NATIONAL AFFAIRS - AUGUST 2010

NATIONAL AFFAIRS

Foreign Contribution Regulation Bill
Organisations of political nature and those involved in religious conversions will henceforth be barred from accepting foreign funds. Also, persons holding political positions like MPs and MLAs can no longer enjoy foreign hospitality and must intimate the government of their visits abroad, personal or official.

After letting private organisations bring in unaccounted foreign remittances for 34 years, the government has brought to the Lok Sabha the Foreign Contribution Regulation Bill, 2010, to regulate the acceptance and utilisation of foreign contribution of hospitality by certain individuals or associations and to prohibit such acceptances for activities detrimental to national interest. The Lower House passed the Bill, which the Rajya Sabha had already cleared.

At the root of the law is the concern that out of 40,173 NGOs (in 1993 there were just 1,500) accepting foreign funding, only 18,796 have submitted their audited accounts. For the rest, the government doesn’t know the source of funding.

So far, Rs 12,000 crore has “officially” come through the foreign route, of which 60 per cent has come from religious organisations, some from countries as small in population as Canada, Mauritius and Luxembourg.

The government’s data shows that in 2005 and 2006, there were over 32,144 organisations taking foreign funds in India. Only 18,000 declared their funding. In 2005-2006, of the Rs 7,000 crore that came from foreign sources, Rs 3,075 crore came for religious organisations. This explains why the new law (which replaces the 1976 legislation) bans foreign funds for conversion purposes.

Significant amounts (to the tune of Rs 7,229 crore) have also come in for education, with no monitoring. In the run-up to the new FCR Bill 2010, the government banned 41 outfits from taking foreign remittances; sealed accounts of 11 and asked 45 to take permission first.

With the new law, the government has also capped administrative expenses at 50 per cent of all inflows to NGOs (India has about 20 lakh).

Nuclear Liability Bill
On August 25, 2001, the UPA government successfully shepherded the Civil Liability for Nuclear Damage Bill, 2010, through the Lok Sabha, with active support from the BJP and strategic absence of some fence-sitters such as the Samajwadi Party.

Quashing opposition from the Left Bloc and other critics, Prime Minister Manmohan Singh denied that the Bill was railroaded through the House to serve US interests. “This Bill is a completion of a journey to end the nuclear apartheid, which the world had imposed on India in the year 1974,” he said.”

The government managed to bring the BJP on board in return for accepting amendments to the controversial Clause 17(b) and dropping the word “intent”. The new formulation of 17(b), now states that suppliers would be liable where “the accident has resulted as a consequence of an act of a supplier or his employees, done to cause nuclear damage, and such act includes supply of equipment or material with patent or latent defects or sub-standard services”.

While his government achieved what appeared even a few months ago to be an impossible task—getting the Lok Sabha to pass the Bill— Manmohan Singh announced that the government would give safety issues top priority. “Concern about nuclear safety is one, which I fully share. I assure (you) we will do everything to strengthen the Nuclear Regulatory Board to ensure that safety concerns receive the attention that they must, if we are to use nuclear power as a major source for generating and meeting India’s need for energy,” he said.

The key points of the Bill are:
—Controversial Clause 17(b) amended by dropping the word ‘intent’.
—Compensation cap to be paid by the operator at Rs 1500 crore provided in the Bill is not the ‘limit’.
—Compensation will be decided by the Claims Commissioner and the operator will have to pay.
—Government assumes full liability for even a plant not operated by it.
—The Bill is necessary for full implementation of civil nuclear deal signed with the USA in 2006.

Bill to provide women equal guardianship rights
A Bill paving way for the women to get equal rights in guardianship and adoption of children has been passed by the Rajya Sabha.

The Personal Laws Amendment Bill seeks to amend the Guardians and Wards Act, 1890 and the Hindu Adoptions and Maintenance Act, 1956. It also seeks to allow the mother, along with the father, to be appointed as a guardian, making the process gender-neutral.

Besides, it aims at removing hurdles in the way of a married woman to adopt. She can give a son or daughter for adoption.

For adoption and guardianship, under the existing Act, only the father is considered to be the natural guardian of the child in a Hindu family and only unmarried, divorced women and widows are allowed to adopt a child. Women separated from their husbands and engaged in lengthy divorce battles cannot adopt a child.

