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August 1 to 3 Current Affairs

International Issues

United States announced fresh sanctions against foreign banks that helps Iran sell its oil on 1 August 2012. The U.S government signed an executive order of new sanctions which will target anyone buying Iranian petrochemicals or facilitating payments to Iran, including an Iraqi and a Chinese Bank. The government stated that the measure would increase pressure on Tehran for failing to meet its international nuclear obligations.

The sanctions are targeting the foreign banks that handle transactions for Iranian oil or handle large transactions from the National Iranian Oil Company (NIOC) or Naftiran Intertrade Company (NICO).

The order given by Obama also targeted the China's Bank of Kunlun and Iraq's Elaf Islamic Bank for providing services to Iranian banks. On this order, China reacted quite angrily , saying that the effort is being used to put pressure on Iran over its nuclear program.

China, a big importer of Iranian oil decided to lodge an official protest with U.S.A after the recent development. The new order provides waiver to countries that have cut the purchases of Iranian oil significantly. Oil and Petrochemical industry account almost eighty percent of Iran’s revenues.

The US Senate on 27 July 2012 unanimously passed a resolution to label the Haqqani network as a foreign terrorist group. The resolution came following the US House of Representatives passed Haqqani Network Terrorist Designation Act of 2012 early July 2012.

The bill was already passed in 2011 but had to be passed by the Senate again given the changes made in it by the House. As the final step to become a legislation, the bill now move to the White House for the approval of President Barack Obama.

The Haqqani Network is a group of Islamic fanatics which have been fighting against US-led NATO forces and the government of Afghanistan to reacquire control over the trouble-torn nation. The insurgent group, which came into existence in mid 1970s, was largely used by the US as a tool against Soviet Russia during the cold war days. Haqqani Network is widely believed to have the support of Pakistani administration as well as the ISI, Pakistan's top spy agency.

The Network is led by Maulvi Jalaluddin Haqqani and his son Sirajuddin Haqqani. The group, which believed to have its base in Pakistan, operates across the Afghanistan- Pakistan border. The dreaded terror group consistently remains one of the most formidable threats to the US led NATO forces and the Afghan Government given its striking capabilities and the influence it enjoys among the conservative islamic groups existing across the border. The network has drawn extreme reactions from the leaders in US and western countries, which consider it as the most resilient enemy network.

Haqqani Network’s alleged link with Taliban militants has added to the anxiety of US administration which wants the group to be banned immediately. To fund its terror operations the group relies on the extortion, kidnapping and smuggling.

Supreme Court of Pakistan on 3 August 2012 annulled the new law called Contempt of Court Act 2012(COCA 2012) seeking to protect the Prime Minister from disqualification. A five-member bench of the Court headed by Chief Justice Iftikhar Chaudhry ruled that the new law is unconstitutional and void with effect from the day it was enforced. The court found Section 2(a), Section 3, Section 4(4), Section 6(2&3), Section 8(1, 3 &5), Section 10(b), Section 11(3, 4 & 5), Section 12 and Section 13 of COCA 2012 as ultra vires the constitution of Pakistan.

The Court also noted that under Article 204 read with Entry 55 of the Fourth Schedule to the constitution, the high courts and the Supreme Court have powers to punish any person who is found guilty of contempt of court, falling within the definition of contempt of court given in Clause (2) of Article 204 of the constitution of Pakistan.

The United Nations General Assembly on 3 August 2012 adopted a non-binding resolution that condemns Syria's use of heavy weapons in the fight against rebel forces. The resolution, drafted by Saudi Arabia, deplored the unrelenting bloodshed in Syria and demanded a peaceful political transition in the country.

The resolution got 133 votes in favour in the 193-member body, while 12 voted against the resolution. 31 nations including India chose to remain absent during the voting. The fresh resolution is largely in line with the League of Arab States’ resolution which demanded Syrian President Bashar-al-Assad to step down from power and urged world community to severe diplomatic relations and ties with Syria.

National Issues

The Election Commission of India and South Korean Election Commission on 1 August 2012 signed an MoU (Memorandum of Understanding) to strengthen institutions and processes for democracy. This was 13th MoU that India signed with Electoral Bodies. It will also strengthen India-South Korea bilateral cooperation.

Both the nations will work together for the cause of the Asian electoral community and the larger global electoral fraternity.

Uttar Pradesh government on 1 August 2012 inaugurated State Service Delivery Gateway, in Lucknow. In first phase, 26 services of eight departments were included in this scheme. Now people can get certificates etc. from Panchayati Raj, Revenue, Labour, Urban development, social welfare and food and civil supplies departments.

Orissa became the First Indian state to commence e-payment facility for government employees from 1 August 2012.

