September 2018
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Decriminalizing corporate law to improve governance

Note4students

Mains Paper 2: Governance | Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

From UPSC perspective, the following things are important:

Prelims level: Not Much

Mains level: The newscard discusses measures to decriminalize certain small offences under Company Law, 2013.


News

Recommendations to amend Companies Act

  1. An expert panel led by corporate affairs secretary Injeti Srinivas recommended a host of measures to make penal provisions in the Companies Act, 2013, to ease the cases of minor offences.
  2. This was aimed to improve governance, especially in ensuring the objectivity of independent directors.
  3. The move is expected to reduce the number of cases reaching company law tribunals.

Committee proposals

  1. The panel noted that trivial cases pending for long in courts impose a serious cost to the economy.
  2. In essence, the panel suggested removing the element of criminality from minor offences and reclassifying them into mere blameworthy acts that carry civil liability.
  3. Such penalty will be levied using an online system so that there was no interface between company executives and regulatory officials.

How will this help?

  1. This is expected to reduce the number of cases reaching the National Company Law Tribunal (NCLT).
  2. The NCLT benches and courts can instead focus on speedy adjudication of more serious offences.
  3. The panel did not seek to dilute penal provisions for serious offences, such as non-compliance of orders of statutory authorities or frauds, which will continue to be governed by existing legal provisions.

The in-house penalty system

  1. The offences proposed to be dealt within the regulatory ecosystem of the corporate affairs ministry include:
  • Prohibition of issue of shares at a discount,
  • Accepting directorships in companies by executives beyond the specified number,
  • Making certain disallowed payments to directors for loss of office,
  • Breech of overall managerial remuneration limit and non-appointment of key managerial person in case of companies
  1. The offences that will not be covered under the proposed in-house penalty system include:
  • Not keeping records of shareholders and significant beneficial owners.
  • Non-disclosure of interest by significant beneficial owners.
  • Not keeping books of accounts at the registered office.
  • Violation of rules on share buyback.
  • Not repaying public deposits
  • Violations relating to loans given to directors or companies related to them, involve public interest and have a bearing on the company’s continuation as a going concern.

New compliance requirement

  1. The panel suggested restoring an earlier provision of the Act which mandated companies to report the receipt of capital from shareholders and file a form to verify the registered office before starting operations or borrowing.
  2. This requirement, the panel felt, will serve as an early warning system for tackling the problem of shell companies and, therefore, should be brought back.

Capping the pay of independent directors

  1. The objectivity of independent directors and their ability to rise above situations of conflicting interest have been a corporate governance priority for the government.
  2. Excessive payment by businesses could compromise their functioning in protecting the interests of minority shareholders.
  3. The panel suggested that the total pay a director gets from a company, including subsidiaries and associates, other than sitting fees and reimbursement of expenses, should be capped at 20% of his or her annual income.
  4. The idea is to prevent independent directors to develop a financial dependence on a company, which will come in their way of functioning
Corporate Social Responsibility: Issues & Development

India wins key concession on services at RCEP Singapore Ministerial

Note4students

Mains Paper 2: IR | Bilateral, regional & global groupings & agreements involving India &/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: RCEP

Mains level: Impact of joining RCEP on Indian economy as well as foreign policy


News

Big success for India

  1. Members of the proposed RCEP trade deal have conceded to India’s demand to liberalize their services market and allow movement of skilled professionals.
  2. This may help India, which had so far been a reluctant participant, to conclude RCEP negotiations by the year-end.
  3. There has been inevitable linkage between services and goods negotiations, because RCEP is not a goods agreement alone, and services must be an integral part of the agreement.
  4. RCEP countries will open up opportunities for India’s burgeoning skilled professionals seeking gainful employment.

Space for bilateral negotiations

  1. Members also agreed that countries, which do not have trade agreements, can negotiate bilaterally to decide more ambitious tariff liberalization within a certain range.
  2. India is also likely to phase out tariffs on certain sensitive items with China beyond 20 years.
  3. This will allow India to allay concerns of domestic industries such as steel and textiles, which fear that China will start dumping goods once RCEP takes effect.

