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Current Affairs: October 2009

RBI monetary policy
As part of its second quarterly review of the monetary policy for 2009-10, the RBI, on October 27, 2009, hiked the Statutory Liquidity Ratio (SLR) for scheduled commercial banks to 25 per cent from 24 per cent of their net demand and time liabilities (NDTL), with effect from November 7, 2009, even as other key rates were left untouched.

RBI Governor D. Subbarao noted that the Indian economy was awash with liquidity and there was possibility of considerable strain in the future from inflationary pressures. However, to keep growth on track, the apex bank left the Bank Rate untouched at 6 per cent while the repo rate under the liquidity adjustment facility (LAF) stay at 4.75 per cent. The reverse repo rate under the LAF, too, remains the same at 3.25 per cent. The cash reserve ratio (CRR) of scheduled banks also has been retained at 5 per cent of their net demand and time liabilities (NDTL).

Mr Subbarao pointed out that the global economy has shown signs of major improvement since the last review in July 2009. However, concerns remained of the recovery being fragile. "Even as output is reviving, unemployment is expected to increase to over 10 per cent. Investment is also expected to remain weak due to ruptured balance sheets, excess capacity and financing constraints. Bank collapses are continuing. World trade still remains below its level a year ago. On balance, while global economic prospects have improved, uncertainties remain about the pace and sustainability of economic recovery," Subbarao said.

The RBI chief also noted that there were concerns of large government market borrowings. "During 2009-10 so far, the Central Government has already completed over 80 per cent (Rs 3,19,911 crore) of its net market borrowing and State governments have mobilised Rs 58,683 crore (net) through the market borrowing programme," he stated.

  • Repo rate retained at 4.75 pc
  • Reverse repo rate at 3.25 pc
  • Cash Reserve Ratio kept at 5 pc
  • Bank rates same at 6 pc
  • Provisioning requirement for realty up at 1 pc from 0.40 pc
  • Retains GDP growth projection for FY'10 at 6 pc
  • Industrial production may revive further in coming months
  • Ups inflation projection to 6.5 pc by March-end, from 5 pc
  • Third quarterly review in January.

RBI survey
The Reserve Bank of India has acknowledged the resurgence of the feel good factor in the Indian economy but has said that growth and inflation continue to be a concern.
Maintaining a hawkish stance on inflation, the central bank has highlighted its concern over slowdown in credit off-take and surplus liquidity in the system, giving no clear indication on its rate stance. In its report on Macro and Monetary Developments in Q2 of 2009-10, the Reserve Bank has noted that "The combination of a weak recovery and elevated CPI (consumer price index) inflation has already magnified the complexity of policy challenges, notwithstanding the subdued nature of headline WPI inflation so far."
While premature reversal of the monetary policy stance entails the risk of stifling recovery, persistence of accommodative stance could adversely impact inflation expectations.
However, the results of its survey, based on “assessment for July- September 2009” and “expectations for October-December 2009”, point to a strong momentum in industrial recovery. Both the indices remained above 100 for the second consecutive quarter (100 is the threshold that separates contraction from expansion). According to the RBI analysis, this suggests that the industrial recovery already seen up to August 2009 in terms of trends in IIP growth could gain further momentum.
The outlook for employment is also improving and firms are expected to increase their workforce on the back of expected increase in demand.
Among the positive pointers to the economic recovery include improved financial conditions as reflected in return of capital flows, significant recovery in the stock markets, and better transmission from low policy rates to declining lending rates. The RBI has also said that there should not be any concerns about private credit getting crowded out since over 80.4% of the government borrowing programme has been completed so far as there is adequate liquidity in the system.
But RBI is concerned about the deceleration in private consumption and investment demand that it says needs to be reversed from the low levels seen in the first quarter of 2009-10 for ensuring a sustainable recovery.

Indian economy seen cruising at 6.5% in 2010
A key economic think-tank has made the most optimistic official projection yet for growth in the fiscal to March 2010, flagged rising food prices as a major concern, and suggested that tighter monetary and fiscal policies are unlikely in the coming months.

The Prime Minister’s Economic Advisory Council, headed by former RBI governor C. Rangarajan, said it sees the gross domestic product (GDP) expanding by 6.5% in 2009-10.

In its July 2009 forecast, the RBI had forecast that India’s economy in 2009-10 would grow by 6%, with an upward bias, and the Planning Commission had said in early September that it sees GDP growth at 6.3%. India’s economy expanded by 6.7% in 2008-09 after growing at over 9% for three years.

The improving trend is unlikely to prompt any immediate withdrawal of stimulus measures or a tightening of monetary policy, even though the panel made clear its concern about inflation and fiscal deterioration. It expects the consolidated fiscal deficit of the Centre and States at 10.09% for 2009-10 and sees inflation, imported and local food inflation, as a significant risk for the Indian economy.

IIMs can now set up campuses abroad
Directors of the prestigious Indian Institutes of Management (IIMs) and members of their boards will eventually be appointed through an independent collegium of industrialists and academics. Also, IIMs can set up campuses abroad, provided they come up with “workable proposals and preferably function together instead of individually”.

"We want to globalise the IIM brand,” said HRD Minister Kapil Sibal. In another major move, the government agreed that a collegium, as mooted for the appointment of vice-chancellors of central universities, would also apply to IIMs, where majority appointments so far are cleared by the HRD ministry, which advertises the positions before short-listing and selecting candidates.

But that is set to change to advance the cause of transparency in appointments to top institutes. IIM boards are also proposed to be restricted in size, with HRD ministry describing them as “unwieldy and huge”. The membership will be limited to 13 (currently over 20 or so.

The boards are proposed to be reconstituted post January 2010, the deadline which the government has given to IIM directors to present their views on the constitution of the collegium, which will be empowered to recommend names of board members and directors to the government for final selection.

For the institutes to beat competition, autonomy is the key, feel the directors. Sibal agrees, but with a rider: “We are for IIM autonomy, for letting go, but let’s not forget that the primary responsibility of all education systems is national.”

Congress wins in Haryana, Maharashtra and Arunachal
With a stunning result in the latest political super-bowl, the Congress has fortified its "top dog" status, while pushing the main opposition party, BJP, into its gravest political crisis in over two decades.

Congress survived a scare in Haryana and retained power in the State with the help of independents as well as five Haryana Janhit Congress MLAs, who decided to join the Congress. Congress sailed back in style in Maharashtra and Arunachal Pradesh. All three CMs—Ashok Chavan in Maharashtra, B.S. Hooda in Haryana and Dorjee Khandu in Arunachal—have been renominated by the party leadership.

If the Lok Sabha polls settled the Number One slot for Congress party, the altest verdict confirmed that the gap between Sonia Gandhi’s outfit and BJP is growing. In fact, some political pundits feel Congress could well be on the way to regaining its pre-1996 status when, as the key player in most States, it could be fought only by a united opposition.

Some riders are, however, in order. The win in Maharashtra has been facilitated by Raj Thackeray playing spoiler again—on a bigger scale. In Haryana, the party failed to get a majority despite a three-way split of anti-Congress votes. The resurrection of Chautala shows the resilience of old-fashioned politics and should be sobering for those who feel traditional political tools—caste/community—have lost salience.
Haryana: In Haryana, the Congress vote share fell by a huge 7.4%, from 42.5% to 35.1%. Normally such a big swing away results in the decimation of a party. But Hooda has managed to keep his head above the water, thanks largely to a fractured opposition.

