Today's Editorial 29 March 2014

      The El Nino puzzle

Source: By Saugata Bhattacharya: The Financial Express
Economists seem to be adding to their technical vocabulary words like Southern Oscillation Index and Indian Ocean Dipole, causing much consternation (and probably merriment) among the policy hierarchy, lay public and investors worried about economic conditions. I have absolutely no idea of meteorology (having squandered half a maths paper on Dynamics in my then Calcutta University BSc Economics Honours ancillary course), save the vague understanding that Navier-Stokes equations used extensively in weather modelling are closely related to the Partial Differential equations that are a staple of economic dynamics, used in modelling the growth-inflation tradeoff. What also works is a fascination for the ‘Butterfly Effect’ where ocean temperatures half a hemisphere away influence precipitation in the Gangetic plains.

But the presumed links between global climatic conditions and Indian agricultural output have manifold implications: RBI response to future inflation and food prices, India’s GDP growth, policy responses to mitigate the impacts of rainfall volatility, including fiscal stabilisers, and a host of others. Although there is much to occupy RBI minds in calibrating policy, agricultural prospects will certainly be one, particularly given the hysteresis of recent memory of food inflation. Understand the phenomenon or not, it is worthwhile to check the effects (the output) of many of these arcane input conditions.

A little aside in defining the terms first, sourced from, where else, Wikipedia. El Nino is a band of anomalously warm ocean water temperatures that periodically develop off the Pacific coast of South America. Extreme climate change patterns, oscillations fluctuate across the Pacific Ocean which results in fluctuating droughts, floods and crop yields in varying regions of the world. La Nina is the opposite, the cold phase. The Southern Oscillation is the atmospheric component of El Nino. The capitalised term El Nino refers to the Christ child, Jesus, because periodic warming in the Pacific near South America is noticed around Christmas.

The first hypothesis is that El Nino conditions are correlated with the intensity and spatial spread of rainfall in India. The accompanying table (credit to Abhaysingh Chavan) is a crosstab of El Nino years (the horizontal bars) and rainfall intensity (columns). The abbreviations on the rows are the intensity of the El Nino/La Nina phenomena (S for strong, M for medium and W for weak), the classifications taken from the Australian Meteorological Bureau. The rainfall classification (and range) is of the Indian Meteorological Department.

Of the 64 years for which we have data (1951 to 2013), 22 were El Nino, 23 La Nina and 19 ‘normal’. Of the 22 El Nino, 77% were moderate or weak; of the 23 La Nina, 78% were moderate. In terms of persistence, La Ninas were more clustered, with one La Nina year following another rather than switching to El Nino or neutral; El Nino years tended to switch. Severe El Nino years have always been singletons, and the time between them is increasing, the last one having been 1997 (the others being 1982, 1972, 1965 and 1957).

More crucially, how did the monsoons respond to El Ninos/La Ninas? The table shows that 10 of the 13 years of deficient rains had been El Nino years (with varying intensities). At the same time, though, 7 of the 25 years of normal rains had also been El Nino years. On the other side, 9 of the 17 years of above normal or excess rains were La Nina years. Of the 25 years of normal rains, 17 had been El Nino or La Nina years. For another perspective, while 45% of El Nino years are associated with deficient rains, 32% are with normal. While 26% of La Nina years associate with excess rains, 43% have normal and 17% with deficit (you’ll be able to draw many more inferences from the table). In short, while there is indeed evidence of El Nino or La Nina conditions affecting rainfall, the confidence in the causation is not robust, given that a large number of normal rain years have been associated with El Nino/La Nina conditions.

Finally, what effect have rains had on agricultural output? The accompanying chart gives you a sense of the impact. While it is a given that bad rains will adversely impact agricultural output, what is interesting is that the impacts seem to have mitigated over the years. While 23% of sub-zero agricultural growth were associated with deficient/below normal rains over the period 1952-1993, this drops to 10% during 1994-2013. At the same time, only 7% of bad rain years are associated with a 0-2% agricultural growth in the initial years, climbing to 15% in the latter period. In other words, the impact of bad rains has not been as damaging as before. Improved irrigation and seed varieties, crop diversification and application of agricultural inputs have obviously had an effect.

Even a layman like me understands that many other climatic factors which will affect output (we hear about dust conditions in Africa and Mid-East, which trap heat), so that El Nino/La Nina conditions will not be the sole determinant of rain conditions (and we have not even mentioned the spatial spread effects) and causality remains ambiguous. However, the correlations are sufficiently strong to warrant paying attention to evolving ocean temperature conditions, opening up, unfortunately, yet another degree of freedom for economic forecasts.

Today's Editorial 28 March 2014

         Declassify Henderson Brooks' report

Source: By Kuldip Nayar: The Tribune
I was a correspondent of The Times, published from London, when Neville Maxwell was its South Asia correspondent. He operated from New Delhi and we often discussed matters concerning India and other countries, particularly China.

That he was anti-India would be an understatement. His hatred towards the country was patent in his dispatches. For example, he wrote after the second general election in 1957 that it was the last poll of the country because democracy was not suited to India's genius.

I have not seen any of his writings to admit that his reading was incorrect. He reminded me at times of British die-hards who exploited India to make their country rich and indulged in unspeakable atrocities to keep us a colony. Both Maxwell and I often compared India's development with China's. Otherwise progressing democracy, he praised China's authoritarian regime. He honestly believed that it was India which attacked China and therefore titled his book as "India's war on China".

The utility of the book was the reproduction of certain portions of the report by Henderson Brooks, appointed by the government to probe reasons for India's debacle in the 1962 war against China. He reportedly blamed New Delhi, particularly Prime Minister Jawaharlal Nehru, for "shoving" India into a war against China when the former had not provided shoes to the soldiers who were moved from Kashmir to face the Chinese.