Back2Basics

Regional Comprehensive Economic Partnership (RCEP)

  1. It is a proposed free trade agreement (FTA) between ASEAN and six Asia-Pacific states.
  2. Members: ASEAN Members (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam) and the six Asia-Pacific states (Australia, China, India, Japan, South Korea and New Zealand).
  3. RCEP negotiations were formally launched in November 2012 at the ASEAN Summit in Cambodia.
  4. The FTA is scheduled and expected to be signed in November 2018 during the ASEAN Summit and Related Summit in Singapore, after the first RCEP summit was held on 14 November 2017 in Manila, Philippines.
  5. RCEP is viewed as an alternative to the Trans-Pacific Partnership (TPP), a proposed trade agreement which includes several Asian and American nations but excludes China and India.
  6. Importance of RCEP:
  • In 2017, prospective RCEP member states accounted for a population of 3.4 billion people with a total Gross Domestic Product (GDP, PPP) of $49.5 trillion
  • It is approximately 39 percent of the world’s GDP with the combined GDPs of China and Japan making up more than half that amount.
  • RCEP is the world’s largest economic bloc, covering nearly half of the global economy.
  • RCEP’s share of the global economy could account for half of the estimated $0.5 quadrillion global GDP (PPP) by 2050.
Regional Comprehensive Economic Partnership (RCEP)

[op-ed snap] Where interests meet

Note4students

Mains Paper 2: IR | Bilateral, regional & global groupings & agreements involving India &/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: 2 + 2 dialogue

Mains level: India’s partnership with the US over years and recent developments related to it


Context

Balanced India-US relationship

  1. The idea that India-US relations are enveloped by a crisis has been a recurring theme for the last quarter of a century and more
  2. Yet, since the end of the Cold War, the bilateral relationship has made a steady advance across a broad front
  3. Despite the presumption or hope in many sections at home and abroad that something will surely trip up India and the US, their partnership has become stronger by the day

India’s growing ties with the US

  1. For India, ties with the US have emerged as the most comprehensive among all its major power relationships
  2. In terms of breadth, it ranges from defence and high technology cooperation to a substantive people-to-people relationship
  3. In terms of weight, it is the most important economic relationship — annual two-way trade in goods and services now stands at nearly $140 billion and mutual investments are on the way up
  4. There is also a growing convergence of perspectives on regional and international affairs
  5. Few other powers have been as positive as the US in addressing either India’s concerns about terrorism in the region or as supportive of its aspirations for a larger international role

Are Trump’s policies harmful to India?

  1. Although many of America’s traditional partners have found themselves at the receiving end of Trump’s effort to reorient US foreign policy, the consequences for India have not been too severe to cope with
  2. On the two primary areas of concern for India — Pakistan and China — Delhi has no reason to complain about Trump’s policies
  3. On the sources of terror in Pakistan and its destabilisation of Afghanistan, Trump has mounted the kind of pressure on Rawalpindi that his predecessors were not willing to consider
  4. Trump’s pushback against China’s assertive policies has already opened up new diplomatic space for Delhi in the Indo-Pacific, including with Beijing

Dealing with US sanctions on trading with Russia

  1. Since the end of the Cold War, India did not have to look over its shoulder in its engagement with either Russia or America
  2. Delhi will now have to deal with this new situation
  3. The new US law that mandates sanctions against countries that buy arms from Russia is at the centre of the current debate
  4. Washington has no reason to wreck the growing military relationship with India — which has seen the US expand its share in arms sales to India at the expense of Russia
  5. India, on its part, needs to take full advantage of the strategic possibilities with the US for modernising India’s military as well as its defence industrial base

Managing Iran problem

  1. The Iran problem might be a lot easier to manage
  2. It’s been done before amidst the continuing confrontation between Tehran and Washington
  3. More than a decade ago, the UPA government refused to sacrifice India’s rising stakes in the US relationship for the sake of Iran
  4. Also, India’s interests are rapidly rising in the UAE and Saudi Arabia — two countries that are in a deepening conflict with Iran

Limiting incoming damage

  1. Driven by powerful domestic political considerations, Trump has chosen to confront all of America’s major economic partners on ending the trade imbalance
  2. India is certainly on the list of countries with a trade surplus with the US
  3. Delhi must find ways to limit the damage to its most important trade relationship through practical negotiations