Chautala, too, lost his vote share, but by just 0.7%, while BJP’s share fell by 1.4%. The new political outfit, Kuldip Singh Bishnoi’s HJC, accounted for 7.4% votes.

Maharashtra: In the the lead-up to the Maharashtra polls, many had wondered whether Raj Thackeray would help Congress-NCP in as big a way as he did in the LS polls by eating into the Sena votebank yet again. Indeed, Congress-NCP cruised back to power as Shiv Sena citadels in Mumbai and Thane crumbled under Raj’s assault. In a result, the loser’s story is almost as important as the winner’s. If the ruling combine beat the incumbency blues, the 144-90 scoreline was the clap of doom for the Sena-BJP camp. To add to Sena’s woes, BJP crept ahead with 46 seats to its 44.

The revenge drama saw Raj Thackeray’s Maharashtra Navnirman Sena demolish Sena’s prospects by not only splitting the “Marathi” vote but emerging as the second largest party in Mumbai with six seats and a staggering 23.35% of the city vote.

MNS polled 5.7% of the State’s vote, eating into Sena and possibly NCP bases. While Sena was the worst hit, losing 3.7% of its support since May 2009, the Raj effect may have dented others, particularly NCP, which lost 2.4% of its vote.

Congress may have raised its tally of seats in the 288-member Maharashtra Assembly from 69 in 2004 to 82 this time round, but the party’s vote share has never been lower in any Vidhan Sabha election in the State, except in 1978. Yet with 21% of votes, Congress has a distinct edge over the other big parties, NCP having won just 16.4%, Shiv Sena 16.3% and BJP 14%. That also means that the combined vote shares of the big four is down by 5.9% from five years ago. This almost exactly matches the 5.7% won by MNS in these elections.

Independents have won 15.5% votes. In other words, despite the existence of two long-standing coalitions in the fray, roughly one in every three Maharashtra voters did not vote for either of them. That is perhaps the clearest indication that this verdict is not so much a positive one for UPA as one it has got by default because of the absence of credible alternatives.

Arunachal Pradesh: The electorate in Arunachal Pradesh returned Congress to power with an overwhelming majority but rejected the man, Gegong Apang, who not only nurtured the party but also ruled the State for over 22 years.

The Congress romped home with 42 of the 60 Assembly seats even as Apang (60) bit the dust at the hands of Alo Libang, a political greenhorn from NCP.

Dorji Khandu had come to power in April 2007 after Congress dissidents revolted against Apang. Like in the last two elections, Khandu has again won from Mukto in Tawang unopposed.

With five seats each, NCP and Trinamool Congress emerged as the main Opposition, followed by People’s Party of Arunachal (four) and BJP (three). In 2004, the BJP had won nine seats against Congress’s 34.

EC announces five-phase polls in Jharkhand from Nov 27
Election Commission has announced five-phase Assembly polls in Jharkhand, spread over November-December 2009. Faced with a serious threat of Maoist violence, five-phase election for 81 assembly constituencies will take place on November 27, December 2, 8, 12 and 18. Results will be announced on December 23.

Jharkhand has 1.8 crore voters and 23,944 polling stations. While photo electoral rolls have been prepared in the case of 74.19% voters, 77.63% voters have electoral photo identity cards.

Admitting that conducting election in Jharkhand could be a problem due to the Maoist menace, Chief Election Commissioner Navin Chawla said home ministry has agreed to provide sufficient central paramilitary forces.

Jharkhand, which has seen four Chief Ministers and six governments in the nine years of its short existence, will be looking for political stability at the end of the Assembly election.

The State was placed under President’s Rule in January 2009 but the then Governor, Syed Sibte Razi, was shifted out following allegations of misuse and corruption. A hung House following the last Assembly election—the State’s first—in 2005 had led to a string of unholy alliances in which Independent MLAs and fringe political parties with one or two members in the Assembly called the shots. The period had also seen an Independent MLA, Madhu Koda, becoming the Chief Minister.

Since then, two former ministers of the State have been arrested and sent to jail in disproportionate assets cases, while the Enforcement Directorate has instituted an adverse preliminary report against Koda and two other former ministers in the State for alleged violation of foreign exchange rules and hawala transactions.

As many as seven MLAs in the 81-member House were disqualified in August under the Anti-Defection Act while three members chose to quit the House, which had been kept under suspended animation.

The election will put the Bharatiya Janata Party to yet another severe test. BJP had emerged as the single largest party in the House with 30 seats after the last Assembly election, though the majority eluded it. It also bagged eight out of the 14 Lok Sabha seats from the State in May 2009. But with most of the party stalwarts in the Lok Sabha and the party riven by factionalism, it faces an uphill task to put its act together.

Congress is trying to revive its fortune in the State where it was virtually marginalised, managing to secure just nine seats in the Assembly in 2005. Even in the general election held in May 2009, the party had managed to win only one of the 14 Lok Sabha seats. A weak organisation and absence of leaders with acceptability throughout the State are handicaps which the party hopes to overcome through campaigning by Rahul Gandhi and others.

The election is also crucial for the Jharkhand Mukti Morcha, which campaigned for separate Statehood but which never managed to get anywhere close to securing the majority in the State Assembly. The virtually one-man party is still a force to reckon with in Santhal Pargana region and the party chief, Shibu Soren, is still a big draw among Santhals. But the JMM, which has declared its intention to contest the election alone, may find the going tough in other parts of the State without the support of its old ally, the Congress.

Ganga clean-up
Twenty two years and Rs 960 crore later, the government plans to spend another Rs 15,000 crore over the next 10 years to make the Ganga river pollution free. This decision was taken at the meeting of the first National Ganga River Basin Authority, chaired by Prime Minister Manmohan Singh, on October 5, 2009.

It has been decided to take up the cleaning of the Ganga river on a mission mode. Mission Clean Ganga will ensure that by 2020 no untreated municipal sewage and industrial effluents flows into Ganga. At present, the sewage treatment capacity is about 1,000 mld, against 3,000 mld sewage being generated in the towns along Ganga. Nearly 75% of the pollution in the Ganga is on account of municipal waste.

The costs will be borne by both the Centre and the States. There were disagreements over the sharing, with States asking for 100% central funding. An alternate funding pattern of 70% by the Centre and 30% by the States has been suggested. A final decision on the sharing ratio will be worked out by the Planning Commission, in consultation with the States and Central government.

In the meantime, the World Bank has offered a loan of $1 billion for the mission.

Vision Statement to cut delays
The Union government has suggested a drastic dilution of the judiciary's role in the appointment of Judges in the "Vision Statement" for cutting down delays and banishing cases pending for more than three years.

"The Executive and the Legislature must take initiative in recommending the best possible talent for selection to the judiciary," Law Minister V. Moily said in the 32-page document presented to Chief Justice K.G. Balakrishnan. The "government should also be given the power to suggest outstanding lawyers and jurists as Judges," the Minister said in the statement, which was discussed threadbare at a conference aimed at "strengthening the judiciary towards reducing pendency and delays."

Moily's proposals have come in the wake of the crisis-like situation that has arisen following allegations of judicial misconduct against a number of Judges—Karnataka High Court Chief Justice P.D. Dinakaran and Judges Soumitra Sen of Calcutta High Court and Nirmal Yadav of Punjab and Haryana High Court. The custodial death of Ashutosh Asthana, the prime accused in the Uttar Pradesh PF scam, which reportedly involves several Judges, has cast a further shadow on the judiciary.

Styled as "National Consultation," the conference was attended by Supreme Court Judges and Chief Justices of High Courts, including Justice Dinakaran, and top judicial luminaries from across the country.

