27th Aug-2nd Sept, 2012

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27TH AUGUST TO 2ND SEPTEMBER 2012

WEEKLY CURRENT

AFFAIRS BULLETIN

Visit:ias100.in

Call: 09582948810, 09953007628

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Week ly Cur r en t A f fa i r s 27th Augu st to 3 rd Sep tember , 2012 [3]

Stringent Mobile Radiation Standards in-troduced

From 1st September 2012 India has been inductedin the list the selected few countries in the world tohave stringent EMF( Electromagnetic Frequency)Radiation Standards, established in the interest ofpublic health, for mobile towers and mobile handsets.Indian standards would now be 10 times morestringent than more than 90% countries in the world.

The following are the highlights of the Standards:

Mobile Towers (EMF Radiation Norms)

a) EMF (Electromagnetic Frequency) exposure limit(Base Station Emissions) has been lowered to 1/10th of the existing ICNIRP exposure level.

b) Telecom Enforcement Resource & Monitoring(TERM) Cells have been entrusted with the jobof conducting audit on the self certificationfurnished by the Service Providers. TERM Cellwill carry out test audit of 10% of the BTS site onrandom basis and on all cases where there is apublic complaint.

c) Telecom Engineering Centre (TEC) has revisedthe Test Procedure for measurement of EMF forverification of EMF compliance for BTS towersin accordance with new standards.

d) For non-compliance of EMF standards, a penaltyof Rs. 5 lakhs is liable to be levied per BTS perService Provider.

Mobile Handsets

a) All the new design of mobile handsets shallcomply with the Specific Absorption Rate (SAR)values of 1.6 W/kg averaged over 1 gram ofhuman tissue.

b) The mobile handsets with existing designs whichare compliant with 2.0 W/kg averaged over 10gram of human tissue, will continue to co-existup to 31st August 2013. From 1st Sept. 2013, onlythe mobile handsets with revised SAR value of1.6 W/kg would be permitted to be manufacturedor imported in India.

c) Mobile hand set manufactured and sold in Indiaor imported from other countries shall be checkedon random basis for compliance of SAR limit after

NATIONAL

TEC SAR Laboratory is set up by end of 2012.Test results from international accredited labs will

be acceptable in the interim period.

d) The manufacturers in India will provide selfdeclaration of SAR value of the handset.

Draft on National Physical FitnessProgramme for School Children unveiled

Union Minister of State (Independent Charge)Youth Affairs & Sports Shri Ajay Maken has unveiledthe Exposure Draft on National Physical FitnessProgramme (NPFP), for school children.

Recognizing Physical Fitness as the underlyingparadigm core for social as well as the economicwell being of the nation, the programme aims atensuring Physical Fitness amongst all school children

by putting into place a system that would assessand ascertain a child's physical fitness from class Vonwards. It would entail the formulation of ascientific programme and criteria to first motivateand encourage school going children of both sexes

to be physically fit and concurrently evaluate theirfitness. It has to be realized that the scheme needs tobe motivational rather than coercive and to obtainthis, the achievement of fitness by a child as to berewarded in a manner similar to reward for academicachievement.

Six basic components of physical fitness have beenidentified:

a. Cardio respiratory endurance,

b. Muscular strength,

c. Muscular endurance,

d. Flexibility,

e. Explosive Strength, and

f. Body composition (percentage of body fat).

The fitness tests will be executed at least two timesin a year i.e., in the month of June and January ofacademic session, which will provide an idea regardingpresent status as well as improvement of physicalfitness during academic session of the student.

The National Physical Fitness Programmeenvisages that every school going child studying inclass V and above, should be evaluated on the abovementioned six components of physical fitness by

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[ 4 ] Week ly Cu r r en t A f fa i r s 27th Au gus t to 3 rd Sep tember , 2012

being made to participate and compete in theenumerated eight measurable fitness tests. Thestudent's performance is accordingly graded and fedinto the child's 'Assessment Card' and the school's'Fitness Assessment Subsequent collection & collationfrom across the schools shall be done at the level ofthe District and grades allotted to every child on the

basis of percentile system for marking & grading.

The scores/grades achieved by every child shallbe enumerated in print on standardised 'AssessmentCards and Fitness Assessment Forms' prepared byLNUPE, Gwalior. After collection and collation ofdata at the district level, the same shall be linked tothe Central Server administered by the LNUPEthrough the Core Application Software (CAS)supplemented by System Integrators.

Setting up of a Knowledge Resource Centre is ofparamount importance, as its role will be very critical

in working out and developing age specific, genderspecific and region specific physical fitnessparameters, collection and analysis of data withregard to physical fitness standards and re-workingof the physical fitness norms, if necessary on the

basis of data collated during implementation andthe initial few years.

The top 10 percentage of gender wise performersin each district in the battery of tests indicated aboveshall be given an additional 3% to the percentage

obtained by him/her in academic disciplines.Subsequently, performers between top 10 to 20percentage will get additional 2.5 %, performers

between 20 to 30 percentage will get 2%, between 30to 40 percentage will get 1.5% and between 40 to 50percentage will get additional 1% weightage in theirmarking which may be converted into grades as perprevalent norms.

In India the concept of nation-wideimplementation of Physical Fitness programme wasinitiated during 1959 and the then Ministry of

Education and Social Welfare, Govt. of India haddeveloped a test battery "National Physical EfficiencyDrive" (NPED) for inculcating awareness of Physicalfitness among the people. The level of physicalefficiency was then assessed and graded by awarding"Star system" (i.e. 3 stars, 2 stars etc.) However, theprogramme was discontinued as it was based oninappropriate and inaccurate assessment of physicalfitness norms.

Cabinet approved proposal for banning

child labour below 14The Union Cabinet has approved a proposal for

amending the Child Labour (Prohibition and

Regulation) Act, 1986, to ban employment of childrenaged up to 14 in any form of industry.

It will be an offence to employ such children notonly in factories or industries but also in home or onfarms, if their labour is meant to serve anycommercial interest.

Quoting the National Sample Survey

Organisation's figures, the amendment would benefit46 lakh children who have been working in variousindustries now, and they can concentrate oneducation.

The Cabinet also approved another amendmentto define those children aged 14-18 as "adolescents"and prohibit their employment in mines, explosiveindustries, chemical and paint industries and otherhazardous establishments.The government's decisionis in line with the convention of the InternationalLabourOrganisation (ILO), which prohibits any formof child labour until the age of 14.

Since the Right of Children to Free andCompulsory Education Act or RTE now stipulatescompulsory and free education of children up to theage of 14, the upper age limit in the Child LabourAct has been kept at 14.The RTE, which makeseducation the fundamental right of a child, waspassed by Parliament on August 4, 2009. It sets forththe modalities of free and compulsory education forchildren aged 6-14. The Act came into effect on April

1, 2010. Prohibition of Employment as Manual

Scavengers and their Rehabilitation Bill,2012

The Prohibition of Employment as ManualScavengers and their Rehabilitation Bill, 2012, to betabled in Parliament in the ongoing Parliamentsession, envisages a hefty penalty for employingpeople for this inhuman practice and in thehazardous job of cleaning septic tanks and sewers.

The financial implication for implementing the lawis expected to be about Rs. 4,825 crore.

According to the bill every insanitary latrine willhave to be demolished or converted into sanitarytoilets within nine months of the notification of thelaw. It prohibits any agency or individual fromemploying manual scavengers and those already inthis job - directly or indirectly - will have to bedischarged irrespective of any contract, agreement,custom or traditional commitments.

An insanitary latrine is defined as a toilet whereexcreta is cleaned or manually handled beforecomplete decomposition either in situ or in an opendrain or a pit. Employing or hiring people for

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cleaning septic tanks and sewers within one year ofthe notification of the Act can attract imprisonment upto two years and a fine of Rs. 2 lakh for the firstviolation. Subsequent instances will attractimprisonment up to five years and a fine of Rs. 5 lakh.

