Search This Blog

Tuesday, December 21, 2010

Admission Notice 2011- 2013 in Defence Institute of Advanced Technology, DIAT, Pune

PhD [(Applied chemistry) any branch of chemistry, (Mechanical engineering) Fluid mechanics (Fluid and Thermal sciences), (Applied Mathematics) Fluid mechanics (Mathematics analysis), (Material science) Mechanical, polymers, paints and materials (camouflage materials and coating); Polymers, Chemistry, material science, physics (super hydrophobic materials); Materials science, condensed matter physics (magnetic materials); Metallurgy and Materials (Metallurgy and Materials for defence), (Applied Physics) Nanotechnology, Nano Materials]
Eligibility: Minimum qualification: 55% marks or equivalent CGPA in M.E./M.Tech for Ph.D in engineering and master of science with 55% marks or equivalent CGPA for Ph.d in science The candidates who are in the final semester of their degree are eligible to apply; mark sheet up to the last semester should be enclosed Provisional certificate in such cases along with mark sheet of the final semester are required to be submitted before commencement of programme
Selection: The admission for Ph.D will be based on performance in the entrance exam conducted by the department followed by interview
Stipend: Stipend is applicable to selected candidates at par with the MHRD/AICTE/UGC guidelines. Candidates with master’s degree in science seeking admission to Ph.D must have valid GATE/UGC-CSIR NET score to become eligible for stipend
How to apply: Candidates can download the application form and the details from DIAT (DU) Application fee of Rs 200/- (Rs 100/- for SC/ST candidates) per programme is required to be paid by means of demand draft drawn in favour of vice chancellor, defence institute of advanced technology, Pune-25 payable at state bank of India, Girinagar branch (code 02155), Pune-411025 The candidates are requested to write their name and department (or name of area of research in case of Ph.D applicant), for which they are applying on the reverse side of the draft Duly filled application form along with necessary enclosures should reach to the registrar, DIAT, Girinagar, Pune-411025 by 30th November, 2010 Separate application must be filled for different programme
Enclosures: Demand draft for application fee; proof of age (attested copy); proof of educational qualifications, degree certificates and mark sheet (attested copy); SC/ST/PHC/OBC certificates if applicable; GATE/NET score card/certificate; details of publication, if any; details of employment, if any; separate application, along with relevant registration fee, if applying for more than one programme; attested passport size photograph
Applications, which are incomplete and without enclosures will be rejected
Reservation as per govt of India rules
For any queries contact Dy Registrar, DIAT at Tel 020-24304025

Admission Notice 2011- 2013 in CChristian Medical College, CMC, Vellore

Eligibility; B.Sc. Statistics as main or B.Sc. Mathematics with Statistics as ancillary

Note:-  When not specified, applicants have to be at leas
t 17 years old and less than 45 years of age as on 31st Dec 2010. Ability to handle English as a medium of learning is important for all courses.
All selected candidates desirous of joining the hostel should apply to the Vice Principal (AHS). Accommodation is limited and will be provided only if available. Hostel costs are about Rs.1500 a month.) In addition, Hostellers will have to pay an annual establishment fee of Rs. 10000/-
Entrance Examinations: There will be examinations for all the courses as detailed in the table on page 1. The entrance examination for the Group B Courses will be on Thursday, 13 May 2010 and for the Group a Course on Friday, 14 May 2010 at the following centres: BANGALORE, CHENNAI, DELHI, ERNAKULAM, GUWAHATI, HYDERABAD, KOLKATTA, LUCKNOW, MADURAI, MUMBAI, PUDUCHERRY, SALEM, THIRUVANANTHAPURAM & VELLORE.
How to Apply: Registration Fee: The following registration fees must be enclosed with the completed application Form. – Rs. 100 per course
The Application Process
Prospectus and application forms may be obtained by any of the following methods:
ü        Accessed on-line through the College website on and submitted with a basic administrative fee of Rs.750/-.
ü        Available by post from the Office of the Registrar on payment of Rs.750/-.
ü        available at selected Head Post Offices throughout India (check Annexure VII for detailed list of post offices)
Money can be remitted using any of the following methods:
(1) As a chalan at no extra cost at any branch of ICICI bank in India. Please mention FC-CMC-V on the chalan.
(2) Demand draft in favour of “C.M.C. Vellore Association a/c” on any scheduled bank, payable in Vellore.

