Gist of The Hindu: January + February 2013
U.N. VOTE MAKES PALESTINE AN OBSERVER STATE
COMPLACENCY HAS NO PLACE IN AIDS FIGHT
ADDING GLITTER TO PAPER GOLD
SETTING AN EXAMPLE
WHO CLEARANCE COULD BOOST VACCINE EXPORTS
RBI TO RELAX NORMS FOR ENTRY OF FOREIGN BANKS
DOHA DITHERS ON EQUITY
INDIA COULD FACE CRIPPLING HEAT WAVES
INDIA, SRI LANKA AND THE MALDIVES TO SIGN AGREEMENT ON
ASTRA MISSILE TEST-FIRED SUCCESSFULLY
SOUTH KOREAN ELECTION
NAVY GETS FIRST OF 8 P-81 MARITIME SURVEILLANCE AIRCRAFT
FIGHTING THE FIBROUS HAZARD
GREAT HOPE FOR SCIENCE
THORNY ISSUES IN INDIA-RUSSIA ENGAGEMENT
RISKY FUTURES THAT BANKS CAN DO WITHOUT
JUSTICE KUMAR IS NGT CHIEF
EU PROMOTES POTATO TO REPLACE RICE IN ASIA
AMMONIUM NITRATE, AFTER LOOSE IMPORTS, FALLS INTO REBEL
CHINA OPENS LONGEST HIGH-SPEED RAIL LINE
U.N. VOTE MAKES PALESTINE AN OBSERVER STATE:
The Palestinian bid to become a nonmember Observer State at
the United Nations has been, as expected, approved by an overwhelming vote of
138 to nine, with 41 abstentions in the General Assembly. The vote implies
global recognition of the relevant territory as a sovereign state and is a major
step towards a two-state solution for historical Palestine. The new status
amounts to less of an achievement than full U.N. membership, which the Security
Council declined to consider in September 2011 on the grounds that the members
were unable to make a “unanimous recommendation”, but the Palestinians can now
participate in General Assembly debates. In sum, this is an important move
towards Palestinian statehood, which 132 countries have already recognised. As
for particular countries, one former colonial power, France, voted in favour,
and the other state with a previous imperial connection to the region, the
United Kingdom, abstained, as did Germany. Predictably, Israel’s biggest
supporter, the United States, opposed the resolution, reconfirming its view that
a negotiated settlement is the only way to establish a Palestinian state.
The U.N. resolution, however, could well be the first of many
momentous changes for West Asia. The Palestinian Authority can now seek
membership of several U.N. agencies and, above all, can apply to sign the Rome
Statute of the International Criminal Court, with the clear implication that
Israel may finally be held accountable for crimes committed against the civilian
population of Gaza. Secondly, differences have emerged between Washington and
major European countries over Israel-Palestine, even if some European officials
call criminal charges against Israel a “red line”.
Thirdly, it is consistent with global public opinion; even
U.S. opinion polls show majorities for a two-state formula. It also testifies to
the increasing confidence of Palestinian representatives, who have said that
continued exclusion would strengthen support for Hamas; the representatives,
moreover, now know that the region’s peoples demand justice for the Palestinians
and can no longer be ignored. The vote will be truly meaningful if it marks the
start of a new international resolve to ensure the people of Palestine are able
to exercise their right to statehood and self-determination, just as the people
of Israel have been doing for years. The first order of business has to be to
stop the Israeli stranglehold over occupied Palestinian territory, including the
monstrous policy of building settlements. As long as the international community
gives Tel Aviv a free pass on these issues, peace and security in
Israel-Palestine will always remain elusive.
COMPLACENCY HAS NO PLACE IN AIDS FIGHT
- New HIV infections now show a declining trend globally. All 11 countries
in the World Health Organisation’s (WHO) South-East Asia Region showed a
decline by 34 per cent in the past decade.
The overall decline in the region is cause for increased
optimism. However, complacency now could become our greatest enemy. Those
most “at risk” of HIV are disproportionately affected by the disease and are
also among the least empowered. They include youth, those who inject drugs,
female sex workers, men who have sex with men (MSM), transgender people and
migrants. Zero new HIV infections and zero AIDSrelated deaths by 2015 can be
achieved through greater efforts directed towards “at risk” populations to
encourage increased testing. HIV prevention services for these people need
to be expanded to battle the concentrated epidemic found in this region.
