Most big scandals and corporate failures in India in recent years happened for ‘want of matured compliance’, Finance and Corporate Affairs Minister Nirmala Sitharaman said on Monday, adding that the government was committed to making compliance norms simpler for businesses.
Addressing the Institute of Company Secretaries of India (ICSI) on their 53rd foundation day, Ms. Sitharaman urged them to recommend ways to simplify compliance requirements.
‘Lacking in maturity’
“In the last few years, compliance-related issues have been the main cause for companies to fail to live up to the expectations of their investors… Most often, big scandals have come out for want of mature compliance,” she said.
“The greater simplicity we can bring into the system, the finer things would work… We are trying to remove the archaic laws, bring in only amendments that can further simplify the system and reduce penal provisions.” Suggesting that the emergence of greater opportunities for corporate India had occurred mostly under the present government, she said: “Your first 53 years may have had an India that was probably struggling to have a fair, open, free marketplace where companies can function freely and openly work towards wealth creation.”
Though India embarked on economic reforms in 1991, the Minister said, a lot was left to be done. “What was envisaged in 1991 itself hadn’t happened, for very many reasons, the pace at which the opening up had to happen, the pace at which companies had to be liberated from the licence quota raj, hadn’t happened.
“That actually is rapidly opening up the doors for companies... more in the last 7-8 years,” she said.
Finance Secretary T.V. Somanathan acknowledged that while the Centre had been easing the compliance burden on firms, there was room for further relaxation.
He requested the ICSI to help identify redundant and cumbersome norms that could be done away with.
