White Label ATMs

White Label ATMs

June 29th, 2013

RBI gives nod to Muthoot Finance to set up White Label ATMs
Indian gold loan company Muthoot Finance Ltd has obtained the RBI’s in-principle approval to set up the white label ATMs,as the government seeks to take financial services to the remote regions of the country.
What are White Label ATMs?
ATMs set up and run by non-banking entities are called White Label ATMs (WLAs). Earlier, only banks were allowed to establish and operate ATMs. RBI had allowed the company under the guidelines it released in June 2012 which set certain minimum net worth and obligation for permitting independent non-banking firms to operate such ATMs, as per three different schemes.
The Muthoot Finance has been given approval as per Scheme A under which Muthoot Finance will set up WLAs, a minimum of 1,000 WLAs have to be installed in the first year; a minimum of twice the number of WLAs installed in the first year have to be installed in the second year; and a minimum of three times the number of WLAs installed in the second year have to be installed in the third year.
What is the purpose of this move?
The fundamental objective of permitting non-banks to operate WLAs is to enhance the penetration of the machines in semi-urban and rural areas, where bank-run ATMs are a few or none. The move is in line to the governments objective of achieving financial inclusion.

‘Diaspora Bonds’

‘Diaspora Bonds’

June 25th, 2013

India thinks over ‘Diaspora Bonds’
India is examining to introduce “Diaspora Bonds” to attract investment from NRIs (Non-Resident Indians), to facilitate greater inflow of funds in the infrastructure sector. The government is examining longer-term investment instruments for overseas Indians so that the NRI community could participate and benefit from India’s growth.
Current Status: At present most of the diaspora investments are in portfolio investments of a short-term nature.
Plan of Govt: The government is considering the option of ‘diaspora bonds’ for longer-term investment instruments to provide opportunities for overseas Indians and thus facilitate greater inflow of funds in the infrastructure sector.
What are Diaspora Bonds (DBs)?

• A sovereign bond that targets investors that have emmigrated to other countries and the relatives of those emmigrants. For example, the Government of India tries to sell a government bond to Americans of Indian origin. Diaspora bonds are marketed to members of the diaspora.

Attraction for issuing countries:

• “Patriotic discount” - Diaspora investors sometimes offer what is called a “patriotic” discount to governments in their country of origin/ancestry. As per George Washington University’s Liesl Riddle, when diaspora members invest in their homelands, they are motivated by more than just profit: “Social and emotional motivations also play a role.”
• Stable source of finance, especially in bad times
• Support to sovereign credit rating
• Diaspora investors might be willing to accept a lower rate of return and have a greater tolerance for uncertainty when buying diaspora bonds than a mainstream investment.
• Diaspora investors might partially view the purchase of a diaspora bond as an act of charity and might also have a greater understanding of a country’s level of risk than other foreign investors.

Attraction for investors:

• Patriotism & desire to do “good” in the country of origin
• Risk management – Diaspora investors are likely to view the risk of receiving debt service in local currency with much less apprehensions.

What is difference b/w Foreign Currency Deposits (FCDs) and  DBs ?

Foreign Currency Deposits (FCDs) are also used by countries to attract foreign currency inflows.

• But, Diaspora bonds are typically long-dated securities to be redeemed only upon maturity. FCDs, in contrast, can be withdrawn at any time.
• FCDs are likely to be much more volatile, requiring banks to hold much larger reserves against their FCD liabilities, thus decreasing their ability to fund investments. Diaspora bonds, on the other hand are a source of foreign financing that is long-term in nature.

What is India’s Experience in DBs?
Diaspora bonds are not yet widely used as a development financing instrument. Diaspora bonds issued by the government-owned State Bank of India (SBI) have raised over $11 billion to date.
3 separate occasions on which the Indian government has tapped its diaspora base of non-resident Indians (NRIs) for funding on –

1. India Development Bonds (IDBs) following the balance of payments crisis in 1991 ($1.6 billion)
2. Resurgent India Bonds (RIBs) following the imposition of sanctions in the wake of the nuclear explosions in 1998 ($4.2 billion)
3. India Millennium Deposits (IMDs) in 2000 ($5.5 billion).

Features of the IDBs, RIBs and IMDs:

• Opportunistic issuance in 1991, 1998 and 2000
• Balance of payments support
• Fixed rate bonds
• Maturitiy: 5 year bullet maturity
• Limited to diaspora
• No SEC registration
• Non-negotiable
• SBI distribution in conjunction with international banks. The conduit for these transactions was the government-owned State Bank of India (SBI). Thus, the proceeds from such bonds can be used to finance investment.
• Issues were done  in multiple currencies – US dollar, British pound, Deutsche Mark/Euro.

India far behind in cyber security compared to US and China

India far behind in cyber security compared to US and China

June 23rd, 2013

Despite being world-known as an Information Technology superpower, India, lags far behind when it comes to official cyber security workforce which comprises a mere 556 experts deployed in various government agencies. If we compare the figures with China, the US and Russia, China has 1.25 lakh experts, the U.S. 91,080 and Russia 7,300.
As per National Security Council Secretariat (NSCS), the current strength of cyber experts in India is grossly inadequate to handle cyber security activities in a meaningful and effective manner. To strengthen the sector the government has decided to recruit 4,446 experts to be deployed in six organisations that would take care of India’s cyber security infrastructure.
What are the major organizations which constitute India’ cyber security infrastructure?
These are the Department of Electronics and Information Technology (DEITy), which includes Indian-Computer Emergency Response Team (CERT-In) and the National Informatics Centre (NIC); the Department of Telecom (DoT); the National Technical Research Organisation (NTRO); the Ministry of Defence; the Intelligence Bureau (IB); and the Defence Research and Development Organisation (DRDO).
What is the status of cyber security in China and the US?
China:
China has “Information Support and Safeguarding Base” to serve as People’s Liberation Army cyber command to address potential cyber threats and safeguard national security. China also has hackers who work for the government. Its cyber workforce is composed of various components of military, national security, public security, propaganda militia and academia. It now has an estimated strength of 1.25-lakh personnel which includes regular troops (30,000), specialists from various universities, research institutes and states enterprises (60,000), and militia (35,000).
The U.S.:
It has 91,080 experts in its cyber security workforce, of whom 88,169 are in the Department of Defense alone. The recent revelations has shown that how the US has been carrying out its clandestine electronic surveillance world over including, India, through its PRISM programme being run by the National Security Agency (NSA) of the US.
The U.S. has also established a 24×7 National Cyber Security and Communications Integration Centre (NCCIC)that is responsible for generating a common operating picture for cyber and communications across the federal, state and local governments, intelligence and law enforcement communities and the private sector. In the event of a cyber or communications incident, the NCCIC functions as the national response centre able to bring to bear the full capabilities of the federal government in a coordinated manner.
What is India doing to address its cyber security concerns?
As per a study conducted by NSCS, all major countries have set up mechanism and organizations dedicated to cyber security, a field where India has performed poorly. To address this concern, India has decided to establish its own ‘cyber security architecture’ that will comprise the National Cyber Coordination Centre (NCCC) for threat assessment and information sharing among stakeholders, the Cyber Operation Centre that will be jointly run by the NTRO and the armed forces for threat management and mitigation for identified critical sectors and defence, and the National Critical Information Infrastructure Protection Centre (NCIIPC) under the NTRO for providing cover to ‘critical information infrastructure’. The government is also coming up with a legal framework to deal with cyber security.