Send the DD, original payment Chalan or receipt to: Office of the Registrar, CMC, Thorapadi PO, Vellore - 632 002. State your full postal address with Pin-code. Mention your telephone number and email address if available. No additional money, stamps or envelopes are required.

Admission Notice 2011- 2013 in Centre for Development of Advanced Computing, CDAC, Hyderabad

Centre for Development of Advanced Computing, CDAC, Hyderabad
(A Scientific Society of the Ministry of Communications and Information Technology Government of India)
2nd Floor, Delta Chambers, Ameerpet, Hyderabad, Andhra Pradesh
Phone-No: 91-40-23401331/2
Fax: 91-40-23401531
à      Centre for Development of Advanced Computing (CDAC) [Mohali, Punjab]
à      Centre for Development of Advanced Computing (CDAC) [Noida, Uttar Pradesh]
à      Centre for Development of Advanced Computing (CDAC) [Mumbai, Maharashtra]
Diploma in Embedded System Design (DESD)
Diploma in System Software Development (DSSD)
Diploma in advanced business computing (DABC)

Eligibility: Engineering Degree (UG/PG) in Electronics/Electrical/ Electronics and Communication/ Electronics and instrumentation/ computer science and engineering/ computer engineering/information technology or MCA or M.Sc computers/ electronics/ M.Sc instrumentation with higher second class (55% and above) in the final degree
Selection process: Selection will be on the basis of performance in the CET, the preference of course and the centre for admission opted by the applicants. The applicant’s academic record will also be taken into consideration.
How to apply: The applicants can register online for the Common Entrance Test (CET) at The non-refundable registration fee of Rs. 350/- for the CET is to be paid through NEFT or demand draft drawn on any nationalized bank in favor of ‘C-DAC’ payable at ‘Hyderabad’ and send to the address mentioned below.
Centre for Development of Advanced computing (C-DAC), A scientific society of the ministry of communications and information technology, govt of India, #1, Shivabagh, Nalanda building, Ameerpet, Hyderabad-500016, Tel 040-23737124/25, Fax 040-23743382, Website, 

Last date for submission of application: 29Th January 2011
Common entrance test (CET): 06th February 2011
CET results declaration: 16th February 2011
Commencement of the course: 24th March 2011

Admission Notice 2011- 2013 in Anna University, Centre for Distance Education, AUCDE, Chennai

Master of Business Administration (MBA) [Specialization in: General Management, Technology Management, Financial Services Management, Retail Management, Health Services Management, Human Resources Management] 2 Years
Eligibility: Any Degree of three years of study duration and a pass in the entrance test conducted by Anna University.
How to Apply: Printed application forms can be obtained in person from the Director, Centre for Distance Education, Anna University, Chennai - 600025.
The cost of application form is Rs. 650/- payable in the form of DD drawn in favour of the “THE DIRECTOR, CENTRE FOR DISTANCE EDUCATION, ANNA UNIVERSITY, CHENNAI - 600 025”. Those who want to get the printed application form by Post should send DD for Rs. 700/- well in advance before the last date for receipt of completed applications. Printed application forms can also be obtained only in person from the following Study Centres located outside Chennai on payment of Rs. 650/- in cash.
Madurai: KLN College of Engineering, Ph: 0452 - 2698 280,
Trichy: Jamal Mohammed College, Ph: 0431 - 2331 015/ 2333235,
Vellore: Pentech Computer Education, Ph: 9244507666 / 9364207666.
Application form can also be downloaded. In such cases the candidates should enclose a DD for Rs. 650/- along with the application.
Completed applications should be sent to the Director, Centre for Distance Education, Anna University, Chennai – 600025 Candidates obtaining the application form from the Centre for Distance Education can submit the same immediately if they bring two copies of Passport size photograph and attested photo copies of certificates of his/her Qualification and get the Hall Ticket on the same day
Last date for receipt of requisition for issue of application forms by post for Calendar Year 2011 batch: 24.12.2010
Last date for receipt of completed applications for Calendar Year 20 batch: 07 01. 2011
Date and Time of Entrance Test: 30.01.2011-
Dates specified are for Calendar Year 2011 batch only. However, application forms are sold throughout the year.