No civil court will have jurisdiction in respect ofany matter to which any provision of this law applies,

and no injunction shall be granted by any civil courtin respect of anything, which is done or intended to

be done by or under the law.

As per the draft of the Bill, the governments orlocal agencies will help in conversion of insanitarylatrines within nine months of the notification of theAct. But non-receipt of assistance will be no reasonfor continuation of insanitary toilets, which the localauthorities will demolish and the occupier will haveto bear the cost.

Any flouting of this provision will attractimprisonment up to one year and a fine of Rs. 50,000for the first offence and subsequent violations,imprisonment of up to two years and Rs. 1-lakh fine.The offences will be cognisable and non-bailable andtried by an Executive Magistrate.

The National Commission for SafaiKarmachariswill monitor the implementation of the law, whiledistrict magistrates will be responsible forimplementing it and ensuring that there are noinsanitary latrines in their jurisdiction. Monitoring

will be done by vigilance committees at the districtand subdivisional levels, and state panels will reportto the central monitoring committee periodically.

Once identified as a manual scavenger, theindividual will be given a photo identity card withdetails of dependent family members; there will bean initial one-time financial assistance andscholarships for his/her children under governmentschemes; the government will provide him/her aresidential plot and financial assistance to constructa house or provide a built house under the scheme

run by the Centre or the State government or localauthorities. Sanitary workers or one family memberwill be imparted training in skill development andwill also be eligible for subsidy and concessional

loans to start their own alternative occupation on asustainable basis.

Make universal healthcare a reality:

President

President Pranab Mukherjee called upon allstakeholders in the health sector to make universal

healthcare a reality.According to him, India's medical healthcare

system must be developed to cater to all sections, inrural as well as in urban areas, merely constructinghospitals was not enough. Human resource wasrequired to make them functional and effective. Therewas a need to augment medical colleges, nursinginstitutions, and training schools for paramedicalprofessions.

On the issue of affordability, technology-based

initiatives including telemedicine could be employedto broaden the reach of healthcare. Ways toencourage cooperation between the public andprivate sectors in achieving health goals also must

be identified and emphasised the need to promotepreventive healthcare.

According to it, the key factors that will decidethe success of the UHC programme would be focuson health outcomes by reducing disease burdenthrough a robust and functioning primary care

system, quality in-patient care and facilitatingeffective utilisation of the available infrastructure.

President also favoured an integrated approachto ensure focus on allied determinants that have acritical impact on health, mainly nutrition, sanitationand wellness.

Universal health cover for India suggests thatincluding out of pocket expenditure, the estimatedtotal spending on health would be between 5.5 percent and 6 per cent of GDP. China, which has

embarked on a journey toward universal health care(UHC) and covered 84 per cent of its population,spends 5.1 per cent of the GDP on health, of which2.7 per cent was spent by the government.

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INTERNATIONAL

China's PoK rail link plan gains traction

China is planning to build a railway line fromwestern China through Pakistan-occupied Kashmir(PoK).

The planned railway line runs from Kashgar, theold Silk Road town in China's far-western Xinjiangregion, through the Khunjerab pass in PoK and onto Havelian, where it will join Pakistan's railwaynetwork.

However, the pre-feasibility work on theproposed railway line has now been completed.China and Pakistan claim that this new link willenhance the economic ties between China andPakistan as well as create a new link between Eastand South Asia.

It is also being reported that China is set to takeover management of the slow-moving port projectat Gwadar, after the Singapore Port Authority pulledout of a contract. In such a situation, the railwaylink from Kashgar can run up to Gwadar if it is

connected to the domestic rail network, providingan alternative route to Chinese imports from WestAsia.

India has voiced its concerns to China about therailway line stressing that India views the region asan integral part of Jammu and Kashmir. India hasalso pointed to China's own long-standingopposition to the involvement of third-partycountries in projects in disputed areas. Most recently,China voiced its objections to the presence of ONGC

Videsh in exploration projects with Vietnam in theSouth China Sea.

But Chinese officials have indicated that theirinvolvement in PoK projects was "without prejudice"to any disputes between India and Pakistan.

China is also widening and repaving theKarakoram Highway, which runs from Kashgarthrough PoK to Pakistan, and is working to make itan all-weather road - the highway is closed foraround six months every year during the winter,and has been damaged by recent flooding. Whilework on the Chinese side has been completed, Chinais assisting Pakistan in a $500-million effort to repaveand widen the highway in Pakistan and in PoK.

China views the road and rail links as crucialelements to taking forward plans to build a SpecialEconomic Zone in Kashgar - the first such zone inwestern China, modelled on the success of Shenzhenin the east. The plans will boost China's economicpresence westward and also bring development tosouthern Xinjiang, which has lagged behind the restof the region and been the source of ethnic unrestand terrorism.

IAEA sets up special Iran Task Force

The U.N. nuclear agency has created a specialIran Task Force of nuclear weapons experts,intelligence analysts and other specialists focused onprobing allegations that Tehran has been or is secretlyworking on developing atomic arms.

The brief announcement by the InternationalAtomic Energy Agency appeared to be an attemptto focus and streamline the IAEA's handling of thesensitive Iran file by concentrating experts and otherresources in one unit.

The Vienna-based UN agency, which regularlyinspects Iran's nuclear sites, has voiced growingconcern over the last year of possible militarydimensions to the country's nuclear program. Tehransays its nuclear work is entirely peaceful.

A new report to be circulated to IAEA memberstates is expected to reveal that Iran has installed350 new centrifuges in its underground Fordowfacility since May. Iran is enriching uranium to afissile concentration of 20 percent -- easily upgradedto the 90 percent needed for bombs -- at Fordow,

buried deep inside a mountain near the holy Shi'itecity of Qom to protect it from foreign attack.

The Vienna diplomats also expect the report tochastise Iran over sanitizing its military base atParchin. The ongoing sanitization efforts, meant toeliminate evidence of possible nuclear work at thesite, may make inspections "pointless," according tothe diplomats.

Chinese tested 14,000-km range missile

The Chinese military had successfully tested thenew 14,000 km-range Dongfeng-41 IntercontinentalBallistic Missile (ICBM), the China's most advancedmissile.

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The development of the missile, representing thethird generation of China's ICBMs, is a significant

boost to the country's deterrence capabilities. It cancarry between three and 10 nuclear warheads, andis regarded as the first Chinese missile that canpenetrate American missile defence systems with itsmobility making it hard to detect.

The DF-41 has been seen as reflecting China'srapidly developing ICBM programme, which nowhas a range that can reach U.S. cities.

NAM Summit 2012

The 16th Summit of the Non-Aligned Movementwas held from 26 to 31 August 2012 in Tehran, Iran.The summit was attended by leaders of 120 countries.

The theme of the summit was Lasting Peacethrough Joint Global Governance.

The major political questions on the Agenda ofTehran 2012 are international concern over the'Nuclear Programme' being pursued by the IslamicRepublic of Iran and the escalating internal conflictin the Syrian Arab Republic.

The Outcome Document focuses on three majorareas i.e. global governance issues, including thereview of the international situation; regional and

sub-regional issues in the Middle East, Africa, LatinAmerica and the Caribbean; and development, socialand human rights issues.

Member States of the NAM considered currentinternational developments and various issuesrelated to the Movement such as Israel's recentprevention of the NAM Committee on Palestine to

meet in Ramallah; the situation in Syria; the reformof the United Nations, including the Security Counciland the General Assembly.

Common challenges facing all NAM membersincluding the financial crises, sustainable economicdevelopment, peace and security, human rights,democracy and rule of law, climate change, andmeeting the Millennium Development Goals (MDGs)were among the issues also deliberated during thesummit.

