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    Aspirants Times Magazine Vol6 [Www.Upscportal.Com] Aspirants Times Magazine Vol6 [Www.Upscportal.Com] Document Transcript

    • http://upscportal.com http://upscportal.com/store Copyright © 2009 | WWW.UPSCPORTAL.COM 1 http://upscportal.com/classifieds
    • INDEX Editorial • War is Approaching, Face the Battle.......................................................................03 SECTION - 1: Articles • India-Switzerland Bilateral Relation ......................................................................04 • India and United Nations .......................................................................................12 • Fiji Suspended from Commonwealth......................................................................25 • Hindi Article ( “EÞ ‡¹É IÉäjÉ E É ‡´ÉE ÉºÉ ¦ÉÉ® iÉÒªÉ +lÉÇ´ªÉ´ÉºlÉÉ E É ¨ÉÖJªÉ +ÉvÉÉ®” ) .............38 SECTION - 2: Hot Topics India’s Per Capita GHG Emissions...............................................................................51 SECTION - 3: Current Relevant Facts......................................................................61 SECTION -4: Sports ................................................................................................65 SECTION -5: Awards...............................................................................................69 SECTION - 6: Mains Special • Foreign Relations Of India.......................................................................................74 • International Organizations...................................................................................120 • Hot Economic Issues..............................................................................................137 Copyright © 2009 | WWW.UPSCPORTAL.COM 2
    • War is Approaching, Face the Battle... Now final war for IAS mains is approaching and you are very near to it. Some candidates are fully prepared and some are confident but there are also some candidates, who are loosing the confidence in themselves. But all of you should keep one thing in mind very clearly, that the battle is open and no-one is victorious or loser, without actually facing the it. So my advice is that all of you must synchronize all your abilities, power, knowledge, time and everything. All of you know that good strategy is indispensable to win the war, so make your own strategy. all of you must have “your own” personal strategy. We are trying our best to provide you the materials for mains in very concise way. In this 6th and maiden volume, you will find “International Relation and Organization”, and Economy under the mains special column. We have covered all the important topics in the style by which you can understand them within few minutes. Read them carefully. Along with this, there is articles on “India and United Nations-Significant Contributions for Peace and Development”, “India-Switzerland Bilateral Relation-Social Security Agreement to Enhance Cooperation”, “ Fiji Suspended from Commonwealth- Failed to Opening Talks on a Return to Democracy”. Also an article on “EÞ ‡¹É IÉäjÉ E É ‡´ÉE ÉºÉ ¦ÉÉ® iÉÒªÉ +lÉÇ´ªÉ´ÉºlÉÉ E É ¨ÉÖJªÉ +ÉvÉÉ®” in Hindi. These are others topics as well, which may be asked in the IAS mains examination 2009. “India’s Per Capita GHG Emissions” is covered in Hot Topic and as always Personality, Awards and Sports sections have been covered under the regular column, Current Affairs. Our best wishes to all of you to win the final war. Editor: R. K. Pandey and UPSCPORTAL Team Copyright © 2009 | WWW.UPSCPORTAL.COM 3
    • Section -1 (Article : India-Switzerland Bilateral Relation) India-Switzerland Bilateral Relation Social Security Agreement to Enhance Cooperation By: R. K. Pandey India and Switzerland signed a Social Security There are over 11,000 Indians in Switzerland and Agreement on September 03, 2009 in New Delhi, there are over 800 Swiss nationals working in In- in presence of the Vice-President of the Swiss Con- dia. There is potential for greater movement of federation and Minister of Economic Affairs, Ms. workers between the two countries in future. This Doris Leuthard. The Agreement was signed by bilateral Social Security Agreement will enhance Shri. K. Mohandas, Secre- trade and investment between the tary of Overseas Indian two countries. India has signed Affairs Ministry and Mr. similar agreements with Belgium, Philippe Welti, Ambassa- France and Germany in the recent dor of the Swiss Confed- past. eration in India. On the occasion, Shri. Mohandas Friendship between India said that this is an impor- and Switzerland tant agreement, which will further boost the The emergence of friendship be- friendly relationship be- tween India and Switzerland for- tween the two countries. mally started with the Treaty of Friendship and Establishment of This Social Security 1948 and was strengthened in various fields such Agreement will enhance cooperation on social se- as development, economy, and culture. The ex- curity between the two countries. It will facili- changes between the two countries have since tate the movement of professionals between the then increased. The two nations had a first com- two countries. The detached workers sent by Swit- mercial contact in 1851 when Salomon and Johann zerland-based companies to their Indian subsid- Georg Volkart simultaneously founded their com- iaries, or those sent by Indian companies to their pany Volkart Brothers in Bombay and Winterthur. branches in Switzerland will be exempt from so- They reacted to the increasing demand in Europe cial security contribution in the host country for for products from the Indian subcontinent and of a period of 72 months. While working abroad, European products in India. The two pioneers and these employees will only be subject to the social adventurers reached high prominence with their security regulations of their home country. The company in India. Agreement provides that an employed or self- employed person, other than detached workers Furthermore, Mahatma Gandhi came to Switzer- shall be subject only to the legislation of the host land in 1931 after having attended the Round country. The Agreement provides for refund of Table Conference in London. He spent five days the contributions at the time of relocation. In so in Switzerland to meet his friend Romain Rolland. far as Switzerland is concerned, the person will Swiss development cooperation with India started be refunded the contributions in accordance with 50 years ago. The first project of the Swiss Agency the Swiss legislation. In so far as India is concerned, for Development and Cooperation (SDC) was ini- the person will be paid the withdrawal benefit or tiated in 1963 in Kerala with the purpose to con- the pension in Switzerland or a third country, as tribute towards the improvement of livestock in the case may be, in accordance with the Indian the State, mainly for dairy production. The suc- legislation at the time of relocation. The Agree- cessful result was an eight-fold increase in milk ment will come into effect after the fulfillment of the national requirements. Copyright © 2009 | WWW.UPSCPORTAL.COM 4
    • Section -1 (Article : India-Switzerland Bilateral Relation) production over 35 years in the region. From splendour and the puzzling diversity, including the Kerala, SDC India geographically extended its ac- philosophical and religious one, of the subconti- tivities to other regions and domains of coopera- nent. Thus, the Swiss psychoanalyst Carl Gustav tion, including to green technologies at present. Jung, who during his trip to India in 1938, which he described thoroughly in his work, was honoured with three doctorates from Allahabad, Swiss agency for development and Cooperation: Benaras and Calcutta universities. Or take the The Swiss agency for development and Coopera- sculptor, painter and art historian Alice Boner tion (SDC) works in India with a central focus on (1889-1981) from Zurich, who spent not less than poverty reduction. Geographically its cooperation 45 years at the banks of the Ganga, in Benaras, programme has been concentrated on semi-arid and who was awarded the "Padmabhushan" in regions of the central Deccan plateau (Karnataka, 1974 by the Indian President for her outstanding Andhra Pradesh, Maharashtra) as well as on scholarly work on Indian art, especially sculpture Kerala, Rajasthan, Orissa, Sikkim and Gujarat. and architecture. As to the well known Swiss travel writer Ella Maillard, she spent the years of SDC's programmes have contributed to people's the World War II in the ashram of Ramana empowerment and poverty reduction by focus- Maharishi, south of Madras, and reflected her ing on three productivity enhancing themes: re- unique experience in the novel "Ti Puss". tention and sustainable use of water, rural energy and housing, rural finance and employment cre- The strong relationship between Switzerland and ation. In addition, SDC has supported Indian India has been continually strengthened by In- organisations in the fight for inclusion and social dian and Swiss dignitaries who believed in the po- justice and in the promotion of the decentralisation tential of sharing ideas and concrete projects to- process. gether. Therefore, it is not surprising that the first ever friendship treaty signed by independent In- Considering the fast growing importance of India dia was with Switzerland, signed by India's first as a global actor, the availability in the country of Prime Minister Jawaharlal Nehru on 14th August financial and human resources to address the chal- 1948. lenge of poverty and sustainable development, as well as the importance to build on more than 45 Ever since, the two countries have maintained a years of development cooperation with India, SDC cordial friendship, kept alive by regular in 2006 decided to engage into a new type of col- visits, economic and cultural activities. Mr. Nehru laboration with India. admired Switzerland as a model democratic state and sent his daughter Indira to a girl's boarding The new Programme involves a shift from tradi- school in Bex, VD. Many members of the Indian tional/classical development cooperation, towards leadership have been to Switzerland at one time a collaboration based on common interests and or another and have helped to create a positive shared investments, with the ultimate aim of re- image of Switzerland in India. ducing poverty. A key feature of this Programme is the exchange of know how and technologies Switzerland and India have since long been en- between Switzerland and India and the promo- joying mutually beneficial trade and economic ties tion of South-South cooperation. but these relations got a new impetus in the be- ginning of the 1990s, when India's economy be- Historical and Political Ties: Switzerland and In- gan opening up to the world market. Both sides dia are in many respects close to each other. Swiss have some core competencies, which our politi- people, mainly artists and intellectuals, have since cal leaders and business communities have always long been attracted to the historic and cultural strived to put together, resulting in increased trade Copyright © 2009 | WWW.UPSCPORTAL.COM 5
    • Section -1 (Article : India-Switzerland Bilateral Relation) and investment flows between the two countries. especially for those Indian companies which The bilateral relations between India and Swit- would like to cover their European business ac- zerland have grown closer over time. On 1st April tivities from within Switzerland. 1947, Switzerland opened a Trade Mission in In- dia, which in 1948 was converted into a Mission Our two countries have indeed a lot to offer to and in 1957 into an Embassy. The present Swiss each other and to gain in developing cooperation Ambassador to India is H.E. Mr. Philippe Welti. in high-tech and knowledge-based industries. In He is also accredited to Nepal and Bhutan. There fact, both sides are already trying to bring more is a Consulate General in Mumbai, which is cur- vibrancy to the relationship by adopting focused rently headed by Mr. Peter Specker. Three Hon- approaches, and initiatives have already been orary Consuls are promoting relations between taken in sectors such as biotechnology, textile India and Switzerland in Kolkata, Bangalore and machinery and railways. Chennai. The Swiss Business Hub India (SBHI) which is part India opened a mission in Switzerland in 1948, of Osec Business Network Switzerland and which which was elevated to an embassy in 1954. Since is located in the Consulate General in Mumbai and 1957 there has been a residing Ambassador in the Swiss Embassy in New Delhi offers a wide Bern. India maintains a General Consulate in range of services to assist small and medium-sized Geneva and is represented by an Honorary Con- enterprises (SMEs) from Switzerland and sul in Zurich. Liechtenstein in their efforts to penetrate the In- dian market. Economic Relations: Switzerland and India con- tinue to be natural partners constantly working The Swiss-Indian Chamber of Commerce (SICC) together to strengthen their relationship in vari- is a key actor in promoting Swiss-Indian bilateral ous fields. In the recent years, economic relations trade and investment. SICC is a bi-national, non- between the two countries have been hoisted to a profit association with over 320 Swiss and Indian higher level of importance. This is reflected in the members. It has offices in Zurich, Delhi, Banga- pace at which our total bilateral trade has increased lore, Mumbai and Chennai. The Chamber provides from Swiss Francs 1.16 billion in 2002 to Swiss members in Switzerland and India access to first- Francs 2.62 billion in 2006, reflecting an increase hand information and expertise thanks to the res- of 125 per cent in four years. This positive trend ervoir of know-how offered by its board and ex- in the last years is set to continue: In the first tensive partner network in both countries. eleven months of 2007, Swiss exports to India have gone up by 30 per cent whilst Indian exports to Recent years have also seen exchange of high-level Switzerland have increased by 25 per cent, as com- visits, and intensification of the dialogue between pared to the same period of the previous year. the two governments to ensure that together they In terms of foreign direct investments, Switzer- can explore new ways and means to further land has remained amongst the top 10 foreign in- strengthen the trade and investment ties. Nota- vestors in India. About 150 Swiss companies have bly, India has been identified as a country of high formed joint ventures or subsidiaries, and many importance in the framework of Switzerland's more have representatives or agents in India. The Foreign Economic Strategy. The EFTA countries Swiss technology-driven companies, including (Iceland, Liechtenstein, Norway and Switzerland) small and medium businesses, play a major role in and India will soon launch negotiations for a the trade and investment flows to India. As more broad-based agreement on trade and investment. and more Indian companies are now venturing The Indo-Swiss joint economic commission meet- abroad, Switzerland is offering many attractive ing that used to be held every four years will now advantages as a business and investment location, be held every year. Copyright © 2009 | WWW.UPSCPORTAL.COM 6
    • Section -1 (Article : India-Switzerland Bilateral Relation) The instruments mentioned above and our bilat- "Swiss Filmfare Award 2001" was announced by eral agreements on the Double Taxation Avoid- the Consulate General of Switzerland where the ance, Promotion and Protection of Investments Swiss Hollywood celebrity Ms. Ursula Andress and an MOU on Intellectual Property Rights, will presented the award to Mr. Yash Chopra. In the ensure that an increasing number of Swiss and following year, the "Swiss Filmfare Award 2002" Indian companies will find a shared interest in was presented to Shah Rukh Khan, this time by doing business together. The future looks very Geraldine Chaplin, who grew up in Switzerland. bright, and both sides are continuing their efforts to deepen and widen the bilateral trade and eco- Development Cooperation nomic ties. The international community is impressed by its Cultural Connections economic and nuclear strength, while others em- phasize the dark facets of this country and con- Pro Helvetia - the Swiss Arts Council: Pro demn the poverty and discrimination endured by Helvetia New Delhi initiates, supports and pre- many of its citizens, in particular minorities and sents projects that reflect the multicultural char- untouchables (Dalits). Further sizeable challenges acter of Switzerland and India. Pro Helvetia aims facing the government and people of India are a to provide opportunities to art practitioners for low job-creation rate, poor-quality public services mutual enrichment and exchange in arts and cul- and lack of access to them, as well as discrimina- ture. It supports Swiss artists seeking dialogue with tion against women. Indian artists in an effort to forge closer ties. The focus is on quality and originality, on mutuality Figures reveal that India has the largest number and respect, to ensure that both sides benefit from of poor people in the world. Even today, 350 mil- the exchange. lion Indians live on less than 1 USD a day, 47% of children suffer from malnutrition and in some The liaison office in New Delhi is the Swiss Arts States, such as Punjab, the proportion of women Council's first office in Asia. Its aim is to coordi- to men is a mere 793/1000. nate Pro Helvetia's activities in the South Asia region starting with India. It supports artistic and This has been the background to Swiss develop- cultural collaboration between India and Switzer- ment cooperation in India since 1961, aimed at land, and also promotes Swiss ideas and arts prac- helping to reduce poverty and contribute to sus- tices among Indian audiences.Contemporary mu- tainable, just rural development. In addition to the sic, theatre, design, dance, literature, photogra- SDC, the State Secretariat for Economic Affairs phy and new media are the areas of focus. (SECO) as well as around 60 Swiss non-govern- mental organizations (some of them with SDC Bollywood in Switzerland: The love story be- support) are active in India. tween Switzerland and the Indian film industry dates way back to the mid-sixties, when Rajkapoor In 2006, the SDC started shifting the emphasis of placed his cameras on Swiss soil for "Sangam", also its development cooperation programme with In- "Evening in Paris" followed by more recent hits dia towards a new type of collaboration known as like "Chandni", "Darr", "Dilwale Dulhaniya Le a Partnership Program. This new program, which Jayaenge". Switzerland as a country offers white is much more modest in financial terms than the winters, colourful springs, sunny summers and current program, has different procedures and golden autumn. Switzerland permits to shoot in thematic priorities, will become operational in public places, there is almost zero crime, and gen- 2010. Between 2007 and 2009, the programme will erous and helping people all around which gives be making the transition from the traditional co- a peaceful, hassle-free mindset to work. The first operation program, in effect since 1961, to the new Partnership Program. Copyright © 2009 | WWW.UPSCPORTAL.COM 7
    • Section -1 (Article : India-Switzerland Bilateral Relation) Bilateral Agreements 2009-Year of Science and Education of Swit- zerland in India: After successfully completing » The Treaty of Friendship and Establishment of the celebration of 60 years of the 14th August 1948, which came into force on 5th Friendship Treaty between India and Switzerland May 1948. in 2008, the celebration of this great friendship is being carried forwards in the year 2009, under the » Indo Swiss Agreement on Technical and Scien- theme of Science and Education.The first bi- tific Co-operation signed on 27th September 1966. lateral treaty in the field of science and technol- ogy-the Indo-Swiss Agreement on Technical and » The Exchange of Letters on 20th February 1989 Scientific Cooperation was signed in 1966. This between Switzerland and India concerning assis- was followed by a number of other bi-lateral tance in criminal matters, which came into force treaties in this field. The appointment of a on 20th February 1989. Counsellor for Science and Technology at the Embassy and an Executive Director, swissnex, » The Agreement for the Avoidance of Double for India, emphasized the commitment towards Taxation between the Swiss Confederation and the strengthening ties between both countries and Republic of India with respect to income taxes, especially in the field of S&T. The year 2009 has which came into force on 29th December 1994. been commenced with various projects, planned and finalized, under the theme of science and edu- » The Agreement on Indo-Swiss Collaboration cation with the objective of expanding the hori- in Biotechnology for 5 years was signed on 13th zons of synergies between both countries. September 1999. » The Agreement for the Promotion and Protec- Switzerland : Fact Sheet tion of Investments between the Swiss Confed- eration and the Republic of India, which came into Background: The Swiss Confederation was force on 16th February 2000. founded in 1291 as a defensive alliance among three cantons. In succeeding years, other locali- » Indo-Swiss Agreement relating to Co-operation ties joined the original three. The Swiss Confed- in Air Services signed on 2nd May 2001. eration secured its independence from the Holy Roman Empire in 1499. Switzerland’s sovreignty » The Agreement on Co-operation in the fields and neutrality have long been honored by the of Science and Technology between the Swiss Fed- major European powers, and the country was not eral Council and the Government of the Republic involved in either of the two World Wars. The of India signed on 10th November 2003. political and economic integration of Europe over the past half century, as well as Switzerland’s role » The Grant Agreement between the State Sec- in many UN and international organizations, has retariat for Economic Affairs and the International strengthened Switzerland’s ties with its neighbors. Competence Center for Organic Agriculture in However, the country did not officially become a India signed on 3rd February 2005. UN member until 2002. Switzerland remains ac- tive in many UN and international organizations, » A Memorandum of Understanding between the but retains a strong commitment to neutrality. Ministry of Commerce and Industry of India and the Federal Department of Economic Affairs of Switzerland on intellectual property signed on 7th August 2007. Copyright © 2009 | WWW.UPSCPORTAL.COM 8
    • Section -1 (Article : India-Switzerland Bilateral Relation) » Location : Central Europe, east of France, north of Italy » Geographic coordinates: 47 00 N, 8 00 E » Area : total: 41,290sqkm » Land : 39,770 sq km » Water : 1,520 sq km » Natural resources : hydropower potential, timber, salt » Population : 7,489,370 (July 2005 est.) » Age structure : 0-14 years: 16.6% (male 643,497/female 597,565) 15-64 » Years : 68% (male 2,570,544/female 2,522,365) 65 » Years and Over : 15.4% (male 472,769/female 682,630) (2005 est.) » Population Growth Rate : 0.49% (2005 est.) » Ethnic Groups : German 65%, French 18%, Italian 10%, Romansch 1%, other 6% » Religions : Roman Catholic 41.8%, Protestant 35.3%, Orthodox 1.8%, other Christian 0.4%, Musim 4.3%, other 1%, unspecified 4.3%, none 11.1% (2000 census) » Literacy : definition: age 15 and over can read and write » Total Population : 99% (1980 est.) » Capital : Bern » Independence : 1 August 1291 (founding of the Swiss Confederation) » National Holiday : Founding of the Swiss Confederation, 1 August (1291) Economy Overview : Switzerland is a peaceful, prosperous, and stable modern market economy with unemployment, a highly skilled labor force, and a per capita GDP larger than that of the big Western European economies. The Swiss in recent years have brought their economic practices largely into conformity with the EU’s to enhance their international competitiveness. Switzerland remains a safe haven for investors, because it has maintained a degree of bank secrecy and has kept up the franc’s long- term external value. Reflecting the anemic economic conditions of Europe, GDP growth dropped in 2001 to about 0.8%, to 0.2% in 2002, and to -0.3% in 2003, with a small rise to 1.8% in 2004. Even so, unemployment has remained at less than half the EU average. GDP (PPP Basis) : $251.9 billion (2004 est.) GDP - Real Growth Rate : 1.8% (2004 est.) GDP - Per Capita : Purchasing power parity - $33,800 (2004 est.) GDP - Composition - By Sector: » Agriculture: 1.5% » Industry: 34% » Services: 64.5% (2003 est.) Copyright © 2009 | WWW.UPSCPORTAL.COM 9
    • Section -1 (Article : India-Switzerland Bilateral Relation) » Inflation Rate : 0.9% (2004 est.) » Industrial Production Growth Rate : 4.7% (2004 est.) » Exports - Commodities : Machinery, Chemicals, Metals, Watches, Agricultural Products » Exports - Partners : Germany 20.2%, US 10.5%, France 8.7%, Italy 8.3%, UK 5.1%, Spain 4% (2004) » Imports - Commodities : machinery, chemicals, vehicles, metals; agricultural products, textiles » Import - Partners : Germany 32.8%, Italy 11.3%, France 9.9%, US 5.2%, Netherlands 5%, Austria 4.3% (2004) Advertise your Business Here Contact Us Online: http://upscportal.com/store/contact Copyright © 2009 | WWW.UPSCPORTAL.COM 10
    • Aspirants Times Previous Issues VOL.1 VOL.2 VOL.3 VOL.4 http://groups.google.com/group/upscportal/files Copyright © 2009 | WWW.UPSCPORTAL.COM 11
    • Section -1 (Article : India and United Nations ) India and United Nations Significant Contributions for Peace and Development By Avadhesh Pandey Author is an Expert of Economic and political Issues and working as a Freelance Editor As a founder member of the faith and hope, towards UN's success, and to as- United Nations, India has sume greater responsibilities that the world com- been a firm supporter of the munity expects from it. Purposes and Principles of the United Nations, and has Indian Contribution: India made significant contribu- is one of the largest contribu- tions to the furtherance and implementation of tors to the core resources of these noble aims, and to the evolution and func- UNDP and a significant con- tioning of its various specialized programmes. It tributor to those of UNFPA stood at the forefront during the UN's tumultu- and UNICEF. India is also a major contributor to ous years of struggle against colonialism and apart- the core resources of and the World Food heid, its struggle towards global disarmament and Programme. India's contribution to these funds is the ending of the arms race, and towards the cre- higher than that of many OECD countries. We ation of a more equitable international economic hope that the developed countries will also in- order. At the very first session of the UN, India crease their contributions to untied and apolitical had raised its voice against colonialism and apart- resources for development.India has contributed heid, two issues which have been among the most US $ 100,000 to the UNCTAD Trust Fund for the significant of the UN's successes in the last half least Developed countries. It has also been con- century. India exulted in the UN's triumph, and tributing US $ 50,000 per annum to the ITC Glo- saw in the UN's victory, a vindication of the policy bal Trust Fund since its inception in 1996. It also relentlessly pursued by it from its initial days at makes substantial voluntary contributions to the world forum. UNEP, Habitat, UN Drug Control Programme, UNRWA, UNIFEM UN Volunteers etc. At the beginning of the 21st century, new chal- lenges are before us. Freed from the shackles of UN Peacekeeping: over and over again, India has the Cold War, the UN stands poised to grapple risked the lives of its soldiers in peacekeeping ef- with the changes which the world has witnessed forts of the United Nations, not for any strategic over the years. Today's challenges, be they politi- gain, but in the service of an ideal. India's ideal cal, economic, social, environmental or demo- was, and remains, strengthening the world body, graphic, are global, impinging on the affairs of all and international peace and security. States and making the interdependence of peoples so much greater. If this demands a greater depen- Indian troops have taken part in some of the most dence on the UN as the only democratic, univer- difficult operations, and have suffered casualties sal forum for the community of nations, it also in the service of the UN. Professional excellence demands a strengthening of the UN itself and its of the Indian troops has won universal admira- revitalization. The ongoing reform process is pri- tion. India has taken part in the UN peacekeeping marily aimed towards these ends. A revitalized operations in four continents. Its most significant and strengthened United Nations and a more rep- contribution has been to peace and stability in resentative Security Council will enable this Africa and Asia. It has demonstrated its unique unique organisation to face the challenges of the capacity of sustaining large troops commitments 21st century more effectively. over prolonged periods. Presently, India is ranked as one of the largest troop contributors to the UN. As the United Nations strives to find solutions to India has also offered one brigade of troops to the these issues, India pledges to work, with abiding Copyright © 2009 | WWW.UPSCPORTAL.COM 12
    • Section -1 (Article : India and United Nations ) UN Standby Arrangements. Over 55,000 Indian 1963-64 (UNYOM). India also participated in the Military and Police personnel have served under UN operation in Cyprus (UNFICYP). India pro- the UN flag in 35 UN peace keeping operations in vided three Force Commanders to UNFICYP, all the continents of the globe. Gen. K.S. Thimmaya, Lt. Gen. P.S. Gyani and Lt. Gen. Dewan Prem Chand. India provided a paramedical unit to facilitate withdrawal of the sick at wounded in Korea. Af- The UN set up a Military Observer Group to moni- ter the ceasefire, India became the Chairman of tor the situation on Iran-Iraq border. India pro- the Neutral Nations Repatriation Commission. vided military observers during the period 1988- One brigade group of the Indian Army partici- 90. pated in the operation in Korea, authorized by the UN General Assembly through Uniting for Peace Following the end of the Gulf War, the UN estab- resolution. Indian troops provided guards for the lished the UN Iraq-Kuwait Observer Mission prisoners of war. (UNIKOM). Indian observers continue to partici- pate in the operation. India also contributed to peace in the Middle East. The United Nations Emergency Force (UNEF) was UN operation in Namibia is considered one of the created in 1956 following cessation of hostilities success stories of the United Nations. Lt. Gen. between Egypt and Israel. India provided an in- Prem Chand of India was the Force Commander. fantry battalion, which accounted for the bulk of Indian military observers in Namibia were respon- the UN force. Over 11 years, from 1956 to 1967, sible for the smooth withdrawal of foreign troops, more than 12,000 Indian troops took part in UNEF. elections and subsequent handing over of the au- Pursuant to the Geneva Accord, an International thority to the government. Control Commission (ICC) for Indo-China was set up in 1954. India was the Chairman of the Com- UN established the ONUMOZ to restore peace and mission, which implemented the ceasefire agree- conduct elections in Mozambique. India provided ment between Vietnam, Laos, Cambodia and a large contingent of staff officers, military ob- France. India provided one infantry battalion and servers, independent headquarters company, and supporting staff until the ICC was wound up in engineering and logistics company. The opera- 1970. tion has ended successfully. The UN faced one of its worst crises when war In recent times, one of the biggest peace keeping between the government and the secessionist operations which was completed successfully was forces broke out in Congo. The UN operation in the UN operation in Cambodia. India provided the Congo, ONUC, was unique in many ways. an infantry battalion, military observers and a field The operation involved heavy casualties. It was ambulance unit. also the first time that the UN undertook an op- eration in an intra -State, rather than an inter- India has also regularly sent military observers to State conflict. The operation upheld the national various UN operations. This includes ONUCA unity and territorial integrity of the Congo. The (Central America) in 1990-92, ONUSAL (El Sal- Indian contingent lost 39 men in action in the vador) in 1991 and UNOMIL (Liberia) in 1994. Congo. The performance of the Indian troops was distinguished by their discipline, self-restraint and The UN Operation in Somalia is considered one humanitarian concern. of the most difficult and challenging operations the UN has ever attempted. Indian naval ships Indian Army provided a Force Commander and and personnel were involved in patrolling duties observers for the Observer Mission in Yemen in off the Somali coast, in humanitarian assistance Copyright © 2009 | WWW.UPSCPORTAL.COM 13
    • Section -1 (Article : India and United Nations ) on shore, and also in the transportation of men staff officers and military observers. The contin- and material for the United Nations. The gent has made a sizeable contribution towards UNOSOM II operation involved peace enforce- construction of quartering camps. The Indian ment under Chapter VII. The objective was hu- contingent was also involved in rebuilding bridges manitarian relief. The Indian contingent success- over the Conga, Rio Quisaju, Rio Mugige and Rio fully combined the often conflicting roles of co- N'hia Rivers. One high risk task was the demining ercive disarmament and humanitarian relief to the of the main arterial road connecting Lobito and civilian population. With stand-alone capacity, Huambo and repairing a 60 mile stretch of the the Indian brigade had operational responsibili- road. The Indian contingent has also built a 3,300 ties for one-third of Somalia viz. 1,73,000 sq. km feet airstrip at Londuimbali. The Deputy Force area of responsibility, the largest ever held by any Commander was an Indian army officer. India also contingent. In spite of such a large areas of op- participated in the UN Observer Mission in Angola erations, there were minimum civilian casualties (MONUA), which succeeded UNAVEM III. in the area of responsibility of the Indian contin- gent. The Chief Military Observer of the UN Observer Mission in Sierra Leone (UNOMSIL) was also an The Indian contingent dug a large number of wells, Indian army officer. India provided a medical unit constructed schools and mosques, and ran mobile and civilian police personnel to UNOMSIL. dispensaries and relief camps, which provided veterinary care, and medical and humanitarian After the upgradation of the UN Mission in Sierra relief to a large number of Somalis and their live- Leone in November-December 1999, India pro- stock. In spite of suffering casualties the Indian vided two infantry battalion groups, a quick reac- contingent exercised utmost restraint in firing in tion company, a field engineering company, a level self defence. It also organized and carried out re- III medical facility, a special forces company, an habilitation and resettlement of thousands of refu- artillery battery, transport and attack helicopters gees and helped to repatriate them to their homes. and the backbone of the force headquarters in The Indian contingent played a vital role in re- Freetown. Maj. Gen. V.K.Jetley was the first UN viving the political process by organizing recon- Force Commander in Sierra Leone. ciliation meetings. The last remaining units of the Indian contingent were repatriated from Somalia India has also provided an infantry battalion to on board Indian naval ships from Kismayo port. the UN Interim Force in Lebanon (UNIFIL). The India demonstrated its capacity to provide an in- Force Commander of UNIFIL is Maj.Gen. L.M. tegrated force, comprising land and naval forces Tewari. as well as air support. India is also currently participating in the UN India provided a contingent comprising one in- Mission in Ethiopia and Eritrea (UNMEE) with fantry battalion and support elements to the UN an infantry battalion, a Force Reserve Company assistance mission in Rwanda to help ensure se- and a Field Engineer Construction Company. curity for the refugees, and to create conditions for free and fair elections. After successful comple- Recent peacekeeping operations have tended to tion of the assignment, the Indian contingent was be multi-dimensional, and include police moni- repatriated in April 1996. tors and election observers. India has contributed police personnel and election observers to the UN The Indian army has participated in the succes- peacekeeping operations in Cambodia, sive phases of the UN mission in Angola since Mozambique and Angola. India provided 123 1989. The Indian contingent comprised one in- police personnel to UN mission in Haiti (Phase fantry battalion group, one engineer company, II). India has also provided police monitors for Copyright © 2009 | WWW.UPSCPORTAL.COM 14
    • Section -1 (Article : India and United Nations ) the UN International Police Task Force in Bosnia India has also provided opportunities for training and Herzegovina, Sierra Leone (UNOMSIL), to military officers from different countries. In- Western Sahara (MINURSO) and Kosovo dia has, at present, army training teams in six coun- (UNMIK). In addition, two companies of CRPF tries: Seychelles, Laos, Mauritius, Botswana, Zam- have deployed in UNMIK as Special Police units. bia and Bhutan. India has also offered diverse The Police Commissioner of MINURSO is an In- courses to service personnel at various military dian Police Officer, Mr. O.P. Rathor. training institutions across the country. This in- cludes officers from Bangladesh, Bhutan, France, India sent Lt. Gen. Satish Nambiar, as the Force Germany, Japan, Jordan, Kazakastan, Kenya, Ko- Commander of UNPROFOR in former Yugosla- rea, Laos, Malaysia, Maldives, Mauritius, via in 1992-93. Myanmar, Namibia, Nepal, Nigeria, Oman, Saudi Arabia, Singapore, South Africa, Sri Lanka, Sudan, India has also provided senior staff to assist the Tanzania, Thailand, UAE, UK, USA, Vietnam, UN Secretary-General at the UN Headquarters. Zambia and Zimbabwe. Cadets from countries Major Gen. I. J. Rikhye served as Military Advi- such as Maldives, Palestine, Bhutan, Nepal, Sri sor to the UN Secretary General from 1960 to 1969. Lanka and also many African States receive pre- India also hosted a UN Regional Training Work- commission training at the National Defence shop for Peacekeeping Operations in New Delhi Academy, Khadakvasla and the Indian Military during January 20-26, 1996 in which 17 countries Academy, Dehradun. of the Asia-Pacific region participated. Mr. Kofi Annan, the then Under Secretary General for Over 100 Indian soldiers and officers have sacri- Peacekeeping visited India in this connection. ficed their lives while serving in UN peacekeep- India also held an International Seminar on UN ing operations. Peacekeeping in March 1999 in which over 70 countries participated. The United Services In- Disarmament: Since independence, India has con- stitution (USI) of India hosted another seminar in sistently pursued the objective of global disarma- New Delhi in September 2000 in collaboration ment based on the principles of universality, non- with the Swedish National Defence College. A discrimination and effective compliance. Given the Centre for UN Peacekeeping (CUNPK) was set up horrific destructive capacity of nuclear weapons, under the aegis of USI in New Delhi in 2000. UN India has always believed that a world free of Secretary General Kofi Annan visited the Centre nuclear weapons would enhance both global se- in March 2001 during his visit to India. curity and India's own national security. Thus India has always advocated that the highest pri- India has considerable experience in demining ority be given to nuclear disarmament as a first activities and has made significant contributions step towards general and complete disarmament. to the de-mining work in various missions in Rwanda, Mozambique, Somalia, Angola and Cam- As early as 1948, India called for limiting the use bodia. Experienced Indian Army Engineers have of atomic energy for peaceful purposes only, and been employed for training of selected personnel the elimination of atomic weapons from national from the host countries to execute mine clearance armaments. India was the first country to call to programmes as also to generate awareness of the an end to all nuclear testing in 1954. This was fol- problem among the local people. Indian Army lowed up in subsequent decades by many other has also undertaken mine clearance projects in initiatives, for example, on the Partial Test Ban support of repatriation and rehabilitation Treaty, and the call for international negotiations programmes of the UNHCR. on nuclear non-proliferation. In 1978, India pro- posed negotiations for an international conven- tion that would prohibit the use or threat of use Copyright © 2009 | WWW.UPSCPORTAL.COM 15
    • Section -1 (Article : India and United Nations ) of nuclear weapons. This was followed by another come into effect in September 1999. India has initiative in 1982 calling for a "nuclear freeze" - declared that it will maintain minimum credible i.e. prohibition on the production of fissile mate- nuclear deterrent and will not engage in an arms rial for weapons, on production of nuclear weap- race. India has declared a no-first-use doctrine. ons, and related delivery systems. At the special We are willing to strengthen this commitment sessions of the United Nations General Assembly by undertaking bilateral agreements as well as by on disarmament, India put forward a number of engaging in discussions for a global no-first-use serious proposals including the 1988 Comprehen- agreement. India believes that a global no-first- sive Plan for total elimination of weapons of mass use agreement would be the first step towards the destruction in a phased manner. It was a matter delegitimization of nuclear weapons. India remains of regret that the proposals made by India along the only state possessing nuclear weapons to un- with several other countries did not receive a posi- ambiguously call for a Nuclear Weapons Conven- tive response and instead, a limited and distorted tion to ban and eliminate nuclear weapons just as non-proliferation agenda, meant above all to per- the Biological Weapons Convention (BWC) and petuate nuclear weapons was shaped. the Chemical Weapons Convention (CWC) have banned the other two categories of weapons of India was compelled by considerations of national destruction. security to establish and adopt a policy of keeping its nuclear option open while it continued to work Nuclear Disarmament and Nonproliferation: In for global nuclear disarmament. India's nuclear 1996, India, along with the members of the Group capability was demonstrated in 1974. India exer- of 21 countries, put forward proposal, submitted cised an unparalleled restraint in not weaponising to the Conference on Disarmament (CD), of a its nuclear capability. It is relevant to recall, that Programme of Action calling for a phased elimi- during this period, when we voluntarily and to- nation of nuclear weapons (1996-2020). India has tally desisted from testing, over 35,000 nuclear unambiguously indicated its commitment the es- weapons were developed through a series of tests tablishment of an ad hoc committee in the Con- by states possessing nuclear weapons. This has ference on Disarmament in Geneva to negotiate happened even as Article VI of the Non-Prolif- global nuclear disarmament. India is also the only eration Treaty committed the Nuclear Weapons state with nuclear weapons, which responded States, party to the NPT, to take steps in good faith positively to certain aspects of the 8-Nation ini- for nuclear disarmament. India was obliged to tiative on disarmament, entitled "Towards a stand apart on the CTBT in 1996 after having been Nuclear Weapon Free World", put forward in June actively engaged in the negotiations for two and a 1998 by Brazil, Egypt, Ireland, Mexico, New half years precisely because the issues of non-pro- Zealand, South Africa and Sweden. liferation, global disarmament and India's concerns about her security and strategic autonomy were At the NAM Summit in Durban, at India's initia- ignored. tive, NAM agreed that an international confer- ence be held, preferably in 1999, with the objec- India's continued commitment to nuclear disar- tive of arriving at an agreement, before the end of mament and non-proliferation is clear from the this millennium, on a phased programme for the voluntary measures announced by India after un- complete elimination of all nuclear weapons. The dertaking a limited series of underground nuclear call for the elimination of nuclear weapons was tests last year. India remains committed to con- reiterated once again by Prime Minister in his verting its voluntary moratorium into a de jure address to the UN General Assembly in 1998. obligation accordance with our long held positions India remains committed to cooperating with like disarmament, and in response to the desire of the minded states to attain this goal. India also intro- international community that the CTBT should duced a resolution in the 53rd General Assembly Copyright © 2009 | WWW.UPSCPORTAL.COM 16
    • Section -1 (Article : India and United Nations ) calling for reducing nuclear danger by de-alerting that the item "Suspension of Nuclear and Thermo- nuclear weapons. Nuclear Tests" was included in the agenda of the UN in 1959. India is fully committed to the goal of curbing nuclear proliferation in all its aspects. It was at During the course of the negotiations in the Con- India's initiative that the item "non-proliferation ference on Disarmament (CD) in Geneva on the of nuclear weapons" was included in the agenda CTBT, India put forward a number of proposals of the UN in 1964. In 1965, India along with other consistent with the mandate adopted by the CD like-minded countries submitted a joint memo- in 1994. These proposals were aimed at ensuring randum towards achieving a solution to the prob- that the CTBT would be truly comprehensive and lem of proliferation; it included the conclusion of would be part of the step-by-step process of elimi- an international nuclear non-proliferation treaty. nating all nuclear weapons. However, these pro- However, the NPT as it emerged from these ne- posals were regrettably ignored and instead, Ar- gotiations, was flawed and discriminatory, seek- ticle XIV on Entry into Force requiring India to ing to create a permanent division between the join the treaty before it became operational was nuclear ‘haves' and 'have-nots'. India believes that adopted in violation of basic treaty law. India was the indefinite and unconditional extension of the thus forced to declare its opposition to the CTBT NPT in May 1995 has only served to legitimize as it emerged. nuclear arsenals of the NPT states possessing nuclear weapons into perpetuity, thus posing a After concluding a series of tests on May 13, 1998, major obstacle to the goal of global nuclear disar- India immediately announced a voluntary mora- mament. The NPT Preparatory Commission torium on further underground nuclear test ex- (PrepCom) meetings held in 1997 and 1998 have plosions. In announcing this moratorium, India also clearly demonstrated the reluctance on the accepted the core obligation of a test ban and also part of the states possessing nuclear weapons to addressed the general wish of the international take steps towards a speedy process of global community. India also announced its willingness nuclear disarmament. to move towards a de jure formalization of the voluntary undertaking. India is now engaged in India has developed wide-ranging expertise in discussions with key interlocutors on a range of nuclear technology and ensured through a strin- issues, including the CTBT. India is prepared to gent and effective system of export controls that bring these discussions to a successful conclusion. there is no proliferation of these technologies for For the successful conclusion of talks, creation of weapons purposes. India's record in this matter a positive environment by India's interlocutors is is, in fact, better than some of the NPT signato- a necessary ingredient. India expects that other ries. At the same time, we are against ad hoc re- countries, as indicated in Article XIV of the CTBT, gimes or cartels which restrict high technology will adhere to this Treaty without conditions. in an arbitrary, unequal and patently discrimina- tory manner. They need to be universalised, made Fissile Material Cut-Off Treaty (FMCT): India transparent and equitable. supports the ban on production of fissile material for nuclear weapons purposes. This demand has Comprehensive Nuclear Test Ban Treaty: India's been articulated by India in the UN through con- commitment to a comprehensive ban on nuclear crete proposals like the Action Plan which it pre- testing dates back to 1954 when Jawaharlal Nehru sented in 1988. India also co-sponsored a UN Gen- called for a "standstill agreement" whereby test- eral Assembly resolution (48/75 L) in 1993, which ing of all nuclear weapons was to be immediately called for an early commencement of negotiations suspended, pending an agreement on their com- for the prohibition of the production of fissile plete prohibition. It was again at India's initiative material for nuclear weapons or other nuclear ex- Copyright © 2009 | WWW.UPSCPORTAL.COM 17
    • Section -1 (Article : India and United Nations ) plosive devices. India has joined the consensus in sal and non-discriminatory character of the CWC the Conference on Disarmament on establishing are primarily responsible for the large number of an ad hoc committee to negotiate a FMCT. India signatories and the equally large numbers of rati- believes that this is an integral part of the nuclear fications. The implementation of the CWC in- disarmament process. It would also go a long way volves a combination of voluntary declarations and in arresting problems of illegal transfers of nuclear mandatory verification arrangements aimed at en- material. India supports efforts for negotiations on suring compliance in a transparent and universal a universal, non-discriminatory and verifiable fis- manner. A National Authority (NA) has been set sile material cut-off treaty that would prohibit the up to oversee implementation of the Convention future production of fissile material for weapons in India. As the first Chairperson of the Executive purposes but would permit such production for Council of the Organization for Chemical Weap- civilian uses. ons (OPCW), India guided the deliberations of the organization during its crucial first year. Imple- Negative Security Assurances (NSAs) and mentation of all obligations assumed by India to Nuclear Weapon Free Zones (NWFZs): India has the Convention and related activities have pro- always maintained that NSAs provide illusory ben- ceeded satisfactorily. India believes that the pro- efits, and that the real security assurance is com- visions of the Convention require to be imple- plete elimination of nuclear weapons, and also that mented in a non-discriminatory manner. National in the interim, if NSAs are to be given, they should implementing legislations containing provisions be provided through an international, comprehen- which undermine the Convention hold out the sive, legally-binding and irreversible agreement. prospect of leading to matching responses by other Similarly, consideration of security assurances in -states parties thereby leading to an unnecessary the narrow strait-jacket of Nuclear Weapon Free dilution of the spirit and the confidence reposed Zones (NWFZS) cannot do justice to the wide in the CWC by a great majority of countries party variety of concerns that emanate from the global to the CWC. Similarly, the existence of technol- nature of the threat posed by nuclear weapons. ogy denial regimes such as the Australia Group remains an aberration when seen against the large As a responsible state possessing nuclear weap- number of ratifications the enjoyed so far. ons, India has stated that it does not intend to use nuclear weapons to commit aggression or for Biological and Toxin Weapons Convention mounting threats against any country. India re- (BTWC): India ratified the Biological Weapons spects the sovereign choice exercised by states not Convention in 1974. India has participated in all possessing nuclear weapons in establishing four Review Conferences of the Biological and NWFZs on the basis of agreements freely arrived Toxin Weapons Convention (BTWC) and in the at among the states of the region concerned. At meetings of the Group of Governmental Experts. the fifth session of the ASEAN Regional Forum India is currently participating in the negotiations in Manila, India stated that it fully respects the of the Ad hoc Group of the States Parties of the status of the Nuclear Weapon Free Zone in South BTWC with the aim to strengthen the conven- East Asia and is ready to convert this commitment tion by a protocol, including possible verification into a legal obligation. India will remain respon- measures. India maintains that these measures sive to the expressed need for commitments to should be non-discriminatory and avoid any nega- other nuclear weapon free zones as well. tive impact on scientific research, international cooperation and industrial development. Chemical Weapons Convention (CWC): Con- vention has India is an original signatory to the Anti-Personnel Landmines (APLS): India is fully Chemical Weapons Convention, having signed it committed to the eventual elimination of anti- on 14 January 1993, and was among the first 65 personnel landmines and achievement of the ob- countries to have ratified the Treaty. The univer- jective of a nondiscriminatory and universal ban Copyright © 2009 | WWW.UPSCPORTAL.COM 18
    • Section -1 (Article : India and United Nations ) on APLS. A beginning can be made with a ban on society.The then Prime Minister of India, Mrs. export and transfer of APLS, that would enjoy an Indira Gandhi, was the sole foreign head of state international consensus, and by addressing hu- or government to participate in the United Na- manitarian. concerns and legitimate defence re- tions Conference on Human Environment held in quirements of states. India is sensitive to the hu- Stockholm in June 1972, at a time when interna- manitarian aspects of the landmine crisis and the tional concern over environmental issues was yet need for a strong international response. Aware to fully crystallise. At that session she emphasised that APLs have been used indiscriminately in con- that the environmental concerns cannot be viewed flicts not of an international nature, India has in isolation from developmental imperatives. called for a ban on their use in all internal con- flicts. India follows a conscious policy of not ex- India considers environmental and developmen- porting APLS. India has also been contributing to tal issues to be closely intertwined. It fully sup- UN demining efforts since the Congo peacekeep- ports international cooperation in the field of the ing operations in 1963. An officer of the Indian environment so as to effectively deal with global Army is presently deployed with the UN Mine environmental problems. It is committed to a glo- Action Centre in Bosnia. India is presently in the bal partnership that simultaneously seeks to pro- process of ratifying amended Protocol II of the tect the environment while addressing the devel- 1980 Inhumane Weapons Convention (CCW), opment requirements and aspirations of the de- which deals with anti-personnel landmines. In- veloping countries. dia stands ready to negotiate a ban on the export and transfer of landmines in the Conference on India has consistently played an important role in Disarmament. the evolution of an international consensus to tackle major global environmental issues. It was Transparency in Conventional Weapons Trans- an active participant in the process leading up to fers and Small Arms: India is committed to and culminating in the convening of the United strengthening the norm of transparency in con- Nations Conference on Environment and Devel- ventional armaments in general, and greater par- opment in Rio de Janeiro in June, 1992. The Rio ticipation in the UN Register of Conventional Conference affirmed the importance of sustainable Arms in particular. India has reported to the Reg- development, which encompasses both develop- ister annually since 1994. The issue of prolifera- ment and environmental protection. Agenda 21, tion of, and illicit trafficking in, small arms has adopted by the Rio meet, provides a blueprint on moved up the agenda of the international com- how to make development socially, economically munity on disarmament issues. India is acutely sustainable. Despite constraints, India has initiated aware of this problem and intends to participate several activities and programmes in the context actively in international search for effective solu- of Agenda 21, which are consistent with its na- tions, including a proposed international confer- tional goals and objectives. India is a party to nu- ence to discuss the issue of illicit trafficking in merous multilateral environmental conventions small arms in all its aspects. which contribute to the protection of the envi- ronment and to sustainable development. These Environment: India is among the top 12 mega include the Framework Convention on Climate centres of the world in terms of its genetic diver- Change, the Convention on Biological Diversity, sity. It has a wide range of geoclimatic conditions the Vienna Convention on the Protection of the and a rich and varied flora and fauna, as well as a Ozone Layer, the Montreal Protocol on Substances long standing tradition of environmental sensi- that Deplete the Ozone Layer, the Ramsar Con- bility and concern that goes to the very roots of vention on Wetlands of International importance, its millennia-old culture. Harmony with nature the Basel Convention on the Transboundary Move- has been an integral part of the ethos of Indian ment of Hazardous Wastes, the Convention on Copyright © 2009 | WWW.UPSCPORTAL.COM 19
    • Section -1 (Article : India and United Nations ) Combating Desertification, and the Convention worker who led the Indian delegation, had made on the International Trade in Endangered Species important contributions in drafting of the Decla- of Wild Flora and2 Fauna. India is also an active ration, especially highlighting the need for reflect- member of the Commission on Sustainable De- ing gender equality. India is fully committed to velopment that was set up after the Rio Confer- the rights proclaimed in the Universal Declara- ence to monitor the implementation of Agenda tion. India is a signatory to the six core human 21. rights covenants, and also the two Optional Pro- tocols to the Convention of the Rights of the Child. India is among the leading countries in the van- guard of efforts directed at environmental protec- India has been advocating a holistic and integrated tion. It has in position an elaborate framework of approach that gives equal emphasis to all human environmental legislation for the conservation of rights, based on their inter-dependence, inter-re- forests, preservation of wildlife and the control of latedness, indivisibility and universality, and re- water, air and soil pollution. It has a network of inforces the inter-relationship between democ- protected areas converting 84 national parks and racy, development, human rights and international 447 wildlife sanctuaries. India has also introduced cooperation for development. the Eco-Mark label for environment-friendly products, requires the undertaking of Environ- India had played an active role as member of the ment Impact Assessment before commencing Commission on Human Rights (CHR) since its major industrial projects, has in 2position func- creation in 1947. India was elected in 2006 as a tioning Environmental Tribunals as well as an ef- member of the newly established Human Rights fective system of Environmental Audit. Council (HRC), which replaced the CHR, by se- curing the highest number of votes among the At the Special Session of the UN General Assem- contested seats. India was re-elected again as a bly held in June 1997 to review the progress made member in 2007 by securing the highest votes by five years after the Rio meet, India expressed its polling 185 votes out of 190 votes cast. India at- disappointment over the lack of fulfillment at the taches great importance to the Human Rights international level of commitments voluntarily Council and is committed to make the Council a undertaken by the industrialised countries at Rio. strong, effective and efficient body capable of pro- On its part, India reiterated its commitment to moting and protecting human rights and funda- the global partnership established at Rio de mental freedoms for all. Janeiro. The National Commission for Human Rights Human Rights: In India the concept of human (NHRC), established in India in 1993, serves as an rights emphasizing pivotal position of individual independent and autonomous body for protection citizen stretches back to the first millennia. Hu- of human rights in the country. The Commis- man rights have been an inherent component of sion is now very much part of the life of the na- various philosophies that have flourished in In- tion and, increasingly, of consequence to the qual- dia. The leaders of the Indian National Movement ity of its governance. Awareness of the rights guar- stressed the primacy of human rights in the fu- anteed by the Constitution, and included in the ture constitutional set-up. The Indian Constitu- international instruments to which India is a State tion, as a result, stands as one of the most compre- party, has increased dramatically in the country. hensive and self-contained documents on human rights. The enactment by the Indian Parliament in Au- India took active part in drafting of the Universal gust, 2005 of a Rural Employment Guarantee Act, Declaration on Human Rights. Dr (Mrs). Hansa providing for 100 days of assured employment in Mehta, a Gandhian political activist and social a year to every rural household, is a step in the Copyright © 2009 | WWW.UPSCPORTAL.COM 20