Now, the government employees in the state will receive their salaries and pensions through the online Portal of Reserve Bank of India. Employees received their salaries and pensions directly to their bank account.

Reserve Bank of India took an initiative for e-payment facilities.

An Empowered Group of Ministers (EGoM) on drought, headed by agriculture minister Sharad Pawar in a meeting on 31 July 2012 announced a 50 per cent diesel subsidy scheme for the farmers to help them save the standing kharif crop through irrigation. The total subsidy burden would be around Rs 1,260 crore and is to be borne equally by the state governments and the farmers. Districts that received 50 per cent deficient rainfalls can avail this facility. The subsidy scheme will be applicable in districts that had more than 50 per cent deficient rains as on 15 July 2012.

The EGoM also approved an increase in the subsidy on the seeds of alternative crops under contingency plans. A relief package of Rs 1440 crore was also cleared towards watershed development-related efforts in Karnataka, Maharashtra, Gujarat and Rajasthan where around 56 lakh hectares of farmland are estimated to go uncultivated. Around Rs 500 crore was approved for meeting drinking water-related challenges in these states. Rs. 453 crore would be given under the National Rural Drinking Water Programme (NRDWP) to Maharashtra, Karnataka, Rajasthan and Haryana.

It was decided in the EGoM meeting that the subsidy amount on seeds of cereals is to be increased from Rs 500 a quintal to Rs 700 per quintal, while that of pulses and oilseeds would be enhanced from Rs 1200 per quintal to Rs 2000 per quintal. The government has prepared contingency plans for 320 districts.

The Agriculture Ministry also decided to waive the duty on import of certain items to increase the availability of feed ingredients for animal husbandry sector needs. Duty- free imports of oilmeal is to be allowed to ensure feed availability to livestock. The withdrawal of customs duty on oilmeal imports is to be applicable for de-oiled soyameal, sunflower, mustard and canola oilmeal. Currently, oilmeal imports attract a duty of 15 per cent.

The Union Government of India on 2 August 2012 approved relaxation in policies relating to transfer of government land. The objective of the policy is to speed up private-public partnership in the country and to fast-track pending infrastructure projects. The decision will ensure that infrastructure projects are not held up for procedural delays. 

A ban was imposed in 2011 on transfer of government-owned land to any entity except in cases where land was to be transferred from one government department to another.This ban however excluded the cases where the land was to be transferred from one government department to another. The policy has also been relaxed for all land transfers from ministries to statutory authorities or PSUs (Public Sector Units).

Besides, the government allowed use and development of railway land by Rail Land Development Authority (RLDA), as per the provisions of Railways Amendment Act, 2005.

A special tribunal in its decision pronounced on 1 August 2012 approved the Ministry of Home Affairs (MHA) move to declare Students Islamic Movement of India (SIMI) as an unlawful association. The tribunal headed by sitting Delhi High Court Judge Justice VK Shali submitted its report to the Union Home Ministry. The tribunal was constituted to decide whether there was sufficient cause for declaring the association unlawful.

The Union Home Ministry on 3 February 2012 had extended the ban on SIMI for another two years. SIMI was first designated as an unlawful association on 27 September 2001, given its alleged involvement in the numerous terrorist incidents in the country. The organization also believed to have a close rapport with dreaded terrorist organization like Lashker-e-Taiba.

SIMI was founded by Mohammad Ahmadullah Siddiqi on 25 April 1977, in Aligadh, Uttar Pradesh. The organization was banned under the provisions of the Unlawful Activities (Prevention) Act, 1967. SIMI appealed against the ban in various courts including Special Unlawful Activities (Prevention) Act tribunals, but it was not given any respite. Though a special tribunal in August 2008 had lifted the ban on SIMI, but the ban was soon restored by the then Chief Justice of India KG Balakrishnan, on 6 August, 2008.

Bilateral Issues

India signed Tax Information Exchange Agreement (TIEA) with Monaco on 31 July 2012 in New Delhi. It will allow the two countries to check tax evasion and money laundering. This was the ninth TIEA signed by India.

Key features of this agreement are as following:

• It is based on international standard of transparency and exchange of information.

• Information must be foreseeably relevant to the administration and enforcement of the domestic laws of the Contracting Parties concerning taxes and tax matters covered by the agreement.

• The requesting State has to provide some minimum details about the information requested in order to justify the foreseeably relevance criteria. 

• Information is to be treated as secret and can be disclosed to only specified person or authorities, which are tax authorities or the authorities concerned with the determination of tax appeal. 

• It also provides for disclosure of information to any other person or entity or authority or any other jurisdiction (including foreign Governments) with the written consent of the competent authority of the requested Party.

