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Insights Daily Current Events, November 01, 2013


In major reform, SC orders fixed tenure for bureaucrats

  • The Supreme Court has directed the Centre and the State Governments to set up a Civil Services Board (CSB) for the management of transfers, postings, inquiries, process of promotion, reward, punishment and disciplinary matters.

  • Officials were also told not to act on oral orders from political executive

  • The CSB, headed by the Cabinet Secretary at the Centre and Chief Secretary at the State level, to guide and advise the State government on all service matters, especially on transfers, postings and disciplinary action, etc; though their views also could be overruled, by the political executive, reasons should be recorded.

  • The Bench (SC) has asked Parliament to enact a Civil Services Act under Article 309 of the Constitution to setup CSB. It has directed the Centre, State governments and the Union Territories to constitute such Boards “within three months, if not already constituted, till the Parliament brings in a proper Legislation in setting up CSB.

Courtesy – Hindu newspaper

Why such a move?

  • At present, there were instances where transfers and postings were made frequently, at the whims and fancies of the political executive and other considerations and not in public interest. The necessity of minimum tenure has been endorsed and implemented by the Union Government.

Impact of this move:

  • The ruling would check arbitrary transfers and suspensions.

  • This will insulate the bureaucracy from political interference and put an end to frequent transfers of civil servants by political class.

  • Fixed tenure would not only enable the civil servants to achieve their professional targets, increase one’s efficiency but also help them to function as effective instruments of public policy.

  • This would ensure good governance, transparency and accountability in governmental functions.


  • However, the former Border Security Force (BSF) Director-General, Prakash Singh, whose public interest litigation (PIL) petition led to the Supreme Court’s landmark judgment on police reforms in 2006, doubted the willingness of political parties to implement the sweeping reforms.

  • Despite the court’s clear order on police reforms, no State has implemented it in letter and in spirit.

  • Recent instances wherein tenures of IAS officers Ashok Khemka and Durga Shakti Nagpal have been mired in transfer controversies, stands testimony to this.

Article 309

  • This Article empowers the Parliament or the State Legislature to make laws to regulate the recruitment and conditions of service of persons appointed to public services and posts in connection with the affairs of the Union or the State, as the case may be. It also authorizes the President or the Governor to make rules for the above purposes until provision in that behalf is made by or under an Act of Parliament or the State Legislature.


China opens new highway near Arunachal border

  • China has opened a new highway that links Medong (a county in China) with the rest of the country and will now provide all-weather access to the strategically important region.

  • ‘Medong’ is described as Tibet’s “last isolated county”. It is located close to the disputed eastern section of the border with India (near Arunachal Pradesh).

Why is it Significant to China?

  • It has been hailed by China as a technological breakthrough, since the project was finally completed after seven failed attempts over the past fifty years. China first started attempting to build the highway to Medog, a landlocked county in Tibet’s Nyingchi prefecture in the 1960s, in the aftermath of the 1962 war with India. (Medog was the only one of China’s 2,100 counties to remain isolated from the highway network)

  • With opening of the road, every county in Tibet is now linked through the highway network, underlining the widening infrastructure gulf across the disputed border, even as India belatedly pushes forward an upgrading of border roads in more difficult terrain.

Development Benefits:

  • Apart from the Strategic benefit, the project would also have development benefits.

  • The road’s opening will bring down commodity prices and widen access to healthcare.

  • The road will provide access to the border county for nine months of the year. Prior to the opening of the highway, reaching Medog required traversing the treacherous Galung La and Doxong La mountains at an altitude of 4,000 metres. With frequent landslides, the road was often rendered impassable.

  • The opening of the road comes at a time when there has been renewed attention on infrastructure projects in border areas in India and China.

  • (Just recently, had both countries signed Border Defence Cooperation Agreement (BDCA) which aimed at expanding confidence-building measures. The agreement calls for setting up channels of communication between military commands, increasing the number of border personnel meetings, and formalizing rules such as no tailing of patrols, to built trust and avoid incidents.

