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BULLETIN–

 

APRIL 2015 A monthly digest concerning issues of

international and national importance  

FOR CIVIL SERVICES EXAMINATION 2015

VAJIRAM AND RAVI INSTITUTE FOR IAS EXAMINATION, NEW DELHI, INDIA

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Contents

INTERNATIONAL AFFAIRS – ........................................................................................................... 2

OPERATION RAHAT - YEMEN CRISIS ...................................................................................... 2

INDIA- CANADA NUCLEAR SUPPLY DEAL .............................................................................. 6

IRAN NUCLEAR DEAL ................................................................................................................... 9

NON-LETHAL WEAPONS STRATEGY ..................................................................................... 13

INDIA –FRANCE DEAL ................................................................................................................. 14

BRICS ENVIRONMENT SUMMIT 2015 ..................................................................................... 15

NATIONAL ISSUES - ........................................................................................................................ 16

NET NEUTRALITY ......................................................................................................................... 16

CEASEFIRE PACTS WITH NAGA GROUPS ........................................................................... 19

NATIONAL JUDICIAL APPOINTMENTS COMMISSION ACT NOTIFIED ........................... 21

ECONOMIC DEVELOPMENTS – ................................................................................................... 22

FOREIGN TRADE POLICY .......................................................................................................... 22

GREEN BONDS ............................................................................................................................. 25

MUDRA BANK: ............................................................................................................................... 27

PRICE STABILIZATION FUND ................................................................................................... 31

GOVERNMENT INITIATIVES/PROJECTS/ACQUISTIONS - ..................................................... 33

KALAVARI SUBMARINE .............................................................................................................. 33SKILL GAP STUDIES .................................................................................................................... 35

MOBILE SCIENCE LAB ................................................................................................................ 36

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INTERNATIONAL AFFAIRS – 

OPERATION RAHAT - YEMEN CRISIS

What is Operation Rahat?

The operation undertaken by the Indian Government to

evacuate Indian Citizens stranded in Yemen.

  Rahat- The word means Relief or Alleviation

Operational Efficiency -

Operation Rahat was very successful and has evacuated more than 5600 people

from the conflict torn country. Both Indians and Foreign nationals belonging to nearly41 countries were rescued by India in the course of the operation.

Who were involved in the rescue operation?

 Along with the Defence personnel, General VK Singh, Minister of state - External

 Affairs and former chief of the army staff along with 5 MEA officials were deputed to

Sana'a (Yemen‘s capital) and Djibouti to take on the spot decisions and oversee

evacuations. General VK Singh was stationed in Djibouti since March 31. He flew

into Sana'a twice for a ground assessment and personal supervision of evacuationoperations.

What were the operational limitations of Rahat?

  Trying conditions and hostilities such as navigating around Saudi Arabian air

strikes and negotiating clearances, Houthi firepower, and even al-Qaeda

fighters in several areas were primary obstructions.

  The command center of the Operation was based out of Djibouti, which was a

third party to the operation where Gen. V.K. Singh was stationed. This is

testimony to exemplary diplomatic efforts and goodwill enjoyed by India in the

region.

Why was the operation successful?

The Indian armed forces and government command experiences spanning over two

decades in overseas hostage rescue, rehabilitation, and foreign evacuations. Since

the first Gulf War, where many lessons were learned in dealing with mass

evacuations from the region, India has honed its skills remarkably well on how to

respond in a crisis situation such as this, and how to safeguard its citizens from a

fast-deteriorating conflict zone.

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Prior to Yemen, the crisis situation in Lebanon in 2006, Libya in 2011, Iraq in

2003 and again in 2014 led to evacuation operations. But the biggest one still

remains from 1990, when India evacuated 110,000 people during the first Gulf War

from Iraq and Kuwait using nearly 500 flights operated by Air India and, later, even

cruise ships. This remains the world's largest civil evacuation till date.During this operation having a minister who has the experience and the ability to

lead from the front on ground has also been an added advantage to the success of

the rescue operations.

KEY ACTORS -

The Houthis  began in the late 1980s as a religious and cultural revivalist movement

among practitioners of Zaydi Shi‘ism in northern Yemen. The Zaydis are a minority in

the majority-Sunni Muslim country, but predominant in the northern highlands alongthe Saudi border, and until 1962, Zaydi imams ruled much of the region. The Houthis

became politically active after 2003, opposing Saleh for backing the U.S.-led war in

Iraq. Also known as Ansar Allah, the Houthis repeatedly fought the Saleh regime—

and, in 2009, an intervening Saudi force. In post-Saleh Yemen, the militarily capable

but politically inexperienced movement gained support from far beyond its northern

base for its criticisms of the transition.

Former President Al i A bdul lah Saleh , though deposed in 2011, has gained inpopularity among some Yemenis who have grown disillusioned with the transition.

He and his son Ahmed Abdullah Saleh command the loyalty of some elements of

Yemen‘s security forces. Their alliance with the Houthis is a tactical one: Saleh is a

secular nationalist, and the Houthis fought his regime for many years. In late April,

Saleh called on his loyalists to withdraw from captured territories, a demand of

the UN Security Council. Saleh‘s loyalists oppose Hadi‘s government and seek

to regain a leading role in Yemen. Saleh‘s party, the General Peoples‘ Congress,

holds a majority in parliament.

Iran  is the Houthis‘ primary international backer and has allegedly provided the

Houthis with economic support. But regional specialists caution against overstating

Tehran‘s influence over the movement. The Houthis and Iran share similar

geopolitical interests: Iran seeks to challenge Saudi and U.S. dominance of the

region, and the Houthis are the primary opposition to Hadi‘s Saudi- and U.S.-backed

government in Sana‘a. 

http://www.cfr.org/yemen/yemens-houthis/p36178http://news.yahoo.com/yemen-ex-president-urges-rebel-allies-implement-un-184850303.htmlhttp://www.securitycouncilreport.org/yemen/http://www.securitycouncilreport.org/yemen/https://www.foreignaffairs.com/articles/yemen/2015-04-19/cahoots-houthishttp://www.pbs.org/wgbh/pages/frontline/foreign-affairs-defense/frontline-fight-for-yemen/after-a-month-of-airstrikes-where-does-yemen-stand/http://www.pbs.org/wgbh/pages/frontline/foreign-affairs-defense/frontline-fight-for-yemen/after-a-month-of-airstrikes-where-does-yemen-stand/http://www.pbs.org/wgbh/pages/frontline/foreign-affairs-defense/frontline-fight-for-yemen/after-a-month-of-airstrikes-where-does-yemen-stand/https://www.foreignaffairs.com/articles/yemen/2015-04-19/cahoots-houthishttp://www.securitycouncilreport.org/yemen/http://news.yahoo.com/yemen-ex-president-urges-rebel-allies-implement-un-184850303.htmlhttp://www.cfr.org/yemen/yemens-houthis/p36178

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President A bed Rabbo Manso ur al-Hadi , Yemen‘s internationally recognized

president, has called his resignation null. He remains in exile in Saudi Arabia,

however, and it is unclear whether he commands much authority on the ground. The

Sunni Islamist party Al-Islah  (Reform), which represents many tribesmen around the

country, back Hadi‘s government. They are the Houthis‘ chief antagonist. 

Saudi Arabia has led the coalition air campaign to roll back the Houthis and

reinstate Hadi‘s government. Riyadh perceives that Houthi control of Yemen would

mean a hostile neighbour that threatens its southern border. It also considers Yemen

a front in its contest with Iran for regional dominance, and losing Sana‘a would only

add to what it perceives as an ascendant Iran that has allies in power in Baghdad,

Beirut, and Damascus. Riyadh‘s concerns have been compounded by its perception

that the United States is retrenching from the region and its pursuit of an Iranian

nuclear deal will embolden Tehran.

Saudi Arabia has cobbled together a coalition of Sunni-majori ty A rab states :

Bahrain. Egypt, Jordan, Kuwait, Morocco, Qatar, Sudan, and the UAE. (That

includes all the GCC states except for Oman, a potential mediator.) The operation

seems to consolidate Saudi Arabia‘s leadership over the bloc, which has split over

other regional issues, and signals consensus against allowing Iran to gain influencein Yemen. But their assistance to the Saudi-led air campaign has been limited. Both

Egypt and Pakistan receive Gulf aid, yet neither volunteered the ground troops that

Saudi Arabia requested.