Both the Law Commission, headed by Justice A.R. Lakshmanan, and the Parliamentary Standing Committee report have recommended reverting to the pre-1993 system which involved appointment of High Court and Supreme Court Judges through consultation between the Chief Justice of India and the government-primarily the Prime Minister and the Law Minister.

In all, Moily has suggested five "improvements" in the present system of appointment. The other three are: There should be lucid and comprehensive guidelines which the Collegium should follow in the matter of selection of judges. The Collegium should be given a timeline to clear the backlog in vacancies. The government and the Collegium should work "hand in hand while appointing Judges."

India notifies N-separation plan
India has notified its separation plan in the IAEA, which formally separates India’s civilian and military nuclear establishments. The plan, which was announced in March 2006, has passed muster at IAEA and India’s safeguards agreement is now officially operational.

This is likely to help in the negotiations for the reprocessing agreement that is currently under way between India and US. But more than that, this will silence many non-proliferation critics in the new Obama-led US administration who had been looking at the delay in notifying the safeguards agreement as an example of Indian dithering.

India slams OIC over J&K envoy
Pakistan has succeeded in its efforts to compel the Organisation of Islamic Conference (OIC) to appoint a special envoy for Jammu and Kashmir. At its meeting in New York earlier in first week of October 2009, the OIC also stated that it supported people of Jammu and Kashmir in realisation of their legitimate right to self-determination in accordance with relevant UN resolutions and aspirations of the Kashmiri people.

A fuming India reacted sharply to the OIC action, dubbing it as interference in the internal affairs of this country. “Jammu and Kashmir is an integral part of India and it is our firm position that the OIC has no locus standi in matters concerning India’s internal affairs,” the External Affairs Ministry said in a statement.

Condemning the OIC move, New Delhi said inherent in its statements and actions on the issue of Jammu and Kashmir was a complete inability to understand India’s position.

The appointment of a Saudi national, Abdullah Bin Adbul Rahman Al Bakr, by the OIC as its envoy on Kashmir is being seen as a move initiated by Pakistan as part of its attempts to internationalise the Kashmir issue.

India has time and again told the international community, including major world powers, that Jammu and Kashmir is a bilateral issue between India and Pakistan and there is no room for third party intervention.

Under pressure from Pakistan, the OIC has at all its meetings adopted resolutions on Jammu and Kashmir, prompting New Delhi to condemn 57-member body’s action every time. Privately, however, many of the Islamic nations have repeatedly assured India that they are not in agreement with OIC resolutions on Kashmir but had to support them for the sake of unanimity and to keep Pakistan in good humour.

Well aware that its action would draw a strong response from India, the OIC is now trying to play down the appointment of the special envoy.
OIC Secretary General Ekmeleddin Ihsanoglu was quoted as saying that the appointment would help bridge the gap between India and Pakistan and address the issue of minorities in India.

India, Argentina sign N-accord
On October 14, 2009, India signed an agreement for civil nuclear cooperation with Argentina, making it the seventh nation to ink such an accord with this country after New Delhi secured a waiver from the nuclear suppliers’ group (NSG) to undertake nuclear commerce.

The agreement for cooperation in the peaceful uses of nuclear energy was among the 10 accords signed by the two countries following wide-ranging talks between Prime Minister Manmohan Singh and visiting Argentine President Cristina Fernandez de Kichner, during which they desired to establish strategic partnership between their two nations. The two leaders discussed a wide range of bilateral, regional and global issues of mutual interest.

A joint statement issued by India and Argentina after the visiting dignitary concluded her talks with Indian leaders said the two sides shared the view that civil nuclear energy could play an important role as a safe, sustainable and non-polluting source of energy in meeting rising global demands for energy.

The other nine accords signed between the two sides include: exchange of letters for business visa providing for five years multiple entry gratis visa for a single stay of 90 days; programme of cooperation in science and technology for 2009-11; MOU between ONGC Videsh Limited and ENARSA; MOU on sports cooperation; MoU on cooperation in the field of trade promotion and technology transfer in international trade; and agreement on outer space.

The two sides also agreed on the need to give a new impulse to multilateral negotiations in the area of disarmament, especially weapons of mass destruction.

India-China talks
Without getting into the recent spat over Arunachal Pradesh, Prime Minister Manmohan Singh and Chinese Premier Wen Jiabao talked peace and harmony on October 24, 2009, in a meeting on the sidelines of the India-ASEAN summit in Thailand.

The visit of the Dalai Lama to Arunachal also did not figure in the discussions between the two leaders who instead focused on the positives in the relationship and agreed that "differences" should not impede cooperation between the two countries.

In an effort to ameliorate the recent strain on the bilateral relationship, Prime Minister Manmohan Singh even proposed that the two countries observe the 60th anniversary of the establishment of diplomatic ties in a "fitting manner". He also put stress on the trade and economic relations, calling it a "vital pillar" in the bilateral relationship.

This exchange at the highest political level came after an escalation in the rhetoric between the two sides over the border issue. China had objected to Mr Singh’s trip to Arunachal Pradesh for the Assembly elections. This had elicited a strong reaction from New Delhi which had reminded Beijing that Arunachal remained an integral part of the country. New Delhi had further pointed out that in the democratic system leaders visited States where elections are taking place. This was further followed by India protesting against China’s involvement in projects in Pakistan Occupied Kashmir, which New Delhi pointed out was also disputed territory. New Delhi had earlier also objected to Beijing’s practice of issuing visas to people from Jammu and Kashmir on loose sheets.

Chinese Prime Minister Wen  recalled Mr Singh’s remark about both sides having enough space to develop and cooperate and added that there are sufficient areas in the world for India and China to enhance such cooperation. The Chinese premier further suggested that the Joint Economic Group should hold early consultations and that China would work with India to handle the matter of the growing trade deficit.

India also rejected China’s objections to Dalai Lama’s Arunachal visit in November while making it clear that the Tibetan spiritual leader was not allowed to indulge in political activities on the Indian soil. The issue figured when Prime Minister Manmohan Singh and his Chinese counterpart Wen Jiabao were seated next to each other at a gala dinner hosted by the Thailand Prime Minister for leaders attending the ASEAN and East Asia summits.

India, China ink pact on climate change
Amidst tension over political issues, India and China have signed an agreement to cooperate on ways to fight climate change. Moving closer, at least on an issue concerning the entire world, the two neighbours announced setting up of a Joint Working Group (JWG) to exchange views concerning international negotiations on global warming. The memorandum of agreement (MoA) assumes significance in the run-up to the Copenhagen climate summit. Developed and developing countries are at loggerheads over who should reduce emissions of greenhouse gases that are causing climate change.

India and China are in the same bloc as the Group of 77 countries in climate negotiations.

The MOA acknowledges that climate change and its adverse effects are a common concern of mankind and need to be addressed through international co-operation. It emphasises that the UNFCC and its Kyoto Protocol were the most appropriate framework for addressing climate change.

The agreement also reaffirms the principle of common but differentiated responsibilities, in particular that developed countries should take the lead in reducing their greenhouse gases and providing financial resources, technology transfer and capacity building support to developing countries.

Egypt offers special industrial zone to India
Egypt has invited India to build a ‘India industrial zone’ in the Suez development area for setting up joint ventures with Egyptian companies. Egypt’s Prime Minister Ahmed Nazif, in his meeting with commerce and industry minister Anand Sharma in Cairo, offered to designate an area for setting up of the zone exclusively for Indian companies.

