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Current Affairs: November 2009

E-payments to be credited directly to merchants
In what would make online commerce faster for customers, the Reserve Bank of India (RBI) has mandated that all payments for such transactions be credited directly to merchants, instead of getting cleared by intermediaries such as CC Avenue and Paypal.
Currently, until a payment is authorised and processed by intermediaries, a transaction is not completed. For instance, online retailers such as eBay do not ship goods purchased online unless funds are credited to their account, after being routed through an intermediary. CC Avenue, BillDesk, Direc-Pay, ICICI PaySeal and Paypal are among major payment gateways in India.

Under the new system, all payments to merchants shall be effected within a maximum of three days from the date of transaction. From now on, no payment other than the commissions at the pre-determined rates/frequency shall be payable to the intermediaries. The existing system has some pitfalls. Often, there is a delay in transferring money to the merchant; at times it is more than seven days.

SEBI allows auction of shares in follow-on offer
SEBI has allowed companies to go for pure auction of shares (offered at bid price) in a follow on public offer for pricing of issues for institutional investors. However, the companies will have to offer shares to retail investors, including employees, at the floor price, fixed before start of the auction process and the existing system of public offerings of shares at an uniform price in a band through book-build method will also continue.

To encourage small and medium firms to come out with public issues, SEBI has also allowed existing stock exchanges to set up a separate trading platform and relax the criteria like track record on profitability for listings. On the issue of trading hours, the board has left it on exchanges to decide between 9 am and 5 pm.
Giving more choices to listed companies in pricing shares via book-build route, SEBI introduced an additional method, called Dutch auction, in which the companies making public issues will fix only floor prices. Institutional bidders will have to submit bids above the floor prices. The bidders will be allotted shares on the basis of their bid prices. The highest bidder will be offered shares first, followed by the second-highest.

If the demand for the highest bidder is equal to the total issue size, second-highest bidder will get nothing. However, if the issuer wants to put a cap on allotting shares to a single bidder, it can do so.
Under the present system, known as French auction, companies fix a band of prices for public offers. The maximum difference between floor and ceiling prices in the band is 10%. A bidder has to bid in the given band only. On the basis of demand at various price points, the offer price is fixed and applied uniformly to all investors. The new methodology of pricing is likely to be used by government while divesting its stake in REC and NTPC.

Liberhan inquiry commission
It took 17 years and 48 extensions for the Liberhan Commission, probing the 1992 demolition of the Babri Masjid in Ayodhya, to submit its report to Prime Minister Manmohan Singh in June 2009. One of the country’s longest running inquiry commissions, it has cost the government nearly Rs 7 crore.

During the entire tenure, the one-judge probe was dogged by procedural delays, non-cooperation from key witnesses and even constant transfers during the early days of the commission’s functioning. The commission’s lawyer, Anupam Gupta, dissociated himself from the one-man panel after eight years because of differences with Justice Liberhan.

The commission recorded statements of scores of politicians from the Bharatiya Janata Party (BJP), including senior leaders Advani, Murli Manohar Joshi, then Chief Minister of Uttar Pradesh Kalyan Singh and now Bharatiya Jan Shakti party chief Uma Bharati. Several members of the Congress and the Rashtriya Swayamsevak Sangh (RSS) were also questioned.

Former Prime Minister Atal Behari Vajpayee, senior BJP leaders LK Advani, Murli Manohar Joshi and ex-UP Chief Minister Kalyan Singh are among the 68 persons severely indicted by Justice M.S. Liberhan Commission for their role in the Babri Masjid demolition 17 years ago, which led the country to a “brink of communal discord.”

The commission, surprisingly, is soft on Congressman and the then Prime Minister P.V. Narsimha Rao for his perceived ‘inaction’ in deploying Central forces or imposing President’s Rule in then BJP-ruled Uttar Pradesh to protect the 16th century structure, purported to have been built during the reign of Mughal emperor Babar. The commission refers to it as the Ram Janam Bhoomi-Babri Masjid structure (RJBM) and has clarified that its role was not to study if the structure was a mosque or a temple or even its history.

In his 1,029-page report, Justice Liberhan, a former Chief Justice of Madras High Court, indicts the perpetrators for having reduced “the oldest civilisation to stark intolerance and barbarianism, all for petty political gains.”

Coming down heavily on the troika of Advani, Vajpayee and Joshi, Justice Liberhan calls them “pseudo-moderates" and refers to them as “icons” of the movement. The commission also indicts Uma Bharti, RSS ideologue K. Govindacharya and Shankar Singh Vaghela, along with Kalyan Singh, who are no more connected with the BJP or the RSS.

Silent on punitive action against those indicted for the 1992 Babri Masjid demolition, government’s Action Taken Report (ATR) on the much-delayed Liberhan Commission findings agrees to enact the Prevention of Communal Violence Bill to punish those who misuse religion for politics, and set up special tribunals to prosecute related offences.

In the name of action against perpetrators of the demolition, all the ATR promises is expediting the hearing of cases registered 17 years ago. These include the case at Lucknow special court against lakhs of unknown karsewaks; case against eight accused (politicians also named by Liberhan) in Rae Bareli special court and 47 other cases in the Lucknow special court.

The ATR, however, is non-condescending to Liberhan’s major recommendation of a statutory national commission of cultural experts to determine the historical legacy of monuments, like those in question. The government plainly rejected this proposal saying the ASI could handle the job. It also declined Liberhan’s idea to confer statutory status on the National Integration Council, though it accepted in part his recommendation that political leaders and holders of public offices should not simultaneously hold positions in religions organisations.

India climbs to tenth slot among top gold holders
India is the world’s largest private gold consumer, but the government’s holding of gold as an asset is modest. Even so, the latest purchase of 200 metric tonne from IMF puts it at number ten among the list of top 10 gold-holders in the world.

For India, the purchase, apart from signalling that its economy has come full circle, is a way of spreading its assets which are said to be currently over-weighted with foreign currency, mainly in the form of sovereign US Treasury bonds. In other words, it is a hedge against a falling dollar.

Of India’s current foreign exchange reserves of nearly $285 billion, foreign currency assets account for more than 90% ($268.3 billion), followed by gold ($10.3 billion), IMF’s Special Drawing Rights ($5.2 billion) and a reserve position in the IMF of $1.59 billion.
While India’s current gold holdings are said to be historically low, buying 200 tons in addition to the 358 tons it already holds is expected to bump up the gold reserves to more than 6%.

India’s gold trauma occurred in the summer of 1991, when faced with dwindling foreign exchange reserves and a possibility of a default on payments, the government mortgaged 47 tons of gold to the Bank of England and 20 tons of gold to the Union Bank of Switzerland to raise $ 600 million. The move helped tide over the balance of payment crisis, and also kick-started the reforms process.

Food prices biting buyers
Even as the overall inflation rate remains at around 1.5%, prices of food articles have gone up 13.4% in the last one year. That statistic  is bad news for the common man, but details of specific commodities like potatoes, onions and pulses are even more disconcerting.
According to the latest data, prices of potatoes have doubled over the last 12 months; onions are 50% more expensive and the prices of pulses have gone up by over 23% on average. It’s another matter that the price of some specific pulses like arhar and moong have risen to all-time highs of around Rs 90 per kg.

Contributing to the spike in food prices has been a weak monsoon in 2009, which is expected to lead to foodgrain production falling by around 21 million tonnes in the current kharif season compared to kharif 2008. Rice production is estimated to fall by over 15 million tonnes and the output of coarse cereals by 5.5 million tonnes.
All-weather roads jack up rural income by 100%
All-weather roads in the villages of the country has doubled the income of rural households, raised literacy rate by 10%, and appreciated land prices by up to 80%, says the World Bank. “In 2000, about 40% of India’s 825,000 villages lacked all-weather roads ... With access to roads, incomes have soared. Household incomes rose by 50% to 100% on average.”

World Bank has been supporting India’s rural connectivity programme—Pradhan Mantri Gram Sadak Yojana (PMGSY). It aids projects in several places like Himachal Pradesh, Rajasthan, Jharkhand and Uttar Pradesh. Over the years, World Bank’s concessionary lending arm International Development Association (IDA) has supported many rural roads projects, both standalone and components of larger projects. The year-round connectivity has narrowed gender gap with access to education for girls and raised job opportunities, IDA said adding every Rs 10 lakh spent on rural roads has helped lift 163 people out of poverty.

The World Bank has said "a second project of $1 billion is under preparation". It would aim to improve maintenance, weak capacity, governance and accountability, and would introduce several efficiency measures. Meanwhile, for two-laning of 6,372-km of the total of 19,702 km single lane highways in the country, the finance ministry has requested the World Bank for a loan of $3 billion.

India’s GDP beats all forecasts
India's economy gave yet another indication of its rapidly improving health, prompting greater ambition from policy-makers still chary of withdrawing the stimulus medicine responsible for the recovery. Gross Domestic Product (GDP) expanded by a surprisingly strong 7.9% during the July-September second quarter, its fastest pace in a year and a half. The growth was driven largely by a pick-up in manufacturing, increased government expenditure, robust investments and modest growth in farm output despite the drought.

