weekly 15 to 21 april 2013

15TH APRIL 2013 TO 21ST APRIL, 2013

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WEEKLY CURRENTAFFAIRS BULLETIN

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[ 2 ] Weekly Current Affairs 15th April to 21st April, 2013

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Current Affairs Notes for IAS PT 2013

UPSC: The central recruiting agency in India, nowadays emphasizing more on applicable part ofknowledge. GS syllabus has undergone an overhaul from the past few years and requiresmultidimensional approach to handle this. The paper concentrates more on concepts related togeneral awareness i.e. what we see around us.

Its recruiting pattern wants an IAS aspirant to have grip on socio-economic problem-solving-skills; applicable knowledge of science; ability to logically analyse the situations and interpretthe outcomes accordingly.

Thus CHRONICLE IAS ACADEMY is launching a comprehensive material which includes:Important Bills; Committees; Reports; Current affairs of the past one year.

This will provide a "trustworthy and time saving guide" for all IAS aspirants preparing forPrelims.

Topics Covered :-

1. INTERNATIONAL ORGANIZATION SUMMITS

2. Bills in Parliament

3. Biotechnology-1

4. Constitutional news

5. Environmental news

6. Health News

7. Important Reports 2012-13

8. INDIA - HDR 2011

9. International News

10. Science and Technology

11. Prelims Special Part-1

12. Prelims Special Part-2

13. Prelims special Part- 3

Package Fee

Current Affairs Notes for PT 2013 for Weekly E-Magazine Subscriber (Printed) ........... 2000.00Current Affairs Notes for PT 2013 (Printed) ............................................................................ 2500.00

Weekly Current Affairs 15th April to 21st April, 2013 [3]

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Programme Assistance:

Email id:[email protected] Assistance : Sushil SinghEmail id: [email protected]: 9582948810, 9953007628Mail: [email protected]

productivity, Microirrigation, Urbanization,Government Initiatives......

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

1991 (LPG), Inflation.....

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

SECTIONAL TESTS(PAPER I & II)

1. Ecology and environment2. Comprehension3. Polity and Governance4. English Language Comprehension + Logical

Reasoning5. Geography6. Decision Making and Problem Solving7. General Science and Science and Technology8. Mental Ability, Basic Numeracy, Data

Interpretation and Data Sufficiency9. History10. Indian Economy

FULL MOCK SCHEDULE31st March ...... Mock 1 Paper 1, Mock 1 Paper 27th April ......... Mock 2 Paper 1, Mock 2 Paper 221st April ........ Mock 3 Paper 1, Mock 3 Paper 228th April ....... Mock 4 Paper 1, Mock 4 Paper 2

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Infrastructure & Resources1. Transportation infrastructure: Road and Highway

Networks, Mass Transit Systems, Railways,Waterways, Ports....

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3. Water management infrastructure:- Drinking watersupply, Sewage Collection and Disposal of Wastewater, Flood Control, Water Harwesting.....

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

5. Solid Waste Management6. Economic Infrastructure: Manufacturing Infrastructure,

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

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

Demography : Population Composition, Density, Literacy,Sex Ratio...

Environmental Problems & Global EnvironmentalGovernance : Deforestation, Pollution: Air, Water, Land,Noise, Desertification, Biodiversity Depletion, GlobalWarming, SD.......

Human Development, Social Sector Initiatives andProgrammes & Policies1. Concept of Human Development, Development

vs. Growth, Human Development Index, MPI,Innovation.....

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

Agriculture, Urbanisation, Health : Agriculture andGDP, Agricultural Regionalization, Production and

Fee Structure :

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40 Qs of IAS 2012 prelims paper were close and directly from Chronicle’s 2012 test series. When it comes to matching the

format of question in the exam it was 100% identical. Have you ever heard of such claim in IAS exam, indeed we

do it habitually! After all it is a matter of experiences. Testimonial is available at chronicleias.com as well in the public domain,

since it was conducted in 22 cities of India. We don’t claim your success, but our performance. Lets begin...


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NATIONAL••••• Supreme Court allows shifting of Asiatic lions

from Gujarat to MP

Asiatic lions will now have a second home inMadhya Pradesh's Kuno wildlife sanctuary as theapex court permitted their relocation in limitednumbers from Gujarat's Gir forest. A bench ofJustices KS Radhakrishnan and CK Prasad has givensix months time to the wildlife authorities concernedfor translocating the lions from Gir sanctuary toKuno Palpur reserve.

The two State governments have been in a tugof war for several years. Gujarat Chief MinisterNarendra Modi claimed Gujarati asmita (pride) isin its lions, which could not be shared with anyother State. Even an offer to translocate tigers toGujarat in return could not move him. Gujaratclaimed that Madhya Pradesh had been unable toprotect its own tigers in the Panna reserve, and couldnot be trusted to host the lion as well.

Whereas according to the wildlife expertsGujarat's lions come from a very narrow geneticbase of about 25 animals at the turn of the lastcentury, and that makes them a very vulnerablepopulation. In case there is an epidemic, they couldeven be wiped out, and hence it's important thatthey have a second home.

The court has also constituted an expert body todecide the number of lions to be relocated and closelymonitor their translocation in Madhya Pradesh.

The court, however, has ruled against theintroduction of African cheetahs in India, sayingpreservation of critically endangered nativespecies, like the wild buffalo and the Great IndianBustard, should be given primacy. Under its Rs300 crore Cheetah Reintroduction Programme, theMinistry of Environment and Forests (MoEF) hadproposed the introduction of the African Cheetahsin the country.

••••• The National Policy for Children, 2012approvedThe Union Cabinet has given its approval to the

National Policy for Children, 2012. The Policyreaffirms the government`s commitment to therealization of the rights of all children in the country.It recognizes every person below the age of eighteenyears as a child and that childhood is an integralpart of life with a value of its own, and a long term,

sustainable, multi-sectoral, integrated and inclusiveapproach is necessary for the harmoniousdevelopment and protection of children.

The policy lays down the guiding principlesthat must be respected by national, state and localgovernments in their actions and initiativesaffecting children.

Some of the key guiding principles are: the rightof every child to life, survival, development,education, protection and participation; equal rightsfor all children without discrimination; the bestinterest of the child as a primary concern in allactions and decisions affecting children; and familyenvironment as the most conducive for all-rounddevelopment of children.

The policy has identified survival, health,nutrition, education, development, protection andparticipation as the undeniable rights of every child,and has also declared these as key priority areas.

As children`s needs are multi-sectoral,interconnected and require collective action, the policyaims at purposeful convergence and strongcoordination across different sectors and levels ofgovernance; active engagement and partnerships withall stakeholders; setting up of a comprehensive andreliable knowledge base; provision of adequateresources; and sensitization and capacity developmentof all those who work for and with children.

A National Plan of Action will be developed togive effect to the policy and a National Coordinationand Action Group (NCAG) will be constituted tomonitor the progress of implementation. Similarplans and coordination and action groups will beconstituted at the state and district levels. TheNational Commission for Protection of Child Rightsand State Commissions for Protection of Child Rightsare to ensure that the principles of the policy arerespected in all sectors at all levels. There is aprovision for review of the policy every five years.The Ministry of Women and Child Development willbe the nodal ministry for overseeing andcoordinating the implementation of the policy andwill lead the review process.

••••• Political parties reach consensus on LandAcquisition BillA consensus on the Land Acquisition,

Rehabilitation and Resettlement Bill 2011 was


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achieved after the government accepted keydemands of the BJP regarding leasing of land andcompensation reaching the original farmer-owners,and that of the left regarding rights of tenants.

The Bill proposes the payment of compensationthat is up to four times the market value in ruralareas and two times the market value in urban areas.

BJP wanted 50 per cent compensation to theoriginal farmers whose land has been purchasedafter the introduction of the bill in Lok Sabha inSeptember 5, 2011. It has raised the issue that the"land mafia" was in land buying spree in many partsof the country after the introduction of the billanticipating that the measure will be passed soonand they can reap benefits. If it happens, the farmerswho have sold land at a lesser price will not bebenefitted from the Land Acquisition Act. Tus BJPhas asked the Government to have a provisionspecifying that there will be sharing of 50 per centbenefit with the original farmers.

Government also agreed to another demand ofthe BJP, which had suggested that instead ofacquisition, land could be leased to developers sothat its ownership will remain with the farmers andwould provide them with regular annual income.

The government agreed to amend the bill toprovide for an enabling provision for states to enactlaws in this regard as leasing of land is a state subject.

The meeting also agreed to CPI-M's demand thata provision of the bill that gives powers to theGovernment to amend the schedule should not bemisused to "dilute the compensation, rehabilitationand resettlement package.

Government has also agreed to look into anotherdemand by the CPI-M that tenants should also toget the benefit of compensation. Now, land ownersget the compensation. Tenants only get the benefitof R and R.

••••• GOI planning to launch E-Pathsala programmesoon

The ambitious e-Pathshala programme of thegovernment, seeking to create quality content acrossdisciplines at the post-graduate level, is set to kickoff with UGC asking universities throughout thecountry to contribute to the exercise. The initiativewas approved by the HRD Ministry in 2011, underits National Mission on Education through ICT,proposes to develop e-content in 77 subjects acrossdisciplines and the material will be made availableto both teachers and students in the form of openonline courses.

The HRD Ministry has also sanctioned grant-in-aid to UGC for production of the e-content in subjectsat postgraduate level.

The content will be developed in subjects' rangesfrom adult education and women studies,architecture and bio-informatics to nano science andnano technology, geology and genetics. Materialswould also be developed on defence and strategicstudies as also on music, French, German, Russian,Spanish and Urdu languages under the initiative.

UGC has constituted a Standing Committee - e-PG Pathshala on e-content creation to monitor andcoordinate the activity of content creation in a mosteffective and efficient manner. The AcademicContent Advisory Committee constituted by UGCcomprises a panel of subject experts, technicalexperts and media professionals which will monitorand review the progress of implementation of the e-content scheme assigned to the institute and agency.

••••• LPG direct cash transfer scheme likely fromJuly 1

The government is gearing up for the next bigleap under the Direct Cash Transfer (DCT) schemeto bring a huge number of nearly 14 crore LPGconsumers under its ambit.

The scheme, which is likely to be launched fromJuly 1, is aimed at directly putting the subsidycomponent of the domestic cylinder into the bankaccount of the consumers to eliminate the leakagesin the system and address the problem of diversionof domestic cylinders for commercial market.

The scheme will be introduced around themiddle of next month in 20 districts and later willbe extended to a bigger chunk of consumers andpractically cover over 14 crore consumers by theyear end.

The consumers are likely to get around Rs.4,000per annum from the government, and they will haveto then buy LPG at the market price of Rs. 901.50per 14.2-kg cylinder. Currently, each consumer isentitled to 9 cylinders of 14.2-kg each at thesubsidised price of Rs.410.50. The government bearsa subsidy Rs.435 per cylinder.

Under the scheme, subsidies and other benefitswill be transferred directly into the Aadhaar-linkedbank account of beneficiary.

It has been decided by the government that thebeneficiaries would approach the banks withdocuments of their Aadhaar number. The bankswould seed the Aadhaar into the beneficiaries' bankaccount. Seeding of Aadhaar number to the bankaccount is essential for the government to identifybeneficiaries.

