Daily News Analysis 3rd November 2018

Daily News Analysis (Prelims + Mains) – 3rd November 2018

General Study – II

Topic

Government policies and interventions for development in various sectors and issues arising out of their design
and implementation.

Companies Act Amendment (Ordinance), 2018

President gives assent to promulgation of the Companies Amendment (Ordinance), 2018.

The Ordinance, which has been promulgated is based on the recommendations of the Committee appointed by the Government to review offences under the Companies Act, 2013.

The twin objectives of the Ordinance are

• Promotion of Ease of Doing Business
• Better corporate compliance.

The main amendments are

• Shifting of jurisdiction of 16 types of corporate offences from the special courts to in-house adjudication, which is expected to reduce the case load of Special Courts by over 60%, thereby enabling them to concentrate on serious corporate offences.
• The penalty for small companies and one-person companies has been reduced to half of that applicable to normal companies.
• Instituting a transparent and technology driven in-house adjudication mechanism on an online platform and publication of the orders on the website.
• Strengthening in-house adjudication mechanism by necessitating a concomitant order for making good the default at the time of levying penalty, to achieve the ultimate aim of achieving better compliance.
• Strengthening the National Company Law Tribunal by

1. Enlarging the pecuniary jurisdiction of Regional Director by enhancing the limit up to Rs. 25 Lakh as against earlier limit of Rs. 5Lakhunder Section 441 of the Act;
2. Giving the Central Government the power to approve the alteration in the financial year of a company under section 2(41); and
3. Giving the Central Government the power to approve cases of conversion of public companies into private companies.

Indian Companies Act 2013

It is milestone legislation with far-reaching consequences on all companies incorporated in India and it replaced the Indian Companies Act, 1956.

The Companies Act 2013 makes detailed provisions to govern all listed and unlisted companies in the country.

Key features of Indian Companies Act 2013

• Maximum number of members (shareholders) permitted for a Private Limited Company is increased to 200 from 50.
• The concept of dormant companies introduced. dormant companies are companies which not engaged in business for two consecutive years.
• Concept of One-Person company introduced.
• Section 135 of the Act which deals with compulsory provision for constitution of Corporate Social Responsibility (CSR) committee and formulation of CSR policy.
• Company Law Tribunal and Company Law Appellate Tribunal.
• Companies Act, 2013 has put a cap on the number of directorships up to 20 companies of which 10 can be public companies.
• National Financial Reporting Authority (NFRA).

General Study – III

Topic:

Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth

MSME Support and Outreach Programme

The Prime Minister launches the MSME Support and Outreach Programme.

It will run for 100 days covering 100 Districts throughout the country.

Various Central Ministers will visit these districts in order to apprise the entrepreneurs about various facilities being extended to MSME Sector by the Government and financial institutions.

Outreach Programme will help in boosting the MSME sector since this sector is one of the major generators of employment opportunities and making a significant contribution to the overall growth of the economy.

In India Nearly, 90 percent of the industrial units belong to this MSME sector, it has around 40 percent of India’s workforce. MSME sector produces more than 8000 products ranging from traditional to high-tech items.

PM unveiled 12 key initiatives are

• 59-minute loan portal to enable easy access to credit for MSMEs. Up to Rs. 1 crore can be granted in-principle approval through this portal, in just 59 minutes.
• 2 percent interest subvention for all GST registered MSMEs, on fresh or incremental loans. For exporters who receive loans in the pre-shipment and post-shipment period an increase in interest rebate from 3 percent to 5 percent.
• All companies with a turnover more than Rs. 500 crores must now compulsorily be brought on the Trade Receivables e-Discounting System (TReDS). Joining this portal will enable entrepreneurs to access credit from banks, based on their upcoming receivables. It will resolve their problems of cash cycle.
• Mandatory 25 percent procurement from MSMEs by CPSEs
• Encouraging women entrepreneurs. Out of the 25 percent procurement mandated from MSMEs, 3 percent must now be reserved for women entrepreneurs.
• All public sector undertakings of the Union Government must now compulsorily be a part of GeM. PSU’s should also get all their vendors registered on GeM.
• 20 hubs will be formed across the country, and 100 spokes in the form of tool rooms will be established. For technological upgradation, tool rooms across the country are a vital part of product design.
• Clusters will be formed of pharma MSMEs. 70 percent cost of establishing these clusters will be borne by the Union Government.
• Simplification of government procedures. Return under 8 labour laws and 10 Union regulations must now be filed only once a year.
• Establishments to be visited by an Inspector will be decided through a computerized random allotment.
• As part of establishing a unit, an entrepreneur needs two clearances namely, environmental clearance and consent to establish. Therefore, under air pollution and water pollution laws, now both these have been merged as a single consent and return will be accepted through self-certification.
• Ordinance for simplifying procedures for minor offences under Companies Act

These initiatives mainly concentrated on Access to Credit, Access to Markets, Technology Upgradation, Ease of Doing Business and Social Security for MSME Sector Employees.

Topic for Prelims

U.S. sanctions waiver

• India to get U.S. sanctions waiver on Iran oil import.
• Eight countries will be given exemptions and “weeks longer to wind down” their trade with Iran, once U.S. sanctions against Iran kick in on November 5.
• European Union (EU) — which consists of 28 countries including the U.K. — will not be granted a temporary exemption.

Swine Flu

• Bangalore city has experiencing rise in H1N1 cases.
• It has been due to fluctuations in weather and increased allergen and pollen load.

About Swine Flu

• It is human respiratory infection caused by an influenza strain that started in pigs.
• Swine flu virus was first isolated from pigs in 1930 in the U.S. and has been recognized by pork producers and veterinarians as it caused infections in pigs worldwide.
• In 2009 swine flu first seen in Mexico, termed as H1N1 flu since it was mainly found infecting people and exhibits two main surface antigens, H1 (hemagglutinin type 1) and N1 (neuraminidase type1).
• The eight RNA strands from novel H1N1 flu have one strand derived from human flu strains, two from avian (bird) strains, and five from swine strains.
• Symptoms of swine flu in humans are similar to most influenza infections like high fever, cough, nasal secretions, fatigue, and headache.
• It is transmitted disease spreads from person to person contact through coughing and sneezing
• Disease lasts about three to seven days with more serious infections lasting about nine to 10 days.
• Vaccination is the best way to prevent or reduce the chances of becoming infected with influenza viruses.
• Flu in most serious condition lead to pneumonia.
• Antiviral medicanes like zanamivir (Relenza) and oseltamivir (Tamiflu), helps prevent or reduce the effects of swine flu if taken within 48 hours of the onset of symptoms.