I was then the Press Secretary to Home Minister Lal Bahadur Shastri and knew his unhappiness over the building up of China's Premier Chou En-Lai by Nehru. The latter introduced him to the world figures and took him to Bandung at the first non-alignment conference. That Nehru was never the same after the defeat and died early because he felt personally betrayed. Although Sardar Patel had warned him through a letter not to trust China which would one day attack India, Nehru was obsessed by a Socialist country and he, to his grief, could not transform India into that mould.

Maxwell has released part of the report by Henderson Brooks. I am inclined to believe that he has done so to give some mileage to the anti-Congress forces. That Nehru did not prepare the country and misjudged the Chinese designs is an open secret. I have had a long interview with Gen P.N. Thapar, the then Chief of the Army Staff. He had given in writing that India would face defeat if there was a war between India and China. General Thapar submitted a long note for the procurement of weapons and raising more troops. Nehru told him that the note was never put up to him.

New Delhi went into the disputed areas to establish its claim. I remember the former Home Secretary, B.N. Jha, telling me that it was "a bright idea" of B.N. Mullick, the Director of Intelligence, to establish police posts "wherever we could," even behind the "Chinese lines", so as to "register our claim" on the territory. "But," then he said, "Mullick does not realise that these isolated posts with no support from the back will fall like ninepins as soon as the Chinese push forward. We are unnecessarily exposing the policemen to death. Frankly, this is the job of the Army, but since they have refused to man the posts until full logistic support is provided, we have placed the policemen."

The posts run in a zigzag line; 41 of them were established, a few policemen here and a few of them there, sometimes like islands in the multitude of Chinese predators. The massive Chinese attack and our puny efforts to cope with it were now plain for all to see. The government decided to play down the news of reverses which was pouring in endlessly. It was treating it like the September 8 intrusion in NEFA (North-East Frontier Agency) which was officially described as the "appearance of some Chinese forces in the vicinity of one of our posts."

I remember the first time I heard of the Sino-Indian border dispute was in the Union Home Ministry in early 1957. I was complaining to a senior official about the East Pakistan border bristling with dangers. He feigned ignorance. But his one remark, even though cryptic, was significant. He said: "Why Pakistan alone? You will have trouble with China very soon." He did not elucidate, but in reply to my insistent queries, he did add that there were vague reports of China building a road through Sinkiang. The Ministry of External Affairs had been informed of the reports many times.

I still cannot understand why the government is keeping the Brooks' report as classified. The Defence Ministry's reasoning that the divulgence of the report would make public certain "tactics" which are still relevant. The tactics and even weapons employed in 1962 have no relevance today. A former Chief of the Army Staff, Gen V.P. Malik, has said that the 1962 operation is not relevant today. He has asked for the publication of the report.

But the Congress-led government is under the wrong perception that Nehru's image would be damaged and so would be that of the ruling party. Now that excerpts of the report are already on the Internet, the government sounds churlish and undemocratic when it insists on keeping the report secret. New Delhi is happy to lock the gate after the animals have bolted.

I vainly tried to get the report public. First, I approached the Defence Ministry, which said no. Ultimately, I tried to seek the report through the RTI (Right to Information). The matter went up to the top. But it rejected my plea. I have appealed to the High Court, which is sitting on the matter. After many years a brief reference came early last year when the judge remarked: "So you want all the country's secrets to be made public!" I wish there had been a decision on that. Unfortunately, there is none. The matter rests there and the government doggedly sticks to its archaic stand that the public has no right to know even after 52 years.

Today's Editorial 27 March 2014

                          The food court

Source: By MG Devasahayam: The Statesman
Food security for India’s teeming millions is among the most critical and challenging issues of governance. However, it is being addressed by the political parties contesting the general election in a rather perfunctory manner. This includes the BJP, which by all accounts is poised to capture power at the Centre.

While addressing a rally in Punjab, the food-bowl of India, wannabe Prime Minister Narendra Modi condemned the rotting of food grains in the Food Corporation of India godowns even as the poor are starving. He suggested the unbundling and restructuring of this ‘leviathan’ into separate procurement, storage and distribution entities as a solution to the country’s food security concerns. This is a management-based approach.

The Food Security Act recently enacted by the UPA Government has attempted a different solution. For up to 75 per cent of the rural population and up to 50 per cent of the urban population, this security is sought to be achieved through the entitlement of 5 kg of foodgrains per month at highly subsidized prices of Rs. 3, Rs. 2, Rs. 1 per kg. for rice, wheat, coarse grains respectively. This will entitle about two-thirds of our 1.2 billion populations to subsidised foodgrains under the Targeted Public Distribution System. This is a fundamental right/welfare-based approach.

Food security for the country’s millions is being considered from different perspectives. Both approaches are flawed because these do not involve the two key stakeholders in food security ~ rural farmers who produce the foodgrains and the traders who reach it to the urban consumers. In fact, food security is something quite different from what is being perceived and actually means access to foodgrains to all sections of society at all times at affordable prices. This does not require a huge stockpile of grain that is stored by FCI under asbestos roofs and canvas canopies exposed to the sun and rain. The crux of the matter is whether the government or its agencies like the FCI should go through this faulty and terribly expensive procurement process or would it suffice to keep the foodgrains trade within well-specified parameters of social discipline.

This matter was examined and debated in the early 1990s by the high-powered Committee on Agricultural Policies and Programmes, set up by the Government of India. It was headed by Bhanu Pratap Singh, former Union Minister for Agriculture and Rural Development. Based on the deliberations, the committee submitted specific recommendations on how the food security system should be structured and managed.

