A Current Affairs

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CURRENT AFFAIRS 2012: July

Indian Polity 7
Thorat Committee Recommendations 7
Critical Evaluation of Cartoon Controversy 8
Gorkhaland Territorial Administration
!CTC 1"
Rational #ehind !CTC 1"
$tate%s Criticism of !CTC 11
Center%s response to the controversy 11
Anti&Corruption 'easures #y Govt 11
'akin( all Government services transparent 1)
Transparency in *u#lic *rocurement +e(islation 1)
'akin( the *u#lic $ervice ,elivery a ri(ht of citi-ens 1)
.ncreasin( people%s access to /ustice and enhancin( accounta#ility 10
,raft Criminal +aw 1Amendment2 3ill4 )"1) 10
Ethnic 5iolence in 6okra/har 10
$ectoral .nnovation Council of .73 18
.ndian 9ishermen 6illin(s 1:
;pinion 17
Role of *resident 17
Re(ulations for 'edia in ,emocracy 18
<udicial Activism 1
Empowerin( voters in our ,emocracy )1
Indian Econoy 2!
Re(ulation of commodity futures market )0
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Challen(es )0
$teps taken )0
.nland =aterways )8
The .nland =aterways Authority of .ndia ):
A.R .ndia *ilot $trike ):
Critical Evaluation of *ilots% ,emands ):
*roducer *rice .nde> )7
+evy on $mall .$*s )7
.ndia%s 0
rd
'a/or $tock E>chan(e )8
*AT 1*erform4 Achieve and Trade2 $cheme )8
'onitorin( of *** *ro/ects )
Electronics 'anufacturin( Clusters 1E'Cs2 $cheme )
3ack(round & ,raft !ational *olicy on Electronics 0"
$teps taken to Com#at 'isuse of Tatkal Tickets 0"
R3.%s 9inancial $ta#ility Report 19$R2 01
$rini me(a food park 01
*ro/ect Clearance 3oard 01
Ta> Return *reparer $cheme 0)
;pinion 0)
.ndia%s 3o* $ituation 0)
.ndia%s 3ilateral .nvestment Treaties 00
Reformin( +a#our +aws 08
!eed for !utirent&3ased $u#sidy in ?rea 0:
Social I&&u'& !(
$ocial $chemes 0@
'G!REGA 0@
$tatistics 0@
Achivements 07
$ome (ood local initiatives 07
=hat can #e improvedA 07
Aadhaar and 'G!REGA 08
.nitiatives to *romote $ports 0
*anchayat Buva 6rida Aur 6hel A#hiyan 0

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;*EC )"1) 0
!ational $ports ,evelopment 9und 0
Rewardin( the *erformances 0
Dunar se Ro-(ar 8"
3order Area ,evelopment *ro(ramme 8"
Ri(hts .ssues 8"
!ational 9ood $ecurity 3ill 8"
,raft !ational *olicy on Children )"1) 81
The Commissioner +in(uistic 'inoritiesss 8)
Education 80
?GC 1.nstitutions ,eemed to 3e ?niversities2 Re(ulations4 )"1" 80
'ahatma Gandhi .nstitute ;f Education for *eace and $ustaina#le ,evelopment 80
'ukta 5idya 5ani 80
Criticism of RTE Act 88
Dealth 8:
'ultidru(&resistant T3 8:
3an on To#acco 8@
Assisted Reproductive Technolo(y 1Re(ulation2 3ill4 )"1". 87
<an Aushadhi $tores 87
;pinion 88
Clinical 9ield Trials in .ndia 88
*ro#lems of medical and health care 88
.ssues with R$3B :"
En%i)on'nt *1
The $econd 'eetin( on !a(oya *rotocol :1
=estern Ghats in ?!E$C;%s =orld Derita(e +ist :)
3an on Tourism in A7! :0
3an on Tourism in Ti(er Reserves :0
$teps to have an effective Ti(er Tourism :8
!ational 'onsoon 'ission ::
Achievements of Earth $ciences 'inistry ::
.ndian ;cean 9orecastin( $ystem ::
;cean Technolo(y 7 Resources ::


;cean $cience and .nformation $ervices :@
,isaster 'iti(ation $upport :@
'eteorolo(ical $ervices :@
*olar $cience 7 cryosphere :7
$amudra *aheredar :7
Environmental performance inde> :7
P')&onaliti'& *+
<im Bon( 6im :8
Thomas +u#an(a ,yilo :8
3andu ,hotre :8
'rinal Gore :8
6amaladevi Chattopadhyay :8
Captain +akshmi $eh(al :
5andana $hiva :
6ulandei 9rancis :
<eet Thayil :
A6 Chakra#arti4 :
5empati Chinna $atyam :
$ports @"
9ernando Torres @"
Andres .niesta @"
;scar *istorius @"
.m ,on(&Dyun @"
=od/an Ali and $arah Attar @"
3radley 'arc =i((ins @"
!atalia *artyka @"
'isc @1
E,elphinus% @1
The Church of the !ativity @1
Ta *rohm Temple @1
India and ,o)ld (2
.ndia%s Fuest for !$G @)
.ndia&$in(apore @0

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.ndia&5ene-uela @0
.ndia&*ak @:
E!e>avar% .ssue @:
9AGs a#out Compulsory +icensin( @:
.!$ E3aa-% @@
Autonomous ?nderwater 5ehicles @7
$alma ,am @8
;pinion @8
?$ vHs China eFuation @8
!onali(nment )." @
.ndia & 'yanmar 7"
.ndia I Central Asia 71
!epal%s Constitutional Crisis 7)
Reforms in .nternational .nstitutions 7:
,o)ld A--ai)& 7(
?-#ekistan suspends its mem#ership from C$T; 7@
5iolence in 'ali 77
$outh $udan Crisis 77
Tokyo Conference on Af(hanistan 78
?$ I *A6 Relationships 7
E+e(al% Coup in *ara(uay 8"
Elections in +i#ya 81
Conflict in ,R Con(o 81
')0 re#els 8)
6ivu Re(ion 8)
Report on 9ukushima !uclear Accident 80
?! Arms Trade Treaty 88
China & <apan 8:
=orld Economy 8:
Euro Jone Crisis 8:
Glo#al Reserve Currency 87
*rotectionism in =orld Economy 8
Sci'nc' . T'c/nolo0y 10

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Di((s 3oson "
'ulti&9eed Gasification Technolo(y 1
Gramateller ,uo AT' 1
Dypersonic 3om#ers 1
Astrosat 1
$olar 9lare )
,!$Chan(er 5irus )
.3' $eFuoia 0
?ltra hi(h&definition T5 1?D,T52 0
$ynthetic 3iolo(y 0
Truvada 8
'edusoid 8
E#ola 5irus 8
Electrical Grid :


IN2IAN PO3IT4

T/o)at Coitt'' R'co'ndation&
The si>&mem#er panel constituted to review the cartoons used in social sciences te>t#ooks of the
!ational Council for Educational Research 7 Trainin( 1!CERT2 has ordered deletion of several cartoons
and words that it says are either Kam#i(uousL4 ne(ative or show politicians and #ureaucrats in an
Eincorrect% way.
<ustifyin( the proposed deletions4 the panel ma/ority headed #y $.6. Thorat says in its reportM KThey
NauthorsO may have reasons to #elieve that the cartoons used were not offensive #ut only reflected
commonly perceived notions. .n a society as vast and as diverse as .ndia is4 there can always #e room
for different understandin( of the te>t and interpretation of visuals4 and especially cartoons could #e
viewed differently #y different se(ment of society. .t is more so when multiple sensitivities (et
involved. The sensitivities4 (enuine or perceived4 have to #e taken note of and addressed carefully.L
=ith a mandate to review the social and political science te>t#ooks and identify educationally
inappropriate material4 the panel constituted #y !CERT and headed #y $.6. Thorat4 was e>pected to
take a detailed look at all visual material with the help of su#/ect e>perts.
3ut the num#er of cartoons asked to #e erased from the te>t#ooks and the flimsy and even #i-arre
reasons (iven4 mark the whole e>ercise as politically coloured from #e(innin( to end.
'any of the chan(es seem to have #een recommended with the interest of the political and
#ureaucratic classes in mind4 and not on peda(o(ic (rounds. $ome cartoons are to #e removed
#ecause they convey a Kne(ative messa(eL a#out politicians and #ureaucrats4 others #ecause they are
politically KsensitiveL. A few cartoons were seen as too Kam#i(uous.L
$urely4 these cannot #e (rounds for e>clusion while preparin( instruction material to develop critical
thinkin( amon( students in Classes C. and C...
=hat is perceived as Kpolitically incorrectL need not #e Keducationally inappropriateL for students
#ein( initiated into critical thinkin(.
The !ational Curriculum 9ramework from which the current te>t#ooks spran( #roke new (round
precisely #ecause they sou(ht to encoura(e youn( learners to ask Fuestions for which there may not
#e a sin(le correct answer.
The authors of the te>t#ook may have (one over#oard here and thereP a sensi#le4 nuanced review
could have easily set thin(s ri(ht. 3ut the deletions now #ein( ordered defy all reason and
commonsense.
A(reed4 there is nothin( sacrosanct a#out the te>t#ooks and the cartoons they carry. ;ther cartoons
and other te>t#ooks could have served the peda(o(ic purpose /ust as well. 3ut inclusion and e>clusion
of material in te>t#ooks cannot #e carried out4 as the Thorat committee has done4 keepin( in mind
narrowly defined political sensitivities and ima(inary community sensi#ilities.


C)itical E%aluation o- Ca)toon Cont)o%')&y
=hen an emotional issue erupts in the pu#lic domain4 ar(ument #ecomes difficult and secondary to
decision&makin(. That is what happened over the controversy re(ardin( the inclusion of a cartoon
depictin( ,r. 3.R. Am#edkar in a class C. te>t#ook.
The controversy has #ecome wider in its scope. =hen the *arliament of the country4 almost in one
voice4 reprimands the inclusion of cartoons in political science te>t#ooks4 is there any scope for
reasonA Thus4 ar(ument is the casualty.
I&&u'& to 5' a)0u'd
.nitially4 when the controversy #roke4 concerns were e>pressed that this has somethin( to do with
freedom of e>pression. 3ut many political leaders have pointed out that they are not opposed to
cartoons #ein( pu#lished in the media. This has made the de#ate more focused now.
The first issue is a#out Kimpressiona#leL minds. 'a(nanimously4 some of the participants in this
de#ate have assured us that cartoons are fine for researchers and post(raduates4 /ust not for youn(
minds4 please. And that takes us to one of the lar(er issuesM an authoritarian parental mindset that
typically characterises our relations with youn(er (enerations and to collective life (enerally. =ith the
e>plosion of information and media4 issues transcend #oundaries of a(e and this needs to #e taken
into account when ar(uin( for a protective approach towards dissemination of ideas and knowled(e.
3ut then4 why should we #e doin( this throu(h these te>t#ooksA And there we come across the second
issueM There is a dan(er of conflatin( (overnment with autonomous state institutions. That is e>actly
what one wants to (uard a(ainst.
.n .ndia4 we have adopted a comple> structure where#y school te>t#ooks are formally under
(overnment /urisdiction4 #ut with a caveatM the (overnment4 as such4 does not write te>t#ooks or
decide what should or should not (o into the te>t#ooks. The (overnment only ensures a certain
procedure Q creation of a #ody responsi#le for the task 1!CERT in this case2P selection of the ri(ht
persons at the top 1the directorRs appointment is made #y the (overnment2P and then leaves the rest to
those persons and institutions. $ayin( that the #ooks are sarkari (oes a(ainst the democratic principle
of dele(atin( work and assi(nin( autonomous responsi#ilities with internal monitorin( mechanisms.
The perception that these are sarkari #ooks is e>actly what the post&!ational Curriculum 9ramework
te>t#ooks sou(ht to dispel. That achievement of the !C9 is now endan(ered. Are we sayin( that
institutions have autonomy only so far as that autonomy does not #ecome realA
The third issue that has come up is a#out the role of cartoons (enerally. Bes4 cartoons Q whether in
te>t#ooks or in print media Q make us lau(h4 chuckle4 and feel a little cheerful. 3ut that is surely not
the core function of a cartoon. .t would #e a (ross misunderstandin(4 therefore4 if we said Q as some
are now sayin( Q that cartoons poke EfunR and hence they are for purposes of cheap criticism Q
Ema-aakR. 'uch more than4 and alon( with4 pokin( fun4 cartoons are a powerful art form for locatin(
ironies and #rin(in( forth the inconsistencies of our collective selves. This core value of the art form is
not at all appreciated in the on(oin( de#ate.
'ovin( on towards the te>t#ook issue a(ain4 a fourth point that deserves attention is the peda(o(y of
te>t#ook writin(. The authors and advisors of the now&controversial te>t#ooks do not claim any
e>pertise on this. 3ut they surely had the inputs of e>perts from the field of education and teachin(.
3esides4 the !C9 and its peda(o(ic approach was the (uidin( principle for the teams that prepared

