CURRENT NATIONAL AFFAIRS: MARCH-APRIL 2009

India, Chile sign four pacts: Chilean President Michelle Bachelet visited India on
March 17, 2009. During the meeting with Prime Minister Manmohan Singh, the
two leaders reiterated that early conclusion of the Comprehensive Convention on
International Terrorism was imperative to consoli-dation of counter-terrorism
efforts within the UN. The two sides also signed four pacts, including one on
cooperation in exploration and utilization of outer space for peaceful purposes.
The two countries also decided to support each other’s candidature for non-
permanent membership of the UN Security Council for 2011-12 (India) and 2014-
15 (Chile).

Economy staring at deflation: India is staring at deflation, or negative inflation,

with the official inflation rate falling to 0.44%—the lowest since 1977. Food
prices, however, continued to be high, with food grains roughly 9% costlier than a
year ago, reinforcing a cruel paradox for consumers that they hear about zero
inflation but face high prices when they buy their groceries. With the Wholesale
Price Index (WPI) falling by one point to 226.7 for the week ending March 7,
2009—the same level at which the index was on March 29, 2008—the year-on-
year inflation rate became zero by the last week of March. Planning Commission
Deputy Chairperson Montek Singh Ahluwalia, however, ruled out any possibility
of the economy slipping into a state of deflation.
IMF pegs India’s growth at 5.25% for FY 10: India’s growth is likely to slow down
in 2008-09 on falling corporate investment and deteriorating global outlook, the
International Monetary Fund has said. Partly reflecting the deteriorating global
outlook, IMF, which concluded its India consultations on March 6, 2009, in a
statement projected India’s growth to moderate to 6.25 per cent in 2008-09 and
further to 5.25 per cent in 2009-10. However, India has forecast growth at 7.1 per
cent for 2008-09. The Fund said corporate investment, the major growth driver
during recent years, is expected to slow because of weakening profitability and
confidence, and tightening of financing conditions from foreign and non-bank
sources. However, the world body said policy measures to stimulate Indian
economy and a good harvest should support domestic demand. Even as the
reserves have declined in 2008-09, from a historic peak of $315 billion in May
2008 to $252 billion as of February 6, 2009, IMF said the reserves remain
adequate compared to India’s gross financing requirement and imports.

India to seek additional $5.2b from World Bank: As a contra-cyclical measure,

India proposes to seek an additional assistance of $5.2 billion from the World
Bank for recapitalisation of State-owned commercial banks and infrastructure
projects. India, at present, receives $3.2 billion annually from the World Bank.
India also plans to increase its share in the quotas of multilateral development
banks like the International Monetary Fund and Asian Deve-lopment Bank after
major stakeholders in these institutions bring forward the issue of quota review
and expanding in accordance with current realities that will give proper
representation to the emerging economies. However, there is no proposal to
commit any additional resources towards the overall fiscal stimulus of $1.1 trillion
announced by the G-20 summit.

India registers 2 million tuberculosis cases in 2007: The number of people

infected with both tuberculosis (TB) and HIV is twice what researchers previously
thought. The World Health Organisation’s (WHO) annual report on TB, presented
in Rio, indicates that there were 1.37 million cases of people with both TB and HIV
in 2007, the latest year for which statistics are available. Asia registered the most
TB cases in 2007, with 55%, while Africa had 31%. Among nations, India had the
most cases with two million; China had 1.3 million and Indonesia 530,000.

India to get Boeing’s maritime recce aircraft: The US administration has cleared
the $2.1 billion contract for US aviation major Boeing to supply eight P-8I
maritime patrol aircraft to India, the largest American arms sale to India to date.
The deal surpasses an earlier $1 billion Lockheed sale of six C-130J Super Hercules
military transport planes to the Indian Air Force (IAF). The Indian Navy is Boeing’s
first international customer for the P-8, a long-range maritime reconnaissance
and anti-submarine warfare aircraft capable of broad area, maritime and littoral
operations. The first flight test is scheduled in 2009 and initial operational
capability is slated for 2013. Boeing will deliver the first P-8I around 2013 and the
remaining seven by 2015.
President’s rule imposed in Meghalaya: On March 18, 2009, the Union Cabinet
imposed President’s Rule in Meghalaya but decided to keep the Assembly in
suspended animation. Chief Minister Donkupar Roy, who had survived a trust
vote on March 16, with the help of a controversial casting vote by the Speaker,
described the decision as murder of democracy.