    • Section -1 (Article : India and United Nations ) direction of ensuring justiciability of economic and society, including non-Governmental social rights. The Right to Information Act passed organisations, have been supplementing by the Indian Parliament in 2005 is a testimony Government’s efforts in eradication of child labour to India’s commitment for providing access to in- in the country. formation to the citizens. The rights of vulnerable groups have received spe- India is fully committed to the implementation of cial mention in India ever since independence and the Beijing Platform for Action. India adopted a the Constitution itself contains extensive provi- rights-based approach to promoting equality of sions for the promotion and protection of the women and evolved a multifaceted strategy aimed rights of all minorities, including some special at their empowerment through awareness-raising, groups of people unique to Indian society known political participation, economic independence, as Scheduled Castes and Scheduled Tribes. These education, health, and legal standards. The ob- measures have been further strengthened through jective is to enable women to overcome disadvan- a recent amendment of the Constitution granting tages that they face and to enable them to play an the Scheduled Tribes local self-government and a effective and equal role in society. Among the high degree of autonomy in the management of most important of these measures include reser- their day-to-day affairs, control over natural re- vation of one-third seats in local and village-level sources, and other development activities in the bodies, and formulation of National Policy for the areas where they live. Independent institutions Empowerment of Women in 2001, provision for such as National Commission for the Scheduled immediate and emergency relief to women in situ- Castes and Scheduled Tribes and National Com- ations of domestic violence, amendment to the mission for Minorities are effectively promoting Hindu Succession Act to give daughters and wid- and protecting the rights of these vulnerable ows equal right in ancestral property including groups. Further, National Minorities Develop- agricultural land, dowry prohibition and preven- ment and Financial Corporation and National tion of immoral trafficking. Backward Classes Finance and Development Cor- poration (NBCFDC) have been set up to promote India adopted a National Charter for Children in economic and development activities of minori- 2003 to reiterate its commitment to the cause of ties and Other Backward Classes. the child in order to see that no child remains hungry, illiterate or sick. The right to free and India became seventh country to ratify the UN compulsory education for all children, in the age Convention on the Rights of Persons with Dis- group of 6 to 14 years, has been made a funda- abilities. India had participated actively in the mental right in 2002 by an amendment to the deliberations of the Ad Hoc Committee of the UN Constitution. India has a proactive stand on the General Assembly on finalisation of a Convention issue of child protection and in creating a protec- on the Rights of the Persons with Disabilities. The tive environment for children. Towards this end, enactment in India of the Persons with Disabili- India has undertaken several initiatives, notably a ties (Equal Opportunities, Protection of Rights and National Commission for Protection of Child’s Full Participation) Act in 1995 marked a signifi- Rights has been set up in February 2007 to pro- cant step towards providing equal opportunities vide speedy trial of offence against children or of for people with disabilities and their full partici- violation of child’s rights, thus ensuring effective pation in the nation building. The Government implementation of laws and programmes relating had also set up National Trust for Welfare of Per- to children. Eradication of child labour in all oc- sons with Autism, Cerebral Palsy, Mental Retar- cupations and industries is one of the most im- dation and Multiple Disabilities in 2001 and a portant priorities of the Government of India. The National Handicapped Finance and Development National Human Rights Commission and the civil Corporation in 1997 to promote economic devel- Copyright © 2009 | WWW.UPSCPORTAL.COM 21
    • Section -1 (Article : India and United Nations ) opment activities, including self-employment countries, that has brought them to a stage where programmes, for the benefit of persons with dis- they can set the goals of economic and social de- abilities. velopment for their societies. Struggle Against Colonialism: The purposes of UN Needs Reform the UN Charter include promoting and encour- aging respect for human rights and for fundamen- The UN needs reform. On that everyone agrees. tal freedoms for all without distinction as to race, But there is sharp disagreement on what kind of sex, language, or religion. This was by no means reform is needed and for what purpose. Again and an easy quest. In 1945, when the UN Charter was again over the years, the UN has been reformed – signed, more than 750 million people lived in colo- on average once every eight years. But the pace nies. A half century later, the number is only about has now quickened and reform projects seem al- 1.3 million. India was in the forefront of the most a constant part of the landscape. Founda- struggle against colonialism, apartheid and racial tions, think tanks and blue ribbon commissions discrimination - a struggle that has transformed regularly call for institutional renovation at the the lives of millions of people in Africa and Asia. UN. Secretary Generals frequently re-organize departments and set up new coordinating com- The Charter provisions on Non-Self Governing mittees. NGOs gather to press their reform causes. Territories were given a new thrust when the UN Diplomats negotiate. And from Washington come adopted the landmark 1960 Declaration on the somber warnings that the UN must "reform or die." Granting of Independence to Colonial Countries But after the fireworks, the same problems per- and Peoples. India was a co-sponsor of the Decla- sist – because the shortcomings of the UN are pri- ration. The Declaration solemnly proclaimed the marily rooted in the dysfunctional global order necessity of bringing to a speedy and unconditional and the conflict-prone state system, not in the end, colonialism in all its forms and manifesta- UN's institutional arrangements. tions. Few reformers are willing to admit that the UN's The following year, the Special Committee on the complex and inefficient machinery results from Implementation of the Declaration on deep political disagreements among its members Decolonization was established to study, investi- and between other contending forces in the glo- gate and recommend action to bring an end to bal system. Yet the United States, military super- colonialism. India was elected the first Chairman power and transnational corporate headquarters, of the Decolonization Committee. As a member clearly wants a weak UN with an impossibly small of the Committee of 24, as it came to be called, budget and scarcely any voice in economic mat- India has ceaselessly struggled for an end to colo- ters. Many other nations, to the contrary, want a nialism. India also took up the decolonization is- stronger UN and more effective multilateral policy sue in the Trusteeship Committee, the Special making. Whose "reform" is to prevail? And how Committee on Non-self Governing Territories and will any newly-devised UN institutions be paid the Fourth Committee. for? India supported numerous resolutions in the UN UN Reform debates have revealed deep divides fora on decolonization. India has also raised the between states and among NGOs and other re- issue in NAM and Commonwealth fora. For com- form advocates. While some seek to strengthen ing generations, colonialism may be a part of his- the UN and improve accountability and efficiency, tory: new challenges of tomorrow have to be faced. there are those who seek reform only on their However, it was the struggle against colonialism, terms. The US consistently pushes its own agenda successfully waged in solidarity by the Afro-Asian for change and aims to weaken the UN. Various Copyright © 2009 | WWW.UPSCPORTAL.COM 22
    • Section -1 (Article : India and United Nations ) areas of UN Reform, include the Security council, Financing of the UN is an additional source for The Economic and Social Council(ECOSOC), The debate. As a solution to the constant financial General Assembly, The Human Rights Council, shortages faced by the organization, many experts The Peacebuilding Commission, Management have suggested Alternative Financing schemes Reform, Responsibility to Protect, , and the cre- such as Global Taxes to improve the UN financial ation of a UN Standing Force. situation and make the organization less depen- dent on government contributios. The Millennium+5 reforms, proposed by the Sec- retary General Kofi Annan in March 2005, were neither ambitious nor far-reaching. Designed to please (or at least not to displease) the superpower, they substantially ignored the most urgent issues – the UN's financial woes, the unilateralism of the superpower, the absence of real disarmament, and the shaky and unjust global economic order. For a time, it seemed that these modest if flawed re- forms might nevertheless be adopted. But as the summit approached, negotiations faltered, due largely to last-minute, far-reaching demands from Washington. In the end, the world leaders ap- (IMP) Get UPSCPORTAL , Jobs, Re- proved an embarrassingly weak document, filled sults, Notification Alerts on Email. mostly with empty platitudes. It remains to be seen how the UN will weather this contentious Step-1: Fill Your Email address in form be- and divisive reform process, and what avenues low. you will get a confirmation email within remain open for a stronger and more effective 10 min. multilateral system. Step-2: Varify your email by clicking on the Over the years, there have been numerous initia- link in the email. (check Inbox and Spam fold- tives to reform the UN. These range from sum- ers) mits of heads of state, to panels of experts, to the reform efforts by UN Secretary Generals. GPF fol- Step-3: Done! Now you will regular Alerts lows and critically analyses the actions of these on your email. UN reform initiatives and monitors subsequent progress. NGOs and businesses are new actors within the United Nations, an organization originally re- served for states. NGOs are increasingly active in policy making at the United Nations, though the relationship between the two remains contentious at times. Although of increasing importance, NGOs do not have a formal role at the UN and have suffered disappointing setbacks due to their limited access. Transnational corporations on the other hand have a more controversial relationship with the UN, as UN and business are gaining a bigger role, putting the integrity of the UN at stake. Copyright © 2009 | WWW.UPSCPORTAL.COM 23
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    • Section -1 (Article : Fiji Suspended from Commonwealth) Fiji Suspended from Commonwealth Failed to Opening Talks on a Return to Democracy By Sangeeta Gupta Author is an Expert of Various Competitive Examinations The Commonwealth has suspended Fiji after the manded that Fiji commit, by 1 September, to re- Pacific Island nation failed to meet a deadline for joining negotiations with the opposition and to opening talks on a return to de- holding credible elections by mocracy on September 01, October 2010. Mr Sharma said 2009.Commonwealth Secretary that although Cmdr General Kamalesh Sharma said it Bainimarama had reaffirmed was with 'deep regret' and 'sor- "his commitment to the prin- row' that the organisation had to ciples of the Commonwealth", fully suspend Fiji from the he had not met the terms of the grouping of 53 nations, mostly 1 September deadline. He said former British colonies. Fiji had Fiji's suspension was therefore already been suspended from Commonwealth "a step the Commonwealth is now obliged to take, meetings. The tougher sanction means that the and one that it takes in sorrow". Fiji has already country is not eligible for Commonwealth aid and been suspended from the regional Pacific Islands will be barred from the Commonwealth Games. Forum, and some European Union aid to the coun- try has been put on hold. In April, Fiji's president reappointed coup leader Frank Bainimarama as interim prime minister, less Fiji has had a chequered relationship with the than two days after a court ruled his 2006 coup Commonwealth. It was expelled in 1987 after two illegal. President Ratu Josefa Iloilo had previously military coups, but was readmitted 10 years later annulled the 1997 constitution and sacked the when democracy was restored. It was also sus- entire judiciary. Bainimarama, who had promised pended in 2000 for 18 months. The only other an election this year, has now ruled it out until country to be fully suspended in the 2014. Commonwealth ministers said on July 31 Commonwealth's history is Nigeria, during the that Fiji would be fully suspended on September 1 rule of Gen Sani Abacha in 1995. Nigeria returned unless Fiji's rulers committed to re-activating a to the Commonwealth after democratic rule was forum set up for political parties to discuss a re- restored. Pakistan was twice suspended from coun- turn to democracy. They said the dialogue should cil meetings, and Zimbabwe was on course to be lead to a credible election no later than October suspended when President Robert Mugabe pre- 2010. empted the move by walking out himself. Secretary General Sharma said that, although Account of Fiji Bainimarama had sent him a letter re-affirming his commitment to the principles of the Common- Fiji is an island nation in the South Pacific Ocean wealth, his response did not meet the east of Vanuatu, west of Tonga and south of Commonwealth's conditions. According to him, Tuvalu. The country occupies an archipelago of it is hoped that Fiji would take the necessary steps about 322 islands, of which 106 are permanently to restore its full participation in the Common- inhabited, and 522 islets. The two major islands, wealth. The Pacific Islands Forum suspended Fiji Viti Levu and Vanua Levu, account for 87% of from the 16-nation grouping in May. the population. Fiji's main island is known as Viti Levu and it is from this that the name "Fiji" is In a statement, the Commonwealth said it had de- Copyright © 2009 | WWW.UPSCPORTAL.COM 25
    • Section -1 (Article : Fiji Suspended from Commonwealth) derived, through the pronunciation of their island then booming sandalwood and beche-de-mer neighbours in Tonga. Pottery excavated from trade. Fijian towns shows that Fiji was settled before or around 3500–1000 BC, although the question of Ratu Seru Epenisa Cakobau was a Fijian chief and Pacific migration still lingers. It is believed that warlord from the island of Bau, off the eastern the Lapita people or the ancestors of the coast of Viti Levu, who united part of Fiji's war- Polynesians settled the islands first but not much ring tribes under his leadership. He then styled is known of what became of them after the himself as King of Fiji or Tui Viti and then to Melanesians arrived; they may have had some in- Vunivalu or Protector after the Cession of Fiji to fluence on the new culture, and archaeological evi- Great Britain. The British subjugated the islands dence shows that they would have then moved as a colony in 1874, and the British brought over on to Tonga, Samoa and Hawai. Indian contract labourers to work on the sugar plantations as the then Governor and also the first The first settlements in Fiji were started by voy- governor of Fiji, Arthur Charles Hamilton-Gor- aging traders and settlers from the west about 3500 don, adopted a policy disallowing the use of na- years ago. Lapita pottery shards have been found tive labour and no interference in their culture at numerous excavations around the country. As- and way of life. pects of Fijian culture are similar to Melanesian culture to the western Pacific but have stronger The British granted Fiji independence in 1970. connection to the older Polynesian cultures such Democratic rule was interrupted by two military as those of Samoa and Tonga. Trade between these coups in 1987 because the government was per- three nations long before European contact is quite ceived as dominated by the Indo-Fijian (Indian) obvious with Canoes made from native Fijian trees community. The second 1987 coup saw the Brit- found in Tonga and Tongan words being part of ish monarchy and the governor general replaced the language of the Lau group of islands. Pots made by a non-executive President, and the country in Fiji have been found in Samoa and even the changed the long form of its name from Domin- Marquesas Islands. Across 1000 kilometres from ion of Fiji to Republic of Fiji (and to Republic of east to west, Fiji has been a nation of many lan- the Fiji Islands in 1997). The coups and accompa- guages. Fiji's history was one of settlement but nying civil unrest contributed to heavy Indian also of mobility. emigration; the population loss resulted in eco- nomic difficulties but ensured that Melanesians Over the centuries, a unique Fijian culture devel- became the majority. oped. Constant warfare and cannibalism between warring tribes was quite rampant and very much In 1990, the new Constitution institutionalised the part of everyday life. Fijians today regard those ethnic Fijian domination of the political system. times as "na gauna ni tevoro" (time of the devil). The group against racial discrimination (GARD) The ferocity of the cannibal lifestyle deterred was formed to oppose the unilaterally imposed European sailors from going near Fijian waters, constitution and to restore the 1970 constitution. giving Fiji the name Cannibal Isles, in turn Fiji Sitiveni Rabuka, the Lieutenant Colonel who car- was unknown to the rest of the outside world. ried out the 1987 coup became Prime minister in The Dutch explorer Abel Tasman visited Fiji in 1992, following elections held under the new con- 1643 while looking for the Great Southern Conti- stitution. Three years later, Rabuka established the nent. Europeans settled on the islands perma- Constitutional Review Commission, which in 1997 nently beginning in the nineteenth century. The led to a new Constitution, which was supported first European settlers to Fiji were Beachcombers, by most leaders of the indigenous Fijian and Indo- missionaries, whalers and those engaged in the Fijian communities. Fiji is re-admitted to the Com- monwealth of Nations. Copyright © 2009 | WWW.UPSCPORTAL.COM 26
    • Section -1 (Article : Fiji Suspended from Commonwealth) The new millennium brought along another coup, abrogated the constitution, removed all office instigated by George Speight, that effectively holders under the Constitution including all judges toppled the government of Mahendra Chaudhry, and the Governor of the Central Bank. He then who became Prime Minister following the 1997 reappointed Bainimarama as Prime Minister un- constitution. Commodore Frank Bainimarama as- der his "New Order" and imposed a "Public Emer- sumed executive power after the resignation, pos- gency Regulation" limiting internal travel and al- sibly forced, of President Mara. Fiji was rocked lowing press censorship. by two mutinies at Suva's Queen Elizabeth Bar- racks, later in 2000 when rebel soldiers went on For a country of its size, Fiji has large armed forces, the rampage. The High court ordered the rein- and has been a major contributor to UN peace- statement of the constitution, and in September keeping missions in various parts of the world. In 2001, a general election was held to restore de- addition, a significant number of former military mocracy, which was won by interim Prime Min- personnel have served in the lucrative security ister Laisenia Qarase's Soqosoqo Duavata ni sector in Iraq following the 2003 US-led invasion. Lewenivanua party. Political Condition In 2005, amid much controversy, the Qarase gov- ernment proposed a Reconciliation and Unity Politics of Fiji normally take place in the frame- Commission, with power to recommend compen- work of a parliamentary representative democratic sation for victims of the 2000 coup, and amnesty republic, whereby the Prime Minister of Fiji is for its perpetrators. However, the military strongly the head of government, the President the head opposed this bill, especially the army's com- of state, and of a multi-party system. Executive mander, Frank Bainimarama. He agreed with de- power is exercised by the government. Legisla- tractors who said that it was a sham to grant am- tive power is vested in both the government and nesty to supporters of the present government the parliament of Fiji. The judiciary is indepen- who played roles in the coup. His attack on the dent of the executive and the legislature.Since legislation, which continued unremittingly independence there have been four coups in Fiji, throughout May and into June and July, further two in 1987, one in 2000 and one in late 2006. strained his already tense relationship with the The military has been either ruling directly, or government. In late November 2006 and early heavily influencing governments since 1987. December 2006, Bainimarama was instrumental in the 2006 Fijian coup. Bainimarama handed 2006 Military Takeover: Citing corruption in the down a list of demands to Qarase after a bill was government, Commodore Josaia Voreqe(Frank) put forward to parliament, part of which would Bainimarama, Commander of the Republic of Fiji have offered pardons to participants in the 2000 Military Forces, staged a military takeover on De- coup attempt. He gave Qarase an ultimatum date cember 5, 2006 against the Prime Minister that of 4 December to accede to these demands or to he himself had installed after the 2000 coup. There resign from his post. Qarase adamantly refused to had been two military coups in 1987 and one in either concede or resign and on 5 December Presi- 2000. The commodore took over the powers of dent, Ratu Josefa Iloilo, was said to have signed a the presidency and dissolved the parliament, pav- legal order dissolving Parliament after meeting ing the way for the military to continue the take with Bainimarama. over. The coup was the culmination of weeks of speculation following conflict between the elected In April 2009, the Fiji court of appeal ruled that Prime Minister, Laisenia Qarase, and Commodore the 2006 coup had been illegal. This began the Bainimarama. Bainimarama had repeatedly issued 2009 Fijian constitutional crisis. President Iloilo demands and deadlines to the Prime Minister. At Copyright © 2009 | WWW.UPSCPORTAL.COM 27
    • Section -1 (Article : Fiji Suspended from Commonwealth) particular issue was previously pending legisla- tion to pardon those involved in the 2000 coup. On April 10, 2009 President Iloilo suspended the Bainimarama named Jona Senilagakali caretaker constitution of Fiji, dismissed the Court of Appeal Prime Minister. The next week Bainimarama said and, in his own words, "appointed himself as the he would ask the Great Council of Chiefs to re- Head of the State of Fiji under a new legal order". store executive powers to President, Ratu Josefa As President, Iloilo had been Head of State prior Iloilo. to his abrogation of the Constitution, but that po- sition had been determined by the Constitution On January 4, 2007, the military announced that itself. The "new legal order" did not depend on it was restoring executive power to President the Constitution, thus requiring a "reappointment" Iloilo, who made a broadcast endorsing the ac- of the Head of State. "You will agree with me that tions of the military. The next day, Iloilo named this is the best way forward for our beloved Fiji", Bainimarama as the interim Prime Minister, in- he said. Bainimarama was re-appointed as Interim dicating that the Military was still effectively in Prime Minister; he, in turn, re-instated his previ- control. ous Cabinet. In the wake of the take over, reports have emerged On July 13, 2009, Fiji became the first nation ever of intimidation of some of those critical of the to be expelled from the Pacific Islands Forum, for interim regime. It is alleged that two individuals its failure to hold democratic elections by that date. have died in military custody since December On September 1, 2009, Fiji became only the sec- 2006. These deaths have been investigated and ond country to be suspended from the Common- suspects charged but not yet brought to court. wealth of Nations. The action was taken because On April 9, 2009 the Court of Appeal overturned Commodore Frank Bainimarama refused to hold the High Court decision that Bainimarama's take- elections by 2010, elections that the Common- over of Qarase's government was legal, and de- wealth of Nations had demanded after the 2006 clared the Interim Government illegal. coup. He states a need for more time to end a vot- Bainimarama agreed to step down as Interim PM ing system he claims favors ethnic Fijians. Critics immediately, along with his government, and claim that he has suspended the constitution and President Iloilo was to appoint "a distinguished was responsible for human rights violations by person independent of the parties to this litiga- arresting and detaining opponents. tion as caretaker Prime Minister, to direct the is- suance of writs for an election ..." Fiji’s Commonweath History » 1987 - Fiji endures two military coups, declares a republic; the Commonwealth expels Fiji » 1997 - Fiji readmitted to the Commonwealth after it introduces a non-discriminatory constitution » May 2000- Parliament stormed, PM Mahendra Chaudhry and cabinet taken hostage. Businessman George Speight proclaims himself acting PM » June 2000 - Commonwealth suspends Fiji » Dec 2001 - Fiji readmitted to the Commonwealth Copyright © 2009 | WWW.UPSCPORTAL.COM 28
    • Section -1 (Article : Fiji Suspended from Commonwealth) Economy Suva, which was inaugurated in 1984. The Suva central commercial centre, which opened in No- Fiji, endowed with forest, miniral, and fish re vember 2005, was planned to outrank the Reserve sources, is one of the more developed of the Pa- Bank building at seventeen stories, but last-minute cific island economies, though still with a large design changes made sure that the Reserve Bank subsistence sector. Natural resources include tim- building remains the tallest. ber, fish, gold, copper, offshore oil potential, hy- dropower. Fiji experienced a period of rapid Trade with Fiji has been criticized due to the growth in the 1960s and 1970s but stagnated in country's military dictatorship. In 2008, Fiji's in- the 1980s. The coup of 1987 caused further con- terim Prime Minister and coup leader Frank traction. Economic liberalization in the years fol- Bainimarama announced election delays and that lowing the coup created a boom in the garment it would pull out of the Pacific Islands Forum in industry and a steady growth rate despite grow- Niue, where Bainimarama would have met with ing uncertainty of land tenure in the sugar indus- Australian Prime Minister Kevin Rudd and New try. The expiration of leases for sugar cane farm- Zealand Prime Minister Helen Clark. ers (along with reduced farm and factory effi- ciency) has led to a decline in sugar production A Chronology of Key Events despite a subsidized price. Subsidies for sugar have been provided by the EU and Fiji has been the 1643 - Dutch explorer Abel Tasman is the first second largest beneficiary after Mauritius. European to visit the islands. Urbanization and expansion in the service sector 1830s - Western Christian missionaries begin to have contributed to recent GDP growth. Sugar arrive. exports and a rapidly growing tourist industry — with 430,800 tourists in 2003 and increasing in 1840s-50s - Christian convert chief Cakobau gains the subsequent years — are the major sources of control of most of western Fiji, while another foreign exchange. Fiji is highly dependent on tour- Christian convert, Ma'afu from Tonga, controls the ism for revenue. Sugar processing makes up one- east. third of industrial activity. Long-term problems include low investment and uncertain property 1868 - Cakobau sells Suva - the current capital of rights. The political turmoil in Fiji has had a se- Fiji - to an Australian company. vere impact on the economy, which shrank by 2.8% in 2000 and grew by only 1% in 2001. The 1871 - European settlers at Levuka island orga- tourism sector recovered quickly, however, with nize a national government and name Cakobau visitor arrivals reaching pre-coup levels again dur- king of Fiji following local disorder. ing 2002, which has since resulted in a modest economic recovery. This recovery continued into British Rule 2003 and 2004 but grew by 1.7% in 2005 and grew by 2.0% in 2006. Although inflation is low, the 1874 - Fiji becomes a British crown colony at the policy indicator rate of the Reserve Bank of Fiji request of Cakobau and other chiefs. was raised by 1% to 3.25% in February 2006 due to fears of excessive consumption financed by debt. 1875-76 - Measles epidemic wipes out one-third Lower interest rates have so far not produced of the Fijian population; British forces and Fijian greater investment for exports. However, there has chiefs suppress rebellion. been a housing boom from declining commercial mortgage rates. The tallest building in Fiji is the 1879-1916 - More than 60,000 indentured fourteen-storey Reserve Bank of Fiji building in labourers brought in from the Indian subconti- Copyright © 2009 | WWW.UPSCPORTAL.COM 29
    • Section -1 (Article : Fiji Suspended from Commonwealth) nent to work on sugar plantations. 1994 - Great Council of Chiefs appoints Ratu Sir Kamisese Mara president in January following the 1904 - Legislative Council, consisting of elected death of Ganilau in the previous month; Rabuka Europeans and nominated Fijians, set up to advise and the FPP win general election. the British governor. 1997 - Fiji re-admitted to the Commonwealth af- 1916 - British colonial government in India stops ter it introduces a non-discriminatory constitu- the recruitment of indentured labourers. tion. 1920 - All labour indenture agreements in Fiji end. 1999 - Mahendra Chaudhry, an ethnic Indian, becomes prime minister after the Fiji Labour Party Fijians Get the Vote emerges from the general election with enough seats to rule on its own. 1963 - Women and Fijians enfranchised; predomi- nantly Fijian Alliance Party (AP) set up. Prime Minister Held Hostage 1970 - Fiji becomes independent with Ratu Sir 2000 May - Bankrupt businessman George Speight Kamisese Mara of the AP as prime minister. and retired major Ilisoni Ligairi storm parliament, aiming to make indigenous Fijians the dominant 1985 - Timoci Bavadra sets up the Fiji Labour political force. They take Prime Minister Party with trade union support. Mahendra Chaudhry and his cabinet hostage. Speight proclaims himself acting premier. Presi- Supremacist Coups dent Mara sacks the Chaudhry government on the orders of Fiji's Great Council of Chiefs. 1987 April - Indian-dominated coalition led by Bavadra wins general election, ending 17 years of 2000 June - Commonwealth suspends Fiji. rule by the AP and Prime Minister Mara. 2000 July - Chaudhry and other hostages released; 1987 May - Lieutenant-Colonel Sitiveni Rabuka Great Council of Chiefs appoints Ratu Josefa Iloilo seizes power in bloodless coup with the aim of - a former father-in-law of Speight's brother - making indigenous Fijians politically dominant. president 1987 October - Rabuka stages a second coup, pro- 2000 July - Speight and 369 of his supporters ar- claims Fiji a republic and appoints Governor-Gen- rested. eral Ratu Sir Penaia Ganilau president; Ganilau in turn appoints Ratu Mara prime minister; Fiji ex- 2000 November - Eight soldiers are killed in a pelled from Commonwealth; Britain, the United failed army mutiny. States, Australia and New Zealand suspend aid. 2001 August - Elections to restore democracy; 1989 - Thousands of ethnic Indians flee Fiji. George Speight becomes MP in a new government. 1990 - New constitution enshrining political 2001 September - Indigenous Prime Minister dominance for indigenous Fijians introduced. Laisenia Qarase sworn in, but doesn't offer cabi- net posts to opposition Labour Party, in defiance 1992 - Rabuka, of the Fijian Political Party (FPP), of constitution. becomes prime minister following general elec- tion. Copyright © 2009 | WWW.UPSCPORTAL.COM 30
    • Section -1 (Article : Fiji Suspended from Commonwealth) 2001 December - George Speight expelled from parliament for failing to attend sessions. Fact Sheet 2001 December - Fiji readmitted to the Common- » Full name: Republic of the Fiji Islands wealth. » Population: 844,000 (UN, 2008) 2002 February - George Speight sentenced to » Capital: Suva death for treason. President Iloilo commutes his » Area: 18,376 sq km (7,095 sq miles) sentence to life imprisonment. » Major languages: English, Fijian, Hindi 2002 November - Government announces radi- » Major religions: Christianity, Hinduism, cal privatisation plan designed to stave off collapse Islam of vital sugar industry threatened by withdrawal of EU subsidies. » LIfe expectancy: 67 years (men), 71 years (women) (UN) 2003 July - Supreme Court rules that Laisenia Qarase must include ethnic-Indian members of the » Monetary unit: 1 Fijian dollar = 100 cents opposition Labour Party in his cabinet. » Main exports: Sugar, clothing, gold, pro cessed fish, timber 2004 April - Former leader Ratu Sir Kamisese Mara, considered to be independent Fiji's found- » GNI per capita: US $3,800 (World Bank, ing father, dies aged 83. 2007) 2004 August - Vice President Ratu Jope Seniloli found guilty of treason over his involvement in Military Coup May 2000 coup attempt. He serves a few months of a four-year sentence. 2006 October - November - Tensions rise be- tween PM Laesenia Qarase and military chief 2004 November - Labour Party declines cabinet Frank Bainimarama, who threatens to oust the seats in favour of opposition role. Fijian soldiers government after it tries, and fails, to replace him. leave for peacekeeping duties in Iraq. Qarase goes into hiding as the crisis escalates. 2005 July - Military chief warns that he will re- 2006 December - Frank Bainimarama says in a move government if proposed amnesty for those televised address he has taken executive powers involved in 2000 coup goes ahead. and dismissed PM Laisenia Qarase. Common- wealth suspends Fiji because of the coup. 2006 March - Great Council of Chiefs elects in- cumbent President Iloilo to a second, five-year 2007 January - Bainimarama restores executive term. powers to President Iloilo and takes on the role of interim prime minister. 2006 May - Former PM Sitiveni Rabuka is charged with orchestrating a failed army mutiny in No- 2007 February - Bainimarama announces plans vember 2000. to hold elections in 2010. Ruling party leader and incumbent PM Laesenia 2007 April - Bainimarama sacks the Great Coun- Qarase narrowly wins elections and is sworn in cil of Chiefs and suspends all future meetings, af- for a second term. Copyright © 2009 | WWW.UPSCPORTAL.COM 31
    • Section -1 (Article : Fiji Suspended from Commonwealth) ter the chiefs refuse to endorse his government A further coup in 2000, led by businessman George and his nomination for vice president. Speight, saw the country's first ethnic Indian prime minister, his cabinet and several MPs held 2007 June - State of emergency lifted but reim- hostage for several weeks.These events caused posed in September. Lifted again in October. great harm to the economy - the tourism indus- try in particular - and Fiji's international reputa- 2007 November - Bainimarama says police have tion. foiled a plot to assassinate him. Rancour over the 2000 coup persisted, with bitter 2008 February - Bainimarama appoints himself divisions over plans to amnesty those behind it. as chairman of the Great Council of Chiefs (GCC), The proposals underlay tensions which culminated a body he suspended after it failed to back his De- in a bloodless military takeover in 2006 - Fiji's cember 2006 coup. fourth coup in 20 years. Fiji's population, which resides mostly on the two main islands of Viti Levu 2008 July - Bainimarama postpones elections and Vanua Levu, is divided almost equally between promised for early 2009, on the grounds that elec- indigenous Fijians and Indo-Fijians, the descen- toral reforms could not be completed in time. dents of indentured labourers brought from In- dia. 2008 August - South Pacific leaders warn Fiji that it faces suspension from their regional grouping if Mixing between the two groups is minimal, and it fails to show progress towards holding elections. informal segregation runs deep at almost every level of society. There are also very small non- 2009 January - Pacific leaders demand Fiji hold Indo-Fijian, non-Fijian minority communities, elections by the end of the year. such as Chinese and Rotumans. 2009 April - Appeal Court rules the military re- Although the former British colony relies heavily gime was illegally appointed after the 2006 coup on the sugar and tourism industries for its foreign and says a caretaker prime minister should be ap- exchange, its economy is diverse. Gold, silver and pointed to call elections to restore democracy. limestone are mined, and there is a strong ser- vices sector and some light manufacturing. President Iloilo repeals the constitution, appoints himself head of state, sets a 2014 election dead- Nonetheless, Fiji has been hampered by persis- line and sacks all the judges. He then reappoints tent trade and budget deficits, making it one of Bainimarama as interim prime minister. the world's largest per capita recipients of aid. Country Profile Interim Prime Minister: Commodore Josaia Voreqe (Frank) Bainimarama The 800-plus volcanic and coral islands that make up the Pacific nation of Fiji enjoy a tropical cli- Fiji's military chief Commodore Frank mate and are a prime destination for Bainimarama seized power in the December 2006 tourists.However, since 1987 racial and political coup and first became interim prime minister in tensions have been an intermittent source of in- January 2007. He accused deposed prime minister stability and international isolation. In 1987 a coup Laisenia Qarase of corruption and of discriminat- by indigenous Fijians overthrew the elected, In- ing against Fiji's ethnic Indian minority. Mr dian-dominated coalition. This triggered a series Qarase, who had secured a second term in May of adverse events, including the introduction - and 2006, had angered the opposition and the mili- subsequent withdrawal - of a constitution enshrin- tary with his controversial proposal to pardon or ing indigenous Fijian political supremacy. amnesty some of those behind the 2000 national- Copyright © 2009 | WWW.UPSCPORTAL.COM 32
    • Section -1 (Article : Fiji Suspended from Commonwealth) ist coup. The Commonwealth Commodore Bainimarama promised to restore de- mocracy through elections, but said the constitu- The Commonwealth is a voluntary association of tion would have to be revised first, as in his view 53 countries that support each other and work it enshrined racial divisions. together towards shared goals in democracy and development. The world’s largest and smallest, He maintains that his aim is to create a fairer, richest and poorest countries make up the Com- multi-racial society, but he has excluded political monwealth and are home to two billion citizens opponents from discussions on the constitutional of all faiths and ethnicities – over half of whom reforms. are 25 or under. Member countries span six conti- A move by Fiji's Appeal Court in April 2009 to nents and oceans from Africa (18) to Asia (8), the declare the military government illegal prompted Americas (2), the Caribbean (12), Europe (3) and the president, Ratu Josefa Iloilo, to suspend the the South Pacific (10). constitution and reappoint Commodore Bainimarama as interim prime minister for a fur- The Commonwealth, with roots as far back as the ther five years, leaving the military chief's grip 1870s, believes that the best democracies are on power apparently stronger than ever. Commo- achieved through partnerships – of governments, dore Bainimarama insists that he enjoys broad business, and civil society. This unique associa- popular support for his elections reform plan, but tion was reconstituted in 1949 when Common- the events of April 2009 have made Fiji even more wealth Prime Ministers met and adopted what has of a diplomatic outcast than before. become known as the ‘London Declaration’ where it was agreed all member countries would be President: Ratu Josefa Iloilo “freely and equally associated.” President Ratu Josefa Iloilo was appointed in the Since then membership has continued to grow. aftermath of the May 2000 coup and was re- The most recent members are the predominantly elected president by the Great Council of Chiefs Francophone Cameroon and Mozambique, which in March 2006. In the December 2006 coup, Mr was the first country to join with no historical or Iloilo lost his executive powers to military chief administrative association with another Common- Commodore Frank Bainimarama, who dissolved wealth country. parliament and declared a state of emergency. Commodore Bainimarama reinstated Mr Iloilo as Beyond the ties of history, language and institu- president in January 2007. tions, it is the association’s values which unite its members: democracy, freedom, peace, the rule of Mr Iloilo endorsed the December 2006 coup, say- law and opportunity for all. These values were ing general elections would be held once the po- agreed and set down by all Commonwealth Heads litical and economic conditions were suitable. of Government at two of their biennial meetings When the Court of Appeal declared the military (known as CHOGMs) in Singapore in 1971 and government illegal in April 2009, Mr Iloilo re- reaffirmed twenty years later in Harare. sponded by assuming governing power, suspend- ing the constitution and dismissing the judiciary. At government level, the values are protected by the Commonwealth Ministerial Action Group He then reappointed Commodore Bainimarama (CMAG), a rotating group of nine Foreign Minis- as interim prime minister and said that elections ters, which assesses the nature of any infringe- would not be held until 2014. He is seen as a close ment and recommends measures for collective ally of the military chief, but denied that he was action from member countries. It has the author- acting at the behest of Commodore Bainimarama. ity to suspend or even recommend to Heads of Now in his late eighties, he is said to be in poor Government that a member country be expelled. health. Copyright © 2009 | WWW.UPSCPORTAL.COM 33
    • Section -1 (Article : Fiji Suspended from Commonwealth) When member countries have been suspended the Commonwealth countries work together in a spirit Commonwealth continues to do everything pos- of co-operation, partnership and understanding. sible to bring them back into the fold. While This openness and flexibility are integral to the CMAG represents one aspect of the Commonwealth's effectiveness. Emphasis on Commonwealth’s commitment to democratic equality has helped it play leading roles in principles, many more discreet interventions are decolonisation, combating racism and advancing made through ‘good offices’ work, where specially sustainable development in poor countries. appointed representatives conduct quiet diplo- This support network of countries and macy as part of efforts to prevent or resolve con- organisations is involved in a diverse range of flicts and build dialogue and democratic structures. work, from helping trade negotiations, building As well as Heads of Government, ministers re- the small business sector and encouraging women sponsible for education, environment, civil soci- entrepreneurs to supporting the quality and quan- ety, finance, foreign affairs, gender affairs, health tity of teachers, and increasing understanding of law, tourism and youth also meet regularly. This HIV/AIDS. ensures that Commonwealth policies and programmes represent views of the members and As well as working with each other, member gives governments a better understanding of each countries and organisations have also built alli- other’s goals in an increasingly globalised world. ances outside the Commonwealth. Common- wealth ideas have been taken up by the World There are three intergovernmental organisations Bank on Small States, by the World Health Orga- in the association: the Commonwealth Secretariat nization on the migration of doctors and nurses, (which executes plans agreed by Commonwealth by the International Labour Organization on the Heads of Government through technical assis- migration of teachers. Its support and expertise tance, advice and policy development); the Com- have been enlisted by the European Union (EU) monwealth Foundation (which helps civil soci- and the African Union on building governance in ety organisations promote democracy, develop- Africa, and by the EU and the Pacific Islands Fo- ment and cultural understanding) and the Com- rum on building governance in the Pacific.The monwealth of Learning (which encourages the Commonwealth is part of the world that it serves, development and sharing of open learning and sharing the same interests as those of its citizens: distance education). Her Majesty Queen Elizabeth democratic freedom and economic and social de- II is Head of the Commonwealth and Kamalesh velopment. Sharma, current Secretary-General of the Com- monwealth, is the principal global advocate for History: Though the modern Commonwealth is the Commonwealth and Chief Executive of the just 60 years old, the idea took root in the 19th Secretariat. century. In 1867, Canada became the first colony to be transformed into a selfgoverning 'Domin- Citizen-to-citizen links are as important to the ion', a newly constituted status that implied equal- Commonwealth as the contacts between member ity with Britain. The empire was gradually chang- governments. The Commonwealth’s worldwide ing and Lord Rosebury, a British politician, de- network of around 90 professional and advocacy scribed it in Australia in 1884 as a "Commonwealth organisations, most of which bear its name, con- of Nations". tinues to grow with a third of these based outside the UK. They work at local, national, regional or Other parts of the empire became Dominions too: international levels and play crucial roles in policy, Australia (1901), New Zealand (1907), South Af- political or social aspects of Commonwealth life. rica (1910) and the Irish Free State (1922). All ex- One such organisation is the Commonwealth cept the Irish Free State (that did not exist at the Games Federation, which manages the four-yearly time) participated as separate entities in the First multi-sport event. Copyright © 2009 | WWW.UPSCPORTAL.COM 34
    • Section -1 (Article : Fiji Suspended from Commonwealth) World War and were separate signatories to the CFTC programmes are mostly demand-led, with Treaty of Versailles in 1919. Subsequently, they an emphasis on South–South cooperation. The became members of the League of Nations. Fund’s work programme fits within the frame- work of the Commonwealth Secretariat’s current After the end of the First World War, the Do- 4-year Strategic Plan and is developed in consul- minions began seeking a new constitutional defi- tation with the national Primary Contact Points nition and reshaping their relationship with Brit- as well as the Divisional Points of Contact. ain. At the Imperial Conference in 1926, the prime ministers of the participating countries adopted The CFTC’s work programme focuses on: the Balfour Report which defined the Dominions » Trade capacity-building, including capacity to as autonomous communities within the British negotiate with multilateral agencies such as the Empire, equal in status, in no way subordinate to one another in any aspect of their domestic or WTO and the EU; external affairs, though united by common alle- » Public-sector reform and governance; giance to the Crown, and freely associated as mem- » Economic and financial management; bers of the British Commonwealth of Nations. » Assistance related to negotiations with multina- This definition was incorporated into British law tional companies to attract foreign direct invest- in 1931 as the Statute of Westminster. It was ment in the mineral and petroleum sectors; adopted immediately in Canada, the Irish Free » Enterprise and private-sector development; State, Newfoundland (which joined Canada in » Supporting institutional capacity-building in a 1949) and South Africa. Australia and New Zealand followed. India, Britain's largest colony wide range of areas including for the promotion at the time, became a Dominion at independence of democracy, the rule of law and human rights; in 1947 and remained so until January 1950, when » Gender mainstreaming and equality; the Indian Republic was born. » Health and education; CFTC: The Commonwealth Fund for Technical » Niche areas including delimitation of maritime Co-operation (CFTC) is the principal means by boundaries and environmentally sustainable de- which the Commonwealth delivers development velopment and youth development; and techni- assistance to member countries.Many Common- cal support at the regional and pan-Common- wealth developing countries face human resource and knowledge constraints limiting their capac- wealth levels for policy development and advo- ity for sustainable development, poverty reduc- cacy of Commonwealth interests. tion and achievement of the Millennium Devel- opment Goals. To address these constraints, the Secretary-General CFTC provides capacity-building and institutional strengthening assistance to developing member Mr. Kamalesh Sharma, an Indian diplomat, be- countries, especially small states and least devel- came Commonwealth Secretary-General on 1 oped members. Assistance is provided through April 2008. He was appointed to the post by Com- professionals who share their skills and experience monwealth Heads of Government at their meet- to maximise the development potential of mem- ing in Kampala, Uganda, in November 2007. Mr. ber states and to build the capacity of the key na- Sharma previously served as India’s High Com- tional and regional institutions. The CFTC also missioner to the United Kingdom, where he was supports and develops training programmes at closely involved in Commonwealth activities. In centres of excellence throughout the Common- that capacity, since 2004 he has served as a mem- wealth to build capacity in priority development ber of the Board of Governors of the Common- areas of need. wealth Secretariat and the Commonwealth Foun- dation. Copyright © 2009 | WWW.UPSCPORTAL.COM 35
    • Section -1 (Article : Fiji Suspended from Commonwealth) Role of the Secretary-General: The Secretary- The process by which Heads of Government se- General is responsible for representing the Com- lect a new Secretary-General is unique. Candidates monwealth publicly; and for the management and are nominated by governments in the months good governance of the Commonwealth Secre- leading up to a CHOGM where the post becomes tariat which sets out the Secretariat’s main goals vacant. A Restricted Session is held during the and programmes. CHOGM, open only to Heads of Government and other Heads of Delegation with ministerial sta- Promoting and protecting the Commonwealth’s tus. The Chair leads in determining which candi- values is a core responsibility. The Secretary-Gen- date has the greatest support amongst the 53 lead- eral does so through regular high level contact ers, and may conduct one or more secret “straw with Commonwealth governments and civil so- poll” ballots to assist that process. Once a clearly ciety leaders, as well as through the media and supported candidate becomes apparent, the gov- public engagements. The Secretary-General also ernments whose candidates are unsuccessful with- uses a low-key, personal and discreet ‘good offices’ draw from the contest in order to achieve unani- approach in certain sensitive situations around the mous support by Heads for one candidate. Commonwealth, and occasionally appoints Spe- cial Envoys. It was agreed at the 1993 Commonwealth Heads of Government Meeting (CHOGM) held in Cyprus At a meeting of Commonwealth Prime Ministers that Secretaries-General would serve a maximum in London, 1965, a memorandum on the functions of two 4-year terms. Kamalesh Sharma (India) is of the Secretariat was agreed, which includes de- the fifth Commonwealth Secretary-General. His tails on the role of the Secretary-General. The predecessors were: Arnold Smith of Canada (1965- Secretary-General therefore reports to Heads of 1975), Shridath ‘Sonny’ Ramphal of Guyana (1975- Government through individual meetings and also 1990), Emeka Anyaoku of Nigeria (1990 - 2000) collectively at the biennial Commonwealth Heads and Don McKinnon of New Zealand (2000-2008). of Government Meeting (CHOGM). The Secre- tary-General is also held accountable through the Commonwealth’s Board of Governors which meets regularly in London on behalf of member governments at senior diplomatic level. Mmasekgoa Masire-Mwamba (Botswana) and Ransford Smith (Jamaica) – the two current Deputy Secretaries-General – support the Secre- tary-General in the management and executive direction of the Secretariat. These three senior managers collectively comprise the Management Committee, and between them have supervisory responsibility for all divisions and other business units in the Secretariat. The Secretary-General directly supervises the Communications and Pub- lic Affairs Division, Strategic Planning and Evalu- ation Division and the Secretary-General’s Office.A meeting between the Secretary-General and the Head of the Commonwealth, Queen Eliza- beth II, usually takes place twice a year. Copyright © 2009 | WWW.UPSCPORTAL.COM 36
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    • Section -1 (Article : Hindi Article) ¨Éå ¨ÉɨɱÉä ¨Éå +Éi¨É ‡xɦÉÇ® ½Éä MɪÉÉ, {É® ¦ÉÉ®iÉÒªÉ ={É ¨É½ÉnÒ{É ¦É]E iÉÒ ‡„ÉE É®Ò ¨ÉÉxÉ´É VÉɇiɪÉÉå xÉä |ÉɮƇ¦ÉE +´ÉºlÉÉ E ä ¨Éå JÉäiÉÒ¤ÉÉcÒ E ä E É¨É ¨Éå +iªÉÉvÉÖ‡xÉE |ÉÉètÉä‡MÉE Ò E ä |ɪÉÉäMÉ E Ò OÉɨªÉVÉÒ´ÉxÉ ¨Éå ¤ÉºÉE ® EÞ ‡¹É E ɪÉÇ „ÉÖ¯ ‡E ªÉÉ +Éè® vÉÒ®ä-vÉÒ®ä <ºÉ ±É¨¤ÉÒ ªÉÉjÉÉ E Éä =ºÉE Ò ‡´É‡´ÉvÉ +´ÉºlÉÉ+ÉäÆ ¨Éå ‡SɇjÉiÉ JÉä‡iɽ® ºÉ¨ÉÉVÉ ¤ÉxÉiÉÉ MɪÉÉ * =ºÉ ªÉÖMÉ ¨Éå ±ÉÉäMÉÉå xÉä xÉB-xÉB E ®xÉä +Éè® ±ÉÉäMÉÉå E Ò <‡iÉ½ÉºÉ E Ò {É®iÉÉå ¨Éå ±Éä VÉÉxÉä E ä ‡±ÉB +ÉèVÉÉ® ‡´ÉE ‡ºÉiÉ ‡E B +Éè® E Éè„É±É |ÉÉ{iÉ ‡E ªÉÉ * ¨ÉxÉÖ¹ªÉ xÉä BE EÞ ‡¹É ‡´ÉYÉÉxÉ ºÉÆOÉ½É±ÉªÉ E ä ‡±ÉB nä„É E Éä º´ÉÉvÉÒxÉiÉÉ E ä ‡¨É]Â]Ò E ä ¤ÉiÉÇxÉ ¤ÉxÉÉxÉÉ ºÉÒJÉÉ +Éè® +xÉÉVÉ E Ò ‡{ɺÉÉ<Ç +Éè® ¤ÉÉn E ®Ò¤É U½ n„ÉE iÉE |ÉiÉÒIÉÉ E ®xÉÒ {ÉcÒ * E {ÉcÉ ¤ÉÖxÉxÉä E Ò E ±ÉÉ ¦ÉÒ +É MɪÉÒ * ±ÉÉäMÉ VÉÉxÉ´É® {ÉɱÉxÉä ±ÉMÉä * ºÉÆOÉ½É±ÉªÉ E ä |ÉÉMÉè‡iɽɇºÉE JÉhb ¨Éå Þ|ÉɮƇ¦ÉE ¨ÉÉxÉ´É +Éè® ‡n±±ÉÒ ¨Éå xÉ´ÉƤɮ 2004 ¨Éå ®É¹]Å{ɇiÉ bÉ. B.{ÉÒ.VÉä.+¤nÖ±É ¦ÉÉäVÉxÉ E Ò iɱÉÉ„ÉÞ „ÉÒ¹ÉÇE E ä +ÆiÉMÉÇiÉ ¨ÉxÉÖ¹ªÉ E ä ‡´ÉSÉ®hÉ ºÉä E ±ÉÉ¨É xÉä ®É¹]ÅÒªÉ EÞ ‡¹É ‡´ÉYÉÉxÉ ºÉÆOÉ½É±ÉªÉ E É =nÂPÉÉ]xÉ ‡E ªÉÉ ¤ÉºÉÉ´É] E ä ¤ÉÒSÉ E Ò E lÉÉ ‡SɇjÉiÉ E Ò MɪÉÒ ½è * * ºÉ¦ÉÒ ºÉÆOɽɱɪÉÉå E Ò iÉ®½ EÞ ‡¹É ‡´ÉYÉÉxÉ ºÉÆOÉ½É±ÉªÉ E Éä ¦ÉÒ ºÉ¨ÉªÉ E ä |É´Éɽ E ä ºÉÉlÉ ¤ÉºiÉÒ +Éè® ºÉ¨ÉÉVÉ +‡vÉE ºÉ¨ÉÖxxÉiÉ MɇiÉ„ÉÒ±É ½ÉäxÉÉ {ÉciÉÉ ½è* ¦ÉÉ®iÉ VÉèºÉä ‡´É„ÉÉ±É VÉ致ÉE , +ÉxÉÖ´ÉÉƇ„ÉE ½ÖB * ˺ÉvÉÖ PÉÉ]Ò E Ò ºÉ¦ªÉiÉÉ +ÉxÉä iÉE ‡E ºÉÉxÉ EÞ ‡¹É E ɪÉÇ ¨Éå +Éè® VɱɴÉɪÉÖ ‡´É‡´ÉvÉiÉÉ ´ÉɱÉä nä„É ¨Éå ‡E ºÉÒ ¦ÉÒ ºÉÆOÉ½É±ÉªÉ E Éä iÉÉƤÉä +Éè® E ÉƺÉä E É |ɪÉÉäMÉ E ®xÉä ±ÉMÉä lÉä* ½±É E É +ɇ´É¹E É® ºÉ¦ÉÒ IÉäjÉÉå, ºÉ¦ÉÒ ¡ ºÉ±ÉÉå +Éè® ´ÉèYÉɇxÉE ‡´ÉE ÉºÉ E Ò ºÉ¦ÉÒ E ® ‡±ÉªÉÉ MɪÉÉ +Éè® fÖ±ÉÉ<Ç E ä ‡±ÉB {ɇ½ªÉÉå ´ÉɱÉÒ MÉÉcÒ PÉ]xÉÉ+ÉäÆ E É E ä´É±É xÉÉ¨É ¨ÉÉjÉ E É ‡SÉjÉhÉ E ®xÉä ¨Éå ½Ò E <Ç <ºiÉä¨ÉÉ±É ½ÉäxÉä ±ÉMÉÒ * ˺ÉSÉÉ<Ç „ÉÖ¯ ½ÉäxÉä ºÉä JÉäiÉÒ E É {Éè¨ÉÉxÉÉ n„ÉE ±ÉMÉ ºÉE iÉä ½é* ¤ÉfÃÉ +Éè® MÉä½ÚÆ, VÉÉè, n±É½xÉ +Éè® +xªÉ ¡ ºÉ±ÉÉå E Ò JÉäiÉÒ ½ÉäxÉä ±ÉMÉÒ * +‡vÉE ¨ÉÉjÉÉ ¨Éå =i{ÉxxÉ +xÉÉVÉ E ä ºÉÆOɽ E ä ‡±ÉB JÉkÉÒ <ºÉE ä ¤ÉÉ´ÉVÉÚn xɪÉÉ JÉÖ±ÉÉ ªÉ½ ºÉÆOÉ½É±ÉªÉ {ÉÖ®ÉxÉä ºÉ¨ÉªÉ ºÉä +¤É +Éè® ¤ÉJÉÉ®Éå E É iÉ®ÒE É fÚÆf ‡xÉE ɱÉÉ MɪÉÉ * iÉE EÞ ‡¹É E ɪÉÇ E ä ¯ {ÉÉÆiÉ® +Éè® <ºÉ IÉäjÉ ¨Éå ´ÉèYÉɇxÉE |ÉMɇiÉ ºÉƤÉÆvÉÒ ºÉÚSÉxÉÉ+ÉäÆ E É BE ¦É´ªÉ ºÉÆOɽ ½è* ´É½ÉÆ ®JÉä iÉè±É ‡SÉjÉÉå ´Éè‡nE +Éè® =kÉ® ´Éè‡nE E É±É ¨Éå EÞ ‡¹É E ɪÉÇ ¨Éå ±ÉÉä½ä E ä +Éè® {ÉÖ®ÉiÉÉÎi´ÉE ´ÉºiÉÖ+ÉäÆ E ä ¤ÉÉ®ä ¨Éå n„ÉÇE Éå E Éä ºÉ¨ÉZÉÉxÉä E Ò ={ÉE ®hÉÉå E É |ɪÉÉäMÉ „ÉÖ° ½Éä MɪÉÉ lÉÉ * ºÉÆOÉ½É±ÉªÉ ¨Éå n„ÉÇE Éå ´ªÉ´ÉºlÉÉ ½è* ªÉ½ E É¨É BE ªÉÉƇjÉE +É´ÉIÉ ¨ÉÚÌiÉ E ä ¨ÉÉvªÉ¨É ºÉä E Éä ªÉ½ näJÉE ® ¨ÉVÉÉ +ÉiÉÉ ½è ‡E ´Éè‡nE +ɪÉÉç E É SÉÆp-ºÉÉè® ‡E ªÉÉ VÉÉiÉÉ ½è VÉÉä BäºÉÒ ´ÉºiÉÖ+ÉäÆ ºÉä ºÉƤÉƇvÉiÉ {ÉÚ®Ò E lÉÉ E É {ÉÆSÉÉÆMÉ {ÉÞl´ÉÒ E Ò {ɇ®G ¨ÉÉ +Éè® EÞ ‡¹É E ɪÉÉç E ä ¤ÉÒSÉ ºÉƤÉÆvÉ ´ÉhÉÇxÉ E ®iÉÒ ½è * ºlÉɇ{ÉiÉ E ®xÉä ¨Éå ‡E ºÉ iÉ®½ ºÉ½ÉªÉE ½Ö+É * ´É½ÉÆ {ÉÚhÉÇ +ÉE É® E ä ‡¨É]Â]Ò E Ò |ɇiÉEÞ ‡iɪÉÉå E ä ¨ÉÉvªÉ¨É ºÉä ´Éè‡nE E É±É E ä ªÉ½ ºÉÆOÉ½É±ÉªÉ 10 JÉhbÉå ¨Éå ¤ÉÉÆ]É MɪÉÉ ½è * |ÉiªÉäE JÉhb {ÉÚ´ÉÇ VÉÒ´ÉxÉ, ´Éä¹É¦ÉÚ¹ÉÉ, E ɪÉÇ ‡´ÉiÉ®hÉ +Éè® MÉÉÆ´É E ä ´ÉÉiÉÉ´É®hÉ E Ò <‡iÉ½ÉºÉ E É±É ºÉä +ÉVÉ iÉE E ä ‡´É‡¦ÉxxÉ E É±É JÉhbÉå ¨Éå EÞ ‡¹É ZÉÉƇE ªÉÉÄ |ɺiÉÖiÉ E Ò MɪÉÒ ½è * E ä ‡´ÉE ÉºÉ +Éè® iÉE xÉÒE Ò |ÉMɇiÉ n„ÉÉÇiÉÉ ½è * <ºÉ¨Éå BE JÉÆb ¤ÉSSÉÉå E ä ‡±ÉB ½è * ¨ÉÖMÉ±É +Éè® +ÆOÉäVÉÒ E É±É : ºÉ±iÉxÉiÉ +Éè® ¨ÉÖMÉ±É E É±É ¨Éå ¦ÉÚ‡¨É +Éè® E Ò¨ÉiÉ ºÉÖvÉÉ® ±ÉÉMÉÚ ‡E B MÉB * ¤Éɤɮ uÉ®É ‡´ÉE ‡ºÉiÉ ºÉÆOÉ½É±ÉªÉ E Ò ¦ÉÉ´ÉxÉÉ E Ò ºÉÉÆE ä‡iÉE |ɺiÉÖ‡iÉ E ®iÉä ½ÖB ºÉÆOÉ½É±ÉªÉ E ®ÉB MÉB ¤ÉMÉÒSÉÉå E É BE ±ÉPÉÖ ¨ÉÉb±É =ºÉ VɨÉÉxÉä ¨Éå =tÉxÉ ¦É´ÉxÉ ¨Éå U½ ºiɨ¦É ¤ÉxÉÉB MÉB ½é * ªÉä ºiɨ¦É, ¨ÉÞnÉ, VɱÉ, „ÉɺjÉ ¨Éå |ÉMɇiÉ E Éä n„ÉÉÇiÉÉ ½è * ´É½ÉÆ VÉÉxÉä ºÉä +É{É E Éä ªÉ½ ¦ÉÒ VɱɴÉɪÉÖ, ¤ÉÒVÉ, ={ÉE ®hÉ +Éè® EÞ ¹ÉE E ä |ÉiÉÒE ½é * EÞ ‡¹É ¨Éå {ÉiÉÉ SɱÉiÉÉ ½è ‡E ¨ÉÖMÉ±É ¤ÉÉn„Éɽ VɽÉÆMÉÒ® ‡E ºÉ iÉ®½ ¦ÉÉ®iÉ <xÉ ºiɨ¦ÉÉå E ä ªÉÉäMÉnÉxÉ E É ´É½ÉÆ +ɇbªÉÉä ´ÉÒVÉÖ+±É iÉlÉÉ E ä ¡ ±É¡Ú ±É +Éè® ´Éxɺ{ɇiɪÉÉå E É ¤ªÉÉè®É ®JÉiÉÉ lÉÉ * =ºÉE ä <±ÉèC]ÅÉì‡xÉE ¨ÉÉvªÉ¨ÉÉå E ä |ɪÉÉäMÉ ºÉä ºÉVÉÒ´É ‡SÉjÉhÉ ‡E ªÉÉ MɪÉÉ ¤ÉÉn {ÉÖiÉÇMÉɇ±ÉªÉÉå xÉä +ÉE ® ¦ÉÉ®iÉ ¨Éå EÖ U xÉB-xÉB |ÉE É® E ä ½è* ªÉÚÆ iÉÉä <ºÉ ºÉÆOÉ½É±ÉªÉ ¨Éå iÉ®½-iÉ®½ E ä ¤ÉÒVÉ, ={ÉE ®hÉ, {ÉÉèvÉä ±ÉMÉÉB * ‡SɇcªÉÉå +Éè® ¨ÉU‡±ÉªÉÉå E Ò ‡´É‡¦ÉxxÉ |ÉVÉɇiɪÉÉå E Éä =xÉE ä ´Éɺiɇ´ÉE ° {É ¨Éå ºÉÉIÉÉiÉ näJÉÉ VÉÉ ºÉE iÉÉ ½è {É® VÉÉä SÉÒVÉå ºÉÉIÉÉiÉ xÉ½Ó <ºÉ ºÉ¨ÉÞ‡r ‡´É®ÉºÉiÉ E ä ºÉÉlÉ +ÆOÉäVÉÒ „ÉɺÉxÉ E ä ºÉ¨ÉªÉ ¦ÉÉ®iÉ |ɺiÉÖiÉ E Ò VÉÉ ºÉE iÉÓ, =x½å ¨ÉÉb±ÉÉå E ä Vɇ®B {Éä„É ‡E ªÉÉ MɪÉÉ E ä EÞ ‡¹É IÉäjÉ ¨Éå +xÉäE ¨É½i´É{ÉÚhÉÇ ¤Én±ÉÉ´É ‡E B MÉB * =ºÉ ½è * nÉè®ÉxÉ EÞ ‡¹É E É {ÉÆVÉÒE ®hÉ „ÉÖ¯ ½Ö+É * =xxÉiÉ ¤ÉÒVÉ ¤ÉÉäB VÉÉxÉä {ÉÚ´ÉÇ Bä‡iɽɇºÉE +Éè® ´Éè‡nE E ɱÉ: <ºÉ E É±É E ä ¤ÉÉ®ä ¨Éå ±ÉMÉä, ¤Écä ¤ÉÉÆvÉÉå E É ‡xɨÉÉÇhÉ ½Ö+É iÉlÉÉ EÞ ‡¹É +xÉÖºÉÆvÉÉxÉ ´É ‡„ÉIÉÉ ºÉÆOÉ½É±ÉªÉ ¨Éå ‡nJÉɪÉÉ MɪÉÉ ½è ‡E ‡E ºÉ iÉ®½ PÉÖ¨ÉÆiÉÚ +Éè® Copyright © 2009 | WWW.UPSCPORTAL.COM 48
    • Section -1 (Article : Hindi Article) E Ò ´ªÉ´ÉºlÉÉ E Ò MɪÉÒ * +ÆOÉäVÉÉå E ä ºÉ¨ÉªÉ E É BE JÉänVÉxÉE {ɽ±ÉÚ ªÉ½ lÉÉ ‡E =xÉE É vªÉÉxÉ ¦ÉÉ®iÉ ¨Éå EÞ ‡¹É ‡´ÉE ÉºÉ ºÉä VªÉÉnÉ +{ÉxÉÉ ®ÉVɺ´É ¤ÉfÃÉxÉä {É® lÉÉ * º´ÉiÉÆjÉ ¦ÉÉ®iÉ +Éè® ½‡®iÉ G ÉƇiÉ: º´ÉÉvÉÒxÉiÉÉ E ä ¤ÉÉn ¦ÉÉ®iÉ xÉä EÞ ‡¹É IÉäjÉ ¨Éå iÉäVÉÒ ºÉä iÉ®CE Ò E Ò* ºÉÆOÉ½É±ÉªÉ ¨Éå º´ÉÉvÉÒxÉ ¦ÉÉ®iÉ E ä EÞ ‡¹É ‡´ÉE ÉºÉ E Ò VÉÒ´ÉÆiÉ E ½ÉxÉÒ |ɺiÉÖiÉ E Ò MɪÉÒ ½è * <ºÉE ä ‡±ÉB ¨ÉÉb±ÉÉå iÉlÉÉ o„ªÉ-¸É´ªÉ ¨ÉÉvªÉ¨ÉÉå E É ºÉ½É®É ‡±ÉªÉÉ MɪÉÉ ½è * ºÉÉ` E ä n„ÉE E Ò ½‡®iÉ G ÉƇiÉ +Éè® =ºÉE ä ¤ÉÉn E ä ‡´ÉE ÉºÉ ºÉä +xÉÉVÉ E É =i{ÉÉnxÉ ´ÉÉ̹ÉE {ÉÉÆSÉ E ®Éäc ]xÉ ºÉä ¤Éfà E ® 20 E ®Éäc ]xÉ iÉE {ɽÖÆSÉ MɪÉÉ ½è* ªÉ½ ºÉÆOÉ½É±ÉªÉ ½‡®iÉ G ÉƇiÉ E ä xÉɪÉE Éå E É ªÉÉäMÉnÉxÉ ‡SɇjÉiÉ E ® =xÉE Éä ¸ÉrÉÆVɇ±É +Ì{ÉiÉ E ®iÉÉ ½è * ºÉÆOÉ½É±ÉªÉ E Ò nÒPÉÉÇ+ÉäÆ ¨Éå E n¨É-n®-E n¨É EÞ ‡¹É IÉäjÉ ¨Éå |ɪÉÉäMÉ ¨Éå +ÉB +ÉvÉÖ‡xÉE ={ÉE ®hÉÉå +Éè® +ÉxÉÖ´ÉÉƇ„ÉE +‡¦ÉªÉÉƇjÉE Ò VÉèºÉÒ xɪÉÒ =nҪɨÉÉxÉ |ÉÉètÉä‡MɇE ªÉÉå E Ò E ½ÉxÉÒ n„ÉÉÇ<Ç MɪÉÒ ½è * <ºÉ ºÉÆOÉ½É±ÉªÉ E Ò ®SÉxÉÉ ¨Éå {ÉÚ®Ò E ±{ÉxÉÉ„ÉÒ±ÉiÉÉ E É {ɇ®SÉªÉ ‡¨É±ÉiÉÉ ½è iÉlÉÉ <ºÉ¨Éå ªÉÖ´ÉÉ {ÉÒfÃÒ E ä ‡±ÉB +ÉE ¹ÉÇhÉ +Éè® ¨ÉÉèVɨɺiÉÒ E É ¦ÉÒ vªÉÉxÉ ®JÉÉ MɪÉÉ ½è * ºÉÆOÉ½É±ÉªÉ näJÉxÉä +ÉxÉä ´ÉɱÉä UÉjÉ-UÉjÉÉBÆ ]SÉ -ºG ÒxÉ |ÉhÉɱÉÒ ºÉä EÞ ‡¹É E ä iÉlÉÉ nè‡xÉE EÞ ‡¹É VÉÒ´ÉxÉ E ä ¤ÉÉ®ä ¨Éå +{ÉxÉä YÉÉxÉ E Ò {É®JÉ E ® ºÉE iÉä ½é* ½c{{ÉÉ ºÉ¦ªÉiÉÉ E Ò EÞ ‡¹É, |ÉE É„É ºÉÆ„±Éä¹ÉhÉ E Ò |ɇG ªÉÉ, +Æbä ºÉä ¨ÉÖMÉÔ iÉE E É ‡´ÉE ɺÉ, SÉÉE ±Éä] ¤ÉxÉÉxÉÉ +Éè® ‡¤ÉºEÖ ] E Ò „ÉÖ¯ +ÉiÉ- ´É½ÉÆ BäºÉÒ ¤É½ÖiÉ ºÉÒ ¤ÉÉiÉå n„ÉÉÇ<Ç MɪÉÒ ½é VÉÉä ¤ÉcÉå E É YÉÉxÉ ¤ÉfÃÉxÉä E ä ºÉÉlÉ-ºÉÉlÉ ¤ÉSSÉÉå E Ò ‡VÉYÉɺÉÉ ¦ÉÒ „ÉÉÆiÉ E ®iÉÒ ½é * <ºÉ ºÉÆOÉ½É±ÉªÉ ¨Éå nä„É-‡´Énä„É ºÉä +Éè® ¦ÉÒ ´ÉºiÉÖBÆ VÉÖ]ÉxÉä iÉlÉÉ nä„É E ä ‡´É‡¦ÉxxÉ ¦ÉÉMÉÉå ºÉä ‡´É‡¦ÉxxÉ SÉÒVÉÉå E ä ºÉVÉÒ´É xɨÉÚxÉä ±ÉÉE ® ®JÉxÉä E Ò ªÉÉäVÉxÉÉ ½è * <ºÉ¨Éå BE +Éè® JÉhb VÉÉäcxÉä E É <®ÉnÉ ½è ‡VɺɨÉå ´ÉèYÉɇxÉE JÉäiÉÒ E ä iÉÉè®iÉ®ÒE ä +Éè® EÞ ‡¹É ‡´ÉYÉÉxÉ ¨Éå xɪÉÒ-xɪÉÒ |ÉMɇiÉ n„ÉÉÇ<Ç VÉÉBMÉÒ * <ºÉE ä {ÉÒUä ¨ÉÆ„ÉÉ ½è ‡E ªÉ½ ºÉÆOÉ½É±ÉªÉ YÉÉxÉ E É ºÉÆOɽ E åp ½ÉäxÉä E ä ºÉÉlÉ-ºÉÉlÉ nä„É E ä ‡E ºÉÉxÉÉå E Ò ºÉä´ÉÉ ¦ÉÒ E ® ºÉE ä* Copyright © 2009 | WWW.UPSCPORTAL.COM 49
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    • Section -2 (Hot Topics : India’s Per Capita GHG Emissions) India’s Per Capita GHG Emissions India-Specific Studies on GHG Emissions Profile Released India’s per capita emission of Greenhouse Gases rates, penetration of clean energy, energy effi- (GHG) will continue to be low until the year 2030- ciency improvements etc. 31. In fact, it is estimated that India’s per capita emissions in the year 2031 will be lower than the All the five studies show evidence of a substantial per capita global emission of GHG in the year 2005. and continuous improvement in India’s energy ef- These significant findings ficiency of GDP. India’s en- were contained in a Report ergy use efficiency has been “India’s GHG Emissions Pro- steadily improving over the file: Results of Five Climate years which is reflected in Modelling Studies” released the decline of its energy in- on September 02, 2009 by tensity of GDP from 0.30 the Deputy Chairman of the kgoe (kilogram of oil equiva- Planning Commission Shri lent) per $ of GDP in 1980 to Montek Singh Ahluwalia. 0.16 kgoe per $ GDP in PPP The Minister of Environ- (purchasing power parity) ment & Forests Shri Jairam terms. This is comparable to Ramesh presided over the Germany and only Japan, function. The Chairman of UK, Brazil and Denmark Unique Identity Authority have lower energy intensities of India, Shri Nandan Nilekani was also present in the world. An Enhanced Energy Efficiency Mis- on the occasion. sion has recently been approved in principle un- der the National Action Plan on Climate Change. As per the estimates of the five different studies, India’s per capita GHG emissions in 2030-31 would Of the five studies on GHG emissions profile in be between 2.77 tonnes and 5.00 tonnes of CO2e India, three were conducted by the National (Carbon Dioxide equivalent). Four of the five stud- Council of Applied Economic Research (NCAER)- ies estimated that even in 2031, India’s per capita Jadavpur University, The Energy Research Insti- GHG emissions would stay under 4 tonnes of CO2e tute (TERI) and the Integrated Research and Ac- which is lower than the global per capita emis- tion for Development (IRADe) with the support sions of 4.22 tonnes of CO2e in 2005. This would of the Ministry of Environment & Forests. Two mean that even two decades from now, India’s other studies by TERI and Mckinsey and Com- per capita GHG emissions would be well below pany were conducted with support from other the global average of 25 years earlier. agencies. These studies were taken up with a view to develop a fact based perspective on climate In absolute terms, estimates of India’s GHG emis- change in India that clearly reflects the realities sions in 2031 vary from 4.0 billion tones to 7.3 of its economic growth, the policy and regulatory billion tones of CO2e, with four of the five stud- structures and the vulnerabilities of climate ies estimating that even two decades from now, change. The Ministry of Environment & Forests India’s GHG emissions will remain under 6 bil- functioned as the facilitator, bringing together the lion tones. The key drivers of the range of these five studies undertaken independently, enabling estimates are the assumptions on GDP growth Copyright © 2009 | WWW.UPSCPORTAL.COM 51