India could gain significantly from the offer as it would give it easier entry to the European and African markets, since Egypt has preferential access to both.

The Suez development area, located on the north-west coast of the Gulf of Suez, has lower bureaucratic barriers to business formation and provides tax incentives. The law gives more incentives for priority areas, such as infrastructure, auto parts, software, oil field services, tourism and manufacturing. The terms and conditions of investing in the proposed India zones and the tax benefits to industry are to be worked out.

Indian companies have, till now, invested about $750 million in 40 projects in Egypt. India has a significant presence in the IT and automobile sector with companies like Wipro, Satyam, Mahindra and Tatas having invested in the country.

Olive branch to Pak with rider
In a speech delivered at the inauguration of the Anantnag-Qazigund rail link in Anantnag, Prime Minister Manmohan Singh focused largely on ties with Pakistan and the earlier success of cross-LoC initiatives. Targeting domestic audience and also sending out a message to Pakistan, Mr Singh prefixed his offer of peace with the rider that Islamabad must bring perpetrators of terror attacks to justice and destroy terror camps. "For a productive dialogue it is essential that terrorism must be brought under control," he said.

Mr Singh said India would put pressure on Pakistan to curb the activities of the elements engaged in terrorism against India. "If they are non-State actors, it is the solemn duty of the government of Pakistan to bring them to book, to destroy their camps and to eliminate their infrastructure. The perpetrators of the acts of terror must pay the heaviest penalty for their barbaric crimes against humanity," he said.

With Pakistan now being targeted by terrorism, Mr Singh said there could be no compromise with the ideology of terror. "It is a misplaced idea that one can reach a compromise with the ideology of the terrorists or that they can be used for one’s own political purpose. Eventually, they turn against you and bring only death and destruction. The real face of the terrorists is clear for the people of Pakistan to see with their own eyes," he said.

He maintained that India was ready to discuss humanitarian issues whose “resolution requires the cooperation of Pakistan”. "We are ready to discuss these and other issues with Pakistan. I hope that, as a result, things will be made easier for our traders, divided families, prisoners and travelers," he said.

President Pratibha Patil’s visit to UK and Cyprus
President Pratibha Patil visited UK and Cyprus from October 27 to 31, 2009. During her visit to UK she received the Baton of the Commonwealth Games from the Queen of England at a ceremony in the Buckingham Palace in London on October 29.

This was the third State visit by an Indian President to the UK. The first was by President S. Radhakrishnan in 1963 and the second by President R. Venkataraman in 1990. This was also the first State visit after the commencement of the strategic partnership between India and the UK in 2009.

During her visit, President Patil interacted with Queen Elizabeth of England as also met Prime Minister Gordon Brown, leader of the opposition David Cameron and leader of the Liberal Democratic Party Nick Clegg.

She also addressed in London a business meeting organised by the UK India Business Council.

Gandhi letters handed By UK to President Patil: Mahatma Gandhi won’t receive letters not bearing stamps as a matter of principle. But he chose to write back and inform sender Hamdiullah Afsar, a contemporary poet of those times, of his decision. These and many such aspects of Gandhi’s personality come out in a set of letters presented by Curry King Ghulam Noon and NRI from London Nat Purie, who bought some of the memorabilia associated with Mahatma Gandhi in an auction in London and presented them to President Pratibha Patil at the India House.

The memorabilia, consisting of a piece of khadi cloth, ostensibly spun by Gandhi bearing his signatures along with those of Sarojini Naidu, Gandhi’s disciple Meerabai, secretary Pyare Lal and some other blurred signs are part of the package bought by the NRI duo that was handed over to the President.

Gandhi’s letters written in Urdu to his disciple Maulana Abdul Bari and a lesser known Urdu poet of those times, Hamidullah Afsar, are a study in contrast. These letters bring out the difference between those who were close Gandhi’s freedom movement and those who tried to intrude upon his privacy.

The President visited Cyprus on an invitation of the then President of Cyprus Papadopoulus who visited India in April 2006. The last time an Indian President visited Cyprus was 21 years ago, again R. Venkataraman, whereas all former Cyprian Presidents have visited India during their term of office.

Cyprus has always supported India on all crucial issues and expressed its understanding on our nuclear tests in 1998 and supported Indian position during Kargil war, too.

India is planning a major headway in generating energy through solar sources. It has approached Cyprus which has made considerable headway in that direction to develop solar power plants ranging between one MW and 50 MW. An MoU was signed in the presence of visiting Indian President Pratibha Patil for providing solar power to India.

The MoU states that NORASCO, UPTURN of DALCO company and CASE NEUBERG of the CASE group of companies will supply solar photovoltaic systems, kits and technology for solar energy projects in India. It also states that CASE will be Indian technology and engineering partners for setting up turnkey solar energy plants in India and NORASCO will provide project finance and investments of EURO 50 million in solar energy sector in India between 2010 and 2015. The Photovoltaic Technology Group of University of Cyprus (PVT Group) also signed an MoU with NORASCO whereby PVT Group will act as a technology consulting partner for developing solar energy projects and solar energy education in India.

Cabinet OKs 50% quota for women in civic bodies
Women will soon occupy half the seats in urban local bodies with the Union cabinet on Thursday clearing a proposal for raising reservation for them in municipalities from 33% at present. This provision will apply to the total number of seats to be filled by direct election, offices of chairpersons and seats and offices of chairpersons reserved for SCs and STs.

The increased representation of women is likely to have significant benefits in terms of higher priority to women’s issues in critical areas of urban governance and service delivery such as water supply, sanitation, education and health.

Former Jharkhand CM Koda booked for graft
Jharkhand presents an example where lack of political stability was allegedly exploited by a group of legislators led by former Chief Minister Madhu Koda to fatten themselves. The Enforcement Directorate, on October 9, 2009, slapped charges under Prevention of Money Laundering Act (PMLA) on the former Jharkhand CM and three of his former Cabinet colleagues for allegedly amassing assets running into several hundred crores—between Rs 700 and 800 crore according to the preliminary estimate.

Koda, the first Independent to become Chief Minister and now a member of Lok Sabha supporting UPA government, has been charged with having business interests of diverse kinds—cement, steel, auto, power, agro and tourism. His alleged investments, estimated at Rs 300-400 crore, are just as widely spread—from Singapore to Thailand to Dubai to Liberia.

His former colleagues who have also been booked under PMLA include Bhanu Pratap Shahi, Bandhu Tirkey and Kamlesh Singh. Though they did not prosper as much as Koda, the trio, according to ED, made personal fortunes ranging from Rs 20 crore to Rs 50 crore.

Koda and his associates milked their success in 2005 Jharkhand polls. The election threw up a hung House, enabling them to play kingmaker with remorseless agility. Shibu Soren, who was sworn in as Chief Minister of Jharkhand when he lacked majority support, had to resign when the group refused to rescue his aspirations. They helped Arjun Munda of BJP become the Chief Minister and were rewarded with 'plum' portfolios as part of deal. The arrangement, however, did not last long. The group ditched BJP after UPA agreed to propel Koda to Chief Ministership. Others in the group, naturally, held on to their portfolios.

The tenure was marked by allegations of corruption, particularly allegedly dubious decisions on mining leases to big industrial houses. Later on, with the stink rising to embarrassing levels, Congress wanted to dissociate itself from the arrangement, but allies RJD and Jharkhand Mukti Morcha prevailed. The import of allegations of the ED begin to sink in deeper when two other factors are considered. First, the last five years have seen Maoists rapidly expanding their influence in Jharkhand, turning huge swathes into "liberated Red zones". Also, the office of the Governor also came under a cloud, with CBI raiding two close aides of Governor Syed Sibte Razi.

