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2013 - August 2 - Current Affairs

National Issues

The Cabinet Committee on Economic Affairs has approved setting up of Special National Investment Fund, SNIF, to help six sick Public Sector Undertakings, PSUs. 

The PSUs include Hindustan Machine Tools, Indian Telephone Industries and Scooters India Limited. Information and Broadcasting Minister Manish Tewari told reporters that the move will enable the PSUs to become compliant with the 10 per cent minimum public holding norm of market regulator, SEBI. 

The CCEA also approved the proposal for continuing Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) in the 12th plan to cover the remaining unelectrified villages and habitations with a population of 100 people and provide free electricity connection to BPL households. The total capital subsidy requirement for the scheme would be 35 thousand 447 crore rupees. 

The CCEA gave its nod to a proposal for infrastructure development at various establishments of the Border Security Force, BSF, under the 12th plan. It would involve the construction of barracks, residential quarters, office buildings and hospitals. 

The approval will address one of the main requirements of BSF to provide infrastruture and training centres. The total estimated cost for the project will be about 3,664 crore rupees. 

The Cabinet has cleared an amendment to the RTI Act to keep political parties out of its ambit. The decision to amend the Act was taken by the Cabinet chaired by Prime Minister Dr Manmohan Singh. The Central Information Commission in its ruling had held that political parties are public authorities and are answerable to citizens under the RTI Act. 

The commission had said that six national parties Congress, BJP, NCP, CPI-M, CPI and BSP have been substantially funded indirectly by the central government and they have the character of public authority under the RTI Act. 

The Commission had also directed the parties to appoint Public Information Officers to respond to RTI queries and adhere to all the legal provisions. 

The Union Cabinet on August 2, 2013, approved a Centrally Sponsored Scheme for marketing of non-nationalized / non monopolized Minor Forest Produce (MFP) and development of a value chain for MFP through Minimum Support Price (MSP). This will be a measure towards social safety for MFP gatherers, who are primarily members of the Scheduled Tribes (STs) most of them in Left Wing Extremism (LWE) areas. 

In addition, the scheme will ensure that the tribal population gets a remunerative price for the produce they collect from the forest and provide alternative employment avenues to them. An estimated 100 million forest dwellers depend on the Minor Forest Produce for food, shelter, medicines, cash income, etc. It seeks to establish a system to ensure fair monetary returns for forest dweller’s efforts in collection, primary processing, storage, packaging, transportation etc, while ensuring sustainability of the resource base. It also seeks to get them a share of revenue from the sales proceeds with costs deducted. The Centrally Sponsored Scheme will have Rs. 967.28 crore as Central Government share and Rs. 249.50 crore as the States share for the current Plan period. 

The scheme would cover 12 MFPs, which are not nationalized in States having Scheduled Areas and Scheduled Tribes in accordance with Fifth Schedule of Constitution. These are Andhra Pradesh, Chhattisgarh, Gujarat, Madhya Pradesh, Maharashtra, Odisha, Rajasthan and Jharkhand. The 12 MFPs are Tendu, Bamboo, Karanj, Mahuwa Seed, Sal Leaf, Sal Seed, Lac, Chironjee, Wild Honey, Myrobalan, Tamarind, and Gums (Gum Karaya). The responsibility of purchasing MFP on MSP will be with State designated agencies. To ascertain market price, services of market correspondents would be availed by the designated agencies particularly for major markets trading in MFP. 

The scheme supports primary value addition as well as provides for supply chain infrastructure like cold storage, warehouses etc. Emphasis on scientific harvesting along with interventions stated in the scheme can sustain the process while ensuring higher returns to the collector. This package of intervention can help in organizing unstructured MFP markets. The Ministry of Tribal Affairs will be the nodal Ministry for implementation and monitoring of the scheme. The Minimum Support Price would be determined by the Ministry with technical help of TRIFED. 

