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  1. 1. Index PAGE NO. 3 MAY, 2012 Chief Editor: Sachchida Nand Jha PAGE NO. 10 Editor: Yagya Nand Jha Designed by: Upendra Bhardwaj PAGE NO. 15 Disclaimer: CURRENT AFFAIRS Editor and Publisher are not v National Issues 19 responsible for any view data, v International Issues 26 figures etc. Expressed in the articles by the author(s). Maps v India & the World 32 are notational. v Economy 36 v Science and Technology 44 Published by: v Sports 53 WWW.UPSCPORTAL.COM v Award & Prizes 59 Mukharjee Nagar, New Delhi-110009 v In the News 64 Ph: 011-45151781For Advertisement Contact at :8826659121, 8744923443Join us at Facebook: PAGE NO. 73Follow us at Twitter: UPSCPORTAL. COM’s Google Groups: PAGE NO. 103Join UPSCPORTAL.COM’s Official Fourm: 106 us at: PAGE NO. v Model Question Paper 109
  2. 2. Editor’s Note Dear Friends/Aspirants As you all know we at are sincerely trying to help the civil service aspirants to achieve theirtarget. In this effort we were publishing a monthly magazine named- Civil Services Mentor, since last one year, butthis was available only online, in PDF format. Above 25000 aspirants were downloading this magazine monthly, butthey were asking for the hard copy repeatedly. So, we are very happy to inform you that, we have decided to launchprint edition of our magazine from this month. Friends, I can assure you for the success once you sincerely followthese simple “Steps of Success” in planning & preparation of civil services. Avoid negative sources, people, places, things and habits Believe in yourself Consider every angle of the fact Don’t give up and don’t give in Energize your thoughts Family and friends are hidden treasures, seek them and enjoy their riches Give more efforts than you are supposed to Hang on to your dreams Ignore those who try to discourage you Just focus on your goals Keep trying to matter how hard it seems, it will get easier Love your goal first and foremost Make it happen Never lie, cheat or deviate from your goal Open your eyes and understand things from your perspective Practice hard Quitters never win and winners never quit Read, study and learn about everything important Stop procrastinating Take control of your own destiny Understand yourself in order to better understand others Visualization of task makes it easy Want it more than anything Xcellerate your efforts You are the best Zero in on your target and go for it! As we are human, we are error prone, so make us aware of our errors. We will sincerely welcome yoursuggestions, Please send your suggestions to Yagya Nand Jha
  3. 3. UPSCPORTAL Current Affairs : he Union Budget 2012-13 was to “intervene decisively to address the allies need to get on board. Mukherjee presented by the Finance the problem of malnutrition, especially said that India’s GDP growth in 2012-13 Minister Pranab Mukherjee in in the 200 high burden districts.” is expected to be 7.6 per cent +/-0.25Lok Sabha on 16th March, identified five Interestingly, that message per cent. He said that in 2011-12, India’sobjectives to be addressed effectively in appeared to have got across to the GDP is estimated to grow at 6.9 per centthe ensuing fiscal year. They include focus Trinamool Congress. For despite the fact after having grown at the rate of 8.4 peron domestic demand driven growth that West Bengal only got a flood cent in each of the two preceding yearsrecovery; create conditions for rapid management project in Murshidabad, a He said though the global crisis hadrevival of high growth in private Congress-controlled district, and Rs. 50 affected India, it still remains among theinvestment; address supply bottlenecks crore to establish a world-class centre to front runners in economic agriculture, energy and transport improve water quality in Kolkata, the Mukherjee said the slowdown is primarilysectors particularly in coal, power, Trinamool MPs seemed low key, due to deceleration in industrial growth.national highways, railways and civil describing the budget as “tolerable.” Of Stating that the headline inflationaviation; intervene decisively to address course, Trinamool Leader in the Lok remained high for most part of the year,the problem of malnutrition especially in Sabha Sudip Bandopadhyay did mention the Finance Minister expressed hope thatthe 200 high-burden districts and the fact that West Bengal, like Punjab and it will moderate further in the next fewexpedite coordinated implementation of Kerala, was “in a debt trap” and wanted a months and remain stable thereafter. FMdecisions being taken to improve delivery three-year moratorium. But government laid emphasis on striking a balancesystems , governance, and transparency; sources told that the Centre had made it between fiscal consolidation andand address the problem of black money clear to all three States that it wanted to strengthening macroeconomicand corruption in public life. see some signs on the part of these State fundamentals. He announced If the Union Budget was expected governments that additional funding introduction of amendments to the Fiscalto make some special concessions for “would not be like pouring water into a Responsibility and Budget ManagementWest Bengal to placate Chief Minister bucket with holes in it.” The message that Act, 2003 (FRBM Act) as part of theMamata Banerjee, there was no hint of it the UPA government, evidently, wants to Finance Bill 2012. He said that conceptin Finance Minister Pranab Mukherjee’s send out through this budget is that its of “Effective Revenue Deficit” andspeech on Friday. focus will be on strengthening the “Medium Term Expenditure Indeed, it was a speech singularly economy, stimulating growth and on Framework” statement are two importantshort of any political message; nor indeed, revenue generating measures. “If India features of Amendment to FRBM Act indid it have a strong social message, as can continue to build on its economic the direction of expenditure reforms.most of the schemes mentioned are strength, it can be a source of stability for This statement shall set forth a three yearalready in place, with the government just the world economy and provide a safe rolling targets for expenditure indicators.making additional allocations. Perhaps, destination for restless global capital.” The FM called for a need to have athe only social sector issue that Mr. Probably the message of this budget: that close look at the growth of revenueMukherjee highlighted in this fiscal year the government intends to govern, and expenditure, particularly, on subsidies. 3 UPSCPORTAL Courses: Online & Correspondance Programmes
  4. 4. UPSCPORTAL Current Affairs : announced that from 2012-13 while disinvestment in 2012-13. He said at least that during the 12th Plan, infrastructuresubsidies related to food and for 51 per cent ownership and management investment will go up to ` 50 lakh croreadministering the Food Security Act will of CPSEs will remain with the with half of this expected from privatebe fully provided for, all other subsidies government. Calling for strengthening sector. Stating that in 2011-12 tax freewould be funded to the extent that they investment environment, FM said that bonds for ` 30,000 crore werecan be borne by the economy without efforts are on to arrive at a broad-based announced for financing infrastructureany adverse implications. He said that the consensus in respect of decision to allow projects, he proposed to double it to raiseGovernment will endeavor to restrict the FDI in multi-brand retail up to 51 per ` 60,000 crore in 2012-13. The Ministerexpenditure on central subsidies under 2 cent. He proposed to introduce a new proposed to allow External Commercialper cent of GDP in 2012-13 and over the scheme called Rajiv Gandhi Equity Borrowings (ECB) to part finance Rupeenext three years, it would be further Savings Scheme to allow for income tax debt of existing power projects. Thebrought down to 1.75 per cent of GDP. deduction of 50 per cent to new retail Finance Minister announced a target ofFinance Minister said that based on investors who invest up to ` 50,000 covering 8,800 km. under NHDP nextrecommendations of the Task Force directly in equities and whose annual year and increase in allocation of the Roadheaded by Nandan Nilekani, a mobile- income is below ` 10 lakh. The scheme Transport and Highways Ministry by14based Fertilizer Management System has will have a lock-in period of 3 years per cent to ` 25,360 crore in 2012-13.been designed to provide end-to-end Regarding