In India, the estimated number of new HIV infections has
declined by 56 per cent over the past decade and the total number of people
living with HIV is estimated at 24 lakh (the range is 19.3- 30.4 lakh). This
is good news but it remains essential to continue with public awareness
programmes on HIV/AIDS and that messages are regularly conveyed to remind
people on the importance to get HIV tested and to be aware of their HIV
ADDING GLITTER TO PAPER GOLD
Burgeoning gold imports to meet the seemingly insatiable
appetite for the precious metal by Indian consumers, though not new, have grown
to such major dimensions recently that policy-makers are forced to take note. A
check on gold imports by way of physical controls over imports or through fiscal
measures to restrain consumption (such as through a special consumption tax) are
impractical, and out of question. Policy-makers are, therefore, forced to look
at ways of harnessing this phenomenon — of unbridled gold imports and
consumption — in ways that will benefit the economy while moderating its demand
There are at least two important macroeconomic dimensions to
this phenomenon of everrising gold imports even in the face of record gold
One, the immediate impact is on the external economy as gold
and energy imports contribute to a widening of the trade deficit, and, hence,
the current account deficit, which was at a record high of 4.2 per cent on March
31. According to the World Gold Council, for April-June 2012, gold imports stood
at 181.3 tonnes. The macro-economic problems associated with running such a high
current account deficit have been highlighted several times before by many
official reports, including those of the Reserve Bank of India (RBI). Needless
to add, the twin deficits, the high fiscal is the other one, are a major threat
to economic stability. Two, the lure for gold among consumers has a direct
impact on the quantum of financial savings by households.
According to the Economic Advisory Council of the Prime
Minister (PMEAC) (in its flagship publication Economic Outlook 2012- 3 released
in August), net financial savings of households available for use by the rest of
the economy fell below 11.6 per cent of gross domestic product (GDP) in 2007-08
to 10 per cent in 2010-11 and likely to go below 9 per cent in 2011-12. (Net
financial savings are calculated by deducting financial liabilities such as
mortgage and personal loans from gross financial savings.
Gross financial savings are measured as an increase in gross financial
assets.) At around the same time as the Economic Outlook, the RBI released data
which were even less upbeat: household financial savings fell to 7.8 per cent in
2011-12, the lowest since 1989-90. During the preceding three years, it averaged
11 per cent. Certain broad conclusions are possible from the above data:
- When the economy is faring well, households tend to put more money in
financial savings instruments. The stock market is likely to be bullish and
mutual funds will also look attractive.
- However, when the cycle turns and the environment is less optimistic,
households tend to do the reverse — withdraw from organised financial
savings such as bank deposits, shares and mutual funds. The availability of
household savings for the industrial economy gets reduced.
- It is in that context that the significance of gold as an investment
avenue and as a hedge against inflation becomes apparent.
Households withdraw money from financial savings, and, to a
large extent, invest in gold, property and other physical assets. This is after
providing for the higher living expenses that are characteristic of high
inflation. Inflation outlook and hardened inflation expectations — prices of
essentials are unlikely to come down — play a large role in apportioning
available savings of households.
In that scenario, gold has emerged as a clear winner. In
India, as in many other countries, the lure for gold is unmistakeable. The surge
is partly explained by increased availability of gold and the growing
realisation of its potential as an investment opportunity, especially in
The task before the government is to find ways to integrate the physical
market for gold with the financial market. Already this is happening.
The oldest and even now the most popular one is the gold
loan, where banks/NBFCs (nonbanking finance companies) dispense money on the
pledge of gold /gold jewellery. As propagated with great success by several
Kerala-based NBFCs, gold loans have come under the scrutiny of the RBI, which
has imposed some stringent conditions to safeguard the borrowers’ interests.
Setting an Example
Convinced that the International Thermonuclear Experimental Reactor (ITER)
installation is safe, the French government recently granted the fusion project
the necessary permission to start construction in Cadarache. There are many
firsts to the project. Maintaining transparency has been one of ITER’s most
significant features and organising an enquiry to give the public an opportunity
to formulate its opinion has set a new benchmark for openness. Independent
experts assessed the safety of the fusion project and the public was not just
taken into confidence but made an integral part of the project construction
approval process. In effect, the two-and-a-half-year effort fully met the
requirements set forth by France’s own 2006 Nuclear Transparency and Security
legislation. If the French government took a bold decision to bring about more
transparency and public engagement before nuclear projects are cleared, the
clearance given to ITER tells us that it is indeed possible to meet the
stringent requirements laid down by the law.
