Insights Daily Current Events, October 29, 2013

ARCHIVES

October 29, 2013

NATIONAL

Centre clears Road project (under PMGSY) in Arunachal Pradesh

• The Centre has cleared the 157 km Miao-Vijaynagar road project that will connect the remote Vijaynagar circle in Changlang district of Arunachal Pradesh along the India-Myanmar border, 100 km of it passing through the Namdapha National Park.

(from the prelims point of view- find out in the Atlas where Namdapha National Park is located, for which animal it is famous for, the rivers flowing through it/near by and also the locations of other National Parks on the same lines)

• It is the country’s longest road project under Prime Minister’s Gram Sadak Yojana (PMGSY) it will have altogether 25 bridges along its stretch.

• At present, there is no road to this border area with 13 recognised villages and one unrecognised settlement. For over 5,000 people of these villages, the only alternative to air transport is a six-day walk from Vijaynagar to the nearest town Miao through the dense jungles of Namdapha. Also there is no electricity in Vijaynagar.

• The Miao-Vijaynagar road was motorable till 1976 and has fallen into disrepair since then.

• Once the project is completed, it will directly link the Advanced Landing Ground (ALG) of Vijaynagar, considered to be one of the toughest ALGs in the country at an altitude of 4,200 feet, and also an Assam Rifles post that was opened in 1962 in this remote and strategic frontier.

What is PRADHAN MANTRI GRAM SADAK YOJANA (PMGSY)?

• PMGSY was launched on 25th December 2000 as a fully funded Centrally Sponsored Scheme to provide all weather road connectivity in rural areas of the country. The programme envisages connecting all habitations with a population of 500 persons and above in the plain areas and 250 persons and above in hill States, the tribal and the desert areas.

• It is one of the schemes of Ministry of Rural Development.

The objective was to give roads to villages

(1) with a inhabitants of thousand persons & more by year 2003

(2) having populace of five hundred & more by 2007

(3) mount states, ethnic & desert region villages having a population of five hundred & more by the year 2003, &

(4) mount states, ethnic & desert region villages having population of two fifty & more by 2007.

• For executing this program, an Online Management and Monitoring System or OMMS GIS scheme was created to recognize targets & monitor growth. CDAC Pune’s e-governance department has developed this & is among the biggest Indian databases. The system administers & monitors every stage of road development starting from its suggestion form to completion of road. The OMMAS scheme also consists of separate unit to follow the fixed cost on every road. Depending on the data given by state & district officials, OMMAS produces detailed reports visible in citizens sector.

Courtesy -pmgsy.nic.in & indianyojna website

U.S. immigration reforms might hurt Indian IT sector

• Commerce and Industry Minister Anand Sharma had raised serious concerns over certain clauses in the United States Immigration Bill and that it would profoundly undermine the competitiveness of the Indian IT industry in the U.S.

• The industry supports over 28,000 jobs and has contributed nearly $15 billion to the U.S. in the last five years.

• The concerns were regarding the discriminatory measures related to skilled non-immigrant visas in the Comprehensive Immigration Reform Bill passed by the U.S. Senate.

• The Minister also sought U.S. investment in the Delhi-Mumbai Industrial Corridor (DMIC) project and National Manufacturing Investment Zones. There were positives signs from the U.S. in this regard.

• DMIC, which passes through six Indian States, accounts for 43 per cent of national GDP, half of the nation’s industrial output and exports and employs 40 per cent of its total workforce.

• National Manufacturing Policy, which has taken cognisance of the serious challenge of reviving the growth of manufacturing and raising its share in the GDP.

Immigration bill: Issues

• The Immigration Bill if implemented would make the illegal immigrants (living in U.S.) citizens of U.S.

India’s concern:

• It is on the provision in the Bill which relates to non-immigrant visas.

• This Bill has a serious bearing on the Indian IT industry, since there are large number of Indians who are working on temporary work visas – H1B or L1 visas in U.S. Around 60% to 70% of offshore IT employees work in U.S and the Indian firms would be forced to cut down on these employees.

Impact on India:

• This would mean that Indian IT companies will have to employ more U.S. residents and this in turn would increase the expenditure on wages and other benefits.

• Indian companies will have to pay more interms of higher visa fees and higher wages to H1B visa holders. All of this could disrupt the companies’ business model.

• The proposed law will hurt the over $100 billion IT-ITeS industry in India and software firms (Wipro, Infosys, TCS etc) as their cost of operations could go up significantly.

All you need to know about DMIC

• Delhi-Mumbai Industrial Corridor is a mega infra-structure project of USD 90 billion with the financial & technical aids from Japan, covering an overall length of 1483 KMs between the political capital and the business capital of India, i.e. Delhi and Mumbai.

