Current Affairs for IAS Exam 2011 Economic & Energy Events October 2011 Www.upscportal

8/3/2019 Current Affairs for IAS Exam 2011 Economic & Energy Events October 2011 Www.upscportal

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UPSCPORTAL Current Affairs : http://upscportal.com/civilservices/current-affairs

Approach Paper for the12 th FYP(2012-17) A pproved

The Union Government approvedthe Approach Paper for the 12thF

YP(2012-17)

on15

September 2011, which seeks to attainsecond generation economicreforms , improving governanceand raise annual economic growthrate to 9 per cent duringimpending five-year period . ThePaper would be placed before theNational Development Council(NDC) for its final approval inOctober 2011. The ApproachPaper provides a broadframework of the governmentpolicy to be pursued in the five-year plan period to achieve thedesired growth rate of 9 per centwas cleared by the PlanningCommission on 20 August 2011.

The theme of the Approach Paper to the 12 th Five Year Plan isfaster , sustainable and more

inclusive growth . H ealth ,education and skill development ,environment and natural resourcesand infrastructure developmentwas pinted to be focus areas inthe next Plan . The paper layemphasis on inclusive growth . For the first time in the history of theFive Year Plans the ApproachPaper has a chapter ongovernance and corruption . Theapproach paper key componentsare following :

State Portal IncludingApplications & e- forms

The functionality of the State

Portal including Applications & e-forms are as follows :

8 The portal will provideinformation aboutgovernment departments ,line ministries , and web linksto the various departments .It will also provideinformation about

government structure in thestate , service offerings ,budget , key notifications ,government schemes etc tothe business and citizencommunity .

8

The portal would primarilybe available in English but indue course itll also need tobe available in H indi andregional language .

8 The State portal will be singlewindow to the Governmentto business (G2B) andGovernment to citizen(G2C) services . The servicedelivery would happen in

integrated fashion usingNeGps core infrastructurecomponents SWAN, SDC,CSC and SSDG

8 The paper suggested that thestate proposals shouldinclude e- forms for respective departments .

8 Content personalization and

ECONOMY
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content management shouldbe a part of the proposalcomponent and links todepartmental websitesshould be included .

8 A complete application for e-receipt of forms by thedestination office , MIS ,printing , accounting , statusreporting , query service andpayment handling should be

provided .

State Service DeliveryG ateway (SSDG)

The functionality of the StateService Delivery Gateway(SSDG) are as follows:

8 SSDG will enable auditmanagement & timestamping which would resultin better tracking (auditing )and security of eachtransaction .

8 With Gateway Server ,legacy applications can beInternet enabled as Gatewayserver can act as a Weblayer around them soGovernment Departments

need to put least effort for web enabled of their legacyapplications .

8 The gateway as themiddleware will facilitate

Data Centre , will help inbetter centralizedAdministration , Monitoring ,over all maintenance workand deployment of hardwareof Web Site at optimal level .

8

Gateway has the capabilityto ad d additionalfunctionality to supportshared common services likeAuthentication , paymentgateway interface , etc

CDAC would provide the SSDGexecutables , centrally versioncontrol and provide technicalassistance to the States inProposal preparation (SSDG

component ), subsequentimplementation and necessary .

Gap Infrastructure -Identification of Gaps inConnectivity

The functionality of GapInfrastructure - Identification of gaps in connectivity the are asfollows: GoI funding will include

funding for minimal gapinfrastructure for the departmentswhich would enable interaction toge t the printout of servicerequests from the centralinfrastructure .

The State may need to prioritizethe departments and services bytaking into account following -HighVolume Services Serviceshaving high volumes of transaction

so that there is maximum impact .IMMP Services Services alreadyidentified under State MMPswhere work is yet to start andwhich are not covered under HighVolumes Services .

Any other services which the Statewants to include because of their high Citizen Relevance .

easy inter -departmental dataexchange .

8 The Gateway will also helpthe Departments backendworkflow evolve graduallyas the Gateway acts as a

middleware de-linking thebackends from the front end .Departments , which do nothave the completeautomation or work , flow atthe back can still deliver e-Service to the citizens in alimited manner .

8 The placement of constellation of GatewayServers at State Level will

facilitate getting informationand doing transactions bycitizens of one State withGovernment Department of other States seamlessly .

8 The positioning of GatewayServer and building portal of al l the departments atCentral location , i.e., in State
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Training

The Approached paper talks of training 2 employees of thedestination departments fo r processing of e-Forms , SSDG &

Portal . Employees from eachdepartment whose service will bedeployed on the portal , SSDG ande-form processing would have tobe selected .

Training would encompass StatePortal Framework & websiteDesign Guidelines , SSDGunderstanding and e- formprocessing .

Manpower

The Approach Paper states thatprovision should be built for technical Advice / Consultationfrom NIC State Unit as well asCDAC during implementation &Operation phase of the project .This can be built in consultationwith State representatives of NIC& CDAC.

The states would have to buildinternal capacities to support thedepartment on on-going basis for e-F orms , new applicationintegration , Service registration onSSDG and continuity when theImplementing Agency exits.