The growth in the first half of the year is now a respectable 7% as against 7.8% during the same period a year ago. In the fiscal year ended March 2009, the economy grew by 6.7%, its weakest in six years and way below rates of 9% or more in the previous three years.

The strong growth may put pressure on RBI to hike policy rates sooner than March 2010 as worries about inflation grow. Bond yields firmed up to 7.25%, six basis points up, as traders see a 25-basis-point hike in key policy rates by January 2010.
There will also be pressure on the government to cut expenditure and roll back stimulus measures such as the cut in indirect rates. The fiscal deficit between April and October 2009 was 61% of the target for the year, but slower-than-expected tax collections suggest the government could overshoot the target of 6.8% of the GDP for the year.

Tougher air quality norms unveiled
India has revised its National Ambient Air Quality Standards (NAAQS), discontinuing the old practice of different air quality standards for different land-use classes like residential and industrial areas. The country will now have uniform health-based NAAQS with uniform standards for all areas, whether residential or industrial.

Revised after a gap of 15 years, new air quality standards also provide legal framework for controlling air pollution and protecting public health, meaning that any citizen can now approach the court demanding better air quality. The revised standards include initiatives that had been developed in consonance with globally best practices and in keeping with latest advancements in technology and research.

The big question, however, is of enforcement, which could prove to be a difficult task.

The standards have brought two new deadly pollutants, PM 2.5 and ozone, within the ambit of regulation. The standard for nitrogen oxide has been made more stringent, from the existing 60 micro-gm per cubic metre, it has been tightened down to 40 micro-gm per cubic metre. Suspended particulate matter (SPM) as parameter has been replaced by fine particulate matter (PM 2.5), which is more relevant for public health.

India's children stunted, undernourished, wasted: UN
India has the largest number of stunted children below the age of five in the world, according to the latest United Nations Children's Fund report.

Approximately 200 million children, under the age of five, suffer from stunted growth in the developing world. The report 'Tracking Progress on Child and Maternal Nutrition' found that stunting is primarily caused due to childhood under-nutrition, which contributes to more than a third of all deaths in children under five.

India also has one of the highest numbers of underweight children, below the age of five, and one third of 'wasted children'—those facing a greater chance of death—in the world.

Out of a total of 19 million new-borns per year in the developing world that are born with low birth-weight, India has 7.4 million low birth-weight babies per year—the highest in the world. The report finds that 80 per cent of the developing world's stunted children live in 24 countries.

India, however, does not have the highest prevalence of stunted children as the high numbers was due to its large population. In terms of prevalence, Afghanistan was first while India was 12th. In 17 countries, underweight prevalence among children under 5 years old is greater than 30 per cent. The rates were highest in Bangladesh, India, Timor-Leste and Yemen,` with more than 40 per cent of children being underweight.

The study also found that 13 per cent of children, under 5 years old, in the developing world were wasted, and 5 per cent were severely wasted (an estimated 26 million children).

A number of African and Asian countries have wasting rates that exceed 15 per cent, including India (20 per cent) Bangladesh (17 per cent), and Sudan (16 per cent). The country with the highest prevalence of wasting in the world is Timor-Leste, where 25 per cent of children under 5 years old are wasted.

In Asia, the prevalence of stunting dropped from approximately 44 per cent in 1990 to an estimated 30 per cent in 2008, while in Africa it fell from approximately 38 per cent in 1990 to an estimated 34 per cent in 2008. Unless attention is paid to addressing the causes of child and maternal under-nutrition today, the costs will be considerably higher tomorrow.

Finally, SC judges declare assets
In a move that will enhance the image of the judiciary, 21 out of the 22 Supreme Court judges—including Chief Justice K.G. Balakrishnan—have declared their assets and of their wives by posting the details on the court’s website—

The step is expected to end months of controversy over the apex court's refusal to place in public domain such details, maintaining that it was not bound to part with these under the Right to Information Act (RTI).

The details, provided under the heading “Assets of Judges,” however, did not have the total assets of each judge and his wife. Also, the value of a number of properties owned by them is not given. Most of the judges had provided such details to the CJI at the time of their elevation to the apex court, but these were not placed in public domain.

Visit of Australian PM to India
Australian Prime Minister Kevin Rudd visited India in November 2009 with a message to India that Australia remained a safe destination for Indian students. Mr Rudd said his government was committed to using the “full force” of law to protect Indian students.

During his visit, in an attempt to upgrade bilateral ties, both countries agreed to elevate the relationship to a strategic partnership. Discussions between Mr Rudd and Mr Singh covered all aspects of the bilateral relationship—from trade to climate change. On climate change, Mr Rudd said: “Indian Prime Minister and I discussed the great challenge of climate change. We must have a good ambition for Copenhagen.” The two sides agreed that it is an issue of concern for both countries, with the Indian side reiterating its position on climate change.
The two sides have also decided to expedite the feasibility study to look into the impact of an FTA between the two countries. In fact, the Australian side has made no secret of its interest in an FTA, with Mr Rudd saying that he expects the study to recommend an FTA.

Iran seeks help to combat terror
Notwithstanding the US pressure, India has unequivocally conveyed to Iran its commitment to participating in the 7.4 billion dollar Iran-Pakistan-India (IPI) gas pipeline project. This reassurance was given by both Prime Minister Manmohan Singh and External Affairs Minister S.M. Krishna at separate meetings with visiting Iranian Foreign Minister Manouchehr Mottaki in New Delhi.

At the delegation-level talks between the two foreign ministers, Iran sought greater cooperation with New Delhi in fighting terrorism emanating from Pakistan. Like India, Iran has also been affected by terrorism sponsored from the Pakistani soil. A horrific suicide attack in south-east Iran in October 2009 targeted the country's Revolutionary Guards and was blamed on Pakistan-based Jundallah, a Sunni extremist outfit.

This was the first high-level contact between the two countries since the UPA government returned to power in New Delhi and Mahmoud Ahmedinejad was re-elected as the President of Iran in June 2009.

Mottaki renewed an invitation to Manmohan Singh to visit Iran. The invitation was accepted and dates of the visit would be finalised in consultations through diplomatic channels.

The two sides also agreed to convene an early meeting of the joint working group (JWG) on energy cooperation between them to resolve issues connected with the pipeline project. An Iranian team would be visiting India soon for the purpose. As Iran and India share common interests in Afghanistan, they also discussed joint infrastructure projects like the deep sea port of Chabahar and a rail link to provide better connectivity for Afghanistan to Central Asia.

Visit of Prime Minister Manmohan Singh to USA
Prime Minister Manmohan Singh’s deliberations with US President Barack Obama in end-November 2009, as his first State guest, did not result in any dramatic announcements but New Delhi was satisfied that it was able to persuade Washington to acknowledge that India was being inflicted by terrorism from neighbouring Pakistan.

Washington went a step further by calling for the defeat of terrorist “safe havens” in Pakistan and Afghanistan and agreed to enhance collaboration in this effort.

The joint statement was prefaced with a commitment by both leaders to expand and deepen their relations. President Obama described India as a “rising and responsible global power” to assure India that it was very much on the US radar and that any impression to the contrary was incorrect.

The two countries signed a new memorandum of understanding on counter-terrorism cooperation to help each other in information and intelligence sharing related to terrorism, which institutionalised an arrangement which has been in place since the 26/11 Mumbai terror attacks.

President Obama’s commitment on the implementation of the Indo-US civil nuclear agreement during his press conference also found mention in the joint statement, which also acknowledges India as a responsible nuclear power. Taking note of the Obama administration’s sensitivities on non-proliferation, India was quick to reaffirm its unilateral and voluntary moratorium on nuclear testing and agreed with US to start early negotiations on a multilateral, non-discriminatory and internationally verifiable Fissile Material Cut-off Treaty. On its part, the US committed to ratify the Comprehensive Test Ban Treaty (CTBT) at an early date. There are fears that such a development would encourage the US to pressurise India to sign the CTBT, which has not been accepted by New Delhi.

President Barack Obama assured Prime Minister Manmohan Singh that the US-China joint statement issued on his visit to Beijing earlier in November was not an endorsement of Chinese mediation in the India-Pakistan dispute. Mr Singh said Obama told him that the intention of that statement was not to support any “third-party intervention in issues in South Asia.” He said he was “very satisfied” with Obama’s assurance on an issue that caused much heart-burn in New Delhi. India opposes third-party mediation in the dispute with Pakistan over Kashmir.

On Afghanistan, Prime Minister Singh said Obama told him that the US “highly values” India's role in reconstruction and development of the war-ravaged country. Manmohan, who met several Republican Democratic as well as Republican lawmakers while in Washington, said there was bipartisan support for India’s role in Afghanistan. This role is viewed with suspicion by Pakistan.

Visit of Canadian PM to India
India and Canada have entered into an agreement for enhancing energy security. Yet another deal has been inked between the two nations to kick off negotiations between the two with respect to free trade area. This happened during the meeting of Prime Minister Manmohan Singh with visiting Canadian Prime Minister Stephen Harper, in November 2009, on a range of bilateral issues, including trade and investment, civil nuclear cooperation, the global financial crisis, terrorism and climate change.