Admission Notice 2011- 2013 in All India Management Association, AIMA, New Delhi

Post Graduate Diploma in Information Technology Management (PGDITM) [Specialization in: information technology systems, financial systems, Retail systems, operations systems, HRD systems] {2 Years + project work} [Distance Education]
Graduation (10+2+3) from a recognized University MAT / CAT / XAT / ATMA / any other state level entrance test appeared.
Admission Procedure: Candidates with minimum 50% in Graduation (under 10+2+3 scheme) from a recognized University are exempted from the entrance test for admission.
(a)    Admission in PGDM / PGDITM can be granted on the basis of MAT/ CAT/ XAT/ ATMA / any other state level test. Interested candidates with below 50% in graduation are required to appear in the test to be eligible for the interview. There will be no cut off score.
(b)    Interested Candidates if not appeared in any mentioned test and with less than 50% in graduation, if desirous for admission in the same session are required to appear in the Aptitude test to be conducted by AIMA / Study centres from time to time. They may be given provisional admission with an undertaking that they will appear in the Aptitude Test whenever finalised.
For online MAT registration please visit:
How to Apply: The OMR-registration form, which comes with CME’s prospectus, is compulsory to purchase before the admission interview from the AIMA Counter/Study Centers on payment of Rs. 500/- in cash or by post through a DD of Rs. 550/- in favor of ‘AIMA-CME’, payable at New Delhi.
The selected candidates after receiving admission offer letter will submit the required documents with a DD of programme fee of Rs. 19000/- in favor of All India Management Association-CME payable at
New Delhi.

Tuesday, December 7, 2010

Tension in West Asia

The tension once again marred the peace in the region when Israeli, code named Operation Sea Breeze or Operation Sky Winds, intercepted the six ships Gaza Freedom Flotilla carrying some 10,000 tons of aid for the isolated seaside territory. Activists aboard the flotilla’s largest ship, the MV Mavi Marmara, clashed with Israeli Shayetet 13 Special Forces as the commandos abseiled onto the deck of the vessel. Nine IHH activists were killed by the Israeli troops and seized 682 persons. The flotilla, organized by the Free Gaza Movement and the Turkish Foundation for Human Rights and Freedoms and Humanitarian Relief (IHH) was carrying humanitarian aid. IHH is a Turkish NGO established in 1992 and officially registered in Istanbul since 1995.
The Gaza area has been blockaded by Israel for three years. The Israeli government had urged the flotilla not to try to breach the blockade before the ships set sail from waters off Cyprus and offered to take some aid in for them. The Gaza Strip has land borders with Israel and Egypt, and a sea border on the Mediterranean. Egypt and Israel largely keep their borders with the territory sealed. After the Hamas takeover of the Gaza Strip in 2007, Israel tightened the blockade of the Gaza Strip. Israel argues that the blockade is necessary to limit Palestinian rocket attacks from the Gaza Strip on its cities and to prevent Hamas from obtaining other weapons. This act of Israel has been condemned by most the nations of the world. Israeli Prime Minister Benjamin Netanyahu had to abruptly cancel his planned meeting with President Barack Obama in Washington to rush home. Israel established the inquiry after a widespread international condemnation against the raid, but rejected a United Nations proposal for an international probe. Israel has named its own threemember “Independent Public Commission”, all of them Israelis, along with two international “observers”, Lord David Trimble, a Nobel Peace laureate from Ireland, and Brigadier General Ken Watkin, a former judge advocate general of the Canadian military forces. The military investigation, headed by retired Major-General Giora Eiland, is examining the operational aspects of the takeover of the flotilla. An internal Israeli military investigation into the takeover of an aid flotilla to the Gaza Strip has revealed flaws in operation planning, and in the way naval commandos were used to seize the ships and criticised the faulty pre-raid intelligence.
1. The global reaction appeared likely to increase pressure to end the embargo that has plunged Gaza’s 1.5 million residents deeper into poverty. As a result of this the key regional ally Turkey withdrew its ambassador, the U.N. Security Council held an emergency session, the British foreign secretary demanded an end to the blockade of Gaza, and Jordan called Israel’s raid a “heinous crime. Britain has said that Israel’s restrictions on access to Gaza must be lifted in line with Security Council Resolution 1860.
2. Obama voiced “deep regret,” over the raids. Clinton has said that ultimately, the solution to this conflict must be found through an agreement based on a two-state solution negotiated between the parties.
3. Russia has said that Israel’s deadly raid on an aid flotilla for Gaza was a tragedy that demands detailed investigation and must not be repeated.
Israeli contention and action: Those who are attacked in the raids are part of the IHH, which is a radical Turkish Islamist organization which has been investigated by Western governments and by the Turkish government itself in the past for their links with terrorist organizations. On the directions of UN, Israel has released the 620 of the 682 detainees and deporting them back to their countries.
Overall impact: It is a sad event in the light building peace in the region. The tension in West Asia is bound to escalate and the peace process is going to be adversely affected. The concerned powers must realize that without sacrifice of pieces CURRENT INTERNATIONAL of land, the peace cannot be restored back in the region and if instability continues then the whole purpose of life is over. The policy of appeasement must be analyzed under this background. It is not going to yield any major results and a peaceful solution to such an intricate problem is bound to be found beyond the pale of policy of appeasement, and alignment and realignment.