Content Service Provider(C SP)

The paper proposed that theStates extend the arrangementwith the existing CSPs under IndiaPortal for content support under this project . If the contractperiod was getting over in Stateswhere the CSPs are not in place ,an Agency can be identified if

required to support the State for Contents . NI C would beresponsible for Standardization of the Content Framework , StatePortal Framework and WebsiteDesign Guidelines and providetechnical guidance to the State for State Proposal preparation (StatePortal component & application )and its development .

India will have Growth Rateof 8. 1 Per cent : UN CTAD

The United Nations Conferenceon Trade and Development(UN CTAD ) projected an

economic growth

of

8.1per

centfor India , the fastest rate of

expansion in the world after Chinain midst of an anticipated globalslowdown to 3 per cent in 2011.

According to the report , despitethe slowdown in developedcountries , the Indian economy isset to grow by 8.1 per cent in2011 as against to 8.6 per cent in2010. Surpassing India during theyear would be China with agrowth rate of 9.4 per , slightlylower than the 10.3 per centposted in 2010. India , the reportmentioned continues to pursuerapid economic growth (close to8 per cent ), based mainly onstrong domestic consumption and

investment as well as on thepositive contribution of netexports .

The report mentioned that slowdown of global economy to 3.1per cent from 4 per cent in 2010,

would

impact

developingeconomies which would getaffected by recession in thedeveloped world . Even as thedeveloping countries wereexpected to regain the pre -crisisgrowth rate of 6 per cent in 2011,economic expansion in thedeveloped economies was likelyto be only about 1.5-2 per cent .The South Asia region was likelyto be among the best performersglobally , with a growth of sevenper cent in 2011. On the other hand , growth in the U.S. was toremain low on account of lowdomestic demand , stagnatingwages. The European debt crisisis expected to act as a drag on theglobal growth .

Lohia Panel Suggestions

Panel headed by S.K. Lohiasuggested an increment in theexcise duty and registration costson diesel - powered privatevehicles . It also suggested a banon hoardings on pedestrianwalkways and cut down thetaxes on buses and other publictransport vehicles as part of measures to make cities andtowns more socially andenvironmentally sustainable . Thepanel was formed to work out theparameters for the urban transportsegment under the recentlylaunched National Mission onSustainable Habitat . It suggestedan increase in the excise duty atthe national level and registrationcosts at the State and city -levels


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for diesel -propelled privatevehicles . It argued that increaseduse of diesel vehicles was onlyadding to the burden of particulatematter and nitrogen oxides , keypollutants of concerns in Indiancities , even while defeating theobjective of improving thecountrys energy security .

The panel pointed ou t thathoardings on pedestrianwalkways were posing major safety hazards . The State and citygovernments could , instead , earntheir revenues by going for advertising on public service

amenities such as buses , metrotrains , commercial passenger vehicles , bus shelters , metroshelters , public toilets and publicgarbage facilities .The panelpointed that the total tax burdenper vehicle km is 2.6 times higher for public transport buses thancars in India . It suggested that the

State and city governments couldgo in for cascade registration tax for owning more than one privatevehicle .

National ManufacturingCompetitiveness Council

NM CC was set up by thegovernment as an inter -

Member (Industry ), Departmentof Industrial Policy and PromotionSecretary , F inance Secretary ,Heavy Industry Secretary , Micro ,Small and Medium EnterprisesSecretary and the D irector -General of the Council for

Scientific and Industrial Researchfrom the government side, thePresident of the Confederation of Indian Industry (CII), Federationof Indian Chambers of Commerceand Industry (FICCI) Presidentand Associated Chambers of Commerce and Industry of India(A SSOCHA M ) President willrepresent the apex industryorganisations in the 28-member

body . F inance Ministry Chief Economic Advisor Kaushik Basuand Indian Council for Research inInternational Economic RelationsIsher Judge Ahluwalia are the twoeconomists in the reconstitutedbody .The representatives of various industrial sectors includedin the NM CC are Tata GroupChairman Ratan Tata , TVS Motor Company CMD Venu Srinivasan ,S Kumars Group Chairman MukulKasliwal, Larsen & Toubro CMDA M Naik , ITC Ltd CMD Y CDeveshwar , Godrej & Boyce LtdCMD Jamshyd Godrej , BHE LCMD B P Rao and HC LInfosystems Chairman and CEOA jai Chowdhry .

PM EAC revised GD PGrowth to 8 Per cent in2 0 11 - 1 2

The Prime Ministers EconomicAdvisory Council (PM EAC)lowered it s forecast for GD Pgrowth to around 8 per cent in2011-12, from its earlier estimateof 8.2 per cent on 29 September 2011. The eastimate was loweredon account of persistently highinflation , slowing industrial

disciplinary body at the highestlevel to serve as a policy forumfor credible and coherent policyinitiatives in the manufacturingsector . The Union Governmentannounced the reconstitution of the National Manufacturing

Competitiveness Council (NMCC)under the chairmanship of V.Krishnamurthy on 26 September 2011. The council is to energiseand sustain the growth of manufacturing industries and helpin the implementation of strategiesby the government . Following thereconstitution , the council willcomprise the Planning Commission


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expansion and global uncertaintiesposing a challenge to economicgrowth .C Rangarajan , chairman of PM EA C mentioned whilespeaking at a golden jubileefunction of the Indian EconomicService the need for for reducingthe countrys reliance on capitalflows as a means to bridge thecurrent account deficit (CAD), aswell as the need to ensure that theCAD does not exceed 2.5 per cent of GDP.PMEAC cautionedon the perils of growing beyond9 per cent as it would trigger inflationary pressures . It pointedout that if the country continues

to grow in the range of 8-9 per cent , as projected in the 12th FiveYear Plan , then a current accountof deficit of 2.5 per cent of theGDP will be created . The CAD isexpected to exceed 2.5 per centby the end of the 2011-12 fiscal.