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those te>t#ooks. !ot information #ut inFuisitiveness is what the te>t#ooks want to inculcate. They do
not satisfy curiosity #ut fan more curiosity. They do not dish out opinions as Kofficial wisdomL #ut help
students #ecome their own leadin( li(hts on the path of knowled(e and understandin(.
=hether cartoons fit in with the peda(o(y #ased on this approach can very well #e de#ated and it
could also #e ar(ued that they are not the only means where#y these o#/ectives could #e achieved.
Dowever4 the ar(ument a#out impressiona#le a(e and the idea of (ivin( a sarkari version of everythin(
would not stop only at throwin( out cartoonsM depictions of drou(ht could #e o#/ected toP pictorial
presentations of domestic violence or communal carna(e could #e o#/ected toP pictures of destruction
caused #y war can #e o#/ected to Q all these unFuestiona#ly make a powerful impression on the
viewer4 youn( or whatever.
The issue isM do we want students to have the #enefit of all these strate(ies of dissemination and
inFuiryA The current series of post&!C9 te>t#ooks #elieves that these are necessary tools if the
o#/ective is to encoura(e creative thinkin(4 ima(ination and4 a#ove all4 the spirit of inFuiry and critiFue.
9inally4 another ar(ument in the current de#ate seems to #e thisM the #ooks are anti&democratic and
show politicians in a poor li(ht. As an aside4 is it not somewhat odd and anti&democratic that a
democratic society should have a separate Kpolitical classL rather than an en(a(ed and active citi-enryA
3ut we shall leave it at that. *olitical science can #e and was #ein( tau(ht mainly as formal institutions
and rules and procedures such as Kwhat are the powers of the *resident of .ndiaL and Khow many
mem#ers are there in the Ra/ya $a#haL and so on. 3esides #ein( information oriented4 this approach is
also the least encoura(in( in terms of producin( an active citi-en. The current 1now nearly a#andoned2
te>t#ooks did not only wish to make political science Kinterestin(L #ut also wanted to make political
science en(a(e seriously with the political 1and hence they have to pay the price for doin( that2.
*olitics is a#out creatin( and runnin( institutionsP politics is a#out power and a#out power #ein( used
for various collective purposesP politics is not a sanitised anthem of democracy #ut a shrill and not so
sweet mi> of different sounds. This politics produces (overnance Q and sometimes may even fail to
produce (overnance. *olitics is E(oodR and E#adR Q unlike the romantic movie4 there are men and
women in politics rather than sanitised heroes and heroines and villains and side villains. .s this not a
ro#ust and democratic depiction of politicsA
.t can #e no#odyRs claim that this approach towards teachin( politics is the only correct approach or
that the te>t#ooks have correctly followed this approach. .t is for the lar(er academic community now
to (o #eyond issues of an emotive nature and en(a(e with the Fuestions that the controversy has
thrown up.

6o)7/aland T'))ito)ial Adini&t)ation
The Gorkha <anmukti 'orcha%s has decided to contest the elections to the Gorkhaland Territorial
Administration 1GTA2
The re(ion was on the #oil for nearly three decades4 driven #y protests over the Gorkhaland demand.
.n more recent years4 a series of shutdowns hit the re(ion4 that is lar(ely dependent on tourism.

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A tripartite a(reement was si(ned amon( the G<'4 and the =est 3en(al and Central (overnments. The
deal provided for the GTA4 replacin( the ,ar/eelin( Gorkha Dill Council that was formed in the late&
18"s.
=hile Kkeepin( on record the demand of the G<' for a separate state of Gorkhaland4L the a(reement
provided for the formation of the autonomous and self&(overnin( GTA throu(h direct elections.
The $tate (overnment a(reein( to acknowled(e in that deal the essentially divisive Gorkhaland dream
clearly amounted to appeasement. The (overnment should not (o down the placatory path anymore
without (ivin( due thou(ht to the disruptive potential of the slo(an.
The whole process cannot #e impervious and insensitive to the le(itimate political and social
aspirations of the people of the ,ooars and the Terai in the ,ar/eelin( and <alpai(uri districts. .f they
do not want their areas to #e part of the GTA4 their sentiments should not #e i(nored.
!ow4 puttin( aside its resistance to the $hyamal $en Committee%s recommendation to include within
the GTA%s /urisdiction only five mou-as in the Terai and the ,ooars Q a(ainst its demand for 0@
mou-as Q the G<' has decided to take part in the elections to the 8: seats in the new #ody even
#efore its final territorial contours are clear.
.t is important that the G<' refrains from muddyin( the waters a(ain4 keepin( alive and revivin( the
Gorkhaland demand. .nstead4 it should help the re(ion realise its development potential and inte(rate
its people with the national mainstream as a truly democratic player. ;n its part4 the $tate (overnment
should stand firm on resistin( divisive trends and not seek to #end over #ackwards to pander to
disruptive demands.
NCTC
Rational 5'/ind NCTC
.n the .ndian conte>t4 the !ational Counter Terrorism Centre4 that will #e an important pillar of the
new security architecture4 is #ased on the followin( premisesM
That4 under the Constitution of .ndia4 counterin( terrorism is a shared responsi#ility of the Central
Government and the $tate GovernmentsP
That terrorists do not reco(nise #oundaries #etween countries or #oundaries #etween $tates
#elon(in( to a countryP
That many terrorist or(anisations have foot prints in several countries and have the capacity to commit
terrorist acts across #orders or #oundariesP
That human resources alone are not sufficient to counter terrorismP technolo(y is the key weapon in
this conflict.
That we have o#li(ations to the international community under the Resolutions of the $ecurity
Council.
That (iven .ndia%s 7:1@ km coastline4 1:41"@ km of international #orders with seven countries
1Af(hanistan4 *akistan4 !epal4 3hutan4 China4 3an(ladesh and 'yanmar2 and a num#er of international
(ateways4 $tate Anti&Terrorist 9orces would have to necessarily work with a num#er of a(encies of the
Central Government4 especially when there are threats in the domain of sea4 air and space.
.n the aftermath of )@H114 the home minister announced a new security architecture to fortify the
country a(ainst terrorist attacks. .nstead of a ma-e of competin( #ureaucracies for intelli(ence4
security and enforcement4 there would #e central coordination Q a networked intelli(ence data#ase


1!ATGR.,24 a !ational .nvesti(ation A(ency 1!.A2 and a !ational Counter&Terrorism Centre 1!CTC24
which would #e ultimately responsi#le for piecin( to(ether information and actin( on it.
Stat'8& C)itici& o- NCTC
+ike other counter&terror mechanisms around the world4 !CTC would process and interpret the delu(e
of intelli(ence data from across the country. Dowever4 unlike most (lo#al models4 the proposed !CTC
would also involve itself in investi(ation and operational supervision.
=hile acknowled(in( the need for a unified anti&terror apparatus4 $tate chief ministers have #een
united in their alarm a#out the proposed anti&terror #ody%s apparently untrammelled authority Q it
will (ive the Centre powers to search4 sei-e and arrest4 cuttin( into the state%s policin( domain. They
e>pressed worry a#out the wisdom of e>emptin( such a powerful a(ency from parliamentary scrutiny.
These concerns are valid4 and should have #een addressed at the very start. Dowever4 this
(overnment%s ina#ility to en(a(e and persuade allies and states has turned the !CTC issue into a
confrontation over federalism.
C'nt')8& )'&9on&' to t/' cont)o%')&y
Earlier the home ministry has softened its stand Q limitin( and clarifyin( the conditions under which
the !CTC will operate. .t will function throu(h state anti&terrorism sFuads4 and it will involve all
state ,G*s in its council. .n the rare cases where !CTC officers need to intervene directly4 they will
#rin( in the state police immediately after.
!ow center has decided that !CTC will no lon(er #e placed under the .ntelli(ence 3ureau Q a #ody
that is e>empt from parliamentary oversi(ht.
As Centre has put a more accepta#le version on the ta#le4 #ut it remains to #e seen if the state
leaderships are a#le to cast aside the #uilt&up distrust and meet the Centre halfway.

Anti:Co))u9tion ;'a&u)'& 5y 6o%t$
The Group of 'inisters 1Go'2 set up in <anuary )"11 to consider measures to tackle corruption has
su#mitted two reports. .n pursuance of this&
1. Government has directed that reFuests for sanction of prosecution are to #e decided upon #y the
competent authority within a period of three months.
). Government decided that for all officers of the central (overnment a#ove the rank of <oint
$ecretary4 the competent authority to approve initiation of enFuiryHinvesti(ation under $ection @A
of the ,elhi $pecial *olice Esta#lishment Act will #e the 'inister&in&char(e in the Government of
.ndia.
0. Government has also accepted the recommendation of the Go' to put in place re(ulatory
parameters for e>ercise of discretionary powers #y 'inisters and to place them in pu#lic domain.
A comprehensive E+okpal and +akyuktas 3ill4 )"11% was passed #y the +ok $a#ha this year.

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EThe =histle 3lowers *rotection 3ill )"11% intended to provide protection to whistle&#lowers4 was
passed #y the +ok $a#ha and is presently with the Ra/ya $a#ha.
.ndia ratified the ?nited !ations Convention A(ainst Corruption in 'ay4 )"11. The Convention has
entered into force for .ndia on 8th <une )"11. =ith a view to ensurin( full compliance with this
Convention4 EThe *revention of 3ri#ery of 9orei(n *u#lic ;fficials and ;fficials of *u#lic .nternational
;r(ani-ations 3ill )"11% was introduced in the +ok $a#ha. The Report of the *arliamentary $tandin(
Committee on the 3ill is under consideration of the Government.
;a7in0 all 6o%')n'nt &')%ic'& t)an&9a)'nt
The !ational e&Governance *lan was approved #y the Government with the vision to K'ake all
Government services accessi#le to the common man in his locality4 throu(h common service delivery
outlets and ensure efficiency4 transparency 7 relia#ility of such services at afforda#le costs to reali-e
the #asic needs of the common manL.
A network of more than 1""4""" Common $ervice Centres for electronic delivery of pu#lic services to
citi-ens in rural areas has #een rolled out.
*ilots for deliverin( hi(h&volume4 citi-en&centric e&Governance services have #een implemented in 88
districts across seven states under the e&,istrict *ro/ect.
The 'CA&)1 e&Governance pro/ect for facilitatin( #usiness #y simplifyin( and reducin( documentation
was carried forward #y ena#lin( online allotment of the ,irect .dentification !um#er and inte(ratin( it
with the .ncome Ta> *A!. This will su#stantially reduce delays in incorporation of a company.
A record 1: lakh annual reports were filed durin( the year with a peak of 7"4""" filin(s on a sin(le day.
Rules have #een amended to facilitate payments #y direct credit to the #ank accounts of payees. A
secured electronic payment system4 throu(h KGovernment e&payment (atewayL has #een
commissioned to facilitate this process. This measure will streamline the process of makin( payments4
minimi-e the interface of the payees with Government offices and will usher in (reen #ankin(.
T)an&9a)'ncy in Pu5lic P)ocu)''nt 3'0i&lation
The *u#lic *rocurement 3ill4 )"1) has #een approved #y the Ca#inet.
The 3ill seeks to re(ulate pu#lic procurement #y all 'inistries and ,epartments of the central
(overnment4 Central *u#lic $ector Enterprises and #odies controlled #y the Central Government to
ensure transparency4 fair and eFuita#le treatment of #idders4 promotin( competition and enhancin(
efficiency and economy in the procurement process.
The 3ill would create a statutory framework for pu#lic procurement which will provide (reater
accounta#ility4 transparency and enforcea#ility of the re(ulatory framework.
;a7in0 t/' Pu5lic S')%ic' 2'li%')y a )i0/t o- citi<'n&
The Ri(ht of Citi-ens for time&#ound delivery of Goods and $ervices and Redressal of their Grievances
3ill% was introduced in the +ok $a#ha on )"th ,ecem#er )"114 and has since #een referred to the
,epartment related *arliamentary $tandin( Committee. This #ill is intended to make the Citi-ens%
Charter statutory and to endow the pu#lic with the ri(ht to delivery of (oods and services.


