CURRENT AFFAIRS: MARCH-APRIL 2009

CURRENT NATIONAL AFFAIRSIndia, 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. 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. 12. 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

CURRENT AFFAIRS: FEB-MARCH 2009

CURRENT NATIONAL AFFAIRS Third stimulus package:The Union government, on February 25, 2009, unveiled a Rs 30,000-crore stimulus package, the third in a row to boost demand in an economy that has been feeling the heat of the global meltdown. The package includes a cut in the median excise duty and service tax rates by 2%. All products that attracted an excise rate of 10% will now be subject to only 8% while service tax on all products is down to 10%. On the other hand, this means the fiscal deficit of the government in 2009-10 will increase to Rs 3,61,935 crore, from Rs 3,32,835 crore estimated in the interim budget announced on February 16, 2009, provided all other estimates remain the same. So, fiscal deficit will again cross 6% of GDP as in 2008-09. Interim Budget: On February 16, 2009, Finance Minister Pranab Mukherjee presented the interim Budget to the Parliament. The largely insipid Interim Budget, however, ensured adequate, even heightened, budgetary allocation to its major flagship programmes affecting the “common man”. Enhanced allocations have, however, been made only to sectors that promise employment generation and infrastructure development and help, in turn, to maintain the fiscal tempo by addressing the economic slowdown. NREGA, JNNURM (Jawaharlal Nehru Urban Renewal Mission) and Bharat Nirmal programmes have emerged the biggest gainers in this category. Budget allocation for education has increased by about Rs 4,000 crore over 2008-09. The government has allocated Rs 1,41,703 crore for defence, which is 34 per cent rise over the previous fiscal and is one of the steepest hikes in recent years. The revised fiscal deficit for 2008-09 is now estimated at as high as 6 per cent of Gross Domestic Product (GDP), against the budget estimate of 2.5 per cent. In money terms, the fiscal deficit is Rs 3,26,515 crore, against the intended Rs 1,33,287 crore or nearly 2.5 times the targeted amount. Railway Budget 2009: On February 14, 2009, Union Railway Minister Lalu Prasad presented the Railway Budget to the Parliament. The high point of this Budget was a 2% cut in most long distance fares. The railways were set to achieve a cumulative cash surplus of Rs 90,000 crore over the course of his tenure, he pointed out. Passenger traffic is expected to go up by 7 pc and gross traffic receipts are estimated at Rs 93,159 cr. Steps to boost exports: During 2008-09, India did achieve an export growth of 30.9 per cent till September 2008, but since then there has been a setback due to the global recession. The following sops have been announced by the Union government to boost exports: Customs duty under export promotion capital goods scheme cut to 3 per cent from 5 per cent; Special incentive of Rs 325 crore for various sectors like handmade carpets, leather and technical textiles from April 1, 2009; Threshold limit for recognition as premier trading house reduced to Rs 7,500 crore; Benefit of 5 per cent under “focus product, focus market” scheme for export of handmade carpets; Authorised persons of gems and jewellery units can personally carry imported gold of up to 10 kg; Obligation under export promotion capital goods scheme extended till 2009-10 for sops availed during 2008-09; Opening of an independent office of DGFT at Srinagar. Unique ID project: Marking the beginning of the Herculean task of providing every Indian citizen with a National Identity Card, the UPA government has earmarked Rs 100 crore for setting up the Unique Identification Authority of India (UIAI) in the annual plan of 2009-10. The project is aimed at establishing citizenship, addressing security-related issues and containing frauds, especially in government run schemes. The UIAI will be responsible for creating and maintaining the core database and laying down all necessary procedures for issuance and use of the unique ID card, including arrangements for collection, validation and authentication of information, proper security of data and rules for sharing and access of data. Initially, the UID number will be assigned to all voters by building on current electoral roll data. Progressively, other persons, including those below 18 years, will be added to the list. S&P review lowers credit rating: India’s credit rating is now just one step away from junk status, as Standard and Poor’s ratings services (S&P) have lowered its outlook on the country’s long-term sovereign rating from stable to negative, because tax cuts and extra spending to win votes and fight the economic slowdown have pushed the fiscal deficit to a record high. Such a move can raise the cost for local firms borrowing abroad as well as weaken the rupee, though some analysts do not expect that to happen. Number of female post graduates in urban India rises: According to the latest report of the National Sample Survey Organisation (NSSO), the number of post graduates in every 1,000 males surveyed has increased from 28 in 2001-02 to 35 in 2006-07 in urban India. The number of female post graduates has increased from 19 to 26 during the same period. The number of male and female graduates during the same period has increased from 97 and 67 to 111 and 82, respectively. The incidence of illiteracy in rural areas has declined from 39.5% in 2001-02 to 34.9% in 2006-07. In urban sector, the same has declined from 19.4% to 16.5% during the same period. What is significant is that in both urban and rural sectors, the illiteracy rate of female has declined at a higher rate than that of the male. Female illiteracy rate has declined by 4.6 percentage points in rural areas and 3.4 percentage points decline of the male illiteracy rate in rural and urban sector respectively, during 2001-02 to 2006-07. India tops world hunger chart: India is failing its rural poor with 230 million people being undernourished the highest for any country in the world. Malnutrition accounts for nearly 50% of child deaths in India as every third adult (aged 15-49 years) is reported to be thin (BMI less than 18.5). According to the latest report on the state of food insecurity in rural India, brought out by the United Nations World Food Programme (WFP), more than 1.5 million children are at risk of becoming malnourished because of rising global food prices. The report said that while general inflation declined from a 13-year high exceeding 12% in July 2008 to less than 5% by the end of January 2009, the inflation for food articles