CrackingIAS.com JULY 2013 Compiled by: CrackingIAS.com CONTENTS INDEX National International India and World Science and Technology Economics Sports & Awards and Honours Social issues & Development Political issues, Human Rights & Governance Monthly Special Focus Bitcoin Silicine - possible Graphene replacement? Inflation Indexed Bonds (IIBs) Integrity pact for Indo-Bangladesh relations NEW GAS PRICING GUIDELINES Rupee Touches 60 Barrier Against Dollar MONTHLY QUESTIONS JULY 2013 P.No. 1 5 9 10 18 22 24 25 23 How to get IAS EXPRESS? You can make payment by depositing requisite fees ` 900 FOR ONE YEAR SOFT COPY ONLY in our ICICI Bank account through any of the ICICI bank branches anywhere in India. (You need not be an ICICI A/c holder to deposit cash in any of the ICICI Bank Branches.) Bank Account Details: Name of the account: King Institute of Talent Excellency (KITE) Current A/c No. : 602705500527. IFSC Code: ICIC0006027 (Chennai, Anna Nagar Branch). OR Demand draft: The DD is to be made in favour of: King Institute of Talent Excellency, Payable at Chennai. The DD is to be sent to: Address: Cracking IAS Study Circle, Y-Block 3020, First Floor. 13th Main Road. Anna Nagar. Chennai-40. Landmark - Behind Natesan institute of coop management on Shanti Colony Road. Call:us:09884554654. E mail:
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[email protected] or SMS TO 09884554654 clearly specifying your Details. 34 IAS 2012 SUCCESSFUL CANDIDATE ASHWIN says – MAINS TEST SERIES I could attempt 40 marks in GS MAINS 2012 based on the last two mock tests conducted by RAJA, Sir. There were many questions GS MAINS 2012 based on the test papers of CrackingIAS.com. Study Materials & IAS Express were very useful. Note: nature that may have found their way into this book inadvertently. Your - All rights reserved. We bear no responsibility for any damage arising from any omissions or negligence or inaccuracies of any constructive criticisms are most welcome. Address: CrackingIAS, 3020, Old Y-Block, 13th Main Road. 1st Floor. Anna Nagar. Chennai -40. Landmark: Natesan Co-operative Instuitute on Shanti Colony Road. (Take 2nd left from the police booth.) POLITICAL SCIENCE IS NOW INEVITABLE FOR ALL THE PAPERS OF GS. GS -II IS ALMOST POLITICAL SCIENCE. OPTING FOR POLITICAL SCIENCE IS A WISE DECISION. Cracking IAS Study Circle, Chennai. KITE4education.com IAS EXPRESS CrackingIAS.com NATIONAL - News IAS EXPRESS JULY 2013 POLITICAL SCIENCE IS NOW UNAVOIDABLE FOR ALL THE PAPERS OF GS. GS -II IS ALMOST POLITICAL SCIENCE. OPTING FOR POLITICAL SCIENCE IS A WISE DECISION. CrackingIAS.com *3 Indian projects to receive U.N. public service awards: U.N. Public Service Awards will be given to three Indian projects for the year 2013. The awards are given for projects that fight poverty and promote sustainable development. The projects are:1. Project Mass Contact Programme of Kerala: Launched in 2011 by Kerala government to Combat red tape and bureaucracy in administration. Key Achievements: Enables interaction b/w the KITE4education.com people and the government by encouraging them to approach the government directly to get their concerns addressed without delay or corrupt practices. Under this programme, The CM visits each town and organizes massive events where people can address their queries personally. The programme has facilitated in improving accountability in the State. It has reduced the time usually taken to respond to complaints and actions and has expedited problem solving. 2. Project Swavalamban of District Administration of Dhanbad in Jharkhand: It is an initiative of Dhanbad administration - To improve disbursement of pensions in the district. Key Achievements: Replaced the manual process of disbursement in the payment of pensions, particularly registration of new pensioners by automating payment and creation of direct cash transfers into pensioners’ bank accounts. It reduced the time from three months to three days. Payment through Business Correspondent in remote rural areas has dramatically improved the delivery of services. Besides, the database of all pensioners was digitized with the help of new software. 3. Graamin Haat programme of Department of Cottage and Rural Industries in Madhya Pradesh: For Women Empowerment. Key Achievements: The Haat Development Committee that operates weekly markets (haats) is setting up Women Self Help Groups (WSHGs) that operate its own haats. Women now not only had an important place in the haat and thus in society but also control over resources. Now, there are 1,775 shops in 36 haats benefiting almost 1,800 sellers and 4, 15,000 villagers from 217 villages. This endeavor has provided women an opportunity to acquire management skills, operate a business on their own and improve overall living conditions in their communities. This in turn imbued a new sense of self-confidence and earned them respect in the family and society. It has also allowed women to gradually become part of the governance of their community. *Crisis looms as country faces TB drugs stock-out: Even as the government is trying to tackle the stockout situation for anti-tuberculosis paediatric drugs, a new problem has surfaced. Stocks of second-line medicines like Kanamycin, an injectible drug used for NATIONAL - News 1 CrackingIAS.com treating multi-drug resistant (MDR) TB have dipped alarmingly. Currently, there is stock only for two and a half months. India is among the few countries with a high burden of MDR TB. The Prime Minister’s Office has asked the Union Ministry of Health and Family Welfare (MoHFW) for clarification on the availability of drugs. The Central TB Division (CTD) called an emergency meeting to find the way forward to extenuate the crisis. Manufacturers of paediatric drugs, prolongation pouches and streptomycin have been identified and the ministry is hopeful of getting supplies to states by the end of July. States with a lower disease burden have been asked to transfer drugs to those with a higher burden facing extreme shortage of drugs. The shortage of drugs was due to procurement failures and delays at the level of the government of India. It also confirmed stock-out of paediatric doses, Rifampicin (the key drug to treat TB), streptomycin injection as well as diminishing stockpiles of Kanamycin injections and other first line drugs. The emergency procurement of paediatric drugs was delayed by six months and the orders had just been placed. As for KANAMYCIN, emergency procurement of over 400,000 vials, done with the support of the Geneva-based Global Drug Facility (GDF) through WHO’s intervention had not reached the country because of delays in processing orders, payments and the ministry not issuing the necessary customs duty clearance on time. *DGCI bans cosmetics with animal-tested ingredients: The Drug Controller General of India (DCGI) has banned testing cosmetics and their ingredients on animals. According to PETA, the DGCI announcement comes in the wake of European Union (EU) and Israel imposing bans on the testing of cosmetic products and their ingredients on animals. Any cosmetic product which performs animal testing will face action as per provisions of the Drugs and Cosmetics Act and the Animal Cruelty Act. Infringement of the Drugs and Cosmetics Act by any person or corporate manager or owner is liable for punishment for a term which may extend from 3-10 years and shall also be liable to fine which could be Rs.500 to Rs.10,000, or with both. The law also makes it mandatory to use modern non-animal alternative tests, replacing invasive KITE4education.com IAS EXPRESS JULY 2013 tests on animals. It implies that any manufacturer interested in testing new cosmetic ingredients or finished products must first get the approval from India’s regulator Central Drug Standards Control Organization. A manufacturer will be given approval to test only after complying with the BIS non-animal standards. Companies around the world are switching to effective, modern non-animal tests and more than 1,200 companies have already given up animaltesting methods. But many still are carrying out with the same old procedures of subjecting animals to painful tests. *India Ranks 141 in Global Peace Index 2013: Iceland tops the list and Afghanistan ranks at bottom. The major indicators that bring down India’s ranking are militarization, domestic and international conflicts, and corruption. According to the 2013 GPI, key drivers in making the world a less peaceful place are: rise in the number of homicides and countries increasing their military expenditure as a percentage of GDP. GPI The GPI is the world’s leading measure of global peacefulness produced by the Institute for Economics and Peace. The list was launched first in May 2007, then continued yearly. It is claimed to be the first study to rank countries around the world according to their peacefulness. It gauges ongoing domestic and international conflict, safety and security in society, and militarisation in 162 countries by taking into account 22 separate indicators. *India to declare 2013 as Water Conservation Year: With per capita availability of water depleting at a faster pace, the government approved a proposal to declare 2013 as Water Conservation Year under which awareness programmes will be launched for conservation of the scarce natural resource. Under the proposal, which got the nod of the Union Cabinet, the Water Resources Ministry will launch a series of programmes among masses, especially children, on water conservation. While India has more than 18 per cent of the world's population, it has only 4 per cent of the NATIONAL - News 2 CrackingIAS.com world's renewable water resources. With growing population and rising needs, per capita availability of water is likely to go down from 1545 cubic meter per annum in 2011 to 1341 cubic meter per annum in 2025. Water Conservation is the key objective of the National Water Mission which is one of the eight National Missions under the National Action Plan for Climate Change. This envisages conservation, minimising wastage and ensuring more equitable distribution of water resources both across and within states through integrated water resources development and management. *India: World’s 3rd most attractive FDI destination: As per the World Investment Report 2013 by the United Nations Conference on Trade and Development (UNCTAD), India is world’s third most attractive destination for investment by Transnational Corporations (TNCs) during 2013-15. In the survey based on responses of 159 companies, India has been positioned after China and United States. Thus India has retained its previous ranking. As per UNCTAD the top five countries in attracting FDI are: China United States India Indonesia Brazil As per the report, developing countries make up four of the top five host economies. Six of the top 10 prospective host countries also come from the developing world, with Mexico and Thailand appearing for the first time. *National Cyber Security Policy Released: This policy aims at facilitating creation of secure computing environment and enabling adequate trust and confidence in electronic transactions and also guiding stakeholder’s actions for protection of cyber space. The National Cyber Security Policy document outlines a road-map to create a framework for comprehensive, collaborative and collective response to deal with the issue of cyber security at all levels within the country. The policy recognises the need for objectives and strategies that need to be adopted both at the national level as well as international level. KITE4education.com IAS EXPRESS JULY 2013 The objectives and strategies outlined in the National Cyber Security Policy together serve as a means to: Articulate our concerns, understanding, priorities for action as well as directed efforts. Provide confidence and reasonable assurance to all stakeholders in the country (Government, business, industry and general public) and global community, about the safety, resiliency and security of cyber space. Adopt a suitable posturing that can signal our resolve to make determined efforts to effectively monitor, deter & deal with cyber-crime and cyberattacks. SALIENT FEATURES OF THE POLICY A vision and mission statement aimed at building a secure and resilience cyber space for citizens, businesses and Government. Enabling goals aimed at reducing national vulnerability to cyber-attacks, preventing cyberattacks & cybercrimes, minimizing response & recover time and effective cybercrime investigation and prosecution. Focused actions at the level of Govt., publicprivate partnership arrangements, cyber security related technology actions, protection of critical information infrastructure and national alerts and advice mechanism, awareness & capacity building and promoting information sharing and cooperation. Enhancing cooperation and coordination between all the stakeholder entities within the country. Objectives and strategies in support of the National cyber security vision and mission. Framework and initiatives that can be pursued at the Govt. level, sectoral levels as well as in public private partnership mode. Facilitating monitoring key trends at the national level such as trends in cyber security compliance, cyber-attacks, cybercrime and cyber infrastructure growth. *The Surge of Leptospirosis: A rise in the number of cases of leptospirosis has been reported in Thiruananthapuram even as the district is focusing its efforts on curbing the dengue fever. Dengue has eclipsed the fact that the incidence of leptospirosis has been on the rise in all districts of the state after the rain began. Leptospirosis is a bacterial disease caused by bacteria Leptospira that affects both humans and NATIONAL - News 3 CrackingIAS.com animals. Humans become infected through direct contact with the urine of infected animals or with a urine-contaminated environment. The bacteria enter the body through cuts or abrasions on the skin, or through the mucous membranes of the mouth, nose and eyes. Person-to-person transmission is rare. The disease has also been known to trigger abortions in cattle. Transmission- Leptospirosis is transmitted by the urine of an infected animal and is contagious as long as it is still moist. Although rats, mice, and moles are important primary hosts, a wide range of other mammals including dogs, deer, rabbits, hedgehogs, cows, sheep, raccoons, opossums, skunks, and certain marine mammals are able to carry and transmit the disease as secondary hosts. Symptoms - include high fever, severe headache, muscle pain, chills, redness of the eyes, abdominal pain, jaundice, haemorrhages in the skin and mucous membranes, vomiting, diarrhea, and rash. Most vulnerable - Although the disease can occur to anyone who comes in contact with the urine of infected with Leptospira, its prevalence is seen in cleaning workers, manual labourers and farm workers are most vulnerable. The number of infection increases in rainy season as people wade through waters contaminated with garbage and animal excreta which contain the bacteria. To counter leptospirosis vulnerable sections are put on Doxycycline prophylactic treatment. Care is taken to distinguish the disease from other diseases like Malaria and Dengue as these too show similar symptoms and spread in the same season. IAS EXPRESS JULY 2013 Train service is already operational within Kashmir Valley on the 118-km-long route b/w Qazigund and Baramulla in north Kashmir. Pir Panchal Tunnel - It is 11-km tunnel b/w tunnel Banihal-Qazigund section. It is the longest tunnel in the country and has been constructed using New Austrian Tunnelling Method, which has been used for the first time on such a large scale in India. This method optimises the tunnel design by mobilising the inherent ground strength in adopting a curved section, providing primary support system immediately after excavation and monitoring the ground behaviour while allowing it to develop its inherent strength. The tunnel also has a 3 metre wide road for maintenance and emergency rescue and relief operations. The tunnel has been made water-proof by providing continuous PVC membrane b/w primary and secondary lining. *Water Min sets up panel to find reasons behind U'khand floods: The committee will be headed by Chairman, Ganga Flood Control Commission, Patna and will comprise representatives from Central Water Commission, India Meteorological Department and Ministry of Water Resources. The committee will study various issues including the river bank erosion, the river draining systems, effect of sedimentation downstream and also the effectiveness of flood warning systems, the monitoring of lakes in the high altitudes including glacier lakes that could be a part of a more effective early warning system for flash floods. *Train service linking Banihal in Jammu to Qazigund in Kashmir launchedJune 29th 2013: PM Manmohan Singh and UPA chairperson Sonia Gandhi flagged off the first train connecting