Inc)'a&in0 9'o9l'8& acc'&& to =u&tic' and 'n/ancin0 accounta5ility
The <udicial $tandards and Accounta#ility 3ill )"1) has #een passed #y the +ok $a#ha.
The !ational 'ission for <ustice ,elivery and +e(al Reforms was launched in the ,epartment of <ustice
for increasin( access to /ustice #y&
a2 reducin( delays and arrears4
#2 enhancin( accounta#ility throu(h structural chan(es and
c2 settin( performance standards and capacities.
.nformation such as filin( of petition4 allotment of cases to courts4 (eneration of cause list4 date of
hearin( and status of the case can #e ascertained from /udicial service centres set up #y district and
su#ordinate courts.

2)a-t C)iinal 3a# >A'nd'nt? @illA 2012
The hi(hli(hts of the 3ill include & replacin( the word Srape% wherever it occurs #y the words Sse>ual
assaultS4 to make the offence of se>ual assault (ender neutral4 and also widenin( the scope of the
offence se>ual assault.
The punishment for se>ual assault will #e for a minimum of seven years which may e>tend to
imprisonment for life and also fine for a((ravated se>ual assault4 i.e.4 #y a police officer within his
/urisdiction or a pu#lic servantHmana(er or person talkin( advanta(e of his position of authority etc.
The punishment will #e ri(orous imprisonment which shall not #e less than ten years which may
e>tend to life imprisonment and also fine.
The a(e of consent has #een raised from 1@ years to 18 years in se>ual assault. Dowever4 it is proposed
that the se>ual intercourse #y a man with own wife #ein( under si>teen years of a(e is not se>ual
assault.
*rovision for enhancement of punishment and for makin( acid attack a specific offence have #een
made.

Et/nic Viol'nc' in Bo7)a=/a)
Ever since the clashes #etween 3odos and mi(rant 'uslim (roups in )""84 6okra/har4 the seat of
administration of the 3odoland Territorial Council 13TC24 has held an uneasy peace.
Trou#le had #een #rewin( for the last few weeks4 after minority student unions and non&3odo tri#es
#e(an pressin( their demand for (reater representation in the 3TC.
'ore than 8" lives have #een lost and nearly 1.7 lakh people displaced. The army has finally #een
called in.
The area under the 3TC%s /urisdiction has seen undercurrents of tension even after the 3odo Accord of
)""0.
The 3odo movement has its roots in the a(itation a(ainst tri#al land #ein( acFuired #y immi(rants.
+and is a fundamental issue in the re(ion that remains unresolved.


;n the other side of the divide4 the minorities and non&3odo tri#es alle(e discrimination in political
representation4 since the 3TC structure has (iven a lar(er say to the 3odos. ;ver the years4 this power&
sharin( arran(ement has appeared to rest on increasin(ly unsta#le (round.
9inally4 the 3odo Accord failed to ensure a round&up of the arms of the erstwhile 3odoland +i#eration
Ti(ers13+T2. $till in circulation4 they sharpen the ed(es of the already fra(ile eFuations #etween (roups.
3oth the state and the ?nion (overnments appear to have misread and mismana(ed the situation in a
district that has witnessed lar(e&scale clashes in 104 184 1@ and as recently as )""8.
6okra/har is the landlocked !ortheast%s narrow passa(e to mainland .ndia throu(h the Kchicken%s
neckL. .f the current trou#le had #een anticipated and adeFuate and visi#le security provided for at the
first si(n of trou#le4 the !ortheast would not have #een virtually cut off from the country.
The confrontation has #een la#elled Eethnic4% #ut economic and even educational an>ieties are as much
at work as the desire to preserve socio&cultural and ethnic identities. .nsecurities relatin( to land4
forest ri(hts and a shrinkin( /o# market have created a com#usti#le mi>.
The lon(&term (oal4 o#viously4 is to re&envision Assam as a place where ascriptive identities do not
disrupt civic relationships. The state needs to keep workin( on achievin( the ri(ht #alance of
development activity.
The key to this will #e restoration of mutual trust. This should #e #ased primarily on systematic
measures to address fears over loss of ownership and ri(ht to land4 and concerns over denial of access
to resources4 development4 and means of livelihood.

S'cto)al Inno%ation Council o- I.@
The $ectoral .nnovation Council of the 'inistry of .nformation 7 3roadcastin( 1.732 is the first amon(st
the various $ectoral .nnovation Councils set up in various sectors of the Government to su#mit its
Report to the concerned 'inistry.
The primary o#/ective of the Council was to desi(n a policy ecosystem in which new ideas would #e
inte(rated into the mainstream and (et converted into policy initiatives #y the Government.
The $ectoral .nnovation Council was set up as part of the Government of .ndia%s initiative of declarin(
)"1"& )")" as the ,ecade of .nnovation. Accordin(ly4 the Government set up a !ational .nnovation
Council with $hri $am *itroda as Chairman and 1@ distin(uished mem#ers and other $ectoral
.nnovation Councils.
The Council in its Report has analysed the (rowth potential of the 'edia 7 Entertainment .ndustry #y
recommendin( chan(es in critical areas such as #roadcastin(4 print media4 animation4 (amin( and 59C4
'edia education and films. $ome of the key recommendations areM
A comprehensive policy media policy4 that inte(rates all e>istin( media se(ments and addresses the
emer(ent issues. The council has recommended to #rin( out a !ational 'edia *olicy that addresses
the new media landscape.
The Government may look into the e>istin( licensin( procedures and reFuirements to ensure further
li#erali-ation and reforms in the #roadcastin( sector.
Content innovation is reFuired in the radio se(ment which would #e possi#le only if the Government
comes up with a separate licensin( model for niche channels.

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'inistry of .734 as the policy head of pu#lic service #roadcastin( and community radio service could
come out with a formal arran(ement #y which community radio stations 1CR$2 could provide
community #ased pro(ramme content to A.R and A.R could provide capacity #uildin( and trainin( to
CR$ workers in content creation4 mana(ement and operation of stations.
The process of di(itali-ation in ,, and A.R was likely to release airwaves which after due utili-ation in
house could #e used for creatin( a pu#lic service #roadcastin( fund in line with ?$; fund of telecom
sector. This fund could #e utili-ed e>clusively for pu#lic service #roadcastin(.
.n view of the potential in the films sector4 the Council has recommended a !ational 9ilm *olicy that
will address the role of the Government vis&T&vis the private sector.
9ilm .nstitutes in the country may #e up(raded to Centre of E>cellence. .n the lon( term4 these Centres
of E>cellence could #ecome part of a Central ?niversity of 9ilms4 3roadcastin( and Animation #y an
appropriate le(islation.
The Government must have a !ational *olicy for Animation4 Gamin( and 5isual effects 159C2.
The Government should (o for co&production treaties in the animation sector to ensure flow of
international pro/ects to .ndia. 'inistry could also consider (ivin( responsi#ility to the Children%s 9ilm
$ociety and ,oordarshan to produce animated content and create .ndian .*.
Relia#le $in(le $ource ,ata on all mediums of advertisin( should #e made availa#le #y the Government
so that advertisers are a#le to take decisions on relia#le data.
Government should interact with key stakeholders and e>pedite a consensus on developin( an
alternative to TA' 1television audiance measurement2 so that an appropriate mechanism is developed
with industry participation to study audience viewin( and listenin( #ehaviour and #rin( out reports on
weekly #asis.
Government should re(ulate media education to ensure orderly (rowth of the discipline as part of
hi(her education.
+ike medical education and technical education4 'edia Education #e re(ulated #y a new or(anisation
known as 'edia Education Council4 to #e a part of .73. The academic course for media education
should #e in line with ?6H ?$ ?niversities and 5ocational courses as part of reFuirement of the
industry. The 'edia Education Council should #e assi(ned the task of settin( up curriculum for all
levels so that standardised curriculum with national accreditation #ecomes a possi#ility.
!ew 'edia should #e utili-ed for media campai(ns #y the Government.

Indian Fi&/')'n Billin0&
The emer(ence of maritime terrorism and the revival of piracy have added a new dimension to the
ha-ards that have traditionally confronted seafarers4 and innocent fisherfolk have now come in the line
of fire.
An .ndian fisherman was killed and three others4 #esides an Emirati national4 in/ured when ?$ navy
personnel on #oard the Rappahannock4 a replenishment ship4 opened fire on a small motor vessel off
the coast of ,u#ai.
Accordin( to an official statement from the ?$ navy4 the vessel was fired upon4 in accordance with
doctrine4 after it KrapidlyL approached the ship4 disre(ardin( repeated warnin(s.

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The incident has4 however4 caused (reat indi(nation in Tamil !adu to which the unfortunate fishermen
#elon(ed4 and .ndia has asked the ?AE authorities to open a criminal investi(ation into the incident.
.n yet another incident in 9e#ruary4 two .ndian fishermen were shot dead #y marines carried on #oard
the .talian merchantman '5 Enrica +e>ie.
This tanker4 on passa(e from $in(apore to E(ypt4 was reportedly #etween 18 and )) miles from the
6erala coast 1outside territorial waters #ut within the conti(uous -one2 when it encountered the fishin(
vessel. 'istakin( it for a pirate skiff4 two marines4 #orne #y the ship for protection4 opened fire4 killin(
two of the fishermen. The .talian ship was asked to enter 6ochi port where the two marines were
placed under arrest and await trial for murder.
9or a warship captain4 it would #e inconceiva#le that a #and of outlaws4 no matter how well armed4
should threaten or attempt to #oard his ship4 and he would act resolutely in accordance with the clear&
cut rules of en(a(ement 1RoE2 (iven to him.
As the Rappahannock incident clearly shows4 the latest RoE framed #y the ?$ navy have #een4 ri(htly4
rela>ed in terms of the discretion that they (ive to the man on the spot. This is appropriate in the
current threat environment.
.n the case of merchantmen4 since there are normally no com#atants on #oard4 the ship%s master4
havin( taken all possi#le preventive and evasive measures4 has no choice #ut to permit #oardin( #y the
piratesH terrorists and take his chances. .t is only recently that merchant ships have #een allowed to
carry privately contracted armed security personnel 1*CA$*2 in hi(h&risk areas.
The (uidance issued #y the .nternational 'aritime ;r(anisation 1.';2 with re(ard to *CA$* states that
a ship%s master will e>ercise command and will retain the overridin( authority on #oard. This (uidance
does not provide any RoE nor does it offer any directions a#out the use of lethal force. 'oreover4 it
deals only with civilian contracted personnel and not with the presence of military personnel on #oard
merchant ships
$hould the .ndian (overnment take the same view of this incident as it did of the Enrica +e>ie4 it could4
in theory4 ask the ?AE (overnment to prosecute the ?$ navy personnel that she carried on #oard or
e>tradite them to .ndia. Dowever4 a more fittin( option would #e for .ndia to formally ask the ?$
(overnment to conduct an inFuiry and deal appropriately with errant navy personnel.
There are a num#er of comple> issues that need consideration.
9irstly4 the fishermen fraternity in our part of the world is focused on earnin( their livelihood4 and
freFuently disre(ard ha-ards and warnin(s4 with tra(ic conseFuences.
$econdly4 the *CA$*4 if carried4 need to #e properly #riefed a#out the (raduated application of forceP
and conditions under which lethal force may #e used.
9inally4 uniformed personnel4 if deputed4 need to #e indemnified #y multilateral consent a(ainst le(al
action #y other states for #ona fide actions in the line of duty.
These are ve>ed issues that need to #e ur(ently addressed4 and this is an opportune moment for
concerned maritime states to /ointly evolve procedures for ensurin( protection of shippin(4 without
endan(erin( safety of innocent fisherfolk. .ndia4 with one of the world%s lar(est fishin( communities4
must take the initiative.