The United States ‘ interests include maintaining stability in Yemen and security for

Saudi borders; free passage in the Bab al-Mandeb, the chokepoint through which 4.7

million barrels of oil per day transit; and a government in Sana‘a that will cooperate

with U.S. counterterrorism programs. In the current conflict, Washington hasprovided the Saudi-led coalition with logistical and intelligence support, as well as

stationed warships in the Gulf of Aden. But while the United States continues to

support coalition operations, by late April U.S. officials pressed for restraint, warning

their Saudi counterparts that the intensity of the bombing campaign was undercutting

U.S. and Saudi political goals—namely, a return to the transition.

Al-Qaeda in the Arabian Peninsula - AQAP, has benefitted from the current chaos. 

It has suffered some battlefield setbacks at the hands of Houthi forces, but theHouthis‘ rapid advances have led some Sunni tribesmen to align with al-Qaeda

http://www.cfr.org/saudi-arabia/new-saudi-foreign-policy/p36456http://www.foreignaffairs.com/articles/143303/bilal-y-saab/houthi-and-the-blowbackhttp://www.foreignaffairs.com/articles/143303/bilal-y-saab/houthi-and-the-blowbackhttp://www.foreignaffairs.com/articles/143303/bilal-y-saab/houthi-and-the-blowbackhttp://www.eia.gov/countries/regions-topics.cfm?fips=wotc&trk=p3http://www.eia.gov/todayinenergy/detail.cfm?id=20932http://www.eia.gov/todayinenergy/detail.cfm?id=20932http://www.eia.gov/todayinenergy/detail.cfm?id=20932https://www.fas.org/sgp/crs/mideast/RL34170.pdfhttp://www.wsj.com/articles/houthis-advance-in-yemen-as-saudis-turn-to-negotiations-1429708217http://www.lawfareblog.com/2015/04/will-al-qaeda-be-the-great-winner-of-yemens-collapse/http://www.lawfareblog.com/2015/04/will-al-qaeda-be-the-great-winner-of-yemens-collapse/http://www.wsj.com/articles/houthis-advance-in-yemen-as-saudis-turn-to-negotiations-1429708217https://www.fas.org/sgp/crs/mideast/RL34170.pdfhttp://www.eia.gov/todayinenergy/detail.cfm?id=20932http://www.eia.gov/todayinenergy/detail.cfm?id=20932http://www.eia.gov/countries/regions-topics.cfm?fips=wotc&trk=p3http://www.foreignaffairs.com/articles/143303/bilal-y-saab/houthi-and-the-blowbackhttp://www.cfr.org/saudi-arabia/new-saudi-foreign-policy/p36456

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against a perceived common threat. A distracted Yemeni army has eased pressure

against the militants. AQAP has been identified as the most dangerous terror

subsidiary of Al-Qaeda.

What is the crisis in Yemen?

The war in Yemen cuts across religious, geographical, ethnic lines. The Hadi

government machinery is struggling to retain power. The Houti militia is striving to

gain further control and influence. The AQAP is concentrating on further acts of

violence. The US and regional coalitions have been intervening with drone and air

strikes to contain the crisis. The ISIS is also reported to have set up shop in Yemen.

Religious differences occur on count of Shia-Sunni conflicts, ethnic conflicts arise out

of unwilling unification of Yemen, and geographical differences exist due to power

ambitions.

Why is Yemen globally important?

Western intelligence agencies consider AQAP the most dangerous branch of al-Qaeda because of its technical expertise and global reach. The US has beencarrying out operations, including drone strikes, against AQAP in Yemen withPresident Hadi's co-operation, but the Houthis' advance has meant the US campaignhas been scaled back.

The conflict between the Houthis and the elected government is also seen as part ofa regional power struggle between Shia-ruled Iran and Sunni-ruled Saudi Arabia,which shares a long border with Yemen.

Gulf Arab states have accused Iran of backing the Houthis financially and militarily,though Iran has denied this, and they are themselves backers of President Hadi.Yemen is strategically important because it sits on the Bab al-Mandab strait, anarrow waterway linking the Red Sea with the Gulf of Aden, through which much ofthe world's oil shipments pass. Egypt and Saudi Arabia fear a Houthi takeover wouldthreaten free passage through the strait.

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INDIA- CANADA NUCLEAR SUPPLY DEAL

Uranium supply deal between India and Canada -

Introduction -

During a recently signed deal between Indian and Canada, it is agreed thatCanada‘s Cameco Corporation will supply India with 3,000 metric tonnes of uraniumover the next five years. The deal will be worth an estimated $280 million. Post thedeal, Canada will be become the first and only western nation to supply Uranium toIndia. Additionally, Russia and Kazakistan are the only nations that supply the same.Uranium is extremely important to achieve India‘s clean energy ambitions.

Chronological context -

- Canada had formally banned Uranium and nuclear hardware export to India in1974 after India conducted the ‗Smiling Buddha‘ test1.

- From 2013 onwards, Canadian Nuclear energy exporters were allowed to tradewith India under the framework and supervision of the International Atomic Energy Association.

- Under the agreement announced, all Canadian uranium supplied to India will bemonitored under the IAEA‘s2 safeguards as well.

The landmark agreement with Canada comes seven years after India received a

historic waiver from the Nuclear Suppliers Group, allowing India access to normalnuclear trade with various countries despite having a nuclear weapons program andremaining a non-signatory party to the Nuclear Non-Proliferation Treaty (NPT). 

Other Commercial Agreements between Indian and Canadian firms

The deals signed between two countries are valued at over $1.6 billion, covering awide range of sectors, including aerospace and defence, education, energy, mining,infrastructure, sustainable technologies, and information and communicationstechnology. The deals with each company are as follows:

•  Air Canada: Air Canada announced that it will reinstate its direct Toronto-Delhi flights making it easier and faster for visitors and business people totravel back and forth between Canada and India.

1 Smiling Buddha was the assigned code name of India’s first nuclear weapon explosion on 18 th May 1974detonated on the army base Rajasthan Pokhran Test Range. A small team of scientists at Bhabha Atomic

Research Center designed the atomic bomb. The Indian Government referred to it as a peaceful explosion but

India received a highly negative international reaction for this explosion.2 The IAEA is the world's centre for cooperation in the nuclear field. It was set up as the world's "Atoms for

Peace" organization in 1957 within the United Nations family. The Agency works with its Member States andmultiple partners worldwide to promote the safe, secure and peaceful use of nuclear technologies. It is

headquartered at Vienna, Austria. 

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•  AMP Solar Group Inc.: AMP Solar Group signed a memorandum ofunderstanding with SUN Group to jointly develop, own and operate solarassets in India over the next three years.

•  Azzimov Corporation: Azzimov Corporation signed a joint venture

partnership with O4 Digital Media to offer India‘s first and largest online videoshopping platform. 

•  Caisse de dépôt et placement du Québec (CDPQ): The institutional fundmanager CDPQ will open an office in India to expand its presence in selectedmarkets and invest strategically, in line with the core trends driving the worldeconomy. 

•  Canadian Solar: Canadian Solar announced that it will invest in a facility forsolar cells and modules in India. 

•  Clearford Industries: Clearford announced the following projects:1. One Sanitation system- to collect and treat wastewater in Gujarat to

provide toilets and bathrooms to every household; 2. Sewage treatment projects for Indian universities such as Jawaharlal

Nehru Technological University new campus in Kalagiri, St. Xavier'sCollege, Kolkata; etc. 

•  Quebec-based CMC Electronics Inc.: will supply Hindustan AeronauticsLimited with integrated cockpit display systems for India‘s new domestically-produced Hindustan Turbo Trainer (HTT-40) aircraft3. 

•  Tata Consultancy Services Co-Innovation Network: announced that it willset up a new innovation lab in Toronto.