The core issues identified were: the need to rely more on the personal involvement of the farmers, who are the producers, and the market mechanism that influences consumption; protecting the farmer and the consumer against the vagaries of production and the market forces in order to enhance agricultural productivity and ensure fair prices; reduction in the cost of foodgrain procurement, storage, transportation and distribution; an efficient delivery system under which those in genuine need of subsidies and support are properly targeted and given sufficient access to foodgrains and effective intervention powers in the hands of the government in times of need to protect the interests of producers or consumers.

A series of policy initiatives were suggested. The emphasis was on withdrawal of all controls ~ except that of quality ~ on movement, processing, marketing and export of farm products except in years of scarcity. The concept of “triple pricing” was advocated in order to regulate the market and protect the producer, consumer and the trader. There will be a ‘parity price’ to fully compensate the farmers for a rise in the cost of inputs and their other necessities of life, a ‘support price’ below which prices will not be allowed to fall, and ‘intervention price’ beyond which prices would not be allowed to rise.

An important suggestion was to establish a chain of professionally managed rural and peri-urban godowns/warehouses with infrastructure and banking facilities. The farmers may, at any time, sell their produce to the warehouses at the support price and this stock will go in government account. The farmers will have the option to deposit the same in their own accounts and take bank loans against their pledged stock. It should be obligatory for all stockists who wish to stock more than 20 tonnes of foodgrains to do so only in these warehouses. The private sector could be involved in building and managing these godowns.

As soon as the price of foodgrains in the open market would rise above the intervention price (already fixed), all stocks or part of it would be acquired by the government agencies on payment of “parity” price plus storage charges. If the price would fall below the support price, the farmers would have the right to sell their stocks to the government at the support price already fixed, plus the storage charges. This mechanism could be made to work effectively by establishing appropriate Food Security Regulatory Authorities at the Centre and in the states invested with adequate powers to implement and monitor.

Under this policy mechanism, farmers will be assured of minimum support price and consumers of supplies at reasonable and relatively stable prices. Traders ~ private as well as cooperatives ~ will also know the limits within which they can operate. Small farmers will be saved from going in for distress sales, and the government will have the facility to quickly locate and acquire foodgrain stocks in times of need.

This mechanism would also remove the damaging flaws inherent in the present impersonal, “command and control” bureaucracy-oriented policy and system regarding food security. These flaws have kept the food prices artificially depressed while providing huge subsidies to the FCI. This has neither helped the predominantly urban consumer nor relieved the suffering of the vast majority of the poor living in villages and small towns. The only beneficiaries are the FCI and the food department employees, some traders/contractors and their political mentors. This has stunted the growth of Indian agriculture, a segment that has vast potential not only for productivity and production-growth, but also in providing additional employment in rural areas.

At the core of this innovative policy is the simple device of relying on the real stakeholders who have personal stake in the system instead of a bunch of “bureaucrat-employees” who are more interested in their job security than the nation’s food security. This is sought to be done by trusting the farmers and giving them incentives to stock foodgrains at the chain of government/privately-owned or contracted godowns and warehouses located in rural areas and small towns. Even if a small fraction of the procurement and storage cost incurred by the FCI is passed on to the farmers as an incentive, in addition to the parity/support price, they would gladly leave their stocks in these godowns, to be lifted and utilised as and when required by the government. This in turn would achieve real food security that is in peril today.

This policy was accepted by the Government of India in principle and would have been implemented in the early 1990s but for the fall of the VP Singh government. For this delay, India and its teeming millions have paid a heavy price while vested interests have flourished from the status quo that continued. Neither the right-based Food Security Act nor the management solution of restructuring the incompetent and corruption-ridden FCI is going to resolve the critical issue. It is time an alternative, based on the stakeholder, and is brought in as the real solution.

Today's Editorial 26 March 2014

   Are we ready for takeoff?

Source: By Amber Dubey: The Financial Express
India could become the third-largest aviation market by 2020 and the largest by 2030, as per the recently-released FICCI-KPMG India Aviation Report.

According to the report, India is blessed with a great geographic location, a large upwardly mobile middle-class and immense tourism opportunities. India is amongst the top 10 in the aviation world with a market size of around $16 billion. But this is just the proverbial tip of the iceberg, with nearly 99.5% of India’s population yet to see the insides of an aircraft.

The key issues include the industry’s low cost-competitiveness, excessive taxation, intrusive government control and inadequate regional connectivity. There is a widespread perception within the bureaucracy and the political class that aviation is a luxury service and hence deserves no special attention. What gives us optimism is that most of India’s challenges are related to policies, procedures, regulations, taxation and perceptions. These are man-made problems and, hence, surmountable.

The last few years have seen a series of far-reaching reforms. Global routes were opened to private Indian carriers, many leading Indian airports were privatised, FDI was permitted in Indian carriers, direct import of ATF was allowed, external commercial borrowing was permitted for airlines and maintenance repairs and overhaul (MRO), import duty on aircraft parts was abolished (up to one year from date of import), the Aircraft Acquisition Committee was abolished and 24x7 Customs operations were started at cargo terminals at leading airports.

In the recent past, the government has decided to allow entry of A380s, provide visa on arrival for tourists from many countries, corporatise Air Navigation Services , abolish the discriminatory 5/20 Rule, create an independent Civil Aviation Authority, etc. These are welcome developments. Some of these decisions need to be ratified by the Cabinet and Parliament and hence may require some more time. A lot more needs to be done.

Perhaps the biggest hindrance to growth is the high taxes on ATF. India sells one of the costliest ATF in the world, nearly 60% costlier than competing nations in the Middle East and ASEAN regions. ATF accounts for nearly half of the operating cost of Indian carriers. This is why a Delhi-Cochin or a Chennai-Srinagar flight ticket is, at times, costlier than a three day all-expense paid vacation in Thailand and Malaysia. No wonder, foreign tourist arrivals in India are an abysmal 7 million per year. Singapore gets 14 million, Malaysia 24 million and China 58 million. India should on a par with China, given that it has many places of historical, cultural and natural interest.

