February 24, 2010

February 24, 2010

ü       Pakistan Foreign Minister Shah Mahmood Qureshi on Tuesday said Islamabad would welcome a third-party mediating role for China to help bridge its differences with India.

·         Would India like it?

·         It is to be noted that China claims a part of Kashmir as its own – Aksai Chin

·         The Pakistan Foreign Minister has also stated that they would like the talks to be broad based and should not be restricted to terrorism alone.

·         But India has ruled out third country mediation and has maintained that terrorism would be the focus of the talks to be held in Delhi later this month.

ü       The government needs an unequivocal statement from Maoists stating that they will abjure violence if it has to consider their offer of talks, Union Home Minister P. Chidambaram said on Tuesday.

ü       The government last week quietly secured Cabinet approval for a new agreement with the United States that aims, inter alia, at promoting the privatization of agricultural extension services and facilitating collaborations between American agribusiness and the Indian farm sector.

·         Agricultural extension was once known as the application of scientific research and new knowledge to agricultural practices through farmer education.

·         The field of extension now encompasses a wider range of communication and learning activities organised for rural people by professionals from different disciplines, including agriculture, agricultural marketing, health, and business studies.

·         The proposed Memorandum of Understanding with the U.S. on ‘Agriculture Cooperation and Food Security’ was approved on Thursday and is likely to be signed this or early next month.

·         It is also intended to give a push to private investment in agriculture for growth of agribusinesses and farm-market linkages with stress on creating an enabling environment for private investment and reciprocal trade.

·         It includes bilateral policy dialogue and agribusiness-to-business collaboration between India and the U.S.

·         The nutrition security component calls for bilateral cooperation and best practices, including access to adequate quantities and quality of “diverse diet and diversified and fortified foods” and an integrated programme that targets the most vulnerable.

·         The food security aspect focuses on sharing technological expertise and promotion of private sector extension in agriculture.

·         Collaboration in S and T and education would focus on technology to farmers and agribusinesses.

·         The weather forecasting for crop management and market information part of the pact highlights improvement of crop production management in response to vagaries of weather and potential impact of climate change variability.

·         While India could gain from improved weather forecast technology in the proposed MoU, the bilateral collaboration on S&T, food and nutrition security will give access to the U.S. to India’s great genetic diversity of crop plants for commercialisation in its interest.

·         The opening of food security policy dialogue is also a matter of concern as it will impose on India the U.S. model of agribusinesses and vertical integration of food chain, impacting diversity and consolidating monopolies.

·         The costs of implementing the MoU would be borne by “parties that incur them.”

·         Joint Working Groups would be set up to implement each component.

·         property issues would be settled as per the S&T agreement with the U.S., which was also approved in the last Cabinet meeting.

·         An India-U.S. Agriculture Knowledge Initiative is already in place that allows for U.S.-based private multi-national trading and seed giants like Cargill and Monsanto to be appointed on the board, enabling them to bear influence on the country’s farm research.

·         The present MoU was initiated under the India-U.S. Agriculture Dialogue during Prime Minister Manmohan Singh’s visit to Washington last November.

ü       The Election Commission on Monday informed the Supreme Court that wearing a burqa by a Muslim woman was a mere religious custom, and not an integral part of Islam.

·         The Commission said: “Article 25 of the Constitution does not confer unfettered rights to religious practice, but merely protects the essential or integral practice of any religion.”

·         The SLP was directed against the September 7, 2006 judgment of the Madras High Court, dismissing a petition filed by M. Ajmal Khan against the use of photographs in the rolls.

·         The Commission, in its affidavit, said: “To maintain the sanctity of democratic process, it is necessary to prevent fraud of voter identity, and the photo electoral rolls will greatly help in identification of electors and prevention of bogus enrolment.”

ü       With the Andhra Pradesh government asserting that Maoists had infiltrated the Osmania University campus as students, the Supreme Court on Tuesday directed the State to produce reported intelligence inputs to support the claim.

ü       Raising anti-Taliban slogans, Sikhs in Jammu and Kashmir on Tuesday blocked roads for hours and burnt tyres during a bandh to protest the recent killing of two members of the community in Pakistan’s restive tribal belt, and demanded concrete steps to ensure the safety of minorities in that country.

ü       India believes that Pakistan’s bid to hoist the water issue on the bilateral agenda would be misplaced because the Indus Water Treaty (IWT) has stood the test of time in resolving differences.

