The new Companies Bill and the National Competition Policy are expected to be passed by Parliament by December this year, said Mr Veerappa Moily, Minister of Corporate Affairs.
The new Companies Bill is a modification of the 45-year-old Companies Act (1956)
“We have fine-tuned the Companies Act and the draft will be taken up for approval by the Cabinet in the next 15 -20 days. We expect it to be passed by the end of this year,” Mr Moily said at a CII International Corporate Governance Summit on Tuesday.
The implementation of the National Competition Policy will also help the economy by bringing down the inflation rate to five-six per cent, he said. The competition policy will help ensure healthy pricing and will prevent cartelisation, he said.
During the course of the summit, corporate governance trends as well as challenges were discussed. Corporate governance practices in India face several challenges. There is a gap between corporate governance standards in the public sector and the private sector. Numerous government departments and multiple layers of bureaucracy stifle stringent enforcement of regulations and there needs to be an objective debate in corporate India about what is required to be done to make independent directors more effective, according to the CII KPMG Corporate Governance: ‘Value beyond Compliance' report.
Many speakers at the summit agreed that along with the other policies, there should also be a national policy on corporate governance to ensure transparency in businesses. “There is a trust deficit between the government and corporate bodies. We need to look at it and see that an atmosphere of trust is built up,” Mr Moily said.