• It passes thru the States of U.P, NCR of Delhi, Haryana, Rajasthan, Gujarat and Maharashtra, with end terminals at Dadri in the National Capital Region of Delhi and Jawaharlal Nehru Port near Mumbai.

• This Dedicated Freight Corridor offers high-speed connectivity for High Axle Load Wagons (25 Tonne) of Double Stacked Container Trains supported by high power locomotives. The Delhi Mumbai leg of the Golden Quadrilateral National Highway also runs almost parallel to the Freight Corridor.

Vision

• To create strong economic base with globally competitive environment

• and state-of-the-art infrastructure to activate local commerce, enhance foreign investments and attain sustainable development.

Project Goals

• Developmental planning for DMIC aims to achieve certain end results with implementation that would ensure realization of envisaged vision for the project and lead to economic development. Accordingly the project goals for DMIC are:

1. Double employment potential in 7 years

2. Triple industrial output in 9 years

3. Quadruple exports from the region in 8-9 years

• DMIC is conceived to be developed as a Model Industrial Corridor of international standards with emphasis on expanding the manufacturing and services base and develop DMIC as the ‘Global Manufacturing and Trading Hub’

• DMICDC undertakes project development services for investment regions / industrial areas/ economic regions/ industrial nodes and townships, for various central government agencies and also help in assisting state governments.

Courtesy – dmicdc website

India’s National Manufacturing Policy

National Investment & Manufacturing Zones (NIMZs)

• The Government of India had announced a National Manufacturing Policy with the objective of enhancing the share of manufacturing in GDP to 25% within a decade and creating 100 million jobs.

• The NIMZs are an important instrumentality of the manufacturing policy. The NIMZs are envisaged as integrated industrial townships with state of the art infrastructure; land use on the basis of zoning; clean and energy efficient technology; necessary social infrastructure; skill development facilities etc. to provide a productive environment for persons transitioning from the primary to the secondary and tertiary sectors.

• The policy is based on the principle of industrial growth in partnership with the States. The Central Government will create the enabling policy frame work, provide incentives for infrastructure development on a Public Private Partnership (PPP) basis through appropriate financing instruments, and State Governments will be encouraged to adopt the instrumentalities provided in the policy

Courtesy -dipp.nic.in

Insurance cover for expatriate workers in Gulf on the anvil

• India is set to launch an ambitious scheme that will provide insurance and financial cover to over a million blue-collar expatriate workers residing in the Gulf countries.

• The scheme will be formally launched by Vayalar Ravi, the Minister of Overseas Indian affairs. The Mahatma Gandhi Pravasi Suraksha Yojana is a pension and life insurance fund that could benefit up to two million expatriate workers.

• The scheme encourages expat employees to mop-up their savings that can be used for their resettlement on their return to India. It would also contribute to their pension and provide a life insurance cover against natural death during the period of coverage.

• Eligibility criteria: Overseas Indian workers between 18-50 years old who have Emigration Check Required status stamped on their passport, and have migrated on employment or contract visa, are eligible to enroll in the scheme.

• Subscribers then have to open a Non-Resident External account that allows NRIs to remit funds in any permitted foreign currency, which is converted to Indian rupees and credited to their account. The participant’s contribution will be automatically deducted from this account and credited to the scheme.

The government would also make significant contribution to the scheme.

• The government will make an annual contribution of Rs.1,000 for those who save between Rs.1,000-Rs.12,000 a year.

• Women workers are eligible for an additional contribution of Rs. 1,000, which would be valid for a period of five years or the return of the worker to India, whichever is earlier.

• Those who save more than Rs.4,000 a year are eligible for an additional payment of Rs.900 by the government. It will be channeled to a corpus to be used for resettlement at the time of return.

Criticism over the new Land Acquisition Act

Criticism by the State (West Bengal):

• Alleging that the Centre did not discuss various important aspects of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013, West Bengal government too did not support the Act.

• According to the State Govt (WB), ‘Land was not an issue; but then instead of acquiring new land it would be better to make use of the land that is already available’. It is also opposed to the setting up of Special Economic Zones (SEZs). Earlier, Infosys had put its plan on hold as it wanted SEZ facility for the project in the state.

Criticism by Social Activist:

• According to Medha Patkar, a social activist – The process of rehabilitation in the Act was “severely flawed” as it had no arrangement for “alternative livelihood” and is only limited to monetary compensation,

• If the rehabilitation process does not include arrangements for alternative jobs for those whose land has been acquired, then it only becomes resettlement and not rehabilitation.