Banihal in Jammu region with Qazigund in Kashmir Valley. It was the first train to pass through 11 km tunnel through Pir Panchal Range. The 18-km Banihal-Qazigund section, which includes an 11-km long Pir Panchal Range tunnel, the country’s longest, reduces the 35 km distance to 18 km. It has been constructed at a cost of Rs 1,691 crore. The Udhampur-Banihal section is expected to be completed by 2017 connecting the Valley to the rest of the country round-the-year without any hindrance. The Banihal-Baramulla Banihal train will make five trips daily beginning from June 27, 2013. KITE4education.com Feel the PULSE OF UPSC With CrackingIAS.com NATIONAL - News 4 CrackingIAS.com INTERNATIONAL - News IAS EXPRESS JULY 2013 POLITICAL SCIENCE IS NOW UNAVOIDABLE FOR ALL THE PAPERS OF GS. GS -II IS ALMOST POLITICAL SCIENCE. OPTING FOR POLITICAL SCIENCE IS A WISE DECISION. CrackingIAS.com *Chandigarh-born "trailblazer" Indian-American legal luminary Srikanth 'Sri' Srinivasan has made history with the US Senate unanimously confirming him as the first South Asian judge on the powerful appeals court for the American capital. *Croatia Becomes 28th EU Member: Croatia has become the 28th member of the European Union, with crowds joining celebrations in the capital Zagreb. It is the first addition since Bulgaria and Romania joined EU in 2007. Croatia is the small Balkan nation that declared independence from the former Yugoslavia in 1991. Croatia formally applied for EU membership in 2003. Slovenia is the only other former Yugoslav republic that has been admitted to the EU since federal Yugoslavia‟s breakup. *EU Releases Nuclear Safety Law: The European Commission released a long-awaited proposal for new EU-wide nuclear safety rules. There are 132 nuclear KITE4education.com reactors in operation in Europe today. Safety objective: Member States shall ensure that – in case of accidents – the release of radioactivity in the environment is practically eliminated. EU-wide, legally binding reviews every six years: Member States will jointly agree on the specific topic (s) and the common methodology of the reviews that multinational teams will carry out. Member States are also responsible for implementing the recommendations. In case, there is a delay or recommendations are not implemented, the European Commission can organize a verification mission to the Member State. National reviews: Every nuclear power plant undergoes a periodic safety review at least once every 10 years and a specific review in case of a possible life time extention; New Power Plants: All new nuclear power plants are designed in a way which ensures that if a reactor core is damaged, this has no consequences outside the plant; On-site emergency preparedness and response: Every Nuclear Power Plant needs to have an emergency response centres which is protected against radioactivity and earthquakes or flooding and implementing strict accident management guidelines; As to transparency, national regulatory authorities and plant operators will have to develop a strategy, which will define how public is informed in the event of an accident, but also in times of normal operation of the plant. This strategy will have to be published. In addition, citizens will have the opportunity to participate in the decision-making process when the licensing of a new nuclear power plant is being chosen. Finally, the directive ensures that national regulatory authorities are independent in their decision-making and that political, economic or societal interests cannot override safety objectives. National regulatory authorities must be allocated sufficient funds and expert staff to allow their effective operation. *First IOR-ARC Economic and Business Conference: The Union Minister of Commerce & Industry Shri Anand Sharma recently co-chaired the Indian Ocean Rim Association for Regional Cooperation (IOR5 INTERNATIONAL - News CrackingIAS.com ARC) Economic and Business Conference in Port Louis, Mauritius. Member States and Dialogue Partners of IORARC, met in the Mauritius, for the First Economic and Business Conference on July 4-5, 2013, under the theme of „Deepening Economic Linkages for Balanced, Inclusive & Sustainable Growth‟. The meeting was co-hosted by the Governments of Mauritius and India and brought together Ministers and business representatives from across the Indian Ocean Rim First IOR-ARC Economic and Business Conference was in keeping with the decisions taken by the IOR Business Forum held in Gurgaon, India, during the IOR-ARC Council of Ministers and Related Meetings in OctoberNovember 2012,which recommended that Business-to-Business meetings have an important role to play for expanding trade and commerce between Member States. Discussions took place in the four panel sessions, namely: Unlocking the Potential of the Services Sector in the IOR-ARC (ICT, Tourism, Financial Services) Enhancing Trade and Investment in the IORARC Creating Agri-business linkages, addressing Food Security and Sustainable Development‟ Ocean Economy/Blue Economy Conference encouraged the concept of ‘Open Regionalism’ and identify trade as an integral factor in in promoting economic cooperation and development. It urged Member States to harmonise trade practices in line with international norms and take steps to minimize barriers to trade in the Indian Ocean region and emphasize the need to build on the complementarities of our economies and identify key growth sectors. It welcomed the IOR-ARC Work Program in Trade Facilitation initiated by Member States and fully support efforts to implement this for boosting intra-IOR-ARC trade and commerce. Conference noted that the study on “Trade and Investment Prospects of the IOR-ARC in the New Millennium” which was released in 2011 in the Council of Ministers Meeting in Bengaluru, has highlighted ten areas of cooperation namely trade cooperation, tariffs, food sector trade, standards cooperation, regional value chains, mining, KITE4education.com IAS EXPRESS JULY 2013 pharmaceutical and traditional medicine, coordination among EXIM Banks, investment and trade facilitation. It recognized the value of ongoing dialogue among Ministers of Economy, Trade and Industries as an integral part of economic dialogue involving the National Chambers of Commerce and Industry. *Ireland set to allow abortion for first time under 'historic' new law: Irish lawmakers voted to allow abortion in limited circumstances for the first time in the deeply Catholic country‟s history, following a bitter debate that saw letters written in blood sent to the country‟s Prime Minister Enda Kenny. Under a new bill, doctors will be allowed to end the life of an unborn child if there is a threat to the life of the pregnant woman. The debate over abortion was re-ignited in Ireland after the death of SAVITA HALAPPANAVAR last year. The 31-year-old was refused a quick termination of her pregnancy even though she was miscarrying and suffering from blood poisoning. The bill allows medical procedures that result in the ending of “an unborn human life” in order to deal with “a real and substantial risk of loss of the [pregnant] woman‟s life.” It also allows for an abortion if three medical practitioners agree this is necessary to prevent a pregnant woman from taking her own life. *Kuwait’s Constitutional Court Dissolves Parliament: Kuwait‟s Constitutional Court ordered the dissolution of 50-member parliament and called for fresh elections. The Constitutional Court made its ruling on a petition by opposition which challenged the recent changes in the electoral system brought by the emir Sheikh Sabah al-Ahmed al-Sabah, the hereditary ruler of the country. The new voting rules, decreed six weeks before the poll, triggered mass protests in the country. The court upheld controversial regulations that brought a one-person, one-vote system in place of the former rules that allowed voters to cast ballots for multiple candidates. The latest electoral reforms reduced the number of votes allowed per citizen in parliamentary elections to one from four. Under the old system, voters could place four votes of equal weight for a candidate in their constituency. 6 INTERNATIONAL - News CrackingIAS.com Since political parties are banned in Kuwait so candidates campaign on an independent basis. According to protesters, the new rules aimed to weaken the opposition, favored Kuwait‟s ruling family and were imposed without public debate. However, the government says that the new voting system brought Kuwait in line with other countries. According to the court ruling, the emir must dissolve parliament and call elections. Kuwait‟s emir is expected to set a new election day, possibly within three months. The decision may set the stage for a new wave of political showdowns in the Gulf nation. ABOUT GOVERNMENT IN KUWAIT Kuwait‟s parliament has legislative powers and can hold government ministers to account. However the emir has the final say in state matters and chooses the prime minister who in turn picks a cabinet, with members of the ruling Al-Sabah family occupying the top posts. *Latvia to Join Euro Zone on Jan. 1, 2014: The European Union has officially approved Latvia as the 18th member of the eurozone, which uses the bloc‟s common currency. Latvia will adopt the euro on January 1, 2014. The EU‟s current presidency holder, Lithuania, announced the news. It was also announced that Latvia‟s current currency, the lat, will be converted at a rate of 0.7028 lats per euro. After its real-estate bubble burst amid the world financial crisis in 2008, Latvia faced massive economic problems leading to a 7.5-billion-euro ($9.7 billion) bailout by the EU and the International Monetary Fund (IMF). Now, after following an austerity plan to recovery, the country boasts the EU‟s highest growth rate, which came in at more than five percent year-onyear in 2011 and 2012. Its deficit and debt levels are also among the lowest in the bloc. All EU countries except for Britain and Denmark are mandated to join the eurozone once they fulfil its criteria. Bulgaria, Croatia, the Czech Republic, Hungary, Lithuania, Poland, Romania and Sweden have yet to adopt the common currency. *Malaysia Declares Emergency in its Province: Malaysia Prime Minister Najib Razak has declared KITE4education.com IAS EXPRESS JULY 2013 emergency in two parts of its southern State of Johor (Muar and Ledang) as smoke from land-clearing fires in Indonesia has increased the air pollution in the air above the normal level. The smoke is the outcome of illegal burning of forests in Indonesia‟s Sumatra Island to clear space for palm oil plantations. The air pollution index had touched 750. Any reading above 300 indicates hazardous air pollution. The “haze” of Sumatra has also shrouded neighbouring Singapore, but air quality in the city state has improved over the weekend after reaching hazardous levels. *More than 65 countries sign Arms Trade Treaty: An overwhelming majority in the UN General Assembly voted in favour of the landmark Arms Trade Treaty (ATT). Treaty intends to regulate the international trade in conventional arms, from small arms to battle tanks, combat aircraft and warships. Argentina was the first to sign the Arms Trade Treaty the General Assembly approved in April. Iran, Syria and North Korea cast the only votes against the treaty. Key arms exporters including Russia and China and major importers including India, Saudi Arabia, Indonesia and Egypt abstained and have given no indication yet that they will sign it. Signatures are the first step to ratification, and the treaty will only take effect after 50 countries ratify it. The treaty will require countries that ratify it to establish national regulations to control the transfer of conventional arms and components and to regulate arms brokers, but it will not control the domestic use of weapons in any country. It prohibits the transfer of conventional weapons if they violate arms embargoes or if they promote acts of genocide, crimes against humanity or war crimes, and if they could be used in attacks on civilians or civilian buildings such as schools and hospitals. *Mugabe Signs New Zimbabwe Constitution Into Law: Zimbabwe moved a step closer to holding new elections, after President Robert Mugabe signed a new constitution into law. The constitution stipulates new voting procedures and reforms to be implemented from the signing 7 INTERNATIONAL - News CrackingIAS.com date so that the earliest new elections can be held. The supreme law replaces the one written in 1979 at Britain‟s Lancaster House. The constitution was unopposed through both houses of parliament. The new constitution limits future presidents to two five-year terms. The provision limiting presidential terms will not apply retroactively, so the 89-year-old Mugabe will be able to run in the next election and potentially continue to serve as president for the next decade. Mugabe has been Zimbabwe‟s president since the country‟s independence from Britain in 1980. Mugabe and his allies want the polls as soon as possible while PM Tsvangirai insists on the application of key reforms first to ensure a free and fair vote. Genesis This new law come as a result of a January agreement between Mugabe and Prime Minister Morgan Tsvangirai, who both pledged their support for the new constitution. In 2008 the two political rivals formed a coalition government following highly contested elections, ultimately finding a compromise to hold elections on the condition that a new constitution was enacted beforehand. The five-year coalition parliament, formed under the same agreement, expires on June 29, and parliamentary and presidential elections should follow within 90 days of that date. Date for elections has yet to be determined. International observers described Mugabe‟s victory in 2002 as deeply flawed, and in 2008 the vote was plagued by violence and irregularities. In March in a nationwide referendum, nearly 95 percent of voters supported the passage of the draft constitution, which then passed completely unopposed through both houses of Parliament. In February three UN independent human rights experts urged the government of Zimbabwe to respect international human rights in anticipation of the referendum and potential changes to the system of government. *Obama nominates James Comey as next FBI director: The US President Barack Obama nominated James Comey as the next FBI (Federal Bureau of Investigation) Director. James Comey has been a registered Republican and former Justice Department KITE4education.com IAS EXPRESS JULY 2013 official under President George W. Bush. The US senate is yet to confirm his nomination. He is likely to take charge from the outgoing Robert Mueller who held the post since 2001. *Peace Deal Signed Between Mali Govt & Rebels: Mali‟s government has signed a peace deal with Tuareg rebels to help pave the way for elections next month. The planned elections on 28 July, will be the first in Mali since the military staged a coup in 2012, accusing the government of failing to end the conflict in the north. The deal was reached after nearly two weeks of talks brokered by Burkina Faso‟s President Blaise Compaore in the Burkina capital, Ouagadougou. The accord calls for an immediate ceasefire and for government troops to return to the last rebelheld northern town of Kidal. The rebels captured Kidal after a French-led offensive forced militant Islamists out of the town in January. The Tuaregs have been fighting for autonomy in the north since Mali gained independence from France in 1960. They say they are marginalised by the government in the capital, Bamako. *Sri Lanka parliament approves voting rights for displaced people: Sri Lanka parliament passed a bill to ensure the voting rights of the displaced people in the North. The legislature passed with amendment the Registration of Electors (Special Provisions) Bill tabled by the Justice Minister Rauf Hakeem in parliament earlier this month. The Northern Province is one of the nine provinces of Sri Lanka. The provinces have existed since the 19th century but did not have any legal status until 1987 when the 13th Amendment to the Constitution of Sri Lanka established provincial councils. Between 1988 and 2006 the province was temporarily merged with the Eastern Province to form the North Eastern Province. The capital of the province is Jaffna. The Sri Lankan Civil War had its roots in this province. It is also known as Sri Lanka‟s Tamil country. According to the 13th Amendment to the 1978 Constitution of Sri Lanka, The Governor is the Constitutional head of the province while the Chief Minister is the head of the 8 INTERNATIONAL - News CrackingIAS.com government and the head of the council of ministers. The Chief Justice of the High Court is the head of the judiciary. Provincial Government is not is functioning in Northern Province at present. It is ruled directly from the Central government. Governors are care taker of province. Most