Commodities Transaction Tax (CTT) on non-farm products

Commodities Transaction Tax (CTT) on non-farm products

June 23rd, 2013

Commodities Transaction Tax (CTT) on non-farm products from July 1, 2013

As per an announcement made by the Central Board of Direct Taxes (CBDT), from July 1, 2013, the Commodities Transaction Tax (CTT) shall be levied on the derivative contracts of non-agricultural commodities which are transacted via recognized commodity bourses.

What is Commodities Transaction Tax (CTT)?

• Proposed in Finance Bill, 2013 for enhancing financial resources.
• A tax which shall be levied on non-agricultural commodities futures contracts at the same rate as on equity futures that is at 0.01% of the price of the trade.
• CTT would tax trading of non-farm commodities like gold, silver and non-ferrous metals such as copper and energy products like crude oil and natural gas in India.
• CTT exempts 23 specified agricultural commodities which include wheat, turmeric, soya bean, red chilli, mustard seed, potato, pepper, cotton, cotton seed, coriander, copra, channa, castor seed, cardamom, barley and almond.
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• All the processed agricultural items such as guar gum, soya oil and sugar are subject to the CTT on future contracts.
• Here both parties—buyer & seller of contract—will be taxed depending on the amount of contract size.
• Similar to the Securities Transaction Tax (STT) levied on the purchase and sale of equities in the stock market.
• So far, commodity transactions have been exempted from any levy.

What are the Advantages of levying CTT?

• It will open up new resources for the augmentation of government finances.
• CTT would generate revenues of around Rs.45 billion to government.
• It is also aimed at bringing transparency in the commodity exchange market.

What could be the disadvantages of CTT?

• CTT has been opposed by the experts and the PMEAC had also suggested against levying such a tax.
• CTT will increase the transaction cost because traders already pay brokerage, deposit margin, brokerage, stamp duty and transaction charges.

Janani Suraksha Yojana

Janani Suraksha Yojana

May 23rd, 2013

Age eligibility norm to get financial aid under JSY relaxed
The Ministry of Health and Family Welfare has relaxed the eligibility criteria for the Janani Suraksha Yojana (JSY), which provides financial assistance to mothers for institutional deliveries. As per new changes, Below Party Line (BPL) women can access JSY benefits irrespective of their age and number of children.
What is JSY?

• Janani Suraksha Yojana (JSY) was launched in 2005 with an aim to enable women — especially those from vulnerable sections — to access institutional delivery. This was done to reduce maternal and neonatal mortality.

Why these changes?
It was found that a majority of women, who needed JSY benefits, remained out of the purview of the scheme because they had to prove they were 19 years of age and had no more than two children. Besides this, highest maternal mortality is reported among girls aged 14-15; the majority of these were out of the purview of the JSY as they were unable to produce proof of age or verify the number of children they had. Thus it was felt that age criteria and the requirement to prove number of children must be done away with in order to bring these left out sections into this scheme.
What were the existing norms?

• Till now, the scheme provided assistance for institutional delivery to all pregnant women who give birth in a government or private accredited health facility in Low Performing States (those with bad health indicators, such as Uttar Pradesh, Bihar, Chhattisgarh, Madhya Pradesh, Uttarakhand, Jharkhand and Assam).

Sub-section within Low Performing States:
In Rural Areas:

• Rs 1400 to the woman who delivered in a government facility or accredited private facility
• Rs. 600 to Accredited Social Health Activist (ASHA) in rural areas.

In the urban areas

• Rs.1,000 the woman who delivered in a government facility or accredited private facility
• Rs. 400 Accredited Social Health Activist (ASHA)

In High Performing States (those with good health indices, such as Kerala, Tamil Nadu and Karnataka), assistance for institutional delivery was available to women from BPL/SC/ST households, aged 19 or above and only up to two live births for delivery in a government or private accredited health facility.
Sub-sections within High Performing States:
In Rural Areas:

• Rs. 700 to the woman who delivered in a government facility or accredited private facility
• Rs. 600 to Accredited Social Health Activist (ASHA)

In Urban Areas:

• Rs. 600 to the woman who delivered in a government facility or accredited private facility
• Rs. 400 to Accredited Social Health Activist (ASHA)

Further, in all States/Union Territories, the scheme provided Rs. 500 to BPL women — aged 19 or above and who deliver up to two live births — who prefer to deliver at home. With the amendments, all women who deliver at home will be entitled to this amount, basically for nutrition.
What are the changes?
As per the changed norms:

• All women from BPL category, Scheduled Castes and Scheduled Tribes in all States and Union Territories will be eligible for JSY benefits if they have given birth in a government or private accredited health facility.
• BPL women who prefer to deliver at home can also get JSY benefits.
• Below Party Line (BPL) women can access JSY benefits irrespective of their age and number of children.