The ITER approval highlights the fact that the public is not unreasonable or
obstinate. All people want is to be provided with facts, made fully aware of the
benefits and risks, convinced that complete transparency is being maintained,
and that their opinion is being taken into account on an important decision.
Internationally, the nuclear industry is well known for maintaining opacity and
for refusing to take the public into confidence. In India, the situation is
compounded by the excessive secrecy surrounding all things nuclear, and by the
lackadaisical and hurried manner in which environmental impact assessments are
often carried out. As for the mandatory public hearings for large projects, both
nuclear and non-nuclear, these frequently descend into chaos if not farce. The
sustained local opposition to the Kudankulam nuclear power plant continues
unabated even days before the first two units are to become operational. While
many valid questions concerning the safety aspects of the plant have not been
clearly answered, public apprehension to a great extent has come from imagined
fear, misconceptions and an improper understanding of the technology-intensive
project. It is time the Indian nuclear establishment realised that it can no
longer bulldoze its way. Winning public approval is not only important but
necessary for two reasons — the Chernobyl catastrophe and the 2011 Fukushima
disaster are fresh in people’s mind, and the government has major plans to
construct many power nuclear plants across the country.
WHO Clearance Could Boost Vaccine Exports
- In a major boost to the country’s private vaccine manufacturing
pharmaceutical companies, the World Health Organisation (WHO) has said that
India’s national regulatory authority — Central Drugs Standard Control
Organisation (CDSCO) — and its affiliated institutions meet the prescribed
- India is a major vaccine producer with 12 major vaccine manufacturing
facilities. These vaccines are used for the national and international
market, reaching nearly 150 countries. Every second child in the world is
vaccinated for measles using a vaccine produced in India.
- India is the first country in the 2012 round of assessment to have
passed the strict levels of seven indicators which are made more stringent
every time in a single round of assessment which is done by a team of 12
international experts headed by a WHO member.
- Passing of this test means that 12 private vaccine manufacturing units
from India are eligible and retain the pre-qualification status for
supplying vaccines to international bodies like the WHO, UNICEF and the
World Bank. WHO pre-qualification is a guarantee that a specific vaccine
meets international standards of quality, safety and efficacy.
- The clearance by the WHO is expected to boost investment in the
pharmaceutical sector and push exports higher, which touched $13 billion
last year and is expected to touch $26 billion this year. Two-thirds of the
vaccines produced in India are exported.
- The WHO has established benchmarks that define international
expectations for a functional vaccine regulatory system.
- It also conducts regular external audits of national regulatory systems
and ensures they meet the necessary standards. The regulatory functions of
India’s National Regulatory Authority (NRA) — the CDSCO — and its affiliated
institutions were assessed for compliance against the WHO indicators and
marketing authorisation and licensing, post-marketing surveillance,
including adverse events following immunisation and so on.
- In 2007, when the CDSCO had failed to meet the WHO-prescribed standards,
it had led to the WHO suspending manufacturing licenses of three public
sector vaccine manufacturing units — Central Research Institute (CRI),
Kasauli; Bacillus Calmette-Guérin Vaccine Laboratory (BCGVL), Guindy; and
Pasteur Institute of India (PII), Coonoor, on account of non-compliance of
good manufacturing practices (GMP) norms.
- India had made up for the deficiency in the 2009 assessment and the
units were re-started.
RBI to Relax norms for Entry of Foreign Banks
- The Reserve Bank of India is expected to relax norms soon allowing
opening of more foreign banks.
- At present, expansion of foreign banks in India is on a reciprocal
- India and Pakistan are negotiating issues with regard to opening of bank
branches in each other’s territory to facilitate trade and commerce. As per
the World Trade Organisation agreement, India allows opening of 12 branches
of foreign banks in a year. Last year, the RBI in a discussion paper
suggested that foreign banks should be incentivised to operate in India as
wholly-owned subsidiaries, as against the present system of having presence
through branch network.
- At present, there are about 34 foreign banks operating in India, with
five major banks, including StanChart, HSBC, Citibank and Deutsche,
accounting for over 70 per cent of the total asset size of overseas lenders
in the country.
