NATIONAL AFFAIRS
RBI’s mid-term review
The RBI, in its first mid-quarter review of its
monetary policy, increased repo and reverse
repo rates leaving the cash reserve ratio
(CRR) unchanged as it battles to contain
inflation.
The central bank noted that food inflation
has risen to 15.10 per cent for the week
ending September 4, thus making it
necessary to rein in liquidity. As a result,
RBI raised short-term borrowing rate
(reverse repo) by 0.50 percentage points to 5
per cent and lending rate (repo) by 0.25
percentage points to 6 per cent. The
increased rates aim to make financing costly
thus curbing consumption.
However, the RBI said that inflation rates
have reached a plateau. The apex bank also
signalled banks to raise fixed deposit rates
and also noted that the government was on
target to contain the fiscal deficit.  development projects as part of the deal
Unique Identification Authority of India
The Union Cabinet has cleared a new law
providing for strict penal action and hefty
fines going up to Rs 1 crore to guard against
misuse of data collected for allotment of a
Unique Identity Card or a Aadhar number to
Indian citizens.
The proposed legislation, titled the National
Identification Authority of India Act, seeks
to give statutory powers to the Unique
Identification Authority of India (UDAI),
created as an attached office under the
Planning Commission.
The decision to enact a legislation was taken
after fears were expressed over the privacy
and security of data collected by the UDAI.
In addition, several civil rights groups had
also pointed out that actions of the UDAI
INTERNATIONAL AFFAIRS
Gillard manages to retain power in
Australia elections Current
On September 7, 2010, ending weeksAffairsof
political uncertainty, Australia’s firstCurrent
General
woman Prime Minister Julia Gillard staked
claim to form a new government afterKnowledge
two
king-maker independent MPs extended events
support to her Labour party, giving itsports
a
career info
wafer-thin one-seat majority in the first
hung Parliament in nearly 70 years. Personality
Developme
Labour now controls 76 seats in nt
Parliament’s 150-member House of debate
Representatives, with the opposition essay
Coalition of Liberal party leader Tony article
Abbott having 74 seats. feature
Cover
Gillard said her minority governmentStorywould
be held to higher standards of accountability
as a result of the deal struck with the
independents. She added that her
government will spend $9.9 billion on
with the rural independents.
Political crisis in Nepal continues
On September 26, 2010, Nepal's Constituent
Assembly failed for the eighth time, during
the past four months, to elect a new Prime
Minister. The deadlock continues, partly
because other mainstream parties do not
trust the single, largest party, Unified
Communist Party of Nepal (Maoist),
because it continues to put its faith in one-
party rule and continues to threaten it would
resume armed struggle.
The last 20 years have seen Nepal move
from a Hindu kingdom to a democratic and
secular republic. The 239 year old
monarchy was cast aside in 2006 and people
voted for a Constituent Assembly and an
interim government in 2008. Maoists
emerged as the largest single party but fell
could well be questioned in the absence of a
legal framework.
This scheme of providing unique identity
number to the citizens of the country took
off on September 29 when Prime Minister
Manmohan Singh presented the first such
number at a function in the tribal district of
Nandurbar in Maharashtra.
Job scenario in India improves
According to the Ma Foi Randstad
Employment Trends Survey, there is
optimism in the economic scenario across all
sectors of India and most of the new jobs
have been created are in services. Conducted
among 650 companies across 13 industry
segments that included eight Indian cities,
the survey revealed 418,000 jobs were
created between January and June, 2010,
with the healthcare sector creating 121,000
jobs, and another 63,000 in the hospitality
sector. The top five sectors leading the boom
are healthcare, hospitality, real estate and
construction, information technology and IT-
enabled services, and education, training and
consulting.
Real estate and construction leads with the
highest growth in number of people
employed. It also expects growth in average
salary by about four per cent, followed by
pharma (3.5 per cent) and healthcare (3.4 per
cent) during the third quarter.
The estimated proportion of experienced
workforce is the highest in the pharma
sector, 87 per cent. Healthcare is estimated
to have the highest percentage of freshers,at
38 per cent. Kolkata has the highest
estimated percentage of experienced
workforce, at 82 per cent, and New Delhi the
highest estimated percentage of freshers (35
per cent).
Fund to boost innovation
short of a majority.
In the 601-member House, two seats are
vacant and if the Speaker and the Deputy
Speaker are excluded, it has an effective
strength of 597 members. The break-up is as
follows : Unified CPN (Maoists): 237,
Nepali Congress: 114, UML: 108, four
Madhes based parties: 82, smaller parties &
others: 56.
Unified CPN (Maoist) continues to say it
