Flash-Cards-for-IAS-Prelims-2018-CA-Day-27
70 Days WAR Plan

Day#27 Current Affairs Flash Cards [70 Days WAR Plan]

Operation Greens; SHAKTI (Scheme for harnessing & allocating koyla transparently in India); National Agricultural Cooperative Marketing Federation of India Ltd (NAFED); ‘SAGAR’ vision’; Sustainable Blue Economy Conference; National Financial Reporting Authority (NFRA); Capital Conservation Buffer (CCB); Industrial Park Rating System; Article 50 of the Lisbon Treaty; Companies Amendment (Ordinance), 2018;
By IT's Core Team
April 17, 2019

 

 

 

Discuss briefly about Companies Amendment (Ordinance), 2018

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Answer & Enrich Your Learning:

Companies Amendment (Ordinance), 2018:

The Companies (Amendment) Ordinance, 2018 was promulgated on November 2, 2018. It amends several provisions in the Companies Act, 2013 relating to penalties, among others. 

  • Issue of shares at a discount: The Act prohibits a company from issuing shares at a discount, except in certain cases. On failure to comply, the company is liable to pay a fine between one lakh rupees and five lakh rupees every officer in default may be punished with imprisonment up to six months or fine between one lakh rupees and five lakh rupees.  The Ordinance changes this to remove imprisonment for officers as a punishment.
  • Commencement of business: The Ordinance states that a company may not commence business, unless it (i) files a declaration within 180 days of incorporation, confirming that every subscriber to the Memorandum of the company has paid the value of shares agreed to be taken by him, and (ii) files a verification of its registered office address with the Registrar of Companies within 30 days of incorporation. If a company fails to comply with these provisions and is found not to be carrying out any business, the name of the Company may be removed from the Register of Companies.
  • Registration of charges: The Act requires companies to register charges (such as mortgages) on their property within 30 days of creation of charge. The Registrar may permit the registration within 300 days of creation.  If the registration is not completed within 300 days, the company is required to seek extension of time from the central government.
  • Change in approving authority: Under the Act, change in period of financial year for a company associated with a foreign company, has to be approved by the National Company Law Tribunal. Similarly, any alteration in the incorporation document of a public company which has the effect of converting it to a private company, has to be approved by the Tribunal.  Under the Ordinance, these powers have been transferred to central government.
  • Declaration of beneficial ownership: If a person holds beneficial interest of at least 25% shares in a company or exercises significant influence or control over the company, he is required to make a declaration of his interest. Under the Act, failure to declare this interest is punishable with a fine between one lakh rupees and ten lakh rupees, along with a continuing fine for every day of default. The Ordinance provides that such person may either be fined, or imprisoned for up to one year, or both.
  • Remuneration for independent directors: The Act restricts an independent director from entitlement to stock options. It further states that he may receive sitting fees, commission, and reimbursement of expenses.  The Ordinance removes this provision.
  • Disqualification of directorship: Under the Act, a person cannot be a director in more than 20 companies. The Ordinance provides that contravening this provision will be a ground for disqualification from directorship.
  • Adjudication of penalties: The Act allows the central government to appoint adjudicating officers to decide penalties under the Act. The Ordinance states that these officers, in addition to imposing penalties, may direct the defaulting entity to rectify the default.
  • Compounding: Under the Act, a regional director can compound (settle) offences with a penalty of up to five lakh rupees. The Ordinance increases this ceiling to Rs 25 lakh.
  • Repeat defaulters: Under the Ordinance, if a company, or an officer, or other person commits a default again within three years of the previous case, the entity will be liable to twice the penalty as provided for such default.

 

 

 

What is the Article 50 of the Lisbon Treaty, which was frequently appeared in news?

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Answer:

  • Article 50 is a clause in the European Union’s (EU) Lisbon Treaty that outlines the steps to be taken by a country seeking to leave the bloc voluntarily.
  • British Prime Minister Theresa May became the first leader to invoke Article 50 on March 29, 2017, following British voters’ decision to pursue Brexit – the UK’s exit from the EU – in a referendum on June 23, 2016.

Enrich Your Learning:

What is Brexit?

  • Brexit is short for “British exit” – and is the word people use to talk about the United Kingdom’s decision to leave the European Union (EU).

