United Nations Conference on Trade and Development (UNCTAD)

 

 

UNO declared 1960-70 as the development decade. In 1961 UNO attempted to increase the income of developing countries with the growth rate of 5% p.a. during that development decade. In July 1960 a conference of developing countries was held at Cairo which resolved to convene a world conference for this purpose. Economic and Social Council of UNO organise a World Trade and Development Conference from March 31, 1964 to July 16, 1964. A worldwide International Trade Policy was determined in this conference. Various issues related to extension of international trade of developing countries were also discussed in that conference. The conference came to be known as UNCTAD-I.

Presently, UNCTAD has become a permanent organisation for promoting international trade with its head quarter at Geneva (Switzerland), Mr. Allec Irwin is its present Chairman. Generally, UNCTAD has its session after four years. IMF has got the permanent representation in all its bodies. This is reason why IMF includes all UNCTAD proposals in its policies. UNCTAD recommendations are only suggestions and no country can be compelled to accept them.

 

The details of various UNCTAD are as follows:

UNCTAD I	Cairo	Mar 31 - June 16, 1964
UNCTAD II	New Delhi	Feb - March 1968
UNCTAD III	Santiago (Chile)	April - May 1972
UNCTAD IV	Nairobi (Africa)	May 1976
UNCTAD V	Manila (Philippines)	May 7 - June 2, 1979
UNCTAD VI	Belgrade (Yugoslavia)	June 6 - July 3, 1983
UNCTAD VII	Geneva (Switzerland)	1987
UNCTAD VIII	Cartegina DE Indias (Columbia)	1992
UNCTAD IX	Midrand (Africa)	April 27 - May 11, 1996
UNCTAD X	Bangkok (Thailand)	Feb 12 - Feb 19, 2000
UNCTAD XI	Sao-Paulo (Brazil)	June 13 - June 18, 2004
UNCTAD XII	Accra (Ghana)	April 20 - April 25, 2008

Objectives of UNCTAD

1. To promote international trade specially with the view to accelerating the economic development of underdeveloped countries.
2. To determine policies and principles for international trade and economic development.
3. To propose the strategy for implementing pre-approved principles and policies.
4. To assist Economic and Social Council of the UNO.
5. To provide a suitable platform for trade dialogues.

Members of UNCTAD

Though UNCTAD is functioning as a permanent agency of the UNO, but its membership is fully optional. Any country may join or quit UNCTAD. 

The functioning of UNCTAD on democratic principles every member has only one voting right. For general disputes, simple majority among present members but two third majority is needed for important issues.

World Habitat Day-2011 to be Celebrated on 3rd October

The United Nations has designated the first Monday in October each year as the World Habitat Day. The idea is to reflect on the state of human settlements and the necessity of adequate shelter for all. It is also intended to remind the world of its collective responsibility for the future of human habitat.

For this year’s celebrations UN-HABITAT has chosen the theme “Cities and Climate Change” because climate change is fast becoming the preeminent development challenge of the 21st century. Indeed, no-one today can really foresee the predicament in which a town or city will find itself in 10, 20 or 30 years time. In this new urban era with most of humanity now living in towns and cities, one must bear in mind that the greatest impacts of disasters resulting from climate change begin and end in cities. Cities too have a great influence on climate change. This gives us a compelling set of opportunities because cities with their people, industries, seats of learning, culture and infrastructure can provide the best solutions when it comes to reducing greenhouse gas emissions, improving coping mechanisms and reducing vulnerability to the impacts of climate disruption.

The Ministry of Housing & Urban Poverty Alleviation is organizing celebrations at National Bal Bhawan, New Delhi on 3rd October, 2011 to commemorate the Day.

Minister of Housing & Urban Poverty Alleviation and Culture Kumari Selja would deliver the World Habitat Day Address on the occasion.

Secretaries in the States / UTs dealing with Housing and Human Settlement, Mayors / Municipal Commissioners and other Dignitaries will also be present during the celebrations.

Setting up of a new Central Procurement Agency

The Union Cabinet has approved the proposal for setting up of Central Procurement Agency (CPA) for Department of Health & Family Welfare ( DoHFW), Ministry of Health & Family Welfare (MoHFW).

The Cabinet has also approved the following :

a) Creation of a fully autonomous CPA in DoHFW as a Society under the Societies Registration Act, 1860 for efficient procurement and distribution of health sector goods.

b) One-time budgetary support of Rs. 50 crore to enable establishment of CPA. Thereafter, CPA will charge service fee, which will be well within the overall ceiling of 5% of the value of procurement, to meet its subsequent operational expenses.

c) Creation of one post of the Chief Executive Officer for CPA of the rank of the Joint Secretary to Govt. of India.

The Cabinet`s approval would enable MoHFW to efficiently procure and properly distribute quality medicines, vaccines, contraceptives and medical equipment. to the State/Union Territory Governments and also eliminate shortages and wastages resulting in considerable savings to the Government.

Background:

DoHFW is procuring drugs, vaccines, contraceptives and medical equipment for its various disease control programmes departmentally and through Procurement Agents. However, certain deficiencies, such as, inadequate professional procurement expertise, absence of supply chain management system, manual collection of data and absence of any credible Management Information System (MIS) have been adversely affecting the procurement. Therefore, a professional, autonomous and efficient organization is being established to eliminate these deficiencies and streamline the procurement system.

Delhi Ministerial Dialogue on Green Economy and Inclusive Growth

The 2011 Delhi Ministerial Dialogue on ‘Green Economy and Inclusive Growth’ will begin New Delhi  from October 03. The Government of India and the United Nations Conference on Sustainable Development (UNCSD Secretariat are jointly hosting it. The Delhi Dialogue aims to support the preparations for Rio+20 by providing a platform for international deliberations on opportunities for a green economy to reinforce countries’ poverty eradication and social development agendas, including enhancing food security and energy security of the poor. It is expected that a shared vision on these issues would be the main outcome of this Dialogue.

The Delhi Dialogue is a step forward in preparations for the UNCSD, also known as Rio+20, scheduled to take place in June 2012 in Rio de Janeiro, Brazil. It aims to provide a platform for international deliberations on the integration of green economy architecture and global challenges of poverty eradication, food security, and energy security. Eradicating poverty is an indispensible requirement for sustainable development. A major cause aggravating poverty is the unsustainable pattern of consumption and production. The Delhi Dialogue will be an opportunity for high level government officials and UN agencies to explore in depth the linkages of a green economy for poverty eradication and broad-based, inclusive growth. Integrating green economy strategies and policies into poverty eradication, food security and energy security is an imperative for sustainable development. The issues to be addressed include sustainable management of sectors like agriculture, industry, energy and transport, urgent adoption of sustainable lifestyles and consumption patterns through reduction in per capita ecological footprint, appropriate population policies, equity concerns, poverty eradication and developmental imperatives.

