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SECURE SYNOPSIS: 15 February 2020


NOTE: Please remember that following ‘answers’ are NOT ‘model answers’. They are NOT synopsis too if we go by definition of the term. What we are providing is content that both meets demand of the question and at the same time gives you extra points in the form of background information.


 

1. Discuss the historical and current engagements of India with Africa. Why is Africa important for India? (250 words)

Reference: Hindustan Times

Introduction:

India and Africa have a long and rich history of interaction marked by cultural, economic and political exchanges based on the principle of south cooperation. In the recent years a number of steps have been taken to further strengthen these relations. The foundations were laid by Mahatma Gandhi. According to him, there will be a “commerce of ideas and services and not of raw materials and goods like imperialist powers”. The present government continues to take this approach as the foundation of India’s Africa Policy.

The historical engagements of India with Africa:

  • India’s relationship with South Africa is both fundamental and unique, dating back several centuries and is anchored in common ideals, ideas, interests, and icons – like Mahatma Gandhi and Nelson Mandela
  • Historically, India has been part of Africa’s movement of self-rule, growth story, development and capacity building which are marked by mutual respect and affection at the grass-roots level. Indian diaspora has been instrumental in the developmental journey of the continent over four-to-five generations
  • No wonder Africa gifted Mahatma Gandhi back to India transforming him from a mere Barrister to an intrepid fighter against injustice and colonialism.
  • Even though India has stood for the cause of Africa since her own independence and even before that its concerted engagement has been somewhat ad hoc in nature until she decided to institutionalize the cooperation through India-Africa Forum Summits (IAFS) when specific targets were established and a SWOT analysis was done.
  • Last IAFS witnessed the largest ever participation from 54 countries at the highest level when major announcements for Lines of Credits, Grants and Capacity Building programmes were announced.
  • The idea of a shared historical experience marked by Western exploitation, is an important factor in the relationship.
  • India as a previous British colony shares a history of anti- colonial struggle with Africa.
  • It was also the first country to take the issue of racial discrimination in South Africa to the United Nations. At the same time, India was a forerunner as a champion of the interests of the developing countries, including those from Africa, particularly through the Bandung Declaration of 1955, the Group of 77, and the NonAligned Movement (NAM).

Nature of the relationship so far:-

  • India’s Africa policy over the past few decades has oscillated between passive and reluctantly reactive at best. Strategic apathy toward the continent was obvious on many fronts.
  • Most of the countries in Africa did not feature in India’s larger foreign policy matrix, but until recently there wasn’t any significant attention paid to the continent.
  • Indian leaders seldom travelled to African nations.
  • The narrative of India’s contemporary relationship with Africa is dominated by the historicity of their interactions.,the century old trade partnerships, socio-cultural linkages built by a thriving diaspora, nationalist movements during the Nehruvian era that supported anti-imperial struggles, and shifting geopolitical tides with the Non-Alignment Movement (NAM).
  • Beyond this rhetoric, what kept driving this relationship forward was the acquisition of critical assets by State Owned Enterprises (SOE) looking to diversify the energy basket away from West Asian nations and other commercial ventures by Small and Medium Enterprises (SME) and Multi-National Companies (MNC).

Importance of Africa for India:

Geostrategic:

  • Africa is critical to India’s security, especially the Horn of Africa region, because of its proximity with India. The threat of radicalism, piracy, organized crime emerge from this region

Economic:

  • Africa can help us in diversifying our energy sources, which is one of the stated objective of our Integrated Energy Policy
  • Africa also contains rich reservoir of valuable minerals, metals including gold and diamond
  • Africa provides a space for Indian investment
  • Africa has ample agricultural land which cab address India’s food security. India is looking at leasing land in Africa to overcome the land deficit that we face in terms of arable land

Geopolitical:

  • Support of African countries is important for India’s aim of gaining a permanent seat in UNSC
  • Africa provides a space for displaying both India’s soft and hard power
  • India has been actively involved in peace and stability of African countries through UN Peace keeping operations. India is involved in capacity building of African countries. Africa is also the largest beneficiary of India’s ITEC programme

The relationship changed and there are areas where both India and Africa can work together:

  • Currently, India’s forte in the continent has been developmental initiatives such as Indian Technical and Economic Cooperation (ITEC), Team 9, and Pan Africa e-network among others are aimed at building institutional and human capacity as well as enabling skills and knowledge transfer.
  • Conscious attempt at evoking morality to reflect an “alternate model of development” by using terms such as “win-win cooperation” to describe New Delhi’s approach to Africa.
  • One of the new trends in this relationship has also been the role played by sub-national organizations and state governments that have been crafting independent relationships with African counterparts.
  • For example, Kerala is planning on importing Cashew from African countries for its processing plants that are running low on raw material.
  • Similarly, Ethiopia and South Africa are working with Kudumbashree, a self-help group created by the Government of Kerala aimed at eradicating poverty and empowering women, to find ways to localize and adapt the model in their respective countries.
  • A unique factor that sets Indian interactions apart is that there is palpable goodwill for people of Indian origin, a sense of familiarity and cultural connection, with Bollywood movies and songs often acting as a bridge.

China role:-

  • Whereas India’s policy has focused on job creation in the countries it has invested in, China has tended to bring in its own labour causing resentment among the locals.
  • The Chinese model has often been criticised for creating huge debts for the nation in which it sets up projects, the Nairobi-Mombasa rail link being one example of this.
  • The $ 4 billion project has left Kenya with enormous debts and the Chinese military base in Djibouti has raised fears that Beijing is abandoning its non-interference policy in the region

Role of Indian businesses:-

  • Indian businesses are active across geographic spaces and sectors in Africa. Agri-business, engineering, construction, film distribution, cement, plastics, and ceramics manufacturing, advertising, marketing, pharmaceuticals, and telecommunication are only some of the sectors that have Indian players.

Way Forward:

  • First, we need to take direct control of our development programme instead of handing our funds to intermediaries whose priorities are often different from India’s.
  • To make an impact, our aid should be disbursed bilaterally and aligned with national priorities of the recipient state, which should be a substantial stakeholder and co-investor in schemes and projects from initiation to operation.
  • Second, India’s development assistance should prefer the countries with its substantial interests, both existing and potential.
  • For instance, Nigeria, South Africa, Egypt, Ghana, Angola and Algeria are India’s top six trading partners in Africa, accounting for nearly two-thirds of its trade and half its exports to the continent; yet, they do not figure commensurately in India’s developmental pecking order.
  • India’s own needs for raw materials, commodities and markets should be factored in its aid calculus.
  • Third, we ought to prefer aiding countries which are willing to help us from access to their natural resources to using our generics.
  • Fourth, the aided project selected should be compatible with local requirements. They should be cost-effective, scalable, future ready and commercially replicable.
  • Fifth, for greater transparency, India should prefer its public sector to implement the aid projects.
  • Sixth, the Indian Head of Mission in the recipient African state must be an integral part of the aid stream including project selection, co-ordination and implementation.
  • Apart from empowering our diplomacy, this would ensure better harmonization between our aid and economic objectives.
  • Finally, the aforementioned should not distract us from our duty to provide the needed humanitarian assistance to Africa: to be rendered promptly and with sensitivity, but without noise.

Conclusion:

The goodwill that our country draws from such linkages is unimaginable. Our partnership with Africa is beyond strategic concerns and economic benefits. It is based on the emotional bonds we share and the solidarity we feel.PM Modi, in his speech to Ugandan Parliament in 2019 has said that India’s priority is not just Africa; India’s priority is Africans — every man, woman and child in Africa. Our shared values and our friendship represent a constant as well as ignite a continuity.

 

2. What is the purpose of a protest? Explain the significance of the right to protest in a democracy, Illustrate with cases specific to Indian context.(250 words)

Reference: India Today

Introduction:

Protests play an important part in the civil, political, economic, social and cultural life of all societies. Historically, protests have often inspired positive social change and the advancement of human rights, and they continue to help define and protect civic space in all parts of the world.

Purpose of a protest:

  • Protests encourage the development of an engaged and informed citizenry.
  • They strengthen representative democracy by enabling direct participation in public affairs.
  • They enable individuals and groups to express dissent and grievances, to share views and opinions, to expose flaws in governance and to publicly demand that the authorities and other powerful entities rectify problems and are accountable for their actions.
  • A clear issue or problem is identified.
  • A symbol of some kind is used to shine a bright light on the issue and to galvanize support.
  • The protest is conducted peaceably.
  • The issue and the proposed solution are communicated clearly (i.e. what the protestors want and how to get it).