The irony is that the common man, in whose name high taxes are imposed on ATF, is prevented from flying due to high travel costs! Some argue that a discounted tax rate for ATF may be unfair given that buses, autos and scooters pay the same tax rate on fuel. This argument misses the logic that as against buses, autos and scooters, aircraft can fly across state and national boundaries! Aircrafts will refuel wherever they enjoy a tax arbitrage.

The progressive states in eastern and central India have perhaps understood this and have reduced ATF sales tax to 4-5%. West Bengal is the only state in the country to have declared 0% sales tax on ATF at its regional airports; and 15% sales tax on ATF (on incremental flights) at capital Kolkata. Gradually refuelling of aircraft will shift to these states and the leading metros will be forced to match these rates. We may have wasted another three to four years of growth opportunities in this process.

The most significant development in the Indian domestic market is the growing dominance of the low-cost carrier model, which in FY13 accounted for 70% of the domestic capacity. LCCs have driven the growth in aviation and tourism through low fares, introduction of regional routes and periodic discount offers. Full service carriers plan to shift more seats to their low cost offerings. Indian carriers plan to double their fleet size by 2020 to around 800 crafts.

The next generation of growth in India will be triggered by regional airports. At present, there are around 450 used, unused and abandoned airports and airstrips spread all over the country. The first step involves development of a concept plan of a no-frills airport (NFA) by MoCA and its approval by DGCA.

An NFA would have no luxuries associated with metro airports—viz air-conditioning, baggage carousels, meet-and-greet areas, pre-check-in waiting area, x-ray machines, ATC tower, a large security contingent and an arrival lounge, etc. It would be more an upgraded railway station than a downgraded metro airport. The focus would be to provide a clean, hygienic and functional terminal at the lowest possible cost. As traffic increases, the terminal can be upgraded.

The other initiatives to promote NFAs involve relaxing onerous regulations regarding ATC and security, allowing domestic code sharing, awarding transferable development rights (TDR) for NFA developers, providing free utilities and connecting infrastructure by the local government, etc. The proposed Essential Air Services Fund (EASF) by MoCA needs to be set up immediately to provide seed-funding for NFAs and airlines operating on regional routes.

India’s current MRO market size is estimated to be around $700 million. By 2020, the total Indian fleet would double in number, making a strong domestic MRO industry a critical need. According to industry sources, merely 5-10% of the MRO work for domestic scheduled carriers is carried out in India and most of the maintenance activities are outsourced to third-party service providers outside the country. An inter-ministerial task force on MRO needs to be formed immediately to check the outflow of MRO revenue, foreign exchange and jobs.

The report points out that development of air transportation services and socio-economic development are highly correlated. According to the International Civil Aviation Organization (ICAO), an additional dollar invested in air transport leads to a benefit of around three dollars to the local economy. Moreover, every additional job created in the sector results in creation of over six new jobs in the local economy.

The growth in Indian aviation has created significant employment opportunities. The need to strengthen the human resource development infrastructure is immediate. As per KPMG estimates, the total manpower requirement of airlines is estimated to rise from 62,000 in FY11 to 1,17,000 by FY17. It is estimated that Indian aviation, overall, will need about 3,50,000 new employees to facilitate growth in the next decade. Shortfalls in skilled labour could create safety issues and may see staff salaries rise, hurting India’s cost competitiveness.

The recent US Federal Aviation Administration downgrade of India to Category 2 has been a dark episode in Indian aviation history. This is evidence of our low focus on talent development and safety issues. MoCA, DGCA and the industry have to work together on a war footing to ensure that India’s Category 1 status is restored at the earliest.

We need to broaden the base of domestic flyers through limited period tax-holidays, monetary support to regional carriers and infrastructural support to NFAs. That may help create a revolution similar to the one in Indian telecom industry, making flying affordable to the aam aadmi.

Today's Editorial 25 March 2014

                Russia without illusions

Source: By Ross Douthat: Deccan Herald
After Crimea there should be fewer illusions about the West’s ability to dictate outcomes in Russia’s near abroad... Since the end of the Cold War, America’s policy toward Russia has been shaped by two dangerous illusions.

The first was the conceit that with the right incentives, eyes-to-soul presidential connections and diplomatic reset buttons, Russia could become what we think of, in our cheerfully solipsistic way, as a “normal country” - at peace with the basic architecture of an American-led world order, invested in international norms and institutions, content with its borders and focused primarily on its GDP. Not the old Russian bear, and not an “Upper Volta with rockets” basket case, but a stable, solid-enough global citizen - Poland with an Asian hinterland, Italy with nukes.

The second illusion was the idea that with the Cold War over, we could treat Russia’s near abroad as a Western sphere of influence in the making - with NATO expanding ever eastward, traditional Russian satellites swinging into our orbit, and Moscow isolated or acquiescent. As went the Baltic States, in this theory, so eventually would go Ukraine and Georgia, until everything west and south of Russia was one military alliance, and its western neighbours were all folded into the European Union as well.

On the surface, these ideas were in tension: One was internationalist and the other neoconservative; one sought partnership with Russia and the other to effectively encircle it. But there was also a deep congruity, insofar as both assumed that limitations on Western influence had fallen away, and a post-Cold War program could advance smoothly whether the Russians decided to get with it or not.

Now both ideas should be abandoned. After Crimea, as Anne Applebaum wrote last week, it’s clear that Putin’s Russia “is not a flawed Western power,” but “an anti-Western power with a different, darker vision of global politics.” It may not be America’s No. 1 geopolitical problem, as a certain former candidate for president suggested. But it is a geopolitical threat - a revisionist, norm-violating power - to a greater extent than any recent administration has been eager to accept.