has no faith in parliamentary democracy,
believes in one-party rule and insists on
absorbing its underground militia into the
Nepalese Army. It also tried to take
arbitrary decisions and sought the removal
of the President and the Army Chief. Other
parties are not sure it would change its
spots.
The Constituent Assembly has failed to
finalise the Constitution as mandated. The
Assembly extended its own life by one year
to complete the task. But differences persist.
In the absence of a consensus between
parties, there is a caretaker government with
few powers.
Having failed to sack the then Army Chief
over the integration of the armed Maoist
guerrillas, Prachanda resigned as Prime
Minoster and Maoists pulled out of the
government in 2009; then they forced the
next government headed by Madhav Kumar
Nepal of UML to also quit.
China-Japan spat
China suspended high-level exchanges with
Japan on September 19, 2010, and promised
tough counter-measures after a Japanese
court extended the detention of a Chinese
captain whose trawler collided with two
Japanese coastguard ships.
The spat between Asia’s two largest
The National Innovation Council (NIC), a
body to promote new ideas for inclusive
development, has announced the setting up
of a Rs 1,000 crore fund to encourage
innovation.
“A major portion of the fund will come from
the private sector and not the government,”
the chairman of the council, Sam Pitroda,
said.
One of the council members and renowned
film-maker, Shekhar Kapur, also mooted the
idea of starting a television reality show that
would provide a platform for the young
minds to showcase their innovative ideas for
solving the problems of the economy.
Set up by Prime Minister Manmohan Singh,
the council is aimed at energising innovation
initiatives so as to make them part of the
national effort aimed at reducing poverty,
improving governance and making
development more inclusive.
The aim of NIC is to herald a mindset
change and create a push at the grassroots
level so that more and more people are
involved in shaping a national-level
innovation strategy.
The council’s mandate also includes
formulating a roadmap on innovation for the
2010 to 2020 period, focusing on inclusive
growth.
Munda sworn in as Jharkhand Chief
Minister
On September 11, 2010, BJP leader Arjun
Munda became the eighth Chief Minister of
the 10-year-old Jharkhand State, as leader of
a coalition with, among others, the
Jharkhand Mukti Morcha. Munda, who is
having a go at the top job for the third time,
will have two deputies — Sudesh Mahato of
the All Jharkhand Union and JMM patriarch
economies has flared since Japan arrested
the captain, accusing him of deliberately
striking a patrol ship and obstructing public
officers near uninhabited islets in the East
China Sea.
Beijing viewed the detention as illegal and
invalid.
UN convention on terrorism moves a step
forward
Rocked by a wave of audacious terrorist
attacks in the last two years, Pakistan has
finally realised the futility of opposing the
proposed Comprehensive Convention on
International Terrorism (CCIT) just because
India was in the forefront of initiating it at
the United Nations in 1996.
Pakistan, along with some other
Organisation of the Islamic Conference
(OIC) countries, had led the campaign
against the proposed convention on various
grounds. It had argued that self-
determination should be outside the purview
of the convention. It had also insisted that
international humanitarian laws should be
taken into account while finalising the text
of the convention. Both these objections
were seen as aimed at embarrassing India
on Jammu and Kashmir since Islamabad has
been demanding the right to self-
determination for Kashmiris and seeking
international intervention on the issue.
The opposition to the convention had also
come from the US and Israel with the latter
insisting that acting against terrorists
indulging in killing innocent people be
brought under its purview. 
The global treaty seeks to criminalise all
forms of international terrorism and deny
terrorists, their financers and supporters
access of funds, arms and safe havens.
Shibu Soren's son, Hemant Soren.
Although the function at the Governor's
house showed the deep rift in the BJP over
the tie-up with the JMM—the BJP's partner
last time in a government that lasted only for
five months—Munda said he would focus on
strengthening the party's grass-root level.
Visit of President of Mozambique
On September 30, 2010, during a meeting
between President of Mozambique Armando
Guebuza and Prime Minister Manmohan
Singh, India and Mozambique inked three
pacts and a credit line of $500 million was
extended to that country for infrastructure
projects, agriculture and energy.
The situation has considerably changed with
just a handful of countries still not
convinced why they should back it. “Most
countries are now in favour of the early
adoption of the convention but there is a
small number of holdouts, may be 10 to
15…efforts are on to convince them also to
support it so that a strong message goes out
to all terrorist organisations that the
international community is united and
determined to jointly fight the menace of
terrorism.