The final communiqu expressed support forIran's nuclear energy program, rejected the UnitedStates' unilateral sanctions against the IslamicRepublic, and called for greater efforts to supportthe Palestinian cause. The need to combatIslamophobia and racism throughout the world aswell as global nuclear disarmament were some ofthe other key issues mentioned in the document.

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Shome panel Report

The expert committee on GAAR (the GeneralAnti-Avoidance Rules), headed by ParthasarathiShome to address the concerns of foreign anddomestic investors, has recently submitted its draftreport.

The panel has advocated postponement of thecontroversial tax provision by three years till 2016-17 along with abolition of capital gains tax on transferof securities.

Some recommendations:

a) Panel suggested that GAAR should be madeapplicable only if the monetary threshold of tax

benefit is Rs.3 crore and more.

b) There should be postponement of thecontroversial tax provision by three years till2016-17. The committee has suggested that theimplementation of GAAR may be deferred bythree years on administrative grounds. GAAR isan extremely advanced instrument of tax

administration - one of deterrence, rather thanfor revenue generation - for which intensivetraining of tax officers, who would specialise inthe finer aspects of international taxation, isneeded. Hence GAAR should be deferred forthree years. But the year, 2016-17, should beannounced now. In effect, therefore, GAARwould apply from Assessment Year 2017-18. Pre-announcement is a common practiceinternationally, in today's global environment offreely flowing capital.

c) The capital gains tax on transfer of securitiesneeds to be abolished.

d) The provisions of GAAR should not be invokedto "examine the genuineness of the residency ofan entity set up in Mauritius," the governmentshould retain the provisions of the CBDT circularissued in the Year 2000 on acceptance of TaxResidence Certificate (TRC) issued by Mauritius.

e) The government may consider increasing the rateof Securities Transaction Tax (STT)

appropriately."

f) The Approving Panel (AP) for purposes ofinvoking GAAR provisions should consist of five

ECONOMY

members, including Chairman, who should be aretired judge of the High Court. Besides, twomembers should be from outside government andpersons of eminence drawn from the fields ofaccountancy, economics or business, withknowledge of matters of income- tax, and twomembers should be chief commissioners ofincome-tax or one Chief Commissioner and oneCommissioner.

g) It also suggested that GAAR can be invoked onlywith the approval of the Commissioner.

Ministry of Finance Notifies Advance PriceAgreement (APA) Scheme

The Ministry of Finance has notified an "AdvancePricing Agreement Scheme".

An APA is an agreement between the CentralBoard of Direct Taxes and any person, whichdetermines, in advance, the arm's length price orspecifies the manner of the determination of arm'slength price (or both), in relation to an international

transaction. Hence, once APA has been entered intowith respect to an international transaction, the arm'slength price with respect to that internationaltransaction, for the period specified in the APA, will

be determined only in accordance with the APA.The APA process is voluntary and will supplementappeal and other Double Taxation AvoidanceAgreement (DTAA) mechanism for resolving transferpricing dispute. The term of APA can be a maximumof five years.

The APA scheme notifies three types of APA:

unilateral, bilateral and multilateral. The choice ison the applicant to choose a particular type of APAat the time of making the application. Unilateral APAis an agreement between the Board and the applicantand this process does not involve any agreementwith the treaty partner. In bilateral and multilateralAPA request, the applicant is required to make anapplication with the Competent Authority of Indiaas well as the Competent Authority of the othercountry.

The APA scheme has many advantages. It willprovide tax certainty with regard to determinationof arm's length price of the international transactionwith respect to which the APA has been entered

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into, reduce the risk of potential double taxationthrough bilateral or multilateral APA, reducecompliance cost by eliminating the risk of transferpricing audit and resolving long drawn and timeconsuming litigation and other dispute resolutionprocess and alleviate the burden of record keepingas the taxpayer knows in advance the requireddocumentation to be maintained to substantiate theagreed terms and conditions of the agreement.

accounts one annual statement would be sent inelectronic or physical form as opted for by the BO.Theannual maintenance charges structure will be on aslab basis.

Air India to stop PLI

The Ministry of Civil Aviation notified that the

provision of PLI would be done away with fromJuly, in accordance with the recommendations of theJustice Dharmadhikari Committee report.

According to the report, while a part of the PLIwill be merged with the salary, certain componentswill be given as profit or productivity related pay(PRP) only after the airline turns profitable. Withthis, it is feared that while pilots and engineers willlose up to 70 per cent and 40 per cent of their monthlyincome, respectively, the other grade employees will

bear some impact.

The PLI was introduced in 1996 to preventpoaching of pilots and engineers. The managementand the associations had entered into memorandumof settlements (MoS) for PLI payment and was alsoratified by a court.

CBDT sets up technical panel to firm uplegal views on major cases

The Central Board of Direct Taxes (CBDT) hasdecided to set up a committee comprising senior

officials of the Finance Ministry and the Income-TaxDepartment to look into the legal intricacies involvedin some of the contentious and "controversial" casesof the likes of the Vodafone dispute that the taxmenare confronted with.

The objective of setting up a Central TechnicalCommittee (CTC), according to an official note, is tousher in clarity on contentious legal issues and,thereby, reduce litigation through adoption of aconsistent approach on similar matters of taxation.

The CTC, as per the CBDT decision, is to beheaded by a Joint Secretary-level official, and itsmembers will consist of senior I-T officials. ARegional Technical Committee (RTC), comprisinglocal tax officials, will act as the sub-office of theCTC.

The CTC will look into cases involving largerevenue implications or strategic legal ramificationsand analyse divergent views from all units of the I-T Department such as investigation, assessment andpricing before a legal reply is filed in the high courts

or the Supreme Court.

Arm's Length Price is the price at which twounrelated and non-desperate parties would agreeto a transaction. This is most often an issue in thecase of companies with international operationswhose international subsidiaries trade with eachother. For such companies, there is often anincentive to reduce overall tax burden bymanipulation of inter-company prices. Taxauthorities want to insure that the inter-company

price is equivalent to an arm's length price, toprevent the loss of tax revenue.

No-frills demat account for small investorsproposed

The Securities and Exchange Board of India (SEBI)proposed that all depository participants (DPs)would make available a Basic Services DematAccount (BSDA) with limited services and reducedcosts for retail individual investors if the value of

securities held in the demat account does not exceedRs.2 lakh at any point of time.

An individual can have only one BSDA in his/her name across all depositories. The annualmaintenance charges (AMC) structure for BSDAwould be on a slab basis. If the value of holding isup to Rs.50,000, there will be nil AMC and forRs.50,001-200,000, the AMC will be up to Rs.100.

The value of holding would be determined bythe DPs on the basis of the daily closing price or

NAV of the securities or units of mutual funds. Ifthe value of holding in such BSDA exceeds theprescribed criteria on any date, the DPs may levycharges as applicable to regular accounts (non-BSDA)from that date onwards. Further, SEBI said thattransaction statements would be sent to the BO(beneficiary owner) at the end of each quarter. Ifthere are no transactions in any quarter, notransaction statement may be sent for that quarter.

One annual physical statement of holding wouldbe sent to the BO in respect of accounts with no

transaction and nil balance and for remaining

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[ 1 0 ] Week ly Cu r r en t A f fa i r s 27th Au gus t to 3 rd Sep tember , 2012

INDIA AND THE WORLD

High Level Meeting Between Indian CoastGuard and Sri Lanka Coast Guard

A high level delegation led by Rear AdmiralAARA Dias, the Director General Sri Lanka CoastGuard (SLCG) held a High Level Meeting, with theIndian delegation led by Vice Admiral MPMuralidharan, Director General Indian Coast Guard.

