Below are the suggested answers of UPSC Mains Marathon Current Affairs Questions – August 22.
Note: The suggested answers are indicative only, and not exhaustive.
- Corporate governance is the system of rules, practices and processes by which a company is directed and controlled.
- Corporate governance essentially involves balancing the interests of a company’s many stakeholders.
- Since corporate governance also provides the framework for attaining a company’s objectives, it encompasses practically every sphere of management, from action plans and internal controls to performance measurement and corporate disclosure
- Good corporate governance creates a transparent set of rules and controls in which shareholders, directors and officers have aligned incentives.
- Corporate governance becomes imperative in today’s globalized world where corporations need to access global pools of capital.
- It will provide increase in transparency and accountability of the companies.
- Ensures good growth of the company along with ensuring the trust of the employees on the company.
- Bad corporate governance can cast doubt on a company’s reliability, integrity or obligation to shareholders.
- There is still lack of awareness about its various issues, like
- quality and frequency of financial and managerial disclosure
- roles and responsibilities of Board of Directories, shareholders rights, etc.
- There have been many instances of failure and scams in the corporate sector, like collusion between companies and their accounting firms, presence of weak or ineffective internal audits, lack of required skills by managers, lack of proper disclosures, non-compliance with standards, etc.
- Insider trading
- Problem in the Indian corporate sector is that of disciplining the dominant shareholder and protecting the minority shareholders.
- Many Indian businesses are old family establishments and while controlling shareholders may welcome cash infusions by outside investors, but they may hesitate to relinquish control. It becomes difficult for outsiders to track the business realities of individual companies.
- Noncompliance with disclosure norms and even the failure of auditor’s reports to conform to the law attract nominal fines with hardly any punitive action. The Institute of Chartered Accountants in India has not been known to take action against erring auditors.
- Too many listed companies and directors follow the letter of the law, rather than the spirit.
- For example, a listed company must have a non-executive and one-third of its board should be non-executive directors.
- The nonexecutives should be on the board to challenge management, but in reality they tend not to.
- Despite of regulations some fraudulent activities like sahara case, saradha chit fund case.
- high difference in salaries of management and employees.
There is a need to ensure proper corporate governance strategy in India.The recent appointment of Uday Kotak committee to look into corporate governance strategies is a good step in the right direction.
- Recently Trade facilitation agreement, the first multilateral deal concluded in the 21 year history of the World Trade Organization entered into force by obtaining two-thirds acceptance of the agreement from its 164 members needed to bring the TFA into force.
Trade facilitation agreement of WTO :-
- The TFA aims to simplify customs regulations for the cross-border movement of goods
- .It was outcome of WTO’s 9th Bali (Indonesia) ministerial package of 2013.
- The agreement includes provisions for lowering import tariffs and agricultural subsidies, Reduction in red tape at international borders, abolish hard import quotas.
Major concerns :-
- Other core areas of the Doha work programme such as
- fundamental reform of global agriculture disciplines
- improvements in special and differential flexibilities
- Special safeguard mechanism to protect farmers in the developing world
- Permanent solution for public stockholding programmes were pushed to the back-burner.
- TFA may become tool in hands of developed countries to flood market of developing countries with cheap products.
- Lack of guarantees sought regarding the Special Safeguards Mechanism and the Public Stockholding processes.
- Policy U-turn after decades of opposing the TFA.
- The ratification will supplement India’s ongoing reforms to bring in simplification and enhanced transparency in cross border trade in goods.
- It will further help India to boost economic growth by reducing trade costs and supporting its integration into the global economy.
- The implementation of the TFA has the potential to create US 1 trillion dollars’ worth of global economic activity
- Trade-related issues such as transparency, predictability and efficiency at the ports, faster clearance procedures, and improved appeal rights for traders are to be addressed by countries.
- A WTO study indicated that when the Trade Facilitation Agreement is fully implemented, trade costs for member countries will decrease by an average of 14.3%.
- Exports and imports:
- It is also estimated that the time taken to export and import will come down drastically.
- Implementing the TFA is also expected to help new firms export for the first time. Moreover, once the TFA is fully implemented, developing countries are predicted to increase the number of new products exported by as much as 20 per cent.
- When Make in India programme matures and India becomes a manufacturing hub, TFA will play it’s role in streamlining the export of India’s manufactured goods.
Major impact of trade facilitation agreement on food security :-
- The existing provisions on public stockholding purpose under current WTO rules will not be able to address the real need of developing countries to effectively support their low-income or resource-poor farmers, nor to fight hunger and rural poverty.
- India which is home to about 25 percent of the world’s hungry, has a viewpoint that it is a Government’s responsibility and duty to ensure availability of proper food to its people which is not the stand of TFA or WTO.
- India’s food programme is largely domestic so it doesn’t distort global food trade. The Indian sources say that once the TFA will be implemented it will be difficult to bargain on the food subsidy thing.
- Impact food security, as buffer stocks are to be maintained according to international standards, reducing power of government to use it when the need arise.
- Since the developed nations have not yet implemented the withdrawal of agricultural subsidy TFA may leave the developing nations’ products less competitive
- The large influx of cheap agricultural products from USA and other countries would cripple down the indigenous production of the same.
- India can invoke Special Safeguard Mechanism (SSM) a protection measure allowed for developing countries to take contingency restrictions against agricultural imports that are causing injuries to domestic farmers
- Providing food to poor at subsidised prices is WTO compatible hence there will not be pressure from US and other developed countries.
- India got peace clause against public stock holding limit under WTO rules which will protect farmers interests and food security
India also needs to ensure infrastructure development, market integration reforms, development of demographic dividend, agricultural revolutions (in terms of ensuring low carbon footprint, less water consumption, organic farming) etc. to take the advantage of trade facilitation agreement.
3. It is important that people don’t consider restrictions as mere ‘issues in society’ but as a parasite that is quickly but silently settling and gaining acceptance in India. Do you agree? Comment critically. (GS 1)
- India is known as a country with amalgamation of different cultures,castes,religions etc living in harmony.It is known as one of the most tolerant nations in the world but in the recent years this notion is under threat.
- The implicit argument is that being a Hindu majority society, What majority of Hindus accept has to be acceptable as a norm for everyone.
- For instance with respect to cow slaughter despite meat trade being the livelihood of some of the Muslims and skinning of cows an occupation for some of the dalits they are forced to leave their occupations to abide by the majoritarian rules.
- So the problem about freedom is put aside.
- Experts are concerned with the nationalistic tendencies on rise as people need to prove their patriotism every now and then to vigilantes
- lesser but equally worrying signals are emanating from everywhere spreading the shadows of lack of freedom.
- For instance the working of the censor board by not allowing what is called Indian culture on screen is curbing of artistic freedom.
- Slowly, the ethic of vegetarianism is being extended to formal and semi-formal occasions.
- The attacks on rationalists and Murder of Kalburgi,trolling on social media,patriarchal tendencies in rise showing the growing culture of unfreedom.
- Despite all these instances people don’t react as it is not their problem mistaking that the problem is all ready in their arena.
- New social energies are involving themselves with the task of restricting the freedoms of individuals and groups. There are a legion of self-appointed vigilantes who would define the limits of our freedom.
- There is a growing acceptance of these trends in the society due to the silent attitude of the government ,weak civil society to counter it etc.
- Some restrictions are important to maintain public order,unity and integrity of the country like banning child labour,restrictions on hate speech.
Despite the trends which are intolerant , measures are being taken by some states like Maharashtra against social boycott,National dignity mission,Supreme court judgement on triple talaq to take the Indian society forward.