The Companies Bill, 2011, which was listed for passage in the Winter Session, was strongly opposed by the opposition parties and UPA ally Trinamool Congress as they said this was virtually a new Bill with considerable alterations to the earlier version
New Delhi: The government on Wednesday said it is hopeful of taking up the new Companies Bill for consideration and passage in the upcoming Budget Session of Parliament, reports PTI.
“Standing Committee had their first meeting on 24th January.
I expect them to give (clearance) as early as possible so that I can present the Bill in the next session of Parliament and get it passed," corporate affairs minister Veerappa Moily told reporters here.
The Companies Bill, 2011, which was listed for passage in the Winter Session, was strongly opposed by the opposition parties and UPA ally Trinamool Congress as they said this was virtually a new Bill with considerable alterations to the earlier version.
As a result, the Bill has to be sent back to the Parliamentary Standing Committee on Finance for scrutiny.
The new legislation seeks to replace the half-a-century-old Companies Act, 1956, and modernise corporate practices in line with developments taking place across the globe.
The Bill will introduce new rules, covering areas such as corporate social responsibility (CSR), class action suits and a fixed term for independent directors. It also proposes to tighten laws for raising money from the public.
The Bill also seeks to strongly check insider trading by company directors or key managerial personnel by treating such activities as a criminal offence.
Further, it has proposed that companies should earmark 2% of their average profit of the preceding three years for corporate social responsibility (CSR) activities and make a disclosure to shareholders about the policy adopted in the process.
Meanwhile, speaking at the CSR Conclave organised by SCOPE-IICA, SCOPE director general UD Choubey said the mandatory provision of CSR in the public sector should be extended to the private sector.
Mr Choubey also stressed on the need for social audit of the expenses incurred by NGOs.
Under the CSR provisions for PSUs, a company with a net profit of less than Rs100 crore will have to spend 3%-5% of it on the CSR.
Those PSUs with a net profit of Rs100-Rs500 crore a year will have to earmark 2%-3% of it for CSR. A company with a bottomline of Rs500 crore and above will have to set aside 0.5%-2% for CSR activities, which should preferably be related to its business as a natural corollary.
Mr Moily further said he has sought a report on the huge quantum of ‘sundry income’ reported by several Indian entities of PricewaterhouseCoopers (PwC).
“I sought a report... First we will get an appropriate report. If there is prima facie case, we will proceed later,” Mr Moily added.
“We are hopeful that by the end of March, headline inflation would be between 6% and 7% while the growth rate may be around 7% plus,” finance minister Pranab Mukherjee told a group of eminent economists at the pre-Budget meeting
New Delhi: Finance minister Pranab Mukherjee Wednesday said the economy may expand by over 7% in 2011-12 and inflation could ease to 6%-7% by March-end, even as economists urged the government to adopt fiscal discipline and push policy reforms for higher growth, reports PTI.
“We are hopeful that by the end of March, headline inflation would be between 6% and 7% while the growth rate may be around 7% plus,” Mr Mukherjee told a group of eminent economists at the pre-Budget meeting.
The finance minister, who would present the Union Budget in the middle of March, discussed the challenges faced by the economy on both global and domestic fronts.
“The current year was a challenging year as we had to face the problem of inflation, fiscal deficit and maintenance of sustainable and inclusive growth,” he said.
Due to volatility of international crude prices, Eurozone crisis and overall slowdown in the growth process in developed countries, emerging economies including India had also to face the adverse impact of global slowdown.
After the meeting, Federation of Indian Chambers of Commerce and Industry (FICCI) secretary general Rajiv Kumar said the economists urged the finance minister to present a Budget signalling fiscal consolidation and policy reforms.
The economists also expressed concern over the widening fiscal deficit, which had crossed 92% of the Budget target by December.
“Budget has to make a strong policy statement. Show the world that government is serious on fiscal consolidation and fiscal deficit will be reduced,” Mr Kumar told reporters.
The headline inflation, which was near double digit for almost two years, has started showing signs of moderation and declined to 7.47% in December.
In the first half of the current fiscal, the economy grew by 7.3% amid adverse global and domestic factors. Last year, the gross domestic product (GDP) stood at 8.4%.
According to a S&P report titled “Increased Country Risk And Reduced Demand To Test Most South Asia Companies In 2012”, the rise in risk in India is due to a perceived increase in corruption and uncertainty in policies, while, political turmoil and an energy crisis have raised country risk in Pakistan
New Delhi: The perceived notion about growing corruption and the policy uncertainties have increased the country-specific credit quality risks for the companies in India, reports PTI quoting global rating agency Standard and Poor’s S&P.
As per S&P, the country-specific risks have increased in India in the past two years, making it harder for the companies to manage their cash flows, make their long-term strategies, and proceed with investment plans.
“In India, the government is engaging with the industry to address policy issues, but we have yet to see any significant positive actions,” it added.
However, the creditworthiness of large companies in India and other parts of South Asia is strong enough to withstand the impact of demand slowdown, rising costs and other country-specific risks, it noted.
On the other hand, many of the smaller companies in this region are not on a similar footing and their credit quality faces the risk of deteriorating in such a scenario.
“The outlook on most of the companies that we rate in South Asia is stable,” Standard & Poor’s credit analyst Mehul Sukkawala said.
“These companies are generally large in their respective markets and have diversified operations, experienced managements, and strong financial resources. This should help them sustain their credit profiles,” Mr Sukkawala added.
S&P believes liquidity for companies it rates in the region “will remain adequate to strong because of companies’ large cash balances, strong banking relationships, and access to capital.”
According to a S&P report titled “Increased Country Risk And Reduced Demand To Test Most South Asia Companies In 2012”, large companies in India, Pakistan, and Sri Lanka are strong enough to withstand the effects of a slowdown in demand and a rise in input costs and country risks.
However, the credit quality of a large number of their smaller peers is likely to deteriorate.
The rating agency however, cautioned that South Asian companies are vulnerable to any further weakening in domestic demand in 2012 as “their respective governments have limited capability to provide a fiscal boost in the face of a domestic or global crisis”, it said.
The report notes that country risk has increased in Pakistan as well in the past two years.
The rise in risk in India is due to a perceived increase in corruption and uncertainty in policies, while, political turmoil and an energy crisis have raised country risk in Pakistan.
Mr Sukkawala further added that “we expect new capital expenditure commitments to continue to slow down in South Asia, with the exception of Sri Lanka. The slowdown is most intense for projects in the electric utilities, and metals and mining sectors.”