service and salar-
ies and allowance of members
• Each member should provide
whole 5me or part 5me serv-
ice to the Commission as the
President with respect to
each case might specify.
• Each member shall receive
salaries according to the pro-
visions made by the central
government.
Disqualifica1on
A member may be disqualified if:
• He is of unsound mind.
• He is involved in a vile act.
• If his interests are likely to af-
fect the smooth func5oning of
the Commission.
Infla1on in India
Infla5on is caused due to several
economic factors:
• When the government of a
country print money in ex-
cess, prices increase to keep
up with the increase in cur-
rency, leading to infla5on.
• Increase in produc5on and
labor costs, have a direct im-
pact on the price of the final
product, resul5ng in infla5on.
• When countries borrow
money, they have to cope
with the interest burden. This
interest burden results in in-
fla5on.
• High taxes on consumer prod-
ucts, can also lead to infla-
5on.
• Demands pull infla5on,
wherein the economy de-
mands more goods and serv-
ices than what is produced.
• Cost push infla5on or supply
Featured Article
shock infla5on, wherein non
availability of a commodity
would lead to increase in
prices.
Problems
The problems due to infla1on
would be:
• When the balance between
supply and demand goes out
of control, consumers could
change their buying habits,
forcing manufacturers to cut
down produc5on.
• The mortgage crisis of 2007
in USA could best illustrate
the ill effects of infla5on.
Housing prices increases sub-
stan5ally from 2002 on-
wards, resul5ng in a drama5c
decrease in demand.
• Infla5on can create major
problems in the economy.
Price increase can worsen
the poverty affec5ng low in-
come household,
• Infla5on creates economic
uncertainty and is a damp-
ener to the investment cli-
mate slowing growth and
finally it reduce savings and
thereby consump5on.
• The producers would not be
able to control the cost of
raw material and labor and
hence the price of the final
product. This could result in
less profit or in some ex-
treme case no profit, forcing
them out of business.
• Manufacturers would not
have an incen5ve to invest in
new equipment and new
technology.
• Uncertainty would force peo-
ple to withdraw money from
the bank and convert it into
product with long las5ng
value like gold, ar5facts.
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Featured Article
Infla1on in Indian
Economy
On March 19, 2010, the Reserve
Bank of India raised its bench-
mark reverse repurchase rate to
3.5% percent, a%er this rate
touched record lows of 3.25%.
The repurchase rate was raised to
5% from 4.75% as well, in an at-
tempt to curb Indian infla5on.
India’s 2009-10 Economic
Survey Report suggests a high
double-digit increase in food in-
fla5on, with signs of infla5on
spreading to various other sec-
tors as well. The Deputy Gover-
nor of the Reserve Bank of India,
however, expressed his op5mism
in March 2010 about an immi-
nent easing of Indian wholesale
price index-based infla5on, on
the back of falling oil and food
prices.
For 2009, Indian infla5on
stood at 11.49% Y-o-Y. This rate
reflects the general increase in
prices, taking into account the
purchasing power of the com-
mon man. According to the Eco-
nomic Survey Report for 2009-10,
economic growth decelerated to
6.7% in 2008-09, from 9% in
2007-08. The economy is ex-
pected to grow by 8.7% in 2010-
11, with a return to a growth rate
of 9% in 2011-12.
The Indian method for calcu-
la5ng infla5on, the Wholesale
Price Index, is different from the
rest of world. Each week, the
wholesale price of a set of 435
goods is calculated by the Indian
government. Since these are
wholesale prices, the actual
prices paid by consumers are far
higher.
In 5mes of rising infla5on,
this also means that the cost of
living increases are much higher
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for the populace. Cooking gas
prices, for example, have in-
creased by around 20% in 2008.
With most of India’s vast pop-
ula5on living close to or below
the poverty line, infla5on acts as
a ‘Poor Man’s Tax’. This effect is
amplified when food prices rise,
since food represents more than
half of the expenditure of this
group.
The drama5c increase in in-
fla5on will have both economic
and poli5cal implica5ons for the
government, with an elec5on
due within the year.
Na1onal Income
The study of Na5onal Income is
important because of the follow-
ing reasons:
• To see the economic develop-
ment of the country.
• To assess the developmental
objec5ves.
• To know the contribu5on of
the various sectors to Na-
5onal Income.
Interna5onally some coun-
tries are wealthy, some countries
are not wealthy and some coun-
tries are in-between. Under such
circumstances, it would be diffi-
cult to evaluate the performance
of an economy. Performance of
an economy is directly propor-
5onate to the amount of goods
and services produced in an
economy. Measuring na5onal in-
come is also important to chalk
out the future course of the econ-
omy. It also broadly indicates
people’s standard of living.
Income can be measured by
Gross Na5onal Product (GNP),
Gross Domes5c Product (GDP),
Gross Na5onal Income (GNI), Net
Na5onal Product (NNP) and Net
Na5onal Income (NNI).
In India the Central Sta5s5cal
Organiza5on has been formulat-
ing na5onal income.
However some economists
have felt that GNP has a measure
of na5onal income has limita5on,
since they exclude poverty, liter-
acy, public health, gender equity
and other measures of human
prosperity.
Instead they formulated
other measures of welfare like
Human Development Index (HDI)
Calcula1ng Na1onal
Income
There are various methods for
calcula5ng the na5onal income
such as produc5on method, in-
come method, expenditure
method etc.
Produc1on Method
The produc5on method gives us
na5onal income or na5onal prod-
uct based on the final value of
the produce and the origin of the
produce in terms of the industry.
All producing units are classified
sector wise.
• Primary sector is divided into
agriculture, fisheries, animal
husbandry.
• Secondary sector consists of
manufacturing.
• Ter5ary sector is divided into
trade, transport, communica-
5on, banking, insurance etc.
Income Method
Different factors of produc5on
are paid for their produc5ve serv-
ices rendered to an organiza5on.
