1 . Cabinet approves Establishment of National Financial Reporting Authority
The Union Cabinet has approved the proposal for establishment of National Financial Reporting Authority (NFRA) and creation of one post of Chairperson, three posts of full-time Members and one post of Secretary for NFRA.
The decision aims at establishment of NFRA as an independent regulator for the auditing profession which is one of the key changes brought in by the Companies Act, 2013. The inclusion of the provision in the Act was on the specific recommendations of the Standing Committee on Finance (in its 21st report).
The decision is expected to result in improved foreign/domestic investments, enhancement of economic growth, supporting the globalisation of business by meeting international practices, and assist in further development of audit profession.
The jurisdiction of NFRA for investigation of Chartered Accountants and their firms under section 132 of the Act would extend to listed companies and large unlisted public companies, the thresholds for which shall be prescribed in the Rules. The Central Government can also refer such other entities for investigation where public interest would be involved.
The inherent regulatory role of ICAI as provided for in the Chartered Accountants Act, 1949 shall continue in respect of its members in general and specifically with respect to audits pertaining to private limited companies, and public unlisted companies below the threshold limit to be notified in the rules.
The Quality Review Board (QRB) will also continue quality audit in respect of private limited companies, public unlisted companies below prescribed threshold and also with respect to audit of those companies that may be delegated to QRB by NFRA. Further, ICAI shall continue to play its advisory role with respect to accounting and auditing standards and policies by making its recommendations to NFRA.
The need for establishing NFRA has arisen on account of the need felt across various jurisdictions in the world, in the wake of accounting scams, to establish independent regulators, independent from those it regulates, for enforcement of auditing standards and ensuring the quality of audits to strengthen the independence of audit firms, quality of audits and, therefore, enhance investor and public confidence in financial disclosures of companies.
2 . Cabinet approves Fugitive Economic Offenders Bill, 2018
The Union Cabinet has approved the proposal of the Ministry of Finance to introduce the Fugitive Economic Offenders Bill, 2018 in Parliament. The Bill would help in laying down measures to deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts.
The cases where the total value involved in such offences is Rs.100 crore or more, will come under the purview of this Bill.
The Bill is expected to re-establish the rule of law with respect to the fugitive economic offenders as they would be forced to return to India to face trial for scheduled offences. This would also help the banks and other financial institutions to achieve higher recovery from financial defaults committed by such fugitive economic offenders, improving the financial health of such institutions.
It is expected that the special forum to be created for
expeditious confiscation of the proceeds of crime, in India or abroad, would coerce the fugitive to return to India to submit to the jurisdiction of Courts in India to face the law in respect of scheduled offences.
Salient features of the Bill
1 . Application before the Special Court for a declaration that an individual is a fugitive economic offender;
2 . Attachment of the property of a fugitive economic offender;
3 . Issue of a notice by the Special Court to the individual alleged to be a fugitive economic offender;
4 . Confiscation of the property of an individual declared as a fugitive economic offender resulting from the proceeds of crime;
5 . Confiscation of other property belonging to such offender in India and abroad, including benami property;
6 . Disentitlement of the fugitive economic offender from defending any civil claim; and
7 . An Administrator will be appointed to manage and dispose of the confiscated property under the Act.
If at any point of time in the course of the proceeding prior to the declaration, however, the alleged Fugitive Economic Offender returns to India and submits to the appropriate jurisdictional Court, proceedings under the proposed Act would cease by law. All necessary constitutional safeguards in terms of providing hearing to the person through counsel, allowing him time to file a reply, serving notice of summons to him, whether in India or abroad and appeal to the High Court have been provided for.
Further, provision has been made for appointment of an Administrator to manage and dispose of the property in compliance with the provisions of law.
Implementation strategy and targets
In order to address the lacunae in the present laws and lay down measures to deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts, the Bill is being proposed. The Bill makes provisions for a Court (‘Special Court’ under the Prevention of Money-laundering Act, 2002) to declare a person as a Fugitive Economic Offender.