• There is a specific provision that the requested Party shall provide upon request the information even though that Party may not need such information for its own tax purposes.

• There is a specific provision for providing banking and ownership information.

• There is a specific provision for Tax Examination Abroad where authorities of one State can present in the tax examination of taxpayer in the other State.

• Upon entry into force, the Agreement allows exchange of information forthwith.

India and Israel signed a memorandum of understanding (MoU) on 2 August 2012 for starting a collaborative academic research programme. Under the Research programme both the countries will together work in areas such as medical, information technology, social sciences, humanities and arts.

The MoU was signed by Professor Benjamin Geiger, Chairman of the Israel Science Foundation and Ved Prakash, Chairman of University Grants Commission. The agreement will exist for next five years, providing support up to 100000 dollar a research project for three years.

The idea of collaborative academic research programme came into being during a recent visit of Minister for Human Resource Development Kapil Sibal to Israel. Sibal during the course of her visit had conducted dialogue with Israel’s Finance Minister Yuval Steinitz, Education Minister Gideon Sa’ar and Chairman of Planning and Budgeting Committee Manuel Trajtenberg.

India on 1 August 2012 signed an agreement with Belgium for the modernisation of the Indian Railways and make some of the major railway stations in the country of global standard. Under the agreement the two countries would share design and current practices in railway infrastructure and deputation of experts in areas of mutual interest. The countries will also explore the new avenues of co-operation in the Railway sector.

Belgian state run companies such as Euro Station and Euro Immostar have vast experience in developing stations. The companies have extensive expertise in transforming historical railway stations into the modern international terminals.

Numerous Belgium or Belgium-based companies are already operating in India and have been involved in activities such as fastening and coating of rails to delivery of parts for train construction and software for safety and network management.

Economic Issues

As per the official figures released on 31 July 2012, growth of eight core sectors slipped to 3.6 percent in June 2012 against 5.6 percent in June 2011. During April-June 2012-13, the cumulative growth rate of the Core industries was 3.6 % as against their growth at 5.2% during the corresponding period in 2011-12. Core sector growth in May 2012 had moderated to 4 percent, from 5.9 percent in May 2011.

The Eight core industries that include crude oil, petroleum refinery products, coal, electricity, cement and finished steel have a combined weight of 37.90 per cent in the Index of Industrial Production (IIP).

Coal: Coal production (weight: 4.38% in IIP) registered a growth of 7.2% in June 2012 compared to its growth at (-) 3.0% in June 2011. The growth of the coal sector in cumulative terms witnessed a growth of 6.4% during April-June 2012-13 compared to its growth at 0.3% during the same period of 2011-12.

Crude Oil: Crude Oil production (weight: 5.22% in IIP) registered a growth of (-) 0.8% in June 2012 compared to its growth at 7.7% in June 2011. Cumulatively Crude Oil production registered a growth of (-) 0.5% during April-June 2012-13 compared to its growth at 9.5% during the same period of 2011-12.

Natural Gas: Natural Gas production (weight: 1.71% in IIP) registered a growth of (-) 11.1% in June 2012 compared to its growth at (-) 11.7% in June 2011. Cumulatively, Natural Gas production registered a growth of (-) 11.1% during April-June 2012-13 compared to its growth at (-) 10.2% during the same period of 2011-12.

Petroleum Refinery Products: Petroleum refinery production (weight: 5.94% in IIP) had a growth of 6.1% in June 2012 compared to its growth at 4.6% in June 2011. In cumulative terms, Petroleum refinery production saw a growth of 3.2% during April-June 2012-13 compared to its 5.2% growth during (April-June) period of 2011-12.

Fertilizers: Fertilizer production (weight: 1.25% in IIP) registered a growth of (-) 11.7% in June 2012 against its growth at (-) 2.4% in June 2011. Cumulatively Fertilizer production had a growth of (-) 12.2% during April-June 2012-13 corresponding to 1.1% growth during (April-June) period of 2011-12.

Steel (Alloy + Non-Alloy): Steel production (weight: 6.68% in IIP) registered a growth rate of (-) 0.5% in June 2012 against its 14.5% growth in June 2011. Cumulatively, Steel production registered a 3.6% growth during April-June 2012-13 compared to its 8.4% growth during the same period of 2011-12.

Cement: Cement production (weight: 2.41% in IIP) registered a growth of 10.2% in June 2012 against its 1.7% growth in June 2011. The cumulative growth of Cement Production was 9.9% during April-June 2012-13 compared to its 0.1% growth during the same period of 2011-12.

Electricity: Electricity generation (weight: 10.32% in IIP) had a 8.1% growth in June 2012 compared to its 7.9% growth in June 2011. The cumulative growth of Electricity generation was 6.4% during April-June 2012-13 compared to 8.2% growth during the same period of 2011-12.