    • Section -2 (Hot Topics : India’s Per Capita GHG Emissions) a thorough review process and publishing the re- of the absorbed energy is then reradiated back to sults with a view to generate a meaningful and the atmosphere as long wave infrared radiation. informed dialogue on the subject of Climate Little of this long wave radiation escapes back into Change. space; the radiation cannot pass through the greenhouse gases in the atmosphere. The green- Greenhouse Gases house gases selectively transmit the infrared waves, trapping some and allowing some to pass Greenhouse gases naturally blanket the Earth and through into space. The greenhouse gases absorb keep it about 33 degrees Celsius warmer than it these waves and reemits the waves downward, would be without these gases in the atmosphere. causing the lower atmosphere to warm. This is called the Greenhouse Effect. Over the past century, the Earth has increased in tempera- Government’s Stance ture by about .5 degrees Celsius and many scien- tists believe this is because of an increase in con- India is a signatory to the Kyoto Protocol and falls centration of the main greenhouse gases: carbon under the non-Annexe I countries, or developing dioxide, methane, nitrous oxide, and fluorocar- countries group. This implies that India does not bons. People are now calling this climate change have any binding commitments to reduce the level over the past century the beginning of Global of its carbon emissions. Recognizing that devel- Warming. Fears are that if people keep produc- oped countries are principally responsible for the ing such gases at increasing rates, the results will current high levels of GHG emissions in the at- be negative in nature, such as more severe floods mosphere as a result of more than 150 years of and droughts, increasing prevalence of insects, sea industrial activity, the Protocol places a heavier levels rising, and Earth's precipitation may be re- burden on developed nations under the principle distributed. These changes to the environment of “common but differentiated responsibilities.” will most likely cause negative effects on society, This said India is currently one of fastest growing such as lower health and decreasing economic emitters of green house gasses (GHG) with a 65% development. However, some scientists argue that increase in emissions between 1990-2005 and pro- the global warming we are experiencing now is a jected increase of another 70% by 2020. Added to natural phenomenon, and is part of Earth's natu- that India is presently the fifth largest GHG emit- ral cycle. Presently, nobody can prove if either ter (absolute terms) and contributes 5% of global theory is correct, but one thing is certain; the emissions. world has been emitting greenhouse gases at ex- tremely high rates and has shown only small signs The Government of India has committed itself to of reducing emissions until the last few years. vastly improving the country’s human develop- After the 1997 Kyoto Protocol, the world has fi- ment indices by 2031-2032. In order to do so, the nally taken the first step in reducing emissions. country must average economic growth of at least 8 percent per annum for the next twenty-five Greenhouse Effect years. According to a report released by the Plan- ning Commission of India, if India is to sustain an The greenhouse effect is the heating of the Earth 8 percent level of growth, then it will need to in- due to the presence of greenhouse gases. It is crease its primary energy supply by at least 3 or 4 named this way because of a similar effect pro- times and its electricity supply by a factor of 5 to duced by the glass panes of a greenhouse. Shorter- 7 by 2031-2032. Likewise, power generation ca- wavelength solar radiation from the sun passes pacity will have to increase from 120,000 MW to through Earth's atmosphere, then is absorbed by 780,000 MW. the surface of the Earth, causing it to warm. Part In addition The Government of India has under- taken to completely meet India’s growing elec- Copyright © 2009 | WWW.UPSCPORTAL.COM 52
    • Section -2 (Hot Topics : India’s Per Capita GHG Emissions) tricity needs by 2012 so that shortage of energy development, not the other way round. supply does not impair the growth and develop- ment needs of our booming economy and indus- The arguments India uses to support this position try, as well as to electrify all villages in India un- are centered around the principles of common but der a time bound programme. As currently renew- differentiated responsibilities (as is with the able and alternate energy sources are not main- UNFCCC) and equity. These arguments can be cat- stream sources, the government aims to achieve egorized under three broad heads as Historical Re- its goal through major investment in thermal and sponsibility, Per-capita emissions, Technology hydro- electric power (50,000 MW Hydro and transfer 1,00,000 MW Thermal projects have been planned). Historic Responsibility The energy sector is already the biggest contribu- GHG stay in the atmosphere for long durations of tor to GHG emissions in India and the above de- time after they are emitted. According to the IPCC mands, while being a legitimate and necessary to “about 50% of a CO2 increase will be removed improve the quality of life of vast sectors of the from the atmosphere within 30 years, and a fur- Indian public and ensure economic and social de- ther 30% will be removed within a few centuries. velopment, will lead to an inevitable increase in The remaining 20% may stay in the atmosphere GHG emissions in coming years. This is especially for many thousands of years.” Other estimates as the majority of the energy needs will be met claim that, “If all recoverable fossil fuels were through fossil fuel based sources and coal in par- burnt up using today’s technologies, after 1,000 ticular. years the air would still hold around a third to a half of the CO2 emissions.” The bottom line is that Given this rapid growth in emission rates and the GHG emitted today will cause problems not just magnitude of likely future emissions The United today but possibly hundreds or even thousands of States of America and other countries from the years from now. West are pressurizing rapidly developing coun- tries like India and China to accept binding emis- Given this, the Indian Government argues that sion reduction targets. They claim that these coun- India has played a insignificant role in bringing tries will soon overtake the developed world in about the present problem, which they say, is carbon emissions and hence should also shoulder caused by emissions of the developed countries the burden of reducing these emissions. They want during their process of industrialization. This claim India and China to take on such commitments in is backed up by statistics. As can be seen from the the post-Kyoto regime. following figure between 1850 and 2000 India contributed only 2% of the cumulative, energy The Indian position on this issue has been quite related CO2 emissions, while the United States of rigid and consistent. The Government of India has America contributed 30% and the European Union long argued that while climate change is a press- 27%. Thus, India feels that the burden of solving ing global problem that needs to be solved, for the problem should also rest with these developed developing countries like India, the prime goal is countries of the West. that of development and securing a good standard of living for the large number of poor and vulner- Per-capita Emissions able peoples. In the words of the Prime Minister’s Special Envoy on Climate Change, Shyam Saran, One major point of difference between the devel- “Developing Countries have the responsibility to oped nations and India is over how to measure engage in sustainable development but their emis- GHG emissions. The United States of America sion reductions will be the result of sustainable talks in terms of absolute emissions, while India Copyright © 2009 | WWW.UPSCPORTAL.COM 53
    • Section -2 (Hot Topics : India’s Per Capita GHG Emissions) says emissions should be measured on a per-capita from with regard to different socio-economic basis. The reasoning behind this argument is given groups. Greenpeace released a report called “Is in the adjoining box. India Hiding Behind the Poor” on 12 November 2007 that highlights this issue. According to the When viewed from the perspective of per-capita study, “The richest consumer classes produce 4.5 emissions, India’s case seems to become stronger. times more CO2 than the poorest class, and al- Though it might be the fifth largest emitter of most 3 times more than the average.” The report greenhouse gasses, according to a WWF report, further states, “…the richest income class in this India’s per capita emissions of GHG were just 1.8 study, earning more than 30,000 rupees a month, tonnes compared 24 tonnes per capita by the produce slightly less than the global average CO2 United States. If we look at carbon dioxide levels emissions of 5 tonnes, this amount already exceeds this is even less. In 2005 India’s per capita CO2 the sustainable global average CO2 emissions of emissions were 1.1 tonnes which, as can be seen 2.5 tonnes per capita that needs to be reached to from the following diagram is significantly lower limit global warming below 2 degrees centigrade.” than the global average and much lower than that Though using per capita emissions is a fair and of the United States which is close to 20 tonnes equitable yardstick, especially given the urgent de- CO2 per-capita. The per capita emissions argu- velopment need of many poor countries, this prin- ment is extremely compelling when viewed from ciple needs to be applied both internally and ex- the development perspective. The developing ternally. The Indian Government should there- countries argue that their per emissions are due fore take measures to control wasteful, non-de- to their efforts to develop and thus as the process velopment related emissions. continues with more production of goods and ser- vices and more and more people get access to elec- Government Policies tricity, heating, modern transport etc., the per capita emissions will go up corresponding to the This does not mean that the Indian Government increase in living standards. Developed countries is not doing anything about climate change. India on the other hand have already achieved very high is a signatory to both the UNFCCC and the Kyoto levels of both development and quality of life. protocol and takes active part in multi-lateral ne- Thus, the fact that developed countries have gotiations on climate change. An example is India’s higher per capita emissions is an indication that membership of the Asia-Pacific Partnership for their emissions are now due to increased produc- Clean Development and Climate 2005. Under this tion and consumption of luxuries and not due to partnership Foreign, Environment and Energy legitimate development needs as is the case of Ministers from partner countries agreed to co- developing countries. operate on development and transfer of technol- ogy, which enables reduction of greenhouse gas Given this, India believes that international cli- emissions. Ministers agreed to a Charter, Commu- mate change agreements should set targets for con- nique and Work Plan that outline a “private-pub- vergence of per capita emissions between devel- lic task forcess to address climate change, energy oped and developing countries and not ask devel- security and air pollution.” In addition, India has oping countries to forgo development by impos- submitted its first National Communication on ing emission reduction targets on them. This Climate Change (NATCOM I) and is currently would be a more equitable arrangement. working on NATCOM II. There, however, is one serious drawback with this With regards to policies, India has in place many line of reasoning. While India calls for per capita environmental laws, which attempt to reduce pol- measurement of emissions globally, internally it lution and environmental damage, even though does not analyse where the emissions are coming not all were framed specifically to tackle climate Copyright © 2009 | WWW.UPSCPORTAL.COM 54
    • Section -2 (Hot Topics : India’s Per Capita GHG Emissions) change. Some of these policies/regulations are Labelling Programme for Appliances 2006: A mentioned in the adjoining box. In India, a major star rating based labeling programme has been in- concern is securing compliance to these policies. troduced for four commonly used consumer goods that indicate their energy efficiency. The goods Some key policies are: covered as of now are; fluorescent tube-lights, air Remote Village Electrification Programme conditioners, refrigerators, distribution transform- (RVE) 2001: Electrify all the remote villages and ers. Introduced and managed by the Bureau of remote hamlets through non-conventional energy Energy Efficiency (BEE) these ratings are meant sources such as solar energy, small hydro-power, to be a guide to consumers so they make an in- biomass, wind energy, hybrid systems, etc. The formed decision. The ratings are backed by an Programme aims at bringing the benefits of elec- aggressive media campaign that aims at increas- tricity to people living in the most backward and ing awareness by informing customers of the cost deprived regions of the country. benefits of energy efficient appliances. Energy Conservation Act 2001: The Indian Par- Energy Conservation Building Code (ECBC) liament passed The Energy Conservation Act 2001, 2007: The ECBC was developed in 2006 and is- in September 2001. This Act requires large en- sued May 2007. It is not mandatory the first three ergy consumers to adhere to energy consumption years, and will become so in 2010, to allow the norms; new buildings to follow the Energy Con- necessary implementation capacity to be devel- servation Building Code; and appliances to meet oped. The code will be mandatory for all new energy performance standards and to display en- buildings (commercial buildings or complexes) ergy consumption labels. The Act also created the with a connected load of 500kW or more, or a Bureau of Energy Efficiency to implement the contract demand of 600 kVA or greater. It will provisions of the Act. also apply to buildings with a conditioned floor space of 1 000m2 or greater. Integrated Energy Policy 2006: Released in Au- gust 2006 it addresses all aspects of energy, in- The code sets minimum requirements for build- cluding energy security, access and availability, ing envelope components, lighting, HVAC, elec- affordability and pricing, efficiency and the envi- trical system, water heating and pumping systems. ronment. There would be three ways of being compliant with the ECBC. First, through a prescriptive ap- In relation to renewable energy, the policy pro- proach, i.e. all minimum standards for separate posed: components must be met. Second, the envelope » The phase-out of capital subsidies by the end of and lighting system would be assessed through a the 10th Plan linked to creation of renewable grid systems performance criteria, while other com- power capacity; ponents would have to meet the minimum re- quirements. Third, setting the whole building tar- » Requiring power regulators to seek alternative get energy use and trading off between systems incentive structures that encourage utilities to in- (Energy cost budget method). tegrate wind, small hydro, cogeneration and so on into their systems, and the linking of all such State and municipal governments must implement incentives to energy generated as opposed to ca- the code, while state governments are allowed to pacity created; modify the code if necessary to account for local climatic conditions. In February 2008 an ECBC » Requiring power regulators to mandate feed-in tip sheet and Technology atlas were distributed laws for renewable energy, where appropriate, as to developers, architects, engineers and other provided under the Electricity Act 2003. building energy efficiency professionals. Copyright © 2009 | WWW.UPSCPORTAL.COM 55
    • Section -2 (Hot Topics : India’s Per Capita GHG Emissions) Solar Power Generation Based Incentive 2008: In January 2008, the federal minister responsible India’s National Action Plan for renewable energy announced that the Indian on Climate Change government would provide a subsidy for solar power plants to help develop renewable energy This plan outlines eight “national missions are infrastructure. The incentives, for a period of 10 following: years, will be over and above any financial assis- 1. National Solar Mission tance provided by the states. 2. National Mission for Enhanced Energy Effi- Generation based incentives for wind power ciency 2008: In July 2008, the Ministry of New and Re- 3. National Mission on Sustainable Habitat newable Energy (MNRE) launched a new genera- 4. National Water Mission tion-based incentive scheme for wind power pro- duction. The scheme is designed to promote in- 5. National Mission for Sustaining the Himalayan vestment in new and large independent wind Ecosystem power producers, to fulfil a target of securing 10 6. National Mission for a Green India 500 MW of new wind power capacity by 2012. 7. National Mission fro Sustainable Agriculture Energy Conservation Awards: The Ministry of 8. National Mission on Strategic Knowledge for Power instituted National Energy Conservation Climate Change Awards, coordinated by the Bureau of Energy Ef- ficiency, to recognize industrial units that have National Solar Mission: Great importance has made special efforts to reduce energy consump- been given to the National Solar Mission in the tion. In the first five years, the participating in- NAPCC. This is justified by the fact that India is dustrial units collectively saved 2397 million units ideally situated in the equatorial Sun Belt receiv- of electrical energy; 9067 kilo litre of furnace oil; ing abundant solar radiation the year around. The 2.76 Mt of coal and 11,585 million cubic metre of average solar insolation incident over India is about gas per year, resulting in substantial reduction in 5.5 kWh/m2 per day, which means that just 1% greenhouse gas emissions. of India’s land can meet the country’s entire elec- tricity requirement till 2030. The stated objective National Action Plan on Climate Change: On of the mission is to increase the share of solar en- 30 June 2008, India released its first National Ac- ergy and other renewable and non-fossil based tion Plan on Climate Change (NAPCC) outlining energy sources in the total energy mix of the coun- existing and future policies and programmes di- try. This includes nuclear energy as a non-fossil rected at climate change mitigation and adapta- option.The mission also calls for the launch of a tion. The plan outlines eight “National Missions” research and development (R&D) programme that, running up to 2017, and ministries are directed to with the help of international cooperation, would submit detailed implementation plans to the Prime look into creating more cost-effective, sustainable Minister’s Council on Climate Change by Decem- and convenient solar power systems. ber 2008. Several target energy use, promoting energy efficiency and renewable energy, as well The NAPCC sets the solar mission a target of de- as improved research capacity on climate change livering 80% coverage for all low temperature issues. Other missions target water efficiency, ag- (<150° C) applications of solar energy in urban riculture, forestation, and ecosystem conservation. areas, industries and commercial establishments, and a target of 60% coverage for medium tem- perature (150° C to 250° C) applications. The dead- line for achieving this is the duration of the 11th Copyright © 2009 | WWW.UPSCPORTAL.COM 56
    • Section -2 (Hot Topics : India’s Per Capita GHG Emissions) and 12th five-year plans, through to 2017. In ad- ferential taxation on energy efficient certified ap- dition, rural applications are to be pursued through pliances. public-private partnership. National Mission on Sustainable Habitat: The The NAPCC also sets the target of 1000 MW/an- aim of the Mission is to make habitats more sus- num of photovoltaic production from integrated tainable through a threefold approach that in- facilities by 2017 as well as 1000 MW of Concen- cludes - trating Solar Power generation capacity. » Improvements in energy efficiency of buildings in residential and commercial sector These efforts are to be backed by R&D to ensure that India develops commercial and near commer- » Management of Municipal Solid Waste (MSW) cial solar technologies. The ultimate aim is to de- » Promote urban public transport velop a solar industry that is competitive against fossil fuel options within the next 20-25 years. The NAPCC claims that use of energy efficient options could have achieve 30% electricity sav- National Mission for Enhanced Energy Effi- ings in new residential buildings and 40% in new ciency: This Mission is basically targeted at in- commercial buildings. For existing buildings the dustry, which, according to the NAPCC, accounts corresponding savings are 20% and 30% respec- for 42% of the country’s total commercial energy tively. use (2004-2005) and 31 % of total CO2 emissions The authors call for a wide and diverse range of (1994). policy instruments to overcome the barriers to adoption of energy efficient options in residential The Government of India already had a number and commercial sectors, highlight the need for of initiatives to promote energy efficiency in place more a more competitive market for energy effi- before the NAPCC such as the star labelling sys- cient products and advocate an involving all stake- tem and energy conservation building code and holders. In addition, they once again stress on the had also passed the Energy Conservation Act of need for technology transfer from developed coun- 2001. In addition to these, the NAPCC calls for: tries. · Mandating specific energy consumption de- creases in large energy consuming industries and With regards to MSW, the Plan suggests some creating a framework to certify excess energy sav- policy reforms such as common regional disposal ings along with market based, mechanisms to trade facilities for smaller towns and villages in a par- these savings. This is aimed at enhancing cost ef- ticular region, and integrated system for collec- fectiveness of improvements in energy efficiency tion, transport, transfer, treatment and disposal in energy-intensive sectors. facilities. » Innovative measures to make energy efficient Finally, with regards to urban public transport, appliances/products in certain sectors more the NAPCC endorses mass transit such as buses, affordable. railways and mass rapid transit systems and the use of CNG, ethanol blending in gasoline and bio- » Creation of mechanisms to help finance demand diesel. Hydrogen is something that is mentioned side management programmes by capturing fu- for the future. In addition, the Plan proposes the ture energy savings and enabling public-private- promotion of costal shipping and inland water- partnerships for this. ways, increasing attractiveness of railways, intro- ducing appropriate transport pricing measures to » Developing fiscal measures to promote energy influence purchase and use of vehicles in respect of fuel efficiency and fuel choice, tightening regu- efficiency such as tax incentives for including dif- Copyright © 2009 | WWW.UPSCPORTAL.COM 57
    • Section -2 (Hot Topics : India’s Per Capita GHG Emissions) latory standards in fuel-economy of mize damage to sensitive ecosystems and despoil- automobiles.As with the other Missions, the Plan ing of landscapes emphasises the need for R&D for all the compo- nents of the Sustainable Habitat Mission. » Encouraging cultivation of traditional varieties of crops and horticulture by promoting organic National Water Mission: According to the farming, enabling farmers to realise a price pre- NAPCC, out of the 4000 billion m3 of precipita- mium tion that India receives annually, only 1000 bil- lion m3 is available for use, which comes to approx. » Promoting sustainable tourism based on best 1000 m3 per capita per annum. Further, by 2050 practices and multi-stakeholder partnerships to it states that India is likely to be water scarce. The enable local communities to gain better livelihoods National Water Mission thus aims at conserving water, minimising wastage and ensuring more » Taking measures to regulate tourist inflows into equitable distribution through integrated water mountain regions to ensure that the carrying ca- resource management. It also aims to optimize pacity of the mountain ecosystem is not breached water use efficiency by 20% by developing a framework of regulatory mechanisms having dif- ferential entitlements and pricing. » Developing protection strategies for certain mountain scopes with unique “incomparable val- In addition, the Water Mission calls for strategies ues” to tackle variability in rainfall and river flows such as enhancing surface and underground water stor- National Mission for a Green India: This Mis- age, rainwater harvesting and more efficient irri- sion aims at enhancing ecosystem services such as gation systems like sprinklers or drip irrigation. carbon sinks. It builds on the Prime Minister’s Green India campaign for afforestation of 6 mil- National Mission for Sustaining the Himalayan lion hectares and the national target of increasing Ecosystem: The NAPCC recognises the Hima- land area under forest cover from 23% to 33%. It layan ecosystem as vital to preserving the ecologi- is to be implemented on degraded forest land cal security of the country. It consists of forests; through Joint Forest Management Committees set perennial rivers which are a source of drinking up under State Departments of Forests. These water, irrigation, and hydropower; rich Committees will promote direct action by com- biodiversity; and is a major tourist attraction. All munities. these are in danger from climate change through increases in temperature, changes in precipitation The Green India programme suggests: patterns, drought and glacier melt. » Training on silvicultural practices for fast-grow- ing and climate-hardy tree species The Plan calls for empowering local communities especially Panchayats to play a greater role in man- » Reducing fragmentation of forests by provision aging ecological resources. It also reaffirms the fol- of corridors for species migration, both fauna and lowing measures mentioned in the National En- flora vironment Policy, 2006. » Enhancing public and private investments for » Adopting appropriate land-use planning and wa- raising plantations for enhancing the cover and ter-shed management practices for sustainable de- the density of forests velopment of mountain ecosystems » Revitalizing and upscaling community-based ini- » Adopting best practices for infrastructure con- tiatives such as Joint Forest Management and Van struction in mountain regions to avoid or mini- Copyright © 2009 | WWW.UPSCPORTAL.COM 58
    • Section -2 (Hot Topics : India’s Per Capita GHG Emissions) Panchayat committees for forest management ance; development of GIS and remote sensing » Formulation of forest fire management strate- methodologies; mapping vulnerable regions and gies disease hotspots; and developing and implement- In-situ and ex-situ conservation of genetic re- ing region-specific, vulnerability based contin- sources, especially of threatened flora and fauna gency plans. » Creation of biodiversity registers (at national, Finally, it suggests greater access to information district, and local levels) for documenting genetic and use of biotechnology. diversity and the associated traditional knowledge National Mission on Strategic Knowledge for » Effective implementation of the Protected Area Climate Change: This Mission will strive to work with the global community in research and tech- System under the Wildlife Conservation Act and nology development and collaboration through a National Biodiversity Conservation Act 2001 variety of mechanisms and, in addition, will also have its own research agenda supported by a net- National Mission for Sustainable Agriculture: work of dedicated climate change related institu- The aim is to make Indian agriculture more resil- tions and universities and a Climate Research ient to climate change by identifying new variet- Fund. The Mission will also encourage private sec- ies of crops, especially thermal resistant ones and tor initiatives for developing innovative technolo- alternative cropping patterns. This is to be sup- gies for adaptation and mitigation. ported by integration of traditional knowledge and practical systems, information technology and bio- The Mission includes: technology, as well as new credit and insurance mechanisms. » Research in key substantive domains of climate science to improve understanding of key phenom- In particular the Mission focuses on rain-fed ena and processes agricultural zones and suggests: » Global and regional climate modelling to im- » Development of drought and pest resistant crop prove the quality and accuracy of climate change varieties projections for India » Improving methods to conserve soil and water » Strengthening of observational networks and Stakeholder consultations, training workshops and data gathering and assimilation to increase access demonstration exercises for farming communities, and availability to relevant data for agro-climatic information sharing and dissemi- nation » Creation of essential research infrastructure, such as high performance computing » Financial support to enable farmers to invest in and adopt relevant technologies to overcome cli- matic related stresses In addition, the Mission makes suggestions for safeguarding farmers against increased risk due to climate change. These suggestions include, strengthening agricultural and weather insurance; creation of web-enabled, regional language based services for facilitation of weather-based insur- Copyright © 2009 | WWW.UPSCPORTAL.COM 59
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    • Section -3 (Current Affairs : Current Relevant Facts) Current Affairs Current Relevant Facts The ministerial meeting of the World Mandela Foundation seeks to encourage all of hu- Trade Organisation (WTO) in New manity to spend 67 minutes of their time doing some- Delhi has broken the impasse and the thing that would make a difference in their commu- Doha trade talks will resume in nities. Geneva on September 14. Even as the A series of events, co-ordinated by 46664 and the 2010 deadline remains a stretch, trade ministers re- Nelson Mandela Foundation, will be organised on affirmed the need for development oriented the occasion of Mandela's 91st birthday this year in talks.WTO members' chief negotiators will meet in South Africa and around the world, especially New Geneva from September 14, in the run-up to the Pitts- York. burgh G20 summit, to grapple with outstanding is- sues in the talks, now in their eighth year, with the The untimely death of Subhas aim of completing the round by 2010. Chakraborty, 68, West Bengal’s Min- ister for Transport, Sports and Youth Political leaders have called repeatedly in recent Affairs, in Kolkata on August 3 has months to conclude the Doha round, launched in caused a genuine void in the State’s 2001 to help developing countries grow by opening Left circles. A maverick Communist trade, to help pull the world out of the economic in every sense being unorthodox and independent- crisis and fight protectionism. minded both in his utterances and his activities. The Delhi meeting did not look at any of the specific His livewire contacts with the people at large was issues that remain open, such as a safeguard to help used by the party leadership in different ways—in farmers in poor countries cope with a flood of im- mass mobilisation as well as during elections in var- ports, or proposals to eliminate duties entirely in some ied forms—but the same leadership did not allow industrial sectors.That will be up to the negotiators, him to rise in the party organisation while far infe- but India expressed confidence that such issues could rior elements with barely any talent registered mete- be resolved around the negotiating table if countries oric rise within a brief span of time. Till his death he were willing.The talks will resume on the basis of was denied entry into the party’s Central Committee the draft negotiating texts issued in December 2008. whereas only because of his mentor Jyoti Basu’s vocal That should provide comfort to WTO members from intervention was he made a member of the State Sec- Brazil to the European Union who had feared that retariat practically at the fag and of his life. the United States wanted to unpick what has already been agreed over the past seven years, jeopardizing » SD Tendulkar, the former chairman of Prime the emerging deal.Ministers also reiterated that the Minister’s economic advisory council has prepared talks had to be multilateral, since any deal must be a report, according to which India has 38 per cent signed off by all 153 WTO members. population below poverty line (BPL). At present, Planning commission of India’s 2006 figure is only South African Government has en- 28.5 per cent of the population is under BPL. dorsed the call for celebrating former President and anti-Apartheid hero If Tendulkar’s report is accepted officially by the Nelson Mandela's birthday on 18th government and the Planning commission, there shall July as global Mandela Day. be an addition of about 11 crore population in the exiting number of people living BPL. In India, since Cabinet called on all South Africans, civil society 1972, poverty is being calculated in terms of calo- organisations and the citizens of the world to sup- ries. 2100 calories for Urban and 2400 calories for port the Mandela Day initiative by doing good work rural areas are the yardsticks to measure poverty in in their communities. The campaign led by the Nelson India. Copyright © 2009 | WWW.UPSCPORTAL.COM 61
    • Section -3 (Current Affairs : Current Relevant Facts) Tendulkar has used different methodology for this cratic senator has been suffering from an incurable survey and took education, health, sanitation, nutri- form of brain cancer for just over a year. He had been tion and household income etc into account while missing in the U.S. Senate for much of this year due calculating poverty, the definition of which has al- to his illness, forcing him to work on his lifelong ways been a point of difference amongst economists signature issue, a national health care system, from and experts. Many experts, economists and rights his home. activists believe, and they give some convincing ar- guments also to support their views that poverty Kennedy had represented Massachusetts in the U.S. measurement formula in India is not satisfactory, there Senate since 1962, when he was elected to the seat are actually more people below BPL. previously held by his older brother, President John F. Kennedy. During his Senate career, he was a strong Efforts have been made earlier also by the govern- champion of liberal causes, including civil rights, ment in order to find a broader consensus on the education, immigration and health care. He was a definition of poverty. One NC Saxena committee was vocal critic of both the Vietnam War and the U.S.- formed by government in June this year, which sug- led invasion in Iraq in 2003. gested that 50 per cent people are under BPL. In 2007, Arjun Sengupta, associated with National com- » Interpol has issued an international wanted notice mission for enterprises in unorganised sector, said for the head of a Pakistan-based Islamic charity over that 77 per cent of Indians are in BPL. the 2008 Mumbai (Bombay) attacks. The wanted man is Hafiz Saeed who heads Jamaat-ud-Dawa, Only a couple of years ago, NSSO, the national sam- accused of being a front for the Lashkar-e-Taiba pling government organisation, has thrown a figure militant group blamed by India for the attacks. Ear- in the public domain that about 70 per cent of popu- lier this month, Pakistan's Supreme Court adjourned lations in India don’t even spend 20Rs/- a day on a hearing seeking Mr Saeed's re-arrest. Interpol has them. Whereas in this country itself, there are people also issued a similar Red Notice against Pakistan- who gifts 700 crores plane to his wife on birthday. based Zaki Ur Rehman Lakhvi, who India says is The number of HNI in India is increasing with gal- one of the masterminds of the Mumbai attacks. The loping speed and it has crossed one lakh figure till Interpol notices followed the decision of a court in date. Mumbai to issue non-bailable arrest warrants against the two men for their alleged role in the Mumbai Fall out on proposed National Food Security Act- attacks. Many Interpol member countries view a Red The Union government is to come out with a his- Notice as a legal basis for arrest or detention of a toric bill on food security in the next session of Par- suspect, but they are not required to do so. liament. The proposed legislation is historic in the sense that it would guarantee availability of at least Andhra Pradesh chief minister Y.S. 25 Kg of grains to one BPL families per month @ 3 Rajasekhar Reddy was found dead on Rs/-. The proposed legislation would incur an addi- Sept. 3 amid the wreckage of a Bell tional 9500 crore rupees on the subsidy of the grains. 430 helicopter that went missing one At present, government is incurring 37,010 crore day before crashing into a hillock and rupees on the subsidy of the food meant for BPL exploding, bringing to a tragic end the life of yet an- families. other charismatic Congress leader. U.S. Senator Edward Kennedy, the The charred bodies of 60-year-old Reddy, known as youngest member of a politically pow- YSR, and four others were traced around 8.20 in erful family that produced a U.S. presi- morning on the Rudrakonda hillock in the Nallamala dent, has died of brain cancer at the age forests of Kurnool district. The find capped a nearly of 77 on 25 August 2009. The Demo- Copyright © 2009 | WWW.UPSCPORTAL.COM 62
    • Section -3 (Current Affairs : Current Relevant Facts) 20-hour aerial and ground search operation that had » For the first time since 1979 Islamic revolution, raised hopes of survival. The helicopter lost radio Iran will have a woman Cabinet Minister, as Parlia- contact about half an hour after lifting off from ment on Sep 03 approved 18 out of 21 nominees Hyderabad’s Begumpet airport for Chittoor, 600km proposed by President Mahmoud Ahmadinejad for away, where YSR was to launch a people-contact his new Cabinet.Marzieh Vahid Dastjerdi, who will programme. The others who died were principal sec- hold the Health portfolio, will be Iran’s first woman retary P. Subramanyam, chief security officer A.S.C. Minister. She is a qualified gynaecologist from Tehran Wesley, pilot Group Captain S.K. Bhatia and co-pi- University, and has been a well-known health activ- lot M.S. Reddy.YSR is the second serving chief min- ist. ister to die in an air crash. In the 1965 war, then Gujarat chief minister Balwantrai Mehta was killed The Parliament also voiced its strong approval for when his civilian plane was brought down by Paki- Mr. Ahmadinejad’s choice of Ahmad Vahidi as De- stani jets in the Kutch region.K. Rosaiah, the 77- fence Minister, with 227 out of a total of 286 law year-old finance minister, was sworn in chief minis- makers backing him for the post. Earlier Interpol ter as an interim arrangement amid demands that distributed an arrest warrant for Mr. Vahidi over a YSR’s son Jaganmohan Reddy, 36, succeed his fa- 1994 attack on the Israeli-Argentine Mutual Asso- ther. ciation (AMIA), which killed 85 people. Iran has strongly denied any involvement in the attack. Mr. » The high court in the Indian state of Gujarat has Vahidi described the Parliament’s approval for him ordered the government to lift the ban on a contro- as a decisive slap to Israel.Parliament also approved versial book “Jinnah : India Partition Independence” some of the other seemingly controversial nominees. on Pakistan's founder Mohammed Ali Jinnah on sept 4. The book was written by Jaswant Singh, a leader The Intelligence Ministry has gone to Heydar in India's Hindu nationalist main opposition party, Moslehi, a former representative of the Supreme the BJP. The party subsequently expelled him. But Leader to the paramilitary Basij militia. Massoud two social activists from Gujarat challenged the ban Mirkazemi, who has close ties with the Islamic Revo- in court. The state government said it had banned lutionary Guard Corps (IRGC), has been approved the book for "defamatory references" to India's first as the new Oil Minister. Parliament approved Mr. home minister. Ahmadinejad’s trusted confidants, Manouchehr Mottaki as Foreign Minister, while Mostafa While banning the book last month, the Gujarat gov- Mohammad Najjar, a senior figure with an IRGC ernment had said that Mr Singh's book Jinnah: In- background, easily passed muster for the post of In- dia-Partition-Independence was "objectionable, mis- terior Minister. leading and against public tranquillity". But the Gujarat high court said that the government had not "read the book" before imposing the ban. The court said the government had not "applied its mind" to arrive at the opinion that the book was "against na- tional interest" and would affect public peace. The Gujarat government is expected to issue a statement reacting to the court decision. It is not clear whether it will issue a fresh ban giving a different reasons. The book examines the role of Congress party leader and the country's first Prime Minister, Jawaharlal Nehru, and Mr Patel in the partition of India in 1947. Copyright © 2009 | WWW.UPSCPORTAL.COM 63
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    • Section -4 (Sports) Sports » The Ministry of Youth Affairs and Sports has of Rs. 220 crore. The Central Team recommended approved grant of Rs. 110 crore to the Kerala Gov- that since it may not be possible for the State Gov- ernment for the conduct of the 35th National ernment to bear the entire cost of Rs. 220 crore Games on Sep 1. The grant would be utilized to- from its own resources because of resource con- wards upgradation of existing sports infrastruc- straint, Planning Commission may consider Ad- ture, laying and development of playing surfaces ditional Central Allocation (ACA) of Rs. 110 crore and procurement of sports of the project cost of Rs. 220 crore) to the Kerala equipments, conduct of Government for hosting 35th Na- National Games including tional Games. opening and closing cer- emonies. » Defending champion India beat Syria by 5-4 in a penalty shootout These games would be the in a thrilling final match to win the last major domestic event ONGC Nehru Cup football tourna- before Commonwealth ment held at the Ambedkar Sta- Games, 2010 and would be dium in New Delhi on Aug 31. The a curtain raiser to CWG win came after a nail-biting finish 2010 and it would be the as no goals could be scored in the basis of selecting the na- normal time, and had to be decided tional teams that would on penalty shoots, where India represent the country at missed just two shots, while Syria CWG 2010. missed three of the seven shots. It may be recalled that Indian Olympic Associa- Goalkeeper Subroto Paul was awarded the man of tion (IOA) has allotted 35th National Games to the match for his superb performance in the State of Kerala, which are scheduled to be held in match.Led by its star striker Bhaichung Bhutia, May 2010. India entered the third consecutive final of the Nehru Cup and anticipations were high, as they Kerala Government has initially requested Cen- had defeated Syria in the 2007 final. tral Government for central assistance, at least 50 per cent, of the total projected requirement of Indian team had strikers in the form of Bhutia about Rs. 600 crore for creation of sports infra- and Sunil Chettri, while Anthony Pereira, N.P. structure and conduct of 35th National Games Pradeep, Climax Lawrence and Steven Dias 2010. handled midfield.Defence was well held by Mahesh Gawli, Anwar, Gourmangi Singh and Earlier in May, a Central Team, led by Joint Sec- Surkumar Singh.The tournament had been quite retary (Sports), Department of Sports and consist- difficult for the home team, as they had won two ing of representatives from Planning Commission, and lost two league matches, including one against Sports Authority of India (SAI) and Indian Olym- Syria. On the other hand Syria, with a strong de- pic Association (IOA), visited Kerala to evaluate fence, had won all their league matches. the proposal for conduct of 35th National Games to be held in May 2010. » India moved up seven places in the FIFA rankings to the 149th spot following their ONGC Based on interactions with the Central Team, the Nehru Cup football triumph. Two wins in the Kerala Government submitted a revised proposal group stage against Kyrgyzstan and Sri Lanka Copyright © 2009 | WWW.UPSCPORTAL.COM 65
    • Section -4 (Sports) pulled India out of the dismal 156th spot. India's since its come-back in early 2008, after a year's win against Syria in Momday's final was not break. Their graph has been steadily rising after counted since it ended in tie-breakers. some stupendous performance. They won the Syria, however, stayed at the 95th spot while Leba- Bitburger Open and Bulgarian Open last year and non, who had defeated India in the group stage, reached the final of the Indian Open Grand Prix dropped two places to the 150th spot. Second run- Gold in March. ners-up Kyrgyzstan, despite losing two matches The entered the top-10 in rankings and made it to in the tournament, stunned everybody by jump- the quarterfinals of the World Badminton Cham- ing 17 places to the 143rd spot while Sri Lanka pionship in Hyderabad earlier this month. dropped three places to the 159th spot. » India's Yuki Bhambri shrugged off an indiffer- Meanwhile, South American champions Brazil are ent start to beat compatriot and top seed Vishnu on top of the FIFA rankings followed by Euro win- Vardhan 6-4, 6-3, to win his fourth International ners Spain in the second place while the Dutch Tennis Federation (ITF) title in the USD 10,000 are third. Germany and world champion Italy are event at the DLTA complex in New Delhi on Aug joint fourth. 29. » Roger Federer has become the first 50-million It was 17-year-old Yuki's third successive win in dollar man in tennis. The world No 1 picked up four meetings with Vardhan and second in a fi- just over 19,000 dollars in prize money following nal. For Vardhan, it was his second straight loss a 6-1 6-3 7-5 first-round win over American teen- in the three consecutive finals at the venue. ager Devin Britton to bring his career total to a The 22-year-old from Andhra Pradesh, in fact, led staggering 30.75 million pounds.Federer has won 3-0 in the first set, Yuki dropping serve in the a record 15 Grand Slams. second game committing three double-faults. But Yuki bounced back in style, firing three aces on » India's Jwala Gutta and Valiyaveetil Diju claimed the trot to win his first game of the match. their biggest career victory on Aug 30 when they defeated Indonesian Hendra Aprida Gunawan and That gave confidence to the Delhi youngster, who Vita Marissa 23-21, 21-18 to win the mixed broke Vardhan with a forehand winner in the sev- doubles title at the Chinese Taipei Grand Prix Gold enth game to even things out and then reeled off badminton. three games to take the first set. The win will fetch Yuki $1,300 and 17 ATP points while Vardhan The World No.7 Indian pair, seeded third in the will pocket $900 and 9 ATP points. tournament, survived a tough battle against the Indonesians en route to their maiden Grand Prix » Chinese domination: Lin Dan and Lan Lu ruled Gold title, also the first by any Indian combina- the roost at the World badminton championship, tion. The semi-final was also an intensely fought clinching the men’s and women’s singles titles in contest, where Diju and Gutta outlasted Malay- Hyderabad on Aug 16. Lin Dan won his third sians Liu Ying Goh and Peng Soon Chan 21-11, straight world title defeating second-seeded fel- 17-21, 24-22. low Chinese and World No. 2 Chen Jin 21-18, 21- Gutta and Diju had lost to both pairs earlier, but 16 in a 46-minute men’s singles final in the BWF made it even this time. World badminton championship which concluded at the Gachibowli Indoor Stadium. The victory came as a advanced birthday gift for Jwala, who turns 26 Sept 7. The Indian pair has In the women’s final seventh-seeded Lan Lu of been making waves on the international scene China defeated two-time world champion and Copyright © 2009 | WWW.UPSCPORTAL.COM 66
    • Section -4 (Sports) fifth-seeded Xie Xingfang 23-21, 21-12 in 38 min- utes to clinch her maiden singles title. Lan was a bronze medallist in the last edition. In the women’s singles final, it was the youthful exu- berance of the seventh-seeded, Lu which prevailed over the 28-year-old Xie. Lu went in for long ral- lies and won most of them. Two upsets marked the doubles competitions. In mixed doubles, seventh-seeds Thomas Laybourn and Kamilia Rytter Juhl ensured a grand finish to their dream run, shocking two-time world cham- pions and second-seeded Nova Widianto and Liliyana Natsir of Indonesia 21-13, 21-17 to give Denmark its first gold in the Worlds after a gap of six years. The women’s doubles final saw Yawen Zhang and Tingting Zhao of China getting the better of their teammates and second-seeded Shu Cheng and Yunlei Zhao 17-21, 21-17, 21-16. The results (All Finals) Men’s Singles: Lin Dan (Chn) bt Chen Jin (Chn) 21-18, 21-16. Men’s Doubles: Cai Yun & Fu Haifeng (Chn) bt Jung Jae Sung & Lee Yong Dae (Kor) 21-18, 16- 21, 28-26. Women’s Singles: Lan Lu (Chn) bt Xie Xingfang (Chn) 23-21, 21-12. Women’s Doubles: Yawen Zhang & Tingting Zhao (Chn) bt Shu Cheng & Yunlei Zhao (Chn) 17-21, 21-17, 21-16. Mixed Doubles: Thomas Laybourn & Kamilia Ryttern Juhl (Den) bt Nova Widianto & Liliyana Natsir (Ina) 21-13, 21-17. Copyright © 2009 | WWW.UPSCPORTAL.COM 67
    • Section -1 (Hindi Article : Climate Change) Advertise your Business Here Contact Us Online: http://upscportal.com/store/contact Copyright © 2009 | WWW.UPSCPORTAL.COM 68
    • Section -5 (Awards) Awards » President Pratibha Devisingh Patil has presented than sportspersons and coaches. Under the new the National Sports awards to 25 sportspersons at category, Railways got the award for Employment an impressive ceremony in Rashtrapati Bhawan of Sportsperson and Sports Welfare Measures. in New Delhi on Aug.29. In a unique departure Railway Minister Mamata Banerjee received the from established tradition, the coveted Rajiv award. Gandhi Khel Ratna award was presented to three sportspersons - two boxers and a wrestler - for TATA Steel bagged two awards for Rashtriya Khel the first time.The Rajiv Gandhi Khel Ratna Award Protsahan Puruskar. They got it for Community was presented to woman boxer M C Marykom and Sports Identification and Nurturing of Budding Beijing bronze medalist boxer Vijender Singh, and Young Talent, and Establishment and Manage- to wrestler Sushil Kumar. ment of Sports Academies of Excellence. The country's best boxer and four-time World List of Awardees Champion, MC Mary Kom, got the Rajiv Gandhi Khel Ratna after applying for it for the past three Rajiv Khel Ratna: M.C. Marykom (boxer), years. Vijender Kumar (boxer) and Sushil Kumar (wres- tling) Vijender Kumar got the highest national sports award a year after he won the bronze medal at Arjuna Award: Mangal Singh Champia (archery), the Beijing Olympics, while wrester Sushil Kumar Sinimol Paulose (athletics), Saina Nehwal (bad- also got the Rajiv Gandhi Khel Ratna award a year minton), L. Sarita Devi (boxing), Tania Sachdeva after winning India a bronze medal at the Beijing (chess), Gautam Gambhir (cricket), Ignatius Tirkey Olympics. (hockey), Surinder Kaur (hockey), Pankaj Shirsat (kabaddi), Satish Joshi (rowing), Ranjan Sodhi Badminton ace Saina Nehwal received the Arjuna (shooting), Poulami Ghatak (table tennis), award for her excellent show in the last one year, Yogeshwar Dutt (wrestling), G.L. Yadav (yacht- as also cricketer Gautam Gambhir.Badminton ing), Parul Parmar (badminton disabled) coach Pullela Gopichand achieved the rare feat of being the only sportsperson in the nation to have Dronacharya Award: Baldev Singh (hockey), won the Khel Ratna, the Arjuna Award and the Jaidev Bisht (boxing), Satpal (wrestling) and Pullela Padma Shree and now the Dronacharya award due Gopichand (badminton) to Saina Nehwal's superb performance. Olympic medallist Sushil’s coach Satpal and former Dhyanchand Award: Ishar Singh Deol (athlet- All England Badminton champion and Saina`s ics), Satbir Singh Dahya (wrestling). coach Pullela Gopichand were presented the Dronacharya Award. The prize money for the Rajiv Gandhi Khel Ratna, Rashtriya Khel Protsahan Puruskar Arjuna, Dronacharya and Dhyanchand Awards have been increased this year. Khel Ratna prize Community Sports Identification and Nurtur- money has been raised from Rs.500,000 to ing of Budding Young Talent: TATA Steel Ltd Rs.750,000. The prize money for the Arjuna, Dronacharya and Dhyanchand Awards has been Establishment and Management of Sports Acad- increased from Rs.300,000 to Rs.500,000. emies of Excellence: TATA Steel Ltd The government instituted this year a new award, Rashtriya Khel Protsahan Puruskar, to recognise Employment of Sportspersons and sports wel- the contribution made to sports by entities other fare measures: Railways Sports Promotion Board Copyright © 2009 | WWW.UPSCPORTAL.COM 69
    • Section -5 (Awards) » Accenture Services Limited, India (Accenture Harbhajan Singh have made the cut for the Crick- eter of the Year award. India) has won the inaugural Asian Human Capi- tal Award. Accenture India will receive their The trio has also been nominated, in the initial award at the Singapore Human Capital Summit list, for the Test player of the year award along on 29 September from Singapore's Minister for with stylish V V S Laxman. Manpower, Mr Gan Kim Yong. Conferred by the Ministry of Manpower, INSEAD and CNBC Asia For the coveted One-day International player of Pacific, the annual Award is the first of its kind the year, skipper Dhoni, prolific batsman Yuvraj that recognises innovative people practices Singh and opener Virender Sehwag have made it adopted by organisations in Asia that have to the initial list of nominees. achieved significant business impact. Indian pacer Zaheer Khan is a strong contender A total of 44 entries were received from 7 coun- for the T20 Performer of the Year award. tries across Asia for the prestigious Asian Human Capital Award 2009. Indian opener Virender Sehwag and former crick- eter Ravi Shastri announced the names of the » State-run steelmaker Steel Authority of India nominees along with the Chief Executive of the Ltd (SAIL) announced its "SAIL HR Excellence International Cricket Council, Haroon Lorgat. Awards" for seven Indian manufacturing firms including Tata Motors and Jindal Steel. The SAIL The sixth ICC annual awards ceremony is to be has instituted the award to commemorate its 50th held at Johannesburg during the ICC Champions year of production. The companies that have been Trophy. awarded in the large scale industries category are Tata Motors, Hindustan Petroleum Corp Ltd There are eight individual prizes, including the (HPCL) and Moser Baer. Sir Garfield Sobers Trophy for the ICC Cricketer of the Year. The winners of seven individual In the medium scale category, Jindal Steel and awards would be chosen on the basis of voting Castrol won the awards, while Honeywell and done by a 25-person panel from around the world ITW Signode were named winners the small scale made up of former players, media personnel and category. an elite umpire and match referee. The jury that selected the winners included Another 16-person group featuring former play- Roongta, National Knowledge Commission Chair- ers and other experts on the women's game would man Sam Pitroda, HDFC Ltd chairman Deepak vote the nominations for the Women's Cricketer Parikh and T.V. Rao and Neharika Vohra of the of the Year award. The other three awards are IIM-Ahmedabad. reserved for the Test Team of the Year, the ODI Team of the Year and the Spirit of Cricket award. » Seven Indian cricketers dominate this year's vari- Performances of players in the period between ous LG ICC Annual Awards for 2009 to be an- August 2008 and August 2009 would be taken into nounced in Mumbai later on Sept.2. account for deciding the awards. Indian skipper Mahendra Singh Dhoni, openers » Recently European Council against Torture and Gautam Gambhir and Virender Sehwag, off-spin- Discrimination has announced the name of Sir ner Harbhajan Singh, middle-order bats V V S Vikrant Singh as the winner of Mahatma Gandhi Laxman and Yuvraj Singh and fast bowler Zaheer Award 2009 for his contribution towards educa- Khan feature in the list. Dhoni, Gambhir and Copyright © 2009 | WWW.UPSCPORTAL.COM 70
    • Section -5 (Awards) tional field. Sir Vikrant Singh, Vice Chancellor of The publication began in May 2002 in Chitrakoot University of Antarcticland has been known for and a second edition was launched in the adjoin- his exemplary work in the area of Higher Educa- ing Banda district in October 2006, according to tion and better livelihood. the NGO`s website. It is written in the local dia- lect Bundeli for its Bundelkhandi readership. European Council Against Torture and Discrimi- nation is an international Non Governmental The other prizes given by Unesco in recognition Organisation based in Hungary and patronised by of innovative programmes designed to teach Prince Gabriel Inellas Paleologo within a Temple women, adolescents and other marginalised popu- Order (Supremus Militaris Templi lations how to read and write, went to programmes Hirerosolymitani Ordo) in 1986.Ambassador Dr in Afghanistan, Burkina Faso and the Philippines. Lamartine Hollanda Junior was the recipient of Mahatma Gandhi Award 2008 organised in Monte The Pashai Language Development Project in Af- Carlo, Monaco. ghanistan provides literacy, livelihood, public health and nutrition education to about 1,000 eth- » A newspaper produced entirely by women in nic minority Pashai men and women annually. rural India is among the four winners of this year`s Literacy Prizes awarded by the United Nations An honourable mention also went to a programme Educational, Scientific and Cultural Organization in Bhutan for its holistic approach to literacy and (Unesco).Khabar Lahariya, the fortnightly news- its success in reaching remote areas, with an em- paper distributed to more than 20,000 readers in phasis on literacy as an integral part of the Uttar Pradesh, is entirely created and marketed country`s "Gross National Happiness" as well as by newly literate "low caste" women who are its focus on adults and out-of-school youth, par- training as journalists in Chitrakoot and Banda ticularly women and girls. The theme for this districts.The King Sejong Literacy Prize was given year`s awards was "Literacy and Empowerment". to this fortnightly paper, started by Nirantar — a centre for gender and education based in New » Coal India Ltd has bagged the Standing Confer- Delhi and Uttar Pradesh. ence of Public Sector Enterprises (SCOPE) award for “Excellence and outstanding contribution to In 1989, the Unesco`s King Sejong Literacy Prize the public sector management” in the Institutional was instituted by South Korea. It is named after category 2007-08 on Aug. 16. Sejong the Great of the 14th century who created the Korean alphabet Hangul and is remembered CIL has bagged the Gold Trophy in the institu- for his contribution to education in the areas of tional category. Selection of the award was based science, technology and literature. Each winner on criteria devised and evaluated by International is awarded $20,000. Nirantar has developed a Management Institute (IMI) and a panel of emi- method of training women as journalists, which nent persons as jury. Former Chief Justice of In- involves developing their literacy skills as well as dia Mr P.N. Bhagwati was the Chairman of the honing their reporting abilities. This includes talk- jury panel. ing to public figures, gathering information and sharpening their editing skills. CIL employs approximately four lakh people. The company was recently offered two exploratory The coverage of Khabar Lahriya includes politics, coal blocks in Mozambique through a bi-lateral crime, social issues and entertainment for their concession agreement. The company has produced readership that spans 400 villages in both districts a little over 400 million tonnes of coal during the of India`s most populous state. last fiscal and is aiming to produce 430 mt in the current fiscal. Copyright © 2009 | WWW.UPSCPORTAL.COM 71
    • Section -5 (Awards) » Mr SK Roongta chairman of Steel Authority of India Ltd has won the Award for Excellence and Out- standing Contribution to the Public Sector Management in the individual category for the 2007-08 period. Standing Conference of Public Enterprises said that Mr Roongta is the first SAIL chief to get this award for 2007-08. Other awardees include Coal India, which bagged the gold trophy in the institutional category and Heavy Engineering Corp Ltd, which won the same trophy in the special institutional turnaround category. Electronics Corporation of India and WAPCOS Ltd also won gold trophies in the medium and smaller public sector enterprises categories, respectively. ADVERTISEMENT Buy Online: http://upscportal.com/store/tag/upkar-prakashan Copyright © 2009 | WWW.UPSCPORTAL.COM 72
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    • Section -6 (Mains Special: Foreign Relations of India) Foreign Relations of India India's Foreign Policy India's foreign policy home to a significant Pashtun population that has always regarded the participated extensively in the Indian indepen- concept of neighbor- dence movement. Everything changed and after hood as one of widening 1947 the NWFP became a part of Pakistan, the concentric circles, Republic of India and the modern State of Af- around a central axis of ghanistan maintained significant cultural and eco- historical and cultural nomic links. Films and music of India are widely commonalties. The popular in Afghanistan and Afghan products such guiding principles of as carpets, nuts and fruit are exported to India. India's Foreign Policy have been founded on For most of their independent history, both na- Panchsheel, pragmatism and pursuit of national tions have enjoyed traditionally friendly relations interest. In a period of rapid and continuing and have cooperated over respective conflicts with change, foreign policy must be capable of respond- Pakistan. Since April 2007, Afghanistan is eighth ing optimally to new challenges and opportuni- member of SAARC after India endorsed Afghan ties. It has to be an integral part of the larger ef- full membership. fort of building the nation's capabilities through economic development, strengthening social fab- Civil wars and Taliban: The Republic of India ric and well-being of the people and protecting was the only South Asian nation to recognise the India's sovereignty and territorial integrity. India's Soviet-backed Democratic Republic of Afghani- foreign policy is a forward-looking engagement stan and the Soviet Union's military presence in with the rest of the world, based on a rigorous, Afghan territories, and provided humanitarian aid realistic and contemporary assessment of the bi- to the country. Following the withdrawal of the lateral, regional and global geo-political and eco- Soviet armed forces from Afghanistan in 1989, nomic milieu. As many as 20 million people of republic of India and the international commu- Indian origin live and work abroad and constitute nity supported the coalition government that took an important link with the mother country. An control, but relations and contacts ended with the important role of India's foreign policy has been outbreak of another civil war, which brought to to ensure their welfare and well being within the power the Taliban, an Islamist militia supported framework of the laws of the country where they by Pakistan. live. Neighbours Countries:- The Taliban regime was recognised only by Saudi Arabia, Turkmenistan, Pakistan and the United Afghanistan–India relations Arab Emirates (UAE). The rise of Islamism in Af- ghanistan and the proliferation of Afghan Bilateral relations between the Republic of India mujahideen in the militancy in Indian-adminis- and the Islamic State of Afghanistan have been tered Kashmir turned the Taliban and Afghani- traditionally strong and friendly. While the In- stan into a security threat for the Government of dian Republic was the only South Asian country India. The destruction of the Bamiyan Buddha to recognise the Soviet-backed Democratic Repub- monuments by the Taliban led to outrage and an- lic of Afghanistan in the 1980s, its relations were gry protests by India, the birthplace of Buddhism. diminished during the Afghan civil wars and the In 1999, the Indian Airlines Flight 814 hijacked rule of the Islamist Taliban in the 1990s. India by Muslim militants landed and stayed in aided the overthrow of the Taliban and became Kandahar in Afghanistan and the Taliban and the largest regional provider of humanitarian and Pakistan's Inter-Services Intelligence (ISI) were reconstruction aid. Afghanistan used to border suspected of supporting them. India became one British India's Northwest Frontier Province of the key supporters of the anti-Taliban North- (NWFP) and congress dominated, which was ern Alliance. Copyright © 2009 | WWW.UPSCPORTAL.COM 74