But at the same time, after Crimea there should also be fewer illusions about the West’s ability to dictate outcomes in Russia’s near abroad. Twice in this era - in Georgia in 2008 and now in Ukraine - Russian troops have crossed alleged red lines in conflicts with countries that felt they had some sort of Western protection: Ukraine through the 1994 Budapest Memorandum, which supposedly guaranteed its territorial integrity, and Georgia because of our support for its potential entry into NATO.

And in both cases the limits of Western power have been laid bare - the disorganisation and disunity of “European” foreign policy, and the fact that even the most bellicose US politicians aren’t ready to say that South Ossetia or Simferopol is worth the bones of a single US Marine.

Realistic assessmentWhat’s needed, after these illusions, is a more of both Russian intentions (which are plainly more malign than the Obama administration wanted to believe) and Western leverage (which is more limited than Obama’s hawkish critics would like to think). Such an assessment should yield a strategy intended to punish Putin, in the short and longer run, without creating new flash points in which the West ends up overstretched.

So yes, for today, to sanctions on Putin’s cronies and economic assistance for Ukraine. Yes, as well, to stepped-up cooperation with those former Soviet satellites - the Baltic states, the “Visegrad battle group” quartet of the Czech Republic, Hungary, Poland and Slovakia - with which we actually have binding commitments and mostly stable partners. Yes, in the long run, to a shift in US energy policy that would use our exports to undercut Russia’s petro-power.

But no to sudden over-commitments that would give Putin exactly what his domestic propaganda effort needs - evidence of encirclement, justifications for aggression. Unless we expect an immediate Russian invasion of Estonia, for instance, we probably don’t need a sweeping NATO redeployment from Germany to the Baltics. Unless we’re prepared to escalate significantly over the fate of eastern Ukraine, we shouldn’t contemplate sending arms and military advisers to the unsteady government in Kiev.

Unless we’re prepared to go to war for Abkhazia and South Ossetia, we shouldn’t fast-track Georgia’s NATO membership. And unless the European Union wants to make its current problems that much worse, its economic accord with Ukraine shouldn’t be a prelude to any kind of further integration. The key here is balance - recognising that Russia is weak and dangerous at once, that the West has been both too naïve about Putin’s intentions and too incautious in its own commitments, and that a new containment need not require a new Cold War.

When illusions are shattered, it’s easy to become reckless, easy to hand-wring and retrench. What we need instead is realism: to use the powers we have, without pretending to have powers that we lack.

Sea Anemones Are Half-Plant, Half-Animal, Gene Study Finds

• The sea anemone is an oddball: half-plant and half-animal, at least when it comes to its genetic code, new research suggests.
• The sea creature's genes look more like those of animals, but the regulatory code that determines whether those genes are expressed resembles that in plants, according to a study published Tuesday (March 18) in the journal Genome Research.
• Researchers from the University of Vienna believe that the sea anemones' genome suggests that their type of gene regulation is 600million years old

• Their genome includes elements that could date back to the common ancestor of humans, flies and sea anemones.
• Scientists discovered that sea anemones are more similar to plants that to vertebrates in their regulation of gene expression.

WHAT ARE SEA ANEMONES?

• Sea anemones are a group of water-dwelling, predatory animals classified in the phylum Cnidaria.
• The polyps stick to the sea floor with an adhesive foot called a basal disk and have a column-shaped body ending in an 'oral disk'.
• Most measure 1.5cm to 3cm in diameter, but some measuring up to two metres have been found.
• They can have up to a few hundred tentacles.
• The creature's mouth is in the middle of its 'oral disk' and is surrounded by tentacles with cells on them that protect the creatures as well as let them catch prey.
• Some of the animals can sting and inject venom into prey such as small fish and shrimp.
• The venom is a mixture of toxins that paralyses the prey so it can be moved to the anemone's mouth for digestion inside its 'gastrovascular cavity,' which functions like a stomach.
• Sea anemones are related to corals and jellyfish.

WHAT ARE GENES?

• Genes are a set of instructions that determine what an organism is like - such as how it looks and how it behaves.
• They lie in strands of DNA called chromosomes and are composed of four different chemical bases, different combinations of which give people and animals different characteristics.
• How genes act together and regulate each other's activity in regulatory networks, also affects an organism's behaviour.
• In the last decades, the sequencing of the human and animal genomes has shown that anatomically simple organisms - such as sea anemones - show a surprisingly complex gene make-up similar to more complex organisms.
• This implies that how complex organisms came to be cannot be easily explained by the presence or absence of individual genes
• How genes are linked together plays a part in how complex creatures are.
• In this experiment, scientists looked at the distribution of regulatory sequences - called enhancers and promoters - in the sea anemone's genome.
• While genes can be likened to the words in the language of genetics, enhancer and promoters serve as the grammar.

World Water Day observed across the Globe on 22nd March

22 March- World Water Day

• World Water Day was observed on 22 March 2014 with the theme Water and Energy to raise awareness of the inter-linkages between water and energy. 
• World Water Day is observed to preserve and ration consumption of water. 
• The Day was celebrated with the events like the UN-Water Decade Programme on Advocacy and communications with journalist workshop in Tokyo, releasing of the World Water Development Report, giving away of Water for Life Awards, high-level policy panel, side events and key note speeches.

About World Water Day

• The United Nation is observed annually on 22 March to draw attention on the importance of freshwater and advocating for the sustainable management of fresh water resources. 
• In 1992 United Nations Conference on Environment and Development (UNCED) recommended to celebrate an international day of freshwater. 
• The UN General Assembly accepted the recommendation of UNCED and celebrated first World Water Day on 22 March 1993.

