Daily Current Affairs for UPSC IAS: 15th September 2021

Pilibhit Tiger Reserve: Uttar Pradesh:

A herd of Elephants from Shuklaphanta National Park reached the Pilibhit Tiger Reserve (Uttar Pradesh) and damaged crops of farmers.

• The Shuklaphanta National Park is a protected area in the Terai of the Far-Western Region, Nepal.
• It is located in Pilibhit district, Lakhimpur Kheri District and Bahraich District of Uttar Pradesh.
• It was designated as a Tiger Reserve in 2014 and was India’s 45th Tiger Reserve Project.
• In 2020, it bagged the International Award TX2 for doubling up the number of tigers in the past four years.
• It forms part of Terai Arc Landscape in the upper Gangetic Plain. The northern edge of the reserve lies along the Indo-Nepal border while the southern boundary is marked by the river Sharada and Khakra.

Corridor Linkages:

• Pilibhit is an important habitat for tigers owing to its connection with several tiger habitats within the State and outside. They are used by tigers and other wild animals.
• The important linkages are:
  • Surahi range – Corbett
  • Lagga-Bagga – Shuklaphanta National Park (Nepal)
  • Kishanpur Wildlife Sanctuary – Dudhwa.
• Flora and Fauna:
  • It is home to a habitat for over 127 animals, 326 bird species and 2,100 flowering plants.
  • Wild animals include tiger, swamp deer, bengal florican, leopard, etc.
  • It has high sal forests, plantations and grasslands with several water bodies.

IRDAI (Trade Credit Insurance) Guidelines, 2021:

The Insurance Regulatory and Development Authority of India (IRDAI) has issued revised guidelines for trade credit insurance.

• Trade credit insurance protects businesses against the risk of non-payment for goods and services.
• It usually covers a portfolio of buyers and indemnifies an agreed percentage of an invoice or invoices that remain unpaid as a result of protracted default or insolvency.
• It contributes to the economic growth of a country by facilitating trade and helps improve economic stability by addressing trade losses because of payment risks.
• It can be issued to sellers or suppliers of goods or services, factoring companies as defined in the Factoring Regulation Act, 2011 and banks and financial institutions.
• For banks and financial institutions and factoring companies, it covers the loss on account of non-receipt of payment from a buyer, due to commercial or political risks, against the bills and invoices purchased or discounted.
• Commercial risks include insolvency or extended default of the buyer, rejection by the buyer after delivery subject to conditions of contract, and rejection before shipment and non-receipt of payment on account of the collecting bank’s failure.
• Political risk cover is available only in case of buyers outside India and will include occurrence of war between the buyer’s country and India and also war, hostilities, civil war, rebellion, revolution, insurrection or other disturbances in the buyer’s country.
• These guidelines will apply to all insurers transacting general insurance business, registered under the Insurance Act, 1938.
  However, ECGC Ltd (formerly Export Credit Guarantee Corporation of India Ltd) is exempted from the application of these guidelines.

REX MKII: Armed Robot:

Israel Aerospace Industries unveiled a remote-controlled armed robot ‘REX MKII’, which can patrol battle zones, track infiltrators and open fire.

• The use of robots in the war involves dealing with ethical dilemmas.
• The proponents say that such semi-autonomous machines allow armies to protect their soldiers, while critics fear this marks another dangerous step toward robots making life-or-death decisions.

About the REX MKII:

• The robot can gather intelligence for ground troops, carry injured soldiers and supplies in and out of battle, and strike nearby targets.
• The Israeli military is currently using a smaller but similar vehicle called the Jaguar to patrol the border with the Gaza Strip.
  Unmanned ground vehicles are being increasingly used by other armies, including those of the United States, Britain and Russia.
• Their tasks include logistical support, the removal of mines and firing weapons.
• An alternative Smart Wall has been proposed to replace the physical and armed patrolling with advanced surveillance technology at the USA-Mexico border.

Groundswell Report On Climate Change:

The Report was recently released by the World Bank. It examined how the impacts of slow-onset climate change, such as water scarcity, decreasing crop productivity and rising sea levels, could lead to millions of what it describes as “climate migrants” by 2050.