    • Section -6 (Mains Special: Foreign Relations of India) Post-2001: During the U.S.-led invasion of Af- ghanistan was signed during the visit of the Af- ghanistan in 2001, India offered intelligence and ghan Foreign Minister Dr. Spanta between June other forms of support for the Coalition forces. 29 and July 1, 2006. During the same year, India After the overthrow of the Taliban, India estab- raised its aid package to Afghanistan by $150 mil- lished diplomatic relations with the newly-estab- lion, to $750 million. India also supported lished democratic government, provided aid and Afghanistan's bid to become a member of the participated in the reconstruction efforts. India has South Asian Association for Regional Cooperation provided USD 650-750 million in humanitarian (SAARC). and economic aid, making it the largest regional provider of aid for Afghanistan. On July 7, 2008 the Indian embassy in Kabul was The Indian Army's Border Roads Organisation is attacked by a suicide car bomb - the deadliest at- constructing a major road in the remote Afghan tack in Kabul since the fall of the Taliban in 2001. province of Nimroz. India's support and collabo- The bombing killed 58 people and wounded 141. ration extends to rebuilding of air links, power Senior Indian Army officer Brigadier Ravi Datt plants and investing in health and education sec- Mehta was entering the embassy gates in a car tors as well as helping to train Afghan civil ser- along with V. Venkateswara Rao when the at- vants, diplomats and police. India also seeks the tack took place. Both were killed in the blast. The development of supply lines of electricity, oil and Afghan government had claimed that Pakistan's natural gas. ISI was involved in the attack. Both nations also developed strategic and military During the 15th SAARC summit in Colombo, In- cooperation against Islamic militants. Owing to dia pledged another USD $450 million along with the killing of an Indian national by Taliban mili- $750 million already pledged for ongoing and tants in November 2005, India deployed 200 sol- forthcoming projects. In August 2008, Afghan diers of the Indo-Tibetan Border Police (ITBP) to President Hamid Karzai visited New Delhi. This provide security for Indian nationals and the visit further strengthened bilateral relations, and projects supported by India. Afghanistan strength- Prime Minister Singh pledged further aid for Af- ened its ties with India in wake of persisting ten- ghanistan. sions and problems with Pakistan, which was sus- pected of continuing to shelter and support the Bangladesh–India relations Taliban. India pursues a policy of close coopera- tion in order to bolster its standing as a regional Both Bangladesh and India are part of what is power and contain its rival Pakistan, which it known as the Indian subcontinent and have had a maintains is supporting Islamic militants in Kash- long common cultural, economic and political his- mir and other parts of India. tory. The cultures of the two countries are simi- lar; in particular Bangladesh and India's states Three MoUs (memorandum of understanding) for West Bengal and Tripura are all Bengali-speak- strengthening cooperation in the fields of rural ing. However, since the partition of the Indian development, education and standardization be- sub-continent in 1947, India emerged as an inde- tween the Bureau of Indian Standards(BIS) and pendent state and Bangladesh (as East Bengal, later Afghan National Standardization Authority were rename to East Pakistan in 1956) was allocated as signed between India and Afghanistan during a part of Pakistan. Following the bloody Libera- Hamid Karzai's visit to India during 9-13 April tion War of 1971, Bangladesh gained her inde- 2006. An agreement providing $50 million to pro- pendence and established relations with India. The mote bilateral businesses between India and Af- political relationship between India and Copyright © 2009 | WWW.UPSCPORTAL.COM 75
    • Section -6 (Mains Special: Foreign Relations of India) Bangladesh has passed through cycles of hiccups. an independent state. Since then, there have been The relationship typically becomes favorable for several issues of agreement as well as of dispute. Bangladesh during periods of Awami League gov- ernment. Areas of agreement:- 1. India played 0a central role in the independence During the Partition of India after independence of Bangladesh. About 250,000 Indian soldiers in 1947, the Bengal region was divided into two: fought for, and 20,000 losing their lives for the East Bengal (present-day Bangladesh) and West cause of an independent Bangladesh. India shel- Bengal. East Bengal was made a part of the Is- tered over 10 million refugees who were fleeing lamic Republic of Pakistan due to the fact that the atrocities of the occupying West Pakistan both regions had an overwhelmingly large Mus- Army. India and its ally Bhutan were the first lim population, more than 85%. In 1955, the gov- countries to recognize Bangladesh as an indepen- ernment of Pakistan changed its name from East dent nation. Bangladeshis have some awareness Bengal to East Pakistan. of their obligation and gratitude towards India. There were some confrontations between the two 2. Sheikh Mujibur Rahman’s first foreign visit as regions though. Firstly, in 1948, Muhammad Ali Prime Minister and the Founding Father of the Jinnah declared that only Urdu would the sole of- newly born nation was to India and it was then ficial language of the entire nation, though more decided Indo-Bangladesh relations would be than 95% of the East Bengali population spoke guided by principles of democracy, socialism, non- Bengali. And when protests broke out in alignment and opposition to colonialism and rac- Bangladesh on February 21, 1952, Pakistani po- ism. Indira Gandhi too visited Bangladesh in 1972 lice fired on the protesters, killing hundreds. Sec- and assured that India would never interfere in ondly, East Bengal/East Pakistan was allotted only the internal affairs of the country. a small amount of revenue for its development out of the Pakistani national budget. Therefore, a sepa- 3. In 1972, both the countries signed a ‘Treaty of ratist movement started to grow in the isolated Friendship and Peace’. An Indo-Bangladesh Trade province. When the main separatist party the Pact was also signed. Awami League, headed by Sheikh Mujibur Rahman, won 167 of 169 seats up for grabs in the 4. The mainstream party Awami League is gener- 1970 elections and got the right to form the gov- ally considered to be friendly towards India. ernment, the Pakistan president under Yahya Khan refused to recognize the election results and Areas of contention:- arrested Sheikh Mujibur Rahman. This led to 1. A major area of contention has been the con- widespread protests in East Pakistan and in 1971, struction and operation of the Farakka Barrage by the Liberation War, followed by the declaration India to increase water supply in the river Hoogly. (by Sheikh Mujibur Rahman on 7 March 1971) of Bangladesh insists that it does not receive a fair the independent state of Bangladesh. share of the Ganga waters during the drier sea- sons, and gets flooded during the monsoons when India under Indira Gandhi fully supported the India releases excess waters. cause of the Bangladeshis and its troops and equip- ment were used to fight the Pakistani forces. The 2. There have also been disputes regarding the Indian Army also gave full support to the main transfer of Teen Bigha Corridor to Bangladesh. Bangladeshi guerrilla force, the Mukti Bahini. Fi- Part of Bangladesh is surrounded by the Indian nally, on 26 March, 1971, Bangladesh emerged as state of West Bengal. On 26 June, 1992, India Copyright © 2009 | WWW.UPSCPORTAL.COM 76
    • Section -6 (Mains Special: Foreign Relations of India) leased three bigha land to Bangladesh to connect mented by the annexation of Tibet in 1950 by the this enclave with mainland Bangladesh. There is People's Republic of China and its border disputes dispute regarding the indefinite nature of the lease. with both Bhutan and India, which saw close ties with Nepal and Bhutan to be central to its "Hima- 3. Indian border force's killing of people while layan frontier" security policy. India shares a 605 crossing the border has been the topic of disputes. kilometres (376 miles) border with Bhutan and is In August 2008, Indian Border Security Force of- its largest trading partner, accounting for 98 per- ficials said that they killed 59 smugglers and ille- cent of its exports and 90 percent of its imports. gal immigrants (34 Bangladeshis and 21 Indians) who were trying to cross the border between In- 1949 Treaty : On August 8, 1949 Bhutan and In- dia and Bangladesh during a 6 month period. On dia signed the Treaty of Friendship, calling for November 16, 2008, 3 people including a women peace between the two nations and non-interfer- and her child were shot dead in a Bangladeshi vil- ence in each other's internal affairs. However, lage by a drunken BSF soldier before he was ap- Bhutan agreed to let India "guide" its foreign policy prehended. and both nations would consult each other closely on foreign and defence affairs. The treaty also es- 4. Terrorist activities carried out by outfits based tablished free trade and extradition protocols. in both countries, like Banga Sena and Harkat-ul- Jihad-al-Islami. Recently India and Bangladesh The occupation of Tibet by Communist China had agreed to jointly fight terrorism. brought both nations even closer. In 1958, the then-Indian Prime Minister Jawaharlal Nehru vis- 5. The Sharing of Ganges Waters was also a mat- ited Bhutan and reiterated India's support for ter of dispute. Bhutan's independence and later declared in the Indian Parliament that any aggression against 6. The unresolved issue of the status of the Bhutan would be seen as aggression against India. Chittagonian plains of Bengal as part of CHT on The period saw a major increase in India's eco- the (grounds of ethnic affiliation). nomic, military and development aid to Bhutan, which had also embarked on a programme of Bhutan–India relations modernisation to bolster its security. While India repeatedly reiterated its military support to The bilateral relations between the Himalayan Bhutan, the latter expressed concerns about India's Kingdom of Bhutan and the Republic of India have ability to protect Bhutan against China while been traditionally close. With independence in fighting a two-front war involving Pakistan. De- 1947, India inherited the suzerainty over Bhutan spite good relations, India and Bhutan did not com- enjoyed by the British Raj. Although modified and plete a detailed demarcation of their borders until modernised since, India remains influential over the period between 1973 and 1984. Border demar- Bhutan's foreign policy, defence and commerce. cation talks with India generally resolved disagree- ments except for several small sectors, including For much of history, Bhutan has preserved its iso- the middle zone between Sarpang and Geylegphug lation from the outside world, staying out of in- and the eastern frontier with the Indian state of ternational organisations and maintaining few bi- Arunachal Pradesh. lateral relations. Bhutan became a protectorate of British India after signing a treaty in 1910 allow- Distancing from India: Although relations re- ing the British to "guide" its foreign affairs and mained close and friendly, the Bhutanese govern- defence. Bhutan was one of the first to recognize ment expressed a need to renegotiate parts of the India's independence in 1947 and both nations treaty to enhance Bhutan's sovereignty. Bhutan fostered close relations, their importance aug- began to slowly assert an independent attitude in Copyright © 2009 | WWW.UPSCPORTAL.COM 77
    • Section -6 (Mains Special: Foreign Relations of India) foreign affairs by joining the United Nations in People's Republic of China give strategic impor- 1971, recognising Bangladesh and signing a new tance to Indo-Burmese relations. The Indo-Bur- trade agreement in 1972 that provided an exemp- mese border stretches over 1,600 miles. tion from export duties for goods from Bhutan to third countries. Bhutan exerted its independent India was one of the leading supporters of Bur- stance at the Non-Aligned Movement (NAM) mese independence and established diplomatic summit conference in Havana, Cuba also in 1979, relations after Burma's independence from Great by voting with China and some Southeast Asian Britain in 1948. For many years, Indo-Burmese countries rather than with India on the issue of relations were strong due Burma previously hav- allowing Cambodia's Khmer Rouge to be seated ing been a province of India, due to cultural links, at the conference. Unlike in Nepal, where its 1950 flourishing commerce, common interests in re- treaty with India is subject of great political con- gional affairs and the presence of a significant In- troversy and nationalist resentment for decades, dian community in Burma. India provided con- the nature of Bhutan's relationship with India has siderable support when Burma struggled with re- not been affected by concerns over the treaty pro- gional insurgencies. However, the overthrow of visions. From 2003 to 2004, the Royal Bhutanese the democratic government by the Military of Army conducted operations against anti-India in- Burma led to strains in ties. Along with much of surgents of the United Liberation Front of Assam the world, India condemned the suppression of (ULFA) that were operating bases in Bhutan and democracy and Burma ordered the expulsion of using its territory to carry out attacks on Indian the Burmese Indian community, increasing its soil. own isolation from the world. Only China main- tained close links with Burma while India sup- 2007 treaty : India renegotiated the 1949 treaty ported the pro-democracy movement. with Bhutan and signed a new treaty of friend- ship in 2007. The new treaty replaced the provi- A major breakthrough occurred in 1987 when the sion requiring Bhutan to take India's guidance on then-Indian Prime Minister Rajiv Gandhi visited foreign policy with broader sovereignty and not Burma, but relations worsened after the military require Bhutan to obtain India's permission over junta's bloody repression of pro-democracy agita- arms imports. In 2008, Indian Prime Minister Dr. tions in 1988, which led to an influx of Burmese Manmohan Singh visited Bhutan and expressed refugees into India. However, since 1993 the gov- strong support for Bhutan's move towards democ- ernments of the Indian Prime Ministers P.V. racy. India allows 16 entry and exit points for Narasimha Rao and Atal Bihari Vajpayee changed Bhutanese trade with other countries with excep- course and began cultivating ties with Myanmar, tion only being the PRC, and has agreed to im- as part of a wider foreign policy approach aimed port a minimum of 5,000 megawatts of electricity to increase India's participation and influence in from Bhutan by 2020. Southeast Asia and to counteract the growing in- fluence of the People's Republic of China. Burma–India relations Commercial relations: India is the largest mar- Bilateral relations between Burma (officially the ket for Burmese exports, buying about USD 220 Union of Myanmar) and the Republic of India have million worth of goods in 2000; India's exports to improved considerably since 1993, overcoming Burma stood at USD 75.36 million. India is Burma’s strains over drug trafficking, the suppression of 4th largest trading partner after Thailand, China democracy and the rule of the military junta in and Singapore, and second largest export market Burma. Burma is situated to the south of the states after Thailand, absorbing 25 percent of its total of Mizoram, Manipur, Nagaland and Arunachal exports. India is also the seventh most important Pradesh in Northeast India. The proximity of the source of Burma’s imports. The governments of Copyright © 2009 | WWW.UPSCPORTAL.COM 78
    • Section -6 (Mains Special: Foreign Relations of India) India and Burma had set a target of achieving $1 ing international condemnation. India also de- billion and bilateral trade reached USD 650 mil- clared that it had no intention of interfering in lion U.S. dollars by 2006. The Indian government Burma's internal affairs and that the Burmese has worked to extend air, land and sea routes to people would have to achieve democracy them- strengthen trade links with Myanmar and estab- selves. This low-key response has been widely lish a gas pipeline. While the involvement of criticised both within India and abroad as weak- India's private sector has been low and growing ening India's credentials as a leading democratic at a slow pace, both governments are proceeding nation. to enhance cooperation in agriculture, telecom- munications, information technology, steel, oil, India–Maldives relations natural gas, hydrocarbons and food processing. The bilateral border trade agreement of 1994 provides Bilateral relations between the Republic of India for border trade to be carried out from three des- and the Republic of Maldives have been friendly ignated border points, one each in Manipur, and close in strategic, economic and military co- Mizoram and Nagaland. operation. India contributed to maintaining secu- rity on the island nation and has forged an alli- On February 13, 2001 India and Burma inaugu- ance with respect to its strategic interests in the rated a major 160 kilometre highway, called the Indian Ocean. Indo-Myanmar Friendship Road, built mainly by the Indian Army's Border Roads Organisation and The Maldives is located south of India's aimed to provide a major strategic and commer- Lakshadweep Islands in the Indian Ocean and cial transport route connecting North-East India approximately 700 kilometres from Sri Lanka. which connects South Asia with Southeast Asia. Both nations established diplomatic relations af- ter the independence of Maldives from British rule Development of strategic ties: India's move to in 1966. Since then, India and Maldives have de- forge close relations with Burma are motivated veloped close strategic, military, economic and by a desire to counter China's growing influence cultural relations. India has supported Maldives' as a regional leader and enhance its own influ- policy of keeping regional issues and struggles ence and standing. Concerns and tensions in- away from itself, and the latter has seen friend- creased in India over China's extensive military ship with India as a source of aid as well as a cooperation and involvement in developing ports, counter-balance to Sri Lanka, which is in proxim- naval and intelligence facilities and industries, ity to the island nation and its largest trading part- specifically the upgrading of a naval base in Sittwe, ner. a major seaport located close to the eastern Indian city of Kolkata. India's engagement of the Bur- Development of bilateral relations: India and mese military junta has helped ease the regime's Maldives officially and amicably decided their international isolation and lessen Burma's tradi- maritime boundary in 1976, although a minor dip- tional reliance on China. Both nations sought to lomatic incident occurred in 1982 when the cooperate to counteract drug trafficking and in- brother of the President of Maldives Maumoon surgent groups operating in the border areas. In- Abdul Gayoom declared that the neighbouring dia and Myanmar are leading members of Minicoy Island that belonged to India were a part BIMSTEC and the Mekong-Ganga Cooperation, of Maldives; Maldives quickly and officially de- along with Vietnam, Laos, Cambodia and Thai- nied that it was laying claim to the island. India land, helping India develop its influence and ties and Maldives signed a comprehensive trade agree- amongst Southeast Asian nations. India was slow ment in 1981. Both nations are founding mem- and hesitant in reacting to the 2007 Burmese anti- bers of the South Asian Association for Regional government protests that had drawn overwhelm- Cooperation (SAARC), the South Asian Economic Copyright © 2009 | WWW.UPSCPORTAL.COM 79
    • Section -6 (Mains Special: Foreign Relations of India) Union and signatories to the South Asia Free Trade munications and labour resources. It established Agreement. Indian and Maldivian leaders have the Indira Gandhi Memorial Hospital in Male, the maintained high-level contacts and consultations capital of Maldives, expanded telecommunications on regional issues. and air links and increased scholarships for Maldivian students. While India's exports to Operation Cactus: In November 1988 speedboats Maldives during 2006 were worth Rs. 384 crores, carrying 80 armed militants of the People's Lib- imports were worth less than Rs. 6 crores. The eration Organisation of Tamil Eelam landed in State Bank of India has contributed more than USD Maldives and along with allies who had infiltrated 500 million to aid the economic expansion of the country, began taking over the government. Maldives. India and Maldives have announced The plot, planned in Sri Lanka by the Tamil na- plans to jointly work to expand fisheries and tuna tionalist group was believed to be an attempt by a processing. Maldivian businessman and politician opposed to the regime of the President of Maldives Maumoon Military relations: On 7 March 2005 Defence Abdul Gayoom to gain control while the PLOTE Attaché's Office ( DAO) was established in the sought a safe haven and base for its activities. High commission of the Republic of Maldives in India by making Lt.Colonel Abdulla Shamaal as The militants took control of the airport in Male, first defense attaché.This was the first Defence the national capital, but failed to capture the Presi- Attaché's office set up abroad. Given, that defence dent of Maldives Maumoon Abdul Gayoom, who relations is a major component of the Indo- had fled and asked for military aid from India on Maldives bilateral relations and both counties have November 3. The then-Indian Prime Minister a long record of strengthening their defense ties Rajiv Gandhi ordered 1,600 troops to aid the through a wide range of activities, such as Mili- Maldivian government. In a military operation tary Joint Exercises, exchange of visits of senior codenamed "Operation Cactus," Indian forces ar- officers of the Armed forces, training of large num- rived within 12 hours of the request for aid being ber of defense services personnel from the made, squashed the coup attempt and achieved Maldives at Indian defense establishments, provi- full control of the country within hours. 19 sion of military aid, and intelligence and informa- PLOTE militants were killed and 1 Indian soldier tion sharing, the necessity for a DAO was felt. wounded. Hence, the DAO was instituted to further strengthen and consolidate the already existing bi- India's intervention was endorsed by other nations lateral defense relations in a mutually beneficial such as the United States, Soviet Union, Great Brit- manner. As a result, the DAO functions as the ain and its neighbours Nepal and Bangladesh. Its primary mechanism integrated in the resident speedy and decisive victory and the restoration of Mission of the Republic of Maldives in New Delhi, the Maldivian government brought both nations India to guide direct and coordinate defense ties even closer in friendship and cooperation. In wake between the two countries. of internal security crises and tensions with Sri Lanka, Maldives saw its relationship with India as On April 2006 Indian Navy gifted a Trinkat Class a source of future security. Fast Attack Craft of 46m length to Maldives Na- tional Defence Force's Coast Guard. Commercial relations: Since the success of Opera- tion Cactus, the relations between India and Indo-Nepalese relations Maldives have expanded significantly. India has provided extensive economic aid and has partici- Relations between India and Nepal are close yet pated in bilateral programs for the development fraught with difficulties stemming from geogra- of infrastructure, health, civil aviation, telecom- phy, economics, the problems inherent in big Copyright © 2009 | WWW.UPSCPORTAL.COM 80
    • Section -6 (Mains Special: Foreign Relations of India) power-small power relations, and common eth- In 1978 India agreed to separate trade and transit nic, linguistic and cultural identities that overlap treaties, satisfying a long-term Nepalese demand. the two countries' borders. New Delhi and In 1988, when the two treaties were up for re- Kathmandu initiated their intertwined relation- newal, Nepal's refusal to accommodate India's ship with the 1950 Indo-Nepal Treaty of Peace wishes on the transit treaty caused India to call and Friendship? and accompanying letters that for a single trade and transit treaty. Thereafter, defined security relations between the two coun- Nepal took a hard-line position that led to a seri- tries, and an agreement governing both bilateral ous crisis in India-Nepal relations. After two ex- trade and trade transiting Indian soil. The 1950 tensions, the two treaties expired on March 23, treaty and letters stated that "neither government 1989, resulting in a virtual Indian economic block- shall tolerate any threat to the security of the other ade of Nepal that lasted until late April 1990. Al- by a foreign aggressor" and obligated both sides though economic issues were a major factor in the "to inform each other of any serious friction or two countries' confrontation, Indian dissatisfac- misunderstanding with any neighboring state tion with Nepal's 1988 acquisition of Chinese likely to cause any breach in the friendly rela- weaponry played an important role. New Delhi tions subsisting between the two governments." perceived the arms purchase as an indication of These accords cemented a "special relationship" Kathmandu's intent to build a military relation- between India and Nepal that granted Nepal pref- ship with Beijing, in violation of the 1950 treaty erential economic treatment and provided and letters exchanged in 1959 and 1965, which Nepalese in India the same economic and educa- included Nepal in India's security zone and pre- tional opportunities as Indian citizens. cluded arms purchases without India's approval. India linked security with economic relations and Independent Political History: In the 1950s, insisted on reviewing India-Nepal relations as a Nepal welcomed close relations with India, but as whole. Nepal had to back down after worsening the number of Nepalese living and working in economic conditions led to a change in Nepal's India increased and the involvement of India in political system, in which the king was forced to Nepal's economy deepened in the 1960s and af- institute a parliamentary democracy. The new ter, so too did Nepalese discomfort with the spe- government sought quick restoration of amicable cial relationship. Tensions came to a head in the relations with India. mid-1970s, when Nepal pressed for substantial amendments in its favor in the trade and transit The special security relationship between New treaty and openly criticized India's 1975 annex- Delhi and Kathmandu was reestablished during ation of Sikkim which was considered as part of the June 1990 New Delhi meeting of Nepal's prime Greater Nepal. In 1975 King Birendra Bir Bikram minister Krishna Prasad Bhattarai and Indian Shah Dev proposed that Nepal be recognized in- prime minister V.P. Singh. During the December ternationally as a zone of peace; he received sup- 1991 visit to India by Nepalese prime minister port from China and Pakistan. In New Delhi's Girija Prasad Koirala, the two countries signed view, if the king's proposal did not contradict the new, separate trade and transit treaties and other 1950 treaty and was merely an extension of non- economic agreements designed to accord Nepal alignment, it was unnecessary; if it was a repudia- additional economic benefits. tion of the special relationship, it represented a possible threat to India's security and could not Indian-Nepali relations appeared to be undergo- be endorsed. In 1984 Nepal repeated the proposal, ing still more reassessment when Nepal's prime but there was no reaction from India. Nepal con- minister Man Mohan Adhikary visited New Delhi tinually promoted the proposal in international in April 1995 and insisted on a major review of forums, with Chinese support; by 1990 it had won the 1950 peace and friendship treaty. In the face the support of 112 countries. of benign statements by his Indian hosts relating Copyright © 2009 | WWW.UPSCPORTAL.COM 81
    • Section -6 (Mains Special: Foreign Relations of India) to the treaty, Adhikary sought greater economic vironment to encourage Indian...investments in independence for his landlocked nation while si- Nepal." multaneously striving to improve ties with China. In 2005, after King Gyanendra took over, Nepalese Furthermore, a three-tier mechanism at the level relations with India soured. However, after the of ministerial, secretary and technical levels will restoration of democracy, in 2008, Prachanda, the be built to push forward discussions on the devel- Prime Minister of Nepal, visited India, in Septem- opment of water resources between the two sides. ber 2008. He spoke about a new dawn, in the bi- Politically, India acknowledged a willingness to lateral relations, between the two countries. He promote efforts towards peace in Nepal. Indian said, "I am going back to Nepal as a satisfied per- External affairs minister Pranab Mukherjee prom- son. I will tell Nepali citizens back home that a ised the Nepali Prime Minister Prachanda that he new era has dawned. Time has come to effect a would "extend all possible help for peace and de- revolutionary change in bilateral relations. On velopment." behalf of the new government, I assure you that we are committed to make a fresh start." He met In 2008, the Bollywood film Chandni Chowk to Indian Prime minister, Manmohan Singh, and China was banned in Nepal, because of a scene Foreign Minister, Pranab Mukherjee. He asked suggesting the Gautama Buddha was born in In- India to help Nepal frame a new constitution, and dia. Some protesters called for commercial boy- to invest in Nepal's infrastructure, and its tourism cott of all Indian films. industry. Indo-Pakistan relations In 2008, Indo-Nepali ties got a further boost with an agreement to resume water talks after a 4 year Indo-Pakistani relations are grounded in the po- hiatus. The Nepalese Water Resources Secretary litical, geographic, cultural, and economic links Shanker Prasad Koirala said the Nepal-India Joint between the Islamic Republic of Pakistan and the Committee on Water Resources meet decided to Republic of India, two of the largest and fastest- start the reconstruction of breached Kosi embank- developing countries in South Asia. The two coun- ment after the water level goes down. During the tries share much of their common geographic lo- Nepal PM's visit to New Delhi in September the cation, and religious demographics (most notably two Prime Ministers expressed satisfaction at the Islam, Hinduism, Sikhism, Buddhism); yet diplo- age-old close, cordial and extensive relationships matic relations between the two are defined by between their states and expressed their support numerous military conflicts and territorial dis- and cooperation to further consolidate the rela- putes. tionship. Much of South Asia came under direct control of The two issued a 22-point statement highlighting Great Britain in the late 18th century. The Brit- the need to review, adjust and update the 1950 ish Raj over the Indian subcontinent lasted for Treaty of Peace and Friendship, amongst other almost two centuries. 95% of the people living in agreements. India would also provide a credit line South Asia practised either Islam or Hinduism. The of up to 150 crore rupees to Nepal to ensure unin- Muslim League, headed by Jinnah, proposed the terrupted supplies of petroleum products, as well Two Nation Theory in the early 20th century. as lift bans on the export of rice, wheat, maize, According to the theory, Muslims and others sugar and sucrose for quantities agreed to with shared little in common, and British India should Nepal. India would also provide 20 crore as im- be divided into two separate countries, one for the mediate flood relief. Muslims and the other for the Hindu majority, which he feared would suppress the Muslim mi- In return, Nepal will take measures for the "pro- nority. The campaign gained momentum in early motion of investor friendly, enabling business en- Copyright © 2009 | WWW.UPSCPORTAL.COM 82
    • Section -6 (Mains Special: Foreign Relations of India) 1940s and by the end of World War II, British population it should be a part of India. Addition- India's partition looked inevitable. The Partition ally, since the state was encircled by Indian terri- of India in 1947 created two large countries inde- tory it should have been a part of India. Indian pendent from Britain: Pakistan as two wings in politicians also stated that by giving Pakistan a the East and West, separated by India in the predominantly Hindu region to govern, the basis middle. Soon after Independence, India and Paki- of the two nation theory was contradicted. stan established diplomatic relations. Subsequent years were marked by bitter periodic conflict, and The Pakistani point of view was that since the nations went to war four times. The war in Junagadh had a ruler and governing body who 1971 ended in defeat and another partition of Pa- chose to accede to Pakistan, they should be al- kistan. The eastern wing split off as a new coun- lowed to do so. Junagadh, having a coastline, could try named Bangladesh, while the western wing have maintained maritime links with Pakistan. continued as Pakistan. Additionally, Pakistani politicians stated that the two nation theory did not necessarily mean a clear There was some improvement in relations since division of land and absolute transfer of popula- the mid-2000s. But relations soured again after the tions as the sheer magnitude of such a proceeding 2007 Samjhauta Express bombings by extremists would wreak havoc upon millions. from India, and the 2008 Mumbai Terrorist At- tacks by a group of Pakistani men, and now mu- Neither of the ten states were able to resolve this tual suspicion governs the relationship again. issue amicably and it only added fuel to an already charged environment. Seeds of conflict: Millions of Muslims and Hin- dus were killed in communal riots following the Sardar Patel, India's then Defence Minister, felt partition of the British Empire. Millions of Mus- that if Junagadh was permitted to go to Pakistan, lims living in India and Hindus and Sikhs living in it would create communal unrest across Gujarat. Pakistan emigrated in one of the most colossal The government of India gave Pakistan time to transfers of population in the modern age. Both void the accession and hold a plebiscite in countries accused each other of not providing ad- Junagadh to pre empt any violence in Gujarat. equate security to the minorities emigrating Samaldas Gandhi formed a government-in-exile, through their territory. This served to increase the Arzi Hukumat of the people of Junagadh. Patel tensions between the newly-born countries. ordered the annexation of Junagadh's three prin- cipalities. Junagadh, facing financial collapse, first According to the British plan for the partition of invited the Arzi Hukumat, and later the Govern- British India, all the 680 princely states were al- ment of India to accept the reins of power. lowed to decide which of the two countries to join. With the exception of a few, most of the Kashmir Dispute: Kashmir was a princely state, Muslim-majority princely-states acceded to Paki- ruled by a Hindu, Hari Singh. The Maharaja of stan while most of the Hindu-majority princely Kashmir was equally hesitant to join either In- states joined India. However, the decisions of some dia – , because he knew his Muslim subjects would of the princely-states would shape the Pakistan- not like to join a Hindu-based and Hindu-major- India relationship considerably, in the years to ity nation – , or Pakistan – which as a Hindu he come. was personally averse to. Pakistan coveted the Himalayan kingdom, while Indian leader Ma- Junagadh Dispute: Junagadh was a state on the hatma Gandhi and Indian PM Jawaharlal Nehru southwestern end of Gujarat, with the principali- hoped that the kingdom would join India. Hari ties of The Indian point of view was that since Singh signed a Standstill Agreement (preserving Junagadh was a state with a predominantly Hindu status quo) with Pakistan, but did not make his decision by August 15, 1947. Copyright © 2009 | WWW.UPSCPORTAL.COM 83
    • Section -6 (Mains Special: Foreign Relations of India) Rumours spread in Pakistan that Hari Singh was with an earlier Indian statement and a UN resolu- trying to accede Kashmir to India. Alarmed by this tion. Pakistan also points to India's failure of not threat, a team of Pakistani forces were dispatched understanding its own political logic and apply- into Kashmir, fearing an Indian invasion of the ing it to Kashmir, by taking their opinion on the region. Backed by Pakistani paramilitary forces, case of the accession of Junagadh as an example Pakistani Pashtun tribal warlords invaded Kash- (that the Hindu majority state should have gone mir in September 1947. Kashmir's security forces to India even though it had a Muslim ruler), that were too weak and ill-equipped to fight against Kashmir should also rightfully and legally have Pakistan. Troubled by the deteriorating political become a part of Pakistan since majoirity of the pressure that was being applied to Hari Singh and people were Muslim, even though they had a his governance, the Maharaja asked for India's Hindu ruler. Pakistan also states that at the very help. However, the Constitution of India barred least, the promised plebiscite should be allowed the Indian Armed Forces' intervention since Kash- to decide the fate of the Kashmiri people. mir did not come under India's jurisdiction. Des- perate to get India's help and get Kashmir back in India on the other hand asserts that the Maharaja's his own control, the Maharaja acceded Kashmir decision, which was the norm for every other to India (which was against the will of the major- princely state at the time of independence, and ity of Kashmiris), and signed the Instrument of subsequent elections, for over 40 years, on Kash- Accession. By this time the raiders were close to mir has made it an integral part of India. This opin- the capital, Srinagar. On October 27, 1947, the ion has often become controversial, as Pakistan Indian Air Force airlifted Indian troops into asserts that the decision of the ruler of Junagadh Srinagar and made an intervention. The Indian also adhered to Pakistan. Due to all such political troops managed to seize parts of Kashmir which differences, this dispute has also been the subject included Jammu, Srinagar and the Kashmir valley of wars between the two countries in 1947 and itself, but the strong and intense fighting, flagged 1965, and a limited conflict in 1999. The state/ with the onset of winter, made much of the state province remains divided between the two coun- impassable. tries by the Line of Control (LoC), which demar- cates the ceasefire line agreed upon in the 1947 After weeks of intense fighting between Pakistan conflict. and India, Pakistani leaders and the Indian Prime Minister Nehru declared a ceasefire and sought Other Territorial Disputes U.N. arbitration with the promise of a plebiscite. Sardar Patel had argued against both, describing Pakistan is locked in other territorial disputes with Kashmir as a bilateral dispute and its accession as India such as the Siachen Glacier and Kori Creek. justified by international law. In 1957, north-west- Pakistan is also currently having dialogue with ern Kashmir was fully integrated into Pakistan, India regarding the Baglihar Dam being built over becoming Azad Kashmir (Pakistan-administered the River Chenab in Jammu and Kashmir. Kashmir), while the other portion was acceded to Indian control, and the state of Jammu and Kash- Bengal refugee crisis: In 1949, India recorded mir (Indian-administered Kashmir) was created. close to 1 million Hindu refugees, who flooded In 1962, China occupied Aksai Chin, the north- into West Bengal and other states from East Paki- eastern region bordering Ladakh. In 1984, India stan, owing to communal violence, intimidation launched Operation Meghdoot and captured more and repression from authorities. The plight of the than 80% of the Siachen Glacier. refugees outraged Hindus and Indian nationalists, and the refugee population drained the resources Pakistan maintains Kashmiris' rights to self-de- of Indian states, which were unable to absorb termination through a plebiscite in accordance them. While not ruling out war, Prime Minister Copyright © 2009 | WWW.UPSCPORTAL.COM 84
    • Section -6 (Mains Special: Foreign Relations of India) Nehru and Sardar Patel invited Liaquat Ali Khan stani relations. Pakistan actively supported the for talks in Delhi. Although many Indians termed Afghan resistance against the Soviet Union, which this appeasement, Nehru signed a pact with was a close ally of India, which brought opposing Liaquat Ali Khan that pledged both nations to the political opinions. The Taliban regime in Afghani- protection of minorities and creation of minority stan was strongly supported by Pakistan - one of commissions. Although opposed to the principle, the few countries to do so - before the September Patel decided to back this Pact for the sake of 11 attacks and the start of the era of global terror- peace, and played a critical role in garnering sup- ism. India, on the other hand, firmly opposed port from West Bengal and across India, and en- Taliban and criticised Pakistan for supporting it. forcing the provisions of the Pact. Khan and Nehru Hatred for the Taliban grew amongst Hindu ul- also signed a trade agreement, and committed to tra-nationalists in India after they enforced laws resolving bilateral disputes through peaceful on Afghan Hindus to "wear label". means. Steadily, hundreds of thousands of Hin- dus returned to East Pakistan, but the thaw in In the following eight years, India voiced increas- relations did not last long, primarily owing to the ing concern over Pakistani arms purchases, U.S. Kashmir dispute. military aid to Pakistan, and a clandestine Pakistan's nuclear weapons programme. In an ef- Bangladesh Liberation War: Pakistan, since inde- fort to curtail tensions, the two countries formed pendence, was geo-politically divided into two a joint commission to examine disputes. In De- major regions, West Pakistan and East Pakistan. cember 1988, Prime Ministers Benazir Bhutto and East Pakistan was occupied mostly by Bengali Rajiv Gandhi concluded a pact not to attack each people. In December 1971, following a political other's nuclear facilities. Agreements on cultural crisis in East Pakistan, the situation soon spiralled exchanges and civil aviation were also initiated. out of control in East Pakistan and India inter- In 1997, high-level Indo-Pakistan talks resumed vened in favour of the rebelling Bengali populace. after a three-year pause. The Prime Ministers of The conflict, a brief but bloody war, resulted in Pakistan and India met twice and the foreign sec- an independence of East Pakistan. In the war, the retaries conducted three rounds of talks. In June Pakistani army swiftly fell to India, forcing the 1997, the foreign secretaries identified eight "out- independence of East Pakistan, which separated standing issues" around which continuing talks and became Bangladesh. The Pakistani military, would be focused. The dispute over the status of being a thousand miles from its base and sur- Kashmir, (referred by India as Jammu and Kash- rounded by enemies, was forced to give in. mir), an issue since Independence, remains the major stumbling block in their dialogue. India Simla Agreement: Since the 1971 war, Pakistan maintains that the entire former princely state is and India have made only slow progress towards an integral part of the Indian union, while Paki- the normalisation of relations. In July 1972, In- stan insists that UN resolutions calling for self- dian Prime Minister Indira Gandhi and Pakistani determination of the people of the state/province President Zulfikar Ali Bhutto met in the Indian must be taken into account. It however refuses to hill station of Simla. They signed the Simla Agree- abide by the previous part of the resolution, which ment, by which India would return all Pakistani calls for it to vacate all territories occupied. personnel (over 90,000) and captured territory in the west, and the two countries would "settle their In September 1997, the talks broke down over the differences by peaceful means through bilateral structure of how to deal with the issues of Kash- negotiations." Diplomatic and trade relations were mir, and peace and security. Pakistan advocated also re-established in 1976. that the issues be treated by separate working groups. India responded that the two issues be Afghanistan crisis: After the 1979 Soviet war in taken up along with six others on a simultaneous Afghanistan, new strains appeared in Indo-Paki- Copyright © 2009 | WWW.UPSCPORTAL.COM 85
    • Section -6 (Mains Special: Foreign Relations of India) basis. In May 1998 India, and then Pakistan, con- India's Border Security Force blamed the Pakistani ducted nuclear tests. military for providing cover-fire for the terrorists whenever they infiltrated into Indian territory Samjhauta Express bombings & 2008 Mumbai from Pakistan. Pakistan has in turn has also blamed attacks : The 2007 Samjhauta Express bombings India for providing support for terrorist groups was a terrorist attack targeted on the Samjhauta inside Pakistan such as the MQM Express train on the 18th of February.The 2008 Mumbai attacks by ten terrorists killed over 173 In 2005, Pakistan's information minister, Sheikh and wounded 308. India blamed the Lashkar-e- Rashid, was alleged to have run a terrorist train- Taiba, a Pakistan-based Welfare group, for plan- ing camp in 1990 in N.W. Frontier, Pakistan. The ning and executing the attacks. Islamabad resisted Pakistani government dismissed the charges the claims and demanded evidence. India provided against its minister as an attempt to hamper the evidence in the form of interrogations, ongoing peace process between the two weapons,candy wrappers, Pakistani Brand Milk neighbours. Packets, and telephone sets . Indian officials de- manded Pakistan extradite suspects for trial. They Both India and Pakistan have launched several also said that, given the sophistication of the at- mutual confidence-building measures (CBMs) to tacks, the perpetrators "must have had the sup- ease tensions between the two. These include port of some official agencies in Pakistan". more high-level talks, easing visa restrictions, re- starting of cricket matches between the two. The Terrorist acts in Jammu and Kashmir: Kashmiris new bus service between Srinagar and Attacks on Jammu & Kashmir State Assembly: Muzaffarabad has also helped bring the two sides A car bomb exploded near the Jammu and Kash- closer. Pakistan and India have also decided to co- mir State Assembly on October 1, 2001, killing 27 operate on economic fronts. people on an attack that was blamed on Kashmiri separatists. It was one of the most prominent at- A major clash between Indian Security Forces and tacks against India apart from on the Indian Par- militants occurred when a group of insurgents liament in December 2001. The dead bodies of the tried to infiltrate into the Indian-administered terrorists and the data recovered from them re- Kashmir from Pakistan in July 2005. The same vealed that Pakistan was solely responsible for the month, also saw Kashmiri militant attack on activity. Ayodhya and Srinagar. However, these develop- ments had little impact on the peace process. Some Developments since 2004: Violent activities in improvements in the relations are seen with the the region declined in 2004. There are two main re-opening of a series of transportation networks reasons for this: warming of relations between near the India-Pakistan border, with the most New Delhi and Islamabad which consequently important being bus routes and railway lines. lead to a ceasefire between the two countries in 2003 and the fencing of the LOC being carried An Indian man held in Pakistani prisons since 1975 out by the Indian Army. Moreover, coming un- as an accused spy walked across the border to free- der intense international pressure, Islamabad was dom March 3, 2008, an unconditional release that compelled to take actions against the militant's Pakistan said was meant to reduce the deep-rooted training camps on its territory. In 2004, the two enmity between the countries. countries also agreed upon decreasing the num- ber of troops present in the region. Under pres- Re-evaluation: The insurgents who initially sure, Kashmiri militant organisations have made started their movement as a pro-Kashmiri inde- an offer for talks and negotiations with New Delhi, pendence movement, have gone through a lot of which India has welcomed. change in their ideology. Most of the insurgents portray their struggle as a religious one. Copyright © 2009 | WWW.UPSCPORTAL.COM 86
    • Section -6 (Mains Special: Foreign Relations of India) Indian analysts allege that by supporting these in- surgents, Pakistan is trying to wage a proxy war India – Sri Lanka Relations against India while Pakistan claims that it regards most of these insurgent groups as "freedom fight- Bilateral relations between the Democratic Social- ers" rather than terrorists ist Republic of Sri Lanka and the Republic of In- dia have been generally friendly, but were con- Internationally known to be the most deadly the- troversially affected by the Sri Lankan civil war atre of conflict, nearly 10 million people, includ- and by the failure of Indian intervention during ing Muslims, Hindus, and Buddhists, have been the war. India is the only neighbour of Sri Lanka, fighting a daily battle for survival. The cross-bor- separated by the Palk Strait; both nations occupy der firing between India and Pakistan, and the a strategic position in South Asia and have sought terrorist attacks combined have taken its toll on to build a common security umbrella in the In- the Kashmiris, who have suffered poor living stan- dian Ocean. dards and an erosion of human rights. The two largest ethnic groups of Sri Lanka are Kargil crisis: Attempts to restart dialogue between Sinhala and Tamil. Sinhalese descend from North the two nations were given a major boost by the India, and Tamils are the majority ethnic group February 1999 meeting of both Prime Ministers in the Indian state of Tamil Nadu. in Lahore and their signing of three agreements. These efforts have since been stalled by the intru- Development of bilateral relations: India and Sri sion of Pakistani forces into Indian territory near Lanka established diplomatic relations when the Kargil in Jammu and Kashmir in May 1999. This latter gained its independence in 1948. Both na- resulted in intense fighting between Indian and tions proceeded to establish extensive cultural, Pakistani forces, known as the Kargil conflict. commercial, strategic and defence ties to estab- Backed by the Indian Air Force, the Indian Army lish a common sphere of influence in the region, successfully regained Kargil. A subsequent mili- adopting non-alignment to control Western and tary coup in Pakistan that overturned the demo- Soviet influence. The close relationship between cratically elected Nawaz Sharif government in the then-Indian Prime Minister Indira Gandhi and October of the same year also proved a setback to then-Sri Lankan Prime Minister Sirimavo relations. Bandaranaike led to the development of strong bilateral relations. In 1971, Indian armed forces In 2001, a summit was called in Agra; Pakistani helped squash a Communist rebellion against the President Pervez Musharraf turned up to meet Sri Lankan government. Indian Prime Minister Atal Behari Vajpayee. The talks fell through. Indian intervention in the Sri Lankan civil war: In the 1980s, private entities and elements in the On June 20, 2004, with a new government in place state government of Tamil Nadu were believed to in India, both countries agreed to extend a nuclear be encouraging the funding and training for the testing ban and to set up a hotline between their Liberation Tigers of Tamil Eelam, a separatist in- foreign secretaries aimed at preventing misunder- surgent force. In 1987, faced with growing anger standings that might lead to a nuclear war. amongst its own Tamils, and a flood of refugees, India intervened directly in the conflict for the India has granted Pakistan unilateral "most first time after the Sri Lankan government at- favoured nation" trade status under WTO guide- tempted to regain control of the northern Jaffna lines, but Pakistan is yet to reciprocate. As of early region by means of an economic blockade and 2005, both countries are committed to a process military assaults, India supplied food and medi- of dialogue to solve all outstanding issues. Baglihar cine by air and sea. After subsequent negotiations, Dam issue was a new issue raised by Pakistan in 2005. Copyright © 2009 | WWW.UPSCPORTAL.COM 87
    • Section -6 (Mains Special: Foreign Relations of India) India and Sri Lanka entered into an agreement. LTTE operations made it extremely unpopular The peace accord assigned a certain degree of re- amongst many Tamils in Sri Lanka. The conflict gional autonomy in the Tamil areas with Eelam between the LTTE and the Indian Army left over People's Revolutionary Liberation Front (EPRLF) 1,000 Indian soldiers dead. controlling the regional council and called for the Tamil militant groups to lay down their arms. The Indo-Sri Lankan Accord, which had been un- Further India was to send a peacekeeping force, popular amongst Sri Lankans for giving India a named the IPKF to Sri Lanka to enforce the disar- major influence, now became a source of nation- mament and to watch over the regional council. alist anger and resentment as the IPKF was drawn Even though the accord was signed between the fully into the conflict. Sri Lankans protested the governments of Sri Lanka and India, with the presence of the IPKF, and the newly-elected Sri Tamil Tigers and other Tamil militant groups not Lankan president Ranasinghe Premadasa de- having a role in the signing of the accord, most manded its withdrawal, which was completed by Tamil militant groups accepted this agreement, the March 1990. on May 21, 1992, Rajiv Gandhi was LTTE rejected the accord because they opposed assassinated and the LTTE was alleged to be the the candidate, who belonged to another militant perpetrator. As a result India declared the LTTE group named Eelam Peoples Revolutionary Lib- to be a terrorist outfit in 1992. Bilateral relations eration Front (EPRLF), for chief administrative improved in the 1990s and India supported the officer of the merged Northern and Eastern prov- peace process but has resisted calls to get involved inces. Instead the LTTE named three other can- again. India has also been wary of and criticised didates for the position. The candidates proposed the extensive military involvement of Pakistan in by the LTTE were rejected by India. The LTTE the conflict, accusing the latter of supplying le- subsequently refused to hand over their weapons thal weaponry and encouraging Sri Lanka to pur- to the IPKF. sue military action rather than peaceful negotia- tions to end the civil war. The result was that the LTTE now found itself engaged in military conflict with the Indian Army, Commercial ties: India and Sri Lanka are mem- and launched their first attack on an Indian army ber nations of several regional and multilateral rations truck on October 8, killing five Indian para- organisations such as the South Asian Association commandos who were on board by strapping for Regional Cooperation (SAARC), South Asia burning tires around their necks. The government Co-operative Environment Programme, South of India then decided that the IPKF should dis- Asian Economic Union and BIMSTEC, working arm the LTTE by force, and the Indian Army to enhance cultural and commercial ties. Since a launched number of assaults on the LTTE, includ- bilateral free trade agreement was signed and came ing a month-long campaign dubbed Operation into effect in 2000, Indo-Sri Lankan trade rose Pawan to win control of the Jaffna peninsula from 128% by 2004 and quadrupled by 2006, reaching the LTTE. When the IPKF engaged the LTTE, the USD 2.6 billion. Between 2000 and 2004, India's then president of Sri Lanka, Ranasinghe exports to Sri Lanka in the last four years increased Premadasa, began supporting LTTE and funded by 113%, from USD 618 million to $1,319 million LTTE with arms. while Sri Lankan exports to India increased by 342%, from $44 million to USD $194 million. In- During the warfare with the ltte IPKF was also dian exports account for 14% of Sri Lanka’s global alleged for human rights violation against the ci- imports. India is also the fifth largest export des- vilians. Notably, IPKF was alleged to have perpe- tination for Sri Lankan goods, accounting for 3.6% trated Jaffna teaching hospital massacre which was of its exports. Both nations are also signatories of the killing of over 70 civilians including patients, the South Asia Free Trade Agreement (SAFTA). doctors and nurses. The ruthlessness of this cam- Negotiations are also underway to expand the free paign, and the Indian army's subsequent anti- Copyright © 2009 | WWW.UPSCPORTAL.COM 88
    • Section -6 (Mains Special: Foreign Relations of India) trade agreement to forge stronger commercial re- to the fishermen in the East of Sri Lanka and solar lations and increase corporate investment and ven- energy aided computer education in 25 rural tures in various industries. schools in Eastern Sri Lanka are under consider- ation. India's National Thermal Power Corp (NTPC) is also scheduled to build a 500 MW thermal power Health Projects: We have supplied medical equip- plant in Sampoor (Sampur). The NTPC claims that ments to hospitals at Hambantota and Point Pedro, the this plan will take the Indo-Srilankan rela- supplied 4 state of the art ambulances to the Cen- tionship to new level. tral Province, implemented a cataract eye surgery programme for 1500 people in the Central Prov- Fishermen Issue: There have been several inci- ince and implemented a project of renovation of dents of firing on Indian fishermen fishing in Palk OT at Dickoya hospital and supplying equipment Bay.Indian Government has always taken up the to it. issue of safety of Indian fishermen on a priority basis with the Government of Sri Lanka. Presently The projects under consideration are: Construc- there is no bona fide Indian fisherman in the Sri tion of a 150-bed hospital at Dickoya, upgradation Lankan custody. A Joint Working Group (JWG) of the hospital at Trincomalee and a US$ 7.5 mil- has been constituted to deal with the issues re- lion grant for setting up a Cancer Hospital in Co- lated to Indian fishermen straying in Sri Lankan lombo. Upgradation of the educational infrastruc- territorial waters, work out modalities for preven- ture of the schools in the Central province includ- tion of use of force against them and the early ing teachers’ training, setting up of 10 computer release of confiscated boats and explore possibili- labs, setting up of 20 e-libraries (Nenasalas), Ma- ties of working towards bilateral arrangements for hatma Gandhi scholarship scheme for +2 students licensed fishing. The JWG last met in Jan 2006. and setting up of a vocational training centre in Development Cooperation: India is active in a Puttalam. India also contributes to the Ceylon number of areas of development activity in Sri Workers Education Trust that gives scholarships Lanka. About one-sixth of the total development to the children of estate workers. credit granted by GOI is made available to Sri Lanka. Training: A training programme for 465 Sri Lankan Police officers has been commenced in Dec Lines of credit: In the recent past three lines of 2005. Another 400 Sri Lankan Police personnel credit were extended to Sri Lanka: US$ 100 mil- are being trained for the course of ‘Maintenance lion for capital goods, consumer durables, of Public Order’. consultancy services and food items, US$ 31 mil- lion for supply of 300,000 MT of wheat and US$ Relation with Other Countries:- 150 million for purchase of petroleum products. All of these lines of credit have been fully uti- China -Indian relations lized. Another line of credit of US$ 100 million is now being made available for rehabilitation of the China-India relations, refer to the ties and rela- Colombo-Matara railway. tions between China and India. The economic and diplomatic importance of People's Republic of A number of development projects are imple- China (PRC) and the Republic of India, which are mented under ‘Aid to Sri Lanka’ funds. In 2006- the two most populous states in the world, as 07, the budget for ‘Aid to Sri Lanka’ was Rs 28.2 emerging economies, has in recent years increased Crs. the significance of their bilateral relationship. They are emerging not only as world powers but Small Development Projects: A MoU on Coop- are forecast to rival the US in the coming decades eration in Small Development Projects has been in economic and military might. Historical rela- signed. Projects for providing fishing equipments Copyright © 2009 | WWW.UPSCPORTAL.COM 89