INTER-LINKAGES AND KEY BACKGROUND INFORMATION - 

Nuclear Suppliers group (NSG)

The NSG is a 48-nation body established to prevent the civilian nuclear trade frombeing used for military purposes. The group is formed by the signatories to the non-

proliferation treaty (NPT). The group has been stringent in opening its doors only tothose countries that are part of the NPT or Comprehensive Test Ban Treaty (CTBT).

Reasons for NSG Formation -

- India was allegedly using nuclear imports from Canada originally meant for civilpurposes for military ends

- U.S was also allegedly developing nuclear warheads

3 The Hindustan Turbo Trainer-40 aircraft project is a Hindustan Aeronautics Ltd. for an

indigenous replacement for the India Air Force’s retired HPT-32 Deepak as a basic trainer.

This is one of the few steps towards make in India campaign.

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India’s 2008 waiver from NSG

The waiver that was given to India in 2008 by NSG implies that India now has the

legal right, under the world nuclear regulatory regime, to trade for civilian nuclear fueland technology. For some time, India has been trying to gain membership of NSGbut is facing oppositions from the member countries, as India is neither a part of NPTnor CTBT. However, the country is getting strong support from the United States.

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IRAN NUCLEAR DEAL

Contextual introduction to the Non-Proliferation of Nuclear Weapons (NPT)

The NPT is a landmark international treaty whose objective is to prevent the spread

of nuclear weapons and weapons technology, to promote cooperation in thepeaceful uses of nuclear energy and to further the goal of achieving nucleardisarmament and general and complete disarmament. The Treaty represents theonly binding commitment in a multilateral treaty to the goal of disarmament by thenuclear weapon States. Opened for signature in 1968, the Treaty entered into forcein 1970. Iran has ratified the treaty. 

When did the problems regarding Iran’s nuclear program start?

The International Atomic Energy Agency (IAEA) traces Iran‘s nuclear arms ambitionsas far back as 1984, when current supreme leader Ayatollah Ali Hosseini Khameneiwas president and Iran was in the middle of the War with Iraq. Fearing that Iraqileader Saddam Hussein might be developing a nuclear weapon, Iran felt the need tohave its own bomb to deter its enemies.

Even though, China and Russia have provided nuclear technology to Iran, the ―brain‖ behind the Iranian nuclear program is believed to be Dr. Abdul Qadeer Khan, thefather of Pakistan's nuclear program, who passed secrets and equipment to Iranianofficials.

Negotiations with Iran aimed at convincing the Iranians to halt their nuclear program

began in 2003 and are continuing till date.

What are Iran’s key nuclear sites?

•   Arak, Heavy water reactor and production plant•  Bushehr, Nuclear Power Station•  Gachin, Uranium mine•  Isfahan, Uranium conversion plant•  Natanz, Uranium enrichment plant•  Parchin, Military site - The complex at Parchin, south of Tehran, is dedicated

to the research, development and production of ammunition, rockets and

explosives.•  Qom, Uranium enrichment plant

Who are the negotiating parties?

On one side of the table is Iran and the other is P5+1 countries. The P5+1 is a groupof six world powers: United States, United Kingdom, Germany, France, Russia andChina (five permanent members of security council plus Germany).

Why is Germany included in P5+1?

http://iranintelligence.com/reference-rulers#khameneihttp://iranintelligence.com/reference-conflicts#iraniraqhttp://iranintelligence.com/reference-conflicts#iraniraqhttp://iranintelligence.com/reference-rulers#khamenei

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Germany is the key trading partner of Iran. Iran's nuclear program depends mainlyupon German products and services. In 2005, Germany had the largest share ofIran's export market. Thus, sanctions imposed on Iran have huge impact onGermany‘s employment and other economic & traded related activities.

What are the key features of the Framework for Iran nuclear talks?

Parameters for a Joint Comprehensive Plan of Action regarding the IslamicRepublic of Iran’s Nuclear Program

Below are the key parameters of a Joint Comprehensive Plan of Action (JCPOA)regarding the Islamic Republic of Iran‘s nuclear program which were decided inLausanne, Switzerland. These elements form the foundation upon which the finaltext of the JCPOA will be written until 30th June 2015. Important implementationdetails are still subject to negotiation. The final details will be further analyzed aswhen the JCPOA takes final shape.

Enrichment

•  Iran has agreed to reduce by approximately two-thirds its installed centrifuges.•  Iran has agreed to not enrich uranium over 3.67 percent for at least 15 years.•  Iran has agreed to reduce its current stockpile low-enriched for 15 years.•   All excess centrifuges and enrichment infrastructure will be placed in IAEA

monitored storage and will be used only as replacements for operatingcentrifuges and equipment.

•  Iran has agreed to not build any new facilities for the purpose of enrichinguranium for 15 years.

•  Iran‘s breakout timeline – the time that it would take for Iran to acquire enoughfissile material for one weapon – is currently assessed to be 2 to 3 months.That timeline will be extended to at least one year, for aduration of at least tenyears, under this framework.

•  Iran will convert its facility at Fordow so that it is no longer used to enrichuranium.

  Iran will only enrich uranium at the Natanz facility.

Inspections and Transparency

•  The IAEA will have regular access to all of Iran‘s nuclear facilities, including toIran‘s enrichment facility at Natanz and its former enrichment facility atFordow, and including the use of the most up-to-date, modern monitoringtechnologies.

•  Inspectors will have access to the supply chain that supports Iran‘s nuclearprogram.

•  Inspectors will have access to uranium mines and continuous surveillance aturanium mills.

•  Inspectors will have continuous surveillance of Iran‘s centrifuge rotors andbellows production and storage facilities.

Reactors and Reprocessing

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•  Iran has agreed to redesign and rebuild a heavy water research reactor in Arak, based on a design that is agreed to by the P5+1, which will not produceweapons grade plutonium, and which will support peaceful nuclear researchand radioisotope production.

•  Iran will ship all of its spent fuel from the reactor out of the country for the

reactor‘s lifetime.•  Iran will not accumulate heavy water in excess of the needs of the modified

 Arak reactor, and will sell any remaining heavy water on the internationalmarket for 15 years.

•  Iran will not build any additional heavy water reactors for 15 years.

Sanctions

•  Iran will receive sanctions relief, if it verifiably abides by its commitments.U.S. and E.U. nuclear-related sanctions will be suspended after the IAEA hasverified that Iran has taken all of its key nuclear-related steps. If at any time

Iran fails to fulfil its commitments, these sanctions will snap back into place.•   All past UN Security Council resolutions on the Iran nuclear issue will be lifted

simultaneous with the completion, by Iran, of nuclear-related actionsaddressing all key concerns (enrichment, Fordow, Arak, PMD, andtransparency).

•   A dispute resolution process will be specified, which enables any JCPOAparticipant, to seek to resolve disagreements about the performance ofJCPOA commitments.

•  Iran will remain a party to the Nuclear Non-Proliferation Treaty (NPT), whichprohibits Iran‘s development or acquisition of nuclear weapons and requiresIAEA safeguards on its nuclear program.

Effect of the deal on India: Through an official statement India has welcomed thedeal between Iran and P5+1.

  India launched ‗Connect  Central  Asia‘  in 2012 and can get the desiredconnectivity options and fillip to boost trade and cooperation with Central Asian Region through Iran. 

  Energy imports (crude oil and natural gas) are a huge burden on the Indian

economy. Sanctions on Iran curtailed imports of energy from that country.This is likely to be reversed when sanctions are lifted.

  India has signed a contract to develop the Chahbahar port in Iran. The liftingof sanctions on Iran will help in expediting work on this project as well as helpin developing the rail-road link from Chahbahar to Afghanistan, a keyrequirement to ship out iron ore from the Hajigak mines in Afghanistan. Also,the Chahbahar port could add value to India‘s strategic needs in the PersianGulf region. 

  The TAPI pipeline, which promises to deliver Turkmen gas to India, ispotentially stuck across two obstacles, Afghanistan and Pakistan. In such asituation, natural gas from Turkmenistan could come directly to Chahbahar

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port and thereafter taken either through an under-sea pipeline or bycontainers to India. 