doubled from 5% to over 11% during the same period. India ranks 94th in the Global Hunger Index of 119 countries, the report said. More than 27% of world’s undernourished population lives in India. Government fiddle opens floodgates to FDI: The Union government has relaxed guidelines on Foreign Direct Investment (FDI) for companies owned and controlled by Indian citizens. This effectively means foreign investment in FDI-restricted sectors like telecom, defence production and single-brand retail can cross set limits. The new guidelines also say that an investment made by a non-resident entity into an Indian company would be counted as foreign investment. Under the existing norms, if a firm with, say, 40% foreign equity and 60% Indian equity had invested Rs 100 crore in another firm, Rs 40 crore of this amount would be treated as FDI. Under the revised norms it will now be treated as zero FDI. Relaxation in foreign direct investment (FDI) norms would not apply to sectors such as multi-brand retail, gambling, atomic energy and lottery where the government prohibits foreign investment. Union government to infuse capital in three PSU banks: In order to strengthen the Public Sector Banks, the Union government has decided to infuse Rs 3,800 crore into three State-run banks—Central Bank of India will get Rs 1,400 crore, while UCO Bank and Vijaya Bank will get Rs 1,200 crore each. The capital infusion would be done in two tranches—the first tranche would be made available during 2008-09 and the remaining in 2009-10. The capital infusion will help these banks to raise capital adequacy over 12%, much above the Basel II norms of 9%. The government holding in Central Bank of India currently stands at 80.2% cent, in UCO bank 76%, while in Vijaya Bank it is 53%. CEC’s recommendation rejected by the President:President Pratibha Patil has rejected the controversial recommendation by Chief Election Commissioner (CEC) N. Gopalaswami for the removal of Election Commissioner Navin Chawla, who is now to head the Commission after Mr Gopalaswami’s term comes to end in April 2009. The decision came as no surprise since the government had said CEC was not empowered to seek removal of a fellow Commissioner except when a Presidential reference was made. Gopalaswami’s action had also attracted sharp criticism from legal luminaries, although main Opposition party, Bharatiya Janata Party, had strongly supported the move. The battle in the three-member Election Commission had taken a new turn on January 31, 2009 when Gopalaswami recommended the removal of Chawla on a petition by the BJP, which had accused him of partisan functioning, sparking a furore. General Election dates announced: India, the world’s largest democracy with 714 million voters, will elect its representatives over five phases between April 16 and May 13, 2009. The EC will also hold simultaneous polls in Andhra Pradesh, Orissa and Sikkim. Incidentally, this is the first scheduled Parliamentary election after the Delimitation Commission redrew constituencies. Delimitation has also pushed up the number of scheduled caste seats in Parliament from 79 to 85 and scheduled tribe seats from 41 to 47. The 2009 polls will also be first photo-electoral rolls-based Parliamentary election, with 522 of the 543 Lok Sabha constituencies using this type of rolls. Standard drill during terror attack being readied:The Home Ministry is drawing up Standard Operating Procedures (SOPs) to deal with terror attacks as part of its 100-day action plan to be implemented by May 31, 2009. The guidelines, which will form part of the crisis management plan of MHA, will cover all aspects of a counter-terror response, including rushing central forces like NSG to the attack sites, evacuation of civilians and media from the site and its immediate surroundings, monitoring of communication lines and the command structure to be followed by various Central and State agencies as they confront terrorists. This is for the first time that SOPs would be prescribed for tackling terror crimes. As of now, SOPs are in place for Central forces and State police operating in Naxal-infested States. Sukh Ram found guilty of corruption: After more than 12 years, the law has completed its first course for former Telecom Minister Sukh Ram when a City Court in Delhi convicted him for possessing assets disproportionate to his sources of income. Special CBI judge V.K. Maheshwari held Sukh Ram guilty under provisions of the Prevention of Corruption Act, 1988, and amassing the properties amounting to Rs 4.25 crore which were disproportionate to his known source of income, between 1991 to 1996, when he was Minister of State for Communications in the Narasimha Rao government. Sukh Ram has been handed down a three-year prison term. Minorities Bill gets approval:The Lok Sabha has passed the National Commission for Minorities Education Amendment Bill that grants statutory power to the Commission, which will no longer need to consult States before according minority status to any educational institute. The bill further enhances the strength of members of the Commission, which has several disputes pending for redressal. Dhaka proposes taskforce for terror: With the atmosphere between India and Bangladesh clearing up under the Sheikh Hasina government, India has got a pledge from Bangladesh that it would not allow terror groups to launch attacks against India from its soil. Security issues, along with trade, were on top of the agenda during External Affairs Minister Pranab Mukherjee’s one-day visit to Dhaka on February 9, 2009. Mr Mukherjee also discussed the viability of setting up a regional taskforce to fight terror. The only two deals that were signed by Mr Mukherjee and his Bangladeshi counterpart were on bilateral trade and investment. Mr Mukherjee said that the deals would cut down the trade gap which has been an issue for Bangladesh. IPL results in foreign players raking in the moolah:India, the cricketing nation, seemed to laugh at the global meltdown at an auction in February 2009, where crores were spent buying the services of 17 overseas players. Former England skippes Andrew Flintoff and Kevin Pietersen went for about Rs 7.5 crore apiece ($ 1.55 million), making them jointly the highest valued players in the Indian Premier League (IPL), more than M.S. Dhoni, bought for Rs six crore in 2008. Bangladesh’s paceman Mashrafe Mortaza would not know how to react to the Rs 2.93 crore the Kolkata Knight Riders have paid for his commercial value. After all, he was valued at a relatively low Rs 24.4 lakh. And then there was South African J.P. Duminy who was sold for Rs 4.64 crore. Whatever happened to the recession? Quipped