    • Section -6 (Mains Special: Foreign Relations of India) tions between Beijing and New Delhi can most Soviet Socialist Republics and the alliance systems accurately be described as being controversial at which dominated by the two superpowers. best. Their relationship has undergone times of both war and peace. It has been characterized by On October 1, 1949 the People’s Liberation Army both border disputes, resulting in military con- defeated the Kuomintang (Nationalist Party) of flict, and by economic cooperation. Both coun- China in a civil war and established the People's tries, despite their belligerent mutual histories, Republic of China. On August 15, 1947, India be- have in recent years attempted to reignite diplo- came an independent dominion under British matic, military and economic ties. Commonwealth and became a federal, democratic republic after its constitution came into effect on Geographical overview: China and India are sepa- January 26, 1950. Mao Zedong, the Commander rated by the formidable geographical obstacles of of the Liberation Army and the Chairman of the the Tibetan Plateau and the Himalayan mountain Communist Party of China viewed Tibet as an chain, with Tibet serving as a buffer region be- integral part of the Chinese State. Mao was deter- tween the two. China and India today share a mined to bring Tibet under direct administrative border along the Himalayas and Nepal and Bhutan, and military control of People’s Republic of China two states lying along the Himalaya range, and and saw Indian concern over Tibet as a manifes- acting as buffer states. In addition, the disputed tation of the Indian Government in the internal Kashmir province (jointly claimed by India and affairs of the People’s Republic of China. The PRC Pakistan) borders both the PRC and India. As Pa- sought to reassert control over Tibet and to end kistan has tense relations with India, Kashmir's Lamaism (Tibetan Buddhism) and feudalism, state of unrest serves as a natural ally to the PRC. which it did by force of arms in 1950. To avoid Two territories are currently disputed between the antagonizing the People's Republic of China, People's Republic of China and India: Aksai Chin Nehru informed Chinese leaders that India had and Arunachal Pradesh. Arunachal Pradesh is lo- neither political nor territorial ambitions, nor did cated near the far east of India, while Aksai Chin it seek special privileges in Tibet, but that tradi- is located near the northwest corner of India, at tional trading rights must continue. With Indian the junction of India, Pakistan, and the PRC. How- support, Tibetan delegates signed an agreement ever, all sides in the dispute have agreed to re- in May 1951 recognizing PRC sovereignty but spect the Line of Actual Control and this border guaranteeing that the existing political and social dispute is not widely seen as a major flashpoint. system of Tibet would continue. Direct negotia- Jawaharlal Nehru based his vision of "resurgent tions between India and the PRC commenced in Asia" on friendship between the two largest states an atmosphere improved by India's mediation ef- of Asia; his vision of an internationalist foreign forts in ending the Korean War (1950-1953). policy governed by the ethics of the Panchsheel, which he initially believed was shared by China, Meanwhile, India was the 16th state to establish came to grief when it became clear that the two diplomatic relations with the People's Republic countries had a conflict of interest in Tibet, which of China, and did so on April 1, 1950. had traditionally served as a geographical and po- litical buffer zone, and where India believed it had In April 1954, India and the PRC signed an eight- inherited special privileges from the British Raj. year agreement on Tibet that set forth the basis of However, the initial focus of the leaders of both their relationship in the form of the Five Prin- the nations was not the foreign policy, but the ciples of Peaceful Coexistence (or Panch Shila). internal development of their respective states. Although critics called the Panch Shila naive, When they did concentrate on the foreign poli- Nehru calculated that in the absence of either the cies, their concern wasn’t one another, but rather wherewithal or a policy for defense of the Hima- the United States of America and the Union of layan region, India's best guarantee of security was Copyright © 2009 | WWW.UPSCPORTAL.COM 90
    • Section -6 (Mains Special: Foreign Relations of India) to establish a psychological buffer zone in place short border war between the People's Republic of the lost physical buffer of Tibet. Thus the catch of China and India in 20 October 1962. The PRC phrase of India's diplomacy with China in the pushed the unprepared and inadequately led In- 1950s was Hindi-Chini bhai-bhai, which means, dian forces to within forty-eight kilometres of the in Hindi, "Indians and Chinese are brothers". Up Assam plains in the northeast and occupied stra- until 1959, despite border skirmishes and discrep- tegic points in Ladakh, until the PRC declared a ancies between Indian and Chinese maps, Chinese unilateral cease-fire on 21 November and with- leaders amicably had assured India that there was drew twenty kilometers behind its contended line no territorial controversy on the border though of control. there is some evidence that India avoided bring- ing up the border issue in high level meetings. At the time of Sino-Indian border conflict, a se- vere political split was taking place in the Com- In 1954, India published new maps that included munist Party of India. One section was accused the Aksai Chin region within the boundaries of by the Indian government as being pro-PRC, and India (maps published at the time of India's inde- a large number of political leaders were jailed. pendence did not clearly indicate whether the Subsequently, CPI split with the leftist section region was in India or Tibet). When an Indian forming the Communist Party of India (Marxist) reconnaissance party discovered a completed Chi- in 1964. CPI(M) held some contacts with the Com- nese road running through the Aksai Chin region munist Party of China in the initial period after of the Ladakh District of Jammu and Kashmir, the split, but did not fully embrace the political border clashes and Indian protests became more line of Mao Zedong. frequent and serious. In January 1959, PRC pre- mier Zhou Enlai wrote to Nehru, rejecting Nehru's Relations between the PRC and India deteriorated contention that the border was based on treaty during the rest of the 1960s and the early 1970s as and custom and pointing out that no government Sino-Pakistani relations improved and Sino-Soviet in China had accepted as legal the McMahon Line, relations worsened. The PRC backed Pakistan in which in the 1914 Simla Convention defined the its 1965 war with India. Between 1967 and 1971, eastern section of the border between India and an all-weather road was built across territory Tibet. The Dalai Lama, spiritual and temporal head claimed by India, linking PRC's Xinjiang Uyghur of the Tibetan people, sought sanctuary in Autonomous Region with Pakistan; India could Dharmsala, Himachal Pradesh, in March 1959, and do no more than protest. The PRC continued an thousands of Tibetan refugees settled in north- active propaganda campaign against India and sup- western India, particularly in Himachal Pradesh. plied ideological, financial, and other assistance The People's Republic of China accused India of to dissident groups, especially to tribes in north- expansionism and imperialism in Tibet and eastern India. The PRC accused India of assisting throughout the Himalayan region. China claimed the Khampa rebels in Tibet. Diplomatic contact 104,000 km² of territory over which India's maps between the two governments was minimal al- showed clear sovereignty, and demanded "rectifi- though not formally severed. The flow of cultural cation" of the entire border. and other exchanges that had marked the 1950s ceased entirely. The flourishing wool, fur and spice Zhou proposed that China relinquish its claim to trade between Lhasa and India through the most of India's northeast in exchange for India's Nathula Pass, an offshoot of the ancient Silk Road abandonment of its claim to Aksai Chin. The In- in the then Indian protectorate of Sikkim was also dian government, constrained by domestic public severed. However, the biweekly postal network opinion, rejected the idea of a settlement based through this pass was kept alive, which exists till on uncompensated loss of territory as being hu- today. miliating and unequal. In late 1967, there were two skirmishes between China-India War: Border disputes resulted in a Copyright © 2009 | WWW.UPSCPORTAL.COM 91
    • Section -6 (Mains Special: Foreign Relations of India) Indian and Chinese forces in Sikkim. The first one awarded Vir Chakras to Rifleman Limbu (post- was dubbed the "Nathu La incident", and the other humous) and battalion commander Major K.B. the "Chola incident". Prior to these incidents had Joshi for their gallant actions. The extent of Chi- been the Naxalbari uprising in India by the Com- nese casualties in this skirmish is also not known. munist Naxalites and Maoists. In August 1971, India signed its Treaty of Peace, Friendship, and Cooperation with the Soviet In 1967 a peasant uprising broke out in Naxalbari, Union, and the United States and the PRC sided led by pro-Maoist elements. A pronunciation by with Pakistan in its December 1971 war with In- Mao titled "Spring Thunder over India" gave full dia. By this time, the PRC had just replaced the moral support for the uprising. The support for Republic of China in the UN where its represen- the revolt marked the end for the relations be- tatives denounced India as being a "tool of Soviet tween CPC and CPI(M). Naxalbari-inspired com- expansionism." munists organized armed revolts in several parts of India, and in 1969 they formed the Communist India and the PRC renewed efforts to improve re- Party of India (Marxist-Leninist). However, as the lations after the Soviet Union invaded Afghani- naxalite movement disintegrated in various splits, stan in December 1979. The PRC modified its pro- the PRC withdrew its political support and turned Pakistan stand on Kashmir and appeared willing non-committal towards the various Indian groups. to remain silent on India's absorption of Sikkim On 11 September 1967, troops of the Indian and its special advisory relationship with Bhutan. Army's 18th Rajput Regiment were protecting an The PRC's leaders agreed to discuss the boundary Engineering Company that was fencing the North issue, India's priority, as the first step to a broad- Shoulder of Nathula, when Chinese troops opened ening of relations. The two countries hosted each fire on them. This escalated over the next five days others' news agencies, and Mount Kailash and to an exchange of heavy artillery and mortar fire Mansarowar Lake in Tibet, the mythological home between the Indians and the Chinese. 62 Indian of the Hindu pantheon, were opened to annual soldiers, from the 18th Rajput, the 2nd Grena- pilgrimages from India. diers and the Artillery regiments were killed. Major Harbhajan Singh of the Rajput Regiment In 1981 PRC minister of foreign affairs Huang Hua was awarded a MVC (posthumous) and Naib was invited to India, where he made complimen- Subedar Pandey a VrC (posthumous) for their gal- tary remarks about India's role in South Asia. PRC lant actions. The extent of Chinese casualties in premier Zhao Ziyang concurrently toured Paki- this incident is not known. stan, Nepal, and Bangladesh. In 1980, Indian Prime Minister Indira Gandhi ap- In the second, on 1 October 1967, a group of In- proved a plan to upgrade the deployment of forces dian Gurkha Rifles soldiers (from the 7th Battal- around the Line of Actual Control to avoid uni- ion of the 11th Regiment) noticed Chinese troops lateral redefinitions of the line. India also increased surrounding a sentry post near a boulder at the funds for infrastructural development in these Chola outpost in Sikkim. After a heated argument areas. over the control of the boulder, a Chinese soldier bayoneted a Gurkha rifleman, triggering the start In 1984, squads of Indian soldiers began actively of a close-quarters knife and fire-fight, which then patrolling the Sumdorong Chu Valley in escalated to a mortar and HMG duel. The Chinese Arunachal Pradesh (formerly NEFA), which is troops signaled a ceasefire after three hours of north of the McMahon Line as drawn on the Simla fighting, but later scaled Point 15450 to establish Treaty map but south of the ridge which Indian themselves there. The Gurkhas outflanked them claims is meant to delineate the McMahon Line. the next day to regain Point 15450 and the Chi- The Sumdorong Chu valley "seemed to lie to the nese retreated across the LAC. 21 Indian soldiers north of the McMahon line; but is south of the were killed in this action. The Indian government highest ridge in the area, and the McMahon line Copyright © 2009 | WWW.UPSCPORTAL.COM 92
    • Section -6 (Mains Special: Foreign Relations of India) is meant to follow the highest points" according A warming trend in relations was facilitated by to the Indian claims, while the Chinese did not Rajiv Gandhi's visit to China in December 1988. recognize the McMahon Line as legitimate and The two sides issued a joint communiqué that were not prepared to accept an Indian claim line stressed the need to restore friendly relations on even further north than that. The Indian team the basis of the Panch Shila and noted the impor- left the area before the winter. In the winter of tance of the first visit by an Indian prime minister 1986, the Chinese deployed their troops to the to China since Nehru's 1954 visit. India and the Sumdorong Chu before the Indian team could ar- People's Republic of China agreed to broaden bi- rive in the summer and built a Helipad at lateral ties in various areas, working to achieve a Wandung. Surprised by the Chinese occupation, "fair and reasonable settlement while seeking a India's then Chief of Army Staff, General mutually acceptable solution" to the border dis- K.Sundarji, airlifted a brigade to the region. pute. The communiqué also expressed China's con- cern about agitation by Tibetan separatists in In- Chinese troops could not move any further into dia and reiterated China's position that Tibet was the valley and were forced to move sideways along an integral part of China and that anti-China po- the Thag La ridge, away from the valley. By 1987, litical activities by expatriate Tibetans was not to Beijing's reaction was similar to that in 1962 and be tolerated. Rajiv Gandhi signed bilateral agree- this prompted many Western diplomats to pre- ments on science and technology cooperation, on dict war. However, Indian foreign minister N.D. civil aviation to establish direct air links, and on Tiwari and Prime Minister Rajiv Gandhi travelled cultural exchanges. The two sides also agreed to to Beijing over the following months to negotiate hold annual diplomatic consultations between for- a mutual de-escalation. eign ministers, and to set up a joint ministerial committee on economic and scientific coopera- After the Huang visit, India and the PRC held tion and a joint working group on the boundary eight rounds of border negotiations between De- issue. The latter group was to be led by the Indian cember 1981 and November 1987. These talks ini- foreign secretary and the Chinese vice minister of tially raised hopes that progress could be made on foreign affairs. the border issue. However, in 1985 the PRC stiff- ened its position on the border and insisted on As the mid-1990s approached, slow but steady im- mutual concessions without defining the exact provement in relations with China was visible. terms of its "package proposal" or where the ac- Top-level dialogue continued with the December tual line of control lay. In 1986 and 1987, the ne- 1991 visit of PRC premier Li Peng to India and gotiations achieved nothing, given the charges the May 1992 visit to China of Indian president exchanged between the two countries of military R. Venkataraman. Six rounds of talks of the In- encroachment in the Sumdorung Chu Valley of dian-Chinese Joint Working Group on the Bor- the Tawang tract on the eastern sector of the bor- der Issue were held between December 1988 and der. China's construction of a military post and June 1993. Progress was also made in reducing helicopter pad in the area in 1986 and India's grant tensions on the border via confidence-building of statehood to Arunachal Pradesh (formerly the measures, including mutual troop reductions, North-East Frontier Agency) in February 1987 regular meetings of local military commanders, caused both sides to deploy new troops to the area, and advance notification of military exercises. raising tensions and fears of a new border war. Border trade resumed in July 1992 after a hiatus The PRC relayed warnings that it would "teach of more than thirty years, consulates reopened in India a lesson" if it did not cease "nibbling" at Chi- Bombay (Mumbai) and Shanghai in December nese territory. By the summer of 1987, however, 1992, and, in June 1993, the two sides agreed to both sides had backed away from conflict and de- open an additional border trading post. During nied that military clashes had taken place. Sharad Pawar's July 1992 visit to Beijing, the first ever by an Indian minister of defence, the two Copyright © 2009 | WWW.UPSCPORTAL.COM 93
    • Section -6 (Mains Special: Foreign Relations of India) defense establishments agreed to develop aca- The 1993 Chinese military visit to India was re- demic, military, scientific, and technological ex- ciprocated by Indian army chief of staff General changes and to schedule an Indian port call by a B. C. Joshi. During talks in Beijing in July 1994, Chinese naval vessel. the two sides agreed that border problems should be resolved peacefully through "mutual under- Substantial movement in relations continued in standing and concessions." The border issue was 1993. The sixth-round joint working group talks raised in September 1994 when PRC minister of were held in June in New Delhi but resulted in national defense Chi Haotian visited New Delhi only minor developments. However, as the year for extensive talks with high-level Indian trade progressed the long-standing border dispute was and defense officials. Further talks in New Delhi eased as a result of bilateral pledges to reduce troop in March 1995 by the India-China Expert Group levels and to respect the cease-fire line along the led to an agreement to set up two additional points India-China border. Prime Minister Narasimha of contact along the 4,000 km border to facilitate Rao and Premier Li Peng signed the border agree- meetings between military personnel. The two ment and three other agreements (on cross-bor- sides also were reported as "seriously engaged" in der trade, and on increased cooperation on the defining the McMahon Line and the line of actual environment and in radio and television broad- control vis-à-vis military exercises and prevention casting) during the former's visit to Beijing in Sep- of air intrusion. Talks in Beijing in July 1995 aimed tember. at better border security and combating cross-bor- der crimes and in New Delhi in August 1995 on A senior-level Chinese military delegation made additional troop withdrawals from the border a six-day goodwill visit to India in December 1993 made further progress in reducing tensions. aimed at "fostering confidence-building measures between the defense forces of the two countries." Possibly indicative of the further relaxation of The visit, however, came at a time when press India-China relations, at least there was little no- reports revealed that, as a result of improved rela- tice taken in Beijing, was the April 1995 announce- tions between the PRC and Burma, China was ment, after a year of consultation, of the opening exporting greater amounts of military matériel to of the Taipei Economic and Cultural Center in Burma's army, navy, and air force and sending an New Delhi. The center serves as the representa- increasing number of technicians to Burma. Of tive office of the Republic of China (Taiwan) and concern to Indian security officials was the pres- is the counterpart of the India-Taipei Association ence of Chinese radar technicians in Burma's Coco in Taiwan; both institutions have the goal of im- Islands, which border India's Union Territory of proving relations between the two sides, which the Andaman and Nicobar Islands. Nevertheless, have been strained since New Delhi's recognition movement continued in 1994 on troop reductions of Beijing in 1950. along the Himalayan frontier. Moreover, in Janu- ary 1994 Beijing announced that it not only fa- Sino-Indian relations hit a low point in 1998 fol- vored a negotiated solution on Kashmir, but also lowing India's nuclear tests in May. Indian De- opposed any form of independence for the region. fense Minister George Fernandes declared that "China is India's number one threat", hinting that Talks were held in New Delhi in February 1994 India developed nuclear weapons in defense aimed at confirming established "confidence- against China's nuclear arsenal. In 1998, China was building measures" and discussing clarification of one of the strongest international critics of India's the "line of actual control", reduction of armed nuclear tests and entry into the nuclear club. Re- forces along the line, and prior information about lations between India and China stayed strained forthcoming military exercises. China's hope for until the end of the decade. settlement of the boundary issue was reiterated. With Indian President K. R. Narayanan's visit to Copyright © 2009 | WWW.UPSCPORTAL.COM 94
    • Section -6 (Mains Special: Foreign Relations of India) China, 2000 marked a gradual re-engagement of Indian relationship is based on the energy require- Indian and Chinese diplomacy. In a major embar- ments of their industrial expansion and their readi- rassment for China, the 17th Karmapa, Urgyen ness to proactively secure them by investing in Trinley Dorje, who was proclaimed by China, the oilfields abroad - in Africa, the Middle East made a dramatic escape from Tibet to the Rumtek and Central Asia. On the one hand, these ven- Monastery in Sikkim. Chinese officials were in a tures entail competition (which has been evident quandary on this issue as any protest to India on in oil biddings for various international projects the issue would mean an explicit endorsement on recently). But on the other hand, a degree of co- India's governance of Sikkim, which the Chinese operation too is visible, as they are increasingly still hadn't recognised. In 2002, Chinese Premier confronting bigger players in the global oil mar- Zhu Rongji reciprocated by visiting India, with a ket. This cooperation was sealed in Beijing on Janu- focus on economic issues. 2003 ushered in a ary 12, 2006 during the visit of Petroleum and marked improvement in Sino-Indian relations fol- Natural Gas Minister Mani Shankar Aiyar, who lowing Indian Prime Minister Atal Bihari signed an agreement which envisages ONGC Vajpayee's landmark June 2003 visit to China. Videsh Ltd (OVL) and the China National Petro- China officially recognized Indian sovereignty leum Corporation (CNPC) placing joint bids for over Sikkim as the two nations moved toward re- promising projects elsewhere. This may have im- solving their border disputes. portant consequences for their international rela- tions. 2004 also witnessed a gradual improvement in the international area when the two countries pro- On July 6, 2006, China and India re-opened posed opening up the Nathula and Jelepla Passes Nathula, an ancient trade route which was part of in Sikkim which would be mutually beneficial to the Silk Road. Nathula is a pass through the both countries. 2004 was a milestone in Sino-In- Himalayas and it was closed 44 years prior to 2006 dian bilateral trade, surpassing the $10 billion mark when the Sino-Indian War broke out in 1962. The for the first time. In April 2005, Chinese Premier initial agreement for the re-opening of the trade Wen Jiabao visited Bangalore to push for increased route was reached in 2003, and a final agreement Sino-Indian cooperation in high-tech industries. was formalized on June 18th, 2006. Officials say In a speech, Wen stated "Cooperation is just like that the re-opening of border trade will help ease two pagodas (temples), one hardware and one soft- the economic isolation of the region. In Novem- ware. Combined, we can take the leadership po- ber 2006, China and India had a verbal spat over sition in the world." Wen stated that the twenty- claim of the north-east Indian state of Arunachal first century will be "the Asian century of the IT Pradesh. India claimed that China was occupying industry." The high-level visit was also expected 38,000 square kilometres of its territory in Kash- to produce several agreements to deepen politi- mir, while China claimed the whole of Arunachal cal, cultural and economic ties between the two Pradesh as its own. In May 2007, China denied nations. Regarding the issue of India gaining a the application for visa from an Indian Adminis- permanent seat on the UN Security Council, on trative Service officer in Arunachal Pradesh. Ac- his visit, Wen Jiabao initially seemed to support cording to China, since Arunachal Pradesh is a the idea, but had returned to a neutral position on territory of China, he would not need a visa to the subject by the time he returned to China. In visit his own country. Later in December 2007, the South Asian Association for Regional Coop- China appeared to have reversed its policy by eration (SAARC) Summit (2005) China was granting a visa to Marpe Sora, an Arunachal born granted an observer status. While other countries professor in computer science. In January 2008, in the region are ready to consider China for per- Prime Minister Manmohan Singh visited China manent membership in the SAARC, India seems and met with President Hu Jintao and Premier reluctant. Wen Jiabao and had bilateral discussions related A very important dimension of the evolving Sino- Copyright © 2009 | WWW.UPSCPORTAL.COM 95
    • Section -6 (Mains Special: Foreign Relations of India) to trade, commerce, defense, military, and vari- from World War II devastation, and following ous other issues. In July 2008, at the 34th G8 sum- Japanese Prime Minister Nobusuke Kishi's visit to mit in Japan, Hu Jintao and Manmohan Singh had India in 1957, Japan started providing yen loans a friendly meeting. In the wake of the 2008 to India in 1958, as the first yen loan aid extended Sichuan earthquake, India offered aid to help the by Japanese government. Relations between the earthquake victims. two nations were constrained, however, by Cold Until 2008 the British Government's position re- War politics. Japan, as a result of World War II mained the same as had been since the Simla Ac- reconstruction, was a U.S. ally, while India pur- cord of 1913: that China held suzerainty over Ti- sued a non-aligned foreign policy. Since the 1980s, bet but not sovereignty. Britain revised this view however, efforts were made to strengthen bilat- on 29 October 2008, when it recognised Chinese eral ties. India’s ‘Look East’ policy posited Japan sovereignty over Tibet by issuing a statement on as a key partner. Since 1986, Japan has become its website. The Economist stated that although India's largest aid donor, and remains so. the British Foreign Office's website does not use the word sovereignty, officials at the Foreign Of- Relations between the two nations reached a brief fice said "it means that, as far as Britain is con- low in 1998 as a result of India's nuclear program. cerned, 'Tibet is part of China. Full stop.'" This After India's nuclear tests in 1998, Japan suspended change in Britain's position affects India's claim all political exchanges with India. The long-es- to its North Eastern territories which rely on the tablish economic assistance was also stopped for same Simla agreement that Britain's prior posi- three years. Relations improved exponentially fol- tion on Tibet's sovereignty was based upon. lowing this period, as bilateral relations between the two nations improved once again. Alleged 2009 naval stand-off: On January 15, Chinese sources reported that two Chinese de- Economic: In August 2000, Japanese Prime Min- stroyers and an anti-submarine helicopter engaged ister Mori visited India. At this meeting, Japan and in a half an hour naval stand off against an Indian India agreed to establish "Japan-India Global Part- submarine. The report said that Chinese destroy- nership in the 21st Century." Indian Prime Min- ers forced an Indian submarine to surface off So- ister Vajpayee visited Japan in December, 2001, malia waters after it tried to test Chinese sonar where both Prime Ministers issued "Japan-India systems for weaknesses. The Indian vessel then Joint Declaration", consisting of high-level dia- apparently left without further confrontation. logue, economic cooperation, and military and However, the report was later confirmed as an anti-terrorism cooperation. In April, 2005, Japa- inaccurate one by both sides. nese Prime Minister Koizumi visited India and signed Joint Statement "Japan-India Partnership India–Japan relations in the New Asian Era: Strategic Orientation of Japan-India Global Partnership" with Indian Throughout history, Indo-Japanese relations have Prime Minister Manmohan Singh. always been strong. For centuries, India and Ja- pan have engaged in cultural exchanges, prima- Japan is currently India’s third largest source of rily as a result of Buddhism which spread from foreign direct investment; Japanese companies India to Japan. During the Indian Independence have made cumulative investments of around $2.6 Movement, the Japanese Imperial Army helped billion in India since 1991. The 2007 annual sur- Netaji Subhash Chandra Bose's Indian National vey conducted by the Japan Bank for International Army in battles against British forces. Diplomatic, Cooperation ranked India as the most promising trade, economic, and technical relations between overseas investment destination for Japanese com- India and Japan were well established since the panies over the long term. In recent years, Japan 1950s. India's iron ore helped Japan's recovery has assisted India in infrastructure development projects such as the Delhi Metro Rail Project. Both Copyright © 2009 | WWW.UPSCPORTAL.COM 96
    • Section -6 (Mains Special: Foreign Relations of India) sides are also discussing the Delhi-Mumbai Indus- as international trade and development, environ- trial Corridor Project and Dedicated Freight Cor- ment, reform of the UN and the UNSC expansion. ridor Projects on the Mumbai-Delhi and the India’s links with Brazil go back five centuries. Delhi-Howrah routes. Portugal’s Pedro Alvares Cabral is officially recognised as the first European to “discover” Bra- In October 2008, Japan signed an agreement with zil in 1500. Cabral was sent to India by the King India under which it would provide the latter a of Portugal soon after the return of Vasco da Gama low-interest loan worth US$4.5 billion to con- from his pioneering journey. Cabral is reported to struct a railway project between Delhi and have been blown-off course on his way to India. Mumbai. This is the single largest overseas project Brazil became an important Portuguese colony and being financed by Japan and reflected growing stop-over in the long journey to Goa. This Portu- economic partnership between the two. India is guese connection led to the exchange of several also one of the only three countries in the world agricultural crops between India and Brazil in the with whom Japan has security pact, the other two colonial days. Indian cattle was also imported to being Australia and the United States. As of March Brazil. Most of the cattle in Brazil is of Indian ori- 2006, Japan was the third largest investor in India gin. with an estimated total investment of US$2.12 billion. Diplomatic relations between India and Brazil were established in 1948. The Indian Embassy Military: India and Japan also have close military opened in Rio de Janeiro on May 3, 1948, moving ties. They have shared interests in maintaining the to Brasília on August 1, 1971. security of sea-lanes in the Asia-Pacific and In- dian Ocean, and in cooperation for fighting inter- Cultural relations: There is enormous interest in national crime, terrorism, piracy and proliferation Brazil on India's culture, religion, performing arts of weapons of mass destruction. The two nations and philosophy. A number of cultural events in- have frequently held joint military exercises and cluding performances by famous Kuchipudi dance cooperate on technology. group, "Raja and Radha Reddy" were organized in the major cities of Brazil ahead of the Prime Min- Cultural: Japan and India maintain strong cultural ister Manmohan Singh's visit to Brasília from 11- connections. The two nations announced 2007 as 14 September 2006. Earlier, a very successful Fes- Japan-India Friendship Year, and held cultural tival of India was organised during the visit of events in both India and Japan. President K.R. Narayanan to Brazil in May 1998. Recently, Japan has also supported the reconstruc- tion of the ancient Nalanda University, and has There are numerous organisations teaching yoga agreed to provide financial assistance, and recently and they invite yoga teachers from India for in- approached the Indian government with a pro- structions and learning. ISKCON, Satya Sai Baba, posal. Maharshi Mahesh Yogi, Bhakti Vedanta Founda- tion and other Indian spiritual gurus and Brazil–India relations organisations have their chapters in Brazil. The University of Londrina has a good specialization Brazil and India are large continental sized coun- course on India in its Department of Afro-Asian tries with social diversity, democratic govern- Studies. Mahatma Gandhi is highly regarded in ments, a multiethnic society, and a large popula- the country and the government has sought to tion base. Both possess advanced technologies. The teach his philosophy of non-violence to the po- two countries share similar perceptions on issues lice to improve its track record. A statue of Ma- of interest to developing countries and have co- hatma Gandhi is located in a prominent square in operated in the multilateral level on issues such Rio de Janeiro. A group called the Filhos de Gandhi (Sons of Gandhi) participates regularly in the car- Copyright © 2009 | WWW.UPSCPORTAL.COM 97
    • Section -6 (Mains Special: Foreign Relations of India) nival in Salvador. Private Brazilian organizations tion and revenue administration. The target of US occasionally invite Indian cultural troupes. $10 billion in trade was already achieved by 2007. Both countries view this as a tool of transforma- Economic relations: In recent years, relations be- tion diplomacy to bring economic growth, sus- tween Brazil and India have grown considerably tainable development, poverty reduction and re- and co-operation between the two countries has gional prosperity in the vast regions of Latin been extended to such diverse areas as science and America, Africa and Asia. The IBSA Fund for Al- technology, pharmaceuticals and space. The two- leviation of Poverty and Hunger has already pro- way trade in 2007 nearly tripled to US$ 3.12 bil- vided funds for capacity building in East Timor lion from US$ 1.2 billion in 2004. and for the fight against HIV/AIDS in Burundi and has won the South-South Partnership Award Global software giant, Wipro Technologies, also at the 2006 UN Day event held in New York City set up a business process outsourcing centre in on 19 December 2006. Curitiba to provide shared services to AmBev, the largest brewery in Latin America. AmBev's zonal India – United States relations vice president, Renato Nahas Batista, said "We are honoured to be a part of Wipro's expansion plans Despite being one of the pioneers and founding in Brazil and Latin America." AmBev's portfolio members of the Non-Aligned Movement, India includes leading brands like Brahma, Becks, Stella developed a closer relationship with the Soviet and Antarctica. Union during the Cold War. India's strategic and military relations with Moscow and strong socialist Current issues policies had an adverse impact on its relations with the United States. After the collapse of the Soviet UNSC reform: Both countries want the participa Union, India began to review its foreign policy in ion of developing countries in the UNSC perma- a unipolar world following which, it took steps to nent membership since the underlying philoso- develop closer ties with the European Union and phy for both of them are: UNSC should be more the United States. Today, India and the U.S. share democratic, legitimate and representative - the G4 an extensive cultural, strategic, military and eco- is a novel grouping for this realization. nomic relationship. South-South cooperation: Brazil and India are During the tenure of the Clinton and Bush ad- deeply committed to IBSA initiatives and attach ministration, relations between India and the utmost importance to this trilateral cooperation United States blossomed primarily over common between the three large, multi-ethnic, multi-ra- concerns regarding growing Islamic extremism, cial and multi-religious developing countries, energy security and climate change. which are bound by the common principle of plu- ralism and democracy. According to some foreign policy experts, there was a slight downturn in India-U.S. relations fol- The first ever IBSA Summit was held in Brasília lowing the appointment of Barack Obama as the in September 2006, followed by the Second IBSA U.S. President in 2009. This was primarily due to Summit held in Pretoria in October 2007, with Obama administration's desire to increase relations the third one to be held in Delhi in October 2008. with China, and Barack Obama's protectionist Four IBSA Trilateral Commission meetings were views on dealing with the economic crisis. How- already held till 2007 since the first one was held ever, the leaders of the two countries have repeat- in 2004 and had covered many areas such as sci- edly dismissed these concerns. ence, technology, education, agriculture, energy, culture, health, social issues, public administra- The historic relationship between India and the Copyright © 2009 | WWW.UPSCPORTAL.COM 98
    • Section -6 (Mains Special: Foreign Relations of India) United states was very strong. One event is the stani wars did not help their relations. During the visit of Swami Vivekananda who introduced Yoga Cold War, the US asked for Pakistan's help be- and Vedanta to America. Vivekananda was the cause India was seen to lean towards the Soviet first known Hindu Sage to come to the West, Union. Later, when India would not agree to sup- where he introduced Eastern thought at the port the anti-Soviet operation in Afghanistan, it World's Parliament of Religions, in connection was left with few allies. Not until 1997 was there with the World's Fair in Chicago, in 1893. Here, any effort to improve relations with the United his first lecture, which started with this line "Sis- States. ters and Brothers of America," made the audience clap for two minutes just to the address, for prior Soon after Atal Bihari Vajpayee became Indian to this seminal speech, the audience was always Prime Minister, he authorized a nuclear weapons used to this opening address: "Ladies and Gentle- test in Pokhran, which got the immediate atten- men". It was this speech that catapulted him to tion of the US. The Clinton administration and fame by his wide audiences in Chicago and then Vajpayee exchanged representatives to help build later everywhere else in America, including far- relations. In March 2000, President Bill Clinton flung places such as Memphis, Boston, San Fran- visited India. He had bilateral and economic dis- cisco, New York, Los Angeles, and St. Louis. cussions with Prime Minster Atal Bihari Vajpayee. Over the course of improved diplomatic relations After Indian independence until the end of the with the Bush administration, India has agreed to cold war, the relationship between the two na- allow close international monitoring of its nuclear tions has often been thorny. Dwight Eisenhower weapons development while refusing to give up was the first US President to visit India in 1959. its current nuclear arsenal. India and the US have He was so supportive of India that the New York also greatly enhanced their economic ties. times remarked "It did not seem to matter much whether Nehru had actually requested or been During the 9/11 terrorist attacks on the U.S., Presi- given a guarantee that the US would help India to dent George W. Bush chose India as the country meet further Chinese communist aggression. to control and police the Indian Ocean sea-lanes from the Suez to Singapore. The tsunami that oc- What mattered was the obvious strengthening of curred in December 2004 saw the U.S. and Indian Indian-American friendship to a point where no navies to work together in search and rescue op- such guarantee was necessary." erations and to reconstruct the damaged lives and land. An Open Skies Agreement was made in April During John F. Kennedy's period as President, he 2005. This helped enhance trade, tourism, and saw India as a strategic partner against the rise of business by the increased number of flights. Air communist China. He said "Chinese Communists India purchased 68 US Boeing aircraft, which cost have been moving ahead the last 10 years. India $8 billion. has been making some progress, but if India does not succeed with her 450 million people, if she Former U.S. Secretary of Defense Donald can't make freedom work, then people around the Rumsfeld and U.S. Secretary of State Condoleezza world are going to determine, particularly in the Rice have made recent visits to India as well. Af- underdeveloped world, that the only way they can ter Hurricane Katrina, India donated $5 million develop their resources is through the Commu- to the American Red Cross and sent 2 plane loads nist system." of relief supplies and materials to help. And on 1 March 2006, President Bush made another diplo- From 1961 to 1963 there was a promise to help matic visit to expand relations between India and set up a large steel mill in Bokaro that was with- the United States. drawn by the U.S. The 1965 and 1971 Indo-Paki- Military relations: The U.S.-India defense rela- Copyright © 2009 | WWW.UPSCPORTAL.COM 99
    • Section -6 (Mains Special: Foreign Relations of India) tionship derives from a common belief in free- bridged many of the gaps in understanding be- dom, democracy, and the rule of law, and seeks to tween the countries. In a meeting between Presi- advance shared security interests. These interests dent Bush and Prime Minister Vajpayee in No- include maintaining security and stability, defeat- vember 2001, the two leaders expressed a strong ing terrorism and violent religious extremism, pre- interest in transforming the U.S.-India bilateral venting the spread of weapons of mass destruc- relationship. High-level meetings and concrete tion and associated materials, data, and technolo- cooperation between the two countries increased gies and protecting the free flow of commerce via during 2002 and 2003. In January 2004, the U.S. land, air and sea lanes. and India launched the Next Steps in Strategic Partnership (NSSP), which was both a milestone In recent years India has conducted joint military in the transformation of the bilateral relationship exercises with the U.S. in the Indian Ocean. De- and a blueprint for its further progress. spite this the Indian government sees the sole U.S. base in the Indian Ocean, Diego Garcia, and the In July 2005, President Bush hosted Prime Minis- permanent presence of the U.S. military there, as ter Singh in Washington, DC. The two leaders an- a potential escalation point in a future war, espe- nounced the successful completion of the NSSP, cially because of the current U.S. operations in as well as other agreements which further enhance Iraq and Afghanistan. cooperation in the areas of civil nuclear, civil space, and high-technology commerce. Other initiatives Recognizing India as a key to strategic U.S. inter- announced at this meeting include: an U.S.-India ests, the United States has sought to strengthen Economic Dialogue, Fight Against HIV/AIDS, its relationship with India. The two countries are Disaster Relief, Technology Cooperation, Democ- the world's largest democracies, both committed racy Initiative, an Agriculture Knowledge Initia- to political freedom protected by representative tive, a Trade Policy Forum, Energy Dialogue and government. India is also moving gradually toward CEO Forum. President Bush made a reciprocal visit greater economic freedom. The U.S. and India to India in March 2006, during which the progress have a common interest in the free flow of com- of these initiatives were reviewed, and new ini- merce and resources, including through the vital tiatives were launched. sea lanes of the Indian Ocean. They also share an interest in fighting terrorism and in creating a stra- In December 2006, Congress passed the historic tegically stable Asia. Henry J. Hyde United States-India Peaceful Atomic Cooperation Act, which allows direct ci- There were some differences, however, including vilian nuclear commerce with India for the first over India's nuclear weapons programs and the time in 30 years. U.S. policy had opposed nuclear pace of India's economic reforms. In the past, these cooperation with India because the country had concerns may have dominated U.S. thinking about developed nuclear weapons in contravention of India, but today the U.S. views India as a growing international conventions and never signed the world power with which it shares common stra- Nuclear Non-Proliferation Treaty. The legislation tegic interests. A strong partnership between the clears the way for India to buy U.S. nuclear reac- two countries will continue to address differences tors and fuel for civilian use. In July 2007, the and shape a dynamic and collaborative future. United States and India reached a historic mile- stone in their strategic partnership by completing In late September 2001, President Bush lifted sanc- negotiations on the bilateral agreement for peace- tions imposed under the terms of the 1994 Nuclear ful nuclear cooperation, also known as the "123 Proliferation Prevention Act following India's agreement." This agreement, signed by Secretary nuclear tests in May 1998. The nonproliferation of State Rice and External Affairs Minister dialogue initiated after the 1998 nuclear tests has Mukherjee on October 10, 2008, governs civil Copyright © 2009 | WWW.UPSCPORTAL.COM 100
    • Section -6 (Mains Special: Foreign Relations of India) nuclear trade between the two countries and opens Rob Portman and the Indian Commerce Secre- the door for American and Indian firms to par- tary is Minister of Commerce Kamal Nath. The ticipate in each other's civil nuclear energy sec- goal of the program is to increase bilateral trade tor. The U.S. and India seek to elevate the strate- which is a two-way trade deal and the flow of gic partnership further to include cooperation in investments. counter-terrorism, defense cooperation, educa- tion, and joint democracy promotion. There are five main sub-divisions of the Trade Policy Forum which include: Agricultural Trade Economic relations: The United States is also one group- This group has three main objectives: of India's largest direct investors. From the year agreeing on terms that will allow India to export 1991 to 2004, the stock of FDI inflow has increased mangoes to the United States, permitting India's from USD $11.3 million to $344.4 million, total- APEDA (Agricultural and Process Food Products ing $4.13 billion. This is a compound rate increase Export Development Authority) to certify Indian of 57.5% annually. Indian direct investments products to the standards of the USDA, and ex- abroad were started in 1992. Indian corporations ecuting regulation procedures for approving ed- and registered partnership firms are allowed to ible wax on fruit. Tariff and Non-Tariff Barriers invest in businesses up to 100% of their net worth. group- Goals of the group include: agreeing that India's largest outgoing investments are manufac- insecticides that are manufactures by United States turing, which account for 54.8% of the country's companies can be sold throughout India. India had foreign investments. The second largest are non- agreed to cut special regulations on trading car- financial services (software development), which bonated drinks, many medicinal drugs, and low- accounts for 35.4% of investments. ering regulations on many imports that are not of agricultural nature. Both nations have agreed to Trade relations: The United States is India's larg- discuss improved facets on the trade of Indian est trading partner. In 2007, the United States regulation requirements, jewelry, computer parts, exported $17.24 billion worth goods to India and motorcycles, fertilizer, and those tariffs that af- imported $24.02 billion worth of Indian goods. fect the American process of exporting boric acid. Major items exported by India to the U.S. include Information Technology Services, textiles, ma- The two nations have discussed matters such as chinery, ITeS, gems and diamonds, chemicals, iron those who wish to break into the accounting mar- and steel products, coffee, tea, and other edible ket, Indian companies gaining licenses for the tele- food products. Major American items imported by communications industry, and setting polices by India include aircraft, fertilizers, computer hard- the interaction of companies from both countries ware, scrap metal and medical equipment. regarding new policies related to Indian media and broadcasting. This group has strived to exchange The United States is also India's largest investment valuable information on recognizing different pro- partner, with American direct investment of $9 fessional services offered by the two countries, billion accounting for 9% of total foreign invest- discussing the movement and positioning of people ment into India. Americans have made notable in developing industries and assigning jobs to those foreign investment in India's power generation, people, continuation of talks in how India's citi- telecommunications, ports, roads, petroleum ex- zens can gain access into the market for financial ploration/processing, and mining industries. servicing, and discussing the limitation of equi- ties. In July 2005, President George W. Bush and In- dian Prime Minister Dr. Manmohan Singh cre- The two countries have had talks about the re- ated a new program called the Trade Policy Fo- striction of investments in industries such as fi- rum. It is run by a representative from each na- nancial services, insurance, and retail. Also, to take tion. The United States Trade Representative is Copyright © 2009 | WWW.UPSCPORTAL.COM 101
    • Section -6 (Mains Special: Foreign Relations of India) advantage of any initiatives in joint investments The exclusion of India from the Asian tour was such as agricultural processing and the transpor- regarded as a "mistake" by some analysts. India tation industries. Both countries have decided to was not even mentioned once in the Obama promote small business initiatives in both coun- administration's official foreign policy agenda. The tries by allowing trade between them. Forbes magazine alerted U.S. President Barack The majority of exports from the United States to Obama on the need to prevent United States' new- India include: aviation equipment, engineering found alliance with India from erosion. materials and machinery, instruments used in optical and medical sectors, fertilizers, and stones The initial approach of the Obama administration and metals. towards ties with India raised concerns of a down- turn in Indo-American relations. In an editorial, Below are the percentages of traded items India the National Interest suggested that the Obama to US increased by 21.12% to $6.94 billion. administration could possibly damage "the foun- 1. Diamonds & precious stones (25%) dations underlying the geostrategic partnership" 2. Textiles (29.01%) between India and the United States. Another 3. Iron & Steel (5.81%) editorial published by the Taipei Times high- 4. Organic chemicals (4.3%) lighted the importance of India-U.S. relations and 5. Machinery (4.6%) urged Barack Obama to give "India the attention it deserves".Terming India to be United States' "in- 6. Electrical Machinery (4.28%) dispensable ally", the Christian Science Monitor argued that the Obama administration needs Major items of export from U.S. to India: For India's cooperation on several issues, including the year 2006, figures are available up to the climate change, Afghanistan war and energy se- month of April. Merchandise exports from US curity and therefore, Obama cannot risk putting to India increased by 20.09.26% to US $2.95 ties with India on "back-burner". billion. Select major items with their percent- age shares are given below: In an attempt to bolster relations between the two countries, U.S. Secretary of State Hillary Clinton 1. Engineering goods & machinery (including elec- will be making a visit to India in the second half trical) (31.2%) of July 2009. Calling India a "key partner" of the 2. Precious stones & metals (8.01%) United States, Clinton said that the United States 3. Organic chemicals (4.98%) wants India "to succeed as an anchor for regional 4. Optical instruments & equipment (7.33%) and global security". She also mentioned four plat- forms for building future U.S.-India relationship 5. Aviation & aircraft ( 16.8%) — "global security, human development, eco- nomic activity, science and technology". Ties Under Obama Administration Foreign policy issues: According to some analysts, Despite much gains in Indo-American relations India-U.S. relations have strained over Obama during the tenure of the Bush administration, In- administration's approach in handling the Taliban dia was not one of the Asian countries U.S. Secre- insurgency in Afghanistan and Pakistan. India's tary of State Hillary Clinton visited in February National Security Adviser, M.K. Narayanan, criti- 2009. The Foreign Policy magazine reported that cized the Obama administration for linking the even though Foreign Policy Staff of the previous Kashmir dispute to the instability in Pakistan and administration had recommended India as a "key Afghanistan and said that by doing so, President stop" during any such official tour of Asia, Hillary Obama was "barking up the wrong tree".The For- Clinton will not be making a visit to New Delhi. eign Policy too criticized Obama's approach to- Copyright © 2009 | WWW.UPSCPORTAL.COM 102
    • Section -6 (Mains Special: Foreign Relations of India) wards South Asia saying that "India can be a part pay lower taxes if you create a job in Bangalore, of the solution rather than part of the problem" India, than if you create one in Buffalo, New York." in South Asia and suggested India to take a more However, during the U.S.-India Business Council proactive role in rebuilding Afghanistan irrespec- meet in June 2009, U.S. Secretary of State Hillary tive of the attitude of the Obama administration. Clinton advocated for stronger economic ties be- In a clear indication of growing rift between In- tween India and the United States. She also re- dia and the U.S., the former decided not to accept buked protectionist policies saying that "[United a U.S. invitation to attend a conference on Af- States] will not use the global financial crisis as an ghanistan. Bloomberg reported that since 2008 excuse to fall back on protectionism. We hope Mumbai attacks, the public mood in India has been India will work with us to create a more open, to pressure Pakistan more aggressively to take ac- equitable set of opportunities for trade between tions against the culprits behind the terrorist at- our nations." tack and this might reflect on the upcoming gen- eral elections in May 2009. Consequently, the In June 2009, United States provided diplomatic Obama administration may find itself at odds with help in successfully pushing through a US$2.9 bil- India's rigid stance against terrorism. lion loan sponsored by the Asian Development Bank, despite considerable opposition from the Robert Blake, assistant secretary of United States' People's Republic of China. Bureau of South and Central Asian Affairs, dis- missed any concerns over a rift with India regard- Strategic and military relations:In March 2009, the ing United States' AfPak policy. Calling India and Obama administration cleared the US$2.1 billion the United States "natural allies",Blake said that sale of eight P-8 Poseidons to India, the largest the United States cannot afford to meet the stra- military deal between the two countries. tegic priorities in Pakistan and Afghanistan at "the expense of India". India expressed its concerns that Obama administration's non-military aid to Pakistan will Economic relations:India strongly criticized not be used for counter-insurgency, but for build- Obama administration's decision to limit H-1B ing up its military against India. However, Robert visas and India's External Affairs Minister, Pranab Blake, assistant secretary of Bureau of South and Mukherjee, said that his country would argue Central Asian Affairs, said that the Pakistani Gov- against U.S. "protectionism" at various interna- ernment was increasingly focused at fighting the tional forums. The Vishwa Hindu Parishad, a close Taliban insurgency and expressed hope that the aide of India's main opposition party the BJP, said people of India would "support and agree with that if the United States continues with its anti- what we are trying to do". outsourcing policies, then India will "have to take steps to hurt American companies in India." India's Concerns were raised in India that the Obama ad- Commerce Minister, Kamal Nath, said that India ministration was delaying the full implementa- may move against Obama's outsourcing policies tion of the Indo-U.S. Nuclear Deal. The Obama at the World Trade Organization. However, the administration has also strongly advocated for the outsourcing advisory head of KPMG said that In- strengthening of the Comprehensive Test Ban dia had no reason to worry since Obama's state- Treaty and has pressurized India to sign the agree- ments were directed against "outsourcing being ment. India's special envoy, Shyam Saran, carried out by manufacturing companies" and not "warned" the United States that India would con- outsourcing of IT-related services. tinue to oppose any such treaty as it was "discrimi- natory". In June 2009, U.S. Secretary of State In May 2009, U.S. President Barack Obama reit- Hillary Clinton said that the Obama administra- erated his anti-outsourcing views and criticized tion was "fully committed" to the Indo-U.S. civil the current U.S. tax policy "that says you should Copyright © 2009 | WWW.UPSCPORTAL.COM 103
    • Section -6 (Mains Special: Foreign Relations of India) nuclear agreement. declared independence. Richard Nixon, then US President, feared that an Indian invasion of West U.S. Chairman of the Joint Chiefs of Staff Mike Pakistan would mean total Soviet domination of Mullen encouraged stronger military ties between the region, and that it would seriously undermine India and the United States and said that "India the global position of the United States and the has emerged as an increasingly important strate- regional position of America's new tacit ally, gic partner [of the U.S.]". China. In order to demonstrate to China the bona fides of the United States as an ally, and in direct Cold War era: India played a key role in estab- violation of the US Congress-imposed sanctions lishing the Non-Aligned Movement in 1961. on Pakistan, Nixon sent military supplies to Paki- Though India pursued close relations with both stan, routing them through Jordan and Iran, while US and USSR, it decided not to join any major also encouraging China to increase its arms sup- power bloc and refrained from joining military plies to Pakistan. alliances. India, however began establishing close military relationship with the Soviet Union. When Pakistan's defeat in the eastern sector seemed certain, Nixon sent the USS Enterprise to After the Sino-Indian War and the Indo-Pakistani the Bay of Bengal, a move deemed by the Indians War of 1965, India made considerable changes to as a nuclear threat. The Enterprise arrived on sta- its foreign policy. It developed a close relation- tion on December 11, 1971. On 6 December and ship with the Soviet Union and started receiving 13 December, the Soviet Navy dispatched two massive military equipment and financial assis- groups of ships, armed with nuclear missiles, from tance from the USSR. This had an adverse effect Vladivostok; they trailed U.S. Task Force 74 into on the Indo-US relationship. The United States the Indian Ocean from 18 December 1971 until 7 saw Pakistan as a counter-weight to pro-Soviet January 1972. The Soviets also sent a nuclear sub- India and started giving the former military assis- marine to ward off the threat posed by USS En- tance. This created an atmosphere of suspicion terprise in the Indian Ocean. between India and US. The US-India relationship suffered a considerable setback during the Soviet Though American efforts had no effect in turning invasion of Afghanistan when India openly sup- the tide of the war, the incident involving USS ported the Soviet Union. Relations between India Enterprise is viewed as the trigger for India's sub- and the United States came to an all-time low sequent nuclear program. American policy to- during the early 1970s. Despite reports of atroci- wards the end of the war was dictated primarily ties in East Pakistan, and being told, most notably by a need to restrict the escalation of war on the in the Blood telegram, of genocidal activities be- western sector to prevent the 'dismemberment' ing perpetrated by Pakistani forces, U.S. Secre- of West Pakistan. Years after the war, many tary of State Henry Kissinger and U.S. President American writers criticized the White House poli- Richard Nixon did nothing to discourage then Pa- cies during the war as being badly flawed and ill- kistani President Yahya Khan and the Pakistan serving the interests of the United States. India Army. Kissinger was particularly concerned about carried out nuclear tests a few years later result- Soviet expansion into South Asia as a result of a ing in sanctions being imposed by United States, treaty of friendship that had recently been signed further drifting the two countries apart. In recent between India and the Soviet Union, and sought years, Kissinger came under fire for comments to demonstrate to the People's Republic of China made during the Indo-Pakistan War in which he the value of a tacit alliance with the United States. described Indians as "bastards." Kissinger has since During the Indo-Pakistani War of 1971, Indian expressed his regret over the comments . Armed Forces, along with the Mukti Bahini, suc- ceeded in liberating East Pakistan which soon Post Cold War Era:Since the end of the Cold War, Copyright © 2009 | WWW.UPSCPORTAL.COM 104
