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the Gulf country were also discussed. A memorandum of Understanding was also signed between the Reserve Bank of India and Qatar Central Bank. India and UAE signed an agreement on 4 April 2012 to ease the entry of Indian contract workers in the Emirates. The agreement was signed in Abu Dhabi, UAE. It provides for an electronic contract registration and validation system to safeguard and protect the interests of migrant Indian workers. The move would ensure a transparent, legal and less cumbersome migration of Indian workers to the Emirates. India is the first country with which the United Arab Emirates has entered into the landmark agreement to safeguard the interests of the migrant Indian workers to the Emirates. In the visit of Brazil President Dilma Rouseff, India and Brazil on 30 March agreed to step up efforts towards global reforms, particularly of the U.N. Security Council. The two countries also agreed to further strengthen the bilateral strategic partnership and exploit full potential in areas such as trade, education, defence, space and nuclear energy. Two countries also set a trade target of 15 billion dollars by 2015. The two sides also signed six documents to enhance cooperation in the fields of science and technology, education and culture.
May
Prime Minister Manmohan Singh returned 29 may after a three-day visit to Myanmar during which the two countries agreed to expand trade, improve connectivity and bring peace in border areas and emphasised on closer ties to boost energy security. The two countries inked a dozen agreements, including a $500 million credit line, on areas like border area development and air services. Manmohan Singh, who held wide-ranging talks with President Thein Sein, also met Myanmar's iconic leader Aung San Suu Kyi, who said she was "very happy at the prospect of closer ties with India". India and Bahrain, on 31 May 2012 made a Tax Information Exchange Agreement to promote economic cooperation and joint investment between the two countries. The agreement is aimed at increasing bilateral trade that stands at 1.7 billion dollar. The agreement with its provision for effective exchange of information between the two countries will help in reducing tax evasion and tax avoidance.The agreement was signed by Indian Minister of State for Finance Namo Narain Meena and Bahrains Minister of Transportation and Acting Chief Executive of Economic Development Board Kamal Ahmed in New Delhi. The two countries also inked a Memorandum of Understanding (MoU) to make the ties on technological front more effective. Under the newly signed MoU India will provide technical assistance to Bahrain and help it to develop its own IT sector in Bahrain.
June
India and South Korea on 28 June decided to enhance engagement in civil nuclear energy cooperation as well as space activities including the launch of Korean satellites by India. The two sides also evaluated the progress and expansion of their Strategic Partnership during the 2nd India Republic of Korea (ROK) Foreign Policy and Security Dialogue here. While the Indian side was led by Sanjay Singh, Secretary (East), Ministry of External Affairs, the Korean side by Ahn Ho-young, First Vice Minister, Ministry of Foreign Affairs and Trade. The two sides accepted to work on upgrading their Comprehensive Economic Partnership Agreement (CEPA) with a view to ensuring that it reflects current realities. Noting with satisfaction that in the two years since the implementation of CEPA, bilateral trade has surged by 70 percent to USD 20.5 billion in calendar 2011, the two sides welcomed recent progress in the implementation
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July
India, Indonesia Signed Double Taxation Avoidance Agreement: India and Indonesia signed an agreement to avoid double taxation and prevent fiscal evasion with respect to taxes on income on 27 July 2012. Indonesian Foreign Affairs Minister Dr. R. M. Marty Natalegawa and his Indian counterpart S.M Krishna at the Hyderabad House in New Delhi signed the agreement. Apart from the agreement, both sides also signed the agreed minutes of the fourth Joint Commission Meeting between India and Indonesia. Both the countries, reviewed the entire
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August
India and China, on 27 August agreed to set up a joint working group (JWG) to look into not only traderelated issues but also investments. The working group is expected to come out with a report within 90 days. The decision to set up the JWG was taken at the meeting of India-China Joint Group on Economic Relations, Trade, Science and Technology in New Delhi on 27 August 2012 .The working group is set up even as India has expressed serious concerns over the widening trade deficit with its neighbour and sought a correction. On its part, China expressed serious concern over the imposition of duty on import of power equipment by New Delhi. Commerce and Industry Minister Anand Sharma said after the meeting, both countries had also agreed to work on a five-year plan on economic cooperation. His Chinas counterpart, Mr. Chen Deming said, in times of global economic crisis, there was a need for strengthening India-China economic relationship. He also expressed the hope that bilateral trade would hit the target of $100 billion by 2015. The total bilateral trade between India and China for 2011-12, stood at 75457.42 million dollar as compared with 59000.36 million dollar in 2010-11. During 2011-12, the exports were 17902.98 million dollar while the imports stood at 57554.44 million dollar. The provisional trade deficit for 2011-12 was 39651.46 million dollar. The Joint Group on Economic Relations, Trade, Science & Technology was formed in 1988 when then Prime Minister Rajiv Gandhi visited Beijing. India