Highlighting the footloose natureof global capital , Rangarajanstressed on the need to containCA D while lowering it sdependence upon capital flows asa means of finance . India receiveddismally low capital inflows of about half - a- billion ($0.488billion ) till August -end in 2011-12fiscal. Rangaranjan pointed outthat there existed short - termconcerns and medium - termconstraints which would come inthe way of achieving 9 per cent

growth . There are three short -term constraints - one is inflation ,the second is balance of paymentand the third area is fiscalconsolidation .

Indias GD P G rowth will be7.5-8% A ccording toMoodys

Global rating agency Moodysprojected Indias GD P (grossdomestic product ) growth for the2011-12 fiscal at 7.5-8 per centon 5 September 2011. It alsocited high domestic interest ratescoupled with the current globaluncertainties as the near -termfactors that could affect it seconomic expansion .

Moodys noted in it s annualsovereign credit update on Indiathat the cyclical slowdown wasunlikely to alter its credit outlook .The rating agency is of the opinionthat rising domestic interest ratesand an uncertain global economicenvironment would possiblydampen Indias near term GDPgrowth . H owever , the reportmentioned that a cyclicalslowdown is unlikely to alter itscredit outlook .Moodys report pointed to thelimited room for further fiscalstimulus , given the fact that thegovernment targeted to cap thefiscal deficit at 4.6 per cent of GDP in 2011-12, down from 4.7per cent last fiscal. Moodys notedthat its outlook on Indias Baa3

foreign currency governmentbond rating remained stable witha Ba1 rating on the countrys localcurrency debt . The gap betweenthe Baa3 foreign currency debtand Ba1 local currency debtratings reflects the potential

likelihood that the governmentcould prioritise it s externalobligations over its domesticobligations .

Export of Endosulfanallowed

The Supreme Court of Indiaallowed the export of more thanone million tons of controversialinsecticide Endosulfan on 30September 2011, subject to strictmonitoring and supervision by theCustoms and EnvironmentMinistry officials. The SC bench

comprising Chief Justice S.H.Kapadia , Justice K.S.Radhakrishnan and JusticeSwatanter Kumar opined that1090.596 metric tons of Endosulfan could be exported tothose countries from whomexport orders have been receivedby the manufacturers in India .TheSC decided on the issue after


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hearing a plea seeking a completeban on production , sale,distribution and us e of theagriculture insecticide accused of causing ailments in human beings .

Railway Revenue Jumps up

by 8.52%

The total approximate earnings of Indian Railways on originatingbasis during the period from 11 thto 20 th September 2011 wereRs. 2495.07 crore compared toRs. 2299.20 crore during the sameperiod last year , registering anincrease of 8.52 per cent . Thetotal goods earnings have gone upfrom Rs. 1497.40 crore during theperiod from 11 th to 20 thSeptember 2010 to Rs. 1614.48crore during 11 th September 20th September 2011, showing anincrease of 7.82 per cent . Thetotal passenger revenue earningsduring the period 11 th to 20thSeptember 2011 were Rs. 780.38crore compared to Rs. 713.47

crore during the same period lastyear , reflecting an increase of 9.38per cent . The revenue earningfrom other coaching amounted toRs. 71.15 crore during this periodcompared to Rs . 59.63 croreduring the same period last year ,showing an increase of 19.32 per cent . The total approximatenumber of passengers bookedduring the period 11 th to 20th

September 2011 were 240.40million compared to 232.30million during the same period lastyear , showing an increase of 3.49per cent . In the suburban and non-suburban sectors , the number of passengers booked during 11th to20 th September , 2011 were130.27 million and 110.13 million

compared to 127.59 million and104.71 million during the sameperiod last year , registering anincrease of 2.10 per cent and 5.18per cent respectively .

MOU between India Post &NSE for FinancialAwareness

India post signed a Memorandumof Understanding (MOU ) withNational Stock Exchange (NSE)here today for deploying LCD TVscreens in selected post officesacross the country .This MOU isaimed at creating financial

awareness among the public . Tobegin with LCD TV screens willbe deployed in 50 post officesacross the country . These LCDTV screens shall be utilized for disseminating financial awarenessand awareness on various postalproducts and services for the

common public visiting postoffices. This step will bring thefinancial market place closer tothe people considering theimportance and footfall at postoffices . Besides publicizingproducts available in post offices,India Post will use the facility totrain the postal staff . Showcasinginformation about market will helppeople develop live skills aboutfinances and people will be ableto manage their finances better .

