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June 21 & 22 Current Affairs

International Issues

South Korea, Japan and the United States began a joint naval exercise denounced by North Korea as a reckless provocation. Seoul's defence ministry said the two-day drill involving destroyers, supply ships and helicopters would practice humanitarian operations such as search and rescue missions.

National Issues

The government has announced that 14 more services will be exempted from payment of service tax by including them in the negative list. The order will come into effect from July 1. With the inclusion of 14 items, the total number of services in the negative list will go up to 38. All other services which do not figure in the list would be taxed.

Releasing the book 'Taxation of service: An Education Guide', Finance Minister Pranab Mukherjee said that with the expansion of the service tax base, it would be possible for the Central Board of Excise and Customs to exceed the collection target of Rs 1.24 lakh crore in the current fiscal. As per the guide, the 14 services which will be exempted from payment of tax include lending of books, publications or any other knowledge enhancing content or material by public libraries.

Besides, services provided to the government, local authorities or a government authority for the repair and maintenance of an aircraft will also come in the negative list.Also, services provided by advocates to other advocates and business entities up to a turnover of Rs 10 lakh in the preceding financial year is exempt from service tax.

Air India Ltd. has constituted a Committee to implement the recommendations of Justice Dharmadhikari Committee report in a time bound manner. The Committee constituted on the direction of Ministry of Civil aviation has representation from both erstwhile Air India and Indian Airlines. The Committee includes Shri Syed Nasir Ali, Director, M/o Civil Aviation & OSD, Air India, Shri A.J. D’Souza, G.M. (Finance), Air India, Shri S.N. Bhattacharya, G.M. (Pers.), SR, Air India and Shri S.U.Shukla, G.M.(P), WR, Air India.

The Committee has already started functioning and had its first meeting on 21st June, 2012 to prepare a roadmap for timely implementation of Justice Dharmadhikari Committee report. It will interact with various associations and employees of the Company to resolve any issue arising in the wake of the implementation of Justice Dharmadhikari Committee report. 

The Competition Commission of India has imposed more than six thousand crore rupees as penalty on 11 cement companies for price cartelisation. It has also imposed penalty on the Cement Manufacturers Association. An official release says, the cement manufacturers which have been penalised include ACC, Ambuja Cements Limited, Ultratech Cements, Ultratech Cements, JK Cements, India Cements, Binani Cements and Jaypee Cements.

The contravening cement manufacturers have been directed to deposit the penalty amount within 90 days. They have also been directed to cease and desist from indulging in any activity relating to agreement, understanding or arrangement on prices, production and supply of cement in the market.

Bilateral Issues

The Philippine government will allow Indian nationals who are regular international travelers to enter the country without a visa and stay for up to 21 days. Immigration Commissioner Ricardo David Jr. said he issued a memorandum circular allowing Indian nationals to enter the Philippines visa-free so long as they are holders of a valid visa from the European Union or any of the six countries of the United States, Canada, Japan, Australia, Singapore, and the United Kingdom. He said Indian nationals who avail of this scheme will be granted an initial stay of 14 days, which may be extended for an additional seven days. David said, however, that the visa-free stay of a frequent Indian traveler is only for a maximum of 21 days.

Previously, Indian tourists were required to apply for an entry visa with a Philippine consulate in their port of origin before coming to the country. According to David, the new policy is based on a Department of Foreign Affairs circular issued in February. The circular aims to draw more foreign tourists to the Philippines.

India and China decided to promote maritime dialogue between the two countries by setting up parallel teams to exchange views on maritime security and navigation. A decision to this effect was taken during Prime Minister Dr Manmohan Singh ’s talks with his Chinese counterpart Wen Jibao on the sidelines of the Rio + 20 summit at Rio De Janeiro.

India would set up a inter ministerial group on its side while China would have an official team that would periodically exchange views on maritime issues relating to trade and security. The sources further said that during the talks took note of the cooperation between the two countries in multilateral forums, including the just concluded G20 summit and the Rio +20 summit in which the two countries had high degree of cooperation in arriving at joint positions. Prime minister Manmohan singh raised the border issue during his talks and it was decided that the special representatives of the two countries who had been holding talks on the issue would submit a report on the developments so far by January next year.