of the governors were retired army generals. The bill will allow the IDPs displaced from the North between May 1, 1983 and May 18, 2009 to register to vote if they have not been registered as voters in any other electoral district. Bill will allow some 20,000 people to vote in the upcoming provincial council elections in the Tamil-dominated north. The Supreme Court ruled that the special bill is consistent with the Constitution. President Mahinda Rajapaksa is expected to make the proclamation on the northern provincial council elections next week. The election may take place in early September. *The Popocatepetl volcano (5,452 m high) in the Mexico has spit out a cloud of ash and vapour 3 kilometres high over several days of eruptions. *UN Security Council Resolution on Sexual Violence During Conflict: On 24 June 2013, the United Nations Security Council adopted Resolution 2106 (2013) on sexual violence in conflict. The resolution acknowledges the importance of women‟s political, social and economic empowerment as well as the enlistment of men and boys to combat all forms of violence against women. The resolution emphasizes more consistent and rigorous investigation and prosecution of sexual violence crimes as a central aspect of deterrence, and ultimately prevention. The resolution also calls for the further deployment of Women Protection Advisers (WPA) in accordance with an earlier resolution 1888, to facilitate the implementation of Security Council resolutions on women, peace and security, and for the systematic assessment of the number and roles of WPAs during the planning and review of each UN peacekeeping and political mission. It also calls on Member States to continue the fight against impunity and recognises the importance of including women in all aspects of mediation and KITE4education.com IAS EXPRESS JULY 2013 peace-building. The UN has recently focused on the issue of violence against women in a variety of contexts and countries. In March more than 130 UN member states agreed to adopt new measures to prevent and eliminate violence against women. In December the UN released a report declaring that women in Afghanistan are still suffering abuse at the hands of men. *US Exempts India Under Iran Sanctions Act: United States exempted 9 countries including India, from sanctions for importing oil from Iran under America‟s Iran Sanctions Act. Other countries are China, Malaysia, Korea, Singapore, South Africa, Sri Lanka, Turkey, and Taiwan. US Secretary of State John Kerry said that these countries have significantly reduced their dependence on Iranian oil in the last six months. The Obama administration has introduced a series of measures over the past week to step up the pressure on Iran over its nuclear program, which US suspects is aimed at making weapons but Iran insists is for generating electricity and medical research. US hopes the pressure will force Iran to come clean on its nuclear activity so that the US and its allies can avoid any military intervention to prevent the Islamic republic from obtaining an atomic arsenal. In optional Subjects – Political Science, Public Administration & Sociology we have 100% coverage. MAINS GENERAL STUDIES TEST (Each Test will be of three hours duration from 2.00 – 5.00 p.m.) FOLLOWING THE +VE FEEDBACK FROM THE STUDENTS FOR PRELIMS TEST SERIES. We have planned to provide complete model solutions also for GS MAINS TEST SERIES... WHY JOIN TEST SERIES @ CrackingIAS only? Nobody else PROVIDES such a set of potential questions with proper evaluation. Now with model solutions too. & Many from our class notes. (In total 500+ marks based on our guidance). Few illustrations (The same trend we have been maintaining since 2007 Mains) INTERNATIONAL - News 9 CrackingIAS.com MAINS 2011 GS QUESTION Bring out the salient features of the PCPNDT Act, 1994, and the Implications of its amendment in 2003. (20 MARKS) Trace the salient sequence of events in the popular revolt that took place in February 1946 in the then „Royal Indian Navy‟ and bring out its significance in the freedom struggle. Do you agree with the view that the sailors who took part in this revolt were some of the unsung heroes of the freedom struggle?. (20 MARKS) Mudiyettu (2 MARKS) OUR TEST PAPER QUESTION Cracking IAS “IAS EXPRESS” – May 2011. P.no.12” + Mains 2011 Test no.1 question.no.1 of III + Discussion. Cracking IAS “Indian History Book”. + Mains 2011 Test no.11 question. No. (b) of I + Discussion. IAS EXPRESS JULY 2013 Cracking IAS “IAS EXPRESS” + Test no. 1 question no.12 of III.. Rahim Fahimuddin Cracking IAS “IAS Dagar (2 MARKS) EXPRESS October 2011 Mains special” + Test no. 10 question no.(b) of 20. „SAGA-220‟ (2 Cracking IAS “IAS Express” + Test no.1 MARKS) question.no.2 of III The UNESCO World Heritage Committee in its current 37th session in Phnom Penh, Cambodia has approved the inclusion of East Rennell area in the Solomon Islands in Dangers List. East Rennell is the largest raised coral atoll in the world and its dense forest has a canopy averaging 20 metres in height. The forests, which cover most of the land area of the 37,000-hectare site, are an essential component of the atoll, which is considered to be a natural laboratory for scientific study. *6 Sites In Syria Put Under UNESCO List of Danger Sites: UNESCO World Heritage Committee has decided to place the six World Heritage sites of the Syria on the List of World Heritage in Danger. It was done basically to draw attention in order to KITE4education.com mobilize all possible support for the safeguarding of these properties. The sites concerned are: Ancient City of Damascus Site of Palmyra Ancient City of Bosra Ancient City of Aleppo Crac des Chevaliers Qal‟at Salah El-Din The decision was taken as part of the World Heritage Committee‟s review of the state of conservation of World Heritage sites already inscribed on the World Heritage List. The World Heritage Committee is currently holding its 37th session in Phnom Penh. The session will close in Angkor on 27 June. The Committee recently removed the Iranian World Heritage site of Bam and its cultural landscape from the list of sites in danger citing improvements in the management and conservation of the site. Bam was inscribed on the World Heritage List in 2004, shortly after it was struck by a major earthquake. Damage caused by the quake warranted the site‟s simultaneous inscription on the List of Heritage in Danger. Feel the PULSE OF UPSC With CrackingIAS.com 10 INTERNATIONAL - News CrackingIAS.com India & World - News *India, Albania sign agreement for avoidance of double taxation: The DTAA provides that business profits will be taxable in the source state if the activities of an enterprise constitute a Permanent Establishment (PE) in the source state. The agreement provides for fixed place for permanent establishment building site, construction and installation the permanent establishment, service and agency permanent establishment. The agreement incorporates para 2 in Article 9 concerning Associated Enterprises. This would enhance recourse to Mutual Agreement Procedure to relieve double taxation in cases involving transfer pricing adjustments. Dividends, interest and royalties and fees for technical services income will be taxed both in the country of residence and in the country of source. The low level of withholding rates of taxation for dividend (10 percent), interest (10 percent) and royalties and fees for technical services (10 percent) will promote greater investments, flow of technology and technical services between the two countries. The agreement further incorporates provisions for effective exchange of information between tax authorities of the two countries in line with latest international standard, including exchange of banking information and supplying of information without recourse to domestic interest. The agreement also contains an Article on Assistance in Collection of Taxes. This article also includes provision for taking measure of conservancy. The agreement incorporates antiabuse (limitation of benefits) provisions to ensure that the benefits of the agreement are availed of by the genuine residents of the two countries. The agreement will provide tax stability to the residents of India and Albania and will facilitate mutual economic cooperation between the two countries. It will also stimulate the flow of investment, technology and services between India and Albania. *India, Lanka, Maldives sign tripartite maritime security pact: India, Sri Lanka and the Maldives have entered into a tripartite agreement on maritime cooperation to secure sea routes in the Indian Ocean region. The three sides agreed that the Third NSA-level Trilateral Meeting will be convened at a mutually convenient date in 2014 to review the progress made in implementing the areas of cooperation agreed upon as well as identifying new areas of cooperation. They also agreed that prior to the Third NSA-level KITE4education.com IAS EXPRESS JULY 2013 Trilateral Meeting, the Working Group would meet to implement the consensus and decisions agreed to by the three sides at the Second NSAlevel Trilateral Meeting. *India, Pakistan granted more time to file submissions on Kishanganga: India and Pakistan have been granted a two-day extension for filing their submissions on the additional information sought by the Court of Arbitration in The Hague on the dispute between them over the 330 MW Kishanganga hydroelectric project, which is under construction in Baramullah district North Kashmir. The extension was sought by Pakistan, highly placed sources told The Hindu. Both the countries were supposed to file their submissions by Wednesday. Pakistan had objected to India diverting waters of a tributary of the Jhelum for the Rs. 3600-crore project, saying that water-flows to their downstream Neelam-Jhelum Hydroelectric Project would be affected. The Court had asked them to provide power generation and agriculture data on their project. In its order in February, the Court asked India to provide statistics on power generation at the Kishanganga project as well as provide information on environment concerns at the dam site in Gurez. India, sources said, was ready with its submissions. At the same time, the Court had asked Pakistan to provide information on the power generation at the Neelam-Jhelum project. Last month India sought “clarification” from the Court on the modern drawdown technique for silt removal in run-of-the-river projects. The Court restrained India from using the technique on its projects on rivers allocated to Pakistan under the Indus Waters Treaty of 1960. The “draw down” technique, which Pakistan has reservations about, requires depletion of reservoirs below the “dead storage level.” In its partial award delivered in February, the Arbitration Court upheld the legality of India’s right under the treaty to divert waters from Kishanganga /Neelam river (a tributary of Jhelum) to Bonar Nallah, another tributary of the Jhelum, for the Kishanganga project. The Court, however, held that India would have to maintain a minimum flow of waters in Kishanganga at a rate that would be determined by the Court in its Final Award, expected by the end of the year. The Court is chaired by Judge Stephen M. Schwebel of the United States. India & World - News 9 CrackingIAS.com *India, Uzbekistan oppose outside interference in Afghanistan: India and Uzbekistan shared the view that any outside interference in internal affairs of Afghanistan could prove to be counter-productive, in the backdrop of the proposed withdrawal of the U.S. forces by 2014. The centuries-old relations between Indian and Uzbekistan could provide a perfect platform to develop friendship and to meet they could be facing in future. There were discussions on the issues of connectivity in the region. The two countries discussed the issues of counterterrorism and connectivity in the region. They signed an MoU for upgrading the Jawaharlal Nehru India –Uzbekistan Centre for Information Technology in Tashkent. *Iran Seeks Enhanced Defence Ties With India: Iran is seeking to enhance defence ties with India and its envoy GholamrezaAnsari met defence minister A K Antony on Saturday. The defence minister is said to have welcomed the idea about the need for more bilateral defence exchanges between the two countries. Iranian army is equipped with a wide range of domestically-manufactured military and defence equipment, including ground surveillance radar systems, personnel carriers, drones, destroyers, submarines, and missile-launching frigates. *Japanese Emperor, Empress to visit India: Japanese royal couple will arrive here on November 30 and leave for Chennai on December 4. They will return to Tokyo the next day. The Emperor of Japan is the titular head of the country, but his overseas visits are carefully calibrated and form an important part of Tokyo’s statecraft. For instance, China has been an important country for Japan after World War II. But the Emperor visited the country in 1992 as Tokyo felt its ties were at a take-off stage, pointed out Prof. Lalima Varma of the Centre of East Asian Studies, Jawaharlal Nehru University. India and Japan are currently engaged in talks at several levels to step up mutual trust and security, and economic ties. The two have signed a Comprehensive Economic Cooperation Agreement, agreed on a first-ever sale of a highly sophisticated dual use amphibious aircraft and agreed to join hands for a mega industrial corridor in India. The two countries held one round of bilateral naval exercises in June last year and during Prime Minister Manmohan Singh’s recent visit to Tokyo, decided to hold a second and expanded edition in the second half of this year off the Indian coast. KITE4education.com IAS EXPRESS JULY 2013 *US asks India to deliver commercial promise of civil Nuclear-deal: US has asked India to deliver the commercial promise of the historic civil nuclear agreement between the two countries. *We will work within the framework of nuclear liability Act, says France : Unlike other countries, France will not ask India to change its nuclear liability Act. This is a law passed by the Indian Parliament and we shall work within the framework of that law to provide civilian nuclear technology to India. French Ambassador to India Francois Richier said the Indian Parliament was sovereign and in its wisdom had passed the nuclear liability Act [Civil Liability for Nuclear Damage Act, 2010]. It was up to France to decide on the best way to work within the framework of the Act to provide nuclear reactors to India in a manner that would take into account the interests of both sides. In a wide-ranging interview that emphasised the “substantive nature of the Indo- French partnership,” Mr. Richier said there was great scope for the two countries to further ties, not just “the four strategic pillars of our relationship, namely cooperation in the military, space and nuclear sectors and counter-terrorism,” but also in student exchanges and specific areas of economic activity where there was a close fit. India & World - News 12 CrackingIAS.com Science & Technology Defence & Environment - News * „INS Trikand‟ Commissioned Into Indian Navy: INS Trikand built in Russia, was commissioned into the Indian Navy today at Kaliningrad, Russia by Vice Admiral R K Dhowan, the Vice Chief of the Naval Staff, Indian Navy. The commissioning of INS Trikand marks the culmination of a three ship contract for “Follow On Talwar Class” ships built in Russia, and is therefore a milestone in the Indo-Russian militarytechnological cooperation. INS Trikand carries a state-of-the-art combat suite which includes: the supersonic BRAHMOS missile system, advanced Surface to Air missiles Shtil, upgraded A190 medium range gun, Electro-optical 30 mm Close-in Weapon System, Anti-Submarine weapons such as torpedoes and rockets and an advanced Electronic Warfare system. The weapons and sensors are integrated through a Combat Management System „Trebovanie-M‟, which enables the ship to simultaneously neutralise multiple surface, sub-surface and air threats. The ship also incorporates innovative features to reduce radar, magnetic and acoustic signatures, which have earned this class of ships the sobriquet of „Stealth‟ frigates. The ship is powered by four gas turbines and is capable of speeds in excess of 30 knots. The ship can carry an integrated Kamov 31 helicopter which is best suited for airborne early warning roles. *British Government gives go ahead to „threeparent baby‟: The UK government has given approval to the controversial IVF technique that would lead to the creation of babies with three parents. If the proposal is passed by its parliament then Britain would become first country to allow this technique. The decision has invited criticism from different calling it unethical, unnecessary and unsafe. “Three-Parent Baby” It is a baby born with the genetic contribution (DNA) from three people. It is