Referendum:

  • A referendum – a vote in which everyone (or nearly everyone) of voting age can take part – was held on Thursday 23 June, 2016, to decide whether the UK should leave or remain in the European Union.
  • Leave won by 51.9% to 48.1%. The referendum turnout was 71.8%, with more than 30 million people voting.

EU:

  • The EU is a political and economic union of 28 countries which trade with each other and allow citizens to move easily between the countries to live and work.

 

  • The UK joined the EU, then known as the EEC (European Economic Community), in 1973.
  • The 2016 vote was just the start. Since then, negotiations have been taking place between the UK and the other EU countries.
  • The discussions have been mainly over the “divorce” deal, which sets out exactly how the UK leaves – not what will happen afterwards.
  • This deal is known as the Withdrawal Agreement.

The Withdrawal Agreement covers some of these key points:

  • How much money the UK will have to pay the EU in order to break the partnership – that’s about £39bn
  • What will happen to UK citizens living elsewhere in the EU, and equally, what will happen to EU citizens living in the UK
  • How to avoid the return of a physical border between Northern Ireland and the Republic of Ireland when it becomes the frontier between the UK and the EU.

A length of time, called the transition period, has been agreed to allow the UK and EU to agree a trade deal and to give businesses the time to adjust.

That means that if the withdrawal agreement gets the green light, there will be no huge changes between the date of Brexit and 31 December 2020.

 

 

 

Which are the four pillars on which Industrial Park Rating System assesses industrial parks?

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Answer:

The Industrial Park Rating System is being developed by the Department of Industrial Policy & Promotion (DIPP) under the Ministry of Commerce and Industry to assess industrial parks in the country based on four pillars

  • Internal and external infrastructure,
  • Connectivity,
  • Environment and safety management, and
  • Business support services.

Enrich Your Learning:

The report on Industrial Park Rating System:

  • In order to ensure that India moves into the top 50 countries in Ease of Doing Business, the Ministry has undertaken this exercise in studying infrastructure across states and in 3354 industrial clusters in order to assess quality of infrastructure in industrial parks.
  • would help increase competitiveness of industries and promotion of the manufacturing sector,
  • This will be a useful tool for policy makers and investors at the click of a button.
  • Under the system, the ministry would assess 200 such parks on several parameters such as sewage effluent and treatment; and water treatment.
  • Over the last one year, State Governments and Industrial Development Corporations have actively used the portal and nominated over 200 parks for their assessment along the above parameters.
  • IPRS is proposed to be translated into an annual exercise covering all the parks across India.
  • Coverage would be widened and updated to bring in deeper qualitative assessment feedback, bring in technological intervention and develop it as a tool that helps effectively for demand driven and need based interventions both by policy makers and investors.
  • The system could become a ready-to-refer database for prospective investors in these industrial parks.
  • The need of the system arises to see whether these parks are matching the global standards

 

 

 

What is capital conservation buffer (CCB)? Why was it in news?

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Answer & Enrich Your Learning:

  • CCB is the capital buffer that banks have to accumulate in normal times to be used for offsetting losses during periods of stress.
  • It was introduced after the 2008 global financial crisis to improve the ability of banks to withstand adverse economic conditions.
  • According to Capital Conservation Buffer (CCB) norms, banks will be required to hold a buffer of 2.5% Risk Weighted Assets (RWAs) in the form of Common Equity, over and above Capital Adequacy Ratio of 9%.
  • Capital Conservation Buffer currently stands at 1.875% and remaining 0.625% was to be met by March 2019.

Why in news?

  • The RBI’s board, in November 2018, decided to ease capital pressure on banks by allowing them one more year to meet the Capital Conservation Buffer (CCB).
  • This buffer is aimed at ensuring that banks build up capital buffers during non-stress periods so that they can be drawn down when losses are incurred.
  • The transition period to implement the last tranche of 0.625 per cent under CCB has been extended by one year — up to March 31, 2020. Now, banks can achieve CCB of 2.5 per cent of their risk-weighted assets by March-end 2020.
  • However, the capital to risk-weighted assets ratio (CRAR), which is the amount of capital banks need to hold for making loans and absorbing possible losses, has been retained at 9 per cent.