The various incomes that in-
cludes in these methods are
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wages, income of self employed,
interest, profit, dividend, rents,
and surplus of public sector and
net flow of income from abroad.
Expenditure Method
The various sectors – the house-
hold sector, the government sec-
tor, the business sector, either
spend their income on consumer
goods and services or they save a
part of their income. These can
be categorized as private con-
sump5on expenditure, private in-
vestment, public consump5on,
public investment etc.
Calcula1on of Na1onal
Income of India: A Brief
History
The first a6empt to calculate Na-
5onal Income of India was made
by Dadabhai Naroji in 1867 -68.
This was followed by several
other methods. The first scien5fic
method was made by Prof. V.K.R
Rao in 1931-32. But this was not
very sa5sfactory. The first official
a6empt was made by
Prof.P.C.Mahalnobis in 1948-49,
who submi6ed his report in
1954.
Difficul1es in Calcula1on
of Na1onal Income
In India there are various difficul-
5es in calcula5ng the na5onal in-
comes .The most severe one is
the finding of reliable data. Most
of the 5me, it is based on as-
sump5ons. Soon a%er independ-
ence the Na5onal Income
Commi6ee was formed to collect
data and es5mate Na5onal In-
come. The two major problems
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which remain in the calcula5on of
Na1onal Income are:
• Most of the data is not from
the current year.
• Even if current data are avail-
able then values are underre-
ported.
Obstacles in High
Growth of Na1onal
Income of India
Even if the Indian economy grows
faster than the BRIC countries
and G 6, the benefits of the
growth would not be evenly dis-
tributed. India’s progress in edu-
ca5on cannot be termed as
sa5sfactory. In terms of higher
educa5on it has achieved
tremendous success, but its un-
sa5sfactory performance in pri-
mary educa5on and secondary
educa5on has been a major ob-
stacle to growth. Similarly India’s
healthcare system is in a less than
desirable state. Governments’
spending on public health has not
been up to the required levels.
Pay Commission
Pay Commission of India: History
Pay commission is a panel con-
sis5ng of the members of the
Union Cabinet of India for hiking
the salaries of the government
employees.
First Pay Commission
The first pay commission of India
was cons5tuted in May 1946,
which submi6ed its report in a
year.
Second Pay Commission
The second pay commission was
set up in August 1957 and it gave
its report a%er two years. The
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recommenda5ons of the second
pay commission had a financial
impact of Rs 396 million.
Third Pay Commission
The third Pay Commission was
set up in April 1970 and it gave its
report in March 1973. The third
pay commission created propos-
als cost the government Rs 1.44
billion.
Fourth Pay Commission
The fourth Pay Commission was
cons5tuted in June 1983, which
gave its report in three phases
within four years. The proposals
of the fourth Pay Commission
cost the government Rs 12.8 bil-
lion.
Fi"h Pay Commission
The fi%h Pay Commission was set
up was set up in 1994 and its pro-
posals were implemented in
1997, which cost the government
about Rs 17,000 crores.
Sixth Pay Commission
In July 2006, the sixth pay com-
mission was set and its proposals
will cost the government about
Rs 20,000 crores. The govern-
ment employees had threatened
to go on a strike if their salaries
were not raised. The government
employees want a hike in their
salaries mainly because the In-
dian economy is facing a serious
problem called infla5on. The
class 1 officers of the Indian gov-
ernment are not adequately paid
and the salaries of IAS officers are
also very stumpy.
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Members of the Sixth
Pay Commission
Following are the members of
the sixth Pay Commission:
Chairman: Mr. Jus5ce B.N.Srikr-
ishna
Members: Prof. Ravindra Dho-
lakia, Mr. J.S.Mathur
Member-Secretary: Smt. Susha-
ma Nath
Per Capita Income
Meaning and Significance :
Per capita Income means how
much an individual earns, of the
yearly income that is generated in
the country through produc5ve
ac5vi5es. It means the share of
each individual when the income
from the produc5ve ac5vi5es is
divided equally among the ci5-
zens. Per capita income is re-
ported in units of currency. Per
capita income reflects the gross
na5onal product of a country. Per
capita income is also a measure
of the wealth of a popula5on of a
na5on when compared with
other countries. It is expressed in
terms of commonly used interna-
5onal currency such as Euro, Dol-
lars because these currencies are
widely known.
Per Capita Income
in India
India's per capita income is found
by the Atlas method and by em-
ploying official exchange rates for
conversion. Further, this Atlas
method of calcula5ng the per
capita income of India is not de-
termined by using purchasing
power parity, which essen5ally
adjusts exchange rates for pur-
chasing power of currencies.
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Economist have been giving
considerable importance to the
performance of states vis a vis
each other in terms of per capita
income. It has been observed
that those states that were more
open and be6er adapted to eco-
nomic liberaliza5on have overall
shown faster rate of growth.
Per Capita Income of
Various Indian States
The two backward states of the
Indian republic Jharkhand and
Orissa are growing at a rapid rate
in terms of the per capita income
because of rise of industrial ac5v-
i5es in these two states. Kar-
nataka is at the top of the chart
with the fastest growing per
capita income (nearly 9.28%) fol-
lowed by Gujarat with 8.92%.The
per capita income in 17 states is
below the na5onal average of
8.4%. Per capita income shows
the purchasing power of the
states and so it is very important
for the states to increase the per
capita income of each person.
History of India Per
Capita GDP
• In 2002-03 the Per Capita In-
come in India was Rs 19040.
• In2003-04 the Per Capita In-
come in India was Rs 20989.
• In2004-05 the Per Capita In-
come in India was Rs 23241.
• In2008-2009 the Per Capita
Income in India was37490.
• GDP at factor cost at constant
(1999-2000) prices in the
year 2008-2009 is likely to at-
tain a level of Rs
3351653.India achieved a
growth rate of 7.1 per cent in
2008-2009.