Government officials and delegates from 54 countries and 12 UN agencies are expected to attend it. Smt. Jayanthi Natarajan, Minister of State for Environment and Forests (I/C) and Shri Vilas Rao Deshmukh, Minister for Science and Technology and Earth Sciences, along with Mr Sha Zukang, Secretary General, UNCSD will address the delegates at the inaugural. It is also expected that Dr. Maurice Strong, Dr. Martin Khor, Executive Director, South Centre, Mr. Steven Stone, Dr. R K Pachauri, Director General, TERI, Dr. M S Swaminathan, Chairman, MS Swaminathan Research Foundation (MSSRF), Dr. Ashok Khosla, President, International Union for Conservation of Nature (IUCN), Dr. Kirit Parikh, former member, Planning Commission, and other international speakers will address the conference.

Setting up of six new National Institutes of Pharmaceutical Education and Research

The Union Cabinet September 30 approved the establishment of six new National Institutes of Pharmaceutical Education and Research (NIPERs) at Gandhinagar, Hyderabad, Kolkata, Hajipur, Guwahati and Rae Bareli at an estimated cost of Rs.633.15 crore.

This will facilitate the establishment of full fledged NIPER Campuses at these places for imparting higher PG level education as well as undertake R&D projects. This will help in meeting the requirement of highly skilled manpower of the pharmaceutical industry, and focus on R&D.

The Government set up NIPER, an Institute of National Importance at Mohali under NIPER Act, 1998. However, in view of the increased requirement of highly skilled manpower for the pharmaceutical industry, the Government, in principle, decided to set up six new NIPERs at Ahmedabad, Hyderabad, Kolkata, Hajipur, Guwahati and Rae Bareli. Accordingly, post graduate courses in pharmaceutical Sciences were commenced at Ahmedabad, Hyderabad, Kolkata and Hajipur from the academic session of 2007-08 with the help of Mentor Institutes. PG courses at Guwahati and Rae Bareli were started with the help of Mentor Institutes from 2008.

Establishment of Borlaug Institute for South Asia (BISA)

The Union Cabinet September 30 approved the proposal of Ministry of Agriculture, Department of Agricultural Research and Education to accept the proposal of International Maize and Wheat Improvement Centre (CIMMYT) to establish an international institute, namely, Borlaug Institute for South Asia (BISA) in India with centres at Ludhiana in Punjab, Pusa in Bihar and Jabalpur in Madhya Pradesh.

CIMMYT is authorised to establish BISA at three centres- one each at Punjab, Bihar and Madhya Pradesh. BISA will be conferred an international status as contemplated in clause 3 of United Nations (Privileges and Immunities) Act, 1947. The Department of Agricultural Research and Education (DARE) on behalf of Government of India will be authorised in all matters regarding establishment of the institute. DARE will be authorised to conclude the agreement/MOU between the Government of India in the DARE and CIMMYT.

The establishment of BISA in India will enable India to harness the best of international science, in meeting food security challenges. India would be able to rapidly and effectively absorb the research output of BISA thus benefiting farmers of the country. A major International R&D institution will make India even a bigger centre for agricultural research in the world and this, in turn, may attract further research & development investment in the country.

Cabinet Committee on Infrastructure

The Cabinet Committee on Infrastructure September 30 approved the implementation of the project of four laning of Lucknow Sultanpur section from Km 11.500 to Km 134.700 (total 125.900 km) on National Highway-56 in Uttar Pradesh under NHDP Phase-IV A to be executed in BOT (Toll) mode on DBFOT basis. The total cost of the project will Rs.1092.60 crore inclusive of Rs.49.09 crore as approximate cost of land acquisition, relief and rehabilitation and pre-construction activities.

The main object of the project is to expedite the improvement of infrastructure in the State of Uttar Pradesh and also in reducing the time and cost of travel for traffic, particularly heavy traffic, plying between Lucknow and Sultanpur. The NH-56 is an important link connecting Lucknow, Sultanpur and other towns in eastern part of Uttar Pradesh. It will also increase the employment potential for the local labourers.

The project will be covered in the districts of Lucknow, Barabanki, Raibareilly and Sultanpur.

Banks see huge fall in requests for demand drafts

The Demand Draft (DD), a popular financial instrument for transfer of funds or payment till recently, is losing its sheen.

Banks are seeing a significant dip in the requests for issue of DDs, thanks to use of electronic mode of transfer and net-banking facilities.“The issue of DDs in banks is showing a 50 per cent decrease of late.

The use of DDs were inevitable till three-four years ago for payment of fees for recruitment tests, academic exams and Government transactions.

“On an average, a bank branch used to issue 300-500 DDs a day earlier. Almost all major recruiters such as Public Service Commissions, banks and some academic institutions have now switched over to online payments making the DDs almost obsolete.

The expanded use of National Electronic Fund Transfer (NEFT) and Real Time Gross Settlement (RTGS) also made DDs less popular.

“Many businessmen are using the electronic mode now as it is faster. There is no blocking of funds. Clearance of DDs may take up to 10 days in some cases,''

Then, there is also a cost factor. The RBI had advised banks to reduce commission on DDs as early as 2007 though commission/service charges continue to be on the ‘higher' side, according to experts.

As of now, commission for issue of DD up to Rs 10,000 is around Rs 50. For Rs 1 lakh it is upwards of Rs 400. Banks are not forthcoming to share exact numbers on the dip in overall revenue due to decreased demand for DDs.

Reserve Bank of India

 

 

It is the Central Bank of the country. The Reserve Bank of India was established in 1935 with a capital of Rs. 5 crore. This capital of Rs. 5 crore was divided into 5 lakh equity shares of 100 each. In the beginning the ownership of almost all the share capital was with the non-government share holders. In order to prevent the centralisation of equity shares in hand of a few people The Reserve Bank of India was nationalised on January 1, 1949.

The general administration and direction of RBI is managed by a Central Board of Directors consiting of 20 members which includes one Governor, four Deputy Governors, one Government Official appointed by the Union Government of India to give representation to important strata in economic life of the country besides four directors are nominated by the Union Government to represent local boards. Apart from the central board there are four local boards also and their head offices are situated in Mumbai, Chennai, Kolkata and New Delhi. Five members of local boards are appointed by the Union Government for a period of four years. The local boards work according to the instructions and orders given by Board of Directors, and from time to time they also tender useful advice on important matter. The office of RBI is in Mumbai. At present Dr. D. Subbarao is the Governor of Reserve Bank of India.