On the other hand, the OMCs have been askedto provide data and details of the consumers toensure that the benefits of the scheme percolate tothe beneficiaries.


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••••• India is set to become the youngest country by2020

The State of the Urban Youth India 2012:Employment, Livelihoods, Skills published by IRISKnowledge Foundation (IKF), Mumbai incollaboration of UN-HABITAT states that everythird person in an Indian city today is a youth. Inabout seven years the median age in India will be29 years, very likely of a city-dweller, making it theyoungest country in the world.

It is a first attempt to pull together a data andknowledge base on and of youth in urban India.The focus of the Report is youth employment andyouth livelihoods in urban India. Through a three-city survey the Report incorporates a youthperspective on the situation of urban youth that isrevealed by data and literature.

The report traces the incredible rise - and theeventual decline - of this cohort in India. Thepopulation in the age-group of 15-34 increased from353 million in 2001 to 430 million in 2011. Currentpredictions suggest a steady increase in the youthpopulation to 464 million by 2021 and finally adecline to 458 million by 2026.

By 2020, India is set to become the world'syoungest country with 64 per cent of its populationin the working age group. With the West, Japanand even China aging, this demographic potentialoffers India and its growing economy anunprecedented edge that economists believe couldadd a significant 2 per cent to the GDP growthrate. A closer analysis of the urban youth suggeststhat greater political participation, engagement ata policy level and urgent attention to improvingtheir quality of life can ensure that India enjoys thebenefits of this dividend.

But the report suggests urban spaces have notnecessarily aided the quality of life enjoyed by Indianyouth. A telling sign: one-fifth of the Indian urbanpopulation lives on less than a dollar a day.Additionally, the report finds that while incomelevels in cities may appear to be higher, the cost ofliving is also constantly increasing, resulting inshrinking savings, inadequate access to health careand lack of quality education. Maternal mortalityremains the 'top cause of death among youngwomen.' Further, more than half of young urbanwomen are anaemic, pointing to inadequate foodand nutrition.

The report's findings indicate that the problemis not urbanisation per se but the inequalities that itseems to accentuate.

While India is undergoing a demographictransition, regional disparities in education mean thebenefits will not be evenly spread across the country.The report says the southern and western States willbe the first to experience a growth dividend as theyaccounted for 63 per cent of all formally trainedpeople. The largest share of youth with formal skillswas found in Kerala, followed by Maharashtra,Tamil Nadu, Himachal Pradesh and Gujarat. Amongthose undergoing training, Maharashtra had thehighest share, Bihar the lowest.

The unequal access to opportunity and the lackof emphasis on education remains a persistentproblem. The report finds that a person in an urbanarea has a 93 per cent greater chance of acquiringtraining than someone in a rural area. The advantageof schooling is unbounded as a person with a highschool degree has a 300 per cent greater chance ofacquiring training than an illiterate person.

••••• GOI launches high tech network for effectiveimplementation of core programmes

The Deputy Chairman of the PlanningCommission, Montek Singh Ahluwalia, todaylaunched the India Backbone ImplementationNetwork (IBIN).

The purpose of IBIN is to improveimplementation of policies, programs, and projects,which the 12th Five Year Plan has located as thecritical necessity for accelerating more inclusive andfaster growth.

An analysis of projects and schemes has revealedthat the major causes of bottlenecks in implementationare contention amongst stakeholders, and poorcoordination amongst agencies.

These bottlenecks are at many levels in thesystem, at the center, in the states, and in districtsand cities too. They cannot be relieved top downby the Planning Commission. They requirecollaborative action by stakeholders and agenciesat multiple points.

IBIN has been modeled on the very successfulTotal Quality Movement in Japan which in the 1960sand 70s transformed the capability of Japaneseorganizations in the private and public sectors todeliver results.

The TQM movement provided to teams withinorganizations, and to inter-organization teams,techniques and tools with which they could makerapid improvements of processes thereby


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transforming Japan into the hallmark of qualityinternationally. The Planning Commission hasstudied best practices for coordination andimplementation in other countries also, such asKorea, Malaysia, Brazil, and Germany.

The IBIN movement will disseminate techniquesand skills for collaboration, coordination, and better

planning through a network of agencies in thecountry. The partners in the expanding networkalready include more than two dozen institutionssuch as the Administrative Staff College of India,the Indian School of Business, SEWA, WISCOMP,UNDP, GIZ, the World Bank, FISME and otherbusiness associations.

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••••• UNICEF report on nutrition

The UNICEF report, 'Improving Child Nutrition:The achievable imperative for global progress' showsthat progress has been made in recent years inaddressing stunting in children, and calls forincreased efforts to accelerate a response to acondition that affects some 165 million childrenacross the world.

One in four of all children less than five years ofage is stunted because of chronic under-nutrition incrucial periods of growth. The damage done to achild's body and brain by stunting is irreversible. Itdrags down performance at school and later at work,and puts children at a higher risk of dying frominfectious diseases. Thus a key to success againststunting is focusing attention on pregnancy and thefirst two years of a child's life.

An estimated 80 per cent of the world's stuntedchildren live in just 14 countries. The reporthighlights successes in scaling up nutrition andimproving policies in 11 countries: Ethiopia, Haiti,India, Nepal, Peru, Rwanda, the DemocraticRepublic of the Congo, Sri Lanka, Kyrgyzstan, theUnited Republic of Tanzania and Viet Nam.

Stunting is reduced through a series of simpleand proven steps such as improving women'snutrition, early and exclusive breastfeeding,providing additional vitamins and minerals as wellas appropriate food - especially in pregnancy andthe first two years of a child's life.

Some examples:

In the Maharashtra state in India, the percentageof stunted children dropped from 39 per cent in2005 to 23 per cent in 2012 largely because ofsupport to frontline workers who focus onimproving child nutrition.

In Peru, stunting fell by a third between 2006and 2011 following a Child Malnutrition Initiativethat lobbied political candidates to sign a '5 by 5 by5' commitment to reduce stunting in children under5 by 5 per cent in 5 years and to lessen inequitiesbetween urban and rural areas. Peru drew on itsexperience of successful smaller projects and

INTERNATIONALintegrated nutrition with other programmes. It alsofocused on the most disadvantaged children andwomen and decentralized government structures.

Ethiopia cut stunting from 57 per cent to 44 percent and under-5 mortality from 139 deaths per 1,000live births to 77 per 1,000 between 2000 and 2011.Key steps included a national nutrition programme,providing a safety net in the poorest areas andboosting nutrition assistance through communities.

The report says that existing solutions and thework of new partnerships represent anunprecedented opportunity to address child under-nutrition through countries accelerating progressthrough national projects coordinated with donorsupport and measurable targets.

UNICEF works in more than 190 countries andterritories to help children survive and thrive, fromearly childhood through adolescence. The world'slargest provider of vaccines for developingcountries, UNICEF supports child health andnutrition, good water and sanitation, qualitybasic education for all boys and girls, and theprotection of children from violence, exploitation,and AIDS. UNICEF is funded entirely by thevoluntary contributions of individuals, businesses,foundations and governments.

••••• Economic and Social Survey of Asia and thePacific 2013: Report

The report, the Economic and Social Survey ofAsia and the Pacific 2013: Forward-lookingmacroeconomic policies for inclusive and sustainabledevelopment stated that the growth in Asia-Pacificwill remain subdued due to the impact of persistentweaknesses and uncertainties in the developedeconomies, thus urged Governments to implementmacroeconomic policies that focus more oninclusivity and sustainable development.

It has projected a recovery of sorts in India'sgrowth to 6.4 per cent in 2013-14 from the previousyear's low of 5 per cent, even as China's growthtrajectory is estimated to post a moderate increasefrom 7.8 per cent in 2012 to 8 per cent.

The mild optimism in growth outlook,expressed in ESCAP's 2013 Survey, stems from the


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expected improvement in global demand arisingfrom steady growth in the United States and thelimited rebound in major emerging economieswhich is projected to help raise the developingAsia-Pacific region's growth to 6 per cent in 2013from 5.6 per cent last year.

According to other figures in the Survey, oil andgas exporting North and Central Asia will continueto benefit from high global energy prices,maintaining steady growth.

In South and South-West Asia, the economies ofAfghanistan, Bangladesh, Bhutan and Sri Lanka areprojected to grow 6 per cent or more in 2013.

The export-led economies in East and North-EastAsia as well as South-East Asia are expected to gainfrom "improved, although still tepid, global trade."

In Indonesia, ESCAP noted that domesticdemand will drive the economy to a growth rate of6.6 per cent. Strong private consumption willsupport growth in the Philippines at 6.2 per centand 5.3 per cent in Thailand, while Viet Nam'seconomy is expected to pick up in the second halfof 2013 to 5.5 per cent.

Meanwhile, growth is expected to decelerate inPacific island developing economies in 2013 due toa sharp, energy sector-led slowdown in Papua NewGuinea, the largest Pacific island economy.

According to the Survey long-term structuralissues, such as rising inequality, energy andinfrastructure shortages are compounding theregional slowdown and the structural solution toinvigorating the domestic drivers of growth will liein making the development process more inclusiveand sustainable.

••••• New law to regulate foreign labour in Gulf

The Gulf Cooperation Council (GCC) will soonpass a law regulating foreign labour in its membercountries, amid concerns in India and other nationsover a similar law passed by Saudi Arabia that seeksto reserve jobs for locals.

The new law being mulled by the GCC wouldinclude returning 'marginal' and unskilled foreignworkers to their home countries.

The GCC is a six-member group with Bahrain,Kuwait, Oman, Qatar, Saudi Arabia, and UnitedArab Emirates (UAE) as its members. The councilwill also attempt to eliminate workers who claimskills that they do not possess.

The new regulation would minimise unusedlabour who had no clear contracts with employers.

Kuwait has already announced that it would cutdown and send away 1,00,000 expat workers whoare considered marginal in order to replace themwith local labour.

••••• US House of Representatives passes CISPAcybersecurity bill

The Cyber Intelligence Sharing and ProtectionAct (CISPA) is a proposed law in the United Stateswhich would allow for the sharing of Internet trafficinformation between the U.S. government andtechnology and manufacturing companies. Thestated aim of the bill is to help the U.S governmentinvestigate cyber threats and ensure the security ofnetworks against cyberattacks.

The legislation was introduced on November 30,2011 by U.S. Representative Michael Rogers (. It waspassed in the House of Representatives on April 26,2012, but was not passed by the U.S. Senate.

President Obama's advisers have argued that thebill lacks confidentiality and civil liberties safeguardsand they advised him to veto it. In February 2013the House reintroduced the bill and passed it onApril 18, 2013.

Companies like Mozilla and Reddit, along withadvocacy organizations ACLU and EFF warn aboutCISPA being used as a pre-text for corporations toshare private information about their users withthe government. This would put the privacy ofusers at risk.

About the Bill

CISPA is an amendment to the National SecurityAct of 1947, which does not currently containprovisions pertaining to cybercrime. It addsprovisions to the Act describing cyber threatintelligence as "information in the possession of anelement of the intelligence community directlypertaining to a vulnerability of, or threat to, a systemor network of a government or private entity,including information pertaining to the protectionof a system or network from either 'efforts todegrade, disrupt, or destroy such system or network';or 'theft or misappropriation of private orgovernment information, intellectual property, orpersonally identifiable information.'" In addition,CISPA requires the Director of National Intelligenceto establish procedures to allow intelligencecommunity elements to share cyber threatintelligence with private-sector entities andencourage the sharing of such intelligence.