Highlights and key findings of the report:

• The report considers three different scenarios with varying degrees of climate action and development.
• These include:
  • Most pessimistic scenario with a high level of emissions and unequal development: The report forecasts up to 216 million people moving within their own countries across the six regions analysed.
  • Those regions are Latin America; North Africa; Sub-Saharan Africa; Eastern Europe and Central Asia; South Asia; and East Asia and the Pacific.
• In the most climate-friendly scenario, with a low level of emissions and inclusive, sustainable development, the world could still see 44 million people being forced to leave their homes.
• In the worst-case scenario, Sub-Saharan Africa — the most vulnerable region due to desertification, fragile coastlines and the population’s dependence on agriculture — would see the most migrants, with up to 86 million people moving within national borders.

Other impacts:

• Hotspots of internal climate migration could emerge as early as 2030 and continue to spread and intensify by 2050.
• The report provides a series of policy recommendations that can help slow the factors driving climate migration and prepare for expected migration flows, including:
• Reducing global emissions and making every effort to meet the temperature goals of the Paris Agreement.
• Embedding internal climate migration in far-sighted green, resilient, and inclusive development planning.
• Preparing for each phase of migration, so that internal climate migration as an adaptation strategy can result in positive development outcomes.
• Investing in better understanding of the drivers of internal climate migration to inform well-targeted policies.

National Financial Reporting Authority (NFRA):

As it seeks to enhance engagement with stakeholders, the National Financial Reporting Authority (NFRA) will set up a single stakeholders’ advisory group as well as a research cell to support the group.

• A large majority of the respondents have expressed the urgent need for a settlement mechanism rather than a prolonged stand-alone law making process.
• National Financial Reporting Authority (NFRA) was constituted on 1st October, 2018 under section 132 (1) of the Companies Act, 2013.
• 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.
• 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:

• Recommend accounting and auditing policies and standards to be adopted by companies for approval by the Central Government;
  Monitor and enforce compliance with accounting standards and auditing standards;
• 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;
• Perform such other functions and duties as may be necessary or incidental to the aforesaid functions and duties.

Powers:

• 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.
• 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.

T+1 Settlement System:

If stock Markus exchanges agree to the proposal for the T+1 settlement system made by the Securities and Exchange Board of India (Sebi), investors will get money for shares they sold or bought in their accounts faster, and in a safer and risk-free environment.

• On September 7, Sebi allowed stock exchanges to start the T+1 system as an option in place of T+2. If it opts for the T+1 settlement cycle for a scrip, the stock exchange will have to mandatorily continue with it for a minimum 6 months.
• Thereafter, if it intends to switch back to T+2, it will do so by giving one month’s advance notice to the market.
• Any subsequent switch (from T+1 to T+2 or vice versa) will be subject to a minimum period.
• According to a Sebi paper, a shortened cycle not only reduces settlement time but also reduces and frees up the capital required to collateralise that risk.
• T+1 also reduces the number of outstanding unsettled trades at any instant, and thus decreases the unsettled exposure to Clearing Corporation by 50%. The narrower the settlement cycle, the narrower the time window for a counterparty insolvency/bankruptcy to impact the settlement of a trade.
• If an investor sells shares on Tuesday, settlement of the trade takes place in two working days (T+2). The broker who handles the trade will get the money on Thursday, but will credit the amount in the investor’s account only by Friday. In effect, the investor will get the money only after three days.
• In T+1, settlement of the trade takes place in one working day and the investor will get the money on the following day. The move to T+1 will not require large operational or technical changes by market participants, nor will it cause fragmentation and risk to the core clearance and settlement ecosystem.
• In April 2002, stock exchanges had introduced a T+3 rolling settlement cycle. This was shortened to T+2 from April 1, 2003.

Bio-Decomposer:

Terming the bio-decomposer technique a “smashing success” at curbing stubble burning in the Capital, Chief Minister Arvind Kejriwal appealed to the Centre to ask the neighbouring States to use the same to prevent pollution.

• The burning of paddy stubble left in the fields after harvest has been a cause of concern for the past several years as it contributes to air pollution in the northern Gangetic plains and its already polluted cities like Delhi.
• It is a common practice in October and November across North West India, but primarily in Punjab, Haryana, and Uttar Pradesh to quickly clear crop residue from their fields before planting the rabi wheat crop.
• To tackle the issue ‘Pusa Decomposer’ capsule has been developed by Indian Agriculture Research Institute (IARI).
• ‘Pusa Decomposer’ is essentially a fungi-based liquid solution that can soften hard stubble to the extent that it can be easily mixed with soil in the field to act as compost.
• This would then rule out the need to burn the stubble, and also help in retaining the essential microbes and nutrients in soil that are otherwise damaged when the residue is burned.
• There are seven strains of fungi that IARI has identified after research which help in rapid breakdown of hard stubble. These seven strains of fungi are packed into four capsules.