Uncertainties in Kyrgyzstan

The history has shown merciless trends of ethnic violence and for the parochial interests humanity has suffered a lot. An ethnic violence has a long-drawn history of mutual grievances. The sudden riots in Osh, an extension of Ferghana Valley, and Jalalabad had a long background mutual discomfort. The Ferghana Valley, where the violence occurred, is a tinderbox of ethnic conflicts. The borders of the three Central Asian states – Kyrgyzstan, Uzbekistan and Tajikistan – that converge in the fertile valley were arbitrarily drawn by Joseph Stalin more than 80 years ago.
Four days of rioting left an estimated 2,000 people dead and some 4,00,000 displaced, of whom about 1,00,000 fled to neighbouring Uzbekistan. Seventy per cent of the buildings in Osh, second largest city of Kyrgyzstan with a population of 2,50,000 people, were torched. The recent genesis of the ethnic violence can be traced back to the second “Tulip Revolution.” President Kurmanbek Bakiyev, who came to power as a reformer in the post-Soviet state, was overthrown and took refuge in Belarus under Alexander Lukashenko. Roza Otunbayeva has assumed as the interim leader of Kyrgyzstan. Many expected Moscow to respond with the same resolve to the crisis in Kyrgyzstan, where it has a military base; Kyrgyzstan is also its ally in the Collective Security Treaty Organisation (CSTO), a defense bloc of seven former Soviet states, which also unites Armenia, Belarus, Kazakhstan, Tajikistan and Uzbekistan. The clashes were the worst ethnic violence to hit impoverished Kyrgyzstan since it gained independence with the collapse of the Soviet Union nearly two decades ago.
Background: There are between 700,000 and 1,000,000 Uzbek residents in 5.5-million-strong Kyrgyzstan, but in the Ferghana Valley they form the dominant and fastest growing ethnic group, prompting Kyrgyz fears of a Kosovo-like situation. The growing disparities between the two ethnic groups have created a sense of deprivation. Kyrgyz residents resent the fact that their enterprising Uzbek compatriots dominate the local economy, while the Uzbek community complains of discrimination in official jobs and language rights. There is a deeper distinction that contributes to animosities: the Kyrgyz are traditional nomads, while the Uzbeks are farmers. Uzbeks and Kyrgyz in the north mostly supported the interim government, while Kyrgyz in the south largely backed Bakiyev.
The recent causes of violence are not very certain but a number of theories are assumed and they may be enumerated as:
1.       The role of Bakiyev is seen as his political and family base is located in the conflict zone.
2.       During both the 2005 “Tulip Revolution” and the April 2010 events – which culminated in President Kurmanbek Bakiyev being driven out of the country – criminal groups took an active part in the change of government, providing detachments of storm troopers to the politicians.
3.       Russian role has been also seen as it was annoyed of the U.S. base at Manas airport near Bishkek, the Kyrgyz capital. It is to note that the US-led coalition in Afghanistan has used the Manas base since US military operations in Uzbekistan ended five years ago.
4.       The nascent stage of state formation, chronic problems of poverty and economic disarray, gross misgovernance, rampant corruption and cronyism, incessant clan struggle, weak regional integration processes, and so on have also contributed a lot to the sense of insecurity of the people.
