Polity & Governance
- Cabinet approves establishment of National Financial Reporting Authority
Government Schemes & Policies
- Cabinet approves Fugitive Economic Offenders Bill, 2018
Environment, Ecology & Disaster Management
- NBA calls for plan to manage import of exotic fish
- Only 13% of tiger conservation areas meet global standards
Bilateral & International Relations
- Cabinet approves MoU with Jordan for rock phosphate mining
Key Facts for Prelims
- Phirangipuram to be Andhra’s first all-women rail station
- Paschim Leher (XPL-18)
- World’s largest solar park Shakti Sthala launched in Karnataka
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Polity & Governance
Cabinet approves establishment of National Financial Reporting Authority
The Union Cabinet approved establishment of National Financial Reporting Authority (NFRA) as an independent regulator for the auditing profession.
- It aims to tighten regulatory oversight over auditors and plug loopholes.
- It will be independent from those it regulates for enforcement of auditing standards and ensuring quality of audits.
About National Financial Reporting Authority (NFRA):
The National Financial Reporting Authority (NFRA) is a body proposed in Companies Act 2013 for the establishment and enforcement of accounting and auditing standards and oversight of the work of auditors.
- NFRA will have 15 members, including a chairperson and three full-time members. Besides, there would be a secretary.
- It would be an overarching watchdog for auditing profession and once set up, the current powers of the ICAI to act against erring chartered accountants will be vested with the new regulator.
- The NFRA will have powers to debar an erring auditor or auditing firm for up to ten years besides slapping heavy penalties.
- The jurisdiction of the NFRA will extends investigation of Chartered Accountants and their firms to all listed companies as well as large unlisted public companies. Government will prescribe thresholds in the rules.
- Government can also refer other entities for investigation where public interest is involved. However, inherent regulatory role of existing ICAI will continue in respect of its members and specifically to audits pertaining to private limited companies and public unlisted companies below threshold limit notified in rules.
- Further, ICAI will continue to play its advisory role with respect to accounting and auditing standards and policies by making its recommendations to NFRA.
NFRA and Quality Review Board (QRB):
- QRB will continue its quality audit in respect of private limited companies, public unlisted companies below prescribed threshold and also with respect to audit of companies delegated by NFRA.
Significance of the move:
- The decision is expected to result in improved foreign/domestic investments, enhancement of economic growth, supporting the globalisation of business by meeting international practices, and assist in further development of audit profession.
Need for establishing NFRA:
- The need for establishing NFRA has arisen on account of the need felt across various jurisdictions in the world, in the wake of accounting scams, to establish independent regulators, independent from those it regulates, for enforcement of auditing standards and ensuring the quality of audits to strengthen the independence of audit firms, quality of audits and, therefore, enhance investor and public confidence in financial disclosures of companies.
- ICAI’s disciplinary record is often criticised-a charge that the institute is now trying to cope with.
- Corporate balance sheets cannot be trusted, because sometimes, CAs will put their signature on any fiction for a price.
- Not just this, helping businesses evade taxes is the main service many of them offer.
- Only 25 auditors had faced any action in over a decade even as 1,400 cases were pending.
- While Companies Act 2013 had provided for NFRA as a regulatory agency for audit, accounts and financial reporting, Section 132 of the law has remained on paper as the rules are yet to be notified. It is one of the few sections of the law that has not been notified yet.
Government Schemes & Policies
Cabinet approves Fugitive Economic Offenders Bill, 2018
The Union Cabinet has approved the proposal of the Ministry of Finance to introduce the Fugitive Economic Offenders Bill, 2018 in Parliament.
- The bill aims to tighten the noose on the wilful defaulters who tends to abscond the nation to evade the clutches of the law.
Highlights of the Fugitive Economic Offenders Bill, 2018:
- The bill defines fugitive economic offender (FEO) as any individual against whom warrant for arrest in relation to scheduled offence (enlisted in the this law) has been issued by any court in India, but he leaves or has left India to avoid criminal prosecution or refuses to return to India to face criminal prosecution.