  • The BDCA will not limit India’s plans to upgrade infrastructure. It recognises the principle of equal and mutual security, which allows either side to pursue its security in its own way. BDCA will still help ‘regulate activity’ along the border by opening up new channels of communication, even as the border continues to remain a matter of dispute.)

India, Cuba ink MoU

  • India and Cuba signed a memorandum of understanding (MoU) for cooperation between Prasar Bharati (PB) and Cuban Radio and Television Institute (ICRT) as part of strengthening the friendly relations between the two countries.

  • They will also explore co-production opportunities in broadcasting on issues of mutual interest. PB and ICRT will exchange programmes in culture, education, science, entertainment, sports and news of mutual interest, subject only to contractual and copyright limitations.

  • The exchange will be on ‘complementary basis’ (as a gratitude), taking into account any existing commercial agreement.

  • In case of exchange on commercial basis, conditions will be determined through mutual agreement on a case-by-case basis.

  • However, any change or alteration to the programmes, including editing, will take place after discussions. The aim of such discussions shall be to ensure that no alteration or distortions to the original meaning of the programmes occur.

  • It also provides for PB and ICRT informing each other of significant cultural, economic, political and social events taking place in their respective countries. Both organisations will take advantage of each other’s expertise through exchange of personnel and training of technical staff.

Syria destroys equipment used to make chemical weapons raising disarmament hopes

  • The Organisation for the Prohibition of Chemical Weapons (OPCW) has declared that –‘Syria has completed the “functional destruction” of all critical equipment that it had declared for manufacturing chemical weapons and mixing/filling plants’

  • The declaration has raised hopes that, Syria could well be on its way to complete chemical disarmament by the middle of 2014.

  • With the infrastructure to build chemical weapons now destroyed, a new phase of chemical disarmament is set to commence, which will focus on Syria’s existing stockpiles of mass destruction arms. (Earlier in September, 2013 under a deal brokered by U.S. and Russia, Syria had pledged to eliminate all its chemical stocks by mid-2014, and has already declared a road map for their destruction.

  • The next milestone for the mission will be November 15, by which time the Executive Council must approve a detailed plan of destruction submitted by Syria to eliminate its chemical weapons stockpile. Syria has acknowledged that it has around 1,290 tonnes of chemical weapons, and 1,230 unfilled chemical munitions —implying shells, rockets or mortars.

  • The OPCW affirmed its findings after its inspectors visited 21 out of 23 chemical weapon production sites that Syria had declared, and witnessed the destruction of equipment on the spot.

  • OPCW’s confirmation would have a significant political impact, as it could encourage a momentum shift towards diplomacy to end the festering Syrian crisis. This would make U.S. to show greater flexibility towards expanding participation in the proposed Geneva-II talks on Syria.

Iran may annul Pakistan gas pipeline project contract

  • Iran-Pakistan gas pipeline would likely be annulled, while Pakistan is banking on funds from Iran to complete its share of the gas pipeline

  • The project is already in limbo since it does not have the $2 billion to complete its share.

  • Earlier, in October, 2013 Pakistan had sought financial assistance from Iran as not many were interested in backing the project given the threat of U.S. sanctions.

  • However, the main issues were financing and the agreement. Pakistan at that time had not done its homework and why such a deal with high prices for gas and huge penalty clauses was negotiated was not clear. Iran had already offered $500 million but Pakistan would need $2 billion to complete its share of the project.

  • Iran has already constructed more than 900 km (out of 1,100 km) of the pipeline on its territory at a cost of $700 million.

  • Conceived in the 1990s as a “peace pipeline,” the project initially had India on board and was scheduled to be completed by December 2014. Iran had expressed concern over Pakistan’s delay in starting work.