·         IWT Commissioners have met over a 100 times since the treaty was signed half a century ago to exchange information and iron out irritants, which means that the mechanism has been working well.

·         In fact, Islamabad’s desire to bring the water issue on the table on the eve of this week’s foreign secretary talks is a change from its stand in 2002, when the “Pakistan Water Sector Strategy” argued for thwarting any “attempt by India” to scrap the treaty. It anticipated an adverse impact on the river water flows if the treaty was scrapped and argued for building storage capacities to meet requirements in times of shortages, which Pakistan has failed to do adequately.

·         Under the IWT, Pakistan has the right to utilise the upper three “western” rivers — Indus, Jhelum and Chenab — and India has the right to use the water of three “eastern” rivers — Ravi, Sutlej and Beas — as it thinks fit.

·         Under the treaty, India is allowed to store 3.6 million acreage feet (MAF) of water of the western rivers, but it has not built any such facility so far, allowing unimpeded flows into Pakistan.

·         Since the water level in the Chenab varies wildly during winter and summer, a better strategy would be for both countries to build a joint storage project which would serve the farmers of both countries during the lean periods.

·         Pakistan’s water woes are compounded by silting at the Tarbela and Mangla dams, with an internal official assessment admitting that it has lost 32 per cent of its storage capacity due to the problem.

·         Pakistan has a large surplus of unused water. Its documents show about 30 MAF as “available surplus” with a very high escapage to the sea.

·         As a result of the IWT, Pakistan was assisted by India financially (£62.06 million) and by the IBRD fund to build replacement works, including link canals for transferring waters of the western rivers to eastern rivers.

ü       The official record of the public hearing on the Vedanta Aluminium’s plan to expand its refinery in the foothills of Orissa’s Niyamgiri Hills seems to contradict itself. While the people said “no” to the project, the officials recording their statements concluded with a “yes”.

·         Please read about the Vedanta Controversy here.

ü       In one of the biggest recalls recorded in the Indian automobile industry, leading car marker Maruti Suzuki India on Tuesday announced that it had recalled nearly one lakh ‘A-Star' cars, the company's flagship export model, to replace a faulty fuel pump gasket.

·         The replacement will be done at no cost to the customers and will help check possible fuel leak.

·         Maruti Suzuki had in 2008 replaced speedometers in its popular Maruti 800 and Omni models.

·         The model was launched on November 19, 2008, and the 998 cc K10B petrol engine car is produced only in India at its Manesar facility.

·         Last month, Japanese auto major Honda had recalled 8,532 units of its sedan Honda City in India due to defective power window switch as part of a global recall initiative.

·         A-Star is now exported to about 70 countries and is sold as Suzuki Alto in Europe, South Africa, Australia and New Zealand.

·         Besides, some of the other major markets are Chile, Angola, Saudi Arabia, Morocco, Algeria and the UAE, where it is sold as Suzuki Celerio.

·         Japanese car major Nissan also sells A-Star in the European market under a contract manufacturing agreement with MSI's parent Suzuki. Nissan sells the model as Pixo.

·         The company is expecting to double its export this fiscal on the back of robust demand from A-Star, as against 70,023 units in 2008-09.

ü       The Greece Crisis(Simplified : Source CNN)

·         What is the problem? Years of unrestrained spending, cheap lending and failure to implement financial reforms left Greece badly exposed when the global economic downturn struck. This whisked away a curtain of partly fiddled statistics to reveal debt levels and deficits that exceeded limits set by the euro zone.

·         What is the debt limit in Euro? It is 3% of its GDP.

·         How big are Greece’ debts? National debt, put at €300 billion ($413.6 billion), is bigger than the country's economy, with some estimates predicting it will reach 120 percent of gross domestic product in 2010. The country's deficit -- how much more it spends than it takes in -- is 12.7 percent.

·         So, what happens now? Greece's credit rating -- the assessment of its ability to repay its debts -- has been downgraded to the lowest in the eurozone, meaning it will likely be viewed as a financial black hole by foreign investors. This leaves the country struggling to pay its bills as interest rates on existing debts rise. The Greek government of Prime Minister George Papandreou, which inherited much of the financial burden when it took office late last year, has already scrapped most of its pre-election promises and must implement harsh and unpopular spending cuts.