The energy security pact will enable better cooperation between the nations in areas of renewable energy and energy efficiency, oil and natural gas, power generation, transmission, distribution and end-use, energy research and development.

The FTA deal will enable the formation of a joint study group for exploring the chances for developing a Comprehensive Economic Partnership Agreement, with the first meeting slated to be held in December.

The two nations have also decided to cooperate for tackling global terrorism.

India reaches nuke agreement with Canada
On November 28, 2009, India reached a civil nuclear agreement with Canada. The agreement was firmed up during a meeting between Prime Minister Manmohan Singh and his counterpart Stephen Harper on the sidelines of the Commonwealth Summit.

Canada has become the eighth country with which India has reached civil nuclear agreement since the NSG lifted a 34-year-old ban on India to join global nuclear trade in September last year. The other countries with which India has already signed the civil nuclear deal are the US, France, Russia, Mongolia, Kazakhstan, Argentina and Namibia.

China protests against Dalai Lama’s Tawang visit
The Chinese rhetoric against India for the Dalai Lama’s visit to Arunachal Pradesh in November 2009 picked up again with a State-run newspaper running a report that said the Tibetan spiritual leader undertook the Arunachal visit under pressure from New Delhi. India rubbished the assessment and took the opportunity to remind China that the Dalai Lama was free to travel anywhere in the country.

Though the Chinese government has refrained from directly attacking India since the meeting between Prime Minister Manmohan Singh and Chinese Premier Wen Jiabao, it is significant that China’s state-run media ran a report attacking India over the visit of the Dalai Lama.

“India may make use of the Dalai Lama to solve the decades-long territorial conflict by encouraging his visit to southern Tibet (Arunachal Pradesh),” Hu Shisheng, a researcher of southern Asian studies at the China Institutes of Contemporary International Relations, was quoted as saying. China calls Arunachal Pradesh southern Tibet.

“The Dalai Lama went to southern Tibet at this critical moment probably because of pressure from India... By doing so, he can please the country that has hosted him for years,” Mr Hu said. He added: “India may have forgotten the lesson of 1962, when its repeated provocation resulted in military clashes. India is on this wrong track again...When the conflict gets sharper and sharper, the Chinese government will have to face it and solve it in a way India has designed,” Mr Hu said.

China had protested against the visit of the Dalai Lama to Tawang monastery in Arunachal Pradesh, but India had dismissed the protests by pointing out that the Dalai Lama continues to be a guest in India.

Responding to that attack, the Dalai Lama dismissed China’s claim that his visit was anti-China and had said that Arunachal was an integral part of India.

Genisis of the dispute: In 1913-14, China, Tibet and Britain tried to hammer out the Shimla Accord—a deal defining borders between Inner and Outer Tibet, and between Outer Tibet and British India. Henry McMahon, a British administrator, drew up 550 miles of the boundary demarcating British India and Outer Tibet. China walked out of the talks, rejecting the line between Inner and Outer Tibet, but the Accord nonetheless ceded Tawang and other Tibetan areas to the British Empire. Since then, China has declared the line invalid, citing the absence of its signature on the Shimla Accord. After the collapse of Chinese power in Tibet, the McMahon line was, de facto, accepted as official, and Britain established administrations in the area. However, Tibet and later the People’s Republic of China claimed Tawang district after India's independence. With China all set to take over Tibet, India declared the McMahon line the official boundary in 1950.
The North East Frontier Agency was created in 1954. The Tibetan uprising was suppressed by China and its self-ruling government abolished in 1959. The Dalai Lama fled to Dharamsala, and maps published by the Tibetan government-in-exile now show McMahon Line as the southern border of Tibet.
During the 1962 war, China acquired large parts of NEFA but voluntarily withdrew to the McMahon line. It was only in 1985 that China declared its ownership claims on the eastern tract roughly corresponding to Arunachal Pradesh. Until then, it was prepared to cede this land to India if it was given the cold western desert of Aksai Chin in Ladakh, of strategic importance to China. India rejects China’s claims over both, and post-1985 China has insisted that Arunachal Pradesh is theirs.

India, EU ink atomic energy pact
On November 6, 2009, India and the European Union (EU) signed a major accord for cooperation in the civil atomic energy field and pledged to conclude an ambitious free trade agreement (FTA) between them within a year. The atomic energy agreement is aimed at facilitating India’s participation in the international thermonuclear experimental reactor (ITER) project for fusion research.

Prime Minister Manmohan Singh led the Indian side at the 10th India-EU summit while the EU was represented by Swedish Prime Minister Fredrik Reinfeldt, in his capacity as chairman of the EU Council and EU President Jose Manuel Barroso.

The ITER project on fusion energy is said to be the costliest experiment of its kind that will cost some 10 billion euros. The first fusion reactor is expected to be operational in Cadarche in southern France by 2016.

India and the EU have been negotiating an FTA since 2007 but have not been able to firm up the accord due to differences over EU’s attempts to link trade with climate and other extraneous issues. Both sides are of the view that a political push was need for the agreement to be wrapped up by 2010.

In a joint statement the two sides shared the understanding that the development of nuclear energy for peaceful purposes should take place in conformity with the highest standards of safety, security and non-proliferation. The joint statement further said India and the EU welcomed the renewed momentum in global disarmament talks while reaffirming their shared interest in working together for disarmament and for countering the proliferation of weapons of mass destruction and their delivery systems. In this context, they stressed the importance of strengthening national export control laws.

On terrorism, the EU condemned the terrorist attacks in Mumbai in November 2008 and reiterated the need for intensifying global cooperation in combating international terrorism. Without any reference to Pakistan, the two sides emphasised the utmost importance of bringing the perpetrators of the crime to justice.

On international financial crisis and global economy, the two sides reiterated their commitment to continue to sustain a strong policy response until the recovery was secured, to prepare internationally coordinated and cooperative exit strategies to be implemented once the recovery has taken hold, to strengthen and reform financial regulatory and supervisory systems to ensure global financial stability and prevent further crises, and to ensure that the international financial institutions reflect contemporary economic realities.

French Parliament ratifies N-deal with India
Even as India and the United States iron out their differences over the reprocessing of the spent nuclear fuel under the 123 agreement, the French Parliament has ratified the India-France nuclear accord, paving the way for French nuclear giants to build nuclear plants in India.

The French National Assembly adopted a law authorising the ratification of the agreement signed between the two countries on September 30, 2008, during Prime Minister Manmohan Singh’s visit to Paris. This is subsequent to the adoption of the same law by the Senate on October 15, 2009.

It will enable the early entry into force of the agreement. It now paves the way for strengthening relations between French and Indian partners and for more concrete developments in the industrial field.

France was the first country to sign a civil nuclear cooperation agreement with New Delhi days after India secured a waiver from the nuclear suppliers’ group (NSG) to undertake nuclear commerce in 2008. Since then, India has signed nuclear deals with the US, Russia, Namibia, Kazakhstan, Mongolia and Argentina.

French nuclear supplier Areva has been allocated the nuclear project site at Jaitapur in Maharashtra to initially build two power plants.

The Indo-French nuclear agreement allows reprocessing of the spent nuclear fuel from French nuclear reactors under safeguards, and gives an assurance of lifetime supply of nuclear fuel for these reactors. It does not bar the transfer of enrichment and reprocessing technologies. With the ratification of the agreement by the French Parliament, France becomes the second country after Russia to give unconditional rights to reprocess spent nuclear fuel to India.

The agreement makes it mandatory that reprocessing be done under the safeguards of the International Atomic Energy Agency.

CBI pegs Satyam fraud at Rs 14,000 cr
Seven months after its first charge sheet in the Satyam scam, CBI on November 24, 2009, filed a supplementary charge sheet against disgraced Satyam founder B. Ramalinga Raju and nine others, pegging the Satyam fraud at Rs 14,000 crore instead of the Rs 7800 crore that Raju had owned up to in January 2009.

The additional charge-sheet, however, fails to nail Raju and aides on siphoning of funds from Satyam Computer, instead saying that the investigating agency was planning to file a separate chargesheet on the allegations of funds diversion and income-tax frauds within the next few days.

The 200-page charge-sheet filed in the CBI court charged the accused of forging board resolutions and unauthorisedly obtaining loans worth Rs 1220 crore from banks as well as inflating Satyam revenues to the tune of Rs 430 crore by creating fake customers and generating fake invoices.
The charge-sheet also identifies 1065 properties with a documented value of Rs 350 crore that were acquired by the Rajus with the spoils of the fraud. These include 6,000 acres of land, 40,000 sq yd of housing plots and 90,000 sq ft of built-up property.

CBI has also slapped charges of criminal breach of trust and falsifying accounts by inflating the acquisition price of Nipuna Services Ltd, the ITeS arm of Satyam. It also slapped a criminal breach of trust on them in the declaration and disbursal of dividends of Satyam Computers.