actor Preity Zinta co-owner of Kings XI Punjab: Recession or no recession, cricket and entertainment always sell. And the IPL is about both. CURRENT INTERNATIONAL AFFAIRS Terror bouncer hits Lanka cricket team in Pakistan:On March 3, 2009, six Pakistani policemen were killed and six Sri Lankan cricketers were injured when gunmen armed with automatic weapons attacked the visiting team’s convoy as it headed for Lahore’s Gaddafi stadium. A military helicopter later evacuated the cricketers as Sri Lanka cancelled its Pakistan tour. Police said 12 terrorists were involved in the attack. India voiced its strong condemnation of the dastardly attack on Sri Lankan cricketers in Lahore, warning that such incidents would continue to occur until Pakistan dismantled the terrorist infrastructure on its territory. Pakistan acknowledges part of Mumbai attack was planned there: Pakistan has accepted for the first time that the Mumbai terrorist attacks were launched from its shores and at least partly plotted on its soil. Interior Ministry Chief Rehman Malik also said Pakistan had arrested most of the main suspects and had started criminal proceedings against them. India termed the development as positive and expressed willingness to share what-ever it can after examining the issues raised by Islamabad. The revelations appear to suggest that Pakistan is serious about punishing those behind the November attacks, which killed 183 people and stirred fear that the nuclear-armed neighbours could slide towards war. Pakistan—Election ban for Sharif brothers: Triggering a fresh round of political instability in Pakistan, former Prime Minister Nawaz Sharif and his brother, Shahbaz Sharif, Chief Minister of the Punjab province, have been barred from contesting elections and holding office. Within hours of the Supreme Court ruling on February 26, 2009, upholding the ban on the Sharif brothers, Governor’s rule was imposed on the Punjab province. As people hit the streets in Lahore, Nawaz Sharif accused President Asif Ali Zardari of being behind the move to disqualify him from contesting elections and asked people to come out on the streets to protest the move. The PML-N chief said that the bone of contention between his party and President Zardari was the NRO (National Reconciliation Ordinance) under which criminal cases against Zardari and other politicians were dropped by the Musharraf administration. The former PM said the reason why the Chief Justice and other deposed judges were not being reinstated was because these judges would question the validity of the NRO. Taliban seal truce in Pakistan’s Swat: Taliban fighters and Pakistani officials agreed on February 21, 2009, to a permanent ceasefire in the north-western Swat valley. The outlawed Tahreek-i-Taliban Swat (TTS) formally accepted the Swat accord. It also promised to release all security personnel in its custody, unconditionally. The Swat peace accord appeared progressing substantially with life returning rapidly to normalcy in Swat’s main cities. Having been freed from its engagement in Swat and Bajour, Pakistan army is likely to refocus full attention on tribal militants along the Afghanistan border. Bangladesh—BDR mutiny: The 33-hour mutiny by Bangladesh Rifles (BDR) troopers ended February 26, 2009, as the rebels laid down their arms in the face of an imminent attack by the army, which had moved tanks into position for an assault on the BDR headquarters in Dhaka. The mutiny by troopers of the Bangladesh rifles, the country’s border guards, had spread to several towns despite Prime Minister Sheikh Hasina’s warning of stern action to quell the unrest. Political observers said the government’s dilemma was that it was banking on the army to stop the rebellion, while the troopers’ grievances are largely centred on poor wages and discrimination as compared to the army. India and China may hold the key to world’s economic survival: In a survey of the global outlook for 2009, the Economist Intelligence Unit (EIU) makes some stark and dire observations. EIU believes that the economic crisis could last at least a couple of years. While the EIU survey says that China may hold the key to the world’s economic survival, many economists in India believe that it could be both India and China. These are the only two countries that could account for growth rates of at least 4.5%. Time blames Bush, Clinton, Jiabao for financial crisis: Former US Presidents George W. Bush and Bill Clinton, and Chinese Premier Wen Jiabao are on the list of 25 people to blame for the financial crisis, compiled by Time magazine. The list also features former Federal Reserve Chairman Alan Greenspan, past Securities and Exchange Commission Chief Chris Cox, former Treasury secretary Hank Paulson and American Consumers, among others. Pointing out that Bush embraced a governing philosophy of de-regulation, the magazine said it trickled down to federal oversight agencies, which in turn eased off on banks, and mortgage brokers. US economy drop biggest since 1982: The US economy suffered its deepest contraction since early 1982 in the fourth quarter, shrinking at a much worse-than-expected at a much worse-than-expected 6.2% annual rate as exports plunged and consumers slashed spending. A separate report showed mounting job losses had turned consumers gloomier in February, evidence that the US recession continues to deepen. The final Reuters/University of Michigan Consumer Sentiment Index for February fell to 56.3 from January’s 61.2. The commerce department said consumer spending which accounts for more than two-thirds of domestic economic activity, dropped at a 4.3 per cent rate in the fourth quarter, the biggest decline since the second quarter of 180. The spending decline dropped more than 3 percentage points off GDP. Success of US stimulus tough to measure: Deciding whether the US government’s $ 1.5 trillion economic bailout is a success or a failure may end up being more an exercise of politics and perception than exact science. Markers for determining the outcome of the treasury’s $700 billion in rescue funding for the financial sector and the $87 billion economic stimulus package are not all clear-cut and can end up relying on eye-of-the-beholder judgements. There are “the what if” scenarios and the possibility that the government’s best intentions will have unintended consequences. But experts tend to agree that doing nothing was not an option and, regardless of political affiliation. Some economists say the bailout of big banks was not helpful because it took away their incentive to restructure by providing a taxpayer-funded cushion. Additional American troops to Afghanistan: In an