• Agriculture, forestry and fish-
ing had a combined growth
rate of 2.6 per cent during
2008-2009
• Industry had growth rate of
3.4 per cent during 2008-
2009
• Service sector had a growth
rate of 10.3 per cent during
2008-2009
In spite of the global melt-
down, India has performed well
in comparison to the rest of the
world.
Planning Commission
The Planning Commission in India
was set up on March 1950 to pro-
mote a rapid rise in the standard
of living of the people by u5lizing
the resources of the country, in-
creasing produc5on and offering
employment opportuni5es to all.
The Planning Commission has the
responsibility for formula5ng
plans as to how the resources can
be used in the most effec5ve way.
The Planning Commission has
to make periodic assessment of
all resources in the country, boost
up insufficient resources and for-
mulate plans for the most effi-
cient and judicious u5liza5on of
resources.
Jawaharlal Nehru was the
first chairman of the Planning
Commission.
Structure of the Planning
Commission
The Prime minister is the chair-
man of the Planning Commission.
The Deputy Chairman and the full
5me members give advice and
guidance for the formula5on of
Five Year Plan, Annual Plans,
State Plans, Projects and
Schemes etc. Currently the struc-
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ture of the planning commission
is like this:
1. Chairman - Dr. Manmohan
Singh
2. Deputy Chairman- Shri Mon-
tek Singh Ahluwalia
3 Minister of State- Shri M.V.
Rajshekharan
4. Members - Dr. Kirit Parikh,
Prof. Abhijit Sen ,Dr. V.L.
Chopra, Dr. Bhalchandra
Mungekar ,Dr.(Ms.) Syeda
Hameed ,Shri B.N. Yugandhar
,Shri Anwar-ul-Hoda, Shri B.
K. Chaturvedi
5. Secretary- Dr. Subhas Pani
Func1ons of the
Planning Commission
India
Following are the func5ons of the
Planning Commission of India:
• To make an assessment of
the resources of the country
and to see which resources
are deficient.
• To formulate plans for the
most effec5ve and balanced
u5liza5on of country's re-
sources.
• To indicate the factors which
are hampering economic de-
velopment.
• To determine the machinery,
that would be necessary for
the successful implementa-
5on of each stage of plan.
• Periodical assessment of the
progress of the plan.
• With the changing 5mes, the
Planning commission is
preparing itself for long term
vision for the future. The
commission is seeing to max-
imize the output with mini-
mum resources.
• From being a centralized
planning system, the Indian
economy is slowly progress-
ing towards indica5ve plan-
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ning wherein the Planning
Commission has set the goal
of construc5ng a long term
strategic vision for the future.
• It sets sectoral targets and
provides the catalyst to the
economy to grow in the right
direc5on.
• The Planning Commission
plays an integra5ve role in
the development of a holis5c
approach to the formula5on
of policies in cri5cal areas of
human and economic devel-
opment.
Five Year Plans
When India gained independ-
ence, its economy was groveling
in dust. The Bri5sh had le% the In-
dian economy crippled and the
fathers of development formu-
lated 5 years plan to develop the
Indian economy. The five years
plan in India is framed, executed
and monitored by the Planning
Commission of India. Currently,
India is in its 11th five year plan.
Let's see the journey of five year's
plan in India and the objec5ves in
each plan.
Objec1ves of all the Five
Year's Plan
1st Plan (1951-56)
• The first five year plan was
presented by Jawaharlal
Nehru in 1951. The First Five
Year Plan was ini5ated at the
end of the turmoil of par5-
5on of the country. It gave
importance to agriculture, ir-
riga5on and power projects
to decrease the countries re-
liance on food grain imports,
resolve the food crisis and
ease the raw material prob-
lem especially in jute and cot-
ton. Nearly 45% of the
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resources were designated
for agriculture, while industry
got a modest 4.9%.The focus
was to maximize the output
from agriculture, which
would then provide the impe-
tus for industrial growth.
• Though the first plan was for-
mulated hurriedly, it suc-
ceeded in fulfilling the
targets. Agriculture produc-
5on increased drama5cally,
na5onal income went up by
18%, per capita income by
11% and per capita consump-
5on by 9%
2nd Plan (1956-61)
• The second five year plan was
ini5ated in a climate of eco-
nomic prosperity, industry
gained in prominence. Agri-
culture programmes were
formulated to meet the raw
material needs of industry,
besides covering the food
needs of the increasing popu-
la5on. The Industrial Policy of
1956 was socialis5c in nature.
The plan aimed at 25% in-
crease in na5onal income.
• In comparison to First Five
Year plan, the Second Five
Year Plan was a moderate
success. Unfavorable mon-
soon in 1957-58 and 1959-60
impacted agricultural produc-
5on and also the Suez crisis
blocked Interna5onal Trading
increasing commodity prices.
3rd Plan (1961-66)
• While formula5ng the third
plan, it was realized that agri-
culture produc5on was the
destabilizing factor in eco-
nomic growth. Hence agricul-
ture was given due
importance. Also allotment
for power sector was in-
creased to 14.6% of the total
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Featured Article
disbursement.
• Emphasis was on becoming
self reliant in agriculture and
industry. The objec5ve of im-
port subs5tu5on was seen as
sacrosanct. In order to pre-
vent monopolies and to pro-
mote economic
developments in backward
areas, unfeasible manufac-
turing units were augmented
with subsidies. The plan
aimed to increase na5onal in-
come by 30% and agriculture
produc5on by 30%.
• The wars with China in 1962
and Pakistan 1965 and bad
monsoon in almost all the
years, meant the actual per-
formance was way of the tar-
get.
4th Plan (1969-74)
• At the 5me of ini5a5ng the
fourth plan it was realized
that GDP growth and rapid
growth of capital accumula-
5on alone would not help im-
prove standard of living or to
become economically self-re-
liant. Importance was given
to providing benefits to the
marginalized sec5on of the
society through employment
and educa5on.
• Disbursement to agricultural
sector was increased to
23.3% .Family planning pro-
gramme was given a big s5m-
ulus.