Functions of Reserve Bank of India

1. Issue of Notes - The Reserve Bank has the monopoly of note issue in the country it has the sole right to issue currency notes of various denominations except one rupees notes. The Reserve Bank act as a only source of legal tender money because the one rupee note issued by the Ministry of Finance are also circulated through it. The Reserve Bank has adopted the Minimum Reserve System for note issue. Since 1957, it maintains the gold and foreign reserve of Rs. 200 crore, of which at least Rs. 115 crore should be in gold.
2. Banker to the Government - The second important function of the Reserve Bank of India is to act as the banker, agent, and adviser to the Government. It performs all the banking functions of the State and the Central Government and it also tenders useful advice to the Government on matters related to economic and monetary policy. It also manages the public debt for the Government.
3. Bankers' Bank - The Reserve Bank performs the same function for the other banks ordinarily perform for their customers. It is not only banker to the commercial bank, but it is the lender of the last resort.
4. Controller of Credit - The Reserve Bank undertakes the responsibility of controlling credit created by the commercial banks. To achieve this objective it makes extensive use of quantitative and qualitative techniques to control and regulate the credit effectively in the country.
5. Custodian of Foreign Reserves - For the purpose of keeping the foreign exchange rates stable the Reserve Bank buy and sells the foreign currencies and also protect the country's foreign exchange funds.
6. Other Functions - The bank performs a number of other developmental works. These works include the function of clearing house arranging  credit for agriculture (which has been transferred to NABARD), collecting and publishing the economic data, buying and selling of Government Securities and Trade Bill, giving loans to the Government, buying and selling of valuable commodities etc. It also act as representative of Government in IMF and represents the membership of India.

Development of Indian Banking

 

 

In order to make the Reserve Bank of India more Powerful, the Government of India nationalised it on January 1, 1949. With a view to have the coordinated regulation of Indian banking. the Indian Banking Act was passed in 1949. According to this Act, the Reserve Bank of India was granted extended powers for the inspection of non-scheduled banks. For the development of the banking facilities in the rural areas the Imperial Bank of India was partially nationalised on July 1, 1955 and it was renamed as the State Bank of India. Along with it other 8 (at present 5) banks were converted as its associate banks which form what is named as the State Bank Group. They are as follows -

1.  The State Bank of Bikaner and Jaipur (in the beginning State Bank of Bikaner and State Bank of Jaipur were merged and named as the Stat Bank of Bikaner and Jaipur)
2. The State Bank of Hyderabad
3. The State Bank of Indore (merged with SBI)
4. The State Bank of Mysore
5. The State Bank of Saurashtra (merged with SBI)
6. The State Bank of Patiala
7. The State Bank of Travancore

In order to have more control over banks, 14 large commercial banks whose reserves were more than Rs. 50 crore each were nationalised on July 19, 1969. The nationalised banks are as follows -

1. The Central Bank of India
2. Bank of India
3. Punjab National Bank
4. Canara Bank
5. United Commercial Bank
6. Syndicate Bank
7. Bank of Baroda
8. United Bank of India
9. Union Bank of India
10. Dena Bank
11. Allahabad Bank
12. Indian Bank
13. Indian Overseas Bank
14. Bank of Maharashtra

After a decade, on April 15, 1980, those 6 private sector banks whose reserves were more than Rs. 200 crore each were nationalised. These banks are -

Andhra Bank

1. Punjab and Sindh Bank
2. New Bank of India
3. Vijaya Bank
4. Corporation Bank
5. Oriental Bank of Commerce 

On Septemeber 4, 1993 the Government merged the New Bank of India with Punjab National Bank and a result of this the total number of nationalised banks reduced from 20 to 19.

With the transition of the national economy to a higher growth trajectory, the provision of adequate and timely availability of bank credit to the productive sectors of the economy has acquired importance. As public sector banks still own about 71 percent of the assets of the banking system they continue to play an important role in responding to the change in economic environment. As the banking regulator and supervisor and as a monetary policy authority, the Reserve Bank of India (RBI) continues to guide the banking system, including foreign, private sectors and public sector banks, to meet emerging economic challenges.

As certain rigidity and weaknesses were found to have developed banking system during the late eighties, the Government felt that the financial system to play its role in ushering in a more efficient and competitive economy. Accordingly, a high level committee under the Chairmanship of Shri M. Narasimham on the Financial System (CFS), was setup on August 14, 1991 to examine all aspects relating to the structure, organisation, functions and procedure of the financial systems. Based on the recommendations of the Committee a comprehensive reform of the banking system was introduced in 1992-93.

A high level committee under Chairmanship of Shri M. Narasimham was again constituted by the Government of India in December 1997 to review the record of implementation of financial reforms recommended by CFS in 1991 and chart the reforms necessary in the year ahead. The Committee submitted its report to the Government in April 1998.

International Monetary Fund

 

IMF is an international monetary organisation. It was established on December 27, 1945 in Washington on the recommendations of Bretton Woods Conference. But it started it's operation on March 1, 1947. At present 184 nations are members of the IMF. East Timor became the newest member in July 2002.

In place of Dominique Strauss-Kahn, Christine Lagard has been made as new Managing Director of IMF on July 5, 2011. She is serving as 11th MD of IMF.

Objective of IMF

According to Article of Agreement of the IMF, its main objectives are as follows:

1. To promote international monetary co-operation
2. To ensure balanced international trade
3. To ensure exchange rate stability
4. To eliminate or to minimize exchange restrictions by promoting the system of multilateral payments
5. To grant economic assistance to member countries for eliminating the adverse imbalance in balance payments.
6. To minimize imbalance in quantum and duration of international trade

Constitution, Membership and Capital of IMF

IMF is controlled and managed by a board of Governors. Each member country nominates a Governor. All the nominated Governors make a board of governors. Each country also nominates an alternate Governor who casts his vote in absence of the Governor. Each Governor is allotted a number of votes which is determined by the quota allotted to respective country in the capital of IMF. Each Governor has got the right of 250 votes on the basis of membership and one additional vote for each SDR 1,00,000 of quota. The additional of these two types of votes becomes the actual voting right of the member country. For example, India's voting right is 250 + 30555 = 30805 because India's quota is SDR 30555 lakh. It clearly indicates that the voting right depends on the quantum of quota of a particular country with IMF. This is the reason why the rich and industrialised countries got the higher voting rights due to their higher quotas. with the IMF.

The main source of IMF resources is the quota allotted to the member countries. Till 1971, all the amounts of quotas and the assistance provided were denominated in US dollar, but since December 1971, all the quotas and transactions are expressed in SDR (Special Drawing Right) which is also known as Paper Gold. In 1971, one SDR was assumed equivalent to 1 dollar but due to subsequent decline in dollar value  SDR 1 became equivalent to $1.585 by the end of April 1995. Since January 1, 1981 the value of SDR is being determined by the basket  of currency of 5 largest exporting member countries: US dollar, Deutsche Mark, Yen, Franc, and Pound Sterling.
In 1991, the weight to these 5 currencies in SDR price determination was as follows:

American Dollar	40 %
German Franc	21 %
Japanese Yen	17 %
British Pound	11 %
French Franc	11 %

The currency value of SDR is determined by the IMF each day by summarising the value in US dollars, based on the market exchange rates of a basket of fine currencies.