The two countries have also decided to

create a partnership based on greater
political engagement, deepening of
economic cooperation, strengthening of
defence and security cooperation, specially
to secure sea lanes against piracy, and
cooperation in capacity building and human
resource development.

India would also support establishment of

training and planning institutions in
Mozambique to support capacity building in
the coal industry, besides supporting
capacity building for the defence and police
forces of that country, the Prime Minister
said.

Expressing concern over the safety and

security of sea lanes in the Indian Ocean,
Guebuza assured to provide all possible
assistance to protect them.

Dhaka okays crucial highway link to

Kolkata
In major development, Bangladesh has
finally agreed to start the construction of a
highway that will not only provide transit
facilities, ensuring easy movement of goods,
but also drastically shorten the circuitous
route—crucial from the military point of
view—between north-eastern States and the
port city of Kolkata.

The project—to be primarily financed by

India—is part of the larger Asian Highway
network project connecting the Asian
nations. The highway project between India
and Bangladesh had been hanging fire for
more than five years, with Dhaka stalling it
for one reason or the other—primarily due to
pressure from Pakistan and China.

The change came after the Sheikh Hasina

Government came to power and in July 2009
Indian negotiators managed to push
Bangladesh to ink the inter-governmental
agreement. 

The first route will enter from Bengal into

Bangladesh at the existing Benapole land
port on the border and run across eastwards
via Jessore and Dhaka; passing through
Sylhet, located on the north-eastern edge of
Bangladesh, it will enter Assam/Meghalaya.

The second axis will start from North Bengal

and enter Bangladesh at Panchgarh and run
southwards via Srirajganj to Dhaka and
further southeast to Cox Bazar and
Chittagong before entering into Myanmar.
India will be able to use both routes.

Once ready, the highway will solve India’s

major problem of moving goods into north-
eastern States of Nagaland, Tripura,
Mizoram and Manipur. At present, it can
take up to five days for a truck from Kolkata
to reach these areas, adding up to the costs,
besides the time delay.

Crucial military pact with South Korea

Signalling a dramatic change in its strategic
positioning, especially vis-à-vis China, India,
on September 3, 2010, entered into a crucial
joint research and manufacturing agreement
with South Korea to co-develop and co-
produce military equipment.

Both countries are neighbours of China and

have a rather testy and tense relationship
with it.

On the military front the importance of the

agreement can be gauged from the fact that
India has such agreements for co-developing
and co-producing military equipment with its
traditional “friend” Russia and other ally,
Israel. It also has product-based cooperation
for joint production of key military
equipment with the French and Italians.
Following the agreement, experts have
placed India-South Korea military relations
at par with Indian relations with Russia and
Israel.

Memorandums of Understanding were

signed following a 90-minute discussion
between high-level delegations led by
Defence Ministers, AK Antony and Kim
Tae-young, respectively. This was the first-
ever visit of an Indian Defence Minister to
South Korea.

Visit of Polish Prime Minister

Polish Prime Minister Donald Tusk visited
India on September 7, 2010. The Indo-Polish
defence cooperation figured prominently
during talks between the visiting dignitary
and Prime Minister Manmohan Singh. 

Since most of the Indian military hardware

was acquired in the 1970s from the then
Soviet Union, Poland, which was a key ally
of former USSR, has the spares and the
technology for upgrading the equipment with
the Indian forces.

Poland is keen to sell tank recovery vehicles

to India. The proposal was made during
Antony’s visit to Warsaw in April for a
meeting of the joint working group (JWG)
on defence cooperation between the two
countries.

A tank recovery vehicle is a type of

armoured fighting vehicle used to repair
battle or mine damaged as well as broken
down vehicles during combat operations, or
to tow them out of the danger zone for more
extensive repairs.

Apart from making these vehicles available

to India, Poland has shown interest in
providing to New Delhi its sophisticated
military hardware up-gradation and
maintenance technology. It is also interested
in joint ventures with Indian companies. 

Poland can also help India upgrade Indian T-

72 tanks, BMP II infantry combat vehicles
and a variety of air defence systems
purchased from the former Soviet Union.

But more than defence ties, it is the prospect

of a quantum jump in economic ties with
Poland that excites New Delhi. Poland, a key
member of the European Union (EU), is
considered by India as a gateway to Europe
and Central Asia.

Allahabad High Court Verdict on Babri

Masjid-Ram Janambhoomi dispute
On September 30, 2010, the much-awaited
judgement of the Lucknow Bench of the
Allahabad High Court unanimously ruled
that the idols of ‘Ram Lalla’ in the makeshift
temple at the disputed site in Ayodhya
cannot be removed.

The three-judge Bench of Justices S.U.

Khan, Sudhir Agarwal and Dharamveer
Sharma separately delivered the historic
verdict. In a 2-1 majority verdict, Justices
Khan and Agarwal decreed that the 2.7-acre
land comprising the disputed site should be
divided into three equal parts and be given to
Sunni Waqf Board, Nirmohi Akhara and the
party representing ‘Ram Lala Virajman’
(Ram deity).