 

 

 

What is an aim of the National Financial Reporting Authority (NFRA)?

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Answer:

  • NFRA aims as an independent regulator for the auditing profession.

Enrich Your Learning:

National Financial Reporting Authority (NFRA):

The Union Cabinet has approved the proposal for establishment of National Financial Reporting Authority (NFRA) and creation of one post of Chairperson, three posts of full-time Members and one post of Secretary for NFRA.

Aim:

  • The decision aims at establishment of NFRA as an independent regulator for the auditing profession which is one of the key changes brought in by the Companies Act, 2013.

Impact:

  • 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.

Jurisdiction:

  • The jurisdiction of NFRA for investigation of Chartered Accountants and their firms under section 132 of the Act would extend to listed companies and large unlisted public companies, the thresholds for which shall be prescribed in the Rules.
  • The Central Government can also refer such other entities for investigation where public interest would be involved.
  • The inherent regulatory role of ICAI as provided for in the Chartered Accountants Act, 1949 shall continue in respect of its members in general and specifically with respect to audits pertaining to private limited companies, and public unlisted companies below the threshold limit to be notified in the rules.
  • The Quality Review Board (QRB) will also continue quality audit in respect of private limited companies, public unlisted companies below prescribed threshold and also with respect to audit of those companies that may be delegated to QRB by NFRA.
  • ICAI shall continue to play its advisory role with respect to accounting and auditing standards and policies by making its recommendations to NFRA.

Importance:

  • 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.

 

 

 

The first global conference on the sustainable blue economy was held at Nairobi by Kenya. It was co-hosted by which countries?

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Answer:

  • The first global conference on the sustainable blue economy was co-hosted by Canada and Japan.

Enrich Your Learning:

Sustainable Blue Economy Conference:

  • The first global conference on the sustainable blue economy was held at Nairobi by Kenya and its co-hosts Canada and Japan.

At the Sustainable Blue Economy Conference, participants from around the world learned how to build a blue economy that:

  • Harnesses the potential of our oceans, seas, lakes and rivers to improve the lives of all, particularly people in developing states, women, youth and Indigenous peoples.
  • Leverages the latest innovations, scientific advances and best practices to build prosperity while conserving our waters for future generations.

The Sustainable Blue Economy Conference builds on the momentum of the UN’s 2030 Agenda for Sustainable Development, the 2015 Climate Change Conference in Paris and the UN Ocean Conference 2017 “Call to Action”.

The conference captured concrete commitments and practical actions that can be taken today to help the world transition to the blue economy.

Why this conference?

  • The world has rallied around the enormous pressures facing our oceans and waters, from plastic pollution to the impacts of climate change. At the same time, there is international recognition that we need to develop our waters in an inclusive and sustainable manner for the benefit of all.

Aim:

  • Identify how to harness the potential of the blue economy to create jobs and combat poverty and hunger.
  • Show how economic development and healthy waters go hand in hand.
  • Capture commitments and practical actions that can be taken today.
  • Bring together the players needed to transition to a blue economy.

 

 

 

The term ‘SAGAR’ vision’ was recently in news. What is it all about?

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Answer:

  • The ‘SAGAR’ vision’ is a clear, high-level articulation of India’s vision for the Indian Ocean.

Enrich Your Learning:

SAGAR (Security and Growth for All in the Region):

  • SAGAR has distinct but inter-related elements and underscore India’s engagement in the Indian Ocean.
  • Security is fundamental to the ‘SAGAR’ vision.

Elements:

  • Enhancing capacities to safeguard land and maritime territories & interests;
  • Deepening economic and security cooperation in the littoral;
  • Promoting collective action to deal with natural disasters and maritime threats like piracy, terrorism and emergent non-state actors;
  • Working towards sustainable regional develop-ment through enhanced collaboration; and,
  • Engaging with countries beyond our shores with the aim of building greater trust and promoting respect for maritime rules, norms and peaceful resolution of disputes.

The principles enshrined in SAGAR provide us with a coherent framework to address some of the challenges relating to economic revival, connectivity, security, culture and identity, and India’s own evolving approach to these issues.

The challenge before India is to ensure intra-ocean trade and investment, and the sustainable harnessing of the wealth of the seas, including food, medicines and clean energy.

