Q.1) The Companies (Amendment) Bill, 2017 recently passed by the Parliament will ensure better corporate governance. Discuss (GS 3)
Ans) The term ‘Corporate governance’ is the mechanisms, processes and relations by which corporations are controlled and directed. It includes rules and procedures for making decisions in corporate affairs. Corporate governance includes the processes through which corporations objectives are set and pursued in the context of the social, regulatory and market environment.
The Parliament has passed Companies (Amendment) Bill, 2017 to strengthen corporate governance standards, initiate strict action against defaulting companies and help improve ease of doing business in the country.
The Bill will ensure better corporate governance through the following ways.
- Group company structure and compliance procedures: The bill has changed definitions relating to ‘holding company’, ‘subsidiary company’ and ‘associate company’. It will have impact on group company structure and compliance procedures.
- Compliance procedures and approval mechanism: It enhances scope of compliance procedures and approval mechanism of Related Party Transaction of related parties.
- Shares on private placement basis: It amends this provision in parent Act. It will have impact on both – private companies and public companies.
- Maintenance of Register of significant beneficial owners in a company: The bill adds this new provision. Besides, changes provisions relating to board meetings and shareholders’ meetings, based on operational and compliance issues faced by the corporate.
- Corporate Social Responsibility (CSR): The amendment to CSR provisions are particularly related to its applicability and constitution of CSR. It takes into account the interpretational and operational issues.
- Resident Director and Independent Director: It provides for clarity in applicability and role of Resident Director and Independent Director. Further it elaborated ‘Pecuniary relationship’ in relation to independent directors.
- Loans to Directors: The bill substitutes entire section relating to ‘Loans to Directors’ under the Companies Act, 2013. It introduces certain checks and balances by way of approval process and for enabling ‘loans to directors’, in certain cases.
- Managerial Remuneration: It liberalises provision related to Managerial Remuneration. It replaces requirement of Central Government approval by requirement of approval of shareholders, secured creditors and non-convertible debenture holders, as the case maybe.
- Auditors Report: It mandates requirement that Statutory Auditor of company to report in its Auditors Report on compliance of provisions of managerial remuneration and whether remuneration paid to any director is in excess of prescribed limits.
Q.2) The Union Cabinet has recently approved the establishment of International Training Centre for Operational Oceanography in Hyderabad. In this context discuss the meaning of the Operational Oceanography . How this move will help India to emerge as a leading country in the Indian Ocean?
Ans) The Union Cabinet has approved the establishment of International Training Centre for Operational Oceanography, as a Category-2 Centre (C2C) of UNESCO, in Hyderabad. The purpose of this Agreement is to establish a training centre towards development of capacity for the countries on the Indian Ocean Rim (IOR), African countries bordering the Indian and Atlantic Oceans, small island countries under the framework of UNESCO.
What is operational oceanography?
- The operational oceanography is an activity of conducting systematic oceanographic studies towards providing information services to various sectors viz. fisherman, disaster management, shipping, ports, coastal states, navy, coast guard, environment, offshore industries for conducting their day-to- day operations.
- The establishment of UNESCO Category-2 Centre will provide an opportunity for India to emerge as a leading country in the Indian Ocean.
- This will also help India to forge cooperation and improve engagement among the counties of the Indian Ocean, including South Asian and African states bordering the Indian Ocean.
- The establishment of the centre would respond to the worldwide increasing need to build technical and management capacity to address marine and coastal sustainability issues and prepare the region for and react efficiently to marine natural hazards.
- The Centre could contribute to achieving Sustainable Development Goal-14 (SDG 14) related to building marine scientific research capacity in geographical area of the Centre responsibility which will also fulfill the commitments to support Small Island Developing States, Least Developed Countries.
- The establishment of C2C is also expected to increase ancillary development leading to employment generation in India.
Q.3) “Introduction of GM crops needs a balance between benefits and challenges”- comment.
Genetically modified crops are plants used in agriculture, the DNA of which has been modified using genetic engineering methods.
Benefits of GM crops:
- Insect / pest resistance
- Disease resistance – Plants can be genetically modified to be resistant to bacterial, fungal or viral infestation.
- Crops that can withstand environmental stresses – (e.g. drought, heat, frost, acid or salty soil)
- Herbicide tolerance – Plants can be genetically modified to be tolerant to a specific weedkiller.
- Improved nutritional value – Crops can be genetically modified to contain additional nutrients that are lacking from the diets of many people in developing countries.
- Biopharmaceuticals – Plants could be genetically modified to produce vaccines or other medicines.
Challenges of GM Crops:
- Health impact – studies cite animal studies showing organ damage, gastrointestinal and immune system disorders, accelerated aging, and infertility.
- GMOs cross pollinate and their seeds can travel. It is impossible to fully clean up our contaminated gene pool.
- Most GM crops are engineered to be “herbicide tolerant”―they deadly weed killer. They increase herbicide tolerance.
- By mixing genes from totally unrelated species, genetic engineering unleashes a host of unpredictable side effects.
- Most of the health and environmental risks of GMOs are ignored by governments’ superficial regulations and safety assessments.
- GM crops and their associated herbicides can harm birds, insects, amphibians, marine ecosystems, and soil organisms.
Q.4) What is RCEP? What were India’s concern for recent RCEP talks held in singapore? How can India benefit from it? Comment.
Answer: Regional Comprehensive Economic Partnership (RCEP) is a proposed free trade agreement (FTA) between the ten member states of the ASEAN and their six Free Trade Partners.
- Trade deficit with ten of the RCEP countries, particularly with China with whom India has a huge trade imbalance.
- As the tariff levels in the important RCEP markets are already low, it may affect Indian industry. Major sectors that may be impacted include steel, plastics, copper, aluminium, machine tools, chemicals, textiles and pharma, which would suffer from cheaper imports.
- Agri products – the huge concessions being sought by Australia in agri products can be an extremely sensitive issue for India’s farmers.
- India has been emphasising the need for a balanced agreement through access to services market and investments. Services are India’s major trade strength, and it enjoys a 3% share in global services exports.
- Indian industry has raised its concerns about tariff concession to China.
How can India benefit:
- It complements India’s existing FTAs with ASEAN nations. It will address the issues of multiple agreements by streamlining rules and regulations.
- It boosts trade with ASEAN countries.
- It gives a direction to India’s Act East policy and benefits the North Eastern states.
- It strengthens India’s integration with regional supply chains of the East Asia.
- If given access, Indian service exports get a boost due to the might of India in services.