O9inion
Rol' o- P)'&id'nt
?nder the .ndian Constitution4 the *resident has no e>ecutive role to play4 #ut his or her actions Q
whether4 for instance4 in approvin( 3ills or sendin( these #ack for reconsideration4 or in formin( a new
(overnment or in askin( the incum#ent to face a vote of confidence Q have political import.
*eople do look upon him also as a person havin( some authority in the (overnance of the country4 and
he can /ustify his position only #y tenderin( such advice and (ivin( such su((estions as he considers
necessary to the ca#inet #efore it takes any decision.
The *resident is no ru##er stamp4 and is not reFuired to si(n on the dotted line irrespective of the
issue at hand. =hile there are strict statutory limits to his discretion4 his advisory or cautionary role is
well reco(nised #y the Constitution.
The occupant of the hi(hest office of the land is also the custodian of the Constitution. The oath
administered to the president&elect is therefore Fuite different from that administered to the prime
minister4 chief ministers and the ministers of the ?nion and states. =hile they owe their alle(iance to
the Constitution4 the president takes the oath to preserve4 protect and defend the Constitution. The
president also promises to dedicate himselfH herself to the service and well&#ein( of the people.
=hile the president%s function as the protector and defender of the Constitution has #een adeFuately
hi(hli(hted4 the role played #y the president to serve and promote the well&#ein( of the people of
.ndia has not received much attention.
Granville Austin4 an American historian who is an e>pert on the .ndian Constitution4 descri#ed it first
and foremost as a social and economic document. .n preservin( and protectin( it4 the president has to
protect the well&#ein( of people Q that is central to the workin( of the Constitution.
There is a su#tle influence of the office of the president on the e>ecutive and the other arms of the
(overnment and on the pu#lic as a whole. .t is a position which has to #e used with a philosophy of
indirect approach. There are one or two thin(s which you can directly do in very critical times. 3ut4
otherwise4 this indirect influence that you can e>ercise on the affairs of the state is the most important
role he can play. And4 he can play it successfully only if he is4 his ideas and his nature of functionin( are
seen #y the pu#lic in tune with their standards &there must #e some eFuation #etween the people and
the president.
An ideal *resident is one who #ecomes a source of wise counsel to the *rime 'inisterP it is easier said
than done. The *rime 'inister must feel comforta#le drivin( down to Rashtrapati 3havan and the
o#li(ation of consultation should not #ecome a /oyless #urdenP /ust as the *resident must remem#er
that the *rime 'inister of the day has his share of political difficulties and constraints. .f the *resident
/oins hands with the *rime 'inister4 the two can #ecome a powerful source of constitutional and
political wholesomeness. A *resident can help the *rime 'inister ward off unhealthy demands of
coalition partners. ;r4 similarly4 the *resident can play a welcome corrective part in the matter of
/udicial appointments #y the simple strata(em of keepin( a du#ious file pendin(4 /ust as *resident
6alam once did.
.n the era of coalition politics and (overnment4 the role of the president is of critical si(nificance. The
provisions of the Constitution coupled with the precedents set #y the successive presidents constitute
the source of inspiration and (uidance to the future presidents of our country.


Today4 a *resident can easily succum# to the temptation of muddyin( the waters and dominate the
news waves. The .ndian repu#lic finds itself at a crossroads when every institution is seekin( to
ma>imise its reach and influence at the e>pense of the e>ecutive. .t should #e remem#ered that
Rashtrapati 3havan is not a rival centre of authority. .t is a(ainst the letter and spirit of the Constitution
to in/ect the notions of an Eactivist% *resident.

R'0ulation& -o) ;'dia in 2'oc)acy
.n democracies4 the media have a critical role in hi(hli(htin( a#uses in markets4 a#use of political
power and in the interaction of the two. They play an essential role in pu#lic opinion formation and the
democratic process.
Dowever4 most media institutions face particular dilemmas #ecause they are4 simultaneously4 key
elements of an effective democracy and commercial entities operatin( in markets seekin( not only
su#stantial and (rowin( audience share4 #ut also revenue from them or advertisers. They #enefit from
favoura#le (overnment decisions a#out media 1and other2 policies affectin( their non&media assets.
These market interests can potentially distort the role that media institutions play in the formation of
pu#lic opinion and4 conseFuentially4 in our democracy.
Conversely4 the privile(ed access that media corporations (ain from politicians seekin( a (ood press
can skew decisions politicians have to make in ways that distort markets while also underminin(
democracy.
,emocratic competition needs to #e carried out on a level playin( field. .f most of the playin( fields are
owned #y those #arrackin( for one side and usin( their ownership to tilt the field4 democracy is in peril.
.n order to fulfil their critical role of speakin( truth to power4 media enterprises claim privile(es that
others do not have to protect sources4 and e>emption or limitation of the reputational and privacy
ri(hts of those on whom they report. .f they use their powers and privile(es to fulfil this role4 those
claims are /ustified. ;therwise4 they are merely traders for profit in assertions a#out the private lives of
others.
Dow can we ensure that the powers and privile(es of the media are used for vital democratic purposes
for which they are claimed rather than a#used for increase in the influence and non&media wealth of
ma/or shareholdersA
;ur approach does not rely on more (overnment re(ulation. !or does it rely on the diversity of views
held #y plutocratic owners.
.nstead4 it centres on stren(thenin( the profession of /ournalism throu(h Kinstitutional inte(rityL4 a
concept that the $upreme Court of .ndia had used to strike down the appointment of a Central
5i(ilance Commissioner who was himself under investi(ation.
K.nstitutional inte(rityL reFuires a set of mutually reinforcin( codes for /ournalists4 editors and media
#oard mem#ers4 plus institutional arran(ements for independent interpretation4 (uidance and
enforcement. These codes and institutions can #e seen as a form of Kinte(rity systemL that promotes
the key role of the media in democracy rather than the a#use of media power that undermines it.
.nte(rity systems include ethical advisers outside the chain of command for /ournalists and editorsP a
'edia .nte(rity Commissioner to assist /ournalists4 editors and #oard mem#ers to develop their codes


and (ive authoritative advice on their applicationP and a complaints #ody to ad/udicate complaints and
order the pu#lication of any adverse findin(s as prominently as the ori(inal reports.
'edia activities undertaken under these codes would en/oy enhanced versions of the protections and
privile(es media currently en/oy. Those that do not would #e su#/ect to normal corporate re(ulation
and defamation laws Q with the possi#ility of ?.$.&style dama(es for those whose li#els and privacy
invasions were due to ne(li(ence4 recklessness or political motivation.
This will provide a very lar(e economic incentive for news or(anisations to either pursue professional
/ournalism with appropriate inte(rity measures4 or en(a(e in entertainment that leaves real people
alone and avoids all controversial statements #ecause the cost of (ettin( them wron( is too (reat in
the a#sence of those inte(rity measures.
.t would #e unscrupulous for media outlets to attack reforms that would compel them to #e more
ethical. ?nethical media or(anisations mi(ht well do so Q offerin( their support to a political party in
return for it opposin( these reforms. This is why cross&party a(reement would #e critical. .f all ma/or
parties a(reed to refuse to modify their policies and i(nored promises of favoura#le election&time
covera(e4 such inducements lose their stin(.
*olitical parties must reco(nise that (ivin( in to pressure is a dan(erous strate(y. Each time they (ive
somethin( away to a media or(anisation for favoura#le covera(e4 they do three thin(sM
.ncrease the effective power of the media or(anisationP
=het its appetiteP
$kew the media in favour of those who would do such deals a(ainst those who would not.
That is4 such an approach4 despite its short&term tactical attraction4 dama(es the lon(&term interests of
even the party en(a(ed in it and weakens the future effectiveness of the (overnment offices they seek
to win.
This is why we would like to see all ma/or parties en(a(e in a Kvirtuous conspiracyL to improve the
effectiveness of the media in democracy. .n doin( so4 they will also do a (reat favour to the media4
#usiness and themselves.

Judicial Acti%i&
The (rave pro#lem that courts are often faced with is thisM on the one hand4 the Constitution is the
supreme law of the land and4 on the other hand4 in the (ar# of interpretin( the Constitution4 the court
must not seek an unnecessary confrontation with the le(islature4 particularly since the le(islature
consists of representatives democratically elected #y the people.
The court certainly has power to decide constitutional issues. Dowever4 since this (reat power can
prevent the full play of the democratic process4 it is vital that it should #e e>ercised with ri(orous self
restraint.
The philosophy #ehind the doctrine of /udicial restraint is that there is #road separation of powers
under the Constitution4 and the three or(ans of the $tate4 the le(islature4 the e>ecutive4 and the
/udiciary4 must respect each other4 and must not ordinarily encroach into each otherRs domain4
otherwise the system cannot function properly.

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Also4 the /udiciary must realise that the le(islature is a democratically elected #ody4 which e>presses
the will of the people 1however imperfectly2 and in a democracy this will is not to #e li(htly frustrated
or thwarted.
Apart from the a#ove4 /udicial over&activism deprives the people of Kthe political e>perience and the
moral education and stimulus that comes from fi(htin( the pro#lems in the ordinary way4 and
correctin( their own errorsL.
.n Asif Dameed vs. The $tate of <76 4 the .ndian $upreme Court o#servedM KAlthou(h the doctrine of
separation of powers has not #een reco(nised under the Constitution in its a#solute ri(idity4 the
Constitution makers have meticulously defined the functions of various or(ans of the $tate. The
le(islature4 e>ecutive4 and /udiciary have to function within their own spheres demarcated in the
Constitution. !o or(an can usurp the function of another. && =hile e>ercise of powers #y the le(islature
and e>ecutive is su#/ect to /udicial restraint4 the only check on our own e>ercise of power is the self
imposed discipline of /udicial restraint.L
<udicial restraint is particularly important for the $upreme Court for two reasonsM
a2 ;f the three or(ans of the state4 only one4 the /udiciary4 is empowered to declare the limits of
/urisdiction of all three or(ans. This (reat power must therefore #e e>ercised #y the /udiciary with
the utmost humility and self restraint.
#2 The errors of the lower courts can #e corrected #y the hi(her courts4 #ut there is none a#ove the
$upreme Court to correct its errors.
$ome people /ustify /udicial activism #y sayin( that the le(islature and e>ecutive are not performin(
their functions properly. The reply to this ar(ument is that the same char(e is often levelled a(ainst the
/udiciary. $hould the le(islature or the e>ecutive then take over /udicial functionsA .f the le(islature and
the e>ecutive do not perform their functions properly4 it is for the people to correct them #y e>ercisin(
their franchise properly4 or #y peaceful and lawful pu#lic meetin(s and demonstrations4 andHor #y
pu#lic criticism throu(h the media and #y other lawful means. The remedy is not in the /udiciary takin(
over these functions4 #ecause the /udiciary has neither the e>pertise nor the resources to perform
these functions.
.f /udicial a((ression is to #e the rule some #asic issues remainM
K9irst4 how le(itimate is (overnment #y <ud(esA .s anythin( #eyond their reachA =ill anythin( #e left
for ultimate resolution #y the democratic process4 for4 Ethat wide mar(in of considerations which
address themselves only to the practical /ud(ment of a le(islative #ody representin( 1as Courts do not2
a wide ran(e of mundane needs and aspirationsA%
K$econd4 if the $upreme Court is to #e the ultimate policy makin( #ody without accounta#ility4 how is
it to avoid the corruptin( effects of raw powerA Also4 can the Court satisfy the e>pectations it has
arousedA
KThird4 can the $upreme Court <ud(es master the comple>ities of every phase of citi-en%s lifeA Are few
men wise enou(h and (ood enou(h to wield such power over the lives of millionsA Are Courts
institutionally eFuipped for such #urdensA ?nlike le(islatures4 they are not representative #odies
reflectin( a wide ran(e of social interest. +ackin( a professional staff of trained investi(ators4 they must
rely for data almost e>clusively upon the partisan advocates who appear #efore them. .nadeFuate or
misleadin( information invites unsound decisions.
K9inally4 what kind of citi-ens will such a system of /udicial activism produce4 a system that trains us to
look not to ourselves for the solution of our pro#lems4 #ut to the most elite amon( elitesM <ud(es