[ 1 0 ] Weekly Current Affairs 15th April to 21st April, 2013

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••••• Falkland vote to stay under British rule

Residents of the Falkland Islands voted almostunanimously to stay under British rule in areferendum aimed at winning global sympathy asArgentina intensifies its sovereignty claim.

The official count showed 99.8 per cent ofislanders voted in favour of remaining a BritishOverseas Territory in the two-day referendum,which was rejected by Argentina as a meaninglesspublicity stunt. Only three "no" votes were cast.

Three decades since Argentina and Britain wentto war over the far-flung South Atlantic archipelago,residents have been perturbed by Argentina'sincreasingly vocal claim over the Malvinas - as theislands are called in Spanish. Local politicians hopethe resounding "yes" vote will help them lobbyinternational support, for example in the US, whichhas a neutral position on the sovereignty issue.

Argentina has claimed the islands since 1833,saying it inherited them from the Spanish onindependence and that Britain expelled anArgentine population.


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••••• GOI announces host of incentives to boostdeclining exports

Faced with declining exports, the governmenthas announced a slew of measures includingextension of the popular EPCG scheme to all sectorsand sops for Special Economic Zones (SEZs) toboost shipments.

The initiatives announced by Commerce andIndustry Minister Anand Sharma as part of theannual supplement to the Foreign Trade Policy(FTP) are aimed at pushing exports whichdeclined by 1.76 per cent to USD 300.6 billionduring 2012-13 and pushed up the trade deficitto USD 190.91 billion.

The incentives are:

a) The Export Promotion Capital Goods (EPCG)scheme, which allows exporters to import capitalgoods at zero duty, would be extended beyondMarch 2013 and would be applicable to allsectors.

b) Under the SEZ scheme the minimum land arearequirement for setting up such zones has beenreduced to half and there would be no ceilingfor IT and ITeS SEZs. For Multi-product SEZfrom 1000 hectares to 500 hectares and for Sector-specific SEZ from existing 100 hectares to 50hectares.

c) To provide greater flexibility in utilizing landtracts falling between 50-450 hectares, it has beendecided to introduce a Graded Scale forMinimum Land Criteria which would permit aSEZ an additional sector for each contiguous 50hectare parcel of land. This will also bring aboutmore efficient use of the infrastructure facilitiescreated in such an SEZ.

d) On exit policy for the SEZs, it has been decidedto allow transfer of ownership and sale ofSEZs units.

e) The government will set up the 2nd TaskForce to suggest measures for reducingtransaction costs and added it will submit itsreport in six months.

f) At present, 2% interest subvention scheme isavailable to certain specific sectors like

ECONOMYHandicrafts, Handlooms, Carpets, ReadymadeGarments, Processed Agricultural Products,Sports Goods and Toys. The scheme had beenfurther widened to include 134 sub-sectors ofengineering sector. Government had alsoannounced that the benefit of this scheme of 2%interest subvention could be available upto31.03.2014.

g) Duty Credit Scrips issued under Focus MarketSchemes, Focus Product Scheme and VisheshKrishi Gramin Udyog Yojana (VKGUY) can beused for payment of service tax on procurementof services within the legal framework of servicetax exemption notifications under the FinanceAct, 1994. Holder of the scrip shall be entitled toavail drawback or CENVAT credit of the servicetax debited in the scrips as per Department ofRevenue rules.

h) Norway has been added under Focus MarketScheme and Venezuela has been added underSpecial Focus Market Scheme. The total numberof countries under Focus Market Scheme andSpecial Focus Market Scheme becomes 125 and50 respectively.

i) Approximately, 126 new products have beenadded under Focus Product Scheme. Theseproducts include items from engineering,electronics, chemicals, pharmaceuticals andtextiles sector.

j) About 47 new products have been added underMarket Linked Focus Product Scheme (MLFPS).These products are from engineering, autocomponents and textiles sector. 2 new countriesi.e., Brunei and Yemen have been added as newmarkets under MLFPS.

k) System for online issuance of RegistrationCertificate for export of Cotton, Cotton Yarn,Non-Basmati Rice, Wheat and Sugar has beenintroduced. This will allow quick issuance ofRegistration Certificates and easy monitoring.

••••• GOI planning to set up Telecom SecurityDirectorate to tackle threat from Chineseequipment

In response to the perception within theintelligence and defence community of the growingthreat to national security from imported Chinese


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telecom equipment, the Centre is planning to set upa 'Telecom Security Directorate.' This is part of thegovernment's broader strategy to set up aninstitutional framework of technical manpower tohandle telecom security-related issues linked to theuse of telecom gear manufactured by Chinese giantsHuawei and ZTE.

The Department of Telecommunications is alsosetting up the Centralised Monitoring System (CMS)for lawful interception and monitoring of telephoneand Internet services, besides establishing the Centrefor Telecom Equipment and Security Certification,for which a pilot laboratory has been set up at theIndian Institute of Science (IISc)-Bangalore that willcarry out R&D activities to develop test tools.

Earlier the Permanent Select Committee onIntelligence of the U.S. Congress on 'issues posedby Chinese telecom companies Huawei and ZTE'reported that "Huawei could not establish beyonddoubt that it is not a company functioning underthe direct control of the Chinese army and [that its]decision making is not influenced by the same."Indian intelligence agencies have highlighted othercrucial elements in the U.S. Committee report, whichhas asked for "a detailed accounting of foreign madehardware/software on the service provider'snetwork along with the information related tosecurity incidence such as discovery of unauthorisedelectronic hardware or suspicious equipment capableof duplication for redirecting data."

Chinese telecom equipment are banned fromdeployment in "sensitive regions" that are "definedas States having international borders with China,Bangladesh, Myanmar and Pakistan," whereas, DoTwas yet to carry out a systematic study to gauge thethreat being posed by imported telecom gear, amajority of which comes from China. Duet to lackof resources the DoT's R&D spending on securityprogrammes, which was just Rs. 67 crore in entire11th Plan period (2007-12). However, in the 12thPlan period (2013-18) Rs. 550 crore has beenproposed for security projects due to increasingthreat from imported equipments. While Rs. 300crore would be spent on operation and maintenanceof security projects like the Centralised MonitoringSystem, Rs.100 crore would be given for setting upthe Centre for Telecom Equipment Testing andSecurity Certification. The CMS would have a centraland regional database which would help Centraland State-level law enforcement agencies ininterception, monitoring and call data analysis.

••••• FinMin instructed government banks to reduceNPA

The Finance Ministry has asked all public sectorbanks to reduce their bad loans, or non-performingassets, to one per cent of their total advances by theend of the current financial year (March 31, 2014).

With the economy registering the lowest growthin a decade, public sector banks have seen theirNPAs go up significantly. According to datacollected for a meeting between Finance Ministryand public sector bank officials last month, bad loanswith respect to the priority sector, which includeagriculture and medium and small enterprises, hadgone up during the quarter ended December 31 vis-à-vis the previous quarter.

Interestingly, however, the NPA position inrelation to retail and real estate loans improvedduring the period.

The gross NPAs of public sector banks rose to4.18 per cent of advances by the end of December2012, compared to 3.22 per cent a year ago. NetNPAs, which are arrived at after making provisionsfrom the gross amount, has increased to 2.12 percent in December 2012.

In absolute term, gross NPA of PSU banksjumped to Rs 1,84,193 crore in December 2012compared to Rs 1,37,102 crore in March 2012, anincrease of Rs 47,091 crore in the nine months period.

The gross NPA in corporate lending rose to Rs98,884 crore in December, as against Rs 68,221 crorein March. In the case of farm loans, the gross NPArose to Rs 30,800 crore in December as against Rs24,827 crore in March.

Another highlight is that the top 30 non-performing accounts made up close to half (around44 per cent) the bad loans of the 19 nationalisedbanks. While for the SBI group, this was around19.3 per cent, for public sector banks as a wholethey were around 34 per cent.

Banks have been advised to adopt a multi-pronged strategy for loan recovery. The multi-pronged strategy includes constitution of a board-level committee for monitoring recovery, review ofNPA accounts of Rs 1 crore and above by the boardof directors, and the top 300 NPA accounts by themanagement committee of the boards, andguidelines for NPA management as part of an early-warning system. Apart from restructuring, bankshave been advised to initiate penal measures againstwilful defaulters. These include not granting themadditional facilities and debarring theentrepreneurs/promoters of defaulting companies


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from getting institutional finance for floating newventures for a period of five years.

Banks have also been asked to lodge a formalcomplaint against the auditors of the borrowers withthe Institute of Chartered Accountants of India, if itis observed that there was negligence or deficiencyin the conduct of audit.

NPAs are a debt obligation where theborrower has not paid any previously agreed uponinterest and principal repayments to thedesignated lender for an extended period of time.The nonperforming asset is therefore not yieldingany income to the lender in the form of principaland interest payments.

••••• Airlines may get direct subsidy for small towns

In a bid to boost regional connectivity from 89small towns that either have small airports orairstrips, the aviation ministry is planning to giveupfront subsidies to airlines to put them on theirnetworks. For this, the existing route dispersalguidelines (RDG) that mandate that airlines fly acertain percentage of their flights to the northeast,Kashmir and some other areas may be phased outin the next two to three years.

The ministry has decided not to force airlinesbut 'nudge' them to provide regional connectivitythrough this route. As a result, it will not be mademandatory for airlines to have small turboprops butthe subsidy for flying to small town India willautomatically make it lucrative for airlines to havethe right fleet to do so.

Facilities such as:

a) More land to develop, modernize oroperationalize an airport will be given free ofcost by the state;

b) States will lower taxes on jet fuel,

c) States will not charge property tax and ensureall infrastructure at the airports.

d) The Airports Authority of India (AAI) will notto charge navigation charges from theseairports, etc.

will be given to the airlines to increase airconnectivity among small towns in India. Theexisting RDGs could be abolished. Some airportsthat airlines are supposed to mandatorily flyto under those rules like Guwahati, Bagdograand state capitals have already become viablefor airlines.

What are RDGs?

According to Route Dispersal Guidelinesformulated in 1994 by DGCA, all routes weredivided into three categories viz. Category - I, IIand III. Route categorization was based ontraditionally surplus generating routes (Category- I), loss making routes (Category - II) and theremaining routes (Category - III). The Category -I routes were largely inter-metro routes andgenerated surplus that cross subsidized losseslargely on Category - II routes that served regionsof difficult terrain and destination in remote areas.Category - II routes included routes connectingairports in North-Eastern region, Jammu andKashmir, Andaman & Nicobar and Lakshadweep.Category - III routes were routes other than thoseincluded in Category - I and Category - II. Theguidelines also mandated a category withinCategory - II, referred to as Category - IIA region,Jammu & Kashmir, Andaman & Nicobar andLakshadweep.