Effects on Israel and Saudi Arabia

Both Israel and Saudi Arabia are greatly alarmed by the agreement reachedbetween Iran and P5+1. They claim that Iran is intent on acquiring a nuclear arsenal

and also, Iran will be strengthened by the lifting of economic sanctions as part of the

agreement. Both see Iran with nuclear weapons as a direct threat to their existence

that must be confronted.

Co-operation between Israel and Sunni states (Saudi Arabia bloc) in the region hasbeen growing in response to Shia Iran‘s expanding influence in Iraq, Lebanon, Syriaand, most recently, Yemen. 

Glossary and Key Terms

•  Enrichment of uranium:

 After digging out uranium ore from the ground, it needs to be processed toextract pure uranium from the ore. After processing, uranium oxide isproduced. Uranium oxide contains two types of uranium: U-235 and U-238.U-235 is what is needed to make a bomb or to fuel a nuclear power plant. Butthe uranium oxide from the mine is about 99 percent U-238. So one needs tosomehow separate the U-235 from the U-238 and increase the amount of U-

235. The process of concentrating the U-235 is called enrichment, andcentrifuges are a central part of the process.

•  Centrifuges: 

The uranium oxide, thus produced, is converted into a gaseous form. Thegas is put into a centrifuge and then spun. The centrifuge creates a forcethousands of times more powerful than the force of gravity. Because the U-238 atoms are slightly heavier than the U-235 atoms, they tend to move outtoward the walls of the centrifuge. The U-235 atoms tend to stay more toward

the center of the centrifuge.

Thus, centrifuge is a machine utilized to enrich uranium.

•  Yellow Cake:

This is milled uranium oxide. The milling process gets rid of the uselessminerals that dominate the ore. First, raw ore is passed through a series ofindustrial-sized crushers and grinders. The resulting "pulped" ore is thenbathed in sulphuric acid, a process which leaches out the uranium. After somedrying and filtering, the end product is yellowcake: a coarse, oxidized powderthat is often yellow in color.

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NON-LETHAL WEAPONS STRATEGY

It is a March 2011 Agreement on the non-use of lethal weapons by the Border

Security Force (BSF), to transform the India-Bangladesh border from a border

management nightmare to a zone of peace and prosperity. It is an outcome of a

cooperative framework – the corner stone of India‘s approach to managing itsborders. 

Under this agreement BSF is to use non-lethal weapons to warn potential illegal

migrants or smugglers twice before resorting to the use of firearms.

Why was it necessary?

India and Bangladesh share a 4000 km long porous boundary. This has resulted in

illegal immigration, smuggling of cattle and fake Indian currency. In such situation

BSF the paramilitary force which is responsible for guarding the Indo-Bangla border

was accused of being trigger happy. Bangladesh had several times complainedabout deaths of unarmed Bangladeshi citizens transgressing the border.

 According to a policy think tank Observer Research Foundation (ORF) from 2001 to

2011 about 1,100 persons died at the border. This figure declined by about 30

percent after the agreement was signed.

Why is it in the news?

During a recent visit to one of BSF's border outposts in West Bengal, indicating a

hardline approach in dealing with smuggling along the India-Bangladesh border,Union Home Minister said that there was no such thing as a non-lethal strategy in

place for BSF.

This comment negating the 2001 agreement has caused online protests by rights

groups. But later Minister clarified that he was not expressing any doubts over

intentions of Bangladesh govt but that the sanctity of the border needed to be

maintained.

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INDIA –FRANCE DEAL

What are the origins of Rafale deal?

The original deal was for 126 fighter aircraft under the Medium Multi-Role Combat

 Aircraft contest, which began in 2007. Dassault Rafale was shortlisted in 2012 afterrigorous evaluation but negotiations have been stuck over pricing and deliveryguarantees for the aircraft manufactured by Hindustan Aeronautics Ltd. (HAL) inIndia.

What is the recent breakthrough in the deal?

During PM‘s visit to France in April 2015, it was decided that India would buy 36 ofthe rafale fighter planes in flyaway condition, citing critical operational requirementsof the Indian Air Force under a government-to-government deal.

The major reasons for the direct purchase are the fast-depleting fighter strength ofthe Indian Air Force, unending delays in the Medium Multi-Role Combat Aircraftnegotiations and the steep price rise.

What is the India-France deal regarding Jaitpur Project?

The Jaitapur project, where French company Areva is to set up six nuclear reactors,has been stuck for long because of differences over the cost of the power generated.In April 2015, an agreement on proceeding forward on the stalled nuclear projectwas signed. The agreement has been signed between India‘s Larsen and Toubro

and France‘s Areva aimed at cost reduction by increasing localisation and to improvethe financial viability of the Jaitapur project.

What are other deals?

•  France has decided to implement a scheme for expediting visa issuance by48 hours for Indian tourists. 

•  France announced an investment of 2 billion euros in India. 

•  An MoU was signed between the two countries for establishing an Institute forfrontier Marine Science & Technology Research in the five years. As a part ofthis France would contribute expertise in developing high standard marinestations for collaborative research programmes, train manpower, facilitatesetting up efficient research infrastructure, facilities & technologies.

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BRICS ENVIRONMENT SUMMIT 2015

Meeting of BRICS Environment Ministers

  Environment Minister Attends First Meeting of BRICS Environment Ministers

  It was held at Moscow in Russia.

  Shri Javadekar said that India will launch ‗Fresh air, my birth right‘, ‗Save

Water, Save Energy‘, ‗Grow More Plants‘ and Urban green‘ and other

campaigns for mass awakening and ensuring peoples‘ participation. 

Why the meeting?

  To launch a cooperation on environmental issues by setting up a steering

committee to coordinate efforts and sharing of technologies and best

practices.

  The 1st meeting of Environment Ministers of BRICS countries is a major

initiative depicting the seriousness attached to various issues related to

environment.

  Technology development, technology transfer and finance are important for

developing world for taking more robust actions. The cooperation of the

developed world is needed in this respect, as the cumulative efforts of the

world will impact the climate in a positive way.

How can India help?

  India can lead by example in its effort to combat climate change as Indian

lifestyle is simple, stresses on need-based consumption and uses less

energy.

  India has already revamped its solid waste, e-waste, plastic waste, bio-

medical waste and hazardous waste management rules and has put it on the

website for public consultation.

  By involving people at all levels in managing environmental issues. Peoples‘

participation adds a new dimension, as it paves way for a responsible

community action. And, India will ensure peoples‘ participation in mitigating

climate change. This participation is the key factor, as it will create more

awareness, make people a partner and ultimately lead to lifestyle changes,

which is the need of the hour.

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NATIONAL ISSUES -

NET NEUTRALITY

What is net neutrality?

Net neutrality is a principle that says Internet Service Providers (ISPs) should treat

all traffic and content on their networks equally. Those advocating Net neutrality

believe all bits of data are equal, and therefore, should not be discriminated on the

basis of content, site or user.

How does net neutrality affect you?

The internet is now a level-playing field. Anybody can start a website, stream music

or use social media with the same amount of data that they have purchased with a

particular ISP. But in the absence of neutrality, your ISP might favour certain

websites over others for which you might have to pay extra. Website A might load at

a faster speed than Website B because your ISP has a deal with Website A that

Website B cannot afford.

Why now?

First, India‘s top telecom company Bharti Airtel, towards the end of last year, decided

to charge subscribers extra for use of apps such as Skype and Viber. These apps

compete with the voice and messaging services of telecom providers, and are even

cheaper. There was uproar, after which Airtel stayed its decision, saying it would wait

for regulator Telecom Regulatory Authority of India‘s (TRAI) Consultation Paper on

Regulatory Framework for Over-the-top (OTT) services.

Then, Facebook brought to India internet.org, a pre-selected bouquet of Web sites

offered free to subscribers of Reliance Communications. There was not much

controversy then.

The buzz became really big after TRAI put out a 118-page consultation paper asking

the public for its opinion on 20 questions, most of them about how the Internet canbe regulated. Views were also sought on net neutrality. The objective of this

consultation paper, the regulator said, was to analyse the implications of the growth

of OTTs and consider whether or not changes were required in the current regulatory

framework. Also Airtel launched Airtel Zero, which is a free offering of a slew of apps

that sign up with the telecom provider.