The visit is in continuation of the various effortsby the governments of the two countries towardscooperation between the ICG and SLCG andpursuance of the discussions on maritime issues ofmutual concerns to formulate a cooperative approach.

The focus of the meeting was on furtherstrengthening the operational level interaction

between the two Coast Guards.

During the High Level discussions, it wasmutually agreed to strengthen the cooperation onevolving collaborative approach, in addressing aspectrum of maritime issues concerning safety andsecurity.

Judicial Commission from Pakistan visiting

Mumbai again

India is likely to give its nod for the visit of aPakistani judicial commission to Mumbai for thesecond time and allow cross-examination of 26/11attack case witnesses for gathering evidence againstseven accused including LeT commander ZakiurRehman Lakhvi.

After the Pakistani court dealing with the 26/11case had said that evidence collected by thecommission during its first visit to India in March

had no "evidentiary value" to punish those involvedin the Mumbai terror attack, Islamabad had askedNew Delhi to allow its panel to visit Mumbai again.

This will lead to facilitate the speedy trial inRawalpindi of seven men accused of mastermindingthe 26/11 attack. The successful conclusion of theRawalpindi trial would be a major confidence

building measure that would help bridge the trustdeficit and shore up public opinion for normalisingties with Pakistan.

The 2008 Mumbai carnage by 10 Pakistani

terrorists had left 166 people dead. Nine of theterrorists were killed by the security a force whileAjmal Kasab, was nabbed and is lodged in a Mumbai

jail. He has been given capital punishment.

India offers Bangladesh a stake inTipaimukh project

The Tipaimukh multipurpose project is meant toregulate flood waters in the lower Barak Valley anddownstream through controlled releases andgenerate electricity for peak-hour distributionthrough the northern grid. The Barak originates inAssam and, after traversing through Manipur, joinsthe Brahmaputra in Bangladesh.

It will be constructed by NHPC, which entered

into an agreement with Sutlej Jal Vidyut Nigam andthe Manipur government for the project last year.

Located about 210 km upstream of Bangladesh,the project has become controversial ever sinceDhaka raised issues about lean period waterdischarges and impact on downstream agriculture,fisheries and environment as the availability of waterin the Surma, Kushiara and Meghna rivers willdecrease and the irrigation and environment of thelower riparian country will get effectecd.

Though no impact assessment was conducted yet,

India on the other hand, has repeatedly assured atthe highest level that it would not do anything inthe project which would go against Bangladesh'sinterests.

India also said the barrage at the project site wouldrelease more water to Bangladesh during dry seasonand control the same during monsoon to save thelower riparian country from floods.

At the first meeting of the subgroup of the India-Bangladesh Joint Consultative Commission (JCC) thatconcluded in New Delhi, India handed over the five-

volume DPR to Bangladesh to enable it carry out animpact study on the hydroelectric dam to be builton the Barak river in northeastern Indian state ofManipur.

India shared data with Dhaka on the project aswell as finalised the Terms of Reference of a studyto be conducted on downstream impact.

The study is likely to examine the location of thedam and its impact on catchment areas, flora andfauna, biodiversity and ecology on the Bangladeshiside

India has offered Bangladesh a stake in theRs.15,000-crore Tipaimukh hydroelectric project onthe Barak river in Manipur.

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Novel mutations linked with sudden car-diac death among Indians found

Novel genetic mutations responsible for suddencardiac death due to a type of heart disease amongIndians were found.

The study analysed several genes in patientssuffering from hypertrophic cardiomyopathy (HCM)in south India. In HCM, the left ventricular musclegets thickened and this in turn affects its contraction.Certain proteins called sarcomeric genes are mainly

involved in contraction and relaxation of the heartmuscle.

Chest pain, breathlessness, swelling in the legsand irregular heart beat were some of the commonsymptoms in HCM patients. The families of HCMpatients with these mutations had a history ofsudden cardiac death.

A high prevalence of mutations was found atthree positions in protein Troponin I (TNNI3) whichplays a key role in contraction and relaxation of theheart muscle. Due to the thickening caused by themutations, the heart muscle does not receive enough

blood as compared to the normal heart.

Findings would help in screening populationswhich were at risk for sudden cardiac death andalso in providing genetic counselling and therapy tohypertrophic cardiomyopathy patients.

The results also corroborated with earlier findingsthat some of the mutations were specific to Indiansand in a way explain the reasons for a higherprevalence of cardiovascular diseases in the country.

IIT Madras formulate a very sensitive TNTsensor

Researchers at the Indian Institute of Technology,Madras, (IIT-M) have developed a novel device thatcan visually detect even a single molecule of TNTused in the making of powerful explosives. Apartfrom national security, this ultra-sensitive and highlyselective detection method will have applications inearly identification of diseases and in radiationprevention

There is a complete change in luminescence fromred to green when TNT is added to the sensor. Allthat is required to detect the change in luminescence

SCIENCE & TECHNOLOGY

is a fluorescence microscope. The results can bedouble checked by Raman spectroscopy. Ramanspectrum specific to TNT gets enhanced and henceidentifying the signature becomes easy.

The researchers have claimed that they can alsodetect extremely low levels of mercury - anenvironmental contaminant -- using the same sensorstrategy. The concept could also be used for thedetection of very low concentration of othersubstances by incorporating appropriate moleculescalled "ligands' on their sensor thereby opening up

applications in catalysis, bio-imaging and other areas. Prevalence of extensively drug-resistant TB

increasing

New study has revealed that prevalence ofextensively drug-resistant tuberculosis (XDR- TB) isincreasing due to expanded use of second-line drugsin people suffering from multidrug-resistant (MDR)diseases.

The study found alarming levels of TB in Africa,Asia, Europe and Latin America that are resistant tofour powerful antibiotics.

The study, conducted from January 2005 toDecember 2008, on over 1,200 people, found thatrates of both MDR-TB and XDR-TB were higher andthreatening the global efforts to curb the spread ofthe disease.

The researchers enrolled consecutive adults withlocally confirmed pulmonary MDR-TB at the start ofsecond-line treatment in Estonia, Latvia, Peru,Philippines, Russia, South Africa, South Korea, and

Thailand. Drug-susceptibility tests were done at theCentres for Disease Control and Prevention for 11first-line and second-line drugs. Among 1,278patients, 43.7 per cent showed resistance to at leastone second-line drug, 20 per cent to at least onesecond-line injectable drug and 12.9 per cent to atleast one fluoroquinolone. Over six per cent ofpatients had XDR-TB (range across study sites 0.8 to15.2 per cent).

It shows that the prevalence of resistance is high(43.7 per cent) and that the risk of XDR-TB (6.7 per

cent).

MDR-TB is resistant to at least first-line drugsisoniazid and rifampicin, while XDR-TB is resistant

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to those two drugs as well as the powerful antibiotic,fluoroquinolone, and a second-line injectableantibiotic.

Fluoroquinolone resistance and XDR-TB weremore frequent in women than in men.Unemployment, alcohol abuse, and smoking wereassociated with resistance to second-line injectable

drugs across countries. Other risk factors differedbetween drugs and countries.

India has also reported several cases of drugresistant and XDR-TB cases.

Single-dose drug for malaria

Scientists claim to have discovered a drug thatcould cure all strains of malaria with a single oraldose.

The compound from the aminopyridine class(code named MMV390048) shows potent activityagainst multiple points in the malaria parasite'slifecycle.

The synthetic molecule from the aminopyridineclass, which has been described as novel and potent,not only has the potential to become a single-dose

cure for malaria, but researchers are convinced thatit could block transmission of the malaria parasitefrom person to person.

The drug is the first compound researched onAfrican soil to enter preclinical development inpartnership with Medicines for malaria venture(MMV), a not-for-profit public-private partnership,in Switzerland.