Doha Dithers on Equity
The World Meteorological Organization (WMO) times the
release of its provisional annual statement with the U.N. climate
negotiations. This year, it dwelt on the Atlantic Basin experiencing an
above-average hurricane season for a third consecutive year, with 19 storms,
10 of them achieving hurricane status, the most notable being Sandy.
East Asia was severely impacted by powerful typhoons,
with Sanba being the strongest in 2012, causing destruction in parts of the
Philippines, Japan, and the Korean peninsula. The years 2001–2011 were all
among the warmest on record and the WMO’s statement highlighted the
unprecedented melting of the Arctic Sea ice and multiple weather and climate
The WMO’s statement fell on deaf ears at the Doha climate
talks. As 194 countries dragged on with negotiations, typhoon Bhopa was
wrecking the eastern part of the Philippines.
The U.S., along with Japan, objected to the equity
principle under the United Nations Framework Convention on Climate Change (UNFCCC)
and also to equity being the basis of future negotiations.
While the Durban platform clung on to the principles of
equity as enshrined under the UNFCCC, the U.S. made it clear that it was not
going to accept it. The climate talks have delivered less and less since
Bali where the two-track approach was mainly geared to bringing on board the
U.S, which is not part of the Kyoto Protocol. Finances, adaptation,
mitigation and technology transfer were the key issues under the Bali
Roadmap. India, part of the G-77 group, plus China had to object
vociferously to the removal of the key pillars of the talks from the
Long-term Cooperative Action plan. A Philippine delegate quipped that this
was meant to be a paperless conference, not a “textless” one.
Doha Gateway only urges the developed countries to scale
up finance to reach $100 billion a year by 2020 and submit plans by the next
round of talks in Poland. There also seems to be a complete lack of ambition
in the second commitment period of the Kyoto Protocol, which is now eight
The issue of carrying forward surplus emissions was
strongly objected to by Russia, which was unhappy with the proposal under
the Kyoto Protocol to cramp the carry-over of carbon credits or surplus
allowances which it had accumulated during the Protocol’s first commitment
period. Money supply for the Adaptation Fund suffered due to the decline in
the market prices of certified emission reduction, and as a result, $301.1
million was collected.
With funds dwindling, countries lobbied for a mechanism
on ‘loss and damage’ since Cancun which finally was agreed upon at Doha.
Crumbs are doled out as global temperatures rise and the poorest countries
India could face crippling heat waves
The warning signs are already out there. Global air and
ocean temperatures have risen in response to human-driven emissions,
particularly of carbon dioxide. Oceans have become more acidic and the sea
level has gone up; the Arctic Sea ice has melted faster than expected;
rainfall and snowfall patterns have changed; and extreme weather events seem
more frequent than in the past. Such changes, with the associated
consequences, are likely to worsen considerably if emissions continue
At the Climate Change Conference in Copenhagen in 2009,
the nations of the world pledged to avoid ‘dangerous’ climate change by
reducing emissions. They would ensure that the average global temperature at
the end of this century did not exceed that of the pre-industrial period by
more than two degrees Celsius. But as emissions continue to soar and with no
meaningful global agreement in place to drastically cut them, there is
increasingly talk of a temperature rise during this century of four degrees
“A four degrees Celsius world would be one of
unprecedented heat waves, severe drought, and major floods in many regions,
with serious impacts on ecosystems and associated services,” warned a World
Bank-sponsored report published last month.
India has already seen its average annual surface air
temperature rise by about 0.5 degrees Celsius during the past century. The
warming had accelerated since 1971 and particularly so during the past
decade, according to the country’s Second National Communication to the U.N.
Framework Convention on Climate Change made earlier this year.
Although higher carbon dioxide levels and more rain can
help crops grow better, higher temperatures and more erratic rainfall are
often detrimental. For instance, the country’s wheat production could fall
by about four million tonnes for every one degree Celsius rise in
temperature during the crop’s growth period. Climate change, along with
other environmental stresses, poses “significant challenges” for cereal
production in China and India, according to a recent report from the U.S.
National Intelligence Council.
Climate change will bring along it with new problems and
challenges that must be faced.