It was obligatory on the part of scheduledairlines to deploy on Category - II, IIA and IIIroutes, a specified percentage of capacity deployedin Category - I routes as per the following:

i) On Category - II routes, at least 10% of thecapacity deployed on routes in Category - I.

ii) On Category - IIA routes, at least 10% of thecapacity deployed on routes in Category - II.

iii) On Category - III routes, at least 50% of thecapacity deployed on routes in Category - I.

••••• Adopt global gas pricing regime: PlanningCommission

The Planning Commission has recommendedswitching to an international pricing formula fornatural gas - which now works out to $14.5 per mBtu,almost three times more than the present price of$4.2 mBtu (per million British thermal unit) - by thebeginning of the 13th Plan (2017-22). This is in linewith the demand made by Reliance IndustriesLimited (RIL).

The Planning Commission has also sought thatcoal bed methane (CBM) gas and the yet-to-bediscovered shale gas be freed from any price controlor approvals without any further delay.

The Commission feels the Rangarajan panel'sformula for natural gas price at $8.5 mBtu should beviewed as an interim or transitional solution validup to the 12th Plan (March 31, 2017) and applicablefor all existing contracts. Post the latter date, theEmpowered Group of Ministers may review the


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price formula towards alignment with internationalprices. For the new contracts, which go intoproduction after March 2017, the producer shouldbe free to market gas to any domestic buyer at amarket-determined price.

Further the existing New Exploration LicensingPolicy (NELP) contracts could be allowed to market10 per cent of production freely to willing buyers,with the percentage increasing by 5 percentagepoints each year. On this basis, gas produced fromthe existing contracts would be 50 per cent free after8 years. A mechanism for sharing risk in the eventof excessively high or excessively low prices can bebuilt into future contracts.

The note further states that new NELP contracts(as well as those signed after the sixth NELP round)entered into from now onwards will begincommercial production only by the beginning of the13th Plan. Thus they should be assured market-basedpricing. If the government wishes to subsidise anyparticular use, it should do it from their profit share.

The policy has faced strong opposition from theFertilizer and Power Ministries as well as powerproducers who fear that switching to internationalpricing would lead to a massive hike in power tariffsand hefty rise in fertilizer prices and subsequentlyput a huge financial burden on the government inthe form of fertilizer subsidy.

••••• Horticulture gets high priority in XII Plan

Horticulture sector, which has shown highgrowth in the XI Plan, and yet more potential forgrowth, is being given special focus in the XII Plan.

Production and supply of quality plantingmaterial will continue to be a high priority area forhorticulture development during the XII Plan.Emphasis will be laid on establishment of hi-technurseries of improved varieties, good quality root-stock banks and hi-tech green houses. Besides, Stateswill be encouraged to set up crop-based Centre ofExcellence to serve as a hub for supply of plantingmaterial and dissemination of technology to farmers.

Area expansion under the National HorticultureMission (NHM) will be linked to availability of

quality planting material through accreditednurseries and tissue culture units. Importance willbe given for covering more area under vegetablehybrids and export-oriented varieties of crops suchas ginger, turmeric and chillies.

High density planting and tree canopymanagement of orchards, right from establishmentstage, will be given focus to derive better yields.An integrated approach will be encouraged fortaking up drip irrigation/mulching and othersupport systems required for cultivation of fruit andplantation crops.

Rejuvenation of old and unproductive orchardswill continue to be a focus area for enhancingproductivity, profitability and sustainability.

Major thrust will be on protected cultivation,particularly of high value crops, in green houses,shade net houses, plastic mulching, etc. Creation ofinfrastructure for post-harvest managements isanother thrust area. Value addition will also continueto be a high priority area with focus on creatingcold chain networks.

Setting up of markets infrastructure will belinked with reforms in APMC Act, for permittingdirect marketing of horticulture produce.

Mobilization of farmers into producer groups/organizations is another priority area aimed atstrengthening their negotiating power, besidesfunctioning as viable farmer groups involved inproduction and marketing of horticulture produce.

For better implementation of variousdevelopmental programmes on horticulture, theexisting schemes of NHM, HMNEH, NHB, CoconutDevelopment Board, Central Institute of Horticultureand National Bamboo Mission are being subsumedin the NHM.

These interventions will lead to productivityenhancement, availability of quality plantingmaterial of improved high yielding varieties,reducing post-harvest losses of perishablecommodities, particularly fruits and vegetables,creation of effective supply chain good prices tothe farmer and overall high growth of thehorticulture sector.

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INDIA AND THE WORLD

••••• Indo-EU Policy Dialogue on Culture

Indo-EU Policy Dialogue on Culture was co-chaired by Smt. Sangita Gairola, Secretary, Ministryof Culture, Government of India and Mr. JanTruszczynski, Director General, Education andCulture in the European Commission.

The Policy Dialogue was set up under the JointDeclaration of the European Commission and theGovernment of India on Culture, issued on 10thDecember, 2010.

The Indo-EU Policy Dialogue on Culture inter-alia focused on the following -

a) Development and support for cultural andcreative industries, including the Audio Visual(AV) Sector.

b) Sharing of professional expertise on thepreservation of cultural, natural and historicalheritage, including conservation techniques.

c) Sharing of technical expertise and experiencesof 'Europeana' for development of NationalVirtual Library.

The Policy Dialogue was very fruitful and someconcrete suggestions were agreed to by both sidesfor exchange of expertise in areas of their strengths.

••••• World Energy Leaders Take Action on CleanEnergy

India hosted the fourth Clean Energy Ministerial(CEM4) in New Delhi on 17-18 April 2013. TheClean Energy Ministerial is the annual forum forenergy ministers from 23 major economygovernments to come together and collaborate todrive accelerated clean energy market development,via 13 technology and policy-focused initiatives.The discussions focused on identifying smartpolicies, programs, and innovative strategies toincrease energy efficiency, enhance clean energysupply, and expand energy access.

Since its launch in 2010, the CEM has leverageda unique distributed leadership approach. Countrieschoose to participate in those initiatives that are ofinterest to them and important to their citizens. Thisapproach is driving faster implementation andboosting the enthusiasm of each participatingcountry in the various initiatives.

A unique feature of this Ministerial was theInnovation Showcase Pavilion, hosted by theGovernment of India. The Pavilion featured 45companies from around the world that are at theforefront of the clean energy revolution in technologysectors such as solar, smart and mini- grid, energystorage, lighting, electric vehicles, and energyefficiency and finance.

The Super-efficient Appliance and EquipmentDeployment (SEAD) initiative recognized thewinners of the SEAD Global Efficiency Medalcompetition for most energy efficient flat-paneltelevisions. The global awards program encouragesthe production and sale of super-efficient equipment,appliances, and electronics. The winning models are33 to 44 percent more energy efficient than TVs withsimilar technology. The competition is alreadyspurring the adoption of increased energy efficientpolicies and standards that will help consumers andbusinesses save thousands of dollars on electricity.

The sixteen governments participating in theSEAD initiative also announced the launch of theSEAD Global Efficiency Medal competition forelectric motors. Electric motors, which are ubiquitousin everything from small appliances to largeindustrial equipment, account for a staggering 43%ofworld electricity consumption. Winners will berecognized at CEM5 in Korea.

The Government of India announced the first-ever database featuring national and state cleanenergy and energy efficiency policies and incentivesin India. The Indian Renewable Energy and EnergyEfficiency Policy Database (IREEED) will disseminaterenewable energy and energy efficiency policies,regulations, and incentive programs for the benefitof project developers, businesses, and consumers.Developed through support from the Clean EnergySolutions Center, IREEED will be a featured resourceon the site.

The World Bank announced the launch of aSouth-South-North Knowledge Exchange (SSNKE)facility. The SSNKE Facility will enable the exchangeof ideas and experiences in clean energy among themembers of the CEM and will function within the21st Century Power Partnership, a CEM initiativeled by India and the United States. The SSNKEFacility will support learning networks and


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communities of practice, study tours and field visits,policy dialogues, peer-to-peer interactions, andformal training programs. Some of these activitieswill be piloted during 2013-2014. The World Banksees the Facility as an important instrument to bringpolicy-makers, private sector and civil society actorstogether in sharing and learning from each other.

The government of India announced that it hasjoined the Electric Vehicle Initiative.

The government of the United Kingdomannounced it will join the Global Lighting andEnergy Access Partnership (Global LEAP) initiative.Global LEAP also announced the launch of a newcompetition that will help transform the globalmarket for products designed for use in an off-gridcontext (i.e., with home-scale power systems) byrecognizing the most efficient, high-quality andaffordable DC-powered appliances. The GlobalLEAP Outstanding Off-Grid Product Awardscompetition builds on the success of the IFC`sLighting Global programawards for integrated solarlanterns and the first rounds of competition will befor DC-powered LED lighting and color televisions.

Looking ahead, the Government of Mexicoannounced that it will host the sixth Clean EnergyMinisterial in Mexico City in 2015.

••••• Changes in H1B visas to affect Indian IT firms

A framework for comprehensive immigrationreform proposed by a group of influential U.S.Senators has sent shockwaves through the Indianbusiness community after it was revealed that itincluded measures to significantly hike the employerfees payable for H-1B visa applications and will puta curb on use of H-1B visa for those companies whichhave a higher ratio of work force under this category.Most of the Indian companies will fall under thisclassification.

The 'Border Security, Economic Opportunity andImmigration Modernisation Act of 2013', aims atcracking down on abusers of the H-1B system byrequiring the dependent employers to paysignificantly higher wages and fees than normalusers of the programme.

If the employer has 50 or more employees, andmore than 30 per cent but less than 50 per cent areH-1B or L-1 employees (who do not have a greencard petition pending), the employer will need topay a USD 5,000 fee per additional worker in eitherof these two statuses.

In case the employer has 50 or more employeesand more than 50 per cent of these workers are H-1B or L-1 employees who do not have a green cardpetition pending, then the companies will have to

pay a USD 10,000 fee per additional worker in eitherof these two statuses.

As such, large Indian IT companies like TCS,Wipro and Infosys will have to pay USD 10,000 foreach additional H-1B employee they would behiring. Such a thing will not be for companies likeIBM, Intel or Microsoft who are based in the US andmajority of their employee are American nationals.

In case of companies like TCS, Wipro andInfosys, which are headquartered in India havinglarge off-site offices back home and depend on asmall strength in the US, will be affected by such aprovision.

The bill proposes that in the fiscal year 2014,companies will be banned from bringing in anyadditional workers if more than 75 per cent of theirworkers are H-1B or L-1 employees.

This provision is in accordance with the US planto crack down on use of H-1B and L visas tooutsource American jobs by prohibiting companies,whose US workforce largely consists of foreign guestworkers, from obtaining additional H-1B and L visas.

Under the bill, the Secretary of Labour mustestablish a searchable website for posting H1Bpositions. The site must be operational and onlinewithin 90 days of the passage of the new law.

It requires employers to post a detailed jobopening on the Department of Labour's website forat least 30 calendar days before hiring an H1Bapplicant to fill that position.

The bill also restrains employers from recruitingor giving preference to H-1B or OPT workers overAmerican workers.

It also proposes to establish significant newauthorities and penalties to prevent, detect, and deterfraud and abuse of the H-1B and L-1 visa systemsby fraudulent employers.

