IAS UPSC Prelims and Mains Exam – 11th June 2019
SEBI mulls norms to reward whistle-blowers
Part of: Prelims and Mains GS III Indian Economy
The Capital Market regulator, SEBI has proposed an informant mechanism to blow the whistle on insider trading cases.
What is Insider Trading?
- Insider trading is defined in the SEBI (Prohibition of Insider Trading) Regulations, 2015 (‘PIT Regulations’) to mean trading of securities while in possession of unpublished price sensitive information (‘UPSI’).
- Insider trading is essentially a malpractice wherein trade of a company’s securities is undertaken by people who by virtue of their work have access to the otherwise non-public information which can be crucial for making investment decisions.
- As per the SEBI Act, insider trading is punishable with a penalty which shall not be less than 10 lakhs. The maximum penalty could be as high as Rs 25 crore or three times the amount of profits made out of insider trading, whichever is higher. The Act also prescribes that insider trading is punishable with a prison term of up to 10 years.
TOPIC: General studies 3:
- Security challenges and their management; linkages of organized crime with terrorism
- Challenges to internal security
- Linkages between development and spread of extremism.
Defence Preparedness in India
With the Modi Government returning to power, expectations of deeper and far-reaching reforms are high across various ministries and departments. The Ministry of Defence (MoD), which has already undertaken a plethora of reforms during the last five years, is expected to walk along the reform path and build on previous initiatives to further strengthen defence preparedness and build a credible defence industrial base.
In April 2018 the Defence Planning Committee (DPC) was set up under the chairmanship of the National Security Advisor (NSA).
The purpose of the powerful DPC is to facilitate comprehensive and integrated defence planning. Its mandate is to articulate a national security strategy, develop a holistic defence plan, keeping in view the critical requirements of the armed forces as well as resource constraints.
A very large portion of the defence budget is earmarked for manpower costs, which has also witnessed a hefty rise after the implementation of the recommendations of the Seventh Central Pay Commission (CPC) and the One Rank One Pension (OROP) scheme.
As a result, the capital procurement budget, which is critical for defence modernisation, has seen a marked fall in its share in the budget.
The present Defence Procurement Management System and the Defence Procurement Procedures (DPP), have come a long way since their creation in 2001. The established structures and procedures have streamlined many aspects of acquisition through the periodic revision of the DPP.
- In performance audit report of 2019, the CAG has pointed out that the existing organisation has “resulted in diffused accountability” as it involves numerous agencies that are accountable to different administrative heads.
- The auditor has also pointed out the lack of objectivity and fair play in technical evaluation.
- The acquisition machinery also suffers from lack of professional expertise to undertake the assigned tasks.
Make in India in Defence:
Under the Make in India initiative, the government has already taken a large number of initiatives to promote indigenous defence manufacturing.
- These include a streamlined industrial licensing process; a hike in the foreign direct investment (FDI) cap from 26 to 100 per cent; a level-playing field for the private sector vis-à-vis public sector entities in payment and tax matters and a new procurement category to enable domestic industry to focus on indigenous design and higher level of indigenisation.
- The MoD has also announced an ambitious defence production policy that aims at arms production; launched two defence industrial corridors; identified a number items in which local suppliers would enjoy purchase preference; and announced a number of initiatives to support start-ups and innovation.
The MOD should now build on the initiatives already taken to further strengthen India’ defence manufacturing base.
- The Defence Planning Committee (DPC) should articulate the national security strategy and a set of holistic capability, R&D and manufacturing plan documents.
- Rationalising the current manpower-driven defence expenditure. To provide greater momentum to the modernisation of the armed forces, there is a need to enhance defence spending.
- The MoD should explore the option of generating revenues by putting to commercial use the unused and underused defence land.
- Making the acquisition apparatus more accountable and professional.
- Strengthening the defence manufacturing base to meet the requirements of the armed forces.
Given its volatile security environment and the changing character of warfare, India cannot afford to lower its military guard. The last five years have witnessed an unprecedented number of reforms to enhance defence preparedness and equip the armed forces with indigenously sourced arms. These reforms need to be deepened so as to meet India’s security threats effectively and through arms made in India.
Connecting the dots:
- Major reforms have been taken by the government in recent times to strengthen India’s defence preparedness. Its time these reforms are deepened to meet India’s security threats effectively. Comment.
General Studies 1:
- Role of women and women’s organization,
- Poverty and developmental issues,
- Social issues; vulnerable sections of the society
General studies 2:
- Government policies and issues arising out of their design and implementation
Declining female employment
It is a national tragedy that women unable to find work are dropping out of the labour force.
- As per labour force survey data, rural India is in the midst of a gender revolution in which nearly half the women who were in the workforce in 2004-5 had dropped out in 2017-18.
- The 61st round of the National Sample Survey Office (NSSO) recorded 48.5% rural women above the age of 15 as being employed either as their major activity or as their subsidiary activity — but this number dropped to 23.7% in the recently released report of the Periodic Labour Force Survey (PLFS).
- Mechanisation and land fragmentation have reduced agricultural work opportunities for both men and women.
- Other work opportunities, except for work in public works programmes, are not easily open to women. This challenge is particularly severe for rural women with moderate levels of education.
A man with class 10 education can be a postal carrier, a truck driver or a mechanic; these opportunities are not open to women.
- The 2017 Maternity Benefit Act cover only 8 per cent of the Indian organised sector workforce and left out 92 per cent of the unorganised and informal workers.
- Establishment of the Cabinet Committee on Employment and Skill Development is a welcome move by the new government.
It is to be hoped that this committee will take the issue of declining female employment as seriously as it does the issue of rising unemployment among the youth.
- One of the most powerful ways in which public policies affect rural women’s participation in non-agricultural work is via development of transportation infrastructure that allows rural women to seek work as sales clerks, nurses and factory workers in nearby towns.
- An expansion in the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme. Since MGNREGA is a self-targeted scheme, women looking for work would automatically look to enrol themselves in it.
- A further boost to female labour force participation could be provided by increasing wages for women in the MGNREGA scheme.
We need to focus on multi-sectoral reforms that have a positive impact on women’s work opportunities. The potential gender dividend could be far greater than the much celebrated demographic dividend.
Connecting the dots:
- Indian women unable to find work are dropping out of the labour force. Comment.
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Q.1) Consider the following statements about BT Cotton,
- There are three types of BT cotton in India namely, BG I Cotton, BG II Cotton, BG III Cotton.
- All the three varieties are allowed to cultivate in general in India.
Select the correct statements
- Only 1
- Only 2
- Both 1 and 2
- Neither 1 nor 2
Q.2) Consider the following statements
- The Securities and Exchange Board of India is a non statutory regulator of Securities market in India.
- Insider trading is a punishable offence under SEBI Act.
Select the incorrect statements
- Only 1
- Only 2
- Both 1 and 2
- Neither 1 nor 2
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