Q1. Analyse the challenges associated with the mechanism of Social Audits. (250 words)
- Paper & Topic: GS III – Environmental Conservation related issues.
- Model Answer:
- What Justifies a Social Audit?
- A corporation or government can use social audits as a way to update its stakeholders on its social performance and work to enhance future social performance. Charles Medawar first proposed the idea in 1972.
- A development audit is not the same as a social audit. A development audit has a wider focus that encompasses environmental and economic issues, such as the success of a project or programme, whereas a social audit is more focused on the sometimes disregarded topic of social implications. The key difference between a social audit and a development audit is this.
- The Basics Of Social Audit:
- Complete transparency in the management and decision-making processes, with a responsibility on the side of the government to proactively grant the public free access to all relevant information.
- Participation: The right-based right of all affected individuals to participate in the decision-making and validation processes, not just their representatives.
- Representative Participation: When options are decided out of necessity, the right of the affected parties to give informed consent as a group or as individuals, as appropriate, is known as representative participation.
- Accountability: Direct and immediate responsibility for the relevant actions or inactions of elected officials and other government personnel to all persons involved and impacted.
- The value of social audits:
- By attentively observing governmental procedures, SA exposes irregularities and misconduct in the public sector and ends leaks and corruption.
- It provides analysis of an organization’s activities as well as an assessment of its social and ethical impact.
- By ensuring that local government representatives conduct themselves responsibly and openly, SA bridges the trust chasm that exists between citizens and their local governments.
- They are urged by SA to participate in programme execution development initiatives and open up more to social contact.
- The Gram Sabha, the focal point of rural administration, has a voice and influence because of SA. SA creates the foundation for management policy establishment by putting forth requests in a way that is accountable and socially responsible.
- SA improves the professionalism of the public sector by requiring Panchayats to keep adequate records and accounts of expenditures made with money from the government and other sources.
- Problems/Challenges With Social Audits:
- Gram Panchayats are not obligated to give Social Audit Units (SAUs) documents pertaining to job completion and expenditures (CAG report) in a number of states, nor are Gram Sabhas given social audit reports in their own languages.
- Because the government has not regulated the institutionalisation of SA, auditors are subject to implementing agencies that encounter resistance and intimidation and struggle to even acquire access to original data for verification.
- Before using funding, some SAUs must receive approval from the organisation in charge of the project.
- Numerous governments do not follow the requirements’ transparent selection process for the SAU’s director.
- Even once a year, some SAUs lack the manpower to cover all of the panchayats.
- SA is a useless endeavour because there are no penalties or legal implications for violating its rules and regulations.
- Members of the Gram Sabha are ignorant of their legal right to social audits because of this.
- It is difficult for auditors to take stock, accelerate, decelerate, or execute remedial measures since government agencies rely on a vague and imprecise system of referencing government accounts and government reporting procedures.
- People’s concerns about their livelihoods are the cause of their lack of participation in village activities.
- Actions That Need to Be Taken:
- Citizens’ groups must fight for the advancement of social audits and hold the political leadership and implementing organisations accountable.
- Each district should gather a team of social audit experts to train the committee members (stakeholders).
- The development of training programmes for social auditing procedures such as conducting and documenting audits, as well as speaking at Gram Sabha, is crucial.
- The system of social audits needs extensive support and encouragement from several authorities in order to become an institutionalised structure that cannot be disputed by vested interests.
Q2. Analyse the features of the Special Economic Zones. (250 words)
- Paper & Topic: GS III – Environmental Conservation related issues.
- Model Answer:
- What are special economic zones?
- A SEZ is a territory of a country with its own set of economic and commercial regulations, is frequently duty-free (Fiscal Concession), and has the goal of attracting investment and creating jobs.
- SEZs are also developed to improve regional governance and promote commerce.
- The aims of the SEZ Act are as follows:
- in order to boost economic activity.
- to increase the amount of goods and services exported.
- to expand my alternatives for employment.
- to increase both domestic and international investment.
- Construction of infrastructure facilities.
- Along with other incentives and amenities, SEZ units may be built, run, and maintained using domestic or duty-free imported items.
- exemption from taxes including, but not limited to, the income tax and the minimum alternate tax.
- The external commercial borrowing by SEZ units through reputable banking channels of up to USD $500 million per year has no maturity restrictions.
- For national and state level approvals, there is a one-window clearance process.
- SEZs in India:
- In 1965, Kandla, Gujarat, was designated as Asia’s first EPZ. Zone for export processing.