The Cabinet Committee on Economic Affairs has approved the proposal of the Ministry of Power for continuing the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) in the 12th Plan for: 
  • Completing spillover works of projects sanctioned in 10th and 11th Plan. 
  • Continuing the scheme for covering all remaining `census villages and habitations with population of above 100. 
  • Providing free electricity connections to BPL households at the rate of Rs 3000 per connection in villages and habitations with population of above 100. 
  • Extending DDG to grid connected areas to supplement the availability of power in areas where power supply is less than six hours a day. 
The total requirement of capital subsidy will be Rs. 35,447 crore including Rs. 12,849 Crore towards spillover works. Out of the total requirement of capital subsidy of Rs. 35,447 Crore, Rs. 23,397 Crore will be met through GBS for 12th Plan and remaining Rs.12,050 Crore would spillover to 13th Plan. 

During the 10th and 11th Plan, 648 projects (including 72 phase 2 projects sanctioned in the year 2011-12) covering 1,12,795 un-electrified villages, 4,02,364 partially electrified villages and 275.69 Lakh BPL households with total project cost of Rs. 42,060.44 crore have been sanctioned. As on 31.03.2012, electrification works in 1,04,496 un-electrified villages, intensive electrification in 2.48,553 partially electrified villages had been completed and free electricity connections to 19,425 Lakh BPL households were released. Capital subsidy of Rs. 26,151 crore was utilized under the scheme as on 31st March, 2012. 

The RGGVY was launched in April 2005 with an objective of providing access to electricity to all rural households. Households belonging to Below Poverty Line (BPL) are provided connections free of cost. Ninety per cent (90 %) capital subsidy is provided by Government of India for projects under the scheme. The scheme was initially approved with capital subsidy of Rs. 5,000 crore for the last two years of the 10th Plan period ending March 2007. RGGVY continued in 11th Plan with capital subsidy of Rs. 28,000 crore. During 2011-12, the Planning Commission approved additional capital subsidy of Rs. 6,000 Crore. 

The Union Cabinet on August 2, 2013, gave its approval for amendment in the Resolution No. 89 dated 21st April, 2004, commonly known as the Public Interest Disclosure and Protection of Informers (PIDPI) Resolution to designate the Chief Vigilance Officer (CVO) of each Ministry/Department of the Government of India as the "Designated Authority" in addition to the Central Vigilance Commission to receive complaints under the PIDPI Resolution. 

The Central Vigilance Commission is the designated agency to receive complaints from whistle blowers under the PIDPI Resolution No. 89 dated 21.4.2004. The workload of the Commission has increased and the number of complaints under the PIDPI Resolution has also increased. The Government has therefore, felt a need to designate additional authorities for receiving complaints under PIDPI. 

Accordingly, the Chief Vigilance Officer (CVO) of each Ministry/Department of the Government of India has been now designated as the `Designated Authority` to receive complaints under the PIDPI Resolution. The proposed amendment would enable speedy disposal of the complaints and would make the public servants more responsible and accountable in their efforts in helping the Government towards combating and eradicating corruption. 

The Union Cabinet has approved introduction of a Bill in the coming session of the Parliament to amend the Right to Information Act, 2005, to exclude the political parties from the definition of Public authority for the purpose of the Act. The Central Information Commission (CIC) in its decision dated 03.06.2013, has held that the political parties, namely, AICC/INC, BJP, CPI(M), CPI, NCP, and BSP are public authorities under Section 2(h) of the RTI Act. While deciding that the said political parties are public authorities, the CIC has relied mainly on the grounds that there is substantial (indirect) financing of political parties by the Central Government and they perform public duty. The political parties are registered with the Election Commission under the provisions of section 29A of the Representation of the People Act, 1951. 

Under this section any small group of persons, if they so desire, can be registered as a political party by making a simple declaration under sub-section (5) of section 29A. With reference to the political parties, detailed provisions exist in the Representation of the People Act, 1951 which provides for dissemination of information relating to political parties, candidates and donations. 