Way Forward

  1. India and the United States have advanced their partnership over the last few years by sticking to two important principles
  2. One is the political commitment not to let any one problem derail the broader partnership and the other is to continue to expand the areas of engagement that yield additional gains for both
  3. The two sides must try and break from the frustrating tradition of incrementalism via 2 + 2 dialogue which could also help set more ambitious goals for the future
  4. Translating the alignment of interests into concrete outcomes requires the development of a new framework for burden-sharing and strategic coordination
Foreign Policy Watch: India-United States

[op-ed snap] The nature of dissent

Note4students

Mains Paper 4: Ethics

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: Importance of dissent and its curbing in recent times


Context

Prevalence of dissent

  1. Disagreeing with each other is a fundamental human trait
  2. At a primordial level, we become individuals only through this act of stating our disagreement
  3. Dissent is thus a condition of existence

Silent assent is a problem

  1. The real problem is not dissent but silent assent
  2. When we agree collectively, we are silently assenting, agreeing with what is being said and done
  3. This is really not the existential characteristic of a human being but only that of a ‘bonded mind’
  4. A group made up of people who agree to everything all the time is not really a society but an oligarchy
  5. A society gets its own identity by learning to dissent

Managing dissent

  1. A mature society is one which has the capacity to manage dissent since members of a society will always disagree with each other on something or the other
  2. Democratic societies are the best of the available models in managing dissent with the least harmful effect on the dissenter
  3. Elections and voting are the means to achieve this
  4. The essence of democracy is to be found in the method it uses to deal with dissent, which is through discussion and debate, along with particular ethical norms
  5. A democratic society manages dissent by trying to make individual practices of dissent into social practices
  6. Academics and research are two important activities where dissent is at the core
  7. Many new ideas arise by going against earlier established norms and truths
  8. No two philosophers agree on one point, and no two social scientists are in perfect harmony with each other’s thoughts
  9. Buddha and Mahavira were dissenters first and philosophers next

Why is dissent required?

  1. Dissent is not just about criticism, it is also about showing new perspectives
  2. It is necessary for the survival of the human race
  3. Any society which eradicates dissent has only succeeded in eradicating itself
  4. The examples of Nazi Germany or Stalinist Russia prove this
  5. A sustainable, harmonious society can only be formed from practices which deal with dissent respectfully and ethically

Ethics of dissent

  1. There is also a fundamental ethical principle involved in dissent
  2. Any society which muzzles dissent is acting unethically
  3. The first ethical principle is related to non-violence, a principle which is so integral to the unique Indian practices of dissent from ancient times to Gandhi and Ambedkar
  4. The second ethical principle is that the worse off in a society have a greater right to dissent and protest even when the more privileged may not agree or sympathise with that dissent

Freedom of dissent required

  1. Dissent is an ethical means of protecting those who are worse off than others
  2. When we hear the voices of dissent from the oppressed and the marginalised, it is ethically incumbent upon those who are better off than them to give them greater space and greater freedom to dissent
Freedom of Speech – Defamation, Sedition, etc.

[op-ed snap] Addressing soil loss

Note4students

Mains Paper 3: Agriculture | Land reforms in India

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: Soil degradation after floods and how to replenish it again


Context

Problem of soil loss

  1. As the rains abate in Kerala, the loss of lives and the devastation of infrastructure and crops is apparent
  2. As rebuilding is planned, what is often ignored is the soil that has been washed away
  3. The gradual loss of soil productivity can have a lasting impact on the local economy

Impact of soil degradation

  1. In the case of Kerala and Kodagu, the undulation and force of the water would have led to severe soil and land erosion
  2. A 2014 review of soil degradation in India by multiple institutions shows that an estimated 14 million hectares suffer soil degradation due to flooding annually
  3. Researchers from the National Bureau of Soil Survey and Land Use Planning (NBSS&LUP) and other institutes estimate that 13 flood-hit districts lost 287 million tonnes of topsoil and soil nutrients across 10.75 million hectares of farmland in 2009 floods in Kerela
  4. Under market prices, the replacement of nutrients such as nitrates, phosphates and iron would have cost ₹1,625 crore, while another ₹853 crore would have been spent on replenishing organic material lost
  5. To recover and replace would take a “considerable” amount of time, and a steadfast programme of recovery

Are all floods bad for soil?