·         What will happen to the other Euro countries? Greece is already in major breach of eurozone rules on deficit management and with the financial markets betting the country will default on its debts, this reflects badly on the credibility of the euro. There are also fears that financial doubts will infect other nations at the low end of Europe's economic scale, with Portugal and the Republic of Ireland coming under scrutiny. If Europe needs to resort to rescue packages involving bodies such as the International Monetary Fund, this would further damage the euro's reputation and could lead to a substantial fall against other key currencies.

·         What is Greece doing to revive its economy? The government has started slashing away at spending and has implemented austerity measures aimed at reducing the deficit by more than €10 billion ($13.7 billion). It has hiked taxes on fuel, tobacco and alcohol, raised the retirement age by two years, imposed public sector pay cuts and applied tough new tax evasion regulations.

·         Are the people happy? Predictably, quite the opposite and there have been warnings of resistance from various sectors of society. Farmers have begun blockading roads to demand greater government subsidies, while on February 10, workers nationwide staged a one-day strike closing airports, government offices, courts and schools. More strikes are expected to follow.

·         Can’t the other countries help? With the reputation of the region's single currency on the line, powerful euro zone partners are keen to see Greece's problems resolved, but analysts say European Union and European Central Bank rules are unclear and seem to rule out bloc-wide rescue packages. This leaves it up to member nations -- all of which are saddled by their own debt problems -- to cobble together their own bailout plans. There are reports that the euro zone’s dominant economy, Germany, is leading calls for a "firewall" to prevent Greece's crisis from spreading, but as yet no concrete proposals have been made public.

February 23. 2010

February 23, 2010

ü       Faced with the inter-State ‘Operation Green Hunt,’ the Maoist leadership said on Monday that it was ready for dialogue only if the Centre halted security operations targeting the outfit for 72 days.

·         The condition comes within a week of Union Home Minister P. Chidambaram saying that the Centre would find ways to facilitate talks with the Maoists if the latter halted violence for 72 hours.

ü       With the Department of Telecommunications (DoT) getting issues with the Union Finance and Law Ministries resolved, the auction of spectrum for advanced 3G mobile services is likely to begin this week. However, the process is unlikely to be completed this fiscal.

·         In his last budget speech, Finance Minister Pranab Mukherjee had expressed the hope that Rs. 35,000 crore could be garnered from the auction in the current fiscal, but the process got delayed following objections from his Ministry and the Law Ministry over the availability of spectrum, the number of slots to be auctioned and other legal issues.

·         What is 3G? International Mobile Telecommunications-2000 (IMT-2000), better known as 3G or 3rd Generation, is a family of standards for mobile telecommunications defined by the International Telecommunication Union, which includes GSM EDGE, UMTS, and CDMA2000 as well as DECT and WiMAX.

·         Services include wide-area wireless voice telephone, video calls, and wireless data, all in a mobile environment.

·         3G networks enable network operators to offer users a wider range of more advanced services while achieving greater network capacity through improved spectral efficiency.

·         The first pre-commercial 3G network was launched by NTT DoCoMo in Japan branded FOMA, in May 2001 on a pre-release of W-CDMA technology.

·         What are its practical applications? Mobile TV, Video on Demand, Video Conferencing, Tele Medicine, Localised services.

·         3G in India? Let us take a look.

o    We should have had 3G services in India 3-4 years ago.

o    But we took a detour to giving more 2.5G licenses.

o    The government owned telecoms (BSNL and MTNL) have been offering 3G services for the past many months - and we have barely noticed.

o    Ex-Telecom Minister Dayanadi Maran was in the verge of releasing the 3G guidelines in India.

o    After the new Telecom Minister took over there was some talk about India going with 2.5G, which enables high-speed data transfer over upgraded existing 2G networks.

o    Upgrading to 3G will be an expensive affair for all telecoms. Which is actually good news for telecom hardware providers.

o    2009 was another boom year for India’s telecom sector which actually creates a huge potential customer base for the telecom companies.

o    Experts believe that India is ready for a widespread rollout of 3G services.

ü       Foreign Secretary Nirupama Rao on Monday made it clear that talks with Pakistan later this week would be restricted to India’s “core concerns” over cross-border terrorism.

ü       Unhappy with the State Excise Departments — as nodal agencies for enforcing alcohol-related regulations — for focusing more on revenue generation than on discouraging consumption, the Centre has suggested that the State Health Departments be empowered to coordinate all alcohol-related issues.

·         It raises an important question. Should liberal sales and consumption be banned across the country?

