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 batt
les to contain inflation.
The central bank noted that food inflation has risen to 15.10 per cent for the w
eek ending September 4, thus making it necessary to rein in liquidity. As a resu
lt, RBI raised short-term borrowing rate (reverse repo) by 0.50 percentage point
s 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 gover
nment was on target to contain the fiscal deficit.
Unique Identification Authority of India
The Union Cabinet has cleared a new law providing for strict penal action and he
fty fines going up to Rs 1 crore to guard against misuse of data collected for a
llotment 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 In
dia (UDAI), created as an attached office under the Planning Commission.
The decision to enact a legislation was taken after fears were expressed over th
e privacy and security of data collected by the UDAI. In addition, several civil
rights groups had also pointed out that actions of the UDAI could well be quest
ioned in the absence of a legal framework.
This scheme of providing unique identity number to the citizens of the country t
ook off on September 29 when Prime Minister Manmohan Singh presented the first s
uch 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 s
egments 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 le
ading the boom are healthcare, hospitality, real estate and construction, inform
ation technology and IT-enabled services, and education, training and consulting
.
Real estate and construction leads with the highest growth in number of people e
mployed. It also expects growth in average salary by about four per cent, follow
ed by pharma (3.5 per cent) and healthcare (3.4 per cent) during the third quart
er.
The estimated proportion of experienced workforce is the highest in the pharma s
ector, 87 per cent. Healthcare is estimated to have the highest percentage of fr
eshers,at 38 per cent. Kolkata has the highest estimated percentage of experienc
ed workforce, at 82 per cent, and New Delhi the highest estimated percentage of
freshers (35 per cent).
Fund to boost innovation
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 governm
ent, the chairman of the council, Sam Pitroda, said.
One of the council members and renowned film-maker, Shekhar Kapur, also mooted t
he 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 t
he economy.
Set up by Prime Minister Manmohan Singh, the council is aimed at energising inno
vation initiatives so as to make them part of the national effort aimed at reduc
ing 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 inn
ovation strategy.
The council s mandate also includes formulating a roadmap on innovation for the 20
10 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 o
f 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 thi
rd time, will have two deputies Sudesh Mahato of the All Jharkhand Union and JMM
patriarch Shibu Soren's son, Hemant Soren.
Although the function at the Governor's house showed the deep rift in the BJP ov
er 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 pact
s and a credit line of $500 million was extended to that country for infrastruct
ure projects, agriculture and energy.
The two countries have also decided to create a partnership based on greater pol
itical engagement, deepening of economic cooperation, strengthening of defence a
nd security cooperation, specially to secure sea lanes against piracy, and coope
ration 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 mili
tary 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 ne
twork project connecting the Asian nations. The highway project between India an
d 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 200
9 Indian negotiators managed to push Bangladesh to ink the inter-governmental ag
reement.
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 A
ssam/Meghalaya.
The second axis will start from North Bengal and enter Bangladesh at Panchgarh a
nd 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 nort
h-eastern States of Nagaland, Tripura, Mizoram and Manipur. At present, it can t
ake 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 Ch
ina, India, on September 3, 2010, entered into a crucial joint research and manu
facturing agreement with South Korea to co-develop and co-produce military equip
ment.
Both countries are neighbours of China and have a rather testy and tense relatio
nship with it.
On the military front the importance of the agreement can be gauged from the fac
t that India has such agreements for co-developing and co-producing military equ
ipment with its traditional friend Russia and other ally, Israel. It also has prod
uct-based cooperation for joint production of key military equipment with the Fr
ench and Italians. Following the agreement, experts have placed India-South Kore
a military relations at par with Indian relations with Russia and Israel.
Memorandums of Understanding were signed following a 90-minute discussion betwee
n 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 Sou
th Korea.
Visit of Polish Prime Minister
Polish Prime Minister Donald Tusk visited India on September 7, 2010. The Indo-P
olish 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 th
en 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 du
ring Antony s visit to Warsaw in April for a meeting of the joint working group (J
WG) on defence cooperation between the two countries.
A tank recovery vehicle is a type of armoured fighting vehicle used to repair ba
ttle or mine damaged as well as broken down vehicles during combat operations, o
r to tow them out of the danger zone for more extensive repairs.