capital markets, the Finance He proposed to permit ECB for workinginformation on movement of fertilizers Minister proposed to allow Qualified capital requirements of the Airlineand subsidies which will be rolled out Foreign Investors (QFIs) to access Indian Industry for a period of one year, subjectnation-wide during 2012. He said that Corporate Bond market. He also to a total ceiling of US dollar 1 billion totransfer of subsidy to the retailer and proposed simplifying the process of Initial address the immediate financial concernseventually to the farmers will be Public Offer (IPO). of the Civil Aviation Sector.He added thatimplemented in subsequent phases which The FM said that the government a proposal to allow foreign airlines towill benefit 12 crore farmer families. On is committed to protect the financial participate up to 49 per cent in the equitythe tax reforms, the Finance Minister said health of Public Sector Banks and of an air transport undertaking is underthat the Direct Taxes Code (DTC) Bill Financial Institutions. He proposed to active consideration.will be enacted at the earliest after provide ` 15,888 crore for capitalization Expressing concern over shortageexpeditious examination of the report of of Public Sector Banks, Regional Rural in housing sector, the Finance Ministerthe Parliamentary Standing Committee. Banks and other financial institutions proposed various measures to addressHe said drafting of model legislation for including NABARD. He added that a the shortage of housing for low incomeCentre and State Goods and Services Tax Central Know Your Customer (KYC) groups in major cities and towns(GST) in concert with States is under depositary will be developed in 2012-13 including ECB for low cost housingprogress. He added that the GST to avoid multiplicity of registration and projects and setting up of a Creditnetwork will be set up as a National data upkeep. The Finance Minister Guarantee Trust Fund. Regarding textileInformation Utility and will become informed that out of 73,000 identified sector, the Finance Minister announcedoperational by August 2012. habitations that were to be covered under setting up of two more mega clusters, one On the disinvestment policy, FM “Swabhimaan” campaign for providing to cover Prakasam and Guntur districtssaid that the Central Public Sector banking facilities by March 2012, about in Andhra Pradesh and other for GoddaEnterprises (CPSEs) are being given a 70,000 habitations have been covered and neighboring districts in Jharkhand inlevel playing field vis-à-vis private sector while the rest are likely to be covered by addition to 4 mega handloom clusterswith regard to practices like buy-backs March 31, 2012.He added that as a next already operationalized. He alsoand listing at stock exchange. Stating that step Ultra Small Branches are being set proposed setting up of three Weaverswhile in 2011-12, the Government will up at these habitations. In 2012-13, Service Centres, one each in Mizoram,raise about ` 14,000 crore from Swabhimaan campaign will be extended Nagaland and Jharkhand. The Ministerdisinvestment as against a target of to more habitations. proposed a ` 500 crore pilot scheme in` 40,000 crore, the Finance Minister Emphasizing on infrastructure and twelfth plan for promotion andproposed to raise ` 30,000 crore through industrial development, Mukherjee said application of Geo-textiles in the North 4 UPSCPORTAL Courses: Online & Correspondance Programmes
  5. 5. UPSCPORTAL Current Affairs : A powerloom Mega Cluster will be allocation of ` 15,850 crore has been through Aajeevika which will support andset up in Ichalkaranji in Maharashtra. FM made for ICDS scheme which is an scale up civil society initiatives andproposed to set up a ` 5000 crore India increase of 58% and ` 11,937 crore for interventions particularly in the tribalOpportunities Venture Fund with SIDBI National Programme of Mid-Day Meals regions covering around 170 enhance availability of equity to micro, in schools for the year 2012-13. He added Allocation under National Socialsmall and medium enterprises. Stating that an allocation of ` 750 crore is Assistance Programme (NSAP) isthat agriculture will continue to be a proposed for Rajiv Gandhi Scheme for proposed to be raised by 37 per cent topriority for the government, Mukherjee Empowerment of Adolescent Girls, ` 8447 crore. Under the Indira Gandhiproposed an increase by 18 per cent to SABLA. National Widow Pension Scheme and` 20,208 crore in the total Plan Outlay The allocation for rural drinking Indira Gandhi National Disability Pensionfor the Department of Agriculture and water and sanitation is proposed to be Scheme for BPL beneficiaries, theCooperation in 2012-13. He said that the increased by over 27 per cent to ` 14,000 monthly pension amount per person isoutlay for Rashtriya Krishi Vikas Yojana crore and for Pradhan Mantri Road being raised from ` 200 to ` 300.(RKVY) is being increased to ` 9217 crore SadakYojana by 20 per cent to ` 24,000 FM announced a provision ofin 2012-13. Underlining importance of crore in 2012-13. He proposed to ` 1,93,407crore for Defence Servicestimely access to affordable credit for enhance the allocation under Rural including ` 79,579 crore for capitalfarmers, the Finance Minister proposed Infrastructure Development Fund to expenditure. He said the allocation isto raise the target for agricultural credit ` 20,000 crore with ` 5,000 crore based on present needs and any furtherto ` 5,75,000 crore, which represents an exclusively earmarked for .creating requirement would be met. Addressingincrease of ` 1,00,000 crore over the warehousing facilities. The Finance governance related issues, Mukherjeetarget for the current year. He said that a Minister proposed an increase in said adequate funds are proposed to beshort term RRB Credit Refinance Fund is allocation by 21.7 per cent for Right to allocated to complete enrollments ofbeing set up to enhance the capacity of Education – Sarva Shiksha Abhiyan to another 40 crore persons under UIDRegional Rural Banks to disburse short ` 25,555 crore and by 29 per cent for Mission. Outlining the steps taken by theterm crop loans to the small and marginal Rashtriya Madhyamik Shiksha Abhiyan Government to address the issue of blackfarmeRs He added that Kisan Credit Card to ` 3,124 crore. He proposed to set up a money, the Minister proposed to lay aScheme will be modified to make it a Credit Guarantee Fund to ensure better White Paper on Black Money in thesmart card which can be used at ATMs. flow of funds to students. Regarding current session of Parliament. In the The Financed Minister said that in health sector he proposed an increase in Budget estimates for 2012-13, the Grossorder to have a better out reach of the allocation for NRHM to ` 20,822 crore Tax Receipts are estimated at ` 10,food processing sector, a new centrally in 2012-13. He also said that National 77,612 crore which is an increase of 15.6sponsored scheme titled National Urban Health Mission is being launched. per cent over the Budget Estimates andMission on Food Processing will be The Finance Minister said that 19.5 per cent over the revised estimatesstarted in cooperation with the States in Mahatma Gandhi National Rural for 2011-12. After devolution to States,2012-13. Minister proposed an increase Employment Guarantee Scheme has had the net tax to the Centre in 2012-13 isof 18 per cent to ` 37,113crore for a positive impact. He proposed an estimated at ` 7,71,071crore.Scheduled Castes Sub Plan and an allocation of ` 3915 crore for National The Non Tax Revenue Receipts areincrease of 17.6 per cent to ` 21,710 Rural Livelihood Mission (NRLM) which estimated at ` 1,64,614crore and Non-crore for Tribal Sub Plan during 2012- represents an increase of 34 per cent. He debt Capital Receipts at ` 41,650 crore.13. Regarding food security, Mukherjee proposed to provide ` 200 crore to The total expenditure for 2012-13 issaid that National Food Security Bill 2011 enlarge the corpus to ` 300 crore of the budgeted at ` 14,90,925 crore. Of thisis before Parliamentary Standing Women’s SHG’s Development Fund. He ` 5,21,025crore is the Plan ExpenditureCommittee. He said a multi-sectoral said the fund will also support the while ` 9,69,900 crore is budgeted as Nonprogramme to address maternal and objectives of Aajeevika i.e. NRLM and will Plan Expenditure. The tax proposals arechild malnutrition in selected 200 high empower women SHGs to access bank guided by the need to move towards theburdened districts is being rolled out credit. He also proposed to establish a Direct Tax Code(DTC) in the case ofduring 2012-13. He further said that an Bharat Livelihoods Foundation of India direct taxes and Goods & Services Tax 5 UPSCPORTAL Courses: Online & Correspondance Programmes