·         It is a known fact that there are harmful effects, both physical and mental.

·         It is good to understand the culture prevailing in the particular region, for example a country that has people who consider social drinking okay and link heavy drinking with manhood, alcohol consumption is seen to have grown up. Whereas, a country that preaches against the moral problems against alcoholism is sure to have decreased consumption.

·         Moreover, it is important to differentiate between alcohol consumption and alcoholism.

·         There are several aspects that should be considered.

o    Social aspects are very important. As man is a social animal, he is greatly influenced by society and culture around him. In India, in several states, alcohol consumption is seen as a way of life and it influences the young and old alike.

o    The age of globalization has brought forward a mixing of culture. Westernization has also had its effects.

o    The political leadership of a country too plays an important role. Liberal parties might favour liberal sales whereas hardliner parties may not.

o    Curbing the sales of alcohol might also throw up some legal problems.

o    Economics is the major driver. Several states gain their major share of profit through alcohol sales only. Such states might oppose such a move.

o    It has to be understood that supply is there because demand is there.

o    Advertisements placed incognito have helped in boosting the sales of product.

o    It is to be understood that several states own outlets for alcohol sales.

o    Excise is the second largest source of revenue for the State governments, after Value Added Tax (VAT). According to an estimation made in 2007-08, they earned Rs. 26,000 crore from tax on alcohol.

o    Apart from major health problems, it has to be understood that children are prone to impressions.

o    A spate of drunken driving cases in the recent days shows the ugly side of alcohol consumption.

o    In a country like India, a ban might not be the right way to go as it may lead to balck marketing and hooch trading.

o    A more restrictive policy will be the right way forward.

o    An important footnote : A study by the National Institute of Mental Health and Neuro Sciences for the WHO, has estimated that while gains in terms of revenue from alcohol sales are Rs. 216 billion every year, losses from adverse effects of the sale are Rs. 244 billion, apart from the immeasurable losses due to multiple effects of alcohol use.

ü       Concerned over the indiscriminate use of emergency contraceptive pills sold across the country, the National Commission for Women (NCW) has written to the Ministry of Health and Family Welfare and the Medical Council of India seeking their opinion in curbing the promotion of these pills.

·         The NCW has said that it had been brought to their notice that wide scale advertisement campaign in favour of oral emergency contraceptive pills was being carried out by the pharmaceutical companies.

·         It is being projected as an alternative to the safe sex method and thus may lead to an everlasting impact on the younger generation and in turn result in the government and the society losing its battle against AIDS and sexually transmitted diseases besides putting the women through grave emotional and physical trauma and everlasting effect of hormonal imbalance.

·         It is to be noted that this over the counter drug is designed for women over 25 years and accordingly it is felt that it may have dangerous side-effects on teenagers and on women using it too regularly.

·         It is dangerous because emergency pills do not prevent sexually transmitted disease like HIV/AIDS, the statement added.

ü       Defeated opposition presidential candidate General (retired) Sarath Fonseka was on Monday named the leader of the newly floated Democratic National Alliance (DNA), of which the ultra-nationalist Janatha Vimukthi Peramuna would be a key constituent.

ü       U.S. President Barack Obama is making a fresh attempt on Monday to rescue his signature issue of overhauling the U.S. health care system, with a proposal to keep a lid on climbing insurance premiums.

·         Mr. Obama's new plan includes a provision to allow the government to deny or roll back egregious increases that infuriate consumers.

·         The idea is bound to resonate with Americans fed up with insurance companies.

·         It also puts Republican lawmakers, who have opposed Mr. Obama's health care overhaul plan, at risk of appearing to favour big business over the constituents who will be voting in November congressional elections.

·         What is Obama’s health care plan over which so many hue and cry has been raised?

o    It is known as the Affordable Health Care for America Act.

o    The Affordable Health Care for America Act is a revision of an earlier proposal, America's Affordable Health Choices Act of 2009.

o    There are several provisions.

o    Some of the major provisions include prohibiting health insurers from refusing coverage based on patients' medical histories, prohibiting health insurers from charging different rates based on patients' medical histories or gender, repeal of insurance companies' exemption from anti-trust laws, requiring most employers to provide coverage for their workers or pay a surtax on the worker's wages up to 8%, a subsidy to low- and middle-income Americans to help buy insurance, a 2.5% excise tax on medical devices, reductions in projected spending on Medicare of $400 billion over a ten-year period etc.

o    It has to be noted that several top insurance companies have opposed the bill.