What is the performance outlook of JSY?
As per the Government the scheme has resulted into an increase in institutional deliveries — from 47% in 2007-08 to 72.9% in 2009 (Coverage Evaluation Survey) and, most recently, to approximately 79% — as per Health Ministry data.

Inflation Indexed Bonds (IIBs)

Inflation Indexed Bonds (IIBs)

May 18th, 2013

RBI to launch Inflation Indexed Bonds in June 2013
As stipulated in the Budget 2013-14, the government, in consultation with the RBI, has decided to launch Inflation Indexed Bonds (IIBs) to wean away investors from the yellow metal (Gold) to paper-based savings instruments. This new investment instrument with provide an alternative for those who were in recent times going in for investment in gold as a hedge against inflation.
IIBs with a maturity period of 10 years will be launched each month by RBI with the objective of diverting household savings from gold into these hedged bonds up to Rs.15,000 crore this fiscal.
For appropriate price discovery and market development the IIBs will also be auctioned to institutional investors such as Pension Funds, Insurance, and Mutual Funds as it will create demand for IIBs and help in making them tradable in the secondary market.
What are IIBs?
Inflation-Indexed Bonds or IIBs are are bonds where the principal is indexed to inflation. They are thus designed to cut out the inflation risk of an investment. These bonds will be linked to the inflation index of the country (Wholesale Price Index or WPI) and serve as a better investment option as compared to physical assets like real estate and gold. Higher the inflation, higher the returns.
Why this step?
The step is being taken to de-motivate investments in gold as bulging imports of the yellow metal has been adversely affecting the country’s Current Account Deficit (CAD), which had surged to a historic high of 6.7% in the third quarter of 2012-13. Last month, imports of gold and silver soared by 138% on an annual basis to $ 7.5 billion.
How would IIBs help?
As per RBI, IIBs would help in:

• Boosting domestic savings and reversing the declining savings-to-GDP ratio.
• Providing households and other investors a competitive option against gold and real estate. In the wake of rising inflation last year, there was considerable flow of investments from financial savings to safe-haven assets like gold that resulted into higher imports of the metal. This led to current account deficit or CAD widening to 4.9% of GDP at the end of September 2012.
• Giving investors choice to use IIBs as good hedging instruments against inflation.

How will the Index ratio be determined?
The IR (index ratio) will be computed by dividing reference index for the settlement date by reference index for the issue date, and the final inflation data based on the Wholesale Price Index (WPI) will be used for providing inflation protection. Besides, in case of revision in the base year for WPI series, base splicing method would be used to construct a consistent series for indexation.
The conflict b/w International Olympic Committee (IOC) and the Indian Olympic Association (IOA) is expected to end soon with both the Indian representatives from the government and sports bodies reached an agreement in a meeting with IOC officials. The IOC has agreed to lift the ban on IOA once it holds fresh election as per the amended constitution of the IOA.
What is the issue?
The membership of the IOA was suspended in December 2012 owing to differences in election procedures of IOA administration body.  IOC wanted that election for top posts of IOA to be held as per Olympic Charter, which insists that organizing committees for each country remain autonomous and free of government influence. But India’s national sports code does not adhere to these requirements, and consequently, a New Delhi court ordered the IOA to hold an election as per government’s sports code instead of adhering to the IOC’s charter.
What is the solution reached?
The IOA has acquiesced to the demand of IOC to amend its constitution in line with the government’s Sports Code. Following this a fresh election will be held for top administrative posts of IOA.

National Agricultural Innovation Project (NAIP)

National Agricultural Innovation Project (NAIP)

April 26th, 2013

Govt. launched a 6-year aspirational agricultural research programme, the National Agricultural Innovation Project (NAIP).
To fulfill the Govt of India’s objectives as expressed in India’s National Policy on Agriculture (NPA), the Indian Council of Agricultural Research (ICAR) has started National Agricultural Innovation Project (NAIP), which grants high priority to generation and transfer of agricultural technologies, and proposes innovations in the technology system.
Objectives of NAIP:
Overall Objective: To alleviate the accelerated and sustainable transformation of Indian agriculture in support of poverty easing and income generation via cooperative development and application of agricultural innovations by the public organizations in partnership with farmers groups, the private sector and other stakeholders.

• NAIP is planned for 6 years to allow time for piloting, learning and then scaling up wherever possible.

Specific objectives/Components of NAIP:
The NAIP will function through four components:
1. Component 1 - The ICAR as the Catalyzing Agent for the Management of Change in the Indian NARS: To build the critical capacity of the ICAR as a catalyzing agent for management of change of the Indian NARS. Component 1 strengthens the Indian Council of Agricultural Research (ICAR) as the catalyzing agent for managing change in the Indian National Agricultural Research System (NARS) by focusing on: 1.1 Information, communication and dissemination system; 1.2 Business planning and development; 1.3 Learning and capacity building; 1.4 Policy and gender analysis and visioning; 1.5 Remodeling financial management and procurement systems; and 1.6 Project implementation.
2. Component 2 – Research on Production to Consumption Systems (PCS): To promote production to consumption systems research in priority areas/themes to enhance productivity, nutrition, profitability, income and employment. Thus, Component 2 funds research on production-to-consumption systems.
3. Component 3 – Research on Sustainable Rural Livelihood Security (SRLS): To improve livelihood security of rural people living in selected disadvantaged regions through innovation systems led by technology and encompassing the wider process of social and economic change covering all stakeholders. Thus, Component 3 funds research on sustainable rural livelihood security.
4. Component 4 – Basic and Strategic Research in the Frontier Areas of Agricultural Sciences (BSR): To build capacity and undertake basic and strategic research in strategic areas to meet technology development challenges in the immediate and predictable future. Thus, Component 4 supports basic and strategic research in the frontier areas of agricultural science.
Total Budget for the NAIP:

• The total budget of NAIP is USD 250 million = USD 200 mn World Bank) + USD 50 mn by GoI).

World Bank will fund US $ 200 million as credit (mostly interest free and a part with negligible interest) and USD 50 million by the Government of India.
The NAIP will be carried out in a decentralized mode. The basic introduction in governance in the system is that the enforcing consortia/ institutions will be helped by the Project Implementation Unit (PIU) to work with full freedom and accountability and without intervening controls of the project authority once they have entered into partnership and clear agreements with the ICAR.