The IMF's financial year is from 1 May to 30 April. IMF lends to various member countries in the form of various facilities (Extended Fund Facility, Standby Facility, Contingent Credit Lines, Compensatory Facility etc.) designed to serve specific purpose, but essentially aimed at balance of payments stabilisation or meeting the emergent foreign exchange needs. The poor countries are also helped by funding from Poverty Reduction and Growth Facility. As on June 2004, the IMF was lending to 13 members in the from of standby facility, to two members under Extended Arrangements and 38 poor countries under poverty Reduction and Growth Facility.

The quota allotted by the IMF to each member has to be deposited partly in their own currency and remainder in form of foreign exchange.

India's 11th Place in IMF General Quota

After the review of IMF's General Quota, India's quota has been raised to 582.15 crore SDR from the existing level of 415.82 crore SDR. (at the time of increase time 1 SDR = $ 1.54 = Rs 69.48). This quota hike has raised India's vote share from 1.91% to 2.44%.

India has been placed at 11th place in IMF's General Quota. USA remains in biggest quota holder despite its quota share coming down to 17.09%.

Country Quota USA 17.09% Japan 6.13% Germany 5.99% UK 4.94% France 4.94% China 3.72%

Country Quota Italy 3.25% Saudi Arabia 3.21% Canada 2.93% Russia 2.74% India 2.44% - -

India and IMF

IMF has played an important role in Indian economy. IMF has provided economic assistance from time to time to India and has also provided appropriate consultancy in determination of various policies in the country. India is the founder member of IMF. The finance minster is ex-officio governor in IMF board of Governors. Till 1970, India was among the first five nation highest quota with IMF and due to this status India was allotted a permanent Place in executive Board of Directors.

India participate in FTP of the IMF from 2002. 43 countries, including India now participate in FTP. By participation in FTP India is allowing IMF to encash its rupee holding as a part of our quota contribution for hard currency which is then lent to other member countries who are debtors to the IMF. From 2002 to Feb 2006, India has made purchases transactions of SDRs 493.23 million and four repurchase transaction amounting to SDRs 466.474 million.

In July India and IMF joint training program at the National Institution of Bank Management, Pune was established. The training program will provide policy oriented training in economics and related operational fields to Indian officials and officials of countries in South Asia and East Africa. The first training program was held during July 2006. The RBI is a nodal body to co-ordinate the training program with the IMF.

Enhanced Structural Adjustment Facility (ESAF) was established in 1987 with an amount of SDR 6 billion to help the low income countries with heavy debt burdens in difficult external environment and implement comprehensive  macro-economic and structural policy program aiming at strengthening their balance of payments position and fostering growth. India contributes as donations to Subsidy Account and made a commitment to provide grant contribution to the extent of US $ 1 million per year over 15 years for a total of US $ 15 million.

World Trade Organisation

 

The Uruguay round of GATT (1986-93) gave birth to World Trade Organisation. The members of the GATT signed on an agreement of Uruguay round in April 1994 in Morocco for establishing a new organisation named WTO. It was officially constituted on January 1, 1995 which took the place of GATT as an effective formal organisation. GATT was an informal organisation which regulated world trade since 1948. Like GATT, the headquarter of WTO is also in Geneva.

Contrary to the temporary nature of GATT, WTO is a permanent organisation which has been established on the basis of an international treaty approved by participating countries. It achieved the international status like IMF and IBRD but it is not an agency of UNO.

WTO has a General Council for its administration which includes one permanent representative of each member nation. Generally, it has one meeting per month which is held in Geneva.

The highest authority of policy making is WTO's Ministerial Conference which is held after every two years.

The present strength of WTO membership is 151. this includes China and Nepal whose accession was approved by the WTO Ministerial  Conference held in Doha and Cancun in November 2001 and September 2003 respectively. There are presently 30 countries in the process of accession to the WTO. Vietnam joined WTO as 150th member. Tonga is the 151st member of WTO.

There are number of important committees for administration of WTO, out of which two committees play the pivotal role in WTO. They are :

1. Dispute Settlement Body (DSB)
2. Trade Policy Review Body (TRRB)

DSP considers the complaints of member countries against violation of rules by any member country. This body appoints a group of experts to investigate into such complaints. This body meets twice a month for such cases.
TPRB reviews the trade policy of member countries. The trade policy of all big trade powers of the world are reviewed after every 2 years. All the members of WTO are the members of TRPB.
Other important bodies of WTO are:

1. Council for Trade in Goods
2. Council for Trade in Services
3. Council for Trade related aspects of Intellectual Property Rights

Objectives of WTO

1. To improve standard of living of people in the member countries.
2. To ensure full employment and broad increase in effective demand.
3. To enlarge production and trade of goods.
   The above three objectives were also included in GATT, but WTO also included some other objectives which are :
4. To enlarge production and trade of services.
5. To ensure optimum utilisation of world resources.
6. To accept the concept of sustainable development.
7. To protect environment.

Functions of WTO

1. To provide facilities for implementation, administration and operation of multilateral and bilateral agreements of the world trade.
2. To provide a platform to member countries to decide future strategies related to trade and tariff.
3. To administer the rules and processes related to dispute settlement.
4. To implement rules and provisions related to trade policy review mechanism.
5. To assist IMF and IBRD for establishment coherence in universal economic policy determination.

Securities and Exchange Board of India

Securities and Exchange Board of India (SEBI) was initially constituted on April 12, 1988 as a non-statutory body through a resolution of Government for dealing with all matters relating to development and regulation of securities market and investor protection and to advice the Government on all these matters. SEBI was given statutory status and powers through an ordinance promulgated on January 30, 1992.

The statutory powers and functions of SEBI were strengthened through the promulgation of the Securities Laws (Amendment) ordinance on January 25, 1995 which was subsequently replaced by an Act of Parliament. In terms of this Act, SEBI has been vested with regulatory powers over corporate in the issuance of capital, the transfer of securities, and other related matters. Besides, SEBI has also been empowered to impose monetary penalties on capital market intermediaries and other participants for a range of violation.

SEBI is managed by six members ~ one chairman (nominated by Central Government), two members (Officials of central ministries), one member from RBI, and remaining two members are also nominated by Central Government. The office of SEBI is situated in Mumbai with its regional offices in Kolkata, Delhi and Channai. In 1988 the initial capital of SEBI was 7.5 crore which was provided by its promoters (IDBI, ICICI, and IFCI). This amount was invested and its its interest amount day-to-day expenses of SEBI are met.

All statutory powers for regulating Indian capital market are vested with SEBI itself.

Functions of SEBI

1. To safeguard the interests of investors and to regulate capital market with suitable measures.
2. To regulate the business of stock exchanges and other securities market.
3. To regulate the working Stock Brokers, Sub-brokers, Share Transfer Agents, Trustees, Merchant Bankers, Underwriters, Portfolio Managers etc and also to make their registration.
4. To register and regulate collective investment plans of mutual funds.
5. To encourage self-regulatory organisation.
6. To eliminate malpractices of security markets.
7. To train the persons associated with security markets and also to encourage investors' education.
8. To check inside trading of securities.
9. To supervise the working of various organisations trading in security market and also to ensure systematic dealing.
10. To promote research and investigations for ensuring the attainment of above objectives.

