New Delhi: Lack of trust in institutions is the root cause for slow progress vis-à-vis achievements of various objectives like improvement in GDP growth, growth in improvement of peoples’ health and education and other such objectives, member of the Planning Commission, Arun Maira said at an ASSOCHAM event held in New Delhi today.
“Rapidly declining trust of citizens in the institutions of the country, be it the political institutions, government institutions and the corporate institutions and what they are doing and in whose interest they are doing is leading to a political, decision-making and action logjam in the country,” said Maira while addressing an a national conference on ‘Corporate Compliance Management,’ organized by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
“This logjam is not just going on in the parliament but in our districts where actions are not being taken and where the agreements and alignments between the industries and governments are not happening rapidly,” said Maira.
These things emerged out of the consultations held by the Planning Commission through several organisations, civil society, business associations, economists’ group, experts group and other such think tanks to ascertain the many perspectives of the people that need to be taken into an account, said Maira. “For the first time while we made the 12th plan we thought to look into the heart of India and see the whole system, the many forces and perspectives shaping up the country.”
“While listening to India through these many channels and these many perspectives we located at the heart of the matter concerns about slowing economic growth, slow pace of improvement in health and education of the people in the country, poor institutions and tapering off the peoples’ rights and poor or no decisions and poor performance is coming in the way of achieving these objectives,” said the member of the Planning Commission.
“The new companies bill has something for everyone as we have compressed most of the best practices of the world into it and that would make sense to corporate India be it the small, medium or the large sector,” while addressing the ASSOCHAM seminar, Dr. Bhaskar Chatterjee, director general and CEO of the Indian Institute of Corporate Affairs (IICA).
“Legal, financial, governance, sectoral compliances and new elements like CSR regulation are the pillars where the main body of compliance lies,” said Dr. Chatterjee while breaking up the compliance world in major areas.
Dr. Chatterjee further said that cost of compliance must lie at the heart of every entity as they can derive a lot of value through it. “If you have not budgeted for compliance you have committed a serious mistake because if you are not able to comply well and slip up then costs and penalties are way too high to the tune of Rs 25 lakhs and three years imprisonment as per the section 134 of the new companies bill.”
On the role of the independent director, Dr. Chatterjee said it has been clearly defined in the new companies bill which was not there earlier as the companies had independent directors that were too close to the companies and next to indistinguishable. “We hope we will soon have truly independent directors as their role has become part of the regulatory mechanism.”
Talking about the role of stakeholders of an organization, Dr. Chatterjee said “Now the companies are answerable not just to the shareholders unlike in the previous regime but to the large entity of stakeholders and this consciousness is seeping not only in governance of companies but also into our regulatory framework.”
Amid others who spoke during the ASSOCHAM conference included Ms Preeti Malhotra, chairperson of ASSOCHAM National Council for Corporate Affairs & CSR and ED & group president, corporate affairs of the Spice Group and G.P. Madaan, senior member of ASSOCHAM National Council for Corporate Affairs & CSR.