Y

EM E
AD L
AC NIWEEKLY CURRENT
C
AFFAIRS BULLETIN
S O
IA R

4 November TO 10 No
Nov vember 2011
Nov
(Dummy Copy)
CH

Contact us

Noida Campus: A-26, Sector-2, North Campus: 2nd Floor, 2520,

Noida, Gautam Budh Nagar-201301 Hudson Lane, Vijay Nagar Chowk,
UP, Near Sector-15 Metro Station. Near GTB Nagar, Metro Station,
Gate No.4, New Delhi-9

Call: 09582948815, 09953120676, 09582263947

Visit: chronicleias.com
Strictly for Internal Circulation
Strictly for Internal Circulation Weekly Current Affairs — 1
 1 NATIONAL NEWS
CAG TO AUDIT ALL SCHEMES OF MINISTRY OF
RURAL DEVELOPMENT
The government auditor will now scrutinise spending
Y
in all the schemes of rural development ministry and the
E
ministry of drinking water and sanitation. The two
ministries annually spend Rs 88,000 crore which is the
single largest public expenditure other than defence.
EM
The initiative is aimed at ensuring accountability and
AD L
transparency.
The Action Plan also includes the following decisions.
1. The CAG may conduct not only financial audit and
C
compliance audit but also performance audits with
regard to these schemes. To begin with, performance
audits of MGNREGA in twelve states will be taken up.
AC NI
These states are Assam, Andhra Pradesh, Bihar,
Chhattisgarh, West Bengal, Jharkhand, Madhya
Pradesh, Rajasthan, Gujarat, Maharashtra, Orissa and
Uttar Pradesh
2. The audit of all schemes of the Ministries of Rural
Development and Drinking Water Supply and
S O
Sanitation will be entrusted to Accountants General in
different states so as to ensure that a focused and
comprehensive audit is carried out.
3. The Ministries of Rural Development and Drinking
IA R
Water Supply and Sanitation and the Comptroller and
Auditor General initiated a joint exercise to prepare
checklists to enable the two ministries to put in place
an efficient Internal Control system for monitoring the
CH
expenditure incurred as also the quality of expenditure.
4. The two Ministries have also taken the initiative to
prepare a common accounting format for all rural
development schemes in consultation with the CAG
which will lend itself not only to internal check and
monitoring by the two ministries but also audit by the
CAG and eventually accountability to Parliament.
A committee is being set up under the chairmanship
of Shri Arvind Mayaram, Additional Secretary and
Financial Advisor to both the ministries to (i) examine
modifications needed in already existing accounting
procedures of DRDAs; (ii) suggest principles and policies
of accounting at the level of the implementing agency,
which in the case of the Ministry of Rural Development
are mainly Panchayat institutions; (iii) identify appropriate
standards for financial reporting and disclosure, including
suggest changes in present format of utilization certificates
(UCs); and (iv) recommend how the accounting and
financial statements can be made IT-enabled.
Strictly for Internal Circulation
CENTRAL BOARD OF EXCISE AND CUSTOMS'
NEW PROPOSAL TO CURB FAKE CURRENCY
CIRCULATION
The menace of fake Indian currency notes has shown
a steep rise of 250 per cent in 2009-10, data from the
Financial Intelligence Unit (FIU) has revealed. And the
alarmed Central Board of Excise and Customs (CBEC)
now plans to seek help from the public to tackle the racket
and assist the department in seizing counterfeit notes.
The department has prepared a proposal to "reward
informers of fake currency", official sources told The Indian
Express. Currently, the department only carries out
electronic surveillance on fake currency and this proposal
is part of its strategy to strengthen its human intelligence
capabilities.
CBES has proposed that 8 per cent of the notional
value of the entire seizure would be given to the informers
of fake currency notes and such rackets. The notional
value has been arrived at in consultation with the Central
Bureau of Investigation and the Intelligence Bureau.
Notional value is the price the fake currency notes would
fetch in the market.
The problem of counterfeit currency has reached
alarming proportions and what is more worrisome is that
the fake notes being printed outside the country are of very
high quality. There are suspicions that the fake currency
is also being used for terror funding.
According to the FIU report, private sector banks
reported the maximum number of counterfeit currency
transactions - 1,15,720 transactions in 2009-08 compared
to 29,846 a year ago - followed by private foreign banks
which submitted 3,572 such reports during the last fiscal
year. A total of 1,27,781 counterfeit currency reports were
received in 2009-10 by the FIU compared to 35,730 reports
during 2008-09. Over 1.72 lakh incidents of detection of
fake currency notes with a face value of Rs 10 crore were
received.
Last month, ex-chairman of CBEC SD Majumdar had
expressed serious concern over large-scale smuggling of
fake Indian currency notes from Bangladesh and Nepal
through the international borders along West Bengal and
the Northeast region like Malda and Petrapole.
Currently, for informing about commercial frauds, drugs,
gold smuggling and other such malpractices, the
government has a policy of rewarding the informers and
20 per cent of the recovered amount or the notional value
is given. Even for officers there is a reward system similar
to that of whistleblowers. Initially, the reward was 20 per
cent but later a cap of Rs 1 lakh was placed.
Weekly Current Affairs — 2
 TASK FORCE ON IT STRATEGY FOR PDS SUBMITS
REPORT TO FINANCE MINISTER
The Task Force on IT strategy for PDS, headed by Shri
Nandan Nilekani, Chairman of UIDAI, has submitted its
report recommending on Direct Transfer of Subsidies on
Kerosene, LPG and Fertilizer.
The government gave its in-principle acceptance to the
recommendations of task force which has suggested setting
up an IT-enabled public distribution system network
(PDSN) to provide direct subsidies on kerosene and food
Y
to poor. The mechanism, according to the task force, would
E
also provide choice to beneficiaries in receiving their
entitlement in kind or cash and at their favoured location.
EM
It also envisages checking corruption in the public
AD L
distribution system.
The Task Force has recommended the setting up of a
dedicated institutional mechanism to implement end to
C
end computerization of PDS across the country. It has
recommended the constitution of a National Information
Utility (NIU) called the Public Distribution System Network
(PDSN) to implement and operate the IT infrastructure for
AC NI
PDS. According to the report participation of the States in
the PDSN would be voluntary and would not hamper the
current efforts in computerization of the PDS in the States.
The Task Force has recommended the implementation
of the IT strategy in two phases -
 Phase I: Information visibility transparency in the
S O
supply chain
 Phase II: Core Subsidy Management System- leveraging
AADHAR.
As per the report, beneficiaries will be able to enquire
IA R
through mobile phones, a toll-free call centre and the
entitlement portability will bring about competition among
FPSs as the shops which indulge in adulteration will
eventually see lesser business.
CH
REGIONAL RAPID TRANSIT SYSTEM (RRTS) FOR
NCR
Urban Development Minister Mr. Kamal Nath has
approved "in-principle" the proposal of implementing
Regional Rapid Transit System (RRTS) in three important
corridors in the NCR viz. Delhi-Gurgaon-Alwar, Delhi-
Sonepat-Panipat and Delhi-Ghaziabad-Meerut. The RRTS
is a rail based mass transit system that would connect
distant areas of National Capital Region (NCR) to the
Capital.
A rapid transit system is an electric passenger railway
in an urban area with a high capacity and frequency, and
grade separation from other traffic. Rapid transit systems
are typically located either in underground tunnels or on
elevated rails above street level. Outside urban centres,
rapid transit lines may run on grade separated ground
level tracks.
Strictly for Internal Circulation
The high speed connectivity between the regional
centres of NCR and Delhi will make the physical distance
shorter and allow these regional towns to capture the
economic impulse and density generated by Delhi. This
faster connectivity will reduce pressure on the National
Capital's infrastructure by opening up the region, including
regional housing market.
HEALTH MINISTRY LAUNCHES ANTI-MEASLES
VACCINATION DRIVE
Measles is a highly infectious disease which is
contracted by children with low immunity and can cause
acute respiratory problems, diarrhoea, and pneumonia.
The disease can also result in disabilities such as visual
impairment.
Thus, Ministry of Health and Family Welfare, with
support from the Ministry of Human Resource
Development (HRD) has launched the massive anti-measles
vaccination drive. The programme aims at immunization
of children in primary schools, aged up to 10 years,
particularly in 14 States where the routine immunization
coverage is less than 80 per cent. More than 13 crore
children are expected to be covered under the Measles
Catch-up Campaign, irrespective of their previous measles
vaccination status.
For each school, the vaccination programme will be
completed in one day with the least disruption to academic
routine. However, unlike the Pulse Polio campaign, there
will be no door-to-door visits, and children will have to be
mobilized from outreach areas to the session site.
Mobilization and actual vaccination will be done by
accredited social health activists, auxiliary nurse midwives,
male health workers and other paramedical staff. The first
round will be conducted in the education institutions and
subsequently at the health centres.
Measles can be prevented by a single dose of vaccine
if it is administered when the child is between 9 and 12
months, but only 69 per cent of children in the country are
protected against this disease in the country.
The States that will benefit from the campaign are
Arunachal Pradesh, Assam, Bihar, Gujarat, Haryana,
Chhattisgarh, Jharkhand, Madhya Pradesh, Manipur,
Meghalaya, Nagaland, Rajasthan, Tripura, and Uttar
Pradesh.
NATIONAL CHILD RIGHTS INDEX
The Child Rights Index (CRI) released by NGO HAQ
placed Kerala at the top of the National Child Rights
Index, followed by Karnataka. Arunachal Pradesh is the
worst performer in protecting the rights of children. The
NGO's report is based on government data - both central
and state - which was collated and studied to decide the
index. Uttar Pradesh has the highest head count of working
children in the country.
Weekly Current Affairs — 3
 Rating on the basis of gender equality
Despite its high literacy rate, Kerala was ranked last in
gender equality in prevention of child marriages, and had
a high percentage of girls (under 18) getting married. On
the other hand, West Bengal, which was the worst
performing state in education, was also the worst performer
in gender equality, and fared poorly in prevention of girl
child marriages as well. Andhra Pradesh and Tamil Nadu
too were ranked poorly in child marriage.
Y
Rating on the basis of crime against children
E
Karnataka is the best state for children to live in as it
has the least number of cases of crime against children,
followed by Andhra Pradesh, Gujarat, Maharashtra and
EM
AD L
Rajasthan. While crimes against children are highest in
Nagaland (in proportion to the number of children), and
Manipur is the worst performer in crimes by children.
Despite being ostensibly backward on social sector
C
parameters, Bihar is ranked number 1 when it comes to
crimes committed by children. It has the least number of
such cases.
AC NI
Rating on the basis of health facility
Kerala and Goa, the two best performing States in
health, are performing poorly in the provision of health
infrastructure. Himachal Pradesh, one of the five best States
in health care, ranks among the last five in HIV/AIDS
intervention.
S O
The ranking has a regional pattern: four of the five best
performing States - Kerala, Karnataka, Tamil Nadu, and
Andhra Pradesh - are from the southern region.
Maharashtra alone is from the west. On the other hand, all
IA R
the worst performing States are in the Northeast: Sikkim,
Meghalaya, Manipur, Nagaland and Arunachal Pradesh.
In fact, of the five States falling in the not-so-well performing
CH
States category, Tripura, Assam and Mizoram are from the
Northeast. They are performing badly in almost indicators.
Rating on the basis of education
A significant proportion of the population of the worst
performing States, which are performing badly in education,
are tribals: Jharkhand and Arunachal Pradesh are tribal-
dominated, with indigenous groups constituting 26.3 per
cent and 64.2 per cent of the population. This is also true