and Belgium on 8 August decided to cooperate in the railway sector. A MoU was signed for this purpose in the presence of visiting Deputy Prime Minister Didier Reynders, who also holds the portfolio of Foreign Affairs, Foreign Trade and European Affairs. Speaking on the occasion, Minister of External Affairs SM Krishna said India wanted to collaborate with Belgium in newer areas, particularly in infrastructure and energy sector, including port development, renewable energy, both solar and wind power. He said his discussions with Mr Reyders touched the entire gamut of their bilateral relations and touched on their cooperation in further strengthening the strategic partnership with the European Union. They took note of the fact that despite global economic slowdown, there was substantial increase in their bilateral trade, which has now crossed the 13 billion Euro mark in 2011. Belgium has now emerged as the second largest trading partner in goods sector within the European Union. On the sidelines of the First India-CELAC Foreign Ministers Troika Meeting in New Delhi on August 7, 2012, Vice Foreign Minister of Cuba ,Mr. Rogelio Sierra Diaz, met with External Affairs of India, S.M. Krishna. During the meeting, both sides reviewed the entire gamut of bilateral relations and expressed satisfaction. Both sides reiterated their desire to sustain and consolidate these relations. Both sides noted that the total bilateral trade of US$ 40 million between India and Cuba did not correspond to the excellent bilateral ties. They emphasized that the trade turnover should be enhanced through concerted efforts and underlined that new opportunities for cooperation existed in the area of trade and investment. The Cuban side appreciated the importance of the role played by the Indian Company OVL (ONGC Videsh Ltd.) in the field of petroleum exploration in Cuba and sought OVLs continued engagement in Cuba in this area. The Indian side reiterated its offer of Lines of Credit announced during the visit of its Minister of External Affairs to Cuba in June 2012. India and Cuba agreed on the need for the reform of the United Nations Organisation. The Indian side appreciated Cubas expression of support to Indias candidature for permanent membership of the United Nations Security Council. Both sides emphasised the continued relevance of the Non-Aligned Movement in the current context of global relations and agreed to work towards the success of the forthcoming NAM Summit in Tehran. India and Cuba expressed appreciation over the importance and significance of the First India-CELAC Troika Ministerial Dialogue and recalled the considerable opportunities available for mutually beneficial cooperation between India and CELAC both in a multilateral manner and bilaterally. The first meeting of the India-CELAC (The Community of Latin American and Caribbean States) Troika foreign ministers was held in New Delhi on 7 August 2012. The Minister of Foreign Affairs of Chile Alfredo Moreno Charme, the pro-tempore President of CELAC, led the CELAC Troika. The Foreign Minister of Venezuela Nicolas Maduro and the Vice Foreign Minister of Cuba, Rogelio Sierra participated in the meeting as members of the Troika. The External Affairs Minister of India, SM Krishna, led the Indian delegation. The meeting was held with the objective of strengthening India-CELAC relationship India and the Community of Latin American and Caribbean countries (CELAC) agreed to work for raising their relationship to the level of Strategic Partnership and having regular Summit Level Meetings in the near future. Pending an agreement on full-fledged Strategic Partnership, both sides agreed to cooperate in diverse sectors like trade and investment, energy, minerals, agriculture, science and technology, culture, education and people-to-people contacts. They agreed to work together on common global challenges in the interest of developing countries by maintaining coordinated approach on UN reforms, financial crisis, climate change and international terrorism. They urged the international community to
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September
India on 17 september, offered a $40 million soft loan to Burundi, a mineral-rich country in eastern Africa, and signed a clutch of pacts in areas of rural development, education, and health and medicine to cement a burgeoning relationship.Prime Minister Manmohan Singh held talks in New Delhi, with Burundi President Pierre Nkurunziza, who is on a three-day visit, on a range of issues including a review of Indias capacity building initiatives in Burundi, deepening trade and investment, and UN reforms.After the talks, the two sides signed the agreements.Underlining Indias commitment to the development of infrastructure in Burundi, Manmohan Singh announced a new line of credit worth over $40 million to Burundi for a farm mechanization and food processing project.This will be addition to the $80 million line of credit for the Kabu hydroelectric project committed earlier.Manmohan Singh also urged the Burundi leader to facilitate Indian investment in agriculture, infrastructure and manufacturing.The two leaders discussed a host of regional and global issues, including the fight against piracy and the need for reforms at the UN Security Council. India and Egypt signed an MoU for cooperation in the field of electoral management and administration on 17 september,in New Delhi. The Election Commission of India and the Supreme Presidential Election Committee of Egypt will henceforth cooperate on initiatives designed to strengthen electoral systems and democratic institutions, besides training of personnel and human resource development. The MoU was signed between India's Chief Election Commissioner V S Sampath and Secretary General of Egypt's Election Committee Hatem Bagato .