• The achievements of the
fourth plan were below tar-
gets. Agriculture growth was
just at 2.8% and green revo-
lu5on did not perform as ex-
pected. Industry too grew at
3.9%.
5th Plan (1974-79)
• As a result of infla5onary
pressure faced during the
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fourth plan, the fi%h plan fo-
cused on checking infla5on.
Several new economic and
non-economic variables such
as nutri5onal requirements,
health, family planning etc
were incorporated in the
planning process. Investment
mix was also formulated
based on demand es5mated
for final domes5c consump-
5on.
• Industry got the highest allo-
ca5on of 24.3% and the plan
forecasted a growth rate of
5.5% in na5onal income.
• The fi%h plan was discon5n-
ued by the new Janata gov-
ernment in the fourth year
itself.
6th Plan (1980-85)
• The Janata government
moved away from GNP ap-
proach to development, in-
stead sought to achieve
higher produc5on targets
with an aim to provide em-
ployment opportuni5es to
the marginalized sec5on of
the society. But the plan
lacked the poli5cal will.
• The Congress government on
taking office in 1980 formu-
lated a new plan with a strat-
egy to lay equal focus on
infrastructure and agricul-
ture.
• The plan achieved a growth
of 6% pa.
7th Plan (1985-89)
• The first three years of the
seventh plan saw severe
drought condi5ons, despite
which the food grain produc-
5on rose by 3.2%.Special pro-
grammes like Jawahar Rozgar
Yojana were introduced. Sec-
tors like welfare, educa5on,
health, family planning, em-
ployment etc got a larger dis-
bursement.
8th Plan (1992-97)
• The eighth plan was ini5ated
just a%er a severe balance of
payment crisis, which was in-
tensified by the Gulf war in
1990.several structural modi-
fica5on policies were brought
in to put the country in a path
of high growth rate. They
were devalua5on of rupees,
dismantling of license prereq-
uisite and decrease trade bar-
riers.
• The plan targeted an annual
growth rate of 5.6% in GDP
and at the same 5me keeping
infla5on under control.
9th Plan (1997-2002)
• It was observed in the eighth
plan that, even though the
economy performed well, the
gains did not percolate to the
weaker sec5ons of the soci-
ety. The ninth plans therefore
laid greater impetus on in-
creasing agricultural and rural
incomes and alleviate the
condi5ons of the marginal
farmer and landless laborers.
10th Plan (2002-2007)
• The aim of the tenth plan was
to make the Indian economy
the fastest growing economy
in the world, with a growth
target of 10%.It wanted to
bring in investor friendly mar-
ket reforms and create a
friendly environment for
growth. It sought ac5ve par-
5cipa5on by the private sec-
tor and increased FDI's in the
financial sector.
• Emphasis was laid on corpo-
rate transparency and im-
proving the infrastructure.
• It sought to reduce poverty
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ra5o by 5 percentage points
by 2007and increase in liter-
acy rates to 75 per cent by
the end of the plan.
• Increase in forest and tree
cover to 25 per cent by 2007
and all villages to have sus-
tained access to potable
drinking water.
11th Plan (2007-2012)
• The eleventh plan has the ob-
jec5ve to increase GDP
growth to 10%.
• Increase agricultural GDP
growth to 4% per year to en-
sure a wider spread of bene-
fits. Create 70 million new
work opportuni5es. Augment
minimum standards of edu-
ca5on in primary school.
• Reduce infant mortality rate
to 28 and malnutri5on
among children of age group
0-3 to half of its present level.
Ensure electricity connec5on
to all villages and increase
forest and tree cover by five
percentage points.
Poverty in India
Current Situa1on :
Poverty is one of the main issues,
a6rac5ng the a6en5on of sociol-
ogists and economists. It indi-
cates a condi5on in which a
person fails to maintain a living
standard adequate for a comfort-
able lifestyle.
Though India boasts of a high
economic growth, it is shameful
that there is s5ll large scale
poverty in India. Poverty in India
can be defined as a situa5on
when a certain sec5on of people
are unable to fulfill their basic
needs. India has the world's
largest number of poor people
living in a single country. Out of
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its total popula5on of more than
1 billion, 350 to 400 million peo-
ple are living below the poverty
line. Nearly 75% of the poor peo-
ple are in rural areas, most of
them are daily wagers, landless
laborers and self employed house
holders. There are a number of
reasons for poverty in India.
Poverty in India can be classified
into two categories namely rural
poverty and urban poverty.
Reasons for Rural
Poverty
Some of the basic reasons of rural
poverty in India are:
• Unequal distribu5on of in-
come.
• High popula5on growth.
• Illiteracy.
• Large families.
• Caste system.
Problems of Rural
Poverty
• Presence of malnutri5on, illit-
eracy, diseases and long term
health problems.
• Unhygienic living condi5ons,
lack of proper housing, high
infant mortality rate, injus5ce
to women and social ill-treat-
ment of certain sec5ons of
society.
Steps Taken by Govern-
ment to Reduce Rural
Poverty
The government of India has
been trying its best to remove
poverty. Some of the measures
which the government has taken
to remove rural poverty are:
• Small farmer’s development
Programme.
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• Drought area development
Programme.
• Minimum needs Programme.
• Na5onal rural employment
Programme.
• Assurance on employment.
• Causes for Urban Poverty.
Causes for Urban
Poverty
The causes of urban poverty in
India are:
• Improper training
• Slow job growth.
• Failure of PDS system
Problems of Urban
Poverty
• Restricted access to employ-
ment opportuni5es and in-
come.
• Lack of proper housing facili-
5es
• Unhygienic environments
• No social security schemes
• Lack of opportunity to quality
health and educa5onal serv-
ices.
The steps taken by government
to remove urban poverty are:
• Nehru Rozgar Yojna.
• Prime Minister Rozgar Yojna.
• Urban Basic services for the
poor Programme.
• Na5onal social Assistance
Programme.