• Acquirement of agricultural land for industrial projects should be stopped and preference should be given to barren land for industrial development i.e., Industrial set-ups like factories should come up on “non-agricultural” land.

• Further improvement of the Act, would also lead to the resolution of the conflict between the “land owners and the government” to a large extent.

Some positives:

However, the activist did not reject the Act all-together. Ms. Patkar welcomed-

• the inclusion of the “role of the people whose land has been acquired”.

• the inclusion of ‘impact analysis’, as it would encompass the social, economic and political effect on those people whose land has been acquired. The activist added that, social impact analysis and assessment of the effects on environment of industrial projects should be included at the very beginning of the total process of development planning since these processes take more time and would go on simultaneously.

Point to be noted:

• In most cases of land acquisition in the country, the interests of those making monetary investments in an industrial project were given more importance than those who had ‘lived their for generations’. The interests of the later, needs to be given due consideration to protect them from any harassment.

Election Commission guidelines

• The Election Commission (EC) has clarified that if the number of electors who had utilised the NOTA (none of the above candidates) option in the EVM/Ballot paper exceeded the votes polled by any of the candidates, the candidate who secures the highest number of votes would be declared winner.

• This is in accordance to the provisions of clause (a) of Rule 64 of Conduct of Elections Rules, 1961, read with Section 65 of the Representation of the People Act, 1951.

• Similarly, if the number of contesting candidates is equal to the number of seats to be filled, the Returning Officer (RO) has to declare all the contesting candidates to be duly elected. In the case of elections to the Lok Sabha and the Legislative Assemblies, where there is only one contesting candidate in the fray, the RO has to, under the relevant provisions, declare the sole contestant as elected.

• Earlier in September, 2013 the Supreme Court,  had asked EC to provide a NOTA option on the EVM and ballot papers so that the electors who did not want to vote for any of the candidates could exercise their option in secrecy.

INTERNATIONAL

India for greater engagement in the West

• India and Peru are looking forward to start negotiations on a free-trade agreement (FTA)

• On this occasion, the Vice-President Hamid Ansari launched INCHAM, the Indian Chamber of Commerce in Peru.

• The chamber will help Indian businesses that want to engage in trade and industry (invest) with Peru and neighbouring Latin American countries.

• Although an FTA is still in the conceptual stage, the development is seen as a sign of India’s widening economic engagement with Latin American countries. There are already positive signs over the finalization of Bilateral Investment Promotion and Protection Agreement (BIPPA).

• The official website of INCHAM (www.incham.pe) was also launched on the occasion INCHAM which will provide information services and advisories and act as a bridge between the businesses and the governments of the two countries.

Trade relations hitherto:

• Bilateral trade between the two countries went up sevenfold in the last five years. Last year, the growth was 35 %; and in the first six months of 2013, trade rose 44 %, as Indian companies showed keen interest in Peru’s gold mines.

• Delegation-level talks would also include defence cooperation and cultural exchanges.

Japan’s engagement in India on Infrastructure development

• Japan International Cooperation Agency (JICA) has come forward to offer assistance to Chennai Port Trust for improving container movement (basically in improving efficiency of the port operations).The move would help the export-import trade plan better and save on time and cost.

• The immediate and short-term plan would be to improve the flow of containers using information technology. Japan’s experience in improving port operations can be used in reducing congestion, particularly the long queue of container trailers.

• With regard to Chennai-Bangalore Industrial Corridor (CBIC) project, the ‘master plan’ was ready and it would be completed by early 2015.

Other projects:

• JICA is also funding the ongoing Chennai Metro Rail project and backs the Chennai Port-Maduravoyal elevated four-lane link road project.

• It was also considering extending assistance for establishing an outpatient tower and purchase of equipment to the Institute of Child Health and Hospital for Children, Egmore, Chennai.

More about the Project (CBIC):

• It involves comprehensive perspective planning at corridor level and detailed planning at industrial-node level mainly in the sectors of transportation, power/energy, water and industrial park. The study will cover an area of 560 km across Tamil Nadu, Karnataka and Andhra Pradesh. It will cost around Rs.37 crore and help arrive at the total cost of the project.

Spain also a victim of U.S. spying

• After France and Germany, it was Spain complaining on the NSA’s snooping.

• From the documents (received from Edward Snowden) it was revealed that, over 60 million calls and e-mails of Spain’s citizens, its government and legislators were monitored in one month

• European leadership has reacted strongly over this issue. At a recent summit meeting in Brussels, EU leaders proposed the establishment of a transatlantic code of conduct for such activities.

• There was a cautious approach taken by the EU in this regard since ‘spying on such a massive scale shows that the U.S. is technically perfectly capable of listening to everything everywhere and stocking it. And even if the data is not used immediately. It can always be used later’.

