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Insights Daily Current Events, 28 May 2015

Insights Daily Current Events, 28 May 2015

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Government Notifies Amendments to Companies Act

The government has notified amendments to the Companies Act, which makes it easier to do business and provides for stricter penalties for fraud cases.

  • The amendments, which were passed by Parliament earlier this month, have been made to the Companies Act, 2013, mainly to deal with board resolutions, utilisation of unclaimed dividends and setting up of a firm, among others, as well as to bring the law in tune with global standards.

New Norms:

  • The Act has removed threshold limit for minimum capital required for formation of a private or public sector firm.
  • For setting-up a private company, new Act has done away with the norms of Rs 1 lakh minimum capital requirement and Rs 5 lakh in case of a public sector unit. Besides, the concept of company seal has also been done away with.
  • With regard to acceptance of deposits by the companies, in contravention with regulations, the new law says that if a firm fails to repay the deposit or any interest due thereon within the time specified, it will be “punishable with fine which shall not be less than Rs 1 crore but which may extend to Rs 10 crore” in addition to payment of deposits.
  • In case of dividend, the amended Act said that no company will declare dividend unless “carried over previous losses and depreciation not provided in previous year or years are set off against profit of the company for the current year”.
  • The unclaimed dividend will not be transferred to the Investor Education and Protection Fund.
  • With regard to trying fraud cases, the new norms said that all cases under the Companies Act cannot be tried by a special court and that only serious offences will go to such courts, while the others would be tried by normal magisterial court.
  • The Act has set a threshold limit for auditors to report frauds to central government with rider.
  • The Audit Committee can make omnibus approval for related party transactions proposed to be entered into by the company in case any loan made by a holding company to its wholly-owned subsidiary or any guarantee given by a holding company in respect of any loan made to its wholly-owned subsidiary company among others.
  • Related party transactions can be passed through ordinary resolution instead of special resolution required currently. The amendments were made as there have been complaints from the corporates about the problems ever since the companies law was enacted in 2013.

Sources: The Hindu.

 

Tripura withdraws AFSPA, says insurgency on the wane

The Tripura government has revoked the Armed Forces (Special Powers) Act (AFSPA) as insurgency is on the wane in the State.

  • The repeal of the Act, which has been in force in the State since February 1997, came less than a month after the election to the Tripura Tribal Areas Autonomous District Council.
  • The AFSPA had been in force in the State’s 26 police station areas. In four police station limits, the Act was partially enforced.

Armed Forces (Special Powers) Act:

It is an Act empowering armed forces to deal effectively in ‘Disturbed Areas’. Any area which is declared ‘Disturbed’ under the disturbed areas act enables armed forces to resort to the provisions of AFSPA.

Who declares an area as disturbed?

  • The choice of declaring any area as ‘disturbed’ vests both with state and central government.

Special powers provided to armed forces:

After an area comes under the ambit of AFSPA, any commissioned officer, warrant officer, non-commissioned officer or another person of equivalent rank can use force for a variety of reasons while still being immune to the prosecution.

Ambit:

  • The act was passed on 11 September 1958 by the parliament of India to provide special legal security to the armed forces carrying out operations in the troubled areas of Arunachal Pradesh, Assam, Meghalaya, Manipur, Mizoram, Nagaland, Tripura (seven sisters).
  • In 1990 the act was extended to the state of Jammu and Kashmir to confront the rising insurgency in the area.
  • In Manipur, despite opposition from the Central government, state government withdrew the Act in some parts in Aug, 2004.

The government can declare AFSPA in the following conditions:

  • When the local administration fails to deal with local issues and the police proves inefficient to cope with them.
  • When the scale of unrest or instability in the state is too large for the police to handle.

Legal provisions of AFSPA:

In an area declared, “disturbed” an army officer is legally free to carry out following operations:

  • Fire upon or otherwise use force, even to the causing of death, against any person who is acting in contravention of any law” against “assembly of five or more persons” or possession of deadly weapons.
  • Destroy any shelter (private or govt.) from which armed attacks are made or likely to be made or attempted to be made.
  • Arrest any person without warrant who has committed a cognizable offence or against whom a reasonable suspicion exists that he has committed or is about to commit a cognizable offence.
  • Enter and search, without warrant, any premises for purpose of arrest or to recover any person, arms, explosives.
  • To search and seize any vehicle suspected to be carrying an offender or any person against whom any reasonable suspicion exists that he has or is about to commit an offence.
  • To provide legal immunity to the army personnel found involved in any violation or ethical breach i.e., they cannot be sued or prosecuted.

The decision of the government to declare a particular area ‘disturbed’ cannot be challenged in a court of law.

In 2005 the Jeevan Reddy Commission said that AFSPA should be repealed and the clauses that are required should be included in other Acts.

Sources: The Hindu, PIB, ET, NDTV.

 

PM’s interaction through PRAGATI

The Prime Minister of India recently chaired his third interaction through PRAGATI – the ICT-based, multi-modal platform for Pro-Active Governance and Timely Implementation.

  • Initiating his interaction, the Prime Minister expressed satisfaction that PRAGATI was speeding up decision-making processes in vital projects and important areas of governance. He also said that the spirit of problem-solving and swift implementation, which is being generated through the PRAGATI interactions, is gradually spreading to all areas of governance.

PRAGATI:

PRAGATI is a unique integrating and interactive platform. The platform is aimed at addressing common man’s grievances, and simultaneously monitoring and reviewing important programmes and projects of the Government of India as well as projects flagged by State Governments.

Unique features:

  • The PRAGATI platform uniquely bundles three latest technologies: Digital data management, video-conferencing and geo-spatial technology.
  • It also offers a unique combination in the direction of cooperative federalism since it brings on one stage the Secretaries of Government of India and the Chief Secretaries of the States.
  • With this, the Prime Minister is able to discuss the issues with the concerned Central and State officials with full information and latest visuals of the ground level situation. It is also an innovative project in e-governance and good governance.
  • It is a three-tier system (PMO, Union Government Secretaries, and Chief Secretaries of the States).
  • Prime Minister will hold a monthly programme where he will interact with the Government of India Secretaries, and Chief Secretaries through Video-conferencing enabled by data and geo-informatics visuals.
  • Issues to be flagged before the PM are picked up from the available database regarding Public Grievances, on-going Programmes and pending Projects.
  • The system will ride on, strengthen and re-engineer the data bases of the CPGRAMS for grievances, Project Monitoring Group (PMG) and the Ministry of Statistics and Programme Implementation. PRAGATI provides an interface and platform for all these three aspects.
  • It will also take into consideration various correspondences to PM’s office by the common people or from high dignitaries of States and/or developers of public projects.
  • It is also a robust system for bringing e-transparency and e-accountability with real-time presence and exchange among the key stakeholders.
  • The system has been designed in-house by the PMO team with the help of National Informatics Center (NIC).

Sources: PIB.

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