However, the third judge Justice D.V.

Sharma ruled that that the disputed site is the
birth place of Lord Ram and that the
disputed building constructed by Mughal
emperor Babur was built against the tenets of
Islam and did not have the character of the
mosque. The Bench directed maintenance
of status quo at the site for three months and
invited suggestions from all the parties for
demarcation of the land.

The judges also dismissed the claims of the

Sunni Central Waqf Board over the Babri
Mosque due to limitation or becoming time
barred as well as the claim of the Nirmohi
Akhara.

With a 2-1 majority, the Bench held that all

the three parties, namely Muslims, Hindus
and Nirmohi Akhara were joint titleholders
of the property in dispute. Both Justices
Sudhir Aggarwal and SU Khan made it clear
that the share of the Muslim parties shall not
be less than one third of the total area of the
premises. “...If while allotting exact portions
some minor adjustment in the share is to be
made then the same will be made and the
adversely affected party may be
compensated by allotting some portion of the
adjoining land,” observed Justice Khan.

The area under the erstwhile central dome

where the idols are placed in the makeshift
temple has been allotted to the Hindus. The
inner courtyard has been given to both the
communities “since it was being used by
both since decades and centuries”, noted
Justice Aggarwal.

The ‘Ram Chabootra’, ‘Sita Rasoi’ and

‘Bhandar’ area in the outer courtyard will go
to the Nirmohi Akhara. The outer courtyard
is once again to be shared by the Nirmohi
Akhara and the Muslim parties.

Highlights
—2.7 acre disputed site to be divided in
three equal parts.
—Two portions to be handed over to
Hindus, Muslims will get one.
—All three parties—Muslims (Sunni Waqf
Board), Nirmohi Akhara and the parties
representing ‘Ram Lalla Virajman’—
declared joint title-holders.
—The portion below the central dome,
where the idol of Lord Rama is presently
kept in makeshift temple, belongs to Hindus.
—All three parties may utilise the area to
which they are entitled to by having separate
entry for egress and ingress of the people
without disturbing each other’s rights. The
parties may approach Centre which shall act
in accordance with the directions and also as
contained in the SC verdict.

Historical Background
The ‘first title suit’ was filed on January 19,
1885. It was submitted by Mahant
Raghubirdas in the court of Faizabad sub-
judge, seeking permission for “puja”
(worship) rights over a “chabootra”
(platform) in front of the mosque which he
claimed was Ram’s birthplace.
In his February 24, 1885, order, the judge
said: “It (chabootra) was so close to the
existing masjid that it would be contrary to
public policy to grant a decree authorising
plaintiff to build a temple as desired by
him.”

Sub-Judge Hari Kishan said: “It is most

unfortunate that a masjid should have been
built on land specially held sacred by the
Hindus, but as the event occurred 356 years
ago, it is too late now to remedy the
grievance. All that can be done is to maintain
the status quo. In such a case as the present
one any innovation could cause more harm
and derangement of order than benefit.”

Then Raghubirdas moved to the Faizabad

district judge, Colonel J.E.A. Chambier,
who, after a spot inspection, dismissed the
appeal on March 17, 1886, on the same
grounds. 

Raghubirdas then filed an appeal before the

Oudh Judicial Commissioner, W. Young,
who also declined his plea in his judgment of
November 1, 1886.

Young observed: “This spot is situated

within the precincts of the grounds
surrounding a mosque erected some 350
years ago, owing to the bigotry and tyranny
of the emperor who purposely chose this
holy spot, according to Hindu legend, as the
site of his mosque.”

DO YOU KNOW
A high-speed train in China has set a new world speed record during a
trial run. The train hit a maximum of 416.6 km per hour on its journey
between Shanghai and Hangzhou. The train is designed to run at a speed
of 350 km per hour.

Amir Khan’s “Peepli Live”, a satire on media’s trivialisation of farmers’

suicide, has been selected as India’s official entry at the 2011 Oscars, in
the Best Film category.

The Union Cabinet has approved the National Identification Authority of

India Bill, 2010, which envisages making UIDAI a statutory body.

Finance Minister Pranab Mukherjee launched the Swavalamban Scheme

of Life Insurance Corporation (LIC) on September 25, 2010. The scheme
seeks to provide pension scheme to the un-organised sector. Under the
scheme, the Central government will contribute Rs 1,000 per year to each
National Pension Scheme (NPS) account opened in year 2010-11 and for
the next three years, till 2013-14.

The World Tourism Day is observed on September 27.

The UN Summit on the Millennium Development Goals, or MDGs, was

held in September 2010 at UN Headquarters in New York, USA.