IBIN – ‘India Backbone Implementation Network’ and India@75

IBIN – ‘India Backbone Implementation Network’ and India@75

April 24th, 2013

Montek Singh Ahluwalia (The Deputy Chairman of the Planning Commission) recently launched the India Backbone Implementation Network (IBIN).
Objective: To improve execution of policies, programs, and projects, which the 12th Five Year Plan has set as the vital requisite for speeding up more inclusive and quicker growth.
What are the major causes of delay in implementation of projects and schemes in India?

• A study of projects and schemes has brought out that the key reasons of chokepoints in execution are conflict amongst stakeholders, and poor coordination between agencies.
• These chokepoints are at many stages in the system, at the centre, in the states, in districts and cities too.

Why the need for IBIN?

• These chokepoints discussed above cannot be eased top down by the Planning Commission.
• They call for cooperative action by stakeholders and agencies at several points. So, the need for IBIN.

IBIN:
India Backbone Implementation Network (IBIN).
Modeled on the very successful Total Quality Movement (TQM) in Japan which in the 1960s and 70s metamorphosed the potentiality of Japanese organizations in the private and public sectors to deliver results. The TQM was furnished to teams within organizations, and to inter-organization teams, techniques and tools with which they could make fast improvements of procedures thus transforming Japan into the brand of excellence at international level.

• IBIN will spread techniques and skills for collaboration, coordination, and improve planning via a network of agencies in India. The partners in IBIN already comprise institutions such as the Administrative Staff College of India, the Indian School of Business, SEWA, WISCOMP, UNDP, GIZ, the World Bank, FISME, etc.
• The IBIN network will form around nodes. The function of a node will be to draw together suppliers of the skills and proficiencies and the agencies that need them, and to ceaselessly filter good practices and propagate them extensively.
• The Planning Commission has analyzed best practices for coordination and execution in other countries also, such as Korea, Malaysia, Brazil, and Germany. Planning Commission has brought in various innovations in the 12th Plan to better planning, communication, and execution. These include the use of proficiencies of ‘scenario planning’ for the first time, use of social media for communications with young, and the construct of IBIN.
• The Planning Commission partnered with India@75 to launch IBIN and incubating it in India@75.

Partnership of Planning Commission and India@75 for IBIN:

• Planning Commission and India@75 have partnered together to launch IBIN.
• Objective of Partnership: To assist collaborative movements of change to achieve national goals in important sectors. India@75 will assist in expanding the IBIN network.
• India@75 is already occupied with flourishing skill development. Planning Commission has partnered with India@75 to set up a cell within India@75 which will be the first node of IBIN.

What is India@75?

• India@75 is a 3-Dimensional development idea for India which was articulated by Prof C.K.Prahalad and then accepted by Confederation of Indian Industry (CII) on May 8, 2008.
• Professor Coimbatore Krishnarao Prahalad (C.K. Prahalad,1941 – 2010), Distinguished University Professor of Corporate Strategy at the Stephen M. Ross School of Business in the University of Michigan was the inspirational force behind the India@75 initiative.
• On September 23, 2007, while celebrating the India@60 (commemorating the 60th year of India’s independence) programme at New York, USA, Prof. C.K.Prahalad articulated the idea of holistic three dimensional development of India to assume adequate economic strength, technological vitality and moral leadership by 75 years of independence i.e. YEAR 2022.
• India@75 is a path breaking go-ahead that visualizes how India should be in her 75th year of independence and attempts to draw together all stakeholders including the industry, government, institutions, community groups and individuals to transform the vision into a reality.

The National Policy for Children, 2012

The National Policy for Children, 2012

April 24th, 2013

The Union Cabinet gave its approval to the National Policy for Children, 2012.
The National Policy for Children, 2012

• Reaffirms the government’s dedication to the recognition of the rights of all children in the country.
• Acknowledges every person below the age of 18 years as a child and that childhood is an integral part of life with a value of its own, and a long term, sustainable, multi-sectoral, integrated and inclusive approach is essential for the pleasant development and protection of children.
• Establishes the guiding principles that must be respected by national, state and local governments in their actions and initiatives affecting children.
• As children’s needs are multi-sectoral, interlinked and call for collective action, the policy directs at meaningful convergence and firm coordination across different sectors and levels of governance; active participation and partnerships with all stakeholders; establishing of a comprehensive and authentic knowledge base; supplying of enough resources; and sensitization and capacity development of all those who work for and with children.

Key guiding principles of the National Policy for Children, 2012:

• Right of every child to life, survival, development, education, protection and participation
• Equal rights for all children without discrimination
• Best interest of the child as a principal concern in all actions and decisions affecting children
• Family environment is the most contributing for all-round growth of children.

Key priority areas the National Policy for Children, 2012:
The policy has identified the following as the undeniable rights of every child, and has also declared these as key priority areas:

• Survival
• Health
• Nutrition
• Education
• Development
• Protection
• Participation

Operation and Supervision of the Policy

• National Coordination and Action Group (NCAG)  be established in order to supervise the performance of National Policy for Children.
• A National Plan of Action will be formulated to give effect to the policy.
• Alike plans and coordination and action groups will be established at the state and district levels.
• The National Commission for Protection of Child Rights and State Commissions for Protection of Child Rights are to ascertain that the principles of the policy are valued in all sectors at all levels. There is a condition for reassessment of the policy every 5 years.
• The Ministry of Women and Child Development will be the nodal ministry for supervising and coordinating the effectuation of the policy and will lead the review process for the policy.