However on the positive side, the reform outlinedemarcates steps for undocumented immigrantsresiding within the U.S. on or before December 31,2011, to apply for "legalisation," if they meet anumber of eligibility criteria. Extrapolating fromDepartment of Homeland Security estimates, 240,000out of the nearly 11.5 million undocumentedimmigrants in the U.S. are from India.

••••• India tops global remittances list

According to the latest edition of the WorldBank's Migration and Development Brief, officiallyrecorded remittance flows to developing countriesgrew by 5.3 per cent to reach an estimated USD 401billion in 2012.


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India topped the list of countries receivingremittances, followed by China (USD60 billion), thePhilippines (USD24 billion), Mexico (USD23 billion)and Nigeria and Egypt (USD21 billion each). Otherlarge recipients include Pakistan, Bangladesh,Vietnam, and Lebanon.

Remittances to developing countries are expectedto grow by an annual average of 8.8 per cent for thenext three years and are forecast to reach USD 515billion in 2015.

Migration and remittances offer a vital lifelinefor millions of people and can play a major role inan economy's take-off.

The World Bank has also established the GlobalKnowledge Partnership on Migration andDevelopment (KNOMAD), envisioned becoming aglobal hub of knowledge and policy expertise onmigration issues.

KNOMAD was initiated in response to the rapidgrowth in migration and remittances over the lastdecade. Nearly one billion people - that is, one outof every seven persons on the planet - have migratedinternally and across international borders in searchof better opportunities and living conditions, withprofound implications for development.

Established with the support of Switzerland andGermany, KNOMAD aims to generate andsynthesize knowledge on migration issues forcountries; generate a menu of policy choices basedon multidisciplinary knowledge and evidence; andprovide technical assistance and capacity buildingto sending and receiving countries for theimplementation of pilot projects, evaluation ofmigration policies, and data collection.

The program will focus on a number of keythematic areas: improving data on migration andremittance flows; skilled and low-skilled labormigration; integration issues in host communities;policy and institutional coherence; migration,security and development; migrant rights and socialaspects of migration; demographic changes andmigration; remittances, including access to financeand capital markets; mobilizing diaspora resources;environmental change and migration; and internal

migration and urbanization. It will also addressseveral cross-cutting themes, such as gender,monitoring and evaluation, capacity building, andpublic perceptions and communication.

••••• India, Tajikistan bilateral meet

India and Tajikistan discussed mutualcooperation on security issues and countering cross-border terrorism during a "very productive meeting"here between visiting Vice President Hamid Ansariand Tajik President Emomali Rahmon. India andTajikistan agreed to elevate their strategicpartnership to a new level by expanding cooperationin several key areas, including InformationTechnology (IT), energy, health, education, trade andcommerce, mining and agriculture.

Tajikistan President stressed the need for a jointconsultative effort before the withdrawal of NATOforces from Afghanistan next year.. He urged Indiato work for the economic rehabilitation ofAfghanistan's people.

As part of "Connect Central Asia Policy", Indiahad begun the process of setting up a Central Asiae-Network, with its hub in New Delhi and spokesin the five Central Asian capitals. Plans were alsounder way to establish a Central Asian University.

Further India sought Tajik help in gainingexpertise on better management of cotton crop, italso agreed to set up an EntrepreneurshipDevelopment Centre in Tajikistan.

Tajikistan has a porous 1400-km long border withAfghanistan which it finds difficult to manage. Italso shares a border with Uzbekistan, Kyrgyzstanand China and a strip of its border is in proximityto Pakistan-occupied Kashmir (PoK). It can play animportant role in maintaining peace along theAfghanistan border and fighting jihadis, drugtraffickers and Taliban elements. The infiltration ofextremist forces into Tajikistan can have serioussecurity implications for India also because of itsproximity to PoK.

India has assisted Tajikistan in becoming the159th member of the World Trade Organisation.

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••••• High Level Working Group Report on WesternGhats

The Western Ghats is a biological treasure trovethat is endangered, and it needs to be "protectedand regenerated, indeed celebrated for its enormouswealth of endemic species and natural beauty" - saysthe Union Ministry of Environment and Forest's HighLevel Working Group which has submitted reporton the Western Ghats to Ms. Jayanthi Natarajan,Minister of State (IC) for Environment & Forests.

The Working Group headed by Dr. K.Kasturirangan was constituted to advise theGovernment on the recommendations of an earlierreport - that of the eminent ecologist Madhav Gadgil-led Western Ghats Ecology Expert Panel (WGEEP).The WGEEP had recommended that the entireWestern Ghats should be declared as an ecologicallysensitive area; had suggested three levels ofcategorization where regulatory measures forprotection would be imposed and had recommendedthe establishment of the Western Ghats EcologyAuthority for management.

The HLWG report draws upon the basicframework suggested by WGEEP to use remotesensing technologies to demarcate the ecologicallysensitive areas of the Western Ghats but with twokey differences. First; it used satellite data, down to24 m resolution, as against 9 km used by WGEEP.This finer resolution, was possible because of thecollaboration with NRSC/ISRO, which used datasetsto distinguish vegetation types over the landscapeof the entire Western Ghats.

Second, it distinguishes between the cultural andthe natural landscape of the region. Using remotesensing technology, it has found that the culturallandscape - which includes human settlements,agricultural fields and plantations -- covers 58.44per cent of the region. The natural landscape rangesover the remaining 41.56 per cent. The methodologyadopted by NRSC/ISRO has then combined spatialinformation generated on vegetation types withspecies level information; biological richness anddisturbance regimes - to identify the biologicallydiverse and contiguous regions of the Western

SCIENCE & TECHNOLOGY

Ghats. Its conclusion, based on this methodology, isthat roughly 37 per cent of the total area defined asthe boundary of the Western Ghats is ecologicallysensitive. Over this area of some 60,000 sq km, spreadover the states of Gujarat, Maharashtra, Goa,Karnataka, Kerala and Tamil Nadu, the HLWG hasrecommended a blanket ban on mining, quarrying,sand mining, setting up thermal power projects,townships and area development projects in the60,000 sq km area.

The Working Group makes a range ofrecommendations to "incentivize green growth inthe Western Ghats". These include managing forestsand improving their productivity to ensure inclusivegrowth and economic benefits for local communities;integrating forest accounts into state and nationaleconomic assessments; initiating an ecosystemservice fund to help villages around the forests;promoting sustainable agriculture and; encouragingecotourism for local benefits. As part of thegovernance of ecologically sensitive areas, theWorking Group has proposed to set up a DecisionSupport and Monitoring Centre for GeospatialAnalysis and Policy Support in the Western Ghats,which will monitor changes and advise stategovernment on policy reform. But it has made itclear that all these reports must be in the publicdomain. It has also recommended that the high-resolution map, which demarcates ecologicallysensitive areas, down to each village settlement, mustbe put in the public domain so that people can beinvolved in taking decisions about environment,which is first and foremost their concern.

••••• Lab-made kidney holds out hope

Researchers in the United States had bio-engineered a kidney and transplanted it into rats,marking a step forward in a quest to help patientssuffering from kidney failure.

The prototype proves that a "bio-kidney" canwork, emulating breakthroughs elsewhere to buildreplacement structures for livers, hearts and lungs.

The work entailed taking a rat kidney andstripping out its living cells using a detergentsolution, leaving behind a shell made of collagen.


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The next step was to repopulate this emptystructure with living cells, comprising humanendothelial cells, which line the walls of bloodvessels in the kidney, and kidney cells taken fromnewborn rats. The trick was then to "seed" thesecells in the correct part of the kidney, using amuscle duct called the ureter as a tube.

The team transplanted the organ into living ratsfrom which a kidney had been removed.

The new kidney started filtering blood andproducing urine through the ureter as soon as thebloody supply was restored, and there was noevidence of bleeding or clots.

••••• Antarctic summer ice melting ten times faster

A joint Australian-British study has showed thatsummer ice in the Antarctic is melting 10 timesquicker than it was 600 years ago, with the mostrapid melt occurring in the last 50 years.

A research team from the Australian NationalUniversity and the British Antarctic Survey drilleda 364-metre long ice core from James Ross Island inthe continent's north to measure past temperatures.

Visible layers in the ice core indicated periodswhen summer snow on the ice cap thawed andthen refroze.

By measuring the thickness of these melt layers;the scientists were able to examine how the historyof melting compared with changes in temperatureat the ice core site over the last 1,000 years.

Scientists have found that the coolest conditionson the Antarctic Peninsula and the lowest amountof summer melt occurred around 600 years ago. Atthat time, temperatures were around 1.6 Celsiuslower than those recorded in the late 20th centuryand the amount of annual snowfall that melted andrefroze was about 0.5 per cent. Today, 10 times ofthe annual snowfall is melting each year.

The research is only the second reconstructionof past ice melts on the Antarctic continent. It helpedscientists gain more accurate projections about directand indirect contribution of Antarctica's ice shelvesand glaciers to global sea level rise.

••••• Russia launches bio-satellite

Russia has launched an 'orbital Noah's Ark' tospace - a bio-satellite packed with an array of 45mice, eight Mongolian gerbils, 15 geckos, snails, fisheggs, micro-organisms and plants blasted off aboardthe modernized Soyuz 2 rocket from the Baikonurlaunch pad in Kazakhstan to study the effects oflong flights on living organisms.

The bio capsule carried by the powerful Soyuz 2rocket is the world's only returnable satellite.

Bion-M1 scheduled to orbit space for 30 dayswill conduct various physiological, biological andgenetic experiments regarding the future possibilityof flights to Mars and other planets.

The bacteria and fungi were attached to a heatresistant material with tiny holes on the outer skinof the capsule. The microbes will be subjected toextreme temperatures and space vacuum.

The satellite is also carrying smaller satellitesfrom US, Germany, Korea which will be released inthe coming days for their respective missions.

BION-M1's advanced solar panels, larger fueltanks and better life support techniques allows it tosurvive in space for three months.

The biological satellite is slated to return earthon 18 May following the completion of 70experiments.

BION-M1 is Russia second biological satellite tobe sent to space after a gap of 15 years.


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2 - MARKERS••••• Maduro sworn in as Venezuelan president

Nicolas Maduro has been sworn in asVenezuelan president, succeeding the late HugoChavez who died of cancer in March after governingfor 14 years. He has defeated Henrique Caprileswith just 1.5% of the vote separating the twocandidates. Capriles immediately demanded arecount, refusing to recognize the outcome as valid.Maduro was later formally inaugurated as Presidenton 19 April, after the election commission hadpromised a full audit of the election results

••••• Armed women security squads introduced

To ensure women's safety in the state, the Punjabgovernment has introduced the Women ArmedSpecial Protection Squad (WASPS).

The new WASPS unit will serve six districts ofBathinda zone in southwest Punjab. These includeMuktsar Sahib, Bathinda, Faridkot, Mansa, Ferozepurand Fazilka districts. 10 teams of WASPS would bedeployed in every district.

The women squad would have a uniform,revolvers, handcuffs, batons, chilli powder, wirelesssystems and a complete sound system to send analert. WASPS would deployed near educationalinstitutions, markets and other busy places.

••••• Single-window for film producers

The Ministry of Information and Broadcasting(I&B) has set up an inter-ministerial committee forpromoting and facilitating film production. It wouldserve as a 'single-window' for clearance forfilmmakers who would otherwise have to seekpermission from as many as 30 different agencies toshoot feature films, short films and televisionprogrammes.