India, Sri Lanka and the Maldives to sign agreement on maritime cooperation
- India, Sri Lanka and the Maldives will soon sign a trilateral agreement
on maritime cooperation to pool resources and share data for better control
over territorial waters and detect suspicious movements.
- India had also agreements with Royal Thai and the Indonesian naval
forces to conduct coordinated patrolling in the east, around the region of
the Malacca Straits.
- In an effort at ensuring better coordination and shorten response
timings during a crisis, India has posted a Military Attaché (MA) in the
Maldives. So far, the MA based in Sri Lanka was also in charge of the
Maldives. Captain R.S. Sunil, based at the Eastern Naval Command
Headquarters at Visakhapatnam, took charge as MA last week at Male. He is
the first MA to be based in the Maldives. India trains the Maldivian
National Defence Forces and its police.
- Only India, Pakistan, Sri Lanka, Bangladesh and China have diplomatic
posts in the Maldives.
Astra missile test-fired successfully
- As part of its developmental trials, Beyond Visual Range Air-to-Air
Missile (BVRAAM), Astra was successfully launched from Chandipur, Odisha.
- The launch was carried out against an electronic target, although
Pilotless Target Aircraft Lakshya was used to check the effectiveness of
systems such as the ground radar.
- The 3.8-metre long Astra is the smallest of the missiles developed by
- It can be launched from different altitudes and cover 110 km when fired
from an altitude of 15 km, reach 44 km when launched from an altitude of
eight km, and 21 km when launched from the sea-level.
- After completion of all developmental trials, Astra will be eventually
integrated with combat fighter aircraft Sukhoi-30, MIG-29 and the Light
South Korean Election
- South Korea elected its first woman President, handing a slim but
historic victory to conservative ruling party candidate Park Geun-hye,
daughter of the former military ruler. As leader of Asia’s fourth-largest
economy, Ms. Park will face numerous challenges: handling a belligerent
North Korea; a slowing economy; and soaring welfare costs in one of the
world’s most rapidly ageing societies.
Navy gets first of 8 P-81 Maritime Surveillance Aircraft from Boeing
- As part of $2.1-billion deal inked with the American firm in January
2009. The Navy received the first of the eight P-8I maritime surveillance
aircraft it is to get from Boeing.
- The first plane was handed over to Indian personnel by the company in
Seattle. It will be used for training the crew there, Navy officials said
here. This aircraft, along with two more will arrive in India in May 2013.
- P-8I is a derivative of Boeing 737-800 long-range maritime
reconnaissance aircraft and anti-submarine warfare aircraft. It is expected
to replace the Navy’s Russian Tupolev Tu-142M maritime surveillance
turboprop. The plane is an Indian variant of the P-8A Poseidon that Boeing
is developing for the U.S. Navy. India requires aircraft able to patrol the
vast stretches of the Indian Ocean. The Navy’s contract with Boeing included
an option for four additional aircraft along with warfare, intelligence and
surveillance systems, as well as training and maintenance support.
Fighting the fibrous hazard
Even as the delivery of India’s second aircraft carrier,
Admiral Gorshkov, has been pushed back towards the end of 2013 owing to repairs
in the malfunctioning boiler section, activists and environmental advocacy
groups have expressed concern over reported use of asbestos-based insulation in
Given the health hazards that asbestos poses and the fact
that International Maritime Organisation (IMO), of which India is a member state
since 1959, has banned installation of all types of asbestos-containing
materials as of January 1, 2011, activists have expressed “shock and surprise”
over India’s willingness to accept use of asbestos in the aircraft carrier’s
insulation in the boiler section.
In a letter to Navy Chief Admiral D.K. Joshi, Occupational
and Environmental Health Network of India (OEHNI) coordinator Mohit Gupta
pointed out that IMO circular of 2011 was binding on all IMO member states.
Asbestos has been widely used in various types of naval ships, including
warships, aircraft carriers, cruisers, destroyers, minesweepers, frigates and
submarines. Ships repaired or built in the pre-1970 period were more likely to
contain the toxic substance. The glass-like asbestos fibres were a major
ingredient in many components of the ship, from pipe insulation to gaskets, in
engine and boiler rooms, mess halls, navigation rooms and even in sleeping
Today, the U.S. Navy and civilian shipbuilders are eliminating its use and
repair workers are making efforts to eliminate asbestos-containing materials
found on current or older vessels.