ü       The Foreign Investment Promotion Board (FIPB) on Monday approved 12 new foreign direct investment (FDI) proposals worth over Rs. 1,000 crore, including that of Walt Disney and Zee Entertainment.

·         Based on the recommendations of FIPB, the government has approved 12 proposals of FDI amounting to Rs. 1,045.61 crore.

·         The highest FDI of Rs. 529 crore is likely to come from Delhi-based Max India, followed by Hyderabad-based Soma Highways (Toll) Projects' Rs. 360-crore proposal.

·         The government deferred 11 proposals, including Essar Capital Holdings, Verizon Communications, Star India Holding, and Etisalat DB Telecom.

·         It, however, rejected seven FDI proposals and referred the proposal of Bharat Oman Refineries to the Cabinet Committee on Economic Affairs (CCEA) for its consideration.

·         Similarly, the government had begun the process of restricting fresh foreign investment in the tobacco sector as it would like India to be seen as a responsible country, conscious about its people's health.

·         Please read more about FDI here.

ü       Following the recommendation of the Directorate General of Anti-Dumping and Allied Duties (DGAD), the Commerce Ministry is toying with the idea of imposing an anti-dumping duty on import of two variants of anti-bacterial drug penicillin to protect the domestic industry from cheap Chinese and Mexican imports.

·         What is dumping? In economics, "dumping" can refer to any kind of predatory pricing. However, the word is now generally used only in the context of international trade law, where dumping is defined as the act of a manufacturer in one country exporting a product to another country at a price which is either below the price it charges in its home market or is below its costs of production.

·         Advocates of free markets see "dumping" as beneficial for consumers and believe that protectionism to prevent it would have net negative consequences.

·         Advocates for workers and laborers however, believe that safeguarding businesses against predatory practices, such as dumping, help alleviate some of the harsher consequences of free trade between economies at different stages of development.

·         But what is Social Dumping? "Social dumping" is a term (with a negative connotation) that is used to describe a temporary or transitory movement of labour, whereby employers use workers from one country or area in another country or area where the cost of labour is usually more expensive, thus saving money and potentially increasing profit.

February 20. 2010

February 20, 2010

ü       With the Andhra Pradesh government expressing a fear that naxalites had infiltrated the Osmania University campus in the guise of students, the Supreme Court on Friday stayed an interim order of a single judge of the Andhra Pradesh High Court directing the State government to withdraw the para-military/rapid action forces from the campus.

ü       Intellectual support to Maoists made the task of tackling them “very difficult” as it confused people, Union Home Minister P. Chidambaram said in Delhi on Friday.

·         Some of our views on the ongoing struggle between the government and the Maoists.

·         The most difficult element in dealing with Naxalites is lack of trained policemen.

·         It is followed by intellectual and material support.

·         Historically, the battle with the Maoists has raged since 1967 when the first Maoist rebellion erupted and has grown over the past 5 years following the formation of the CPI (Maoist), in 2004, through the merger of two prominent Naxalite groups, the Peoples War Group (PWG) and the Maoist Communist Centre (MCC).

·         The CPI (Maoist), on its part, has intensified its attacks in different parts of the country. They include Jharkhand, Chhattisgarh and Orissa, which are the organisation’s strongholds, the Gadchiroli region in Maharashtra, where it is apparently recapturing lost space, and parts of West Bengal, where it has made forays in the past two years.

·         According to Union Home Secretary Gopal Krishna Pillai, the arrests of Ghandy and Bagchi signify remarkable improvement in terms of intelligence gathering vis-a-vis Maoist operations.

·         The new Home ministry initiative is also broadly based on the confabulations that took place over the past two years under the auspices of the Ministry

·         According to informal estimates, the CPI (Maoist) has more than 20,000 armed cadre, apart from lakhs of supporters.

·         Union Home Ministry officials pointed out that as part of the new initiative a detailed study of the Maoist-affected areas was done and the most sensitive and difficult areas were mapped. The study identified 11 areas as most sensitive, spread over 40 districts

·         Forces would be deployed in these areas and the forces deployed in an area would be followed by a back-up team that focuses on socio-economic development.

·         These are the basic actions that have been taken against the Maoists in the past couple of years.