done through IVF technique which involves taking the nucleus of one egg (first female) and inserting it into the cytoplasm of another egg (second female) which has had its nucleus removed, but still contains KITE4education.co IAS EXPRESS JULY 2013 mitochondrial DNA, and then fertilizing the hybrid egg with a sperm (third person). The purpose of the procedure is to remove a nucleus from a cell with defective mitochondria and place it in a donor cell with healthy mitochondria, which after fertilisation will contain a nucleus with genetic material from only the two parents. Utility As per experts, this method will give a choice to women with mitochondria disorders to bear children free from such diseases. These are caused by mutated mitochondria — tiny structures that supply power to human cells — and are passed from a mother, through the egg, to her child. It is said to affect one in every 6,500 babies. The technique will help combat genetic problems that can cause rare and debilitating conditions affecting the heart, muscles and brain. *India to have shield from missiles of 5,000km range: India's missile defence system is set to get a big boost as it is developing capability to intercept enemy missiles fired from a distance of up to 5,000km, in effect tackling any possible threat from countries such as China. The capability is being developed by DRDO as part of the Ballistic Missile Defence (BMD) shield, whose first phase is ready for deployment possibly in Delhi. Development of the first phase of the BMD programme has been completed. Under this, the BMD shield can tackle enemy missiles fired at from ranges up to 2,000 km. Taking this forward, the DRDO is enhancing the capability of BMD in phase-II to deal with threat from missiles of longer range of up to 5,000km. Under the phase II of the programme, all the components of such a missile shield including the radar and interceptor missiles would be new and will have extended ranges. *INSAT-3D integrated with French launcher: The INSAT-3D satellite of the Indian Space Research Organisation (ISRO) has been successfully integrated on to the French-built Ariane 5 launcher. The satellite, which will aid in meteorological observation and monitoring of land and ocean surfaces, has been slated for launch on July 26. *INSAT-3D launch likely on July 26: Indian Space Research Organisation (ISRO) will put a second satellite in orbit in July: advanced meteorology satellite INSAT3D is slated to fly weeks after the space agency launches the regional navigation satellite. ISRO will launch navigation satellite IRNSS-1A from Sriharikota on the Science & Technology + Defence & Environment + Health Issues - News 13 CrackingIAS.com light-lift PSLV rocket on July 1. INSAT-3D is meant exclusively for meteorological studies. Weighing 2,090 kg, it will be flown to its orbit on the European Ariane 5 launch vehicle. It is tentatively planned to be sent up on July 26, says an ISRO official. Paris-based Arianespace announced on Thursday that the spacecraft had reached the French Guiana space port of Kourou this week and would go into space along with Alphasat, Europe‟s largest telecommunication satellite, which is owned by the U.K.-based commercial operator Inmarsat. IAS EXPRESS JULY 2013 *ISRO successfully launches India's first navigation satellite: The IRNSS-1A is the first dedicated Indian Navigation Satellite. In total seven satellites of the IRNSS constellation will be launched and the full constellation will be up during 2014 timeframe. The PSLV-C22 rocket is expected to spit out its only luggage - the 1,425 kg IRNSS (Indian Regional Navigational Satellite System)-1A. The Polar Satellite Launch Vehicle, PSLV- C22 blasted off from Satish Dhawan Space Centre, Sriharikota with the Indian Regional Navigation Satellite System (IRNSS-1A) it is for the first time that the space agency has launched a satellite at night. The IRNSS-1A is the first dedicated Indian Navigation Satellite. In total seven satellites of the IRNSS constellation will be launched and the full constellation will be up during 2014 timeframe. According to ISRO, the IRNSS is designed to provide accurate position information service for terrestrial (cars, goods transport, buses) aerial (flights) and maritime (shipping) navigation for users in India as well as neighbouring regions extending up to 1,500 km from India's borders/boundaries, which will be its primary service area. The IRNSS will provide two types of services: Standard Positioning Service (SPS) for all users; and Restricted Service (RS), an encrypted service provided only to authorised users. The IRNSS System is expected to provide a position accuracy of better than 20 m in the primary service area. This means if your vehicle is at point A on the ground, the error would go only as far as 20 metres, and not more -- which is pretty accurate in terms of navigational aspects. The IRNSS-1A will be placed in an inclined geosynchronous orbit at 55 degree East longitude KITE4education.co with an inclined orbit of 29 degrees with respect to the equator. The satellite will be positioned at 36,000 Kms altitude. AN INCLINED GEOSYNCHRONOUS ORBIT means that the satellite's orbital plane will be tipped to some number of degrees from the horizontal as compared to the equator. In such cases although the satellite will be geosynchronous (completing one revolution around Earth along with Earth's rotation), it will not be geostationary (fixed in space at one point in relation with a location on Earth). The entire IRNSS satellite constellation will compromise of three satellites geostationary orbits and four in inclined geosynchronous orbits, of which IRNSS-1A is the first one. Around 20 minutes into the launch, the rocket Polar Satellite Launch Vehicle-XL (PSLV-XL) will eject the navigational satellite at an altitude of 501 km. Applications of IRNSS Terrestrial, aerial and marine navigation, disaster management, vehicle tracking and fleet management, integration with mobile phones, precise timing, mapping and geodetic data capture, terrestrial navigation aid for hikers and travellers, and visual and voice navigation for drivers. The satellite with a life span of around 10 years is one of the seven satellites constituting the IRNSS space segment — a regional navigational system developed by India designed to provide accurate position information service to users within the country and up to 1,500 km from the nation's boundary line. Following this launch of navigational satellite, ISRO is planning to launch its communication satellite G-Sat 14 using a heavier rocket — Geosynchronous Satellite Launch Vehicle (GSLV) - powered with a domestic cryogenic engine sometime in August this year. *Mystery of Moon‟s Surface Gravity Solved By NASA Mission: NASA‟s Gravity Recovery and Interior Laboratory (GRAIL) mission has uncovered the origin of massive invisible regions that make the moon‟s gravity uneven, a phenomenon that affects the operations of lunar-orbiting spacecraft. GRAIL‟s twin spacecraft studied the internal structure and composition of the moon for nine months. They pinpointed the locations of large, dense regions called mass concentrations, or mascons, Science & Technology + Defence & Environment + Health Issues - News 14 CrackingIAS.com which are characterized by strong gravitational pull. Launched as GRAIL A and GRAIL B in September 2011, the probes, renamed Ebb and Flow, operated in a nearly circular orbit near the poles of the moon until their mission ended in December 2012. GRAIL data confirm that lunar mascons were generated when large asteroids or comets impacted the ancient moon, when its interior was much hotter than it is now. The origin of lunar mascons has been a mystery in planetary science since. This new understanding of lunar mascons also is expected to influence planetary geology well beyond that of Earth and our nearest celestial neighbor. Because of GRAIL‟s findings, spacecraft on missions to other celestial bodies can navigate with greater precision in the future. *NASA Decommissions Its Galaxy Hunter Spacecraft: NASA has turned off its Galaxy Evolution Explorer (GALEX) after a decade of operations in which the space telescope used its ultraviolet vision to study hundreds of millions of galaxies across 10 billion years of cosmic time. Operators at Orbital Sciences Corporation in Dulles, Va., sent the signal to decommission GALEX at 3:09 p.m. EDT Friday, June 28. The spacecraft will remain in orbit for at least 65 years, then fall to Earth and burn up re-entering the atmosphere. GALEX met its prime objectives and its mission was extended three times before NASA decided to end it. Highlights from the mission‟s decade of sky scans include: The discovery of a gargantuan comet-like tail behind a speeding star called Mira. Catching a black hole “red-handed” as it munched on a star. Finding giant rings of new stars around old, dead galaxies. Independently confirming the nature of dark energy. The discovery of a missing link in galaxy evolution The mission also captured a dazzling collection of snapshots, showing everything from ghostly nebulas to a spiral galaxy with huge, spidery arms. In a first-of-a-kind move for NASA, the agency in May 2012 loaned GALEX to Caltech, which used private funds to continue operating the satellite KITE4education.co IAS EXPRESS JULY 2013 while NASA retained ownership. Since then, investigators from around the world have used GALEX to study everything from stars in our own Milky Way galaxy to hundreds of thousands of galaxies 5 billion light-years away. *NASA Launches Satellite to Study how sun's atmosphere is energized: NASA's Interface Region Imaging Spectrograph (IRIS) spacecraft was launched from Vandenberg Air Force Base, Calif. The mission is to study the solar atmosphere. IRIS is a NASA Explorer Mission to observe how solar material moves, gathers energy and heats up as it travels through a little-understood region in the sun's lower atmosphere. This interface region between the sun's photosphere and corona powers its dynamic million-degree atmosphere and drives the solar wind. The interface region also is where most of the sun's ultraviolet emission is generated. These emissions impact the near-Earth space environment and Earth's climate. IRIS is expected to start science observations upon completion of its 60-day commissioning phase. During this phase the team will check image quality and perform calibrations and other tests to ensure a successful mission. *Nicobar islands declared a world biosphere reserve: The reserve which encompasses a large part of the island of Great Nicobar is home to indigenous Shompen people, semi-nomadic hunters living inland. The International Coordinating Council of Man and the Biosphere Programme (MAB-ICC) under the United Nations Organisation for Education, Science and Culture designated the 103,870 hectares Great Nicobar reserve as protected, in its meeting in Paris, this week, according to a statement released by the body. Biosphere Reserves are sites chosen by the MAB program to experiment with different approaches to the management of terrestrial, marine and coastal resources as well as fresh water. They also serve as in situ laboratories for sustainable development. The designation is not binding under any law but is aimed at building and promoting a network of places where people are attempting to mesh human activity with biological and scenic assets. Great Nicobar joins the reserves at Simplipal (Orissa), Nokrek (Meghalaya), Pachmarhi (Madhya Pradesh), Nilgiri (Tamil Nadu), the Gulf of Mannar (Tamil Nadu), Sunderban (West Bengal) Nanda Devi (Uttarakhand) Similipal (Odisha) and Achanakmar-Amarkantak (Madhyapradesh and 15 Science & Technology + Defence & Environment + Health Issues - News CrackingIAS.com Chhatisgarh) which are already on UNESCO‟s list. Among the other 11 global sites included in the new batch of UNESCO bioreserve is the reserve in Alakol Kazakhstan, which includes wetlands of world significance. The additions bring the total number of biosphere reserves to 621 in 117 countries. *Nuclear fission progressing smoothly in Kudankulam plant: India's 21st nuclear reactor at Kudankulam in Tamil Nadu is functioning well after it began nuclear fission process for the first time on July 14, 2013. All its parameters remained normal. This is a much-awaited development for the Indian nuclear establishment. India's atomic power plant operator, NPCIL, is setting up two 1,000 MW reactors with Russian technology and equipment at Kudankulam, around 650 km from Chennai. The over Rs 17,000 crore project, which came up in the face of intense protests in nearby villages who feared for their safety, began generating heat and steam from the 163 uranium fuel bundles loaded in the reactor. The reactor was loaded with fuel assemblies containing about 80 tonnes of uranium oxide. On July 11 night, armed with the AERB's clearance, the KNPP started its journey towards criticality. At the first stage, the plant will be synchronised with the southern grid when power generation touches 400 MW. That is expected to happen in 30-45 days. After necessary regulatory clearances, power generation will be increased gradually to 50 per cent, 75 per cent, 90 per cent and finally 100 per cent. *Prithvi missiles to be replaced by more-capable Prahar: DRDO: Seeking to enhance its precision strike capabilities, India is planning to replace its 150km-range Prithvi ballistic missiles with the newly developed quick reaction Prahar missiles. The 150km-range Prahar is a single-stage missile and is fuelled by solid propellants. It was first testfired by DRDO in mid-2011 from its range in Odisha. The uniqueness of the missile system is that it can be fired in the salvo mode also from one launcher vehicle in which four missiles can be fired in one go. This short-range missile would be an "excellent weapon" which would fill the gap between the 90kmrange of the Smerch multi-barrel rocket launchers and guided missiles like Prithvi, which can strike at 250km to 350km range. The under-development Prahar missile would be offered to the Army for user trials very soon and after its acceptance, it is planned to be part of its Corps of IAS EXPRESS JULY 2013 Artillery. The Prithvi missiles were developed by India under its Integrated Missile Development Programme in the 1980s. The ballistic missile was developed with multiple strike ranges from 150km to 350km. The longer ranges are planned to be in service with both the Army and the IAF. *Royal Bengal Tiger count in Sunderbans is 103: Sunderbans, one of the last surviving natural tiger habitats in the world, has a minimum of 103 tigers. This was found after a study was conducted in collaboration with WWF and Wildlife Institute of India. SUNDARBANS The Sundarbans is a UNESCO World Heritage Site covering parts of Bangladesh and the Indian state of West Bengal. Two-third of the Sundarbans is in Bangladesh and the remaining third in West Bengal, India. The Sundarbans National Park is a National Park, Tiger Reserve, and a Biosphere Reserve located in the Sundarbans delta in the Indian state of West Bengal. The figures indicated that there was presence of a tiger in every 20 sq km of the delta. The figures point out that there are 22 tigers in South 24 Parganas forest and 81 in the STR. *Satellite launch to put first piece of India's own GPS in orbit: When PSLV-C22 lifts off with IRNSS1A satellite in tow from Sriharikota on July 1, 2013, it will mark India's first step towards building its own satellite navigation system. Named IRNSS for Indian Regional Navigation Satellite System, it will be one of the few navigation systems in the world and will provide an alternative to systems like the GPS (global positioning system) owned by the US, for navigation in and around India. Most countries build their own navigation systems because global systems like GPS owned by a single country cannot be relied upon in times of war and conflict. This system will ensure India has access to navigation systems in hostile situations. While the US operates a GPS, Russia has its own GLONASS (global navigation satellite system). China is building its BeiDou navigation satellite system (also called COMPASS) and the European Union is developing Galileo for its own needs. IRNSS consists of seven satellites, three in geostationary orbit and four in inclined geosynchronous orbits, and will mainly cover the KITE4education.co Science & Technology + Defence & Environment + Health Issues - News 16 CrackingIAS.com area around India. A geosynchronous orbit leads to satellite passing over the same locations over the earth at the same time every day. A geostationary orbit, a special form of geosynchronous orbit, means the satellite will always be over a certain point on earth, ensuring continuous coverage. IRNSS will aim to provide more than 20-metre accuracy over the Indian landmass. Its range will extend to 1,500km around India. On whether the satellites will