AGRICULTURE
Bt Brinjal controversy
Faced with vehement protests by farmer groups and the green lobby, as also some States, the Union government has decided to freeze the introduction of Bt Brinjal in the country till independent scientific studies established health and environment safety of the product to the satisfaction of both public and experts.
Although India’s biotechnology regulator, the Genetic Engineering Approval Committee (GEAC), has cleared Bt brinjal for regular agriculture purposes, the detractors say that the variety may have passed the yield test and the pest-resistance analysis, but its edibility is yet to be confirmed.
Three major brinjal producing States, West Bengal, Bihar and Orissa, which account for nearly 60 per cent of the produce, have also refused to endorse the product. The governments of Madhya Pradesh and Chhattisgarh also specified that they would not have Bt Brinjal in their States.
The variety has been developed by Maharashtra Hybrid Seeds. It has been created by inserting gene from the soil bacterium bacillus thuringiensis into brinjal, which is said to give the plant resistance against insect pests.
BANKING & FINANCE
RBI monetary policy review
There is a shift in RBI’s monetary policy stance to managing the revival of the economy from managing the crisis. In its review on January 29, 2010, the central bank has accepted a 7.5% growth with 8.5% inflation.
RBI is worried about the high inflation rate but its governor D. Subbarao pointed out that it is mainly on account of supply side constraints. The condition could further deteriorate. "With growth accelerating in the second half of 2009-10 and expected to gain momentum over the next year, capacity constraints could potentially reinforce supply side inflationary pressure," the review document said.
Therefore, the Reserve Bank's new shift in the policy stance from managing the risk to managing the recovery made it to take a relatively milder action to increase the cash reserve ratio by 0.75 percentage point to take out Rs 36,000 crore from the system. Besides that, it did not take any harsh measure.
On the food inflation front, the central bank pinned its hope on good rabi crop and good monsoon in 2010. Assuming a normal monsoon, it expected inflation to moderate from July 2010 onward.
At the same time, RBI expressed its worry over the industrial growth, as it is not broad based, and underlined the need for consolidating it. The RBI's document on macro-economic development showed that while industries like food products, beverages, tobacco and related products showed a negative growth, industries like basic metals & alloys and paper & paper products were still decelerating. On the other hand, the RBI document showed industries like transport equipment, rubber, petroleum, textile products and a host of other industries were growing.
PLANNING & ECONOMY
Rural poor estimated at 42%
Agriculture sector in India continues to suffer, save for sharp growth in some years. The expert group to review the methodology for estimation of poverty, chaired by Suresh Tendulkar, has now suggested that the poverty ratio at the all India level was actually 37.2% in 2004-05.
Rural poverty was projected at 41.8% and urban at 25.7% by the committee, as against official estimates of 28.3% and 25.7% for rural and urban population, respectively.
In the past, the poverty line was defined in terms of per capita consumer expenditure at 1973-74 market prices and adjusted over time and across States for changes in prices keeping unchanged the original 1973-74 reference poverty line baskets of goods and services. The all-India rural and urban poverty line baskets were derived separately, assuming per capita daily calorie intake of 2,400 for rural people and 2,100 for urban population.
The Tendulkar panel has made four major departures from the past practices. It moved away from the calorie intake criteria for determining poverty line. Instead, it tests for adequacy of actual food expenditure near the poverty line to ensure aggregate nutrition, rather than just calories.
Two, it has recommended adoption of uniform PLB for the urban and rural population, breaking away from the past practice of two separate baskets. This has been done to get rid of the problem of outdated PLB, a major criticism of the existing poverty line.
Three, it has suggested a new price adjustment procedure based in the same data set as the one used for poverty estimation, rejecting the earlier practice of using price indices that are generated externally, specific to population segments and were outdated.
And four, it incorporates explicit provision in the price expenditure on health and education, which in any case has been rising. The official poverty estimate, in contrast, assumes basic health care and education services would be provided by the State, and although the 1973-74 base takes note of the private expenditure on these items, it does not take into account the increase in the proportion for total expenditure over the years.
The Tendulkar panel has also recommended that 365-day mixed reference period be used to collect data instead of the past practice of using 30-day uniform reference period. The advantage of using MRP is that data integrity is better when respondents are asked about their expenditure in the 365 days prior to the survey, particularly on items of low frequency consumption such as clothes, footwear and durables, than when they are questioned on expenditure on the preceding 30 days.