5.       Both Afghanistan and Kyrgyzstan suffer from the absence of any regional security architecture. There has been no regional initiative to address the Kyrgyz crisis. And the role of Shanghai Cooperation Organisation (SCO) is limited and far from effective in resolving the contentious issues.
6.       Besides that neither the Collective Security Treaty Organisation (CSTO) nor the North Atlantic Treaty Organisation (NATO) — in sum, neither Russia nor the U.S. — has shown willingness to depute peacekeeping forces to Kyrgyzstan despite the desperate cry from Bishkek for intervention by foreign forces to put down the violence.
7.       It is only through patient economic reconstruction that the roots of instability can be eliminated in Kyrgyzstan and Afghanistan. Whereas the Afghan economy was devastated by three decades of modern war, the Kyrgyz economy got derailed with the disintegration of the Soviet material supply system. In both the countries, the viable economic system has not created and as a result of this a lot of speculation and deviant tendencies use to cripple the law and order of the country. Kyrgyzstan’s vote for parliamentary form In order to resolve the on-going crisis the more than 90 per cent of Kyrgyz voters backed radical changes from a presidential to a parliamentary form of government. Basically four issues were involved in the referendum:
(a)    a new constitution, which would reduce the powers of the President and make Kyrgyzstan Central Asia’s first parliamentary republic;
(b)    The interim government. If endorsed, Roza Otunbayeva will remain interim President until December 31, 2011;
(c)    abolition of constitutional court, which the interim government claims was heavily influenced by allies of an ousted President; and
(d)    The constitutional court’s powers will now be transferred to the Supreme Court. The Constitution approved would devolve power from the President to Parliament. This will make Kyrgyzstan the first state in Central Asia with a parliamentary form of government. Kyrgyzstan will adopt the new political system this year itself after elections to Parliament are held within the next few months. Roza Otunbayeva, the interim President, called the referendum a success. Otunbayeva has said members of her interim government will continue to pass necessary legislation until October 2010, when voters elect a parliament.
Reactions: Russia: It has expressed doubts about the viability of the new political system. Russian President Dmitry Medvedev has expressed bewilderment at how a country ravaged by bloodletting and instability would transform itself into a democracy. Kyrgyzstan’s neighbors as well as China and the United States are afraid that the parliamentary republic will completely finish off the Kyrgyz state.  China: Chinese trade with Kyrgyzstan has been affected. China’s involvement in the crisis has far been limited to offering 5 million yuan ($732,000) worth of medicine, medical equipment, food, drinking water, blankets, and tents, while flying out almost 1,300 Chinese nationals from the battle-scarred city of Osh.
Impact of the violence: It holds out grave implications for regional security and India cannot remain impervious to them. Kyrgyzstan too is a land-locked country like Afghanistan that at once becomes highly susceptible to foreign interference. Further, the deepening crisis in Kyrgyzstan contains a mirror image of almost all the elements associated with the Afghan civil war. The international diplomacy over the issue of ethnic violence will have a direct impact on the politics of Afghanistan. India must be watchful under these circumstances and any major change in the power equation has a direct bearing on the stability of the region.