Strictly for Internal Circulation
of health, wherein the five worst performing States are
Assam, Uttar Pradesh, Jharkhand, Nagaland and
Arunachal Pradesh. All among them are essentially tribal
States, except Uttar Pradesh.
"ADIVASI SHIKSHA RRINN YOJANA" OF NSTFDC
LAUNCHED
The Minister for Tribal Affairs & Panchayati Raj Shri
V. Kishore ChandraDeo launched Education Loan Scheme
titled "ADIVASI SHIKSHA RRINN YOJANA" (ASRY) of
National Scheduled Tribes Finance and Development
Corporation (NSTFDC).
National Scheduled Tribes Finance and Development
Corporation was set up in April, 2001 as a Government of
India Company under the Ministry of Tribal Affairs. It
provides financial assistance at concessional rates of
interest to STs for undertaking income generating activities
and for procurement and marketing of minor forest
produce and other tribal products.
Under the Scheme, NSTFDC would provide loan at
concessional rate of interest to the eligible Scheduled Tribes
for pursuing higher professional and technical education
including PhD. in India conducted by colleges/universities
approved by UGC/Govt./AICTE/ICMR etc.
A Scheduled Tribe having annual family income up to
double the poverty line would be eligible. The present
limit is Rs. 39,500/- p.a. for rural areas and Rs. 54,500/
- p.a. for the urban areas.
The features of the scheme are as follows:
a) Loan would cover expenses towards Admission/
Examination/Library/ Laboratory/Tuition fee,
Boarding and Lodging, Caution Money, Building
fund/Refundable Deposit, Books, Stationery items,
Computer, Equipments/Instruments, Study Tours,
Project Work/Thesis, Insurance Premium for students
and any other expense towards completion of course.
b) The loan amount can be 90% of expenditure/deposits
for entire duration of the course, subject to a maximum
loan amount of five lakh rupees per eligible family at
6% p.a.
c) The time limit for repayment of loan is- After the
moratorium period (Course Period plus one year or
six months after getting job, whoever is earlier) within
next 5 years subject to maximum period of 10 years.
Weekly Current Affairs — 4
 2 INDIA AND THE WORLD
INDIA SIGNS TAX INFO TREATY WITH JERSEY
India has signed an agreement with the island of
Jersey (a British Crown Dependency off the coast of
Y
Normandy, France and a tax haven) on tax information
E
exchange, which will help the country to unearth black
money slashed by Indians there.
The agreement was signed by India's acting High
EM
Commissioner to the UK Rajesh Prasad and Senator Philip
AD L
Ozouf, who is the Deputy Chief Minister and Treasury
and Resources Minister of Jersey.
It is the seventh such agreement to be struck by India
C
as part of its efforts to clamp down on tax evasion. India
has signed information exchange agreements with Liberia,
the Bahamas, Bermuda, Virgin Islands, Isle of Man, and
the Cayman Island, and concluded negotiations with a
AC NI
total of 16.
INDIA SIGNS CONVENTION ON GLOBAL TAX
COOPERATION
India has signed the Convention on Mutual
Administrative Assistance in Tax Matters, developed
jointly by the Council of Europe and the Organisation for
S O
Economic Co-operation and Development (OECD).
All members of the G20 have now become signatories
but the Convention will have to be ratified by the Indian
Parliament to become law.
IA R
In order to check Tax evasion and illicit flows, India
has already negotiated 19 new double taxation avoidance
agreements and 17 new tax information exchange
agreements.
CH
The Convention facilitates international co-operation
for a better operation of national tax laws, while respecting
the fundamental rights of taxpayers. The Convention
provides for all possible forms of administrative co-
operation between states in the assessment and collection
of taxes, in particular with a view to combating tax
avoidance and evasion. This co-operation ranges from
exchange of information, including automatic exchanges,
to the recovery of foreign tax claims. However the
Convention imposes safeguards to protect the
confidentiality of the information exchanged.
G-20 SUMMIT: SALIENT FEATURES
G-20 is an abbreviated form of the Group of Twenty.
It consists of 19 member countries and EU. G20 was
established in 1999 to bring together systemically important
industrialised and developing economies to discuss key
issues in the global economy.
The 6th G20 (Major Economies) summit was held in
Cannes, France on November, 3 and 4 2011 to discuss key
Strictly for Internal Circulation
issues in the global economy. The outcomes of the meet
were:
a) To address the immediate challenges faced by the global
economy nations agreed to set up a G20 Task-Force
on Employment, with a focus on youth employment,
that will provide input to the G20 Labour and
Employment Ministerial Meeting to be held under the
Mexican Presidency in 2012. International
organizations (IMF, OECD, ILO, World Bank) will
report to Finance Ministers on a global employment
outlook and how our economic reform agenda under
the G20 Framework will contribute to job creation.
b) To invest in nationally determined social protection
floors such as access to health care, income security
for the elderly and persons with disabilities, child
benefits and income security for the unemployed and
assistance for the working poor. This will foster growth
resilience, social justice and cohesion. Nations
commited to promote and ensure full respect of the
fundamental principles and rights at work.
c) For a more stable and resilient International Monetary
System an action plan to support the development
and deepening of local currency bond markets, scaling
up technical assistance from different international
institutions, improving the data base and preparing
joint annual progress reports to the G20 will be done.
d) An affirmation was made on G20's commitment to
move more rapidly toward more market-determined
exchange rate systems and enhance exchange rate
flexibility to reflect underlying economic fundamentals,
avoid persistent exchange rate misalignments and
refrain from competitive devaluation of currencies.
e) The leaders of G20 agreed to continue their efforts to
further strengthen global financial safety nets. They
committed to support the IMF in putting forward the
new Precautionary and Liquidity Line (PLL) to provide
on a case by case basis increased and more flexible
short-term liquidity to countries with strong policies
and fundamentals facing exogenous shocks.
f) They supported the euro area's comprehensive plan
and urged rapid elaboration and implementation,
including of country reforms.
g) Member countries decided to develop the regulation
and oversight of shadow banking. They agreed on
developing further their regulation on market integrity
and efficiency, including addressing the risks posed
by high frequency trading and dark liquidity.
h) They determined to enhance the functioning and
transparency of energy markets. 
Weekly Current Affairs — 5
 3 SCIENCE AND TECHONOLOGY
INDIA PRESSES FOR NEW GLOBAL INTERNET
GOVERNANCE MECHANISM
India is pressing for a new global Internet governance
mechanism, thus presented a proposal to the United
Y
Nations for the establishment of a Committee for Internet-
E
Related Policies (CIRP). The committee will help to frame
international public policies on issues relating to Internet
governance.
EM
AD L
According to the proposal - The United Nations
Committee for Internet-Related Policies will consist of 50
member-states, "chosen/elected on the basis of equitable
geographical representation" and four advisory groups,
C
one each for civil society, the private sector, the inter-
governmental and international organisations and the
technical and academic community. The advisory groups
will provide "inputs and recommendations to the CIRP."
AC NI
"The CIRP will report directly to the General Assembly
and present recommendations for consideration, adoption
and dissemination among all relevant inter-governmental
bodies and international organisations,"
The proposal aimed at governing the Internet not
unilaterally but in an open, democratic, inclusive and
S O
participatory manner, with the participation of all
stakeholders, so as to evolve universally acceptable and
globally harmonised policies in important areas and pave
the way for improving the quality of peoples' lives
IA R
everywhere."
RUSSIAN MISSION TO MARS MOON STUCK IN
EARTH'S ORBIT
CH
A Russian space probe to a Mars moon launched on
9 November got stuck in the Earth's orbit after its engines
failed to fire. After the booster rocket put the spacecraft on
a support orbit around the Earth, the probes own engines
were programmed to get started to put it on a trajectory to
Mars, but they did not.
The project, named Phobos-Grunt that means "soil from
Phobos" after one of Mars' two moons, is dubbed the most
challenging inter-planetary mission so far. It involves
sophisticated manoeuvring to approach Phobos from a
Mars orbit, soft-land on the surface of 22-km wide Phobos,
collect samples of its soil and return to the Earth in 2014.
Scientists hope the mission could help solve the mystery
of the origin of Phobos and the solar system. Phobos-
Grunt is carrying a Chinese mini-satellite that is to study
Strictly for Internal Circulation
Mars for two years in its orbit. The spacecraft has onboard
a U.S. experiment with bacteria, plant seeds and
microscopic invertebrates to find out whether life could
have migrated between planets. The French and German
space agencies also have provided instrumentation for the
mission.
Russia had sent several probes to Mars in the past, but
none reached its goal. The last attempt was mounted five
years ago, when the Mars-96 spacecraft failed to reach
even its support orbit and fell back to the Earth.
ICRISAT-LED GLOBAL TEAM COMPLETED PIGEON
PEA GENOME SEQUENCE
The genome sequence of the pigeon pea referred to as
an "orphan crop" has been unveiled by ICRISAT scientists.
Pigeon pea is the first "non-industrial crop" and the second
food legume (after soybean) with a completed genome
sequence.
The International Crops Research Institute for the Semi-
Arid Tropics (ICRISAT) has resulted in the identification
of 48,680 pigeon pea genes. A couple of hundreds of these
genes were found unique to the crop in terms of drought-
tolerance, an important trait that can be transferred to
other similar crops like soybean, cowpea or common bean
that belong to the same family.
The crop, grown on about 5 million hectares in Asia,
sub-Saharan Africa and South-Central America, is a very
important food legume for millions of the poor in the semi-
arid regions of the world. Known as the "poor people's
meat" because of its high protein content, it provides a
well-balanced diet when accompanied with cereals.
The genomic sequence will be useful for improving
crop for sustainable food production, particularly in the
marginal environments of Asia and sub-Saharan Africa.
GIANT ASTEROID ZIPS PAST EARTH
A massive asteroid called 2005 YU55, came within 2,
01,700 miles (3, 24,600 km) of the Earth before speeding off
into space at a speed of about 46,700 kmph.
It provided scientists with an opportunity to learn more
about the asteroid and its orbit. They used giant radio
telescopes in Puerto Rico and NASA's Deep Space Network
facility in Goldstone, California, to get a better idea about
its size, surface features and rotational period.
2005 YU55 makes one complete lap around the Sun
every 15 months. 
Weekly Current Affairs — 6
 4 INTERNAIONAL
UN AND BRAZIL LAUNCH INITIATIVE TO COMBAT
HUNGER AMONG SCHOOL CHILDREN
Y
The United Nations World Food Programme (WFP) and
E
the Brazilian Government have launched a new initiative
to combat hunger. The Centre of Excellence against Hun-
ger, located in the capital, Brasilia, will help countries to
EM
run their own national school meal programmes to ad-
AD L
vance the nutrition and education of children.
It will assist governments in Africa, Asia and Latin
America by drawing on the expertise of WFP and Brazil
C
in the fight against hunger, promoting sustainable school
feeding models and other food and nutrition safety nets.
The Centre will provide a unique "South-South bridge" to
end hunger.
AC NI
The South American nation has been recognized for its
Fome Zero (Zero Hunger) strategy for reducing poverty
and food insecurity and its school meals programme,
which reaches about 45 million children per year.
AQUACULTURE HAS POTENTIAL TO CUT
POVERTY, COMBAT FOOD INSECURITY - UN
S O
REPORT
According to the UN World Aquaculture 2010 Report,
released by the Food and Agriculture Organization, more
than 50 per cent of the world's food fish comes from aquac-
IA R
ulture, thus making it a crucial method to reduce poverty
and combat food insecurity.
Aquaculture, which involves cultivating fresh water
and saltwater populations of fish under controlled condi-
CH
tions as opposed to catching fish in the wild, is the world's
fastest growing source of animal protein. It grew by more
than 60 per cent between 2000 and 2008, from 32.4 million
tons to 52.5 million tons, according to the report.
The report also states that there are marked differences