  6. 6. UPSCPORTAL Current Affairs : in the case of indirect taxes. order to augment funds for SMEs, sale of care, and services provided by charities,Individual income up to ` 2 lakh will be residential property will be exempt from independent journalist, sport persons,free from income tax; income upto ` 1.8 capital gains tax, if the proceeds are used performing artists in folk and classical arts,lakh was exempt in 2011-12. Income for purchase of plant and machinery, etc. etc are exempt from service tax. Filmabove ` 5 lakh and upto ` 10 lakh now A General Anti-Avoidance Rule (GAAR) industry also gets tax exemption oncarries tax at the rate of 20 per cent; the is being introduced in order to counter copyrights relating to recording of20% tax slab was from ` 5 lakh to ` 8 aggressive tax avoidance. Securities cinematographic films. Service tax rate islakh in 2011-12. A deduction of up to transaction tax (STT) is being reduced being increased from 10 per cent to 12` 10,000 is now available for interest by 20 per cent on cash delivery per cent, with consequential change infrom savings bank accounts. Within the transactions, from 0.125% to 0.1%. rates for services that have individual taxexisting limit for deduction allowed for Alternative Minimum Tax is proposed to rates. The standard rate of excise dutyhealth insurance, a deduction of up to be levied from all persons, other than for non-petroleum goods is also being` 5000 is being allowed for preventive companies, claiming profit linked raised from 10 per cent to 12 per check-up. Senior citizens not deductions. No change is proposed in peak rate ofhaving income from business will now not The Finance Minister has proposed customs duty of 10 per cent on non-need to pay advance tax. a series of measures to deter the agricultural goods. While no changes have been made generation and use of unaccounted The Budget offers relief to differentin corporate taxes, the budget proposes money. In the case of assets held abroad, sectors of economy, especially thosea number of measures to promote compulsory reporting is being introduced under stress. Import of equipment forinvestment in specific sectors. In order and assessment up to 16 years will now fertilizer projects are being fullyto provide low cost funds to some stressed be allowed to be re-opened. Tax will be exempted from basic customs duty of 5infrastructure sectors, withholding tax on collected at source on trading in coal, per cent for 3 years Basic customs duty isinterest payments on external borrowings lignite and iron ore; purchase of bullion also being lowered for a number of(ECBs) is being reduced from 20 percent or jewellery above ` 2 lakh in cash; and equipment used in agriculture and relatedto 5 per cent for 3 years. These sectors transfer of immovable property (other areas. In the realm of infrastructure,are – power, airlines, roads and bridges, than agricultural land) above a specified customs relief is being given to power,ports and shipyards, affordable housing, threshold. Unexplained money, credits, coal and railways sectors while steam coalfertilizer, and dam. Investment linked investments, expenditures etc. will be gets full customs duty exemption for 2deduction of capital expenditure in some taxed at the highest rate of 30 per cent years (with the concessional counter-businesses is proposed to be provided at irrespective of the slab of income. The veiling duty of 1 per cent), natural gas,150 per cent as against the current rate Finance Minister has made an effort to LNG and certain uranium fuel get fullof 100 per cent. These sectors include widen the service tax base, strengthen its duty exemption this year. Different levelscold chain facility, warehouses for storing enforcement and bring it as close as of duty concessions are being providedfoodgrain, hospitals, fertilizers and possible to the central excise. A common to help mining, railways, roads, civilaffordable housing. Bee keeping, simplified registration form and a aviation, manufacturing, health andcontainer freight and warehousing for common return are being introduced for nutrition and environment. So as to helpstorage of sugar will now also be eligible central excise and service tax. modernization of the textile industry, afor investment linked deduction. The All services will now attract service number of equipment are being fullybudget also proposes weighted deduction tax, except those in the negative list. The exempted from basic customs duty, andfor R&D expenditure, agri-extension negative list has 17 heads and includes lower customs duty is being proposed forservices and expenditure on skill specified services provided by the some other items used by the textiledevelopment in the manufacturing sector. government or local authorities, and industry. For small and medium enterprises services in the fields of education, renting Customs duty is being raised for(SMEs) the turnover limit for compulsory of residential dwellings, entertainment gold bars and coins of certain categories,tax audit of accounts as well as for and amusement,public transportation, platinum and gold ore. Customs duty ispresumptive taxation is proposed to be agriculture and animal husbandry. A to be imposed on coloured gem stones.raised from ` 60 lakh to ` 1 crore. In number of other services including health Excise duty on certain categories of 6 UPSCPORTAL Courses: Online & Correspondance Programmes
  7. 7. UPSCPORTAL Current Affairs : and bidis, pan masala and children from ` 12,000 to ` 15,000 lakh; 20 pc on income betweenchewing tobacco is being increased. v Customs and central excise ` 5-10 lakh and 30 pc on incomeCustoms duty is being increased on proposals to net a revenue of above ` 10 lakh.completely built large cars/ SUVs/ MUVs ` 27,280 crore v Tax exemption of up to ` 5,000 forof value exceeding $40,000. Silver v Installation of solar plants exempted health insurance for annualjewellery will now be fully exempt from from CVD. preventive health checkupexcise duty. Unbranded precious metal v Oil cess on domestic crude raised v Direct taxes proposals to result injewellery will attract excise duty on the to ` 4,500 per ton from ` 2,500 per net revenue loss of ` 4,500 crore.lines of branded jewellery. Operations are ton. v All services except 17 in thebeing simplified and measures taken to v Standard excise duty rate raised negative list to be brought underminimize impact of this provision on from 10 per cent to 12 per cent. service tax net.small artisans and goldsmiths. While v Service tax to yield additional v Copyright relating todirect tax proposals in the Budget will revenue of ` 18,650 crore. cinematography in film industryresult in a net revenue loss of ` v No change in the peak rate customs exempted from service tax4,500crore, indirect taxes will result in a duty. v Team to study common tax codenet revenue gain of ` 45,940 crore. Thus, v Full exemption from basic customs for service tax and central excise tothe tax proposals will lead to a net gain of duty on natural gas, LNG, uranium be set up` 41,440crore. for generation of electricity for two v No change in the peak rate customs years. duty HIGHLIGHTS OF BUDGET : v Import of equipment for fertilizer v Service tax to yield additional v Cars to attract ad valorem rate of plants fully exempt from customs revenue of ` 18,650 crore. 