Water Day, by the years

2014: Water and Energy

2013: Water Cooperation

2012: Water and Food Security: The World is Thirsty Because We are Hungry 

2011: Water for cities: responding to the urban challenge

2010: Clean Water for a Healthy World

2009: Trans Waters

2008: Sanitation

2007: Coping With Water Scarcity

2006: Water and Culture

2005: Water for Life 2005–2015

2004: Water and Disasters

2003: Water for Future

2002: Water for Development

2001: Water for Health

2000: Water for the 21st century

1999: Everyone Lives Downstream

1998: Groundwater – The Invisible Resource

1997: The World's Water: Is there enough?

1996: Water for Thirsty Cities

1995: Women and Water

1994: Caring for our Water Resources is Everybody's Business

Government raises $1.4 billion in divestment push

• The government on Friday raised as much as $1.4 billion through share sales, in a push to shore up state finances before it heads into a tough parliamentary election next month.
• As a result, New Delhi managed to exceed its sharply-lowered budget target to raise as much as $3.1 billion via stake sales in some private as well as state companies in the fiscal year to March 31, after years of falling short.
• Some analysts hope the new government, taking office in May, will speed divestments to bolster revenue generation and trim the budget deficit, as part of efforts to revive slowing economic growth.
• Finance Minister P. Chidambaram had penciled nearly $9 billion in divestment revenues into his budget for this fiscal year, but slashed that figure last month to $3.1 billion.
• He also set an ambitious target of raising $8.5 billion from further share sales in the next fiscal year, but this estimate could be revised by a possible successor after the election.

REDUCED EXPECTATIONS

• Stake divestment was a key plank for the ruling Congress party, forecast to face its worst defeat in the upcoming parliamentary election, its support undermined by an economy growing at its slowest pace in a decade.
• Against the revised target of raising $2.6 billion by selling stakes in state companies and another $490 million from selling part of its holdings in some private companies, the government is set to end the year with a combined $3.5 billion.
• The government on Friday raised about $900 million by selling 9 percent of Axis Bank Ltd (AXBK.NS), India's No.3 private-sector bank by assets, to institutional investors.
• The sale will pare the government's ownership in Axis Bank, held via a trust fund called Specified Undertaking of the Unit Trust of India (SUUTI), to 11.7 percent.
• Separately, about $490 million was raised by selling partial stakes in 10 state-owned companies via an exchange traded fund (ETF) operated by Goldman Sachs' (GS.N) asset management unit in India.
• The Central Public Sector Enterprises ETF, which targets retail and institutional investors, started accepting subscriptions on Tuesday, aiming to raise as much as 30 billion rupees by March 21.
• The ETF was seen helping the government divest its stakes in some of the public sector companies by pairing blue chips such as Oil and Natural Gas Corp Ltd (ONGC) (ONGC.NS) with smaller, financially weaker firms.
• Both the offerings saw strong demand, with investors' bids exceeding the number of shares on offer.
• The share sales came as the broader Mumbai market index rallied this month to record highs, boosting domestic and overseas investors' appetite for new equity offerings in Asia's third-largest economy.
• Total equity offerings in India dropped to $9.4 billion in 2013 from $14.9 billion a year earlier, according to Thomson Reuters data.

FIH to make hockey a 60-minute affair to engage fans more

• Taking cue from Hockey India League, the International Hockey Federation (FIH) has decided to implement four-quarter format of 15 minutes each instead of 35 mins viz.reduced the 70-minute game to 60 minutes, starting on September 1. 
• This means that there will be more space for advertisements and hockey can be marketed in a similar manner as that of cricket.
• After the first and third quarters there will be a two-minute break while the existing 10-minute half-time will remain unchanged.

New format of Hockey

• Purpose: To improve the flow and intensity of hockey, increase fan experience and provide more time for game presentation and analysis.
• Played in 4-quarter format.
• Match duration: 60 minutes 4 quarters: Each quarter will be of 15 minutes.
• 40 sec timeout: After penalty corner awarded and after a goal scored.
• Two-minute breaks: After the first and third quarters. The existing 10-minute half time will remain unchanged.
• Commentators will be allowed more time to provide analysis between plays.
• Additionally, coaches and players will see improvement in their performance with the additional opportunities to re-hydrate and re-strategise.
• The new regulations will come into effect from September 1, 2014.
• Will be used in the upcoming Champions Trophy, World League Round 2, World League Semi-Final and Final, all continental Olympic qualifying events as well as the 2016 Rio Olympics.

Point to Note: The four-quarter model has been tried and implemented by both the Euro Hockey League and the Hockey India League.

Physicist Rajesh Gopakumar chosen for 2013 G D Birla award

• The prestigious G D Birla award for scientific research for 2013 has been given to Rajesh Gopakumar, a theoritical physicist at the Harish Chandra Research Institute in Allahabad. 
• 46-year-old Gopakumar has been awarded for his contribution in the Quantum Field Theory and String Theory. 
• The selection of the award is made by a board comprising eminent scientists including Asis Datta and Anupam Varma.
• Born on December 14, 1967, Gopakumar is a theoritical physicist who has made significant contributions to the understanding of String Theory and Quantum Field Theory. 
• He is a recipient of several other awards, including B M Birla Science prize in 2004 & Third World Academy of Sciences Award in 2013.

About G D Birla award:

• The G D Birla award for scientific research was instituted in 1991 by K K Birla Foundation to recognise significant scientific research undertaken by Indian scientists below the age of 50, working in India. 
• The award carries a cash prize of Rs 1.5 lakh and a citation. 
• For 2012, G D Birla Award was given to Prof. Nibir Mandal of Jadavpur University for his work in area of structural geology.