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(overnin( our lives without political or /udicial accounta#ilityA $urely this is neither democracy nor the
rule of law.L
.n ,ivisional 'ana(er4 Aravali Golf Course vs. Chander Daas 1)""@2 the .ndian $upreme Court
o#servedM K<ud(es must know their limits and not try to run the (overnment. They must have modesty
and humility and not #ehave like Emperors. There is #road separation of powers under the
Constitution4 and each of the or(ans of the state must have respect for the others and must not
encroach into each other%s domain.L
KCourts are not representative #odies. They are not desi(ned to #e a (ood refle> of a democratic
society. Their essential Fuality is detachment4 founded on independence. Distory teaches that the
independence of the /udiciary is /eopardised when Courts #ecome em#roiled in the passions of the
day4 and assume primary responsi#ility in choosin( #etween competin( political4 economic4 and social
pressuresL.
The moral of this story is that if the /udiciary does not maintain restraint and crosses its limits there will
#e a reaction which may do (reat dama(e to the /udiciary4 its independence4 and its respect in society.
.t is not my opinion that a /ud(e should never #e activist4 #ut such activism should #e done only in
e>ceptional and rare cases4 and ordinarily /ud(es should e>ercise self restraint.

E9o#')in0 %ot')& in ou) 2'oc)acy
Dow democratic4 actually4 is .ndian democracyA
.ndia is a representative democracy4 where people select their representatives once in five years to
make laws and policies on their #ehalf. +imitin( the participation of the people merely to votin( once in
five years has si(nificantly reduced the responsiveness of the representatives to the people.
9urther4 representatives often make policies that are not ali(ned with the wishes of the people. A key
reason for this is that political parties reFuire hu(e funds to contest elections4 which are usually
provided #y moneyed special interests. ;nce elected4 it is these special interests to whom our
representatives often cater4 rather than the interests of the people.
$o4 what institutional mechanism do the people have to make their voice heard4 if their representatives
do not represent their interestsA
This pro#lem is not uniFue to .ndia. Representative democracies around the world have searched for
solutions to this structural flaw. ;ne innovative solution tried in numerous countries is the Referendum
1R2 and the .nitiative 1.2. These are instruments where#y some decisions of policy and law&makin( are
Ereferred% to a direct vote #y the electorate4 rather than solely #ein( decided #y their representatives.
They provide a formal4 institutional channel for the voice of the citi-ens4 if they feel that their
representatives are not adeFuately representin( them.
The Referendum 1R2M The citi-en&initiated Referendum is an instrument where#y citi-ens4 #y a direct
vote4 can decide whether a le(islation passed #y *arliament should #e re/ected. Citi-ens sceptical of a
certain law or policy can (ather si(natures of a small percenta(e of the electorate which can force a
direct vote4 #y the entire electorate4 on the le(islation in Fuestion. .f a ma/ority vote opposes the
le(islation4 then their re/ection is #indin( upon *arliament.

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The .nitiative 1.2M =hile the Referendum is an instrument that allows citi-ens to accept or re/ect
le(islation passed #y the *arliament4 an E.nitiative% lets citi-ens initiate a new le(islation or
constitutional amendment4 #y puttin( their own proposal on the political a(enda that *arliament is
i(norin(. A #ill drafted #y a (roup of citi-ens and supported #y a small percenta(e of the electorate
1a(ain esta#lished #y si(natures2 is put to a nationwide direct vote.
@'n'-it&
The primary value of .7R is to ali(n le(islative #ehaviour closer to pu#lic opinion. The mere presence of
.7R4 even when it is not used4 makes the le(islature more ali(ned to pu#lic opinion4 since they know
that citi-ens have the .7R channel to KtrumpL them.
$econd4 .7R results in si(nificant (overnance reforms Q an area in which the le(islature is least likely
to act4 since it typically curtails their own power. There is a conflict of interest4 and the lawmakers
typically i(nore or even sa#ota(e such reforms.
Third4 an important impact of the .7R process is the educative and transformative effect it has in
creatin( a more politically informed and participative citi-enry.
C/all'n0'&
;ne lo(istical challen(e is conductin( in direct votin( at the national or even state level. 5arious
solutions e>ist4 includin( the employment of information and communication technolo(ies 1.CT2 in
innovative ways. 9urther4 the content of the #allot to #e voted on4 needs to #e structured in a way that
is easily understood #y a wide variety of voters with varyin( lin(uistic #ack(rounds and levels of
literacy. Dere a(ain various solutions e>ist.
Another challen(e has to do with voter competence in makin( informed /ud(ment on matters of law
and policy. ;ne response to this concern is if our elected representatives 1who are clearly not e>perts
on many of the issues they take decisions on2 can make decisions on laws and policies takin( into
account the views of e>perts4 so can the people.
Additionally4 in referendums it has #een found that even when voters do not understand the
comple>ity of issues4 they are a#le to take simple cues Q like who is supportin( or opposin( the
proposition Q to make informed and ideolo(ically consistent choices. They also try to educate
themselves on the issues to #e voted on #y listenin( to views of e>perts on the topic and en(a(in( in
de#ate. 'echanisms to make diverse e>pert opinions availa#le in an easy to access manner need to #e
devised.
Bet another challen(e is to prevent moneyed special interests from influencin( the .7R process4 #y
sponsorin( hi(h&spendin( misleadin( campai(ns.
;ne response to this concern is that it is far more difficult and e>pensive for moneyed special interests
to convince citi-ens at lar(e than to convince a smaller set of lawmakers throu(h lo##yin(. That said4
there is need to have safe(uards that limit or eliminate campai(n financin( in the .7R process.
=hatever #e the challen(es in introducin( such democratic reform4 the time has come to discuss such
a chan(e to ensure that our (overnment truly represents the people.


IN2IAN ECONO;4

R'0ulation o- coodity -utu)'& a)7't
C/all'n0'&
There is understanda#le e>citement re(ardin( the si(nificant (rowth of commodity market in .ndia4 #ut
it cannot #e denied that there are also apprehensions amon( some Fuarters whether the market is
truly achievin( its o#/ective of price discovery and price risk mana(ement and helpin( farmers and
hed(ers.
.t is well known that hed(ers transfer their risk in this market which is assumed #y the speculators who
#rin( in the liFuidity and that (reater participation and volumes lead to a more efficient price
discovery4 there#y reducin( the possi#ility of price manipulation.
An analysis of the trade volumes on futures market indicates that in case of some commodities4 the
volumes are much hi(her than the open interest4 there#y indicatin( that the e>tent of hed(in( is much
less than the speculative volumes (enerated.
.t is also seen that in respect of a num#er of commodities4 the volume of participants is not very
si(nificant. .t is a matter of concern4 as this will result in poor Fuality of price discovery in such
contracts.
!um#er of studies and reports do indicate that futures tradin( in commodities cannot #e said to #e
responsi#le for price rise. .t is4 however4 possi#le that if futures&market is not ali(ned properly with the
physical market4 price discovery in the futures platform may #ecome distorted which may #e misused
#y vested interests.
$uch a situation can only #e avoided when hed(ers and potential hed(ers are encoura(ed to
participate in this market in lar(e num#er.
St'9& ta7'n
9orward 'arkets Commission 19'C2 has #een takin( a num#er of initiatives to address the a#ove
challen(es. There is need to create awareness amon( the hed(ers and industry associations a#out
these critical issues I it is here industrial #odies such as 9.CC. should play their important role in
creatin( such awareness.
The 9'C has also started a comprehensive e>ercise for ali(nment of futures market with the physical
market. A sta((ered delivery system has #een introduced in a num#er of a(ricultural commodities. This
has already resulted in si(nificant reduction in e>cessive speculation in the near month and in reduced
price volatility in these commodities.
The 9'C is also reviewin( all the futures contracts traded in the market to e>amine if those are suited
to the needs of the physical market participants.
;ne of the primary o#/ectives of Commodity 'arkets is to help farmers to (et #est possi#le price for
their produce. The farmers4 especially small and mar(inal4 are not a#le to participate in the market
directly. They do so throu(h a((re(ators. Therefore4 the 9'C has asked the e>chan(es to promote


a((re(ators on a pilot #asis in the a(ricultural commodities so that the market #enefits the farmers
much more.
The *rice ,issemination *ro/ect of the Commission is #ein( implemented across the country. The price
si(nals comin( from futures market also help farmers to take important sowin( and marketin(
decisions. 9armers would #e #enefited far more #y introduction of options which would #e possi#le
after the amendment of the 9CR Act
.ntroduction of investor protection measures will instill a sense of confidence in the retail clients
encoura(in( them to participate in lar(e num#er. .nvestor *rotection 9und has #een set up in each
e>chan(e and a trust is #ein( set up to operate the fund.
There is also a need to undertake a ma/or media campai(n in colla#oration with the E>chan(es to
increase investor education in all the $tates on a sustained #asis.
The need for stren(thenin( re(ulatory mechanism throu(h Amendment of 9CR Act has #een discussed
over the years and it is certainly necessary to stren(then this mechanism. The proposed amendment
9orward Contract Re(ulation Act 1Amendment2 3ill4 would ena#le the 9'C to play a more effective role
in re(ulation of these markets.

Inland ,at')#ay&
$ince <anuary4 *'; has identified and fast&tracked implementation of key pro/ects in the !ational
=aterways & 14 ) and 0 1!= & 14)402. These are the 5aranasi& Daldia stretch of the Gan(a 1!=&124 the
3rahmaputra in Assam 1!=&)2 and the inland stretch in 6erala 1!=&02.
.=A. has since moved forward on lar(e scale private investments to transport coal and fertili-er on
!=&14 food(rains and coal on !=&) and a lot of car(o on !=&0.
The share of .nland =ater Transport 1.=T2 in the total domestic transport durin( )""7&"8 was ".)8 U
compared to :".1) U for the road and 0@."@ per cent for the rail sector in terms of tonne km.
The development and re(ulation of the waterways which are declared as !ational =aterways are
under the purview of Central Government4 while the other waterways remain under the purview of the
respective $tate Governments.
The Government has #een takin( various steps to develop .nland =ater Transport 1.=T2 which4 inter&
alia4 includes
ensurin( tar(eted depth and width in the navi(ational channels4
aids for day and ni(ht navi(ation4
fi>edHfloatin( terminals at specified locations for #erthin( and loadin(Hunloadin( of vessels and
intermodal connectivity at select locations.
3esides these4 Central Government also provides 1"" per cent Grants&in&aid to the $tates in the !orth&
Eastern Re(ion for development of .=T.
A Committee has #een constituted to scale up private investment in .nland =aterways $ector under
the $ecretary4 *lannin( Commission. This Committee would undertake a systematic effort to identify
new areas for private investment4 #oth in infrastructure and in transportation. .t will also identify
multiple #usiness models which could then #e #id out throu(h concessions.

