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[Mission 2022] INSIGHTS DAILY CURRENT AFFAIRS + PIB SUMMARY- 17 September 2021

 

 

InstaLinks help you think beyond the issue but relevant to the issue from UPSC prelims and Mains exam point of view. These linkages provided in this ‘hint’ format help you frame possible questions in your mind that might arise(or an examiner might imagine) from each current event. InstaLinks also connect every issue to their static or theoretical background. This helps you study a topic holistically and add new dimensions to every current event to help you think analytically. 

 

Table of Contents

GS Paper 2:

1. National Financial Reporting Authority (NFRA).

2. World Bank discontinues Doing Business rankings.

3. Collective Security Treaty Organization.

4. AUKUS alliance.

 

GS Paper 3:

1. ‘Bad bank’ setup and guarantee programme announced by Government to clear the NPA mess.

2. Edible plants into vaccines.

 

Facts for Prelims:

1. Char Dham.


National Financial Reporting Authority (NFRA):

GS Paper 2

Topics Covered: Statutory, regulatory and various quasi-judicial bodies.

 

Context:

National Financial Reporting Authority (NFRA) Chairperson has pitched for a ‘standalone legislation’ for the regulator in the interests of autonomy.

  • He also demanded that all necessary penal provisions relating to financial reporting should be consolidated and vested with it.

 

Why this is necessary?

Currently, the NFRA may take action against auditors for professional misconduct but when it came to other functionaries of a company who have the responsibility for financial reporting, penal powers continue to be vested with the Centre. A standalone legislation will allow for integrated regulation of all participants in the financial reporting system.

 

About NFRA:

National Financial Reporting Authority (NFRA) was constituted on 1st October, 2018 under section 132 (1) of the Companies Act, 2013.

 

Why was it needed?

In the wake of accounting scams, a need was felt to establish an independent regulator for enforcement of auditing standards and ensuring the quality of audits so as to enhance investor and public confidence in financial disclosures of companies.

 

Composition:

The Companies Act requires the NFRA to have a chairperson who will be appointed by the Central Government and a maximum of 15 members.

 

Functions and Duties:

  1. Recommend accounting and auditing policies and standards to be adopted by companies for approval by the Central Government;
  2. Monitor and enforce compliance with accounting standards and auditing standards;
  3. Oversee the quality of service of the professions associated with ensuring compliance with such standards and suggest measures for improvement in the quality of service;
  4. Perform such other functions and duties as may be necessary or incidental to the aforesaid functions and duties.

 

Powers:

  1. It can probe listed companies and those unlisted public companies having paid-up capital of no less than Rs 500 crore or annual turnover of no less than Rs 1,000 crore.
  2. It can investigate professional misconduct committed by members of the Institute of Chartered Accountants of India (ICAI) for prescribed class of body corporate or persons.

 

Insta Curious:

Did you know that NFRA’s accounts shall be audited by the Comptroller and Auditor-General of India (CAG)? Know more about CAG audits here.

 

InstaLinks:

Prelims Link:

  1. Provisions under which NFRA was constituted?
  2. About ICAI.
  3. Composition of NFRA.
  4. Companies Act 2013- key provisions.

Mains Link:

Discuss the key functions of NFRA and write a note on its significance.

Sources: the Hindu.

World Bank discontinues Doing Business rankings:

GS Paper 2

Topics Covered: Important International institutions, agencies and fora, their structure, mandate.

 

Context:

The World Bank Group has decided to discontinue publication of its ‘Doing Business’ rankings of country business climates after a review of data irregularities in the 2018 and 2020 reports.

 

What’s the issue?

In August 2020, World Bank paused the publication of Doing Business reports following a number of irregularities were reported regarding changes to the data.

  • The irregularities in Doing Business reports had affected four countries: China; Saudi Arabia; United Arab Emirates; and Azerbaijan.
  • A probe of data irregularities cited “undue pressure” by top bank officials, including then-Chief Executive Kristalina Georgieva, to boost China’s ranking in 2017.
  • This raised ethical matters involving former bank staff and board officials.

 

Why the report matters?

World Bank’s annual report matters to several nations, especially developing ones, since it greatly influenced investor decisions by releasing a ranking of economies based on how easy it is to open up, and operate, a business. But while the report was hugely popular among investors, it was heavily criticized by many governments for its methodology that, leaders said, inaccurately captured the realities on the ground.

 

About Doing Business project:

  • It provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level.
  • Launched in 2003, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle.
  • It ranks countries on the basis of Distance to Frontier (DTF) score that highlights the gap of an economy with respect to the global best practice.

opening_business

 

InstaLinks:

Prelims Link:

  1. About the Report.
  2. Indicators.
  3. Overview of 2018 and 2020 reports.

Mains Link:

Comment on the concerns associated with Doing Business report of World Bank.