But these processes can be
helpful only if the policies go to
those people for whom it is
meant. The clash between the
central government and the state
government o%en results in the
lack of implementa5on of these
policies. So it is very important
that the governments do not play
power poli5cs when it comes to
a serious issue such as poverty.
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Featured Article
Natural resources in
India
India's total cul5vable area is
1,269,219 km² (56.78% of total
land area), which is decreasing
due to constant pressure from an
ever-growing popula5on and in-
creased urbaniza5on.
India has a total water sur-
face area of 314,40 km² and re-
ceives an average annual rainfall
of 1,100 mm. Irriga5on accounts
for 92% of the water u5lisa5on,
and comprised 380 km² in 1974,
and is expected to rise to 1,050
km² by 2025, with the balance ac-
counted for by industrial and do-
mes5c consumers. India's inland
water resources comprising
rivers, canals, ponds and lakes
and marine resources comprising
the east and west coasts of the
Indian ocean and other gulfs and
bays provide employment to
nearly 6 million people in the
fisheries sector. In 2008, India
had the world's third largest fish-
ing industry.
India's major mineral re-
sources include Coal (third-
largest reserves in the world),
Iron ore, Manganese, Mica, Baux-
ite, Titanium ore, Chromite, Nat-
ural gas, Diamonds, Petroleum,
Limestone and Thorium (world's
largest along Kerala's shores).
India's oil reserves, found in Bom-
bay High off the coast of Maha-
rashtra, Gujarat, Rajasthan and in
eastern Assam meet 25% of the
country's demand.
Rising energy demand con-
comitant with economic growth
has created a perpetual state of
energy crunch in India. India is
poor in oil resources and is cur-
rently heavily dependent on coal
and foreign oil imports for its en-
ergy needs. Though India is rich
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in Thorium, but not in Uranium,
which it might get access to in
light of the nuclear deal with US.
India is rich in certain energy re-
sources which promise significant
future poten5al - clean / renew-
able energy resources like solar,
wind, biofuels (jatropha, sugar-
cane).
Consump1on
Oil
India had about 5.6 billion barrels
(890,000,000 m3) plus another 4
billion barrels (as of March 2010,)
of proven oil reserves as of Janu-
ary 2007, which is the second-
largest amount in the Asia-Pacific
region behind China. Most of
India's crude oil reserves are lo-
cated in the western coast (Mum-
bai High) and in the northeastern
parts of the country, although
considerable undeveloped re-
serves are also located in the off-
shore Bay of Bengal and in the
state of Rajasthan.
The combina5on of rising oil
con sump5on and fairly unwaver-
ing produc5on levels leaves India
highly dependent on imports to
meet the consump5on needs. In
2006, India produced an average
of about 846,000 barrels per day
(bbl/d) of total oil liquids, of
which 77%, or 648,000 bbl/d
(103,000 m3/d), was crude oil.
During 2006, India consumed an
es5mated 2.63 Mbbl/d (418,000
m3/d) of oil. The Energy Informa-
5on Administra5on (EIA) es5-
mates that India registered oil
demand growth of 100,000 bbl/d
(16,000 m3/d) during 2006. EIA
forecasts suggest that country is
likely to experience similar profits
during 2007 and 2008.
Sector organisa1on
India’s oil sector is dominated by
state-owned enterprises, al-
though the government has
taken steps in past recent years to
deregulate the hydrocarbons in-
dustry and support greater for-
eign involvement. India’s
state-owned Oil and Natural Gas
Corpora5on is the largest oil com-
pany, and also the country’s
largest company overall by mar-
ket capitaliza5on. ONGC is the
leading player in India’s upstream
sector, accoun5ng for roughly
75% of the country’s oil output
during 2006, as per Indian gov-
ernment es5mates.
As a net importer of all oil,
the Government of India has in-
troduced policies aimed at grow-
ing domes5c oil produc5on and
oil explora5on ac5vi5es. As part
of the effort, the Ministry of Pe-
troleum and Natural Gas cra%ed
the New Explora5on License Pol-
icy (NELP) in 2000, which permits
foreign companies to hold 100%
equity possession in oil and nat-
ural gas projects. However, to
date, only a handful of oil fields
are controlled by foreign firms.
India’s downstream sector is also
dominated by state-owned en5-
5es, though private companies
have enlarged their market share
in past recent years.
Natural gas
As per the Oil and Gas Journal,
India had 38 trillion cubic feet
(Tcf) of confirmed natural gas re-
serves as of January 2007.A huge
mass of India’s natural gas pro-
duc5on comes from the western
offshore regions, par5cularly the
Mumbai High complex. The on-
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shore fields in Assam, Andhra
Pradesh, and Gujarat states are
also major producers of natural
gas. As per EIA data, India pro-
duced 996 billion cubic feet of
natural gas in 2004.
India imports small amounts
of natural gas. In 2004, India con-
sumed about 1,089×10^9 cu %
(3.08×1010 m3) of natural gas,
the first year in which the country
showed net natural gas imports.
During 2004, India imported
93×10^9 cu % (2.6×109 m3) of liq-
uefied natural gas (LNG) from
Qatar.
Sector Organiza1on
As in the oil sector, India’s state-
owned companies account for
the bulk of natural gas produc-
5on. ONGC and Oil India Ltd.
(OIL) are the leading companies
with respect to produc5on vol-
ume, while some foreign compa-
nies take part in upstream
developments in joint-ventures
and produc5on sharing contracts.
Reliance Industries, a privately-
owned Indian company, will also
have a bigger role in the natural
gas sector as a result of a large
natural gas find in 2002 in the Kr-
ishna Godavari basin.
The Gas Authority of India
Ltd. (GAIL) holds an effec5ve con-
trol on natural gas transmission
and alloca5on ac5vi5es. In De-
cember 2006, the Minister of Pe-
troleum and Natural Gas issued a
new policy that allows foreign in-
vestors, private domes5c compa-
nies, and na5onal oil companies
to hold up to 100% equity stakes
in pipeline projects. While GAIL’s
domina5on in natural gas trans-
mission and alloca5on is not en-
sured by statute, it will con5nue
to be the leading player in the
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sector because of its exis5ng nat-
ural gas infrastructure.