- The government started developing SEZs in 2000 as part of the Foreign Trade Policy to solve the infrastructure and administrative constraints that were viewed as being limiting EPZ performance, despite the fact that the foundation of these EPZs was identical to that of SEZs.
- In 2005, the Special Economic Zones Act was passed. Both the Act and the SEZ Regulations went into effect in 2006.
- SEZs, on the other hand, existed in India from 2000 to 2006.
- India’s SEZs were modelled after China’s very successful system in many ways.
- Of the 379 SEZs that have been notified, 265 are currently operational.
- About 64% of the SEZs are located in five states: Tamil Nadu, Telangana, Karnataka, Andhra Pradesh, and Maharashtra.
- The highest authority is the Board of Approval, which is presided by by the Secretary of Commerce (Ministry of Commerce and Industry).
- The Ministry of Commerce and Industry put together a committee under the leadership of Baba Kalyani to evaluate India’s current SEZ strategy. The panel presented its proposals in November 2018.
- Its main goals are to evaluate SEZ policies to make sure they comply with WTO (World Trade Organization) regulations and to promote best practises from across the world to maximise SEZ capacity utilisation and potential output.
- The performance thus far is:
- Exports: They climbed to Rs 7,59,524 crore in 2006-07 from Rs 22,840 crore in 2005-06. (2020-21).
- Investment increased from Rs. 4,035.51 crore in 2005-2006 to Rs. 6,17,499 crore in 2007-2008. (2020-21).
- Employment has increased from 1,34,704 in 2005–2006 to 23,58,136 at the moment. (2020-21).
- Challenges:
- Vacant land:
- Due to the pandemic’s delays and a lack of demand for SEZ space, there is unutilized land in SEZs.
- Different Models:
- The many different economic zone models that exist include SEZs, coastal economic zones, the Delhi-Mumbai Industrial Corridor, the National Investment and Manufacturing Zone, food parks, and textile parks, to name a few. These models all struggle to include the many models.
- ASEAN countries’ threats:
- The rules of many ASEAN countries have recently been altered in order to entice foreign enterprises to participate in their SEZs and engage on an increasing number of skill-building programmes.
- The benefits of Special Economic Zones include:
- They increase foreign direct investment in the FDIC (FDI).
- Special Economic Zones increase foreign exchange earnings.
- They aid in the employment process.
- They encourage the experimentation of novel policies.
- The creation of special economic zones increases exports.
- They support economic expansion.
- Baba Kalyani Committee recommendations:
- switch from focusing on export growth to widely based Economic Growth and Employment (Employment and Economic Enclaves-3Es).
- Standards and recommendations specific to manufacturing and service SEZs are being developed.
- To increase investment efficiency, switch the 3Es development strategy from being supply-driven to being demand-driven, based on certain industries and the amount of existing inventory in the region.
- The 3Es’ Ease of Doing Business (EoDB) structure is in line with governmental goals. For new investments, operational requirements, and exits, there is a single integrated web platform.
- Increase your competitiveness by making investments in business services, utilities infrastructure, and fast multi-modal connection. It is crucial to support the development of high-quality infrastructure within or related to the zones, including high-speed rail, quick roads, passenger/cargo airports, shipping ports, and warehouses.
- To promote integrated industrial and urban development, encourage people to walk to their places of employment. The federal government and the states should work together to develop a framework that connects all of the efforts.
- Processes for developers and renters should be loosened up in order to handle operating and exit difficulties.
- Extension of the Sunset Clause and Preservation of Tax or Duty Benefits
- By broadening the scope of services, more services will be able to cooperate.
- Additional enablers and procedural easings are also included.
- Utilizing the Multi Services SEZ IFSC for all incoming and leaving foreign investment, there is just one regulator for the IFSC.
- There are incentives for domestic institutions to employ the IFSC SEZ’s services.
- Extension of services-related benefits Enabling non-traditional sectors to invest in 3Es and SEZs dedicated to certain industries is part of a plan to promote exports.
- Long-term leases should be flexible for both landlords and tenants.
- Customers from outside the 3Es/SEZs are permitted to subcontract without limitations at any level.
- When determining NFE, domestic suppliers who support “Make in India” will be taken into account.
- Products that are given to developers and utilised in the manufacture of export-worthy goods shouldn’t be subject to export tariffs.
- Developers have more flexibility in how they use NPA and how they sell space to investors or as separate apartments.
- In order to improve credit availability and make long-term borrowing simpler, infrastructure must be in good condition.
- Encourage MSME involvement in the 3Es and provide manufacturers and service providers permission to open up shop there.
Conflicts are resolved through arbitration and business courts.
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