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Geonkhali&Char#atia stretch of East Coast Canal 1)17 km24 Char#atia& ,hamra stretch of 'atai River 10
km2 4 Talcher& ,hamra stretch of 3rahmani& 6harsua& ,hamra River system 1)@: km2 alon( with
'an(al(adi& *aradeep stretch of 'ahanadi delta Rivers 1 @7 km2 havin( a total len(th of :88 km. in the
$tates of =est 3en(al and ;disha have #een declared as !ational =aterway 1!=&:2 w.e.f. ):th
!ovem#er4 )""8.
The efforts to develop more commercially via#le stretches of !=&: under *u#lic *rivate *artnership
1***2 mode with 5ia#ility Gap 9undin( 15G92 under .ndia .nfrastructure *ro/ect ,evelopment 9und
1..*,92 and *** *ilot *ro/ect .nitiative under the Asian ,evelopment 3ank 1A,32 Technical Assistance
are in process.
T/' Inland ,at')#ay& Aut/o)ity o- India
The .nland =aterways Authority of .ndia 1.=A.2 was constituted for development and re(ulation of the
.nland =ater Transport sector in ;cto#er 18@ after which five waterways have #een declared as
national waterways for their systematic development for shippin( and navi(ation.
.=A. strives to promote inland water transport infrastructure #y providin( the tar(eted depth and
width for most part of the year in the navit(ational channelsP aids for day and ni(ht navi(ationP fi>edH
floatin( terminals at selected locations for #erthin( and loadin(H unloadin( of vesselsP and intermodal
connectivity at selected locations.

AIR India Pilot St)i7'
The de&reco(nised .ndian *ilots% Guild has decided to call off its nearly two&month&lon( strike after
,elhi Di(h Court directive4 #ut the (overnment would do well to acknowled(e thisM the end of the
strike is (oin( to help neither Air .ndia nor the ta>payer. Resumption of full operations will only mean a
return to status Fuo.
?nless A. reforms or is forced to4 it will continue to make losses. ;nly a transformative rethinkin( of A.
that entails immediate disinvestment and downsi-in( of the #ehemoth can make a difference.
The latest packa(e of Rs 0"4""" crore had come with the attached caveats of " per cent on&time
performance4 70 per cent passen(er load and improved yields.
The (overnment had decided to take away A.%s monopoly over #ilaterals and ri(ht of first refusal4 #ut
there must #e movement on allowin( more efficient private .ndian carriers to increase their overseas
operations.
A#ove all4 what%s needed is (enuine reform Q such as allowin( forei(n carriers to hold eFuity in .ndian
airlines. This would4 for instance4 help stru((lin( .ndian carriers to raise capital.
A. must #e fi>ed4 if not a#andoned4 to help the civil aviation sector.
C)itical E%aluation o- Pilot&8 2'and&
3efore the mer(er4 the (overnment made the country #elieve that the losses incurred #y Air .ndia 1A.2
and .ndian Airlines 1.A2 stemmed from competition #etween the two airlines4 that they could not
survive on a standalone #asis. The creation of a mer(ed entity would help them consolidate and
capture the world market. At the same time4 #oth the airlines claimed that their respective old fleets

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were a #ane. $o the (overnment ordered 1"" new aircraft and mer(ed the two airlines in )""74
inventin( a perfect recipe for disaster.
Currently4 A. has a de#t of around Rs 8@4""" crore4 accumulated losses of Rs ))4""" crore4 a workin(
capital loan of Rs )"4""" crore and other sundry de#ts4 such as dues to oil companies4 airports and
caterin(4 amountin( to another Rs 1"4""" crore. .n A.4 we have an airline owned and run #y the
(overnment with implications of financial mismana(ement of over Rs 1 lakh crore. $adly4 the
(overnment has a(reed on a Rs 0)4""" crore packa(e for a turnaround Q this comes after it has
already invested some Rs )4""" crore.
There are many reasons why A. is in such a pitia#le state4 #ut the recent strike #y pilots from the pre&
mer(er A. is a perfect e>ample of how the airline had #een run earlier and how the employees4 from
loader to top mana(ement4 have arm&twisted an or(anisation said to #e our national pride.
The (overnment has needlessly poured in money from the pu#lic e>cheFuer to suit the whims and
fancies4 not of passen(ers or the people of this country4 #ut of A. employees4 the #a#us and even
politicians.
!ow let us e>amine what the a(itatin( pilots had asked for. 9irst4 they had said that they would not4 in
any situation4 accept pilots of the erstwhile .A #ein( sent for trainin( on 3oein( 787 ,reamliners4 or for
that matter4 any other aircraft flown #y the strikin( pilots Q the 777s or the 787s. =here in the world
do employees decide their own terms of employment and those of their collea(ues tooA ;ver the
years these youn( captains4 and their predecessors4 have served A. while en/oyin( the privile(e of
flyin( the most #eautiful aircraft. This was a privile(e not many other youn( trained pilots had. Davin(
(ained e>perience4 under(one trainin( and then havin( Fualified at a hu(e cost to the company4 they
decide to set their own terms of employment. The (overnment4 after investin( hu(e resources4 is
threatened #y arm&twistin( and pilots can (o on strike at their own sweet will. They stand protected as
KworkmenL under our la#our laws4 which put our captains at par with carpenters4 electricians and
others.
The second demand the pilots had made is that if they have to operate anywhere in the world as staff
on duty4 they should #e (iven a confirmed first&class seat4 provided the seat has not #een fully paid for
#y a passen(er already. The cost of the first&class seat to !ew Bork or Toronto would almost eFual the
salary of the captain. .f the first&class seat has #een paid for #y a passen(er4 the captain will decide
whether he wants to travel #usiness class or not. 3ut in no situation will he a(ree to fly economy.
Third4 the pre&mer(er A. pilots had said that they will only fly to the =est and those destinations
should #e theirs e>clusively. 9ormer .A pilots could fly to Eastern destinationsP under no circumstances
should they look =est.
9ourth4 at some point of time earlier4 the mana(ement had a(reed4 under duress4 that if a captain did
not #ecome commander in 1" years4 due to his own professional a#ilities or #ecause the mana(ement
had failed to put him on command trainin(4 he should #e (iven the perks and remuneration of a
commander. This proviso4 si(ned #etween the mana(ement and the .ndian *ilots Guild4 was inherently
atrocious. The pilots now propose to reduce it from 1" to @ years4 which means that a captain who fails
to achieve the competence of a commander in si> years should still #e treated as one.
.t is time the (overnment takes a final call and sets everythin( in order4 somethin( it has failed to do
since the mer(er in )""7.


P)oduc') P)ic' Ind'C
The Reserve 3ank of .ndia 1R3.2 has proposed a *roducer *rice .nde> 1**.24 which would measure the
avera(e chan(e over time in the sale prices of domestic (oods and services.
.n its present structure4 the =holesale *rice .nde> 1=*.2 does not capture the price movement of
services. Also4 it is a hy#rid of consumer and producer price Fuotes. 9or e>ample4 the inde> captured
the price of important commodities such as milk from the retail marketsP not at the producer level.
.n contrast to Consumer *rice .nde> 1C*.24 **. measures price chan(es from the perspective of the
seller. $ellers% and purchasers% prices differ due to (overnment su#sidies4 sales and e>cise ta>es4 and
distri#ution costs. 9or these reasons4 it is4 therefore4 desira#le that we move towards **..
Theoretically4 C*.4 which measures chan(es over time of the (eneral level of prices of (oods and
services that households acFuire for the purpose of consumption4 is considered a #etter measure of
inflation than =*..
3ut4 the new comprehensive C*. did not have adeFuate history to support data analysis and to #e used
as a sole headline measure of inflation.
The structural chan(es in our economy over the past decade have created an unprecedented demand
for commodities. .n the a#sence of a supply response4 this has resulted in a lastin( chan(e in the price
level. Therefore4 headline measure of inflation will necessarily have a lar(er momentum than core
inflation.
Core inflation was usually estimated #y e>cludin( food and ener(y prices from the #asket of (oods and
services that represents a household%s typical spendin(.
.n an economy like .ndia where food constitutes nearly :" per cent of the consumption #asket and fuel
has a wei(ht of 1: per cent4 can a measure of inflation that e>cludes them #e called coreA .nflation in
fuel and certain protein food items has #een persistent over the last three years. Can a persistent
component #e e>cluded from the core measure A

3'%y on Sall ISP&
+ast month4 the (overnment decided to levy on stand&alone .nternet service providers 1.$*s2 a licence
fee of 8 per cent of their ad/usted (ross revenue 1AGR2. This is a hu(e /ump from earlier notional
licence fee of Re 1 only.
9or #i((er players who provide telecom and .nternet&telephony services4 such as Airtel or 3$!+4 the fee
will #e 7 per cent & a one percenta(e point hike from the earlier @ per cent.
=ith this order4 the (overnment has unwittin(ly #ecome the de&facto controller of the Eprivate
hi(hway%4 allowin( #i( telecom companies to rule the roost on the roads4 pushin( smaller and mid&
si-ed .$*%s into the (round.
.ndependent and local .$*%s operate on thin mar(ins4 and cannot a#sor# the cost of such a levy. The
result will #e an increase in prices for their small4 lower to middle&class4 customer #ase.
The emer(in( dispute #etween small .$*s and the (overnment underscores the core weakness of the
.nternet economy. .n order for millions of .ndian citi-ens to reach the multitude of online services that
compete for their attention4 they must first (et past the #ottleneck that is not competitive at allM
#road#and access.


The decision to levy such a fee is driven #y the (overnment%s intent to address alle(ed underreportin(
of revenue #y the lar(e companies that derive most of their revenues from telecom services. Telecom
licences attract lar(er revenue shares of up to 1" per cent. The (overnment has found some of these
companies reportin( their telecom revenues under the .nternet to pay a lower fee.
.nstead of takin( action a(ainst the #i( players for their wron(&doin(s and failin( to audit them
properly4 they are penali-in( the smaller .$*s. This is a disaster. An increase of four per cent of the
annual licence fee would cascade and lead to an effective fee of )1&)8 per cent as smaller .$*s would
#e ta>ed multiple times4 as they purchase #andwidth from the telcos.
9or most independent .$*s4 small mar(ins are inevita#le in an era of droppin( #road#and prices due to
competition even as last&mile costs such as settin( up infrastructure have remained more or less
unchan(ed over the years.

India8& !
)d
;a=o) Stoc7 ECc/an0'
The approval for 'CC&$C to set up .ndia%s third ma/or stock e>chan(e comes in a year when interest in
the financial markets amon( retail investors has reached its nadir. $o4 as a move to perk up interest
amon( investors4 this is a step in the ri(ht direction.
The primary /ustification for a stock market to e>ist is to provide liFuidity to companies listed there and
create an easy investment avenue for the middle class.
As the world economy lurches throu(h a prolon(ed recession4 with daily liFuidity at the cash market in
.ndia%s !ational $tock E>chan(e plummetin( to /ust a#out Rs 1)4""" crore4 it will #e interestin( to
o#serve how the new e>chan(e is a#le to ramp up liFuidity.
The .ndian financial sector has la((ed #ehind the rest of the economy as a means to raise funds to
maintain a trend G,* (rowth rate of 8 per cent per annum. $ince interest rates too are hi(her in .ndia
than in compara#le economies4 the com#ination of shallow liFuidity and hi(h rates has encoura(ed a
raft of companies to move their financial reFuirements overseas.
.n the calendar year )"1"4 #efore the economy tum#led4 the total primary issue was only Rs 884@:8
crore. Compared with an a((re(ate #ank credit of Rs 0:48)4"88 crore4 this looks paltry and shows the
e>tent to which the .ndian economy depends on the latter N3ank CreditO. This asymmetry needs to #e
addressed.
To the e>tent that the new e>chan(e is a#le to make retail investors come in to trade and small
enterprises to list4 the depth of the markets will improve.
9or the .ndian economy4 this will #e the measure of the success of this #old new venture.