Right to protest:

The right to protest is a human right arising out of a number of recognized human rights. While no human rights instrument or national constitution grants the absolute right to protest, such a right to protest may be a manifestation of the right to freedom of assembly, the right to freedom of association, and the right to freedom of speech. Additionally, protest and restrictions on protest have lasted as long as governments have.

The significance of the right to protest in a democracy:

  • Convinced that protests constitute a fundamental pillar of democracy and complement the holding of free and fair elections;
  • Recalling that protests occur in all societies, as people stand up for their civil, political, economic, cultural and social rights, struggle against repression, fight against poverty, protect the environment or demand sustainable development, and thereby contribute towards progress;
  • Bearing in mind that participating in protests enables all people to individually and collectively express dissent and seek to influence and strengthen governments’ policymaking and governing practices, as well as the actions of other powerful entities in society;
  • Highlighting that the right to protest embodies the exercise of a number of indivisible, interdependent and interconnected human rights, in particular the rights to freedom of expression, freedom of peaceful assembly and of association, the right to take part in the conduct of public affairs, the right to freedom of thought, conscience and religion, the right to strike, the right to take part in cultural life, as well as the rights to life, privacy, liberty and security of the person, and the right to freedom from discrimination;
  • Recognizing that a free and independent media and digital technologies are essential for ensuring the public is informed about protests and their context, for facilitating and organising protests, for enabling the free flow of information between all actors concerned in protests, and for monitoring and reporting on violations;
  • Acknowledging that digital technologies and the internet also provide a platform for online protests.
  • Emphasizing the invaluable role of civil society, including journalists and human rights defenders, in protests, including through their organisation and mobilisation of others, and by documenting, reporting on, and demanding accountability for violations of the rights of protesters;
  • Expressing our abhorrence at brutal repression against many protests, including the unnecessary, excessive and unlawful use of force, arbitrary detention, enforced disappearances, torture, summary executions or extrajudicial killings;
  • Deeply concerned by legal, policy and law enforcement measures that deter, prevent or obstruct protests, including detention, harassment and intimidation, and disproportionate criminal, administrative and civil sanctions against protesters;
  • Cognizant that the development of surveillance technologies and the data retention capabilities of both public authorities and private actors may violate the human rights of protesters and have a chilling effect on protests generally;
  • Desiring to demand that governments fulfil their obligation to respect, protect and facilitate the enjoyment of the right to protest without discrimination of any kind, to avoid unlawful, unjustified or unnecessary restrictions, and to ensure accountability for violations; and to encourage private entities to meet their responsibilities in this regard.

Examples of Successful protests:

 Nirbhaya Movement, 2012

The 2012 Delhi gang rape incident saw one of the angriest reactions from people who were very clear on expressing that they have had enough. After the incident, thousands came out on streets to protest in several parts of the country. The movement also created a stir in social media. Taking the movement into consideration, the government at the centre and various states announced several steps to ensure the safety of women.

Anti-Corruption Movement by Anna Hazare, 2011

When anti-corruption activist Anna Hazare began a hunger strike at Jantar Mantar in New Delhi on April 5, 2011, the movement led to the resignation of Agriculture Minister Sharad Pawar from the group of ministers that had been charged with reviewing the draft Jan Lokpal bill. The initiative brought together a huge number of people, making it a one-of-its-kind event in decades.

Conclusion:

During points of widespread tension or controversy within a society, it is important for government institutions to recognize this right. A democracy’s ability to preserve its citizen’s right to protest is a result of that democracy’s “political health.

 

3. What steps has Indian been taking to protect itself from the menace of drug trafficking? Elaborate on the measures it is taking to  realise its vision of a Drug-free India.(250 words)

Reference: News On Air

Background:-

  • The drug trafficking scenario in India is largely attributed to various external and internal factors.
  • One of the prime external factors happens to be India’s close proximity to the major opium producing regions of South West and South East Asia known as the ‘Golden Crescent’ and the ‘Golden Triangle’, respectively.
  • The geographical location of India as such, makes it vulnerable to transit, trafficking and consumption of Opium derivatives in various forms along the known trafficking routes.
  • The major internal factors responsible are illicit cultivation of Poppy and the diversion from the licit Opium sources into illicit production in interior areas.