Additional Production ofPulses in Rabi 2011-12

Government

has

prepared

acontingency plan for additional

production of pulses in Rabi 2011-12 through area expansion andproductivity enhancement . Pulsescovered under the scheme arepigeon pea, gram , pea and lentil .It is targeted to achieve anadditional production of Rs. 2.78MT during the ensuing Rabiseason and offset the loss of

Kharif season . A dditionalallocation of Rs. 80 crore hasbeen made for this purpose under NFSM- Pulses programme . State-wise allocation of additional fundsfor increasing crop production andproductivity of pulses are asunder :

State Additional allocation (in Rs . crore )

A.P. 8.23Assam 3.78Bihar 3.20Chhattisgarh 8.80Haryana 5.32Jharkhand 4.55Karnataka 8.88MP 7.56Maharashtra 7.83Orissa 7.20Punjab 2.73U.P. 11.92


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Gujarat and Tamil Nadu will meetthe expenses of additional areaexpansion from their normalallocation under NFSM-Pulses . Asper the current coverage of areaunder pulses during Kharif 2011,there is a shortfall of 10.89 lakh

hectare as against area coverageduring last Kharif season . Lessacreage during Kharif 2011 maylead to shortfall of 0.70 MT asper 1 st Advance Estimates of Production . The production andproductivity of pulses haveincreased during last three -four years from 14.20 MT in 2006-07to 14.66 MT during 2009-10.Likewise the productivity of

pulses has also increased from612kg /ha during 2006-07 to 630kg /ha during 2009-10. A s per 4thAdvance Estimates of CropProduction , the production of pulses has increased from 14.66MT (2009-10) to 18.09 MTduring 2010-11. Productivity of pulses has also increased from630 kg /ha during 2009-10 to 689kg /ha during 2010-11.

Cropped A rea Acreaged up

As per data received from States,rice has been sown in 381.32 lakhhectare as on today . It representsan increase of 33.54 lakh hectareover last years acreage on thisdate . H igher area coverage hasbeen reported from West Bengal ,Bihar , Jharkhand , Uttar Pradesh ,Madhya Pradesh and Tamil Nadu .Oilseeds have been sown in178.60 lakh hectare , 5.58 lakhhectare more than last year .H igher area coverage has beenreported in Maharashtra , MadhyaPradesh , Rajasthan and Uttar Pradesh . The cropped areas as ontoday are as follows:

Crop This years area Last years area [as[as on 23 rd September] on 23 rd September]

Rice 381.32 347.78Maize 75.36 75.19Jowar 26.28 30.50Bajra 80.82 86.30Total of coarsecereals 200.19 210.89Arhar 38.64 45.54Moong 23.93 27.95Urad 23.37 24.86

109.41 120.30Soyabean 103.36 93.20Groundnut 43.28 49.46Total oilseeds 178.60 173.02Sugarcane 50.93 49.44Cotton 120.03 109.92

Mines and Minerals(D evelopment an dRegulation ) Bil l , 2011

The Government constituted aHigh Level Committee (HLC) in2006, which suggested for evolving a mining code adapted tothe best international practices ,streamlining and simplifyingprocedures for grant of mineralconcessions to reduce delays , etc .Based on the H LCrecommendations , theGovernment had announcedNational Mineral Policy (NMP) on13 March 2008. To give effect tothe policy directions in NMP , theGovernment has now evolved anew Mines and Minerals(Development and Regulation )Bill, 2011, after several rounds of consultations with thestakeholders including StateGovernments , concernedMinistries and Departments of Central Government , Industry andCivil Society . The MMDR Bill,2011 was referred to a Group of Ministers (GoM) on 14 June 2010and which has now , after five

rounds of discussion , hadrecommended the draft Bill to theCabinet . The GoM in its meetingheld on 7 July , 2011 hasrecommended the draft MMDRBil l, 2011 for introduction inParliament . The Union Cabinetapproved the proposal tointroduce the Mines and Minerals (Development and Regulation ) Bill (MM DR Bill ), 2011, in terms of

National Mineral Policy , 2008 inParliament and to repeal theexisting Mines and Minerals(Development and Regulation )Act , 1957.

The Key Features of NewMM DR Bil l , 2011, are theFollowing :

8 States ma y call for

applications in notified areasof known mineralization for prospecting based ontechnical knowledge , valueaddition , end -use proposedore -linkage etc. and to invitefinancial bid;

8 States may grant of directmining concessions through


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bidding based on aprospecting report andfeasibility study in notifiedareas where data of mineralsis adequate for the purpose ;

8 State Government may set

up a minimum floor price for competitive bidding ;8 Special provisions for

allowing mining of smalldeposits in cluster , wherecooperatives can apply ;

8 National Mining RegulatoryAuthority for major minerals- State Governments mayset up similar Authority atState level for minor minerals ;

8 Imposition of a Central cessand a State cess, and settingup of Mineral Funds atNational and State Level for capacity creation ;

8 For the purpose of sharingthe benefits of mining withpersons or families havingoccupation , usufruct or

traditional rights in miningareas , and for local areainfrastructure , creation anamount equal to royalty incase of mineral other thancoal , and 26% of net profits ,in the case of coal, has beenproposed to be credited eachyear to district Level MineralFoundation ;

8 Sustainable and scientificmining through provision for a Sustainable DevelopmentFramework ;

8 Consultation with localcommunity before notifyingan area for grant of concession , and for approvalof Mine Closure Plans ;

8 Enhanced penalties for violation of provisions of theAct , including debarment of person convicted of illegalmining for future grants andtermination of all mineralconcessions held by suchperson ; and

8 Establishment of SpecialCourts at the State level for speedier disposal of thecases of illegal mining .

The new draft MMDR Act wouldhave financial implications in thecreation of an independentNational Mining Tribunal andNational Mining RegulatoryAuthority at the Central Level,and the expenditure involved inthe capacity building of the IndianBureau of Mines . The funds for this expenditure are likely to bemet from levy of cess at the rateof 2.5% on the basis of Customs /Excise Duty .