PAT >P')-o)A Ac/i'%' and T)ad'? Sc/''
The *AT 'echanism is an important initiative under !ational 'ission for Enhanced Ener(y Efficiency
1!'EEE2 pro(ramme of Government of .ndia under the ei(ht national missions of !A*CC.
.t is a market #ased mechanism to further accelerate as well as incentivi-e ener(y efficiency in the
lar(e ener(y&intensive industries.
The scheme provides the option to trade any additional certified ener(y savin(s with other desi(nated
consumers to comply with the $pecific Ener(y Consumption reduction tar(ets.

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The Ener(y $avin(s Certificates 1E$Certs2 so issued to those who e>ceed their savin( tar(ets4 will #e
trada#le on special tradin( platforms to #e created in the two power e>chan(es 1.ndian Ener(y
E>chan(e and *ower E>chan(e.ndia2.

;onito)in0 o- PPP P)o='ct&
=ith an increasin( reliance #ein( placed on *** pro/ects across many win(s of the (overnment4 it has
#ecome necessary to adopt a well&defined institutional structure for overseein( contract performance
effectively.
The .nstitutional 9ramework reFuires pro/ect authorities to create a two&tier mechanism for
monitorin( the performance of *** pro/ectsM
i. A*** *ro/ects 'onitorin( ?nit 1*'?2 at the pro/ect authority level
ii. A*** *erformance Review ?nit 1*R?2 at the 'inistry or $tate Government level4 as the
case may #e.
The *'? is to prepare a report to #e su#mitted to *R? within 1: days of the close of the relevant
month. The report is to cover compliance of conditions4 adherence to time lines4 assessment of
performance4 remedial measures4 imposition of penalties4 etc.
The *R? is to review the reports su#mitted #y the different *'?s and oversee or initiate action for
rectifyin( any defaults or lapses.
.n addition to followin( the (uidelines for the mechanism4 the respective 'inistries will send a
Fuarterly compliance report to the *lannin( Commission with a copy to the 'inistry of 9inance.
*lannin( Commission4 in consultation with the 'inistry of 9inance4 will prepare a summary of these
reports alon( with the recommendations relatin( to further actionHimprovements which would #e
placed #efore Ca#inet Committee on .nfrastructure 1CC.2 once every Fuarter for the ne>t two years.
3ased on the e>perience (ained any necessary modifications would #e made in the Guidelines.
.t will ensure (ood (overnance4 accounta#ility4 efficiency and economy in spendin(. The *lannin(
Commission will have a central role in ensurin( hi(h Fuality monitorin(. The Ca#inet will have a chance
to monitor every Fuarter.

El'ct)onic& ;anu-actu)in0 Clu&t')& >E;C&? Sc/''
Electronics 'anufacturin( Clusters 1E'Cs2 would aid the (rowth of the Electronics $ystems ,esi(n and
'anufacturin( 1E$,'2 sector4 help development of entrepreneurial ecosystem4 drive innovation and
cataly-e the economic (rowth of the re(ion #y increasin( employment opportunities and ta> revenues.
The proposed E'Cs scheme would support settin( up of #oth Greenfield and 3rownfield E'Cs.
The proposed scheme is e>pected to help flow of investment for the development of world&class
infrastructure specifically tar(eted towards attractin( investment in the E$,' sector.
!early )8 million persons are e>pected to #e employed4 directly or indirectly for the E$,' turnover to
reach ?$, 8"" #illion.
The policy covers all $tates and districts and provides them an opportunity to attract investments in
electronics manufacturin(.

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The importance of clusters in E$,' is a well accepted phenomenon worldwide. A well developed
cluster can (ive a unit located in it a cost advanta(e of : to 8U #ecause of various reasons such as
increased supply chain responsiveness4 consolidation of suppliers4 decreased time&to&market4 superior
access to talent and lower lo(istics costs. The cluster development approach also helps in the
development of entrepreneurial ecosystems which drive innovation and cataly-e the economic (rowth
of a re(ion #y increasin( employment opportunities and ta> revenues.
@ac70)ound : 2)a-t National Policy on El'ct)onic&
As part of the vision to make .ndia a leadin( destination for the E$,' sector4 the draft !ational *olicy
on Electronics 1!*E2 proposes to achieve a domestic production of a#out ?$, 8"" 3illion #y )")" in
the E$,' sector #y creatin( an industry friendly policy framework and ecosystem which provides a
level playin( field for the domestic industry.
The draft !*E also proposes to set up two semiconductor wafer manufacturin( facilities and to create
and sustain a vi#rant research and development and innovation eco&system in the E$,' sector.
$ettin( up of E'Cs is an inte(ral part of this strate(y.

St'9& ta7'n to Co5at ;i&u&' o- Tat7al Tic7't&
To prevent misuse of the facility4 Railways have taken steps like de#arrin( the a(ents to #ook tickets
durin( the first two hours4 installation of CCT5s in all ma/or #ookin( centres to monitor the movement
of touts4 non issuance of duplicate in lieu of the lost Tatkal tickets and non&refund on cancellation of
unused Tatkal tickets.
The reFuirement of indicatin( 'o#ile num#er of the passen(er in the application form is also #ein(
insisted to cross verify the (enuineness of the passen(er.
$in(le user re(istration on one e&mail ., with email verification has #een implemented.
;nly two tickets can #e #ooked per .* address #etween 1"&1) A'. .* address check has helped in
preventin( multiple #ookin(s from same office comple>Hinternet cafV etc. This also helps in facilitatin(
#ookin(s #y (enuine users and prevents #ookin(s for commercial (ains.
3esides these measures4 attachin( the photo copy of identity proof of passen(er has #een made
mandatory for #ookin( of Tatkal tickets and carryin( of ., card have also #een made compulsory for all
passen(ers of AC classes.
.n addition4 it has further #een decided to chan(e the time of #ookin( of Tatkal tickets at the counters
from e>istin( 8."" A.'. to 1"."" A.'. with effect from 1"th <uly4 )"1) to avoid con(estion in the
mornin( hours at counters for the normal advance #ookin( passen(ers. The restriction on the a(ents
for Tatkal tickets #ookin( durin( the first two hours shall also continue.
The surprise inspections and preventive checks are #ein( conducted re(ularly at reservation centres to
contain the activities of the unauthori-ed a(ents and touts. These checks are intensified durin(
peakHrush period and festival seasons
.RCTC4 has also taken several steps to prevent touts and unauthori-ed a(ents from their ille(al
activities. $everal technolo(ical innovations like increase in the #andwidth of internet4 au(mentin( E&
Ticketin( software licences4 technical evaluation of mo#ile #ased technolo(y etc. are re(ularly #ein(
undertaken to cope up the demand and minimi-e the misuse of the system #y unscrupulous people.


R@I8& Financial Sta5ility R'9o)t >FSR?
The R3.%s latest 9inancial $ta#ility Report 19$R24 attempts to share the results of the central #ank%s
macro prudential surveillance with the markets. The o#/ective is not only to #rid(e the knowled(e (ap
in a crucial area #ut to encoura(e de#ate and create awareness of the vulnera#ilities of the financial
system.
Given that it is the financial sector%s weaknesses that spawned much #i((er economic crises in many
countries recently4 the need to keep a ta# on vulnera#ilities can hardly #e overstated.
The 9$R%s ma/or findin( is that the country%s financial system remains ro#ust despite increases in risks
stemmin( from (lo#al factors and macroeconomic conditions.
,omestic (rowth is threatened #y the twin deficits of current account and fiscal im#alances. .nflation
risks remain.
9orei(n e>chan(e and eFuity markets have corrected themselves and are e>periencin( a hi(h de(ree of
volatility.
3anks4 however4 remain resilient to credit4 market and liFuidity risks and would #e a#le to withstand
macroeconomic shocks (iven their comforta#le capital adeFuacy levels. There has4 however4 #een a
deterioration in the Fuality of assets Q inevita#le4 perhaps4 in a slowin( economy.
+iFuidity issues have come to the fore recently. 3anks are mo#ilisin( fewer deposits. Their advances
are also lower #ut their level of outside #orrowin( has increased.
The (rowin( KinterconnectednessL in the financial sector is a ma/or concern. Amon( others4 it has
increased the scope of asset&lia#ility mismatches in the #anks4 which have #een #orrowin( for short
periods from mutual funds to fund their lon(&dated assets.
9inally4 Kdistress dependenciesL #etween #anks have risen. The systemic importance of Kthe most
connectedL #anks has increased4 warrantin( closer monitorin(. Any failure here will have lar(e
ne(ative implications for other #anks4 mutual funds and insurance companies4 which have lent
e>tensively to #anks.

S)ini '0a -ood 9a)7
$rini me(a food park at Chittoor in Andhra *radesh is the first me(a food park in the country.
This new&a(e facility is eFuipped with Central *rocessin( Centre and *rimary *rocessin( Centres.
$rini 9ood *ark provides world&class facilities for pulpin(4 .G94 #ottlin(4 tetra packin(4 modular cold
stora(e4 warehousin( and advanced testin( la#.
.t ena#les #asic and supply chain infrastructure4 cluster farmin( and is a#ly #acked #y field collection
centers4 self help (roups and individual farmers.
A me(a food park provides various facilities to food processors4 farmers4 retailers and e>porters4 thus
help in fast (rowth of food processin( industries.
P)o='ct Cl'a)anc' @oa)d
To review the status of clearances of ;il 7 Gas 3locks awarded under the !E+*4 it was decided that
a*ro/ect Clearance 3oard alon( the lines of 9orei(n .nvestment *romotion 3oard 19.*324 would #e
constituted under the chairmanship of the Ca#inet $ecretary for review and issue of one&time
clearances4 includin( security clearance.

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This 3oard will include representatives from the 'inistries of Dome4 ,efence4 Environment 7 9orests4
Commerce4 Coal4 ,Ho $pace and other infrastructure and ener(y related 'inistriesH ,epartments.
.t will meet re(ularly on a monthly #asis to review the status of clearances for ener(y and
infrastructure pro/ects and e>pedite issuin( of security and other clearances. 'inistries would report
to this 3oard the status of issuin( of clearances after followin( their internal due dili(ence processes.
9or the *etroleum 7 !atural Gas sector4 the special cell for clearances #ein( set up in ,GD will act as
the secretariat. A common mechanism for all sectors will #e evolved soon and the 3oard will #e set up
in the comin( weeks.

TaC R'tu)n P)'9a)') Sc/''
.t is an initiative of the .ncome Ta> ,epartment to help small and mar(inal ta> payers in filin( of their
.ncome Ta> Returns. This $cheme is applica#le to individual and Dindu ?ndivided 9amily 1D?92 ta>
payers who can take assistance of Ta> Return *reparer 1TR*2 in preparation and filin( of their .ncome
Ta> Returns.
The TR*s are self employed (raduates who are trained #y the .ncome Ta> ,epartment for filin( of
.ncome Ta> Returns as well as Fuarterly T,$ statements.
The TR*s are authori-ed to collect nominal char(es of Rs. ):" or less from the ta> payers for preparin(
their .ncome Ta> Returns. The ,epartment also pays incentive to the TR*s for preparin( of returns of
ta> payers which is a percenta(e of the total ta> paid as per the returns prepared #y the TR* su#/ect to
a ma>imum of Rs. 1"""H&.
.n order to make the .ncome Ta> Return filin( e>perience even more convenient4 the .ncome Ta>
,epartment has started two more ta>payer friendly initiatives ERe(ister for Dome 5isit% and E;nline Ta>
Delp%. !owa ta>payer can take help of trained professionals either online or at their homes.

O9inion
India8& @oP Situation
The latest #alance of payments 13o*2 data for .ndia released #y R3. hi(hli(hts the (rim economic
situation faced #y the country.
.t could mean further rupee depreciation4 stress on #alance sheets of companies who have #orrowed
in dollars4 a hi(her import #ill4 difficulties for #anks whose clients have #orrowed in dollars4 hi(her
inflation as the price of trada#les rises4 and capital fli(ht from .ndia.
The data shows that for the year )"11&1) .ndia ran a current account deficit of 8.) per cent of the G,*.
The main sources that financed this overspendin( were portfolio flows and dissavin( throu(h depletion
of reserves. .n the comin( Fuarters we cannot e>pect these two to #e the sta#le sources to fund our
overspendin(.