The said Act, inter alia, provides for – 

• Registration with the Election Commission of associations and bodies as political parties (section 29A) 
• Political parties entitled to accept contribution (section 29B) 
• Declaration of donation received by the political parties (section 29C) 
• Declaration of assets and liabilities (section 75A) 
• Account of election expenses and maximum thereof (section 77) 
• Lodging of account with the district election officer (section 78) 
• Penalty for filing false affidavit etc. 

(section 125A) The above provisions of the Representation of the People Act, 1951 indicate that there are sufficient provisions in the Act to deal with each and every aspect of financing, its declaration and punishment for filing false affidavit and all such information is made available to the public through the website of the Election Commission. 

Under section 13A of the Income-tax Act, 1961, the political parties claiming exemption from tax are required to file their return of income before the due date before the tax authorities along with audited accounts; and form 24A prescribed under section 29C of the Representation of the People Act, 1951 read with Rule 85B of the Conduct of Election Rules, 1961 declaring the list of persons making donations to the political parties exceeding 20,000/- rupees. 

As per section 138 of the Income-tax Act, any information with the Income-tax Department would be ordinarily held confidential, but can be made public, if in the judgment of the Commissioner of Income-tax, it serves public purpose. Under section 10A of the Representation of the People Act, 1951, for failure to lodge the account of election expenses as per the requirement of law, the defaulting candidate may be disqualified by the Election Commission for three years from the date of the order of disqualification. 

Section 29C of the Representation of the People Act, 1951, provides that each political party shall submit report to the Election Commission (before filing its income-tax return) regarding all contributions in excess of 20000/- rupees received by it in a financial year and failure to submit this report will deprive them of the tax benefit. 

Further, the candidates are required to file affidavit along with their nomination papers giving the annual income of the candidate and filing of false affidavit attract punishment for furnishing wrong information. The RTI Act was enacted to provide for an effective framework for effectuating the right of information recognised under Article 19 of the Constitution. 

The RTI Act was enacted to ensure greater and more effective access to information by making the Freedom of Information Act, 2002 more progressive, participatory and meaningful. The definition of public authority given in clause (h) of section 2 of the RTI Act is well defined to include only such authority or body constituted by or under the Constitution or by any law made by Parliament which is substantially financed directly or indirectly by funds provided by the appropriate Government. The political parties do not fall within the parameters of the definition of public authority given in the RTI Act, as they are only registered and recognised under the RP Act, 1951. 

The Cabinet Committee on Economic Affairs has approved the collaboration project of Indian Institute of Technology, Hyderabad (IITH) under the Official Development Assistance (ODA) loan by Government of Japan and grants by Ministry of Human Resource Development (MHRD), Government of India. The project costing Rs. 1776.50 crore will be financed out of the ODA loan of Rs. 1501.72 crore from the Government of Japan. The balance of Rs. 274.77 crore represent 15.5% non-eligible portion of the project as the Indian portion to be met from grants by MHRD over a period of four years starting from 2013-14 to 2016-17. 

The project would create value addition through collaborative interactions with academics and the industry of Japan and exchange of students and faculty. This will enhance cooperation between the two nations in the area of science & technology and human resource development. For the Indian side, the project would also help in creation of a number of basic infrastructure facilities and faster scaling up of a quality institution viz. IIT, Hyderabad with benefits for the Indian economy. 

Background: The IIT, Hyderabad is one of the eight new IITs established by the GOI in 2008 at an estimated cost of Rs.760 crore based on the Cabinet’s approval in July, 2008. The IIT, Hyderabad and Japan collaboration is an externally aided central sector project emanating from the broader Indo-Japan Collaboration and agreement between the Prime Ministers of India and Japan for a Japanese loan to fund the specific projects of IIT, Hyderabad. 

The Cabinet Committee on Economic Affairs has approved the proposal for infrastructure development at various establishments of the Border Security Force (BSF) under the 12th Five Year Plan at a total estimated cost of Rs.3664.61 crore. 

This includes construction of 111 Barracks, 10300 residential quarters, about 210 office buildings and two composite hospitals. The approval will address one of the main concerns of the BSF for providing infrastructure at training centres and various establishments. 