Major trends and patterns

  • Trafficking of Heroin from South West Asia to India and then from India to Sri Lanka, Maldives and other western countries.
  • Trafficking of hashish and cannabis from Nepal to India.
  • Suspected diversion of opium from licit cultivations and indigenous production of low quality Heroin.
  • Illicit cultivation of opium poppy.
  • Wild growth of cannabis.
  • Diversion of precursor chemicals and other controlled substances.
  • Diversion of pharmaceutical preparations and prescription drugs containing psychotropic and controlled substances and their smuggling to neighbouring countries.
  • Trafficking of drugs through illicit internet pharmacies and misuse of courier services.
  • Involvement of foreign nationals in trafficking and distribution networks.
  • Trafficking of Ketamine, an anaesthetic, from India to certain destinations in South East Asia.
  • Emergence of new psychoactive substances like Mephedrone in the country.

Steps has Indian been taking to protect itself from the menace of drug trafficking:

The Government has taken several policy and other initiatives to deal with drug trafficking problem.

  • It constituted Narco-Coordination Centre (NCORD) in November, 2016 and revived the scheme of “Financial Assistance to States for Narcotics Control”.
  • In 2017, the government approved new Reward Guidelines with increased quantum of reward for interdiction or seizure of different illicit drugs.
  • For effective coordination with foreign countries, India has signed 37 Bilateral Agreements/Memoranda of Understanding.
  • Narcotics Control Bureau has been provided funds for developing a new software i.e. Seizure Information Management System (SIMS) which will create a complete online database of drug offences and offenders.
  • The government has constituted a fund called “National Fund for Control of Drug Abuse” to meet the expenditure incurred in connection with combating illicit traffic in Narcotic Drugs; rehabilitating addicts, and educating public against drug abuse, etc.
  • The government is also conducting National Drug Abuse Survey to measure trends of drug abuse in India through Ministry of Social Justice & Empowerment with the help of National Drug Dependence Treatment Centre of AIIMS.
  • The Narcotic Drugs and Psychotropic Substances Act, 1985, prohibit a person to produce, possess, sell, purchase, transport, store, and/or consume any narcotic drug or psychotropic substance. The NDPS Act has since been amended thrice – in 1988, 2001 and 2014. The Act extends to the whole of India and it applies also to all Indian citizens outside India and to all persons on ships and aircraft registered in India.

Status of drug de-addiction centres:

  • Rampant irregularities and torture of inmates are prevalent at New Delhi’s de-addiction centres.
  • An inspection report submitted by Delhi State Legal Services Authority (DSLSA) revealed how inmates are being ill-treated, subjected to sexual and physical torture, asked to perform sexual favours, and not allowed to contact their families.
  • Most of the centres do not have adequate infrastructure, including toilets and ventilation.
  • The report also alleged some inmates have allegedly died from the torture they were subjected to.
  • The right of basic human dignity of persons desperately in need of care and treatment is being violated with impunity.
  • Violations of fundamental rights to life, liberty and dignity, as enshrined in Article 21 of the Constitution.
  • There are unauthorised and illegally run centres, charging money and subjecting such persons to inhumane and degrading treatment.

Concerns / Challenges:

  • The alarming increase of alcohol and drug addiction.
  • Drug abuse has become common in children and adolescents and causes serious ramifications on their physical and mental health and overall wellbeing.
  • The non-availability of government sponsored de-addiction centres is paving way for private centres to exploit patients.
  • Instead of medical care, “punishments” are meted out to patients, inflicting severe torture and, in some cases, causing death.
  • People seem to forget that drug users are human beings first. By using drugs a person doesn’t cease to be human.
  • Those who become chronic drug abusers have rare chances of complete de-addiction.
  • Proximity to the largest producers of heroin – the Golden Triangle and Golden Crescent (Afghanistan-Pakistan-Iran) -has made India’s border vulnerable to drug trafficking.