Chowmhalla Palace in Hyderabad, spectacular 18th century monument,

has been selected for the Heritage “Award of Merit” by the UNESCO, for
cultural heritage conservation for 2010.

The Business Standard Best Business Schools Survey 2010 shows that

India’s top business schools are: Indian Institutes of Management in
Ahmedabad and Kolkata, Indian Institute of Foreign Trade in New Delhi,
Institute of Management Technology at Ghaziabad, Management
Development Institute at Gurgaon, National Institute of Industrial
Engineering in Mumbai and XLRI Jamshedpur.

A new wholesale price index series with an updated product portfolio

was launched on September 14, 2001. The series will have 2004-05 as the
base year, as against 1993-94 in the previous model. Some important
items included in the new series basket are: flowers, lemon, crude
petroleum, scooter and motorcycle tyre, polymers, marble, silver and gold.

The Employee Provident Fund trustees have decided to raise the interest

for 2010-11 to 9.5 percent.

The World Tiger Summit was held in September 2010 in St. Petersburg,

Russia.

The six living species of Tigers are: Amur, Bengal, Indochinese,

Malayan, South China and Sumatran. The Bali, Caspian and Javan tigers
have become extinct.

Navodaya Vidyalayas celebrated 25 years of existence in 2010. A

befitting match to costly private schools, the Navodayas have shown in
last 25 years how gifted children with humble means can rise to life.

India has replaced the US as the second most important Foreign Direct

Investment (FDI) destination for trans-national corporations, according to
a survey conducted by UNCTAD. Global FDI flows are expected to jump
from $1.2 trillion in 2010 to $1.5 trillion in 2011 and $1.6-2.0 trillion in
2012.

As per the Quacquarelli Symonds (QS) World University rankings,

Cambridge University, UK, is the top university of the world, followed by
Harvard University, USA, Yale University, US, University College
London (UCL), UK, and Massachusetts Institute of Technology, USA, in
that order.
 Rajkot People’s Cooperative Bank does not offer any job to people who
smoke cigarette or eat gutkha. Even the customers with the habits have to
pay higher interest on loans.

Reliance Industries has been ranked second in the list of world’s 10

biggest ‘sustainable value creators’—companies that have been successful
in creating the most shareholder value over the last decade—prepared by
Boston Consulting Group. Brazil-based mining and materials giant Vale
has been ranked the top value creator.

India’s first agri-biotechnology institute, the National Agri Food

Biotechnology Institute (NABI) is being set up in Mohali, near
Chandigarh.

Home

URRENT AFFAIRS: AUGUST 2010

NATIONAL AFFAIRS INTERNATIONAL AFFAIRS

Foreign Contribution Regulation Bill China overtakes Japan as second-largest economy