Scientific studies over the past three decades have proved
the dangers involved during asbestos exposure. Pleural mesothelioma is the most
common form of cancer that attacks the lining of the lungs when unprotected
workers inhale the asbestos fibres; they pass through the lungs and get embedded
in the pleural mesothelium, a wall of tissue surrounding the lungs.
Great hope for Science
The recent decision of the United Nations General
Assembly to grant ‘Observer status’ for the European Organisation for
CERN is highly commendable. CERN is the first physical
sciences research organisation to become an Observer.
The development comes a year after CERN and the United
Nations Office at Geneva signed a co-operation agreement.
Founded in 1954 under the auspices of Unesco, the
research organisation has till date lived up to the U.N. agency’s prime
objective of international co-operation in the science and technology
In fact, it has gone beyond its initial mission of
restricting its co-operative activities to researchers from the “Allied
countries and former Axis countries,” and has today taken on board other
countries as members and observers, including India.
It has become a benchmark for other large-scale science
collaborative projects involving many countries. The fundamental difference
between CERN and other international projects is that CERN’s activities go
beyond the core area. Not widely known is the important digital library
tools it has been sharing with several countries in Africa for empowering
and changing the way people access information. The new status and global
platform will help the organisation direct and set a course so science and
technology will ultimately benefit people.
The U.N. decision comes at a most crucial time when
proprietary science is proving to be a great stumbling block in making the
fruits of basic scientific research available to all. The wall that divides
basic and applied science is getting replaced with a thin line, with certain
promising fields coming up at the “intersection of basic research and
application.” Molecular biology is one such field. U.S. federal agencies,
universities and pharmaceutical companies had to go to great lengths to free
up the human genome sequence data generated by the privately-funded Craig
Venter team. This is one contentious issue that CERN can probably try to
tackle. It was at CERN that the World Wide Web was invented, and an early
WWW was initially made available to the small community of high-energy
physicists. It also played a central role in developing the Internet in
Europe. Today, it has the CERN Easy Access IP through which it makes
available some of its technologies “free of royalties,” provided they are
developed to “benefit the economy and society.” The latest is its pioneering
effort to make the entire field of high-energy physics open access through
the Sponsoring Consortium for Open Access Publishing in Particle Physics
Thorny issues in India-Russia engagement
Russian President Vladimir Putin’s visit to India should dispel speculation
about hiccups in bilateral ties.
Russia was unhappy with India’s refusal to waive civil liability for units
III and IV of the Kudankulam Nuclear Power Plant (KNPP) and failure to secure
Russian telecom company Sistema’s massive investment in the joint venture,
Sistema Shyam TeleServices Ltd (SSTL), while India was concerned over a
year-long delay in the delivery of the Vikramaditya aircraft carrier.
Russia remains India’s most trusted and valuable defence partner. It
reaffirmed its readiness to share cutting-edge weapons technologies, leasing out
the nuclear submarine Chakra and offering to jointly develop the
fifth-generation fighter aircraft. The coming summit may see the two sides seal
multi-billion deals for the supply of Su-30MKI fighters, Mi-17 helicopters,
aircraft engines and tank missiles.
Mr. Putin is also expected to endorse India’s efforts to expand its
involvement in the Russian energy sector, with talks currently focusing on the
development of new oil and gas fields in Russia’s Far East, Siberia and the
The perceived irritants in the relations have been blown far
out of proportion by the media and interested parties. Informed Russian sources
said the liability issue for Kudankulam III and IV will be resolved by somewhat
raising the price tag for the Russian-built reactors. Problems with boiler
insulation on the Vikramaditya are unfortunate, but should not obscure the fact
that overall, the aircraft carrier demonstrated admirable seaworthiness,
manoeuvrability and aircraft takeoff and landing capacity during the trials.
The cancellation of Sistema’s licences for CDMA services is a
more serious problem. The company’s $3.1-billion investment, including $700
million of government funds, should have been a trail-blazing example of a
successful foray by Russian business in India, but may end up discouraging other
potential investors. That said, the Kremlin is not prepared to let the row mar
Mr. Putin’s visit.
If the disputes over Kudankulam and Sistema have been pushed
to the forefront of the bilateral agenda, it is only because of an unacceptably
low level of commercial links: trade hardly exceeds the combined price of two
reactors for Kudankulam, plus Sistema’s investment in Shyam Telecom.