New anti-Naxal policy
The Centre’s plans to take the battle to Naxalites hinge on a strategy that will see Central and State forces acting in concert to first wrest control of areas long considered “Red” zones and then facilitate expeditious restoration of civil administration. The Cabinet Committee on Security (CCS) has okayed a comprehensive approach to Maoist extremism with a "clear and hold" doctrine at the centre of the anti-Naxal "action plan". Moving from the current largely reactive stance which saw occasional jabs into Maoist hinterland, forces will pro-actively engage the ultras.

Recognising that draining Maoist swamps would also require restoration of rule of law and demonstrable development, the government has decided that the forces used in anti-naxal operations will not pull out after an operation. Rather, reinforcements will beef up security and set the stage for the civil bureaucracy to get to work. The developmental aspect of the plan is crucial to denying Maoist ranks of fresh recruits and addressing the argument that exploitation and abysmal conditions in tribal areas in far-flung areas has led to "popular" support for the Red insurgency. Fixing things and making them work was important in showing the state could deliver.

The view in government is that the offensive cannot be delayed much further. With alarming signs of an emboldened Maoist leadership targetting urban areas beyond their known forest hideouts—arrested politburo member Kobad Gandhy was incharge of operations in cities like Delhi, Mumbai and Pune—the government is gearing for action and bracing for casualties.

The strategy for acting on intelligence tip-offs and hitting at naxal bases deep in Red "liberated" zones was put to trial in September 2009 in Chhattisgarh’s Dantewada. The Maoists were routed but the hazardous forests and complete lack of infrastructure underlined how difficult it would be for a force to operate "behind the lines". It is felt that the surge in Central and State forces after the Assembly elections in Haryana, Arunachal Pradesh and Maharashtra can be sustained if the local population is convinced that Maoists can be defeated and that the forces will not leave in a hurry. This would strengthen intelligence collection and provide the administration with valuable allies as even fence sitters opt for the winning side.

The Centre plans to deploy 70,000 paramilitary personnel—drawn from CRPF, ITBP, BSF, SSB, CoBRA and Nagaland Armed Police—in States like Jharkhand, Chhattisgarh, Orissa, Bengal, Bihar, Maharashtra and Andhra.

Maoists step up the gore, behead police officer
On October 5, 2009, in a barbaric, Taliban-style execution, Maoists beheaded special branch inspector Francis Indwar and threw his body on a slip road leading to National Highway 33 that connects Patna to Jamshedpur. The officer was abducted and held hostage by Naxalites demanding a swap for arrested Maoist ideologues Kobad Ghandy in New Delhi, Chhatradhar Mahato in Kolkata and another captured leader Chandrabhushan Yadav.

Ireland endorses Lisbon treaty
On October 3, 2009, Irish voters strongly endorsed the European Union's Lisbon Treaty-16 months after their first vote rejecting it plunged EU reforms into deadlock.

About 67% voted "Yes". Irish Prime Minister Brian Cowen hailed a "clear and resounding" endorsement. Political leaders across the EU have also welcomed the result. The President of the European Commission, Jose Manuel Barroso, said it was a great day for Europe. He urged the leaders of Poland and the Czech Republic-the only other countries yet to ratify Lisbon Treaty-to sign the treaty as soon as possible.

The treaty-which is aimed at streamlining decision-making in the 27-nation bloc-cannot take effect until all 27 member States ratify it.

Ireland was the only EU member State to hold a referendum on Lisbon Treaty, though there have been calls for referendums in several countries. 

Irish opinion is thought to have swung behind the "Yes" vote this time because of the severity of the economic downturn, as well as the legal "guarantees" on Irish sovereignty that the EU pledged after the first referendum.

The legally binding "guarantees" state that Lisbon Treaty will not affect key areas of Irish sovereignty, such as taxation, military neutrality and family matters such as abortion-significant issues in 2008's campaign in Ireland. But they have not yet been attached to the treaty.

The treaty is intended to make EU institutions better suited to the enlarged bloc of 27. But opponents see it as part of a federalist agenda that threatens national sovereignty.

Multi-terror attacks on cops, 40 dead
Teams of terrorists unleashed attacks on three law enforcement facilities in Lahore on October 15, 2009, even as car bombs exploded in two cities near the Afghan border, killing 39 persons in an escalating wave of anti-government violence in Pakistan.

No group claimed responsibility, though suspicion fell on Pakistan’s umbrella Tehreek-e-Taliban movement, Al Qaeda and home-grown Islamist groups Lashkar-e-Jhangvi and Jaish-e-Muhammad.

The co-ordinated assaults underscored the power of armed radicals to strike in the heart of Pakistan, and the weakness of poorly equipped security forces, despite promises of a new offensive against the Taliban. Nuclear-armed Pakistan, a key ally in the US-led fight against terrorism, is reeling from two years of Taliban-linked attacks that have escalated such that over 160 people have been killed since October 5. Pakistan's weak civilian government said the country faced a new war after the slew of militant attacks away from the insurgent hotbed of the north-west tribal region.

Human Development Index
While China figures among the only five countries across the world that improved their Human Development Index (HDI) rankings, 2009, by three or more points, India continues to cut a sorry figure, slipping six points (from the last compilation) in the latest UNDP Human Development Index. Overall, however, India made progress on HDI, improving its value from 0.556 in 2000 to 0.612 in 2007.

As against a standing of 128 in the 2008 UN Human Development Report, India has been ranked 134th among the 182 nations surveyed. The slip represents poor progress on some indicators of people’s well-being, including life expectancy, literacy, school enrolment and GDP per capita.

In China (ranked 92), along with Colombia, France, Peru and Venezuela, which improved their rankings by at least three points, the fillip has been attributed to increase in incomes and life expectancy. China, Colombia and Venezuela’s progress has also been driven by improvement in education. The report concludes that disparities in life expectancy in the world can range up to 30 years. Despite progress in the last 25 years, disparities in people’s well-being in rich and poor countries continue to be unacceptably wide.

2009 report represents the most extensive coverage ever of 182 countries. As for rankings, the top three ranked countries in the HDI are: Norway, Australia and Iceland. France rejoined the top 10 countries after dropping down for one year, while Luxembourg fell from the top 10.

US exits recession
The world's largest economy, USA, has climbed out of recession as it grew by 3.5 per cent in the third quarter ending September 30, 2009, the first quarterly expansion in a year, thanks to higher consumer and government spending among others.

The economy, which was battered by the worst financial turmoil since the 1930s Great Depression, expanded last in the second quarter of 2008, when GDP rose 1.5 per cent.

The advanced estimates from the US Bureau of Economic Analysis (BEA) showed that American GDP expanded 3.5 per cent in the third quarter.
Consumer spending, which accounts for two-thirds of the GDP, grew 3.4 per cent in the quarter under review, compared to 0.9 per cent fall in the previous quarter.

USA is the latest advanced economy to shrug off recession and joins the likes of Germany, France, Japan and Singapore. However, the country would be officially out of recession only after the National Bureau of Economic Research (NBER) declares so. A country is said to be in recession if its economy contracts for two straight quarters.

The third quarter growth was primarily due to rising personal consumption expenditures (PCE), higher federal government spending and exports.