Organisations of political nature and those involved in religious
conversions will henceforth be barred from accepting foreign
funds. Also, persons holding political positions like MPs and
MLAs can no longer enjoy foreign hospitality and must
intimate the government of their visits abroad, personal or
official.
After letting private organisations bring in unaccounted foreign
remittances for 34 years, the government has brought to the
Lok Sabha the Foreign Contribution Regulation Bill, 2010, to
regulate the acceptance and utilisation of foreign contribution
of hospitality by certain individuals or associations and to
prohibit such acceptances for activities detrimental to national
interest. The Lower House passed the Bill, which the Rajya
Sabha had already cleared.
At the root of the law is the concern that out of 40,173 NGOs
(in 1993 there were just 1,500) accepting foreign funding, only
18,796 have submitted their audited accounts. For the rest, the
government doesn’t know the source of funding.
After three decades of spectacular growth, China has passed
Japan in the second quarter of 2010 to become the world’s
second-largest economy behind the United States. The
milestone, though anticipated for some time, is the most
striking evidence yet that China’s ascendancy is for real and
that the rest of the world will have to reckon with a new
economic superpower.
The recognition came on August 16, 2010, when Tokyo said
that Japan’s economy was valued at about $1.28 trillion in the
second quarter, slightly below China’s $1.33 trillion. Japan’s
economy grew 0.4 percent in the quarter, substantially less
than forecast. That weakness suggests that China’s economy
will race past Japan’s for the full year.
Experts say unseating Japan—and in recent years passing
Germany, France and Great Britain—underscores China’s
growing clout and bolsters forecasts that China will pass the
United States as the world’s biggest economy as early as
2030. 
So far, Rs 12,000 crore has “officially” come through the
foreign route, of which 60 per cent has come from religious
organisations, some from countries as small in population as
Canada, Mauritius and Luxembourg.
The government’s data shows that in 2005 and 2006, there
were over 32,144 organisations taking foreign funds in India.
Only 18,000 declared their funding. In 2005-2006, of the Rs
7,000 crore that came from foreign sources, Rs 3,075 crore
came for religious organisations. This explains why the new
law (which replaces the 1976 legislation) bans foreign funds for
conversion purposes.
Significant amounts (to the tune of Rs 7,229 crore) have also
come in for education, with no monitoring. In the run-up to the
new FCR Bill 2010, the government banned 41 outfits from
taking foreign remittances; sealed accounts of 11 and asked 45
to take permission first.  of issues; for instance, in 2009 it asserted that the dollar must
With the new law, the government has also capped
administrative expenses at 50 per cent of all inflows to NGOs
(India has about 20 lakh).
Nuclear Liability Bill
On August 25, 2001, the UPA government successfully
shepherded the Civil Liability for Nuclear Damage Bill, 2010,
through the Lok Sabha, with active support from the BJP and
strategic absence of some fence-sitters such as the Samajwadi
Party.
Quashing opposition from the Left Bloc and other critics, Prime
Minister Manmohan Singh denied that the Bill was railroaded
through the House to serve US interests. “This Bill is a
completion of a journey to end the nuclear apartheid, which the
world had imposed on India in the year 1974,” he said.”
The government managed to bring the BJP on board in return
for accepting amendments to the controversial Clause 17(b) and
dropping the word “intent”. The new formulation of 17(b), now
states that suppliers would be liable where “the accident has
resulted as a consequence of an act of a supplier or his
employees, done to cause nuclear damage, and such act
includes supply of equipment or material with patent or latent
defects or sub-standard services”.
While his government achieved what appeared even a few
months ago to be an impossible task—getting the Lok Sabha to
pass the Bill— Manmohan Singh announced that the
government would give safety issues top priority. “Concern
about nuclear safety is one, which I fully share. I assure (you)
we will do everything to strengthen the Nuclear Regulatory
Board to ensure that safety concerns receive the attention that
For Japan, whose economy has been stagnating for more than
a decade, the figures reflect a decline in economic and
political power. Japan has had the world’s second-largest
economy for much of the last four decades, according to
the World Bank. And during the 1980s, there was even talk
about Japan’s economy someday overtaking that of the United
States. But, while Japan’s economy is mature and its
population quickly aging, China is in the throes of
urbanization and is far from developed, meaning it has a much
lower standard of living, as well as a lot more room to grow. 
China is already a major driver of global growth. The
country’s leaders have grown more confident on the
international stage and have begun to assert greater influence
in Asia, Africa and Latin America, with things like special
trade agreements and multi-billion dollar resource deals.
Beijing is also beginning to shape global dialogues on a range
be phased out as the world’s primary reserve currency.
While the United States and the European Union are
struggling to grow in the wake of the worst economic crisis in
decades, China has continued to climb up the economic league
tables by investing heavily in infrastructure and backing a
$586 billion stimulus plan.
There are huge challenges ahead, though. Economists say that
China’s economy is too heavily dependent on exports and
investment and that it needs to encourage greater domestic
consumption—something China has struggled to do. The
country’s largely state-run banks have recently been criticized
for lending far too aggressively in 2009, while shifting some
loans off their balance sheet to disguise lending and evade
rules meant to curtail lending growth.
China is also locked in a fierce debate over its currency policy,
with the United States, European Union and others accusing
Beijing of keeping the Chinese currency, the renminbi,
artificially low to bolster exports—leading to huge trade
surpluses for China but major bilateral trade deficits for the
United States and the European Union. China says that its
currency is not substantially undervalued and that it is moving
ahead with currency reform.
Regardless, China’s rapid growth suggests that it will continue
to compete fiercely with the United States and Europe for
natural resources but also offer big opportunities for
companies eager to tap its market.
US ends combat mission in Iraq
On August 31, 2010, US President Barack Obama announced
an end to the US combat mission in Iraq, not with a
they must, if we are to use nuclear power as a major source for