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2 - MARKERS

Tamper-proof EVMs to come in 2014

The Election Commission of India will introducenew-age EVMs with a voter-verifiable paper audittrail. But huge costs are involved as 7 lakh of the 11lakh existing EVMs deployed in Lok Sabha polls areincompatible with a printing unit.

Thus EC may introduce the new voter-verifiablepaper trail system in some select states, while lettingthe other states vote with the old set of EVMs.

To update an existing EVM and have it attached

to a printer is estimated to cost anything between Rs8,000 to Rs 10,000. And if all the EVMs are to beupdated, the total cost would work out to nearly Rs1,000 crore. However, of the 11 lakh existing EVMs,only 4 lakh are compatible with printers. Theremaining cannot even be updated.

Besides, printers being bulky and prone to snagslike ink-related issues and jamming, especially inextreme climates, and the rather-impractical task ofhaving them serviced and maintained in between

elections, the EC views the solution as highlyimpractical in the long run.

There is the second option of going in for anentirely new set of EVMs, which will have an in-

built hardware to enable a paper trail. This will costapproximately Rs 1,800 crore.

Commissioning of Indian Coast Guard ShipRajkiran

Indian Coast Guard Ship `Rajkiran`, the third ofthe series of eight Inshore Patrol Vessels (IPVs),designed and built by M/s Garden ReachShipbuilders and Engineers, Kolkata wascommissioned at Vishakhapatnam by Vice AdmiralAnil Chopra, Flag Officer Commanding EasternNaval Command.

The indigenous IPV displaces 300 tonnes and canachieve a maximum speed of 34 knots with anendurance of 1500 nautical miles at economical speedof 16 knots. Equipped with state-of-the-art weaponryand advanced communication and navigational

equipment, it makes an ideal platform forundertaking multifarious close-coast missions suchas surveillance, interdiction, Search and Rescue, andmedical evacuation. The special features of the ship

include an Integrated Bridge Management System(IBMS), Integrated Machinery Control System (IMCS)and an integrated gun mount with indigenous FireControl system (FCS).

New Navy Chief

Admiral Devendra Kumar Joshi took charge asthe Navy chief, succeeding Admiral Nirmal Verma.He will have three-year tenure as the 21st Chief ofthe Naval Staff

Admiral Joshi, who was the Western NavalCommander, has commanded the tri-servicesAndaman and Nicobar Island Command. He alsoheaded the Integrated Defence Staff Headquarters.

Admiral Joshi has also commanded aircraft carrierINS Viraat, guided-missile destroyer Ranvir andcorvette INS Kuthar. He has been awarded theNausena Medal, the Vishisht Seva Medal and theYudh Seva Medal. He commanded the Vizag-basedEastern Fleet, wherein he was awarded the AtiVishisht Seva Medal.

Raghuram Rajan: New Chief EconomicAdvisor

Raghuram G. Rajan, former chief economist ofthe International Monetary Fund (IMF) assumedcharge as the Chief Economic Advisor (CEA) in theMinistry of Finance.

He is also a visiting professor for the World Bank,Federal Reserve Board, and Swedish ParliamentaryCommission.

Major uranium deposit found in Rajasthan

In a major boost to the quest for deposits ofuranium ore in the country, the Department ofAtomic Energy (DAE) has come across another sitewith a large deposit of the mineral in Rajasthan.

The deposit found at Rohil in Rajasthan's Sikardistrict is estimated at 5,185 tonnes, which makes itthe fourth largest in the country after Tummalapalle,Chitrial and Peddagattu extension in AndhraPradesh.

The new site is close to the Rohil North region,which has already been found to have a deposit ofabout 381 tonnes.

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Aditi Mukherji

Aditi Mukherji, a senior researcher with theInternational Water Management Institute (IWMI)in New Delhi, has won the first Norman BorlaugAward for Field Research and Application, endowed

by the Rockefeller Foundation.

Her work on groundwater resources in agricultureled to major policy changes that benefitted thousandsof farmers in West Bengal. She will receive the$10,000 award at the World Food Prize internationalsymposium in the US in October.

This award recognizes exceptional, science-basedachievement in international agriculture and foodproduction by an individual under 40 who has clearlydemonstrated intellectual courage, stamina, anddetermination in the fight to eliminate global hungerand poverty.

V.V. Giri Memorial Award 2011

The V.V. Giri Memorial Award 2011, institutedby the V.V. Giri National Labour Institute, anautonomous body of the Ministry of Labour andEmployment, Government of India, was conferredto Prof. Utsa Patnaik, a Professor in the Jawahar

Lal Nehru University, New Delhi in recognition ofher outstanding contributions to labour studies. Inher academic and policy oriented research studies,she has strongly argued for the promotion of labour-intensive small-scale production, which ensuressustainable agrarian development. Besides stressingthe necessity of enhancing public investment inrural development, Prof. Utsa Patnaik has alsoemphasized the need to provide poor householdswith greater access to land and other productiveassets.

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EDITORIALS

Defending the indefensible

The parliamentary stalemate continues on one ofthe greatest corruption scandals in Indian history.Allocation of natural resources has been a subjectmatter of public debate in the last two decades,particularly with the entry of the private sector ininfrastructure development. Minerals are animportant natural resource. The private sector has agreat role to play in development of mineral-basedindustries. However, the policy of allocation of these

natural resources has been discretionary, therebyleaving ample scope for allocation on account ofcorrupt and collateral motives. It is, therefore,important that aware of the characters of polity andgovernance, discretions be eliminated and objectivecriteria be introduced.

Competitive bidding

Most tangible resources such as minerals,spectrum, oil and gas must be allocated only througha competitive bidding mechanism. The discretionaryallocation of 2G spectrum resulted in a scam ofdisproportionate magnitude. It is now proven thatRs.1,658 crore fixed for an all-India licence spectrumin 2008 was not the market value of the spectrumthen. Under adverse market conditions, thegovernment itself in 2012 has fixed the base pricefor 2G auction at Rs.14,000 crore.

There has to be an equitable balance between theinterests of the public exchequer and the optimumuse of natural resources for economic development.

Whispers about misdemeanours in the allocationof coal blocks have been rife in the last few years.The government took a correct policy decision on

June 28, 2004 that competitive bidding be introducedin the coal block allocation policy. For most of thenext five years, the Prime Minister was the CoalMinister. The exploitation of coal blocks allotted

between 2004 and 2012 is negligible. For most ofthese coal blocks, statutory and environmentalpermissions have not been given.

The Prime Minister's argument that pending

change of policy to competitive bidding, allocationwas necessary for the growth of GDP is eyewash.None of these coal blocks has contributed to the GDP.They have only contributed to the huge valuation of

the private sector allottees and a correspondingopportunity and real cost to the public exchequer.

The Prime Minister's alternative defence is thathis government was handicapped by the Oppositionfrom the coal and lignite States to competitive

bidding. In any federal polity, it is legitimate for theStates to be concerned about the development ofpower production in their own States. Mineral-producing States have always been concerned aboutthe minerals mined in their States. The PrimeMinister overlooks the fact that coal as a majormineral is in the domain of the Central government.His government admittedly overruled the States in2006. The present Minister of State, Coal, Sriprakash

Jaiswal, admitted in Parliament on December 21, 2009that the majority of States had agreed to thecompetitive bidding process. Thus to shift the blameto the States is a very poor alibi. Federalism cannot

be blamed for the corruption of the UnitedProgressive Alliance.

The Prime Minister's statement is an assault on

constitutionalism and constitutional authority.Instead of respecting the observations of theComptroller and Auditor General of India (CAG)and taking remedial action, the Prime Minister hasevolved a logic which is in defiance of ethicalgovernance. His government's policy is to subvertthe institutions but if they assert themselves, to attackthem.