One of the main factors for the upturn in economic activities in the third quarter is the government's 'Cash for Clunkers' programme for the auto industry, which resulted in increased car sales. The initiative which ended in August had offered rebate of about $4,500 for consumers to purchase new cars and sell their old models.

UN climate talks end without any consensus
As the Bangkok round of talks on climate change in October 2009 came to an end, the rift between the developed and developing countries appeared to have deepened and widened. The developed countries would like to abandon the Kyoto Protocol, in favour of a new agreement, while the developing countries would like an extension of the Protocol. There has been virtually no progress on the issue of finance and mid-term emission reduction targets for industrialised countries.

Developing countries have opposed scrapping the Kyoto Protocol as it clearly places an obligation on developed world to deepen emission cuts and to provide finance to help developing countries to adapt to and mitigate climate change. The United States and Australia were among the 42 countries that sought to junk the Protocol. They argued that the world had changed since the 1990s, and keeping in mind the ground realities a new agreement needs to be crafted. This agreement would require all countries to take on emission cuts. This move was resisted at Bangkok, with the developing countries under the G-77 umbrella argued that such a proposal would violate the Kyoto Protocol and the Bali Action Plan.

The bright spot in Bangkok was the unveiling of an aggressive emission reduction plan by Norway. The Scandinavian country had previously committed unconditionally to slashing emissions 30 per cent below 1990 levels by 2020. Its new pledge is to cut greenhouse gas output by 40 per cent if an international agreement is reached in Copenhagen in December 2009.

Lawmakers join hands to fast-track carbon cut
The time to act is now, whether or not there is an international consensus on climate change at the UN Copenhagen talks in December, say the 100-odd legislators from major economies representing major political parties—including US, UK, France, China, Brazil, Mexico and India.

The lawmakers converged at the Danish capital at a GLOBE International and COM+ meeting held over two days from October 24-25, 2009 at the Folketing, the Danish Parliament, in preparation to the UNFCCC meeting in December that is expected to find an alternative to the Kyoto Protocol that is to conclude in 2012.

The legislators have signed key guiding principles set out by Chinese Congressman Wang Guangtao, chairman of the steering committee on environment and resources protection, National People’s Conference, China and US Congressman Edward Markey to enable enacting of climate change laws in their respective countries.

The Wang-Markey principles outline energy standards, forestry preservation, and renewable energy that could see 70% of the emissions cuts needed by 2020 if the global average temperature rise is to be limited to 2°C.

They include standardized action on building and appliance standards; renewable energy; vehicle fuel and efficiency standards; and forestry. Such coordinated action—especially in areas like domestic, transportation and industrial energy efficiency—will result in cost savings and more competitiveness.
The overriding theme has been to stress the need to accelerate domestic legislation that bind national governments to short, medium and long-term targets for emissions; a commitment to "climate compatibility assessments" for major government policies; a duty on governments to report to parliament regularly on their progress in meeting targets; and a commitment to a regular review to ensure that policies are consistent with the latest science.

India joins rich nations to protect forests
India, along with five other developing countries, has joined a group of five rich nations to work on a $350-million project to fight climate change through forest management.

The six developing nations, which also include Brazil, Congo, Morocco, Nepal and Romania, have joined the group of five contributing countries-the US, Australia, Britain, Denmark and Norway-under the governing body of the Forest Investment Programme (FIP).

The FIP Trust Fund Sub-Committee met in Washington for the first time on October 29, 2009, to begin implementation of the Program, including consideration of criteria for how to select pilot countries and regions.

The FIP governance structure is among the first in a new generation of partnerships among developing and developed countries and other stakeholders which takes account of the need for a level playing field in addressing climate action.

RIC meeting in New Delhi
Global terrorism with special focus on Afghanistan dominated the ninth trilateral meeting of the foreign ministers of Russia, India and China (RIC) that concluded in Bangalore on October 27, 2009.
The ministers emphasised the need for the three countries to assist Afghanistan in fighting terrorism, ensuring security, restoring peace and stability and building a democratic and pluralistic Afghanistan.

The meeting was held in the backdrop of two significant bilateral issues—meeting between Prime Minister Manmohan Singh and China’s Premier Wen Jiabao at Hua Hin, Thailand and trade, economy, scientific and climate meeting with Russia in Moscow on October 21—and resolved to jointly fight terrorism and narcotic trafficking with mention also being made on diplomatic settlement of Iran nuclear issue and denuclearization of the Korean peninsula.

The demand for a greater role for India in the United Nation affairs has gained momentum once again. Russia and China made a strong bid for India’s status in international affairs be accorded importance. "There is a need for a comprehensive reform of the United Nations with a view to make it more efficient so that it can deal with the current global challenges more effectively. Russia and China attach importance to the status of India in international affairs. We urge the world communities to understand and support India’s aspirations to play a greater role in the United Nations," Russian and China’s foreign ministers Sergei Lavrov and Yang Jie Chie, jointly stated.

Obama signs into law Pak Aid Bill
US President Barack Obama has signed into law legislation that will provide $7.5 billion in US aid to Pakistan over the next five years. 
"This law is the tangible manifestation of broad support for Pakistan in the US, as evidenced by its bipartisan, bicameral, unanimous passage in Congress," the White House said in a statement.

Obama signed the legislation after hectic jockeying by Pakistan's Foreign Minister Shah Mahmood Qureshi to secure assurances from Congress that the Bill does not trample on Pakistan's sovereignty.

The United States Congress sought to allay Pakistani concerns. Lawmakers released an explanatory statement assuring critics of the legislation that the Bill in no way impinges on Pakistani sovereignty.

"This Act formalises that partnership, based on a shared commitment to improving the living conditions of the people of Pakistan through sustainable economic development, strengthening democracy and the rule of law, and combating the extremism that threatens Pakistan and the United States," the White House statement said.

Sen John Kerry, a co-author of the legislation, said the statement was issued "to set the record straight". He emphasised that the legislation in no way sought to “compromise Pakistan's sovereignty, impinge on Pakistan's national security interests, or micromanage any aspect of Pakistani military or civilian operations". House Foreign Affairs Committee chairman Howard Berman, an author of the legislation, said the statement was "a reflection of our desire to be long-term partners with the Pakistani people".

Visit of Chinese PM to N-Korea
North Korea’s leader Kim Jong-il made a rare appearance to personally greet visiting Chinese premier Wen Jiabao at the start of a trip to North Korea in the month of October 2009.
Kim Jong-il’s unusual outing followed by Wen’s talks with the premier was a show of how serious North Korea is about shoring up ties with Beijing, which gives its poor neighbour crucial economic help and diplomatic backing.

Kim Jong-il is widely believed to have suffered a serious illness in 2008, and it is rare for him to personally greet an arriving visitor. Even audiences are uncommon.

North Korea told Jiabao that it was open to bilateral and multilateral talks on its nuclear programmes. The comments appeared to be the latest indication of Pyongyang’s apparent willingness to return to six-nation disarmament talks that it broke off in early 2009.
China termed Wen’s visit a "goodwill" trip to mark the 60th anniversary of diplomatic relations, but nuclear issues figured to be high on the agenda.

Hillary Clinton's visit to Pakistan
Stating that Pakistan was at a "critical point" of history, the US has offered to stand soldier-to-soldier with the country in its fight against "tenacious and brutal terror groups". "This is not Pakistan's fight alone," US Secretary of State Hillary Clinton said during her visit to the country in October 2009.

During her maiden visit to Pakistan after assuming office, Clinton  met President Asif Ali Zardari, Prime Minister Yousuf Raza Gilani and Army Chief Gen Ashfaq Parvez Kayani.