The committee would be chaired by the secretaryin the I&B Ministry and include joint-secretary levelofficers from the Ministries of Home, Tourism,External Affairs, Culture, Railways, Civil Aviationand Defence.

The committee's mandate would be two-fold:facilitate granting of permission for both foreign anddomestic producers from relevant authorities of theCentral and State governments; and meet regularlyto 'monitor' the facilitation process and issuedirections to the authorities concerned.

••••• Bihar Cabinet nod for quota for women inpolice

The Bihar Cabinet has passed a proposal of theHome Department to grant 35 per cent reservationfor women in recruitment of constables and sub-inspectors in reserved and as well as unreservedcategories.

••••• Pulitzer Prize

The New York Times newspaper has won fourPulitzer Prizes for journalism, including a story thatexposed corruption in high levels of China'sgovernment.

The newspaper also won prizes for reporting onthe business practices of Apple and Wal-Mart andan avalanche in Washington State.

The Denver Post won in the breaking newscategory for its coverage of the mass shooting in amovie theater last year in Aurora, Colorado.

In addition to 14 journalism categories, PulitzerPrizes are also given in seven arts categories.

The fiction prize went to a novel set in NorthKorea, Adam Johnson's The Orphan Master's Son.

The novel was one of several works with Asianthemes to win Pulitzers in the arts categories. Thedrama prize went to Ayad Akhtar's Disgraced, abouta successful Pakistani-American lawyer and thehistory prize went to Fredrik Logevall's Embers ofWar: The Fall of an Empire and the Making ofAmerica's Vietnam.

Caroline Shaw won the music award, for her acappella work Partita for 8 Voices.

Prizes were also awarded in the categories ofbiography, poetry and general non-fiction.

Pulitzer Prizes, named for newspaper publisherJoseph Pulitzer, have been awarded annually since1917. The prizes are awarded by New York'sColumbia University and each winner receives$10,000.

••••• Goldman Environmental Prize

The Goldman Environmental Prize, the mostprestigious award for grassroots environmentalwork, has been awarded in San Francisco to sixactivists who struggled against the odds to protectthe world ecosystem. The prize honors grass-roots


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leaders from Africa, Asia, Europe, islands and islandnations, North America, as well as South and CentralAmerica. Each winner receives $150,000.

The winners are:

a) Kimberly Wasserman of USA battle to shutdown two coal power plants, that were sickeningher community.

b) Azzam Alwash helped in restoring theMesopotamian marshlands that had been turnedinto dust bowls by Iraqi leader Saddam Hussein,who was executed in 2006.

c) Aleta Baun, a mother from West Timor,Indonesia, led hundreds of village women in afour-year-long "weaving occupation." Sitting onrocks at mining sites, they weaved theirtraditional cloth to protest marble-miningoperations, which threatened their territory andway of life.

d) Jonathan Deal helped protect the Karoo, a semi-desert region in South Africa.

e) Rossano Ercolini, a fourth-grade teacher in Italy,helped raise the recycling rate in his small townof Capannori from 11% to 82%. Dozens of othermunicipalities have joined Capannori inadopting a goal of zero waste.

f) Nohra Padilla organized recyclers, pejorativelycalled "waste pickers," into unions despitepolitical opponents and a culture of violence.She won a court ruling that prohibits wastemanagement contracts that do not provide jobopportunities for informal recyclers.

••••• Jnanpith Award

Telugu writer Ravuri Bharadwaja was selectedfor the prestigious Jnanpith award for the year 2012.

He has written 37 collections of short stories,seventeen novels, four play-lets, and five radio plays.

He has also contributed profusely to children'sliterature. Paakudu Raallu, a graphic account of lifebehind the screen in film industry, is considered hismagnum opus. Jeevana Samaram is another of hispopular works.

He was earlier chosen for Lok Nayak Foundation'sLiterary Award in 2009 and he was the first recipientof the Raja-Lakshmi Literary Award by Sri Raja-Lakshmi Foundation in the year 1987.

••••• EC to launch new voter identity card

The laminated voter identity card made of paperwith black and white photograph is all set toundergo a change with the Election Commissionplanning to replace it with a driving licence-like hardplastic card which is more durable.

The new voter card will be first issued in Assamand Nagaland and it will be done free of cost there.

Nearly 95 per cent of India's over 700 millionvoters are covered by EPIC except in Assam andNagaland. However, the Commission will charge afee, which will be less than Rs 50, from the votersholding the present EPIC to convert them into hardplastic cards. The choice to opt for the new versionwill be that of the voter.

••••• RBI to start plastic money project on trial basis

The Reserve Bank of India (RBI) is likely to startthe introduction of plastic notes on a trial basis,according to K. C. Chakrabarty, Deputy Governor,RBI. It would first start with notes of Rs.10denomination and continue with other smalldenominations.

Plastic notes are said to withstand more wear-and-tear than their paper counterparts and have alonger life than the latter. The plastic notes will bemore difficult to fake and could therefore be a meansof countering counterfeiting.

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EDITORIALS••••• Food Security Bill is affordable

The additional allocation in grain and moneyterms will neither distort the grain market nor placea burden on the fisc.

Many recent commentators have portrayed theNational Food Security Bill (NFSB) as an "unbearableburden" on the exchequer. The facts, however, dono substantiate the claim.

The NFSB has been trashed from time to time inthe English dailies. For instance, Business Line(March 21, 2013) published an article titled "FoodSecurity Bill will torpedo Budget".

Another national daily claims that the Bill has a"fundamental flaw" that places "an unbearableburden" and "distorts agriculture" (Indian Express,March 19, 2013). Quite often, the claims are partlydue to a misconception that the government ismaking new financial and grain commitments underthe NFSB.

In fact, the NFSB does little more than turninginto legal entitlements pre-existing food securityschemes such as the Integrated Child DevelopmentServices (ICDS) Scheme, Mid-Day Meal (MDM)Scheme, Public Distribution System (PDS) andmaternity entitlements.

UNJUSTIFIED FEARS

Some commentators have said that it is preciselythe legal commitment that will lead to problems inthe future - for example, the fear of the emergenceof a government monopoly in the grain market. Thisfear is not borne out by the facts.

Under the PDS, ICDS and MDM, the governmentcurrently allocates about 58 million tonnes of grain.To meet this commitment, the government currentlyprocures about 30 per cent of grain. The NFSBcommits 62 million tonnes, i.e., an additional 4million tonnes.

The Budget of 2013-14 allocates Rs. 31,000 crorefor two children's food schemes - school meals andthe ICDS which reaches children under six. TheBudget allocation for the food subsidy in 2013-14 isRs 90,000 crore.

According to our estimates, the food subsidy willincrease from Rs 80,000 crore (in 2012-13) to Rs1,11,221 crore, under the NFSB.

Thus, the NFSB implies an increase of just overRs 30,000 crores in financial terms and 4 milliontonnes in real (grain) terms.

Can India afford this? Speaking at a paneldiscussion at IIT Delhi in February, DeputyChairperson of the Planning Commission, MontekSingh Ahluwalia, said "it would be dishonest" tosay that we cannot afford the Food Bill, and that thesubsidies that we need to target are those enjoyedby the middle classes (e.g., fuel).

Speaking at the same discussion, Amartya Senmade a pertinent point - that the reason why it ismore difficult to reduce subsidies enjoyed by themiddle classes (fuels such as LPG, petrol and diesel)is that the beneficiaries of those are more vocal thanthe rural poor or children under six who benefitfrom the food subsidies.

DOUBLE STANDARDS

This point is well illustrated by the eventsfollowing last year's Budget. The Budget 2012-13announced a 1 per cent excise duty on unbrandedjewellery and doubled custom duty on gold to 4 percent. Gold is the country's second biggest import,after crude oil. This burden on the current accountdeficit was an important reason for doubling thecustoms duty.

Following this, the All India Gems and JewelleryTrade Federation and others initiated a strike whichwent on for 21 days. They argued that the industry,including the "large" number of people it employs,and buyers of gold, would suffer. A massive mediacampaign was launched, following which theFinance Minister withdrew the excise duty.

According to the revenue foregone statementpresented along with the Budget 2013-14, therevenue foregone from the gold and diamondindustry for the previous financial year was Rs.65,000 crore.

Such tax breaks are often justified on the groundsof the employment potential of the gems andjewellery industry. According to Invest India, awebsite of the Ministry of Commerce and Industry,"The sector provides employment to around 1.8million people. In the next five years, the sector isexpected to create additional employment for around1.1 million people."


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According to the National Sample SurveyOrganisation, 2009-10, the size of the Indianworkforce is between 430-471 million persons. If thegems and jewellery industry employs 3 millionpeople as per the Ministry's target, this would be0.7 per cent of the workforce.

An industry that employs less than one per centof the Indian workforce is currently enjoying taxbenefits amounting to Rs 65,000 crore (nearly 20 percent of all revenue foregone). The Food Bill willbenefit 67 per cent of the population at an additionalcost of Rs 30,000 crore, yet it is said that it will"torpedo" the Budget.

NOT ENOUGHIf anything, the NFSB does not go far enough.

The NFSB tabled in Parliament in December 2011included special provisions for the destitute andother vulnerable groups (e.g., community kitchensand social security pensions).

These have been discarded in the version clearedby Cabinet on March 19, 2013. In many rural areas,the Block is already too far to go to complain, yetfor violations of rights under the NFSB, grievanceredressal only begins at the District level.

Viewed in this comparative perspective (forexample, it is approximately 1 per cent of the GDP),few can question the affordability or desirability ofthe NFSB. In absolute terms it is not a small amount.One might argue whether such expenditure is worthit, given the "fact" that the programmes in its ambit,for example, the PDS, are "dysfunctional" (IndianExpress, March 19, 2013).

However, recent data from the National SampleSurvey of 2004-05 and 2009-10 suggest that whilethe functioning of the PDS is far from perfect, wedo need to update our "facts". In joint research withJean Drèze, we show that the implicit subsidy fromthe PDS eliminates 18 per cent (14 per cent) of the"poverty gap" - or the difference between the povertyline level of income and the median income (ormonthly per capita consumption expenditure) of poorhouseholds - among poor rural (urban) households.

Again, there are marked inter-State contrasts -in Tamil Nadu the corresponding figure is 60 percent and in Chhattisgarh and Andhra Pradesh it isnearly 40 per cent.

The real question then is not whether India canafford to have a right to food but as the Food Ministersaid in a recent interview, "Can we afford not to?"

Source: Business Line

••••• Tensions in KoreaPERIODICALLY, the barely contained hostility

between North and South Korea breaks out in

renewed tension and threat. The Korean war of morethan 60 years ago has never been brought to a formalconclusion, so technically the two parts of thedivided Korean peninsula remain at war, withnothing more than an armistice agreement to restrainthem. Every now and then armed incidents takeplace in the seas between the two countries, or alongthe Demilitarized Zone (DMZ) which is their landfrontier, so a real risk of escalation and of moregeneral hostilities can never be put to rest. Whencircumstances have permitted, efforts have beenmade to increase contact and cooperation, especiallyin economic activities. Thus, after much negotiation,limited crossings of the DMZ were permitted, to thegreat satisfaction of aging citizens of both sides whowere thereby given an opportunity of renewingpractically forgotten family bonds, albeit briefly andunder watchful supervision. Such travails of dividedpopulations will not be unfamiliar in India andPakistan, but between these two countries a trickleof contact and communication has never been cutoff in a manner comparable to what has occurredbetween the two Koreas.