Meanwhile, the Rs 1,220 crore unauthorized loans detailed by CBI in the charge-sheet are not reflected in the company's books and are over and above the Rs 1,230 crore that Raju confessed to Satyam having received from various Raju family owned companies including Maytas Infra and Maytas Properties.

Madhu Koda arrested for mining and money laundering
The Jharkhand Vigilance Bureau has arrested former Chief Minister Madhu Koda in the multi-crore mining and money laundering case. A joint team of Jharkhand Police and State vigilance bureau arrested Mr Koda after he repeatedly refused to respond to summons from the Enforcement Directorate for questioning. Mr Koda described his arrest as part of Congress’ conspiracy to keep him away from election campaigning.

Mr Koda is alleged to have laundered thousands of crores during his stint as the Chief Minister between 2006 and 2008. ED’s probe into the money laundering operation, which is spread from Singapore to Thailand and from Dubai to Liberia, is set to balloon into one of the biggest bribery and corruption scandals in the country.
Assembly hails rebel groups
The Nagaland State Legislative Assembly has extended ‘recognition’ to the Naga undergrounds for having “selflessly worked, fought and sacrificed” for the aspirations and rights of the Naga people. This ‘recognition’ as a resolution was adopted in the State Assembly on November 29, 2009, even as talks between the government of India and the NSCN(IM) have yet to reach a conclusive stage. The resolution was passed unanimously with members cutting across party lines to support it.

The State Assembly also reiterated its earlier stand on integration of all Naga-inhabited areas in the region, an issue that also figures prominently on the NSCN agenda.

The Nagaland Assembly has so far passed four resolutions in favour of integration of Naga areas—first on December 12, 1964, followed by August 28, 1970, September 16, 1994 and December 18, 2003. The 60-member House in the resolution also appealed the negotiating parties of the Naga political dialogue to expedite the political process and bring about an early resolution through a negotiated settlement which was honourable and acceptable to the Naga people.

The State Assembly, through its resolution, also appreciated the government of India, particularly Prime Minister Manmohan Singh and Union Home Minister P. Chidambaram for their “renewed sincerity” towards finding a permanent solution to the decades-old “Indo-Naga” political problem.

The resolution also appreciated the civil society, churches, NGOs and the Forum for Naga Reconciliation (FNR) for their all out efforts towards reconciliation, understanding and oneness of all sections of Naga society. The resolution also hailed the sincerity of the underground groups, especially their commitment towards peace and understanding by signing the “Covenant of Reconciliation” earlier at Chiangmai in Thailand on September 23, 2009.

The resolution further decided to constitute a Joint Parliamentary Committee on the Naga political issue comprising members from all political parties. This committee would carry the voice of the House to all concerned sections including the Centre and the Naga rebel groups.

Centre ready with anti-Naxal plan
Home Minister P. Chidambaram announced on November 1, 2009 that the Union government is a ready to launch the much-awaited full-fledged anti-Naxal operations in three different areas, considered tri-junctions of Maoist violence.

The tri-junctions, which have been identified for the offensive against the ‘Red Rebels’, are: Andhra Pradesh-Maharashtra-Chhattisgarh; Orissa-Jharkhand-Chhattisgarh and West Bengal-Jharkhand-Orissa.

Around 40,000 paramilitary personnel would assist the respective State police forces during the operations. Almost 7,000 specially trained troops in jungle warfare are also part of the total strength of the Central forces to be deployed for the task.

The anti-Naxal plan also includes Rs 7,300 crore package for unleashing developmental works in areas cleared off the Left-wing extremists. Officials feel that the Naxal menace, which has now spread to 40,000 sq km area across the country, can be wiped out in a period of 12 to 30 months.

Around 25 lakh people live in areas where Maoists are now having a free run. The Naxalites have killed more than 2,600 people, including civilians, in 5,800 incidents in last three years.

Karzai elected President
On November 1, 2009, Afghanistan's Presidential challenger announced he would not participate in the run-off election because his demands for measures to prevent fraud were rejected. He stopped short of calling on his supporters to boycott the balloting.

Abdullah made no mention of agreeing to take part in any future unity government with President Hamid Karzai, which the US and its international partners believe is the best hope for curbing the Taliban insurgency.

In an emotional speech, Abdullah said he did not believe a free and fair election was possible without changes in the leadership of the electoral commission, which ran the fraud-marred first-round ballot on August 20, 2009. Abdullah said the Afghan people should not accept results of a ballot run by the current group.

A run-off was ordered after the UN auditors threw out nearly a third of Karzai's votes in the first round ballot, dropping him below the 50 per cent threshold for victory in the 36-candidate field.

Afghanistan's election commission declared Hamid Karzai elected as President on November 2, 2009 after it called off a run-off following the withdrawal of his only rival, Abdullah Abdullah. With this move the political uncertainty in Kabul came to an end.

US officials hope to help restore legitimacy to Karzai's government by encouraging him to build a reform-minded government that is ethnically representative and includes Abdullah's followers. US Secretary of State Hillary Rodham Clinton released a statement that hinted at Abdullah's group having some voice in the government. She praised Abdullah for running a "dignified and constructive campaign that drew the support of Afghan people across the nation. We hope that he will continue to stay engaged in the national dialogue and work on behalf of the security and prosperity of the people of Afghanistan."

Hamid Karzai was sworn in for a second term as Afghan President on November 19, 2009. The 51-year-old has pledged to fight corruption and take control of his country's security before his five-year term ends.

His inauguration came against the backdrop of an ever more deadly Taliban insurgency, doubts over his legitimacy after the tainted election, and demands from Western donors that he address rampant corruption and mismanagement.

Hindu property confiscated during 1965 war to be returned
On November 2, 2009, the Bangladesh cabinet approved a proposed law to return Hindu property, which were confiscated during the 1965 Indo-Pak war, when the country was eastern wing of Pakistan, ending a major violation of the rights of minorities in the country.

The proposed law is meant to redress the long-disputed law of the Pakistani era, which was widely criticised as a major violation of the minority rights. During the Pakistan period, the law was called as the Enemy Property Act.

The then Pakistani regime enacted the law to confiscate the property of the Hindu families who fled the country when the India-Pakistan war broke out in 1965 while the post-independent Bangladesh government renamed it as the Vested Property Act 1974.

Officials familiar with the process said under the amended proposal, the government would publish lists of “returnable and non-returnable vested property” within a certain period of times while the claimants could also seek review about “non-returnable” property. Under the law, government committees at district and upzila or sub-district levels would settle disputes regarding the disputed property.

The Awami League had enacted the law to return the minority property at the fag end of its previous 1996-2001 tenure setting a two-year implementation deadline but the subsequent Bangladesh Nationalist Party (BNP) sat on it exposing it to a natural death. The 2001 law stipulated that land that was seized be returned to its original owners, provided that the original owners or their heirs remained resident citizens.

Mujib’s murderers convicted after 34 years
On November 19, 2009, Bangladesh's Supreme Court rejected the appeals of five former army officers and confirmed death sentence on seven others, who are living abroad, for killing the country's founding father Sheikh Mujibur Rahman and his family members 34 years ago.

A five-judge bench of the apex court delivered the judgement amid tight security on the court premises and key establishments across the country, bringing to an end a long court battle on an emotive issue.

Sheikh Mujib, officially referred to with the honorific Bangabandhu, who was then the country's President, was killed in a coup on the morning of August 15, 1975, less than four years after he led a movement that culminated in the emergence of Bangladesh after its violent separation from Pakistan.

In its judgement, the apex court ruled that the incidents of August 15, 1975, were “a simple murder and it was not a result of mutiny”. Also gunned down or bludgeoned in three separate attacks were most of Mujib's family members, close relatives, political associates, Mujib's security chief and personal staff.

Referred to as “killer majors”, since most of them were junior officers, the condemned men had later openly claimed to have carried out the killings in what they described as national interest.

Prime Minister Sheikh Hasina, Mujib's elder daughter and one of the two survivors, revived the court trial after she returned to power in January 2009. Sheikh Rehana, the other surviving daughter of Sheikh Mujibur Rahman, in her reaction, said it was important that the verdict had been upheld by the Supreme Court.

Belgian PM chosen first President
On November 19, 2009, European Union leaders have named Belgian Prime Minister Herman Van Rompuy as the bloc’s first President and appointed Briton Catherine Ashton as its foreign affairs chief.

A consensus was reached at a summit in Brussels after Britain dropped its insistence that former British Prime Minister Tony Blair should become President, ending weeks of deadlock and opening the way to agreement on Van Rompuy.

The appointments are intended to bolster the EU’s standing and help it match the rise of emerging powers such as China following the global economic crisis.

Van Rompuy, 62, and Ashton, 53, are low-profile compromise candidates little known outside the EU and at least initially will not have the clout in foreign capitals that an established statesmen such as Blair would have had.
Zardari hands over ‘nuke button’ to Gilani
Pakistan's embattled President Asif Ali Zardari has transferred control of the country’s nuclear arsenal to Premier Yousuf Raza Gilani and said he intended to strip the Presidency of more powers soon.
The President gave up his control over the nuclear arsenal by re-promulgating the National Command Authority Ordinance and amending it, a move described as a “giant leap forward to empower the elected Parliament and the Prime Minister.”