attempt to stabilize a deteriorating situation, President Barack Obama has approved sending 17,000 more US troops to Afghanistan over the next few months. It was Obama’s first major military decision. “There is no more solemn duty as President than the decision to deploy our armed forces into harm’s way”, he said. The United States already has 38,000 troops in Afghanistan, apart from 30,000 military personnel from allied nations. But the violence is expected to rise further in the spring and afterwards in the run-up to Presidential elections set for August 20, 2009. The new troops are expected to be deployed in the south, which has been worst hit. The situation in Afghanistan, Obama said, had not received the strategic attention, direction and resources it urgently required. Pakistan signs FTA with China: China and Pakistan signed a Free Trade Agreement (FTA) during the four-day visit of Pakistani President Asif Ali Zardari to Hubei and Shanghai, China. Zardari’s mission was largely focused on economy and investment issues because the Pakistani President did not get to meet the top echelons of Chinese leadership who were busy hosting the first official visit of Hilary Clinton, the US Secretary of State. Meanwhile, China has signed an agreement with Pakistan’s main Islamic party, Jamaat-e-Islami despite the fact that official credo of China is atheism. A China observer said as part of the agreement with Beijing’s Communist leaders, Jamaat-e-Islami has promised not to encourage Islamic Uighur separatists in the Xinjiang region, which is a hotbed of the East Turkmenistan movement. Bailed out US companies can’t hire people on H1-B:In what could be seen as a major blow to Indian IT professionals, the US Congress has prohibited banks and firms receiving federal bailout money from hiring people on H-1B visas in place of Americans laid off by them due to the economic meltdown. The measure forms part of the American Recovery and Reinvestment Act, popularly known as the Stimulus Bill. The Act makes a provision of USD 787 billion for reviving the battered US economy. The measure as finally approved by the Congress, would require the bailed-out banks to hire only Americans for two years unless they could prove they were not replacing laid-off Americans with guest workers. HAL, India’s military plane maker, and Bharat Electronics Ltd have jointly bid to build the Rustom-branded UAV of India’s Aeronautical Development Establishment, or ADE, which is designing the medium-altitude long-endurance Drone. In an effort to improve the capital adequacy of the public sector banks—UCO Bank, Central Bank of India and the Vijaya Bank—the Union government has decided to infuse Rs 3,800 crore into the three banks. Khmer Rouge was a Maoistregime that ruled Cambodia from 1975-1979. It was founded and led by Pol Pot, who died in 1998. It abolished religion, school and currency in a bid to create agrarian utopia. Providing legal space for green concerns, the Karnataka High Court has announced the setting up of the Bench to exclusively deal with environmental issues. This is a first in the legal history of the country. Mega Food Parks program is modelled on the lines of creation of a three-tier structure for value adding enabling infrastructure in food producing clusters in the country. The scheme aims to provide expenditure- linked financial assistance of 50% (75% in difficult and ITDP areas), limited to 50 crore per Mega Food Park, to leverage an equivalent investment in enabling infrastructure and Rs 200-250 crore in value adding activities. Locations of the mega food parks will be: Shirwal (Maharashtra), Ranchi (Jharkhand), Chikmanglur (Karnataka), Dharmapuri (Tamilnadu), Jalandhar (Punjab), Haridwar (Uttarakhand), Jagdishpur-Raibareily (UP), Jangipur (West Bengal), Chittoor (Andhra Pradesh), Nalbari—Assam (Northeast) India ranks 94th in the Global Hunger Index of 119 countries. Samrupa was the world’s first cloned buffalo calf. It was to be India’s answer to Dolly the sheep. But unlike Dolly, the first mammal cloned 13 years ago, who lived for seven years, Samrupa succumbed to a lung infection five days after it was born. The Planning Commission had recommended Maha-navratna status to BHEL, Bharat Petroleum, Hindustan Aeronautics, Hindustan Petroleum, Indian Oil, NMDC, Power Grid Corporation, REC and SAIL. Maha-navratna status would give these companies freedom to make investments up to 50% of their net worth, while the investment cap on a single project would go up to 25% of their net worth. The tag will also have given them greater functional autonomy for forming joint ventures. Delhi Metro has become the first rail network in the world to get a UN certificate for preventing over 90,000 tonnes of carbon dioxide from being released into the atmosphere. Oscar is the name given to the annual award given by the US-based Academy of Motion Picture, Arts and Science for achievement in film industry. The awards are given in 24 annual categories and 6 special categories. First Oscar award was given in 1929. India’s first dedicated Small and Medium Pharmaceutical Industry Centre (SMPIC) has been inaugurated in Mohali. The centre is located on the premises of the National Institute of Pharmaceutical Education and Research (NIPER). India has slipped three notches in the UNIDO’s industrial competitiveness index to feature at the 54th position, even as the government expressed optimism that the country would move up the ladder once the list is updated. ONGC and the newly-incorporated National Aviation Company of India Ltd (NACIL) are placed on the extremes in a recent survey of central PSUs, with the oil firm making the highest profits and the aviation giant incurring the biggest losses. ONGC earned a profit of Rs 16,702 crore in 2007-08, almost thrice its nearest rival Steel Authority of India Limited (SAIL). On the other extreme was NACIL, formed as a holding company after the merger of Air India and Indian Airlines in 2007, which incurred a loss of Rs 2,226 crore during the year. The contribution to the exchequer by 242 PSUs, which includes excise duty, customs duty, corporate tax and dividend, increased by more than 11% during 2007-08, according to the 48th Public enterprises Survey. However, PSU’s dividend and interest paid to the government totalled Rs 20,172.5 crore in 2007-08, marginally down from Rs 20,942 crore in the previous year. One of the Army’s oldest armoured regiments, 7 Cavalry, observed its 225th Raising Day in 2009. Raised in 1784, 7 Cavalry is the Army’s second oldest and the most highly decorated armoured unit, having earned 21 battle and theatre honours of which nine are from post-independence operations.