Special Economic Zone Act, 2005

As a major step forward meant to instill confidence in investors and signal the government's commitment to a stable SEZ policy regime, a comprehensive Special Economic Zone Act, 2005 was passed by the parliament in May 2005. It received Presidential award on the 23rd of June 2005. This Act came into force w.e.f. February 10, 2006.

The salient features of SEZs Act are:

• Exemption from custom duty, exercise duty etc. on import/ domestic procurement of goods for the development, operation and maintenance of SEZs and the units therein.
• 100% income tax exemption for 5 years, 50% for next five years and 50% of ploughed back export profits for 5 years thereafter for SEZs unit.
• Exemption from capital gains on transfer of an undertaking from an urban area to SEZs.
• 100% income tax exemption to SEZ developers for a block of 10 years in 15 years.
• Exemption from dividend distribution tax to SEZ developers.
• 100% income tax exemption for 5 years and 50% for next 5 years for off shore banking unit located in SEZ.
• Exemption to SEZ developers and units from Minimum Alternate Tax.
• CST exemption to SEZ developers and units on inter-state purchase of goods.
• Constitution of an authority for each SEZ with a view to providing greater administration financial and functional autonomy to these zones.
• Establishment of designated courts and a state enforcement agency to ensure speedy trial and investigation of offences committed in SEZs.
• Encouragement to State Government to liberalise State laws and delegate their power to the Development Commissioners to the SEZs to facilitate single window clearance.

Census findings point to decade of rural distress

Is distress migration on a massive scale responsible for one of the most striking findings of Census 2011: that for the first time since 1921, urban India added more numbers to its population in a decade than rural India did?

At 833.1 million, India's rural population today is 90.6 million higher than it was a decade ago. But the urban population is 91 million higher than it was in 2001. The Census cites three possible causes for the urban population to have risen by more than the rural: ‘migration,' ‘natural increase' and ‘inclusion of new areas as ‘urban.' But all three factors applied in earlier decades too, when additions to the rural population far outstripped those to the urban. Why then is the last decade so different? While valid in themselves, these factors cannot fully explain this huge urban increase. More so in a census in which the decadal growth percentage of population records “the sharpest decline since India's independence.”

Take the 2001 Census. It showed us that the rural population had grown by more than 113 million since 1991. And the urban by over 68 million. So rural India had added 45 million people more than urban. In 2011, urban India's increase was greater than that of rural India's by nearly half a million, a huge change. The last time the urban increase surpassed the rural was 90 years ago, in 1921. Then, the rural total actually fell by close to three million compared to the 1911 Census.

However, the 1921 Census was unique. The 1918 Influenza epidemic that killed 50-100 million people worldwide, ravaged India. Studies of the 1921 Census data say it records between 11 and 22 million deaths more than would have been normal for that decade. There was also the smaller impact of World War I in which tens of thousands of Indian soldiers died as cannon fodder for Imperial Britain in Europe and elsewhere.

If Influenza left its fatal imprint on the 1921 enumeration, the story behind the numbers of the 2011 Census speaks of another tragedy: the collapse of millions of livelihoods in agriculture and its related occupations. And the ongoing, despair-driven exodus that this sparked in the countryside.

The 2011 Census captures only the tip of an iceberg in terms of rural upheaval. The last time urban India added more numbers to its population than rural India was 90 years ago and that followed giant calamities in public health and war. Yet, without such conditions, urban India added 91 million to its 2001 total, against rural India's 90.6 million. . Nor can this reversal be fully captured by the factors Census 2011 cites as driving the urban increase. Take ‘migration.' In public debate, ‘urban' is often equated with big metros. This conjures images of massive waves of people from villages heading straight for the big metros. And this flow, you will be assured, is falling.

The Census data, however, do not convey the harshness and pain of the millions trapped in “footloose” migrations. That is, the desperate search for work driving poorer people in many directions without a clear final destination. Like Oriya migrants who work some weeks in Raipur. Then a couple of months at brick kilns in Andhra Pradesh. Then at construction sites in diverse towns in Maharashtra. Their hunger, and contractor, drive them to any place where there is work, however brief. There are rural migrations to both metros and non-metro urban areas. To towns and smaller cities. There are also rural to rural migrations. There are urban-urban migrations. And even, in smaller measure, urban to rural migrations.

Flight from agriculture

Neither the Census nor the National Sample Survey is geared to capture the complexity of India's migrations. A migrant in the Census is someone counted at a place other than his or her last place of residence. This records a single move — not multiple migrations. So it sees only the tip of the mobility iceberg, missing footloose migrations altogether. What we do know from Census 2001 is of the flight from agriculture. Between 1991 and 2001, over seven million people for whom cultivation was the main livelihood, quit farming. That is a mind-boggling figure. It suggests that, on average, close to 2,000 people a day abandon farming in the country. Where do they go? Nothing in employment data suggests they get absorbed in decent work in bustling cities.

What about ‘natural increase' (the difference between the numbers of births and deaths in a population)? That does not explain the switch around in rural-urban increases either. Indeed, the rate of natural increase has declined in both rural and urban areas. Still the urban population and towns get bigger and bigger.

As Registrar General and Census Commissioner of India Dr. C. Chandramouli puts it: “Fertility has declined across the country. There has been a fall in numbers even in the 0-6 age group, as a proportion of the total population. In fact, in absolute numbers too, this group (now 158.8 million) has declined by five million, compared to the previous Census. This would suggest migrations as a significant factor in urban growth. But what kind of migrations we can only ascertain or comment on when their patterns emerge more clearly. The Census in itself is not structured to capture short-term or footloose migrations.”

We also get an extraordinary picture when viewing what demographers call the ‘Urban-rural growth differential.' The URGD is simply the difference between the rates at which rural and urban populations expanded in each decade. It is also a rough and ready index of the extent of rural-urban migrations. The URGD in the 2011 Census is 19.8, the highest in 30 years.

‘Natural increase' does not then account for the growth in urban numbers. Certainly not for the 30 per cent rise in urban population in the States. Thousands of towns today have far larger populations than they used to have — but not due to natural increase. The reason is migrations on a massive scale. Rural folk still outnumber urban people by more than two to one. In the 2001 Census, rural family size (5.4) remained bigger than urban family size (5.1). Also striking, States like Uttar Pradesh and Bihar show massive falls in growth rates in 2011. In the 2001 Census, Uttar Pradesh and Bihar were “the two States with largest number of net migrants migrating out of the state.”

The other factor cited by the current Census for the turnaround is interesting. “Inclusion of new areas under ‘Urban'.” The number of ‘statutory towns' has gone up by a mere 241 since 2001. Compare that with the preceding decade when they rose by 813, or more than three times that number. (A ‘Statutory town' is an urban unit with a municipality, corporation, cantonment board or notified town area committee.)