Way forward:

  • Prevention and solid support are the ways in which drug abuse can be dealt with.
  • Prevention programmes involving families, schools and the immediate communities are important in this regard.
  • Government must notify minimum standards for running de-addiction centres.
  • Fast track courts.
  • Integrating drug de-addiction centre’s with rehabilitation centres.
  • Unlicensed centres and those committing human rights violations must be liable to closure.
  • A chapter on the impact of drug abuse should be included in school curriculum so that children understand how addiction destroys lives of people.
  • Focused sensitisation programmes on drug abuse in schools and a substance abuse policy could go a long way in curbing the menace.
  • Parents must consult specialists in case there is change in behaviour of their children as it could be signs of drug abuse.

 

4. The United States Trade Representatives (USTR) has updated its list of developing and least-developed countries, removing India from the list of countries that are designated as developing, what does this indicate for India? Discuss and elaborate on the pros and cons.(250 words)

Reference: Indian Express

(USTR) has updated its list of developing and least-developed countries

Introduction:

The Office of the United States Trade Representative (USTR) has published a notice, amending lists of developing and least-developed countries that are eligible for preferential treatment with respect to countervailing duties (CVDs) investigations. It updated to removing India from the list of countries that are designated as developing. Other countries that were removed from the list include Thailand, Vietnam, Brazil, Indonesia and Malaysia. India was taken off the list also because — like Argentina, Brazil, Indonesia and South Africa — it is part of the G20. Given the global economic significance of the G20, and the collective economic weight of its membership (which accounts for large shares of global economic output and trade), G20 membership indicates that a country is developed.

USTR list of developing and least-developed countries:

To harmonise U.S. law with the World Trade Organization’s (WTO) Subsidies and Countervailing Measures (SCM) Agreement, the USTR had, in 1998, come up with lists of countries classified as per their level of development.

  • These lists were used to determine whether they were potentially subject to U.S. countervailing duties.
  • The de minimis (too small to warrant concern) thresholds and import volume allowance are more relaxed for developing and least-developed countries.
  • The de minimis standard is usually a subsidy of 1% or less ad valorem and 2 percent for special cases.
  • The 1998 rule is now “obsolete” as per the USTR notice.

Negligible import volumes:

  • If a country’s goods constitute less than 3% of all imports of that good into the U.S., it meets the ‘negligible import volumes’ standard. For special cases it is 4%.
  • Imports do not meet the standard, if, individual volumes are less than 3% (special cases: 4%) but the aggregate volume of imports into the U.S. is 7% of all such goods.

Criteria:

The USTR used the following criteria to determine whether a country was eligible for the 2% de minimis standard:

  • Per capita Gross National Income or GNI
  • share of world trade
  • Other factors such as Organization for Economic Co-operation and Development (OECD) membership or application for membership, EU membership, and Group of Twenty (G20) membership.

Impact on India:

  • India was, until February 10, on the developing country list and therefore eligible for these more relaxed standards. It has now been taken off of that list.
  • Countries not given special consideration have lower levels of protection against a CVD investigation.
  • This will now make it easier for it to impose countervailing duties (CVDs) on goods from India.
  • The move has cast a shadow on India being able to restore preferential benefits under the Generalised System of Preference (GSP) as part of its trade talks with the US, as only developing countries are eligible for it.
  • India is no longer a developing country and its hopes of getting GSP may not materialise as it doesn’t qualify to get the benefits

Out_of_Benefit

Conclusion:

Despite having a minimal impact on India’s overall outbound trade with the US, specific exports from India in a diverse set of sectors such as jewellery, leather, pharmaceuticals, chemicals and agricultural products may face higher costs and competition.

 

5. What are Orphan diseases? Discuss the challenges involved in the treatment of such diseases. Explain in the context of India whether the State should be responsible for such treatments.(250 words)

Reference: Hindustan Times

Introduction:

A rare disease, also referred to as an orphan disease, is any disease that affects a small percentage of the population. Most rare diseases are genetic, and are present throughout a person’s entire life, even if symptoms do not immediately appear. In Europe a disease or disorder is defined as rare when it affects less than 1 in 2000 citizens.