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Aiming to improve ties between India and Association of South East Asian Nations (ASEAN), "INS Sudarshini", a sail training ship, began its journey on 28 September, from Chennai on a nine nation voyage. Director General, Naval Projects (V) Vice Admiral V K Namballa flagged off the ship, manned by five officers, 31 sailors, 30 Naval and Coast Guard cadets, from the Chennai Port Trust. During its journey, the ship would call on 13 foreign ports across nine nations to bolster friendship across the seas. The ship would take the ancient route of Indian mariners to South East Asia, it said, adding during its journey, the ship would spend a total of 127 days before berthing back at Kochi on March 29, 2013. India, Palestine against any outside interference in solving Gulf issues: India and Palestine on 11 September, called for resolution of all the developments in the Gulf through dialogue without any outside interference. Visiting Palestine President Mahmoud Abbas and Prime Minister Manmohan Singh exchanged views on regional developments, particularly the developments in the West Asian and the Gulf region. "There is a great degree of similarity in our views. We both agree that the developments in the region must be addressed through political dialogue and peaceful means without recourse to violence and outside interference, while taking into account the legitimate aspirations of all people," Dr Singh said in a statement to the media after holding talks with Mr Abbas. Mr Abbas also expressed the commitment of his nation to resolve issues with Israel through negotiations, while calling upon the neighbour to stop all violence and illegal settlements. He thanked India for its continued support to the Palestinian cause and sought to underline that a "Palestinian state with its East Jerusalem as its capital" was all for living in peace with Israel. Responding to the Prime Minister's call for early resumption of the peace dialogue between Palestine and Israel, Mr Abbas said both the states living in peace and security was the objective his government was aspiring forv India extended a credit of $10 Million aid to Palestine in a gesture of support: Indian Prime Minister Manmohan Singh announced a support of $10 Million to Palestine during a meet with Palestines National Authority President Mahmoud Abbas on 11 September 2012. Palestinian president was here in Indian on a three day visit from 10 to 12 September 2012. Mr. Singh also promised his Palestinian counterpart about Indias backing for their full and equal membership of the U.N. the one that is threatened by US for veto. During the meet, both the sides inked three different agreements comprising information and communication technology, education and vocational training. The agreements were inked in presence of the Indian external Affairs Minister S.M. Krishna and the member of executive committee of Palestinian Liberation Organization (PLO) Dr. Saeb M.S. Erakat. A MoU (Memorandum of Understanding) has been signed up to set up two schools at two districts of
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October
India on 17 september, offered a $40 million soft loan to Burundi, a mineral-rich country in eastern Africa, and signed a clutch of pacts in areas of rural development, education, and health and medicine to cement a burgeoning relationship.Prime Minister Manmohan Singh held talks in New Delhi, with Burundi President Pierre Nkurunziza, who is on a three-day visit, on a range of issues including a review of Indias capacity building initiatives in Burundi, deepening trade and investment, and UN reforms.After the talks, the two sides signed the agreements.Underlining Indias commitment to the development of infrastructure in Burundi, Manmohan Singh announced a new line of credit worth over $40 million to Burundi for a farm mechanization and food processing project.This will be addition to the $80 million line of credit for the Kabu hydroelectric project committed earlier.Manmohan Singh also urged the Burundi leader to facilitate Indian investment in agriculture, infrastructure and manufacturing.The two leaders discussed a host of regional and global issues, including the fight against piracy and the need for reforms at the UN Security Council. India and Egypt signed an MoU for cooperation in the field of electoral management and administration on 17 september,in New Delhi. The Election Commission of India and the Supreme Presidential Election Committee of Egypt will henceforth cooperate on initiatives designed to strengthen electoral