Daily News Mail - News of 11/03/2015

Land Bill passed in Lok Sabha

• The controversial Land Acquisition (Amendment) Bill was approved by the Lok Sabha on March 10.
• The Congress, the Trinamool Congress, the Samajwadi Party, the RJD and the BJD walked out of the House while NDA ally Shiv Sena abstained as the Bill was passed by voice vote. In the official amendments it moved, the government accommodated some concerns of the Opposition and allies, such as dropping “social infrastructure” from the five categories of land use exempted from the consent clause.
• However, other key points of contention — the Social Impact Assessment and the restoration of the consent clause — remained unresolved as the Bill moves to the Rajya Sabha, where the government is outnumbered — and the Opposition plans to force the Bill to a Select Committee.

Striking a jarring note

• Indo-Sri Lankan relations have seen a marked upturn in recent weeks after a new administration took over in Colombo. Last month, during the visit of President Maithripala Sirisena, four substantive agreements were signed. There are also indications that India’s sensitivities regarding Colombo’s relations with Beijing are being addressed. Prime Minister Narendra Modi is set to visit Sri Lanka this week, the first such bilateral visit at the prime ministerial level from India in years. 
• Given this backdrop, it is jarring(incongruous(not in harmony or keeping with the surroundings or other aspects of something) in a striking or shocking way) to note Sri Lankan Prime Minister Ranil Wickremesinghe’s remarks seeking to justify the shooting of Indian fishermen who cross the maritime boundary between the two countries. His claim that fishermen found in another country’s territorial waters deserve to be shot, goes against the international policy of looking at such transgressions(an act that goes against a law, rule, or code of conduct; an offense) as civil offences. It also goes against the established bilateral policy of India and Sri Lanka treating the fisheries conflict in the Palk Bay as a humanitarian and livelihood issue to be resolved peacefully. Following Mr. Wickremesinghe’s intriguing(arousing one's curiosity or interest; fascinating) remarks in an interview to a Tamil television channel that there would be no shooting incidents if Indian and Sri Lankan fishermen avoided entering each other’s territory, External Affairs Minister Sushma Swaraj had to raise the issue at a recent meeting with Mr. Wickremesinghe, and underscore the essential humanitarian nature of the problem. The comparison with India’s approach to the Italian marines case was also inapt as it involved Indian fishermen being shot at from a foreign vessel and had nothing to do with any fisheries conflict.
•  There is little doubt that the root of the problem lies in trawlers from Tamil Nadu entering Sri Lankan waters, and engaging in unsustainable fishing practices using banned equipment. While negotiations between fishermen from both sides are needed before an acceptable solution is reached, any such agreement will necessarily have to involve Indian trawlers being phased out early. The answer may lie in Tamil Nadu fishermen being weaned away from fishing grounds in the limited space in the Palk Bay and Palk Strait and being encouraged to engage in deep-sea fishing.

Current account deficit narrows to $8.2 billion in October-December

• India’s current account deficit (CAD) narrowed to $8.2 billion, which is 1.6% of GDP, during October-December 2014, compared to $10.1 billion (2% of GDP) in the previous three months. It, however, doubled compared to $4.2 billion or 0.9% of GDP a year earlier, the Reserve Bank said on March 10.
• On the balance of payments basis there was a surplus of $13.2 billion in foreign exchange reserves during October-December 2014 — the fifth consecutive quarter of surplus. It was also almost double the $6.9 billion surplus in the previous quarter.
• Remittances from Indians employed overseas of $17.5 billion continued to support the BoP. The trade deficit during the three months widened slightly to $39.2 billion from $38.6 billion a quarter ago.
• The CAD reduction was primarily on a pick-up in net exports of travel and software services and due to lower net outflows under primary income (repatriation of profits, dividends and interest payments). For the nine month period, April-December 2014, the CAD shrank to $26.2 billion (1.7 per cent of GDP) from $31.1 billion (2.3 per cent of GDP) in the same period in the previous year.

Current Account Deficit

• A measurement of a country’s trade in which the value of goods and services it imports exceeds the value of goods and services it exports. 
• The current account also includes net income, such as interest and dividends, as well as transfers, such as foreign aid, though these components tend to make up a smaller percentage of the current account than exports and imports. 
• The current account is a calculation of a country’s foreign transactions, and along with the capital account is a component of a country’s balance of payment.

Capital Account

• A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public and private international investments flowing in and out of a country.
• May also refer to an account showing the net worth of a business at a specific point in time.
• The capital account includes foreign direct investment (FDI), portfolio and other investments, plus changes in the reserve account. The capital account and the current account together constitute a nation's balance of payments.
• Since large capital inflows or outflows can have destabilizing effects on a nation's economy, many countries have controls in place to regulate capital account flows.