Characteristics:

  • Rare diseases are characterised by a wide diversity of symptoms and signs that vary not only from disease to disease but also from patient to patient suffering from the same disease. Relatively common symptoms can hide underlying rare diseases, leading to misdiagnosis.
  • The most common rare diseases recorded in India are Haemophilia, Thalassemia, sickle-cell anaemia and primary immuno deficiency in children, auto-immune diseases, Lysosomal storage disorders such as Pompe disease, Hirschsprung disease, Gaucher’s disease, Cystic Fibrosis, Hemangiomas and certain forms of muscular dystrophies.

Challenges involved in the treatment of such diseases

  • Rare diseases pose a significant challenge to health care systems because of the difficulty in collecting epidemiological data, which in turn impedes the process of arriving at a disease burden, calculating cost estimations and making correct and timely diagnoses, among other problems.
  • Many cases of rare diseases may be serious, chronic and life-threatening. In some cases, the affected individuals, mostly children, may also suffer from some form of a handicap.
  • As per the 2017 report, over 50 per cent of new cases are reported in children and these diseases are responsible for 35 per cent of deaths in those below the age of one, 10 per cent of deaths between the ages of one and five, and 12 per cent between five and 15.
  • Pharmaceutical companies don’t have satisfactory commercial incentives to develop treatments because the small number of patients does not present an opportunity to recoup their research and development costs
  • For this reason, where treatments have been developed, the price of the treatments is astronomical.
  • For instance, for the treatment of Gaucher’s Disease, only three companies in the world manufacture lifesaving enzyme-replacement therapy, which costs anywhere between ~7 lakh to ~10 lakh per dose, with each patient requiring a dose every one or two months. The treatment is lifelong, and the inability to receive it could mean death.

State should be responsible for such treatments:

  • State has responsibility for providing affordable, accessible and reliable health-care services to every citizen. In fact constitution also mentions importance of health-care services under articles like 21, 38 and 47 and thus state cannot evade this responsibility under the pretext of non-justifiability of articles.
  • Given the low volumes at which the drugs needed to treat such diseases would be consumed, pharmaceutical companies have little commercial incentive to produce them. Thus, a nationwide policy on orphan drugs could incentivize these players.
  • Even if pharmaceutical companies are incentivized to develop drugs to treat rare diseases, pharmaceutical companies remain beholden to the laws of economics and, given the low demand for orphan drugs, price these drugs as high as they choose to. Hence there has to be regulation of the government in restricting the exorbitant prices of the drugs.
  • Although proportion of rare diseases is much less than the other diseases, it does not reduce the importance of the life of person affected by rare diseases. Thus national policy would remove this adverse distinction and would make government committed equally to all people.
  • Over the past few years, this agonising decision, the one between life and death, has entered courtrooms in India. In the case of Mohd Ahmed v. Union of India & Ors, the Delhi High Court held that the right to life under Article 21 of the Constitution includes the right to health, and “because someone is poor, the State cannot allow him to die”.
  • The court found a breach of the patient’s constitutional rights and ordered delivery of State-sponsored treatment. Similar cases are pending a final decision in Karnataka and Kerala.
  • More recently, the Delhi High Court revisited the issue, in cases filed by patients suffering from rare diseases, against the Employees State Insurance Corporation (ESIC).
  • The HC ruled that the administrative circulars seeking to exclude genetic diseases were issued by the ESIC in a manner contrary to the ESIC Act. Once again, patients received treatment through court orders.
  • The Supreme Court (SC) has long held that Article 21 imposes an obligation on the State to preserve life. In the cases of Parmanand Katara v. Union of India and Paschim Bangal Khet Mazdoor Samity v. State of West Bengal, the SC emphasised the fact that providing adequate medical facilities for people is an essential part of the obligations undertaken by the government of a welfare State.

Government efforts:

  • Government has announced a ‘one-time financial assistance’ for Rare diseases. The standing finance committee has approved a proposal for adding a sub-component under the umbrella scheme of Rashtriya Arogya Nidhi (RAN) for provision of one-time financial assistance to those below threshold poverty line for specified rare diseases which require one-time treatment.
  • National Policy for the treatment of 450 ‘Rare Diseases’
  • The Centre first prepared such a policy in 2017 and appointed a committee in 2018 to review it.
  • It was created on the direction of the Delhi High Court to the Ministry of Health and Family Welfare.
  • This was in response to writ petitions for free treatment of such diseases, due to their “prohibitively” high cost of treatment.
  • Hence, a policy was deemed necessary to devise a “multipronged” and “multisectoral” approach to build India’s capacity for tackling such ailments.