RBI extended 80:20 scheme to import gold to five private banks

• The Reserve Bank of India (RBI) on 19 March 2014 extended the 80:20 scheme to import gold to five private banks. 
• The move was aimed to ease the restrictions on inward shipments of the gold.  
• The five banks which have been allowed to import gold under the 80:20 scheme are HDFC Bank, Axis Bank, Kotak Mahindra Bank, IndusInd Bank and Yes Bank. 
• Under the 80:20 schemes:

1. Nominated agencies could import gold on condition that 20 percent of the shipment would be exported and the remainder would be kept for domestic use. 
2. It was introduced by the Government of India and RBI on 14 August 2013 to put curbs on gold imports.
3. Earlier, under the 80:20 scheme, only six banks and three state-run trading agencies were allowed to import gold provided that each had facilitated export of gold or jewellery in the past three years. 

• The recent decision of the RBI though does not require any facilitation of exports of gold in the past three years by these private banks. However, it has permitted the import of gold only  within a prescribed limits.
• The move to allow more banks to import gold will raise shipments to about 40 tonnes per month. India used to ship in as much 70 tonnes per month. 
• Note:Gold import is the biggest import after oil that had pushed the current account deficit (CAD) to a record high in the year ended March 2013.

Brazil’s first World Cup winning captain Bellini dies

• Former Brazilian international footballer Hilderaldo Luiz Bellini died on Thursday aged 83.
• Bellini had suffered from Alzheimer’s disease and died in the Hospital 9 de Julho from complications following a heart attack on Tuesday.
• Bellini captained the national team during Brazil’s first World Cup win in 1958, in Sweden, and famously became the first captain to hold the trophy above his head in celebration.
• There is a statue in his honour in the pose outside the Maracana stadium in Rio de Janeiro.
• In 1962 Bellini was part of the team which successfully defended the trophy in Chile and he also played at the 1966 World Cup in England.
• Bellini played for three clubs in his career and enjoyed spells with Vasco da Gama and Sao Paulo before finishing with Atletico Paranaense.

Today's Editorial 24 March 2014

Moscow’s ‘near abroad’ troubles

Source: By Sunanda K. Datta: The Free Press Journal
Despite its understandable chagrin over last Sunday’s referendum in Crimea, the West needs to bear two things in mind. First, Crimea was not part of Ukraine until 1954, when the Supreme Soviet, acting at the instance of the party general secretary, Nikita Khrushchev, himself a Ukrainian, transferred it from the Soviet Union. Second, Russia is not the only country to base its foreign policy on the concept of what Moscow calls Near Abroad. The United States has done so far more emphatically, for nearly 200 years.

India would feel more secure if it, too, could manage its “near abroad.” Every large country is surrounded by small, and perhaps, sovereign states, whose governments must accommodate the security needs of the central power.

The US articulated this in 1823, when James Monroe, the fifth president, drew a cordon sanitaire around the two Americas, forbidding any foreign power to intervene in regional affairs. China has tried to solve the problem by swallowing up parts of its “ near abroad”, but is still embroiled in controversies over the Paracel and Spratly Islands, arguments with Vietnam and the Philippines, territorial disputes with Japan, Bhutan and India, and claims regarding the South China Sea. Although annexed, Tibet and injiang have not been pacified. Many of the “core interests” that Beijing speaks of refer to the “near abroad.” Countries need a glacis – an open field of fire for defensive purposes – such as surrounds Calcutta’s Fort William.

The US was the first nation to formalise and articulate the concept that Russia is trying to uphold in the Crimea and Ukraine against determined inroads by the North Atlantic Treaty Organisation and the European Union. But, as often happens, governments, like people, practise the least what they preach the loudest.

The nation that invented the Monroe Doctrine and enforced it for nearly two centuries, affects not to understand why Moscow feels vulnerable. Subsequent American presidents have refined and expanded Monroe’s formulation. Some (Theodore Roosevelt, 1904) asserted the right unilaterally to intervene in small Caribbean and South American nations to stabilise their economic affairs, others (John F Kennedy 1962) to “isolate the Communist menace.” The 1928 Clark Corollary clarified the US didn’t need to hide behind the skirts of the Monroe Doctrine: Military intervention was its self- evident right. In 1954, John Foster Dulles specifically targeted the Soviet Union for allegedly violating the Monroe Doctrine, especially in Guatemala.

The Monroe Doctrine was further enhanced by claims of America’s “manifest destiny.” On the ground, this was facilitated by constructing the Panama Canal, which permitted US naval domination of both the Pacific and Atlantic Oceans. The manner in which this was achieved bears reiteration in light of the furore over the Crimean referendum. Bluntly stated, Washington promised to support a bunch of secessionist Colombian politicians on condition they allowed the US to cut a canal through the Isthmus of Panama ( then part of Colombia) and exercise what amounted to sovereign control over it. The treaty concluded in 1903 between John Hay, the US secretary of state, and Philipe Bunau- Varilla, a French commercial adventurer in Washington’s pay, who had bought up a number of Colombian politicians, granted the US “ in perpetuity the use, occupation and control of a zone of land” and further allowed it “ all the rights, power and authority within the same…. which the United States would have if it were sovereign of the territory… to the exclusion of the exercise by the republic of Panama of any such sovereign rights, power or authority.” The American position was that Panama retained titular jurisdiction, but nothing more. Almost all that Panama was able to secure after more than 70 years of agitating against the treaty was that its flag would fly with the Stars and Stripes.

The US felt obliged to dismember Colombia and create Panama to reinforce control over its “near abroad.” That was also the rationale for buying Alaska, deposing Hawaii’s Queen Liliuokalani, and annexing Texas and California. The same logic explained Kennedy almost plunging the world into nuclear war over the Soviet missiles in Cuba.