Nutrient-based subsidy policy cleared
The Union government has approved the Nutrient Based Fertiliser Subsidy (NBS) plan with effect from April 1, 2010. This is likely to have positive sentimental impact on share prices of fertiliser companies. Under the new policy, the companies can fix retail fertiliser prices. However the urea prices will be increased by Rs 483 per tonne or 10 per cent.
“The hike in urea prices is not going to impact the bottom-line or EPS of fertiliser companies as extra 10 per cent will go from farmer’s pocket directly. However, looking at the shift in policy, it’s a big positive for the industry,” said an analyst.
Fertilisers are sold at government-fixed prices, which are lower than their costs of production or import. The difference is met through subsidy. The NBS does away with maximum retail price. It proposes to replace the current system of giving subsidy to the industry with direct assistance to farmers.
Solar Mission launched
Prime Minister Manmohan Singh launched India’s Solar Energy Mission (named Jawaharlal Nehru National Solar Mission) on January 11, 2010. The main aim of the mission is to help generate 20,000 MW of solar power by 2022.
The Prime Minister urged the industry to create ‘Solar Valleys’ on the lines of Silicon Valleys and asked business houses to view the Solar Energy Mission as a business opportunity. He added that the success of the mission had the potential of transforming India’s energy prospects while contributing to national and global efforts to combat climate change.
The solar mission assumes important because it holds the centre-stage of the country’s activities to combat climate change. The mission is an important part of the country’s National Action Plan on Climate Change and is trying to establish the country as a global leader in solar energy, not just in terms of solar power generation but also in solar manufacturing and generation of this technology.
The mission targets 1,100 MW grid solar power, 7 million sq meter solar collectors and 200 MW off grid solar applications in first phase by 2013, and 20,000 MW grid solar power, 20 million sq m solar collectors and 2,000 MW off grid solar applications by the year 2022.
New adult literacy mission gets under-way
The Union government has chosen 19 States to start adult literacy classes under the all-new Sakshar Bharat Mission, which the Prime Minister launched in September 2009.
The mission, with a whopping budgetary support of $1 billion, seeks to educate 70 million illiterates by 2012; 60 million being women. Its first phase began on January 15, 2010 in 167 districts of 19 States, which have, in the past, displayed commitment to adult literacy.
The selected States are the ones that continued to stress adult literacy even after the old National Literacy Mission (NLM) was disbanded. Some States like Punjab and Himachal neglected the sector, with none having any ongoing adult literacy component or programme.
The mission aims to achieve 100 per cent literacy in 365 low literacy districts where adult female literacy rate is 50 per cent less as per the 2001 census. The final goal, however, is to take national literacy level from 64 per cent to 80 per cent by 2017, and reduce the gender gap from 21 to 10 per cent. In the first phase, Rajasthan has clinched the maximum number of projects for 31 districts. Close behind is Uttar Pradesh with projects for 26 districts, Andhra Pradesh 18, Gujarat 13 and Uttarakhand five.
The focus will be on learning beyond reading, writing and arithmetic to include life skills and employment as part of adult literacy. The idea is to retain learners and not lose them to lack of post-literacy avenues.
Another thing that sets the Sakshar Bharat Mission apart from the NLM is its complete ownership with the Gram Panchayat. The past programme was controlled by districts, which used to get certificates for compliance. Now the programme will be run and monitored by Panchayats and learners will be the king.
Social Situation Report
With over 40 per cent of people in India still living on less than $1.25 (around Rs 60) a day, India now stands third in terms of the highest proportion of extremely poor people in South Asia, next only to Nepal and Bangladesh, with corresponding percentages at 54.7 and 50.5, respectively.
The latest UN Report on the World Social Situation 2010, places India below Pakistan, Myanmar and Sri Lanka in terms of extreme poverty. Pakistan is the only nation in the sector to have achieved the Millennium Development Goal (MDG) of cutting poverty by half between 1990 and 2015. It had 73 per cent of the people in ‘extreme poverty’ 15 years ago; it now has 22.6 per cent as against its MDG target of 29.3 per cent.
India is lagging on the front, and must have an annual poverty reduction rate of 4.7 per cent (between 2005 and 2015) against 1.4 between 1990 and 2005 if it wants to meet the MDG target of 27 per cent; so far it has touched only 41.6 per cent. Rural India has 43.8 per cent of the people in extreme poverty as against 36.2 per cent in urban areas.
This underlines the need for inclusive growth in India, as stated by the UN report, which credits China, and to some extent India, for reduced global poverty in the past two decades when the number of people living on less than $1.25 a day came down from 1.9 billion to 1.4 billion.