be used by other countries in the region, Karnik said it's a "policy matter which will be discussed at a later stage". The system can also be expanded beyond its current stated aim of covering the area around India. "Expansion at a later date is always possible. In fact, the orbits were designed keeping a possible expansion in mind," said Karnik. The IRNSS-1A, first in the constellation, will have an inclined geosynchronous orbit. The ISRO navigation centre in Byalalu, Karnataka will be the nerve point for managing the IRNSS system. All the seven satellites will be identical and have a stated mission life of 10 years. The arrangement of satellites is different from global systems like GPS. "We studied various combinations and this provided us with the best accuracy," said Karnik. He said the complete satellite system will be in place by 2015. Each satellite will be equipped with rubidium atomic clocks that will help applications requiring precise timing. Apart from navigation and precise timing, the system will have applications in disaster management, visual and voice navigation for drivers and vehicle tracking and fleet management, among other things. The IRNSS navigation system will provide two kinds of services: standard positioning system (SPS) for civilian uses and restricted system (RS) in which encrypted service will be provided only to authorize users, like the armed forces. IAS EXPRESS JULY 2013 *Switzerland retains top spot in 2013 Global Innovation Index: The Global Innovation Index 2013 looked at 142 economies around the world, using 84 indicators including the quality of top universities, availability of microfinance, venture capital deals - gauging both innovation capabilities and measurable results. Published annually since 2007, the GII has become a chief benchmarking tool for business executives, policy makers and others seeking insight into the state of innovation around the world. India ranked 66th in the Global Innovation KITE4education.co Index 2013. Switzerland and Sweden's performance reflects the fact that both countries are leaders in all components (pillars) of the GII, consistently ranking in the top 25. The Global Innovation Index 2013 (GII), in its 6th edition this year, is co-published by Cornell University, INSEAD, and the World Intellectual Property Organization (WIPO, a specialized agency of the United Nations). The United Kingdom has a well-balanced innovation performance (ranking 4th in both input and output), in spite of a relatively low level of growth in labor productivity. The United States continues to benefit from its strong education base (especially in terms of toprank universities), and has seen strong increases in software spending and employment in knowledgeintensive services. Highlights For India India ranked number one in the Centraland South Asia region followed by Kazakhstan and Sri Lanka, and 11th overall in Innovation efficiency ratio. (Innovation efficiency reflects the Innovation output per unit of Innovation input in the economy). The strength areas for India are its Gross Capital formation (% of GDP) (Rank:9), Investment in new business (Rank: 20), Industrial Cluster Development (Rank: 29), Growth rate % of PPP GDP/Worker (Rank:14), Computer & Info. Services exports (Rank:1), Creative goods exports(%)(Rank:11). India ranked poor in the areas such as political stability (Rank: 123), Ease of starting business (Rank: 128), School life expectancy (Rank: 109), Pupil-teacher ratio (Rank:108), Knowledge absorption (Ran:122) and others. Despite the economic crisis, innovation is alive and well. Research and development spending levels are surpassing 2008 levels in most countries and successful local hubs are thriving. A group of dynamic middle and low-income countries, including China, Costa Rica, India, and Senegal - are outpacing their peers, but haven't broken into the top of the GII 2013 leader board. Get our BTB Study materials Ensure your success Science & Technology + Defence & Environment + Health Issues - News 17 CrackingIAS.com ECONOMICS - News * Modified Industrial Infrastructure Upgradation Scheme: The Cabinet Committee on Economic Affairs has approved the Modified Industrial Infrastructure Upgradation Scheme (MIIUS) with an approved outlay of Rs.1030 crore for the 12th Five Year Plan period consisting of Rs. 450 crore for committed liability and the remaining Rs. 580 crore for taking up 14 to16 new projects including a minimum 2 projects in the North Eastern Region (NER) for upgradation of infrastructure in existing or greenfield industrial clusters. The IIUS was launched in 2003 as a Central Sector Scheme to enhance competitiveness of industry by providing quality infrastructure through a public private partnership in selected functional clusters with central assistance upto 75 percent of the project cost subject to a ceiling of Rs. 5 crore. The Scheme was recast in February, 2009 based on the recommendation of an independent evaluation. Central assistance was retained upto 75 percent and assistance upto 90 percent of the project cost introduced for NER/Hill States with a maximum ceiling of Rs. 60 crore (with 15 percent minimum industry contribution and 5 percent in case of NER/Hill States). The CCEA further approved that at least 10 percent outlay will be set aside for the minimum two projects in the NER. All States are covered under the scheme. However projects are likely to be undertaken in only 14 to 16 States/Districts due to limitation of outlay in the 12th Plan. After notification of the MIIUS, the Project Management Agency (PMA) would be appointed. The PMA will assist the Department of Industrial Policy & Promotion (DIPP) in appraisal of project proposals and also, in monitoring of projects. Project proposals would be invited through advertisements in two national dailies; the proposals received would be scrutinized with the help of the PMA and these would be brought before Apex Committee for ‘in-principle’ KITE4education.com IAS EXPRESS JULY 2013 approval. Monitoring of projects would start after ‘inprinciple’ approval so that these achieve stipulated milestones according MIIUS, to qualify for ‘final approval’. Monitoring of projects would continue till these projects achieve completion. These projects are targeted to achieve completion by the end of the 12th Plan. The decision will have to develop of better common infrastructure, common facilities including skill development centers at the selected industrial clusters. It will also positively impact better employment generation in the selected clusters. * RBI announces fresh steps to tackle rupee volatility: Under the measures announced, RBI raised lending rates to commercial banks 2 per cent to 10.25 per cent making the loans costlier. The RBI will conduct sale of Government of India Securities to suck up Rs 12,000 crore on July 18 from the market, in a move to make rupee dearer. There has been continuous decline of rupee from 53.8 levels against dollar since April. The Marginal Standing Facility (MSF) rate has also been increased to 10.25 per cent from current 8.25 per cent. Repo rate has been left unchanged. “The Marginal Standing Facility (MSF) rate is calibrated with immediate effect to be 300 basis points above the policy repo rate under the Liquidity Adjustment Facility (LAF). Accordingly, the Bank Rate also stands adjusted to 10.25 per cent with immediate effect. Introduced during the 2011-12 period, MSF allows banks to borrow money from the central bank at a higher rate when there is significant liquidity crunch. The overall allocation of funds under the LAF will be limited to 1.0 per cent of the Net Demand and Time Liabilities (NDTL) of the banking system, reckoned as Rs 75,000 crore for this purpose. According to RBI, the market perception of likely tapering of US Quantitative Easing has triggered outflows of portfolio investment, particularly from the debt segment. ECONOMICS - News 18 CrackingIAS.com The exchange rate pressure also evidences that the demand for foreign currency has increased vis-avis that of the Rupee in part because of the improving domestic liquidity situation. Last week, RBI had asked oil firms to source all of their 8-8.5 billion of dollar needs every month for import of oil, from a single public sector bank. It also barred banks from trading in currency futures and exchange-traded currency options IAS EXPRESS JULY 2013 IAS 2014 BATCH CLASSES @ CHENNAI from 24th August 2013 GENERAL STUDIES CSAT POLITICAL SCIENCE SOCIOLOGY GEOGRAPHY ADMISSION OPEN NOW. LIMITED SEATS WEEK END BATCH DAILY BATCH FMR & IOC TECNIQS RAJA SIR & TEAM – SYNONYMOUS TO SUCCESS BTB Study materials market on their own. Meanwhile, the RBI has imposed fines totaling 49.5 crore rupees on 22 private and public sector banks, including SBI, PNB and Yes Bank for violating KYC or Know Your Customer norms. It also gave cautionary letters to seven, including Citibank and StanChart, following an expose made by an online portal. *‘Commodity Transaction Tax’ From 1st July: Commodity Transaction Tax (CTT) at 0.01 per cent will be levied on various non-agricultural commodities, including gold, sugar and edible oils, with effect from July 1. KITE4education.com At 0.01 per cent of the transaction value, the levy would work out to Rs.10 on a deal worth Rs.1 lakh. The tax was proposed in the budget in February. India has 21 commodity bourses, including six operating at the national level. Foreigners are still not allowed to trade in futures, but can buy stakes in commodity exchanges. Apart from gold, other commodities such as silver, crude oil and base metals and processed farm items such as sugar, soya oil, mentha oil and guar gum will also come under CTT. The tax would be levied on futures trading and not on spot trading in the commodities. CTT is to apply to all non-agricultural commodities traded on futures exchanges. There are 6 such national exchanges. The rules specify that the exchanges must collect the tax from members and pay to the central government. CTT was proposed 2013-14 Budget speech by Finance Minister P. Chidambaram. Finance Minister had stated that it will be on par with the amended Securities Transaction Tax (STT) to be levied at the rate of 0.01%. *Govt clears ETF for public units to push disinvestment: The Cabinet today approved the setting up of a CPSE Exchange Traded Fund (ETF) which is expected to speed up disinvestment programme, check volatility in share price movement and encourage retail participation. An ETF is a security that tracks an index like an index fund but trades like a stock on an exchange. Constituent stocks are listed and actively traded, and may have representation from various sectors to provide ETF unit holders adequate diversification. ETF was introduced in India in the year 2001 when the Nifty BeES was launched with an Asset Under Management (AUM) of Rs. 7 crore. Since then, ETFs have grown in India, with a total of 33 ETFs at present, having AUM of close to Rs. 11,500 crore and held by 6.2 lakh investors. Gold ETFs dominate the ETF market in the country. The AUM of equity ETFs is around Rs. 1,600 crore. ECONOMICS - News 19 CrackingIAS.com Gold ETFs dominate ETF market in India. IAS EXPRESS JULY 2013 *Govt Panel Recommends Increasing FDI Limits: A govt panel headed by Economic Affairs Secretary This committee was set up by Finance Minister P Chidambaram to review the sectoral caps in FDI. According to the sources, the FDI limit in the defence sector is likely to be raised to 49 per cent from 26 per cent now. Similarly, telecom and private banking could see FDI up to 100 per cent against the current 74 per cent. Print and broadcasting media might have FDI limit up to 49 per cent from 26 per cent now. There is also a move to axe the requirement for approval from the Foreign Investment Promotion Board (FIPB) for FDI of up to 49 per cent in various sectors. However, FIPB approval could be retained for sensitive sectors so that strategic interests are not compromised. MERGING FDI, FII CAP - One key proposal is also setting a single cap of 49 per cent merging Foreign Direct Investment and Foreign Institutional Investment. Currently, the FII, or portfolio investment, limit in various sectors (excluding public sector banks) is 24 per cent. *RBI decided to Launch Inflation Indexed Bonds (IIBs): The RBI (Reserve Bank of India) on 15 May 2013 decided to launch Inflation Indexed Bonds (IIBs). The first tranche of the IIBs 2013-2014 for 1000 to 2000 crore rupees will be issued on 4 June 2013. The maturity period of these bonds will be 10 years. The total issue size will be 12000 to 15000 crore rupees in 2013 to 14. The RBI will do on monthly basis to attract household savings of up to 15000 crore rupees so as to discourage investments in gold. After the first tranche, bonds will be issued on the last Tuesday of every month. While the first series of the bonds will be open for all class of investors, the second series issue - beginning October - will be reserved exclusively for retail investors. Arvind Mayaram proposed raising foreign investment limits in host of sectors like defence, multi-brand retail and telecommunications. According to him the main objectives behind raising the cap is to spur investment in the country and tide over the Current Account Deficit woes. KITE4education.com *Rising Farm Wages in India – The ‘Pull’ and ‘Push’ Factors: A new working paper titled Rising Farm Wages in India – The ‘Pull’ and ‘Push’ Factors, written by Ashok Gulati, Surbhi Jain and Nidhi Satija of the Commission for Agricultural Costs and Prices (CACP), Ministry of Agriculture has been in news ECONOMICS - News 20 CrackingIAS.com lately. This has been for the reason that the paper disputes the MNREGA’s contribution to creation of farm and rural sector jobs. Main arguments Real farm wages (i.e. the rise in wages adjusted for inflation) grew by 3.7 percent during the 1990s. The growth fell to 2.1 percent in 2000s. Based on the above two it can be argued that if real wages had followed the same trend of 1990s in 2000s, the current level of real farm wages would have been higher than what it is today with MGNREGS. The data in the 2000s can be divided into two very different parts. Between 2000-01 and 2006-2007, farm wages declined by 1.8 percent per year whereas they grew by 6.8 percent between 20072008 and 2011-2012. Guaranteed wages under MGNREGS have increased the wage expectations, although the employment generated under MGNREGS has been less than 10 percent of the total rural employment in most of the states during most of the years. According to 64th round of National Sample Survey (Migration in India), 2007‐08, nearly 57 percent of urban migrant households migrated from rural areas and mostly for employmentrelated reasons. For rural males, around 20 percent were employed as casual labour after migration. Thus, construction activity certainly competes for rural labour and would act as a pull on farm wages. Taking these arguments into account, the working paper authors constructed a statistical model to test what really impacts farm wages. According to this model, a growth of 10 percent in construction pushes up farm wages by 2.8 percent. A 10 percent increase in overall economic growth (measured through growth in the Gross Domestic Product) pushes up farm wages by 2.4 percent. Impact of MGNREGS is limited as with 10 percent increase in employment generated through MNREGA led to around 0.3 – 0.5 percent increase KITE4education.com IAS EXPRESS JULY 2013 in farm wages. Thus, the impact of MGNREGS on farm wages is nowhere near the impact that a rise in real economic activity, which is measured through an increase in construction GDP or overall GDP, has had on farm wages. The impact of growth variables [GDP (overall) or GDP (agri) or GDP(construction)] is almost 4‐6 times higher than the MGNREGS impact. Policy implications The paper conclusively shows that growth is the main driver of farm wages, not MGNREGS. These results raise a pertinent policy issue: given fiscal constraints and high food inflation, if there was a trade‐off between allocating resources for welfare schemes and increasing investments with a view to raise farm wages, could the money spent on MGNREGS (more than Rs 2 lakh crore) not be better used if it was for investment in say ruralurban construction, or for overall growth, or for agri growth?. These investments would have raised the growth rates in these sectors, and thereby ‘pulled’ the real farm wages through a natural process of development, whereby wages increase broadly in line with rising labour productivity, making the whole process much more economically efficient and sustainable. ECONOMICS - News 21 CrackingIAS.com SPORTS & AWARDS - News *SAMARJIT SINGH clinched the bronze medal in javelin throw of men’s section at the Asian Athletics Championship being held at Pune. *The Basketball Federation of India (BFI) has appointment Spain’s Francisco Garcia as head coach of the Indian senior