The government is set to introduce a new set of disclosure norms and levels of compliance for companies, which would vary depending on their size.
The government is looking at reducing the compliance cost for smaller companies, union minister for corporate affairs Salman Khurshid told HT. This is expected to encourage these companies to go public.
“We may set different level of compliance for companies, the smaller companies may be allowed certain flexibilities,” Khurshid said.
At present, all firms have to follow the same compliance level and disclosure norms.
The idea is still very much at a nascent stage, a senior official of the ministry said. “At this point, we cannot say how many levels we may have,” the official said. The government is reportedly working with the Securities and Exchange Board of India.
Khurshid said the move would also provide a breather for those firms which are already listed but are “relatively” smaller in size. Of the 26,000 public companies in the country only 5,000 are listed on the stock exchange. A large number of these companies meet the required criteria for listing but are not listed.
The proportion of household savings in the stock market is miniscule now, and the government is evidently boost this.