EDUCATION
Forty four deemed universities to be de-recognised
The HRD Ministry has decided to de-recognize as many as 44 "Deemed Universities", spelling uncertainty for nearly two lakh students who are enrolled with them. The Ministry's decision amounts to an acknowledgement of irregularities in conferring the "deemed" tag to these institutions under the first UPA government in which Arjun Singh was the HRD minister.
These deemed Universities were found deficient on many grounds—ranging from lack of infrastructure to lack of evidence of expertise in disciplines they claim to specialize in.
The HRD Ministry emphasized that the affected students would be taken care of. The Ministry's task force has recommended that institutions not found fit for deemed University status "revert to status quo ante as an affiliated college of the State University of jurisdiction so that students would be able to complete their ongoing courses and obtain degree from the affiliating University." Similarly, medical and dental colleges not found suitable can affiliate to State University or State medical University.
In case, the institution is unable to obtain affiliation, efforts would be made to facilitate the migration/re-enrolment of the affected students in other institutions. Doctoral students will have to re-register in affiliating Universities and those in distance education should either go to IGNOU or State open Universities. While these safeguards have been recommended, the students are nonetheless likely to go through a phase of uncertainty as they move from one University to another.
Tamil Nadu has the distinction of having 16 of the 44 de-recognized deemed Universities, 15 of them private and one government-sponsored.
Karnataka has six de-recognized deemed Universities; Uttar Pradesh four; Haryana, Uttarakhand, Rajasthan and Maharashtra three each; Gujarat, Orissa, Andhra Pradesh, Delhi, Bihar, one each. The three government-run institutions to be de-recognized are: Nava Nalanda Mahavira in Bihar, Rajiv Gandhi National Institute of Youth Development, Tamil Nadu, and National Museum Institute of the History of Art, Conservation and Musicology, New Delhi.
National Knowledge Network
The Union government has approved the setting up of a National Knowledge Network (NKN) that will connect all major educational institutions like the IITs, the IIMs and top universities for exchange of information and research.
One of the important recommendations of the National Knowledge Commission (NKC) is to inter-connect all knowledge institutions through high speed data communication network. This would encourage sharing of knowledge, specialised resources and collaborative research. The government’s decision to set up such a network was announced in 2008-09 and an initial amount of Rs.100 crore was allocated to the Department of Information Technology, Ministry of Communications and IT for this.
The architecture of the NKN will be scalable and the network will consist of an ultra-high speed core (multiples of 10Gbps and upwards) to provide a nationwide ultra high-speed data-network highway. The IT mesh will connect around 1,500 institutions and the setting up of core network is expected to be completed in a span of two years.
The network will enable scientists, researches and students from diverse spheres across the country to work together for advancing human development in critical and emerging areas.
Health, education, grid computing, agriculture and e-governance are the main applications identified for implementation and delivery on NKN.
Model rules for RTE Act
On January 30, 2010, the Union government approved model rules for the Right to Education Act 2009, which requires State governments to make free and compulsory elementary education a right of every child between 6 and 14 years of age.
The model rules, list priorities for States, which would have to conform to the standards under the Act within three years of its commencement; non-conformation could bring de-recognition. The Act, passed by the Parliament in August 2009, is yet to be officially notified though.
To begin with, the rules ask school management committees or the local authorities to identify children, who have never been to school or not managed to complete elementary education, and arrange for their special training in appropriate classes so that they can ultimately be integrated into the system. Any child above 6 years of age will be entitled to free special training either at school or residential facility, before he/she is ready to enter school at a convenient level. Such children would be allowed to complete elementary education even after they have attained 14 years, for the obvious reasons that they enter the school late.
At least one primary school (class I to V) must be located within a km of walking distance of the neighbourhood; for schools with classes VI to VIII, this distance would be three km. States need to provide more neighbourhood schools in highly populated areas and ensure safety of students in areas with tough terrains.
But before a school comes up, the States would have to undertake a mapping to identify all children in remote areas, including those from disadvantaged groups. This must be done in a year and the data updated every year.
For the first time, the law mandates maintenance of records of all children from birth to 14 years of age through a household survey to be updated every year. The rules further prescribe strict norms for non-segregation of students and safe transport for disabled children to ensure that they attend school.
Also, there is flexibility on birth certificate for admission. If formal birth record is not available, an affidavit would suffice, so would a hospital/ANM or anganwari record.
Adequate qualification for teachers has been stressed upon, with the academic authority (to be set up under the Act) to enlist the qualifications for teachers, who would get five years to upgrade their skills. An important part of the rules pertains to specifications on recognition of elementary level schools. The Act will, for the first time, mandates recognition of such schools within three years of the commencement.