This year, trade has posted a robust 30 per cent growth, but
still amounts to just $11 billion, and, with some luck, could hit the
$20-billion target set by the two governments for 2015. By that time, India’s
and Russia’s trade with China will be well above $100 billion for each.
Achieving a quantum jump in trade and economic ties will be the biggest
challenge for Mr. Putin during his five-year term till 2018 and for India.
Without a solid economic foundation, the two countries would find it hard to
sustain the current high level of their “special and privileged strategic
Risky Futures that Banks can do Without
Finance Minister P. Chidambaram proposed to add a new clause
in the Banking Laws (Amendment) Bill which was not a part of the original
amendments vetted by the Standing Committee on Finance last year. It allows the
entry of banks in commodity futures trading in India. After strong opposition by
political parties on the grounds of parliamentary impropriety, the government
dropped it from the Bill on December 18.
However, this clause would be incorporated in the Forward
Contract Regulation Act (Amendment) Bill which is likely to be tabled in
Parliament next year. As allowing banks to trade in commodity futures signals a
major policy shift in the banking sector with wider ramifications, it should be
discussed in and outside Parliament. As per the existing regulatory framework,
banks in India are allowed to trade in financial instruments (shares, bonds and
currencies) in the securities market. But the Banking Regulation Act, 1949
prohibits banks (domestic and foreign) from trading in goods. Section 8 of the
Act states: “no banking company shall directly or indirectly deal in the buying
or selling or bartering of goods, except in connection with the realisation of
security given to or held by it.”
However, banks are allowed to finance commodity business and
provide fund and non-fund-based facilities to commodity traders to meet their
working capital requirements. Banks also provide clearing and settlement
services for commodities derivatives transactions. But banks cannot trade in
In addition to banks, mutual funds, pension funds, insurance
companies and foreign institutional investors (FIIs) are not allowed to trade in
Indian commodity futures markets.
By and large, Indian banks (public and private) lack the
market knowledge and the expertise to benefit from trading in commodity futures.
The Reserve Bank of India (RBI) has also expressed concern at the risks posed by
domestic banks that lack the expertise and skilled manpower to deal with such
risky trading instruments.
The commodity exchanges are supportive of this move as higher
trading volumes would boost their revenues. The real beneficiaries are likely to
be big foreign banks that have considerable international experience and
expertise in dealing with futures trading. Unlike small traders and hedgers, big
foreign banks and FIIs could also benefit immensely from algorithmic trading and
other advanced trading tools.
Already, foreign banks dominate the financial derivatives
market in India. Most of these products are financial in nature with no actual
bank lending involved. The off-balance-sheet exposure of foreign banks (e.g.,
currency forward contracts, interest rate derivatives) is currently very high in
India and should be a matter of concern to policymakers. The off-balance-sheet
exposure of foreign banks as a proportion of their on-balance-sheet exposure was
1,860 per cent in 2010-11. The entry of banks into commodity futures trading
could turn out to be a risky proposition for several valid reasons. To begin
with, the commodity futures market in India is still in a nascent stage of
development. Therefore, the existing regulatory environment cannot handle the
sudden entry of big financial players such as banks and institutional investors.
In addition, the existing penalty provisions are grossly
inadequate and not in tune with the current trading volume in the Indian
commodity derivatives markets. It may sound astonishing that the FMC — which
regulates billions of dollars worth of commodity trade — does not have the power
to directly impose a financial penalty on traders. Now, only a maximum penalty
of Rs.1,000 can be imposed on market participants by the FMC — and through court
orders on conviction. A financial penalty of a mere Rs.1,000 (enforced through a
lengthy court process) does not deter potential offenders in the commodity
Justice Kumar is NGT chief
- Justice Swatanter Kumar has taken over as chairperson of the National
Green Tribunal (NGT), to decide on cases relating to environmental
protection, and conservation of forests and natural resources.
- Though Justice Kumar’s tenure as a Supreme Court judge is due to end
next week, December 14 was his last working day and he assumed charge of the
new office on December 20. He is the first Supreme Court judge to preside
over the Tribunal which was, till now, functioning without a full-time
chairperson. Justice P. Jyothimani, a retired Judge of the Madras High
Court, who has been appointed a judicial member of the NGT.