- The onus is on authorities to prove that an individual is a fugitive economic offender. It gives government right to confiscate property of such economic offenders in India and abroad. Its provisions are also be applicable on proxy-owned properties of economic offenders.
- It is applicable in cases where total value involved in such economic offences is Rs.100 crore or more. It keeps banks and other financial institutions at Centre and provide help to them recover amount.
- It establishes Special Court under the Prevention of Money-laundering Act (PMLA), 2002 to declare a person as FEO.
- The special court will also appoint ‘administrator’ to oversee confiscated property. It will be responsible for disposing of confiscated property and t property will be used to satisfy creditors’ claims.
- It debars fugitive economic offender from defending any civil claim at the discretion of any court including High Court. If prior to the declaration, the alleged FEO returns to India and submits to the appropriate jurisdictional court, proceedings under this Act will cease by law.
Need for such law:
- There have been several instances of economic offenders fleeing country to evade clutches Indian law to remain outside jurisdiction of Indian courts.
- The absence of such offenders from Indian courts has several deleterious consequences. It hampers investigation in criminal cases, wastes precious time of courts of law, undermines rule of law in India.
- Further, most such cases of economic offences involve non-repayment of bank loans thereby worsening financial health of banking sector.
- Moreover, existing non-coherent civil and criminal provisions in law are not entirely adequate to deal with severity of problem.
Significance of the Bill:
- The bill will provide effective, expeditious and constitutionally permissible deterrent legal teeth to enforcing agencies to ensure that such actions of FEO are curbed.
- The Bill is expected to re-establish the rule of law with respect to the fugitive economic offenders as they would be forced to return to India to face trial for scheduled offences.
- This would also help the banks and other financial institutions to achieve higher recovery from financial defaults committed by such fugitive economic offenders, improving the financial health of such institutions.
- It is expected that the special forum to be created for expeditious confiscation of the proceeds of crime, in India or abroad, would coerce the fugitive to return to India to submit to the jurisdiction of Courts in India to face the law in respect of scheduled offences.
Environment, Ecology & Disaster Management
NBA calls for plan to manage import of exotic fish
Expressing concern over the increase in the import of ornamental fishes to the country, which is posing a threat to India’s native fish populations, the National Biodiversity Authority (NBA) has urged the government to come up with quarantine facilities at major seaports and airports.
- The government of India has only approved the import of 92 species of ornamental fish but the number of ornamental fish species being imported and in trade is somewhere between 200-300.
- The huge market for Invasive Alien Species (IAS) is turning out to be major threat to India’s aquatic biodiversity.
- Several studies have disclosed the occurrence of exotic ornamental fish in many inland aquatic systems, including biodiversity-sensitive areas such as the Western Ghats.
What are Invasive Alien Species (IAS)?
- Alien species is a species introduced by humans – either intentionally or accidentally – outside their natural areas, where they out-compete the native species and upset the ecological balance.
National list of Invasive Alien Species (IAS):
- Under the Centre for Biodiversity and Policy and Law (CEBPOL), the NBA is trying to bring out a national list of IAS.
- So far, no attempt has been made by any scientific organisation to have a national IAS list across different categories.
- The list will be put made available on a public platform and will be communicated to different Ministries and stakeholders.
- The announcement by NBA assumes significance as scientists and experts in the country are still divided over the number of IAS and their economic and ecological impact.
Need for such list:
- While the number of publications on IAS has increased over the past few years, there has been no coordinated effort for the management of IAS.
- Statisticians and biologists need to come together for distribution mapping and the application of statistical approaches in the management of IAS.
- Most of the fish are imported from southeast Asian countries. Besides legislative measures, there is the need for educating and creating awareness among Customs officials at airports and seaports.
- Centre for Biodiversity and Policy and Law (CEBPOL) is a bilateral collaboration between the Indian and Norwegian governments, and focuses on biodiversity policies and laws.