27 per cent. duty for three years v Standard excise duty rate raised v Upper limit raised from ` 8 lakh to v Full exemption from basic customs from 10 per cent to 12 per cent. ` 10 lakh for 20 per cent bracket duty for equipment for road and v Determined to bring down fiscal v Individual income tax payer highway construction deficit to 5.1 per cent of GDP next exemption limit to be raised to v Customs duty on import of parts of fiscal ` 200,000 from ` 180,000. aircraft, tyres and testing equipment v Total debt of the Centre will be 45 v Capital gains tax on residential fully exempted. per cent of GDP property exempted if sale proceeds v Excise duty on handmade and semi- v Revenue deficit for 2012-13 used for SMEs. mechanised matches reduced from projected at ` 1,85,752 crore. v Customs duty on bicycles and parts 10 to 6 per cent v Non-plan expenditure ` 9,69,900 increased v Introduction of compulsory crore in 2012-13; 8.7 per cent v Customs duty on standard gold bar reporting of assets held abroad. higher than current year and coins exceeding 99.5 per cent v Securities Transaction Tax (STT) v Direct tax collection fell short by purity, platinum and non-standard reduced from 0.125 per cent to 0.1 ` 32,000 crore in current fiscal. gold raised per cent. v Fiscal deficit at 5.9 per cent of GDP v Import duty on large cars, MUVs, v Withholding tax on power, airlines, in revised estimates for 2011-12. SUVs enhanced road and brides, ports and shipyard, v Determined to bring down fiscal v Gold jewellery not bearing brand fertilisers, dams and affordable deficit to 5.1 per cent of GDP next name to be included in the one per houses lowered to 5 pc from 20 pc fiscal. cent levy on precious metal for 3 years. v Urban health schemes get higher jewellery v No change in corporate tax rate. allocation. v Branded silver jewellery fully v The Budget also exempts up to v 40 crore Aadhar enrollment in year exempted from excise duty ` 10,000 of interest income from beginning April 2012. v Baggage allowance for people of tax. v White Paper on black money to be Indian origin increased from v No IT for income up to ` 2,00,000; tabled in current session of ` 25,000 to ` 35,000 and for 10 pc on income between ` 2-5 Parliament. 7 UPSCPORTAL Courses: Online & Correspondance Programmes
  8. 8. UPSCPORTAL Current Affairs : Information on blackmoney v Investment in agriculture will be on allowing FDI in multibrand retail stashed abroad has started flowing hiked, says FM up to 51 percent. in; prosecution to be executed in v Government to provide ` 10,000 v FM expects current account deficit some cases. crore to NABARD for refinancing to be 3.6%v Net tax receipts of the Centre in regional rural banks v Govt. will keep FY13 subsidy at 2011-12 stands at ` 7,71,071 crore. v Farmers will continue to get interest under 2% of GDPv Interest subvention of 7 pc to subsidy v Direct Tax Code (DTC) Bill to be women self groups for loans up to v Government to set up ` 5000 crore enacted at the earliest, says FM, but ` 3 lakh, additional 3 pc for those venture fund for MSME sector. indicated its deferment. making timely repayment. v Agriculture credit target to be raised v Govt to fully provide for foodv ` 1000 crore to be provided for by ` 100,000 cr to ` 5,75,000 cr, subsidy and food security act in National Skill Development says FM 2012-13. Corporation in 2012-13. v Govt to double tax free bonds for v Food Security Act will be fullyv ` 3,915 crore to be spent on infrastructure financing to ` 60,000 provided for and subsidy to be 2 National Rural Livelihood Mission. crore in next FY per cent of GDP for next two years.v ` 193,407 crore provision made for v Proposal to allow foreign airlines to v Pilot project for direct transfer of defence services in 2012-13. participate direct or indirectly in subsidiary for kerosene has beenv National Backward Region Grant India being considered actively. initiated in Alwar, Rajasthan. scheme outlay raised by 22 per cent v India will become self-sufficient in v Amendments to FRBM Act part of to ` 12,040 crore urea production in five years, says the budget.v ` 20,000 cr to be spent on rural FM v Expectations are for economic infrastructure development, v Microfin institution regulation bill, growth rate of 7.6% next year. including ` 5,000 cr for creating natl housing bank regulation bill, reg v Macro-economic policies must be warehousing facilities. bank regulation bill and public debt improved.v ` 20,822 crore earmarked for management bill this session v RBI’s monetary policy which has National Rural Health Mission v Income Tax deduction of 50 per been tight has impacted both against ` 18,115 crore this year cent on investments of up to growth and consumptionv Govt to create PDS through Adhaar ` 50,000 in savings scheme named Sectoral allocations are as follows: platform by Dec to realise objectives after Rajiv Gandhi which will be of Food Security Bill introduced AGRICULTURE AND ALLIEDv ` 15,850 cr to be allocated to ACTIVITIES v IPO equity offer above ` 10 crore Integrated Child Development will have to be made electronically v Budgetary allocation for agriculture Scheme in 2012-13 as against in capital market reforms. and allied activities 2012-13 ` 10,000 cr this fiscal. v ` 15,888 cr to be provided for increased by 18%v Allocation for rural drinking water capitalisation of public sector and v 9217 crore rupees allocated for and sanitation scheme increased regional rural banks and NABARD. Rashtriya Krishi Vikas Yojana. from ` 11,000 cr in FY 12 to v Infrastructure investment in 12th v 1000 crore rupees for Bringing ` 14,000 cr in 2012-13v National Mission on Food Proce- Plan to go up to ` 50 lakh crore; Green Revolution to Eastern India ssing to be started in 2012-13. half of it to come from pvt sector (BGREI) projectv Govt to allow use of Kisan credit v Qualified institutional placement v 300 crore rupees to Vidarbha cards in ATMs (QIPs) will be allowed to access Intensified Irrigation Developmentv FM says computerisation of the Indian markets Programme under RKVY. Public distribution system will be v Government to raise ` 30,000 crore v 200 crore rupees allocated for done in 2012-13 from disinvestment of incentivising research with rewardsv Additional 3 per cent interest stake in PSUs v 14242 crore rupees allocated for subvention to farmers for promptly v Efforts to arrive at broadbased Accelerated Irrigation Benefit repaying their dues. consensus with state governments Programme (AIBP)8 UPSCPORTAL Courses: Online & Correspondance Programmes
  9. 9. UPSCPORTAL Current Affairs : v 500 crore rupees provided to HEALTH INFRASTRUCTURE AND broaden scope of production of fish INDUSTRIAL DEVELOPMENT v 20822 crore rupees National Rural to coastal aquaculture Health Mission v 25360 crore rupees allocated for RURAL DEVELOPMENT Road Transport and Highways EMPLOYMENT AND SKILL Ministry v 14,000 crore rupees allocated for DEVELOPMENT v 3884 crore rupees loan waiver for rural drinking water and sanitation v 3915 crore rupees provided for handloom weavers and their v 24000 crore rupees allocated for National Rural Livelihood Mission cooperative societies Pradhan Mantri Grameen Sadak v 1276 crore rupees allocated for v 500 crore rupees pilot scheme Yojna Prime Minister’s Employment announced for promotion and v 12040 crore rupees provided for Generation Programme application of Geo-textile in the Backward Regions Grant Fund v 1000 crore rupees allocated for North Eastern Region scheme National Skill Development Fund v 70 crore rupees allocated to set up v 20,000 crore rupees allocated for a powerloom mega cluster in Rural Infrastructure Development DEFENCE AND SECURITY Ichalkaranji in Maharashtra Fund v 193407 crore rupees aallocated for v 5000 crore rupees India v 5000 crore rupees earmarked for Defence services including Opportunities Venture Fund to be creating warehousing facilities 79579crore rupees for capital set up with SIDBI expenditure v 15888 crore rupees to be provided EDUCATION v 1185 crore rupees to be allocated for capitalisation of public sector v Sarva Siksha Abhiyan-Right to banks and financial institutions for construction of nearly 4000 Education- 25555 crore rupees residential quarters for Central v 3124 crore rupees provided for OTHER MAJOR ALLOCATIONS Armed Police Forces Rashtriya Madhyamik Shiksha v 3280 crore rupees proposed to be v 37113 crore rupees allocated for Abhiyan (RMSA) allocated for construction of office Scheduled Castes Sub Plan building of CentralArmed Police v 21710 crore rupees earmarked for Forces Tribal Sub Plan UPSCPORTAL’S Golden Book Series CSAT INDIAN HISTORY PAPER–1 For Civil Services Preliminary Examinations Buy Online at: 9 UPSCPORTAL Courses: Online & Correspondance Programmes