Since their parting of ways, North and SouthKorea have followed very different paths. Securelyentrenched within the Western alliance, the Southhas chosen the course of political and economicliberalism, and has made a remarkable transitionfrom a less developed country to one of the globaleconomic leaders. In contrast, the North hasconsolidated itself as a one-party, centrally directedstate whose autarkic economic management has heldit back and made it the back marker in a rapidlygrowing part of Asia. This was not always so, forKorea's major mineral reserves are in the North andthat is where the early industrial advance wasconcentrated, but that period of relative advantageis now hardly to be recalled.

Economically laggard, the North has soughtsecurity through building up its military muscle. Ithas a vast conventional army, one of the largestanywhere, well-equipped to defend its part of theKorean peninsula. In the setting of the Cold War itenjoyed active military support from the Eastern blocand though Russia has moved away, China remainsthe main bulwark of the North. China has neverbeen ready to see a powerful external powerestablished on its doorstep and prefers to give itssupport to a long-standing ally.

Notwithstanding the fierce legacy of the Koreanwar, the current situation would be of only limitedinternational concern were it not for the sustained,and ultimately successful, effort of North Korea todevelop nuclear weapons. This is certainly a majorachievement by a country otherwise struggling and


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dependent on neighbouring China for the food andfuel that it seems unable fully to provide for itself.On occasion, the North has tried to develop relationswith foreign countries, but only on its own terms,and not at the cost of what it would consider eventhe remotest threat to its security interest. Nuclearweapons give it a sense of safety in a hostileenvironment and stave off the fear of attack frombeyond its borders. These fears may be illusionary,for no other state is currently threatening the North,but they are nevertheless deeply felt and are at thecore of the defence doctrine.

To emphasise the seriousness of its militaryconcerns, North Korea has invested heavily indeveloping its rocketry, and recent tests of long-range rockets have projected to the world that NorthKorea is not helpless against foreign aggression butcan retaliate effectively even against the mightiestsuperpower. A parallel of sorts may be found inPakistan, which is a notable collaborator of the Northin advanced weaponry like rockets and gives priorityto defence requirements above all else. Notsurprisingly, ties between the North and Pakistango deep and Pakistan's notorious AQ Khan networkhas been identified as a key source of the NorthKorean nuclear programme.

The regional risks emanating from its militaryprogramme have been used more than once by theNorth to bear down on others and squeeze outconcessions from them. In earlier days when theNorth was advancing towards but yet to cross thenuclear threshold, a real sense of alarm was invokedby its nuclear programme, for the Asian East andNorth-East has several well-developed industrialisedcountries capable of taking the same path, and itwas feared that what happened in the North couldset in motion a whole chain of proliferation alongthe Pacific littoral. It did not come to that, of course,and the major powers were able to combine tomaintain nuclear restraint notwithstanding theactions of the North. Subsequent crises around Korea,despite occasional naval and other confrontations, didnot have comparably unsettling effects on regionalnuclear issues. The inexorable rearming of the Northand its steady advance towards nuclear status didnot keep Asia perpetually on tenterhooks and itbegan to seem that the situation was more or lesscontained ~ not put to rest, to be sure, but unlikelyto flare up without warning.

Until now. In the last few weeks, there has beena notable raising of political temperature and somethreatening gestures from the North have triggeredrenewed alarm. It is not clear why this should be so,and the secretive regime of the North has given fewclues. However, tests of long-range missiles with

claimed intercontinental reach and theannouncement that more tests are being plannedhave induced a flurry of diplomatic activity. TheUN Secretary-General, himself Korean though fromthe South, has asked the North to desist from actionsthat could become uncontrollable, and he has beenbacked by a chorus of similar admonitions frommajor countries across the world. Many have theconcern that there is a relatively new and untestedleader in Pyongyang who may feel compelled toshow his mettle and hence become unpredictable inhis actions.

The USA has reacted strongly and has beeninsistent that the situation must not be allowed todeteriorate, and that the North must be suitablycurbed. Secretary of State Kerry has beencrisscrossing the region to convey the message andto gain adherents for US policy. Most significantly,he appears to have obtained support from NorthKorea's historic patron, China. Even before Mr Kerryreached there, China had made a statement thatconveyed guarded disapproval for the unsettlingactions being threatened by the North. After hismeetings with Chinese leaders Mr Kerry was ableto indicate that the USA and China had taken alargely common approach to the situation. This willhelp defuse tension. It will also be a soberingdevelopment so far as the North is concerned, for itis a rare instance of China seeking to impose restrainton its actions.

Source: The Statesman

••••• Making space for the tiger a reality

Promoters of development projects in forestareas can be made to compensate by creating bufferzones around sanctuaries through minormodifications to the Forest Conservation Actguidelines

The contentious issue of notifying buffer areasaround tiger reserves came under sharp debate whenthe Supreme Court issued interim directions to stoptourism in core or Critical Tiger Habitats (CTHs)and notify buffer areas. However, after the NationalTiger Conservation Authority (NTCA) filedcomprehensive guidelines on tiger conservation andtourism on October 15, 2012, the Supreme Courtpermitted the reopening of tourism strictly inaccordance with the guidelines. Visitation is nowpermissible in existing tourism zones subject to amaximum of 20 per cent of core areas being used.But the important issue of creating viable buffersaround a core area lost focus even though the NTCAguidelines harp on its importance to sustain tigerpopulations.

In most tiger reserves, core areas comprisenotified sanctuaries and/or national parks, which


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are to be managed as areas free of incompatiblehuman activity. Reserved forests, deemed forests andother unencumbered government land with somevegetation immediately abutting the CTHs are to benotified as buffer areas, which can act as "shockabsorbers" for core areas.

Viable buffers

While notifying such contiguous forests as bufferareas may be relatively easy, the real challenge is increating viable buffers wherever private agriculturallands abut core areas. Merely notifying such areasas buffer or peripheral areas without any viablehabitat, as is being done now, may not only fail todeliver the imagined benefits for tiger conservationbut also lead to hostility and loss of support fromthe local community.

Yet, acquiring large extent of private landabutting tiger reserves, to insulate the entire corearea with a complete "wrap around" buffer that cansupport wildlife might be impractical. So is there away forward to resolve this important issue?

An innovative mechanism can be created withinthe current legal framework with some very minormodifications to the Forest Conservation Act, 1980Guidelines. This could greatly contribute to creatingadditional areas as viable forested buffers aroundtiger reserves.

Presently, most development project promotersseeking diversion of forest land for a non-forestrypurpose have to identify an equivalent area of non-forest land. This has to be transferred and mutatedin favour of the forest department for declaration asreserved forest/Protected Forest (PF). The projectmust also deposit funds for taking up compensatoryafforestation in such lands. Stage II clearance underthe Forest Act is to be granted only after complianceof this important condition. As far as possible, suchareas should be contiguous with reserved forestsfor effective management. This is mandated underChapter 3 of the Act's guidelines.

Legal loophole

Unfortunately, in most cases, this importantcondition is relaxed based on certification by theState that sufficient/appropriate non-forest land isnot available. In such cases a simpler condition ofcompensatory afforestation in degraded forest landtwice the area diverted is insisted upon. This legalloophole has meant the loss of an excellentopportunity to create viable buffer areas as Stategovernments routinely provide this exemption tomost projects.

To facilitate the creation of viable forestedbuffers, the Ministry of Environment and Forests

(MoEF) must first revise the current guidelinesappropriately to plug this loophole. A newmechanism must then be created whereby the TigerReserve Authority in each tiger reserve Stateidentifies private (non-forest) land immediatelyabutting a reserve, based on scientific and objectivecriteria, to be developed as ecologically viablebuffers.

Private enclosures within contiguous reserveforests can also be identified. This data must beshared with development project promoters toexplore the possibility of them privately acquiringthe lands to comply with the Forest Act guidelines.

There could be two possible scenarios underwhich this idea could be enabled:1. The owner(s) of such identified farm land may

be willing to sell the land at prevailing marketprices (which the project proponent /ownermutually agree upon as in any private landtransaction). The project promoter has to thentransfer and mutate the land in favour of theForest Department for notification as a reserveforest/PF, as mandated by existing guidelinesor even as a conservation reserve under Section36-A of the Wildlife (Protection) Act, 1972 underthe proposed new mechanism or;

2. The owner(s) may not be willing to sell but maybe agreeable - with suitable benefits - to developit as a private/community reserve based on anappropriate management plan. There areenabling provisions in the Wildlife Act, whichallow for any individual/group of individualsor community volunteering to conserve wildlifeand its habitat to approach the government fora notification. While the land will continue tobe owned by the individual/community, theland use will be agreed upon jointly with theForest Department based on a management plan.

Participatory planThis will enable appropriate development of the

private/community reserve or the land mutated infavour of the Forest Department, by creating suitablevegetation with mixed plantation/bamboo/grassypatches/salt licks, etc to attract wildlife. The fundingfor this can come from money deposited by theproject promoter for compensatory afforestation. Theindividual or community could then be encouragedand assisted to develop a participatory community-based tourism plan with benefit sharing as envisagedin the new NTCA guidelines. The tourism pressureon core areas can thus be reduced progressively.

All that is required are some minor modificationsin the Forest Act Guidelines to include the terms"Core or Critical Tiger Habitat," "Protected Area" and


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"Community Reserve" to enable identification andtransfer of lands adjacent to these areas to the ForestDepartment by the project promoter. But for thisidea to work, the MoEF must issue a properclarification to States that, henceforth, transfer ofnon-forest land will not ordinarily be condoned.

This innovative mechanism, which is within theframework of existing laws, could open uptremendous opportunities for increasing viablebuffers and creating additional habitats for wildlifewhere it is most needed - around tiger reserves/protected areas. It will not only help in achievingthe true objective of compensatory afforestation, butalso deliver benefits to local communities from theincreasing economic opportunities of non-consumptive tourism outside core areas.

Source: The Hindu

••••• Addressing Dhaka

At a time when Bangladesh is in turmoil, Delhimust reach out, do the right thing

In a remarkable illustration of how easily acommonsensical policy position is allowed to beupturned by a narrow reading of regional politics,consider the timetable of the BJP's utterances onBangladesh. On Thursday, in the course of an IdeaExchange at The Indian Express, BJP presidentRajnath Singh endorsed the need to resolve theboundary dispute with Bangladesh. Within hours,however, a meeting of party leaders withrepresentatives of its Bengal and Assam units rolledback the spirit of accommodation in Singh'scomments. They did not exactly oppose moves tooperationalise a bilateral agreement to exchange 162tiny enclaves of one country's territory in the other's.But caution was counselled against any urgency inresolving the matter once and for all, given pocketsof potential discontent in the two states againstcooperation with Bangladesh.