 

 

 

Which Union Ministry has launched the Operation Greens scheme?

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Answer:

The Ministry of Food Processing Industries has launched the Operation Greens scheme.

Enrich Your Learning:

Operation Greens:

  • Operation Greens was announced to stabilize the supply of Tomato, Onion and Potato(TOP) crops and to ensure availability of TOP crops throughout the country round the year without price volatility.
  • The Ministry of Food Processing Industries has launched the scheme. NAFED will be the Nodal Agency to implement price stabilisation measures.

Objectives:

  • Enhancing value realisation of TOP farmers by targeted interventions to strengthen TOP production clusters and their FPOs, and linking/connecting them with the market.
  • Price stabilisation for producers and consumers by proper production planning in the TOP clusters and introduction of dual use varieties.
  • Reduction in post-harvest losses by creation of farm gate infrastructure, development of suitable agro-logistics, creation of appropriate storage capacity linking consumption centres.
  • Increase in food processing capacities and value addition in TOP value chain with firm linkages with production clusters.
  • Setting up of a market intelligence network to collect and collate real time data on demand and supply and price of TOP crops.

Strategies:

  • The scheme will have two-pronged strategy of Price stabilisation measures (for short term) and Integrated value chain development projects (for long term).

Short term Price Stabilisation Measures

MoFPI will provide 50% of the subsidy on the following two components:

  • Transportation of Tomato Onion Potato(TOP) Crops from production to storage;
  • Hiring of appropriate storage facilities for TOP Crops;

Long Term Integrated value chain development projects:

  • Capacity Building of FPOs & their consortium
  • Quality production
  • Post-harvest processing facilities
  • Agri-Logistics
  • Marketing / Consumption Points
  • Creation and Management of e-platform for demand and supply management of TOP Crops

 

 

 

National Agricultural Cooperative Marketing Federation of India Ltd (NAFED) has four regional offices at which place in India?

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Answer:

  • NAFED has four regional offices at Delhi, Mumbai, Chennai and Kolkata.

Enrich Your Learning:

National Agricultural Cooperative Marketing Federation of India Ltd (NAFED):

  • National Agricultural Cooperative Marketing Federation of India Ltd (NAFED) is an apex organization of marketing cooperatives for agricultural produce in India, under Ministry of Agriculture.
  • Agricultural farmers are the main members of Nafed, who have the authority to say in the form of members of the General Body in the working of Nafed.
  • NAFED is now one of the largest procurements as well as marketing agencies for agricultural products in India. With its headquarters in New Delhi, NAFED has four regional offices at Delhi, Mumbai, Chennai and Kolkata.

Objectives:

  • The objectives of the NAFED shall be to organize, promote and develop marketing, processing and storage of agricultural, horticultural and forest produce, distribution of agricultural machinery, implements and other inputs, undertake inter-state, import and export trade, wholesale or retail as the case may be and to act and assist for technical advice in agricultural, production for the promotion and the working of its members, partners, associates and cooperative marketing, processing and supply societies in India.

 

 

 

What is the SHAKTI Scheme all about?

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Answer:

The SHAKTI Scheme aims to centralise the process of allocating coal to thermal power plants.

Enrich Your Learning:

SHAKTI (Scheme for harnessing & allocating koyla transparently in India):

  • The government has designed coal linkage policy that allocates coal among different coal using thermal power plants, with the active guidance of coal assigned state governments.
  • SHAKTI is the new methodology approved by the government to centralise the process of allocating coal to thermal power plants.
  • According to the SHAKTI policy, power companies will have to get their Power Purchase Agreement (PPAs) amended within 45 days to factor in the lowered cost of coal attained after bids.
  • The Policy would provide coal linkages to power plants which lacks fuel supply agreements (FSAs) through coal auctions.
  • The new coal linkage policy for power plants will help producers ensure fuel supplies in an organised manner.

Benefits of the Policy:

  • Coal available to all Power Plants in transparent and objective manner.
  • Auction to be made the basis of linkage allocations to IPPs; cheaper and affordable Power for all.
  • The Stress on account of non-availability of linkages to Power Sector Projects shall be overcome. Good for the Infrastructure and banking Sector.
  • PPA holders to reduce tariff for linkage; Direct benefit of reduced tariff to Discom/consumers.
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