Overall fiscal scenario needs austerity measures

 “The test of our progress is not whether we add to the abundance of those who have much. It is whether we provide enough to those who have little.”- Franklin D. Roosevelt by Kartik

The main aim of every Government is to ensure the welfare of all its citizens. To achieve this end, the Government constantly works and reworks its overall policy objectives to meet various demands and changing environmental situations. Among other policies objectives, one of the important being the Fiscal Policy, which implies a policy with regard to the revenue, expenditure and borrowing programme of the Government. This Policy has four major objectives, namely, Growth, Stability, and Allocation of resources and Reduction of inequalities. The fiscal reforms were initiated in the 1990’s as a part of the economic liberalization. These reforms included expenditure reforms, tax reform measures, and public sector restructuring and systematic reforms in the government’s borrowing process. The reforms were aimed at raising the rate of savings and investments, which further enhances the productivity of public expenditure. Fiscal consolidation (a policy aimed at reducing government deficits and debt accumulation) began in the 1990s with fiscal deficit declining from 6.6 per cent of the GDP in 1990-91 to 4.1 per cent in 1996-97; however, the situation took an ugly turn during 1997-98 and reached a level of 6.2 per cent of the GDP in 2001-02. It was in this backdrop that the Fiscal Responsibility and Budget Management Act of 2003 (FRBMA) assumed significance. This Act has been emulated from the successful experience of a similar legislation in New Zealand. The FRBM Act was enacted by Parliament in 2003 to bring in fiscal discipline and the government had notified the FRBM Rules in July 2004. The rules included:
Progressively bringing down the revenue deficit beginning 2004-05 by 0.5 per cent per annum so as to bring it down to zero per cent by 2008- 09
Progressively bringing down the Fiscal deficit beginning 2004-05 by 0.3 per cent per annum so as to bring it down to not more than three percent by 2008-09.
Additional borrowings of the government should not exceed nine percent of the GDP with a progressive reduction by one per cent every year upto 2008-09
Government should present before the parliament its fiscal health every year in terms of Revenue deficit as a percentage of the GDP, Fiscal Deficit as a percentage of the GDP, Tax-GDP ratio and the total borrowings as a percentage of the GDP.
Government should take corrective action if the Revenue Deficit and the Fiscal Deficit exceed 45 percent of the budget estimates and non debt receipts fall short of 40 per cent of the budget estimates.
Change in accounting procedures, if any, must be reported to the parliament. The Act makes it obligatory for the Central Government to bring about Fiscal Consolidation, Fiscal Stability and Accountability of the Central Government to the Parliament for parameters like Fiscal deficit, Revenue Deficit, Total borrowings, Tax-GDP ratio etc. The adherence to the fiscal discipline for a period of five years ending 2007-08, the Indian Economy grew at 8.8 percent thereby reaping the benefits of fiscal consolidation.
However, owing to the economic slowdown in 2008-09, there was a sharp deterioration in the fiscal position leading to abandoning the targets set under the Act in 2004. The slowdown resulted in a fall in the tax revenues as a percentage of GDP thereby forcing the Government to borrow from the market to counter the downswing and trigger recovery.  The borrowings were mainly used by the government to fund crucial stimulus measures, known as ‘Pump Priming’ which is aimed at generating not only employment, incomes and demands but also pushing up the rate of investment, both by the Government itself as well as by way of motivating the private sector as economy starts showing signs of recovery. To revive the economy, the Government of India, like most other economies hit by the recession, announced a slew of stimulus packages earmarking Rs 20,000 crore ($200 billion) for infrastructure, industry and export sectors. The stimulus package had continued the highly expansionary fiscal policy, boosting demand with tax cuts and spending increases on the rural sector. Complimenting the stimulus package, the Reserve Bank of India, with a prudent monetary policy, took steps to pump in sufficient liquidity in the financial system asking the banks and other financial institutions to ease the cost of funding, signaling the lenders to lower their interest rates. It is due to these initiatives that the Indian economy fared much better than other countries of the world thereby registering a growth rate of 6.7 percent. (2008-09). The Government of India, in its first full year budget (2010- 11) since the resounding victory in May 2009 elections, aimed at achieving a growth rate of 9 percent thereby temporarily abandoning fiscal consolidation. In fiscal year (FY) 2010/11 (ending in March 2011), the government is attempting to direct fiscal policy prudently. The government continues targeted spending on key areas such as infrastructure, agriculture, health, and education, while reducing oil and other subsidies. On the