YH Malegam PanelsSuggestions

YH Malegam panel in September 2011 proposed that the existingwell managed co-operative creditsocieties meeting certain financialcriteria like profits , capitaladequacy and NPA proportion begiven priority for granting licencesas urban co - operative banks(UCBs) particularly in unbankedor inadequately banked centres .

The panel acknowledged theimportance of urban co-operativebanks for financial inclusion and

suggested that new entrantsshould be encouraged to openbanks and branches in unbankedor inadequately banked area .UCBs play a useful role and thepanel felt a need for a greater presence of UCBs in unbankeddistricts and in centres havingpopulation less than 5 lakh .

It was also considered necessaryto discourage new entrants fromopening branches in districts andpopulation centres which arealready adequately banked . Asfar as capital requirement isconcerned , the panel suggestedminimum paid up capital of fromRs 50 lakh to Rs 5 croredepending on the area of operation .

The panel has recommended aminimum paid -up capital of Rs 5crore for UCBs that wish tooperate in more than one stateafter five years of successfuloperations . It also suggested thatthere should be segregation of the

ownership of the UCB as a co-operative society from it sfunctioning as a bank .The RBI hadannounced in the Annual PolicyStatement 2010-11 its intentionto set up a committee comprisingall stakeholders for studying theadvisability of granting new urbanco-operative banking licences .

Agr o Advisory Services

The agro advisory servicescontinue to serve 50 A gr oAdvisory Services units againstthe largest of 600 during themonth of last July. The serviceshave been extended to 21 ,00,000 users through mobileservices .During this period , an


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exclusive ocean state forecastservice for the southern districtsof Kerala state (Trivandrum ,Kollam and Alapuzha ) has beeninaugurated this month .

The forecasts are disseminated inlocal language , i.e. Malayalamthrough website of IndianNational Centre for OceanInformation Services , Hyderabad .An electronic display board alsohas been installed at the harbour .The system provides 3- dayforecasts of wave , wind , tide andcurrents characteristics for thecoastal waters of Kerala as wellas location specific forecasts for the harbours /fishing harbours inthe state . Digital Current Weather Indicating System (DCWIS ) has

been upgraded at Gondia Airport( Maharashtra ) to report surfacepressure and temperature for altimeter setting for safe landingof aircraft .

H igh Wind Speed Recorder (H WSR) has been installed atVeraval & Dwarka for cyclonemonitoring .Under the NumericalWeather Prediction & Dat aAssimilation system , the radar data (radial wind and reflectivity )from nine radar stations receivedthrough Global Telecommuni -cation System (GTS) are includedin the high resolution (9 km )WR F-VAR assimilation systemover Indian region . The utilizationof ASCAT scattero -meter windshave been developed .

Review of MineralConcession Regime in India

The quarterly meeting of theCentral Coordination - cum -Empowered Committee (CEC) onmonitoring and minimizing delaysin grant of approvals for mineralconcessions was held under thechairmanship of Shri S. VijayKumar , Secretary , Ministry of Mines .The Committee reviewedthe position regarding variousimportant aspects of the mineralconcession regime in the country ,and took decisions aimed atbringing about more efficiency andtransparency in the system . Someof the important issues that cameup for discussions and review inthe meeting were : action taken tocurb illegal mining including use of satellite imagery ; improvingmonitoring of the mineral systemthrough a State EmpoweredCommittee and District level TaskForces ; plugging loopholes in theroyalty collection system ;strengthening governance by

gearing up the State MiningDirectorates ; expediting approvalincluding forest clearance cases toclear long pending mineralconcession applications .

Major decisions takenincluded :

(i) Action Plan to be preparedto increase capacity of StateMining Directorates .

(ii) End - to -end accountingsystem for mineraltransaction to prevent anddetect illegal mining throughan All Indian Online System.

(iii) Ensuring proper explorationin leasehold areas in a time -bound way to enableexecution of Mining Plans ina scientific manner .

8 Core InfrastructureIndustries registered 3.5 %G rowth

As per the provisional datareleased on 27 September 2011

by the Commerce Ministry , the 8core infrastructure industriesregistered an output growth of 3. 5 pe r cent in August 2011lower than the 4. 4 per centgrowth witnessed in thecorresponding period in 2010. Theeight core industries include -crude oil , petroleum refineryproducts , natural gas, fertilizers ,coal , electricity , cement and

finished steel . The eight coreindustries have a total weight of 37.90 per cent in the Index of Industrial Production (IIP ).Thecumulative growth rate of theeight industries during the April -August period of 2011-12 stoodat 5.3 per cent , down from the6.1 per cent in April -A ugustperiod of 2010.