·         For our opinion on Naxalism, please visit this link

ü       Mr. Chidambaram has hinted that certain specific issues relating to the Mumbai 26/11 attacks would be taken up with Pakistan during the upcoming talks.

·         This is a welcome move as this would provide the Indian government with the necessary thaws in moving the 26/11 case forward.

·         India would also be in a better position to present its facts to other nations, if at all needed.

·         Please read about our opinions on the necessity of Indo-Pak talks here .

ü       The BJP is planning a twin-campaign to corner the Centre on the issue of price rise of essential commodities.

·         It will ‘gherao’ Parliament on April 21, when it is in session, and submit five crore signatures collected from all over the country to President Pratibha Patil.

·         At the end of the party’s three-day conclave here on Friday, BJP president Nitin Gadkari said he expected a 15-lakh strong rally to surround Parliament.

·         ‘Mahangai roko ya gaddi chodo’ (stop the inflation or quit) is the slogan for this mass agitation.

·         The party president has blamed forward trading of cereals and sugar as the cause of price rise. But what is forward trading? Forward trading is a trading practice in which the price is fixed at an earlier date and the settlement is made at a stipulated later date. To minimize the risk of default in a forward trading agreement, future trading is used.

ü       The Left parties have called upon the Union government to withdraw its decision to decontrol the price of fertilizers and a new nutrient-based subsidy scheme, arguing that this would have “disastrous repercussions” for the cultivating peasantry, especially small and marginal farmers.

·         But what are the advantages and disadvantages of a nutrient based subsidy scheme?

o    This move will ensure balanced application of fertilizers through the nutrient-based subsidy regime instead of the current product pricing regime.

o    This move will ensure that even smaller farmers are able to gain incentives.

o    This move is claimed to be more farmer friendly and is in alignment with other flagship schemes started by the government.

o    Decontrolling the prices will help marginal and more efficient producers.

o    Now, companies producing complex or nutrient-based fertilisers will be incentivized to invent products and increase their revenues in the long run, apart from the gains on margins.

o    For the farmer, the application of nutrient-based fertiliser would help to increase overall productivity and, hence, lead to higher incomes.

·         And what are the disadvantages?

o    No immediate effects.

o    Chances for further reductions in farm holdings.

o    The move may find opposition amongst left parties.

o    Adverse affects of free market pricing of fertilizers is a fear.

o    Has a possibility to be seen  as an “anti farmer move”

ü       Veteran diplomat Shyam Saran has resigned as the Prime Minister’s Special Envoy on the India-U.S. nuclear deal and climate change. He will demit office on March 14.

ü       Maoists set free Prashant Kumar Layek, Block Development Officer of Dalbhumgarh, on Friday. He was kidnapped a week ago from East Singhbhum district.

ü       Preview to the budget ( Petroleum prices)

·         As mentioned earlier, the decision to decontrol the prices of urea and fertilizers might well be an indication of a similar move in the prices of petrol.

·         The government is already providing subsidies and has issued oil bonds worth Rs 12.000 crores. This has helped in controlling the prices of oil and gas so far in the retail sector.

·         But, the government, due to its huge fiscal deficit (6.5%of GDP) is hard pressed to find money for its flagship schemes.

·         This is a clear indication that there could be a roadmap for dismantling the Administered Price Mechanism which governs oil prices in the economy.

·         The Kirit Parikh committee had recommended total decontrol of oil prices and the oil marketing companies want the same.

·         One of the ways to lessen the impact on the common man is to reduce certain taxes and increase the price.

·         The major problem that the Government seems to be facing is the opposition of its allies.

·         Expert opinion recommends a hike in the oil and gas prices.

·         The government is also looking at the option of a price regime that can be revised every month according to the global oil prices.

·         It is important to consider the role of private players, who have opposed the subsidies doled out to the PSUs.

·         Moreover, the pricing of kerosene has to be revamped by revamping the role of Public Distribution Systems also. There has been a lot of wastage, leakage, adulteration and inefficiency.

·         A small note on deregulation.

o    Deregulation is the removal or simplification of government rules and regulations that constrain the operation of market forces.

o    Deregulation does not mean elimination of laws against fraud.

o    The stated rationale for deregulation is often that fewer and simpler regulations will lead to a raised level of competitiveness, therefore higher productivity, more efficiency and lower prices overall.

o    One influential measure of worldwide business regulations that has inspired mostly deregulation but also in some instances increased regulations is the Ease of Doing Business Index, in which India is ranked 132 out of 183 nations.

o    One of the major oppositions leveled against deregulation is that it may lead to a market in which profit becomes the major motive.

