Q.1) What is retrospective taxation? Critically analyze its impact on India’s Ease of Doing Business prospects. (15 Marks - 250 Words)
Why this question? - The Permanent Court of Arbitration (PCA) at The Hague has ruled that the Indian government was wrong in applying retrospective tax on Cairn.
Intro - Start with context - Why in new?
- Examples of countries imposing it
Way ahead - Plug loopholes in India’s taxation laws etc.
Conclusion - Summarize based on above discussion.
Q.2) Independent Directors (IDs) are the tightrope walkers in the corporate circus. The more their experience, autonomy and clout, the merrier for minority shareholders. Discuss. (250 words)
Why this question?
- According to the Corporate Governance Survey 2020 by online platform LocalCircles, 79% individual shareholders have expressed concern about the independence of independent directors. Thus the question.
Introduction: Mention in brief about the definition of IDs.
Significance of IDs:
- Trustees of shareholders (especially minority shareholders): They are expected to take an outsider’s view and ensure checks and balances in areas such as strategy, performance, key appointments, remuneration, etc.
- Good governance: The ID is envisaged as a watchdog on the Board to ensure good governance.
- IDs act as the connecting link between the management of the company and its many diverse stakeholders.
- The Tata-Mistry spat: In the former, independent directors in listed companies such as Indian Hotels, Tata Steel, Tata Chemicals faced the wrath of the promoter group for throwing their weight behind Mistry.
- The Infosys Board shake-up : Independent directors were unable to play impartial peacemakers when founder Narayana Murthy repeatedly alleged governance lapses involving the Board.
Way forward: Recommendations of the Uday Kotak Committee on Corporate Governance
Conclusion: Summarize the above points