Sources: the Hindu.

Collective Security Treaty Organization:

GS Paper 2

Topics Covered: Bilateral, Regional and Global Groupings and agreements involving India.

 

Context:

The Collective Security Treaty Organisation (CSTO) is planning to hold large military drills in Tajikistan next month, amid what it described as a deteriorating situation in neighbouring Afghanistan.

 

Implications and rationale behind this:

Tajikistan is the only country out of the six-member bloc led by Russia that shares a border with Afghanistan.

  • Moscow has moved to cement its position as a key player in the region after the United States’ hasty retreat from Afghanistan and the Taliban’s takeover of the country.
  • The group also said it has taken “collective measures” to ensure Tajikistan’s security in case of an “aggravation” on its border with Afghanistan.

 

About Collective Security Treaty Organization:

  • It is an intergovernmental military alliance (six countries) that came into effect in 2002.
  • Its’ origin can be traced to the Collective Security Treaty, 1992 (Tashkent Treaty).
  • The headquarter is located in the Russian capital of Moscow.
  • The objectives of the CSTO is to strengthen peace, international and regional security including cybersecurity and stability, the protection on a collective basis of the independence, territorial integrity and sovereignty of the member states.

 

Composition:

Current CSTO members are Armenia, Belarus, Kazakhstan, Kyrgyzstan, the Russian Federation and Tajikistan.

Afghanistan and Serbia hold observer status in the CSTO.

 

What the membership entails?

  1. CSTO membership means that member states are barred from joining other military alliances, limiting, for example, their relationship with NATO.
  2. Most importantly, membership presumes certain key security assurances – the most significant of which is deterring military aggression by third countries.
  3. In the CSTO, aggression against one signatory is perceived as aggression against all.
  4. It however remains unclear whether this feature works in practice.

 

Insta Curious:

India joined the UK in drive known as ‘Five Eyes’ group of nations, as a seventh member in 2020. What is this group about? Reference: read this.

 

InstaLinks:

Prelims Link:

  1. About CSTO.
  2. Composition.
  3. Objectives.

Mains Link:

Discuss about the significance of CSTO.

Sources: the Hindu.

AUKUS Alliance:

GS Paper 2

Topics Covered: Important International institutions, agencies and fora, their structure, mandate.

 

Context:

The UK, US and Australia have announced a historic security pact in the Asia-Pacific, in what’s seen as an effort to counter China. It is called the AUKUS pact and AUKUS alliance.

 

About the AUKUS Pact:

  • Under the AUKUS alliance, the three nations have agreed to enhance the development of joint capabilities and technology sharing, foster deeper integration of security and defence-related science, technology, industrial bases and supply chains.
  • Under the first major initiative of AUKUS, Australia would build a fleet of nuclear-powered submarines with the help of the US and the UK, a capability aimed at promoting stability in the Indo-Pacific region.

 

China’s response:

China has condemned the agreement as “extremely irresponsible”.

Concerns raised by China:

  • The Alliance undermines regional peace and stability and intensifies the arms race.
  • It shall reinvent a “Cold War mentality and ideological prejudice”.

 

Rationale behind the formation of this alliance:

The new partnership was announced in a joint virtual press conference. And while China was not mentioned directly, the three leaders referred repeatedly to regional security concerns which they said had “grown significantly”.

 

Why nuclear-powered submarines?

These submarines are much faster and harder to detect than conventionally powered fleets. They can stay submerged for months, shoot missiles longer distances and also carry more.

  • Having them stationed in Australia is critical to US influence in the region, analysts say.
  • The US is sharing its submarine technology for the first time in 50 years. It had previously only shared technology with the UK.
  • Australia will become just the seventh nation in the world to operate nuclear-powered submarines, after the US, UK, France, China, India and Russia.
  • Australia has reaffirmed it has no intention of obtaining nuclear weapons.

 

Insta Curious:

Learn about Asia/Pacific Group on Money Laundering (APG) here.

 

InstaLinks:

Prelims Link:

  1. About AUKUS Pact.
  2. Objectives.
  3. Features.

Mains Link:

Discuss why China is concerned about the AUKUS Alliance.

Sources: the Hindu.

‘Bad bank’ setup and guarantee programme announced by Government to clear the NPA mess:

GS Paper 3

Topics Covered: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.

 

Context:

The government has set up two new entities to acquire stressed assets from banks and then sell them in the market.

 

Mechanism envisioned:

The “National Asset Reconstruction Company Limited” (NARCL) has already been incorporated under the Companies Act.

  • It will acquire stressed assets worth about Rs 2 lakh crore from various commercial banks in different phases.

Another entity — India Debt Resolution Company Ltd (IDRCL), which has also been set up — will then try to sell the stressed assets in the market.