Strictly for Internal Circulation
in production levels and types of production. China, Thai-
land, Viet Nam, Indonesia and India for example, lead
production levels of shrimp and prawns, while Norway
and Chile produce mostly salmon.
The report warns that governments need to invest in
aquaculture so they can continue to enjoy its benefits and
address the challenges that are linked to this practice. Key
concerns regarding aquaculture include quality and safety
standards, traceability, certification and eco-labelling. In
addition, aquaculture faces major challenges due to cli-
mate change and the economic downturn in many coun-
tries, which could particularly affect small producers in
Asia and Africa, where they make up the backbone of the
industry.
CAMBRIDGE UNIVERSITY PROJECT ON RARE
SANSKRIT MANUSCRIPTS
Some 2,000 rare Sanskrit manuscripts detailing momen-
tous political and economic events across south Asia and
written on fragile birch bark, palm leaf and paper are to
form part of a major project undertaken by Cambridge
University to document ancient civilisations by studying
the language of the time, officially known as "linguistic
archaeology."
The documents, which belong to Cambridge University
Library's South Asian manuscript collection, will be stud-
ied individually and catalogued placing them in their
broader historical context. They will also be digitized and
put on the library's new online service.
More than half of the library's collection of south Asian
manuscripts was in Sanskrit, which dominated the literary
culture of pre-modern South Asia for almost three millen-
nia. The University hopes the project would help to further
research on South Asia.
Weekly Current Affairs — 7
 5 ECONOMY
GOM GIVES GREEN SIGNAL TO SOVEREIGN
WEALTH FUND
Y
A Group of Ministers (GoM) on external security inter-
E
face chaired by Pranab Mukherjee has agreed in principle
on setting up a sovereign wealth fund to help companies
acquire mineral and energy assets abroad. The money
EM
from the fund would be available only to state-owned
AD L
undertakings, and not those in the private sector.
A sovereign wealth fund is an investment fund owned
by the state. It is a pool of money derived from a country's
C
reserves, which is set aside for investment purposes that
will benefit the country's economy and citizens. The fund-
ing for a sovereign wealth fund (SWF) comes from from
central bank reserves that accumulate as a result of budget
AC NI
and trade surpluses, and even from revenue generated
from the exports of natural resources.
The major drawback of SWFs is that they are not very
transparent about their dealings, as a result of which they
arouse both suspicion and concern about their investing
S O
intentions among the public. One of the biggest fears is
whether the investments of SWFs are driven purely by
commercial sense or partly by political agendas.
TRAI PROPOSES NEW MERGERS AND
IA R
ACQUISITIONS (M&A) GUIDELINES FOR
TELECOM SECTOR
The Telecom Regulatory Authority of India (TRAI)
unveiled its long-awaited recommendations on crucial
CH
issues like spectrum, unified licensing, rollout obligations,
M&As and the exit policy.
The norms are as follows:
a) The merged entity could own up to 25 per cent of the
spectrum in a given circle and it could have a combined
market share of up to 60 per cent.
b) The merged entity can also own larger quantum of
spectrum. For example, in Karnataka over 90 Mhz of
2G spectrum has been allocated and if TRAI proposals
are implemented, the merged entity can own 22.5 Mhz
of spectrum.
c) The merged entity can buy spectrum through an
auction or any market-based mechanism.
d) It has also scrapped its earlier proposal to have at
least six operators in each circle post a merger. The
regulator said the number of operators in a circle does
not have any relevance.
Strictly for Internal Circulation
IRDA REMOVED GUARANTEED RETURNS ON
PENSION PRODUCTS
Insurance Regulatory and Development Authority
(IRDA) has released final guidelines on pension products
according to which though IRDA has removed the clause
mandating 4.5% guaranteed return on Unit-linked pen-
sion plans (ULPPs) but it has made it mandatory that
insurer will have to provide either return or capital guar-
antee on all pension plans. Guidelines will be implemented
from first December 2011 and product that does not com-
ply with guidelines will have to be withdrawn till first
January 2012.
Final Guidelines
i. Guidelines have removed the earlier regulation which
mandating 4.5% guaranteed return on every pension
plan index to the saving rate of State Bank of India
(SBI) which was not felt viable by life insurance
companies and they stopped to launch new pension
products which contracted their new business growth.
ii. Insurers will have to provide guarantees; either as
guaranteed returns or as guarantees of capital on
pension products and they have to disclose the nature
of guarantees to the customer at the time of sale of the
plan.
iii. Insurers will also have to provide assured benefits like
minimum guarantee on premium payable on
surrender, death or maturity. This will ensure the
downside protection.
iv. Final guidelines also says that insurers should disclose
upfront to customers the assured benefits of pension
plans in all three situations i.e. death, surrender and
maturity.
v. Insurer will also have to illustrate the assured benefits
at the time of sale and in each year of tenure as well
so that customer can track it.
vi. As per final Guidelines policyholder can withdraw
one-third of the accumulated amount at the time of
vesting or if policy is surrendered after the lock-in
period then policyholder can compute one-third of the
value and buy an annuity.
RBI EASES TRANSFER OF SHARES NORMS FOR
FDI
In order to attract global investors to the nation RBI has
eased its foreign direct investment (FDI) procedures by
Weekly Current Affairs — 8
 announcing that transfer of shares between Indians and ii. When the transfer of shares requires the prior approval
non-resident Indians (NRIs) would not require its permis- of the FIPB as per the extant Foreign Direct Investment
(FDI) policy;
sion in several key areas such as financial services.
iii. The Indian company whose shares are being
Besides, the RBI permission has also been done away
transferred is engaged in rendering any financial
with for transfer of shares between residents and non-
service;
residents in cases where the Foreign Investment Approval
iv. The transfer falls under the purview of the provisions
Board (FIPB) has already given its clearances and the SEBI
of SEBI (SAST) Regulations
guidelines have been adhered to.
v. The transfer of shares from a Non Resident to a
Earlier the transfer of shares from a Resident to a Non Resident which does not conform to the pricing

