Passing laws may have become difficult, but the Government is committed to putting in place a new financial regulatory system that will serve the nation well for at least the next 50 years, said Finance Minister P. Chidambaram.

A complete revamp of the financial sector laws in the current political milieu may be tough, but there are several elements of the Financial Sector Legislative Reforms Commission (FSLRC) report that can be operationalised at the earliest, he said.

Detailed consultations before issue of any new regulation and conducting basic cost-benefit analysis are recommendations that can be implemented right away, Chidambaram said, addressing the third national seminar on ‘India Financial Code’ organised by the Institute of Company Secretaries of India (ICSI)..

SRIKRISHNA PANEL

Budget 2010-11 had proposed the setting up of FSLRC to revamp the financial sector laws so as to bring them in line with the requirements and expectations of the sector. Justice (Retd) B. N. Srikrishna was asked to head the FSLRC, comprising ten experts from the fields of law, economics, finance, regulation and markets.

The panel, which was set up in March 2011, submitted its report to the Finance Minister in March this year. Stating that it was not easy to pass laws in India, Chidambaram pointed out this has become even more complex with coalitions and “legitimisation of obstruction as a parliamentary tactic”.

He highlighted the case of the Companies Bill, which even after passage by the Lok Sabha is hanging fire with the Rajya Sabha yet to approve it.

PROJECT PLAN APPROACH

Careful analysis of every sentence of existing laws and every section of the proposed Indian Financial Code is necessary before any large scale repeal of existing laws can be agreed upon, Chidambaram added.

srivats.kr@thehindu.co.in

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