About National Biodiversity Authority (NBA):
- The NBA was established by the Central Government in 2003 to implement India’s Biological Diversity Act (2002).
- The NBA is a Statutory Body.
- It performs facilitative, regulatory and advisory functions for the Government of India on issues of conservation, sustainable use of biological resources and fair and equitable sharing of benefits arising out of the use of biological resources.
Only 13% of tiger conservation areas meet global standards
According to recent survey, only 13% of tiger conservation areas that are part of Conservation Assured | Tiger Standards (CA|TS) Partnership meet global standards.
- The survey was conducted over hundred tiger conservation areas by 11 leading conservation organisations and countries with tiger ranges that are part of CA|TS Partnership.
Key findings of the survey:
- The surveyed area is home to approximately 70% of the world’s wild tigers. The survey found that at least one-third of tiger conservation these areas are severely at risk of losing their tigers and most of these sites are in Southeast Asia.
- Two-thirds of surveyed area is reported fair to strong management, but their basic needs such as encroachment against poaching, engaging local communities and managing conflict between people and wildlife remained weak for all surveyed areas.
- Despite poaching being one of greatest threats faced by big cats, 85% of the areas surveyed do not have the staff capacity to patrol sites effectively. 61% of areas in Southeast Asia have very limited anti-poaching enforcement.
What is CA|TS?
CA|TS is a set of criteria which allows tiger sites to check if their management will lead to successful tiger conservation.
- CA|TS is organised under seven pillars and 17 elements of critical management activity.
- CA|TS was developed by tiger and protected area experts.
- Officially launched in 2013, CA|TS is an important part of Tx2, the global goal to double wild tiger numbers by the year 2022.
- Developed by WWF and partners, the Global Tiger Forum (GTF) has endorsed CA|TS and has requested member countries to establish National Review Committees for purpose of initiating CA|TS.
- CA|TS is an important tool in the achievement of the CBD’s Global Aichi Targets, in particular Aichi Target 11 and 12, and contributes to the implementation of the Programme of Work on Protected Areas, particularly the last goal related to Standards, Assessment and Monitoring.
How does CA|TS work and who is using it?
- Sites taking part will initially be ‘registered’ (standards not yet attained) then, when all required standards are met, ‘approved’ (standards achieved). An approved site has achieved excellence in tiger site management. Sites are evaluated through an assessment and independent review process.
- Of the 13 tiger range countries Nepal, India, Bangladesh and Russia have registered and rolled out CA|TS, whilst discussion is ongoing with Bhutan, Indonesia, Thailand, Malaysia and China.
- Currently there are two sites that are CA|TS approved; Chitwan National Park in Nepal and Sikhote-Alin Nature Reserve in Russia.
Why is CA|TS important?
- Protected areas are a good strategy for retaining forest cover, however their role in protecting wildlife depends on the quality of management.
- Many studies show that tiger numbers can continue to decline in protected areas, particularly due to bushmeat (tiger prey) hunting or the poaching of tigers themselves for trophies, traditional medicines and other illegal activities.
- Until CA|TS, there has not been a set of criteria which not only provide clarity on management of tiger sites, but also encourage further development and sharing of best practice across the tiger range countries.
- Tigers are a large, charismatic species that require rigorous conservation efforts and best practices to ensure their future in the wild. This, combined with their need for vast areas of forest, make tigers an “umbrella species”.
- By focusing on tigers, and ensuring the forest they live in is protected to the highest standard, all the other species in the same forest benefit too.
Bilateral & International Relations
Cabinet approves MoU with Jordan for rock phosphate mining
The Union Cabinet has approved the signing of a Memorandum of Understanding (MoU) between India and Jordan for mining and beneficiation of Rock Phosphate & Muriate of Phosphate (MOP).
- It also approved setting up production facility in Jordan for Phosphoric Acid/NPK/DAP Fertilizers with long term agreement for 100% off-take to India.