Y
Resident where to be approved by the RBI under following guidelines as stipulated by the Reserve Bank of India

E
circumstances: from time to time also requires the prior approval of
i. When the transfer does not conform to the pricing the Reserve Bank of India.

EM
guidelines as stipulated by the Reserve Bank from The country has foreign exchange reserves of USD 318

AD L
time to time; billion but the pressure on rupee is matter of concern for
an economy which depends on large commodity imports.

C
AC NI
S O
IA R


CH

Strictly for Internal Circulation Weekly Current Affairs — 9

 6 2 - MARKERS

'ORDER OF FRIENDSHIP' AWARD of experience and information" and to "encompass tech-

Y
The Russian Federation has announced the presenta- niques and procedures involved in Low Intensity Conflict

E
tion of 'Order of Friendship' award to noted Tamil nov- Operations environment." The exercises were started in
elist D. Jayakanthan. It is the highest civilian award pre- 2004, with Pakistan becoming the first foreign army to
sented to foreign nationals who promoted cultural ties conduct an exercise on Chinese soil.

EM
AD L
between Russia and their countries. The writer had trans- BHUPEN HAZARIKA
lated works of Russian author Pushkin in Tamil.
He was an Indian lyricist, musician, singer, poet and
'ELECTRONIC NOSE' film-maker from Assam. He had won Sangeet Natak

C
The Electronic Nose is a biomarker which has the
potential to diagnose tuberculosis (TB) at earlier stage in
symptomatic patients. The Electronic Nose is the outcome
of collaboration between the International Centre for
AC NI
Genetic Engineering and Biotechnology in New Delhi
and Next Dimension Technologies in California.
PAKISTAN-CHINA JOINT MILITARY EXERCISE
The joint exercise, named Youyi-IV (or "Friendship"),
between China and Pakistan aimed at "mutual exchange
S O
IA R
CH
Akademi Award (1987), Dadasaheb Phalke Award (1992),
and Padma Bhushan (2001). He became the first Indian
to win Best Music for the film Rudaali at the Asia Pacific
International Film Festival in Japan (1993).
MISS WORLD 2011
Miss Venezuela Ivian Sarcos has won the Miss World
title 2011 which was held in London. Whereas Miss Phil-
ippines Gwendoline Ruais and Miss Puerto Rico Amanda
Perez were first and second runner up respectively.