RBI hiked Repo Rate by 25basis points

The Reserve Bank of India (RBI)in a move to contain persistinginflationary pressure , hiked theshort -term policy rate (repo rate )by 25 basis points from 8 per centto 8.25 per cent on 16September 2011. The reverserepo rate as a result got

automatically adjusted to 7.25 per cent and the marginal standingfacility (MSF) rate to 9.25 per cent .Repo rate is the rate atwhich banks borrow from thecentral bank and reverse repo isthe rate at which banks park their funds with the RBI. The centralbank raised rates for the 12 thtime since March 2010.


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FD I Limit for FM radio upto 26%

The Union government increasedthe foreign direct investment limitfor FM radio from 20 per cent to

26 per cent on 30 September 2011. The government alsoexempted the education sector and old -age homes from theconditions imposed in theconstruction sector .The FDI limitin terrestrial broadcasting and FMradio was approved by theCabinet in July 2011.

TR AI in 2010 had madenecessary recommendationsarguing that increasing the limitwill help the third -phase for FMradio , which will see 806 F Mstations across 217 cities .FDI intoconstruction activities in theeducation sector and old -agehomes has been exempted fromthe conditionalities imposed onFD I in the constructiondevelopment sector . This would

mean that schools , universities andcolleges would not have to meetminimum area and built -up arearequirement , minimum capitalrequirement , minimum capitali -sation requirement and lock -inperiod . The Department of Industrial Policy and Promotion(D IPP ) mentioned that theeducational institute and old-agehomes have their own special

requirements which do not fitthese conditionalities .

Ban on the Export of OnionsLifted

The Government has decided tolift the ban on the export of onions .Onions can now beexported subject to a Minimum

Export Price (MEP) of US$ 475per tonne .

This is exactly the position thatwas prevailing on 8th September 2011, immediately before the ban

on the export of onions wasimposed on 9th September 2011.The MEP will be reviewed everyfortnight and a close watch wouldbe kept on domestic arrivals ,total exports , overall domesticavailability and domestic prices .

Fraud Risk ManagementPractices will beImplemented

The Reserve Bank of India (RBI)directed banks to implementvarious safety measures related tocredit card and debit card usageover a period of next two yearsin order to eliminate cases of fraud and ensure security of transactions on 22 September 2011. The RBI emphasised on the

need to migrate to Euro payMaster Card Visa (EMV) chip and

PIN based cards from the presentmagnetic strip cards as themagnetic strip card is vulnerable

to skimming and cloning . The needfor a complete migration to EMVchip and PIN based cards couldbe considered based on theprogress of Aadhar (UniqueIdentification Card) in 18 monthstime frame . The RBI directedbanks to strengthen the existingpayment infrastructure and futureproofing system along withadoption of fraud riskmanagement practices within aperiod of next 12-24 months . Animperative need was felt tosecure card based transactions aswell to protect the interests of the card holders . In the circular issued in this repect the centralbank directed banks to implementimproved fraud risk management


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practices by 30 September 2012and secure the technology set upby 30 September 2013.

MOU between II FCL, LICand IDFC for TFS

A MoU was signed in Mumbaibetween IIFCL, LIC and IDFC inMumbai .The Union FinanceMinister Shri Mukherjee said thatin this Scheme ,IIFCL can take outdebt up to 20 % of the TotalProject Cost after the COD of the project with certainlimitations .He said that there wasfelt need for higher take out . MoU

between II

FCL

and

LI

C &IDFC

will provide for takeout upto50% of the Total Project Cost inthe ratio of 20:20:10 by theseinstitutions respectively .ShriMukherjee said that he expectsthis mechanism will help financingto the tune of 30,000 crore under the Scheme .Take out finance isessentially a mechanism designedto enable Banks / Lenders to

avoid asset liability mismatch thatmay arise out of extending longtenor loans to infrastructureprojects . Under this arrangement ,Banks that extend credit facilityto infrastructure projects enter into an arrangement with afinancial institution for transferringthe loan outstanding in the Banksbooks to the books of thefinancial institution who take outthe loan .Subsequent to theannouncement in the FY 2010-11general budget , Government of India (G oI ) entrusted IndiaInfrastructure Finance CompanyLtd . (II FC L) with the task of introducing the Takeout FinanceScheme (TFS).

This will facilitate banks to takemore exposure in new projects ,which in turn will help in bridgingthe gap in infrastructure financingto a great extent the FinanceMinster added .

Details of the MOU are :

1. Identified project Lender (s)will offer eligibleinfrastructure projects for availing takeout financing toIIFCL in respect of mutuallyagreed accounts inaccordance with IIFCLsTakeout Finance Scheme .

2. In respect of aforesaidmutually agreed accounts of

infrastructure financing LIC,IDFC and IIFCL will agreeto give takeout finance(a) enter into a quadri -

partite agree -ment ,which will be theTakeout Agreement asmutually agreedbetween the Parties ,

(b) LIC, IIFCL and IDFCwill take out / buy-out in

the ratio of 20:20:10respectively and takeout debt upto 50% of the project cost.

3. Earlier IIFCL could take outdebt upto 20% of the TotalProject Cost. With this MoUin place , the take out of debtupto 50 % of the TotalProject Cost will bepossible . This will facilitate

banks to take more exposurein new projects , which inturn will help in bridging thegap in infrastructure financingto a great extent .