There is, however, a boom in the number of ‘Census towns.' In the decade 1991-2001, Census towns actually declined from 1,702 to 1,361. In the 2011 Census, they nearly tripled to 3894. That is stunning. How did this happen? And what is a ‘Census town?' This is a village or other unit declared as a town when: its population crosses 5,000; when the number of male workers in agriculture falls to less than 25 per cent of the total; and where population density is at least 400 per square kilometre.

At the very least, this means the male workforce in agriculture has collapsed in thousands of villages, falling to less than a quarter of all workers. So the farm exodus continues. What might the 2011 data on cultivators show us when it is out late next year? It could show us that the numbers quitting cultivation since 2001 might equal or exceed the over seven million dropouts of the previous decade.

SOCIO ECONOMIC DEVELOPMENTS MCQs

1. Which of the following is a General Insurance Company functioning in India ?
1. Life Insurance Corporation of India
2. ICICI Prudential
3. Tata AIG
4. United India Insurance Company
5. All are General Insurance Companies

2. Who amongst the following is the Regulator of Insurance sector in India ?
1. RBI
2. AMFI
3. IRDA
4. SEBI
5. All of these

3. Which of the following terms is NOT used in insurance sector ?
1. Indemnity
2. Coverage
3. Misuse Alert
4. Casualty
5. Annuity

4. Which of the following Public Sector companies/ organizations provides insurance cover to exporters ?
1. ECGC
2. NABARD
3. SIDBI
4. IRDA
5. None of these

5. The main feature of the National Agricultural Insurance Scheme is to insure which of the following?
1. Life of the farmer
2. Crop of the farmer
3. Animals who are used in agricultural activities
4. Land of the farmer
5. Both Land and family of the farmer

6. In which one of the following States was the first UID card issued ?
1. Gujarat
2. Manipur
3. Assam
4. West Bengal
5. Maharashtra

7. Which of the following books is written by Anita Desai ?
1. Magic Seeds
2. The Village by the Sea
3. A Bend in the River
4. My God Died Young
5. None of these

8. Expand the term MGNREGA
1. Mahatma Gandhi National Rural Employment Guarantee Act
2. Mahatma Gandhi National Rural Employment Guarantee Agency
3. Mahatma Gandhi National Rural Employment Generation Act
4. Mahatma Gandhi National Rural Employment Generation Agency
5. None of these

9. Which of the following terms is used in the field of finance and banking?
1. Elasticity
2. Inflation
3. Pulse Rate
4. Hot waves
5. Plasma

10. With which one of the following sports, Saina Nehwal is associated ?
1. Chess
2. Badminton
3. Long Jump
4. Lawn Tennis
5. Table Tennis

11. Which one of the following States has passed a bill to regulate the interest rates on microfinance?
1. Odisha
2. Haryana
3. Karnataka
4. Kerala
5. Andhra Pradesh

12. Which of the following rates are reviewed by the RBI at the time of periodical review of the policy ?
(a) Bank Rate
(b) Repo Rate
(c) Savings Bank Rate
1. Only (a)
2. Only (b)
3. Both (a) and (b)
4. All (a), (b) and (c)
5. Only (c)

13. Which one of the following is not included in TAPI gas project ?
1. Turkmenistan
2. Pakistan
3. Afghanistan
4. India
5. Iran

14. Which one of the following States has passed a legislation to confiscate the property of corrupt officials and to open schools in these properties?
1. West Bengal
2. Jharkhand
3. Bihar
4. Rajasthan
5. Haryana

15. Brihadeeswara Temple has recently celebrated its millennium birthday. In which of the following States is it located ?
1. Karnataka
2. Andhra Pradesh
3. Kerala
4. Odisha
5. Tamil Nadu

16. In which one of the following: States, Jaitapur Nuclear Power plant is proposed to be set up ?
1. Gujarat
2. Haryana
3. Odisha
4. Karnataka
5. Maharashtra

17. According to Planning Commission, in how many years shall the per capita income in India become double ?
1. Nine
2. Five
3. Seven
4. Three
5. None of these

18. Expand the term IFRS.
1. Indian Financial Reporting Standards
2. Indian Financial Reporting Systems
3. International Financial Reporting Standards
4. International Financial Reporting Systems
5. None of these

19. Who is Liu Xiaobo ?
1. North Korean dissident, who has been awarded Nobel peace prize
2. Chinese citizen, who has been awarded Nobel peace prize
3. North Korean dissident, who has been awarded Nobel literature prize
4. Sportsman who was awarded maximum 8 Gold medals in Commonwealth
5. None of these

20. Who is Hardeep Puri ?
1. India’s permanent representative at UN
2. Vice President, IMF
3. Vice President, World Bank
4. India’s ambassador in USA
5. India’s ambassador in UK

21. With which one of the following games is Ishant Sharma associated ?
1. Chess
2. Badminton
3. Table Tennis
4. Volley Ball
5. Cricket

22. With which one of the following games, France’s Zinedine Zidane is associated ?
1. Hockey
2. Football
3. Snooker
4. Volley Ball
5. Base Ball

23. As per recent newspaper reports, which one of the following countries was second largest importer of goods and services in the world during year 2009-10 ?
1. China
2. USA
3. Japan
4. Russia
5. India

24. According to RBI governor, which one of. the following is the challenge in its monetary policy?
1. Inflation
2. Inflation and Supportive recovery
3. Inflation and fiscal deficit
4. Inflation and high cost of imports
5. None of these

25. Which one of the following Public Sector Organisations has offered largest ever equity offer ?
1. SAIL
2. Coal India
3. Power Grid
4. Shipping Corporation of India
5. None of these

26. Through which one of the following sources domestic funds are raised by Companies ?
(a) IPO only
(b) FPO only
(c) Commercial papers
1. Only (a) and (b)
2. All (a), (b) and (c)
3. Only (a),and (c)
4. Only (a)
5. Only (c)

27. Which one of the following was the reason owing to which Govt. want Reserve Bank of India to tighten prudential norms for NBFCs?
1. To reduce liquidity in the market
2. It is as per Basel II requirements
3. It is as per Bank for International Settlement (BIS) directives
4. It is to protect NBFCs from any impact of possible economic slowdown
5. None of these

28. In the financial year 2009-10, which one of the following Banks has made highest Total dividend Payout?
1. SBI 2. PNB
3. Bank of India
4. Canara Bank
5. None of these

29. In respect of which one of the following countries, India has proposed non payments for import of crude oil ?
1. Iran
2. Iraq
3. Kuwait
4. Sudan
5. U.A.E.