K. Kasturirangan High-Level Working Group

K. Kasturirangan High-Level Working Group

April 18th, 2013

K. Kasturirangan-led 10-member panel High-Level Working Group (HLWG) Presented its report on Western Ghats to MoEF (Ministry of Environment and Forests)
K. Kasturirangan-led 10-member panel High-Level Working Group (HLWG) has prepared a report on Western Ghats which suggests for ban on development activities in 60,000 sq km ecologically sensitive area spread over Gujarat, Karnataka, Maharashtra, Goa, Kerala and Tamil Nadu.
Objective: K.Kasturirangan panel was formed to study and advise Govt on the earlier report of ecologist Madhav Gadgil-led Western Ghats Ecology Expert Panel (WGEEP).
Some Facts:

• Around 37% of the total area defined as the boundary of the Western Ghats is ecologically sensitive.
• This area is of about 60,000 sq km and it spreads over the states of Goa, Gujarat, Karnataka, Kerala, Maharashtra and Tamil Nadu.

What were the key suggestions made by the K. Kasturirangan led HLWG?

• K.Kasturirangan panel has moved away from the suggestions of the Gadgil panel.
• The HLWG has suggested a prohibitive regimen on those activities which have the most interference and harmful impact on the environment.
• The report notes, “environmentally sound development cannot preclude livelihood and economic options for this region… the answer (to the question of how to manage and conserve the Ghats) will not lie in removing these economic options, but in providing better incentives to move them towards greener and more sustainable practices”.
• Promotion of Ecotourism along the ecologically-volatile Western Ghats to preserve the depleting natural wealth of the area
• Economically empower the local population
• Incentivize green growth in the Western Ghats – i.e. supervising forests and bettering their productivity to ascertain inclusive growth and economical gains for local communities; integrating forest accounts into state and national economic assessments; initiating an ecosystem service fund to help villages around the forests; promoting sustainable agriculture and; encouraging ecotourism for local benefits.
• Establish a Decision Support and Monitoring Centre for Geospatial Analysis and Policy Support in the Western Ghats, which will supervise changes and propose state government on policy reform and all such reports must be in the public domain.
• High-resolution map, delimiting ecologically sensitive areas, down to each village settlement, must be put in the public domain so that people can be involved in taking decisions about environment.
• The HLWG report draws upon the basic framework suggested by WGEEP to use remote sensing technologies to demarcate the ecologically sensitive areas of the Western Ghats but with two key differences:-

First: it used satellite data, down to 24 m resolution, as against 9 km used by WGEEP.
This finer resolution was possible because of the collaboration with NRSC/ISRO, which used datasets to distinguish vegetation types over the landscape of the entire Western Ghats.
Second: it distinguishes between the cultural and the natural landscape of the region.
Using remote sensing technology, it has found that the cultural landscape – which includes human settlements, agricultural fields and plantations – covers 58.44% of the region.

The natural landscape ranges over the remaining 41.56 %.

Thus, HLWG has moved away from the suggestions of the Expert Panel, which had recommended a blanket approach consisting of guidelines for sector-wise activities, which would be permitted in the ecologically sensitive zones.
What were the key suggestions made by the Madhav Gadgil led WGEEP earlier?
Earlier, the WGEEP had suggested that:

• Entire Western Ghats be declared as an ecologically sensitive area.
• 3 levels of categorization for the regulatory measures for protection would be imposed.
• Establishment of the Western Ghats Ecology Authority for management of the Ghats.
• A blanket approach comprising of road map for sector-wise activities, which could be permitted in the ecologically sensitive zones.

Asian Forum of Parliamentarians on Population and Development (AFPPD)

Asian Forum of Parliamentarians on Population and Development (AFPPD)

April 14th, 2013

PJ Kurien – New Chairman of Asian forum of Parliamentarians
Deputy Chairman of Rajya Sabha, PJ Kurien elected as the Chairman of the prestigious Asian Forum of Parliamentarians on Population and Development (AFPPD). He replaced Yasuo Fukuda, former Prime Minister of Japan as the Chairman of AFPPD. PJ Kurien is also the Chairman of the Indian Association of Parliamentarians on Population and Development.
Asian Forum of Parliamentarians on Population and Development (AFPPD)
Established in 1981 as a regional NGO which serves as a coordinating body of 25 National Committees of Parliamentarians on Population and Development.
Objective:

• To generate cooperation and support among the Asian Parliamentarians in different areas like population and development issues.
• Initiate, promote and support exchange programs among the parliamentarians in Asia and the Pacific.
• Promote other lawful acts which generate cooperation and support among the Asian Parliamentarians.

Structure:

• General Assembly - highest decision making body of AFPPD
• Executive Committee  - provides direction, monitors progress and approves financial and administrative reports.
• Standing Committee - provide direction on specific programs and actions. 3 Standing committees:

1. Standing Committee on the Status of Women - advises the AFPPD on parliamentarians’ activities on the status of women, gender equality and equity,
2. Standing Committee on Population and Food Security – deals with issues such as food security, water resources, poverty, environment and climate change
3. Standing Committee on Male Involvement in EVAW (Elimination of Violence Against Women ) - offers a role in working together via furnishing information and reinforcing male involvement across the network all over other parliaments.

National Programme for Health Care of the Elderly

National Programme for Health Care of the Elderly

April 10th, 2013

“National Programme for the Health Care of Elderly” (NPHCE)
NPHCE launched during 11th Plan period by The Ministry of Health & Family Welfare keeping in view the recommendations made in the “National Policy on Older Persons” as well as the State’s obligation under the “Maintenance & Welfare of Parents & Senior Citizens Act 2007”.
Objective:

• To address various health related problems of elderly people.
• To provide separate and specialized comprehensive healthcare to the senior citizens at various level of State healthcare delivery system including outreach services.

Some of the key components of the NPHCE during 11th Five Year Plan were:
Establishment of 30 bedded Department of Geriatric in 8 identified Regional Medical Institutions (Regional Geriatric Centres) in different parts of the country and to provide dedicated health care facilities in District Hospitals, CHCs, PHCs and Sub Centres in 100 identified districts of 21 States.
Future plan for NPHCE:

• Programme being implemented in a phased manner. 100 districts have been selected initally from 21 States in 11th Five Year Plan.
• Proposal to cover more districts under the programme.
• Development of 12 additional Regional Geriatric Centres in selected Medical Colleges of India during the 12th Five Year Plan
• Establishment of National Institute of Aging at AIIMS, New Delhi and Madras Medical College, Chennai.
  Continuation of programme activities in the existing 100 districts and 8 Regional Geriatric Centres.
  Addition of 4 new Regional Geriatric Centres.
  Addition of more districts in a phased manner.

