A day after presenting the nation a spirited defence of his renewed economic reforms, Prime Minister Manmohan Singh said the UPA would soon bring a new Companies Bill before Parliament.
“We must build a climate that attracts investment and encourages and rewards innovation, and establish fair and effective regulatory institutions and also legal processes. Above all, we have the responsibility to ensure probity, transparency and accountability in processes of governance,” Singh told a conference on Economic Growth in Asia and Changes of Corporate Environment.The Bill is a key part of these aspirations, because once voted into law by Parliament, it would create checks and balances to prevent frauds, make corporate board room decisions transparent and hold auditors and directors more accountable.
It will allow shareholders’ associations to take legal action against companies’ promoters and management through class action suits and provide for faster prosecution of companies doing wrong.
The Bill, which was first introduced in Parliament in August 2009, is expected to incorporate amendments suggested by the Parliamentary Standing Committee on Finance.
“In response to transformational changes of this century, 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,” Singh said.
Finance minister P Chidambaram told the conference that clarity in tax laws, a non-adversarial approach to tax administration and a quick dispute resolution mechanism were key to creating a stable environment.
Chidambaram added that he was satisfied with the overall positive response to the recent reform measures of the government.
“I am happy to note that the recent decisions taken by government have been widely welcomed, especially by the markets and by important stake-holders in the market,” he said.
Stock markets have risen and the rupee strengthened in recent days.