Strictly for Internal Circulation Weekly Current Affairs — 10

 7 EDITORIALS
EDITORIALS
ROAD AHEAD FOR URBAN RENEWAL
The Jawaharlal Nehru National Urban Renewal
Y
Mission will complete its first phase of seven years in
E
March 2012. What next? Though there is no indication yet
as to whether there will be a second phase, there is a
distinct possibility that JNNURM will be continued, and
EM
that this will be reflected in the Five-Year shape and form
AD L
it will take, the changes made on the basis of the experience
so far, and the size of the mission - all these are unknown
factors.
C
But considering the enthusiasm it generated and the
dire need for improving the basics of our 7,985 cities and
towns, with almost 32 per cent of India's population living
in these areas, it is very likely that another phase of the
AC NI
mission will be taken up.
The time available from now till the launch of the next
phase should be utilised to prepare for proper
implementation of such a massive programme.
Preconditions to be met
S O
The time, up to say, December 2012, by when the new
mission should get launched, should be the preparatory
phase for states and cities. The following should be the
preliminaries which the states and cities should complete
IA R
by or before December 2012: ensure completion of pending
reforms under the present phase of the mission; complete
action on transfer of funds, functions and functionaries to
the urban local bodies; have properly prepared city
CH
sanitation plans; complete implementation of the 13th
Finance Commission recommendations so that all states
become fully eligible to draw the incentive grant part; state
governments should take decisions on municipal cadre
strengthening; implement the basics of the national urban
transport policy, including preparation of city mobility
plans which will give the road map for an organised,
integrated transport strategy and constitution of a unified
metropolitan transport authorities for at least all million-
plus cities; city development plans prepared in active
consultation with the stakeholders should be in the public
domain; and take stock of land available and prepare a
time-bound plan of action for slum rehabilitation.
There should be an agreement between each state and
the Centre on the timelines and completion of these basic
steps.
If states lag behind in completing this new agenda, it
may be made clear that they will have to wait till it gets
completed to benefit from the new phase.
Strictly for Internal Circulation
Shape of phase II
Considering the need to focus on a big agenda of basic
urban requirements - such as providing access to water to
all, providing dwelling units to a large section of the urban
population, keeping the cities clean by removing all the
garbage on a daily basis, providing latrine facilities to all
and sewage connectivity to the best possible extent, and
having an organised city transport, thereby increasing the
share of public transport - it would be appropriate to
announce upfront that the next phase of the mission will
be for 10 years, divided into two stages corresponding to
the two Plan periods, with specific targets for this period.
What should these be? It will include essentials, such
as 100 per cent access to drinking water, increased hours
of supply, reduction of water wastage from the present
average level of 50 per cent to an acceptable level of 15 per
cent, slum-free cities, housing for all, doing away with
open defecation in cities and towns and garbage-free cities.
Another point to be addressed is whether the maximum
carrying capacity of a city can be identified, after reaching
which further expansion should move to the immediately
adjoining satellite area. Frequent monitoring and reporting
to the public of the progress made by states may be
entrusted to a group of independent persons of eminence.
A new, comprehensive reform agenda will have to be
drawn up for the five-year period, and a call has to be
taken at the start as to whether a funds flow in the form
of grant will continue even if cities and states lag behind
in keeping pace with the agreed reform agenda.
The NDC sub-group of chief ministers should finalise
recommendations, which in the normal course would be
acceptable to all states.
Resources and PPP
While the availability of Plan funds would become
clear once the Five-Year plan is finalised, the next step
would be to see what other sources can be availed. In
addition to state funds, resource generation by the city
itself, loans from multilateral agencies, infrastructure funds,
bond issues, PPP and other possible financing mechanisms
will have to be lined up.
Since at the macro level, the Five Year Plan is aiming
at 50 per cent of the funds required for infrastructure to be
raised by the private sector, methods will have to be
evolved, whereby such funds are available for deployment
in the cities as well.
Weekly Current Affairs — 11
 Citizen Participation
A hallmark of the new phase will have to be formalising
arrangements for active citizen participation both in
identifying and prioritising projects. Another clear lesson
that has emerged on the basis of implementation so far is
that if the municipal commissioners are given a reasonable
tenure that becomes a major factor in ensuring effective
implementation.
Considering the increasing importance of our cities in
the national scheme of development, it is also necessary
Y
that the state governments carefully choose the
E
commissioners for mission cities and they are given a
definite tenure of three years.
EM
In order to infuse confidence among the states, it would
AD L
be necessary that the Centre also make certain clear
commitments at the beginning of the exercise.
Apart from committing on the funds front, an enabling
C
mechanism to raise funds through a bond issue,
positioning a huge network of professionally-competent
national institutions for the required support to states and
local bodies and positioning a time-bound mechanism for
AC NI
release of funds would all be required at the outset.
Some basic enabling programmes, such as implementing
e-governance, will also have to be supported right from
the beginning of the Plan.
Source: Business Line dated 6 November 2011
S O
BRINGING LEGAL AID A STEP CLOSER HOME
Para-legal volunteers can help bridge the gap between
the ordinary citizen and legal services institutions.
The provision of legal aid to the poor and the
IA R
disadvantaged exists in all civilised countries, often guided
by charitable and philanthropic concerns. In a democratic
set-up, the philosophy of legal aid has acquired a new
meaning, with an emphasis on the concept of equality of
CH
all human beings, increasingly drawn from the universal
principles of human rights. Free legal aid to the poor and
marginalised members of society is now viewed as a tool
to empower them to use the power of the law to advance
their rights and interests as citizens, and as economic
actors. Such a paradigm shift in the concept of legal aid
gains greater importance when India is viewed as a
growing economic power.
Parliament enacted the Legal Services Authorities Act,
1987 in order to give effect to Article 39-A of the Constitution
to extend free legal aid, to ensure that the legal system
promotes justice on the basis of equal opportunity.
(November 9 is observed as National Legal Services Day,
to commemorate the enactment of the legislation.) Those
entitled to free legal services are members of the Scheduled
Castes and the Scheduled Tribes, women, children, persons
with disability, victims of ethnic violence, industrial
workmen, persons in custody, and those whose income
does not exceed a level set by the government (currently it
Strictly for Internal Circulation
is Rs.1 lakh a year in most States). The Act empowers legal
services authorities at the district, State and national levels,
and the different committees (legal services institutions) to
organise Lok Adalats to resolve pending and pre-litigation
disputes. It provides for permanent Lok Adalats to settle
disputes involving public utility services. Under the Act,
"legal services" have a meaning that includes rendering of
service in the conduct of any court-annexed proceedings
or proceedings before any authority, tribunal and so on,
and giving advice on legal matters. Promoting legal literacy
and conducting legal awareness programmes are functions
of legal services institutions.
Access to justice
The Constitution treats all citizens as being equal and
provides them equal protection under the law. Yet, the
common person faces barriers to 'access to justice.'
Illiteracy, lack of financial resources and social
backwardness are major factors that hinder the common
person from accessing justice. There are other invisible
barriers: lack of courage to exercise legal rights, the
proclivity to suffer silently the denial of rights, and
geographical and spatial barriers are examples. Such
barriers keep people disempowered and subjected to
exploitation by powerful people. This results in their being
shoved away from the mainstream, and they become
constrained in becoming potential economic actors
contributing to the nation's development.
The Act provides for a machinery to ensure access to
justice to all through the institutions of legal services
authorities and committees. These institutions are manned
by judges and judicial officers. Parliament entrusted the
judiciary with the task of implementing the provisions of
the Act, as the other pillars of the government were neither
inclined nor had the expertise to take up the responsibility
to provide access to justice to the weaker sections.
Reaching out
One of the problems faced by legal services institutions
is their inability to reach out to the common people. This
hiatus between them and the common people was
perceived as indirectly defeating the objectives of the Act.
It is in this context that the National Legal Services
Authority (NALSA) has come up with the idea of para-
legal volunteers to bridge the gap between the common
person and legal services institutions.
The scheme seeks to utilise community-based
volunteers selected from villages and other localities to
provide basic legal services to the common people.
Educated persons with commitment to social service and
with a record of good character are selected. The volunteers
are trained by district legal services authorities. The
training equips them to identify the law-related needs of
the marginalised in their locality. Such needs include
assistance to secure legal rights, benefits and actionable
Weekly Current Affairs — 12
 entitlements under different government schemes that are
denied to them. Coming as they do from the same locality,
they are in a better position to identify those who need
assistance and bring them to the nearest legal services
institutions to solve their problems within the framework
of law. They can assist disempowered people to get their
entitlements from government offices where ordinary
people often face hassles on account of bureaucratic
lethargy and apathy.
Y
Legal aid clinics in villages
E
In order to reach out to the common people, NALSA
has come up with a project to set up legal aid clinics in
all villages, subject to financial viability. Ignorance of what
EM
to do when faced with law-related situations is a common
AD L
problem for disempowered people. Legal aid clinics work
on the lines of primary health centres, where assistance is
given for simple ailments and other minor medical
C
requirements of village residents. Legal aid clinics assist
in drafting simple notices, filling up forms to avail benefits
under governmental schemes and by giving initial advice
on simple problems. A legal aid clinic is a facility to assist
AC NI
and empower people who face barriers to 'access to justice.'
Trained para-legal volunteers are available to run legal
aid clinics in villages. The common people in villages will
feel more confident to discuss their problems with a friendly
volunteer from their own community rather than with a
city-based legal professional. The volunteers will refer any
S O
complicated legal matters that require professional
assistance to the nearest legal services institutions. When
complex legal problems are involved, the services of
professional lawyers will be made available in the legal
IA R
aid clinics.
Free and competent legal services
There has been a widespread grievance that lawyers
CH
engaged by legal services institutions do not perform their
duties effectively and that the lawyers are not paid
commensurately for their work. In order to solve these
problems, NALSA has framed the National Legal Services
Authority (Free and Competent Legal services) Regulations,
2010 to provide free and competent legal services. Scrutiny
of legal aid applications, monitoring of cases where legal
aid is provided, and engaging senior lawyers on payment
of regular fees in special cases, are the salient features of
the Regulations. In serious matters where the life and
liberty of a person are in jeopardy, the Regulations
empower legal services authorities to specially engage
senior lawyers.
Children's rights, a neglected field
Juveniles including children constitute more than a
third of India's population. Yet, children and their rights
are neglected. The problems of children are often seen
through the spectacles of an adult. Consequently, the rights
Strictly for Internal Circulation
of children who are orphaned, abandoned and in conflict
with the law are not properly handled by government
officials and juvenile justice institutions. Denied care and
protection, they may end up as children in conflict with
law. At the same time, children in conflict with the law
need care and protection. In October 2011, the Supreme
Court, in Sampurna Behrua v. Union of India, a public
interest litigation, directed the Directors General of Police
of the States to designate one police officer in each police
station as juvenile/child welfare officer. The court directed
legal services authorities to train such police officials and
give free legal services to all children in conflict with law
on an incremental basis, starting with the State capital
cities.
Legal services to the mentally-ill and the mentally-
retarded, to workers in the unorganised sector, and to
solve disputes arising out of the implementation of the
Mahatma Gandhi National Rural Employment Guarantee
Act, are other schemes drawn up by NALSA for
implementation by legal services institutions. A web-based
monitoring system is in place to monitor their activities.
NALSA works with civil society organisations, specialised
statutory bodies and government departments.
Legal services institutions have until now functioned
in uncharted waters, often making their presence felt only
at certain ports of call like court-based legal services,
organising legal literacy camps and Lok Adalats. Now,
with a paradigm shift in the concept of legal services, legal
services authorities are reaching out to the people to
facilitate 'access to justice' to all in the most practicable
and economical manner.
Source: the Hindu dated 9 November 2011
PUTTING GROWTH IN ITS PLACE
Is India doing marvellously well, or is it failing terribly?
Depending on whom you speak to, you could pick up
either of those answers with some frequency. One story,
very popular among a minority but a large enough group-
of Indians who are doing very well (and among the media
that cater largely to them)-runs something like this. "After
decades of mediocrity and stagnation under 'Nehruvian
socialism', the Indian economy achieved a spectacular take-
off during the last two decades. This take-off, which led to
unprecedented improvements in income per head, was
driven largely by market initiatives. It involves a significant
increase in inequality, but this is a common phenomenon
in periods of rapid growth. With enough time, the benefits
of fast economic growth will surely reach even the poorest
people, and we are firmly on the way to that." Despite the
conceptual confusion involved in bestowing the term
'socialism' to a collectivity of grossly statist policies of
'Licence raj' and neglect of the state's responsibilities for
school education and healthcare, the story just told has
much plausibility, within its confined domain.
Weekly Current Affairs — 13
 But looking at contemporary India from another angle,
one could equally tell the following-more critical and more
censorious-story: "The progress of living standards for
common people, as opposed to a favoured minority, has
been dreadfully slow-so slow that India's social indicators
are still abysmal." For instance, according to World Bank
data, only five countries outside Africa (Afghanistan,
Bhutan, Pakistan, Papua New Guinea and Yemen) have
a lower "youth female literacy rate" than India (World
Development Indicators 2011, online). To take some other
these policies kill the goose that lays the golden egg of
economic growth. There is a neglect of the role of economic
growth in economic and financial stability in the European
debate, with its focus only on cutting public expenditure
to satisfy the market and to obey the orders of credit rating
agencies.
Yet it is also important to recognise that the impact of
economic growth on living standards is crucially
dependent on the nature of the growth process (for instance,
its sectoral composition and employment intensity) as well

Y
examples, only four countries (Afghanistan, Cambodia, as of the public policies-particularly relating to basic

E
Haiti, Myanmar and Pakistan) do worse than India in education and healthcare-that are used to enable common
child mortality rate; only three have lower levels of "access people to share in the process of growth. There is also, in
to improved sanitation" (Bolivia, Cambodia and Haiti); India, an urgent need for greater attention to the destructive

EM
and none (anywhere-not even in Africa) have a higher aspects of growth, including environmental plunder (e.g.