Series of blasts in Assam: On April 6, 2009, just ten days before Assam was to go
to the polls, and 24 hours before Prime Minister Man-mohan Singh was to land in
his home State, Assam was rocked by five deadly explosions that left at least nine
people dead and more than 60 people injured. The finger of suspicion pointed to
the northeast’s most active terrorist outfit, the United Liberation Front of Asom
(ULFA), which was observing its 30th ‘Raising Day’ on the same day. In the past
also ULFA had triggered blasts in the State to observe the day and also planted
bombs just ahead of VVIP visits, the deadliest being serial blasts in January 2009,
just ahead of Mr Chidambaram’s first visit to Guwahati as Home Minister. A police
officer scanning the site said the explosion was caused by an improvised explosive
device planted either on a bicycle or a motorcycle.
 CURRENT INTERNATIONAL AFFAIRS

G-20 summit in London: On April 2, 2009, leaders of the Group of 20 countries

met in London and agreed to a $ 1.1 trillion (Rs 55 lakh crore) deal to combat the
worst economic downturn since the Great Depression. The key points of the
declaration issued were: An end to banking secrecy; Action against tax havens;
Improve global accounting standards; Resist protectionism and promote global
trade; No new barriers to investment or trade; New rules on corporate pay; Sale
of gold reserves to help poor countries; Financial Stability Board with India as
member; New regulations for financial institutions, markets and instruments,
including hedge funds.

IMF paints gloomy picture of global economy: The International Monetary Fund
has said the global economy in 2009 is likely to contract for the first time since the
Second World War. At this point, we expect global GDP to decline between half a
per cent and one per cent in 2009 before recovery gradually gets underway in
2010, a senior official said.

South Asia doing better due to India’s resilience: India’s economy is estimated to
have grown by 7.1 per cent in 2008, providing an anchor of economic stability in
the region, concludes the Economic and Social Survey of Asia and the Pacific
(ESCAP) 2009. It predicts 6 per cent economic growth for India in 2009. The ESCAP
notes India’s measures to improve the liqui-dity of the financial sector and its
relaxed monetary policy, and predicts that the fiscal stimulus packages offered by
the government would soften the economic downturn and further strengthen
domestic demand.

China, US caught in naval row: On March 10, 2009, China angrily accused a US
navy surveillance ship of violating international law in a face-off with its fleet of
Hainan, home to its strategic island naval base. China has lodged a solemn
representation that the USNS Impeccable conducted activities in China’s special
economic zone in the South China Sea without China’s permission. A US defence
department statement said the Chinese vessels shadowed and aggressively
maneuvered in dangerously close proximity to the USNS Impeccable, an unarmed
ocean surveillance vessel, with one ship coming within 25 feet. The confrontation
occurred soon after US Secretary of State Hillary Clinton’s trip to Beijing to gather
much needed Chinese support for the US economic recovery.

N. Korea launches rocket, world seeks punishment: On April 5, 2009, North Korea
fired a long-range rocket, provoking international outrage and prompting the UN
Security Council to call an emergency meeting. The reclusive communist State
said a satellite was launched into orbit and circled the earth transmitting
revolutionary songs. Analysts say the launch was effectively a test of a ballistic
missile designed to carry a warhead, potentially as far as Alaska.
Chavez says yes to Russian military base: Russia is planning to open an airbase
for its strategic nuclear bombers in Venezuela in a snub to the United States that
taints a promised rapprochement between Moscow and Washington. Venezuela’s
President, Hugo Chavez, has offered a Caribbean island for the base.