India's economic growth rate dipped to nine-year low, both in the March quarter at 5.3 percent, as well as for the 2011-12 fiscal at 6.5 percent on account of global economic slowdown and its own domestic problems thereby prompting the industry to demand immediate and bold action to arrest slowdown.

India’s leading bank State Bank of India (SBI) on 1 August 2012 reduced its interest rate on home and car loans by up to 0.5 percent. The new interest rate will be effective from 7 August 2012.

It has reduced the interest rate on home loans of up to 30 lakh rupees from 10.50 percent to 10.25 percent. Whereas, the loan more than 30 lakh to 75 lakh, the interest rate is 10.40 percent against 10.75 percent.

SBI new car loans are likely to be available at an interest rate of 10.75 percent against previous rate of 11.25 percent for 7 years. 

It makes customers to pay 1699 rupees EMI for every 1 lakh rupees against 1725 rupees EMI per month earlier. The reduction is likely to save 312 rupees per year on every one lakh.

According to the latest data released by the Controller General of Accounts (CGA) on 1 August 2012, India's fiscal deficit in the first quarter (April-June) of the fiscal year 2012-13 stood at 1.90 lakh crore rupees which was 37 percent of the entire budget estimate.

The Union Government in the budget 2012 had pegged the fiscal deficit for the financial year 2012-13 at 5.13 lakh crore, or 5.1 percent of total GDP. Fiscal deficit during the corresponding period of fiscal year 2011-12 was 39 percent of the budget estimates amounting 1.63 lakh crore rupees.

The revenue receipts, however, increased in the first three months of fiscal year 2012-13. The revenue receipt during the given period stood at 1.18 lakh crore rupees, which was 12.7 percent of the budget estimates. Total expenditure of the government stood at 3.12 lakh crore rupees, or 21 percent of the budget estimates.


Former UN Secretary-General Kofi Annan on 2 August 2012 stepped down as the UN special envoy to Syria. Annan formally informed UN Secretary-General Ban Ki-moon and the Secretary-General of the League of Arab States, Nabil El Araby about his decision. His appointment for the high-profile as the UN peace interlocutor was set to expire on 31 August 2012.

Annan was appointed the UN-Arab League special envoy to Syria in February 2012. A formidable diplomat Annan was assigned with the task to explore for the peaceful solution to the Syrian crisis and secure a peaceful transition of the regime.


An environment project made by Hand in Hand India, a Chennai based development organization was named the winner of World Environment Day Challenge 2012 organised by the UN. Projects of our other organisations also emerged victorious for their unique and inspiring work.

Hand in Hand India created a colourful 10000 square foot rangoli carpet depicting 10 environmental themes. The awe inspiring theme came into being after the tireless efforts of nearly 500 volunteers.

The names of a Colombian group Fundacion Ecoprogreso, Kenyan group Maji Mazuri Centre International, Asutralia's Sunshine Coast Environment Council and a Bangladeshi non-profit organization, Shidhulai Swanirvar Sangstha also figured in the list of winners.

To increase the people’s participation in environmental activities the UN Environment Programme (UNEP) had come out with the innovative competition on World Environment Day 2012. Under the competition people across the world were asked to come out with an unique environmental project in connection with World Environment Day 2012. The World Environment Day is observed on 5 June every year.

Pather Panchali secured 42 rank in Sight and Sound Poll with 31 votes on 2 August 2012. It was featured in the 50 greatest films of all time List by Sight & Sound Maganzine.

Pather Panchali (Song of the Road) was made by the Film maker Satyajit Ray. This Film was based on Bengali Novel Pather Panchali written by Bibhutibhushan Bandopadhyay.

This movie was made under the small budget of Rs. 150 thousand. It was lyrical and the story of the film was related to the peasant family in rural India of 1920. Approximately, 846 critics, academics and distributors had given the vote to Pather Panchali for the 50 greatest films.

Pather Panchali was honoured with Best Human Document prize at the Cannes Film Festival in the year 1956. This is first Indian Film that was the part of the Sight & Sound list. In 2002, this film was ranked 22 in Sight and Sound Poll. Sight & Sound is the reputed Magazine from the Film Institute of British. Vertiogo secured first rank in Sight and Sound Poll.


In a nerve-wracking battle for Olympic medal in the individual 25 metre rapid fire pistol event, Indian shooter Vijay Kumar clinched the silver on 3 August 2012. Kumar hit the target 30 times out of 40 attempts in the series comprising eight rounds of five shots each. Leuris Pupo of Cuba, whi clinced the gold clinched scored 34 out of 40. Chinese marksman Ding Feng bagged the bronze.



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