Geopolitically speaking, undivided (or British) India is India’s “ near abroad.” That includes not only Pakistan, Bangladesh, Nepal and Bhutan, but also Sri Lanka, probably Myanmar and possibly, parts of Tibet. I would have included Sikkim if India had not in this one respect self- defeatingly followed the Chinese example of annexing a fragment of the “near abroad.” The main question revolves around Pakistan, which is yoked with India in the American consciousness, like unreconciled Siamese twins. As I noted in Waiting for America: India and the US in the New Millennium, sometimes the hyphenation is symbolic, like Harry Truman lavishing exactly the same hospitality on Liaquat Ali Khan immediately after Jawaharlal Nehru’s first US visit; sometimes substantial, like successive administrations building up Pakistan militarily.

“Parity was extended to create the myth that if India’s neighbours were not its equal in every way (despite their combined area and population being a fraction of India’s), this invested India with a special responsibility to shrink to their level in all regional transactions.” Indians did not repudiate this theory, perhaps seeing in it a tribute to their own pre- eminence.

In January 2002, China’s foreign minister, Tang Jiaxuan, advised Jaswant Singh that “ as a big country,” India should “ play a more positive role” in the subcontinent. No one asked Tang what concession big China made to smaller Vietnam, to the even weaker Philippines or to Tibetans and Uighurs.

Some facts have changed, but as I wrote then, “Pakistan’s domestic product is oneeighth India’s; it has one- seventh the population and one- fifth the area. Pakistan’s armed forces are only between two- and- ahalf to three times smaller than India’s because the military has been built up at the expense of social welfare. While India has sustained its parliamentary democracy through regular elections at several levels – from village council to Parliament – Pakistan had already known three prolonged spells of military rule before General Pervez Musharraf seized power.” et, Kissinger dared to argue that a strong and stable Pakistan presented India with a psychological challenge! Andrei Kozyrev, who became Russia’s foreign minister in 1991, coined the term ‘Near Abroad’ to mean the 14 countries that became independent when the Soviet Union disintegrated. But Vladimir Putin emphasised the political and economic content by using Near Abroad interchangeably with “sphere of influence." The Military Doctrine of the Russian Federation that came into effect in 2010 under the third president and current prime minister, Dmitry Medvedev, justifies intervening militarily in the Near Abroad to protect Russian minorities. A Russian passport- holder living in Georgia or Ukraine has exactly the same legal claim on Moscow as a Russian citizen living in Russia. Medvedev is on record stating he would "protect the life and dignity of Russian citizens wherever they are" and 85 per cent of Crimeans are Russian.

But the real point is that Russia may never have felt it necessary to act if NATO’s relentless eastward push had not raised the bogey of more anti- Russian and pro- Western coups like the one in Kiev in all Near Abroad capitals.

Journalist Shubhranshu Choudhary wins 'Digital activism award'

• Indian Journalist Shubhranshu Choudhary bagged prestigious award 'Digital Activism Award' 2014. 
• The Award is conferred every year by a London based organization called Index Freedom of Expression. 
• He got this award for his CGNET SWARA project. 
• Journalist Shubhranshu Choudhary's used internet and mobile phone networks to get the voices of tribals from deep inside of forests of Chhattisgarh across the world in Gondi Language. 
• The jury chooses from among the bravest of journalists, artists, campaigners and digital innovators, the world over and among the four categories only the Digital Activism Award is judged through public voting online.

Note : American whistleblower Edward Snowden was also a contender for this award. 

RBI issued notice to banks concerning discontinuation of Windows XP

• The Reserve Bank of India (RBI) issued notice to banks on 19 March 2014 to take measures to counter the threat expected to arise from discontinuation of Windows XP from 8 April 2014.
• Microsoft the maker of the Windows XP operating system will be withdrawing support for the operating system from 8 April 2014. 
• Microsoft introduced Windows XP in October 2001.
• The withdrawal of Windows XP means that no updates and patches for bugs will be issued by the Microsoft. 
• As a result, the banking system of India largely running on Windows XP may become vulnerable to viruses and other cyber attacks.
• However, Indian Banks Association (IBA) has said that banks are well prepared to tackle the threat arising from the discontinuation of Windows XP. 
• Thus, neither branches nor cash vending machines will be shut down once Microsoft stops support to the system from April 8.

Indian languages to be official subjects in S African schools

• Five Indian languages were again started in South African Schools, which were discontinued in 1994. 
• These languages are : 

1. Hindi,
2. Tamil,
3. Gujrati,
4. Marathi,
5. Urdu.

• These languages were offered as official subjects in schools of South Africa until 1994. These languages will be offered to students as optional third language.
• In this regard the circular was issued to schools in South Africa on 20th March 2014.
• These languages first will be offered as an optional third language for learners only in KwaZulu-Natal province where about 70 percent of the Indian-origin population inhabit.
• Further these five Indian languages along with Arabic language will be offered as official subjects up to matric level (final year of schooling) in South Africa.
• However, these languages as official subjects will only be offered at schools where the number of learners makes it a viable option to hire specialist teachers in the language concerned.
• The five Indian languages Hindi, Tamil, Gujarati, Telugu and Urdu alongside Arabic are referred as Eastern languages.

IbiboGroup acquires YourBus

• Online travel company and an e-Commerce firm ibiboGroup on 20th March 2014 announced to acquire Bangalore based startup YourBus.in. 
• It will give it more strength in the field of bus travelling space. 
• YourBus.in is an online GPS-based bus tracking and analytics platform. 
• YourBus is functional in 200 buses and is already integrated with redBus mobile and web applications. 
• YourBus was founded in 2011 by Rajesh Mallipeddi and Satya Padmanabham. 
• Both are BITS-Pilani graduates. 
• YourBus application shows the real time location of buses smartphones.

Note : Eariler redbus.in was also aquired by ibiboGroup