CURRENT AFFAIRS: JAN-FEB 2009

CURRENT NATIONAL AFFAIRS India, Kazakhstan ink N-accord: As part of its efforts to boost the country’s energy sources, India, on January 24, 2009, signed a civilian nuclear energy cooperation agreement with the uranium-rich Kazakhstan. The agreement was signed during the visit of President Nursultan Nazarbayev. India and Kazakhstan also signed four other key accords, including an extradition treaty. President Nazarbayev was also the chief guest at the Republic Day parade. Afghan President’s visit: Expressing solidarity with India in the wake of the Mumbai terror attacks, Afghan President Hamid Karzai, during his visit on January 12, 2009, joined Prime Minister Manmohan Singh in castigating Pakistan for reneging on its commitment not to allow the misuse of its territory for terrorist activities. This was President Karzai’s second visit to New Delhi within six months. He held extensive talks with Prime Minister Manmohan Singh on a wide range of issues, but the focus was on the Mumbai terror attacks. India inks safeguards pact with IAEA: On February 2, 2009, India signed a safeguards agreement with the International Atomic Energy Agency (IAEA) which paves the way for the supply of atomic fuel and technology by the international community to India after 34 years of nuclear isolation. The agreement would effectively bring 14 of India’s nuclear reactors under non-proliferation inspections of the international atomic watchdog. The IAEA currently applies safeguards to six nuclear reactors in India.  The India-specific safeguards agreement was unanimously approved by the IAEA Board of Governors on August 1, 2008. RBI leaves rates untouched, sees lower 7% growth:The Reserve Bank, on January 27, 2009, lowered the economic growth forecast to 7%, saying the global economic crisis has hit India shores, but kept key policy rates and ratio unchanged. The bank also lowered inflation estimates to 3% by March-end. In its quarterly review of the annual monetary policy, the apex bank extended special refinance facilities to banks up to September 30 for providing liquidity support to meet the funding requirements of mutual funds, non-banking finance companies by relaxing the maintenance of SLR up to 1.5%. The bank has injected over Rs 3,00,000 crore liquidity into the financial system through several changes in policy rates since October 2008. In the last three months, the repo rate, at which the apex bank lends short-term funds to banks, has been reduced from 9% to 5.5% and the reverse repo, at which the RBI accepts funds from banks, has been lowered from 6% to 4%. RBI said that the Central government’s fiscal deficit—the money spent more than the revenue raised and borrowed funds—would shoot up from the earlier estimate of 2.5% to 5.9% of the value of the country’s total economic output. Cabinet okays Rs 25,000 cr for NBFCs: The government has set in motion the process of providing liquidity support of up to Rs 25,000 crore to cash-strapped Non-Banking Finance Companies (NBFCs) to enable them to pay existing liabilities as was announced in the second stimulus package to spur sagging economic growth. A Stressed Asset Stabilisation Fund, set up for acquiring the stressed assets of IDBI, would function as a Special Purpose Vehicle (SPV) to provide money to non-deposit taking systemically important NBFCs. The SPV would issue government guaranteed securities, subject to a total amount of securities not exceeding Rs 20,000 crore with an additional Rs 5,000 crore, if needed. The funds will be used by NBFCs only to repay existing liabilities he said, adding the RBI would issue guidelines for pricing and lending in consultation with the Department of Financial Services. SEBI unveils norms for pledging of shares: The Securities and Exchange Board of India (SEBI) has spelt out the reporting norms for companies whose promoters have pledged shares to a third party. The market regulator has asked companies to disclose details of the promoters’ pledged shares within seven days of the date of receiving information from the promoters. In a circular dated January 28, 2009, SEBI said the promoters, who have pledged shares, have to disclose the details to the company within seven days of such a transaction. Further, the market regulator said that companies should disclose all the details pertaining to the promoters’ share pledge, if at the end of any quarter, the total number of such pledged shares exceeds 25,000 or one percentage of the total shareholding, whichever is lower. India lags in health spending: At 4.8 per cent of the GDP, India’s total annual health expenditure (THE) is among the poorest in the world, with only Nigeria, Indonesia and Bangladesh reporting lesser expenditure. The WHO recommends a total annual health expenditure of 6.5 per cent of a country’s GDP. The public health expenditure (PHE) in the country is as low as Rs 215 per capita per year. It works out to a shockingly low 1.2 per cent of the GDP and 25 per cent of the total health expenditure. That the basic health services are yet to reach the low-income groups is clear from the fact that a whopping 75 per cent funding of the health sector still comes from private sources. The national Samples Survey Organisation’s 60th round has reported 126 per cent increase in urban hospita-lization costs and 78 per cent increase in rural hospitalization costs in the private sector as compared to the 52nd NSSO conducted in 1995. India losing 1m neonates, 78,000 mothers annually:India is losing one million neonates annually, 82 per cent of them to birth-related infections (pneumonia, tetanus and diarrhea), asphyxia and pre-term birth, finds the latest UNICEF State of the World Children (SOWC) report. Maternal health scenario is even worse, with 78,000 