ü       Union Minister for Commerce and Industry Anand Sharma on Friday endorsed the seafood exporter community’s demand that fisheries be treated on a par with agriculture.

·         A bit on the fishing sector in India.

o    Fish production has increased more than fivefold since India's independence and is a major industry in the coastal states.

o    It rose from only 800,000 tons in FY 1950 to 4.1 million tons in the early 1990s.

o    Great potential exists for expanding the nation's fishing industry.

o    India's exclusive economic zone, stretching 200 nautical miles (370 km) into the Indian Ocean, encompasses more than 2 million square kilometers. In the mid-1980s, only about 33 percent of that area was being exploited. The potential annual catch from the area has been estimated at 4.5 million tons.

o    In addition to this marine zone, India has about 14,000 km² of brackish water available for aquaculture, of which only 600 km² were being farmed in the early 1990s; about 16,000 km² of freshwater lakes, ponds, and swamps; and nearly 64,000 kilometers of rivers and streams.

o    There have been several programmes, institutes and training programmes in place to improve the sector.

ü       The Supreme Court on Friday banned mining in 157 mines in the Aravalli Ranges, in respect of which applications for renewal of lease have been pending with the Rajasthan government.

ü       China has voiced its strong opposition to the United States President Barack Obama's meeting with the Dalai Lama, warning it had “seriously damaged” Sino-U.S. ties.

·         Implications of Obama’s Meeting

o    The groundwork was laid last September, when the president quietly dispatched White House Senior Advisor Valerie Jarrett to Dharamsala, India, to personally deliver the invitation.

o    All the US Presidents from Bush Sr. have met Dalai Lama.

o    US has repeatedly maintained that it considers Tibet to be a part of China, but they do have concerns over the human rights violations.

o    China considers the visit as a meddling in its affairs.

o    The meeting came at a time when U.S.-Chinese relations are particularly raw, with China suspending military-to-military exchanges and warning of further retaliation over the Obama administration's approval of a multibillion-dollar arms sale to Taiwan, the self-governing democratic island that Beijing claims as its own.

o    Disputes over trade, exchange rates, and human rights have also ratcheted up tensions, although Beijing has recently signaled through the official media that it doesn't want to see a major crisis.

o    China might respond to the visit by calling off some bilateral contacts and dialing back cooperation with Washington on international issues.

o    But, an understanding by Beijing that there is a need for cooperation between the two global powers on several issues has minimized its impact.

o    The Chinese Premier is scheduled to visit Washington later this year and the forthcoming visit could imply the underlying connotations of Obama’s visit.

ü       In what may be a broad prescription for the government's economic policy road map ahead of the Budget for 2010-11, the Prime Minister's Economic Advisory Council (PMEAC) on Friday pitched for a partial roll-back of stimulus measures to usher in fiscal correction by scaling up excise duties and service tax and “adjusting” Central expenditure without hurting capital spending on infrastructure.

·         Since the expenditure stimulus was directed at augmenting consumption and not investment, the corrective measures must also focus on adjusting expenditure.

·         The government finances have come under severe strain and the fiscal imbalance “is now a matter of concern”

·         Government cannot continue with the kind of large revenue and fiscal deficits recorded in the last two years and will have to initiate fiscal consolidation in the coming fiscal year.

·         Since more of fiscal expansion was owing to an increase in expenditure than from tax cuts, the Centre's expenditure would need to be curtailed.

·         On the revenue side, while the Goods and Services Tax (GST) is unlikely to be implemented from the April 2010 deadline.

·         There could be a possible expansion of the base of service tax “by converting the selective taxation of services into a general taxation, unify the threshold and rate structure of CENVAT and service tax to introduce GST at the Central level.

·         There is a need to roll back service and excise tax and unify both the rates at 10 percent.

·         As part of the stimulus package to industry to tackle the impact of the global meltdown, the government had reduced the excise duty from 14 per cent to 8 per cent and service tax from 12 per cent to 10 per cent.

·         On the whole, a cut in fiscal deficit during 2011-12 by one per cent by outlay rationalisation and another 0.5 per cent from the revenue side would be a possibility.

ü       The new simplified version of foreign direct investment (FDI) policy will be out on March 31, Union Minister for Commerce and Industry Anand Sharma said in Chennai on Friday.