Economic liberalisa-
1on in India
The economic liberalisa5on in
India refers to ongoing economic
reforms in India that started in
1991. A%er Independence in
1947, India adhered to socialist
policies. In the 1980s, Prime Min-
ister Rajiv Gandhi ini5ated some
reforms. In 1991, a%er the Inter-
na5onal Monetary Fund (IMF)
had bailed out the bankrupt
state, the government of P. V.
Narasimha Rao and his finance
minister Manmohan Singh
started breakthrough reforms.
The new neo-liberal policies in-
cluded opening for interna5onal
trade and investment, deregula-
5on, ini5a5on of priva5za5on, tax
reforms, and infla5on-controlling
measures.
The overall direc5on of liber-
alisa5on has since remained the
same, irrespec5ve of the ruling
party, although no party has yet
tried to take on powerful lobbies
such as the trade unions and
farmers, or conten5ous issues
such as reforming labor laws and
reducing agricultural subsidies.
The main objec5ve of the govern-
ment was to transform the eco-
nomic system from socialism to
capitalism so that to achieve high
economic growth and industrial-
ize the na5on for the well-being
of Indian ci5zens. Today India is
mainly characterized as a market
economy.
As of 2009, about 300 million
people—equivalent to the en5re
popula5on of the United States—
have escaped extreme poverty.
The fruits of liberalisa5on
reached their peak in 2007, when
Featured Article
India recorded its highest GDP
growth rate of 9%. With this,
India became the second fastest
growing major economy in the
world, next only to China.[8] An
Organisa5on for Economic Co-op-
era5on and Development (OECD)
report states that the average
growth rate 7.5% will double the
average income in a decade, and
more reforms would speed up
the pace.
Indian government coali5ons
have been advised to con5nue
liberalisa5on. India grows at
slower pace than China, which
has been liberalising its economy
since 1978. McKinsey states that
removing main obstacles "would
free India’s economy to grow as
fast as China’s, at 10 percent a
year".
Pre-liberalisa1on policies
Indian economic policy a%er in-
dependence was influenced by
the colonial experience (which
was seen by Indian leaders as ex-
ploita5ve in nature) and by those
leaders' exposure to Fabian so-
cialism. Policy tended towards
protec5onism, with a strong em-
phasis on import subs5tu5on, in-
dustrializa5on, state interven5on
in labor and financial markets, a
large public sector, business regu-
la5on, and central planning. Five-
Year Plans of India resembled
central planning in the Soviet
Union. Steel, mining, machine
tools, water, telecommunica-
5ons, insurance, and electrical
plants, among other industries,
were effec5vely na5onalized in
the mid-1950s. Elaborate li-
cences, regula5ons and the ac-
companying red tape, commonly
referred to as Licence Raj, were
required to set up business in
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Featured Article
India between 1947 and 1990.
In the 80s, the government
led by Rajiv Gandhi started light
reforms. The government slightly
reduced License Raj and also pro-
moted the growth of the
telecommunica5ons and so%-
ware industries.
The Vishwanath Pratap Singh
government (1989–1990) and
Chandra Shekhar Singh govern-
ment (1990–1991) did not add
any significant reforms.
Impact
• The low annual growth rate
of the economy of India be-
fore 1980, which stagnated
around 3.5% from 1950s to
1980s, while per capita in-
come averaged 1.3%. At the
same 5me, Pakistan grew by
5%, Indonesia by 9%, Thai-
land by 9%, South Korea by
10% and in Taiwan by 12%.
• Only four or five licences
would be given for steel,
power and communica5ons.
License owners built up huge
powerful empires.
• A huge public sector
emerged. State-owned enter-
prises made large losses.
• Infrastructure investment
was poor because of the pub-
lic sector monopoly.
• License Raj established the
"irresponsible, self-perpetu-
a5ng bureaucracy that s5ll
exists throughout much of
the country" and corrup5on
flourished under this system.
Narasimha Rao govern-
ment (1991–1996)
Crisis
The assassina5on of prime minis-
ter Indira Gandhi in 1984, and
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later of her son Rajiv Gandhi in
1991, crushed interna5onal in-
vestor confidence on the econ-
omy that was eventually pushed
to the brink by the early 1990s.
As of 1991, India s5ll had a
fixed exchange rate system,
where the rupee was pegged to
the value of a basket of curren-
cies of major trading partners.
India started having balance of
payments problems since 1985,
and by the end of 1990, it was in
a serious economic crisis. The
government was close to default,
its central bank had refused new
credit and foreign exchange re-
serves had reduced to the point
that India could barely finance
three weeks’ worth of imports.
Reforms
The Government of India headed
by Narasimha Rao decided to
usher in several reforms that are
collec5vely termed as liberalisa-
5on in the Indian media.
Narasimha Rao appointed Man-
mohan Singh as a special eco-
nomical adviser to implement
liberalisa5on.
The reforms progressed fur-
thest in the areas of opening up
to foreign investment, reforming
capital markets, deregula5ng do-
mes5c business, and reforming
the trade regime. Liberalisa5on
has done away with the Licence
Raj (investment, industrial and
import licensing) and ended
many public monopolies, allow-
ing automa5c approval of foreign
direct investment in many sec-
tors. Rao's government's goals
were reducing the fiscal deficit,
priva5za5on of the public sector,
and increasing investment in in-
frastructure. Trade reforms and
changes in the regula5on of for-
eign direct investment were in-
troduced to open India to foreign
trade while stabilizing external
loans. Rao's finance minister,
Manmohan Singh, an acclaimed
economist, played a central role
in implemen5ng these reforms.
New research suggests that the
scope and pa6ern of these re-
forms in India's foreign invest-
ment and external trade sectors
followed the Chinese experience
with external economic reforms.