30. Through which one of the following methods, RBI has allowed Indian companies to hedge exchange rate risks associated with trade transactions ?
1. Forwards
2. FRA
3. Swaps
4. Currency options
5. Cross currency options

31. Which of the following books is written by V. S. Naipaul ?
1. A Handful of Dust
2. A House for Mr. Biswas
3. A Passage to India
4. Darkness at Noon
5. None of these

32. With which one of the following countries, India has signed agreement to build Multi Model Transit Transport Project ?
1. Bangladesh
2. Myanmar
3. Sri Lanka
4. Nepal
5. Maldives

33. Which one of the following countries is Number One Country in terms of Purchasing Power ?
1. USA
2. Germany
3. China
4. South Korea
5. None of these

34. Which one of the following directions has been given by Government to Civic bodies ?
1. They must use 70 per cent of the funds for BPL families
2. They must use 70 per cent of the funds for the poor living within their jurisdiction
3. They must use 25 per cent of the funds for BPL families
4. They must use 25 per cent of the funds for the poor living within their jurisdiction
5. None of these

35. On which one of the following issues a group of business leaders and other eminent citizens have expressed concern ?
1. E-Governance
2. Governance
3. Fiscal deficit
4. Governance deficit
5. None of these

36. ‘Yuan’ is the currency of which one of the following countries ?
1. Japan
2. South Korea
3. North Korea
4. Taiwan
5. China

37. Which one of the following is a leading power in 17 nation Euro Region ?
1. Germany
2. France
3. Norway
4. Greece
5. Portugal

38. What are teaser loan rates charged by banks ?
1. Fixed rate of interest charged by banks
2. Floating rate of interest charged by banks
3. Rate of interest in the initial period is less and goes up subsequently
4. Rate of interest in the initial period is more and it goes down subsequently
5. None of these

39. Expand the term FSDC which is used in financial sectors ?
1. Financial Security and Development Council
2. Financial Stability and Development Council
3. Fiscal Security and Development Council
4. Fiscal Stability and Development Council
5. None of these

40. According to the 8th Annual Global Retail Development Index (GRDI), which one of the following countries is ‘most attractive’ retail market in the world ?
1. China
2. India
3. UAE
4. Saudi Arabia
5. Japan

41. Govt.’s ‘Food-for-work’ programme means
1. to pay in kind to work and build rural infrastructure
2. supplying balanced diet to workers in rural areas
3. no-work-no-pay principle
4. ensuring enough food to rural workerhouseholds
5. None of these

42. The insurance companies collect a fixed amount from its customers at a fixed interval of time. What is it called ?
1. Instalment
2. Contribution
3. Premium
4. EMI
5. Service Charge

43. Which of the following is/ are the various types of insurance ?
(a) Life Insurance
(b) Health Insurance
(c) Liability Insurance
1. Only (a)
2. Only (b)
3. Only (c)
4. All (a), (b) and (c)
5. Only (a) and (b)

44. What is the full form of ‘ESOPs’ as seen in financial newspapers ?
1. Employee Stock Ownership Plan
2. Executive Salary Options
3. Emergency Stock Operations
4. Early Sales Opportunities
5. Executive Stock Ownership

45. Who are considered Super Senior Citizen as per budget 2011-12 ? Those who have completed a minimum age of
1. 65 years
2. 70 years
3. 75 years
4. 80 years
5. 90 years

46. Pohang Steel Company (POSCO) is a company originally based in
1. China
2. Vietnam
3. USA
4. Italy
5. South Korea

47. As per the revised data released by the Central Statistical Organisation, the GDP growth in 2010 has been at which of the following levels?
1. 6%
2. 6.5%
3. 8%
4. 7.5%
5. None of these

48. Who amongst the following was awarded Padma Vibhushan recently (2011) ?
1. Kumar Mangalam Birla
2. Harbhajan Singh
3. Nirupama Rao
4. Montek Singh Ahluwalia
5. Saina Nehwal

49. Annual meeting of World Economic Forum was organized in January 2011 in which of the following cities ?
1. Davos
2. Milan
3. Tokyo
4. London
5. Lisbon

50. India recently signed a deal on the sharing of Teesta and Feni river waters. This agreement is signed with which of the following countries?
1. Nepal
2. China
3. Pakistan
4. Bangladesh
5. Bhutan

ANSWERS:

1. (4) 2. (3) 3. (3) 4. (1) 5. (2) 6. (5) 7. (2) 8. (1) 9. (2) 10. (2)
11. (5) 12. (4) 13. (5) 14. (3) 15. (5) 16. (5) 17. (1) 18. (3) 19. (2) 20. (1)
21. (5) 22. (2) 23. (5) 24. (3) 25. (2) 26. (3) 27. (4) 28. (5) 29. (1) 30. (4)
31. (2) 32. (2) 33. (1) 34. (2) 35. (2) 36. (5) 37. (1) 38. (3) 39. (2) 40. (2)
41. (5) 42. (1) 43. (4) 44. (1) 45. (4) 46. (5) 47. (3) 48. (4) 49. (1) 50. (4)

FINANCIAL AWARENESS MCQs

1. When did Regional Rural Banks start functioning in India?
(A) 1975
(B) 1947
(C) 1956
(D) 1960
Answer: (A)
2. Who was the Chairman of the Sixth Central Pay Commission?
(A) Justice B. N. Srikrishna
(B) Prof. Ravindra Dholakia
(C) J. S. Mathur
(D) Sushma Nath
Answer: (A)
3. The 11th Five Year Plan is termed as plan for.
(A) India’s Health
(B) Eradication of poverty from India
(C) India’s Education
(D) Development of Rural India
Answer: (C)
4. Which of the following correctly describes what sub-prime lending is?
(1) Lending to the people with less than ideal credit status.
(2) Lending to the people who are high value customers of the banks.
(3) Lending to those who are not a regular customer
(A) Only 1
(B) Only 2
(C) Only 3
(D) All
Answer: (A)
5. The actual return of an investor is reduced sometimes as the prices of the commodities go up all of a sudden. In financial sector this type of phenomenon is known as:
(A) Probability risk
(B) Market risk
(C) Inflation risk
(D) Credit risk
Answer: (A)
6. Which of the following is the limitation of the ATMs owing to which people are required to visit branches of the bank?
(1) It does not accept deposits.
(2) It has a limited cash disbursement capacity.
(3) Lack of human interface.
(A) Only (1)
(B) Only (2)
(C) Only (3)
(D) All
Answer: (D)
7. The World Development Report 2009 is released by which of the following Organisations?
(A) UNESCO
(B) ADB
(C) IMF
(D) World Bank
Answer: (D)
8. Which of the following statements is/are TRUE about the Lehman Brothers Holdings Inc. which was in news sometimes back?
(1) The US government provided a US$ 7000 million bailout package to the company.
(2) The company filed for bankruptcy in a court in New York.
(3) The company is now out of financial crisis and is busy in its restructuring so that it can start afresh.
(A) Only (1)
(B) Only (2)
(C) Only (3)
(D) All of the Above
Answer: (B)
9. The Reserve Bank of India has recently issued guidelines to banks on Pillar 2 of Basel II framework. Pillar 2 deals with which of the following?
(1) Better human resource management
(2) Adequate capital to support risks
(3) Better profitability with minimum number of employees
(A) Only (1)
(B) Only (2)
(C) Only (3)
(D) None of these
Answer: (D)
10.The World Investment Report 2008 was released in September 20This report is published every year by:
(A) Government of India
(B) World Trade Organisation (WTO)
(C) Asian Development Bank (ADB)
(D) United Nations Conference on Trade and Development (UNCTAD)
Answer: (D)
11. As we all know some new initiatives were introduced in the area of Fiscal Management by the government of India. Which of the following acts was passed a few years back to keep a check on the fiscal indiscipline on macroeconomic parameters?
(A) FERA
(B) FRBMA
(C) FEMA
(D) Public Debt Act
Answer: (B)
12. Which of the following has the sole right of issuing paper notes in India?
(A) Union Government
(B) Reserve Bank of India
(C) Ministry of Finance
(D) Supreme Court
Answer: (B)
13. Decision taken at Bretton Woods Conference led to the formation of
(A) IDA
(B) IMF
(C) ADB
(D) IFC
Answer: (B)
14. Which of the following is known as plastic money?
(A) bearer cheques
(B) credit cards
(C) demand drafts
(D) gift cheques
Answer: (B)
15. Euro is the currency of European Union. When did it come into being?
(A) 1999
(B) 1995
(C) 2000
(D) 2001
Answer: (A)
16. Which is the largest commercial bank in India?
(A) Reserve Bank of India
(B) State Bank of India
(C) ICICI Bank
(D) Bank of India
Answer: (B)
17. The Bank of Calcutta, Bank of Bombay and Bank of Madras were merged in 1921 to form
(A) Reserve Bank of India
(B) Imperial Bank of India
(C) Bank of India
(D) Union Bank of India
Answer: (B)
18.In India, income tax is levied by
(A) Union Government
(B) State Governments
(C) Ministry of Finance
(D) RBI
Answer: (A)
19. The Reserve Bank of India was nationalized in?
(A) 1947
(B) 1948
(C) 1950
(D) 1956
Answer: (B)
20. What is a Bank which has capital and reserves of over Rs. 5 lakhs called?
(A) National Bank
(B) Cooperative Bank
(C) Scheduled Bank
(D) Unscheduled Bank
Answer: (C)