Zardari also said in an interview with a TV news channel that the 17th Constitutional amendment which gives President sweeping powers to dismiss the Premier and dissolve Parliament will also be done away with soon.

Meanwhile, a controversial law which scrapped graft cases against Asif Ali Zardari and his key allies expired on November 28, 2009, but the Pakistan President felt it will not affect him as the Constitution provides “indemnity” to the person holding the top post in the country.

Emergency imposed after massacre
On November 24, 2009, Philippines President Gloria Macapagal Arroyo placed two southern provinces and a city under emergency rule after 24 people were killed in the worst-ever election related violence in the country.

The orders were issued as troops, using shovels and bare hands, dug up hastily covered graves on a grassy hillside in Maguindanao to recover the victims of the massacre. Some of the dead men had their hands tied behind their back and one of the women was pregnant. Eight of those found dead were local journalists. They were part of a group of 40 people abducted by gunmen when on their way to file a candidate's nomination to contest the governorship in elections May 2010.

Elections in the Philippines are usually marred by violence, especially in the south, where security forces are battling communist rebels, Islamic radicals and clan rivalries.

Voters approve ban on minarets
Swiss voters approved a ban on construction of new minarets on November 29, 2009, a surprise result that is certain to embarrass Switzerland’s neutral government and could also damage its economic ties with Muslim States.

About 57.5% of voters and all but four of the 26 cantons approved the proposal in the nationwide referendum, which was backed by the right-wing Swiss People’s Party (SVP). The government said it would respect the people’s decision and declared construction of new minarets would no longer be permitted. “Muslims in Switzerland are able to practise their religion alone or in community with others and live according to their beliefs just as before,” it said in a statement. Justice Minister Eveline Widmer-Schlumpf said the outcome of the vote reflected a fear of Islamic fundamentalism, but the ban was “not a feasible means of countering extremist tendencies”.

Both the government and Parliament had rejected the initiative as violating the Swiss constitution, freedom of religion and the nation’s cherished tradition of tolerance. The UN human rights watchdog had also voiced concerns.

The SVP, Switzerland’s biggest party, and Federal Democratic Union gathered enough signatures to force the vote on the initiative opposing the “Islamisation of Switzerland”. The move has stirred fears of violent reactions in Muslim countries and an economically disastrous boycott by wealthy Muslims who bank and vacation in Switzerland.

The right-wing campaign to outlaw minarets on mosques has received an unlikely boost from radical feminists arguing that the tower-like structures are “male power symbols” and reminders of Islam’s oppression of women. Julia Onken, a prominent feminist, warned that failure to ban minarets would be “a signal of the State’s acceptance of the oppression of women”.

G-20 launches framework to boost global economy
The finance ministers of G-20 nations have agreed on a timetable for the new framework for balanced and sustainable growth of the global economy, but made a little progress on financing efforts to reduce global warming.

The world’s leading developed and emerging economies committed to have peer review and “more specific policy recommendations” in place by  November 2010. The Finance Ministers, during the two-day meeting at St Andrews in Scotland, on November 8, 2009, hoped that if all countries put political weight behind the negotiations over the next year, the world can recover without developing the huge trade and financial imbalances of the past decade.
But there was no agreement on a specific set of common objectives, nor a mechanism to resolve disputes. On the climate change issue, the Finance Ministers agreed only to keep working for an ambitious outcome at meeting in Copenhagen but could not agree on the amount of money developed countries will offer to poorer countries to help them reduce their carbon dioxide emissions.

The meeting was also overshadowed by a dispute about the possibility of a global tax on financial transactions. Addressing the meeting, British Prime Minister Gordon Brown floated the idea of such a tax would help banks to pay for the insurance they receive from taxpayers. Within hours of the suggestion, the idea appeared still-born when US Treasury Secretary Tim Geithner said: “A day-to-day financial transaction tax is not something we are prepared to support.” But some of the other measures mentioned by Brown—an insurance fee to reflect the risk of some banks, a pre-funded pool of money to support orderly bank bankruptcies and contingent capital arrangements-have more international support. The US is supportive of efforts to ensure banks cannot rely on taxpayers to bail them out in future.

Eurozone pulls out of recession
Europe's deepest recession since the second world war has officially ended after the world's biggest single trading bloc joined Japan and the United States in returning to growth. Both the 16-nation eurozone, and the 27-nation European Union as a whole, expanded their economies in the third quarter, with a 0.4 per cent increase in the single currency area and a 0.2 per cent rise across the bloc as a whole.

But despite exiting five quarters running of economic retreat, analysts said that the improvement is unlikely to be robust enough to allow governments to end State support measures, particularly with unemployment continuing to rise.

The eurozone economy had shrunk by 0.2 per cent between April and June after a record collapse of 2.5 per cent in the first three months of 2009. But growth of 0.7 per cent in Germany, Europe's most powerful economy, and 0.3 per cent in France, in the third quarter lay behind the improvement.

Britain, with a 0.4 per cent contraction and Spain, with a 0.3 per cent decline, contributed to the lower figure for the EU as a whole.

The European figures compare with a 0.9 per cent improvement in third-quarter economic output in the United States, with Japan having already exited from recession in the second quarter with 0.6 per cent growth.

Hoarwd Archer, the chief economist at IHS Global Insight, poured some cold water on the news when he said the the emergence into daylight  came "at a trot rather than a canter". Cautioning that "consumer spending likely saw little or no growth," Archer warned that the recovery "could well lose momentum for a time in 2010 before growth starts to gradually pick up again".

But he forecast overall eurozone growth of one per cent in 2010. Clemente De Lucia of BNP-Paribas, a French bank, said the rebound was due mainly to the industrial sector and warned that the recovery "might fade in 2010" once the impact of schemes, such as help for boosting new car sales, was fully withdrawn. He also pointed to high unemployment, running at more than 22 million at the last count across the EU, acting as a brake on expansion for some time yet.

OECD doubles 2010 forecast
The Organisation for Economic Cooperation and Development has doubled its growth forecast for the leading developed economies in 2010 and predicted a further acceleration in 2011 as China powers a global recovery.

The economy of the group’s 30 member countries will expand 1.9% in 2010 and 2.5% in 2011, the Paris-based organisation said in a report. Output will contract 3.5% in 2009. The OECD, which advises members on economic policy, forecast 2010 growth of 0.7% in June.

But the recovery will be marred by high unemployment and huge government debt across the industrialised countries, the OECD said. Central banks and governments in major Western economies should prepare for a gradual upwards shift in ultra-low interest rates and for fiscal consolidation once recovery is stronger, but they will only need to move in late 2010 at the earliest given that inflation is so low.

Output in the OECD economies will only return to the level achieved in the first three months of 2008 in the third quarter of 2011, underlining the damage done by the banking crisis.

The OECD gave 2011 growth forecasts for the first time. The US will grow 2.8%, the euro area 1.7% and Japan 2%. The Chinese economy will expand 9.3%, it said. The global growth forecast includes emerging giants China, Brazil, India and Russia with the mostly industrialized economies of its own 30-country membership and in all covers some 80% of world output.

The OECD said it expected world trade to grow 6.0% in 2010 and 7.7% in 2011 after a plunge of 12.5% in 2009. China and India are poised to accelerate due to strong stimulus measures, the OECD projected.

The Paris-based group hiked its growth forecast for China to 9.3% in 2009 and 10.2% in 2010. In March, it projected China's growth at 6-7% in 2009. For India, the OECD boosted its growth forecast to 6.1% in 2009 and 7.3% in 2010, rising to 7.6% the following year. The OECD, in March, projected 4.3% expansion for India in 2009. India's recovery appeared to be only “modestly hampered” by the driest monsoon in nearly four decades and economic data suggested the growth “momentum is strengthening,” the OECD said. But a resurgence of inflationary pressures pose a “key challenge” to Indian policymakers in deciding when to withdraw stimulus in order to tackle the large public deficit, it said.

Dubai rattles global scrips with its woes
Global markets from Sydney to Sao Paulo trembled on November 26, 2009, on fears that Dubai’s attempts to reschedule loans might trigger a fresh round of financial troubles in a world just emerging from the worst economic crisis since the 1930s and which may be amplified in India as thousands of expats stare at job losses and reduced trade.

India, which gets nearly a quarter of its remittances from the United Arab Emirates and has lakhs of labourers working in the region, may be worse off than most other nations if the crisis escalates into a full-blown one like the Russian or Argentinian crises of the past.

Indian shares and the rupee fell in sync with the rest of the global markets where investors are fleeing for safety after Dubai World, the government investment company with $59 billion of liabilities, sought to delay repayment on much of its debt. Investors believe that there could be more trouble spots in emerging markets after Vietnam devalued its currency and raised rates. The Bombay Stock Exchange’s Sensex fell 2% to 16,854.95, and the rupee fell 24 paisa to 46.55 against the dollar. The MSCI Emerging Markets Index lost 1.4%.