women dying each year from complications related to pregnancy and childbirth. Three-quarters of all maternal deaths in India are occurring from hemorrhage (38 per cent), followed by infections (11 per cent), unsafe abortions (8 per cent) and hypertensive disorders (5 per cent). On an average, every seven minutes, one woman dies of pregnancy problems; institutional delivery rate remains a poor 40 per cent. State of education—Puducherry best, Bihar worst:India now has lesser number of single-teacher schools than it had a year ago. The latest government study on the state of elementary education in India shows that percentage of single-teacher schools in the country has declined from 11.76 in 2006-07 to 10.13 in 2007-2008, an improvement of 1.63 per cent. Among the States, Puducherry is ranked first in both primary and elementary education, while Bihar, Arunachal, West Bengal and Jhar-khand are at the bottom. Kerala is the first in upper primary education, while Delhi and Chandigarh are fourth and fifth, respectively. The government also lists Muslim students as a separate category saying the percentage of Muslim enrolment in primary classes increased to 10.49 in 2008 as against 9.39 the previous year. Jharkhand Chief Minister resigns following loss in by-poll: On January 12, 2009, Jharkhand Chief Minister Shibu Soren submitted his resignation to Governor Syed Sibte Razi, ending speculation on his continuance in the post after his defeat in the Tamar Assembly by-election.  On January 19, the Centre imposed President’s rule in Jhar-khand as no political alliance was in a position to form an alternative government. Soren lost to the Jhar-khand party’s Gopal Krishna Patar, also known as Raja Peter—a local Robin Hood—by nearly 9,000 votes. Raja Peter joins the ranks of MLAs with criminal backgrounds in Jharkhand. Satyam—A Rs 7,000 Crore Lie: Ramalinga Raju, the politically-connected promoter-chairman of Hyderabad headquartered Satyam Computers was lying for years to shareholders, employees and the world at large, building up to India’s largest corporate fraud of over Rs 7,000 crore. India’s fourth largest IT company—after TCS, Infosys and Wipro—was for years cooking its books by inflating revenues and profits, thus boosting its cash and bank balances; showing interest income where none existed; understating liability; and overstating debtors position (money due to it). This wasn’t some fly-by-night operator that had been caught out. Satyam is listed on the NYSE, boasts 185 Fortune 500 companies and the US government among clients and employs 53,000 people. The Union government has entrusting the probe to the Serious Fraud Investigations office, or SFIO. Heroes, villains can smoke again: Amitabh Bachchan and Shah Rukh Khan can again blow rings of smoke on celluloid. The Delhi High Court has struck down the Ministry of Health’s 2005 notification banning smoking scenes. The court said the ban violated a filmmaker’s right to freedom of speech and expression as guaranteed under Article 19. “Directors should not have multi-farious authorities breathing down their necks. A film must reflect the realities of life. It may be undesirable but it exists and is not banned by law”, Justice Sanjay Kishan Kaul said. The order came on a petition filed by director Mahesh Bhatt questioning the validity of a notification under the Cigarettes and Other Tobacco Products (Prohibition of advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act. CURRENT INTERNATIONAL AFFAIRS Obama takes over as 44th President of USA: On January 20, 2009, Barack Obama became first black American to occupy White House, fulfilling Martin Luther King’s dream sooner than anyone had imagined. He was sworn in as the 44th President of the United States. The event marked the end of an eight-year chapter of George W. Bush’s Presidency, a record blighted by unfinished wars, record deficits and an economy in recession.   United States pulls back as Iraqis vote: On February 1, 2009, Iraqis across the country voted in provincial elections that will help shape their future, but regardless of the outcome it is clear that the Americans are already drifting offstage and that most Iraqis are ready to see them go. The signs of mutual disengagement were everywhere. In the days leading up to the elections, it was possible to drive safely from near the Turkish border in the north to Baghdad and on south to Basra, just a few miles from the Persian Gulf without seeing an American convoy. In the Green Zone, the Americans retreated to their vast, garrisoned new embassy compound. Iraqi soldiers now handle all checkpoints. In the US, many view the war as already over, even though more than 140,000 American soldiers remain in Iraq. Allies of Iraq’s Prime Minister appeared to have made gains in the provincial elections, rewarding groups credited with reining in insurgents and militias, according to unofficial projections.   $138-b lifeline for Bank of America: In yet another rescue act, the US government decided to inject $20 billion of fresh capital into financial services major Bank of America, apart from standing guarantee to its toxic assets worth $118 billion. While the treasury will invest $20 billion in the firm in return for preferred stocks, FDIC, along with the Treasury, will guarantee bad assets. Bank of America would also comply with enhanced exe-cutive compensation restrictions. The bank, which recently acquired Merrill Lynch, has already received $25 billion from the Troubled Asset Relief Program.   