Climate Action And Finance Mobilization Dialogue (CAFMD):

India and the United States of America (USA) launched the “Climate Action and Finance Mobilization Dialogue (CAFMD)”.

• The CAFMD is one of the two tracks of the India-U.S. Climate and Clean Energy Agenda 2030 partnership launched at the Leaders’ Summit on Climate in April 2021, by Prime Minister Shri Narendra Modi and US President Mr. Joseph Biden.
• The dialogue was formally launched by Union Minister of Environment, Forest and Climate Shri Bhupender Yadav and Mr. John Kerry, U.S. Special Presidential Envoy for Climate (SPEC), at an event held in New Delhi.
• The dialogue will not only strengthen India-US bilateral cooperation on climate and environment but will also help to demonstrate how the world can align swift climate action with inclusive and resilient economic development, taking into account national circumstances and sustainable development priorities.
• The launch was preceded by a bilateral meet where both sides discussed at length a wide range of climate issues relating to COP26, Climate Ambition, Climate Finance, Global Climate Initiatives including International Solar Alliance (ISA), Agriculture Innovation Mission for Climate (AIM4C).

Insolvency And Bankruptcy Code (IBC):

The Supreme Court has said “judicial delay” was the main reason for the failure of the insolvency regime in India prior to the 2016 Insolvency and Bankruptcy Code (IBC), as it urged company law tribunals to “strictly adhere” to the timelines under the new law and clear pending resolution plans.

• The IBC mandates a 330-day outer limit for conclusion of the corporate insolvency resolution process (CIRP).
• However, a parliamentary panel report published last month stated that more than 71% cases have been pending before the tribunals for over 180 days.

Reasons for delays:

• The national company law appellate tribunal taking considerable time in admitting CIRPs.
• Multiplicity of litigation.
• Appeals to the NCLAT and the Supreme Court.
• Long delays in approving the resolution plan by the adjudicating authority (NCLT) affect the subsequent implementation of the plan.
• These delays, if systemic and frequent, will have an undeniable impact on the commercial assessment that the parties undertake during the course of the negotiation.
• Also, they cause commercial uncertainty, degradation in the value of the corporate debtor and makes the insolvency process inefficient and expensive.

About the IBC:

• The IBC was enacted in 2016, replacing a host of laws, with the aim to streamline and speed up the resolution process of failed businesses.
• The Code also consolidates provisions of the current legislative framework to form a common forum for debtors and creditors of all classes to resolve insolvency.

Input Tax Credit (ITC):

The Supreme Court has confirmed a Madras High Court judgment which upheld a fiscal formula included in the Central Goods and Service Tax Rules to execute refund of unutilised Input Tax Credit (ITC) accumulated on account of input services.

• The Madras HC had held last year that Section 54(3) of the Central Goods and Service Tax (CGST) Act – which allows for a refund of Input Tax Credit (ITC) where the accumulation is due to an inverted duty structure – does not infringe on Article 14 of the Constitution.
• It said that refund of tax paid on inputs and not input services was available under the inverted duty structure.

Input Tax Credit (ITC):

• It is the tax that a business pays on a purchase and that it can use to reduce its tax liability when it makes a sale.
• In simple terms, input credit means at the time of paying tax on output, you can reduce the tax you have already paid on inputs and pay the balance amount.
• Exceptions: A business under composition scheme cannot avail of input tax credit. ITC cannot be claimed for personal use or for goods that are exempt.
• There could be possibility of misuse of the provision by unscrupulous businesses by generating fake invoices just to claim tax credit.
• As much as 80% of the total GST liability is being settled by ITC and only 20% is deposited as cash.
• Under the present dispensation, there is no provision for real time matching of ITC claims with the taxes already paid by suppliers of inputs.
• Currently there is a time gap between ITC claim and matching them with the taxes paid by suppliers. Hence there is a possibility of ITC being claimed on the basis of fake invoices.