The Prime Minister has no answer for the factthat despite the initial policy decision of June 2004,it was the Prime Minister's Office which circulated

a parallel note on September 11, 2004 highlightingthe drawbacks in the decision of competitive bidding.

It was the Law Ministry that delayed thecompetitive bidding by first giving the opinion thatadministrative instructions were enough to switchover to competitive bidding. They then suggestedan alternative that the Mines and Minerals(Development & Regulation) Act (MMDR) beamended. Over two valuable years were wasted andfinally, when the MMDR (Amendment) Bill was

approved by Parliament on September 9, 2010, theUPA government took 17 months to notify it. Thetenders of competitive bidding have not beenprepared yet as the government was so

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overenthusiastic in continuing the discretionaryprocess in allotment. When vested interests realisedthat the doors of discretion were about to be closed,they queued up for allotments through the ScreeningCommittee mechanism.

The Prime Minister's final defence that theScreening Committee mechanism was fair and

transparent is repelled by an observation of the CAGin Paragraph 4.1 of its report. The CAG has stated:

"It was also noted that the Screening Committeerecommended the allocation of coal block to aparticular allottee/allottees out of all the applicantsfor that coal block by way of minutes of the meetingof the Screening Committee. However, there wasnothing on record in the said minutes or in otherdocuments on any comparative evaluation of theapplicants for a coal block which was relied upon

by the Screening Committee. Minutes of theScreening Committee did not indicate how each oneof the applicant for a particular coal block wasevaluated. Thus, a transparent method for allocationof coal blocks was not followed by the ScreeningCommittee."

Ordinarily, Parliament is the forum for debate onthe issue. The Public Accounts Committee (PAC) isthe forum where CAG recommendations should beconsidered. Our experience of the recent past inrelation to the CAG recommendations in the 2G

spectrum allocation have convinced us that the rulingparty has decided to subvert the parliamentaryaccountability available through the PAC. The PAChas been effectively made non-functional on thatissue.

Legitimate tactic

Parliamentary obstructionism should be avoided.It is a weapon to be used in the rarest of the rarecases. Parliamentary accountability is as importantas parliamentary debate. Both must co-exist. If

parliamentary accountability is subverted and adebate is intended to be used merely to put a lid onparliamentary accountability, it is then a legitimatetactic for the Opposition to expose the governmentthrough parliamentary instruments available at itscommand. Presently, a national debate on allocationof natural resources is on. Left to this government,it would have distributed these resources forcollateral purposes to its own favourites.

The Prime Minister must own full and realresponsibility. Let him cancel these 142 discretionary

allocations, put them on auction and test whetherthey had been allocated at a fair price.

Source: The Hindu

The Mobility Of Information

Aided by new media has the information explosionbecome unmanageable?

An animated debate is raging around socialmedia. More specifically, around its negative anddestructive use in certain contexts, the most recent

of which is its schizophrenic role in Assam's ethnicviolence. The narrative of the circulation of morphedimages and messages of false forebodings resultingin the subsequent government clampdown is by nowwell known. New media is vibrant, volatile, andsome even say, unmanageable. But that's not all thatthere is to the ongoing debate. The clash of viewshas placed the very idea of information at the centreof the problem.

The debate has brought up basic questions,uncertainties and dilemmas about how to handle

the over-abundance of news, often inseparable fromrumours, gossip and misinformation. What's moresignificant is that the volume of both 'truth' and 'lies'seems poised to grow in future, as social media alsoproliferates and expands.

The key to understanding the fluidity of socialmedia lies in understanding the quirky nature of theconstant flow of information and its networks. Peoplehave always had an organic connection to all kindsof information, from the trivial to the serious. Theinsatiable human hunger for information existedeven before the onset of the technological and cyberrevolutions, before newspapers and the radioappeared on the scene. As a Bengali i can think of'addas' thriving at street corners, bookshops, coffeehouses and tea stalls where no topic is tabooed andno censorship is applicable, as a precursor to modernflows of information. From politics to art and theatre,local to national, gossip to serious introspection -'addas' could well pass off as one of the most effectiveand diverse information networks.

The free flow of news and gossip is carried fromperson to person by word of mouth. In innocuoussituations that would be a fairly harmless thing, butas historians and anthropologists have shown,unauthorised, mobile information can, throughrumour and gossip, lead to violence, riots and death.

Even before the explosion of cyber technologyinformation travelled across boundaries. Thedifference was that news, back then percolatedmostly through the controlled sluice of themainstream media, and that glimpse of the truth

behind everyday affairs of state rarely came to thefore. Once in a while the Bob Woodwards and CarlBernsteins of media lore would appear on stage with

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fantastic exposes. For much of the time howeverdecisions, even when conflicted, were handed down,in a sanitised form, without revealing any of themessy backroom transactions that had made thempossible.

Media historians have chronicled the history ofthe irrepressible curiosity among citizens to know

and confront the 'unknown', to catch a glimpse ofthe invisible hand behind major political, economicand military decisions. This is where curiosity, fearand conspiracy cross paths - when informationmoves without us knowing who is moving it.

Such curiosity gives birth to conspiracy theories,like those which have recently gained ground, goinghand in hand with media proliferation. Consider forexample, Julian Assange - the radical purveyor ofinformation. It's perhaps only fitting that the architect

of WikiLeaks, Assange is a reader of surreal andsubversive authors like Kafka, Koestler andSolzhenitsyn. He revels in his conspiracy theoriesaround states and perhaps owes his present statusof an outlaw to the inevitable logic of leveraging acentralised media using a myriad of servers andhundreds of media activists spread across networks.

As information networks have diversified, leakshave also become that much more difficult to stem.Leaks have filled a vacuum not only in terms of thesimple volume of information they reveal, but also

in the desire of the consumer to know more than theobvious. The more an organisation attempts to guardagainst leaks, the more severe becomes its internalcontradiction between the requirement of sharinginformation and that of controlling it. Some of thesedynamics are on display in the current struggle overthe scope of tools like the Right to Information andquestion over what falls within its purview.

How then does one dam this information deluge?Against its insurgent character, Noam Chomsky's

famous theory of manufacturing consent - arguingthat information is routed through a propagandistindoctrination model - seems to collapse. Theadvance in cyber technology has created, accordingto Howard Rheingold, a 'virtual community',intransient and perennially on the move.Monopolising information, controlling and vettingit, is trickier than before because of the dispersednature of sources now actively dealing with the

business of disseminating information. Asphilosopher Jean Baudrillard observed: "You put out

an item of information. So long as it has not beendenied, it is plausible. And, barring some happyaccident, it will never be denied in real time and sowill always remain credible. Even if denied, it will

no longer ever be absolutely false, since it has oncebeen credible."

Paradoxically, as we witness in recent happenings,the phenomenon of hybrid virtual communities,erasing boundaries between nationalities andcultures, has gone hand in hand with burgeoningethnic and nationalistic jingoism. This sharp

xenophobic language calls for closing borders toimmigrants, ensuring that the free mobility ofinformation and capital is not matched by theunfettered circulation of populations. Thecontradictory pulls and tensions mutating the worldof information, and its intimate connection withpeople's lives have opened up a new discourse abouthow to regulate the sector.

Source: Times of India

Much more than a survival scheme

In the midst of the debates that prevail in thiscountry over the feasibility of the world's largestpublic works programme, the MGNREGASameeksha - an anthology of independent researchstudies and analysis on the Mahatma GandhiNational Rural Employment Guarantee Act, from2006-2012 - is a significant innovation to evaluatepolicy and delivery. In bringing out MGNREGASameeksha , a collection of critical independentvoices, released in English and Hindi by the Prime

Minister on July 14, the Ministry of RuralDevelopment provides a platform for evaluation ofa law designed to assist the most invisible in India'spolitical spectrum. The Sameeksha is not a 'new'study. As the introduction explains, it is "an analyticalanthology of all major research studies done onMGNREGA that were published in academic

journals or came out as stand-alone reports".