UK launches second rescue plan: Britain unveiled a second bank rescue plan and Royal Bank of Scotland recorded the biggest loss in UK corporate history in the month of January 2009, while a cut in Spain’s credit rating caused fresh market wobbles. Announcing Britain’s bank bailout, Finance Minister Alistair Darling said fourth-quarter GDP figures would confirm the UK was in recession for the first time since 1992. The European Commission, meanwhile, forecast the euro zone economy would contract for the first time in 2009, by 1.9%, and grow by only 0.4% in 2010. RBS said it made a loss of up to £28 billion ($41.3 billion) in 2008, including a huge goodwill hit on its purchase of parts of ABN Amro in 2007. Britain pumped £37 billion into the banks in October 2008 but credit remains scarce. The UK government will now allow banks to insure themselves against losses on their riskiest assets. It will offer guarantees on their debt and set up a £50-billion fund to buy up high-quality securities to get cash flowing freely again.   Sri Lanka—LTTE last post falls, Army says war over:On January 25, 2009, Sri Lankan troops rampaged through stiff resistance to capture the garrison town of Mullaitivu, the last military stronghold of the Liberation Tigers of Tamil Eelam, making a decisive victory in the war for territorial control of the island’s north and east. Earlier, on January 9, Elephant Pass, the last LTTE stronghold on the A-9 main highway also fell and enabled the military to re-open the Jaffna-Kandy supply route for people and troops instead of relying on supplies through ships.   Middle East—Tensions remain despite ceasefire: On January 18, 2009, Israel decided to halt its Gaza offensive without any agreement with Hamas. However, Hamas vowed to fight on. Gaza’s border crossings with Israel were initially allowed to open only for humanitarian supplies, with a more permanent solution linked to progress over negotiations. Later, Hamas also announced an immediate ceasefire by its fighters and allied groups in the Gaza Strip, adding that the Islamists gave Israel a week to pull out its troops. During the 22-day-long offensive, Israeli attacks killed more than 1,300 Palestinians, including some 700 civilians. Hundreds of gunmen were among the dead. Ten Israeli soldiers were killed as well as three Israeli civilians hit by rockets. The mounting civilian death toll in the Gaza Strip and mounting destruction and hardship in the territory brought strong international pressure on Israel to stop the offensive.   Obama, Hu discuss trade imbalances: On January 31, 2009, US President Barack Obama told Chinese leader Hu Jintao in a phone call that the two countries must work together to correct global trade imbalances and unclog credit markets to fight the world economic crisis. Hu told Obama that China firmly opposed trade or investments protectionism as part of settling the crisis and said Beijing would join Washington in promoting stable development at an economic summit in London in April 2009. Hu also acknowledged US efforts to address the world economic crisis and said the two countries should strengthen cooperation. In 2008 China overtook Japan as the largest foreign holder of US government debt and held $681.9 billion in US Treasuries as of November 2008. With the US expected to issue new debt to help pay for a huge economic stimulus package, China’s holdings could grow.   US cuts $ 55 m of terror aid to Pakistan: The Obama administration’s threat to make Pakistan more accountable in the war on terror is materializing quickly, with Washington now withholding $55 million from the latest tranche of reimbursement of expenses that Pakistan claims to have incurred while fighting against terrorism. The decision was taken after auditors raised objections about the bills given by Pakistan for expenses incurred in the war on the Pakistan-Afghan border. Financial advisor in Pakistan PM’s office, Shaukat Tarin, confirming the development, put down the US decision to a change in accounting procedures. He added that Pakistan has demanded a reassessment from Washington to enable release of the remaining amount. But the decision assumes significance in view of the Obama administration’s known stance that Islamabad must deliver on its commitment as a member of the coalition against terror, in order to receive assistance.   US sanctions on Pak N-scientist, 12 others: The US State Department has slapped sanctions on 13 individuals and three private companies because of their involvement in the Pakistan-led Abdul Qadeer Khan nuclear-proliferation network. The sanctions followed a multiyear US government review of information regarding the A.Q. Khan network. The entities provided an extensive international network for the proliferation of nuclear equipment and know-how that offered one-stop shopping for countries seeking to develop nuclear weapons, the State Department said. In 2008 a UN nuclear watchdog said the A.Q. Khan network smuggled nuclear weaponisation blueprints to Iran, Libya and North Korea and was active in 12 countries.   Lashkar-e-Toiba’s latest name: Jamaat-ud-dawa, the banned charity front of Lashkar-e-Toiba, has resurfaced as the Tehreek-e-Tahafuz Qibla Awal following the United Nations Security Council ban. A video in public domain shows JuD leaders and activists holding a rally under the banner Tehreek-e-Tahafuz Qibla Awal. The Indian establishment had been voicing concerns about JuD renaming itself in a bid to escape UNSC sanctions that included freezing of accounts, travel and arms ban. Sources have pointed out that JuD remained active in spite of the ban and kept updating its website regularly. Headquarters of JuD in Muridke was never shut down and reports said that all educational institutes, hospitals and seminaries of JuD were operating routinely. The change of name will basically allow JuD to escape restrictions placed on organisations and individuals put on UNSC consolidated list of terror groups and terrorists and operate funds in banks’ accounts frozen by the UNSC ban.