US weighs expanding Taliban strike in Pakistan: US President Barack Obama and

his national security advisers are considering expanding the American covert war
in Pakistan far beyond the unruly tribal areas, to strike at a different centre of
Taliban power in Baluchistan, where top Taliban leaders are orchestrating attacks
into southern Afghanistan. A second option, officials say, is to significantly boost
the US commitment to train Afghanistan troops, with Americans taking on the
Taliban with increasing help from the Afghan military. A third option would
involve devoting full US and North Atlantic Treaty Organisation (NATO) resources
to a large-scale counter-insurgency effort. But Obama would be bound to face
considerable opposition within NATO. At the very time the US is seeking to
expand its presence in Afghanistan, many of the allies are scheduled to leave.

US offers Pak cheque on terror: On March 27, 2009, US Presi-dent Barack Obama
unveiled his plan for winning the war on terrorism in Pakistan and Afghanistan,
describing Al-Qaida and its extre-mist allies as a “cancer that risks killing Pakistan
from within” and noting that the future of Afghanistan is “inextricably linked” to
that of Pakistan. The US President also sought support for legislation that would
increase US financial aid to Pakistan. But, he also warned that the US would “not
provide a blank cheque” and expected results from the Pakistani government.
Strategic experts, however, wonder whether the “new policy” would actually help
defeat the Al-Qaida and the Taliban. India has already cautioned the US against
treating any section of the Taliban as ‘good’. Besides, Pakistan has always in the
past used military aid from the US against India, the experts argued.

Global meeting on water crisis: Government ministers from 120 countries,

scientists and campaigners met in Istanbul from March 16, 2009 to discuss how to
avert a global water crisis and ease tensions between States fighting over rivers,
lakes and glaciers. The world’s population of 6.6 billion is forecast to rise by 2.5
billion by 2050. Most of the growth will be in developing countries, much of it in
region where water is already scarce. As populations and living standards rise, a
global water crisis looms unless countries take urgent action, the international
body said. The agenda for the talks included how to avert catastrophic floods and
droughts as climate patterns change, and how the global financial crisis threatens
to hit large scale water infra-structure projects within the next several years.

Chaudhry back as Chief Justice of Pakistan: Pakistan’s sacked Chief Justice

Iftikhar Chaudhry got back his office on March 22, 2009, a week after the
government gave in to protests that took the nation on the threshold of civil
unrest. Chaudhry and 60 other jurists had been fired by former President Pervez
Musharraf in November 2007, amid fears that the judiciary might disqualify him
for simultaneously holding the offices of President and the military Chief. After
Zardari replaced Musharraf as President he backed out on promises to re-instate
Chaudhry. The differences with Nawaz Sharif reached crisis proportions in
February 2009. The climb-down by President Zardari led lawyers and Nawaz Sharif
to call off the “Long March”. However, the stand-off with lawyers and Nawaz
Sharif, and the subsequent climb-down has considerably weakened President
Zardari and eroded his credibility.

Taliban strike at Lahore police school: On March 30, 2009, in a 26/11-style attack
on a Pakistani police training school on the outskirts of Lahore, barely 12 km from
the Wagah border, heavily armed terrorists rampaged for eight hours through a
complex teeming with hundreds of trainees, killing at least eight cadets and
wounding 89 others before fighting a pitched battle with elite commandos. After
regaining control of the premises, security forces said four terrorists were dead
and three had been nabbed. The assault comes within a month of a similar
operation in which gunmen attacked the Sri Lankan cricket team in Lahore, killing
six policemen and a bus driver. All 14 assailants escaped.
Extra - GK

Major recommendations of the 12th Finance Commission are:

1. Centre and States to improve the combined tax-GDP ratio of 17.6% of 2009-10.

2. Fiscal deficit to GDP targets for Centre and States to be fixed at 3%.

3. Revenue deficit of the Centre and States to be brought down to zero by 2008-
09.

4. Interest payments relative to revenue receipts to be brought down to 28% and

15% in case of Centre and States, respectively.

5. The share of States in the net proceeds of sharable central taxes fixed at 30.5%,
treating additional excise duties in lieu of sales tax as part of general pool of
central taxes.