  1. Not all floods are bad for the soil, as seen in the oft-occurring floods along the banks of the Ganga, Kosi, Brahmaputra and other rivers taking birth in the Himalayas
  2. There, the gushing river emanating from the mountains carries with it loosened alluvial soil, and not only washes over farmlands but also replenishes floodplains with fertile soil
  3. But in the south and central India, floods wash away rich, weathered soil, which is deposited in reservoirs or as sandbars along the river bed or in the sea
Soil Health Management – NMSA, Soil Health Card, etc.

[pib] Technology Initiatives for Coffee Stakeholders

Note4students

Mains Paper 2: Governance | Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

From UPSC perspective, the following things are important:

Prelims level: Read B2B, Coffee Connect and Krishi Tharanga

Mains level: Coffee Cultivation in India


News

Context

  • Minister for Commerce & Industry and Civil Aviation, Suresh Prabhu has launched Coffee Connect – India coffee field force app and Coffee Krishi Tharanga – digital mobile extension services for coffee stakeholders.

Coffee Connect

  1. The mobile app Coffee Connect has been developed to ease the work of field functionaries and to improve the work efficiency.
  2. This application provides solution by harnessing the power of mobility comprising the latest technology in easing the whole process of the field.
  3. This includes activities like digitization of Coffee Growers & Estates with Geo Tagging, collecting the Plantation details.
  4. It will also help in transparency in the activities of the extension officers and officials, transparency in subsidy disbursement and real time report generation.

Coffee Krishi Tharanga

  1. The Coffee KrishiTharanga services are aimed at providing customized information and services to increase productivity, profitability, and environmental sustainability.
  2. The service is pilot tested in the Chikmagalur and Hassan districts of Karnataka State covering 30,000 farmers during the first year and will be extended to remaining growers in a phased manner.
  3. NABARD has partly funded the Pilot project.
  4. The solution will help in to reach maximum growers in limited period, efficient, timely, customised advisory, improve the efficiency through digitization and leverage existing mobile reach for wider delivery of improved technology.

Coffee cultivation in India

  1. Coffee is cultivated in India in about 4.54 lakh hectares by 3.66 lakh coffee farmers and 98% of them are small farmers.
  2. Its cultivation is mainly confined to Karnataka (54%), Kerala (19%) and Tamil Nadu (8%) which form traditional coffee tracts.
  3. New fields are also developed in NE states.
  4. Indian coffee, grown mostly in southern states under monsoon rainfall conditions, is also termed as “Indian monsooned coffee”.
  5. The two well known species of coffee grown are the Arabica and Robusta.
  6. The first variety that was introduced in the Baba Budan Giri hill ranges of Karnataka in the 17th century was marketed over the years under the brand names of Kent and S.795.

Back2Basics

Coffee Board of India

  1. The Coffee Board of India is an organisation managed by the Ministry of Commerce and Industry of the government of India to promote coffee production in India.
  2. Head Office is in Bangalore.
  3. The Coffee Board of India was established by an act of Parliament in 1942.
  4. Until 1995 the Coffee Board marketed the coffee of many growers from a pooled supply, but after that time coffee marketing became a private-sector activity due to the economic liberalisation in India.
  5. The Coffee Boards tradition duties included the promotion of the sale and consumption of coffee in India and abroad, conducting coffee research, financial assistance to establish small coffee growers, safeguarding working conditions for laborers, and managing the surplus pool of unsold coffee.

 

Plantation Agriculture – RISPC, Tea Act, etc.

[pib] Indo-Kazakhstan Joint Exercise KAZIND 2018

Note4students

Mains Paper 2: IR | Bilateral, regional & global groupings & agreements involving India &/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: Exercise KAZIND

Mains level: Indo-Kazakhstan defence cooperation


News

Exercise KAZIND 2018

  1. The Joint Army Exercise will be conducted between the Indian and Kazakhstan Army in Otar region, Kazakhstan.
  2. This is the third joint military exercise between the two countries which have a history of extensive cooperation in the defence arena.
  3. The second edition of the exercise was held in India last year.
  4. The aim of the exercise is to build and promote bilateral Army to Army relations and exchange skills and experiences between Kazakhstan Army and the Indian Army.