    • Section -6 (Mains Special: Foreign Relations of India) India-US relations have improved dramatically. tarian assistance projects in India. The United States encouraged India to sign the Comprehen- This has largely been fostered by the fact that the sive Test Ban Treaty (CTBT) immediately and US and India are both democracies and have a large without condition. The U.S. also called for re- and growing trade relationship. During the Gulf straint in missile and nuclear testing and deploy- War, the economy of India went through an ex- ment by both India and Pakistan. The non-prolif- tremely difficult phase. The Government of India eration dialogue initiated after the 1998 nuclear liberalized the Indian economy. After the break tests has bridged many of the gaps in understand- up of the Soviet Union, India started looking for ing between the countries. new allies and tried improving diplomatic rela- tions with the members of the NATO particularly Post-September 11 attack: After the September the United States, Canada, France and Germany. 11, 2001 attacks, Indian intelligence agencies pro- In 1992, India established formal diplomatic rela- vided the U.S. with significant information on Al- tions with Israel. Qaeda and related groups' activities in Pakistan and Afghanistan. India's extensive contribution to In the mid-1990s, India tried to attract world at- the War on Terrorism has helped India's diplo- tention towards the Pakistan backed terrorism in matic relations with several countries. Over the Kashmir. The Kargil War resulted in a major dip- past few years, India has held numerous joint mili- lomatic victory for India. The United States and tary exercises with U.S. and European nations that European Union recognized the fact that Paki- have resulted in a strengthened U.S.-India and stani military had illegally infiltrated into Indian E.U.-India bilateral relationship. India's bilateral territory and pressurized Pakistan to withdraw trade with Europe and U.S. has more than doubled from Kargil. Several anti-India terrorist groups in the last five years. based in Pakistan were labelled as terrorist groups by the United States and European Union. However, India has yet to sign the CTBT, or the Nuclear Non-Proliferation Treaty, claiming the Pokhran tests: In 1998, India tested nuclear weap- discriminatory nature of the treaty that allows the ons which resulted in several U.S., Japanese and five declared nuclear countries of the world to European sanctions on India. India's then defence keep their nuclear arsenal and develop it using minister, George Fernandes, said that India's computer simulation testing. Prior to its nuclear nuclear program was necessary as it provided a testing, India had pressed for a comprehensive deterrence to some potential nuclear threat. Most destruction of nuclear weapons by all countries of of the sanctions imposed on India were removed the world in a time-bound frame. This was not by 2001. India has categorically stated that it will acceptable to the US and other countries. Pres- never use weapons first but will defend if attacked. ently, India has declared its policy of "no-first use In fact Pakistan is the first country that India in- of nuclear weapons" and the maintenance of a forms if any nuclear tests are on the agenda. "credible nuclear deterrence". The US, under President George W. Bush has also lifted most of The economic sanctions imposed by the United its sanctions on India and has resumed military States in response to India's nuclear tests in May co-operation. Relations with US have consider- 1998 appeared, at least initially, to seriously dam- ably improved in the recent years, with the two age Indo-American relations. President Bill countries taking part in joint naval exercises off Clinton imposed wide-ranging sanctions pursu- the coast of India and joint air exercises both in ant to the 1994 Nuclear Proliferation Prevention India as well as in the United States. Act. U.S. sanctions on Indian entities involved in the nuclear industry and opposition to interna- India has been pushing for reforms in the UN and tional financial institution loans for non-humani- WTO with mixed results. India's candidature for a permanent seat at the UN Security Council is Copyright © 2009 | WWW.UPSCPORTAL.COM 105
    • Section -6 (Mains Special: Foreign Relations of India) currently backed by several countries including post Cold War era, the strategic objectives of In- United Kingdom, France, Germany, Japan, Bra- dia and the US converges on a number of issues zil, African Union nations and recently People's and not just one–as well as the case earlier. These Republic of China. In 2005, the United States issues include, inter alia, containment of terror- signed a nuclear co-operation agreement with ism, promotion of democracy, counter prolifera- India even though the latter is not a part of the tion, freedom of navigation in the Indian Ocean, NPT. The US argued that India's strong nuclear Asian balance of power, etc. non-proliferation record made it an exception and persuaded other NSG members to sign similar deals One of the very interesting feature of Indo-US with India. relations of recent times is the changes on the terms of engagement between the two countries On March 2, 2006 India and the US signed the on the issue of nuclear proliferation.While ear- Indo-U.S. Nuclear Pact on co-operation in civil- lier, in the US strategic thinking on nuclear pro- ian nuclear field. This was signed during the four liferation, India figured mainly because of Ameri- days state visit of US president George Bush in can concern about latter’s nuclear and missile India. On its part, India would separate its civil- programmes, in the twenty-first century,however, ian and military nuclear programs, and the civil- American strategic thinking on the issue of nuclear ian programs would be brought under the safe- proliferation has undergone radical guards of International Atomic Energy Agency reorientation.Now, the Americans are increasingly (IAEA). The United States would sell India the realising the futility of insisting on a rollback of reactor technologies and the nuclear fuel for set- India’s nuclear programme. They, rather, want to ting up and upgrading its civilian nuclear program. leverage India’s growing power and influence in The U.S. Congress needs to ratify this pact since favour of their broader nonproliferation and U.S. federal law prohibits the trading of nuclear counter proliferation objectives. technologies and materials outside the framework of the Nuclear Suppliers Group (NSG). As promotion of democracy around the world is one of the most important foreign policy objec- Indo-US Strategic Partnership tive of the USA, India- as the largest democracy of the world-can hardly be ignored by the US.This Indo-US relations got strategic content way back is the reason, cooperation in promotion of democ- in early sixties. The rise of China worried the racy in the world has become one of the most policymakers in Washington. Chinese annexation important facets of Indo-US relations in recent of Tibet, its role in Korean war and other such times.India is a founding member of the ‘Com- acts convinced Washington about the expansion- munity of Democracies’ – a prominent endeavour ist designs of the Chinese. As the relations between of the US on promotion of democracy. India and China deteriorated during late fifties, the Americans found a golden opportunity to take However,India rejected the suggestion of the US advantage of this situation to promote India as a about setting up a Centre for Asian Democracy. counterweight to China But any unidimensional Agriculture is another important area of coopera- alliance is bound to be short-lived and this alli- tion between India and the USA in present ance was no exception to this general rule. As times.Considering the fact that both the nations China ceased to be a headache for the American at present have a vast pool of human resources policymakers by the late sixties, this unidimen- adept at knowledge economy, it is only natural sional alliance disappeared into thin air. that the most optimal course such partnership can aim at is harnessing these human resources by The end of the Cold War necessitated as well as concentrating on development and dissemination facilitated the infusion of strategic content to Indo- of agricultural knowledge through research, edu- US relations–this time multidimensional.In the Copyright © 2009 | WWW.UPSCPORTAL.COM 106
    • Section -6 (Mains Special: Foreign Relations of India) cation and training etc.An initiative to forge such bilateral summit with France. This matter will a partnership is the 'India-US Knowledge Initia- come up and I hope some good results will emerge tive on Agriculture' (KIA) out of that meeting," Singh said when asked about the issue. Singh said that he was "very satisfied" European Union with the results of the summit. He added that EU and India have "common values" and the two India was one of the first countries to develop re- economies are complementary to each other. Eu- lations with the Union, signing bilateral agree- ropean Commission President Jose Manuel ments in 1973, when the United Kingdom joined. Barroso, also speaking at Monday's press confer- The most recent cooperation agreement was ence, expounded the joint action plan on adjust- signed in 1994 and an action plan was signed in ments of EU's strategic partnership with India, 2005. As of April 2007 the Commission is pursu- saying the two sides will strengthen cooperation ing a free trade agreement with India. on world peace and safety, sustainable develop- ment, cooperation in science and technology and The Union is India's largest trading partner, ac- cultural exchanges. counting for 20% of Indian trade. However, India accounts for only 1.8% of the EU's trade and at- Reviewing the two sides' efforts in developing the tracts only 0.3% of European Foreign Direct In- bilateral strategic partnership, the joint action plan vestment, although still provides India's largest reckoned that in politics, dialogue and coopera- source. During 2005 EU-India trade grew by tion have enhanced through regular summits and 20.3%. exchanges of visits and that in economy, mutual investments have increased dramatically in recent There was controversy in 2006 when the Indian years, dialogue in macro economic policies and fi- Mittal Steel Company sought to take-over the Lux- nancial services has established and cooperation embourg based steel company, Arcelor. The ap- in energy, science and technology and environ- proach met with opposition from France and Lux- ment has been launched. Under the joint action embourg but was passed by the Commission who plan, EU and Indian would enhance consultation stated that were judging it on competition grounds and dialogue on human rights within the UN only. framework, strengthen cooperation in world peacekeeping mission, fight against terror and non- The European Union (EU) and India agreed on proliferation of arms, promote cooperation and September 29,2008 at the EU-India summit in exchange in developing civil nuclear energy and Marseille, France's largest commercial port, to strike a free trade deal as soon as possible. France, expand their cooperation in the fields of nuclear which relies heavily on nuclear power and is a energy and environmental protection and deepen major exporter of nuclear technology, is expected their strategic partnership. French President to sign a deal that would allow it to provide nuclear Nicolas Sarkozy, the EU's rotating president, said fuel to India. at a joint press conference at the summit that "EU welcomes India, as a large country, to engage in Trade between India and the 27-nation EU has developing nuclear energy, adding that this clean more than doubled from 25.6 billion euros ($36.7 energy will be helpful for the world to deal with billion) in 2000 to 55.6 billion euros last year, with the global climate change." Sarkozy also said the further expansion to be seen. "We have agreed to EU and Indian Prime Minister Manmohan pledged achieve an annual bilateral trade turnover of 100 to accelerate talks on a free trade deal and expected billion euros within the next five years," Singh told to finish the deal by 2009. The Indian prime min- reporters. A joint statement issued at the end of ister was also cautiously optimistic about coop- the summit said the EU and India would work to eration on nuclear energy. "Tomorrow we have a reach an agreement on climate change by the end Copyright © 2009 | WWW.UPSCPORTAL.COM 107
    • Section -6 (Mains Special: Foreign Relations of India) of 2009. two-way bilateral investments. India–United Kingdom relations Defense: Cooperation is undertaken under the De- fence Consultative Group (DCG) formed in 1995. Indian–British relations are foreign relations be- India and the UK cooperate in a number of ways. tween the United Kingdom and India. India has a Joint Indo-UK exercises (a ten-day exercise Em- high commission in London and two consulates- erald Mercury was held in India in March 2005, general in Birmingham and Edinburgh. The the first of its kind between the two countries, United Kingdom has a high commission in New which marked the biggest land deployment of Delhi and three deputy high commissions in British military personnel in India), research and Mumbai, Chennai and Kolkata. Both countries are technology and defence equipment collaboration. full members of the Commonwealth of Nations. Britain supports India’s case for permanent mem- Since 1947, relations between the two countries bership of the United Nations Security Council as have been mostly friendly and there are many well as bilateral cooperation in civilian nuclear areas in which both India and the UK seek stron- technology. The UK and India also cooperate on ger ties for mutual benefit. There are also strong security and terrorism issues. cultural and social ties between the two nations. In India, English is one of the official languages, Political: Politically, relations between India and and Cricket is among the most popular sports. In the UK occur mostly through the multilateral the UK Indian Cuisine is hugely popular. Britain organisations of which both are members, such as imports most of its tea from India, and there are a the Commonwealth of Nations, the World Trade number of words of Indian origin in the English Organisation and the Asian Development Bank. language. The UK has an ethnic Indian popula- Britain was the first G8 nation to suggest that In- tion of over 1 million. dia, along with China, Brazil, Mexico and South Africa, be allowed to attend summits with the G8. Republic of India (since 1950): India remained Britain recently donated £825 million in aid to in the Commonwealth of Nations after become a India for the development of India's Healthcare Republic, but diversified its foreign relations be- System and Educational System. yond the former British Empire. In particular, India became a major force within the Non- The President of India Sarvepalli Radhakrishnan Aligned Movement, which initially sought to paid a state visit to the United Kingdom in June avoid taking sides during the Cold War. This con- 1963. The President of India Ramaswamy trasted with Britain's position as a founding mem- Venkataraman paid a state visit to the United ber of NATO, and key ally of the United States. Kingdom in October 1990. HM Queen Elizabeth However, relations between the two countries II of the United Kingdom paid state visits to India have generally been cordial. Due mainly to post in November 1963, and in April 1990. independence immigration, there are now over a million people of Indian descent in the United India–Russia relations Kingdom. India-Russian relations refers to the bilateral re- Economy: India is the second largest foreign in- lations between the Republic of India and the Rus- vestor in the UK after the USA, and the UK is also sian Federation. During the Cold War, India and a significant investor in India. There are many bi- the Soviet Union enjoyed a strong strategic, mili- lateral trade agreements between the two nations tary, economic and diplomatic relationship. After designed to strengthen ties. For example, in 2005, the collapse of the USSR, India improved its rela- the Joint Economic and Trade Committee (JETCO) tions with the West but it continued its close re- was inaugurated in New Delhi aimed at boosting lations with Russia. India is the second largest Copyright © 2009 | WWW.UPSCPORTAL.COM 108
    • Section -6 (Mains Special: Foreign Relations of India) market for Russian arms industry. In 2004, more an effort to secede from its political union with than 70% on Indian Military's hardware came West Pakistan. India supported the secession and, from Russia, making Russia the chief supplier of as a guarantee against possible Chinese entrance arms. India has an embassy in Moscow and 2 Con- into the conflict on the side of West Pakistan, sulates-General (in Saint Petersburg and signed a treaty of friendship and cooperation with Vladivostok). Russia has an embassy in New Delhi the Soviet Union in August 1971. In December, and 3 Consulates-General (in Chennai, Kolkata, India entered the conflict and ensured the vic- Mumbai). Since 2000 and the visit of Vladimir tory of the secessionists and the establishment of Putin in India there have been an Indo-Russian the new state of Bangladesh. Strategic Partnership. Relations between the Soviet Union and India did Soviet Union and India:A cordial relationship with not suffer much during the rightist Janata Party's India that began in the 1950s represented the most coalition government in the late 1970s, although successful of the Soviet attempts to foster closer India did move to establish better economic and relations with Third World countries. The rela- military relations with Western countries. To tionship began with a visit by Indian prime min- counter these efforts by India to diversify its rela- ister Jawaharlal Nehru to the Soviet Union in June tions, the Soviet Union proffered additional weap- 1955 and Khrushchev's return trip to India in the onry and economic assistance. fall of 1955. While in India, Khrushchev an- nounced that the Soviet Union supported Indian During the 1980s, despite the 1984 assassination sovereignty over the disputed territory of the by Sikh extremists of Prime Minister Indira Kashmir region and over Portuguese coastal en- Gandhi, the mainstay of cordial Indian-Soviet re- claves. lations, India maintained a close relationship with the Soviet Union. Indicating the high priority of The Soviet relationship with India rankled the relations with the Soviet Union in Indian foreign Chinese and contributed to Sino-Soviet enmity policy, the new Indian prime minister, Rajiv during the Khrushchev period. The Soviet Union Gandhi, visited the Soviet Union on his first state declared its neutrality during the 1959 border dis- visit abroad in May 1985 and signed two long- pute and the Indo-China war of 1962, although term economic agreements with the Soviet Union. the Chinese strongly objected. The Soviet Union In turn, Gorbachev's first visit to a Third World gave India substantial economic and military as- state was his meeting with Gandhi in New Delhi sistance during the Khrushchev period, and by in late 1986. Gorbachev unsuccessfully urged 1960 India had received more Soviet assistance Gandhi to help the Soviet Union set up an Asian than China had. This disparity became another collective security system. Gorbachev's advocacy point of contention in Sino-Soviet relations. In of this proposal, which had also been made by 1962 the Soviet Union agreed to transfer technol- Brezhnev, was an indication of continuing Soviet ogy to coproduce the MiG-21 jet fighter in India, interest in using close relations with India as a which the Soviet Union had earlier denied to means of containing China. With the improve- China. ment of Sino-Soviet relations in the late 1980s, containing China had less of a priority, but close In 1965 the Soviet Union served successfully as relations with India remained important as an peace broker between India and Pakistan after an example of Gorbachev's new Third World policy. Indian-Pakistani border war. The Soviet chairman Military relations:Defence relations between In- of the Council of Ministers, Aleksei N. Kosygin, dia and the Russian Federation have a historical met with representatives of India and Pakistan and perspective. Russia has been an important supplier helped them negotiate an end to the military con- of defence goods for several decades. Today, the flict over Kashmir. cooperation is not limited to a buyer-seller rela- In 1971 the former East Pakistan region initiated Copyright © 2009 | WWW.UPSCPORTAL.COM 109
    • Section -6 (Mains Special: Foreign Relations of India) tionship but includes joint research and develop- modest and stood at US $ 3 bn in 2006-07, out of ment, training, service to service contacts, includ- which Indian Exports to Russia were valued at US ing joint exercises. The last joint naval exercises $ 908 mn. Main Indian exports to Russia are phar- took place in April 2007 in the Sea of Japan and maceuticals; tea, coffee & spices; apparel & cloth- joint airborne exercises were held in September ing; edible preparations; and engineering goods. 2007 in Russia. Main Indian imports from Russia are iron and steel; fertilizers; non-ferrous metals; paper products; There is an Inter-Governmental commission on coal, coke & briquettes; cereals; and rubber. Indo- military-technical cooperation co-chaired by the Russian trade is expected to reach US$10 billion two Defence Ministers. The Seventh session of this by 2010. Inter-Governmental Commission was held in Oc- tober 2007 in Moscow. During the visit, an Agree- The India-Russia Inter-Governmental Commis- ment on joint development and production of pro- sion on Trade, Economic, Scientific, Technologi- spective multi role fighters was signed between cal and Cultural Cooperation (IRIGC) has had 13 the two countries. sessions so far and is co-chaired by the External Affairs Minister from the Indian side and a Deputy India and Russia have several major joint mili- Prime Minister from the Russian side. There are tary programs such as those mentioned below: six Joint Working Groups [WG] under the IRIGC, » BrahMos cruise missile program namely, WG on Trade and Economy [trade and financial matters], WG on Energy [oil and gas, » INS Vikramaditya aircraft carrier program thermal and hydel power, non-conventional en- » 5th generation fighter jet program ergy], WG on Metallurgy and Mining [steel, non- » Sukhoi Su-30MKI program (230+ to be built by ferrous metal, coal], WG on Science & Technol- ogy; WG on Communication and Information » Hindustan Aeronautics) Technology; and WG on Culture and Tourism. The » Ilyushin/HAL Tactical Transport Aircraft 13th of the IRIGC was held in Moscow on 12 October 2007. Additionally, India has purchased/leased several military hardware from Russia: The two countries have set-up India-Russia Fo- » T-90S Bhishma program. (1000+ to be built rum on Trade and Investment at the level of the in India) two Commerce Ministers to promote trade, in- vestment and economic cooperation. The first » Akula-II nuclear submarine (2 to be leased) Forum was held in New Delhi on 12-13 February » Tu-22M3 bombers (4 ordered) 2007 which was attended by the Minister of Com- » US$900 million upgrade of MiG-29 merce and Industry and the Russian Minister of » Mil Mi-17 (80 ordered) Economic Development and Trade, apart from a large number of business representatives from both Ilyushin Il-76 Candid (6 ordered to fit Israeli sides. The Minister of Commerce & Industry, Shri Phalcon radar) Kamal Nath participated in the 11th Saint Peters- burg International Economic Forum on 9-10 June Russia's MiG-35 is competing in the Indian MRCA 2007. Competition and is considered to be the front-run- ner for the winning bid, given India's already, In February 2006, India and Russia also set-up a largely Russian-built air force. The Farkhor Air Joint Study Group to examine ways to increase Base in Tajikistan is currently jointly operated by trade to US $ 10 bn by 2010 and to study feasibil- India and Russia. ity of a Comprehensive Economic Cooperation Economic relations:Bilateral trade turnover is Agreement (CECA). The Group finalized its re- port after its fourth meeting in Moscow in July Copyright © 2009 | WWW.UPSCPORTAL.COM 110
    • Section -6 (Mains Special: Foreign Relations of India) 2007. It has been agreed that a Joint Task Force dustry & Science and Technology from the Rus- would monitor the implementation of the recom- sian side. Development of SARAS Duet aircraft, mendation made in the Joint Stdy Group Report, semiconductor products, super computers, poly- including considering CECA. vaccines, laser science and technology, seismol- ogy, high-purity materials, software & IT and Cooperation in the Energy sector: Energy sector Ayurveda have been some of the priority areas of is an important area in Indo-Russian bilateral re- co-operation under the ILTP. Under this lations. In 2001, ONGC-Videsh Limited acquired programme, eight joint Indo- Russian centers have 20% stake in the Sakhalin-I oil and gas project in been established to focus on joint research and de- the Russian Federation, and has invested about velopment work. Two other Joint Centres on Non- US $ 1.7 billion in the project. The Russian com- ferrous Metals and Accelerators and Lasers are be- pany Gazprom and Gas Authority of India Ltd. ing set up in India. A Joint Technology Centre have collaborated in joint development of a block based in Moscow to bring cutting edge technolo- in the Bay of Bengal. Kudankulam Nuclear Power gies to the market is also under processing. An Project with two units of 1000 MW each is a good ILTP Joint Council met in Moscow on 11-12 Oc- example of Indo-Russian nuclear energy coopera- tober 2007 to review cooperation and give it fur- tion. Both sides have expressed interest in expand- ther direction. In August 2007, an MoU was signed ing cooperation in the energy sector. between Department of Science and Technology and Russian Foundation of Basic Research, Mos- In December 2008, Russia and India signed an cow to pursue scientific cooperation. agreement to build civilian nuclear reactors in India during a visit by the Russian president to North-South Transport corridor: The “North- New Delhi. South” Transport Corridor Agreement [INSTC] has been ratified by all the three original signatory Space Cooperation:Space is another key sector of states, viz. India, Iran and Russia, and has come cooperation between the two countries. During into force since 16 May, 2002. This route is ex- President Vladimir Putin’s visit to India in De- pected to reduce the cost of movement of goods cember 2004, two space-related bilateral agree- between India and Russia and beyond. The 3rd ments were signed viz. Inter-Governmental um- Coordination Council Meeting of the INSTC was brella Agreement on cooperation in the outer held in October 2005 in New Delhi and the 4th space for peaceful purposes and the Inter Space meeting was held in Aktau, Kazakhstan in Octo- Agency Agreement on cooperation in the Russian ber 2007 to discuss further streamlining the op- satellite navigation system “GLONASS”. Subse- eration of the corridor. quently a number of follow-up agreements on GLONASS have been signed. In November 2007, Cooperation in the sphere of Culture: India-Rus- the two countries have signed an agreement on sia relations in the field of culture are historical. joint lunar exploration. These space cooperation Five Chairs relating to Indology have been estab- programmes are under implementation. lished in Moscow, Saint Petersburg, Kazan and Vladivostok. Days of Russian Culture were held Science and Technology:The ongoing cooperation in India in November 2003, in Delhi, Kolkata and in the field of science & technology, under the Mumbai. “Days of Indian Culture” in Russia were Integrated Long-Term Programme of cooperation organized from September- October 2005 in Rus- (ILTP) is the largest cooperation programme in sia. 130th birth anniversary of Nikolai Roerich and this sphere for both India and Russia. ILTP is co- 100th birth anniversary of Svyatoslav Roerich ordinated by the Department of Science and Tech- were celebrated in India in October 2004. Chief nology from the Indian side and by the Russian Minister of National Capital Territory of Delhi led Academy of Sciences and Russian Ministry of In- a delegation for participating in the event “Days Copyright © 2009 | WWW.UPSCPORTAL.COM 111
    • Section -6 (Mains Special: Foreign Relations of India) of Delhi in Moscow” from 28 May-1 June 2006. dos instruction in counter-terrorist tactics and The “Year of Russia in India” is being held in 2008. urban warfare. There is also growing space coop- It will be followed by the “Year of India in Rus- eration between the two. In February 2008, the sia” in 2009. There is a Hindi Department, in the Indian Space Research Organization (ISRO) University of Moscow. launched an Israeli spy satellite to monitor the activities of Iran. Given India's strong relations Terrorism:On international terrorism, India and with both the Arab world and Israel, it has been Russia agree that there is no justification for ter- indicated that India can play a constructive role rorism, and this must be fought against, without in the Israeli–Palestinian peace process. compromise and wherever it exists. Russia has supported the Indian draft at the UN on Compre- India gained independence from the British Em- hensive Convention on International Terrorism pire in 1947, a year before the State of Israel was (CCIT). The two sides signed a MoU on coopera- founded. Officially, India was opposed to the cre- tion in combating terrorism in December 2002. A ation of Israel for a philosophical reason, it did Joint Working Group on Combating International not like the concept of creation of nations based Terrorism meets from time to time and its fourth on religion. This was to keep India and Pakistan meeting was held in Delhi on 24 October 2006. in one country. Due to its opposition for creation of Pakistan based on Islam, it opposed the cre- India–Israel relations ation of Israel as a nation for Jews. Before Israel was created, a number of countries sent their rep- Despite formation of the State of Israel in 1948, resentatives and the representative from India was India's strong historic ties with the Arab world a Muslim. Though Gandhi had a good relation- prevented it establishing diplomatic ties with Is- ship with Jews, he opposed the creation of Israel rael. However, the collapse of the Soviet Union as he was against the creation of countries based (with whom India maintained strong relations) on religion]. India did not have any official rela- and increasing concerns over the rise of Islamic tions with Israel until 1991 due to its problem with extremism in the Indian subcontinent convinced Palestine. Despite this, its military had an excel- India to change its position towards Israel. On lent relationship with Israel. People like Moshe January 29, 1992, full diplomatic ties between the Dayan have had interaction with India despite the two were established and since then the bilateral lack of diplomatic relationship between the two relations have grown exceedingly. countries. Israel has provided India with crucial information during multiple wars that India faced. During the tenure of the Hindu nationalist India's first Prime Minister, Jawahar Lal Nehru Bhartiya Janata Party (BJP), relations between supported the creation of Israel. India and Israel blossomed. The relations have continued to grow ever since the Indian National Muslims in India were largely pro-Arab and the Congress (INC) came to power in 2004. By 2008, Congress-led Indian government did not want to bilateral trade between India and Israel exceeded publicly take a pro-Israel stance. India recognized US$4 billion and Israel was India's second-largest Israel as a nation in 1950. Another factor which military supplier after Russia. It was expected that affected India-Israel diplomatic relationship was Israel would overtake Russia as the largest arms the Kashmir dispute. During the First Kashmir supplier to India, which it did in 2009. War, India referred the Kashmir issue to the United Nations Security Council. Had India es- As of 2008, India has bought more than US$5 bil- tablished diplomatic relations with Israel, it was lion worth of Israeli equipment since 2002. In ad- thought in Indian power circles, that the Arab dition, Israel is training Indian military units and nations would favor Pakistan's claim over India's discussing an arrangement to give Indian comman- to Kashmir. In private though, Indian political leaders have expressed their support for Israel. In Copyright © 2009 | WWW.UPSCPORTAL.COM 112
    • Section -6 (Mains Special: Foreign Relations of India) a statement in 1954, Nehru said he would not "be ter H.D. Deve Gowda. Weizman negotiated the a party to a resolution which stated that the cre- first weapons deal between the two nations, in- ation of Israel was a violation of international law". volving the purchase of Barak-1 vertically- He also wrote a letter to Frances Gunther express- launched surface-to-air (SAM) missiles from Is- ing his support for the general Jewish behavior in rael. The Barak-1 has the ability to intercept anti- Palestine. Various Hindu organizations, led by the ship cruise missiles such as the Harpoon. The pur- Sangh Parivar, openly supported the Jewish cause chase of the Barak-1 missiles from Israel by India and the creation of Israel. The opposition to the was a tactical necessity since Pakistan had pur- establishment of diplomatic relations with Israel chased P3-C II Orion maritime strike aircraft and during the 1960s and 1970s arose from the Con- 27 Harpoon sea-skimming anti-ship missiles from gress Party's desire to appease the Muslims in In- the United States. In what would be end of an dia. era, Israel became India's biggest military supplier in 2009, supplying equipment worth more than 1 In 1986, the members of the Organisation of the Billion Dollars each year. Israel replaced Russia in Islamic Conference (OIC) issued a joint declara- the process as biggest supplier, which tradition- tion supporting Pakistan's claim over Kashmir. ally had been India's top supplier. Relations between India and the OIC became tense in 2001 when the latter criticised India for taking Strategic Naval Cooperation: In naval terms Israel insufficient action to stop the alleged human rights sees great strategic value in an alliance with the violations against Muslims in the disputed Indian Indian Navy, given India's dominance of South occupied territory of Jammu and Kashmir. India Asian waters. It would be advantageous to the Is- dismissed these allegations as baseless and Paki- raeli Navy to establish a logistical infrastructure stani propaganda. India responded to the anti-In- in the Indian Ocean with the cooperation of the dia position taken by the OIC by re-evaluating its Indian Navy, since the Mediterranean has a domi- Middle East policy. nant Arab and European presence that is hostile to the Israeli navy in varying degrees. In 2000, Intelligence and military: India and Israel have Israeli submarines reportedly conducted test increased cooperation in military and intelligence launches of cruise missiles capable of carrying ventures since the establishment of diplomatic nuclear warheads in the waters of the Indian relations. While India and Israel were officially Ocean, off the Sri Lanka coast. "rivals" during the Cold War, the fall of the Soviet Union and the rise of Islamic terrorism in both Air Force contracts: In 1996 India purchased 32 countries have generated a solid strategic alliance. Searcher" Unmanned Aerial Vehicles, Electronic India recently launched a military satellite for Is- Support Measure sensors and an Air Combat Ma- rael through its Indian Space Research Organiza- noeuvering Instrumentation simulator system tion. from Israel. Since then Israel Aircraft Industries (IAI) has serviced several large contracts with the During the Kargil War, Israel provided India with Indian Air Force including the upgrading of the military hardware, including laser-guided bombs IAF's Russian-made MiG-21 ground attack aircraft and unmanned aerial vehicles to help it to flush and there have been further sales of unmanned out the Pakistani infiltrators in Kargil. This rela- aerial vehicles as well as laser-guided bombs. tionship soon developed into a major defense part- nership between India and Israel. Intelligence: A Rediff story in 2003 revealed that the Indian external intelligence agency R&AW In 1997, Israel's President Ezer Weizman became had clandestine links with the Mossad, Israel's the first head of the Jewish state to visit India. He external intelligence agency. When R&AW was met with Indian President Shankar Dayal Sharma, founded in 1968 by Rameshwar Nath Kao, he was Vice President K.R. Narayanan and Prime Minis- advised by the then Indian Prime Minister Indira Copyright © 2009 | WWW.UPSCPORTAL.COM 113
    • Section -6 (Mains Special: Foreign Relations of India) Gandhi to cultivate links with Mossad. This was kistan even as the aircraft operates within Indian suggested as a countermeasure to military links airspace. between that of a hostile Pakistan and China, as well as with North Korea. Israel was also con- Barak missile deal: Israel Aerospace Industries Ltd cerned that Pakistani army officers were training has signed a $2.5 billion deal with India to de- Libyans and Iranians in handling Chinese and velop an anti-aircraft system and missiles for the North Korean military equipment. Though India country, in the biggest defense contract in the planned to bomb Kahuta, as in Operation Opera, history of Israel at the time. IAI CEO Yitzhak where Israel destroyed an Iraqi nuclear reactor, Nissan recently visited India to finalize the agree- the plan was later dropped. ment with heads of the defense establishment and the country's president. The Indian government The Pakistanis eventually started to suspect in- has already approved the project, in the frame- telligence relations between India and Israel re- work of which the IAI will develop for the In- sulting in a threat to Pakistani security. When dian Navy and Air Force the Barak-8 missile that young Israeli tourists began visiting the Kashmir is capable of protecting sea vessels and ground fa- valley in the early nineties, Pakistan suspected cilities from aircraft and cruise missiles. The mis- they were disguised Israeli army officers there to sile has a range of over 70 kilometres. The missile help Indian security forces with counter-terror- will replace the current obsolete Russian system ism operations. Pakistani intelligence inspired a used by India. series of terrorist attacks on the unsuspecting Is- raeli tourists with one slain and another kid- On November 10 2008, Indian military officials napped. Intense pressure from the Kashmiri Mus- are expected to visit Israel to discuss joint weap- lim diaspora in the United States led to their re- ons development projects, additional sales of Is- lease. raeli equipment to the Indian military, and counter-terrorism strategies. The new round of Phalcon AEW&C radar systems: In March 2004, talks are seen as a significant expansion in the In- Israel and India signed a US$1.1 billion deal ac- dian-Israeli strategic partnership. In 2008, Israel cording to which IAI would deliver the Indian surpassed Russia as the largest arms supplier to Air Force three Phalcon AEW&C radar systems. India India signed a separate deal with the Ilyushin Corporation of Russia for the of supply three Il- MR-SAM deal: The deal, signed in February, in- 76 A-50 heavy air-lifters, which were to be used volves development and production of a land- as platforms for these radar systems, for an addi- based version of the Barak 8 missile systems. The tional US $500 million. sea-based version is already in advanced develop- ment stages. On 12 January 2009, the Indian Air Force received its first aircraft, which was flown to the IAF Agra The missile will be capable of intercepting enemy base where it will be stationed. First AWACS air- aircraft and missiles within a 70-kilometer range. craft will be inducted to No 50 sq based in Agra in DRDO-IAI joint venture will develop and equip end May 2009. According to the revised delivery Indian Air Force (IAF) with 18 combat manage- schedule, second and third ones now expected in ment systems with 435 MRSAMs. Missiles will November/December 2009 and May/June 2010. replace obsolete PECHORA missile systems. In Order for another 3 in process, reports suggest that December 2008, DRDO chief M Natarajan in- deal was inked in Nov 08. IAF is keen on building formed Cabinet Committee on Security (CCS) that up its Phalcon AWACS fleet to a strength to six. the nation’s air defence was under threat: IAF had AWACS will enable the IAF to carry out tactical reported that 17 out of 60 firing units of surveillance over a radius of 400 kilometers and PECHORA had already been phased out. collect surface target information deep inside Pa- Science and technology:India is building closer ties Copyright © 2009 | WWW.UPSCPORTAL.COM 114
    • Section -6 (Mains Special: Foreign Relations of India) with Israel in the areas of nanotechnology, infor- Science and Technology in India signed an MoU mation technology, alternative fuels, agriculture, with Israel for jointly funding industrial R&D animal husbandry and space research. projects. Israel's Minister for Science and Technology, In an agreement signed on May 30, 2005, India Eliezer Moodi Sandberg, said in 2003 that Israel and Israel pledged to set up a fund to encourage was keen on strengthening science and technol- investment and joint industrial ventures. Accord- ogy ties with India considering that the latter had ing to the Press Trust of India, there are five pri- a rich base of scientists and technologists and the ority areas for enhanced collaboration: two countries could benefit by synergising their nanotechnology, biotechnology, water manage- activities. ment, alternative energy, and space and aeronau- tics. India and Israel will each start by contribut- Various activities under Indo-Israel Cooperation ing US$1 million to provide risk-free grants to in Science & Technology continued during the entrepreneurs in the two countries. 1999 – 2000 year, including 22 joint research projects. Work on six projects was completed by In 2008, Israel and India finalised a three-year plan 2002. Twelve scientists from both countries vis- to introduce crops such as olives, dates and grapes ited the laboratories of their collaborators and two to be introduced and cultivated in the states of exploratory visits from India were also supported Rajasthan and Maharashtra, to create an agricul- with three young Indian scientists deputed to Is- tural market that meets Western demand for prod- rael on short term exchange visits. ucts like olive oil. In addition to the hope that this plan would boost yield and stave off famine, The Indo-Israel Joint Symposium on Human Ge- officials presented the project as symbolic. nome was held in Jerusalem in 1998 with 6 In- dian scientists working in the area. Subsequently, Spy satellites:Israel's Minister for Science and as a follow up to the symposium, a call for joint Technology has expressed interest in collaborat- research proposals on Human Genome was issued ing with the Indian Space Research Organization in July 1999 for which 11 proposals were received. (ISRO) towards utilizing satellites for better man- Out of these, 6 research projects have been rec- agement of land and other resources. Israel has ommended for implementation. Another Indo- also expressed interest in participating in ISRO's Israel status seminar on human Genome Research Chandrayaan mission of sending an unmanned was organized in India on December 2000. craft to the moon. A Memorandum of Understand- ing, signed by ISRO and Israel's space agency, pro- In 2003, the two countries proposed to double the vides for cooperation in multiple areas of space investment under the ongoing science and tech- science and technology nology collaboration to $1 million with $0.5 mil- lion from each country in the next biennial pe- TecSAR: In a significant move, Israel chose India riod starting October 2004. to launch its satellites. The latest Israeli spy satel- lite, TecSAR, was launched by India on 22 Janu- The Indo-Israel Joint Committee of scientists was ary, 2008. The Indian PSLV launch-vehicle was constituted with the DST (Department of Science chosen instead of its own home grown Shavit and Technology)and India as Co-chairmen with rocket. This was due to the cost of the PSLV be- representatives from various research organiza- ing no more than $15 million (as it is a more ma- tions in India and the Ministry of Information tured system), compared to the Shavit which is Technology as members. The 4th Meeting of the close to $20 million. Besides the cost and matu- joint committee was held in the first week of No- rity factors, the Shavit had other several critical vember 1999 in Jerusalem, attended by a 3 mem- drawbacks. The most important was the constraint ber Indian delegation. In 2004, the Ministry of on possible satellite orbits. Any launch from Is- Copyright © 2009 | WWW.UPSCPORTAL.COM 115
    • Section -6 (Mains Special: Foreign Relations of India) raeli territory must be directed westwards, to- on the Palestinian issue. wards the sea, in order to prevent the launcher's first stages (or the satellite itself, in case of a mal- Muslim response: Sharon's visit was condemned function) from falling on populated areas or on by some, especially in leftist and Muslim circles. foreign (hostile) territory. A westward launch, that Hundreds of supporters of India's various pro-Is- is, against the direction of the Earth's rotation, lamic communist parties rallied in New Delhi, seriously restricts the weight of the satellite that denouncing the visit. Muslims accused Sharon of the launch vehicle can carry. In the past, Israel being a "terrorist and a war criminal". Nearly 100 also experienced several failures - the most recent Muslims were arrested. example being the attempted Ofeq-6 launch in March 2004. In such cases, security links and the Students of the Aligarh Muslim University joined operational experience of a more capable partner the protests of Sharon's visit, denounced him as a can allow alternative, more reliable launching "terrorist," and demanded that India sever all ties when needed. with Israel and increase ties with Palestine. RISAT-2: In March 2009, India acquired access Newspapers like The Times of India and Outlook to Israeli advanced spy satellite, RISAT-2. The sat- expressed "concern" over "India's changing priori- ellite has the capability to take high resolution ties", accusing India of "turning away" from the images at night and can carry out reconnaissance cause of supporting the Palestinians and other "op- operations even through a dense cloud cover. Most pressed peoples".Urdu-language newspapers such Indian satellites currently in operation lack these as Slasat launched a campaign against Sharon, ac- capabilities. The decision to purchase the satellite cusing Israel of "aggressive and fascistic inclina- was taken in the wake of the 2008 Mumbai at- tions". tacks. The 300 kilogram RISAT-2 was successfully launched by India's PSLV rocket in April 2009. Positive response: Sharon was welcomed by many A spokesman of the Indian Space Research Orga- in India, including some politicians. The Hindi- nization said that RISAT-2 is an Indian satellite language daily Navbharat Times condemned pro- built with assistance from Israel. India is also de- tests made against him and wrote that none of veloping its own, indigenous version of RISAT-2, Sharon's controversies can justify demonstrations capable of taking images through clouds and at planned in protest of his visit by some Indian op- night. It will be launched in late 2009. position parties "because he is coming as the prime minister of Israel, which is an important friend of Tourism: India is a big destination for Israeli tour- India". Articles in The Indian Express agreed with ists. They usually visit the states of Goa, and this view, noting that the issue of India's relations Himachal Pradesh. Similarly, Israel is a destina- with Israel "instantly polarises hard-nosed prag- tion for religious tourism for the 15,000 Indian matists from dewy-eyed idealists", which is "re- Jews. grettable, for cementing geo-political and trade links with Israel need in no way weaken New Ariel Sharon's visit to India: In 2003 Ariel Sharon Delhi's traditional insistence that Palestinians be was the first Israeli Prime Minister to visit India. granted control of their territories". He was welcomed by the center-right wing Bharatiya Janata Party led National Democratic The various Jewish communities in India expressed Alliance coalition government of India. Several satisfaction at Sharon's visit, though some regret- newspapers expressed positive views on his visit, ted that Sharon could not visit them in person, and Indian Prime Minister Atal Behari Vajpayee and some Indian Jews opined that it would have voiced confidence that Sharon's visit would pave been better if a previous head of state from Israel the way for further consolidating bilateral ties and had visited India. Sharon's visit sparked an inter said there was no dilution of the country's stand Most of Sharon's activities in India went unhin- Copyright © 2009 | WWW.UPSCPORTAL.COM 116
    • Section -6 (Mains Special: Foreign Relations of India) dered and were largely productive towards ce- as counter terrorism to information technology. menting the India-Israel alliance. The central topic In early 2006 Indian government ministers Sharad of the dialogues between the Indians and the Is- Pawar, Kapil Sibal and Kamal Nath visited Israel. raeli delegation was the mutual problem of Islamic Gujarat Chief Minister Narendra Modi has also fundamentalism and Islamic terrorism in both visited Israel. countries, and how India and Israel can join forces to defeat this enemy. Israeli deputy minister Josef Issue of Kashmir:Owing to Israel's turbulently Lapid said that both India and Israel face "threats volatile relationship with Pakistan, Israel ardently from fanatic Muslims and terrorism". While de- supports India's Territorial integrity on the Kash- livering a lecture on 'The Global War Against mir controversy and says the Disputed territory Terror -- Israel and India' organised by the Indian belongs to them. Council of World Affairs (ICWA) in Delhi, he stressed that Israel has developed an excellent Bnei Menashe controversy:The Bnei Menashe are military and defense system to combat terrorism a group of more than 8,000 people from India's and the technology would be very beneficial to remote North-Eastern border states of Manipur India. Since India had been experiencing terror- and Mizoram who claim descent from one of the ism more than western Countries, its leaders un- Lost Tribes of Israel. Ethnically and linguistically, derstood him better than others. they are Tibeto-Burmans and belong to the Mizo, Kuki and Chin peoples (the terms are virtually in- Sharon expressed satisfaction over the outcome terchangeable). Prior to their conversion by Brit- of the talks with Indian leaders, saying that the ish missionaries in the 19th century, they were landmark visit would result in upgradation of bi- animists. lateral relations to new heights. Indian Prime Minister Atal Bihari Vajpayee also expressed sat- On March 31, 2005 Sephardi Rabbi Shlomo Amar, isfaction, saying that the visit would increase ties one of Israel's two chief rabbis, accepted the Bnei between India and Israel. Sharon also invited Menashe's claim because of their exemplary de- Vajpayee to visit Israel. Sharon himself spoke posi- votion to Judaism. His decision was significant be- tively of the importance of his hosts. Sharon him- cause it paved the way for all of the Bnei Menashe self said that Israelis "regard India to be one of the to enter Israel under Israel's Law of Return.In the most important countries in the world,", and past two decades, some 1,300 Bnei Menashe have Vajpayee was sure that Sharon's visit would bring moved to Israel. the two states closer together. Sharon said that terrorism was a menace that required an interna- In June 2003 Israeli Interior Minister Avraham tional response. Poraz halted Bnei Menashe immigration to Israel following charges by Ofir Pines-Paz (Minister of 2007 Jewish-Hindu leadership summit:The Science and Technology, 2006) that the Bnei world's first Jewish-Hindu interfaith leadership Menashe "are being cynically exploited for politi- summit,spearheaded by Hindu organizations in In- cal purposes." Arutz Sheva quoted Rabbi Eliyahu dia and Jewish organizations in Israel, as well as Birnbaum, a rabbinical judge dealing with the the American Jewish Committee, was held in New conversion of Bnei Menashe, as saying that the Delhi on February 2007. Knesset Absorption Committee's decision was one of "ignorance, racism, and unjustifiable hate." Visits of Indian politicians to Israel: In 2000 Jaswant Singh became the first Indian foreign Rabbi Eliyahu Birnbaum says that community minister to visit Israel. Following the visit, the two members who move to Israel in fact suffer finan- countries set up a joint anti-terror commission. cially because their move is motivated by a desire The foreign ministers of the two countries say to return to the Holy Land and not material gain. intensified cooperation will range from areas such Michael Freund has suggested that the Bnei Copyright © 2009 | WWW.UPSCPORTAL.COM 117
    • Section -6 (Mains Special: Foreign Relations of India) Menashe could help with Israel's demographic problem saying "I believe that groups like the Bnei Menashe constitute a large, untapped demographic reservoir for Israel and the Jewish people." With the March 2005 decision by Rabbi Amar, the immigration issue seemed to have been rendered moot. The Bnei Menashe's Orthodox conversion would in the future be conducted in India, and they would be recognized as wholly Jewish prior to their arrival in Israel. However, this solution was short-lived because the government of India, under pressure from Mizo-Kuki churches and Fundamentalist Christian preach- ers, objected formally to the conversion of its citizens. This ignited a furious controversy in Mizoram, culminating in top-rating television debates. The opposition mainly came from fundamentalist Christian preachers such as Chuauthuama of the Aizawl Theological College, and Biaksiama from Aizawl's Christian Research Centre. On November 9, 2005 the Israeli government halted all conversions of the Bnei Menashe in India, saying it was straining relations between the two countries. Indian officials reportedly expressed concern about the conversions and indicated mass conversions are considered illegal in India. Concern may have been triggered after a task force from the Rabbinic Court travelled to India in September 2005 to complete the conversion process for 218 Bnei Menashe. The decision by the Israeli government led to criticism from supporters of the Bnei Menashe who say Israeli officials failed to explain to the Indian government that the rabbis were not proselytising, but rather formalizing the conversions of Bnei Menashe who had already accepted Judaism. The Indian government's complaint was also criticized by some Hindu groups in India, who claim that the Indian government takes Christian complaints more seriously than theirs, and that Hindus have com- plained for years about Christian proselytizing without government response. In July 2006 Israeli Immigration Absorption Minister Zeev Boim said that the 218 Bnei Menashe who were formally converted in 2005 by the Chief Rabbinate "would be allowed to come here, but first the govern- ment must decide what its policy will be towards those who have yet to (formally) convert" . In response Michael Freund said that Boim may devise a policy concerning the Bnei Menashe remaining in India, but must allow the converted Bnei Menashe to immigrate to Israel without bureaucratic delays .Freund says that he has engaged "a prominent lawyer" and is prepared to take the minister to the Supreme Court if he does immediately facilitate the arrival of the Bnei Menashe. The Bnei Menashe have not suffered anti-Semitism in India, but over 1300 have migrated to Israel as they regard the country as their homeland and decided to emigrate "on Zionist considerations." Copyright © 2009 | WWW.UPSCPORTAL.COM 118
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    • Section -6 (Mains Special: International Organizations) International Organizations World Trade Organization The WTO was born out of the General Agreement peace and stability in the world through a multi- on Tariffs and Trade (GATT), which was estab- lateral system based on consenting member states lished in 1947. A series of trade negotiations, (currently there are slightly more GATT rounds began at the end of than 140 members) that have rati- World War II and were aimed at fied the rules of the WTO in their reducing tariffs for the facilitation individual countries as well. This of global trade on goods. The ra- means that WTO rules become a part tionale for GATT was based on of a country's domestic legal system. the Most Favored Nation (MFN) The rules, therefore, apply to local clause, which, when assigned to companies and nationals in the con- one country by another, gives the duct of business in the international selected country privileged trad- arena. If a company decides to invest ing rights. As such, GATT aimed in a foreign country, by, for example, to help all countries obtain MFN- setting up an office in that country, like status so that no single coun- the rules of the WTO (and hence, a try would be at a trading advan- country's local laws) will govern how tage over others. that can be done. Theoretically, if a country is a The WTO replaced GATT as the world's global member to the WTO, its local laws cannot con- trading body in 1995, and the current set of gov- tradict WTO rules and regulations, which cur- erning rules stems from the Uruguay Round of rently govern approximately 97% of all world GATT negotiations, which took place through- trade. out 1986-1994. GATT trading regulations estab- lished between 1947 and 1994 (and in particular How It Functions? those negotiated during the Uruguay Round) re- main the primary rule book for multilateral trade Decisions are made by consensus, though a ma- in goods. Specific sectors such as agriculture have jority vote may also rule (this is very rare). Based been addressed, as well as issues dealing with anti- in Geneva, Switzerland, the Ministerial Commit- dumping. tee, which holds meetings at least every two years, makes the top decisions. There is also a General The Uruguay Round also laid the foundations for Council, a Goods Council, Services Council, and regulating trade in services. The General Agree- an Intellectual Property Rights Council, which all ment on Trade in Services (GATS) is the guide- report to the General Council. Finally, there are a line directing multilateral trade in services. Intel- number of working groups and committees. lectual property rights were also addressed in the establishment of regulations protecting the trade If a trade dispute occurs, the WTO works to re- and investment of ideas, concepts, designs, pat- solve it. If, for example, a country erects a trade ents, and so forth. barrier in the form of a customs duty against a particular country or a particular good, the WTO The purpose of the WTO is to ensure that global may issue trade sanctions against the violating trade commences smoothly, freely and predict- country. The WTO will also work to resolve the ably. The WTO creates and embodies the legal conflict through negotiations. ground rules for global trade among member na- tions and thus offers a system for international commerce. The WTO aims to create economic Copyright © 2009 | WWW.UPSCPORTAL.COM 120
    • Section -6 (Mains Special: International Organizations) As most investment comes from the developed and Free Trade at What Cost? economically powerful into the developing and less influential economies, there is, however, a tendency for the system to give the investor an The anti-WTO protests we have seen around the advantage. Regulations that facilitate the invest- world are a response to the consequences of es- ment process are in the investor's interest because tablishing a multilateral trading system. Critics say these regulations help foreign investors maintain that the after-effects of WTO policies are undemo- an edge over local competition. Controversy over cratic because of the lack of transparency during what is the best course of action in the creation of negotiations. Opponents also argue that since the a global economic system - one that fosters free WTO functions as a global authority on trade and trade and free choice - will persist. reserves the right to review a country's domestic trade policies, national sovereignty is compro- mised. For example, regulations that a country International Monetary Fund may wish to establish to protect its industry, work- ers or environment could be considered barriers The International Monetary Fund (IMF) is an in- to the WTO's aim to facilitate free trade. A coun- ternational organization that provides financial as- try may have to sacrifice its own interests to avoid sistance and advice to member countries. This ar- violating WTO agreements. Thus, a country be- ticle will discuss the main functions of the orga- comes limited in its choices. Moreover, brutal re- nization, which has become an enduring institu- gimes that are pernicious to their own countries tion integral to the creation of financial markets may inadvertently be receiving concealed support worldwide and to the growth of developing coun- from foreign governments who continue, in the tries. name of free trade, to do business with these re- gimes. Unfavorable governments in favor of big The IMF was born at the end of World War II, business therefore remain in power at the cost of out of the Bretton Woods Conference in 1945. The a representative government. Fund was created out of a need to prevent eco- nomic crises like the great depression. With its One high profile WTO controversy has to do with sister organization, the World Bank, the IMF is intellectual property rights and a government's the largest public lender of funds in the world. It duty to its citizens versus a global authority. One is a specialized agency of the United Nations and well known example is HIV/AIDS treatments and is run by its 184 member states. Membership is the cost of patented medicines. Poor, very needy open to any country that conducts foreign policy countries, such as those in South America and sub- and accepts the statutes of the Fund. Saharan Africa, simply cannot afford to buy these patented drugs. If they were to buy or manufac- Functions and Duties: The IMF is responsible for ture these same drugs under an affordable generic the creation and maintenance of the international label, which would save thousands of lives, these monetary system, the system by which interna- countries would, as members of the WTO, be in tional payments among countries take place. It violation of intellectual property rights (TRIPS) thus strives to provide a systematic mechanism agreements and subject to possible trade sanctions. for foreign exchange transactions in order to fos- ter investment and promote balanced global eco- Analysis nomic trade. To achieve these goals, the IMF focuses and ad- Free trade fosters investment into other countries, vises on the macroeconomic policies of a country, which can help boost the economy and eventu- which affect its exchange rate and its government's ally the standard of living of all countries involved. budget, money and credit management. The IMF Copyright © 2009 | WWW.UPSCPORTAL.COM 121