What is an OTT?

OTT or over-the-top refers to applications and services which are accessible over

the internet and ride on operators' networks offering internet access services. Thebest known examples of OTT are Skype, Viber, WhatsApp, e-commerce sites, Ola,

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Facebook messenger. The OTTs are not bound by any regulations. The TRAI is of

the view that the lack of regulations poses a threat to security and there‘s a need for

government‘s intervention to ensure a level playing field in terms of regulatory

compliance.

Pro Net Neutrality Arguments:

  Net neutrality ensures network operators don‘t discriminate by limiting access

to services you want to use. It‘s an essential part of the open internet. 

  Every Internet user will be able to access any information he wants on the

internet without the telecom service provider interfering to serve some sites

faster than others.

  New ventures benefit as one of the key reasons for start-ups to have come up

in a big way in recent decades is the openness of the Internet. The Internethas reduced transaction costs and levelled the playing field. A start-up can

come up with an app today, and can immediately attract a global audience.

The likes of Googles and Facebooks could have struggled to grow if the

Internet had not been open.

  By rejecting net neutrality, which will enable telcos to play the gatekeeper to a

valuable resource, we will be shutting the door on the entrepreneurial

aspirations of millions. Also according to supporters of Net Neutrality the role

of gate keeper can be misused to create winners and losers. They could

charge companies a premium for access to users.

  The absence of Net neutrality could also benefit established Internet

companies who are flush with money. They could nip challengers in the bud

with vastly higher payoffs to telecom companies.

  The absence of net neutrality will probably benefit the telcos while at the same

time harming the market by unleashing monopolistic tendencies.

What are the arguments of Telcos to charge for OTT services?

The telcos argue that since they have to invest billions in getting access to spectrumand build networks as also adhere to regulations it is unfair that OTT services

like voice-calling and messaging apps using such infrastructure created by them do

not share any revenue or profits.

Is Internet.org and Airtel Zero inherently perverse?

The internet is one of the most powerful tools for economic and social progress. It

gives people access to jobs, knowledge and opportunities. It gives voice to the

voiceless in our society, and it connects people with vital resources for health and

education. Everyone in the world deserves access to these opportunities.

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In many countries, however, there are big social and economic obstacles to

connectivity. The internet isn‘t affordable to everyone, and in many places

awareness of its value remains low. Women and the poor are most likely to be

excluded and further disempowered by lack of connectivity.

By partnering with mobile operators and governments in different countries,Internet.org offers free access in local languages to basic internet services in areas

like jobs, health, education and messaging. Internet.org lowers the cost of accessing

the internet and raises the awareness of the internet‘s value. It helps include

everyone in the world‘s opportunities. 

More than 800 million people in 9 countries can now access free basic services

through Internet.org. In India, free basic services on the Reliance network to millions

of people in Tamil Nadu, Maharashtra, Andhra Pradesh, Gujarat, Kerala and

Telangana is being provided.

 According to Mark Zuckerberg, founder of Facebook, net neutrality is not in conflict

with working to get more people connected. These two principles — universal

connectivity and net neutrality — can and must coexist. Also it is always better to

have some access than none at all.

Is this an issue in India alone?

The Federal Communications Commission just recently voted for what is seen as

strong Net neutrality rules. This is to ensure Internet service providers neither block,

throttle traffic nor give access priority for money. Europe is trying to correct a 2013proposal for Net neutrality, in which privileged access was allowed to ‗specialised

services‘. This was vague and threatened Net neutrality. Chile last year banned

zero-rated schemes, those where access to social media is given free to telecom

subscribers.

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CEASEFIRE PACTS WITH NAGA GROUPS

* Government of India has signed a ceasefire agreement with the National

Socialist Council of Nagaland Reformation [NSCN/R].

* The Ceasefire and the mutually agreed Cease Fire Ground Rules will apply

for a period of one year with effect from 28th April.

* The Government of India has also extended the ceasefire with the National

Socialist Council of Nagaland (Khole-Kitovi) [NSCN/KK] for a further period of one

year with effect from 28th April.

* The Government of India has meanwhile decided not to engage with the

National Socialist Council of Nagaland (Khaplang) [NSCN/K] any longer and

therefore the earlier Ceasefire agreement with NSCN/K is no longer valid.

Who are NSCN/R, NSCN/KK and NSCN/K?

National Socialist Council of Nagaland The National Socialist Council of Nagaland

(NSCN) was formed on January 31, 1980 by Isak Chisi Swu, Thuingaleng Muivah

and S.S. Khaplang opposing the ‗Shillong Accord‘ signed by the then NNC (Naga

National Council) with the Indian government. Later, differences surfaced within the

outfit over the issue of commencing a dialogue process with the Indian Government

and NSCN split into factions. The NSCN split into the Isak-Muivah and Khaplang

factions. The NSCN (K) later split again into NSCN (Khole-Kitovi).

Besides Nagaland, the NSCN groups have a presence in three districts of Arunachal

Pradesh - Tirap, Changlang and Longding - that border Myanmar and are close to

China. The area has routes leading to the rebel camps in Myanmar.

The outfits aim to establish a ‗Greater Nagaland‘ (‗Nagalim‘ or the People‘s Republic

of Nagaland) based on Mao Tse Tung‘s ideology. Its manifesto is based on the

principle of Socialism for economic development.

Why is there a break down with the NSCN(K)?

On March 27, the National Socialist Council of Nagaland-Khaplang (NSCN-K)

headed by its Myanmar-based Chairman, S.S. Khaplang, unilaterally decided to

retract from the 14-year ceasefire agreement with the Indian government, due for

annual renewal on April 28. NSCN-K also expelled two senior India-based leaders,

Y. Wangtin Naga and P. Tikhak. The two have subsequently formed NSCN

(Reformation), a new body. It is argued that he saw greater benefits in snapping ties

with the Indian government and getting closer to the Myanmarese army and the

separatist outfits from India's Northeast that have camps in that region.

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How will the breakdown affect India?

The NSCN(K)‘s move might lead to renewed factional violence, which could stall the

plans of connectivity via Myanmar that Narendra Modi announced in his visit to the

North-East last year. It may also jeopardise the government‘s plan to make North-

East the gateway to trade with ASEAN countries.

IMPACT OF OTHER NATIONS – 

MYANMAR -

Naypyidaw (the capital of Myanmar) is aware of these developments but prefers to

turn a blind eye as befriending the Nagas would be more profitable. A ceasefire

agreement was concluded with NSCN(K) in April 2012 and this happens to be one of

the very few written accords with insurgent groups by the army. Not only have

hostilities come to an end but the Nagas have refused to be drawn into any allianceof insurgent groups in Myanmar against the army (the Kachin Independence Army

had approached the NSCN-K several times for a coalition). The Nagas have also

accepted some demands of the army like allowing Naga children to be taught

Myanmarese in some villages.

CHINA -

China's involvement with these insurgent outfits is covert. Its alleged that the top

functionaries of some of these groups have been given asylum in China with the

intention to convert this zone into its sphere of influence.

Recent developments in Myanmar have greatly disturbed Beijing, especially

Naypyidaw's move to draw closer to the US and India. The Chinese armed forces

has actively started assisting the United Wa State Army in the hills of Shan state with

sophisticated weaponry that include armoured personnel vehicles.

IMPLICATIONS OF OVERSEAS INTERESTS -

The presence of rich mineral deposits in the Naga region. These can only be

exploited in an ambience of peace and understanding with the NSCN(K). Also

foreign control and involvement with these rebel groups will help as a bargaining chipduring future bilateral exchanges.

What is or should be India’s response? 

India will have to continue with its policy of engaging Myanmar and China

irrespective of their policy towards the rebels. Economic and Trade relations with

China are very crucial; Myanmar is central to the Look East Policy and its huge

reserves of gas and oil would be crucial for India's increasing energy needs.