systems and democratic institutions, besides training of personnel and human resource development. The MoU was signed between India's Chief Election Commissioner V S Sampath and Secretary General of Egypt's Election Committee Hatem Bagato . Sampath said Egypt has evinced keen interest in the use of electronic voting machines and India's voter education programme and techniques used for cracking election frauds. India and Burundi signed 3 Major Agreements and issued a Joint Statement: President of the Republic of Burundi visited India from 17 to 19 September 2012. During this visit, India and Burundi signed three agreements-(i) Exchange Programme for Cooperation in the field of Education, (ii) Memorandum of Understanding on Cooperation in the field of Rural Development and (iii) Memorandum of Understanding on Cooperation in the field of Health and Medicine. Besides, India also announced a Line of Credit of 42.38 million US dollars for Farm Mechanisation and Integrated Food Processing Complex in Burundi. India and Burundi issued a joint statement on that occasion. The major highlights of the joint statement are as following: India and Burundi agreed to further enhance the bilateral cooperation in view of the considerable untapped potential. Burundi thanked India for approval of a concessional line of credit of 80 million US dollars for the Kabu 16 Hydro-electric project. Both nations agreed to continue strengthening cooperation in the areas of economy, trade and investment, finance, human resource development, culture, etc. while striving to expand cooperation into other potential areas such as agriculture, food processing, ICT, science & technology, health, mining etc. Burundi conveyed its support for Indias candidature for Permanent Membership in an expanded United Nations Security Council.
Aiming to improve ties between India and Association of South East Asian Nations (ASEAN), "INS Sudarshini", a sail training ship, began its journey on 28 September, from Chennai on a nine nation voyage. Director General, Naval Projects (V) Vice Admiral V K Namballa flagged off the ship, manned by five officers, 31 sailors, 30 Naval and Coast Guard cadets, from the Chennai Port Trust. During its journey, the ship would call on 13 foreign ports across nine nations to bolster friendship across the seas. The ship would take the ancient route of Indian mariners to South East Asia, it said, adding during its journey, the ship would spend a total of 127 days before berthing back at Kochi on March 29, 2013. India, Palestine against any outside interference in solving Gulf issues: India and Palestine on 11 September, called for resolution of all the developments in the Gulf through dialogue without any outside interference. Visiting Palestine President Mahmoud Abbas and Prime Minister Manmohan Singh exchanged views on regional developments, particularly the developments in the West Asian and the Gulf
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November
India and Libya on 30 November signed a Memorandum of Understanding (MoU) in New Delhi, for cooperation in the field of election management and administration, with Libyan Election Commission seeking training and electoral assistance from Election Commission of India. The MoU was signed by the Chief Election Commissioner of India, V.S. Sampath and the Deputy Chairman of the High National Election Commission of Libya, Mr. Najeeb Abdessalam Mohammed Arrabiti. The major aims of MoU are: promotion of exchanges of knowledge and experience in electoral processes; exchange of information, materials, expertise and training of personnel; production and distribution of materials pertaining to electoral systems, voting technology, voters education and awareness, and participation of women and minorities in electoral process. Election Commission of India has so far signed sixteen MOUs with Election Management Bodies and international organizations across the world. Some of the MoU signed recently are with Egypt, Venezuela, Republic of Korea and UNDP. A social security agreement between India and Sweden was signed in New Delhi on 26 November. The agreement was signed by Vayalar Ravi, Union Minister of Overseas Indian Affairs from the Indian side and Mr. Ulf Kristersson, Minister for Social Security of Sweden from Swedish side. Speaking on the occasion, Ravi said this agreement will help both the countries in more investment and work opportunities for nationals of India and Sweden. The Minister said this agreement will encourage more and more Indians to go to Sweden for employment opportunities. Mr. Kristersson said that 