Conclusion:

It is likely that the draft policy, if finalized in its current form, will find itself the subject of legal challenge. It is also likely that it will once again fall to the courts to make the agonising decisions that have come to be associated with the rarest of the rare diseases.  Overall, although having a rare disease poses various challenges, the resilience and creativity of the patient and governmental, scientific, and commercial stakeholders have created powerful offsetting mechanisms by which care has been made available and research toward cures has advanced.

 

6. The auditing profession plays a vital role in maintaining the integrity of the Indian capital markets, but recent audit failures are renewing doubts about whether the country’s largest accounting firms are truly serving the public interest. Critically examine and suggest measures to overcome the challenges.(250 words)

Reference: Indian Express

Introduction:

The word “audit” is derived from the Latin word “audire”, which means to hear. In the process of an audit, fraud risk will be one of several risks that are evaluated. In 1986, in the case of Kingston Cotton Mills Company, it was stated that the auditor is a watchdog, not a blood hound. His responsibility is to find the true and fair value of the business and provide details of errors and fraud. The duty of an auditor is not to harm. The remedial action has to come from the owner of the entity in question.

Issues with the functioning auditing/accounting firms:

  • Recent scams in various large entities have displayed the inability of auditors to report fraud to the owner/shareholders.
  • In most of the cases, the magnitude of the fraud is in the thousands of crores.
  • In the NSEL scam, a default to the tune of Rs 5,600 crore exists.
  • Around 13,000 trading clients were affected and their money was stuck for more than six years.
  • The failure of the auditor to detect the fraud and report it is the main cause for these losses.
  • The auditors, Shravan Jalan and Amit Kabra have been arrested six years after the fraud was committed.
  • More recently, in the IL&FS case, lenders and shareholders lost about Rs 3 lakh crore. In the PMC bank scam more than Rs 4,300 crore worth of loans were extended to HDIL through bogus accounts
  • The auditors could not detect or detected but did not report — fraud committed in earlier years. The PMC scam is a painful incident as middle-class people lost their hard earned money and retirement funds deposited with the bank.
  • About 10 people died/committed suicide as they lost their life savings. All the auditors of the bank have been arrested.
  • But there are number of companies where the market capitalization lost is much less, in lakhs of rupees. No auditors were arrested in most of these cases. Then there are frauds committed in the nationalized banks and not reported in time by the auditor. For such scams, the onus is on RBI auditors as well.
  • The ICAI has failed completely in controlling the misconduct of its members. Some elements involved in misconduct and fraud are ruining the ICAI’s reputation.
  • Some elements involved in misconduct and fraud are ruining the ICAI’s reputation.
  • Arresting the auditor is only part of the remedy. For the depositors, this will not help recover their lost money.

Efforts to strengthen the institutions:

  • SEBI recently issued a circular to discourage the auditor from resigning midway through an audit, instead of reporting the lapses.
  • There is a government plan to revise the company auditor regulation order 2016 (CARO 2016).
  • There are various steps being taken to improve the reporting, especially about the use of borrowed funds and to report on critical financial ratios.
  • The Institute of Chartered Accountants (ICAI) has its own disciplinary committee and the power of a civil court to try professional misconduct.
  • The National Financial Reporting Authority (NERA) has largely taken over the powers of ICAI to regulate auditors.
  • It will make stricter rules for the audit firms, increasing compliance and reporting.

Way forward:

  • Watchdogs should force the largest audit firms to produce their own publicly available audited financial statements. This would boost transparency and help regulators and the public to monitor their activities
  • Regulators should at the same time tighten the independence and conflict of interest rules to prevent cross-marketing and anti-competitive behaviour.
  • Policymakers should insure that audit regulators are independent of the profession to avoid the growing threat of regulatory capture.
  • The watchdogs should also focus their inspection and enforcement attention on the largest firms and require them to act more quickly to repair defects.
  • Regulators could create the equivalent of a Hippocratic Oath that would require all auditors, including firm leaders, to attest that the investing public, not company managers, are their primary clients.
  • Auditors should also be required to reaffirm that they have a duty to assess whether a company will struggle to stay afloat in the coming year, and tell the public if they have concerns.