  10. 10. UPSCPORTAL Current Affairs : inance Minister Pranab constrained investment and January 2012. Rupee reached a peak of Mukherjee tabled the Economic manufacturing, government data released 43.94 on 27 July 27 2011 and lowest at Survey 2011-12 in Parliament on earlier showed. GDP rose 6.1 percent in 54.23 per US dollar on 15 December15th of March, stating the Gross Domestic October to December compared with a 2011 indicating a depreciation of 19 perProduct (GDP) is likely to grow 7.6 year earlier. That marked a sharp cent. The RBI was required to sell dollarspercent in FY’13. “The growth rate of pullback from 6.9 percent growth in July twice in the fiscal to help raise the valuereal GDP (is expected) to pick up to 7.6 to September and was the seventh of the rupee. Also in 2011-12 India’spercent (plus or minus 0.25 percent) in successive quarterly slowdown. external debt stock increased by US $2012-13 and faster beyond that,” said The slowdown in Indian economy 20.2 billion (6.6 per cent) to US $ 326.6Pranab Mukherjee in Parliament. It was attributed largely to billion at end-September 2011 vis-à-visexpects the economic growth to further weakening industrial growth. The US $ 306.4 billion at end-March 2011,improve to 8.6 percent in 2013-14. The industrial sector has performed poorly, primarily due to higher commercialSurvey said fiscal consolidation is likely retreating to a 27% share of the GDP. borrowings and short-term get back on track from 2012-13, when The services sector however continued to The Labour Bureau conductedsavings and capital formation will also be a star performer as its share in GDP twelve quarterly quick employmentbegin to improve. “Moreover, with the climbed from 58% in 2010-11 to 59% in surveys to assess the impact of theeasing of inflationary pressure in the 2011-12 with a growth rate of 9.4%. economic slowdown on the employmentmonths to come, there could be Agriculture and allied sectors were sector. The surveys indicated an upwardreduction in policy rates by the RBI, which estimated to achieve a growth rate of trend in employment since July 2009 waswould encourage investment that could 2.5% in 2011-12. Agriculture & allied maintained. Overall employment inhave a positive impact on growth”, it sectors were are estimated to achieve a September 2011 over September 2010added. Indian economy is likely to slow growth rate of 2.5% in 2011-12 with increased by 9.11 lakh, with the highestdown to 6.9 percent in 2011-12 from 8.4 foodgrains production likely to cross increase recorded in IT/BPO (7.96 lakh)percent in the previous two years mainly 250.42 million tones as a result of sector. The coverage underon account of global slowdown and increase in the production of rice in a the MGNREGA consistently increaseddomestic factors. “There were also the number of states. Overall growth during from 4.51 crore households during 2008-pressures of democratic politics, which April-December 2011 reached 3.6% 09 to 5.49 crore households during 2010-slowed reforms,” the Survey said while compared to 8.3% in the corresponding 11 with averaged employment of 47endorsing the Central Statistical period of the previous year. The fiscal persondays per household. Average wageOrganisation’s (CSO) estimate of 6.9 2011-12 was marked by a increased from Rs 65 in 2006-07 to Rs.percent growth during 2011-12. India’s sharp depreciation of the Indian rupee. 100 in 2010-11. The Survey stated thateconomic growth slowed to its weakest In the current fiscal 2011-12, on month- to strengthen transparency andannual pace in almost three years in the to-month basis the rupee depreciated by accountability in the implementation ofthree months to December, as high 12.4 per cent from 44.97 per US dollar the MGNREGA, the Governmentinterest rates and rising input costs in March 2011 to 51.34 per US dollar in initiated a service delivery project for 10 UPSCPORTAL Courses: Online & Correspondance Programmes
  11. 11. UPSCPORTAL Current Affairs : and Communication Following are the highlights of environment turned sharplyTechnology (ICT) and biometrics related Economic Survey 2011-12 : adverse in September, 2011works of the MGNREGA on PPP basis. v Rate of growth estimated to be 6.9% v Euro-zone crisis responsible for The real GDP growth is expected in FY 12 international downturnto pick up to 7.6% in 2012-13 and 8.6% v Outlook for growth and stability v Slowdown of Indian economy duein 2013-14 as per the survey. Pranab promising to global, domestic factorsMukherjee predicted 7.6% GDP growth v Real GDP growth expected at 7.6% v Decline in overall investment ratein 2012-13. As per the survey, given that in FY 13 cause for slow recoveryfiscal consolidation is back on track, v GDP pegged at 8.6% in FY 14 v Gross capital formation in Q3 of FYsavings and capital formation should is v Agriculture grows at 2.5 % growth 12 as a ratio of GDP at 30%, downlikely to start rising. Also the RBI policy in FY 12 from 32% in FY 11rates are expected to be reduced in the v Services grow at 9.4 %, in FY 12, v Global economy remains fragile;back of easing of inflationary pressures. share in GDP at 59% efforts needed through G-20 forThe lowered interest rates will encourage v Industrial growth pegged at 4-5 % stabilityinvestment activity and have a positive in FY 13 v Progressive deregulation of interestimpact on growth. v Industry expected to improve as rates on savings accounts These projections were all made on economic recovery resumes recommendedthe basis of assumptions regarding v Inflation on WPI was high, but v Deregulation of interest rates onfactors like normal monsoons, shows signs of moderation savings accounts to help raisereasonably stable international prices, v Inflation moderation likely to spur financial savings and improveparticularly oil prices, and global growth. investment transmission of monetary policyThe progressive deregulation of interest v WPI food inflation dropped from v Need deepening of domesticrates on savings accounts is expected to 20.2% in February 2010 to 1.6% in financial markets, especiallyraise financial savings and thus improve January 2012 corporate bond markettransmission of monetary policy. v Calibrated steps initiated to contain v Efforts on to attract dedicated Sustainable development and inflation infrastructure fundsclimate change were recognized by the v India remains among the fastest v India’s foreign trade performancesurvey as central areas of global concern. growing economies of the world key driver of growthThe Survey suggested need to examine v India’s sovereign credit rating rose v Balance of Payments widens tothe linkages and trade-offs between by 2.98 percent in 2007-12 USD 32.8 bn in H1 of FY 12 Vspolicy rate changes and inflation in the v Fiscal consolidation on track USD 29.6 bn FY 11Indian context, for better calibration of v Savings & Capital Formation v Forex reserves up from USD 279monetary policy. The Economic Survey expected to rise bn in March ’10 to US USD 305 bn2011-12 stated that it was essential to v Exports grew at 40.5% in H1 in March’11make lower carbon sustainable growth a v Imports grew by 30.4% in H1 v India now more closely integratedcentral element of our Twelfth Five Year v Foreign trade performance key with the world economyPlan commencing in April 2012. driver of growth v India’s share of trade to GDP of The Economic Survey in v Forex reserves enhanced, cover goods and services in world tripledconclusion mentioned that India is more nearly the entire external debt stock in 1990-2010closely integrated with the world v Central spending on social services v India’s flows of capital as a share ofeconomy as its share of trade to GDP of up at 18.5% in FY 12 Vs 13.4% FY GDP in word increasedgoods and services tripled between 1990- 07 dramatically in last two decades2010. The extent of financial integration, v MNREGA coverage of 5.49 crore Inflationmeasured by flows of capital as a share of households in FY 11 v Inflation to moderate further in FYGDP also increased leading to an v Sustainable development and 13expansion of India’s role in the world climate change high priority v Renewed focus on supply sideeconomy. v Tenuous global economic measures essential for price stability 11 UPSCPORTAL Courses: Online & Correspondance Programmes