AD L
proportion of underweight children. Almost any composite through razing of forests, indiscriminate mining, depletion
index of these and related indicators of health, education of groundwater, drying of rivers and massacre of fauna)
and nutrition would place India very close to the bottom and involuntary displacement of communities-particularly

C
in a ranking of all countries outside Africa. adivasi communities-that have strong roots in a particular
ecosystem.
Growth and Development
India's growth achievements are indeed quite
So which of the two stories-unprecedented success or
remarkable. According to official data, per capita income
AC NI
extraordinary failure-is correct? The answer is both, for
has grown at a compound rate of close to five per cent per
they are both valid, and they are entirely compatible with
year in real terms between 1990-91 and 2009-10. The more
each other. This may initially seem like a bit of a mystery,
recent rates of expansion are faster still: according to
but that initial thought would only reflect a failure to
Planning Commission estimates, the growth rate of GDP
understand the demands of development that go well
was 7.8 per cent in the Tenth Plan period (2002-03 to
beyond economic growth. Indeed, economic growth is not
2006-07) and is likely to be around 8 per cent in the
S O

constitutively the same thing as development, in the sense

Eleventh Plan period (2007-08 to 2011-12). The "advance
of a general improvement in living standards and
estimate" for 2010-11 is 8.6 per cent. These are, no doubt,
enhancement of people's well-being and freedom. Growth,
exceptional growth rates-the second-highest in the world,
of course, can be very helpful in achieving development,
next to China. These dazzling figures are, understandably,
but this requires active public policies to ensure that the
IA R

causing some excitement, and were even described as

fruits of economic growth are widely shared, and also
"magic numbers" by no less than Lord Meghnad Desai,
requires-and this is very important-making good use of
who argued, not without irony, that whatever else happens,
the public revenue generated by fast economic growth for
"the government can still sit back and say 8.6 per cent".
CH

social services, especially for public healthcare and public

education. India does need rapid economic growth, if only because
average incomes are so low that they cannot sustain
We referred to this process as "growth-mediated"
anything like reasonable living standards, even with
development in our 1989 book, Hunger and Public Action.
extensive income redistribution. Indeed, even today, after
This can indeed be an effective route to a very important
20 years of rapid growth, India is still one of the poorest
part of development; but we must be clear about what can
countries in the world, something that is often lost sight
be achieved by fast economic growth on its own, and what
of, especially by those who enjoy world-class living
it cannot do without appropriate social supplementation.
standards thanks to the inequalities in the income
Sustainable economic growth can be a huge force not only
distribution. According toWorld Development Indicators
for raising incomes but also for enhancing people's living
2011, only 16 countries outside Africa had a lower "gross
standards and the quality of life, and it can also work very
national income per capita" than India in 2010:
effectively for many other objectives, such as reducing
Afghanistan, Bangladesh, Cambodia, Haiti, Iraq,
public deficits and the burden of public debt. These growth
Kyrgyzstan, Lao, Moldova, Nepal, Nicaragua, Pakistan,
connections do deserve emphasis, not only in Asia, Africa
Papua New Guinea, Tajikistan, Uzbekistan, Vietnam and
and Latin America, but also very much in Europe today,
Yemen. This is not exactly a club of economic superpowers.
where there has been a remarkable lack of understanding
of the role of growth in solving problems of debt and Having said this, it would be a mistake to "sit back"
deficit. There is a tendency to concentrate only on and rely on economic growth per se to transform the living
draconian restrictive policies to cut down public conditions of the unprivileged. Along with our discussion
expenditure, no matter how essential and no matter how of "growth-mediated" development, in an earlier book, we