Who is a Fugitive Economic Offender?
A Fugitive Economic Offender is a person against whom an arrest warrant has been issued in respect of a scheduled offence and who has left India so as to avoid criminal prosecution, or being abroad, refuses to return to India to face criminal prosecution.
A scheduled offence refers to a list of economic offences contained in the Schedule to this Bill. Further, in order to ensure that Courts are not over-burdened with such cases, only those cases where the total value involved in such offences is 100 crore rupees or more, is within the purview of this Bill.
There have been several instances of economic offenders fleeing the jurisdiction of Indian courts, anticipating the commencement, or during the pendency, of criminal proceedings.
The absence of such offenders from Indian courts has several deleterious consequences – first, it hampers investigation in criminal cases; second, it wastes precious time of courts of law, third, it undermines the rule of law in India. Further, most such cases of economic offences involve non-repayment of bank loans thereby worsening the financial health of the banking sector in India.
The existing civil and criminal provisions in law are not entirely adequate to deal with the severity of the problem. It is, therefore, felt necessary to provide an effective, expeditious and constitutionally permissible deterrent to ensure that such actions are curbed.
It may be mentioned that the non-conviction-based asset confiscation for corruption-related cases is enabled under provisions of United Nations Convention against Corruption (ratified by India in 2011). The Bill adopts this principle.
In view of the above context, a Budget announcement was made by the Government in the Budget 2017-18 that the Government was considering to introduce legislative changes or even a new law to confiscate the assets of such absconders till they submit to the jurisdiction of the appropriate legal forum.
3 . First Mega Food Park in Maharashtra at Satara Inaugurated
The first Mega Food Park in the state of Maharashtra, M/s Satara Mega Food Park Pvt. Ltd. at Village Degaon, District Satara was inaugurated recently. This is the 12th Mega Food Park operationalized in the country so far .
Locational advantage at Satara
Satara district, which has unique locational advantage, produces fruits like strawberries at Mahabaleshwar, export quality grapes and pomegranates in its drought prone areas and spices like turmeric and ginger. Satara is situated close to the Konkan coast having access to fruits like mangoes, jackfruit etc.
Mega Food Park Scheme
- It was launched by the government in 2008.
- To give a major fillip to the food processing sector by adding value and reducing food wastage at each stage of the supply chain with particular focus on perishables, Ministry of Food Processing Industries is implementing Mega Food Park Scheme in the country.
- Mega Food Parks create modern infrastructure facilities for food processing along the value chain from farm to market with strong forward and backward linkages through a cluster based approach.
- Common facilities and enabling infrastructure is created at Central Processing Centre and facilities for primary processing and storage is created near the farm in the form of Primary Processing Centers (PPCs) and Collection Centers (CCs).
- Under the Scheme, Government of India provides financial assistance uptoRs. 50.00 Crore per Mega Food Park project.
4 . China-backed AIIB eyes $1 billion infrastructure push in India
The AIIB, a multilateral investment bank proposed by China that started operations in 2016, has already approved funding for roughly $1 billion worth of projects in India and considering around $1 billion more. It includes a $200 million investment in New Delhi’s National Infrastructure Investment Fund .
The focus in India, the bank’s biggest borrower, has been on rural roads, mass transit and power projects. The bank is currently proposing to fund a metro rail system in Mumbai, rural road construction in the state of Madhya Pradesh, and irrigation and flood control projects in West Bengal.
About Asian Infrastructure Investment Bank
- The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank that aims to support the building of infrastructure in the Asia-Pacific region.
- The bank currently has 61 member states while another 23 are prospective members for a total of 84 approved members and was proposed as an initiative by the government of China.
- The bank started operation on 25 December 2015, after ratifications were received from 10 member states holding a total number of 50% of the initial subscriptions of the Authorized Capital Stock.
- Major economies that are not members include Japan and the United States.
- The capital of the bank is $100 billion, equivalent to 2⁄3 of the capital of the Asian Development Bank and about half that of the World Bank.