  12. 12. UPSCPORTAL Current Affairs : Inflation expected to moderate at v Higher levels of agricultural output v Moderation in growth in other 6.5-7% by March end augur well segments of IIPv Gap between WPI and CPI inflation v Concerns over growth rate in agri v Negative growth observed in capital narrows in FY 12 sector falling short of target goods and intermediates segmentsv Milk, eggs/meat/fish, gram & edible v Agriculture grows at 2.5% Vs target v Gross Capital Formation in oils major drivers of food inflation of 4% in five yr plan industry as percent to the overallv Monetary policy measures taken to v Agriculture, allied activities account GCF moderated to 48.3% in FY 11 contain inflation for 13.9 % of GDP in FY 12 v Manufacturing GCF growth ratev Substantial Monetary policy v Foodgrains stocks at 55.2 million declined to 7% in FY 11 Vs 42% in challenge to rein-in inflation tonnes FY 10v RBI addressed liquidity concerns v Production of foodgrains in FY 12 v Moderation in rate of growth ofv Monetary market remained orderly estimated at 250.42 million tones credit in infrastructure and in FY 12 2011-12 v Speedy improvement in yield manufacturing sectorsv Need to examine linkages between through adequate investment in v Need to address land acquisition policy rate changes and inflation R&D needed and infra issue on priorityv Threat from asset price bubbles in v Agri infra priority area Services Sector real estate and stock markets v Agri outlook for next fiscal bright v Services sector proves saviourv Scope to further sharpen monetary Industry during global crisis policy and use macro prudential to v Industrial growth pegged at 4-5% v Services grow by 9.4% despite deal with above said threats in FY 12 slowing GDP growthv Unexpected shocks such as oil v Industrial growth less than recent v Share of services in GDP at prices remain inflationary threats past and far below potential increased from 55.1% in FY 11 tov High level of food stocks to help v Need to boost business sentiments, 56.3% in FY 12 maintain overall price stability encourage investment and identify v Financial & non-financial services, bottlenecks IT, Telecomm, Real Estate MEASURES FOR PRICE v Industrial sector expected to constituted 41.9 % of total FDI STABILITY IN FOOD ITEMS rebound during next financial year equity inflows during April 2000- v Industry expected to rebound withv Need guidance for farmers on December 2011 inflation easing, moderation in fertilizers, insecticide, alternate v FDI inflows to the Services Sector commodities prices in international cropping patterns slowed down FY 10 & FY 11, market and revival ofv Need strategy, regular imports of dipping to negative zone manufacturing performance agriculture commodities in smaller v FDI inflows in FY 12 recovered; v Long term average annual growth quantities of industries comprising mining, increased by 36.8 % to USD 9.3v Need to set up special markets for manufacturing and electricity billion (April-Dec) special crops remain aligned with overall GDP v Slight moderation in servicesv Improve Mandi governance growth rate growth no cause of worryv Need to promote interstate trade v Employment in Industry increase v Moderation due to the steep fall inv Perishable food items should be from 16.2% in 1999-2000 to 21.9% growth of public administration taken out of ambit of the APMC in 2009-10 largely due tp and defence services reflecting fiscal Act construction sector consolidationv FDI in multi brand retain will fill v Contraction in production in the v Growth in trade, hotels and infra gap during harvest period mining sector, particularly in coal restaurants robust at 11.2%v Need to step up creation of modern and natural gas segments v Retail-sector growth expected to be stores facilities for food grains v Electricity sector witnessed even more robust in FY 13 Agriculture improvement v Worry areas include real estatev FDI in multi-brand retail v Basic goods and non-durables ownership of dwellings and recommended goods grew at 6.1% business services segment12 UPSCPORTAL Courses: Online & Correspondance Programmes
  13. 13. UPSCPORTAL Current Affairs : v Software service exports steady; v Forex Reserves at USD 293 bn v Core and infrastructure sector still face threat from Eurozone v External Debt Stock at USD 326 depends on public sector projects bn v Delays increase project risk and TRADE v Oil, Gold and Silver prices cost, and need to be minimized v India’s exports grew at 23.5% to contribute to modest rise in current v Credit growth to infrastructure reach USD 242.8 bn in April 2011 account deficit sector turned negative in FY 12 - Jan 2012 v Net capital flows at USD 41.1 billion v Incremental credit flow to the infra v Exports decelerated in Oct-Nov due (4.5% of GDP) in the H1 of FY 12 sector in April-December 2011 to global downturn; recovered in v External commercial borrowing at nearly 61% in same period year Dec-Jan USD 10.6 billion in H1 of FY 12 before v Key performers in export - v Portfolio investment shows large v Reduction in credit flow in power petroleum and oil products, gems decrease in inflow to USD 1.3 bn in and telecom sectors and jewellery, engineering, cotton H1 of FY 12 v Total FDI inflows into majors fabrics, electronics, readymade v Trade deficit more than 8 % of GDP infrastructure sectors during April- garments, drugs and current account deficit more December 2011 registered growth v Imports up 29.4% during April - Jan than 3 % sign of growing imbalance of 23.6% 2011-12 at USD 391.5 bn in BOP v Challenges on form plateauing of v Key import areas -POL (petroleum, v High share of volatile FFI flows the domestic savings and macro oil and lubricant), gold and silver added external shock availability of resources v Trade deficit in April-Jan 2011-12 Infrastructure v Need for innovative schemes to at USD148.7 bn Vs USD 105.9 v Performance of broad sectors and attract large-scale investment into billion in last fiscal sub sectors in key infrastructure infrastructure v Diversification of export and areas presents mixed picture v Strengthening domestic financial import markets a success v Achievements in certain institutions and development of v UAE India’s largest trading partner, infrastructure sector ‘remarkable’ long-term bonds market critical followed by China v Need to attract large scale Rupee v India’s services exports bounce investment into infrastructure v Rupee falls by 12.4 % against USD back after contraction in FY 10 v Public-Private Partnership v Rupee falls from 44.97 per USD in v India’s services exports grew 38.4 successful model March 2011 to 51.34 per USD in % to USD 132.9 bn in FY 11 v PPPs expected to augment resource January 2012 v Growth in export of services availability, improve efficiency v Rupee’s high volatility impairs moderated in H1 FY 12 to 17.1% v Investment requirement at USD 1 investor confidence v Software exports may show some trillion during Twelfth Plan v Aggressive stand to check Rupee sluggishness v 50% investment to come from volatility recommended v Trade challenges include global private sector as against the 36% situation, systemic problems anticipated FINANCIAL MARKETS v Further diversification of India’s v Financing infrastructure a big v Volatility in global financial markets export basket needed challenge likely to tighten availability and cost v Facilitate trade by removing v Improvement in growth in power, of foreign funding procedural delays, red tape petroleum refinery, cement, railway v Government measures mitigate v Infrastructural bottlenecks need to freight traffic, passenger handled liquidity stress be removed v Coal, Natural Gas, Fertilizers, v Indian banks robust amidst v Total investment in SEZs till 31 Dec handling of Export Cargo at airports Eurozone crisis 2011 at Rs. 2,49,630.80 crore and number of cell phone v Financial infrastructure continues v Formal approvals granted for connections show negative growth to function without any major setting up of 583 SEZs of which 380 v Steel sector witnesses moderation disruption notified in growth v Indian financial markets, especially 13 UPSCPORTAL Courses: Online & Correspondance Programmes
  14. 14. UPSCPORTAL Current Affairs : currency and equity, performed v Self Help Group- bank linkage v Five main challenges include under pressure in FY 12 programme major success climate change, food security, waterv Global market turmoil caused risk v Capital in banks essential for security, energy security and aversion and moderation in capital balance sheet expansion managing urbanization inflows v Rs 12,000 provided in FY 12 for v Broad-based economic and socialv Countervailing steps helped capital infusion in public sector development answer for greater mitigate strains banks sustainabilityv Global situation, rising trade v Growth in bank credit extended by Education and Employment imbalance, pace of reform initiatives Scheduled Commercial Banks grew v Reform process in education to boost capital flows at 17.1% continued IN FY 12v Domestic growth concerns likely to v Flow of agricultural credit v Aakash, low cost computing device influence financial markets impressive launched movements v Infrastructure Debt Funds to v Sarva Shiksha Abhiyan normsv Concerns over Greece’s sovereign facilitate flow of funds into revised to correspond with the debt problem spreading to India infrastructure projects provisions of the RTE Actv Banking business may become v Resource mobilization through v National