Corporate Affairs Minister, Veerappa Moily, on Wednesday told captains of the Indian Industry that a watchdog regime was necessary to protect investors from financial fraud without affecting flexibility and autonomy of an enterprise.
In his address at industry chamber ASSOCHAM’s function, Moily informed that the Ministry of Corporate Affairs is setting up a high-powered committee with immediate effect to recommend short, medium and long term process reforms at the Central and state levels to enhance institutional capability for effective delivery of core services together with an inclusive economic growth process.
“Being a reformist I would like to go for all out reforms and thus we are constituting a committee to ease the business atmosphere in the country across all sectors and segments and will address them on short, long and medium term basis and the committee is expected to submit its report within next 45 days,” Moily said.
Speaking about the necessity of a watchdog, the Minster said, “ We do realise that our pro-active role to improve quality of corporate governance does at times cause some misgivings in the corporate world there is no doubt that we require a watchdog regime without affecting flexibility, autonomy and enterprise...” “It is constant endeavour to keep this equilibrium, Moily added.
He said it was the responsibility of the Ministry of Corporate Affairs to protect the interest of millions of investors from losses arising out of financial frauds and related business irregularities including mis-governance.
Moily added that corporate growth was not just about increasing turnovers anymore but is much wider and includes corporate social responsibility corporate governance and corporate sustainability.
Good governance reflects the way companies address legal responsibilities and therefore provides the foundation upon which corporate social responsibility and corporate sustainability practices can be built to enhance responsible operations he said.
He also said that there was a need for institutional reforms and capacity building in financial management system at all levels of government.
The purpose, he said, is not only to ensure high quality of accounting and financial reporting but also monitoring flow of funds in various governmental programmes and projects.