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NATIONAL JUDICIAL APPOINTMENTS COMMISSION ACT NOTIFIED

  The Government has notified the National Judicial Appointments Commission

 Act, 2014 and the Constitution (Ninety-ninth Amendment) Act, 2014 for

bringing in a change in the existing system for appointment of Judges in

Supreme Court and High Courts.  Two Bills titled 'The Constitution (One Hundred and Twenty First Amendment)

Bill, 2014' and 'The National Judicial Appointments Commission Bill, 2014'

were passed unanimously by the Lok Sabha and Rajya Sabha.

  Subsequently these Bills were ratified by the required number of State

legislatures before getting the President‘s assent. 

  The Constitution (One Hundred and Twenty First Amendment) Bill, 2014

enacted as the Constitution (Ninety Ninth Amendment) Act and the National

Judicial Appointments Commission Act, 2014 were published in Gazette ofIndia on 31st December 2014.

The Constitution (Ninety Ninth Amendment) Act, 2014 provides for the composition

and the functions of the proposed NJAC.

  The Acts provide for a transparent and broad-based process of selection of

Judges of the Supreme Court and High Courts by the National Judicial

 Appointments Commission (NJAC).

  The NJAC would be chaired by the Chief Justice of India as in the earlier

collegium system.

  The NJAC membership would include two senior most Judges of the

Supreme Court, the Union Minister of Law and Justice, two eminent persons

to be nominated by a committee of the Prime Minister of India, the Chief

Justice of India, and the Leader of the Opposition in the House of the People,

or if there is no Leader of the Opposition, then the Leader of the single largestOpposition Party in the House of the People.

  With a view to ensuring that the composition of the National Judicial

 Appointments Commission is inclusive, the Act provides that one of the

eminent persons shall be nominated from amongst persons belonging to the

Scheduled Caste, the Scheduled Tribes, Other Backward Classes, Minorities

or Women. The NJAC will frame its own regulations.

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ECONOMIC DEVELOPMENTS – 

FOREIGN TRADE POLICY

The Foreign Trade Policy, 2015-20 (‗FTP‘) was announced by the Hon‘ble Minister of

Commerce and Industry, Smt. Nirmala Sitharaman on April 1, 2015. The FTP hasbeen announced in the backdrop of several measures initiated by the Government of

India such as ‗Make in India‘, ‗Digital India‘ and ‗Skills India‘, among others. 

Objectives:

The FTP has been introduced,

  to double India‘s share in world trade by the year 2020.

  to rationalize the general provisions regarding imports and exports and also,

various promotional measures offered by the Commerce Ministry

  to offer a mechanism for resolving quality complaints and trade disputes.

Key Highlights of the FTP

  FTP is to be aligned with Make in India, Digital India & Skills India initiatives.

  It has been outlined that higher level of support for export of defence, farm

produce and eco-friendly products would be provided.

  The benefits of the erstwhile FTP have now been consolidated into two newschemes for export of merchandise and services, i.e., Merchandise Export

from India Scheme (‗MEIS‘) and Service Export from India Scheme (‗SEIS‘). 

  MEIS

o  Objective of MEIS is to offset infrastructural inefficiencies and

associated costs involved in export of goods, which are

produced/manufactured in India, especially those having high export

intensity, employment potential and thereby enhancing India‘s export

competitiveness.

  SEIS

o  SEIS is made available to ―Service Providers located in India‖ as

against the existing Served Form India Scheme available to ―Indian

Service Providers‖. 

o  Objective of SEIS is to encourage export of notified Services from

India.

  The benefit of MEIS and SEIS has been extended to units located in SpecialEconomic Zones – This step is imperative to boost the SEZ sector.

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  MEIS and SIES schemes provide rewards to importers and exporters in terms

of duty free scrips.4 

   Additional Ports are now allowed to export and import which include Calicut

 Airport, Kerala and Arakonam ICD.

  Boost to "MAKE IN INDIA"

o  FTP has reduced Export Obligation5 (EO) for domestic procurement in

order to promote domestic capital goods manufacturing industry.

o  There are higher level of rewards under MEIS for export items with

high domestic content and value addition.

  Status Holders

o  Business leaders who have excelled in international trade and havesuccessfully contributed to country‘s foreign trade are proposed to be

recognized as Status Holders and given special treatment and

privileges to facilitate their trade transactions, in order to reduce their

transaction costs and time.

o  The nomenclature of Export House, Star Export House, Trading

House, Star Trading House, Premier Trading House certificate has

been changed to One, Two, Three, Four, Five Star Export House.

o  The criteria for export performance for recognition of status holder havebeen changed from Rupees to US dollar earnings.

  Centre for Research in International Trade – is a new institution being

established not only to strengthen India‘s research capabilities in the area of

international trade, but also to enable developing countries to articulate their

views and concerns from a well-informed position of strength.

  The policy also said that two institutional mechanisms are being put in

place for regular communication with stakeholders – the Board of Trade and

the Council for Trade Development (CTD) and Promotion.

  While the Board of Trade will have an advisory role, the CTD

would have representation from State and UT governments.

CTD will be an institution between the Centre and the states

with the objective of to ensure participation of state government

into central government policy making, implementation and

monitoring.

4 Duty free scrips are explained later.5 Export Obligation” means obligation to export products in terms of quantity, value or both,

as specified by Regional or competent authority.

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  FTP also promotes e Commerce focusing on job creation.

  Unlike the annual reviews of the past, the FTP will be reviewed after two-and-

half years to ensure continuity in the trade policy.

What are duty-free scrips?

Duty free scrips are paper authorizations that allow the holder to import inputs that

go into manufacture of products that are to be exported. Such goods are imported

without paying duties equivalent to the printed value on the scrip. For instance, if a

duty free scrip is valued at Rs 10 lakh, the holder can use it to import such goods

without paying duties up to Rs 10 lakh.

Who gets duty-free scrips?

Duty free scrips are given to exporters under various export promotion schemes of

the government. Under these promotional schemes, incentives are given for ex-

porting identified products and targeting specific markets fixed at a certain

percentage of the export value. It is also used to reimburse duties on imported inputs

as mentioned in the exmple given above.

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GREEN BONDS

What are green bonds? 

 A bond is a debt instrument with which an entity raises money from investors. Thebond issuer gets capital while the investors receive fixed income in the form ofinterest. When the bond matures, the money is repaid to the investors.

 A green bond is very similar. The only difference is that the issuer of a green bondpublicly states that capital is being raised to fund ‗green‘ projects, which typicallyinclude those relating to renewable energy, emission reductions and sustainabledevelopment initiatives. There is no standard definition of green bonds as of now.Green bonds are issued by multilateral agencies such as the World Bank,corporations, government agencies and municipalities.

Why are they in the news?

In February 2015, Yes Bank issued green bonds, being the first one in India to issuegreen bonds.

In March, the EXIM Bank of India issued a five-year $500 million green bond, whichis India‘s first dollar-denominated green bond. The bank has said it would use the netproceeds to fund eligible green projects in countries including Bangladesh and Sri

Lanka.

Why are green bonds important for India? 

India has embarked on an ambitious target of building 175 gigawatt of renewableenergy capacity by 20226. This requires massive funding. Given the budgetaryconstraints and India‘s ambitious energy targets, the green bonds will enable thegovernment to raise capital at low interest rates and for a longer period.

Why should an investor invest in Green Bonds despite lower interest rates? 

 A green bond carries lower risk than other bonds. The proceeds from the bond areraised for specific green projects, but repayment is tied to the issuer, not the successof the projects. This means the risk of the project not performing stays with the issuerrather than investor. Simply put, an investor in Green Bonds is assured return to agreater extent as opposed to other bond instruments.

6 Announced during the budget 2015-2016 by Finance Minister Arun Jaitley

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What are the risks and challenges? 

Globally, there have been serious debates about whether the projects targeted bygreen bond issuers are green enough. There have been a few instances ofcorporations, governments, and other institutions asking for green bond investmentsover projects that may not be specifically towards the cause of environmentalsustainability. Also, a few cases of the projects not been environmentally consciousby themselves also been reported.