Sal ient Features andadvantages of TFS :

1. Enhances the availability of long tenor debt finance for

infrastructure projects

2. It enables availability of cheaper cost of financeavailable for the borrower

3. Addresses sectoral / group /single party exposure issues

of Banks / Lenders who areproviding long term debtfinancing to infrastructureprojects .

4. A ddresses Asset-Liabilitymismatch (ALM) of Banksarising ou t of financinginfrastructure projects andalso to free up capital for financing new projects .

Terms of Referenceextended of the NilekaniPanel

The Union government extendedthe terms of reference of theNilekani task force on directtransfer of subsidies on 20September 2011. The extendedterms of reference is to include anAadhaar -enabled unified paymentinfrastructure . Considering theexpansion the governmentenlarged the task force by addingfive new members .The newmembers is to include arepresentative from the ReserveBank of India , a representativefrom the Indian BanksAssociation , D irector of theNational Informatics Centre , the

Controller -General of Accounts inthe Finance Ministry or one of hisrepresentatives and the CEO of the National PaymentsCorporation of India .

Set up by the Union FinanceMinistry under the chairmanship of Unique Identification Authority of India (UI DA I) chief Nandan


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Nilekani in February 2011, the taskforce was asked to recommendand implement a solution for directtransfer of subsidies on kerosene ,LPG and fertiliser to the intendedbeneficiaries .In tune with thedecision to expand the terms of reference the panel was asked torecommend an architecture for e-banking through inter -operablebusiness correspondents andexamine the alignment of currentstandards for devices that will bedeployed by them . The panel wasalso asked to suggest one to alignthe recommendations of the Inter -Ministerial Group (IM G) on a

Framework for the Delivery of Basic Financial Services usingmobile phones with Aadhaar -enabled payments infrastructure .

The panel is to recommend :8 A solution that incorporates

a robust customer supportand grievance redressmechanism

8 The feasibility of extending

the solution architecture toinclude payment instrumentsapart from bank accountsand post office savings bankaccounts to facilitate thefostering of e-commerceoversee and evaluate theimplementation of thesolution proposed on a pilotbasis.

8 A common framework toadopt it for all governmentwelfare schemes involvingdisbursements to individualbeneficiaries .

Solutions devised by the panelshould ensure that the entirecountry can leverage the samepayments platforms . whilerecommending an approach to

harmonise various exercisesrelated to opening bank accountsfor financial inclusion andelectronic benefit transfers , thepanel should also identify andrecommend amendments which itfelt was required required to

enable direct subsidytransfers .The task force is tosubmit its final report on theextended Terms of Referencewithin 3 months of the extensionof the Terms of Reference .Thetask force had submitted it sinterim report on 5 July 2011 andthe suggestions therein were takenup by Ministries on a pilot basisunder its supervision of the task

force.The

interim

report

hadsuggested direct cash transfers

through banks , ATMs or evenmobile banking to beneficiaries of kerosene , LPG and fertiliser subsidies.

$1 Billion ECBs in Yuanallowed

The Union Government decidedto allow corporates to raiseExternal Commercial Borrowings(ECBs) in yuan (Renminbi )equivalent to $1 billion to helpcompanies who are trading with

China on 15 September 2011.F or the first time yuan , (equivalent of $1 billion ) was allowed as anacceptable currency under theECB. So far , the government hadallowed firms to raise externalcommercial borrowings (ECBs)only in US dollar , Japanese yen ,euro and British pound . Thedecision to allow companies toraise ECBs in yuan is expected tobenefit infrastructure firms such asADAG G roup company ReliancePower and Lanco Infratech .TheCabinet Committee on EconomicAffairs did not raise the overallceiling of ECB, which is now at

$30 billion .The decision wouldhelp companies across al lsegments to access higher quantum of overseas funds . For the services sector , the ECB limitunder the automatic route hadbeen doubled to $200 million andfor NGOs from $5 million to $10million .

Post Offices toProvide Visa RelatedServices

India Post has signed aMemorandum of Understanding


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(MOU) with M /s VFS Global toprovide visa related services for different countries through PostOffices . Memorandum of Understanding between IndiaPost and M /s VFS Global wassigned in Delhi on 30 A ugust2011. The MOU sets out broadunderstandings and intentions of both the parties to provide visarelated services at places wherethey ar e not currentlyavailable .Post Office counters willbe used fo r fe e collections ,providing visa applications forms ,dissemination of visa information ,biometric enrollment and other

visa application process relatedservices . India Post and VFS arealso planning to cooperate inutilizing India Posts courier service , Speed Post fo r movements of passports to VFSoffices and concerned embassies ,and their delivery back to theapplicants . Both the parties willalso explore to provide any other service that India Post may wantto provide through VFS globalnetwork on mutually acceptedterms .M /s VFS Global is in thebusiness of visa applicationservices and is working with 35governments across the worldwith over 45 0 offices in 50countries .

