JOIN USReforms will be 'investor-friendly'
A day after seeking the people’s cooperation in taking hard decisions to push the economy onto a higher growth trajectory, Prime Minister Monmohan Singh on Saturday promised more investor-friendly reforms in the coming days. The much-awaited Companies Bill will soon be a reality, he said.
Singh said his government is examining most of the commercial and corporate laws to make them relevant to the challenges ahead.
His assurance for revisiting corporate laws came a day after the government eased overseas borrowing norms to facilitate credit availability for local companies and help spur capital inflows. The government also raised the limit for rupee loans that infrastructure and manufacturing companies are allowed to refinance through overseas borrowings.
Addressing the International Academic Conference, 2012, devoted to 'Economic Growth and changes of Corporate Environment in Asia', the Prime Minister also reiterated the importance of corporate social responsibility as being fundamental to sustainable growth and said the Companies Bill will soon be introduced in Parliament.
It seeks to make significant changes in functioning of the corporate sector is still awaiting the approval of Parliament. The BJP has opposed the Bill in its current form.
The Bill proposes to tighten laws for raising money from the public. Among other things, it seeks to prohibit any insider trading by company directors or other personnel and treats such activities as a criminal offence. It also proposes that companies should earmark 2 per cent of their average profits in the preceding three years for CSR activities and make a disclosure to shareholders about the policy adopted in the process. The Bill also incorporates features like class action suits, which will benefit small investors seeking relief from large corporations.
"As Asian governments, we in the government have the responsibility to ensure that corporate laws match up to international standards, that the regulation of our stock exchanges comes up to the expectations of global investors and that our banking and financial sectors are exemplars of both efficiency and stability,” Singh said. Singh also hailed the Indian judiciary for delivering judgements with international ramifications and assured that government is ready to adopt the transnational changes in corporate and economic laws. Singh said that with its high economic growth rate, the Asian region is expected to play a crucial role in driving global economic recovery.