Council for Teacher more complex and riskier in future primary market shows sharp Education notified as the academic with greater global integration decline in FY 11 authority for teacher qualificationsv Risk and liquidity management, skill Environment and Climate Change v Number of out-of-school children enhancement necessary v Lower carbon sustainable growth to down from 134.6 lakh in 2005 tov Need to maintain sustainable levels be central element of 12th plan 81.5 lakh in 2009 of external debt v India’s per capita CO2 emissions v Need to scale up the successfulv Need innovative steps to bring much lower than those of developed centres of innovations, create higher corporate bond market at the countries even if historical technical institutions centrestage emissions are excluded v Labour Bureau Survey indicatesv Infrastructure financing and v Need for more sensitivity from upward trend in employment since financing of unorganized micro/ developed countries to carbon July 2009 maintained small business sector needed emissions v Employment in organized sector Banking and Micro Finance v Economic pricing of energy, new increased by 1.9 % in 2010v Public sector banks show 19 % technologies to be the key v Share of women in organized- growth in priority sector lending v India has taken voluntary actions to sector employment at 20.4% inv Credit Disbursement to agri sector pursue sustainable development 2010 March end exceeded target by 19 % strategy v MGNREGA: Coverage increases tov Credit Disbursement helped over v Warming planet may cause adverse 5.49 crore households in 2010-11 12.7 mn new farmers effects, extreme weather events v Government sets up committee forv 98 % public sector bank branches v India has stepped up protection of developing index for fixing fully computerised its natural environment, forests MGNREGA wage rates14 UPSCPORTAL Courses: Online & Correspondance Programmes
  15. 15. UPSCPORTAL Current Affairs : oalition Politics is a time tested which is holding a second term in Office. no party on its own can achieve a majority thing in Modern Democracy. The term ‘coalition’ is derived from in the parliament. In such times, parties The concept of Coalition Politics the Latin word ‘coalitio” which is the have formed all-party coalitions (nationalbasically draws its roots from the times verbal substantive of coalesce which unity governments, grand coalitions). If awhen warring states sometimes used to means to grow together. However, as coalition collapses a confidence vote isally with each other in order to defeat of actually used, it somewhat belies it held or a motion of no confidence isa common enemies, as in Vedic nominal meaning, ‘for the units or the taken.Civilisation’s Dasragya war, Nizams & elements brought into combination by a Coalition and/or minorityBritish coalition verses Marathas . In coalition very seldom grow together in governments were rare between 1947recent times in India got a taste of any literal sense. According to the and 1989 when the Congress Party wonCoalition Politics at the state level when dictionary meaning coalition means an majorities of seats in the Lok Sabhathe Left front comprising of Communist act of coalescing, or uniting into one (Lower House), based on only pluralitiesParty of India (CPI), CPI (Marxist) and body: a union of persons, states: alliance. of 40 to 48 percent of the vote. Theseothers formed the first ever Coalition In the strict political sense the word victories were an artifact of the first-past-Government in India at West Bengal with coalition is used for ‘alliance or temporary the-post electoral system’sMr. Jyoti Basu as the Chief Minister union into a single government of distinct disproportional seat-vote ratio by which(succeeded by Mr. Buddhadeb parties or members of distinct parties. It the leading party gets disproportionatelyBhattacharjee) which till date hasn’t been is also generally accepted that a coalition more seats than votes in percentage terms.defeated. At the national level the first can take place only within the contexts of As like any other democracy, politicalever coalition government was formed mixed motive in which both conflict and parties represent different sectionsunder the Prime Ministership of Late Shri common interest are simultaneously among the Indian society and regions, andMorarji Desai Ji which existed from 24th present and must govern the Course. their core values play a major role in theMarch 1977 to 15th July 1979 headed Political coalition or political alliance is politics of India. Both the executiveby now an insignificant Janata Party (who an agreement for cooperation between branch and the legislative branch of thereputation has now been acquired by its different political parties on common government are run by thebreakaway section which formed political agenda, often for purposes of representatives of the political parties whothe Bharatiya Janata Party). Since 1996 contesting an election to mutually benefit have been elected through the elections.Indian Politics has been dominated with by collectively clearing election thresholds Through the electoral process, the peopleCoalition Governments which by far have or otherwise benefiting from of India choose which majority in thebeen stable after a shaky start.The characteristics of the voting system or for lower house; a government can beincumbent Prime Minister of India Dr. government formation after elections. A formed by that party or the coalition. TheManmohan Singh is heading a coalition coalition government is a cabinet of a full-term stability of the NDA and theGovernment of 15 parties called the parliamentary government in which endurance of the UPA for eight years asUnited Progressive Alliance (UPA) with several parties cooperate. The usual of today, has also been due to the factMrs. Sonia Gandhi, being its Chairperson reason given for this arrangement is that that coalitions in India since 1996 have 15 UPSCPORTAL Courses: Online & Correspondance Programmes
  16. 16. UPSCPORTAL Current Affairs : characterized to a large degree by those that use a first-past-the-post these efforts at consensus building arespatial compatibility, that is, they consist system, and so are more likely to have debated on the merits of the issuesof a patchwork quilt of parties that have coalition governments. involved, coalition governments arestate-specific bases and do not compete The basic essence of federalism is actually healthy. In practice, however, theon each other’s turf. This enables even the notion of two or more orders of perception that these negotiationsminority coalitions dependent on outside government combining the elements of amongst allies sometimes amount tosupport to last, combined with the fact ‘shared rule’ for some purpose and unhealthy and unethical quid-pro-quos,that in the UPA’s case the supporting Left regional ‘self rule’ for others. It is based is gaining ground. The recent cash-for-parties, whatever their dissatisfaction with on the objective of combining unity and votes issue that erupted in Parliament,Congress policies do not wish to create diversity. This means accommodating, and widespread media coverage aboutan opportunity for the BJP to return to preserving and promoting distinct the kinds of ‘deals’ that have been struckpower. identities within a larger political union. with various allies to get support for the Experts say that Coalition Politics is The noted constitutional authority, India-US nuclear agreement, Rail Budget,result of rise of Regional Parties on Durga Das Basu wrote that Constitution FDI in retail, Srilanka issue and manyagendas of National Importance. One of of India is basically federal, but of course more have only reinforced our concernsthe reasons for the growing importance with striking unitary features. According about tenuous nature of coalition politics.of Regional Parties has been their success to Nani Palkivala, Indian Constitution If we as a nation are likely to live within articulating the interests of the assertive provides for a cooperative federalism coalition politics, there are somebackward castes and Dalits or among states with a bias in favour of the important issues we need to consider.