generating and meeting India’s need for energy,” he said.
The key points of the Bill are:
—Controversial Clause 17(b) amended by dropping the word
‘intent’.
—Compensation cap to be paid by the operator at Rs 1500
crore provided in the Bill is not the ‘limit’.
—Compensation will be decided by the Claims Commissioner
and the operator will have to pay.
—Government assumes full liability for even a plant not
operated by it.
—The Bill is necessary for full implementation of civil nuclear
deal signed with the USA in 2006.
Bill to provide women equal guardianship rights
A Bill paving way for the women to get equal rights in
guardianship and adoption of children has been passed by the
Rajya Sabha.
The Personal Laws Amendment Bill seeks to amend the
Guardians and Wards Act, 1890 and the Hindu Adoptions and
Maintenance Act, 1956. It also seeks to allow the mother, along
with the father, to be appointed as a guardian, making the
process gender-neutral.
Besides, it aims at removing hurdles in the way of a married
woman to adopt. She can give a son or daughter for adoption.
For adoption and guardianship, under the existing Act, only the
father is considered to be the natural guardian of the child in a
Hindu family and only unmarried, divorced women and
widows are allowed to adopt a child. Women separated from
their husbands and engaged in lengthy divorce battles cannot
adopt a child.
Annual Supplement to Foreign Trade Policy 2009-14
The government has extended sops worth Rs 1,052 crore to
exporters, particularly for the labour-intensive textile,
handicrafts and leather sectors, to help them see through the
fragile economic recovery globally. The revenue implication of
these measures would be Rs 1,052 crore. The government also
made it clear that the popular Duty Entitlement Pass Book
(DEPB) scheme, which has been in vogue for over a decade, is
being extended for the last time.
Experts said drawing the curtains on the DEPB scheme was
inevitable as it was considered incompatible with the global
trade rules under WTO.
A number of additional products from sectors like engineering,
leather, textiles and jute have also been added to the existing
two per cent interest subvention scheme. Handloom,
declaration of victory but rather a sombre admission that the
US had paid a “huge price.”
Announcing an end to Operation Iraqi Freedom in a nationally
televised speech from the White House, the President said the
Iraqi people now have lead responsibility for the security of
their country.
But as US troops roll out of Iraq, the country continues to be
locked in a political stalemate with disagreement over who
will lead it, after elections failed to throw up a clear winner.
Obama urged Iraq’s leaders to “move forward with a sense of
urgency to form an inclusive government that is just,
representative, and accountable to the Iraqi people.” “And
when that government is in place, there should be no doubt:
The Iraqi people will have a strong partner in the United
States. Our combat mission is ending, but our commitment to
Iraq’s future is not,” he added.
Anthony Cordesman of the Center for Strategic and
International Studies said while US troops may have
withdrawn, the Iraq war is not over, it is not “won,” and any
form of stable end state in Iraq is probably impossible before
2020.
A transitional US force will remain in Iraq with a mission of
advising and assisting Iraq’s security forces, supporting Iraqi
troops in targeted counter-terrorism missions, and protecting
US civilians.
Mid-East Summit
US President Barack Obama waded into a new round of
Middle East diplomacy September 1, 2010, seeking
momentum for revived peace talks clouded by a flare-up of
West Bank violence and a deadlock over Jewish settlements.
Obama met Israeli Prime Minister Benjamin Netanyahu as he
launched a series of one-on-one meetings with Middle East
leaders attending a US-led peace summit that culminated with
the first direct Israeli-Palestinian talks in 20 months.
With Obama's peace bid facing broad skepticism and the clock
ticking toward the September 26, 2010 expiration of an Israeli
settlement construction freeze, Israel's defence minister
sounded a conciliatory note about the prospects for sharing
Jerusalem, an issue at the heart of the decades-old conflict.
But big obstacles remain to Obama's quest for a peace deal
that eluded so many of his predecessors.
Hamas militants declared war on the talks even before they
began, killing four Jewish settlers in the occupied West Bank,
vowing more attacks and underscoring the threat hard-liners
handicrafts, carpet and the SMEs have been getting this facility,
which will now be available till March 31, 2011.
The government also extended the zero-duty Export Promotion
Capital Goods (EPCG) scheme by one year to March 31, 2012.
The scheme, which was announced in August 2009, was to
expire on March 31, 2011. Steps to reduce transaction cost of
exports too were announced in the policy.
India-Japan Strategic Dialogue
On August 21, 2010, visiting Japanese Foreign Minister
Katsuya Okada held the fourth round of strategic dialogue with
External Affairs Minister S.M. Krishna. The two sides
discussed the nuclear pact, comprehensive economic
partnership agreement (CEPA), other bilateral and international
issues, including UN reforms and the situation in Afghanistan
and Pakistan.
However, the focus was clearly on the nuke deal, the
discussions on which the two countries propose to conclude as
quickly as possible without setting any time-line.
Addressing a joint press conference with Krishna after the
three-hour talks between the two sides, Okada candidly
admitted that initiating negotiations with India on the nuclear
pact was the toughest decision he had taken during his
stewardship of the Japanese Foreign Ministry, given the fact
that India was not a signatory to the NPT. He also
acknowledged that the proposal for a nuclear agreement with
India was facing sharp criticism back home, since Japan is the
only country to have experienced a nuclear attack.
pose to the fragile peace process.
The summit marked Obama's riskiest plunge into Middle East
diplomacy, not least because he wants the two sides to forge a
deal within 12 months, a target many analysts call a long shot.
Cricket shamed again
Yet another match-fixing scandal rocked Pakistan cricket on
August 29, 2010, engulfing its captain Salman Butt, brilliant
pace duo of Mohammad Asif and Mohammad Amir and four
other players, leading to the arrest of a bookie in London and
questioning of the players by the Scotland Yard after a tabloid
sting.
The ‘News of the World’ tabloid alleged that a Pakistani man
Mazhar Majeed had paid bribes to the players to bowl no-balls
in the series and the Lord’s Test. The video evidence that the
tabloid has presented also shows Majeed talking about his
links with Indian bookies.
The two Pakistanis who bowled no-balls allegedly on
directions from Majeed were Asif and Aamir. Both bowlers
delivered three no-balls during the Lord’s Test. 