The Cabinet Committee on Economic Affairs, in accordance with the Government of India`s disinvestment policy, has approved the disinvestment of 10 percent paid-up equity in the Indian Oil Corporation Limited (IOCL), out of its equity capital holding of 78.92 percent. The disinvestment will be through Offer for Sale (OFS) method in the domestic market according to the SEBI rules and regulations. After this disinvestment the Government of India shareholding in the company would come down to 68.92 percent. The paid up equity capital of the company, as on 31st March, 2013 was Rs. 2,428 crore. The Government of India holds 78.92 percent of the paid up capital in IOCL. 

The IOCL is a "Maharatna" Public Sector Undertaking under the administrative control of the Ministry of Petroleum & Natural Gas. It is the highest ranked Indian corporate in the prestigious Fortune `Global 500` listing with a ranking of 83 for the year 2012. IOCL is primarily engaged in refining, transportation and marketing of petroleum products and petrochemicals with an installed refining capacity of 54.2 million metric tonnes. It has a pipeline network over 11,000 kilometers and marketing infrastructure of over 39,000 customer touch points. IOCL is also now venturing into exploration and production of crude oil and distribution of natural gas. 

The Cabinet Committee on Economic Affairs has approved the proposal of the Ministry of Food Processing Industries for continuing the Scheme of Technology Upgradation/ Establishment/ Modernization of Food Processing Industries during the 12th Plan (2013-17) to meet the committed/spillover liabilities of the proposals received in the Ministry of Food Processing Industries during 11th Plan (upto 31.03.2012), under the Scheme for an amount of Rs.740 crore during the 12th Plan. 

The Scheme has been one of the most popular of the Plan Schemes of the Ministry. As a result, a large number of applications were received, which could not be accommodated within the allocated budget during the 11th Plan. Therefore, the committed liabilities have arisen, which are required to be met under the Central Sector by the Ministry. 

The above scheme envisages back ended subsidy by way of grant-in-aid. Their cases would be considered for sanction by continuing the scheme during 12th Plan (2013-17) to clear the committed/spillover liabilities of 11th Plan. The above Scheme has been subsumed w.e.f. April 1, 2012 under the newly launched Centrally Sponsored Scheme of National Mission on Food Processing (NMFP) in the 12th Plan for implementation through State/ UT Governments. Thus all the eligible applicants under the Scheme will be sanctioned financial assistance by the respective State Governments w.e.f. April 1, 2012 and onwards in the 12th Plan. 

The Cabinet Committee on Economic Affairs has approved creation of the Special National Investment Fund for the specific objective of meeting the minimum public shareholding of 10 percent requirement in the following six Central Public Sector Enterprises (CPSEs). 

(i) Andrew Yule & Company Ltd. 
(ii) Fertilizers & Chemicals (Travancore) Ltd. 
(iii) Hindustan Photo Films Manufacturing Co. Ltd. 
(iv) HMT Ltd. 
(v) ITI Ltd. 
(vi) Scooters India Ltd. 

Since these Companies were not financially sound, it was found difficult to meet the minimum public shareholding by following SEBI approved methods. However, Government was keen to comply with the requirement in all Government Companies. The Department of Disinvestment discussed the matter with SEBI and has proposed to meet the minimum public shareholding in the above six Companies. 

The salient features of the Fund are: 

(i) The number of shares that is required to make the six Companies compliant with the minimum public shareholding will be transferred to the Special National Investment Fund out of Government of India shareholding on irrevocable basis without any consideration. 
(ii) The Fund will be managed by independent professional Fund Managers. 
(iii) The Fund will sell the shares within a period of 5 years. 
(iv) The funds realized from the sale of shares would be used for social sector schemes of the Government. 
(v) The modalities of the sale of shares in the Fund would be decided by the existing EGoM. 

Vide Securities Contracts.(Regulations) (Second Amendment) Rules, 2010 dated 09th August, 2010 all Government Companies are required to have at least 10% public shareholding and where public shareholding is less than 10%, the Companies were required to comply with this condition within a period of 3 years by following methods permitted by SEBI for this purpose. 