Enhancing Defense cooperation

  1. The vast experience and expertise of Indian troops in counter insurgency operations holds special importance to the Kazakhstan Army.
  2. The fourteen days exercise with the Kazakhstan Army will follow a graduated continuum from orientation to a full scale mock exercise.
  3. Another aim is to achieve optimum integration among the two contingents through enhanced mutual comprehension of each other’s tactics, techniques and procedures.
  4. The conduct of the joint exercise will set the stage for greater defence cooperation and consequently will manifest in stronger ties between the two great nations.
Foreign Policy Watch- India-Central Asia

Google to help EC track online political ads

Note4Students

Mains Paper 2: Governance | Important aspects of governance, transparency and accountability, e-governance- applications, models, successes, limitations, and potential

From UPSC perspective, the following things are important:

Prelims level: ECI mechanisms to monitor election expenditure.

Mains level: Bringing transparency in the process of election campaigning and expenditure.


News

Eye on Online Ads

  1. Google will soon be helping the Election Commission (EC) keep tabs on online political advertising.
  2. It will develop a mechanism that will not only ensure pre-certification of political advertisements but also enable it to share with the authority, details about the expenditure incurred on its platforms.
  3. A committee has been set up to explore possible modifications in Section 126 (election silence) and other provisions of the Representation of the People Act, 1951 in view of the expansion and diversity of media platforms.

Keeping an eye on Election Expenditures

  1. Google will keep track of political advertisements and ensure that they are pre-certified by the EC’s Media Certification and Monitoring Committees.
  2. This would entail Google asking prospective clients, whenever an order is placed, whether they have been pre-certified.
  3. Google has also assured that it would set up a mechanism for sharing information on the cost of the political advertisements.
  4. The ECI is the nodal body for pre-certification of advertisements of a political nature, released by either an individual or an organisation.
  5. This would be of use to Returning Officers when it comes to calculating the election expenditure of individual candidates.

Present Mechanism

  1. The ECI asks the candidates to declare their official social media accounts.
  2. As soon as someone is declared a candidate for any election, all the money spent by the person for campaigning gets added as election expenditure.

Facebook tools

  1. The EC’s committee has agreed with Facebook to develop tools for removing any content related to election matters during the 48-hour period when the ‘prohibition protocol’ is in place.
  2. It is working on ways to check fake news and share details of expenditure on poll-related advertisements.
  3. During the Karnataka Assembly polls, Facebook tied up with the Indian fact-checking agency, Boom Live, which confirmed over 50 cases of fake news.
Electoral Reforms In India

Japan to test mini ‘space elevator’

Note4students

Mains Paper 3: Science & Technology | Awareness in the fields of IT, Space, Computers, robotics, nano-technology, bio-technology

From UPSC perspective, the following things are important:

Prelims level: Mini Space Elevator

Mains level: This is first of its kind space elevator between mini satellites.


News

Mini Space Elevator

  1. A Japanese team has developed a space elevator and will conduct a first trial this month, blasting off a miniature version on satellites to test the technology.
  2. The test equipment, produced by researchers at Shizuoka University will hitch a ride on an H-2B rocket being launched by Japan’s space agency.
  3. The test involves a miniature elevator stand-in a box just 6 cm long, 3 cm wide, and 3 cm high.
  4. If all goes well, it will provide proof of concept by moving along a 10-metre cable suspended in space between two mini satellites that will keep it taut.
  5. The mini-elevator will travel along the cable from a container in one of the satellites.

World’s First such Elevator

  1. The movement of the motorized “elevator” box will be monitored with cameras in the satellites.
  2. The idea was first proposed in 1895 by Russian scientist Konstantin Tsiolkovsky after he saw the Eiffel Tower in Paris, and was revisited nearly a century later in a novel by Arthur C. Clarke.
  3. But technical barriers have always kept plans stuck at the conceptual stage.
  4. Japanese construction firm Obayashi, which is collaborating with the Shizuoka university project, is also exploring other ways to build its own space elevator to put tourists in space in 2050.
  5. The company said it could use carbon nanotube technology, which is more than 20 times stronger than steel, to build a lift shaft about 96,000 km above the earth.

