Current National Affairs--Dec 2008_Jan2009 For SBI Clerical & PO Exams

CURRENT NATIONAL AFFAIRS

RBI infuses 20k crore: On January 2, 2009, the Reserve Bank of India (RBI) announced a further easing of money supply with the reduction of key rates and ratio which it said would release Rs 20,000 crore into the banking system. While the cash reserve ratio—the amount of cash that banks need to keep in reserve—has been cut by 0.5 per cent to 5 per cent, repo and reverse repo rates—the short-term rates at which the RBI lends and borrows from banks—have been cut by 100 basis points each to 5.5 per cent and 4 per cent, respectively. Following the RBI measures, government-owned banks provided a respite from high interest rates to individuals wanting to buy a house and to the distressed owners of Micro, Small and Medium Enterprises (MSMEs).
Companies can now launch IPOs 1 year after SEBI nod: The Securities and Exchange Board of India (SEBI) has granted greater flexibility to corporate to raise funds and outlined measures to prevent the kind of panic redemptions that brought the mutual fund industry to its knees in October 2008. SEBI has now approved a proposal to extend the validity period for an initial public offering approval from three months to a year.  The new rule comes as a relief for those who were forced to defer their IPOs even though they had obtained approval. Under the new rule, the companies can go public within one year of receiving the regulator’s approval. However, SEBI has
stipulated that companies will have to update the document with fresh numbers and any other material changes whenever required.
Economy gets another booster dose: On December 7, 2008, the Union government announced major tax cuts across the board for housing sector and duty cuts for companies that provide finance to real estate companies. The move was intended to prop up sagging demand in sectors such as housing, exports, textile and infrastructure. Paying special attention to exports, the government has decided to provide an interest subvention of 2 per cent up to March 2009 for pre- and post-shipment export credit for labour-intensive exports like textiles, leather, marine products and SME sector. Items of handicrafts will be included under Vishesh Krishi and Gram Udyog Yojana among other initiatives.

30k-cr oil bonds: The government is working on a bailout package to prevent its three blue chip oil companies—Indian Oil, Bharat Petroleum and Hindustan Petroleum—from closing 2008-09 in the red. The package proposes to provide additional oil bonds of Rs 30,000 crore to the oil companies to compensate them for losses incurred on fuel sales at government-controlled prices. The total subsidy for 2008-09 is estimated at around Rs 1,06,000 crore. The government gives oil bonds to the State-run OMCs to partly compensate their losses for keeping retail prices of four fuels below market rates. The compensation was based on a ‘burden sharing formula’ approved by theCabinet on October 11, 2007 while extending fuel subsidy schemes up to April 1, 2010. Due to an unprecedented jump in crude oil price, the formula was later abandoned. The crude oil prices had peaked at $147 a barrel in mid-July 2008.

Factory output drops to negative terrain: Industrial production unexpectedly fell 0.4% in October 2008, shocking policy- makers. It slipped into negative territory for the first time in 15 years, highlighting the case for further aggressive interest rate cuts and fiscal measures to shore up a slowing economy. The drop was on the back of a 1.2% year-on-year contraction in manufacturing activity, confirming fears the economic slowdown was gathering pace amid a faster-than expected drop in demand slowdown in overseas and domestic markets. Manufacturing accounts for nearly 80% of the Index of Industrial Production (IIP), which rose by a revised 5.5% in September 2008.