Significance of this MoU:
- The MoU would ensure consistent supply of raw material, intermediaries and finish P&K fertilizers to cater to the needs of the country at a reasonable price.
About Rock phosphate:
- Rock phosphate or Phosphorite is a non-detrital sedimentary rock which contains high amounts of phosphate minerals.
- Rock phosphate is a mined rock that contains limestone and clay as well as a high concentration of phosphorus (P). The actual composition varies depending on its source but it usually contains 16 to 20% P.
- Limestones and mudstones are common phosphate-bearing rocks.
- Rock Phosphate is recommended as an organic fertilizer.
- Fertilisers containing potassium must be applied wherever soil potassium reserves are inadequate for targeted crop or pasture production.
- Potassium stimulates the growth of strong stems and gives the plant some disease resistance by promoting thickness of the outer cell walls.
- Adequate potassium can reduce moisture loss from growing plants, thereby giving some drought resistance.
- Potassium improves colour, flavour and storing quality of fruit and vegetables.
- Potassium can be applied as a straight fertiliser, or as part of a blended or compound fertiliser with nitrogen and phosphorous.
There are four common kinds of straight potash fertilisers:
- Muriate of Potash (MOP)
- Sulfate of Potash (SOP)
- Potassium Magnesium Sulfate
- Potassium Nitrate
About Muriate of Potash (MOP):
- Potassium chloride (commonly referred to as Muriate of Potash or MOP) is the most common potassium source used in agriculture, accounting for about 95% of all potash fertilisers used worldwide.
- MOP has a high nutrient concentration and is therefore relatively price competitive with other forms of potassium. The chloride content of MOP can also be beneficial where soil chloride is low.
- MOP is the most concentrated form of granular potassium and typically the most cost effective.
- MOP is used extensively for fertilising pastures, sugar cane, fruit trees, vegetables, and other field crops.
- MOP should not be used on salt sensitive crops, where soil salt levels are high or increasing, or where irrigation water has high salt levels.
Location of Jordan:
- Jordan is a sovereign Arab state in western Asia, on the East Bank of the Jordan River.
- Jordan is bordered by Saudi Arabia to the south, Iraq to the north-east, Syria to the north, Israel and Palestine to the west.
- The Dead Sea lies along its western borders and the country has a small shoreline on the Red Sea in its extreme south-west, but is otherwise landlocked.
- Jordan is strategically located at the crossroads of Asia, Africa and Europe.
Key Facts for Prelims
Phirangipuram to be Andhra’s first all-women rail station
- Phirangipuram is all to be Andhra Pradesh’s first all-women rail station. It will be a big step in addressing gender equality in the biggest public sector organisation in the country.
- It will be the third-of-its-kind railway station in the country after Jaipur’s Gandhi Nagar and Mumbai’s Matunga.
Paschim Leher (XPL-18)
- The Western Naval Command of the Indian Navy has concluded a large scale operational exercise named ‘Paschim Leher’ in the Arabian Sea.
- The objective of the exercise was to build interoperability between Indian Navy, Indian Army, Indian Air Force and Coast Guard.
- The exercise tests operational readiness of the Western Naval Command and the execution of it’s operational plans. The XPL 2018 enabled testing and revalidation of operational plans and manoeuvres in a hostile maritime scenario on India’s Western Seaboard.
- The exercise will enable further refine the operational, logistics and administrative plans of the Western Naval Command.
World’s largest solar park Shakti Sthala launched in Karnataka
- Recently, the Karnataka government inaugurated the world’s largest solar park, Shakti Sthala.
- It is located in Tumkur district, about 180km from Bengaluru.
- The park ties in with the centre’s scheme to generate 100 gigawatts (GW) of solar power by 2020.
- It has a capacity of 2,000 MW.
- It is part of the “Karnataka Solar Policy 2014-2021” which aims to decrease dependence on traditional power sources and move to environmentally friendly ones to meet the growing power needs of the state.