Annual Supplement to Foreign Trade Policy 2009-14
The government has extended sops worth Rs 1,052 crore to exporters, particularly for the labour-intensive textile, handicrafts and leather sectors, to help them see through the fragile economic recovery globally. The revenue implication of these measures would be Rs 1,052 crore. The government also made it clear that the popular Duty Entitlement Pass Book (DEPB) scheme, which has been in vogue for over a decade, is being extended for the last time.

Experts said drawing the curtains on the DEPB scheme was inevitable as it was considered incompatible with the global trade rules under WTO.

A number of additional products from sectors like engineering, leather, textiles and jute have also been added to the existing two per cent interest subvention scheme. Handloom, handicrafts, carpet and the SMEs have been getting this facility, which will now be available till March 31, 2011.

The government also extended the zero-duty Export Promotion Capital Goods (EPCG) scheme by one year to March 31, 2012. The scheme, which was announced in August 2009, was to expire on March 31, 2011. Steps to reduce transaction cost of exports too were announced in the policy.

India-Japan Strategic Dialogue
On August 21, 2010, visiting Japanese Foreign Minister Katsuya Okada held the fourth round of strategic dialogue with External Affairs Minister S.M. Krishna. The two sides discussed the nuclear pact, comprehensive economic partnership agreement (CEPA), other bilateral and international issues, including UN reforms and the situation in Afghanistan and Pakistan.

However, the focus was clearly on the nuke deal, the discussions on which the two countries propose to conclude as quickly as possible without setting any time-line.

Addressing a joint press conference with Krishna after the three-hour talks between the two sides, Okada candidly admitted that initiating negotiations with India on the nuclear pact was the toughest decision he had taken during his stewardship of the Japanese Foreign Ministry, given the fact that India was not a signatory to the NPT. He also acknowledged that the proposal for a nuclear agreement with India was facing sharp criticism back home, since Japan is the only country to have experienced a nuclear attack.

He also told the Indian side that the philosophy of nuclear disarmament and non-proliferation must be incorporated in the proposed accord on nuclear cooperation.

Asked if Japan had advised India against detonating another nuclear device, Okada said: “I don’t think we can suggest to India to refrain from conducting a test…but if such a thing were to happen, we shall have no option but to suspend our cooperation with India (in the field).”

The two countries will continue and enhance consultations within the G-4 process for reforms of the UN, including the Security Council. They also welcomed the inclusion of the US and Russia in the East Asia Summit (EAS).

National Innovation Council
Prime Minister Manmohan Singh has approved the setting up of a National Innovation Council to prepare a road map for the 'Decade of Innovation 2011-2020'. Sam Pitroda, adviser to the Prime Minister on public information infrastructure and innovations, will head the National Innovation Council.

The Council has been given the mandate to evolve an Indian model of innovation focussing on inclusive growth and creating an appropriate eco-system conducive to fostering inclusive innovation.

It will delineate appropriate policy initiatives within the government required to spur innovation. It will also promote the setting up of sectoral innovation councils and state innovation councils.

While encouraging all important sectors of the economy to innovate, the NIC will take special efforts to facilitate innovation by micro, small and medium enterprises.

Innovation in public services delivery and encouraging multi-disciplinary and globally competitive approaches for innovations would be focused on by the council.


The N.C. Saxena Committee was set up by the Ministry of Environment and Forests. It details the manner in which laws were flagrantly flouted to facilitate the Vedanta Alumina Ltd project in Orissa. The project is aggressively opposed by the local tribal groups.

India remained the largest recipient of World Bank loans in 2009-10. The World Bank, through its lending arms IBRD and IDA, committed $9.3 billion in financial assistance to India in 2009-10, more than the aid committed by the US and European Union. Next in line were South Africa ($3.8 billion), Brazil ($3.7 billion) and Turkey ($3.0 billion).

The Indian Parliament has hiked the salary of Members of Parliament to Rs 50,000 per month. Two key allowances (constituency and office expenses) have also been increased to Rs 45,000 each.

Airtel has bagged the title sponsorship rights for the India cricket team’s home games for two-and-half years, at a cost of Rs 3.33 crore per match.

Rajiv Gandhi Akshay Urja Diwas is observed on August 24.

“Oh yaaron, India ne bula liya”, composed by A.R. Rahman, is the theme song of Commonwealth Games, 2010. It has been directed by Shyam Benegal and produced by Bharat Bala.

With his Independence Day speech on August 15, 2010—the seventh—Manmohan Singh edged past Atal Behari Vajpayee to become the Prime Minister of India who has addressed the nation on Independence Day the third-highest number of times. Jawaharlal Nehru addressed the nation 17 times and Mrs Indira Gandhi 16 times.