The Cabinet Committee on Economic Affairs (CCEA) on August 1, 2013, approved the “dilution” of certain safeguards, including relaxing the 30 per cent sourcing norm and dropping the mandatory 50 per cent condition for backend infrastructure investment, which were approved by Parliament while allowing 49 per cent foreign direct investment (FDI) in multibrand retail announced last year. 

The move to dilute some conditions met with strong resistance from the Ministry of Micro, Small and Medium Enterprises (MSME), but they were overlooked by the CCEA while approving the new norms seeking to attract much needed FDI investments by global retail chains in multibrand retail trade (MBRT). At the time of granting approval to the 49 per cent MBRT policy last year, Parliament called for putting in place certain safeguards to protect the interests of industry, especially small scale trade, and also to ensure that investments are made in a big way in backend infrastructure. 

The Cabinet also approved increasing the number of cities to be covered under the MBRT policy by amending the clause of permitting cities or States with less than 10 lakh population to open front end stores with the permission of the States or Union Territories. The 30 per cent mandatory sourcing from small scale industries clause has been waived. 

Under the new policy, medium scale industries with total investment not exceeding $2 million would also be made eligible for sourcing of manufactured/processed to products. The new policy proposes that this requirement would be reckoned only at the time of first engagement with the retailer and such industry shall continue to quality for this purpose even if it outgrows the investment of $2 million during the course of its relationship with the said retailer. 

The United Nations Population Fund-UNFPA has joined hands with Human Resource Development -HRD Ministry to impart life-skills education to students pursuing courses under National Institute of Open Schooling. 

Under the initiative, both UNFPA and Ministry of HRD have launched a video series to train tutors to improve quality of teaching to students under the system. The life skills mainly aims at integrating issues such as adolescent health and well being in school curriculum to help them make informed decisions. The teaching-learning video series was released by Minister of State for HRD Shashi Tharoor in New Delhi on August 2, 2013. 

Economic Issues

Reserve Bank of India Governor D. Subbarao, on August 2, 2013, defended the central bank’s decision to make corporates eligible for bank licences, saying that responsible regulation involved being “pragmatic” and not “dogmatic”. Elaborating on what he called responsible regulation, the RBI Governor said an important characteristic of such regulation was open-mindedness and the willingness to change regulations to suit the changing circumstances. In this context, he defended the RBI’s decision to make corporates eligible for bank licences, which was done after extensive debate, consultation and deliberation. 

 “The Bank took a pragmatic view, in response to the changed situation, and determined that allowing corporates into banking sector would be net positive,” he said. Dr. Subbarao was delivering the keynote address themed “Responsible innovation and regulation in the financial sector” at the Institute of Development and Research in Banking Technology (IDRBT) Technology Excellence Awards 2012-13 & the CEO Panel on August 2, 2013. 

The argument against allowing bank licences to corporates centred around “misuse” of public deposits for private gain and that banking in hands of the corporates would lead to concentration of economic power and political influence. The bank, however, took the decision to leverage the proven entrepreneurial talent and management expertise. Coupled with this was the scope for bringing in vast pools of capital that would help in strengthening financial inter- mediation. 


Eminent Malayalam Poetess Sugathakumari has been conferred the prestigious "Saraswati Samman" for the year 2012. The award has been given for her collection of poems in Malayalam entitled "MANALEZHUTHU", which means the writing on the sand published in 2006.

The award was presented by Union Minister of Human Resouces Development Dr. M M Pallam Raju, at a function in New Delhi on August 2, 2013. It carries a citation and cash prize of 10 lakh rupees. Speaking on the occasion Pallam Raju called for preserving rich cultural heritage and languages through writings. 

The Bharat Heavy Electricals Limited, Electronics Division, has won the “Champion progress through participation” award from the Indian National Suggestion Scheme Association (INSSAN). The award, according to a BHEL release, was conferred on the company for its outstanding participation. 


Former tennis player Nirupama Vaidyanathan, announced the launch of her book named “The Moonballer’’. 



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