Kishenganga Project

Kishenganga Project

March 28th, 2013

Recently, India won the legal battle against Pakistan regarding construction of Kishenganga Hydro Electric Project in North Kashmir.

What is the issue?

Pakistan had pleaded before the Court of Arbitration at The Hague that India’s construction of Project over Kishenganga was a violation of Indus Waters Treaty (IWT) signed in 1960.

What is the Project?

India is constructing Rs. 3600 crore, 330 MW, run-of-the-river, hydro-electric project on Kishenganga River (known as Neelam in Pak) which is a tributary river to Jhelum. The power project is under construction by the National Hydro Power Corporation in Gurez valley near Bandipura in north Kashmir.

What is the opposition from Pakistan?

• The project involves diverting waters from a dam site to Bonar Madmati Nallah, another tributary of Jhelum. Pakistan sees it a breach of India’s legal obligations owed to Pakistan under the IWT, as interpreted and applied in accordance with international law, including India’s obligations under Article III (2) (let flow all the waters of the Western rivers and not permit any interference with those waters) and Article IV (6) (maintenance of natural channels).
•  Another objection is the use of modern drawdown flushing technique for the management of sedimentation on the dam. It requires waters to be brought below the Dead Storage Level.  Pakistan had objected to the drawdown flushing apprehending that it will affect flows at its downstream Neelam project.

 What was the award by the Court of Arbitration?

• The Court of Arbitration has allowed India to go ahead with the construction of the project in rejecting Pakistan’s plea that this was a violation of the 1960 Indus Waters Treaty.
• However, the court restrained India from adopting the draw down flushing technique for clearing sedimentation. India may have to adopt a different technique for flushing.

Is it for the first time Pakistan dragged India to international court on a river issue?

No. This was the second water dispute on which Pakistan dragged India to an international arena charging New Delhi with violation of the IWT. Earlier a neutral expert was appointed by the World Bank to adjudicate on the Baglihar dam built on Chenab River also located in Jammu and Kashmir.

What is Indus Waters Treaty?

Background:

After the partition of India-Pakistan, the issue of sharing of water of rivers originating from Indus basin surfaced. India had all the advantage of using the waters of the all six main rivers originating from either the Himalayan or the Chinese Tibet side. Pakistan was wary that since the sources of rivers of the Indus basin were in India, it could potentially create droughts and famines in Pakistan, especially at times of war.

During the first years of partition the waters of the Indus were apportioned by the Inter-Dominion Accord of May 4, 1948. As per this accord, India was required to release sufficient waters to the Pakistani regions of the basin in return for annual payments from the government of Pakistan. The accord was meant to meet immediate requirements and was followed by negotiations for a more permanent solution. However, neither side was willing to compromise its respective position thus the issue reached a deadlock.

The Treaty:

Finally, head of both countries (India’s then PM Jawaharlal Nehru and Pak’s then President Mohammed Ayub Khan) came to negotiation table to sign the Indus Waters Treaty brokered by the World Bank. As per the treaty proposed by the World Bank, Ravi, Beas and Sutlej, which constitute the eastern rivers, are allocated for exclusive use by India before they enter Pakistan. However, a transition period of 10 years was permitted in which India was bound to supply water to Pakistan from these rivers until Pakistan was able to build the canal system for utilization of waters of Jhelum, Chenab and the Indus itself, allocated to it under the treaty. Similarly, Pakistan has exclusive use of the Western Rivers Jhelum, Chenab and Indus but with some stipulations for development of projects on these rivers in India. Pakistan also received one-time financial compensation for the loss of water from the Eastern rivers. Now, as the moratorium is over, India has secured full rights for use of the waters of the three rivers allocated to it. The treaty resulted in partitioning of the rivers rather than sharing of their waters.

IFRS

IFRS

March 19th, 2013

Investors prefer accounting levels close to IFRS: Survey
Majority of investors want the government to keep national accounting standards as close to the international norms (called IFRS) as possible, says a survey conducted by the global accounting firm Ernst & Young.
What is IFRS ?
International Financial Reporting Standards (IFRS):

• A set of international accounting standards stating how particular types of transactions and other events should be reported in financial statements.
• IFRS are issued by the International Accounting Standards Board (IASB).
• The rules to be followed by accountants to maintain books of accounts which is comparable, understandable, reliable and relevant as per the users internal or external.

What is the need of IFRS?
Now, when huge number businesses are going global the international shareholding is also increasing. However, international investors face difficulties in understanding a company’s financial statements as companies in different countries follow different kinds of financial reporting standards like the US GAAP which is different from Canadian GAAP. Hence, the need was felt to evolve such standards in the form of IFRS which can even out these disparities across international boundaries.

• IFRS was started with an aim to synchronize accounting across the European Union but the value of harmonization quickly made the concept attractive around the globe. IFRS are sometimes confused with International Accounting Standards (IAS), which are the older standards that IFRS replaced. (IAS were issued from 1973 to 2000).

How is IFRS being implemented in India?

• India is also gradually trying to comply with IFRS.
• Indian companies had been till now using the U.S. GAAP (Generally Accepted Principles of Accounting) for reporting financial statements.
• As per RBI banks were to become IFRS-compliant for periods beginning on or after April 1, 2011. Companies are to comply with the new set of rules in a phased manner.
  

As per the plan IFRS proposed Roadmap for INDIA:
Opening balance sheet as at April 1* using IFRS-converged accounting standards.
*If the financial year of a company commences n a date other than April 1, then the opening balance sheet needs to be prepared from the beginning of the new financial year of the company.
2011:

• NSE – NIFTY 50 companies
• BSE – Sensex 30 companies
• Companies whose shares or other securities listed outside India
• Companies listed or NOT having a net worth in excess of Rs 1,000 Crore banking

companies (NBFCs)> 2012:

• All Insurance Companies

2013:

• Companies listed or Not, but having a net worth between Rs 500 Crores and Rs 1000 Crores
• All Scheduled Commercial Banks
• Urban Co-operative banks having a networth in excess of Rs 300 crores
• NBFCs – Nifty 50 or Sensex 30
• NBFCs listed or NOT, but having a networth more than 1,000 Crores

2014:

• Listed companies having a networth less than Rs 500 Crores
• Urban co-operative banks having a networth between Rs 200 to Rs 300 crores
• NBFCs (all other Listed)
  NBFCs (Other Unlisted) haveing net worth between Rs 500 to Rs 1000 Crores.