She refused to be drawn into the debate on whether there are "good Taliban" and made no reference to contentious issues like differences between the US and Pakistan on conditions attached to economic aid.

ASEAN Summit
The 15th ASEAN Summit and the related summits, including the 12th ASEAN-China Summit, the 12th ASEAN-Japan Summit, the 12th ASEAN-Republic of Korea Summit, the Seventh ASEAN-India Summit, the 12th ASEAN Plus Three Summit and the Fourth East Asia Summit,  were held on October 23-25, 2009 in Cha-am Hua Hin, Thailand. ASEAN Leaders discussed among themselves and with relevant Dialogue Partners on how to realise an ASEAN Community by 2015.

Highlights for the Summits include the inauguration of the ASEAN Intergovernmental Commission on Human Rights, the adoption of a declaration on climate change to reaffirm ASEAN position in the negotiation under the UN Frameworks Convention on Climate Change (UNFCCC), as well as the adoption of a declaration on education cooperation to achieve an ASEAN Community. Other issues affecting the well-being of the peoples, including food and energy security, financial stability, pandemics as well as disaster management, were also discussed.

During the Summits, ASEAN Leaders also met with representatives from the ASEAN Inter-Parliamentary Assembly (AIPA), ASEAN Youth and ASEAN Civil Society Organisations which reflected Thailand’s will to promote people’s participation in ASEAN Community-building process.

The 15th ASEAN (Association of Southeast Asian Nations) Summit and the related summits were concluded Sunday afternoon, with a series of documents being adopted by the participating national leaders.

Key documents, such as the Cha-am Hua Hin Declaration on the Inauguration of the ASEAN Intergovernmental Commission on Human Rights (AICHR), Cha-am Hua Hin Declaration on Strengthening Cooperation on Education to Achieve an ASEAN Caring and Sharing Community, Draft ASEAN Joint Statement on Climate Change, and ASEAN Leaders' Statement on ASEAN Connectivity were adopted by ASEAN leaders and other participating national leaders.

The next ASEAN summit and related summits will be held in Vietnam.

East Asia Summit
The Fourth East Asia Summit was rescheduled several times, had its venue changed and one attempt to hold it was cancelled due to the 2008–2009 Thai political crisis. It was ultimately held on October 25, 2009 in Cha-am and Hua Hin, Thailand. ASEAN (Association of Southeast Asian Nations) countries, China, Japan, South Korea, India, Australia, and New Zealand attended the Summit.

The Summit adopted two documents. The first was a statement on disaster management. The second related to the re-establishment of Nalanda University by India.

The Chairman's Statement noted: We acknowledged the importance of regional discussions to examine ways to advance the stability and prosperity of the Asia Pacific region. In this connection, we noted with appreciation the following:
(a) the Philippines’s proposal to invite the heads of other regional fora and organizations in Asia-Pacific to future EAS meetings to discuss measures that will protect the region from future economic and financial crisis and strengthen Asia economic cooperation, including through the possible establishment of an economic community of Asia.
(b) Japan’s new proposal to reinvigorate the discussion towards building, in the long run, an East Asian community based on the principle of openness, transparency and inclusiveness and functional cooperation.
(c) Australia’s proposal on the Asia Pacific community in which ASEAN will be at its core, will be further discussed at a 1.5 track conference to be organized by Australia in December 2009.

The East Asia Summit is a forum for dialogue on broad strategic, political and economic issues of common interest and concern with the aim of promoting peace, stability and economic prosperity in East Asia. It is an open, inclusive, transparent and outward-looking forum, which strives to strengthen global norms and universally recognised values with ASEAN as the driving force working in partnership with the other participants of the East Asia Summit.

Pak’s Saeed farce continues
Hafiz Saeed, who has shown to be the mastermind behind the 26/11 terror assault on Mumbai, has been allowed to go scot-free yet again. In a development which lays bare Pakistan’s game of deceit in acting against perpetrators of the attack, the Lahore High Court, in October 2009, dismissed two cases registered against him on the ground that the Jamaat-ud-Dawa, the organisation headed by him, was not 'proscribed' in Pakistan. JuD is the new avatar of the banned Lashkar-e-Taiba.

Describing the case against Saeed as arising out of a 'mala fide intention' by the Punjab provincial government, the court quashed the cases, which were registered at police stations in Faisalabad for allegedly inciting people to wage 'jihad' (holy war) against 'infidels'.
The first FIR was based on his preaching session at Royalton Hotel in Faisalabad’s Canal Road on August 27, 2009, in which Saeed urged people to retaliate against those who’ve suppressed their rights. He explained away the problems of the American economy as God’s way of retaliation.
The second FIR was lodged over his speech at an Iftar dinner at Peoples Colony, Jaranwala Road Faisalabad on August 26. In this tirade, Saeed accused India of stage-managing the 26/11 attacks and conspiring against Pakistan—a clear attempt to invoke anti-India sentiments.
Car Bomb Targets India’s Kabul Mission
In yet another reminder of the desperation of terror groups and their sponsors to get India out of Afghanistan, Taliban terrorists executed a suicide car bomb attack on the Indian embassy in Kabul on October 8, 2009, killing 12 people and injuring more than 80 others. The attack came 15 months after the deadly strike near the embassy in 2008, which left more than 60 dead, including an IFS officer and the Indian defence attache.
The damage could have been much more but for the security arrangements put in place after 2008’s attack that was traced to ISI-affiliate Sirajuddin Haqqani.

Taliban spokesman Zabiullah Mujahid took responsibility for the attack. In a statement posted on a website, he claimed the attacker was an Afghan who blew up his SUV stuffed with explosives outside the embassy. Indian security agencies, however, said this could be a smokescreen to keep the ISI out of scrutiny.

Clearly suggesting a Pakistani link to the suicide bomb attack, India said the terrorist act was the handiwork of forces which had their patrons residing across the border. Undeterred by the suicide attack, India also reiterated its "unwavering commitment" to the reconstruction of Afghanistan and its assistance to the Afghan people "in realising a democratic, peaceful and prosperous" country.

Top military brass among 50 killed in Iran suicide blast
A suicide bomber killed seven commanders of Iran’s elite Revolutionary Guards and up to 42 others on October 17, 2009, in an attack that President Mahmoud Ahmadinejad charged had been plotted from neighbouring Pakistan.

The foreign ministry of Iran called in Pakistan’s charge d’affaires over the bombing, which targeted one of the Islamic republic’s most prestigious institutions in a region that has been a hotbed of Sunni insurgency against the Shi’ite Muslim regime.

Several tribal leaders in the majority ethnic Baloch Sistan-Baluchestan province also died in the bombing which left many others wounded.

The chief prosecutor in Sistan-Baluchestan, Mohammad Marziah, said Abdolmalek Rigi, the head of the shadowy Sunni rebel group, Jundallah (Soldiers of God) had "accepted the responsibility" for the attack.
The Iranian president hit out at Pakistan over the bombing, accusing it of sheltering Jundallah militants.

The Revolutionary Guards accused the United States of involvement. "Surely foreign elements, particularly those linked to the global arrogance, were involved in this attack," a Guards statement quoted by television said. Iran often uses the term "global arrogance" to refer to the United States, its old foe.

FBI foils LeT plan to attack India
Pakistan-based terror group Lashkar-e-Taiba (LeT), blamed for the 26/11 Mumbai terrorist attack, was planning to use an American national to carry out another major terrorist attack in India, according to the Federal Bureau of Investigation (FBI) of USA.
The man, identified as David Coleman Headley, was arrested in early October 2009, by FBI Joint Terrorism Task Force at O’Hare International Airport.