women’s basketball team. *UN Public Service Awards Announced: Three Indian projects received U.N. Public Service Awards this year. The United Nations Public Service Award is the most prestigious international recognition of excellence in public service. It rewards the creative achievements and contributions of public service institutions that lead to a more effective and responsive public administration in countries worldwide. Through an annual competition, the UN Public Service Awards promotes the role, professionalism and visibility of public service. In 2003, the United Nations General Assembly, in its resolution designated June 23 as the United Nations Public Service Day to “celebrate the value and virtue of public service to the community”. The UN Economic and Social Council established that the United Nations Public Service Awards be bestowed on Public Service Day for contributions made to the cause of enhancing the role, prestige and visibility of public service. INDIAN INITIATIVES WHO WON THIS AWARD THIS YEAR Mass Contact Programme of Kerala: Under the programme, the Chief Minister visits each town and organises massive events where people can address their queries personally. The main aim is to combating red tape and bureaucracy in administration. Swavalamban of District Administration of Dhanbad in Jharkhand: This programme improved disbursement of pensions in the district. This project has created an automating payment and creation of direct cash transfers into pensioners’ bank accounts. Graamin Haat programme of Department of Cottage and Rural Industries in Madhya Pradesh: This programme created Women Self Help Groups (WSHGs) that operates its own haats (weekly markets). The initiative provided women an opportunity to acquire management skills, operate a business on their own and improve overall living conditions in their communities. There are 5 following categories in which awards are given: Preventing and Combating Corruption in the KITE4education.com IAS EXPRESS JULY 2013 Public Service Improving the Delivery of Public Services Fostering participation in public policy decision making through innovative mechanisms Promoting Whole-of-Government Approaches in the Information age Promoting Gender-Responsive Delivery of Public Services *Wimbledon 2013 Winners: Andy Murray (British) and Marion Bartoli of France won the 2013 Wimbledon singles titles. The 2013 Wimbledon Championships was a tennis tournament played on outdoor grass courts. It was the 127th edition of the Wimbledon Championships and the third Grand Slam event of the year. Roger Federer and Serena Williams were the defending champions in singles events, but neither was able to repeat their success. This marked the first time since 1927 in which both defending champions were eliminated before the quarterfinals. The Wimbledon 2013 mixed doubles championship has been won by Daniel Nestor and Kristina Mladenovic. The No.1 seeds Barbora Krejcikova and Katerina Siniakova of the Czech Republic continued their dominance in the Girls’ Singles Championship. Australians Nick Kyrgios and Thanasi Kokkinakis have captured the boys’ doubles title at Wimbledon with a dominant victory over Enzo Couacaud and Stefano Napolitano. 2013 FRENCH OPEN WINNERS Men’s Singles: Rafael Nadal beat —— David Ferrer Women’s Singles: Serena Williams beat ——Maria Sharapova Men’s Doubles: Bob Bryan & Mike Bryan beat—— Michael Llodra & Nicolas Mahut Women’s Doubles: Ekaterina Makarova & Elena Vesnina beat ——- Sara Errani & Roberta Vinci Mixed Doubles: Lucie Hradecka & Frantisek Cermak beat—- Kristina Mladenovic & Daniel Nestor SPORTS & AWARDS - News 22 CrackingIAS.com SOCIAL ISSUES & DEVELOPMENT - News *National Skill Development Agency Constituted: The Union Government has constituted the National Skill Development Agency (NSDA) by subsuming the: Prime Minister’s National Council on Skill Development (PMNCSD), the National Skill Development Coordination Board (NSDCB) and The Office of the Adviser to the PM on Skill Development. The NSDA will coordinate and harmonize the skill development efforts of the Government of India and the private sector to achieve the skilling targets of the 12th Plan and beyond. It will endeavour to bridge the social, regional, gender and economic divide by ensuring that the skilling needs of the disadvantaged and marginalized groups like SCs, STs, OBCs, minorities, women and differently-abled persons are taken care of through the various skill development programmes. While the Central Ministries and National Skill Development Corporation (NSDC) will continue to implement schemes in their remit, the NSDA will develop and monitor an overarching framework for skill development, anchor the National Skills Qualifications Framework (NSQF) and facilitate the setting-up of professional certifying bodies in addition to the existing ones. NSDA will be an autonomous body chaired by a person of the rank and status of a Cabinet Minister supported by a Director General and other support staff. *National Urban Health Mission (NUHM) as a sub-mission under the National Health Mission (NHM): The Union Cabinet gave its approval to launch a National Urban Health Mission (NUHM) as a new sub-mission under the over-arching National Health Mission (NHM). Under the Scheme the following proposals have been approved : One Urban Primary Health Centre (U-PHC) for every fifty to sixty thousand population. One Urban Community Health Centre (U-CHC) for five to six U-PHCs in big cities. One Auxiliary Nursing Midwives (ANM) for 10,000 population. One Accredited Social Health Activist ASHA (community link worker) for 200 to 500 households. The estimated cost of NUHM for 5 years period is Rs.22,507 crore with the Central Government share of Rs.16,955 crore. Centre-State funding pattern will be 75:25 except for North Eastern states and other special category states of Jammu and Kashmir, Himachal Pradesh and Uttarakhand for whom the funding pattern will be 90:10. The scheme will focus on primary health care needs of the urban poor. This Mission will be implemented in 779 cities and towns with more than 50,000 population and cover about 7.75 crore people. KITE4education.com IAS EXPRESS JULY 2013 The interventions under the sub-mission will result in Reduction in Infant Mortality Rate (IMR) Reduction in Maternal Mortality Ratio (MMR) Universal access to reproductive health care Convergence of all health related interventions. The existing institutional mechanism and management systems created and functioning under NRHM will be strengthened to meet the needs of NUHM. Citywise implementation plans will be prepared based on baseline survey and felt need. Urban local bodies will be fully involved in implementation of the scheme. NUHM aims to improve the health status of the urban population in general, particularly the poor and other disadvantaged sections by facilitating equitable access to quality health care, through a revamped primary public health care system, targeted outreach services and involvement of the community and urban local bodies. *World Bank approves USD 106 mn credit for improving nutrition: The World Bank approved a USD 106 million (about Rs 583 crore) credit to the government of India to improve the nutritional outcomes for children less than six years of age. This represents the first part of a two-phase loan for ICDS Systems Strengthening and Nutrition Improvement Project (ISSNIP). ISSNIP has 4 major components Institutional and systems strengthening in ICDS Community mobilization and behavior change communication Piloting multi-sectoral nutrition actions Project Management, Technical Assistance and Monitoring & Evaluation. India has one of the highest malnutrition rates in the world. One-third of the children are born with low birth-weight, 43 per cent of children under five are underweight, 48 per cent are stunted, 20 per cent are wasted, 70 per cent are anemic, and 57 per cent are vitamin A deficient. The project will be financed by a credit from the International Development Association (IDA)- the World Bank’s concessionary lending arm – which provides interest-free loans with 25 years to maturity and a grace period of five years. *World Bank Loan For AIDS Control Project in India: India and World Bank sign an agreement for loan of US$ 255 million for the National AIDS Control Project (NACP-IV). The Objective of the project is to increase safe behaviors among high risk groups in order to contribute to India’s national goal of reversal of the HIV epidemic by 2017. The Project has three components that include implementation at the national, State and district levels: (i) Scaling-up Targeted Prevention Interventions; (ii) Behavior Change Communications; and (iii) Institutional Strengthening. 24 SOCIAL ISSUES & DEVELOPMENT - News CrackingIAS.com POLITICAL ISSUES, HUMAN RIGHTS & GOVERNANCE - News *Govt sets up panel of six to measure states' backwardness: The Union Government on 15 May 2013 had set up an expert Committee under the supervision Raghuram G Rajan, Chief Economic Adviser to evolve a composite index to measure backwardness of states. The panel is set up in consistent to the Budget announcement, and it can also invite other experts as Special Invitees for discussions. The decision was taken amid demands for special category status by Bihar. The backwardness of the States will be consider in terms of measures like distance of the State from the national average under criteria such as per capita income and other human development indicators and for evolving a Composite Development Index of States. The Committee is supposed to submit its report within 60 days. The other members of the committee are Shaibal Gupta, Bharat Ramaswami, Najeeb Jung, Nirija G Jayal and Tuhin Pandey. It is important here to note that the present criteria for determining backwardness are based on terrain, density of population and length of international borders. *Restructuring of centrally sponsored schemes approved: The Union Cabinet today decided to restructure the existing Centrally Sponsored Scheme (CSS)/ Additional Central Assistance (ACA) schemes in the Twelfth Five Year Plan into 66 schemes, including Flagship programmes. This includes 17 Flagship programmes with significant outlays for major interventions required in health, education, irrigation, urban development, infrastructure, including rural infrastructure, skill development, etc. To suit the requirements of the States, the Cabinet has also approved that a scheme may have state specific guidelines which may be recommended by an Inter-Ministerial Committee constituted for this purpose. Besides, the financial assistance to the States in these schemes would be provided through the Consolidated Funds of the states. Further, to bring in desired flexibility, the Cabinet has approved that 10% of the outlay of the Schemes be kept as flexi-funds. For each new CSS/ACA/Flagship scheme, at least 25 per cent of funds may be contributed by the General Category States and 10 percent of funds by the Special Category States including J&K, Himachal Pradesh and Uttarakhand. In the BE of 2013-14, budgetary provision has been made for 137 CSS and 5 Scheme based ACA excluding block grants. These arrangements will come into force for the IAS EXPRESS JULY 2013 remaining years of the Twelfth Five Year Plan and will help in optimum utilisation of resources for desired results. Earlier, the National Development Council (NDC), while approving the 12th plan in its meeting in December 2012 had also recommended building flexibility in the schemes to suit the requirements of the State Governments. *Sensitising citizens about electoral rights: EC, NLMA sign MoU: The Election Commission and the National Literacy Mission Authority of the HRD Ministry today signed an MoU to help sensitise citizens about their electoral rights. The MoU on 'Electoral Literacy and Greater Participation for a Stronger and Inclusive Democracy', the first by EC with a government department will help sensitise citizens, especially the vulnerable and disadvantaged including women, SCs, STs, Minorities, in NLMA-covered districts, about their electoral rights and exercise of franchise. Electoral literacy will form part of curriculum for adult literacy and basic education. The NLMA will spread electoral literacy during its environment building and mass mobilization campaigns, with specific focus on electoral registration and informed and ethical voting in coordination with the Election Commission. *Tripartite Talks Between Govt of India, Assam Govt & ULFA Held: Among other issues, ULFA leaders requested that additional measures are needed to be taken for effective guarding of Indo-Bangladesh Border to check illegal infiltration from across the border. The three issues are: protection of political and cultural identity of the indigenous people of Assam, land rights and illegal immigration. United Liberation Front of Assam (ULFA) is a separatist group from Assam, among many other such groups in North-East India. It seeks to establish a sovereign Assam via an armed struggle in the Assam conflict. The government of India banned the organisation in 1990 citing it as a terrorist organisation. There has recently been a large ULFA crackdown in Bangladesh, which has significantly assisted the government of India in bringing ULFA leaders to talks. In January 2010, ULFA softened its stand and dropped the demand for independence as a condition for talks with the Government of India. On 3 September 2011, a tripartite agreement for Suspension of Operations (SoO) against ULFA was signed between Indian Government, Assam government and ULFA. KITE4education.com POLITICAL ISSUES, HUMAN RIGHTS & GOVERNANCE - News 25 CrackingIAS.com IAS EXPRESS JULY 2013 Digital Currency Bitcoin In the second week of April 2013, the virtual digital currency – Bitcoin – crashed to the lowest ever from $266 to $54 for a single Bitcoin, according to the Mt. Gox platform, which manages 80 per cent of the Bitcoin transactions and had to briefly shut down trading. This 21st century internet era currency was gaining popularity among the internet user community, but the recent crash has raised many issues regarding its viability and trustworthiness under current global economic circumstances. BITCOIN Bitcoin is an experimental, decentralized digital currency that enables instant payments to anyone, anywhere in the world. Bitcoin uses peer-to-peer technology to operate with no central authority - managing transactions and issuing money are carried out collectively by the network. The original Bitcoin software by Satoshi Nakamoto was released under the MIT license. Bitcoin is one of the first implementations of a concept called crypto-currency which was first described in 1998 by Wei Dai on the cypherpunks mailing list. Building upon the notion that money is any object, or any sort of record, accepted as payment for goods and services and repayment of debts in a given country or socio-economic context, Bitcoin is designed around the idea of using cryptography to control the creation and transfer of money, rather than relying on central authorities. It gained popularity after 2009, in the wake of the global financial crisis. Bitcoin uses public-key cryptography, peer-to-peer networking, and proof-of-work to process and verify payments. Bitcoins are sent (or signed over) from one address to another with each user potentially having many, many addresses. Each payment transaction is broadcast to the network and included in the blockchain so that the included bitcoins cannot be spent twice. After an hour or two, each transaction is locked in time by the massive amount of processing power that continues to extend the blockchain. Using these techniques, Bitcoin provides a fast and extremely reliable payment network that anyone can use. Advantages of BitCoins Bitcoins are sent easily through the Internet, without needing to trust any third party. Transactions are irreversible by design. Funds received are available for spending within minutes. It can’t be stolen. Cost very little, especially compared to other payment networks. The supply of bitcoins is regulated by software and the agreement of users of the system and cannot be manipulated by any government, bank, organization or individual. The limited inflation of the Bitcoin system’s money supply is distributed evenly (by CPU power) to miners who help secure the network. Disadvantages of BitCoins Bitcoins Are Not Widely Accepted: Bitcoins are still only accepted by a very small group of online merchants. This makes it unfeasible to completely rely on Bitcoins as a currency. There is also a possibility that governments might force merchants to not use Bitcoins to ensure that users’ transactions can be tracked. Apart from this, high degree of anonymity is concerning as this currency might be used for illegal transactions. Bitcoin Valuation Fluctuates: The value of Bitcoins is constantly fluctuating according to