    • Section -6 (Mains Special: International Organizations) will also appraise a country's financial sector and for floating rates instead. The IMF does all of its its regulatory policies, as well as structural poli- accounting in SDRs, and commercial banks accept cies within the macroeconomy that relate to the SDR denominated accounts. The value of the SDR labor market and employment. In addition, as a is adjusted daily against a basket of currencies, fund, it may offer financial assistance to nations which currently includes the U.S. dollar, the Japa- in need of correcting balance of payments discrep- nese yen, the euro, and the British pound. ancies. The IMF is thus entrusted with nurturing economic growth and maintaining high levels of The larger the country, the larger its contribution; employment within countries. thus the U.S. contributes about 18% of total quo- tas while the Seychelles Islands contribute a mod- The IMF gets its money from quota subscriptions est 0.004%. If called upon by the IMF, a country paid by member states. The size of each quota is can pay the rest of its quota in its local currency. determined by how much each government can The IMF may also borrow funds, if necessary, pay according to the size of its economy. The quota under two separate agreements with member in turn determines the weight each country has countries. In total, it has SDR 212 billion (USD within the IMF - and hence its voting rights - as 290 billion) in quotas and SDR 34 billion (USD 46 well as how much financing it can receive from billion) available to borrow. the IMF. IMF Benefits Twenty-five percent of each country's quota is paid in the form of special drawing rights (SDRs), The IMF offers its assistance in the form of sur- which are a claim on the freely usable currencies veillance, which it conducts on a yearly basis for of IMF members. Before SDRs, the Bretton Woods individual countries, regions and the global system had been based on a fixed exchange rate, economy as a whole. However, a country may ask and it was feared that there would not be enough for financial assistance if it finds itself in an eco- reserves to finance global economic growth. nomic crisis, whether caused by a sudden shock Therefore, in 1968, the IMF created the SDRs, to its economy or poor macroeconomic planning. which is a kind of international reserve asset. It A financial crisis will result in severe devaluation was created to supplement the international re- of the country's currency or a major depletion of serves of the time, which were gold and the U.S. the nation's foreign reserves. In return for the dollar. The SDR is not a currency; it is a unit of IMF's help, a country is usually required to em- account by which member states can exchange bark on an IMF-monitored economic reform pro- with one another in order to settle international gram, otherwise known as Structural Adjustment accounts. The SDR can also be used in exchange Policies (SAPs). for other freely-traded currencies of IMF mem- bers. A country may do this when it has a deficit There are three more widely implemented facili- and needs more foreign currency to pay its inter- ties by which the IMF can lend its money. A stand- national obligations. by agreement offers financing of a short-term bal- ance of payments, usually between 12 to 18 The SDR's value lies in the fact that member states months. The extended fund facility (EFF) is a commit to honor their obligations to use and ac- medium-term arrangement by which countries cept SDRs. Each member country is assigned a can borrow a certain amount of money, typically certain amount of SDRs based on how much the over a three to four-year period. The EFF aims to country contributes to the Fund (which is based address structural problems within the on the size of the country's economy). However, macroeconomy that are causing chronic balance the need for SDRs lessened when major econo- of payment inequities. The structural problems are mies dropped the fixed exchange rate and opted addressed through financial and tax sector reform Copyright © 2009 | WWW.UPSCPORTAL.COM 122
    • Section -6 (Mains Special: International Organizations) and the privatization of public enterprises. The ploit the situation by taking advantage of local third main facility offered by the IMF is known cheap labor while showing no regard for the en- as the poverty reduction and growth facility vironment. The oppositional groups say that lo- (PRGF). As the name implies, it aims to reduce cally cultivated programs, with a more grassroots poverty in the poorest of member countries while approach towards development, would provide laying the foundations for economic development. greater relief to these economies. Critics of the Loans are administered with especially low inter- IMF say that, as it stands now, the IMF is only est rates. deepening the rift between the wealthy and the poor nations of the world. The IMF also offers technical assistance to transi- tional economies, such as the former Soviet Re- Indeed, it seems that many countries cannot end publics, in the changeover from centrally planned the spiral of debt and devaluation. Mexico, which to market run economies. The IMF also offers sparked the infamous "debt crisis" of 1982 when emergency funds to collapsed economies, as it did it announced it was on the verge of defaulting on for Korea during the 1997 financial crisis in Asia. all its debts in the wake of low international oil The funds were injected into Korea's foreign re- prices and high interest rates in the international serves in order to boost the local currency, thereby financial markets, has yet to show its ability to helping the country avoid a damaging devalua- end its need for the IMF and its structural adjust- tion. Emergency funds can also be loaned to coun- ment policies. Is it because these policies have not tries that have faced economic crisis as a result of been able to address the root of the problem? Could a natural disaster. more grassroots solutions be the answer? These questions are not easy. There are, however, some All facilities of the IMF aim to create sustainable cases where the IMF goes in and exits once it has development within a country and try to create helped solve problems. Egypt is an example of a policies that will be accepted by the local popula- country that embarked upon an IMF structural tions. However, the IMF is not an aid agency, so adjustment program and was able to finish with all loans are given on the condition that the coun- it. try implement the SAPs and make it a priority to pay back what it has borrowed. Currently, all Providing assistance with development is an ever- countries that are under IMF programs are devel- evolving and dynamic endeavor. While the inter- oping, transitional and emerging market countries national system aims to create a balanced global (countries that have faced financial crisis). economy, it should strive to address local needs and solutions. On the other hand, we cannot ig- Because the IMF lends its money with "strings at- nore the benefits that can be achieved by learn- tached" in the form of its SAPs, many people and ing from others. organizations are vehemently opposed to the Fund's activities. Opposition groups claim that World Bank structural adjustment is an undemocratic and in- humane means of loaning funds to countries fac- The World Bank Group (WBG) was established ing economic failure. Debtor countries to the IMF in 1944 to rebuild post-World War II Europe un- are often faced with having to put financial con- der the International Bank for Reconstruction and cerns ahead of social ones. Thus, by being required Development (IBRD). Today, the World Bank to open up their economies to foreign investment, functions as an international organization that to privatize public enterprises, and to cut govern- fights poverty by offering developmental assis- ment spending, these countries suffer an inability tance to middle-income and low-income coun- to properly fund their education and health pro- tries. By giving loans and offering advice and train- grams. Moreover, foreign corporations often ex- ing in both the private and public sectors, the Copyright © 2009 | WWW.UPSCPORTAL.COM 123
    • Section -6 (Mains Special: International Organizations) World Bank aims to eliminate poverty by helping funding from rich countries as well as from the people help themselves. Under the World Bank issuance of bonds on the world's capital markets. Group, there are complimentary institutions which aid in its goals to provide assistance. The IBRD offers assistance to middle income and poor but credit worthy countries, and it also works Membership as an umbrella for more specialized bodies under the Bank. The IBRD was the original arm of the There are 184 member countries that are share- Bank which was responsible for the reconstruc- holders in the IBRD, which is the primary arm of tion of post-war Europe. Before gaining member- the WBG. To become a member, however, a coun- ship in the WBG's affiliates (the International Fi- try must first join the IMF. The size of the Bank's nance Corporation, the Multilateral Investment shareholders, like that of the IMF's shareholders, Guarantee Agency and the International Center depends on the size of a country's economy. Thus, For Settlement of Investment Disputes), a coun- the cost of a subscription to the Bank is a factor of try must be a member of the IBRD. the quota paid to the IMF. There is an obligatory subscription fee, which is equivalent to 88.29% The International Development Association offers of the quota that a country has to pay to the Fund. loans to the world's poorest countries. These loans In addition, a country is obligated to buy 195 Bank come in the form of "credits", and are essentially shares (USD 120,635 per share, reflecting a capi- interest-free. They offer a 10-year grace period tal increase made in 1988). Of these 195 shares, and hold a maturity of 35 years to 40 years. 0.60% must be paid in cash in U.S. dollars while 5.40% can be paid in a country's local currency, The International Finance Corporation (IFC) in U.S. dollars, or in non-negotiable non-interest works to promote private sector investments by bearing notes. The balance of the 195 shares is both foreign and local investors. It provides ad- left as "callable capital", meaning the Bank reserves vice to investors and businesses, and it offers nor- the right to ask for the monetary value of these malized financial market information through its shares when and if necessary. A country can sub- publications, which can be used to compare across scribe a further 250 shares, which do not require markets. The IFC also acts as an investor in capi- payment at the time of membership but are left tal markets and will help governments privatize as "callable capital". inefficient public enterprises. The president of the Bank comes from the largest The Multilateral Investment Guarantee Agency shareholder, which is the United States, and mem- (MIGA) supports direct foreign investment into a bers are represented by a Board of Governors. country by offering security against the invest- Throughout the year, however, powers are del- ment in the event of political turmoil. These guar- egated to a board of 24 Executive Directors (ED). antees come in the form of political risk insur- The five largest shareholders - the U.S., U.K., ance, meaning that MIGA offers insurance against France, Germany and Japan - each have an indi- the political risk that an investment in a develop- vidual ED, and the additional 19 EDs represent ing country may bear. the rest of the member states as groups of con- stituencies. Of these 19, however, China, Russia Finally, the International Center for Settlement and Saudi Arabia have opted to be single country of Investment Dispute facilitates and works to- constituencies, which means that they each have wards a settlement in the event of a dispute be- one representative within the 19 EDs. This deci- tween a foreign investor and a local country. sion is based on the fact that these countries have large, influential economies, which requires that As mentioned earlier, the main function of the their interests be voiced individually rather than WBG is to eliminate poverty and to provide assis- diluted within a group. The World Bank gets its tance to the poor by offering loans, policy advice Copyright © 2009 | WWW.UPSCPORTAL.COM 124
    • Section -6 (Mains Special: International Organizations) and technical assistance. As such, the countries Moreover, even though the Bank provides train- receiving aid are learning new ways to function. ing, assistance, information and other means that Over time, however, it has been realized that may lead to sustainable development, opponents sometimes as a nation develops, it requires more have observed that developing countries often aid to work its way through the development pro- have to put health, education and other social pro- cess. This has resulted in some countries accumu- grams on hold in order to pay back their loans. lating so much debt and debt service that pay- ments become impossible to meet. Many of the Opposition groups have protested by boycotting poorest countries can receive accelerated debt re- World Bank bonds. These are the bonds that the lief through the Heavily Indebted Poor Countries WBG sells on global capital markets to raise money scheme, which reduces debt and debt service pay- for some of its activities. These opposition groups ments while encouraging social expenditure. also call for an end to all practices that require a country to implement structural adjustment pro- Another issue on which the Bank has recently grams - including privatization and government been focusing has presented itself as an endanger- austerity measures - an end to debt owed by the ment to a country's livelihood: support programs poorest of the poor, and an end to environmen- for HIV/AIDS. The WBG has also been focusing tally damaging projects such as mining or the on reducing the risk of projects by means of bet- building of dams. ter appraisal and supervision mechanisms as well as a multidimensional approach to overall devel- Analysis opment. (This includes not only lending but also support for legal reform, educational programs, It is not surprising that there is a clash of opinion environmental safety, anti-corruption measures over how aid is given. Indeed, those that offer as- and other types of social development.) sistance are going to want to have a say in how the loans are used and what kind of economic The Bank encourages all of its clients, which num- policies are fostered in a country's developmental ber over 100, to implement policies that promote process. Many developing and poor nations, how- sustainable growth, health, education, social de- ever, are stuck in a quagmire of debt and impov- velopment programs focusing on governance and erishment, no matter how much assistance they poverty reduction mechanisms, the environment, receive. Given this, it may need to remember that private business and macroeconomic reform. the process of aid is also a developing state, in which both the giver and the receiver should be Opposition to the Bank helping each other reach a poverty-free world. While the WBG strives to create a poverty-free Asian Development Bank: The Asian Develop- world, there are groups that are passionately op- ment Bank (ADB) is a regional development bank posed to the international patron. The opponents established in 1966 to promote economic and so- believe that, due to the fundamental structure of cial development in Asian and Pacific countries the Bank, the already existing imbalance between through loans and technical assistance. It is a mul- the world's rich and poor is only exacerbated. The tilateral development financial institution owned system allows the largest shareholders to domi- by 67 members, 48 from the region and 19 from nate the vote, resulting in WBG policies being other parts of the globe. ADB's vision is a region decided by the rich but implemented by the poor. free of poverty. Its mission is to help its develop- This can result in policies that are not in the best ing member countries reduce poverty and improve interests of the developing country in question, the quality of life of their citizens. whose political, social and economic policies will The work of the Asian Development Bank (ADB) often have to be molded around WBG resolutions. is aimed at improving the welfare of the people in Copyright © 2009 | WWW.UPSCPORTAL.COM 125
    • Section -6 (Mains Special: International Organizations) Asia and the Pacific, particularly the 1.9 billion members while the others come from non-re- who live on less than $2 a day. Despite many suc- gional members. cess stories, Asia and the Pacific remains home to two thirds of the world's poor. The Board of Governors also elect the bank's Presi- dent who is the chairperson of the Board of Di- The bank was conceived with the vision of creat- rectors and manages ADB. The president has a ing a financial institution that would be "Asian in term of office lasting five years, and may be re- character" to foster growth and cooperation in a elected. Traditionally, and because Japan is one of region that back then was one of the world's poor- the largest shareholders of the bank, the Presi- est. ADB raises funds through bond issues on the dent has always been Japanese. The current Presi- world's capital markets, while also utilizing its dent is Haruhiko Kuroda. members' contributions and earnings from lend- ing. These sources account for almost three quar- The headquarters of the bank is at 6 ADB Av- ters of its lending operations. enue, Mandaluyong city, Metro Manila, Philip- pines, and it has representative offices around the Although recent economic growth in many mem- world. The bank employs approximately 2,400 ber countries have led to a change in emphasis to people, coming from 55 of its 67 member coun- some degree, throughout most of its history the tries, and with more than half of the staff being bank has operated on a project basis, specifically Filipino. ADB has 67 members (as of 2 February in the areas of infrastructure investment, agricul- 2007). tural development and loans to basic industries in member countries. Although by definition the The year after a member's name indicates the year bank is a lender to governments and government of membership. The largest share holders of the entities, it also provides direct assistance to pri- ADB are Japan and USA, each holding 15.57% of vate enterprises and has also participated as a li- the shares. At the time a country ceases to be a quidity enhancer and best practice enabler in the member, the Bank shall arrange for the repurchase private sectors of regional member countries. of such country's shares by the Bank as a part of The primary human capital asset of the bank is its the settlement of accounts with such country in staff of professionals, encompassing academic and/ accordance with the provisions of paragraphs 3 or practical experts in the areas of agriculture, civil and 4 of this Article. engineering, economics, environment, health, public policy and finance. Professional staff are Republic of China(Taiwan) initially joined as drawn from its member countries and given vari- "China" as a founding member representing the ous incentives to relocate to Manila. whole of China. However, its share of Bank capi- tal was based on the size of Taiwan's capital, un- It is conceivable that once all of Asia-Pacific like the World Bank and IMF where the govern- reaches a certain level of living standard the bank ment in Taiwan had had a share representing the will be wound down or reconfigured to operate as whole of China prior to the People's Republic of a commercial enterprise. China joining and taking the Republic of China's seat. In 1986, a compromise was effected when Policy-making Body & Members: The highest the People's Republic of China joined the institu- policy-making body of the bank is the Board of tion. The ROC was allowed to retain its member- Governors composed of one representative from ship, but under the name of Taipei,China — a each member state. The Board of Governors, in name it protests. Uniquely, this allows both sides turn, elect among themselves the 12 members of of the Taiwan Straits to be represented at the in- the Board of Directors and their deputy. Eight of stitution. the 12 members come from regional (Asia-Pacific) Copyright © 2009 | WWW.UPSCPORTAL.COM 126
    • Section -6 (Mains Special: International Organizations) ADB projects and Technical Assistance:- economic organisation of 10 countries located in ADB's annual project lending amounts to about southeast Asia, which was formed on 8 August US$7 billion per year with typical lending per 1967 by Indonesia, Malaysia, the Philippines, project being in the $100 million range. Singapore and Thailand. Since then, membership » Afghan Diaspora Project has expanded to include Brunei, Burma (Myanmar), Cambodia, Laos, and Vietnam. Its » Funding Utah state university led projects to aims include the acceleration of economic growth, bring labor skills in Thailand social progress, cultural development among its » Earthquake and Tsunami Emergency Support members, the protection of the peace and stabil- Project in Indonesia ity of the region, and to provide opportunities for member countries to discuss differences peace- » Greater Mekong Subregional Program fully. » ROC Ping Hu Offshore Oil and Gas Develop- ment In 2005, the bloc spanned over an area of 4.46 » Strategic Private Sector Partnerships for Urban million km2 with a combined GDP of about USD $896.5 billion/$2,728 billion growing at an aver- Poverty Reduction in the Philippines age rate of around 5.6% per annum. Nominal GDP » Trans-Afghanistan gas pipeline feasibility assess- had grown to USD $1.4 trillion in 2008. ment Establishment Loan of $1.2 billion to bail it out of an impending economic crisis in Pakistan and on going funding ASEAN was preceded by an organisation called for the countries growing energy needs, specifi- the Association of Southeast Asia, commonly cally Hydro-power projects called ASA, an alliance consisting of the Philip- pines, Malaysia, and Thailand that was formed in Micro finance support for private enterprises, in 1961. The bloc itself, however, was established conjunction with governments, including Paki- on 8 August 1967, when foreign ministers of five stan and India. countries – Indonesia, Malaysia, the Philippines, Singapore, and Thailand – met at the Thai Depart- In 2009, the bank endorsed a 2.9-billion-dollar ment of Foreign Affairs building in Bangkok and funding strategy for proposed projects in India. signed the ASEAN Declaration, more commonly The projects in this strategy were only indicative known as the Bangkok declaration. and still needed to be further approved by the bank's Board of Directors; however, PRC Foreign The motivations for the birth of ASEAN were the Ministry spokesman Qin Gang claimed, "The Asian desire for a stable external environment (so that Development Bank, regardless of the major con- its members’ governing elite could concentrate on cerns of China, approved the India Country Part- nation building), the common fear of communism, nership strategy which involves the territorial reduced faith in or mistrust of external powers in dispute between China and India. China expresses the 1960s, as well as the aspiration for national its strong dissatisfaction over this... The bank's economic development; not to mention move not only seriously tarnishes its own name, Indonesia’s ambition to become a regional hege- but also undermines the interests of its members. mon through regional cooperation and the hope on the part of Malaysia and Singapore to constrain Association of Southeast Indonesia and bring it into a more cooperative Asian Nations framework. Unlike the European Union, ASEAN was designed to serve nationalism. The Association of Southeast Asian Nations, com- monly abbreviated ASEAN is a geo-political and Copyright © 2009 | WWW.UPSCPORTAL.COM 127
    • Section -6 (Mains Special: International Organizations) In 1976, the Melanesian state of Papua New in the region. On 15 December 1995, the South- Guinea was accorded observer status. Through- east Asian Nuclear-Weapon-Free Zone Treaty was out the 1970s, the organization embarked on a signed with the intention of turning Southeast program of economic cooperation, following the Asia into a Nuclear-Weapon-Free Zone. The Bali Summit of 1976. This floundered in the mid- treaty took effect on 28 March 1997 after all but 1980s and was only revived around 1991 due to a one of the member states have ratified it. It be- Thai proposal for a regional free trade area. The came fully effective on 21 June 2001, after the bloc then grew when Brunei Darussalam became Philippines ratified it, effectively banning all the sixth member after it joined on 8 January 1984, nuclear weapons in the region. barely a week after the country became indepen- dent on 1 January. At the turn of the 21st century, issues shifted to involve a more environmental prospective. The On 21 July 1994, Vietnam became the seventh organization started to discuss environmental member. Laos and Burma (Myanmar) joined two agreements. These included the signing of the years later in 23 July 1997. Cambodia was to have ASEAN Agreement on Transboundary Haze Pol- joined together with Laos and Myanmar, but was lution in 2002 as an attempt to control haze pol- deferred due to the country's internal political lution in Southeast Asia. Unfortunately, this was struggle. The country later joined on 24 April unsuccessful due to the outbreaks of the 2005 1997, following the stabilisation of its government. Malaysian haze and the 2006 Southeast Asian haze. During the 1990s, the bloc experienced an increase Other environmental treaties introduced by the in both membership as well as in the drive for organization include the Cebu Declaration on East further integration. In 1990, Malaysia proposed Asian Energy Security, the ASEAN-Wildlife En- the creation of an East Asia Economic Caucus com- forcement Network in 2005, and the Asia-Pacific posing the then-members of ASEAN as well as Partnership on Clean Development and Climate, the People's Republic of China, Japan, and South both of which are responses to Global Warming Korea, with the intention of counterbalancing the and the negative effects of climate change. growing influence of the United States in the Asia- Pacific Economic Cooperation (APEC) as well as Through the Bali Concord II in 2003, ASEAN has in the Asian region as a whole. This proposal, how- subscribed to the notion of democratic peace, ever, failed since it faced heavy opposition from which means all member countries believe demo- Japan and the United States. Despite this failure, cratic processes will promote regional peace and member states continued to work for further in- stability. Also, the non-democratic members all tegration. In 1992, the Common Effective Prefer- agreed that it was something all member states ential Tariff (CEPT) scheme was signed as a sched- should aspire to. ule for phasing tariffs and as a goal to increase the region’s competitive advantage as a production The leaders of each country, particularly Mahathir base geared for the world market. This law would Mohamad of Malaysia, also felt the need to fur- act as the framework for the ASEAN Free Trade ther integrate the region. Beginning in 1997, the Area. After the East Asian Financial Crisis of 1997, bloc began creating organisations within its frame- a revival of the Malaysian proposal was established work with the intention of achieving this goal. in Chiang Mai, known as the Chiang Mai Initia- ASEAN Plus Three was the first of these and was tive, which calls for better integration between created to improve existing ties with the People's the economies of ASEAN as well as the ASEAN Republic of China, Japan, and South Korea. This Plus Three countries (China, Japan, and South was followed by the even larger East Asia Sum- Korea). mit, which included these countries as well as India, Australia, and New Zealand. This new Aside from improving each member state's econo- grouping acted as a prerequisite for the planned mies, the bloc also focused on peace and stability Copyright © 2009 | WWW.UPSCPORTAL.COM 128
    • Section -6 (Mains Special: International Organizations) East Asia Community, which was supposedly pat- ASEAN Charter terned after the now-defunct European Commu- nity. The ASEAN Eminent Persons Group was On 15 December 2008 the members of ASEAN created to study the possible successes and fail- met in the Indonesian capital of Jakarta to launch ures of this policy as well as the possibility of draft- a charter, signed in November 2007, with the aim ing an ASEAN Charter. of moving closer to "an EU-style community".The charter turns ASEAN into a legal entity and aims In 2006, ASEAN was given observer status at the to create a single free-trade area for the region United Nations General Assembly. As a response, encompassing 500 million people. President of the organisation awarded the status of "dialogue Indonesia Susilo Bambang Yudhoyono stated that partner" to the United Nations. Furthermore, on "This is a momentous development when ASEAN 23 July that year, José Ramos-Horta, then Prime is consolidating, integrating and transforming it- Minister of East Timor, signed a formal request self into a community. It is achieved while ASEAN for membership and expected the accession pro- seeks a more vigorous role in Asian and global af- cess to last at least five years before the then-ob- fairs at a time when the international system is server state became a full member. experiencing a seismic shift," he added, referring to climate change and economic upheaval. South- In 2007, ASEAN celebrated its 40th anniversary east Asia is no longer the bitterly divided, war- since its inception, and 30 years of diplomatic re- torn region it was in the 1960s and 1970s." lations with the United States. On 26 August 2007, The charter's aims included: ASEAN stated that it aims to complete all its free » "Respect for the independence, sovereignty and trade agreements with China, Japan, South Ko- territorial integrity of member states". rea, India, Australia and New Zealand by 2013, in line with the establishment of the ASEAN Eco- » "Peaceful settlement of disputes". nomic Community by 2015. In November 2007 » "Non-interference in member states internal the ASEAN members signed the ASEAN Charter, affairs". a constitution governing relations among the ASEAN members and establishing ASEAN itself » "Right to live without external interference". as an international legal entity. During the same year, the Cebu Declaration on East Asian Energy However, the ongoing global financial crisis was Security in Cebu on 15 January 2007, by ASEAN stated as being a threat to the goals envisioned by and the other members of the EAS (Australia, the charter, and also set forth the idea of a pro- People's Republic of China, India, Japan, New posed human rights body to be discussed at a fu- Zealand, South Korea), which promotes energy ture summit in February 2009. This proposition security by finding energy alternatives to conven- caused controversy, as the body would not have tional fuels. the power to impose sanctions or punish coun- tries who violate citizens' rights and would there- On February 27, 2009 a Free Trade Agreement fore be limited in effectiveness. with the ASEAN regional block of 10 countries and New Zealand and its close partner Australia Policies was signed, it is estimated that this FTA would boost aggregate GDP across the 12 countries by Apart from consultations and consensus, ASEAN’s more than US$48 billion over the period 2000- agenda-setting and decision-making processes can 2020. be usefully understood in terms of the so-called Track I and Track II. Track I refers to the practice of diplomacy among government channels. The participants stand as representatives of their re- Copyright © 2009 | WWW.UPSCPORTAL.COM 129
    • Section -6 (Mains Special: International Organizations) spective states and reflect the official positions of Looking at the three tracks, it is clear that until their governments during negotiations and discus- now, ASEAN has been run by government offi- sions. All official decisions are made in Track I. cials who, as far as ASEAN matters are concerned, Track II on the other hand refers to diplomatic are accountable only to their governments and not activities that are unofficial and includes partici- the people. pants from both government and non-government institutions such as the academic, economic com- ASEAN Summit munities and NGOs. This track enables govern- ments to discuss controversial issues and test new The organization holds meetings, known as the ideas without making official statements or bind- ASEAN Summit, where heads of government of ing commitments, and, if necessary, backtrack on each member meet to discuss and resolve regional positions. issues, as well as to conduct other meetings with other countries outside of the bloc with the in- Although Track II dialogues are sometimes cited tention of promoting external relations. as examples of the involvement of civil society in regional decision-making process by governments The ASEAN Leaders' Formal Summit was first held and other second track actors, NGOs have rarely in Bali, Indonesia in 1976. Its third meeting was got access to this track, meanwhile participants held in Manila in 1987 and during this meeting, it from the academic community are a dozen think- was decided that the leaders would meet every tanks. However, these think-tanks are, in most five years. Consequently, the fourth meeting was cases, very much linked to their respective gov- held in Singapore in 1992 where the leaders again ernments, and dependent on government fund- agreed to meet more frequently, deciding to hold ing for their academic and policy-relevant activi- the summit every three years. In 2001, it was de- ties. Their recommendations, especially in eco- cided to meet annually to address urgent issues nomic integration, are often closer to ASEAN’s affecting the region. Member nations were as- decisions than the rest of civil society’s positions. signed to be the summit host in alphabetical or- The track that acts as a forum for civil society in der except in the case of Myanmar which dropped Southeast Asia is called Track III, which is essen- its 2006 hosting rights in 2004 due to pressure from tially people-to-people diplomacy undertaken the United States and the European Union. mainly by CSOs. Track III networks claim to rep- By December 2008, the ASEAN Charter came into resent communities and people who are largely force and with it, the ASEAN Summit will be held marginalised from political power centers and twice in a year. unable to achieve positive change without out- side assistance. This track tries to influence gov- East Asia Summit ernment policies indirectly by lobbying, generat- ing pressure through the media. Third-track ac- The East Asia Summit (EAS) is a forum held an- tors also organise and/or attend meetings as well nually by leaders of 16 countries in the East Asian as conferences to get access to Track I officials. region. EAS meetings are held after annual ASEAN While Track II meetings and interactions with leaders’ meetings. The first summit was held in Track I actors have increased and intensified, Kuala Lumpur on December 14, 2005.The con- rarely has the rest of civil society had the oppor- cept of an East Asia Grouping has significant his- tunity to interface with Track II. Those with Track tory going back to an idea first promoted in 1991 I have been even rarer. In other words, the par- by then Malaysian Prime Minister Mahathir bin ticipation of the big majority of CSOs has been Mohamad for an East Asia Economic Caucus. excluded from ASEAN’s agenda-setting and deci- sion-making. The final report in 2002 of the East Asian Study Group, established by the ASEAN Plus Three countries, was based on an EAS involving ASEAN Copyright © 2009 | WWW.UPSCPORTAL.COM 130
    • Section -6 (Mains Special: International Organizations) Plus Three, therefore not involving Australia, New The reality appears however that movement to- Zealand or India The EAS as proposed was to be wards such a relationship is a long way-off. Lee an ASEAN led development, with the summit to Kuan Yew has compared the relationship between be linked to ASEAN summit meetings however South-East Asia and India with that of the Euro- the issue was to which countries beyond those in pean Community and Turkey, and has suggested ASEAN the EAS was to be extended to. that a free-trade area involving South-East Asia and India is 30 to 50 years away. The decision to hold the EAS was reached during the 2004 ASEAN Plus Three summit and the ini- The members of EAS agreed to study the Japa- tial 16 members determined at the ASEAN Plus nese proposed Comprehensive Economic Partner- Three Ministerial Meeting held in Laos at the end ship in East Asia (CEPEA). The Track Two report of July 2005. on CEPEA is due to be completed in mid-2008 and at the Third EAS it was agreed this would be Credit for advancing the forum during the 2004 considered at the Fourth EAS. ASEAN Plus Three summit has been attributed to Malaysia. Third EAS: The issues of Myanmar (Burma), fol- lowing the 2007 Burmese anti-government First EAS: Prior to the first meeting there was protests,and climate change were expected to be significant discussion as to which countries should discussed at the Third EAS. be represented .At the time there were difficul- ties in the relationship between the "Plus Three" Myanmar successfully blocked formal discussion members (ie Japan, China and South Korea) of of its internal affairs. ASEAN Plus Three ,and the perception that India and to a lesser extent Australia and New Zealand The summit did issue the Singapore Declaration were present to balance the growing China power on Climate Change, Energy and the Environment. all meant the first meeting's achievements were The Summit also agreed to the establishment of limited. Russia expressed early interest in EAS the Economic Research Institute for ASEAN and membership and attended the first EAS as an ob- East Asia and to receive the final report on the server at the invitation of 2005 EAS host Malay- Comprehensive Economic Partnership in East Asia sia. at the Fourth EAS. Second EAS: The next EAS was to be held on De- The outcomes are summarised in the Chairman's cember 13, 2006 in Metro Cebu, Philippines. Af- Statement of the 3rd East Asia Summit Singapore, ter the confidence building of the inaugural EAS 21 November 2007. the 2006 EAS will help to define the future role of the EAS, its relationship with ASEAN Plus Fourth EAS: The Summit was significantly de- Three and the involvement of Russia in EAS. How- layed and its location changed a number of times ever in the face of Tropical Typhoon Utor the sum- due to internal tensions in Thailand, the host na- mit was post-poned until January 2007. It was re- tion. In the lead up to the Summit there were also scheduled for January 15, 2007, approximately a several fatal border clashes between Thailand and month after the original scheduled date.The out- Cambodia. The Summit however is said to be used comes are summarised in the Chairman's State- as an opportunity for discussions on the sidelines ment of the Second East Asia Summit. The EAS between the respective nation's leaders. members signed the Cebu Declaration on East Asian Energy Security, a declaration on energy It was also announced that India would be repre- security and biofuels containing statement for sented at the Summit by its Commerce and In- members to prepare, non-binding, targets. dustry Minister Kamal Nath not its Prime Minis- ter. Copyright © 2009 | WWW.UPSCPORTAL.COM 131
    • Section -6 (Mains Special: International Organizations) The Summit was then cancelled following pro- The relationship between APEC, ASEAN Plus testers takin over the summit's venue on the day Three and the EAS remained unresolved heading of the Summit. into the 2007 APEC meeting. Following the meet- ing the then Malaysian Prime Minister Abdullah The relationship with ASEAN Badawi described ASEAN Plus Three as the pri- Plus Three mary vehicle and implied APEC was the lesser of the three. At the same time a Malaysian commen- The relationship between the EAS on the one hand tator writing in a Singaporean newspaper de- and ASEAN Plus Three on the other is still not scribed concentric circles for the three with clear. As discussed above, some countries are more ASEAN Plus Three at the centre and APEC at the supportive of the narrower ASEAN Plus Three outer, also suggested the Nikai Initiative, with its grouping whereas others support the broader, regional OECD like plans, might overtaking the more inclusive EAS. ASEAN Plus Three, which remaining role for APEC. has been meeting since December 1997 has a his- tory, including the Chiang Mai initiative which Regional Forum appears to have led to the development of the Asian Currency Unit. This may be significant for The ASEAN Regional Forum (ARF) is a formal, those advocating a broader role for EAS in the official, multilateral dialogue in Asia Pacific re- future. gion. As of July 2007, it is consisted of 27 partici- pants. ARF objectives are to foster dialogue and The tension between the groupings extends to the consultation, and promote confidence-building respective members' intentions towards future and preventive diplomacy in the region. The ARF Free Trade Agreements with China and South met for the first time in 1994. The current par- Korea focused on ASEAN Plus Three and Japan ticipants in the ARF are as follows: all the ASEAN on the broader EAS members. members, Australia, Bangladesh, Canada, the People's Republic of China, the European Union, The 1997 Asian financial crisis had demonstrated India, Japan, North Korea, South Korea, Mongolia, the need for regional groupings and initiatives. It New Zealand, Pakistan, Papua New Guinea, Rus- was during this time ASEAN Plus Three had com- sia, Timor-Leste, United States and Sri Lanka. The menced and it was also during this time that the Republic of China (also known as Taiwan) has been East Asian caucus was being discussed. excluded since the establishment of the ARF, and issues regarding the Taiwan Strait is neither dis- The EAS is just one regional grouping and some cussed at the ARF meetings nor stated in the ARF members down play its significance, the former Chairman's Statements. Australian Prime Minister John Howard has stated that the EAS was secondary as a regional summit Economic Community to Asia-Pacific Economic Cooperation (APEC) which has on his view a premier role. Not all ASEAN has emphasised regional cooperation in members of the EAS, notably India, are members the “three pillars” of security, sociocultural and of APEC. However as the EAS meetings are sched- economic integration. The regional grouping has uled with the ASEAN Plus Three meetings (they made the most progress in economic integration, both follow the annual ASEAN meetings) and all aiming to create an ASEAN Economic Commu- members of ASEAN Plus Three are members of nity (AEC) by 2015. The AEC would have a com- EAS the ability of the two forums to remain rel- bined population of over 560 million and total evant given the existence of the other remains in trade exceeding US$ 1,400 billion. question. China has stated its preference for both EAS and ASEAN Plus Three to exist side-by-side. Copyright © 2009 | WWW.UPSCPORTAL.COM 132
    • Section -6 (Mains Special: International Organizations) Free Trade Area: The foundation of the AEC is the ASEAN Free Trade Area (AFTA), a common Trade in Services: An ASEAN Framework Agree- external preferential tariff scheme to promote the ment on Trade in Services was adopted at the free flow of goods within ASEAN. The ASEAN ASEAN Summit in Bangkok in December 1995. Free Trade Area (AFTA) is an agreement by the Under AFAS, ASEAN Member States enter into member nations of ASEAN concerning local successive rounds of negotiations to liberalise trade manufacturing in all ASEAN countries. The AFTA in services with the aim of submitting increasingly agreement was signed on 28 January 1992 in higher levels of commitments. The negotiations Singapore. When the AFTA agreement was origi- result in commitments that are set forth in sched- nally signed, ASEAN had six members, namely, ules of specific commitments annexed to the Brunei, Indonesia, Malaysia, the Philippines, Framework Agreement. These schedules are of- Singapore and Thailand. Vietnam joined in 1995, ten referred to as packages of services commit- Laos and Myanmar in 1997, and Cambodia in 1999. ments. At present, ASEAN has concluded seven The latecomers have not fully met the AFTA's packages of commitments under AFAS. obligations, but they are officially considered part of the AFTA as they were required to sign the Single Aviation Market: The ASEAN Single Avia- agreement upon entry into ASEAN, and were tion Market (SAM), proposed by the ASEAN Air given longer time frames in which to meet AFTA's Transport Working Group, supported by the tariff reduction obligations. ASEAN Senior Transport Officials Meeting, and endorsed by the ASEAN Transport Ministers, will Comprehensive Investment Area:- introduce an open-sky arrangement to the region The ASEAN Comprehensive Investment Area by 2015. The ASEAN SAM will be expected to (ACIA) will encourage the free flow of invest- fully liberalise air travel between its member ment within ASEAN. The main principles of states, allowing ASEAN to directly benefit from the ACIA are as follows: the growth in air travel around the world, and also freeing up tourism, trade, investment and ser- » All industries are to be opened up for invest- vices flows between member states. Beginning 1 ment, ith exclusions to be phased out according December 2008, restrictions on the third and to schedules fourth freedoms of the air between capital cities of member states for air passengers services will » National treatment is granted immediately to be removed, while from 1 January 2009, there will ASEAN investors with few exclusions be full liberalisation of air freight services in the region, while By 1 January 2011, there will be » Elimination of investment impediments liberalisation of fifth freedom traffic rights be- tween all capital cities. » Streamlining of investment process and proce- dures Free Trade Agreements With Other Countries: ASEAN has concluded free trade agreements with » Enhancing transparency China, Korea, Japan, Australia and New Zealand. In addition, it is currently negotiating free trade » Undertaking investment facilitation measures agreement with India (conclusion expected in April 2009) and with the European Union. Tai- Full realisation of the ACIA with the removal of wan has also expressed interest in an agreement temporary exclusion lists in manufacturing agri- with ASEAN but needs to overcome diplomatic culture, fisheries, forestry and mining is sched- objections from China. uled by 2010 for most ASEAN members and by 2015 for the CLMV (Cambodia, Lao PDR, Myanmar, and Vietnam) countries. Copyright © 2009 | WWW.UPSCPORTAL.COM 133
    • Section -6 (Mains Special: International Organizations) Cultural activities: The organisation hosts cul- other in the form of training and research facili- tural activities in an attempt to further integrate ties, cooperate more effectively in joint efforts that the region. These include sports and educational are supportive of, and complementary to national activities as well as writing awards. Examples of development plans of member states, maintain these include the ASEAN University Network, close and beneficial cooperation with existing in- the ASEAN Center for Biodiversity, the ASEAN ternational and regional organizations, and coop- Outstanding Scientist and Technologist Award, erate in projects that can be dealt with most pro- and the Singapore-sponsored ASEAN Scholarship. ductively on a sub-regional basis and which make best use of available synergies. BIMSTEC was ini- Bay of Bengal Initiative for tiated with the goal to combine the 'Look West' MultiSectoral Technical and Economic policy of Thailand and ASEAN with the 'Look East' Cooperation policy of India and South Asia. So it could be ex- plained that BIMSTEC is a link between ASEAN and SARRC. Seven members of BIMSTEC covers Bay of Bengal Initiative for MultiSectoral Tech- 13 Priority Sectors led by member countries in a nical and Economic Cooperation (BIMSTEC) is an voluntary manner namely, Trade & Investment, international organisation involving a group of Technology, Energy, Transport & Communica- countries in South Asia and South East Asia. The tion, Tourism, Fisheries, Agriculture, Cultural member countries of this group are: Bangladesh, Cooperation, Environment and Disaster Manage- India, Myanmar, Sri Lanka, Thailand, Bhutan and ment, Public Health, People-to-People Contact, Nepal. Poverty Alleviation and Counter-Terrorism and Transnational Crimes. On 6 June 1997, a new sub-regional grouping was formed in Bangkok and given the name BIST-EC What make BIMSTEC different from other orga- (Bangladesh, India, Sri Lanka, and Thailand Eco- nization would be that BIMSTEC represent one nomic Cooperation). Myanmar attended the in- of the most diverse regions of the world, be it, augural June Meeting as an observer and joined way of life, religion, language, culture, etc. the organization as a full member at a Special Min- BIMSTEC clearly separates issues of development isterial Meeting held in Bangkok on 22 Decem- into 13 Priority Sectors besides focusing only on ber 1997, upon which the name of the grouping economic cooperation which make BIMSTEC cov- was changed to BIMST-EC. Nepal was granted ers all aspects regarding the word 'developing'. observer status by the second Ministerial Meet- BIMSTEC provides a unique link between South ing in Dhaka in December 1998. Subsequently, Asia and Southeast Asia bringing together 1.3 bil- full membership has been granted to Nepal and lion people - 21 percent of the world population, Bhutan in 2004. In the first Summit on 31 July a combined GDP of US$750 billion, and a consid- 2004, leaders of the group agreed that the name erable amount of complementarities. A study of the grouping should be known as BIMSTEC or shows the potential of US$ 43 to 59 billion trade the Bay of Bengal Initiative for Multi-Sectoral creation under BIMSTEC FTA. Technical and Economic Cooperation. Regarding economic aspect, BIMSTEC has Trade According to the Bangkok Declaration on the Es- Negotiating Committee (BIMTEC TNC). The 16th tablishment of BIST-EC, the aims and purposes TNC meeting was held during 17-21 March 2008 of BIST-EC/BIMST-EC are to create an enabling in India. The 17th TNC meeting was held during environment for rapid economic development, ac- 15-17 October 2008 in Colombo, Sri Lanka. TNC celerate social progress in the sub-region, promote Meeting is now working on the List of Goods re- active collaboration and mutual assistance on mat- garding the Framework Agreement that has been ters of common interest, provide assistance to each signed in 2004. So far, BIMSTEC has been work- Copyright © 2009 | WWW.UPSCPORTAL.COM 134
    • Section -6 (Mains Special: International Organizations) ing on the FTA and looking forward to finalise our agreement soon. BIMSTEC Priority Sectors BIMSTEC has thirteen priority sectors cover all areas of cooperation. Six priority sectors of coopera- tion were identified at the 2nd Ministerial Meeting in Dhaka on 19 November 1998. They include the followings: 1. Trade and Investment, led by Bangladesh 2. Transport and Communication, led by India 3. Energy, led by Myanmar 4. Tourism, led by India 5. Technology, led by Sri Lanka 6. Fisheries, led by Thailand After the 8th Ministerial Meeting in Dhaka on 18-19 December 2005, a number of new areas of coopera- tion emerged. The number of priority sectors of cooperation increased from 6 to 13. The 7 new sectors were discussed in the 1st BIMSTEC Summit and there has been various activities to enhance those co- operations ever since. The sectors are as follows:- 7. Agriculture, led by Myanmar 8. Public Health, led by Thailand 9. Poverty Alleviation, led by Nepal 10. Counter-Terrorism and Transnational Crime, led by India 11. Environment and Natural Disaster Management, led by India 12. Culture, led by Bhutan 13. People to People contact, led by Thailand Chairmanship BIMSTEC uses the alphabetical order for the Chairmanship. The Chairmanship of BIMSTEC has been taken in rotation commencing with Bangladesh (1997 - 1999), India (2000) Myanmar (2001-2002), Sri Lanka (2002 - 2003), Thailand (2003 – 2005), Bangladesh (2005-2006). Bhutan asked for the skip. So it's turned to India (2006-present). In 2009, Myanmar will host the 12th Ministerial Meeting and assume the BIMSTEC Chairmanship. Cooperation with ADB ADB has become BIMSTEC's development partner since 2005, to undertake a study which is designed to help promote and improve transport infrastructure and logistic among the BIMSTEC countries. So far, ADB has already finished the project so called BIMSTEC Transport Infrastructure and Logistic Study (BTILS). The final report of the said study from ADB has already been conveyed to all members and being awaited for the feedback. Other fields of cooperation will be designed later on. Copyright © 2009 | WWW.UPSCPORTAL.COM 135
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    • Section -6 (Mains Special: Hot Economic Issues) Hot Economic Issues The Globalization Debate Globalization Debate Some of these changes arose as a result of the North American Free Trade Agreement (NAFTA). Globalization is the tendency of investment funds NAFTA sent the jobs of U.S. autoworkers to and businesses to move beyond domestic and na- Mexico, a developing country, where wages are tional markets to other markets around the globe, significantly lower than those in the U.S. A few allowing them to become interconnected with years later, some of those same jobs were relo- different markets. Proponents of globalization say cated to third-world countries in East Asia, where that it helps developing nations catch up to wages are even lower. In both cases, the auto industrialized nations much faster through in- manufacturers expected U.S. consumers to con- creased employment and technological advances tinue buying those products at U.S. prices. While and Asian economies are often highlighted as ex- critics of globalization decry the loss of jobs that amples of globalization's success. Critics of glo- globalization can entail for developed countries, balization say that it weakens national sovereignty those who support globalization argue that the and allows rich nations to ship domestic jobs over- employment and technology that is brought to seas where labor is much cheaper. developing countries helps those populations to- ward industrialization and the possibility of in- The View from the Penthouse creased standards of living. For business leaders and members of the economic The View from the Middle Ground elite, globalization is good. Cheaper labor over- seas enables them to build production facilities in In the globalization battleground, outsourcing is locations where labor and healthcare costs are low a double-edged sword. and then sell the finished goods in locations where wages are high. On the one hand, low wages in foreign countries enable retailers to sell clothing, cars and other Profits soar and Wall Street rewards big profit goods at reduced rates in western nations where gains with higher stock prices. The CEOs of glo- shopping has become an ingrained part of the cul- bal companies also get credit for the profits, and ture. This allows companies to increase their profit are rewarded with generous compensation pack- margins. ages, in which company stock and stock options figure prominently. Institutional investors and At the same time, shoppers save money when they wealthy individuals also take home the big gains buy these goods, causing some supporters of glo- when stock prices increase. balization to argue that while sending jobs over- seas tends to lower wages, it may also lower prices The View From the Street at the same time. But globalization doesn't only affect CEOs and Lower-income workers also enjoy some of the high-net-worth individuals. Competition for jobs benefits of stock price appreciation. When com- stretches far beyond the immediate area in a glo- panies outsource jobs and get rewarded with ris- bal marketplace. From technology call centers in ing share prices, mutual funds that hold those India, to automobile manufacturing plants in shares also increase in value. China, globalization means that workers must compete with job applicants from around the world. Copyright © 2009 | WWW.UPSCPORTAL.COM 137
    • Section -6 (Mains Special: Hot Economic Issues) The Effects of Globalization as an economy with low to middle per capita in- come. Such countries constitute approximately The ever-increasing flow of cross-border traffic 80% of the global population, and represent about in terms of money, information, people and tech- 20% of the world's economies. The term was nology isn't going to stop. coined in 1981 by Antoine W. Van Agtmael of the International Finance Corporation of the Some argue that it is a classic situation of the rich World Bank. get richer while the poor get poorer. While glo- bal standards of living have risen overall as indus- Although the term "emerging market" is loosely trialization takes root in third-world countries, defined, countries that fall into this category, vary- they have fallen in developed countries. Today, ing from very big to very small, are usually con- the gap between rich and poor countries is ex- sidered emerging because of their developments panding as is the gap between the rich and poor and reforms. Hence, even though China is deemed within these countries. one of the world's economic powerhouses, it is lumped into the category alongside much smaller Homogenization of the world is another result, economies with a great deal less resources, like with the same coffee shop on every corner and Tunisia. Both China and Tunisia belong to this the same big-box retailers in seemingly every city category because both have embarked on eco- in every country. So, while globalization does pro- nomic development and reform programs, and mote contact and exchange between cultures, it have begun to open up their markets and "emerge" also tends to make them more similar to one an- onto the global scene. EMEs are considered to be other. At the market level, linked global financial fast-growing economies. markets propel local issues into international prob- lems, such as meltdowns in Southeast Asia to Rus- What an EME Looks Like sian debt defaults. EMEs are characterized as transitional, meaning What lies ahead? they are in the process of moving from a closed economy to an open market economy while build- Deviation from the status quo on this issue is likely ing accountability within the system. Examples to be minimal. The massive outsourcing of U.S. include the former Soviet Union and Eastern bloc manufacturing jobs that began decades ago con- countries. As an emerging market, a country is tinues today. White collar jobs, such as call cen- embarking on an economic reform program that ter workers, medical technicians and accountants will lead it to stronger and more responsible eco- have also joined the outsource parade, leaving nomic performance levels, as well as transparency many to argue that those profiting from the ar- and efficiency in the capital market. An EME will rangement have little incentive to change it, while also reform its exchange rate system because a those most impacted by it are virtually powerless. stable local currency builds confidence in an economy, especially when foreigners are consid- Politicians have latched onto the idea of the dis- ering investing. Exchange rate reforms also reduce appearing middle class as a political issue, but none the desire for local investors to send their capital of their income redistribution schemes are likely abroad (capital flight). Besides implementing re- to have any immediate substantial impact. forms, an EME is also most likely receiving aid and guidance from large donor countries and/or Emerging Market Economy world organizations such as the World Bank and International Monetary Fund. An emerging market economy (EME) is defined Copyright © 2009 | WWW.UPSCPORTAL.COM 138
    • Section -6 (Mains Special: Hot Economic Issues) One key characteristic of the EME is an increase generations, this can change the very fabric of a in both local and foreign investment (portfolio and society and if a population is not fully trusting of direct). A growth in investment in a country of- change, it may fight back hard to stop it. ten indicates that the country has been able to build confidence in the local economy. Moreover, Although emerging economies may be able to look foreign investment is a signal that the world has forward to brighter opportunities and offer new begun to take notice of the emerging market, and areas of investment for foreign and developed when international capital flows are directed to- economies, local officials in EMEs need to con- ward an EME, the injection of foreign currency sider the effects of an open economy on citizens. into the local economy adds volume to the Furthermore, investors need to determine the risks country's stock market and long-term investment when considering investing in an EME. The pro- to the infrastructure. cess of emergence may be difficult, slow and of- ten stagnant at times. And even though emerging For foreign investors or developed-economy busi- markets have survived global and local challenges nesses, an EME provides an outlet for expansion in the past, they had to overcome some large ob- by serving, for example, as a new place for a new stacles to do so. factory or for new sources of revenue. For the re- cipient country, employment levels rise, labor and International Trade managerial skills become more refined, and a shar- ing and transfer of technology occurs. In the long- International trade is the exchange of goods and run, the EME's overall production levels should services between countries. This type of trade gives rise, increasing its gross domestic product and rise to a world economy, in which prices, or sup- eventually lessening the gap between the emerged ply and demand, affect and are affected by global and emerging worlds. events. Political change in Asia, for example, could result in an increase in the cost of labor, thereby Local Politics vs. Global Economy increasing the manufacturing costs for an Ameri- can sneaker company based in Malaysia, which An emerging market economy must have to weigh would then result in an increase in the price that local political and social factors as it attempts to you have to pay to buy the tennis shoes at your open up its economy to the world. The people of local mall. A decrease in the cost of labor, on the an emerging market, who are accustomed to be- other hand, would result in you having to pay less ing protected from the outside world, can often for your new shoes. be distrustful of foreign investment. Emerging economies may also often have to deal with issues Trading globally gives consumers and countries of national pride because citizens may be opposed the opportunity to be exposed to goods and ser- to having foreigners owning parts of the local vices not available in their own countries. Almost economy. every kind of product can be found on the inter- national market: food, clothes, spare parts, oil, jew- Moreover, opening up an emerging economy elry, wine, stocks, currencies and water. Services means that it will also be exposed not only to new are also traded: tourism, banking, consulting and work ethics and standards, but also to new cul- transportation. A product that is sold to the glo- tures. The introduction and impact of, say, fast bal market is an export, and a product that is food and music videos to some local markets has bought from the global market is an import. Im- been a by-product of foreign investment. Over the ports and exports are accounted for in a country's current account in the balance of payments. Copyright © 2009 | WWW.UPSCPORTAL.COM 139