6. Share of States to come down to 29.5%, when States are allowed to levy sales
tax on sugar, textiles and tobacco.

7. In case of any legislation enacted in respect of service tax, after the notification
of the 88th amendment to the Constitution, revenue accruing to a State should
not be less than the share that would accrue to it, had the entire service tax
proceeds been part of the sharable pool.

8. A grant of Rs 20,000 crore for Panchayati Raj institutions and Rs 5,000 crore for
urban local bodies to be given to States for a period of 2005-10.
9. Priority to be given to expenditure on operation and maintenance costs of
water supply and sanitation, while utilizing the grants for the Panchayats.

10. The scheme of calamity Relief Fund (CRF) to continue in its present form with
contributions from Centre and States in ratio of 75 : 25, the size of the fund
worked out at Rs 21,333 crore for the period of 2005-10.

11. Non-plan revenue deficit grant of Rs 56.856 crore recommended to 15 States

for the period 2005-10.

12. Grants amounting to Rs 10,172 crore recommended for the education sector
to 8 States.

13. A grant of Rs 15,000 crore recommended for roads and bridges, which is in
addition to the normal expenditure of States.

Bharat Nirman programme envisages:

1. A four-year business plan for rural infrastructure.

2. Bring additional one crore hectare of land under assured irrigation.

3. Connect all villages that have a population of 1000 (or 500 in hilly/tribal area)
with an all-weather road.

4. Construct 60 lakh additional houses for the poor.

5. Provide drinking water to all habitations.

6. Reach electricity to all villages and offer electricity connection to 2.3 crore
households.

7. Give telephone connectivity to all villages.

The policy brief for a Global Green New Deal, developed by economist and the
UN ahead of the G-20 meeting of world leaders in London on April 2, 2009,
highlights the benefits of investing a significant amount of the $ 3 trillion-worth of
global stimulus packages in five areas. The UN Environment Programme said
these areas include raising the energy efficiency of old and new buildings, and
more emphasis on renewable energy sources. The three other areas are:
sustainable transport, including hybrid vehicles, high-speed rail and bus rapid
transit systems; the planet’s ecological infrastructure, including freshwaters,
forests, soils and coral reefs, and sustainable agriculture, including organic
production.

The Times of India’s Teach India campaign has received the only grand prix at the
creative Abby awards at Goafest 2009.

India’s first human tooth bank has been set-up at the Government Medical
College, Lucknow.

Ordnance Factories Day is observed on March 18.

World Water Day is observed on March 23.

Earth Hour was observed on March 29, 2009.

World Health Day is celebrated on April 7. The WHO set the theme for year 2009
as: “resilience and safety of health facilities and workers who treat those affected
in emergencies.”

On March 5, 2009, the Reserve Bank of India (RBI announced a 50 basis points
reduction in repo and reverse repo rates, from 5.5 per cent to 5 per cent, as part
of efforts to moderate the cost of borrowing by a slowing economy.

STD and local calls from cell-phones became 20% cheaper from April 1, 2009,
following a directive from the telecom regulator asking mobile service providers
to slash the fee they pay each other for moving calls between networks.

With a fortune of US$ 40 billion, software czar Bill Gates has regained his position
as the world’s wealthiest from his friend and legendary investor Warren Buffett,
even as the economic crisis wiped off $ 2 trillion from the wealth of billionaires
across the world. Gates, who himself lost US$ 18 billion in the past one year, is
followed by Buffett (US$ 37 billion) at the second and Mexican tycoon Carlos Slim
(US$ 35 billion) at the third position, as per the world billionaires’ list released by
the US magazine Forbes. Indian petro-chemicals giant Reliance Industries
Chairman and MD Mukesh Ambani has been ranked as the richest among all
Indians with a net worth of US$ 19.5 billion, followed by NRI steel tycoon Lakshmi
Mittal (US$ 19.3 billion). Ambani is ranked seventh in the global list (down from
fifth last year) and Mittal is at eighth position (fourth in 2008).

The Union government has chosen well-known Chennai-based ad and feature

filmmaker Bharatbala to organize the opening and closing ceremonies of the 2010
Commonwealth Games. Bharatbala is famous for making India-centric patriotic
films like Vande Mataram-Ma Tujhe Salaam and Jana Gana Mana.