Dubai, which borrowed $80 billion in a four-year construction boom to transform its economy into a regional tourism and financial hub, suffered the world’s steepest property slump in the global recession. Home prices fell 50 percent from their 2008 peak, according to Deutsche Bank AG. Banks around the world have written off more than $1.7 trillion as the credit crisis trashed the value of their assets.
Dubai World’s lenders include Credit Suisse Group AG, HSBC Holdings, Barclays, Lloyds Banking Group and Royal Bank of Scotland Group.

China announces ambitious emission caps
Green NGOs were elated after China announced ambitious cuts in the carbon intensity of its economy by 2020 in a major boost to the global effort to tackle climate change. China announced a 40-45 percent reduction in the carbon intensity from the business-as-usual scenario by 2020. Carbon intensity measures the amount of carbon dioxide—the main greenhouse gas that is causing global warming—emitted per unit of industrial output. India's carbon intensity is one of the lowest among emerging economies.

International NGO Greenpeace also welcomed China's announcement but said it was not enough. "Given the urgency and magnitude of the climate change crisis, China needs stronger measures to tackle climate change," said Ailun Yang of Greenpeace China. "This is a significant announcement at a very important point in time. But China could do more."

Since 2007, China is the world's largest emitter of greenhouse gases, though almost all the carbon dioxide in the atmosphere now has been put there by developed countries since the start of the Industrial Age.

Yang noted that the announcement by China is yet another commitment for the climate coming from a major developing country ahead of the UN Copenhagen Climate Summit. "This is another challenge to the industrialised world, particularly the US, which has just announced an inadequate emissions reduction target of only 4-5 percent by 2020."

The Intergovernmental Panel on Climate Change—a grouping of over 2,500 scientists from around the world—has said the developed world should cut emissions by at least 25-40 percent below 1990 levels by 2020 and reduce 80-95 percent by 2050.

For China, a low carbon path is a national priority and a sure way to keep up its economic tempo. China can ill-afford to let ‘invisible’ carbon denominated process and production methods (PPMs) standards shackle its export offensive.

More than India, it is China that should be worried about the current efforts to re-interpret Article XX (e) of GATT to keep out ‘goods based on carbon intensive processes’. In reality, China has been under greater pressure to stave off the ‘climate related threat’ from the WTO window. By sending a ‘concrete’ signal of commitment to emission intensity reduction, the People’s Republic is doing its best to keep the trade dragon from getting into the FCCC fold.

There could be an interpretation that the Chinese concession is an implicit acceptance of NAMA. Given the fact that China is still coal dependent and looks towards safe and cost-effective carbon capture and storage (CCS) technologies, it does not make sense for it to accept NAMA commitments without quid pro commitments on the technology transfer front. It is important that India and China have a concerted position on this issue.
Earlier in the month of November, Brazil had offered to reduce its emissions if it was provided international funding to control deforestation of the Amazonian forests. The move was interpreted by some as a sell-out to industrialised countries. And, now India faces the challenge of how to escape being seen as a global hurdle.

The Chinese move came a day after the US administration, that held out for long, announced that it would offer a target of reducing its greenhouse gas emissions "in the range of" 17% by 2020 as compared to 2005 levels. When converted to benchmarks set under Kyoto Protocol, this works out to 4% reduction below 1990 levels—almost seven times less than what the EU has offered and less than 1/10th of what the UN IPCC requires industrialised countries to do to check catastrophic climate change.

One senior official said: "China’s offer are not absolute reductions, please note, and they are purely voluntary, China has not offered them as a commitment towards international compact. This is along lines that China had informed us of. But they leave a positive impression internationally." In fact, the Chinese are aiming to earn goodwill without doing much. The industrialized countries are obliged under the existing UN treaty to reduce their emissions by absolute levels below a fixed benchmarked year. China, in comparison has offered a purely voluntary reduction in its carbon intensity. The carbon intensity target also provides enough leverage for ‘creative accounting’ in measuring success of targets.
Chinese N-shopping mall helped Pakistan
China supplied Pakistan with enough weapons-grade uranium for two atomic bombs in 1982 and continued to help Islamabad out with its nuclear programme, according to a report in The Washington Post.

Outing China as a nuclear proliferator, the report, which sourced the narrative from accounts written by disgraced Pakistani nuclear scientist A.Q. Khan, said that a Pakistani military C-130 left the western Chinese city of Urumqi with the “highly unusual cargo" in 1982.

That China supplied Pakistan with nuclear know-how has always been suspected, but this is the first time that a detailed account of how it took place has come out and that too straight from the accounts of A.Q. Khan. The uranium transfer was reportedly part of a secret nuclear deal approved years earlier by Mao Zedong and Prime Minister Zulfiqar Ali Bhutto in the 1976, four years after India tested its first nuclear weapon.
But it was realised only during the time of Zia ul-Haq, who after taking power and hanging Bhutto was struggling under rumours of a pre-emptive strike by India. So Khan and a Pakistani general were sent to Beijing "to borrow enough bomb-grade uranium for a few weapons." Chinese leader Deng Xiaoping gave the approval and Khan and his team flew aboard a Pakistani C-130 to Urumqi where Khan says they enjoyed barbecued lamb while waiting for the Chinese military to pack the small uranium bricks into lead-lined boxes to be flown to Islamabad.

“Upon my personal request, the Chinese Minister . . . had gifted us 50 kg [kilograms] of weapon-grade enriched uranium, enough for two weapons,” Khan wrote in an 11-page narrative of the Pakistani bomb programme that he prepared after his January 2004 detention. “The Chinese gave us drawings of the nuclear weapon, gave us 50 kg enriched uranium,” he said in a separate account sent to his wife several months earlier. China in effect supplied a "virtual do-it-yourself kit that significantly speeded Pakistan’s bomb effort."

Even before that, China sent Pakistan 15 tons of uranium hexafluoride (UF6), a feedstock for Pakistan’s centrifuges, whose designs Khan has stolen. But it was also a give and take with Khan sharing Europe’s best centrifuge technology in the 1980s with the Chinese in an effort to help China’s uranium-enrichment programme.

India votes against Iran on IAEA resolution
On November 27, 2009, India joined 24 other countries at the Vienna-based International Atomic Energy Agency (IAEA) to vote against Iran on its nuclear programme. India’s censure was based on IAEA director-general Mohammed El Baradei’s report on Implementation of the NPT safeguards agreement in Iran which said all efforts to negotiate with Iran to address the international community’s concern over its ‘clandestine enrichment programme’ has reached a “dead-end.”

This was the third time that India has voted against Iran’s alleged clandestine nuclear weapons programme at the IAEA, the last two occasions being in September 2005 and February 2006. This decision had kicked off a massive political storm in the country. The Left parties, which were offering critical outside support to the UPA government at that time, had come down heavily on the ruling combine and accused it of being arm-twisted by the US into voting against Iran.

The vote had also raised serious concerns within the ruling Congress, which feared that this vote would erode its minority support base. Explaining New Delhi’s third vote on the governing body resolution Vienna, External Affairs Ministry spokesperson said: “Our support for the resolution was based on the key points contained in the Report of the Director General.”

The IAEA has come to the conclusion that Iran was not transparent about its nuclear programmes and concluded that it was pursuing clandestine nuclear weapons programme. In September, Iran confirmed the doubts about its weapons programme when it disclosed the existence of a second uranium enrichment plant in Fordo, not very far from Tehran.

India, on its part, has been doing a tightrope walk on the sensitive issue. It has consistently opposed Tehran on this issue in multi-lateral forums but continued to engage with Tehran bilaterally. The reasons for this were explained by Prime Minister Manmohan Singh when he pointed to the ancient civilization links between the two countries, New Delhi’s dependence on Iran for energy and the presence of five million Indians living in Iran.

Continuing with its balancing act, India was quick to strike a conciliatory note after its censure of Iran at Vienna. It pointed out that this resolution should not be used to renew punitive action or new sanctions against Iran.

The latest resolution was backed by all five permanent members of the UN Security Council. The three countries that opposed the anti-Iran IAEA resolution were Cuba, Venezuela and Malaysia, while Pakistan, Afghanistan, Egypt, Turkey, South Africa and Brazil abstained from voting.

Iran to build 10 new enrichment plants
On November 29, 2009, Iran announced plans to build 10 new uranium enrichment plants in a major expansion of its nuclear programme—a clear show of defiance after the UN nuclear watchdog rebuked Tehran over secret such work. The decision by hardline President Mahmoud Ahmadinejad's government will further aggravate tensions between the Islamic Republic and major powers seeking a diplomatic solution to a long-running dispute over Iranian nuclear activities.

It may speed up discussions in the West about possible new sanctions on Iran over its repeated refusal to halt uranium enrichment, which the US and its allies suspect is part of a covert bid to develop nuclear bombs. Iran denies this.

The new enrichment facilities would be the same size as Iran's main enrichment complex at Natanz.

Visit of US President to China
On November 17, 2009, in a delicate balancing act during his visit to China, US President Barack Obama supported early resumption of talks between China and the Dalai Lama’s representatives while describing Tibet as part of this country. Taking note of the sensitivities of China and the exiled Tibetan leader, Obama, during his maiden visit to China as President, said: “We did note that while we recognise that Tibet is part of the People’s Republic of China, the US supports the early resumption of dialogue” between the Dalai Lama’s representatives and Beijing.