PMO nod to new pay panel for armed forces: The Prime Minister’s Office has approved a separate pay commission for the armed forces. The Seventh Pay Commission for soldiers would be delinked from the civilian pay panel. The decision comes after a committee, headed by External Affairs Minister Pranab Mukherjee, submitted its report to review the concerns in the armed forces. The concerns were raised after the Sixth Pay Commission recommended placing lieutenant colonels and equivalent ranks in the Air Force and Navy at a lower pay band than their counterparts in the paramilitary/Group A services and IAS. The government has also agreed to accommodate lieutenant colonels in a higher pay band and increase their monthly salary by Rs 8,000. However, the government has not yet addressed the sweeping discontent in the military’s higher echelons over lieutenant generals and their equivalent being excluded from the higher pay band.
Centre accepts 70% pay hike for teachers: In line with the Sixth Pay Commission recommendations for Central government employees, the Union government has accepted the G.K. Chadha Committee report recommending a 70% hike in pay scales of teachers. Other recommendations in the report include a uniform retirement age of 65, opportunities for re-employment up to 70 years, flexibility to accommodate talent through incentives, and one-time grants for research for teachers in Central, State and deemed universities. At the early level, the recommendations aim to attract talented young people hoping to get into the teaching profession. Among other things, it includes advance increment, enhanced research grants and facilities for housing and research. To boost research and consultancy projects, the panel also encourages teachers in universities and college to accept consultancy, directing projects, registering patents, R & D products and technology transfers.
Education schemes get Cabinet nod: The Cabinet Committee on Economic Affairs has approved a scheme, National Mission on Education, to use the Information Communication Technology (ICT) to provide personalized and interactive knowledge modules to students. The scheme will cost Rs 4,612 crore in the 11th Plan. Over 18,000 colleges across India will get computer infrastructure and connectivity, including all departments in 419 universities, deemed universities and institutions of national importance. In another decision, the Cabinet approved the Rashtriya Madhyamik Shiksha Abhiyan to increase enrolment rates in secondary education from 52.56 per cent at present to 75 per cent in 2012. Under the scheme 11,188 new schools will be built and 44,000 existing schools strengthened and 1.79 lakh additional teachers will be appointed.
India, US ink $2.1 bn defence deal: The Union government has signed the biggest-ever defence deal with US—a $2.1 billion contract for eight Boeing P-8I Long-Range mari-time Reconnaissance (LRMR) aircraft for Navy. India will get the first P-8I towards end 2012 or early 2013, with the other seven following in a phased manner by 2015-2016. The contract also provides an option for India to order four to eight more such planes. Armed with torpedoes, depth bombs and Harpoon anti-ship missiles, the P-8I will also be capable of anti-submarine warfare and anti-surface warfare. They will replace the eight ageing and fuel-guzzling Russian Tupolev-142M turboprops currently being operated by Navy.
India, Russia clinch civil nuclear accord: During the visit of Russian President Dmitry Medvedev in December 2008, New Delhi and Moscow signed an agreement on civil nuclear cooperation. Russia is the third country to sign such an agreement with India after France and US. India also signed the $1.2 billion deal to buy 80 Mi-17 V-5 helicopters even as both countries work towards resolving “outstanding issues” over the lease of a nuclear-powered submarine and huge cost escalation in aircraft carrier Admiral Gorshkov’s refit. In the initial stages, Russia will help India build two additional nuclear power plants at Kundankulam. Even before the NSG waiver, Russia was helping India build two 1,000 MW nuclear power plants at the same site. The Russians, however, had to wait for the NSG waiver to India for a more focused N-cooperation. More such power plants of Russian design, according to the two sides, will come up at other places in the country.
Jammu & Kashmir elects new government: In first week of January 2009, the decks were cleared for Omar Abdullah, 38, to become the youngest and the 13th Chief Minister of Jammu and Kashmir after his party, the National Conference (NC), and the Congress decided to share power in the State. Former Speaker and Congressman Tara Chand has been appointed as the new Deputy Chief Minister. The NC emerged as the single biggest party in the 87-member State Assembly after winning 28 seats in the month-long elections. The People’s Democratic Party (PDP) and the Congress, which had an alliance government over the past six years, followed with 21 and 17 seats, respectively. The BJP sprung a major surprise by emerging victorious in 11 constituencies.