ENVIRONMENT
India submits proposed carbon cuts to UN
On January 30, 2010, India submitted its proposed emission intensity cut targets by 20-25 per cent by 2020 to the UN, a day before the world body’s January 31 deadline for submitting the climate change mitigation steps under the Copenhagen Accord.
However, it made it clear to the Secretariat of the United Nations Framework Convention on Climate Change (UNFCCC) that all its domestic mitigation actions were entirely voluntary in nature and not legally binding, a position India had maintained at Copenhagen Summit in Denmark.
Though agriculture sector contributes around 14 per cent of the total GHG emissions, India has kept it out of the purview of the mitigations actions in its blueprint submitted to the UN to ensure food security.
LAW POINT
CJI comes under RTI ambit, says Delhi HC bench
In an unusual display of checks and balances within the judiciary, the Delhi High Court, on January 12, 2010, rejected the contention of the Supreme Court that the office of the Chief Justice of India was beyond the ambit of the Right to Information Act.
A full bench of the High Court, comprising Chief Justice A.P. Shah, Justice Vikramjit Sen and Justice S. Muralidhar, unanimously dispelled the fear raised by the apex court that the extension of RTI to the CJI’s office would undermine judicial independence.
Referring to a resolution adopted by Supreme Court judges in 1997, a resolution adopted by a conference of Chief Justices in 1999 and the UN-sponsored 2001 Bangalore principles of judicial conduct, the HC said, ‘‘Well defined and publicly known standards and procedures complement, rather than diminish, the notion of judicial independence.’’
The HC verdict came in the context of the prolonged controversy over whether the declarations of assets made by judges should be put in the public domain.
Free to criticize religions but without hate
In a significant ruling, a three-judge bench of the Bombay High Court has held that in India criticism of any religion—be it Islam, Hinduism, Christianity or any other—is permissible under the fundamental right to freedom of speech and that a book cannot be banned on those grounds alone.
However, the criticism must be bona fide or academic, said the Court, as it upheld a ban issued in 2007 by the Maharashtra government on a book titled “Islam—A Concept of Political World Invasion by Muslims.” The book contained an “aggravated form of criticism made with a malicious and deliberate intention” to outrage the feelings of Muslims, the Court said.
Delivering the landmark verdict, the Court upheld the State’s ban on a book but at the same time brought joy to civil rights activists when it held that, “in our country, everything is open to criticism and religion is no exception. Freedom of expression covers criticism of religion and no person can be sensitive about it.”
The Court also found “totally unacceptable” the author’s argument that banning the book in the age of the internet is passe and pointless.
FOREIGN RELATIONS
India-ASEAN trade treaty gets operational
The Union government has notified the rules to operationalise the India-ASEAN free trade agreement, which came into effect from January 1, 2010. The rules specify that products having more than 35 per cent of local content will get preferential tax treatment under the free-trade treaty.
The rules also specify the methodology for calculation of the cost of products to be traded between India and the Association of South East Asian Nations (ASEAN).
New Delhi had signed the an agreement on August 13, 2009, in Seoul with ASEAN for duty-free import and export of as many as 4,000 products ranging from steel to apparel to sugar and tobacco over a period of eight years.
While the pact opens the 1.7-billion consumer market to each other, it also eliminates duties on 80 per cent of goods traded between the two regions by 2016.
Visit of Bangladesh Prime Minister
On January 11, 2010, India committed one billion dollars line of credit for developmental projects in Bangladesh and transformed its bilateral ties by signing five accords, including three key security pacts to expand counter-terror cooperation, during the visit of Bangladesh Premier Sheikh Hasina.
“This visit has opened a new chapter in India-Bangladesh relations, reflecting the unity of minds and hearts,” Manmohan Singh told Sheikh Hasina.
The one-billion dollar line of credit is the largest ever one-time bilateral financial assistance India has provided to any country. This will be used for construction of railway bridges and lines, supply of coaches and locomotives and buses, and assistance in dredging, an issue of pressing concern to Dhaka.
India also agreed to supply 250 MW of electricity through its central grid. The two sides also took major steps to improve connectivity, including the start of the Akhara-Agartala rail link.
The ties between the two nations had suffered under the previous regime in Dhaka over a host of tricky issues, including the alleged sheltering of insurgents from India’s north-eastern States in Bangladeshi territory.