    • Section -6 (Mains Special: Hot Economic Issues) Increased Efficiency of Trading Note that, in the example above, Country B could Globally produce both wine and cotton more efficiently than Country A (less time). This is called an abso- lute advantage, and Country B may have it be- Global trade allows wealthy countries to use their cause of a higher level of technology. However, resources - whether labor, technology or capital - according to international trade theory, even if a more efficiently. Because countries are endowed country has an absolute advantage over another, with different assets and natural resources (land, it can still benefit from specialization. labor, capital and technology), some countries may produce the same good more efficiently and there- fore sell it more cheaply than other countries. If a Other Possible Benefits of Trading country cannot efficiently produce an item, it can Globally obtain the item by trading with another country that can. This is known as specialization in inter- International trade not only results in increased national trade. efficiency but also allows countries to participate in a global economy, encouraging the opportu- Let's take a simple example. Country A and Coun- nity of foreign direct investment (FDI), which is try B both produce cotton sweaters and wine. the amount of money that individuals invest into Country A produces 10 sweaters and six bottles foreign companies and other assets. In theory, of wine a year while Country B produces six sweat- economies can therefore grow more efficiently and ers and 10 bottles of wine a year. Both can pro- can more easily become competitive economic duce a total of 16 units. Country A, however, takes participants. three hours to produce the 10 sweaters and two hours to produce the six bottles of wine (total of For the receiving government, FDI is a means by five hours). Country B, on the other hand, takes which foreign currency and expertise can enter one hour to produce 10 sweaters and three hours the country. These raise employment levels and, to produce six bottles of wine (total of four hours). theoretically, lead to a growth in the gross do- mestic product. For the investor, FDI offers com- But these two countries realize that they could pany expansion and growth, which means higher produce more by focusing on those products with revenues. which they have a comparative advantage. Coun- try A then begins to produce only wine and Coun- Free Trade vs. Protectionism try B produces only cotton sweaters. Each coun- try can now create a specialized output of 20 units As with other theories, there are opposing views. per year and trade equal proportions of both prod- International trade has two contrasting views re- ucts. As such, each country now has access to 20 garding the level of control placed on trade: free units of both products. trade and protectionism. Free trade is the simpler of the two theories: a laissez-faire approach, with We can see then that for both countries, the op- no restrictions on trade. The main idea is that sup- portunity cost of producing both products is ply and demand factors, operating on a global scale, greater than the cost of specializing. More spe- will ensure that production happens efficiently. cifically, for each country, the opportunity cost Therefore, nothing needs to be done to protect or of producing 16 units of both sweaters and wine promote trade and growth because market forces is 20 units of both products (after trading). Spe- will do so automatically. cialization reduces their opportunity cost and therefore maximizes their efficiency in acquiring In contrast, protectionism holds that regulation the goods they need. With the greater supply, the of international trade is important to ensure that price of each product would decrease, thus giving markets function properly. Advocates of this an advantage to the end consumer as well. Copyright © 2009 | WWW.UPSCPORTAL.COM 140
    • Section -6 (Mains Special: Hot Economic Issues) theory believe that market inefficiencies may 2001 Census, about 78 million people in the coun- hamper the benefits of international trade and try were living without a home and more than they aim to guide the market accordingly. Pro- that number were holed up in urban slums. The tectionism exists in many different forms, but the number of the poor living in the country is more most common are tariffs, subsidies and quotas. than the poor living in any other country of the These strategies attempt to correct any inefficiency world. in the international market. Despite the above socio-economic problems plagu- National Treatment ing the Indian society, post-reforms period has been marked by high growth rate, placing the A concept of international law that declares if country among the front runners in the race for a state provides certain rights and privileges to its highest growth in the world. During the past five own citizens, it also should provide equivalent years, India has been second only to rights and privileges to foreigners who are cur- China in terms of the growth rate achieved. India’s rently in the country. This concept of equality can Information Technology (IT) industry, services, be found in bilateral tax treaties and also manufacturing and automobile sectors have been in most World Trade Organization agreements. booming. The urban areas, particularly the met- ropolitan cities, have been the centres of growth. For example, if country A provides special tax Industrial centres have also been the hubs of eco- breaks for its fledgling pharmaceutical industry, nomic activity and the income levels in the coun- all pharmaceutical companies that have operations try are on the rise. in country A will be entitled to the tax breaks, regardless of whether the company is domestic or During the past about a decade, the foreign sector foreign. in the country has also been performing extremely well and the policy of globalization has paid rich In some situations, national treatment may not dividends, with the foreign sector, registering over be such a great thing. For instance, suppose that 20 per cent growth in the past several years. With- a state has a law that allows it out taking away the credit from the liberalization to expropriate property. Under national policy, the resilience of the Indian economy must treatment, a foreign firm would technically still also be given its due credit for outstanding achieve- be subject to the expropriation law. ments. However, depending on the country, other laws may exists that could limit national treatment Unfortunately, the spurt in economic activity in to only the upside benefits. the country and increase in the growth rate over the past few years has not been able to make a Rich-Poor Divide discernible dent on the problem of poverty, dep- rivation and exploitation of the downtrodden. The Despite the high growth rate of the economy, in divide between the rich and the poor has now absolute terms India still is a low income economy, become a tangible reality. There are more Indian with its per capita income at a level less than $500 billionaires in the Forbes list than ever before. But per annum. Low per capita income is a pointer the number of the poor and hungry is also not towards the existing sharp divide between India’s decreasing. The growth centres are encircled by wealthiest and poorest sections of society. Out of the group of underprivileged people whose basic the total population, about 26 million people live needs are still to be met. During this era of rapid below poverty line and 35 per cent out of this growth, the problems of unequal and skewed dis- group, also classified as the poorest of the poor, tribution of economic resources and the fruits of have income level of less than $1 per day. As per growth have surfaced. Copyright © 2009 | WWW.UPSCPORTAL.COM 141
    • Section -6 (Mains Special: Hot Economic Issues) In addition to the economic divide between the The current situation in most of the cities and rich and the poor, the digital divide between vari- towns is pathetic. Mumbai, Delhi and Kolkata are ous regions of the country has also become an the main business and growth centres in the coun- important issue. It has been admitted by the gov- try. In addition cities like Bangalore and ernment policy makers that the growth rate in Hyderabad are the hub centres of the IT revolu- the rural areas has been quite sluggish despite high tion in the country. But these very cities have their growth rate in the urban centres. Economic ac- darker side as well. There is a huge population of tivity in the rural areas has not been able to pick urban poor and slum dwellers living there. Water up to match the rapid growth of the cities. The supply and sanitation is a serious problem and solid result is that in the hope of getting better em- waste collection and its safe disposal is something ployment and growth opportunities a large num- that requires a major national initiative. ber of people are migrating to the cities every year. While a person from the middle class and upper Rural economy is largely comprised of the agri- middle class in the cities would invariably have culture and allied activities. The growth rate of access to better health, educational and other fa- the agricultural sector has been between 2 to 4 cilities, the poorer sections would generally be per cent over the past couple of decades, while denied these facilities, which come at a higher cost the rest of the economy is growing at the rate of than they can afford. The variation in the income around 8 per cent. It implies that increase in in- levels in the cities has also created a kind of di- comes in the rural sector has been almost one- chotomy in the society and the vertical split in third of the average growth of incomes in the the society is a matter of serious concern for the country. Resultantly, the rural economy has sociologists as well as the economists. emerged as a poor cousin of the urban and indus- trial sectors and the existing yawning gap has ac- Equitable growth of the economy is the ultimate tually increased further. goal and every government must strive hard to achieve this goal. Indian Constitution, through the The above does not imply that all is well in the Directive Principles of State Policy entrusts this urban sector as a whole. Urban areas have their responsibility of equitable distribution of economic own set of problems and inequalities resulting in resources to the government policies. what is known as urban-urban divide. The urban problems in India are no different. With about Globalization cannot snatch away the basic right 300 million people living in 5,000 cities and towns, of decent living from the poor and the downtrod- the urban population cries for more care, invest- den. It is the duty and responsibility of the gov- ment in urban infrastructure and basic civic ameni- ernment to take immediate measures for bridging ties. the widening gap, which requires pragmatic poli- cies aimed at redistributive justice on sustainable About 40% of the urban population in India lives basis. in 60 metropolitan urban agglomerations. As per one estimate of the government, about 65 million Government of India has already launched an am- urban people live in slums and squatter settlements bitious programme aimed at stimulating the eco- in these agglomerations. It is estimated that the nomic activity in the rural areas. Known as Bharat urban population of the country would increase Nirman, this new initiative is expected to pump to 468 million by the year 2020. This poses a in huge sums of public expenditure in the devel- Herculean task to the cities opment of rural infrastructure of the country. Two in terms of improvements in civic infrastructure, more flagship programmes, called Sarv Siksha housing, basic amenities and employment oppor- Abhiyan and “National Rural Health Mission”, are tunities. being implemented which aim at bringing in quali- tative as well as numerical improvement in the Copyright © 2009 | WWW.UPSCPORTAL.COM 142
    • Section -6 (Mains Special: Hot Economic Issues) education and healthcare sectors, particularly in renewed interest in and demand for Sharia-com- the rural areas. To take care of the urban-urban pliant products and practice. divide, another ambitious programme called Jawaharlal Nehru National Urban Renewal Mis- Central to Islamic banking and finance is an un- sion is being implemented in 66 major cities of derstanding of the importance of risk sharing as the country under which a lot of funds are being part of raising capital and the avoidance of riba spent to upgrade the urban infrastructure, hous- (usury) and gharar (risk or uncertainty). ing and service delivery mechanism. Islamic law views lending with interest payments as a relationship that favors the lender, who In addition to the above initiatives, the govern- charges interest at the expense of the ment has to ensure distributive justice through borrower. Because Islamic law views money as a its taxation and other economic policies. Due at- measuring tool for value and not an 'asset' in it- tention is required to be paid to the education sec- self, it requires that one should not be able to re- tor in the rural areas so that the people living there ceive income from money (for example, interest are able to get the best possible education to com- or anything that has the genus of money) alone. pete with their urban counterparts. Healthcare Deemed riba (literally an increase or growth), such and sanitation facilities need a total upgrade in the practice is proscribed under Islamic law (haram, entire country. Special attention of the govern- which means prohibited) as it is considered usu- ment is required to be focused on stepping up the rious and exploitative. By contrast, Islamic bank- economic activity in the rural areas so that the ing exists to further the socio-economic goals of rural incomes experience the required upsurge and Islam. the existing gap is bridged to some extent. Divide in the early stages of development is a global phe- Accordingly, Sharia-compliant finance (halal, nomenon but it must not be allowed to perpetu- which means permitted) consists of profit ate beyond reasonable limit. banking in which the financial institution shares in the profit and loss of the enterprise that it un- Islamic Finance derwrites. Of equal importance is the concept of gharar Defined as risk or uncertainty, in a finan- Islamic finance refers to the means by which cor- cial context it refers to the sale of items whose porations in the Muslim world, including banks existence is not certain. Examples of gharar would and other lending institutions, raise capital in ac- be forms of insurance, such as the purchase of pre- cordance with Sharia, or Islamic law. It also re- miums to insure against something that may or fers to the types of investments that are permis- may not occur or derivatives used to hedge against sible under this form of law. A unique form of possible outcomes. socially responsible investment, Islam makes no division between the spiritual and the secular, The equity financing of companies is hence its reach into the domain of financial mat- permissible, as long as those companies are not ters. Because this sub-branch of finance is a bur- engaged in restricted types of business - such as geoning field, in this article we will offer an over- the production of alcohol, pornography or weap- view to serve as the basis of knowledge or for fur- onry - and only certain financial ratios meet speci- ther study. fied guidelines. The Big Picture Basic Financing Arrangements Although they have been mandated since the be- ginnings of Islam in the seventh century, Islamic Below is a brief overview of permissible financ- banking and finance have been formalized gradu- ing arrangements often encountered in Islamic ally since the late 1960s, coincident with and in finance: response to tremendous oil wealth which, fueled Copyright © 2009 | WWW.UPSCPORTAL.COM 143
    • Section -6 (Mains Special: Hot Economic Issues) Profit-and-loss sharing contracts (mudarabah). Leasing ('ijarah/'ijar): The sale of the right to use The Islamic bank pools investors' money and as- an object (usufruct) for a specific time period. One sumes a share of the profits and losses. This is condition is that the lessor must own the leased agreed upon with the depositors. A group of mu- object for the duration of the lease. A variation tual funds screened for Sharia compliance has on the lease, 'ijarah wa 'iqtina provides for a lease arisen. The filter parses company balance sheets to be written whereby the lessor agrees to sell the to determine whether any sources of income to leased object at the lease's end at a predetermined the corporation are prohibited (for example, if the residual value. Only the lessor is bound by this company is holding too much debt) or if the com- promise. The lessee, by contrast, is not obligated pany is engaged in prohibited lines of business. In to purchasing the item. addition to actively managed mutual funds, pas- sive ones exist as well based on such indexes as Islamic Forwards (salam and 'istisna): These are the Dow Jones Islamic Market Index and the FTSE rare forms of financing, used for certain types of Global Islamic Index. business. These are an exception to gharar. The price for the item is prepaid and the item is deliv- Part ne rs hip and joint st ock ow nership ered at a definite point in the future. Because there (musharakah). Three such structures are most is a host of conditions to be met to render such common: contracts valid, the help of an Islamic legal advi- sor is usually required. a. Declining-Balance Shared Equity: Commonly used to finance a home purchase, the declining Basic Insurance Vehicles balance method calls for the bank and the investor to purchase the home jointly, with the Traditional insurance is not permitted as a means institutional investor gradually transferring its of risk management in Islamic law. This is because portion of the equity in the home to the indi- it constitutes the purchase of something with an vidual homeowner, whose payments constitute uncertain outcome (form of ghirar), and because the homeowner's equity. insurers use fixed income - a form of riba - as part of their portfolio management process to satisfy b. Lease-to-Own: This arrangement is similar to liabilities. the declining balance one described above, except that the financial institution puts up most, if not A possible Sharia-compliant alternative is coop- all, of the money for the house and agrees on ar- erative (mutual) insurance. Subscribers contrib- rangements with the homeowner to sell the house ute to a pool of funds, which are invested in a to him at the end of a fixed term. A portion of Sharia-compliant manner. Funds are withdrawn every payment goes toward the lease and the bal- from the pool to satisfy claims, and unclaimed ance toward the purchase price of the home. profits are distributed among policy holders. Such a structure exists infrequently, so Muslims may c. Installment (Cost-Plus) Sale (murabaha): This avail themselves of existing insurance vehicles if is an action where an intermediary buys the home needed or required. with free and clear title to it. The intermediary investor then agrees on a sale price with the pro- Islamic finance is a centuries-old practice that is spective buyer; this price includes some profit. The gaining recognition throughout the world and purchase may be made outright (lump sum) or whose ethical nature is even drawing the interest through a series of deferred (installment) pay- of non-Muslims. Given the increased wealth in ments. This credit sale is an acceptable form of Muslim nations, expect this field to undergo an finance and is not to be confused with an inter- even more rapid evolution as it continues to ad- est-bearing loan. dress the challenges of reconciling the disparate worlds of theology and modern portfolio theory. Copyright © 2009 | WWW.UPSCPORTAL.COM 144
    • Section -6 (Mains Special: Hot Economic Issues) Basel I& Basel II standards with national regulations, by setting the minimum capital requirements of financial insti- Basel I: A set of international banking regulations tutions with the goal of ensuring institution li- put forth by the Basel Committee on Bank Super- quidity. vision, which set out the minimum capital require- ments of financial institutions with the goal of Basel II is the second of the Basel Committee on minimizing credit risk. Banks that operate inter- Bank Supervision's recommendations, and unlike nationally are required to maintain a minimum the first accord, Basel I, where focus was mainly amount (8%) of capital based on a percent of risk- on credit risk, the purpose of Basel II was to cre- weighted assets. ate standards and regulations on how much capi- tal financial institutions must have put aside. Banks The first accord was the Basel I. It was issued in need to put aside capital to reduce the risks asso- 1988 and focused mainly on credit risk by cre- ciated with its investing and lending practices ating a bank asset classification system. This clas- sification system grouped a bank's assets into Sovereign Wealth Funds five risk categories: A sovereign wealth fund is simply an investment » 0% - cash, central bank and government debt fund managed by a government or other organi- and any OECD government debt zation on behalf of a nation or sovereign state. The capital that flows into sovereign wealth funds can come from any number of sources, but the most » 0%, 10%, 20% or 50% - public sector debt common are foreign currency reserves (budget and banking surpluses) and excess profits from the sale » 20% - development bank debt, OECD bank debt, of natural resources and commodities. Crude oil OECD securities firm debt, non-OECD bank debt profits in particular have been a huge benefactor (under one year maturity) and non-OECD public to sovereign wealth fund assets. sector debt, cash in collection On the whole, sovereign wealth funds don't have » 50% - residential mortgages boilerplate restrictions on what can or can't be owned, much like with hedge funds in the United States, but foreign stocks, bonds, derivatives and » 100% - private sector debt, non-OECD bank currencies are all fair game. debt (maturity over a year), real estate, plant and equipment, capital instruments issued at other Many of the big-story headlines you may have banks read about SWFs relate to their efforts to buy large stakes in financial corporations like Citigroup, The bank must maintain capital (Tier 1 and Tier Merrill Lynch, Morgan Stanley and Blackstone 2) equal to at least 8% of its risk-weighted assets. Group. But with these investments, and the at- For example, if a bank has risk-weighted assets of tempts to make others, sovereign wealth funds $100 million, it is required to maintain capital of have incited feelings of protectionism within the at least $8 million. countries where these banks and other invest- ments are located. Basel II: A set of banking regulations put forth Major Players by the Basel Committee on Bank Supervision, which regulates finance and banking internation- There are dozens of sovereign wealth funds in ex- ally. Basel II attempts to integrate Basel capital istence, and many have been around since the '80s and '90s. The growth in assets and the intent of Copyright © 2009 | WWW.UPSCPORTAL.COM 145
    • Section -6 (Mains Special: Hot Economic Issues) fund managers to diversify away from just hold- ity refers to a worker's ability to work in a par- ing currency reserves or gold is what sets apart ticular physical location, while occupational mo- the old SWFs from the newly created ones. In the bility refers to a worker's ability to change job interest of seeking higher returns and diversifica- types. For example, a worker moving from the tion, many SWFs invest in global assets like stocks United States to France involves the concept of and bonds, and they invest in multiple curren- geographic mobility. An automobile mechanic cies. who changes jobs to become an airline pilot in- volves the concept of occupational mobility. According to data compiled by the IMF in early 2008, the current aggregate value of SWFs are in Geographic Mobility Matter the neighborhood of US$2-$3 trillion, which is already more than is held by the world's hedge From a policy-maker's perspective, geographic funds (US$1.7 trillion). It should be noted, how- mobility can have important implications on the ever, that the use of leverage within hedge funds economy of a particular country. This is because gives them much more buying power than their easing immigration requirements can do sev- net asset values alone. eral things: The top five largest SWF by assets: 1. Increase the supply of labor: As more workers 1. Abu Dhabi Investment Authority (UAE) - $875 enter the economy, the general labor supply in- billion creases. An increase in labor supply accompanied by a static labor demand can decrease wage rates. 2. Norway Government Pension Fund (Global) - $380 billion 2. Increase unemployment: Unless employers de- 3. Government of Singapore Investment Corpo- mand more workers, an increase in labor supply ration - $330 billion could lead to a glut in labor. This means that more workers are available than jobs. 4. Saudi Arabia 1 (no official fund name) - $300 billion 3. Increase productivity: Not all laborers added 5. State Administration of Foreign Exchange to the labor supply will be unskilled. An influx in (China) - $300 billion laborers can increase productivity if they bring specialized skills to the workplace, although they Three of the top five funds have gained their heft might push out existing employees who are less thanks to exploding oil profits, with the excep- productive. tion of Singapore and China, which were running high current account surpluses in the mid-2000s. Obtaining geographic mobility is not a purely eco- nomic matter. It can also be an issue of state sov- ereignty and government control. After all, gov- Labor Mobility ernments are also concerned with security, and completely open borders mean that governments Labor mobility refers to the ease with which la- are not sure who, or what, is coming into their borers are able to move around within an economy countries. While increased geographic mobility and between different economies. It is an impor- generally has a positive impact on the economy, tant factor in the study of economics because it it is also one of the first targets to incur the wrath looks at how labor, one of the major factors of of both citizens and their production, affects growth and production. representatives. Immigration is already a hot-but- ton topic, both in the United States and abroad. There are two primary types of labor mobility: geographic and occupational. Geographic mobil- Copyright © 2009 | WWW.UPSCPORTAL.COM 146
    • Section -6 (Mains Special: Hot Economic Issues) A reduction in geographic restrictions can be aren't enough employees to provide the service reached in several different ways. Between coun- or work the machines used to make the product. tries, it is accomplished through treaties or eco- nomic agreements. Countries can also increase the Occupational mobility can be restricted through number of worker visas available, or reduce the regulations. Licensing, training or education re- requirements of receiving one. For example, coun- quirements prevent the free flow of labor from tries that are part of the European Union have one industry to another. For example, restrictions fewer restrictions on the movement of labor be- limit the supply of physicians, since specialized tween members, but can still place tight restric- training and licensing is required to work in that tions on labor movement from non-member coun- particular profession. This is why physicians can tries. command higher wages, because the demand for physicians coupled with a restricted supply in- The effectiveness of improved geographic mobil- creases the equilibrium wage. This funnels un- ity will ultimately depend on individual workers. qualified members of the labor force into indus- If economic opportunities are not available in a tries with fewer restrictions, keeping the wage rate different country or in a different part of one's lower through a higher labor supply compared to current country, the likelihood of an employee the amount of labor demanded. wanting to make a change will be diminished. Labor Mobility: Two Perspectives Occupational Mobility Labor mobility affects workers on two levels: the The ease with which employees can move from a aggregate level and the personal level. job in one particular industry to a job in a differ- ent industry determines how quickly an economy On a personal level, increased labor mobility gives can develop. For example, if there was zero occu- workers an opportunity to improve their finan- pational mobility we would still be hunter-gath- cial situations. If workers are permitted to train erers, because no one would have been able to for new jobs, move locations or seek higher become farmers or specialists. wages, then they are more likely to be happy working, which can have a positive impact on An easing of occupational mobility restrictions productivity. Workers who do not feel indefinitely can do several things: relegated to low wages or jobs with few benefits will consistently seek better positions, which also Increase the supply of labor in particular indus- makes it easier for new industries to attract the tries. Lower restrictions cause laborers to have an most qualified applicants by offering better perks. easier time entering a different industry, which can mean that the demand for labor is more readily The aggregate level refers to the economy as a met. whole. The extent to which labor forces are mo- bile can impact how quickly an economy can adapt Lower wage rates. If it is easier for laborers to enter to technological changes, how quickly competi- a particular industry, the supply of labor will in- tive advantages can be exploited and how innova- crease for a given demand, which lowers the wage tive industries develop. Restrictions placed on how rate until equilibrium is reached. workers move around, either geographically or occupationally, can slow growth by making it Allow nascent industries to grow. If an economy more difficult for businesses to hire productive is shifting toward new industries, employees must workers. At the same time, unrestricted labor can be available to run that industry's businesses. A depress wages in certain industries and create un- shortage of employees means that overall produc- employment. tivity can be negatively impacted because there Copyright © 2009 | WWW.UPSCPORTAL.COM 147
    • Section -6 (Mains Special: Hot Economic Issues) As labor mobility improves, so do the lives of National Output: GDP workers around the globe. As a general rule, work- ers are able to find better paying jobs and improve Output, the most important concept of macroeco- their living situations when less control is placed nomics, refers to the total amount of goods and on where they can move and what occupations services a country produces, commonly known as they can apply for. At the same time, businesses the gross domestic product. The figure is like a improve because workers receive better training snapshot of the economy at a certain point in time. and the right employee can be hired. Economies improve as productivity improves. When referring to GDP, macroeconomists tend to use real GDP, which takes inflation into ac- Macroeconomic Analysis count, as opposed to nominal GDP, which reflects only changes in prices. The nominal GDP figure macroeconomics is the study of the behavior of will be higher if inflation goes up from year to the economy as a whole. This is different from year, so it is not necessarily indicative of higher microeconomics, which concentrates more on in- output levels, only of higher prices. dividuals and how they make economic decisions. Needless to say, macro economy is very compli- The one drawback of the GDP is that because the cated and there are many factors that influence information has to be collected after a specified it. These factors are analyzed with various eco- time period has finished, a figure for the GDP to- nomic indicators that tell us about the overall day would have to be an estimate. GDP is none- health of the economy. theless like a stepping stone into macroeconomic analysis. Once a series of figures is collected over Macroeconomists try to forecast economic condi- a period of time, they can be compared, and econo- tions to help consumers, firms and governments mists and investors can begin to decipher the busi- make better decisions. ness cycles, which are made up of the alternating periods between economic recessions (slumps) and » Consumers want to know how easy it will be to expansions (booms) that have occurred over time. find work, how much it will cost to buy goods From there we can begin to look at the reasons and services in the market, or how much it may why the cycles took place, which could be gov- cost to borrow money. ernment policy, consumer behavior or interna- tional phenomena, among other things. Of course, » Businesses use macroeconomic analysis to these figures can be compared across economies determine whether expanding production will be as well. Hence, we can determine which foreign welcomed by the market. Will consumers have countries are economically strong or weak. enough money to buy the products, or will the products sit on shelves and collect dust? Based on what they learn from the past, analysts can then begin to forecast the future state of the » Governments turn to the macroeconomy when economy. It is important to remember that what budgeting spending, creating taxes, deciding on determines human behavior and ultimately the interest rates and making policy decisions. economy can never be forecasted completely. Macroeconomic analysis broadly focuses on three Unemployment things: national output (measured by gross domes- tic product (GDP), unemployment and inflation. The unemployment rate tells macroeconomists how many people from the available pool of labor (the labor force) are unable to find work. Copyright © 2009 | WWW.UPSCPORTAL.COM 148
    • Section -6 (Mains Special: Hot Economic Issues) Macroeconomists have come to agree that when ary for which employees will work and the the economy has witnessed growth from period amount employers are willing to pay in order to to period, which is indicated in the GDP growth keep the worker in employment. Given that the rate, unemployment levels tend to be low. This is demand and supply go hand in hand, the salary because with rising (real) GDP levels, we know level will suffer in times of high unemployment, that output is higher, and, hence, more laborers and it will prosper when unemployment levels are are needed to keep up with the greater levels of low. Demand inherently will determine supply production. (production levels) and an equilibrium will be reached; however, in order to feed demand and Inflation supply, money is needed. The third main factor that macroeconomists look Monetary Policy at is the inflation rate, or the rate at which prices rise. Inflation is primarily measured in two ways: A simple example of monetary policy is the cen- through the consumer price index (CPI) and the tral bank's open-market operations. When there GDP deflator. The CPI gives the current price of is a need to increase cash in the economy, the cen- a selected basket of goods and services that is up- tral bank will buy government bonds (monetary dated periodically. The GDP deflator is the ratio expansion). These securities allow the central bank of nominal GDP to real GDP. to inject the economy with an immediate supply of cash. In turn, interest rates, the cost to borrow If nominal GDP is higher than real GDP, we can money, will be reduced because the demand for assume that the prices of goods and services has the bonds will increase their price and push the been rising. Both the CPI and GDP deflator tend interest rate down. In theory, more people and to move in the same direction and differ by less businesses will then buy and invest. Demand for than 1%. goods and services will rise and, as a result, out- put will increase. In order to cope with increased Demand and Disposable Income levels of production, unemployment levels should fall and wages should rise. What ultimately determines output is demand. Demand comes from consumers (for investment On the other hand, when the central bank needs or savings - residential and business related), from to absorb extra money in the economy, and push the government (spending on goods and services inflation levels down, it will sell its T-bills. This of federal employees) and from imports and ex- will result in higher interest rates (less borrow- ports. ing, less spending and investment) and less de- mand, which will ultimately push down price level Demand alone, however, will not determine how (inflation) but will also result in less real output. much is produced. What consumers demand is not necessarily what they can afford to buy, so in or- Fiscal Policy der to determine demand, a consumer's dispos- able income must also be measured. This is the The government can also increase taxes or lower amount of money after taxes left for spending and/ government spending in order to conduct a fiscal or investment. contraction. What this will do is lower real out- put because less government spending means less In order to calculate disposable income, a worker's disposable income for consumers. And, because wages must be quantified as well. Salary is a func- more of consumers' wages will go to taxes, de- tion of two main components: the minimum sal- mand as well as output will decrease. Copyright © 2009 | WWW.UPSCPORTAL.COM 149
    • Section -6 (Mains Special: Hot Economic Issues) A fiscal expansion by the government would mean ics, the inflation or deflation can also be caused that taxes are decreased or government spending by the reasons of the adequacy or lack of money is increased. Ether way, the result will be growth supply in the country. If the money supply is less, in real output because the government will stir it is a situation of more money chasing lesser goods demand with increased spending. In the mean- and services, leading to general rise in prices. On time, a consumer with more disposable income the other hand, if the money supply is more than will be willing to buy more. the supply of goods and services, the situation of fall in prices is generally experienced and is re- A government will tend to use a combination of ferred to as deflation. both monetary and fiscal options when setting policies that deal with the macro economy. Deflation caused by rapid growth of production and manufacturing in the country, causing the The performance of the economy is important to supply to go up is good for the economy, as with all of us. We analyze the macro economy by pri- abundant availability of all goods and services in marily looking at national output, unemployment the economy, the prices go down, resulting in in- and inflation. Although it is consumers who ulti- crease in the real income and wealth of all the mately determine the direction of the economy, consumers. Such a situation does not harm the governments also influence it through fiscal and producers also, as they gain by increasing sales monetary policy. volumes. Deflation The Great Depression of 1930s was associated with deflation and it is said that the recession coupled In the common parlance deflation is an economic with deflation leads the economies to suffer. It is situation of falling prices, but in economic theory this very concern which is causing anxiety among there is much more to it than just the reducing the economists and the policy makers. But it must price level.In economic terms, deflation can be be clearly understood that deflation and depres- termed as a situation of declining prices, often sion are two different words and situations and caused by a reduction in the supply of money or should not be taken as synonymous. credit. It can also be caused by the direct contrac- tion in expenditure, including the public expen- Effects on the Economy diture, personal spending or the investment ex- penditure. This is opposite of inflation and often Temporary fall in prices is not deflation and it is leads to lower effective demand and increasing the sustained fall for a considerably long period of unemployment rate in the economy. time which is a matter of serious concern. It causes the aggregate demand to fall, as due to the falling According to economic theory, price level is the prices the consumers try to delay the purchases, result of functional relationship between demand which in turn reduces economic activity in the and supply. To put it simply, the supply being economy, thereby accentuating the spiral effect constant, if the demand of the goods and services of deflation. The result is that the existing manu- increases in an economy, the prices are likely to facturing capacity of the economy becomes idle, go up and the economy is likely to encounter a leading to further reduction in aggregate demand situation of inflation. On the other hand, if the and even more reduction in economic activity. If supply increases with demand being constant, or the process continues without any interventions the supply increases more than the demand, the from the government, the economies may move prices may fall and such a situation may be re- in to a situation of recession. ferred to as ‘deflation’. Theoretically speaking, the situation of deflation In addition to the above demand supply dynam- Copyright © 2009 | WWW.UPSCPORTAL.COM 150
    • Section -6 (Mains Special: Hot Economic Issues) may also lead to a peculiar economic condition Consumer Price Index (CPI), on the other hand, known as the ‘liquidity trap’. Generally, the rate is an index of the consumer prices that give 46 per of interest in an economy is linked to the rate of cent weightage to the food items, 15 per cent inflation. But the situation of deflation may ne- weightage to the domestic facilities, 6.4 per cent cessitate the interest rates to go down as low as to lighting and fuel and 6.6 per cent to apparel zero. Deflationary times and zero interest rates and shoes. reduce the economic viability of most of the projects due to tremendously reduced demand and The inflation rate in India has suddenly fallen to a the investors also tend to postpone their new level of less than half a per cent and closer to zero projects. This worsens the situation further. in March 2009 onwards and the fears of the In- dian economy slipping into a precarious situation Generally, the deflationary situation encourages of deflation have been expressed by many. But people to hold on to their money, mainly because despite extremely lower inflation rate, the prices of the reasons like lower aggregate demand for of food items are still experiencing reasonably newly produced goods and very low interest rates higher increase in prices. This, while putting the that discourage the people from keeping money economically vulnerable sections of society in a in bank deposits. This causes substantial reduc- disadvantageous position, has also given a glim- tion in the velocity of money i.e. reduction in the mer of hope to the policy makers because this number of transactions, dramatically reducing the phenomenon may gradually stabilize the economy money supply in the economy, as one man’s ex- and help it come out of the deflationary pressures penditure is the income of another. Reduced ve- early. locity of money results in reduction of incomes. The economists are in a fix and do not know Deflation results in fall of availability of hard cur- whether to call this economic situation in the rency per person. This further results in increas- country as deflation or disinflation. While the ing the purchasing power of each unit of currency, deflation is persistent fall in price level, disinflation as the average price level goes down. Increase in is a situation where the inflation rate goes down. purchasing power may sound beneficial to a lay- The economic theory provides separate sets of man but actually it may cause hardship to those solutions for both the situations and unless the people whose majority of wealth is kept in non- situation is clearly identified and diagnosed, it liquid assets such as real estate, land and build- would be difficult to resolve it. ings. Government agencies in India vehemently deny It is thus evident that sustained deflation is a seri- that there is any fear of deflation in the near fu- ous cause of worry to the policy makers, as it may ture. The International Monetary Fund has pro- lead the economies to recession and, more seri- jected the annual inflation rate of 1.7 per cent for ously, to a situation of depression. the Indian economy for 2009-10. This implies that for some part of the year, the economy may expe- Indian Scenario rience a brief spell of deflation. Whether or not to call such In India, the rate of inflation or deflation is mea- a situation a deflationary situation, is a matter of sured on the basis of Wholesale Price Index (WPI) argument. on weekly basis and then computed for the fiscal years for the purpose of policy monitoring, ap- The current economic situation is that of praisal and decisions. WPI is an indicative and disinflation in India. The basis for such a belief is representative index of the wholesale prices of that the economy has grown at the rate of 5.3 per various commodities produced in the economy. cent in the third quarter of the previous fiscal. Copyright © 2009 | WWW.UPSCPORTAL.COM 151
    • Section -6 (Mains Special: Hot Economic Issues) Citigroup has said that the deflationary patch in required Public-Private Partnership (PPP) frame- India is due to high base effect and supply side work to facilitate the private participation in the issues and is likely to be temporary and short-lived infrastructure sector in a big way. The govern- in nature. But persistence of such a situation may ment has also asked the Infrastructure Investment increase the problems of the economy in the Finance Company to earmark a corpus of over 8.15 months to follow. billion US dollars for this purpose. This is in addi- tion to $320 billion to be spent by the govern- Many economists believe that the current situa- ment for up-gradation of sea ports, railroads, high- tion can be termed as ‘demand deflation’. Both ways and airports over the next about 15 years. production and the prices are falling down. This would require more targeted fiscal measures, along A massive 494 billion dollar investment is pro- with stepped up direct government purchases and posed in the Eleventh Five-Year Plan (2007-12), increased scope of public distribution system. which would increase the share of infrastructure investment in this sector from 5 per cent of the The situation in India may not be as grave as that GDP at the beginning of Eleventh Plan to 9 per of sustained deflation. The CPI is still positive and cent during the Plan. This massive investment in at around 10 per cent; the rural demand for FMCGs the infrastructure sector is envisaged through huge is robust and food items are in great demand. The doses of public spending through several flagship resilience of our economy may not allow the typi- national programmes, as well as through active cal deflationary situation to emerge and the cur- participation of the private sector in this gigantic rent phase may turn out to transient and tempo- effort. To facilitate PPP in infrastructure sectors, rary. Despite the above, the situation needs to be the government has not only introduced the model tackled by the Government very carefully. concession agreements but also permitted in- creased percentages of Foreign Direct Investment Infrastructure (FDI) in various sectors. Major expansion of in- frastructure in the sub-sectors like Like most of the developing countries, Indian railways, ports, civil aviation, road, power, tele- economy is also a diversified and resilient in na- communications and housing is planned to be ture. Similarly, like most of the developing coun- achieved during the plan period. Urban infrastruc- tries, huge sums of funds are being spent on the ture is targeted to be strengthened through the development of infrastructure, both in the private Jawaharlal Nehru National Urban Renewable Mis- as well as in the public sectors. But, it is felt that sion, while the general rural infrastructure is pro- the infrastructure spending is shorter than what posed to be up-graded through implementation is ideally required for achieving the required of national programmes like Bharat Nirman, Rajiv higher growth rate. As per the estimation of the Gandhi Gramin Vidyutikaran Yojana, and Na- Planning Commission of India, the total require- tional Rural Health Mission etc. ment of funds for financing the infrastructure re- quirements during the Eleventh Five Year Plan Private Participation (2007-12) is to the tune of USD 500 billion, which is about 2.5 times of the funds provided for this Policy makers realise that the basic goal of inclu- purpose during the Tenth Five Year Plan. sive development laid down for the Eleventh Five Year Plan may not be achieved if the basic infra- Realizing that the government may not be able to structure facilities are not available in the urban fund the huge requirement for infrastructure as well as rural areas of the country. In this re- projects required to be taken up for rapid growth gard, the participation of the private sector is con- of the economy, the Union government and vari- sidered to be very important. Partnership with the ous State governments have come up with the private sector had been continuing in the country Copyright © 2009 | WWW.UPSCPORTAL.COM 152
    • Section -6 (Mains Special: Hot Economic Issues) during the past several years but there was no project preparation manuals. This effort is also defined uniform policy and legal framework till being supported by the Asian Development Bank. recently. Over the past three to four years, the government With a view to facilitate the private and foreign of India has worked towards creating institutional investors to pump funds into Indian infrastruc- framework to facilitate it. But at the same time, ture projects, and to standardize the concessions the overall environment is very important before to be extended to the private investors under the the private investors commit funds into such PPP, the government of India carried out special projects. Simplicity of government procedures, workshops in various parts of the country. Main reduction in corruption level and reduction in time objectives of these workshops were to bring out taken for decision making in government are some the developmental relevance of the PPP in the of the areas of concern that may have to be ad- current context, assist interested in the PPP to go dressed before the PPP picks up in the country. ahead, understand and address the concerns of Efficiency in government as well as enforcement the potential PPP investors, and international ex- of market-driven tariffs are two other important perience sharing from successful PPP models determinants of the enabling environment. across the world. Precursor to Rapid Growth The government of India has set up a PPP cell in the Ministry of Finance, Department of Economic Infrastructure development has been identified as Affairs. It is also felt that many PPP projects may an effective tool for taking the economy out of not be economically viable but are essentially re- the effects of global recession. There has been stiff quired to be executed. For such projects, Viabil- increase in the proposed expenditure for infra- ity Gap Funding (VGF) Scheme has been intro- structure projects particularly in the rural areas. duced. This is a special facility aimed at support- Hefty 31 per cent increase has been proposed in ing such infrastructure projects which are eco- the interim Budget 2009-10 for Bharat Nirman nomically and socially justifiable but are not com- programme, aimed at strengthening the rural in- mercially viable. Under the VGF Scheme, upfront frastructure in the country. This would not only assistance upto 20 per cent of the project cost can increase the economic activity in the countryside be sanctioned as grant for such PPP projects. but would also provide the rural people with the required infrastructure and increased employment No facilitation is complete without making insti- opportunities. tutional arrangements for financing. The govern- ment of India has set up India Infrastructure Fi- One of the ambitious ongoing infrastructure nance Company Ltd (IIFCL) as a wholly govern- projects is the Golden Quadrilateral Project, which ment-owned company to facilitate long-term is aimed at improving the road infrastructure on funding of infrastructure projects. IIFCL provides the highways/expressways connecting major cit- direct financing, as well as refinancing of such ies of the country. The Project, on completion, projects in public, private or PPP sector. would connect the metropolitan cities of Delhi, Mumbai, Bangalore, Chennai and Kolkata with The government has also paid special attention expressways. It is the largest expressway project towards the capacity building at the Central and of the country, aimed at constructing 5,846 State levels. Capacity building needs include train- kilometres of six/four lane express highways at a ing of the key personnel, development of stan- cost of Rs 60,000 crores. Its North South and East dard toolkits, Model Concession Agreements, de- West sections are nearing completion while the velopment of Project Manuals, preparation of stan- work on other sections is going on. dard bidding documents, consultancy support and Road infrastructure, world class telecommunica- Copyright © 2009 | WWW.UPSCPORTAL.COM 153
    • Section -6 (Mains Special: Hot Economic Issues) tions, availability of efficient sea ports and airports, resultant outcome of this system. capacity creation in electricity generation and strong rural and urban infrastructure were some Nationalisation of major commercial banks in the of the areas identified for improvement by the late sixties and early seventies provided the gov- policy makers. After the planning stage, it is now ernment with virtually the complete control over the implementation stage and it is expected that the direction of the bank credit. The emphasis was within next five to ten years, India would have all mainly on control and regulation and the market the world class infrastructure facilities available. forces had very limited role to play. In addition to creation of sustainable infrastruc- The economic system was working to the satis- ture in the country, the government effort would faction of the government. The social indicators also result in ensuring huge doses of investment were gradually improving and the number of into the economy, including the rural economy, people below poverty line also declined steadily. at a time when most of the western and devel- The only problem area had been that the growth oped markets are reeling under the influence of rate of the economy had been very low, and till worldwide recession. Investment in this sector has late seventies, the growth rate of the GDP was ensured that the economy grew at 7 per cent dur- hovering around 3.5 per cent per annum. It was ing the previous financial year, when the world only during mid-eighties that the growth rate growth rate was around one per cent. During the touched 5 percentage points. current fiscal also, when the world economy is likely to record zero growth rate, Indian economy The situation became difficult by the eighties. Fi- may still record reasonable growth rate. nancial system was considerably stretched and ar- tificially directed and concessional availability of Financial Sector Reforms in India credit with respect to certain sectors resulted in distorting the interest rate mechanism. Lack of The period immediately after independence posed professionalism and transparency in the function- a major challenge to the country. Due to centu- ing of the public sector banks led to increasing ries of exploitation at the hands of foreign pow- burden of non-performance of their assets. ers, there were very high levels of deprivation in the economy—both social as well as economic. Late eighties and early nineties were characterised To take up the Herculean task of rapid growth by fluid economic situation in the country. War with socio-economic justice, the country adopted in the Middle East had put tremendous pressure the system of planned economic development af- on the dwindling foreign exchange reserves of the ter independence. Due to paucity of economic country. The country witnessed the worst short- resources and limitations of availability of capital ages of the petroleum products. High rate of in- for investment, the government also came up with flation was another area of serious concern. Most the policy of setting up public enterprises in al- of the economic ailments had resulted due to over most every field. regulation of the economy. The international lend- ing and assisting agencies were ready to extend The fiscal activism adopted by the government assistance but with the condition that the coun- resulted in large doses of public expenditures for try went in for structural reforms, decontrols and which not only the revenues of the government deregulation, allowing increased role for the mar- were utilized but the government also resorted to ket forces of demand and supply. borrowing at concessional rates, which kept the financial markets underdeveloped. The growth of The precarious economic conditions left the coun- fiscal deficit also continued unabated year after try with no alternative other than acceptance of year. Complex structure of interest rates was a the conditions for introducing the reforms. Copyright © 2009 | WWW.UPSCPORTAL.COM 154
    • Section -6 (Mains Special: Hot Economic Issues) Post Reforms decade before that. The economy withstood boldly the Asian economic crisis of 1997-98. Even the Rationalisation of the taxes has already taken place economic sanctions by the US and other devel- on the basis of the recommendations of Raja oped countries after the nuclear testing did not Challiah Committee Report during mid-nineties. affect the economy to the extent apprehended. The government has been able to tighten its fiscal The current global slowdown and sub-prime cri- management through the FRBMA and the con- sis affecting the banking system all over the world tinuing increase in the fiscal deficit has been con- has not impacted the Indian economy to that ex- tained significantly. Reforms in the external sec- tent. tor management have yielded results in the form of increased foreign capital inflows in terms of Banking and insurance sectors are booming. While Foreign Direct Investment (FDI), Foreign Insti- the private and foreign banks are giving stiff but tutional Investment (FII) and the exchange rate healthy competition to the public sector banks, has also represent true international value of In- resulting in overall improvements in the banking dian rupee vis-à-vis hard global currencies. services in the country, the insurance sector has also witnessed transformation. The consumer is a The primitive foreign exchange regulation regime gainer with the availability of much better and controlled by FERA has been replaced by a liber- diversified insurance products. alized foreign exchange rate management system introduced by FEMA. Introduction of such a mod- The stock exchanges in the country are in the pro- ern management law was perhaps a pre-condition cess of adopting the best practices all over the for allowing FDI and FII. In 1993, the RBI issued world. The RBI has also been able to control and guidelines to allow the private sector banks to regulate effectively the operations and growth of enter the banking sector in the country, a virtual the Non-Banking Financial Companies (NBFCs) reversal of the policy of bank nationalisation. For- in the country. eign banks were also given more liberal entry. A few changes which are on the anvil pertain to The thrust of the monetary policy after the intro- the legal provisions relating to fiscal and budget duction of the process of reforms has been able to management, public debt, deposits, insurance etc. develop several instruments of efficient financial As per the Finance Minister, future reforms by management. A Liquidity Adjustment Facility making legal changes also pertain to banking regu- (LAF) was introduced in June 2000 to precisely lations, Companies Act, Income Tax, Bankruptcy, modulate short-term liquidity and signal short- negotiable instruments etc. term interest rates. A lot of reliance is being placed on indirect instruments of monetary policy. But there are certain issues that call for more cau- Strengthening and upgradation of the institu- tious approach towards the financial sector reforms tional, technological and physical infrastructure in the future. The social sector indicators—like in the financial markets has also improved the fi- availability of doctor per 1000 population, avail- nancial framework in the country. ability of health institutions, quality of elemen- tary education, literacy rate, particularly among Economy and Reforms the females—are some of the areas of serious con- cern. Countries like China, Indonesia and even Sri The introduction of financial sector reforms has Lanka are much better than India in most of the provided the economy with a lot of resilience and social sector indicators. stability. The average annual growth rate of the economy during the post-reform period has been Despite being among the most rapidly developing more than 6 per cent, which was unimaginable a economies of the world, the literacy rate and pov- Copyright © 2009 | WWW.UPSCPORTAL.COM 155
    • Section -6 (Mains Special: Hot Economic Issues) erty percentage are two biggest embarrassments and the country still languishes at 128th position in the Human Development Index of the UNDP, where it is virtually stagnating for the last about five years. Further, the systems should also be able to check any unusual rise in prices to protect the common man from inflation. One of the major criticisms of the government policy has been that the reforms have lacked the human face, as the government has been over-obsessed with the idea of achieving higher growth rate and fiscal and monetary management, rather than addressing the needs for equitable and inclusive growth. The reforms process has ignored the common man and the trickle down theory has actually failed to deliver. The Planning Commission, while finalising the Eleventh Five-Year Plan has now sought to achieve the overall objective of achieving the ‘inclusive growth’, i.e., to include all those in the process of economic growth, who has remained excluded from the process of economic growth experienced by the country during the past decades. (IMP) Get UPSCPORTAL , Jobs, Re- sults, Notification Alerts on Email. Step-1: Fill Your Email address in form be- low. you will get a confirmation email within 10 min. Step-2: Varify your email by clicking on the link in the email. (check Inbox and Spam fold- ers) Step-3: Done! Now you will regular Alerts on your email. Advertise your Business Here Contact Us Online: http://upscportal.com/store/contact Copyright © 2009 | WWW.UPSCPORTAL.COM 156
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