BJP secures majority in Karnataka Assembly: Karnataka’s ruling Bharatiya Janata Party (BJP) won five out of eight seats in crucial by-elections, cementing its hold in the State’s Legislative Assembly where it had been short of an outright majority by three seats since May 2008. The BJP now has 115 out of 224 Assembly seats. The by-polls also marked the entry of Deve Gowda’s daughter-in-law Anita Kumara-swamy into Karnataka politics—the fourth member from the Gowda family to do so. She won on a
JD(S) ticket from Madhugiri constituency.
Parliament passes Bills on anti-terror apparatus, NIA: The Parliament, despite opposition from Left parties on select provisions, has approved the anti-terror Unlawful Activities (Prevention) Amendment (UAPA) Bill—which analysts say is similar to the Prevention of Terrorism Act (POTA), repealed after the Congress-party-led United Progressive Alliance (UPA) assumed power. The complementary National Investigation Agency Bill, 2008, that seeks to create a federal agency to investigate terror-related incidents has also been passed. After the President’s assent the National Investigative Agency (NIA) started functioning from January 1, 2009.
Right to Education Bill: Almost six years after Parliament passed the 86th Constitutional Amendment, the government has introduced the Right of Children to Free and Compulsory Education Bill in the Rajya Sabha. The 86th Amendment made free and compulsory education for children between the age of 6 and 14 years a fundamental right. The proposed legislation provides a blueprint for systemic reforms in the elementary education. It promises to counter the growing lobby for the privatization of school education. The legislation is, in fact, a step towards the common school system first proposed by the Kothari Commission.
Self-regulation guidelines for media in place: With visual media drawing the flak for coverage of the Mumbai mayhem and the government mulling an emergency protocol, India’s broadcasters association has unveiled self-regulatory guidelines. These include no live reporting of hostage crises and blocking information which may help terrorists. The guidelines, billed as first big step towards self-regulation, were formulated and unveiled by the News Broadcasters Association. Among the major guidelines are: Don’t give live coverage of hostage crises; Block information that may help terrorists; Don’t disclose details of hostages; withhold sensitive information on rescue operations; Avoid live contact with victims and with security personnel engaged in rescue operations in 26/11-like situations; Avoid unnecessary repetition of archival footage which may agitate the minds of viewers.
Cash for vote scam: A Lok Sabha panel probing allegations that Members of Parliament (MPs) were bribed to vote in favour of the United Progressive Alliance (UPA) government in the July 22, 2008 trust vote gave a clean chit to two politicians, even as committee members belonging to the Opposition Bharatiya Janata Party (BJP) and the Left submitted dissent notes while differing with the conclusions. The two Rajya Sabha MPs at the centre of the controversy were Samajwadi Party general secretary Amar Singh and Congress President Sonia Gandhi’s political
secretary Ahmad Patel.
Administrative Reforms Commission: In what will be one of the biggest changes in the bureaucratically-run Indian governance system, the Administrative Reforms Commission (ARC), headed by Congressman M. Veerappa Moily, has suggested much-desired changes that aim to free the system from political meddling and also from the grip of bureaucrats hiding behind self-serving safety nets. The ARC wants a change in the profile and method of recruiting civil servants to provide for a lateral entry on earmarked posts, identify specialists and have accountability. It also rules out assured promotions, besides having a civil services authority to administer the services. These are among the dozen new path-breaking suggestions, probably the biggest since Lord Thomas Macaulay laid down the basic policy governing recruitment to civil services in India in 1854. Among the major recommendations are: Lower age profile, lateral entry; Armed forces personnel can apply for top IPS posts;
Higher accountability; No assured promotions; New civil authority to control and decide on selections; Change in exam system; No deputation for IAS for profit-making bodies.
Terror strike in Guwahati: The year 2009 began with terror striking, this time in Assam. Three serial blasts in as many hours, triggered by suspected ULFA militants, left five people dead and over 60 injured in Guwahati. The explosions took place a few hours before P. Chidambaram flew in for his maiden visit as Home Minister. Terrorists appeared to mock heavy security put in place for the New Year in the wake of the 26/11 carnage and for the Home Minister’s visit. Assam Chief Minister Tarun Gogoi admitted that there were security lapses.