Summary of findings

No department, from the social sector orotherwise, has published a summary of findings ofall the independent research studies conducted onits major programmes. To do so asserts confidencein independent evaluations, and the wisdom thatthe government would do well to consider suchviews and analyses. Given India's very poor recordof rural development, it was important that theworld's largest employment programme be evaluated

by credible institutions and researchers. By bringinga summary of findings of all the studies together,Sameeksha facilitates informed understanding,analysis, implementation, and reform wherenecessary.

Sameeksha is an initiative of Jairam Ramesh,Minister of Rural Development, edited by Planning

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Commission Member Mihir Shah and compiled by ateam led by Neelakshi Mann and Varad Pande. Toensure academic merit, suitable coverage of majorstudies, and veracity of reportage, the anthology wasrefereed by two prominent academics/writers;economist Jean Dreze, and the editor of the Economicand Political Weekly , C. Rammanohar Reddy. This

anthology is finally a tribute to the MGNREGA, andthe millions of workers who have diligentlystruggled against poverty and unequalimplementation, and even violence in some cases toaccess their rights.

Evaluating MGNREGA on the basis of rigorousresearch, rather than anecdotal evidence, offers arational framework for improvement, and rejectsirrational demands for closure. It also becomes the

basis for more informed discussion to write articles,conduct television studio debates, and even design

policy initiatives.

In the midst of ill-informed adverse criticism, thiscompendium gives us a set of answers based on factand not opinion.

Continuing critical comments and assertions begfor answers. Has the MGNREGA really built assets,or has it just been a compendium of useless earthwork? Has it created a lazy workforce that is affectingour work culture? Has it negatively affectedagriculture by drying up the labour market? Has the

MGNREGA become the biggest source of corruptionin rural India? Has it failed to arrest distressmigration? Has it helped household income, andreduced hunger in the poorest households?

These papers provide answers premised ondetailed research or study. For instance, the oft-repeated aggressive assertion that MGNREGA doesnot build useful assets has been made without thesupport of any study to justify this claim. Theseassertions arise very often from fleeting visits toroadside worksites, with insufficient time for

anything more than an anecdote. This off-the-cuffdismissal of "useless earth works" arises from a groupwhich often lives on the other side of a fracturedIndia, for whom mud and dirt become synonymous!It also raises the pertinent question of what indeedis a productive asset - a village tank that recharges40 wells, or only a work of brick and mortar.

Sameeksha has a whole chapter dedicated tostudies on asset creation which, by and large, showthat sustainable assets have been created. A study of

the best performing water harvesting assets in Bihar,Gujarat, Rajasthan, and Kerala for instance show thepotential of these works where a majority of theassets studied had a return on investment of well

over 100 per cent, with investment costs recoveredin less than one year! Perception-based surveys,including those carried out by the National SampleSurvey Organisation (NSSO) in three States showedthat the vast majority of assets were being used, andthe people found them useful.

Multiplier effect

This report should give policymakers andpoliticians a chance to take stock. Interestingly, thecompendium effectively answers many of the basiccriticisms of MGNREGA that have emanated frompoliticians and bureaucrats even within the system.The Prime Minister will hopefully acknowledge thefindings contained in Sameeksha , and accept thatMGNREGA is more than a lifeline for survival.Different studies have shown that it has providedlivelihood and income security, decreased the

incidence of poverty, increased food intake, reducedmental depression, positively affected healthoutcomes, and been successful as a self targetingscheme - as the poorest and most marginalisedcommunities have sought work. In many States, ithas decreased gender differential in wages, increasedreal wages accompanied by an increase inagricultural productivity and growth. This increasein agricultural productivity could be due to thewatershed and water harvesting works, as well asthe land development work on the fallow private

lands of SC, ST and BPL families to make themproductive. The studies do not bear out the assertionthat MGNREGA has caused a shortage of farmlabour. Importantly, some studies seem to indicate asignificant multiplier effect on the rural economysuggesting, as the authors say, a need to study thisaspect further.

The report also shows that there is poorimplementation in many places. Average wages paidare lower than minimum wages; there is a distressing

delay in the payment of wages; demand is notproperly captured (an NSSO survey found 19 percent of people who wanted work did not get it);dated receipts for work applications are not properlygiven; and the payment of unemployment allowanceis a rarity. There is a shortage of staff, and there aremany instances of irregular flow of funds. Non-compliance with proactive disclosure provisions suchas muster rolls being available at worksites continuesto be a problem in some States. As a result, leakagesand corrupt practices continue to exist. While social

audits in Andhra Pradesh have significantlyincreased awareness and identified fraud, Sameekshanotes that social audits are a facade in most otherStates.

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Several initiatives have a mixed outcome. TheManagement Information System places the largestset of data of any public works programme in thepublic domain via the MGNREGA website, but Statesare still struggling to upload data online on a real-time basis. Ten crore bank and post office accountshave been opened, bringing about financial inclusion,

and reduced corruption in wage payments, but thedelay in payments through such accounts is a majorcause of distress.

Many of these concerns obvious to those whowork in rural India have been corroborated by thescope and rigour of academic research. The areaspecific outcomes have been no less significant. Wehave seen thanks to the MGNREGA offeringalternative work, hundreds of bonded labour(Saheriya adivasis) in Rajasthan freed fromgenerations of bondage. People have been saved

from destitution in Uttar Pradesh, Bihar, Orissa, andChhattisgarh, women have been empowered and areparticipating in huge numbers in Tamil Nadu, andthe programme is even showing very positive resultsin "non-NREGA" States like Himachal Pradesh andKerala.

Academic studies contextualise experience andanecdote, within the framework of critical factualanalysis. Policymakers cannot brush these aside asirrelevant. Ironically, the report also reveals the manyissues and areas that have not been researched. Itexposes the missed opportunities of the academia toinvest in detailed and widespread study of this veryunique right, entitlement and programme. Perhapsthis report can help be a force multiplier for thestudies conducted so far, which in turn willencourage more research.

The MoRD has also invited the Comptroller andAuditor General to conduct a performance audit ofMGNREGA, and mentor the social audit process.The CAG oversight should enable a detailed

appraisal of the shortcomings in implementation.These kinds of partnerships must become a regularactivity not only within one Ministry, but in thegovernment. It will help improve implementationand could be a creative way in which governancecould be improved with the help of modes ofindependent evaluation and public participation.

Source: The Hindu

The emerging slowdown

Emerging economies survived the global shockin 2008 quite well. But now that the industrialcountries have not fully recovered, the crisis inEurope continues, the uncertainty in world markets

remains high and large emerging economies areseeing a rapid fall in GDP growth. Weak growth inemerging markets will, in turn, slow down the worldeconomy. In the last decade, growth in the US andChina contributed to a benign global environment,which made it possible for India to get away withmore policy mistakes. Now, the government needs

a bigger focus on building confidence in privateinvestment.

The slowdown of GDP growth in emergingeconomies appears to be well entrenched now. In2010, there seemed to have been a rebound inemerging economies, but it has not been sustained.The GDP growth in Brazil declined from 6.1 per centin 2007 to 2.7 per cent in 2011. China has seen adramatic fall in GDP growth from 14.2 per cent in2007 to 9.1 percent in 2011. In 2012, emergingeconomies are expected to slow down further.

China was a big contributor to post-crisis worldGDP growth. China's GDP growth will be roughly7.5 per cent in 2012. Two factors are at work. Thereare deeper problems in China's growth model thatare beginning to rein in growth. In recognition ofthese deeper problems, the government pushedtowards policies that would yield sustainable growth.These policies inevitably entailed slower growth.Recent indicators suggest that the Chinese economyis slowing down to a greater extent than expected.With consumer prices falling in the last three months,indicating a possible deflation, the Chinese central

bank announced two interest rate cuts. China alsohas significant scope for a fiscal stimulus at thecentral and local levels.