Strictly for Internal Circulation Weekly Current Affairs — 14

 also drew attention to the pitfalls of "unaimed opulence"-
the indiscriminate pursuit of economic expansion, without
paying much attention to how it is shared or how it affects
people's lives. A good example, at that time (in the late
1980s), was Brazil, where rapid growth went hand in
hand with the persistence of massive deprivation.
Contrasting this with a more equitable growth pattern in
South Korea, we wrote "India stands in some danger of
going Brazil's way, rather than South Korea's". Recent
experience vindicates this apprehension. Interestingly, in
Y
the meantime, Brazil has substantially changed course,
E
and adopted far more active social policies, including a
constitutional guarantee of free and universal healthcare
as well as bold programmes of social security and
EM
economic redistribution (such as Bolsa Familia). This is
AD L
one reason why Brazil is now doing quite well, with, for
instance, an infant mortality rate of only 9 per 1,000
(compared with 48 in India), 99 per cent literacy among
C
women aged 15-24 years (74 per cent in India), and only
2.2 per cent of children below five being underweight
(compared with a staggering 44 per cent in India). While
India has much to learn from earlier experiences of growth-
AC NI
mediated development elsewhere in the world, it must
avoid unaimed opulence-an undependable, wasteful way
of improving the living standards of the poor.
India's Decline in South Asia
One indication that something is not quite right with
S O
India's development strategy is the fact that India has
started falling behind every other South Asian country
(with the partial exception of Pakistan) in terms of social
indicators, even as it is doing so well in terms of per capita
income.
IA R
The comparison between Bangladesh and India is a
good place to start. During the last 20 years or so, India
has grown much richer than Bangladesh: per capita
CH
income was estimated to be 60 per cent higher in India
than in Bangladesh in 1990, and 98 per cent higher (about
double) in 2010. But during the same period, Bangladesh
has overtaken India in terms of a wide range of basic
social indicators: life expectancy, child survival, fertility
rates, immunisation rates, and even some (not all) schooling
indicators such as estimated "mean years of schooling".
For instance, life expectancy was estimated to be four years
longer in India than in Bangladesh in 1990, but it had
become three years shorter by 2008. Similarly, the child
mortality rate was estimated to be about 24 per cent higher
in Bangladesh than in India in 1990, but it was 24 per cent
lower in Bangladesh in 2009. Most social indicators now
look better in Bangladesh than in India, despite Bangladesh
having barely half of India's per capita income.
No less intriguing is that Nepal also seems to be
catching up rapidly with India, and even overtaking India
in some respects. Around 1990, Nepal was way behind
India in terms of almost every development indicator.
Strictly for Internal Circulation
Today, social indicators for both countries are much the
same (sometimes a little better in India still, sometimes the
reverse), in spite of per capita income in India being about
three times as high as in Nepal.
To look at the same issue from another angle, the table
below displays India's "rank" among South Asia's six major
countries (excluding tiny Maldives), around 1990 as well
as today (more precisely, in the latest year for which
comparable international data are available). As expected,
in terms of per capita income, India's rank has improved-
from fourth (after Bhutan, Pakistan and Sri Lanka) to third
(after Bhutan and Sri Lanka). But in most other respects,
India's rank has worsened, in fact, quite sharply in many
cases. Overall, India had the best social indicators in South
Asia in 1990, next to Sri Lanka, but now looks second-
worst, ahead of only Pakistan. Looking at their South
Asian neighbours, the Indian poor are entitled to wonder
what they have gained-at least so far-from the acceleration
of economic growth.
India and China
One of the requirements of successful growth-mediated
development is the skilful use of the opportunities provided
by increasing public revenue. There are interesting and
important contrasts in the policies followed by different
countries in this respect. Since China is often cited by
advocates of a single-minded focus on economic growth,
it is interesting to compare what China does with what
India has been doing. China makes much better use of the
opportunities offered by high economic growth to expand
public resources for development purposes. For example,
government expenditure on healthcare in China is nearly
four times that in India (after adjusting for "purchasing
power parity"-the gap is even larger otherwise). China
does, of course, have a larger population and a higher per
capita income than India, but even as a ratio of GDP,
public expenditure on health is much higher in China
(about 2.3 per cent) than in India (around 1.4 per cent).
China has much higher values of most social indicators
of living standards, such as life expectancy (73 years in
China and 64 years in India), infant mortality rate (16 per
thousand in China and 48 in India), mean years of
schooling (estimated to be 7.6 years in China, compared
with only 4.4 years in India), or the coverage of
immunisation (very close to universal in China but only
around two-thirds in India, for DPT and measles). While
India has nearly caught up with China in terms of the rate
of economic growth, it seems quite far behind China in
terms of the use of public resources for social support, and
correspondingly, it has not done nearly as well in
translating growth into rapid progress of social indicators.
While there are also, undoubtedly, other factors behind
the China-India contrast, the differing use of the fruits of
growth for social support would seem to be an important
influence in this contrasting picture.
Weekly Current Affairs — 15
 It is not at all our purpose to argue that India should
learn from China in every respect. India has reasons to
value its democratic institutions. Even with all their
limitations, these institutions allow for a wide variety of
voices to be heard, and facilitate significant opportunities
for various forms of public participation in governance.
There are, of course, many failings of Indian democracy
(which we have discussed in our writings), but there are
big democratic achievements as well, and also the
hindrances can be addressed through democratic battles
Y
to remove them. If China officially executes more people in
E
a week than India has done since Independence (and this
is true of a shockingly large number of weeks every year
in China), this comparison, like many others involving
EM
legal and human rights of citizens, is not to India's
AD L
disadvantage. If there is something to learn from China,
especially about how to ensure that the fruits of economic
growth are more widely shared, then that is a case for
C
learning from what there is to learn, not a case for blind
imitation.
The China-India contrast does, however, raise another
interesting question: could it be that India's democratic
AC NI
system is a barrier to using the fruits of economic growth
for the purpose of enhancing health, education and other
aspects of "social development"? In addressing this
question, there is some possibility of a sense of nostalgia.
When India had a very low rate of economic growth, a
common argument coming from the critics of democracy
S O
was that democracy was hostile to fast economic growth.
It was hard, at that time, to convince the anti-democratic
advocates that fast economic growth depends on the
friendliness of the economic climate, rather than on the
IA R
fierceness of political systems. That debate on the alleged
contradiction between democracy and economic growth
has now ended (not least because of the high economic
CH
growth rates of democratic India), but a similar scepticism
about democracy seems to be now emerging, suggesting
an alleged inability of democratic systems to pursue public
health, public education and other socially supportive
arrangements.
It is important in this context to understand how
democratic decisions emerge and how policies get adopted.
What a democratic system achieves depends greatly on
the issues that are politicised, which contributes to their
advancement. Some issues are extremely easy to politicise,
such as the calamity of a famine-and as a result famines
tend to stop abruptly with the establishment of a democratic
political system. But other issues-less spectacular and less
immediate-present a much harder challenge. Using
democratic means for remedying inadequate coverage of
public healthcare, non-extreme undernourishment, or
inadequate opportunities for school education demands
more from democratic practice-more vigour and much more
range.
Strictly for Internal Circulation
Authoritarian systems can change their policies very
quickly, when the leaders want that, and it is to the credit
of the Chinese political leaders that they have focused so
much on social interventions in education, healthcare and
other supportive mechanisms to advance the quality of life
of the Chinese people. But authoritarianism does not, of
course, provide any kind of guarantee that the social
commitments will emerge (they clearly have not in North
Korea or Burma), or that they would invariably be stable
and non-fragile (there have been sharp variations in the
past even in China, including its having the largest famine
in world history during the failure of the Great Leap
Forward initiative).
Even China's commitment to broad-based public
healthcare has had ups and downs, and came close to
being undone: the coverage of the rural cooperative medical
system crashed from 90 per cent to 10 per cent between
1976 and 1983 (when market-oriented reforms were
initiated), and stayed around 10 per cent for a full 20
years. During this period of abdication of state
responsibility for healthcare in China, the progress of
health-related indicators (such as life expectancy and child
survival) slowed down sharply. This led eventually to
another U-turn, around 2004-5, when the rural cooperative
medical system was rebuilt, with the coverage rising again
to 90 per cent or so within three years (Shaoguang Wang,
'Double Movement in China', Economic and Political
Weekly, Dec 27, 2008).
There is, in fact, no real barrier in India in combining
multi-party democratic governance with active social
intervention. But what would be needed is much greater
public engagement with the central demands of justice
and development through more vigorous democratic
practice. The development of the welfare state in Europe
has many lessons to offer here. As it happens, public
debate is quite powerful in India, but the range of
engagement has often been quite limited. The India-China
comparisons tend to concentrate mostly on the horse race
of relative rates of overall economic growth rather than the
variations in mediation for development. Underlying this
dialogic narrowness, there is a social picture. A big part
of the Indian population-a fairly small minority but still
quite large in absolute numbers-has been doing very well
indeed, through the process of high growth alone; they do
not depend on social mediation. In contrast, more vigorous
mediation would be very important for other Indians-many
more, in fact-whose lives are affected by ill health,
undernourishment, lack of healthcare and other
deprivations.
Power Imbalances, Old and New
The neglect of elementary education, healthcare, social
security and related matters in Indian planning fits into a
general pattern of pervasive imbalance of political and
economic power that leads to a massive neglect of the
Weekly Current Affairs — 16
 interests of the unprivileged. Other glaring manifestations
of this pattern include disregard for agriculture and rural
development, environmental plunder for private gain with
huge social losses, large-scale displacement of rural
communities without adequate compensation, and the odd
tolerance of human rights violations when the victims
come from the underdogs of society.
None of this is entirely new, and much of it reflects
good old inequalities of class, caste and gender that have
been around for a long time. For instance, the fact that not
Y
even one of the 315 editors and other leading members of
E
the printed and electronic media in Delhi surveyed recently
by the Centre for the Study of Developing Societies belonged
to a scheduled caste or scheduled tribe, and that at the
EM
other end, 90 per cent belonged to a small coterie of upper
AD L
castes that make up only 16 per cent of the population,
obviously does not help to ensure that the concerns of
Dalits and adivasis are adequately represented in public
C
debates. Nor is India's male-dominated Lok Sabha (where
the proportion of women has never crossed 10 per cent so
far) well placed to address the concerns of women-not
only gender issues, but also other social issues in which
AC NI
women may have a strong stake. A similar point applies
to rural-urban disparities: a recent study found that rural
issues get only two per cent of the total news coverage in
national dailies.
Some of these inequalities are diminishing, making it
S O
easier for disadvantaged groups to gain a voice in the
system (even the proportion of women in the Lok Sabha,
abysmally low as it is, is about three times as high today
as it was 50 years ago). However, new or rising inequalities
are also reinforcing the vicious circle of disempowerment
IA R
and deprivation. For instance, the last 20 years have seen
a massive growth of corporate power in India, a force that
is largely driven-with some honourable exceptions-by
CH
unrestrained search for profits. The growing influence of
corporate interests on public policy and democratic
institutions does not particularly facilitate the reorientation
of policy priorities towards the needs of the unprivileged.
It is important to recognise the influence of elements of
the corporate sector on the balance of public policies, but
it would be wrong to take that to be something like an
irresistible natural force. India's democratic system offers
ways and means of resisting the new biases that may
emanate from the pressure of business firms. One
instructive example both of a naked attempt to denude an
established public service and of the possibility of defeating
such an attempt is the long saga of attempted takeover of
India's school meal programme by biscuit-making firms.
The "midday meal" programme, which provides hot cooked
meals prepared by local women to some 120 million
children, with a substantial impact on both nutrition and
school attendance, had been eyed for many years by food
manufacturers, especially the biscuits industry.
Strictly for Internal Circulation
A few years ago, a "Biscuit Manufacturers' Association"
(BMA) launched a massive campaign for the replacement
of cooked school meals with branded biscuit packets. The
BMA wrote to all members of Parliament, asking them to
plead the case for biscuits with the minister concerned
and assisting them in this task with a neat pseudo-
scientific precis of the wonders of manufactured biscuits.
Dozens of MPs, across most of the political parties,
promptly obliged by writing to the minister and rehashing
the BMA's bogus claims. According to one senior official,
the ministry was "flooded" with such letters, 29 of which
were obtained later under the Right to Information Act.
Fortunately, the proposal was firmly shot down by the
ministry after being referred to state governments and
nutrition experts, and public vigilance exposed what was
going on. The minister, in fact, wrote to a chief minister
who sympathised with the biscuit lobby: "We are, indeed,
dismayed at the growing requests for introduction of pre-
cooked foods, emanating largely from suppliers/marketers
of packaged foods, and aimed essentially at penetrating
and deepening the market for such foods" (Hindustan
Times, Apr 14, 2008).
The bigger battle is still on. The BMA itself did not give
up after being rebuked by the Union minister for human
resource development. It proceeded to write to the Union
minister for women and child development, with a similar
proposal for supplying biscuits to children below the age
of six years under the Integrated Child Development
Services (ICDS). Other food manufacturers are also on the
job, and despite much vigilance and resistance from activist
quarters (and the Supreme Court), they seem to have made
significant inroads into child feeding programmes in
several states.
Similar concerns apply in other fields of social policy.
For instance, the prospects of building a public healthcare
system in India are unlikely to be helped by the growing
influence of commercial insurance companies, very active
in the field of health. India's health system is already one
of the most privatised in the world, with predictable
consequences-high expenditure, low achievements and
massive inequalities. Yet, there is much pressure to embrace
this "American model" of healthcare provision, despite the
international recognition in the health community of its
comparatively low achievement and significantly high cost.
However, recent events have also shown the possibility
of fighting back, not just in terms of winning isolated
battles against inappropriate corporate influence, as
happened with the biscuits lobby, but also in terms of
building institutional safeguards against abuses of
corporate power. The Right to Information Act, for instance,
though not directly applicable to information held by
private corporations, is a powerful means of watching
and containing the state-corporate nexus, as the biscuits
story illustrates. Regulations and legislations pertaining
to corporate funding of political parties, corporate social
Weekly Current Affairs — 17
 responsibility, financial transparency, environmental
standards, and workers' rights also have an important
role to play in disciplining the corporate sector.
The Case for a Comprehensive Approach
The need for growth-mediated development has not
been completely ignored in Indian policy debates. The
official goal of "inclusive growth" could even claim to
have much the same connotation. However, the rhetoric of
inclusive growth has gone hand in hand with elitist
Y
policies that often end up promoting a two-track society
E
whereby superior ("world-class") facilities are being created
for the privileged, while the unprivileged receive second-
rate treatment, or are left to their own devices, or even
EM
become the target of active repression-as happens, for
AD L
instance, in cases of forcible displacement without
compensation, with a little help from the police. Social
policies, for their part, remain quite restrictive (despite
C
some significant, hard-won initiatives such as the National
Rural Employment Guarantee Act), and are increasingly
steered towards quick fixes such as conditional cash
transfers. Their coverage, in many cases, is also sought to
AC NI
be confined to "below poverty line" (BPL) families, a
narrowly defined category that tends to shrink over time
as per capita incomes increase, which may even look like
a convenient way of ensuring that social welfare
programmes are "self-liquidating".
Cash transfers are increasingly seen as a potential
S O
cornerstone of social policy in India, often based on a
distorted reading of the Latin American experience in this
respect. There are, of course, strong arguments for cash
transfers (conditional or unconditional) in some
IA R
circumstances, just as there are good arguments for
transfers in kind (such as midday meals for school
children). What is remarkably dangerous, however, is the
illusion that cash transfers (more precisely, "conditional
CH
cash transfers") can replace public services by inducing
recipients to buy health and education services from private
providers. This is not only hard to substantiate on the
basis of realistic empirical reading; it is, in fact, entirely
contrary to the historical experience of Europe, America,
Japan and East Asia in their respective transformation of
living standards. Also, it is not how conditional cash
transfers work in Brazil or Mexico or other successful
cases today.
In Latin America, conditional cash transfers usually
act as a complement, not a substitute, for public provision
of health, education and other basic services. The incentives
work for their supplementing purpose because the basic
public services are there in the first place. In Brazil, for
instance, basic health services such as immunisation,
antenatal care and skilled attendance at birth are virtually
universal. The state has done its homework-almost half of
all health expenditure in Brazil is public expenditure,
compared with barely one quarter (of a much lower total
Strictly for Internal Circulation
of health expenditure) in India. In this situation, providing
incentives to complete the universalisation of healthcare
may be quite sensible. In India, however, these basic
services are still largely missing, and conditional cash
transfers cannot fill the gap.
The pitfalls of "BPL targeting" have become increasingly
clear in recent years. First, there is no reliable way of
identifying poor households, and the exclusion errors are
enormous: at least three national surveys indicate that,
around 2004-05, about half of all poor households in rural
India did not have a "BPL card". Second, India's poverty
line is abysmally low, so that even if all the BPL cards
were correctly and infallibly allocated to poor households,
large numbers of people who are in dire need of social
support would remain excluded from the system. In 2009-
10, for instance, the official poverty line in Delhi was
around Rs 30 per person per day. This is just about enough
to buy one kilogram of rice and a one-way bus ticket that
would take you three stops down the road. Third, BPL
targeting is extremely divisive, and undermines the unity
and strength of public demand for functional social
services, making a collaborative right into a divisive
privilege.
The power of comprehensiveness in social policy is
evident not only from international and historical
experience, but also from contemporary experience in India
itself. In at least three Indian states, universal provision of
essential services has become an accepted norm. Kerala
has a long history of comprehensive social policies,
particularly in the field of elementary education-the
principle of universal education at public expense was an
explicit objective of state policy in Travancore as early as
1817. Early universalisation of elementary education is
the cornerstone of Kerala's wide-ranging social
achievements.
Less well known, but no less significant, is the gradual
emergence and consolidation of universalistic social
policies in Tamil Nadu (see 'Understanding Public Services
in Tamil Nadu' by Vivek S., PhD thesis, 2010, Syracuse
University, and the literature cited there). Tamil Nadu was
the first state to introduce free and universal midday meals
in primary schools. This initiative, much derided at that
time as a "populist" programme, later became a model for
India's national midday meal programme, widely regarded
today as one of the best "centrally sponsored schemes".
The state's pioneering efforts in the field of early child
care, under the ICDS, has made great strides towards the
provision of functional anganwadis (child care centres),
accessible to all, in every habitation. Tamil Nadu, unlike
most other states, also has an extensive network of lively
and effective healthcare centres, where people from all
social backgrounds can get reasonably good healthcare,
free of cost. NREGA, another example of universalistic
social programme, is also doing well in Tamil Nadu:
employment levels are high (with about 80 per cent of the
Weekly Current Affairs — 18
 work going to women), wages are usually paid on time
and leakages are relatively small. Last but not the least,
Tamil Nadu has a universal public distribution system
(PDS), in both rural and urban areas. Tamil Nadu's pds
supplies not only foodgrains but also oil, pulses and other
food commodities, with astonishing regularity and minimal
leakages.
Himachal Pradesh began this journey much later than
Kerala and Tamil Nadu, but is catching up very quickly.
This is most evident in the field of elementary education:
Y
starting from literacy levels similar to the dismal figures
E
for Bihar or Uttar Pradesh around the time of India's
Independence, Himachal Pradesh caught up with the
highest-performing Kerala within a few decades. This
EM
"schooling revolution" was based almost entirely on a
AD L
policy of universal provision of government schools, and
even today, elementary education in Himachal Pradesh is
overwhelmingly in the public sector. Like Tamil Nadu,
C
Himachal Pradesh has a well-functioning pds, providing
not only foodgrain but also pulses and oil and covering
both "BPL" (Below Poverty Line) and "APL" (Above Poverty
Line) families. Himachal Pradesh has also followed
AC NI
comprehensive principles not only in the provision of
essential social services (including schooling facilities,
healthcare and child care) but also in the provision of
basic amenities such as roads, electricity, drinking water
and public transport. For instance, in spite of adverse
topography and scattered settlements, 98 per cent of
S O
Himachali households had electricity in 2005-6.
It is perhaps not an accident that Kerala, Tamil Nadu
and Himachal Pradesh also tend to have the best social
indicators among all major Indian states. For instance, a
IA R
simple index of children's health, education and nutrition
achievements clearly places these three states at the top
(Dreze, R. Khera, S. Narayanan, 2007, 'Early Childhood in
India: Facing the Facts', Indian Journal of Human
CH
Development, 1(2), Jul-Dec 2007). Despite wide historical,
cultural and political differences, they have converged