Just a glance at what is at stake in the lives of50,000 or so residents of these enclaves calls outthe irresponsibility in any hesitation to act uponthe 2011 agreement with Bangladesh for the long-pending territorial exchange - 111 enclaves are tobe transferred from India to Bangladesh and 51 theother way. Having the residents live in territorycontiguous with the country of their citizenship isvital to extract them from poverty and provide themrightful access to social and economic infrastructure.In fact, some of these enclaves are not even simpleenclaves. They are what are called counter-enclaves- that is, a country's enclave located within theother's enclave in the former's territory. If the mindboggles to imagine what callousness has allowedthis state of affairs to persist, it must also turn

hollow objections to speedy resolution of the issue.It is not beyond comprehension, therefore, that inBangladesh there is a widespread feeling thatIndia's attitude to rationalising the border is ameasure of its neighbourly goodwill in improvingbilateral relations.

Any policy position by the BJP that is based onconsiderations other than the national interest wouldamount to high irresponsibility. Bangladesh's politicsis currently in a crucial, possibly game-changingphase, with the faultline deepening between thosewho embrace secularism and the rule of law andthose who are ambivalent. India must do what itcan, and magnanimously so, to reduce sources ofxenophobia there. In the case of the enclaves, itwould also be the humane thing to do.

Source: Indian Express

••••• Cheaper oil, coal, gold can reignite foreigninvestment on right signals from govt.

Global commodity prices are down and are likelyto decline at least for the next two years, even asworld growth and trade improve. This givesgovernments around the world more policy spacefor manoeuvre. The real question is what to do withthat extra elbowroom.

The softening of commodity prices offers reliefon three counts. One, inflation: food and energyprices have been the main culprits in the persistentrise in wholesale prices. Two, the fiscal deficit: whenfertiliser and energy subsidies fall, as their globalprices come down, the government's borrowingrequirement would fall. A lower fiscal deficit bringsdown excess demand in the system and narrow thesavings-investment gap, lowering inflation and thecurrent account deficit (CAD).

Three, lower commodity prices bring down CADdirectly as well. Oil, gold, coal and edible oil togetheraccount for about half of country's total imports.When their prices come down, so would India'simport bill, and that would narrow the CAD. TheWorld Economic Outlook expects commodity pricesto fall 2% in 2013 and even more in 2014, even asworld growth picks up to 3.3% in 2013 and 4% in2014, accompanied by a pick up in export growth.

A lower CAD would ease the downwardpressure on the rupee. Improved macroeconomicprospects, along with consistent progress oncontaining the fiscal deficit, would avert any rashdowngrade by the rating agencies, whoseimprimatur still matters for a variety of global funds.Greater confidence in economic revival wouldreverse the flight to safety performed by global


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investment funds, and stock and bond markets inemerging markets, including India, would receivegreater inflow of foreign capital.

The Prince & the Princess

If all this makes you begin to look around for theprince and the princess needed to complete whatlooks like a fairy-tale, please note that absence oftragedy does not quite mean happily-ever-after. Forthat, we need a fairy godmother who acts withdispatch, sense and a whole lot of imagination. Andonly the government can step into those dainty shoes.

India is poised for a quantum leap in its growthrates thanks to four ongoing changes. One, hugeadvances in power generation capacity (54,000 MWadded over 2007-12) and rural electrification (powerlines have been laid to 5,60,000 villages); two,broadband connectivity reaching 2,50,000 rurallocalities; three, the political economy changing withvoters putting a premium on growth andgovernance; and four, the wherewithals of electronicbanking accessible by all are being put in place,thanks to a combination of telecom, banking andthe unique identity project. The power story iscompelling. If power flows through those lines thatnow connect 5.6 lakh villages, the effect on ruralprosperity would be, well, electrifying. For the firsttime, climate-controlled storage and agroprocessingindustry would be possible in rural areas.

This would raise farm yields and farm incomes,diversify the rural production structure, reduce foodinflation across the land and generate new demandfor consumer goods.

But for this virtuous cycle to begin, the nearly50,000 MW of generation capacity lying idle for wantof fuel must begin to produce power. For that, theUPA government must have the courage to scrapan outdated, idiotic, anti-people state monopoly oncoal that makes India import $20 billion worth ofcoal in spite of having the fifth-largest reserves ofcoal in the world. Convert Coal India's subsidiariesinto independent companies that compete with oneanother, let in new private players and watch thefun. The Rajya Sabha already has for considerationa Bill introduced during the NDA years to allowmerchant mining in coal.

Grab this Opportunity

The London interbank offered rate is down to0.5%. Blue-chip companies can borrow moneycheaper than most European governments can. Thisshould be leveraged to finance infrastructure, whichis estimated to require $1 trillion over the next fiveyears. Let suppliers of mining equipment formspecial purpose vehicles with Indian miners, let

foreign rolling stock and signalling equipment makersform joint ventures with Indian Railways to add toand modernise rail capacity, offer annuities from theCentre's budget for building new ports and roads.

To Realise Dream, Wake Up

Let the ministry of environment do a U-turn fromobstruction and formulate a plan to utilise a chunkof the promised climate-change funds fromdeveloped countries to upgrade thermal efficienciesat the country's power plants from the lowly 33% atpresent to whatever is technologically possible, sothat the developed world's power equipment-makerswould find a new market.

Arrange for market-based risk mitigation,ultimately underwritten by government guarantee.Sure, contingent liabilities would go up, but hugeinvestments would materialise, riding on cheapcredit and developed-country companies' desperateneed for new markets.

Of course, fairy godmother has to snap out ofher slumber.

Source: Economic Times

••••• Behind the current account gap

Rising CAD levels are linked to sustainedinflation, which eroded financial savings by morethan the fall in investment.

India's current account deficit (CAD) rose to arecord 6.7 percent of GDP in the last quarter of 2012.That clearly is unsustainable. But an effective curemust address the roots of the problem, for which acorrect diagnosis is essential.

Let us look at the various possible explanationsfor such a rise in the CAD.

EXCESS DEMAND

Excess demand cannot be responsible for thehigher CAD, when GDP growth has fallen to sub-six per cent levels and industry is actually facedwith a problem of excess capacity.

At the same time, there is the issue of highfiscal deficit (FD), which could be raising demand.But then, the Government, pushed by fears of ratingdowngrades, has also made a serious effort toreduce the FD.

In the last quarter of 2012, growth in governmentconsumption fell to 1.9 per cent, from 8 per cent inthe preceding quarter, while that for community,social and personal services as a whole fell from 7.5to 5.4 per cent.

If the fall in the FD reduced growth but not theCAD, it implies government expenditure createsdemand largely for non-tradable goods, not for


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imported goods. Excess demand may be a problemonly in agriculture, where supply rigidities preventexpansion to keep up with rising demand for food.There is also speculation-based argument, whichsays that if interest rates do not adequatelycompensate for or are even set below inflation rates,the resulting low/negative real interest ratesencourage borrowings and imports. It, then, leadsto a higher CAD.

But that argument is not credible either, giventhat credit growth has been low in the recent period.In any case, India's CAD has never been high inhigh-growth periods, when one would expect higherdomestic demand raising net imports.

If domestic absorption or aggregate demand isnot responsible for the CAD, the problem couldperhaps, then, lie in imports being cheap and exportsnot profitable enough. In that case, shouldn't adepreciation in the rupee help?

EXCHANGE RATES

This argument, again, has limits. The CAD wasonly around one per cent of GDP during India'shigh growth period in the mid-2000s, when the rupeewas actually appreciating. After the steepdepreciation following the 2008 global financialcrisis, the CAD rose to about 3 percent of GDP andstayed there until 2011.

Then, as the rupee fell against the dollar, fromRs 44 in July 2011 to Rs 54-55 levels, the CADwent up to over 3 percent. Despite substantial realdepreciation, export growth slowed more thanimport growth. To that extent, the cheaper rupeeonly worsened the CAD, implying that import andexport demand are largely inelastic to exchangerate movements.

CAPITAL FLOWS

Another explanation points to capital flows,wherein it is said that higher capital flows lead tohigher CADs, since the balance of payments mustadd up to zero. But this argument falls into theclassic Immaculate Transfer doctrine trap. True, thecapital and the current account must equal thechange in reserves, but that does not mean one isdirectly causing the other. CAD outcomes are theresult of various other macroeconomic adjustments,including in foreign exchange reserves, output,exchange and interest rates. But whatever theseadjustments were, capital inflows definitely did notcause the current widening of the CAD. On thecontrary, just when the CAD widened in 2011, therewere capital outflows that made it difficult tofinance the CAD.

EXTERNAL SHOCKS

A more promising explanation for rising CADlevels could be linked to supply shocks that havesustained high inflation over 2007-13, alongsidelower growth. These, by impacting real incomes andgenerating low real returns, reduced financialsavings in the economy.

The multiple cost shocks began with thespiralling of global food and oil prices in 2008. Theirslow release through the system, given dysfunctionaladministered price regimes, kept inflation high.Capital outflows-driven rupee depreciationsustained these shocks, even when internationalcommodity prices softened.

The CAD, by definition, equals domesticinvestment minus savings. While investments fallduring slowdowns, if savings fall even more, theCAD widens. Savings are the sum of financialsavings that largely fund investments involvinggoods that are tradable, as opposed to physicalsavings that are invested more in non-traded goods,such as in real estate. So a fall in financial savingswould have a greater impact on the CAD.

The estimates of physical savings in thehousehold sector are identical to those of investmentin the unorganised sector. The latter is measured asa residual, after deducting the respective shares ofthe corporate sector and of the Government. Itfollows, then, that if the rest of investment exceedsfinancial savings, it will have to be financed byforeign savings that is, by running a CAD.

In 2011-12, the CAD rose to 4.2 per cent of GDP,from 2.7 per cent the previous year - i.e. by 1.5percentage points. Investment fell from 36.8 to 35per cent, or by 1.8 percentage points, while savingsfell more, from 34 to 30.8 per cent, or by 3.2percentage points. The widening of the CAD has toequal the excess of the fall in savings over the fallin investment - which is what it works out here.

Within savings itself, the largest fall was in thehousehold financial savings component, by 2.4percentage points. This, together with a 0.7percentage points fall in the corporate savings-GDPratio, almost covers the rise in CAD and fall ininvestment. The increase in household physicalsavings by 1.2 percentage points, in fact, almost madeup for the fall in public sector savings of 1.3percentage points - both of which largely impactnon-traded goods.

These financial aspects were reflected on thetrade side. Inelastic demand for oil, in the absenceof local price pass-through, and for gold, given the


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absence of other inflation hedges, widened theCAD. If imports of oil and gold are subtracted fromthe trade deficit, the country actually recorded atrade surplus.

POLICY ACTION

What all this highlights is the inadequacies ofthe policy of freer import competition withoutbuilding export capacity, leading to import growthexceeding that of exports. An example of this isIndia's per container trade costs, which are morethan twice the East Asia average. The intensificationof the European crisis lowered export demand, justas domestic supply bottlenecks raised coal imports.It

follows, the real story is sectoral. Aggregate policyinstruments such as interest and exchange rates areconstrained by their opposite effects on savings andinvestment in the case of the first, and exportdemand and import costs in respect of the second.The correct policy response requires concertedsupply-side action to reduce costs, along with adismantling of the administered pricing regime.

Lower inflation and a better menu of savingsinstruments can revive financial savings. Betterexport capacity must be matched by a diversificationof export destinations.

Source: Business Line

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weekly 15 to 21 april 2013

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