What was wrong with the old Chinese model ofgrowth? In the pre-crisis years, Chinese familiessaved half their incomes, and American familiesconsumed more than they earned. Low Chineseconsumption was engineered through the exchangerate, monetary policy, financial repression, etc. The

delicate balance between China and the US brokedown in the crisis. Policymakers everywhere havetalked about the need for a rebalanced world inwhich Chinese households save less and Americanfamilies consume less. A rebalancing should lead toa lower current account surplus for China, reducingits build-up of reserves; less buying of US treasury

bills by China; and lower liquidity and asset pricebubbles in the US economy.

A good part of this required adjustment has comeabout. China's current account surplus has fallen

from a high of 10 per cent in 2007 to 2.8 per cent in2011. While this is good for the world, these changesrequire substantial changes within China. Growing

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inventories, a fall in export orders and decliningcapacity utilisation all suggest that the slowdown inChina is intensifying.

The Chinese slowdown is cause for concernworldwide. By itself, this yields slower world GDPgrowth. Many emerging economies are part of thesupply chain that feeds Chinese manufacturing, and

have benefited from Chinese demand. A slowdownin China will lead to a decline in their growth. In

July 2012, Indian exports to China showed an 8 percent decline on a year-on-year basis: a sharp contrastto the explosive growth of recent years. The bulk ofthis decline was in iron ore.

Another channel of impact for India is indirect:through the world prices of tradeables. The worldprice of things that can be globally traded - forinstance, steel - is influenced by over-capacity inChina. The Chinese slowdown is exerting a negativeinfluence on the global prices of tradeables. Thishampers the profitability, and thus the outlook forinvestment, of Indian firms that make tradeables. Thischannel of influence is likely to be more importantfor India, when compared with the small scale ofIndian exports to China.

Chinese households consume about 30 per cent ofChinese GDP, compared to Indian households, whichconsume about 70 per cent. The value of 30 per centis the lowest consumption share in the world. If the

Chinese economy slows down, there are twopossibilities. One is that households continue to earnand spend the same share in GDP. This could lead tosocial unrest, and further disrupt growth.

Most observers believe that this scenario will notarise. The key is to increase the share of consumption,so that even if GDP growth slows, consumptiongrowth stays strong. This is closely linked to theproblems of the Chinese model of growth, whichemphasised a very high investment rate. The question

before China today is finding a new policy framework

involving a lower share of resources going intoinvestment, an increasing share of consumption inGDP, ending the emphasis on export of goods andcapital, and settling into a lower but sustainablegrowth trajectory.

The Chinese leadership appears to haveunderstood that their old growth model was flawed.They appear to be keen on moving towards a newgrowth model. In other words, it is not likely thatthe emerging GDP slowdown will bring forth a fresh

wave of highway projects to prop up the economy.The recent stimulus measures were small andintended to slow down the speed of reduction ofgrowth rate. The debate within China is about how

to shift the growth model. We in India need to factorthis into our thinking about our growth model.

From 2004 onwards, the Indian leadership hasneglected the foundations of economic growth. Theeconomic policy reforms of previous years, coupledwith benign global conditions, gave effortlessgrowth, and the focus of the UPA was on spending.

Now we need to re-evaluate our growth model, andask how to rebuild the confidence of privateinvestors so as to obtain growth even when globalconditions are adverse.

Source: Indian Express

Airline safety, finances need separatewatchdogs

The most recent developments in KingfisherAirlines, where the pilots are yet again on strikeand the company is operating only 11 aircraft and

85 flights in a day, raises an important question:Should the financial viability of an airline be totallyand completely linked with its safety aspects?

Or, should the two - financial sustainability andsafety -- be separated, with lapses in either providingenough grounds to shut down an airline? Shouldan airline that may be technically 'safe', butfinancially in a poor state, be allowed to run? Afterall, could not its poor finances eventuallycompromise on the safety of its operations as well?

At the moment, both the financial and safetyaspects of airlines are looked into by the DirectorateGeneral of Civil Aviation (DGCA). According toCivil Aviation Requirement (CAR) norms regulatingthe operations of airlines in the country, the DGCAcan consider adverse financial indicators - such assignificant lay-offs or turnover of personnel, delaysin meeting payrolls, evidence of cutting corners,demands for 'cash on delivery' by suppliers whowere earlier providing credit, inadequatemaintenance of aircraft, shortage of supplies and

spare parts, curtailment or reduced frequency ofrevenue flights, and sale or possession of aircraft orother major equipment - for taking action, includingshutting down, against the airline.

It is another thing, though, that the DGCA hardlyinvokes these provisions. Instead, the airlinewatchdog confines itself to only the safety aspects.As a result, there is no body that closely monitorsthe financial conditions of airlines and takes action

based on these indicators that can be the precursorto non-adherence to safety standards.

Bifurcating functions

The Government is making some attempts atchanging this state of affairs by proposing the setting

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up of a Civil Aviation Authority (CAA), whosemandate would extend to safety, economic regulationand grievance resolution functions. The CAA will

be a financially autonomous body, which will haveseparate wings looking into the financial and safetyaspects of operating airlines.

The proposal of bifurcating the two functions

within a single regulatory body was mooted firsttwo years ago, after the crash of an Air IndianExpress airline in Mangalore, which resulted in thedeath of 150 people. Given the precarious financesof not just Air India, but even Kingfisher - whichhave implications in terms of unpaid, overworkedand de-motivated employees not giving their best -the need to take action based on both aspects cannot

be overemphasised.

Incidentally, this is also the practice globally,where the safety and financial aspects of the aviationsector are looked after by different agencies. In theUS, for example, there is the National TransportationSafety Board (NTSB) and the Federal AviationAdministration (FAA).

The NTSB is an independent federal agencycharged with determining the probable cause oftransportation accidents, promoting transportationsafety, and assisting victims of transportationaccidents and their families. The FAA's mission onthe other hand is to provide the safest, most efficient

aerospace system in the world.No clarity in the air

Coming back to the domestic aviation sector, theguidelines for running a domestic airline currentlyrequire an airline to operate with a minimum fleetof five aircraft and a paid-up capital of at least Rs 50crore. Both these are conditions that the likes ofKingfisher or Air India meet.

Of course, it is a different matter when the airlineshave disgruntled staff members, owe various entities

thousands of crores in arrears, and operate truncatedflight schedules for months leaving harassed flyersliterally on the ground. Should the Government inthese cases wait for an untoward incident to happen,

before initiating any action?

Or is it waiting for the airlines to collapse underpiles of debt, which will then save it from taking

any tough decision? In the current scenario, there isno clarity as to what a body like the DGCA can doabout addressing the financial viability aspects ofany airline. DGCA officials claim they are only asafety watchdog - though the CAR says otherwise -and hence not mandated to shut down an airline ifit is not financially viable.

At the moment, any decision to shut the airlinewill have to be taken by the DGCA in consultationwith the Ministry of Civil Aviation. And while this

is not happening, Kingfisher continues to operate itstruncated fleet.

Way forward

Another school of thought believes that ifKingfisher - or for that matter any other airline isnot making money - it should be the owner's decisionto shut down the airline. After all, this is whathappens in any business.

But since the government gives permissionto airlines to fly in the skies after checking out

their financial standing, shouldn't it also playa role in deciding to shut down an airline? Ofcourse, in the event of shutting down, what willhappen to the employees of the airlines andthousands of others who depend on it for theirlivelihood?

The only way forward is to expedite the formationof the CAA and ensure that its mandate is carefullythought through before it becomes operational.

Source: Business line

Documents

27th Aug-2nd Sept, 2012