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MUDRA BANK:

MUDRA, Micro Units Development and Refinance Agency launched by Prime

Minister Narendra Modi, would be responsible for developing and refinancing

through a Pradhan Mantri MUDRA Yojana, all Micro-finance Institutions (MFIs) whichare in the business of lending to micro / small business entities engaged in

manufacturing, trading and service activities. MUDRA would also partner with

State/Regional level coordinators to provide finance to Last Mile Financiers of

small/micro business enterprises. Further, the approach goes beyond credit only

approach and offers a credit – plus solution7 for these enterprises spread across the

country.

The roles envisaged for MUDRA would include:

  Laying down policy guidelines for micro enterprise financing business.

  Registration of MFI entities.

  Rating of MFI entities.

  Laying down responsible financing practices to ward off over indebtedness

and ensure proper client protection principles and methods of recovery.

  Promoting right technology solutions for the last mile.

  Formulating and running a Credit Guarantee scheme for providing guaranteesto the loans which are being extended to micro enterprises.

  Support development & promotional activities in the sector.

What exactly is MUDRA?

 As announced in the Budget, the MUDRA institution has been initially set up as an

NBFC (Non-Banking Financial Company) and as a subsidiary of SIDBI (Small

Industries Development Bank of India). Later, it will take the shape of a full-fledged

institution to be set up under legislation. It will work as a refinance8 and credit

guarantee organization and also as a regulator of micro financial institutions.

Why do we need MUDRA bank?

 According to the NSSO Survey of 2013, there are approximately 5.77 crore small

business units, mostly individual proprietorship, which run manufacturing, trading or

services activities. These encompass myriad of small manufacturing units,

shopkeepers, fruits / vegetable vendors, truck & taxi operators, food-service units,

repair shops, machine operators, small industries, artisans, food processors, street

7 Explained later in the article.8 Refinance: Replacing an older loan with a new loan offering better terms.

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vendors and many others. Most of these ‗own account enterprises‘9 (OAE) are

owned by people belonging to Scheduled Caste, Scheduled Tribe or Other

Backward Classes. The biggest bottleneck in the growth of entrepreneurship in this

sector is the lack of financial support. A vast part of the non-corporate sector

operates as unregistered enterprises and formal or institutional architecture has notbeen able to reach out to meet its financial requirements. Providing access to

institutional finance to such micro/small business units/enterprises will not only help

in improving the quality of life of these entrepreneurs but also turn them into strong

instruments of GDP growth and employment generation.

Since the enactment for MUDRA is likely to take some time, it is proposed to initiate

MUDRA as a unit of SIDBI to benefit from SIDBI‘s initiatives and expertise.

Products and Offerings:

The primary product of MUDRA will be refinance for lending to micro businesses /units under the aegis of the Pradhan Mantri MUDRA Yojana. The initial products and

schemes under this umbrella have been named ‗Shishu‘, ‗Kishor‘ and ‗Tarun‘ to

signify the stage of growth and funding needs of the beneficiary micro unit /

entrepreneur as also provide a reference point for the next phase of growth for the

entrepreneur to aspire for:

  Shishu: covering loans upto Rs. 50,000/-

  Kishor: covering loans above Rs. 50,000/- and upto Rs. 5 lakh

  Tarun: covering loans above Rs. 5 lakh and upto Rs. 10 lakh

Who benefits from MUDRA?

Businesses/entrepreneurs/units covered would include proprietorship/partnership

firms running as small manufacturing units, shopkeepers, fruits/vegetable sellers,

hair cutting saloon, beauty parlours, transporters, truck operators, hawkers, co-

operatives or body of individuals, food service units, repair shops, machine

operators, small industries, artisans, food processors, self help groups, professionalsand service providers etc. in rural and urban areas with financing requirements upto

Rs.10 lakh.

Credit Plus Approach

MUDRA would adopt a credit plus approach and take up interventions for

development support to micro businesses. The highlights of such proposed

interventions are as under:

9 A commonly used term for informal businesses that usually involve family members.

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  Supporting financial literacy

  Promotion and Support of Grass Root Institutions

  Creation of Framework for ―Small Business Finance Entities‖ 

  Synergies with National Rural Livelihoods Mission

  Synergies with National Skill Development Corporation

  Working with Credit Bureaus

  Working with Rating Agencies

Other Proposed Offerings:

  MUDRA Card

  Portfolio Credit Guarantee

  Credit Enhancement

How will MUDRA bank help in financing Small business?

  It is structured as an apex refinancer to enable over 50 million unfunded

entrepreneurs to access formal credit from credit institutions registered under

it.

  MUDRA will fund the micro units which are more efficient than moderncorporates. According to the Economic Census 2014, the gross fixed assets

of the 5.77 crore small businesses is about 11.5 lakh crore. While corporates

pay interest at 9 to 14 per cent, micro units pay at least ten times more.

 Also,these micro units provide 128 million jobs

  The MUDRA architecture is indigenously designed to fund the uniquely Indian

non-formal sector.

Why do micro businesses require Institutional support?

  In July 2013, the Credit Suisse Asia Pacific Equity Division put out a study of

the non-formal sector in India titled ‗India‘s better half: the informal economy‘.

It noted that nine out of ten jobs in India and half of its GDP originated in the

non-formal sector.

  Over 70 per cent of the micro businesses are unregistered. The best way to

register them into the national economic records is to provide organised

financing to them.

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What is LMF, why should MUDRA integrate them and how does MUDRA help in

their inclusion?

LMF refers to Last Mile Financier. Integrating the existing and new LMFs to deliver

credit to micro businesses is an indigenous idea. LMFs borrow money at high cost to

finance micro businesses thus making their interest very high. If LMFs are evaluated,appraised, registered and given refinance at lower rates, the ultimate interest rate for

micro businesses would be lower. This is how the MUDRA structure seeks to

integrate the hundreds of thousands of informal financiers into the formal modern

financing system. Thus, the approach goes beyond credit only approach to a credit – 

plus solution for these myriad micro enterprises, creating a complete ecosystem

spread across the country.

The inclusion of the local LMFs is an innovative idea as local knowledge is the

primary requisite for successful and recoverable lending to micro units; LMFs have

local knowledge and knowledge of the borrowers‘ character and worth. The MUDRA

concept, therefore, seeks to formalise the non-formal LMFs to deliver credit to micro

businesses. MUDRA will lay down normative guidelines for small units financing

institutions at all levels including the LMFs.

It will register them. Regulate them. Accredit them. Rate them. Fix responsible

financial practices, client protection principles and methods of recovery. Develop

standardised covenants governing last mile lending to micro enterprises. Formulate

and run credit guarantee schemes for credit extended to micro businesses.

MUDRA will build on experiences of some of the existing players who have

demonstrated ability to cater to the Non Corporate Small Business segment to build

a financing architecture and right ecosystem for both the entrepreneurs as well as

the last mile financiers to the segment.

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PRICE STABILIZATION FUND

The Union Agriculture Ministry has approved the Price Stabilisation Fund (PSF) as a

Central Sector Scheme. The fund, with a corpus of Rs. 500 crore, will be used to

support market interventions10 for managing prices of perishable agri-horticultural

commodities.Why do we need such fund?

  To support market interventions for price control of perishable agri-

horticultural commodities.

  Prices volatility affects farmers as well as consumers. Abnormal increases in

price of commodities affects the consumers by way of increase in food

consumption budget, while a decrease in prices below the cost of cultivation,

affects the producers.

  Wide price fluctuations also lead to speculation which further impact prices in

retail market.

  Horticultural commodities are not covered under the Minimum Support Price

(MSP) mechanism and therefore, the farmers at times, do not even recover

their cost of cultivation, being fully dependent upon the market for disposal of

their produce. As a result, farmers suffer the most on account of steep fall in

prices.

  Utilising price stabilisation fund, the government may participate in the marketof perishable commodities by developing backward and forward linkages and

proper infrastructure provisions for procurement and distribution.

Objectives:

1. To protect farmers from distress sale of selected horticulture commodities.

2. To promote direct purchase by identified Central and State agencies from

farmers.

3. To maintain a strategic buffer stock that would discourage hoarding andunscrupulous speculation.

4. To supply such commodities at reasonable prices through calibrated release

of stock and their proper distribution.