156 Swedish companies are operating in India and expressed the hope that this agreement will encourage Swedish people to come in large numbers to India. He said, India is the first Asian countries with which Sweden has signed this type of agreement. The Social Security Agreement will enhance cooperation on social security between the two countries. The Agreement will provide following benefits to Indian nationals working in Sweden: a) For short term contract up to two years, no social contribution would need to be paid under the Swedish law by the detached workers provided they continue to make social security payment in India. b) The above benefits shall be available even when the Indian company sends its employees to Sweden from a third country. c) Indian workers shall be entitled to the export of the social security benefit if they relocate to India after the completion of their service in Sweden. d) The self-employed Indians in Sweden would also be entitled to export of social security benefit of their relocation to India. There are about 18,000 Overseas Indians in Sweden, most of whom are working as professional and selfemployed. However, there is a huge potential for Indian workers to take employment in Sweden owing to the huge labour supply gap in the market. As such, a bilateral Social Security Agreement with Sweden is a significant requirement from the futuristic point of view to take advantage of the emerging employment opportunities and to strengthen the trade and investment between the two countries. India has singed similar
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December
Defence deals worth around $4 billion (Rs 22,000 crore) were among 10 key pacts inked on 24 December, between India and Russia after comprehensive talks including on differences over $3 billion investment by Russian telecom major Sistema, whose license was cancelled. Visited Russian President Vladimir Putin and Prime Minister Manmohan Singh undertook an extensive review of bilateral cooperation, especially in the field of nuclear energy and discussed ways to expedite an agreement for nuclear reactor 3 and 4 at Kudankulam. All key bilateral issues, including defence, space, trade and investment, science and technology, education, culture and tourism were discussed in the meeting which also witnessed Russians raising their concerns over the issue of Sistema.Sistema, with investment of $3.1 billion, has 56.68% stake in Shyam Sistema Teleservices (SSTL) whose 21 out of 22 licences were cancelled by the Supreme Court on February 2 as irregularities were found in their allocation. About their discussions on regional and international issues, P.M Manmohan Singh said, "India and Russia share the objective of a stable, united, democratic and prosperous Afghanistan, free from extremism, terrorism and external interference. We reviewed the ongoing developments in Afghanistan, and agreed to work together against threats posed by extremist ideologies and drug trafficking. "The pacts include Foreign Office consultations protocol, cultural exchanges, science, technology and innovation, telecommunications; financing of projects and promoting investments which envisages investments up to $2 billion in important bilateral projects or companies, privatisation and other opportunities. The defence deals include contract for delivery of 71 Mi -17V5 helicopters and contract for delivery of 42 technological kits for SU-30MKI aircraft licenced production. The leaders also expressed satisfaction at the improved bilateral trade during 2011 and 2012 and agreed to enhance efforts to achieve the target of $20 billion bilateral trade by 2015. India welcomed Russia's recent accession to the WTO and both sides agreed that it provided further opportunities to augment bilateral trade and investment and business-to- business linkages. The much awaited Free Trade Agreement (FTA) in investments and services was finalised between India and Association of Southeast Asian Nations (ASEAN) on 20 December 2012. The actions would be beneficial in
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February
The Reserve Bank of India (RBI) panel on priority sector lending headed by M. V. Nair, Chairman, Union Bank of India ,on 21 February 2012 proposed increment in the target (priority sector) for foreign banks to 40% of net bank credit from the current level of 32 per cent with sub-targets of 15 per cent for exports and 15 per cent for the MSE sector. The target of domestic scheduled commercial banks for lending to the priority sector is to be retained at 40 per cent of net bank credit.