  • The NARCL-IDRCL structure is the new bad bank. To make it work, the government has okayed the use of Rs 30,600 crore to be used as a guarantee.

 

 

About the Programme:

It will be a five-year guarantee for the National Asset Reconstruction Company Limited (NARCL)-issued security receipts to banks.

  • Under the mechanism, the NARCL will acquire assets by making an offer to the lead bank.
  • Private sector asset reconstruction firms(ARCs) may also be allowed to outbid the NARCL.
  • Separately, public and private lenders would combine forces to set up an India Debt Resolution Company (IDRC) that would manage these assets and try to raise their value for final resolution.

 

How it works?

  • A 15% cash payment would be made to the banks based on some valuation and the rest will be given as security receipts.
  • Once the NARCL and the IDRC have finally resolved the asset, the balance 85% held as security receipts would be given to the banks.
  • If the bad bank is unable to sell the bad loan, or has to sell it at a loss, then the government guarantee will be invoked and the difference between what the commercial bank was supposed to get and what the bad bank was able to raise will be paid from the Rs 30,600 crore that has been provided by the government.

 

Significance:

While there are 28 ARCs in the private sector, she said there was a need for government-backed receipts for big ticket resolutions. The latest move will ensure that NPAs for which this whole set-up is being created, and the value that is locked in the assets is realised and comes back to the banks; they use it as a growth capital and the banking system becomes more robust.

 

Insta Curious:

Do you know about the twin balance sheet problem? Read here.

 

InstaLinks:

Prelims Link:

  1. What is an Asset Reconstruction Company?
  2. What is a bad bank?
  3. Who can set up a bad bank in India?
  4. What are stressed assets?
  5. What are non performing assets?

Mains Link:

Discuss the merits and demerits of setting up of bad banks.

Sources: the Hindu.

Edible plants into vaccines:

GS Paper 3

Topics Covered: Biotechnology related issues.

 

Context:

Scientists attempt to turn edible plants like lettuce into mRNA vaccine factories under the edible vaccine project.

 

The edible vaccine project:

The project, backed by a US $500,000 grant from the US National Science Foundation, has three goals:

  • Showing that DNA containing the mRNA vaccines can be successfully delivered into the part of plant cells where it will replicate.
  • Demonstrating the plants can produce enough mRNA to rival a traditional shot.
  • Determining the right dosage.

If this new project is successful, plant-based mRNA vaccines which can be eaten could overcome this challenge with the ability to be stored at room temperature.

 

What makes it possible in plants ?

  • Key to making this work is chloroplasts, small organs in plant cells that convert sunlight into energy the plant can use.
  • They’re tiny, solar-powered factories that produce sugar and other molecules which allow the plant to grow.
  • They’re also an untapped source for making desirable molecules.

 

What is this technology all about?

Messenger RNA or mRNA technology works by teaching our cells to recognize and protect us against infectious diseases. One of the challenges with this new technology is that it must be kept cold to maintain stability during transport and storage.

 

What are mRNA vaccines?

mRNA vaccines trick the body into producing some of the viral proteins itself.

  • They work by using mRNA, or messenger RNA, which is the molecule that essentially puts DNA instructions into action.
  • Inside a cell, mRNA is used as a template to build a protein.

 

How it works?

  1. To produce an mRNA vaccine, scientists produce a synthetic version of the mRNA that a virus uses to build its infectious proteins.
  2. This mRNA is delivered into the human body, whose cells read it as instructions to build that viral protein, and therefore create some of the virus’s molecules themselves.
  3. These proteins are solitary, so they do not assemble to form a virus.
  4. The immune system then detects these viral proteins and starts to produce a defensive response to them.

 

Significance of mRNA vaccines:

There are two parts to our immune system: innate (the defences we’re born with) and acquired (which we develop as we come into contact with pathogens).

  • Classical vaccine molecules usually only work with the acquired immune system and the innate immune system is activated by another ingredient, called an adjuvant.
  • Interestingly, mRNA in vaccines could also trigger the innate immune system, providing an extra layer of defence without the need to add adjuvants.

 

InstaLinks:

Prelims Link:

  1. What is a vaccine?
  2. How do vaccines work?
  3. Working of the immune system.
  4. What is mRNA?
  5. Potential applications of mRNA vaccines.

Mains Link:

Discuss the benefits of mRNA vaccines.

Sources: Indian Express.

Facts for Prelims:

Char Dham:

  • Char Dham means Four Dhams i.e. Four religious places. Char Dham in Uttarakhand is a collective term used for religous circuit covering Holy hindu pilgrimage centres of Badarinath, Kedarnath, Gangotri and Yamunotri.
  • All four temple shrines are located in Garhwal Himalayas range of Uttarakhand.
  • This is considered as most sacred religious places to be visited by Hindus, to get rid of their sins and pave path to ultimate goal of human life – the Moksha.


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