tax front, it lowers taxes for the middle class, and raises customs and excise taxes on petroleum products. It expands divestment and privatisation initiatives to increase government revenue receipts. The introduction of Goods and Services Tax, in April 2011, which subsumes the other indirect taxes such as cenvat, service tax, state level VAT, octroi etc, is expected to boost up the revenues. The new fiscal consolidation plan will reduce the central government’s fiscal deficit from a revised estimate of 6.7 per cent in the fiscal year 2009/10 to 5.5 per cent in fiscal year 2010/11. The budget of 2010-11 announced in February marks the country’s first step towards fiscal consolidation after two years of deteriorating finances. The main aim of the budget is to bring India’s growth level back to 9 percent and address the issue of distribution of wealth for the low income groups, particularly in rural areas, at the same time aiming at the reduction of fiscal deficits. On the would boost up the revenues due to re-distribution of the burden of taxation equitably between manufacturing and services bringing about a qualitative change in the tax system, bringing down the compliance cost and enabling the trade and industry to become more competitive leading to an increase in exports and lower prices for domestic consumers thereby increasing the demand and also raising the level of GDP.
The GST would have all the merits of VAT which includes minimizing tax evasion due to which the government may end up with a revenue surplus within a short period of time. On the expenditure side, the budget includes an increase in the allocation for infrastructure sector and a gradual increase in the social security sector. Thus the spending on the infrastructure and social security sector would encourage investments, create employment opportunities, increase demand and consumption thereby contribution to the overall growth of the economy.  On the other hand, while pursuing an expansionary fiscal policy (a net increase in the government spending), the government needs to exercise caution that the resultant fiscal policy does not become unmanageable by way of not only increased interest burden but also its impact on the liquidity and inflation in the economy which can make the fiscal policy counter productive to some extent. Also, massive borrowings by the government lead to an increased fiscal deficit. It is not the mere size of the fiscal deficit that is important but also the use to which this fiscal deficit is put, matters a lot. This raises the question of whether a high fiscal deficit can raise the rate of growth of the economy as all the affected governments in the global crisis have opted to go in for massive borrowings to reviving the economy. Most of the European governments and the United States of America at present have been running in high fiscal deficits, some of them even over 10 percent.
Despite such high fiscal deficits in the western countries, it has not caused alarm because most of the borrowings are by and large used productively. On the contrary, the Indian experience shows that more than 60 percent of the borrowings have been incurred on revenue items and thus it has only met the consumption needs of the economy rather than increasing the medium term productivity. As such, there is always a debate in India whether a high fiscal deficit is desirable and manageable to ensure that it leads to high growth. Hence, to achieve fiscal consolidation, thereby keeping the fiscal deficit under manageable limits, the government should focus on utilizing the borrowings to qualitative use so as to increase the productivity of the economy which determines the impact on growth. On the revenue front, one of the critical factors for India’s fiscal consolidation will be the timing and the details regarding the implementation of the nation-wide GST system. A successful implementation of the GST could pave the way for a structural improvement in budget revenues.
Also, the government should aim at a “calibrated exit strategy from the expansionary fiscal stance of 2008- 2009 and 2009-2010” as suggested by the 13th Finance Commission. Reforms to the Fiscal Responsibility and Budget Management Act should be brought in which will replace the current legislation that expired in March 2010. Therefore, the future of India’s fiscal policy should be aimed at consolidating the notable fiscal progress made in recent years and that would require a lasting consensus on a fiscal system capable of harmonizing macroeconomic stability with other public responsibilities in terms of growth and distribution. The focus should be on the efficiency, effectiveness and quality of expenditure. The expenditure should be directed towards social sector which would create employments and incomes on the one hand and increase the medium term productivity of the economy on the other. It must also be ensured that proper mechanisms are put in place through promoting the development of balanced and democratic fiscal institutions so that the impact of future global economic shocks might be prevented. Since public finances are at the heart of the democratic process, all efforts should be made to ensure that the tax payer’s money is put to effective and efficient use.