India Canada agree on FIPA and SSA

Anand Sharma, the Union Minister for Commerce, Industry and Textiles, and Mr. Edward Fast, Minister of International Trade and Minister for the Asia Pacific Gateway of Government agreed that residual issues with regard to Foreign Investment Protection Agreement (FIPA) and Bilateral Social Security Agreement (SSA) between the two countries have been resolved and both agreements could now be signed at an opportune time. Minister Fast also confirmed that the Canadian side has delinked the SSA from FIPA. The Canadian Minister flew down to New York to meet with, on 23 September.

Minister Sharma raised the issue of constrained supply of Potash from Canada to the Indian buyers. He said that the Government of Canada should view this matter from a strategic perspective and urge the Canadian businesses to enter into long term agreements with the Indian buyers on commercial terms.

The two Ministers took stock of the current status of trade and commercial linkages between India and Canada. They also discussed steps to be taken by both sides to intensify the interaction between the government and the private sector stakeholder on both sides.

Minister Sharma underscored the need to convene the meeting of the India-Canada CEO Forum at an early date so that the agenda for positive engagement between the businesses of the two countries could be furthered.

Minister Sharma strongly raised the problems being faced by professionals of the Indian IT industry in obtaining appropriate visas for Canada. He said that this was limiting services trade between the two countries. In this regard, he asked Minister Fast to sensitize the relevant Canadian authorities to remove impediments to the movement of IT professionals from India to Canada. Minister Fast said that the Canadian government had recently changed its policy and under the revised guidelines Canada was giving appropriate multiple entry visas if the passports were of 10 year validity.

Nilekani Panel Submits Report on Cash Transfer Scheme

UIDAI Chairman Nandan Nilekani submitted the report of the committee headed by him regarding direct transfer of subsidy to the beneficiaries, to the Finance Minister Pranab Mukherjee. The interim report of the task force on direct transfer of subsidies on Kerosene, LPG and Fertilisers suggested creation of a Core Subsidy Management System (CSMS) for maintaining information on entitlements and subsidies for all beneficiaries. The CSMS, as indicated in the report, will provide increased transparency in the movement of goods, level of stocks, prediction and aggregation of demand and identification of beneficiaries.

Nilekani Panel on Cash Transfer Scheme
Highlights of Recommendations Nade in Interim Report Submitted by the Panel
LPG:

• Phase I: Cap consumption of subsidised cylinders (Policy decision of government and not a specific task force recommendation).
• Phase II: Consumers buy LPG at market price, with direct transfer of subsidy to their bank account.
• Phase III: Identify and target segmented customers for subsidy.

Fertiliser:

• Phase I: Information visibility up to the retailer level. Phase II: Direct transfer of subsidy to the retailer.
• Phase III: Farmers buy fertilisers at market price, with direct transfer of subsidy to their bank account.

Kerosene:
Phase I: Cash transfer through state governments.
Phase II: Cash transfer to accounts of beneficiaries.

Report recommends creation of centralised software for the product and service transfer. The poors have been recommended to get the share of subsidies directly through bank branches, Automated Teller Machines (ATMs), business correspondents, the internet or mobile banking channels. Pilot projects for such direct cash transfers have been recommended to begin in seven places— Tamil Nadu, Assam, Maharashtra, Haryana, Delhi Rajasthan and Orissa—from October 2011.

Country’s Exports Register 45.7% Growth in Q 1 Of 2011-12

Country’s exports in June 2011 rose for the third month in a row by growing 46.4 per cent to $ 29.2 billion, driven by high-end products such as engineering goods. Imports increased 42.4 per cent to $ 36.2 billion. About one-third of this import bill was accounted for by petroleum, oil and lubricant. This resulted trade deficit at $ 7.7 billion.

During the first quarter of 2011-12 (i.e. April- June 2011), exports rose 45×7% to $ 79 billion. With imports growing 36×2% to $ 110.6 billion, the trade deficit stood at $ 7.7 billion.

Export sector’s good performance was well supported by various industries like engineering, oil, electronics, drugs, chemicals and readymade garments. The main components in the import bill on the other hand were oil, gold and silver, machinery, electronics and pearls/ precious stones. Oil import bill has been a major head in country’s total import bill. During the first quarter of 2011-12, oil imports rose 18 per cent to $ 30.5 billion and it is projected to be around $ 120-130 billion during the entire financial year 2011-12. Machinery imports valued at $ 9 billion showing 49 per cent growth. With 71 per cent growth electronics imports went to $ 7.6 billion.

It may be recalled that during last year 2010-11, merchandise exports had grown 37.55% to $ 246 billion compared with 2009-10 while imports were up 21.6 per cent at $ 350 billion, resulting trade deficit at $ 104 billion.

The government has set a target of $ 500 billion worth of exports by 2014 and doubling of India’s share of global exports by 2020.