The three security-related pacts signal a major step forward in expanding counter-terror cooperation and in addressing India’s concerns over this issue that had earlier strained their ties. The pacts will help New Delhi press Dhaka for the extradition of suspected insurgents from its north-eastern States who have taken shelter in Bangladeshi territory over the years.
During her visit, Sheikh Hasina was also conferred the prestigious Indira Gandhi Prize for Peace, Disarmament and Development.
Visit of Prime Minister of Malaysia
On January 20, 2010, India and Malaysia y signed an extradition treaty and two other accords during the visit of Malaysian Prime Minister Mohd Najib Tun Abdul Razak. The extradition treaty will enable India to seek the transfer from Malaysia of Indians who commit crime on the Indian soil and take refuge in the South East Asian nation.
A Malaysia-India capital market collaborative agreement was signed between the Securities and Exchange Board of India (SEBI) and the Security Commission of Malaysia. The third agreement was in the field of higher education.
Prime Minister Manmohan Singh and the Malaysian leader discussed a wide range of issues, including bilateral ties as well as international developments. India’s ties with ASEAN were also discussed at length. Mr Razak strongly pitched for the early conclusion of a Comprehensive Economic Cooperation Agreement (CECA) between the two countries.
With bilateral trade exceeding $10.5 billion in 2008-09, Malaysia is India’s second largest trading partner (after Singapore) among the 10 ASEAN members. Infrastructure, IT, biotechnology, energy and education have emerged as promising areas of cooperation between the two countries.
Nepal assures of no anti-India activity from its soil
Indian External Affairs Minister S.M. Krishna visited Kathmandu on January 15, 2010. During his meetings with his counterpart Sujata Koirala he gave positive gesture to Nepal to the latter’s long-standing proposal to review the Nepal-India Peace and Friendship Treaty-1950.
In return, Nepal sought to address India's concerns with regard to fake currency being smuggled from here, pledging that it would not allow its territory to be used against its neighbour.
India and Nepal also agreed to “cooperate closely” to end the menace of terrorism and extremism, including human trafficking, smuggling of arms and fake Indian currency.
During the meeting, Nepal raised serious concerns over the highly controversial issues on border encroachment from the Indian side whereas the Indian officials urged Nepal to cooperate with India by signing the much-awaited Extradition Treaty that Nepal had been dilly dallying to sign.
Five MoUs regarding the construction of Terai roads with Indian assistance at an estimated cost of Rs 805 crore, a project worth Rs 9.2 crore for the Nepal Stock Exchange Ltd and Central Depository Services (India) Ltd, Rs 6.3-crore electrification project, and construction of a Science Learning Centre with India’s assistance of Rs 16.6 crore, were signed during the visit.
During his meeting with Unified Communist Party of Nepal-Maoists chairman Pushpa Kamal Dahal, alias Prachanda, Mr Krishna expressed disappointment on their ongoing anti-India movement.
However, just a day after he met with Krishna when he had said he received positive response from him to address their concerns, Prachanda, in his address to party cadres in Khotang district, criticised India and said it has played negative role by backing up other political parties to uphold civilian supremacy in Nepal.
Visit of Korean President
Cooperation in the civilian nuclear energy field was high on the agenda during the meeting between Prime Minister Manmohan Singh and South Korean President Lee Myung-bak, on January 25, 2010. Presdent Myung-bak was also the chief guest at the Republic Day.
During the visit the two countries signed accords in diverse areas, including IT and civilian space, following the talks between the two leaders.
President Lee Myung-bak began his four-day visit to India with a visit to the Hyundai factory near Chennai to meet Korean businessmen living in the city before reaching New Delhi.
Regional and global issues, including the intensification of economic ties and cooperation in sphere of civilian nuclear cooperation and space technologies, figured prominently during talks between the two sides. Closer cooperation in combating global financial recession was also discussed in the context of the G-20 summit to be held in Seoul later in 2010.
Apart from the civilian nuclear sector, the two sides also agreed to look at the possibility of joint venture co-operation in research and development, and manufacture of military equipment including through transfer of technology, the joint statement said. The two leaders also agreed to work towards a revised double taxation avoidance convention before the end of 2010.
The Posco steel project in Orissa was also discussed with both sides agreeing that there was a need to expedite the project, which has been facing delays for three years. The two leaders also recognised the need to expedite the implementation of the POSCO project in Orissa,’’ the joint statement said. The Indian side assured South Korea the government is doing its best to expedite the project, which continues to be entangled in land acquisition issues. The Indian side further hoped that South Korean investment would expand in the infrastructure and manufacturing sectors.
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