• In the industrial sector, indus-
trial licensing was cut, leaving
only 18 industries subject to
licensing. Industrial regula-
5on was ra5onalized.
• Abolishing in 1992 the Con-
troller of Capital Issues which
decided the prices and num-
ber of shares that firms could
issue.
• Introducing the SEBI Act of
1992 and the Security Laws
(Amendment) which gave
SEBI the legal authority to
register and regulate all secu-
rity market intermediaries.
• Star5ng in 1994 of the Na-
5onal Stock Exchange as a
computer-based trading sys-
tem which served as an in-
strument to leverage reforms
of India's other stock ex-
changes. The NSE emerged as
India's largest exchange by
1996.
• Reducing tariffs from an aver-
age of 85 percent to 25 per-
cent, and rolling back
quan5ta5ve controls. (The
rupee was made conver5ble
on trade account.)
* Encouraging foreign direct in-
vestment by increasing the maxi-
mum limit on share of foreign
capital in joint ventures from 40
to 51 percent with 100 percent
foreign equity permi6ed in prior-
ity sectors.
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• Streamlining procedures for
FDI approvals, and in at least
35 industries, automa5cally
approving projects within the
limits for foreign par5cipa-
5on.
• Opening up in 1992 of India's
equity markets to investment
by foreign ins5tu5onal in-
vestors and permi7ng Indian
firms to raise capital on inter-
na5onal markets by issuing
Global Depository Receipts
(GDRs).
• Marginal tax rates were re-
duced.
• Priva5za5on of large, ineffi-
cient and loss-inducing gov-
ernment corpora5ons was
ini5ated.
Later reforms
• Atal Bihari Vajpayee's admin-
istra5on surprised many by
con5nuing reforms, when it
was at the helm of affairs of
India for five years.
• The Vajpayee administra5on
con5nued with priva5za5on,
reduc5on of taxes, a sound
fiscal policy aimed at reduc-
ing deficits and debts and in-
creased ini5a5ves for public
works.
• The UF government at-
tempted a progressive
budget that encouraged re-
forms, but the 1997 Asian fi-
nancial crisis and poli5cal
instability created economic
stagna5on.
• Right to Informa5on Act
(2005)
• Mahatma Gandhi Na5onal
Rural Employment Guarantee
Act (2005)
• Indo-US civilian nuclear
agreement (2008)
• Right to Educa5on Bill (2008)
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Impact of reforms
The impact of these reforms may
be gauged from the fact that total
foreign investment (including for-
eign direct investment, por4olio
investment, and investment
raised on interna5onal capital
markets) in India grew from a mi-
nuscule US$132 million in 1991–
92 to $5.3 billion in 1995–96.
Ci5es like Gurgaon, Banga-
lore, Hyderabad, Pune and
Ahmedabad have risen in promi-
nence and economic importance,
became centres of rising indus-
tries and des5na5on for foreign
investment and firms.
Ongoing economic chal-
lenges
• Problems in the agricultural
sector.
• Highly restric5ve and com-
plex labour laws.
• Inadequate infrastructure,
which is o%en government
monopoly.
• Failing educa5on.
• Inefficient public sector.
• Infla5on in basic consumable
goods.
• Corrup5on
• High fiscal deficit
Income in India
India's per capita income (nomi-
nal) is $1016, ranked 142th in the
world, while its per capita (PPP)
of US$2,762 is ranked 129th.
States of India have large dis-
pari5es. One of the cri5cal prob-
lems facing India's economy is
the sharp and growing regional
varia5ons among India's different
states and territories in terms of
Featured Article
per capita income, poverty, avail-
ability of infrastructure and socio-
economic development.
Although income inequality in
India is rela5vely small (Gini coef-
ficient: 32.5 in year 1999- 2000)
it has been increasing of late.
Wealth distribu5on in India is
fairly uneven, with the top 10% of
income groups earning 33% of
the income. Despite significant
economic progress, a quarter of
the na5on's popula5on earns less
than the government-specified
poverty threshold of $0.40/day.
27.5% of the popula5on was liv-
ing below the poverty line in
2004–2005.
States
Between 1999 and 2008, the an-
nualized growth rates for Maha-
rashtra (9.0%) Gujarat (8.8%),
Haryana (8.7%), or Delhi (7.4%)
were much higher than for Bihar
(5.1%), U6ar Pradesh (4.4%), or
Madhya Pradesh (3.5%).
According to a World Bank
paper Development Policy Re-
view, $1 a day poverty rates in
rural Orissa (43%) and rural Bihar
(40%) are some of the highest in
the world. Seven low-income
states - Bihar, Chha7sgarh, Jhark-
hand, Madhya Pradesh, Orissa,
Rajasthan, and U6ar Pradesh -
are home to more than half of
India's popula5on. Bihar's 80 mil-
lion people are by far the poorest
in India.
On the other hand, rural
Haryana (5.7%) and rural Punjab
(2.4%) compare well with middle-
income countries.
The five-year plans have at-
tempted to reduce regional dis-
pari5es by encouraging industrial
development in the interior re-
gions, but industries s5ll tend to
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concentrate around urban areas
and port ci5es. A%er liberaliza-
5on, the more advanced states
are be6er placed to benefit from
them, with infrastructure like well
developed ports, urbanisa5on
and an educated and skilled
workforce which a6ract manu-
facturing and service sectors. The
union and state governments of
backward regions are trying to re-
duce the dispari5es by offering
tax holidays, cheap land, etc., and
focusing more on sectors like
tourism, which although being
geographically and historically
determined, can become a
source of growth and is faster to
develop than other sectors.
