Union Corporate Affairs Minister Dr. M. Veerappa Moily on Tuesday said the over all aim of the initiatives taken up by his ministry is to be responsive and sensitive to changes in the business environment and suitably formulate and modify corporate laws and regulations from time to time.
Dr. Moily today detailed the recent initiatives taken by his ministry for attaining an all- inclusive role of addressing a vide sweep of functions, including Corporate Governance Reforms and the Emerging Legal Framework with a vision to facilitate corporate growth with enlightened regulation.
"We are meeting in a scenario which is growth driven with realistic optimism indicating an ever improving economic situation. The measures recently announced to accelerate the pace of reforms has not only sent a positive signal to the corporate sector but have auger well in the economic as a whole and I am glad that these measures have been whole-heartedly welcomed by different shades of objective opinions," said Dr. Moily while addressing mediapersons gathered at the annual Economic Editors Conference here.
"That these announced measures are not a passing phenomenon is buttressed by the fact that on a single day i.e. 4th of October the inflow of FII was 0.8 billion US Dollars. What is more the movement of NIFTY in the recent past has been of the order of 25 % which is the highest in the corresponding period among all the major exchanges like NASDAQ (21 percent) and the German exchange (20 percent)," he added.
Dr. Moily said the Ministry of Corporate Affairs is tasked with the responsibility of not only regulating and overseeing governance of companies, but is indirectly responsible to providing a suitable legal framework which allows businesses to play a role in the development by a country with of course involvement and policy inputs from a number of ministries / agencies.
Dr. Moily said the corporate sector continues to grow at a steady rate, and added that at present the number of companies incorporated is nearing a million mark.
"There is more to this figure - 2.00 lakh companies have been added in the last two years alone. This shows a high degree of corporatisation of businesses in the country and promises ever increasing role of corporates in the overall Indian growth story," he added
Dr. Moily referred to the Cabinet approval of a number of amendments to the Companies Bill introduced last year largely on the basis of the report of the Parliamentary Standing Committee on Finance.
"The amendments seek to fine tune the provisions of the Bill to make them more effective and serve the needs of the growth of the corporate sector," he added.
The Corporate Affairs Minister, however, dispelled the impression that one of the amendments makes the requirement to spend two percent of the average net profits of the last three years by the prescribed class of companies from non-mandatory to mandatory.
He clarified that in the Companies Bill, 2011 as introduced, the stipulation is that the select class of companies "shall endeavour to ensure" expenditure as above on the CSR - if they fail to do so, the Director's Report will explain the reasons for not being able to achieve the requisite target.
Dr. Moily also mentioned of the recommendations made by a Committee of eminent business personalities under the Chairmanship of Shri Adi Godrej on adoption of 17 "Guiding Principles" to underpin the system of corporate governance in the country.
He said SEBI is actively contemplating making these principles as part of its listing agreements and the MCA on its part is examining as to how these principles can form part of policy guidelines of corporate governance.
He also hoped of obtaining the endorsement of the Cabinet to the National Policy on Competition applicable to the Centre and States to serve as a forward linkage and extension of the Competition Act.
Dr. Moily said his ministry has taken serious note of the reported procedural bottlenecks, jurisdictional overlaps and systematic inertia coming in the way of Ease of Doing Business.
He informed that a Committee constituted by the Ministry has prepared an Annual Business Responsibility framework, which has been shared with various stakeholders, and intimated that SEBI has already adopted this framework got top 100 listed Companies. (ANI)