The large number of unfilled vacancies in Primary Health
Centres in many States is proof that any plan to provide universal health
coverage in India is going to be a major challenge.
Availability of human resources for health, be it
doctors, nurses, or support staff, is far from optimal. In the WHO’s Global
Atlas of the Health Workforce for 2010, India is 52 among 57 countries
facing a critical HR crisis in health. A well-functioning health system
should have at least 23 health workers per 10,000 people, while the
statistic for India is 19. Even this national performance is not uniform, as
the statistics on PHCs show. It is unconscionable that as per 2011 figures,
some States have staggering levels of vacancies of doctors at the most basic
access level. Chhattisgarh tops the list with 71 per cent; West Bengal,
Maharashtra, Uttar Pradesh, Madhya Pradesh, Gujarat, Odisha and even Tamil
Nadu have significant number of vacant doctor posts. These statistics
strengthen the argument that many more medical and nursing colleges, and
institutions for health worker training should be opened on a war footing.
It is true that legislation in this regard is pending, and the Parliamentary
Standing Committee on Health and Family Welfare has recently submitted its
report. The Centre must now move forward through democratic consensus
The litany of human resource shortages is not peculiar to
the PHCs. Vacant posts are found in the even more basic unit of Health Sub-Centres
(HSCs), besides hospitals at higher levels. What this highlights is the
patchy performance of the National Rural Health Mission in several States.
Unfortunately, these States have failed to grasp the importance of PHCs and
HSCs to reduce the country’s notorious maternal and infant mortality rates.
Unless they act with determination, it will be impossible to achieve the
growth in primary care so essential to cater to a much higher population
just a decade from now. The Planning Commission’s High Level Expert Group on
universal health coverage projects a need for 3.14 lakh HSCs (more than
double the present number) and over 50,000 PHCs by 2022. To staff them with
trained manpower, a robust plan to augment human resources must be pursued.
Towards this end, the National Commission for Human Resources for Health
Bill, 2011 provides an enabling framework. Yet, it can make progress only
when all stakeholders, including the medical community and civil society,
are agreed on the way forward. What is unarguable is the need for a rapid
scaling up of training facilities for doctors, nurses and auxiliary workers,
and filling up of vacancies in all States. Without this, universal health
coverage cannot make much headway.
EU Promotes Potato to Replace Rice in Asia
The potato has a 12,000-year-old history but an even
brighter future as a crop that is set to replace rice as a staple in the
Asian rice-consuming countries.
It requires less amount of water compared to other basic
food products, without compromising the nutrition value.
Potato, therefore, is increasingly being promoted, in the
genetically modified organism-free European Union (EU), as the foremost
solution for meeting the increased food demand for an estimated 6 billion
world population by 2030.
Dutch researchers from the famous Wageningen University —
dedicated to bio-based economy in food, feed and chemicals produced from
renewable resources — told a visiting press delegation that if prepared in a
healthy manner and consumed in the right proportion (balanced reduction of
calories), consumers can benefit from the many nutrients and dietary fibres
in the tuber.
Ammonium Nitrate, after Loose Imports, falls into Rebel Hands
The ambiguous rules governing the import of the chemical
leave gaping holes in the system Amid a persisting terror threat, the
handling of ammonium nitrate imports, and the ambiguous rules governing
them, continue to leave gaping holes in the system which ultras keep
exploiting. Even a naval base and an entire port are under threat.
Ammonium nitrate, used in fertilizers, is also one of the
ingredients of improvised explosive devices (IEDs) that extremists rig up to
India imports a sizable amount of this explosive for use
in its mines, but a portion goes missing.The Visakhapatnam Port, on the east
coast, imports this material; it handled 3.4 lakh tonnes in 2011-12. But the
chemical is imported unbagged, a practice that leaves ample scope for
spillage, and possibly theft.
China Opens Longest High-speed Rail Line
- China launched services on the world’s longest high-speed rail route,
the latest milestone in the country’s rapid and — sometimes troubled —
super-fast rail network.
- The opening of the 2,298-km line between Beijing and Guangzhou means
passengers will be whisked from the capital to the southern commercial hub
in just eight hours, compared with the 22 hours previously.
- China’s high-speed rail network was only established in 2007 but has
fast become the world’s largest. The official Xinhua news agency said China
now operates 9,300 km of high-speed railways.
Courtesy: The Hindu