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March
The R B I on 26 March 2012 restructured the fair practices code (FPC) to be adopted by non-banking finance companies (NBFCs) while doing lending business. The guidelines issued by the central bank covered general principles on adequate disclosures on the terms and conditions of a loan and also adopting a non-coercive recovery method. The modified FPC is required to be put in place by all NBFCs with the approval of their boards within one month from the date of issue of this circular (26 March 2012). Also RBI directed that the FPC should be published on the web-site of the company for public information. The NBFCs were directed not to resort to undue harassment such as persistently bothering the borrowers at odd hours and use of muscle power with respect to loan recovery. In 2006, the RBI had issued FPC norms for all NBFCs to be adopted by them while doing the lending business Four States namely Jharkhand, Mizoram, Sikkim and Lakshadweep on 16 March 2012 signed MoU with the Ministry of Statistics and Programme Implementation under the Indian Statistical Strengthening Project (ISSP) for the States and Union Territories. ISSP is aimed at strengthening State Statistical Systems by way of providing adequate technical and financial support to improve their statistical capacity and infrastructure. ISSP is a very important and a comprehensive project of Ministry of Statistics & Programme Implementation, with an approved outlay of about 650 crore rupees, out of which 80% has been funded through World Bank Loan and 20 percent is being borne by the Government of India. Union Railway Minister Mukul Roy rolled back the railway fare hike as proposed by Dinesh Trivedi in the first Union Rail Budget 2012-13 presented on 14 March 2012. Roy also struck down the plan to restructure Railway Board. The hike announced by Roys predecessor Trivedi was the first instance in 9 years when the fares had been raised. All railway reform measures suggested by Trivedi such as setting up of an independent tariff regulator, restructuring of Railway Board on professional lines, and creation of posts of Member PPP and Member Safety was also ignored in the latest budget tabled by Roy. Finance Minister Pranab Mukherjee presented the Economy Survey report 2011-12 in Lok Sabha on 15 March. Following are the highlights of the economic survey1. The country's economic growth estimated at 6.9 per cent in the current fiscal; growth momentum to pick up in next two fiscals to 7.6 per cent in 2012-13 and 8.6 per cent in 2013-14. 2. RBI expected to lower policy interest rates, as inflationary pressures expected to ease in coming months; A low interest rate regime to encourage investment activity and push forward economic growth. 3. Steps required for deepening of domestic financial markets, especially corporate bond market and attracting longer-term inflows from abroad; Efforts at attracting dedicated infrastructure funds have begun. 4. The growth rate of investment in the economy is estimated to have declined significantly; borrowing costs up due to a sharp increase in interest rates. 5. Slowdown in Indian economy largely due to global factors, as also because of domestic factors like tightening of monetary policy, high inflation and slower investment and industrial activities. 6. Inflation high, but showing clear signs of slowdown by the year-end; Whole-sale food inflation down to 1.6 per cent in January 2012 from 20.2 per cent in February 2010. 7. India remains one of the fastest growing economies of the world; Country's sovereign credit rating rose by a substantial 2.98 per cent 2007-12 8. Farm sector growth pegged at 2.5 percent for 2011-12. 9. Services sector to grow at 9.4 percent. 10. Services sector share in GDP to go up to 59 percent in the fiscal ending March 31. 11. Industrial growth pegged at 4-5 percent, expected to improve as economic recovery resumes. 12. Calibrated steps initiated to rein-in inflation on top priority. 13. Fiscal consolidation on track - savings and capital formation expected to rise. 14. Exports grew by 40.5 percent in the first half of this fiscal and imports grew by 30.4 percent. 15. Foreign trade performance to remain a key driver of growth. 16. Forex reserves enhanced - covering nearly the entire external debt stock. 17. Central spending on social services goes up to 18.5 percent this fiscal from 13.4 percent in 2006-07.
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April
The International Monetary Fund (IMF) on 27 April 2012 lowered Indias growth projection to 6.9 per cent for 2012. The multilateral agency in January projected Indian economy to grow to by 7 per cent for 2012. The slashed growth projection is broadly attributed to the countrys poor performance on the front of economic reforms and slowing investment. Standard & Poor's downgraded credit rating outlook for India to negative from stable on 25 April 2012. The cut in credit rating is the reflection of India's widening fiscal and current account deficits. Indias fiscal deficit widened to 5.9% of gross domestic product in the fiscal year 2011-12, which is higher than the government's target of 4.6%. The country is performing equally bad on the front of foreign institutional investment as it witnessed a sharp decline in the FII over the past few months. India has drawn nearly 171.8 million dollar FII so far in April 2012 against more than 5 billion dollar in February 2012.The credit rating
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May
The Central Government announced the setting up of a five-member technical group under the Chairmanship of Dr C Rangarajan, Chairman of the Prime Minister's Economic Advisory Council, to revisit poverty estimates, methodologies and identification of the poor. The committee made a comprehensively review of the existing methodology of estimation of poverty and examine if the poverty line should be fixed solely in terms of consumption basket or whether other criteria were also relevant. The Union government on 30 May 2012 announced the constitution of a committee under the chairmanship of Prime Minister's Economic Advisory Councils (PMEAC) chairman C. Rangarajan to review the existing production sharing contracts (PSCs). The PSCs are to be reviewed in the backdrop of the recent spat between Reliance Industries Ltd. (RIL) and the Petroleum Ministry. The review followed the Comptroller and Auditor Generals (CAG) draft report that had asked the Petroleum Ministry to carry out a comprehensive review of the PSCs to protect the interests of the Government. The committee will look into the structure and elements of the guidelines for determining the basis or formula for the price of domestically produced gas, and for monitoring actual price fixation as well as for any other issues relating to PSCs. It will rewrite some of the terms in the PSCs signed for exploration and production of oil and gas.