India and China agreed to step up their defence and security dialogue and work to take steps to ensure that the two countries achieve a 100 billion dollars trade target by 2015.

A decision to this effect was taken during Prime Minister Dr Manmohan Singh’s talks with his Chinese counterpart Wen Jibao on the sidelines of the Ri0+ 20 summit at Rio De Janeiro. Briefing reporters after the meeting, Foreign Secretary Ranjan Mathai said that during the discussion on trade and economic cooperation Prime Minister Manmohan Singh invited Chinese investment in infrastructure sector in India.

The Union Minister of Commerce, Industry and Textiles Shri Anand Sharma addressed a group of political and business leaders from Russia and India at the third “India-Russia Business Dialogue” which was held under the umbrella of the St. Petersburg International Economic Forum 2012. Speaking on the historical bonds between the two nations, Shri Sharma said that India and Russia share a “special and privileged strategic partnership” which permeates the entire spectrum of economic activity.

Highlighting the fact that the GDP of both the countries is over US$ 3 trillion, Shri Sharma further added that the bilateral trade between India and Russia in 2011 was in the range of US$ 9 billion. “We have set for ourselves an ambitious target of reaching US$ 20 billion by 2015. However, there is a need to diversify the trade basket between our countries as the current profile of trade is dominated by commodities with large imports of iron, steel, fertilizer and oil from Russia. We need to expand the trade basket to have more value added products,” he underlined during the event.

India is also planning to invest US$ 1 trillion in the infrastructure sector alone in the next five years. For this, Shri Sharma welcomed Russian participation to build a strong infrastructure base in India. “We are also building gas and oil pipelines and Russian companies have considerable expertise in pipeline construction technologies which will greatly be valued. In the telecom sector, of course, we have seen the emergence of flourishing partnerships between India and Russia which will see investments of over US$ 1.5 billion in the coming years” said Shri Sharma. 

Sweden-based single brand furniture retailer IKEA’s CEO Mikael Ohlsson met the Union Minister of Commerce, Industry and Textiles Shri Anand Sharma in St. Petersburg to confirm that they will be investing in India to the tune of Euro 600 Million (approximately Rs. 4200 crores) in the first stage and additional estimated FDI of upto Euro 900 Million (approximately Rs. 6300 crores) totalling to estimated Euro 1.5 billion (approximately Rs. 10, 500 crores) for initial establishment of twenty-five retail stores in a wholly owned subsidiary. The CEO also communicated their decision to raise existing sourcing for their global operation from India significantly. After meeting the global CEOs, Shri Sharma said that despite the problems in global economy and recent lowering of the rating outlook, investors’ confidence in India remains robust. Shri Sharma also informed that IKEA had certain reservations about sourcing norms which were discussed with the DIPP officials; suitable answers of which were provided leading to the decision to invest.

Shri Sharma who is in St. Petersburg for International Economic Forum (SPIEF) also met Mr. Olaf Koch, CEO and Chairman of the Management Board, METRO AG, who expressed happiness over the performance of their investment in India and apprised the Minister about the expansion plans in India. He also informed that soon they will raise the number of their stores from 10 to 16 in the country.

Economic Issues

The Reserve Bank of India, RBI has allowed non-bank entities with a minimum networth of 100 crore rupees to set up, own and operate money dispensing machines on behalf of banks. The Central bank in a notification said the automatic teller machines, ATMs operated by non-banking entities will be known as 'White Label ATMs'. 

The RBI said that each of these new ATM operator will have a bank sponsoring them.All services offered by regular ATMs will be available at white Label dispensers as well with existing debit or credit cards issued by banks.


Antonis Samaras has been sworn in as Prime Minister in Greece , raising hopes of an end to the country's political and economic turmoil. His party, New Democracy, has forged a coalition with the Socialists, Pasok, and the smaller Democratic Left. The deal ends weeks of uncertainty in Greece. An inconclusive election on 6 May raised fears Greece could leave the eurozone and trigger a wider crisis.



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