Apart from making these vehicles available to India, Poland has shown interest i
n providing to New Delhi its sophisticated military hardware up-gradation and ma
intenance technology. It is also interested in joint ventures with Indian compan
ies.
Poland can also help India upgrade Indian T-72 tanks, BMP II infantry combat veh
icles and a variety of air defence systems purchased from the former Soviet Unio
n.
But more than defence ties, it is the prospect of a quantum jump in economic tie
s 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 Al
lahabad 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 Sharm
a 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 sh
ould 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 i
s the birth place of Lord Ram and that the disputed building constructed by Mugh
al emperor Babur was built against the tenets of Islam and did not have the char
acter of the mosque. The Bench directed maintenance of status quo at the site fo
r three months and invited suggestions from all the parties for demarcation of t
he land.
The judges also dismissed the claims of the Sunni Central Waqf Board over the Ba
bri 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. Bo
th Justices Sudhir Aggarwal and SU Khan made it clear that the share of the Musl
im 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 m
ade then the same will be made and the adversely affected party may be compensat
ed 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 make
shift 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 centur
ies , noted Justice Aggarwal.
The Ram Chabootra , Sita Rasoi and Bhandar area in the outer courtyard will go to the
irmohi Akhara. The outer courtyard is once again to be shared by the Nirmohi Akh
ara 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 repres
enting 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 se
parate 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 d
irections 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 Rag
hubirdas 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 Ra
m s birthplace.
In his February 24, 1885, order, the judge said: It (chabootra) was so close to t
he 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 35
6 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 co
uld 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 sam
e 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 surroun
ding a mosque erected some 350 years ago, owing to the bigotry and tyranny of th
e emperor who purposely chose this holy spot, according to Hindu legend, as the
site of his mosque.

INTERNATIONAL AFFAIRS
Gillard manages to retain power in Australia elections
On September 7, 2010, ending weeks of political uncertainty, Australia s first wom
an Prime Minister Julia Gillard staked claim to form a new government after two
king-maker independent MPs extended support to her Labour party, giving it a waf
er-thin one-seat majority in the first hung Parliament in nearly 70 years.
Labour now controls 76 seats in Parliament s 150-member House of Representatives,
with the opposition Coalition of Liberal party leader Tony Abbott having 74 seat
s.
Gillard said her minority government would be held to higher standards of accoun
tability as a result of the deal struck with the independents. She added that he
r government will spend $9.9 billion on development projects as part of the deal
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 continu
es, partly because other mainstream parties do not trust the single, largest par
ty, Unified Communist Party of Nepal (Maoist), because it continues to put its f
aith 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 vo
ted for a Constituent Assembly and an interim government in 2008. Maoists emerge
d as the largest single party but fell 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 in
to the Nepalese Army. It also tried to take arbitrary decisions and sought the r
emoval 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. Th
e Assembly extended its own life by one year to complete the task. But differenc
es 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 Maoi
st guerrillas, Prachanda resigned as Prime Minoster and Maoists pulled out of th
e government in 2009; then they forced the next government headed by Madhav Kuma
r Nepal of UML to also quit.
China-Japan spat
China suspended high-level exchanges with Japan on September 19, 2010, and promi
sed tough counter-measures after a Japanese court extended the detention of a Ch
inese captain whose trawler collided with two Japanese coastguard ships.
The spat between Asia s two largest economies has flared since Japan arrested the
captain, accusing him of deliberately striking a patrol ship and obstructing pub
lic 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 Convent
ion 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) cou
ntries, had led the campaign against the proposed convention on various grounds.
It had argued that self-determination should be outside the purview of the conv
ention. It had also insisted that international humanitarian laws should be take
n into account while finalising the text of the convention. Both these objection
s 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 int
ernational intervention on the issue.
The opposition to the convention had also come from the US and Israel with the l
atter insisting that acting against terrorists indulging in killing innocent peo
ple 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 h
avens.
The situation has considerably changed with just a handful of countries still no
t convinced why they should back it. Most countries are now in favour of the earl
y 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 unit
ed and determined to jointly fight the menace of terrorism.