CITES (Convention on International Trade in Endangered Species)

CITES (Convention on International Trade in Endangered Species)

March 17th, 2013

CITES concludes, eight nations escape sanctions
The 16th meeting of the Conference of Parties to CITES (Convention on International Trade in Endangered Species), concluded in Bangkok, Thailand, after granting better protection to hundreds of threatened animal and plant species.
The eight countries accused of failing to do enough to tackle the illegal trade in elephant ivory escaped sanctions. The conference found that Kenya, Tanzania and Uganda, Malaysia, the Philippines and Vietnam, and top markets China and Thailand are making insufficient efforts to curb the trade. However, the nations avoided sanctions after 6 of them submitted draft action plans in response and China and Tanzania committed to do so by a specific date.
Possible punishment option: Under the convention, member states can halt trading with offender countries in the 35,000 species covered by the convention.

• CITES CITES is (the Convention on International Trade in Endangered Species of Wild Fauna and Flora) is also known as the Washington Convention.
• It is an international agreement b/w governments to ensure that international trade in specimens of wild animals and plants does not threaten their survival.
  Currently 178 nations are members of CITES, Headquarter in Geneva, Switzerland.
  CITES was drafted as a result of a resolution adopted in 1963 at a meeting of members of IUCN.
  It is an effort towards regulation of cross-border trade in wild animals and plants b/w countries to safeguard certain species from over-exploitation.
  It provides protection to more than 35,000 species of animals and plants.
  Although it is legally binding on all Parties to the agreement to implement the Convention, it does not take the place of national laws. Rather it provides a framework to be respected by each Party, which has to adopt its own domestic legislation to ensure that CITES is implemented at the national level.

Operation Lal Dora

Operation Lal Dora

March 15th, 2013

 India planned ‘Operation Lal Dora’ in 1983 to prevent coup in Mauritius
India, during the regime of Indira Gandhi in 1983, had planned top secret military intervention-“Operation Lal Dora” to help the then Mauritian Prime Minister Anerood Jugnauth fight off a challenge from his radical rival Paul Berenger which New Delhi feared might take the form of an attempted coup. With this operation India wanted to ensure an Indian-origin Prime Minister remained in power there.
As per Operation Lal Dora, Indian Navy and Army were to land troops to the island nation to thwart any possible coup. The plan also included the deployment of major naval assets including as many as six destroyers with Alouette helicopters and MK 42C Sea Kings for slithering operations.
However, Mrs. Gandhi put on hold the military part of the operation due to differences between the the Navy and the Army over who would lead the intervention. Instead, she chose to task the Research and Intelligence Wing’s then chief, Nowsher F. Suntook, with supervising a largely intelligence-led operation to reunite the Indian community whose fracturing along ideological and communal lines had allowed Mr. Berenger to mount a political challenge. India’s overall intervention became successful and Anerood Jugnauth stayed as PM for more than a decade.
Though eventually aborted, Operation Lal Dora has a special significance today because of the Indian strategic community’s focus on promoting the Indian Navy’s role in the wider neighborhood, especially the Indian Ocean.

India’s other military interventions in the India Ocean:

• ‘Operation Flowers are Blooming’: India’s first military intervention in the Indian Ocean, first with INS Vindhyagiri helping to abort a coup in the Seychelles in 1986
  ‘Operation Cactus’:  In 1988 when commandos and naval ships were rushed to the Maldives after Sri Lankan Tamil militants sought to remove the then President, Abdul Gayoom.

CTT (Commodity Transaction Tax)

CTT (Commodity Transaction Tax)

March 14th, 2013

In Budget 2013-14, Finance Minister P Chidambaram proposed 0.01% tax on the trade of non-agricultural commodities futures, the new tax is called Commodity Transaction Tax (CTT). As per Budget speech, there is no distinction b/w derivative trading in the securities market and derivative trading in the commodities market, only the underlying asset is different.

What is CTT?
Commodities Transaction Tax (CTT)

• Proposed in Finance Bill, 2013 for enhancing financial resources.
• A tax which shall be levied on non-agricultural commodities futures contracts at the same rate as on equity futures that is at 0.01% of the price of the trade.
• CTT would tax trading of non-farm commodities like gold, silver and non-ferrous metals such as copper and energy products like crude oil and natural gas in India.
• Here both parties—buyer & seller of contract—will be taxed depending on the amount of contract size.
• Similar to the Securities Transaction Tax (STT) levied on the purchase and sale of equities in the stock market.
• So far, commodity transactions have been exempted from any levy.
• Agricultural commodities have been left out of CTT.

What are the Advantages of levying CTT?

• It will open up new resources for the augmentation of government finances.
• CTT would generate revenues of around Rs.45 billion to government.
• It is also aimed at bringing transparency in the commodity exchange market.

What could be the disadvantages of CTT?

• CTT has been opposed by the experts and the PMEAC had also suggested against levying such a tax.
• CTT will increase the transaction cost because traders already pay brokerage, deposit margin, brokerage, stamp duty and transaction charges.

Prisoner X

Prisoner X

March 12th, 2013

‘Prisoner X’ worked for Israel: Australia
Australia acknowledged for the first time that the dual Australian-Israeli citizen who died in a maximum-security Israeli prison had been working for Israel. Australia has raised the possibility of a diplomatic fuss if the man’s Australian passport was used for espionage.
Who is Prisoner X?

• Prisoner X, Mr. X and Mister X were proxy names for Ben Zygier while he was imprisoned in Israel in strict secrecy for unspecified crimes at Ayalon Prison.
• Ben Zygier was an Australian-Israeli citizen.
• The Israeli government has accepted that a prisoner held under a fictitious name died in their custody and has affirmed the prisoner’s identity as Ben Zygier.
• The name Prisoner X has previously been used for other unidentified prisoners and is the name of an X-Men book by Ann Nocenti.