10 Due to the forces of demand and supply and various factors influencing these,there are fluctuations in the commodity prices. Too much fluctuation especially inagriculture market can prove to be detrimental for both sellers and consumers. Thus,government sometimes has to intervene in the market to stabilize the prices. This iscalled market intervention.

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How will the fund be used?

  PSF will be used to advance interest free loan to State Governments/Union

Territories and Central agencies to support their working capital and other

expenses on procurement and distribution interventions for such commodities.

  Initially the fund is proposed to be used for onion and potato only.

  These commodities will be procured directly from farmers at the farm gate or

mandi level and be made available at reasonable prices to consumers.

  In case of North Eastern States, the State level corpus will comprise of 75%

funds from Centre and 25% from the State. The Central Government will

share 50% of losses (75% in case of NE states), if any, at the time of

settlement of the advance on 31st March, 2017. The Central Government also

intends to share the profits, if any, in the same ratio.

  The States could also request Central Agencies to undertake such operations

on their behalf to be supported out of the State corpus. Additionally, the

Centre can also request the Central Agencies like SFAC, NAFED, etc. to

undertake price control operations for onion and potato.

Are there any drawbacks?

The provision for procurement through farmer producer organizations (FPOs) may

prove to be a remarkable move as this will create competitive advantage and boost

infrastructure. At the same time, it should also be considered that these FPOs are

private companies and while to benefit the farmers, State governments may facilitate

them in procuring, during period of scarcity (or high market price), it may not force

these organizations to sell at a lower price to consumers.

Under such circumstances, a component of Price Stabilisation Fund should be

maintained aiming at avoiding interference to the autonomy of FPOs as well as

consumer welfare.

Provisions such as aid for private storage may also be introduced to promote storage

of the commodity (by farmers and FPOs during period of low prices) which later canbe sold at higher prices.While finalising and floating the scheme, thought must be

given to have an approach considering the entire value chain of the commodities and

not a single stakeholder.

How will the Fund be managed?

The Price Stabilization Fund will be managed centrally by a Price Stabilization Fund

Management Committee (PSFMC) which will approve all proposals from State

Governments and Central Agencies. The PSF will be maintained in a Central Corpus

Fund account to be opened by Small Farmers Agri-Business Consortium (SFAC),which will act as Fund Manager.

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GOVERNMENT INITIATIVES/PROJECTS/ACQUISTIONS -

KALAVARI SUBMARINE

Kalvari, first of the Indian Navy‘s Scorpene class stealth submarines being built

under the Project 75, under collaboration with M/s DCNS, France. It achieved amajor milestone with her ‗undocking‘ at the Mazagon Dock Limited (MDL). Kalvari,

upon its scheduled commissioning in 2016, would lend an enormous fillip to the

Indian Navy‘s underwater capability. 

What is MDL?

MDL refers to Mazagon Dock Limited, called ―Ship Builder to the Nation‖, is India‘s

leading Shipyard. As the exclusive public sector shipyard manufacturing submarines

in the country, its main activities are construction of state-of-the-art warships and

submarines with facilities situated at Mumbai and Nhava. They have the capability tobuild warships, submarines, merchant ships.

What are Scorpene Class submarines?

The Scorpene is a conventional submarine with classical diesel propulsion. It is 219

feet long and has a speed of over 20 knots for a displacement of 1,700 tonnes. With

31 men on board it can remain at sea for about 50 days and can dive to a depth of

more than a thousand feet.

The Scorpene Submarine has been jointly developed by DCN of France andNavantia Spain and incorporates the very latest Naval technology. At the heart of the

submarine is the SUBTICS integrated combat system, a highly computerised central

management system, which oversees all of the submarine‘s sensors and its

weapons.

Features:

India‘s first ultra-deep diving vessel, the Scorpéne is stealthier than the average

submarine. The design uses "high-yield specific steel," which allows it to dive almost

1,000 feet into the ocean. It also uses a noise-cancelling technique, whereby its

equipment is mounted on elastic to prevent noisy vibrations from travelling outside

the vessel. The Scorpéne‘s body is also designed to be harder for Sonar to detect.

How will the scorpene submarines strengthen our forces?

The Scorpene submarines would pack a potent punch as they would be equipped

with anti-ship missiles and long range guided torpedoes along with modern sensor

suite.

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Designed to be extremely silent, the Scorpene can loiter under water for days,

scouring the seas through long-range passive sonar signals, which detect the

presence of other submarines and warships in the vicinity

Despite advances in sonar technology over the decades, detecting, tracking and

targeting submarines remains extremely difficult, particularly in the Indian Oceanwhere the salinity of the seas and the presence of thermal zones of variable water

temperature, make submarine detection extremely difficult. Submarines like the

Scorpene make this game of detection and counter-detection even tougher.

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SKILL GAP STUDIES

Minister of Ski l l Developm ent and Entrepreneurship Shri Raj iv Pratap Rudy

Launched Hum an Resour ce and Ski l l Requirement Reports for 24 Prior i ty

Sectors

Who?

The reports were commissioned by National Skill Development Corporation (NSDC)

and authored by consulting firm KPMG.

Why?

The idea behind the Skill Gap Studies is to understand which sectors are likely to

face the biggest gaps. These skill gap reports will help us to understand the sectorial

and geographical spread of skill requirements that exist.

  Industry will Require close to 109 Million Skilled Workforce over the next

Decade

  Flagship Scheme of MSDE Pradhan Mantri Kaushal Vikas Yojana will Skill

People in Accordance with Estimated Gaps and Requirements.

  Nearly 460 Million people will Require Up-Skilling/Re-Skilling.

  These reports will be used for the implementation of the recently announced

Pradhan Mantri Kaushal Vikas Yojana (PMKVY); for State Skill Missions, and

for various other skill initiatives being planned across the country.

 According to the findings of the reports,

  The incremental human resource requirement across these 24 sectors is

nearly 109.73* million whereby the top 10 sectors account for about 80% of

requirements.

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MOBILE SCIENCE LAB

Shri Piyush Goyal Flaged off NTPC Mobi le Science Labs fo r

Underpriv i leged Students in Rural India

What is Mobile Science Lab?

Mobile Science Lab (MSL) a vehicle fitted with LCD TV carrying working Science

Models emphasizing curiosity based learning for children in rural India.

Why is it necessary?

* It is an initiative to revolutionize rural education and make hands-on learning

accessible amongst underprivileged children.

* It is an innovative concept by which spirit of scientific learning and openthinking can be ignited among young boys and girls in rural areas.

* This new initiative of Labs on Wheels will further encourage young bright

minds in remote parts of India also to think differently and learn better & faster.

Other Features: Three Mobile Science Labs shall be initially deployed at NTPC's

on going projects at Darlipalli, Pakri Barwadih and Kahalgaon through Agastya

International Foundation. Each Mobile Science Lab will cover a set of about 20

schools around NTPC project generating about 16000 student exposures per

year. More than 1,40,000 student exposure will be generated in three yearsenhancing level of curiosity and creativity among children. The instructors for

mobile science lab will be from neighbourhood community.

How will Mobile Science Lab work?

• School visits: Each Mobile Science Lab will travel to doorstep of remote schools

with hands-on science models covering topics in Physics, Chemistry & Math for

awareness amongst children up to Secondary school level in line with National

Curriculum Framework and NCERT syllabus.

• Young Instructor's Program: Apart from teaching & demonstrating through

experiments, students will be trained as Young Instructors to teach their peers.

• Science Fairs: Science Fairs shall be organized for wider participation using

simple models, and Young Instructors will demonstrate scientific phenomena

such as solar and lunar eclipse, seasonal changes, pressure & volume

relationship etc.

• Activity Camps: Emphasis on activity based learning for community during

summer & winter vacations. At night, MSL team will visit villages and

demonstrate models & experiments in gathering spots of villages, with focus to

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impart sense of responsibility amongst parents, motivating them to send their

children to schools.

• Teacher Training: MSL shall organize Teacher Training programs to diffuse &

propagate creative-thinking with problem-solving skills among school teachers.

The instructors will work with mixed groups of teachers & children to bridge thegap between teacher training and classroom requirement.