Conclusion:

The government should think of a better alternative to the ICAI and SEBI. There should be an entirely new regulatory body to protect against frauds of the sort we have been discussing. It is well said that prevention is better than cure. There is no use of crying over spilt milk. In the current system, actions are often taken after the investors suffer huge losses. It’s time to think about preventive measures.

 

7. Discuss the key findings of the ‘’Future of the Earth report, 2020”. Also discuss how it aims at reducing carbon footprint and halting global warming below 2 degree Celsius by 2050.(250 words)

Reference: The Hindu

Introduction:

The Future of Earth 2020 report has been released by the South Asia Future Earth Regional Office, Divecha Centre for Climate Change, Indian Institute of Science. The report was prepared with the aim of reducing carbon footprint and halting global warming below 2 degree Celsius by 2050.

Key findings:

  • Interrelation of risk factors: Extreme heat waves can accelerate global warming by releasing large amounts of stored carbon from affected ecosystems, and at the same time intensify water crises and/or food scarcity.
  • Biodiversity loss and its impact: The loss of biodiversity weakens the capacity of natural and agricultural systems to cope with climate extremes, increasing our vulnerability to food crises.
  • The five years from 2014 to 2018 were the warmest recorded over land and ocean since 1880.

 Five global risks:

The report lists five global risks that have the potential to impact and amplify one another in ways that may cascade to create a global systemic crisis. They are:

  • Failure of climate change mitigation and adaptation.
  • Extreme weather events.
  • Major Biodiversity loss and ecosystem collapse.
  • Food crises.
  • Water crises.

Alarm_bells

  • Anthropogenic factors: Humans have now “significantly altered” 75% of our planet’s land area; about a quarter of species in assessed plant and animal groups are threatened.
  • Strains on food production are expected to increase, as a result of various forces including climate change, biodiversity loss, and a global population on the rise.
  • Denial of climate change: Right-wing populism, a breed of politics that exploits people’s fears during times of economic decline and growing inequality, and that focuses on nationalist tendencies to clamp down on borders and reject immigrants, is on the rise around the world. This often leads to a denial of climate change facts or impacts.
  • The digital platforms such as social media, search engines and e-commerce algorithms, tend to favour the spread of information designed to engage with emotion over reason, which can cause the propagation of “fake news”, and can lead to social harms like an erosion of trust in vaccines.

It aims at reducing carbon footprint and halting global warming below 2 degree Celsius by 2050:

  • This provides an important and focused benchmark on the state of the climate, and an assessment of current efforts to limit global warming
  • The report received widespread public and media attention, and its findings continue to inform policy discussions across the world
  • It examines the pathways and options that might limit warming to 1.5°C and how response options might interact with sustainable development.
  • Although many countries have pledged to reduce their emissions under the UN Framework Convention on Climate Change Paris Agreement, the promised cuts are not enough to limit longer-term warming to 2°C, let alone 1.5°C.
  • Net-zero emissions are needed by 2050. This means that whatever emissions are produced by human activity must be balanced by the removal of greenhouse gases by natural systems (like plants) or negative emission technologies (like bioenergy or capturing and storing carbon).
  • The report assesses adaptation options that include constructing coastal barriers or planting mangroves to reduce the impacts of storms and sea-level rise; more efficient irrigation and water harvesting to conserve water; and designing buildings and planting trees to reduce urban temperatures
  • Increasing energy efficiency and renewable use help provide energy for all. Protecting forests to soak up carbon in places such as the Amazon and Indonesia can also support the goal of protecting biodiversity on land.

In India the National Education Policy will address the question of environmental health and education at the school level. “Children in the last four years of secondary education will have a reasonable grounding to be sensitive towards the environment. Without it no government rules and policies can be helpful,”

Conclusion:

The UN Climate Change Summit in September 2019 called upon leaders to develop concrete, realistic plans to enhance their commitments to reduce climate risks by 2020 by reducing greenhouse gas emissions by 45% over the next decade, and to net-zero emissions by 2050, in order to limit warming to 2°C. The question is whether sufficient action will be taken, and whether humanity’s efforts to reduce warming will be compatible with sustainable development – without creating a bigger division of winners and losers.