Timeline of Prisoner X scandal

• December 10, 2010: A man is found hanged in cell at Ayalon prison, in Ramla, Israel
• Story was reported  about the details of the death in Israeli news website Ynet, but is soon then taken down. Rumours continued to circulate that Prisoner X, as he became known, was a Mossad agent.
• February 12, 2013: Australia’s ABC News names Prisoner X as Ben Zygier who was reportedly born in Melbourne to a prominent Jewish family and who later moved to Israel in 2000
• February 13, 2013: Israeli justice ministry affirms the existence of Prisoner X
• February 14, 2013: Australia admits it was told of Mr Zygier’s detention in February 2010
• March 2013: Australia contends that the ‘Prisoner X’ worked for Israel

- The Mossad (short for HaMossad leModi’in uleTafkidim Meyuhadim) is the national intelligence agency of Israel.
- It is believed that Prisoner X (Mr. Zygier) met Australian Security Intelligence Organisation (ASIO) agents and told them about secret and sensitive Mossad operations he was involved in, including one to set up a shell company in Italy that would export electronic equipment to Iran and Arab countries.

FUA (Flexible Use of Airspace)

FUA (Flexible Use of Airspace)

March 11th, 2013

Government approves Flexible Use of Airspace (FUA)
The Cabinet Committee on Security (CCS) cleared Flexible Use of Airspace (FUA) by civil and military users. The issue was pending for last so many years.
Why such a step ?

• In the fast changing environment of air warfare and national security, there is an urgent sense of need of airspace use by the military. Therefore, sharing of airspace on a need basis, by civil and military users was an urgent national requirement.
• Now, the airspace of the nation is a finite sovereign asset, which is used by civil, military and aerospace authorities. Thus, Fa lexible utilization of airspace is essential from the view point of efficiency of operation, viability of airlines and minimizing damage to environment. The same can be achieved by the introduction of the concept of FUA (Flexible Use of Airspace).

What will be the environmental benefits of implementation of FUA?

• Fuel saving of 20,29,380 Kg/year
• Reduction of CO2 emissions by 63,93,600 Kg/year

This will be achieved via direct routing between 7 city pairs of: Delhi-Mumbai, Delhi-Kolkata, Delhi–Chennai, Delhi-Hyderabad, Delhi- Begaluru, Kolkata-Chennai and Chennai-Mumbai for which the information is available.
What are the Objectives of FUA?
Primary objective:

• Enhance airspace Capacity – sharing of airspace on a need basis, by civil and military users

Other Objectives:

• Minimize delays
• Fuel conservation
• Emission reduction
• Benefits to travelling public

What is the framework of this model?
In this model a coordinated procedure between the civil and the military and vice versa, as per need and on a real time basis if it is not being used by the user assigned with the responsibility for its control.

• First step would be implementation of a National High Level Airspace Policy Body (NHLAPB) for airspace use will be set up in order to take up the job of strategic planning and assess/reassess the national airspace requirements of various stakeholders.
• NHLAPB will establish flexible airspace use structure/committee’s and introduce procedures for allocation of these airspace structures.
• The NHLAPB will be chaired by Secretary, Ministry of Civil Aviation with representation from Ministry of Defence, Indian Air force, Indian Navy, Indian Space Research Organization, Airport Authority of India and Directorate General of Civil Aviation. It can co-opt new members in future depending upon requirement.

Implementation of FUA via effective civilian military co-ordination is a crucial prerequisite to promote the traffic growth with ultimate benefit to the nation’s economy. FUA will allow both military and civil users to expeditiously and efficaciously utilize the available airspace on sharing basis so as to gain optimal usage, thus enhancing its capacity, which will result into efficient operations.
What are the dangers involved ?

• It has to be strictly ensured that appropriate safeguards in the system are there in order to prevent any accidental leak of Military information and and to ensure that the any information on Military Aviation activities is disseminated strictly on “need to know” basis.

Viability Gap Funding (VGF)

Viability Gap Funding (VGF)

March 8th, 2013

India’s first transmission project viability-gap funding unveiled
India’s first viability-gap funded, 99-km power transmission line project, in Haryana, was unveiled. The 400 KV double circuit Jharli-Kabulpur-Rohtak line was established by a joint venture of Kalpataru Power Transmission and Techno Electric and Engineering Company.
The Rs 444-crore public-private-partnership project with the Haryana Government has received Rs 92 crore of viability gap funding from Government of India.
What is Viability Gap Funding (VGF)?
VGF is a government’s initiative to assist private investors or entities to set up projects of high economic worth. It is usually seen that many projects, like a road connecting a rural area, generates high economic returns, but the financial returns may not be sufficient for a profit-seeking investor. Although such a project would yield huge economic benefits by linking these villages with the market economy, but because of low incomes it may not be possible to charge user fee. In such condition, the project would not attract private investment. In such cases, the government extends its support to the investors by sharing a fraction of the cost, making the project viable. This method is known as viability gap funding.
How does it work?
Typically, VGF is provided in competitively bid projects. The central government meets up to 20% of capital cost of a project being implemented in Public Private Partnership (PPP) mode by a central ministry, state government, statutory entity or a local body. The state government, sponsoring ministry or the project authority can provide another 20% of the project cost to make the projects even more attractive for the investors. Potential investors bid for these projects on the basis of VGF needed. Those needing the least VGF assistance will be awarded the project. The Ministry of Finance administers the scheme.
Eligible sectors:
Projects in a number of sectors such as roads, ports, airports, railways, inland waterways, urban transport, power, water supply, other physical infrastructure in urban areas, infrastructure projects in special eco-nomic zones, tourism infrastructure projects are generally eligible for VGF. The government intends to add social sectors such as education and health to the list.
What are the benefits of VGF for the government?
If the government builds all the infrastructure on its own then it would require huge expenses as well as time to create it on such a vast scale. But, with VGF, the limited resources of the government can be distributed more widely through private participation implementing more number of projects as well as saving money for other schemes and activities. Thus VGF works as a force multiplier, enabling government to invest its resources more effectively.