Obama’s remarks came after his meeting with his Chinese counterpart Hu Jintao during which the two sides discussed a host of issues including India-Pakistan relations, Iran’s controversial nuclear programme, Afghanistan, terrorism and climate change.

The US and China agreed to work together to bring about stable and peaceful relations in all of South Asia, Obama said during his joint briefing with Chinese president Hu Jintao in Beijing. Hu, who spoke first, didn’t mention Pakistan or South Asia. This was a rare occasion when a US president acknowledged that Beijing has a role to play in the India-Pakistan relationship. The move, if serious, runs counter to predictions of US foreign policy experts that the US would not acquiesce in a future Chinese hegemony in the region.

While the joint statement was met with silence by New Delhi, it infuriated officials in the foreign office because it brought back nasty memories of another US-China joint statement by Bill Clinton and Jiang Zemin on June 29, 1998. Then too, it was Clinton and Jiang, in what India considered “offensive” language, scolding India and Pakistan for their nuclear tests. India had reacted sharply then, buffetted by general international condemnation after the tests.

But latest statement cut at the heart of an Indian effort to build a relationship with the US without China complicating the issue. The reality is perhaps that the joint statement was drafted by Obama’s China officials who don’t read India’s sensitivities. But that it was allowed to go through signals to many Indian strategists that Obama may be more than pliant to China, giving it a role in a region where it’s bound to come into conflict with a country Obama says is a strategic US partner, India.

Commonwealth Heads of Government Meeting (CHOGM) was hosted in the city of Port of Spain in the Republic of Trinidad and Tobago on November 27-29, 2009. The Opening Ceremony of the Meeting included an address by Her Majesty Queen Elizabeth II, Head of the Commonwealth.

The CHOGM is the supreme body of the Commonwealth. It is convened every two years to review global, political and economic developments and to conduct a strategic overview of the Commonwealth’s work in support of the interests of member countries.

The objective of this Summit was to engage leaders of the Commonwealth in discussing global and Commonwealth issues and to agree upon collective policies and initiatives.

The leaders agreed to admit Republic of Rwanda as the 54th member of Commonwealth.

Climate change was a major topic of discussion at 2009 CHOGM, due to the proximity of the meeting to the Copenhagen climate change summit, but also because many Commonwealth States are particularly vulnerable to the effects of global warming.

The 53 member States of the Commonwealth called for an “internationally legally binding agreement” on climate change to be agreed at the Copenhagen conference in December 2009. Leaders also pledged support for a fund to help poorer countries tackle climate change.

Heads of government endorsed the Report of the Commonwealth Ministerial Action Group (CMAG), covering the Group's deliberations in the period since last meeting in Kampala in November 2007. They commended CMAG's work, which has contributed significantly to the protection and promotion of the Commonwealth's fundamental political values in member countries.

Heads of government also welcomed the reinstatement of Pakistan in the Councils of the Commonwealth following the conduct of credible elections in the country in February 2008 and the assumption of office by an elected, civilian government in April 2008. However, they expressed deep concern at the further deterioration of the situation in Fiji Islands with regard to its adherence to fundamental Commonwealth values, including the abrogation of the Constitution in April 2009, ongoing restrictions on human rights, including freedom of speech and assembly, and the Interim government’s decision to further delay elections until 2014. They noted that these actions had led to the full suspension of Fiji from the Commonwealth on September 1, 2009.

Heads of government once again acknowledged the threats posed by weapons of mass destruction, especially nuclear weapons, and reaffirmed their commitment towards ridding the world of these weapons. Recognising that the ultimate objective is general and complete disarmament under strict and effective international control, Heads reaffirmed their commitment to the non-proliferation of weapons of mass destruction, which should be achieved in accordance with the United Nations Charter. Heads reaffirmed the rights of States to nuclear energy for peaceful uses in conformity with their international obligations. They also noted the ongoing efforts towards the negotiation of a comprehensive Arms Trade Treaty (ATT) in respect of conventional weapons, and the proposed ATT conference to be held in 2012. They called for the finalisation of a robust and comprehensive ATT based on consensus.

CHOGM reaffirmed unequivocal condemnation of terrorism in all its forms and manifestations, committed by whomever, wherever and for whatever purposes, as criminal and unjustifiable. They reiterated that acts of terrorism cannot be justified or legitimised by any cause or grievance whatsoever.

Continuing need for comprehensive efforts at all national and international levels to counter terrorism, including efforts to build respect and understanding among peoples was stressed. The Heads also emphasised the need to conclude negotiations on a Comprehensive Convention on International Terrorism on a priority basis, preferably during the Sixty-Fourth Session of the UN General Assembly and called upon all member States to accede to the UN Counter-Terrorism Conventions and Protocols, and to effectively implement these as well as the UN Global Counter-Terrorism Strategy and relevant Security Council Resolutions, and to prevent the use of their territories for the support, incitement or commission of terrorist acts in other States.

Recognising that corruption in its various forms undermines good governance, public security, respect for human rights and economic development, CHOGM urged member States which had not already done so to consider becoming parties to the UN Convention against Corruption (UNCAC), and to implement its provisions, including those addressing asset recovery, to help them combat systemic corruption at both national and international levels.

Heads expressed their support for the commitment to avoid protectionism, and to strengthen financial supervision and regulation. They emphasised the importance of renewing the contract between financial institutions and the society they serve, and the need to ensure the sector bears the full cost of the risk associated with their activities. They encouraged the IMF to consider the full range of options in their review and welcomed the steps taken by many countries to mitigate the impact of the economic crisis, and the fragile signs of growth in the global economy. They expressed concern, however, that the social and economic impact of the crisis would continue to affect a vast majority of the developing countries, particularly the smallest and most economically vulnerable members of the Commonwealth, including LDCs and SIDS.

Australia will host the 2011 CHOGM. Sri Lanka and Mauritius will host the 2013 and 2015 CHOGMs, respectively.

Italy arrests two for aiding 26/11 attacks on Mumbai
Tracing new links to the Mumbai carnage, a Pakistani father-son duo were arrested from Italy for allegedly managing money transfer to finance phone communications of the attackers following leads from Indian and US investigators.

The two men, who ran a money transfer agency, were arrested in an early morning raid from the northern Italian city of Brescia, police said. The duo have been identified by the police as Mohammad Yaqub Janjua, 60, and Aamer Yaqub Janjua, 31. They have been accused of aiding and abetting international terrorism as well as illegal financial activity.

On November 25, 2008, a day before the attacks, they transferred $ 229 to activate an internet phone account that was used by the attackers and their accomplices, said Stefano Fonzi, the head of anti-terror police in Brescia.

The funds that enabled the terrorists to be in touch with their handlers in Pakistan were transferred under the identity of another Pakistani man who had never been to Italy and was not involved in the attacks, reports from Italy said. The two managed a money transfer agency where it is reported to be a common practice to transfer funds using false identities. The Italian police arrested the two men in an early morning raid in Brescia, the police said in a statement.

Italian police started their investigation the following month after being alerted by Indian authorities and the FBI that funds had been transferred from Italy.

Pak court names Zaki-ur-Rehman Lakhvi as 26/11 mastermind
In what is being seen as a clever move by Islamabad to bury LeT founder and Jamaat-ud-Dawa chief Hafiz Saeed’s role as the prime strategist behind the 26/11 attacks, a Pakistani trial court, while framing charges against seven accused on its soil, has instead named Zaki-ur-Rehman Lakhvi as the mastermind.
Exactly a year after the Mumbai assault, on November 25, 2009, the special anti-terror court set up in Adiala jail in Rawalpindi framed charges against all the seven accused in Pakistan’s custody, reportedly confirming Lakhvi as the mastermind and Zarar Shah, Abu al-Qama, Hamad Amin Sadiq, Shahid Jamil Riaz, Jamil Ahmed and Younas Anjum as handlers/facilitators. All seven had pleaded not guilty. They have been reportedly charged under the anti-terrorism act and the Pakistani penal law. The charges include providing training, financial support, accommodation, equipment and communication gear to the 10 terrorists who had attacked Mumbai, including the lone survivor Ajmal Amir Kasab, who is now in India’s custody.

Interestingly, the dossier submitted by India on the 26/11 investigations to Pakistani names JuD chief Hafiz Saeed as the mastermind behind the Mumbai plot. Zaki-ur-Rehman, Zarar Shah, Abu Qama and others, now facing trial in Pakistan for their involvement in the 26/11 attacks, were only acting under the instructions of Saeed. Saeed is alleged to have personally overseen the preparations and events leading up to the major assault on India’s financial capital. Senior officials of the security establishment are obviously disappointed over the absence of any reference by the Pakistani court to Saeed’s role in the 26/11 conspiracy. The assessment in India is that the Pakistani court’s move, timed to coincide with the eve of the 26/11 anniversary, was essentially to exhibit to the world its “commitment” to punish the attacks’ perpetrators on its soil while ensuring a complete cover-up of Hafiz Saeed’s role as the key conspirator.
Arms Trade and Transfer Treaty
On November 1, 2009, even as the crucial global Arms Trade and Transfers (ATT) treaty, which seeks to regulate the $55 billion arms trade and promote democracy, found overwhelming support from 153 member countries at the UN. India was among the 19 who abstained from the meet. These 153 countries—including top arms suppliers like US, Britain, Germany and France—supported a UN disarmament committee resolution which will lead into negotiations for the treaty starting 2010.