Strictly for Internal Circulation
towards a similar approach to social policy, and the results
are much the same too. There is a crucial lesson here for
other Indian states, and indeed for the country as a whole.
A Concluding Remark
We hope that the puzzle with which we began is a
little clearer now. India's recent development experience
includes both spectacular success as well as massive
failure. The growth record is very impressive, and provides
an important basis for all-round development, not least by
generating more public revenue (about four times as much
today, in real terms, as in 1990). But there has also been
a failure to ensure that rapid growth translates into better
living conditions for the Indian people. It is not that they
have not improved at all, but the pace of improvement has
been very slow-even slower than in Bangladesh or Nepal.
There is probably no other example in the history of world
development of an economy growing so fast for so long
with such limited results in terms of broad-based social
progress.
There is no mystery in this contrast, or in the limited
reach of India's development efforts. Both reflect the nature
of policy priorities in this period. But as we have argued,
these priorities can change through democratic
engagement-as has already happened to some extent in
specific states. However, this requires a radical broadening
of public discussion in India to development-related
matters-rather than keeping it confined to simple
comparisons of the growth of the gnp, and naive admiration
(implicit or explicit) of the high living standards of a
relatively small part of the population. An exaggerated
concentration on the lives of the minority of the better-off,
fed strongly by media interest, gives an unreal picture of
the rosiness of what is happening to Indians in general,
and stifles public dialogue of other issues. Imaginative
democratic practice, we have argued, is essential for
broadening and enhancing India's development
achievements.
Author: Amartya Sen
Source: Outlook Magazine
Weekly Current Affairs — 19