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According to data released by Ministry of Statistics of India on 1 June 2012, Bihar emerged as the state with highest economic growth rate in the country. The state recorded an impressive 13.1 per cent growth in 201112. Bihar topped the list for second consecutive year. The state was closely followed by Delhi and Puducherry. The Union cabinet on 31 May 2012 approved a new telecom policy 2012 which seeks to do away with roaming charges across the country. The new policy called National Telecom Policy-2012 will replace more than decade old legislation. The new Telecom Policy also simplifies the licencing policy.It also seeks to provide a predictable and stable policy regime for a period of nearly 10 years. Some of the New Telecom Policy-2012 Highlights are1) Increase rural teledensity from the current level of around 39 to 70 by the year 2017 and 100 by the year 2020 2) Repositioning of Mobile phone as an instrument of empowerment 3) Broadband -"'Broadband For All" at a minimum download speed of 2 Mbps 4) Domestic Manufacturing - Making India a global hub The Competition Commission of India (CCI) formed an Eminent Persons Advisory Group (EPAG) on 7 May 2012. The group is constituted to give advice to CCI, on issues impacting markets and competition. The group comprise Infosys founder N.R. Narayana Murthy, former Comptroller and Auditor General V.N. Kaul, former Deputy Governor of Reserve Bank of India Rakesh Mohan, Biocon Chairman and MD Kiran Mazumdar-Shaw, former Director, of IIM-Ahmedabad Bakul Dholakia, former Chairman of CERC S.L Rao, former Vice-Chancellor of NLSIU, Bangalore N.L Mitra. The Group will have interaction/meetings with the Commission two to three times a year. Goa gained top rank with highest per capita income in the country with a total per capita income of 192652 rupees in 2011-12. The national average was estimated at 38005 rupees in 2011-12 against 35993 rupees in 2010-11.Delhi has the second position with a total per capita income of 1.75 lakh rupees. Haryana with per capita income of 109227 rupees positioned third. The estimates were prepared as per methodology prescribed by the Central Statistical Organisation based on provisional data provided by it.
June
Indian Rupee plunged to an all time low of 56.90 rupees against the US dollar on 22 June 2012 on global risk aversion and demand for dollar. Indias slipping domestic growth, declining industrial output figure, RBIs stringent monetary policy stance, persistent high rate of inflation and credit rating downgrade by international rating agencies like Fitch and Standard and Poors have prompted the worsening of Indian rupee against the dollar. Rupee, given its current trading status, is proving to be Asia's worst performing currency. The currency has also been the poorest performer among the all-Asian currencies this week, on a 5-day basis. So far, the Indian currency had tumbled 6.7 per cent in the year 2012. International credit rating agency Fitch revised the credit outlook of India to negative on 18 June 2012. The agency cited rampant corruption and stalled reform existing in the country as the reason behind the move to downgrade the country's credit rating. The rating agency maintained the India's sovereign rating at 'BBB'.However, The Union Finance Ministry rejected the agencys rating and pointed out that foreign institutional investors (FII) have reposed their faith in the Indian economy and have already invested a net 12.3 billion dollar in the first five months of the calendar year 2012 compared to 8.3 billion dollar in the full calendar year of 2011.Another credit rating agency Standard & Poor's had also revised the Indias credit outlook to negative in April 2012. S&Ps in its most recent report on Indias credit outlook released on 12 June 2012 had warned that given its sluggish growth rate and stalled economic policy reforms, India could be the first among the BRIC grouping nations to lose investment-grade rating. The World Bank in its report named Global Economic Prospects released on 12 June 2012, projected Indian economy to grow by 6.9% in the financial year 2012-13. The World Bank report predicted Indias growth
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July