  • The agreement had recently come under scrutiny by a report – Sustainable Policy Development Institute’s (SDPI), “Rethinking Pakistan’s Energy Equation: Iran-Pakistan Gas Pipeline.”

  • It called for renegotiating the gas purchase agreement and pricing and the huge penalty clauses. The agreement would give Pakistan gas at the price of $13/MMBtu which would increase periodically depending on the crude prices.

  • The agreement also stipulated construction of Pakistan’s side of the pipeline by December 2014.If Pakistan failed to meet this deadline it would be liable to pay heavy daily penalties, which could run into millions of dollars.

  • Given the acute energy requirements, Pakistan remains committed to all options for addressing energy needs, including the pipeline project.


Six major central banks make currency swap pacts permanent

  • Six major central banks(The Bank of Japan, the U.S. Federal Reserve, the European Central Bank, the Bank of England and the central banks of Canada and Switzerland), have decided to make their web of currency swap arrangements permanent.

  • The central banks will convert their “temporary bilateral liquidity swap arrangements’’ into standing arrangements that ‘will remain in place until further notice’.

  • The existing temporary swap arrangements have helped to ease strains in financial markets and mitigate their effects on economic conditions. The standing arrangements will continue to serve as a ‘prudent liquidity backstop’ in case of future global financial strains.

  • The arrangements were next due for review in February, 2014.


  • Currency swap lines were first introduced nearly six years ago in response to a global credit crunch that starved banks of liquidity and threatened to distort the entire financial system.

  • They were an important part of the policy response to the 2007-09 financial crisis, keeping a lid on funding costs, which had spiralled due to fear over counter-party risk.

(For more information on Currency Swap- refer to our previous ‘current events’)

Norms relaxed for manufacturing units in special economic zones

  • The government, has allowed manufacturing units in special economic zones (SEZs) to sub-contract production or any production process by large manufacturing SEZ units to DTA (domestic tariff area) units for up to three years, instead of just one year at present.

  • The decision was taken following representations received from large manufacturing units, which have stated that the move would help facilitate manufacturing processes and augment exports.

  • Conditions  to be met:

  • However, the Commerce Ministry has made it clear that the relaxation would apply only to those manufacturing units that have substantial exports with average annual shipments of Rs.1,000 crore or more in at least two out of four years.

  • The units should have an annual average export of not less than 51% of its total turnover in the block of five years. The units should have a flawless track record, and no penalties against the unit for any violations should have been imposed.

  • The new norms also stated that the DTA unit (unit outside SEZ) to which the sub-contract is to be awarded should be registered with the Central Excise Department.

  • SEZs which emerged as major export hubs and investment destinations started loosing sheen after the global economic crisis and imposition of minimum alternate tax (MAT). Exports from these zones declined by 4.1 % during the first quarter of the current fiscal which has impacted job creation in these zones.

  • The government has been in the recent months have taken steps to revive interest of SEZ investors. Recently, it had unveiled a package of reforms, including easing of land norms, to revive investments in SEZs.

SEZ in India

  • India was one of the first in Asia to recognize the effectiveness of the Export Processing Zone (EPZ) model in promoting exports, with Asia’s first EPZ set up in Kandla in 1965. With a view to overcome the shortcomings experienced on account of the multiplicity of controls and clearances; absence of world-class infrastructure, and an unstable fiscal regime and with a view to attract larger foreign investments in India, the Special Economic Zones (SEZs) Policy was announced in April 2000.

  • The Special Economic Zones Act was passed in 2005 and came into effect in 2006.

  • The main objectives of the SEZ Act are:

(a) generation of additional economic activity

(b) promotion of exports of goods and services;

(c) promotion of investment from domestic and foreign sources;

(d) creation of employment opportunities;

(e) development of infrastructure facilities;

Courtesy – ‘’

Core sector grows 8 % in September

Crude oil, steel and electricity sectors perform well

(This was added since in 2012 Prelims, there was a question on Core Industries)