He also told the Indian side that the philosophy of nuclear

disarmament and non-proliferation must be incorporated in the
proposed accord on nuclear cooperation. 

Asked if Japan had advised India against detonating another

nuclear device, Okada said: “I don’t think we can suggest to
India to refrain from conducting a test…but if such a thing
were to happen, we shall have no option but to suspend our
cooperation with India (in the field).”

The two countries will continue and enhance consultations

within the G-4 process for reforms of the UN, including the
Security Council. They also welcomed the inclusion of the US
and Russia in the East Asia Summit (EAS). 

National Innovation Council

Prime Minister Manmohan Singh has approved the setting up
of a National Innovation Council to prepare a road map for the
'Decade of Innovation 2011-2020'. Sam Pitroda, adviser to the
Prime Minister on public information infrastructure and
innovations, will head the National Innovation Council.
The Council has been given the mandate to evolve an Indian
model of innovation focussing on inclusive growth and creating
an appropriate eco-system conducive to fostering inclusive
innovation.

It will delineate appropriate policy initiatives within the

government required to spur innovation. It will also promote
the setting up of sectoral innovation councils and state
innovation councils.

While encouraging all important sectors of the economy to

innovate, the NIC will take special efforts to facilitate
innovation by micro, small and medium enterprises.

Innovation in public services delivery and encouraging multi-

disciplinary and globally competitive approaches for
innovations would be focused on by the council.

DO YOU KNOW
“A Journey” is a memoir written by former British Prime Minister Tony Blair.

The N.C. Saxena Committee was set up by the Ministry of Environment and Forests. It details the
manner in which laws were flagrantly flouted to facilitate the Vedanta Alumina Ltd project in Orissa.
The project is aggressively opposed by the local tribal groups.

India remained the largest recipient of World Bank loans in 2009-10. The World Bank, through its
lending arms IBRD and IDA, committed $9.3 billion in financial assistance to India in 2009-10, more
than the aid committed by the US and European Union. Next in line were South Africa ($3.8 billion),
Brazil ($3.7 billion) and Turkey ($3.0 billion).

The Indian Parliament has hiked the salary of Members of Parliament to Rs 50,000 per month. Two
key allowances (constituency and office expenses) have also been increased to Rs 45,000 each.

Airtel has bagged the title sponsorship rights for the India cricket team’s home games for two-and-half
years, at a cost of Rs 3.33 crore per match.

Rajiv Gandhi Akshay Urja Diwas is observed on August 24.

The 2010 Academic Ranking of World Universities has ranked Harvard University as the top
University of the world for the eighth year in the annual ranking. Harvard is followed by University of
Cambridge, Yale University, University College London (UCL), Imperial College London, University of
Oxford, University of Chicago, Princeton University, Massachusetts Institute of Technology (MIT) and
California Institute of Technology (CALTECH).

“Oh yaaron, India ne bula liya”, composed by A.R. Rahman, is the theme song of Commonwealth
Games, 2010. It has been directed by Shyam Benegal and produced by Bharat Bala.

With his Independence Day speech on August 15, 2010—the seventh—Manmohan Singh edged past
Atal Behari Vajpayee to become the Prime Minister of India who has addressed the nation on
Independence Day the third-highest number of times. Jawaharlal Nehru addressed the nation 17 times
and Mrs Indira Gandhi 16 times.

On September 1, 2010, South-East Asia’s first Sports Injury Centre was opened on the campus of
Safdarjung Hospital, New Delhi, in partnership between the government and six private players.

An elephant, named Stumpy, is the official mascot of the 2010 Cricket World Cup.

UNESCO has granted the World Heritage status to Jantar Mantar in Jaipur which is a celebrated
astronomical observatory built in 18th century. This is India’s 28th and Rajasthan’s second site (after
Keoladev National Park) to be given the World Heritage status.

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