Reserve Bank tightens Ombudsman Scheme

Note4students

Mains Paper 2: Governance | Important aspects of governance, transparency and accountability, e-governance- applications, models, successes, limitations, and potential

From UPSC perspective, the following things are important:

Prelims level: Not Much

Mains level: Need for Banking Ombudsman 


News

Strengthening Grievance Redressal Mechanism

  1. The RBI has tightened the banking ombudsman scheme with the objective to strengthen the grievance redressal mechanism for customers.
  2. It has asked all commercial banks having 10 or more banking outlets to have an independent internal ombudsman (IO) to review customer complaints that are either partly or fully rejected by the banks.
  3. The IO shall examine customer complaints which are in the nature of deficiency in service on the part of the bank, that are partly or wholly rejected by the bank.
  4. The instructions are not applicable for Regional Rural Banks sponsored by commercial banks.
  5. As banks should internally escalate complaints that are not fully redressed to their respective IOs before conveying the final decision to the complainant, customers need not approach the IO directly.

Fixed term

  1. According to bankers, the Internal Ombudsman Scheme of 2018 mandates banks to grant a fixed term of three to five years, which cannot be renewed, to the IO.
  2. The IO can be removed only with prior approval from RBI.
  3. The remuneration would have to be decided by the customer sub-committee of the board and not by any individual.
  4. RBI has said that the Ombudsman Scheme of 2018 covers appointment/tenure, roles and responsibilities, procedural guidelines and oversight mechanism for the IO.
  5. The implementation of IO Scheme 2018 will be monitored by the bank’s internal audit mechanism apart from regulatory oversight by RBI.

Back2Basics

Banking Ombudsman Scheme

  1. Banking Ombudsman Scheme is a mechanism created by the RBI to address the complaints raised by bank customers.
  2. It is run by the RBI directly to ensure customer protection in the banking industry.
  3. The scheme was introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI with effect from 1995. The present Ombudsman scheme was introduced in 2006.
  4. The Banking Ombudsman is a senior official appointed by the Reserve Bank of India.
  5. He has the responsibility to redress customer complaints against deficiency in certain banking services.
  6. All Scheduled Commercial Banks, Regional Rural Banks and Scheduled Primary Co-operative Banks are covered under the Scheme.
  7. The Banking Ombudsman can receive and consider any complaint relating to a number of deficiencies related to banking operations including internet banking.
Banking Sector Reforms

Drug-resistant superbug spreading in hospitals

Note4students

Mains Paper 2: Governance | Issues relating to development & management of Social Sector/Services relating to Health, Education, Human Resources

From UPSC perspective, the following things are important:

Prelims level: Staphylococcus Epidermidis, MRSA

Mains level: Growing incidences of HIV in country and measures to prevent it


News

Three variants found in 10 countries

  1. A superbug resistant to all known antibiotics that can cause “severe” infections or even death is spreading undetected through hospital wards across the world.
  2. Researchers from Australia discovered three variants of the multidrug-resistant bug in samples from 10 countries.

Staphylococcus Epidermidis

  1. The bacteria known as Staphylococcus Epidermidis (Gram-positive) are related to the better-known and more deadly MRSA (Methicillin-resistant Staphylococcus Aureus) superbug.
  2. It’s found naturally on human skin and most commonly infects the elderly or patients who have had prosthetic materials implanted, such as catheters and joint replacements.
  3. It can be deadly for the patients who already are very sick in the hospital and it is difficult to cure.
  4. The researchers found that some strains of the bug made a small change in its DNA that led to resistance to two of the most common antibiotics.
  5. Another Australian study suggested some hospital superbugs are growing increasingly tolerant to alcohol-based disinfectants found in handwashes and sanitisers used on hospital wards.
Health Sector – UHC, National Health Policy, Family Planning, Health Insurance, etc.