demand. As reflected in recent crash of its exchange value. No Buyer Protection: When goods are bought using Bitcoins and the seller doesn’t send the promised goods, no action can be taken to reverse the transaction. This problem can be solved using a third party escrow service like ClearCoin, but then, escrow services would assume the role of banks, which would cause Bitcoins to be similar to a more traditional currency. Risk of Unknown Technical Flaws: The Bitcoin system could contain unexploited flaws. As this is a fairly new system, if Bitcoins were adopted widely, and a flaw was found, it could give tremendous wealth to the exploiter at the expense of destroying the Bitcoin economy. Built in Deflation: Since the total number of bitcoins is capped at 21 million, it will cause deflation. Each bitcoin will be worth more and more as the total number of Bitcoins maxes out. This system is designed to reward early adopters which lean towards so-called Ponzi scheme. KITE4education.com ARTICLES – MONTHLY FOCUS 26 CrackingIAS.com IAS EXPRESS JULY 2013 Since each bitcoin will be valued higher with each passing day, the question of when to spend becomes important. This might cause spending surges which will cause the Bitcoin economy to fluctuate very rapidly, and unpredictably. No Valuation Guarantee: Since there is no central authority governing Bitcoins, no one can guarantee its minimum valuation. If a large group of merchants decide to dump bitcoins and leave the system, its valuation will decrease greatly which will immensely hurt users who have a large amount of wealth invested in Bitcoins. The decentralized nature of bitcoin is both a curse and blessing. Apart from the above mentioned limitations of the Bitcoins, international community, especially, Central Banks of various nations (European Central Bank report, October, 2012) are concerned regarding misuse of this digital currency for illegal operations. The mass production of illegal drugs is widely recognized as devastating plague to all peoples of all cultures. A study administered by the United Nations found that in 2005, the global drug market generated approximately $321.6 billion US dollars, representing almost 1% of worldwide commerce. Now, as it is evident that BitCoins easily lend itself to money laundering and the anonymous nature of transactions. Unsurprisingly, one the most significant bottlenecks in the drug trade are the laundering of money from first-world markets to their final destination, generally in clandestine territories far from the reach of the law. A simple internet connection and some capital investment could completely eliminate the most significant obstacles to the flow of currency. It is apparent that there are many issues regarding the illegal drug trade and the viability of BitCoins. However, as we all know, it is only one of the many dastardly industries that would broadly benefit from BitCoins. For example, those who run prostitution rings or are human traffickers would greatly benefit as it would eliminate all tangible evidence, as history has witnessed that many criminals were only convicted of money-based crimes such as tax evasion. Therefore this, pivotal tool of law enforcement cannot be compromised. Not to mention, money laundering is the important tool used for terrorist group fundings and BitCoins may become a handy tool in the hands of enemies of humanity. Due to these concerns already Europen Central Bank has derecognised the BitCoin Currency transactions. Silicine - possible Graphene replacement? Silicene is a two-dimensional allotrope of silicon, similar to graphene. Silicon and carbon both have four valence electrons which means that the two elements should be able to demonstrate a degree of similarity including the possibility of silicon-based life forms and carbon-based conductors and semiconductors. Graphene has attracted much attention recently because it offers higher electron mobility than materials used to date in silicon-based transistors. However, before it has reached commercial deployment if could be rivaled its silicon equivalent, especially because of the inherent compatibility silicene has with silicon-based electronics and how easily it could be used in wafer fabs. Silicene is thought to differ from graphene by having a rippled surface but the electronic properties of silicene nanoribbons and sheets are said to resemble those of grapheme. 2D silicene is not fully planar, apparently featuring chair-like puckering distortions in the rings. This leads to ordered surface ripples. Hydrogenation of silicenes to silicanes is exothermic. This led to the prediction that the process of conversion of silicene to silicane (hydrogenated silicene) is a candidate for hydrogen storage. Unlike graphite, which consists of weakly held stacks of graphene layers through dispersion forces, interlayer coupling in silicenes is very strong. In addition to its potential compatibility with existing semiconductor techniques, silicene has the advantage that its edges do not exhibit oxygen reactivity. If fully tamed, this material might match graphene's useful electrical properties. It could also be much easier to integrate with normal silicon-based circuits, meaning the development of super-miniaturised electronic devices could be accelerated. Inflation Indexed Bonds (IIBs) – Q & A 1. Inflation Indexed Bonds (IIBs) were issued in the name of Capital Indexed Bonds (CIBs) during 1997. How is the new product of IIBs different from earlier CIBs? KITE4education.com ARTICLES – MONTHLY FOCUS 27 CrackingIAS.com IAS EXPRESS JULY 2013 The CIBs issued in 1997 provided inflation protection only to principal and not to interest payment. New product of IIBs will provide inflation protection to both principal and interest payments. 2. How will inflation protection be provided to both principal and interest rate? Whether inflation component will be paid along with interest? Inflation component on principal will not be paid with interest but the same would be adjusted in the principal by multiplying principal with index ratio (IR). At the time of redemption, adjusted principal or the face, whichever is higher, would be paid. Interest rate will be provided protection against inflation by paying fixed coupon rate on the principal adjusted against inflation. An example of cash flows on IIBs is furnished below. Example 1 (For illustration purpose) Year Period Real Coupon III 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% Inflation Index IV 100 106 111.8 117.4 123.3 128.2 135 138.5 142.8 150.3 160.2 100.0 106.0 111.0 104.0 98.0 99.0 105.5 110.2 106.5 104.2 99.2 Inflation Coupon adjusted Payments principal Vti=(IVti/IVt0) VI=(FV*V) VII=(VI*III) 1.00 1.06 1.12 1.17 1.23 1.28 1.35 1.39 1.43 1.50 1.60 1.00 1.06 1.11 1.04 0.98 0.99 1.06 1.10 1.07 1.04 0.99 100.0 106.0 111.8 117.4 123.3 128.2 135.0 138.5 142.8 150.3 160.2 100 106 111 104 98 99 105.5 110.2 106.5 104.2 99.2 1.59 1.68 1.76 1.85 1.92 2.03 2.08 2.14 2.25 2.40 1.50 1.59 1.67 1.56 1.47 1.49 1.58 1.65 1.60 1.56 1.49 100 160.2 Index Ratio Principal Repayment VIII I 0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10 II 28-May-13 28-May-14 28-May-15 28-May-16 28-May-17 28-May-18 28-May-19 28-May-20 28-May-21 28-May-22 28-May-23 28-May-13 28-May-14 28-May-15 28-May-16 28-May-17 28-May-18 28-May-19 28-May-20 28-May-21 28-May-22 28-May-23 Example 2 (For illustration purpose) 3. Whether capital protection will be provided? Yes, capital protection will be provided by paying higher of the adjusted principal and face value (FV) at redemption. If adjusted principal goes below FV due to deflation, the FV would be paid at redemption and thus, capital will get protected. 4. Why will WPI be used for inflation protection? Why CPI has not considered for the same? The consumer price index (CPI) reflects the inflation people at large face and therefore, globally CPI or Retail Price Index (RPI) is used for inflation target by the Central Banks as well as for providing inflation protection in IIBs. KITE4education.com ARTICLES – MONTHLY FOCUS 28 CrackingIAS.com IAS EXPRESS JULY 2013 In India, all India CPI is being released since January 2011 and it will take some time in stabilizing. Monetary policy has also been continuing to target WPI for its price stability objective. In view of above, it has been decided to consider WPI for inflation protection in IIBs. 5. What is the formula for calculating index ratio? Index ratio (IR) will be calculated by dividing the reference WPI on the settlement date with the reference WPI on the issue date. The formula for the same is as under: 6. Why will final WPI be used with a lag of four months? Final monthly WPI will be used as reference WPI for 1st day of the calendar month. The reference WPI for intermittent days, i.e. dates between 1st days of the two consecutive months will be computed through interpolation. For interpolation, two months final WPI should be available throughout the month. As final WPI is available with a lag of about two and half months (e.g. final WPI February 2013 will be released in mid-May 2013), two months final WPI could be available only with a lag of four months. In view of above, the four months lag has been chosen for final WPI to be considered as reference WPI for 1st day of the calendar month. For example, December 2012 final WPI will be taken as reference WPI for 1st of May 2013 and January 2013 final WPI will be taken as reference WPI for 1st of June 2013. 7. What is the formula for interpolation of daily reference WPI? For calculating the index ratio for a specific date, daily reference WPI values would be linearly interpolated using ‘Ref WPI’ for the first day of the calendar month and the first day of the following calendar month. The formula for computing the reference WPI for a particular day is as under: [Ref WPIM = Ref WPI for the first day of the calendar month in which Date falls, Ref WPIM+1 = Ref WPI for the first day of the calendar month following the settlement date, D = Number of days in month (e.g. 31 days in August), and t= settlement date (e.g. August 6)] An example of daily reference WPI computed through interpolation is furnished below. Date 1-May-13 2-May-13 3-May-13 4-May-13 5-May-13 6-May-13 7-May-13 8-May-13 9-May-13 10-May-13 11-May-13 12-May-13 13-May-13 14-May-13 KITE4education.com Ref WPI (Given) 168.8 T-1 D Ref WPI (Interpolation) 168.85 168.90 168.95 168.99 169.04 169.09 169.14 169.19 169.24 169.28 169.33 169.38 169.43 29 1 2 3 4 5 6 7 8 9 10 11 12 13 31 31 31 31 31 31 31 31 31 31 31 31 31 ARTICLES – MONTHLY FOCUS CrackingIAS.com 15-May-13 16-May-13 17-May-13 18-May-13 19-May-13 20-May-13 21-May-13 22-May-13 23-May-13 24-May-13 25-May-13 26-May-13 27-May-13 28-May-13 29-May-13 30-May-13 31-May-13 1-June-13 170.3 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 IAS EXPRESS JULY 2013 31 31 31 31 31 31 31 31 31 31 31 31 31 31 31 31 31 169.48 169.53 169.57 169.62 169.67 169.72 169.77 169.82 169.86 169.91 169.96 170.01 170.06 170.11 170.15 170.20 170.25 Integrity pact for Indo-Bangladesh relations DISPUTE over the use of water resources has been one of the key determinants in the bilateral relations between Bangladesh and India for long. Despite initiatives, establishing sovereign rights over trans-boundary international rivers has remained a cause of concern for Bangladesh. In their major engagements, India used non-elastic diplomacy while taking advantage of the elastic attitude of the Bangladeshi counterparts. It is time for Bangladesh to revisit the balance sheet of this mutual relationship and ask what was wrong with the big neighbour, India. Bangladesh’s major problems in bilateral relations with India stem from a number of irritants ranging from water disputes, un-demarcated lands, exchange of enclaves, frequent border killings, trade complications, using Bangladesh as a market for Indian narcotics, push-in of the Indian minorities into Bangladesh territory, non-compliance by India with major treaty provisions, and finally lack of commitment from the Indian side to address these issues through goodwill and friendship. One priority issue for India is to integrate northeast India with its mainland through Bangladesh territory, for which it has been persistently seeking some form of transit/corridor facilities for a long time. The traffic between India proper and the northeast is mainly carried by rail and road links through the Shiliguri Corridor, which requires staggering transportation costs for carrying goods. To transport goods to and from the northeast through this ‘chicken neck’ corridor, the Indian government provides 25% transport subsidy. It was estimated in the 1990s that Rs.7 billion is spent as additional costs to transport goods and services to and from northeast India. It is expected that the cost has increased subsequently in tandem with economic growth both in the northeast and the rest of India. India is now desperately seeking transit facilities for its landlocked states in the northeastern region. It is asking for a free gift or token cost from Bangladesh. During her visit to New Delhi in January 2010, Bangladesh Prime Minister Sheikh Hasina signed a framework agreement allowing river port ‘transit facility’ to the seven sisters region from Ashuganj to Akhaura. Once implemented fully, it would allow India to transport annually an estimated 10 million tons of inward and outward traffic to the northeast, surpassing the previous level of river transit of about 50,000 tons a year. Prior to the full implementation of the transit deal, Bangladesh should claim from India about two-third of the total additional costs that India has to spend now. Also, in order to avail the complete inland river facility, India will have to ensure the flow of water in the major river basins of Bangladesh, including Meghna and Tessta. Besides, many observers fear that if these transit/corridor facilities are used for military purposes at times, an anti-Indian insurgency might start inside Bangladesh territory. Bangladesh has to be very cautious in KITE4education.com ARTICLES – MONTHLY FOCUS 30 CrackingIAS.com IAS EXPRESS JULY 2013 dealing with such issues and lessons should be learnt from anti-Taliban drive in Pakistan. The Pakistani example should be sufficient to help persuade Bangladesh not to invite similar risks for its own territory and people. Amongst the major problems, the water sharing dispute remains dominant. Farakka Barrage and the desertification of northern Bangladesh have been the most contentious issues for the last 38 years. Bangladesh has 54 common rivers with India, out of which Ganges, Brahmaputra and Meghna are major trans-boundary rivers. In the absence of joint basin management, and non-compliance with the Indo-Bangladesh water sharing agreement of 1996, about 20,000 kilometres of Bangladeshi rivers have dried up. Gazoldoba barrage project in Teesta River is another serious concern for Bangladesh. India keeps the barrage closed during the winter season, which affects the river flow downstream and disrupts the navigability of the Teesta River and ecology of the northern districts. India has also constructed several dams on Teesta to produce hydropower. The Tipaimukh dam project on the Barak River in Manipur state in India is a new addition that will affect Bangladesh. It will have drastic and adverse impacts on the hydrology, morphology, and ecology of the downstream Bangladesh. The Joint River Commission (JRC) has been working to assess the gravity of the overall economic and ecological impacts of the dams. On its side, the Bangladesh government has engaged two consultants who might be able to submit their full reports by mid-2014. This assessment is necessary, but the measure allows India to buy time. Given the situation, the present government will not be able to sign any agreement during the next few months. Playing the Mamata card, however, Teesta water sharing deal was unilaterally abandoned by India in September 2011, and again by postponing the ministerial meeting scheduled for June 2013. Furthermore, there are disputes between the two nations that impede a settlement on maritime boundary demarcation. The establishment of Bangladesh’s right over New Moore (South Talpatti) island remains a far cry. India claims that the main channel of the Haribhanga river flows to the east of the new island, whereas Bangladesh maintains that it flows to the west, which would clearly make the island an integral part of Bangladesh territory. The Bangladeshi position is also supported by the British survey report from the colonial era. As a result of the controversial claims made by India, Bangladesh is also facing difficulties in the exploration of untapped resources from its Exclusive Economic Zone (EEZ) and continental shelves, which are essential for the exploitation of marine resources in the country. Whereas Bangladesh’s claim over the seabed areas with Myanmar was resolved by the International Tribunal for the Law