The Reserve Bank of India (RBI), on 31 July, kept the key indicative policy rates unchanged while it cut the gross domestic product (GDP) forecast for the current financial year from 7.3 per cent to 6.5 per cent and raised the inflation forecast from 6.5 per cent to 7 per cent. However, the RBI cut the Statutory Liquidity Ratio (SLR) by one percentage point from 24 per cent to 23 per cent which is expected to provide liquidity of around Rs.60,000 crore. The RBI left interest rates unchanged for the second straight review. It kept the Repo rate unchanged at 8 per cent, and the Cash Reserve Ratio (CRR) at 4.75 per cent. Repo rate is the rate at which banks borrow money from the central bank. CRR is the portion of deposits banks have to keep with the central bank in cash. However, in a move to provide more liquidity in the system, the central bank has reduced the Statutory Liquidity Ratio (SLR) from 24 per cent to 23 per cent with effect from August 11. SLR is the amount of liquid assets or securities that commercial banks must maintain as reserves other than the cash. After constituting the Parthasarathi Shome committee in the first week of July to look into the controversial GAAR (General Anti-Avoidance Rules) provisions and address the thorny issues to the satisfaction of foreign investors and all other stakeholders, Prime Minister Manmohan Singh, on 30 July, set up yet another panel to bring about clarity on taxation matters pertaining to development centres and the IT sector. In this regard, the Prime Ministers Office (PMO) said that a four-member panel headed by former CBDT (Central Board of Direct Taxes) Chairman N. Rangachary would hold consultations with stakeholders and government departments concerned to finalise the approach to taxation of Development Centres and suggest appropriate measures.Incidentally, Mr. Rangachary is also a member of the expert committee on GAAR headed by Dr. Shome. SEBI tightened Eligibility & Exit Criteria for Stocks in Derivatives Segment: The market regulator, Securities and Exchange Board of India (SEBI) on 23 July 2012 tightened eligibility and exit criteria for stocks in the derivatives segment by increasing the benchmark liquidity level for any scrip to be eligible for trading in
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August
The Supreme Court on 31 August, held that the economic offences committed by Saharas must be dealt with by an iron hand and directed the Sahara India Real Estate Corporation Ltd. (SIRECL) and the Sahara Housing Investment Corporation Ltd. (SHICL) to refund over Rs. 24,400 crore collected from 2.21 crore depositors through the optimally fully convertible debentures (OFCDs) by way of bonds. A Bench of Justices K.S. Radhakrishnan and J.S. Khehar said they should refund the amounts collected through Red Herring Prospectus (RHPs) dated March 13, 2008 (Rs. 17,400 crore) and October 16, 2009 (over Rs. 7,000 crore), along with 15 per cent interest to the Securities and Exchange Board of India (SEBI) from the date of receipt of the subscription amount till the date of repayment, within three months. The sum should be deposited in a nationalised bank bearing the maximum rate of interest. In its common order, the Bench directed Saharas to furnish the SEBI, in 10 days, with all documents in their custody, especially the application forms submitted by subscribers, the approval and allotment of bonds, to enable it to ascertain the genuineness of the subscribers as well as the amounts deposited. The court appointed the retired Supreme Court judge, B.N. Agrawal, to oversee whether directions issued by this court are properly and effectively complied with by the SEBI (WTM) from the date of this order. Mr. Justice B.N. Agarwal would also oversee the entire steps adopted by the SEBI (WTM) and other officials for the effective and proper implementation of the directions issued by this court. GAIL (India) and GDF SUEZ of France, on 27 August, announced that they had entered into a mediumterm LNG supply agreement for supply of 12 cargoes from 2013 to 2014, representing a total of 0.8 million tones. This agreement will contribute to supply the Indian gas market, which is expected to grow from 58 billion cubic meters in 2012 to 220 cubic meters in 2020, representing a CAGR of over 18 per cent. The agreement was signed in Paris. B.C. Tripathi, chairman and managing director, GAIL said that, this agreement with GDF SUEZ is yet another step by GAIL to bridge the demand-supply deficit of the Indian market in the medium-term. This is in addition to other initiatives of GAIL towards LNG sourcing, creating LNG regasification infrastructure and augmenting transmission capacity significantly during the next two to three years. The Confederation of Indian Industry (CII) held the eleventh Energy Efficient Summit in HICC, Novotel Hyderabad. The summit was held between 22 August 2012 to 25 August 2012. The objective of the summit was to facilitate the Indian industry to improve energy efficiency on a continuous basis and help them in achieving the target set as part of Perform Achieve and Trade under the National Mission on Enhanced Energy Efficiency. The other objective was also to disseminate information on the latest trends and energy efficient technologies and facilitate sharing of best practices amongst the Industries. In addition, while the summit was
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