The International Monetary Fund (IMF) has forecast that India’s Gross Domestic
Product (GDP) growth will slow dramatically to 6.25% in 2008-09, and to 5.25% in
the 2009-10. This is well below the 9% growth in 2007-08 and even lower than the
government’s prediction of 7.1% growth in 2008-09.

India has slipped 11 positions to be ranked 75th in a list of world’s best countries
for business, compiled by US publication Forbes, as the country lost ground in
areas like trade freedom, technology, corporate tax rate and corruption. The list
has been topped for the second year in a row by Denmark. The US has moved up
two position to be ranked second on the list. Besides, Canada and Singapore have
moved up four spots each to number three and four, respectively. Other
countries in the top 10 include New Zealand, UK, Sweden, Australia, Hong Kong
and Norway.

The fabled Pearl Carpet of Baroda has become the world’s most expensive rug to
be auctioned after it fetched $ 5.5 million at an auction in Doha. The rare jewelled
master-piece that was once part of Maharaja Khande Rao Gaekwad’s collection
went under the hammer as part of Sotheby’s first international auction series in
the Middle East.

Works of three Asia-born authors figure in the long list of 2009’s Orange Prize for
Fiction, awarded for writings in English by women, but there are no Indians
among the 20. The three novels are Pakistan-born Kamila Shamsie’s Burnt
Shadows, Malaysia-born Preeta Samarasan’s Evening is the Whole Day and Sri
Lanka-born V.V. Ganeshananthan’s Love Marriage. The Orange Prize is UK’s only
annual book award for fiction written by a woman.

First-ever nuclear-weapon-free zone in Central Asia has come into force with the
pact being ratified between the nations in the region. All five Central Asian
Nations—Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan—have
ratified the treaty for a nuclear-weapon-free zone, first formally proposed by
Uzbek President Islam Karimov at the General Assembly in 1993.
The Elliott wave theory, created by US market analyst Ralph Elliott in 1938,
attempts to predict future price moves by dividing past trends into sections, or
waves, and calculating changes in value. Gainesville, Georgia-based Elliott Wave
International was founded by Robert Prechter, who was famous for cautioning
investors that stocks would slump two weeks before the 1987 stock market crash.

Multi Screen Media, formerly Sony Entertainment Television, and World Sports
Group have been signed as the official broadcast partners for the DLF Indian
Premier League in a fresh nine-year deal running through to 2017, for a whopping
Rs 8,200 crore.

Homai Vyarawala, 96, is the first woman press photographer of India.

Historian Ramachandra Guha has raked in Rs 97 lakh for a seven book deal with
Penguin India, which includes a two volume biography of Mahatma Gandhi.
Traditionally, big money in India goes to the novelists. Amitav Ghosh’s three book
deal, the first of which is Sea of Poppies, got the author a reported advance of Rs
18 lakh per book. It’s only Nandan Nilekani’s Imagining India that got a heftier
advance of a reported Rs 25 lakh, that too for a non-fiction book.
The Union government has inked the Rs 10,000 crore project deal with Israel to
develop new-generation medium range surface to air missile systems, capable of
detecting and destroying hostile aircraft and spy drones at a range of 120 km.

The United Stock Exchange of India, promoted by State-run MMTC and brokerage
firm Jaypee Capital, will start trading in currency derivatives by July 2009. This will
be the fourth exchange after NSE, BSE and MCX-SX to introduce currency futures.
Besides MMTC and Jaypee Capital, the exchange is also promoted by 11 banks,
including the Federal Bank.

India spends less than 1.2% of its GDP on health sector. But, it takes enough care
while caring for foreign patients. The country ranks second in the world in medical
tourism, with Thailand leading the pack. In 2007, Indian hospitals treated 4.5 lakh
patients from other countries, compared to 12 lakh by Thailand’s.

Former President APJ Abdul Kalam unveiled the inaugural issue of a monthly
magazine, India Matters, launched by the Consulate General of India in Dubai. The
publication will focus on economic issues and endeavour to promote and
strengthen the India-UAE economic partnership