India has slipped to the 41st position from 23rd in 2007-08 in the Global Innovation Index (GII) 2008-09, says a study by industry body CII and B-school INSEAD. The US has topped the ranking once again, followed by Germany, Sweden and the UK. As per the survey, India is at the 49th position in terms of the overall input pillars index and is ranked 34 when it comes to the overall output pillars index. In both cases, China is ranked above India. However, India tops the BRIC nations for variables such as institutions and policies that can provide support for innovation. Similarly, in terms of human capacity, which captures the human resource and education aspects of a nation, India is among the top 30 countries in the world and leads among the BRIC countries as well.   Army Day is celebrated on January 15.   Kazakh President Nursultan Nazarbayev was the Guest of Honour at the Republic Day parade, 2009.   The new armoured limousinewhich transported US President Barack Obama down Pennsylvania Avenue during the inauguration parade on January 20 looked like something out of a James Bond film. Nicknamed The Beast, the 18-foot-long Cadillac is actually a bunker on wheels. It features heavy armour that is at least 5 inches thick and is filled with special foam that can prevent it from blowing up in the event of a direct hit. The tradition of US Presidents using Cadillac limousines dates back to the Woodrow Wilson era (1913-21). In 1965, Lyndon Johnson was the first President to ride in a bulletproof limo to an inaugural parade, less than two years after John F. Kennedy was shot and killed while riding in an open car.   The US Food and Drug Administration has opened an office in New Delhi and would shortly start another in Mumbai. The move is part of a US programme called Beyond the Borders initiative, that aims at ensuring safety and quality of medicines and food imports by expanding FDA’s outreach.   Vikas Swarup is the author of the book “Q & A” on which the film Slumdog Millionaire is based.   The Union government has scrapped its export tax on basmati rice and cut the floor price for overseas shipments to $1,100 (Rs 53,900) per tonne.   The Heads of eight institutions—Archeological Survey of India, Anthropological Survey of India, National Museum, National Library, National Archives, National Gallery of Modern Arts, Central Reference Library, National Research Laboratory for Conservation of Cultural Property)—who were earlier appointed through the UPSC, will now be appointed through a search-cum-Selection Committee monitored by the Ministry of Culture.   Archeological Survey of India, New Delhi established in 1861, maintains 3,667 monuments of national importance (including 21 monuments, which are world heritage sites).   Anthropological Survey of India, Kolkata, researches in the area of bio-cultural and biological aspects of Indian populations.   National Museum, New Delhi was set up in 1960, and houses more than two lakh art objects. National Library, Kolkata is a repository of all reading and information material produced in India as well as abroad, concerning India.   National Archives, New Delhi was set up as an imperial records department in 1891 in Calcutta. It is the custodian of non-current records of enduring value of Central Government Ministries/Departments/ offices and their predecessor bodies.   The silver lotus awards are the national film awards presented in two main categories: feature films and non-feature films. These were established in 1954. Two separate 10-member jury panels select the winners for each, and these juries are appointed by the Directorate of Film Festivals in India.   The distance between planetswas calculated by Copernicus using Kepler’s Third Law of Planetary Motion. According to Kepler’s Law of Motion, the square of the time period of the revolution of a planet around the sun is directly proportional to the cube of the semi-major axis of its orbit.   S. Krishnaswamy, adocumentary film maker on historical subjects, was commissioned by late Prime Minister Indira Gandhi to do the controversial Time capsule project during the Emergency in 1975. He has been conferred the Padma Shri award in 2009. He is also known for making the hugely popular documentary Indus Valley to Indira Gandhi which covered every State from Kashmir to Kerala and dealt with contentious issues like untouchability, women being worshipped as deity and being subjected to slavery.   International Customs Day is observed on January 26.   On recommendations of the Commission for Agricultural Costs and Prices (CACP), the Cabinet Committee on Economic Affairs has approved the Minimum Support Prices (MSP) for wheat at Rs 1,080 per quintal, an increase of Rs 80 per quintal over the past year’s MSP. CACP is the nodal agency that recommends remunerative prices of crops.   Rising by almost 60 per centsince 2003-04, India’s per capita income, which indicates what an average person earns, has increased to Rs 33,283 in 2007-08, as per the quick estimates of national income released by the Central Statistical Organisation (CSO). The per capita income, increased by 12.7 per cent (at current prices) during 2007-08, while country’s population inched up by 1.4 per cent to 1.38 billion by the end of the fiscal.   Commanding officer of Chandigarh-based 48 Squadron, Gp Capt S.C. Chafekar has been decorated with the Shaurya Chakra for exceptional courage and professionalism. He had created history by landing an AN-32 twin-engine aircraft at the world’s highest airfield, Daulat Beg Oldie, located at an altitude of 17,000 feet, on May 31, 2008.   Reliance Industries Limited (RIL) Chief Mukesh Ambani has emerged as the third-richest Chief Executive in the world, as per a list of the 10 wealthiest CEOs compiled by Forbes magazine. Steel tycoon Lakshmi Mittal, Anil Ambani and Sunil Mittal are the other Indians in the list. Billionaire investor Warren Buffet was the wealthiest Chief Executive for the second year in a row, with a stake worth $ 35.9 billion in investment management firm Berkshire Hathaway. Business software major Oracle CEO Larry Ellison was ranked second ($ 19.7 billion).   First-time users of internet can now literally find the web at their doorstep as Google India has launched a customized internet-enabled bus which will touch 15 towns in Tamil Nadu to rope in more people on the information superhighway. The bus has four booths based on four themes—information, communication, entertainment and education—with informative content in English and Ta