Friday, August 09, 2013

Rajya Sabha passes Companies Bill: Telecom mess due to TRAI's failure, says Mani Shankar Aiyar initiating the debate

New Delhi: Congress' nominated member in Rajya Sabha Mani Shankar Aiyar was a surpise choice to commend the UPA's Companies Bill 2012 which was debated and passed in the Upper House on Thursday afternoon. Minister for company affairs Sachin Pilot skilfully piloted the bill which was passed in the Lok Sabha in December, 2012. Pilot explained that the main theme of the bill which was being amended after more than half a century – the earlier Companies Law was enacted in 1956 – was “less regulation and total compliance”. Aiyar, no reforms enthusiast, held the day with his mordant wit and clear-eyed intelligence, so much so that BJP's Piyush Goyal, an unabashed market advocate, praised Aiyar's intervention. Aiyar remarked that there was a time when the state was to occupy commanding heights of the economy. After reforms it was decided to vacate the comanding heights and depend on the private sector to boost economic growth. “Nature abhors a vacuum. Private sector will seize the commanding heights,” he said. While he conceded that the private sector could be technically speaking more efficient, he reminded the state cannot abnegate its moral obligation to the people. He said that the Companies Bill was putting in place a regulatory framework which was a good thing but he followed this up with caveats. He thought that the mere setting up of regulatory authorities was not sufficient. He said that the TRAI, which was the watchdog for the telecom sector, has not fulfilled expectations and that the telecom mess followed this failure. He also felt that the petroleum regulatory authority too did not fare well. He said that the Institute of Chartered Accounts of India, of which his father was a member, has failed too in its duty, and urged the need to make the private auditors more accountable and more liable to penalties. He cited Karl Marx's observation about dominant classes which has nothing to do with evil capitalists and warned minister for company affairs Sachin Pilot that he should not be seen with Das Kapital on his bookshelf because then he would lose his job. Pilot in his reply highlighted the important features of the bill including the One Person Company (OPC), which will now empower the craftsman and artisan to create a company and avail the credit facilities available to corporates. Responding to the demand that minority shareholders and women and other oppressed sections should have a representation as independent directors, Pilot said that it is now mandatory that there would be a woman independent director, he said that in his interactions with the corporates he stressed the need to give representation to the Scheduled Castes (SCs) and Scheduled Tribes (STs) without making it a statutory obligation at this stage. He put forward the same argument with regard to Corporate Social Responsibility (CSR). Pilot said the bill mandated that two per cent of the corporate profits should be spent on the community and in the area where the company was operating. Again he pleaded that there should not be penalties if it is not complied with.

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