• The Europeans are particularly outraged by the ‘casual’ manner in which the U.S. has treated these allegations, promising to give “full and complete” answers but in effect giving none. They were particularly shocked over the U.S. response on ‘Ms. Merkel, the German Chancellors phone being tapped’. The U.S. representative said that, it is not being monitored and it will not be monitored in future. (But what about the past?  Remained unanswered.)

• Moreover U.S. representative has said that, the French and Germans should be grateful that U.S. spying had actually allowed the foiling of several terrorist attacks on European soil.

Kivu at the heart of Congo unrest

• The area of North and South Kivu in eastern Democratic Republic of Congo, known for its rich mining resources, is the main centre of conflict in the country and of tensions in Africa’s wider Great Lakes region.

• Having borders with Rwanda, Burundi, Uganda and Tanzania, Kivu has found itself at the heart of the region’s tragedies, marked by inter-community rivalries and deadly clashes over land.

• The provinces of North and South Kivu are rich in natural resources, especially gold, coltan and tin, which are sought by telecommunications and agricultural sectors.

Historical Background: Issue of nationality

• Since the 18th century Kivu has progressively seen large influxes of Tutsis and Hutus from Rwanda, and in the early 1980s, the regime of Mobutu Sese Seko in what was then Zaire highlighted the issue of nationality to sideline those who came from Rwanda.

• Kivu experienced a massive influx of nearly one million Rwandan Hutu refugees in 1994 after the genocide of Tutsis, along with rebels from Burundi and Uganda and tribal militias.

• The wars of 1996-1997 and 1998-2003, which involved up to seven African countries on DRC soil, started in Kivu.

• During these two regional wars, and later in the framework of joint operations with Kinshasa in the late 2000s, Rwanda sent troops into the east of DRC, officially to assure the security of its own regime, driving out Rwandan Hutu rebels grouped within the Democratic Forces for the Liberation of Rwanda (FDLR).

• In 2007 and 2008, North Kivu was the scene of clashes between the army and insurgent soldiers fighting on the side of former Congolese general Laurent Nkunda in the ethnic Tutsi National Congress for the Defence of the People (CNDP).

• The insurgents were integrated into the armed forces under a pact signed with Kinshasa on March 23, 2009.

• The M23 movement which is estimated by foreign military sources, not more than 1,000 fighters — emerged in April 2012 with a mutiny by the former rebels taken into the army under the 2009 deal.

• In April 2012, fierce clashes broke out between the M23 rebels and loyalist forces in the eastern North Kivu province.

• U.N. experts regularly accuse Rwanda and Uganda, despite their denials, of backing the M23.

• In November 2012, the M23 took Goma before withdrawing 11 days later following a demand from states in the region and in return for a promise of dialogue with Kinshasa, which has been broken off on several occasions.

• In renewed fighting since last week of October, 2013 the army has retaken several M23 strongholds in the east.

Courtesy- Hindu Newspaper

Victory for PM loyalist in Georgia

• A loyalist of Georgia’s Prime Minister Bidzina Ivanishvili- Giorgi Margvelashvili has won (62% of the vote) the presidential poll to replace reformer Mikheil Saakashvili.

• It marked the end of U.S. ally Mr. Saakashvili’s second and last five-year term.

ECONOMICS

FMC orders forensic audit of NSEL

• The Bombay High Court was hearing the petitions filed about the e-series of NSEL. On this regard Forward Markets Commission (FMC) said that it would soon obtain forensic audit of e-series of the National Spot Exchange Ltd. (NSEL).

• The audit was to be conducted by an independent body. FMC is entrusted with the responsibility and power of supervising and regulating even the e-series contracts.

• The FMC had told the court that it would not allow NSEL to accept or permit any rematerialization request, financial settlement or physical delivery till the forensic audit was received.

• The court stated that NSEL would be allowed to operate the frozen accounts to finance the audit only if the amount in the operational accounts was not sufficient to fund it.

• At present, NSEL members owe over Rs.5,500 crore to thousands of investors who have filed cases with the EOW of Mumbai Police following the default.

Capital infusion credit positive for banks

• Ratings agency Moody’s Investors Service, has said that, the recent government decision to inject Rs.14,000 crore of capital in state-run banks was credit positive.

• The ‘recapitalisation’ is credit positive because it would ensure that the public sector banks will meet regulatory capital requirements while maintaining loan growth to economically important sectors.

• This was in regard to the government’s decision on injecting Rs.14,000 crore in 20 state-run banks through the preferential share allotment route to meet the credit requirement of productive sectors of the economy and maintain the regulatory capital adequacy ratios in public sector banks.