'any o#servers ar(ue that 9,. is a sta#le source of fundin(. 3ut durin( the period in which there has
#een a crisis in international #ankin( and poor investment sentiment4 and lack of 9,.&related reforms
in .ndia4 many forei(n firms have pulled money #ack.
;ne view of the lar(e current account deficit is that it is driven #y (old imports4 and is thus not truly a
current account deficit as (old is an asset. $o the money spent on (old imports should #e treated as a
capital account outflow rather than an outflow on the current account.
Dowever4 this i(nores the Fuestion of why there has #een a sudden fall in #ank deposits and an
increase in (old purchase #y .ndian households in the last one year. .f we i(nore this story4 we do not
take into account the pro#lem of inflation and the household response to it4 and the implications for
the #alance of payments.
The fundamental pro#lems that are causin( .ndia%s #alance of payments crisis are &
;n the one hand4 on the current account4 the country faces a twin deficit situation Q a lar(e fiscal
deficit spillin( over into a lar(e current account deficit. At the same time4 spendin( on the most import&
intensive consumption item4 oil4 does not fall even when the rupee price of oil chan(es as firms and
households do not face hi(her prices4 thanks to a product su#sidy. .nflation has undermined the value
of the rupee4 and households have moved towards (old where a(ain additional demand is met throu(h
imports.
;n the other hand4 on the capital account4 the inflow of forei(n capital has #ecome hi(hly unsta#le.
The (lo#al economic situation was #ad enou(h with European #anks delevera(in( and forei(n portfolio
investors flippin( #etween risk&on and risk&off mode after the crisis in the ?$ and Europe. =e added to
our woes #y announcin( the GAAR4 violatin( rule of law throu(h the 5odafone ta> issue4 stallin( lar(e
pro/ects4 proposin( investor unfriendly policies and killin( the .ndia (rowth story.
.nstead of only mana(in( the e>chan(e rate of the rupee4 and hidin( the pro#lem4 the (overnment will
need to address the disease and not its symptoms.

India8& @ilat')al In%'&t'nt T)'ati'&
Recently .ndia%s 3ilateral .nvestment Treaties 13.Ts2 have #een cau(ht up in investment disputes as the
many forei(n companies have accused .ndia of violatin( these 3.Ts
9or instance4 $istema a Russian corporation4 has send notice to the .ndian (overnment to amica#ly
settle the investment dispute4 under the .ndia&Russia 3ilateral .nvestment Treaty 13.T2. The dispute had
arisen #ecause of the cancellation of the )G licences #y the $upreme Court. After the deadline e>pires4
$istema reserves the ri(ht to #e(in proceedin(s a(ainst .ndia in an investment treaty tri#unal. $imilar
notices have #een issued #y other forei(n corporations like Telenor and 5odafone.
An important aspect of 3.Ts is that they #estow on forei(n investors the ri(ht to prosecute their claims
a(ainst the soverei(n re(ulatory actions of the host state 1investor&state dispute settlement24
independent of their home country (overnments. This monumental provision plays an important role
in ena#lin( 3.Ts to provide real protection to forei(n investment.


Apparently4 some in the .ndian (overnment are of the view that the challen(e posed #y 3.Ts should #e
dealt with #y deletin( the investor&state dispute settlement clause. Dowever4 not havin( this clause in
a 3.T will noticea#ly reduce the efficaciousness of these treaties in protectin( forei(n investment.
.t will add to the e>istin( policy and re(ulatory upheaval4 further dampenin( the spirit of forei(n
investors to invest in .ndia.
'oreover4 deletin( the investor&state dispute settlement provisions in 3.Ts will ne(atively affect many
.ndian companies who have invested ma/orly in Africa4 +atin America and other countries like !epal4
and put .ndian investment a#road in peril.
Also .ndia%s flawed understandin( of the real character of 3.Ts has (iven rise to some myths and half&
truths.
The first myth is that 3.Ts can #e invoked only a(ainst the actions of the (overnment4 that is4 the
e>ecutive. This is erroneous. .n addition to the e>ecutive4 soverei(n actions of the /udiciary and the
le(islature can also violate international law contained in a 3.T4 for which .ndia4 as a country4 will #e
lia#le.
The second myth is that 3.Ts do not apply to issues related to ta>ation. The fact is they are a part of the
host state%s soverei(n re(ulatory functions and hence fall within the am#it of 3.Ts4 unless e>plicitly
e>cluded.
The third myth is that only forei(n direct investment 19,.2 falls under the am#it of 3.Ts. Bet they define
investment in an e>tremely #road manner4 coverin( all kinds of assets. The definition of investment in
all .ndian 3.Ts covers investment4 portfolio investment4 intellectual property ri(hts4 ri(hts to money or
to any performance under contract havin( a financial value or #usiness concessions conferred under
law or contract.
,ay Fo)#a)d
The dauntin( challen(e posed #y 3.Ts does not stem from the investor&state dispute settlement
provision4 #ut from the #road su#stantive protections covered in the treaty4 which do not #alance
investment protection with .ndia%s ri(ht to re(ulate. The way forward for .ndia is to focus on
rene(otiatin( such provisions and narrowin( their scope as per its developmental priorities.
Rene(otiatin( 3.Ts is not as difficult a /o# as it is often made out to #e Q most o#li(ations under them
are for 1" years4 with the option of reviewin( the 3.T after this period.
9urther4 rene(otiatin( a #ilateral treaty is easier than rene(otiatin( a multilateral treaty like the =T;4
for e>ample. .ndia has a pretty successful track record in rene(otiatin( ,ou#le Ta>ation Avoidance
A(reements 1,TAAs2 in order to address concerns related to ta> evasion and #lack money. .f #ilateral
,TAAs can #e re&ne(otiated4 so can 3.Ts.
.ndia must aim to #alance its ri(ht to re(ulate with investment protection.
$ava(e attack on mana(ers at 'aruti plant hi(hli(hts need for ur(ent reform of archaic la#our laws

R'-o)in0 3a5ou) 3a#&
.ndia has developed a stron( trade union movement #ut it has insufficient le(al safe(uards a(ainst
unreasona#le and militant trade union activity4 which is harmin( the formal sector and discoura(in(
investment.

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=ithin two decades of .ndependence4 a(itations had severely dama(ed 'aharashtra%s te>tiles
industry4 and wiped out heavy industries and /ute mills in =est 3en(al. This is #ecause la#our laws had
e>cessively valorised la#our%s ri(ht to employment over the entrepreneur%s ri(ht to security4 #oth
personal and fiscal.
Today4 almost )"" Central and state laws impin(e on la#our relations and markets Q includin( the
archaic .ndustrial ,isputes Act of 187.
,ispute resolution is painfully slow4 with tens of thousands of cases pendin( for years.
3esides4 as economists have pointed out4 laws (overnin( la#our markets were written simplistically.
Ri(id strictures on hirin( and firin( protected /o#s without re(ard for the implications for productivity4
or the strate(ies that entrepreneurs would use to (et around them.
3ecause of this lack of perspective4 the formal sector has (rown to only a fraction of its potential while
the unor(anised sector has #ur(eoned4 thou(h it offers no protection to la#our or employers.
.ncidents like the one at 'anesar are local red alerts. 3ut the (overnment should reco(nise that they
indicate a structural sickness which must #e solved nationally.

N''d -o) Nut)i'nt:@a&'d Su5&idy in U)'a
.nadeFuate supplies of natural (as will limit capacity additions in urea4 leadin( to an increase in
imports. .ncreased urea imports 1where the su#sidy #urden per tonne is hi(her compared to domestic
urea2 alon( with hi(h (lo#al prices of raw materials for comple> fertili-ers are likely to derail the
(overnment%s efforts to contain fertili-er su#sidies in the medium&term.
!atural (as is the predominant input in the manufacture of urea4 which accounts for :" per cent of
fertili-er consumption in the country. The (overnment has accorded priority to allocation of natural (as
to fertili-er units4 #ut e>perts do not e>pect any fresh urea capacities to come on stream in the ne>t
few years due to (as scarcity.
Another ma/or disincentive for capacity addition in the fertili-er sector has #een the (overnment%s
policy of price control4 #ecause fertili-er is a key a(ricultural input. 9ertili-er cost accounts for @&8 per
cent of total cost of cultivation of ma/or principal crops such as wheat4 paddy4 #a/ra4 and mai-e. ,ue to
ne(li(i#le capacity additions4 imports have played a si(nificant role in the sector.
And4 despite the introduction of schemes such as the nutrient&#ased su#sidy 1!3$2 scheme for comple>
fertili-ers 1aimed primarily at reducin( the (overnment%s su#sidy #urden24 imports will remain
si(nificant even in the ne>t few years4 due to a steady (rowth in demand and hi(h raw material prices.
The dependence on imports will #e particularly true in the case of comple> fertili-ers. .ndia is the sin(le
#i((est #uyer of ,A* 1di&ammonium phosphate4 a phosphatic fertili-er2 in the (lo#al market4 as it
imports around :) per cent of (lo#ally&traded ,A*4 or eFuivalently @" per cent of its domestic
consumption. $imilarly4 the country imports all its reFuirement of muriate of potash 1a potassic
fertili-er2. To(ether4 these two fertili-ers account for around )0 per cent of total consumption. 9urther4
in the case of domestically&manufactured ,A*4 .ndia imports nearly " per cent of its reFuirement of
phosphoric acid 1which is the raw material in the manufacture of ,A*2.

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9arm(ate prices of urea 1a nitrone(ous fertili-er2 and comple> fertili-ers have traditionally #een
controlled #y the (overnment. ConseFuently4 any increase in the cost of production for fertili-er
companies was reim#ursed #y the (overnment in the form of a su#sidy.
To rein in the #alloonin( fiscal deficit4 the (overnment4 in )"1"4 introduced an !3$ re(ime in comple>
fertili-ers4 under which the su#sidy was fi>ed for each nutrient. $imultaneously4 farm(ate prices of
comple> fertili-ers were decontrolled. .t was thou(ht that the new re(ime would (ive pricin( fle>i#ility
to the manufacturer4 and partly insulate the CentreRs su#sidy #urden from the volatility in (lo#al raw
material as well as product prices.
Dowever4 the scenario since introduction of !3$ in comple> fertili-ers has #een mi>ed. The su#sidy
payout was lower in )"1"&114 #ut since then international prices of raw materials for comple>
fertili-ers have risen continuously4 necessitatin( an upward revision in su#sidy on more than once to
avoid sharp increase in retail prices.
Dowever4 despite such temporary #lips4 !3$ is a step in the ri(ht direction. Already4 one ne(ative
conseFuence of not implementin( !3$ in urea while implementin( it in comple> fertili-ers is that the
sharp difference in the retail prices make it more attractive for farmers to purchase urea.
At present4 the (overnment is a#le to restrict this practice #ecause it controls :" per cent of urea
supply. Any tilt towards urea consumption would distur# the tar(eted nutrient ratio and increase the
dependence on imported urea. !3$ in urea is4 therefore4 an imperative not only to achieve #alanced
nutrient consumption #ut also to improve the (overnment%s finances.

SOCIA3 ISSUES

Social Sc/''&
;6NRE6A
Stati&tic&
E'G!REGA $ameeksha% which is #rou(ht out #y the 'inistry of Rural ,evelopment4 (ives us some vital
statistics a#out this scheme.
.n )"1"&114 nearly :.:" crore families4 or nearly one in four rural households4 were provided over ):"
crore person&days of work under the pro(ramme.
The $cheme scores hi(h on inclusiveness. The share of $cheduled CastH$cheduled Tri#e families in the
work has #een :1 per cent and that of women 87 per cent.
The avera(e wa(e per person&day has (one up #y 81U since the $cheme%s inception. =a(es are
inde>ed to protect workers from the rava(es of inflation.
!early 1" crore #ankHpost office accounts have #een opened and around 8" per cent of 'ahatma
Gandhi !REGA payments are made throu(h this innovative route4 an unprecedented step in the
direction of financial inclusion.

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