Poverty in India
Poverty in India is widespread
with the na5on es5mated to have
a third of the world's poor. Ac-
cording to a 2005 World Bank es-
5mate, 42% of India falls below
the interna5onal poverty line of
US$ 1.25 a day (PPP, in nominal
terms Indian rupee 21.6 a day in
urban areas and Indian rupee
14.3 in rural areas); having re-
duced from 60% in 1981. Accord-
ing to the criterion used by the
Planning Commission of India
27.5% of the popula5on was liv-
ing below the poverty line in
2004–2005, down from 51.3% in
1977–1978, and 36% in 1993-
1994. A study by the Oxford
Poverty and Human Develop-
ment Ini5a5ve using a Mul5-di-
mensional Poverty Index (MPI)
found that there were 421 million
poor living under the MPI in eight
north India states of Bihar, Chat-
5sgarh, Jharkhand, Madhya
Pradesh, Orissa, Rajasthan, U6ar
Pradesh and West Bengal. This
number is higher than the 410
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million poor living in the 26 poor-
est African na5ons. However, lat-
est es5mates by NCAER(Na5onal
Council of Applied Economic Re-
search), show that 48% of the In-
dian households earn more than
Indian rupee 90,000 (US$2,025)
annually(or more than US$3 PPP
per person). According to NCAER,
in 2009, of the 222 million house-
holds in India, the absolutely
poor households (annual in-
comes below Indian rupee
45,000) accounted for only 15.6
% of them or about 35 million
(about 200 million Indians). An-
other 80 million households are
in income levels of Indian rupee
45,000-90,000 per year.
Since the 1950s, the Indian
government and non-govern-
mental organiza5ons have ini5-
ated several programs to alleviate
poverty, including subsidizing
food and other necessi5es, in-
creased access to loans, improv-
ing agricultural techniques and
price supports, and promo5ng
educa5on and family planning.
These measures have helped
eliminate famines, cut absolute
poverty levels by more than half,
and reduced illiteracy and malnu-
tri5on.
Poverty es1mates
The World Bank es5mates that
456 million Indians (41.6% of the
total Indian popula5on) now live
under the global poverty line of
US$ 1.25 per day (PPP). This
means that a third of the global
poor now reside in India. How-
ever, this also represents a signifi-
cant decline in poverty from the
60 percent level in 1981 to 42
percent in 2005. The rupee has
decreased in value since then,
while the official standard of In-
dian rupee538 (urban)/Indian
rupee356 (rural) per month has
remained the same. Income in-
equality in India is increasing,
with a Gini coefficient of 32.5 in
1999-2000. However, according
to the latest NCAER es5mates, in
2009, only 15.6% of the house-
holds or 200 million people, had
income levels less than Indian
rupee 45,000 annually(US$ 1.4
PPP per person). On the other
hand, the Planning Commission
of India uses its own criteria and
has es5mated that 27.5% of the
popula5on was living below the
poverty line in 2004–2005, down
from 51.3% in 1977–1978, and
36% in 1993-1994. The source for
this was the 61st round of the Na-
5onal Sample Survey (NSS) and
the criterion used was monthly
per capita consump5on expendi-
ture below Indian rupee356.35
for rural areas and Indian
rupee538.60 for urban areas.
75% of the poor are in rural
areas, most of them are daily wa-
gers, self-employed householders
and landless labourers.
Although the Indian economy
has grown steadily over the last
two decades, its growth has been
uneven when comparing differ-
ent social groups, economic
groups, geographic regions, and
rural and urban areas.[5] Be-
tween 1999 and 2008, the annu-
alized growth rates for Gujarat
(8.8%), Haryana (8.7%), or Delhi
(7.4%) were much higher than for
Bihar (5.1%), U6ar Pradesh
(4.4%), or Madhya Pradesh
(3.5%).
Poverty rates in rural Orissa
(43%) and rural Bihar (41%) are
among the world's most extreme.
A study by the Oxford Poverty
and Human Development Ini5a-
5ve using a Mul5-dimensional
Poverty Index (MPI) found that
. . Vol. - 19
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there were 421 million poor living
under the MPI in Bihar, Cha7s-
garh, Jharkhand, Madhya
Pradesh, Orissa, Rajasthan, U6ar
Pradesh and West Bengal. This
number is higher than the 410
million poor living in the 26 poor-
est African na5ons.
Despite significant economic
progress, one quarter of the na-
5on's popula5on earns less than
the government-specified
poverty threshold of 12 rupees
per day (approximately US$
0.25). Official figures es5mate
that 27.5% of Indians lived below
the na5onal poverty line in 2004-
2005. A 2007 report by the state-
run Na5onal Commission for
Enterprises in the Unorganised
Sector (NCEUS) found that 77% of
Indians, or 836 million people,
lived on less than 20 rupees (ap-
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proximately US$0.50 nominal;
US$2 PPP) per day. It is relevant
to view poverty in India on a PPP
basis as food etc. are purchased
in Rupees. So the annual income
of a family of four at US$2
PPP/day (current exchange rate
of Indian rupee 47 = US$1) would
be Indian rupee 137,240 (i.e. In-
dian rupee1.37 lakh). According
to a recently released World Bank
report, India is on track to meet
its poverty reduc5on goals. How-
ever by 2015, an es5mated 53
million people will s5ll live in ex-
treme poverty and 23.6% of the
popula5on will s5ll live under
US$1.25 per day. This number is
expected to reduce to 20.3% or
268 million people by 2020. How-
ever, at the same 5me, the ef-
fects of the worldwide recession
in 2009 have plunged 100 million
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more Indians into poverty than
there were in 2004, increasing
the effec5ve poverty rate from
27.5% to 37.2%.
As per the 2001 census,
35.5% of Indian households
availed of banking services,
35.1% owned a radio or transis-
tor, 31.6% a television, 9.1% a
phone, 43.7% a bicycle, 11.7% a
scooter, motorcycle or a moped,
and 2.5% a car, jeep or van;
34.5% of the households had
none of these assets. According
to Department of Telecommuni-
ca5ons of India the phone den-
sity has reached 33.23% by Dec
2008 and has an annual growth
of 40%.. This tallies with the fact
that a family of four with an an-
nual income of 1.37 lakh Rupees
could afford some of these luxury
items.
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