While India may still take part in negotiations, the treaty in its present form was not in India’s interest. Certain binding clauses on social issues like violation of human rights and restrictions on arms sale expanding into controls on export of advanced technologies could work against India.
The US under George Bush in 2006 had opposed the treaty but it came round to supporting it under Barack Obama. The fate of the UN sponsored treaty still hangs in the balance as the list of 19 who abstained includes China and Russia, as also Pakistan.

The proposed treaty calls upon States involved in arms trade to not violate human rights, promote democracy and refrain from getting into any armed conflict. It also calls for ban on sale of arms to countries which promote terrorism.

The fact that India is still dependent on conventional weapons and imports a large number of these is another major concern. The proposed treaty will seek to set up export controls on transfers of advanced weapons, thereby extending the present Western-inspired controls on export of advanced technologies. This could impinge on the interests of India. 

The Reserve Bank of India’s gold stock has shot up by more than 55 per cent with the purchase of 200 tonnes of IMF gold at an estimated cost of $6.7 billion. RBI, which pledged gold during 1991 crisis with the Bank of England to raise resources to meet external obligations, said it has purchased 200 tonnes of gold from International Monetary Fund (IMF).

The minimum support price (MSP) of wheat has been increased by the Union government by Rs 20 a quintal to Rs 1,100 a quintal. The MSP for barley has been fixed at Rs 750 per quintal and chana at Rs 1,760 per quintal.

Sachin Tendulkar holds the world record for most number of fifties in One day matches (91). He also holds the world record for most tons (9) in a calendar year (1998), as also world record for most runs in a calendar year (1894 in 34 matches).

National Cancer Awareness day is observed on November 7.

“Sesame Street” is a landmark children’s TV show that for last 40 years has taught generations of children to count, countless parents how to teach, and is seen in 125 countries.

Phyan was the name of the cyclone that hit Arabian Sea off the coast of Maharashtra-South Gujarat.

July 18 has been declared as Nelson Mandela International Day by the Un General Assembly to mark the South African anti-apartheid leader’s contribution to peace.

Caccine Vial Monitor (VVM) is a measurement of heat exposure to vaccine. Potency of a vaccine is judged by VVM indicator present on the ampule.

Four Indians, including Prime Minister Manmohan Singh and fugitive Dawood Ibrahim, have made it to the Forbes list of the world's most powerful people topped by US President Barack Obama, who is followed by Chinese President Hu Jintao and Russian Prime Minister Vladimir Putin. Among the four Indians, Manmohan Singh has been ranked highest at 36th position, while the country's top corporate house Reliance Industries' chief Mukesh Ambani finds himself ranked 44th ahead of Tata Group Chairman Ratan Tata (59th). Ranked very next to Manmohan Singh is al-Qaida founder Osama bin Laden at 37th place, while Indian underworld don Dawood Ibrahim is at 50th position.

The Union government has said it would soon launch two more schemes to improve the health status of adolescent girls and mothers. When rolled, the “Rajiv Gandhi Abla Scheme” and the “Indira Gandhi Matritva Scheme” would be additions to the eight government schemes already in place to fight undernourishment among children aged 0 to six years and pregnant women. These eight schemes include: Integrated Child Development Scheme (ICDS), Midday Meal Scheme, Targeted PDS Scheme, National Maternity Benefit Scheme, Antodaya, Annapurna and National Old Age Pension Scheme. All schemes are closely monitored by the Supreme Court under the Right to Food verdict.

India’s public officials and politicians continue to be perceived as “highly corrupt” by global experts and business surveys, says the latest Corruption Perception Index (CPI) by the Transparency International. With “Integrity Score” of 3.4, the CPI 2009 has ranked India 84th among the 180 countries surveyed, below other developing economies like Brazil (3.7) and China (3.6). The 2009 edition analysed 180 countries, the same number as the 2008 CPI. In 2008, India scored 3.4, dropping from 3.5 in 2007.
Pakistan, with a score of 2.4, is ranked 139th on the list, followed by Bangladesh (2.4), Nepal (2.3), Maldives (2.5) and Sri Lanka (3.1). Haiti, Iraq, Myanmar and Somalia have recorded the score of less than 1.5, while leaders of the pack are New Zealand (9.4), Denmark (9.3) and Singapore and Sweden (9.2).

Transparency International’s Corruption Index has ranked India 84 out of 180 countries. However, with an integrity score of 3.4, India is the least corrupt country in South Asia, excluding Bhutan.

With a fortune of $32 billion, industry leader Mukesh Ambani has topped the list of richest Indians, where his estranged brother Anil figures at number three with nearly half the wealth. Steel tycoon Lakshmi Mittal, who lives in London but holds an Indian passport, is sandwiched between the Ambani brothers in the list at number two with a net-worth of $30 billion, according to the US business magazine Forbes. The list of India's richest 100 people included 52 billionaires, nearly double from 27 in 2008 and just short of 54 in November 2007, but there were only six women.The collective wealth of these 100 is $276 billion (nearly Rs 13 lakh crore), which corresponds to almost one-fourth of the country's GDP.

India’s first LTTD (Low Temperature Thermal Desalination System) plant—with a capacity of 1 lakh litres fresh water a day—was developed and commissioned in May 2005 at Kavaratti.

84-km Mughal Road, is a dream project under construction that will connect the Kashmir valley through Shopian with Bafliaz-Poonch in the Jammu region. Mughal emperors used to ride into the valley using this historic road which runs through high mountains. The centrally-sponsored Rs 640-crore road project, taken up in 2006, would be thrown open to public by July 2010.

India joined China, Brazil and South Africa to prepare a joint front for tough negotiations with rich nations at the Copenhagen Climate talks.  The four countries, seen as the “BASIC” block, agreed to a strategy that involved walking out of the conference together if western nations try to force terms on the developing world.

Kisan Vision Yojna is ambitious project of Indian Railways to set up cold-chain facilities across the country for fresh fruit and vegetables. The pilot project has been started at Singur in West Bengal.

Continuing the commendable trend of the past decade, India’s forest cover increased by 728 sq km during 2005-07—a marginal rise of 0.03%. Overall, 21.02% of the country’s geographical area is now under green cover. In the past 10 years, forest cover has increased by 3.31 million hectares, showing an average 0.46% increase every year. These figures are contained in the State of Forest Report 2009. The biennial report is based on satellite imagery up to 2007. India’s increasing forest cover deserved praise, especially compared to the loss of 2.5 million ha of forests in Brazil every year. India, however, lagged behind China’s achievement of gaining 4 million ha of forests annually. While India seemed to be doing well in protecting dense forests, the report indicated that moderately dense forests weren’t faring too well.

The world’s largest atom smasher, Large Hadron Collier, broke the record for proton acceleration on November 30, 2009, previously held by a US lab, Fermilab, since 2001, sending beams of particles at 1.18 trillion electron volts around the massive machine.


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13.0 Learning Outcome

13.1 Introduction

13.2 Initiatives towards Constitutional Status to Local Governance

13.2.1 Features of 73rd Constitutional Amendment

13.2.2 Features of 74th Constitutional Amendment

13.2.3 Decentralised Planning in Context of 73rd and 74th Constitutional Amendment Act

13.3 Initiatives after Economic Reforms

13.4 Functioning of PRIs in Various States after 73rd Amendment

13.5 Functioning of Local Governance after 73rd and 74th Constitutional Amendment: Observations

13.6 Conclusion

13.7 Key Concepts

13.8 References and Further Reading

13.9 Activities


After studying this Unit you should be able to:

• Identify the background of revitalisation of local governance;

• Understand the features of 73rd and 74th constitutional amendment;

• Discuss the initiatives after economic reforms; and

• Outlines the functioning of local governance in various states after the amendment.


The revitalization of Pancha…

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1.0 Learning outcome

1.1 Introduction

1.2 Concept of Democratic Decentralisation

1.3 Evolution of Democratic Decentralisation

1.4 Significance of Democratic Decentralisation

1.5 Democratic Decentralisation in India

1.6 Conclusion

1.7 Key concepts

1.8 References and Further Reading

1.9 Activities


After studying this unit, you should be able to:

• Understand the concept of Democratic Decentralization;

• Know the evolution and significance of Democratic Decentralization; and

• Describe the Democratic Decentralization pattern in India.


The dawn of 21st century is marked by decentralized governance both as a strategy and philosophy of brining about reforms and changes in democracies. These changes led to such virtues of transparency, responsiveness and accountability and ensures good governance. Today decentralization and democracy are the most significant themes in the development discourse. In the present contex…