Yuan As a reserve currency

The People’s Bank of China has ended a two-year peg to the dollar and manage the yuan or renminbi (RMB) with reference to a basket of currencies. As a result of this the currency closed at its strongest level since 1993. The Yuan is permitted to rise or fall 0.5 per cent from daily reference rate. It has been felt that Yuan has been kept at an artificially low level and has significantly contributed to the global financial crisis.
In order to mitigate the possibility of third recession, the Asian Development Bank (ADB) has proposed the Yuan as an alternative to the US dollar. The ADB study, entitled “The Future Global Reserve System — An Asian Perspective”, recommended having Asia’s vast currency reserves play a more important role in stabilising the global financial system, through swap lines, the International Monetary Fund’s Special Drawing Rights (SDRs) and other borrowing. As per the ADB report undertaken by 11 economists including Joseph Stiglitz and Barry Eichengren, once the Yuan becomes more convertible, it can gradually grow to become an international currency and by 2035, it can be expected that Yuan may share about 3 to 12 per cent of international reserves. ADB says that a new global reserve system is absolutely essential if the global economy could be restored and sustained to prosperity.
A stronger yuan should boost consumption in China, while reducing its dependence on exports, thus helping the process of “global rebalancing. China is the world’s second largest oil consumer, using one in every 10 barrels produced. China is also the top consumer of iron ore, copper and aluminum and the world’s largest buyer of soybeans. As per the data of IMF, since 2000, global foreign exchange reserves have grown by staggering $6.15 trillion and stood at $8.09 trillion at the end of 2009, or 14 per cent of the world’s gross domestic product. China and Japan together hold about 43 per cent of global reserves. It has been understood that a stronger Yuan would also mark the end of an epoch for the Bretton Woods II strategy of governments trying to use a depreciated currency to facilitate export-led growth.
It is pertinent to point out that China had let the Yuan to rise by about 20 per cent beginning in 2005, but halted its rise in 2008. China has kept the Yuan at about 6.83 per dollar since July 2008, aiding the nation’s exporters and fuelling tensions with trade partners.
Argument against Yuan as global reserve currency:
1.       China has only $4 trillion economy whereas the USA has a $14 trillion.
2.       Yuan still is a pegged currency and dollars are free-float. China would continue to “manage” its currency through its heavy intervention by its central bank. It is necessary to go all-out for free-float for a global reserve currency. It is important to note that without full capital account convertibility, the currency cannot be called fully convertible.
3.       China cannot be accepted as a super power like USA and mutual political relations and equations with most of the countries with China would not permit the global transaction in the form of Yuan.
4.       Most of the countries are capitalist and they would never trust Chinese socialist government in major developments and at the theoretical level they still view their economic interests as diametrically opposed to the socialist countries.
5.       There is an absence of a large market for yuan-denominated bonds. One key sign of acceptance as a reserve currency would be if Western countries such as the U.S. purchased bonds denominated in yuan and sold at market rates. Until now, yuandenominated bonds have been sold only by Chinese banks, along with multilateral banks such as the Asian Development Bank and International Finance Corporation, and the bonds have been sold only in China.
Argument for Yuan as global reserve currency:
1.      The dominance of US has been considerably reduced and the relevance of Bretton Woods’s system needs to be re-evaluated. It has to be mentioned that Bretton Woods’s system had provided the basis for US dollar as the reserve currency. The world needs an alternative reserve currency. The U.S. trade deficit with China reached $71 billion for the first four months of the year, up 5.8 percent from the same period of 2009.
2.      The US dollars ravaged by the global economic recession, despite the fiscal stimulus package of Obama administration, still not able to retrieve its old position.
3.      There has been a perceptible trend in shifting the trends of economic dominance from West to East.
4.      China has maintained a growth rate of 8.5 per cent despite the global recession and this indicates the strong foundation of Chinese economy. China’s economy surged 11.9 per cent in the first quarter of this year and exports jumped to almost 50 per cent over a year earlier despite the Greek crisis. China is the biggest trading partner of European Union.
5.      China holds as much as $2 trillion in reserves and recent step to permit Yuan to appreciate signals towards Chinese ambition of making Yuan as global reserve currency. China has unleashed an era of flexible currency.
6.      It has been argued that a world in frequent phases of slowdown needs multi-currency reserve structure.
7.      Noble Laureate Joseph Stiglitz has opined that if China goes for improved and flexible monetary regime, then Yuan may play a role a stabililizing role at the global and regional level. Commodities and oil also surged, as a stronger currency would give the world’s third-biggest economy more purchasing power to buy foreign goods, which would be positive for world trade, especially for commodity exporters such as Australia, Brazil, Canada and New Zealand. Crude rose more than 1 per cent, while copper and zinc traded in Shanghai both rose by their daily limits.
8.      World Bank President Robert Zoellick has said in 15 years the Chinese yuan can become an alternative to US dollar as a global reserve currency, with China’s fast economic growth and efforts to internationalise the currency. Robert Zoellick, agreed: “Ultimately, that’s a good thing. And ultimately it’s good if you’ve got, I think, some multipolarity of reserve currencies to create, to make sure that people manage them well.”
9.      Since mid-December 2008, Beijing has signed currency swap contracts worth 650 billion yuan (about $95 billion) with central banks in South Korea, Malaysia, Belarus, Indonesia and Argentina and Hong Kong. These swap accords allow other overseas central banks to sell yuan to local importers who want to buy Chinese goods.