As per the draft law, whoever offers or gives bribe directly or indirectly for a private sector entity, for the person himself or for another person shall be punishable
New Delhi: Indian industry bodies have supported a proposed law to criminalise private sector bribery saying such an attempt would help in checking corruption, reports PTI.
Federation of Indian Chambers of Commerce and Industry (FICCI) has noted with approval the government attempt to amend the Indian Penal Code (IPC) to make corruption in private sector a criminal offence.
"We believe that such a provision could be an effective deterrent and help curb corruption," it said.
The Central Government has proposed to make bribery in private sector -- both giving and accepting it -- a criminal offence by amending the IPC.
However, FICCI said that it was necessary to ensure that the amended law does not cause undue harassment to businessmen in the country.
"It is imperative that such a law be implemented only after a thorough cleansing of the existing regulations and legal provisions...It is also important to ensure that the amended law does not cause undue harassment to private businessmen in the country," the industry body said.
The Government's move was also supported by the Associated Chambers of Commerce and Industry of India (Assocham). Assocham Secretary General DS Rawat said that the body favours such a law which was the need of the country.
Whereas, the Confederation of Indian Industry (CII) said it was "examining the matter internally".
The draft Indian Penal Code (Amendments) Bill, 2011, circulated to states and Union Territories by the Centre for their comments, would cover graft by an individual, firm, society, trust, association of individuals, company, whether incorporated or not, which undertakes any economic or financial or commercial activity.
At present, there are no legal provisions to check graft in the private sector.
As per the draft law, whoever in the course of economic, financial or commercial activity promises, offers or gives, directly or indirectly, any gratification, in any capacity, for a private sector entity, for the person himself or for another person shall be punishable.
The Centre has asked all States and UT administrations to give their views on the proposed amendments in the IPC.
According to an expert of Pricewaterhouse Coopers (PwC), a consultancy firm, penalising errant private firms could be a way to check corruption.
"Strengthening of corporate governance norms and increasing disclosure requirements thereby creating a market mechanism to penalise errant private firms could be a way to check corruption," said Kunal R Gupta, Associate Director, PwC India.
He also cited a US Law which deals with foreign bribery saying it had a "tremendous impact" in the manner in which companies and persons in that country do business.
"We understand that in the US context US Foreign Corruption Practices Act (FCPA) of 1977 which, in a slightly different context of foreign bribery, deals with the supply side of bribery, has had a tremendous impact in the manner in which the US companies and persons do business and on their compliance policies," Gupta said.
The expert hinted support to a regulatory body close on the lines of the US's Securities and Exchange Commission (SEC) and the UK's Financial Services Authority (FSA).
"Purely based on our experience and information available in public domain, SEC in the US and FSA in the UK have had a discernible impact on the corruption in private sector," the expert said when asked whether there was a need to have a regulatory body to check corruption in the private sector.
The Securities and Exchange Board of India (SEBI) has off late declined to play a CVC-like role to check corruption in private firms saying it was not its mandate.
Despite the recent policy measures, the current account deficit to GDP ratio will worsen to 4.1%, higher than the previous estimate of 3.6% by the year-end
Will the improvement in balance of payments (BoP) in the first quarter of the fiscal sustain? Not quite, according a Kotak Bank report titled “No joy yet”. While recent policy steps have been in the right direction, there may not be significant improvement under the capital account immediately, the report says because the global risk conditions are still not conducive. While the BoP outturn is marginally positive at $0.5 billion for the first quarter of the current fiscal (1QFY13), this is not likely to sustain and by end-FY2013, the BoP deficit will be $8.4 billion. This is based on the anticipation of continuing drag on the CAD (current account deficit) from the net interest income outflows.
On the positive side, India has increased its capital account receipts to $66 billion (3.6% of GDP) compared to $58 billion (3.2% of GDP) based on the current momentum of the short-term trade credit, FII flows and banking capital flows (NRI deposits).
But Kotak cautions that the services sector inflows may not see large increases due to the global slowdown continuing. It is now estimated that the CAD/GDP for FY2013E at 4.1%, higher than the previous estimate of 3.6%. Contributing to the negative outlook on the interest income component, it is now expected that there will be a net outflow of $17 billion against the earlier estimate of $12 billion.
CAD improved in 1QFY13 at $16.6 billion (3.9% of GDP) against a deficit of $21.8 billion in 4QFY12 (4.5% of GDP). Even as exports were lower in 1QFY13, there was a sharper contraction in the imports from all ends as: (a) gold & silver imports came down by 47.5% year-on-year due to higher gold prices (including effect of customs duty increase) and the jewellers’ strike to protest against excise tax increases, (b) decline in the oil imports due to a sharp drop in the international crude oil prices, and (c) a moderation in non-oil non-gold imports.
Interest incomes have been hit on account of low interest rates abroad. This drag from the net investment income failed to be supplemented by increases in the invisible receipts under software services and the private transfers, according to the Kotak report.
Capital flows remained steady, according to the Kotak report. Overall capital flows for 1QFY13 were at $17 billion (4.0% of GDP) against $16.6 billion (3.4% of GDP) in the previous quarter. This was despite a sharp fall in the FII flows in 1QFY13 against $14 billion in 4QFY12. Equity flows in 4QFY12 had improved significantly.
The policy of the Reserve Bank of India (RBI) to enhance the debt limits in the G-sec and the corporate bond markets for the FIIs has led to an increase in the FII debt inflows. The negatives of a poor FII flows in 1QFY13 was balanced out by a sharp increase in net FDI flows, banking capital (on account of higher NRI deposits) as also by an increase in the short-term trade credit.
Even as the BoP is in a marginal positive territory of $0.5 billion in 1QFY13, Kotak expects the BoP to remain in a stressed zone and produce a deficit of around $8.4 billion in FY2013E.
Kingfisher Airlines CEO Agarwal, while admitting that he himself have not received his salary, said the carrier will clear all pending salaries of its staff in next few days