Fiscal Deficit Surged to Rs2.73 lakh crore

According to Comptroller Generalof Accounts data released on 30September , the governmentsfiscal deficit surged nearly two -fold to Rs 2.73 lakh crore duringthe first five months (A pril -August ) of the current fiscal2011-12 du e to low revenue

realisation .Deficit was Rs 1.5 lakhcrore in April -August period of 2010. The higher deficit in theApril -A ugust , 2011 wasattributed to slowdown in netrevenue collection following higher refunds and moderation ineconomic growth rate . Thegovernment decided to increase2011 s borrowing target by anadditional Rs 53,000 croreanticipating slower tax collectionsand lower disinvestmentproceeds .The deficit in the April -August period was 66.3 per centof the target originally estimatedat the beginning of the 2011-12

fiscal for the whole year .PrimeMinisters Economic AdvisoryCouncil (PM EAC) chairman CRangarajan pointed out that thetarget to cut fiscal deficit to at 4.per cent of the GD P for thecurrent financial year would bemissed.Finance Minister PranabMukherjee had lowered the fiscaldeficit target to Rs 412,817 croreor 4. 6 per cent of the grossdomestic product from 4.7 per cent achieved during 2010-11.

Public Private Partnershipfor Infrastructure Projects

The finance ministry released thedraft national public -privatepartnership (PPP) policy aimed atcreating a framework for implementing infrastructure

projects across sectors on 27September 2011. Thedevelopment follows theannouncement made by theF inance Minister PranabMukherjee in the Budget . Thedraft of PPP policy was releasedin pursuance of governmentscommitment to improve the leveland quality of economic and social

infrastructure service .The Policyseeks to expand the scope of thePPP scheme . It aims to developgovernance structures to facilitatecompetitiveness , fairness andtransparency in procurement andattaining appropriate public

oversight and monitoring of PPPprojects .

Indias Spending on GreenIT & SustainabilityInitiatives to Double to $70billion in 2015

According to a report H ype cycle for green IT an d sustainability in India , 2011 by

leading IT research and advisorycompany Gartner , Indiasspending on green IT andsustainability initiatives will doublefrom $35 billion in 2010 to $70billion in 2015.The report pointedout that Indias information andcommunication technology (ICT)industry will be an early adopter of green IT and sustainabilitysolutions as India is one of thefastest -growing markets in termsof IT hardware and communi -cations infrastructure consum -ption . A part from the ICTindustry , the banking and financialservices , hospitality ,manufacturing (such asautomobiles ), pharma , and other industries that have significantexposure to the export markets ,

will join the green IT andsustainability trend early inIndia .As per the report awarenessof green IT and sustainabilityissues is low in Indianorganisations . H owever theincreasing global focus on energyefficiency , energy security andgreen IT and sustainability issuesis will not only raise awareness


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bu t also cause the executiveleadership in the technology sector to track , report and managesustainable and resource -efficientbusiness practices .

Committee Set up byTRA I Submitted Report

A three - member expertcommittee , set up by the TelecomRegulatory Authority of India andmeant to determine the precisevalue of spectrum during 2001-2008 submitted a report In thereport the committee compalinedof a tricky exercise plagued bydata deficit .The panel stressed onthe importance of adequate andgood quality data in an estimationof the loss.The task of estimatingthe data become further complicated because it involvedgoing back in time during whichthere was unexpected andunprecedented growth of thetelecom industry .The reportrecommended auction of spectrum as the ideal method .Thereport estimated the value of

spectrum in 2008 to be betweenRs 5500 crore and Rs 9500crore . It complained that theauction route not being taken bythe government proved to be astumbling block in its inquiry .

domestic and internationalparticipants . Over 200 exhibitorsfrom 22 countries ar eparticipating in Indias largestrailway show .IREE-2011 is alsohosting an international rail withthe theme Rail Transportation in

India : Moving to the Next Orbitwill focus mainly on future of railtransportation in India , rollingstock - emerging trends andtechnologies including diesel andelectric locomotives , high speedtrains , system components , railinfrastructure including Trackmodernization , Integrated Railmanagement , A dvances inSignaling and Telecom , Dedicated

Freight Corridor , Upgradation of Railway Bridges , Propulsiontechnology , PPP , finance ,investment , Operations ,Maintenance , logistics and thechanging face of urbantransportation in India .

The objectives of theconference ar e :

8 To showcase the large-scalebusiness opportunity in

Indias railway sector ,8 To discuss the Indian

Railways vision in adoptingnext - generation policy ,procedural and regulatoryinitiatives needed to attractinvestments in the sector ,

8 To provide a platform for exchange of views , ideas andbusiness opportunitiesamong the global / domesticindustry and Indian railways ,

8 To discuss the state of development and trends inbenchmarking for the Indianrailways in operationparameters and to highlightthe railways vision in freightmanagement and passenger services .

The International RailwayEquipment Exhibition -2011

The International RailwayEquipment Exhibition (IREE)organised by the Confederation of Indian Industry (C II ) inassociation with the Ministry of Railways , Government of India , isthe only international event inIndia for the Railway industry andits allied sectors .IREE has alwaysbeen organized in association withthe Indian Railways and theyparticipate in a big way ,displaying their capabilities andfuture requirements .We ar epresently staging the 9th Editionfrom 28-30 September 2011. Thefirst edition of IREE was held in1990 in Kolkata . The exhibitionturned biennial in 2003. The 9thIR EE 2011 received anoverwhelming response from both


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