of the Sea (ITLOS) on March 12, 2012, issues with India are still waiting for international arbitration. Maintaining its hegemony, India has been asking for seaport facilities from Chittagong and Mongla without recognising the maritime boundary. In view of this reality, Bangladesh should send a clear message to India about shelving all the treaty provisions on transit and river port facilities, unless India comes forward with total cooperation and integrity. A more plausible way would be signing an ‘Integrity Pact’ taking China and Nepal as joint partners to find durable solutions of the outstanding disputes between Bangladesh and India. NEW GAS PRICING GUIDELINES The Government recently approved new Gas Pricing Policy Guidelines which generated a large scale interest among various stake holders. The Cabinet Committee on Economic Affairs recently (28.6.2013) decided to review the domestic natural gas price policy on the basis of recommendations made by Dr. Rangarajan Committee constituted by the Prime Minister in May, 2012. Accordingly a new domestic natural gas pricing guidelines, 2013 has been approved which will be applicable to all natural gas produced domestically and to all consuming sectors informally. These guidelines shall apply from 1st April, 2014 and shall be applicable for five years after which market discovery price could be adopted as per the road map being prepared by Dr. Kelkar Committee. As per the Rangarajan formula, the price will be fixed on the basis of average of net back price of Indian gas imports and also the weighted average of the price at international hubs. The underlying principle is that the Indian producer should get a similar price what the gas producers elsewhere are getting. On the basis of the said formula, the price for natural gas in India for the quarter April – June 2013 comes to 6.83 $ per MMBTU. During the course of circulation of the Cabinet Note, the Planning Commission suggested a price of KITE4education.com ARTICLES – MONTHLY FOCUS 31 CrackingIAS.com IAS EXPRESS JULY 2013 11.18 $ per MMBTU, Ministry of Finance 6.99 to 8.93 $ per MMBTU, Department of Fertilizer 6.68 $ per MMBTU, whereas Ministry of Power opined that we should stick to the present cost plus regime which comes to around 4.14 $ per MMBTU. BACKGROUND The domestic oil and gas sector is mainly administered under New Exploration Lincensing Policy (NELP) introduced in 1997 by the United Front Government and the first round of bidding was announced by NDA Government in 1999. So far, nine rounds have already taken place. However, the performance of the NELP Blocks has been far from satisfactory due to a variety of reasons which is evident from the fact that out of 110 discoveries announced under NELP, only six are presently under production. As per the production sales contract signed by the Government with the selected contractor, the sale of gas is to take place at competitive arms length price discovered by the contractor and approved by the Government. Accordingly, the present price of 4.2 $ per MMBTU was fixed in 2009 which is applicable till March, 2014. However, the price of 4.2 $ per MMBTU is not found to be viable for sustenance of the domestic production of gas and all the operators are demanding increase in price. The Gujarat State Petrochemical Corporation (GSPC) owned by Government of Gujarat has been demanding a price of 13 – 14 US$ per MMBTU for their blocks in KG D-6 basin. Similarly, Reliance Industries Limited (RIL) has also been asking a price in the same range. Even the Public Sector Undertakings such as ONGC and Oil India Limited have been repeatedly representing for increase in gas price as the production will not be viable at any price less than 7 US$. The domestic gas production in the country has been falling drastically short of the demand and the present deficit of 142.78 SCMMD is expected to increase to around 234.26 SCMMD in 201617. Therefore, there will be huge dependence on the import of gas at much higher price of around 14 $ per MMBTU and above, which will simply become unaffordable for consuming sector. Moreover, the Economy cannot afford to continue with such a huge Import Bill which is around 160 billion US$ for the import of petroleum products. As per a reliable estimate, the subsidy burden to meet core sector demand through imported LNG can go up to as high as Rs 1,20,000 Crore, if the demand is not substantially met by domestic gas. One of the main reasons for weak domestic gas production sector is viability of the production vis-à-vis price of the gas at which the producers are supposed to sell. The present price of 4.2 $ per MMBTU has not been found to be feasible and the Ministry is not approving the development plan for the lack of commercial viability. Around 3 TCF of gas reserve is waiting to be exploited. The investment in exploration and development plan consistently going down from 6 billion US$ in 2007-08 to around 1.8 billion US$ in 2011-12. At the same time, Indian Companies have already invested 27 billion US$ in the E&P Sector abroad and the remaining 10 billion US$ is in pipeline. It is important to note that every 1 $ per MMBTU increase in the gas pricewould result in an additional burden of approximately 1 billion US$. However, half of it i.e. around 500 million US$ will come back to the Government in the form of royalty, profit, petroleum taxes and dividend. This additional income can take care of the additional subsidy burden of fertilizer and LPG, if the Government decides to absorb the burden. As regards to the Power Sector, around 16000 MW Capacity is stranded for want of gas supply. Apart from the high import price of the gas, the import infrastructure is also insufficient to meet the requirement and therefore, if domestic gas supply is not restored to the Power Sector, the huge investment made on the gas based Power Plant will go waste. As regard to alleged windfall gain to the private operators, more than 65% of the domestic gas production is by the public sector companies and the remaining 35% by the private or joint venture companies between public sector and the private sector. KITE4education.com ARTICLES – MONTHLY FOCUS 32 CrackingIAS.com IAS EXPRESS JULY 2013 As regard to RIL, presently it is producing only 10% of the gas production in the country. With the new price, it is expected that their production from KG D-6 will increase with the additional investment. However, the gas flow is not likely to start before 2017-18 and therefore, allegation of any windfall gain is misconceived. In view of the above, it can be concluded that revision of the gas price is the most economically prudent decision taken by the Government which is likely to trigger additional investment, additional production, reduction of import dependence and therefore, better fiscal balance. Increased availability of domestic gas is also likely to result in affordable production by the consuming sector such as Power and Fertilizer. In any case, as indicated by the Finance Minister, the Government has revised the output price of the domestically produced gas and its impact on the increased input cost for certain sectors would be looked into by the Government separately. Apart from the gas pricing, Government in recent few months, has also taken anumber of measures such as approval of exploration in the mining lease area, clearance of all pending administrative issues and the management committee resolutions (around 200 such issues were pending and even approved management committee resolutions were not signed since last 1 to 5 years), clearance of 30 Blocks from Ministry of Defence, aggressive. acquisition of oil and gas assets abroad, formulation of Shell Gas and CBM Policies etc. These steps alongwith the right gas price would certainly result in increase in investment in the oil and gas E&P Sector and substantial boost to the domestic production. Rupee Touches 60 Barrier Against Dollar The Indian Rupee has depreciated significantly against the US Dollar marking a new risk for Indian economy. The rupee touched an all-time low of 60.76 a dollar recently, breaching its previous historic low of 59.98. It closed at 60.72 in the foreign exchange market. Meaning Rupee depreciation means that rupee has become less valuable with respect to dollar. On the other hand if the rupee moves downwards from 55 per dollar to 50 per dollar then it is said to appreciate. For example, 1 USD = Rs 60 now. One year ago it was Rs 50. If the demand for the dollar is higher than its supply, the Rupee depreciates. If it is the other way round, it appreciates. Main Reasons The main reason is global economic scenario. The economic situation, world over is very volatile. People are worried about the safety of their investments. Because of risk aversion on the part of people, US Dollar regained its place as a Safe Haven. People still believe that the US Dollar is much safer than any other currency in the world and hence are accumulating the US Dollar. The reason behind the rupee’s recent weakness is the heavy selling of debt by foreign investors. FIIs have sold debt worth Rs 15,402 crore in the Indian market since May 22. Another reason of drop in rupee is RBI’s hand-off on currency policy and the central bank does not want to shed forex reserves defending rupee. Implications Exporters benefit from a rupee depreciation while importers benefit from rupee appreciation. Weak rupee would pose threat of high inflationary pressure and would impact PSU oil marketing companies and subsidy sharing companies. Due to descending flow of rupee, Oil minister was forced to increase petrol prices. Apart from oil, prices of other imported commodities like metals, gold etc will also rise pushing overall inflation higher. With the depreciation of the Rupee, the cost of living goes up substantially. The depreciating rupee has serious effects on the external debt figures of the nation. Indian Rupee is currently caught in this vicious cycle; it will have to find a stable level to regain investors’ confidence. ARTICLES – MONTHLY FOCUS KITE4education.com 33 CrackingIAS.com IAS EXPRESS JULY 2013 MONTHLY QUESTIONS 1. What is a ‘Three-Parent Baby? It is a baby born with the genetic contribution (DNA) from three people. It is done through IVF technique which involves taking the nucleus of one egg (first female) and inserting it into the cytoplasm of another egg (second female) which has had its nucleus removed, but still contains mitochondrial DNA, and then fertilizing the hybrid egg with a sperm (third person). The purpose of the procedure is to remove a nucleus from a cell with defective mitochondria and place it in a donor cell with healthy mitochondria, which after fertilisation will contain a nucleus with genetic material from only the two parents. 2. What are White Label ATMs? ATMs set up and run by non-banking entities are called White Label ATMs (WLAs). Earlier, only banks were allowed to establish and operate ATMs. RBI had allowed the company under the guidelines it released in June 2012 which set certain minimum net worth and obligation for permitting independent non-banking firms to operate such ATMs, as per three different schemes. The Muthoot Finance has been given approval as per Scheme A under which Muthoot Finance will set up WLAs, a minimum of 1,000 WLAs have to be installed in the first year; a minimum of twice the number of WLAs installed in the first year have to be installed in the second year; and a minimum of three times the number of WLAs installed in the second year have to be installed in the third year. 3. How Does a Gas Lighter Work? Gas lighters work by a physical phenomenon known as the PIEZOELECTRIC EFFECT. There is a special class of materials called piezoelectric crystals, which exhibit the effect. This effect was discovered in 1880-81by Pierre Curie who studied tourmaline, cane sugar and quartz. If a stress is applied along one axis of the crystal, a voltage develops across a transverse direction. Even the reverse effect occurs, i.e., if a voltage is applied across the crystal along one direction, the crystal deforms along the transverse direction. Now, a large number of piezo materials have been discovered and perform better than the ones studied first. Z-cut quartz crystals are well known and most frequently used piezo components. Because of their high mechanical and chemical stability quartz crystals are used in high precision oscillators in electronic circuits including quartz watches. In gas lighters piezoelectric ceramics (like lead zirconate titanate known as PZT) are normally used because of their low cost and high sensitivity. Apart from their use in gas lighters and oscillators the piezoelectric materials find extensive use in many other technological applications requiring extremely high precision movements. In the gas lighter, a spring-loaded hammer gets suddenly released and hits a piezoelectric crystal when the lever or button is presses beyond a limit. This sudden hammering causes a large stress and a high voltage, of the order of 800 volts, gets generated. The device is wired in such a way as to apply the voltage across a small air gap between two metallic points placed at the tip of the lighter. This voltage is sufficient to produce the necessary discharge or spark. This spark lights the combustible gas available in the neighbourhood. 4. Explain the Working Principle of Fluorescent Tube Lights. Fluorescent and compact fluorescent lamps work based on the LOW PRESSURE GAS DISCHARGE PRINCIPLE. The glass tube on low pressure gas discharge lamps is filled with a noble gas at low pressure and a small quantity of mercury. The glass wall is coated with a fluorescent. Inside the housing, an electrical field develops between two electrodes and gas discharge occurs. The discharge process causes the mercury vapor to emit UV rays. Visible light is emitted as soon as the UV radiation makes contact with the fluorescent. The light color generated can be varied using an appropriate fluorescent mixture. Thus it is possible to create fluorescent lamps for all kinds of applications. KITE4education.com ARTICLES – MONTHLY FOCUS 34 CrackingIAS.com IAS EXPRESS JULY 2013 When a lamp of this design is produced with no phosphor coating, it produces a very small amount of violet light and is considered to be an ultraviolet lamp used for germicidal and sterilization purposes. It is harmful for humans to be exposed to this type of lamp. Another variation of this process is the tanning lamp, which is coated by phosphors that allow a high percentage of the UV produced to radiate through. 5. Compare the efficiency of LEDs, CFLs and incandescent bulbs. Compact fluorescent light bulbs (CFL) - Compact fluorescent light bulbs, also called CFLs, are the most popular energy-efficient bulbs. They have a life span of eight to 10 years. One of the main downsides to CFLs is that they contain mercury and therefore make safe disposal difficult. Light-emitting diode (LED) - LED bulbs consume the least power and have the longest life span, lasting up to 40 or 50 years. This kind of bulb is both energy-efficient and environmentally friendly, as it does not contain mercury or lead like CFLs do. LEDs also function much better than CFLs when it comes to using dimmer switches. The LED color spectrum is still in development. As of right now, LED bulbs only come in two varieties: cool white light and warm white light. Cool white light is used for task lighting and warm white light is best for accent lighting. The major downside with LEDs is the price. LEDs use less power (watts) per unit of light generated (lumens). LEDs help reduce greenhouse gas emissions from power plants and lower electric bills. Both LEDs and CFLs are better than traditional incandescent light bulbs when it comes to energy efficiency, but their practicality in consumer households is variable. 6. How does an induction stove work?. In the case of an induction stove, magnetic energy inside the coils of the stovetop generate electromagnetic fields that initiate a warming reaction with the substance of the steel-based cooking vessel. This, in turn, causes the cooking vessel to heat. The coil does not heat up during this process. However, because all of the energy is transmitted to the base of the cooking vessel only, the cooking vessel actually cooks the food, not the stove. Additionally, because there has to be stimulation between the metal of the vessel and the coil, once the vessel is removed, the process is broken. In contrast to the induction cooking process, other types of stovetops create a heat source –either the coils of an electric stove or the flames of a gas stove- which warm up and cook the food through the cooking vessel. Induction cooking is very popular with professional chefs who find that working on gas or electric stovetops is just not conducive to certain cooking methods. With an induction cooktop, they have much more control. KITE4education.com ARTICLES – MONTHLY FOCUS 35