‘untouchables’. These parties remain Centre. He was of the view that if the Hollow as it might sound, we need a‘regional’ in terms of geographic location, Constitution is worked in the right spirit, massive push for enforceable ethicsbut are national in terms of issues relevant there would be no need to consider any reforms among political parties, howto the country as a whole. Their role within amendment as far as centre-state relation parties raise funds, how they spend them,the national coalition is also indicative of is concerned. He further said that the how much of it needs to be transparenta more competitive and polarised party problem has arisen to-day in an acute and other related issues. As a country, wesystem. Cabinets based on a coalition with form because over a period of years the cannot wait for a chance discovery of anmajority in parliament, ideally are more Centre has acted in a manner in which at oasis in the desert to save us. This needsstable and long-lived than minority best has been contrary to the spirit of the a concerted effort of citizens from acrosscabinets while the former are prone to Constitution. Article-1 of the the country to push for higher standardsinternal struggles, they have less reason Constitution mentioned that ‘India, that in public fear votes of no confidence. is, Bharat shall be Union of States’ If this . Reasons for Coalition Politics inSometimes grand coalitions of two large article is analysed it provides the message India are as follows:parties also occur, but these are relatively that there should be more of cooperation 1. Growth of Regional Politicalrare and large parties usually prefer to and understanding than the concept of Parties: Growth of regional partiesassociate with small ones. However, if domination and conflict. The conflict that has been reason for the emergencenone of the larger parties can receive occured in the Indian Federal process are of coalition politics in India.enough votes to form their preferred due to the conflict between party in the 2. Inability to Represent India’scoalition, a grand coalition might be their power at the Centre and the parties in diversity: Coalition politics alsoonly choice for forming a government. opposition to it which control some of thrives because of the inability ofIn many democratic countries, such as the states. In all federal system, and, in national parties to continue to giveGermany, France, India, Israel and Italy, particular, what are called polyethnic a feeling to the diverse populationgovernment by a coalition of political unions there is a conflict of values in India that they are able toparties is considered normal. This debate between those of the nation and the sub- adequately represent their disparateis closely related to issues of voting nations which constitute the Union. interests. pc. The BJP’s vote sharereform, as countries with some form of In a coalition situation, governments increased from about 11 pc in 1989proportional representation tend to have are forced to build consensus amongst to a little below 25 pc in recentmore political parties in parliament than the allies. In theory, to the extent that elections. 16 UPSCPORTAL Courses: Online & Correspondance Programmes
  17. 17. UPSCPORTAL Current Affairs : 3. Lose of Trust: The tendency of the choice at election time. It is also for concessions from the main national parties to speak of national easier for parties to split, or new groups within the coalition. level issues, and to force coherence ones to be formed, as new political 2. Coalition government is less in the politics and views on issues, is issues divide opinion, because new transparent, Because a party has no at odds with our extremely diverse parties still have a chance of a share real chance of forming a population. In the initial years, to in political power. government alone, the manifestos the extent that the Congress party 4. Coalitions provide good they present to the public become was able to accommodate regional/ government because their decisions irrelevant and often wildly local interests and reflect their are made in the interests of a unrealistic. aspirations, it was possible to majority of the people. A coalition 3. Coalitions provide bad government maintain a large single party government better reflects the because they are unable to take a identity. But over the years, regional popular opinion of the electorate long term view. and caste identities have begun to within a country. 4. Coalition governments are very increasingly assert themselves in the 5. Coalition government provides unstable, often collapsing and political space. more continuity in administration. reforming at frequent intervals – 4. The moral degeneration in A more consensual style of politics Italy, for example, averages more politics: Combined with regional also allows for a more gradual and than one government per year since parties’ ability provide credible constructive shift of policy between 1945. This greatly restricts the alternatives to the Congress party administrations. ability of governments to deal with in the states, led to a situation, 6. Such government functions on major reforms and means that where ‘horse trading’ became principle of politics of consensus. politicians seldom stay in any relatively common in unsettling state Besides, states are given more particular ministerial post for long governments. The brazen manner powers, and the base of concept of enough to get to grips with its in which political parties traded federalism is strengthened. demands. MLAs led to the passage of the anti- 7. Government will be more 5. Coalition governments are defection law in 1985. consensus based: resulting policies definitely far less effective, not will be broadly approved of for the durable, and non-dependable as MERITS & DEMERITS OF benefit of the nation. compared to the governments COALITION POLITICS 9. Better representation of the formed by any one party with aMerits electorate’s wishes definite ideology and principles. 10. Better quality of policy: enhanced 6. In coalition governments, MLAs 1. The coalition government scrutiny and increased attention and MPs from all the parties are addresses the regional disparity more than the single party rule. paid to each policy given portfolios/ministries and 2. Coalition government is more 11. Increased continuity: election does appointed as Ministers. These democratic, and hence fairer, not lead to dramatic overhaul ministers are appointed on the because it represents a much which can produce fragmented rule recommendations of the parent broader spectrum of public opinion 12. Yet instability apart, coalition party, without taking the than government by one party governments have been effective in qualification, character and criminal alone. In almost all coalitions, a enhancing democratic legitimacy, /clean record of the MLAs and majority of citizens voted for the representativeness, and national MPs. parties which form the government unity. From above discussion it can be and so their views and interests are concluded that since India is a diverse represented in political decision- Demerits country with different ethnic, linguistic, making. 1. Coalition government is actually and religious communities, it also has 3. Coalition government creates a less democratic as the balance of diverse ideologies. Due to this, the benefit more honest and dynamic political power is inevitably held by the small that a coalition has is that it leads to more system, allowing voters a clearer parties who can barter their support consensus based politics and reflects the 17 UPSCPORTAL Courses: Online & Correspondance Programmes
  18. 18. UPSCPORTAL Current Affairs : opinion of the electorate. In order parties do not always agree on the correct Governments in W. Bengal, Kerala,to have stable coalitions, it is necessary path for government policy. Different N.D.A. last ministry as well as presentthat political parties moderate their parties have different interests and beliefs U.P.A. Government led by Congressideologies and programmes. They should and it is difficult to sustain a consensus (twice) at centre have been successfulbe more open to take others point of view on issues when disagreement arises. well. They must accommodate each However, this is not to say that we haveother’s interests and concerns. In India, never had successful coalitions. UPSCPORTAL’S Golden Book Series CSAT INDIAN ECONOMY PAPER–1 For Civil Services Preliminary Examinations Buy Online at: UPSCPORTAL’S Golden Book Series CSAT ENVIRONMENT PAPER–1 For Civil Services Preliminary Examinations Buy Online at: UPSCPORTAL’S Golden Book Series CSAT INDIAN POLITY PAPER–1 For Civil Services Preliminary Examinations Buy Online at: 18 UPSCPORTAL Courses: Online & Correspondance Programmes