PM promises overhaul of corporate and commercial laws

New Delhi : Prime Minister Manmohan Singh Saturday made a pitch for inclusive, faster and sustainable growth, promising to overhaul the existing corporate and commercial laws to facilitate growth of the corporate sector.

In response to transformational changes of this century, the Prime Minister said: “We are examining many of our commercial and corporate laws to make them relevant to the challenges that lie ahead, particularly for ensuring distributive equities and empowerment of the marginalised sections of our society.”

“We will soon bring before Parliament the new Companies Bill that has been in the making for quite some time now,” Manmohan Singh said.

The prime minister said this in his inaugural address at the International Academic Conference, 2012, devoted to ‘Economic Growth and changes of Corporate Environment in Asia’.

The two-day conference was organised by the Indian Law Institute in association with Korean Legislation Research Institute and Asian Legal Information Network.

“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’, the prime minister said.

Manmohan Singh said the evolving of economic space, has to be a “addressed by all organs of the government: the executive, legislature and the judiciary”.

The prime minister called for building a climate to attract investments, support and reward innovation.

“Above all, we have the responsibility to ensure probity, transparency and accountability in processes of governance.”

Dwelling upon the corporate governance, the prime minister said it includes responsible conduct towards all the stakeholders, within the corporation as well as outside and seen as good economics besides desired moral behaviour.

Corporate Social Responsibility (CSR) was increasingly being seen as a fundamental dimension of the social contract between human beings and therefore sought to be subject to public disclosure and scrutiny, he said.

Earlier in his address at the conference, Chief Justice S.H. Kapadia in an obvious reference to political turmoil in the wake of the Comptroller and Auditor General’s report on allocation of coal blocks, said: “The basic fact is that loss is a matter of fact whereas profit or gain is a matter of opinion.”

In the absence of economic literacy coupled with legal literacy, Justice Kapadia said that “government institutions will suffer both in terms of democracy and the economy will be in peril.”

Justice Kapadia regretted that in public discourse “our bench mark becomes what is stated in electronic media and the print media. We don’t go into deep studies”.

He quoted Dr. Bhimrao Ambedkar saying that the Directive Principles of State Policy were incorporated in the constitution so that future governments could chart on the course of achieving economic democracy.

Justice Kapadia said that without economic democracy – empowerment of poor and vulnerable section of the society – the political democracy would be in peril.

Advocating more and more investments, Justice Kapadia said that 8 percent or more growth in GDP translates into creating 10 million jobs and if growth pushes down to 5.5 percent then creation of jobs would shrink to 8.5 million.

Cautioning that youth in the country was restless and needed to be pacified, he said that leaders of this country must understand that law is not discretion and it sets “minimum standards of fairness.”

Justice Kapadia that “without the rule of law, the well connected will grab an unfair share of development….”

Justice Kapadia’s successor-designate Justice Altamas Kabir delivered the key note address.

Justice Kabir said that some hard decisions were needed to be taken.

Referring to Prime Minister Manmohan Singh’s address to the nation Friday, Justice Kabir said that there were certain issues that needed to be debated like the issue of foreign direct investment (FDI) which has some flip side also.

He said there are a section of people who may think otherwise.

Justice Kabir wondered that while helping a certain section of people (by encouraging the FDI) “can we ignore the section which will face the pinch”.

The conference was also addressed by union Law Minister Salman Khurshid and attorney general G.E. Vahanvati.