Headley, 49, along with a Canadian citizen of Pakistani origin, Tahawwur Hussain Rana, have been arrested on charges of plotting a terror attack against the facilities and employees of a Danish newspaper which had published cartoons of the Prophet Mohammed in 2005.

Rana is the owner of several businesses, including First World Immigration Services, which has offices on Devon Avenue in Chicago, as well as in New York and Toronto.

According to the FBI affidavit filed in a Chicago court, Headley was in close contact with Ilyas Kashmiri and several unidentified leaders of LeT.

Kashmiri is the operational chief of Pakistan-occupied Kashmir section of Harakat-ul Jihad Islami (HUJI), a Pakistani-based terrorist organisation with links to Al-Qaida.

SAARC Ministers promise to free services sector
Trade Ministers from SAARC countries have decided to fast-track negotiations on liberalising the services market within the region, a move that will enable freer movement of people within the region and give a boost to investments in areas like tourism, financial services and telecom.

Services could be incorporated into the South Asia Free Trade Agreement (SAFTA) soon.

SAARC Ministers, who met in Kathmandu in October 2009, also decided to work on reducing the negative list of items that are not covered under SAFTA to make the free trade agreement more "meaningful". SAFTA is an agreement for elimination of tariffs on goods traded within the SAARC region, and was signed in January 2004.

Indian Commerce and Industry Minister Anand Sharma pointed out that India had unilaterally reduced its negative list for LDCs in the SAARC region, from 744 items to below 500 items. "We are also working towards reduction on negative list with reference to non-LDCs of SAARC (which include Pakistan and Sri Lanka)," the Minister said. The minister urged the non-LDC members to consider reviewing their respective negative lists in respect of both LDCs and non-LDCs, so that intra-SAARC trade could be further expanded.

Interestingly, Pakistan continues to trade with India based on a positive list of items it allows from India. The SAFTA, however, requires all members to trade with each other on the basis of a negative list, which means that all goods would be allowed to be traded except the ones included in the negative list.

The Union government, acting on a proposal made by Bihar Chief Minister Nitish Kumar, has declared dolphin as a national aquatic animal. The animal has been declared as a ‘highly endangered’ under the ICUN and Schedule I of Wildlife Protection Act (1972), Government of India.

United Arab Emirates (UAE) has become the top destination for Indian exports in 2008-09, displacing the US from the number one rank. India’s exports to UAE grew by phenomenal 53% to $23.92 billion primarily due to sharp increase in gems and jewellery export.

Cloud-based services are those services in which software is accessed over internet by a company, and maintained at data centres of the service provider, instead of a company’s computers.

Michael Jackson’s new single “This Is It” features backing vocals by Jackson’s brothers, opens with a soft, soulful introduction and the lines: “This is it, here I stand/I’m the light of the world, I feel grand.”

Delhi, a city people love to hate for its traffic, lack of civic services, civility and now its inability to appear trussed and ready for the Commonwealth Games, has found a place of honour in the National Geographic Traveller magazine’s "50 Places of a Lifetime." The Capital and Fatehpur Sikri are the only two Indian destinations to make it to the prestigious list that is part of the travel magazine’s compilation that comes after a decade-long gap. In fact, the first list published in 1999 featured the Taj Mahal and put Kerala on the international map after it was described as ‘Paradise Found’.  The 25th anniversary special October issue also includes cities like Berlin, St Petersburg and Mexico City while short-listing Aleutian Islands in Alaska in its section on wild places and the Hawaiian island of Molokai as paradise found.

India-born Nobel laureates: Ronald Ross (Medicine, 1902); Born in Almora. Rudyard Kipling (Literature, 1907); Born in Bombay. Rabindranath Tagore (Literature, 1913) C.V. Raman (Physics, 1930) Hargobind Khorana (Medicine, 1968) S. Chandrashekhar (Physics, 1983) Amartya Sen (Economics, 1998), Venkatraman Ramakrishnan (Chemistry, 2009).

Yudh Abhyas was the largest-ever ground combat exercise held jointly between India and US armed forces at Babina, near Jhansi.

Kerala High Court has become the first in India to post details of the assets and liabilities of all its judges on the Court’s official website.

Orissa has been renamed as Odisha and Oriya language has been renamed as Odia. The proposed change will require amendment to the First and Eighth Schedule of the Constitution to be officially accepted.

Major cities of India that have been renamed after independence include: Kanpur (Cawnpore), Thiruvananthapuram (Trivandrum), Mumbai (Bombay), Chennai (Madras), Kolkata (Calcutta), Pune (Poona) and Kochi (Cochin).

The world’s largest cruise liner, Oasis of the Seas, began its maiden voyage to Florida on October 30, 2009, gliding out of a shipyard in Finland. With an amphitheatre, basketball courts and an ice rink on board, the 16-deck liner spans 1,200 feet from bow to stern. Its 2,700 cabins can accommodate 6,300 passengers and 2,100 crew. The ship cost $1.5 billion and took two and a half years to build. It boasts of four swimming pools, volleyball and basketball courts, and a youth zone with theme parks and nurseries for children.

World Sight Day is observed on October 8.

World Standards Day is celebrated on October 14.

Global Iodine Deficiency Disorders Day is observed on October 21.

India has signed agreements with the World Bank for $4.2 billion (around Rs 20,000 crore) credit to support the country's infrastructure projects and also for recapitalising the public sector banks. State-run PowerGrid Corp of India, India Infrastructure Finance Company Ltd (IIFCL) signed pacts for $1 billion and $1.195 billion, respectively. The Centre signed the agreement for $2 billion to recapitalise the state-run banks. The funding to IIFCL has two components, IBRD loan of $1.195 billion long-term finance to infrastructure projects and a grant of $5 million for capacity building of IIFCL, which finances infrastructure projects. The loan will be utilised for strengthening transmission systems for Sasan, Mundra and Krishnapatnam Ultra Mega Power Projects and South-West interconnection.

The 150th birth anniversary of Rabindranath Tagore will be celebrated internationally by the UNESCO in 2010 as a mark of respect to the Nobel Laureate whose literary work blends universal humanistic values and sympathy for the poor. The agency will also celebrate the 100th birth anniversary of Chilean poet Pablo Neruda and 100th birth anniversary of Afro-Martinican littérateur Aime Cesaire. The UNESCO will establish prizes and medals in the name of these literary giants. It will also organise a series of seminars and conferences across the world to spread awareness about their literary works.

Larsen and Toubro (L&T) has built India’s largest ship-building yard near Chennai.

India has announced sites for setting up light water reactor-based nuclear plants in cooperation with the United States, France and Russia. Power plants would be set up in cooperation with the US at Chhayamithi Virdi in Gujarat and Kovvada in Andhra Pradesh, while Jaitapaur in Maharashtra has been designated as the site for the plant to be set up with France’s assistance. Kudankulam in Tamil Nadu and Haripur in West Bengal have been chosen as the sites for power plants to be set up in cooperation with Russia.

The new series of Index of Industrial Production (IIP) will have base year as 2004-05 for calculating factory production.

Cope-India 09 was joint air exercise that Indian Air Force held with US Air Forece at Babina, near Agra.

Four-time world champion and Khel Ratna awardee woman boxer M.C. Mary Kom was India’s flag-bearer in the third Indoor Asian Games held at Hanoi.


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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.


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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…