Citizens' Issues
Industry bodies favour criminalising private sector bribery

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.

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COMMENTS

nagesh kini

4 years ago

We talk of global good governance practice, even without
any enactment, nothing prevents
the industry bodies from formulating their own Self Regulations.
Are we waiting for more of Neera Radias or Suhel Seths to emerge?
Who 'persuaded' her to wind up her vast lobby empire after the expose?
What happened to the results of the finding of tapped information gathered? Was it pushed under the back burner just because too many big names, including those of high profile media personalities would have to answer inconvenient questions? And Ratan Tata's invasion of privacy suit? Why a quiet burial? There is more than meets the eyes!

jaideep shirali

4 years ago

To me as a citizen, the focus on private sector bribery is just to divert the public attention from massive scams. I am more concerned about public money and bribery involving the govt and would prefer the harshest punishment for the culprits. If we can tackle that to a good extent, public life as a whole will be cleaner, including the private sector.

nagesh kini

4 years ago

Justice Dr. DY Chandrachud of the Bombay High Court wonders why the RTI Act is not made applicable to India Inc. where crores worth of public funds in terms of equity and borrowings are involved.
Extending the RTI to Corporate India should be the first step in the criminalization of private sector bribery in India.

nagesh kini

4 years ago

What stops the MCA to include this in the Corporate Governance disclosures by mandating it ?

FICCI, ASSOCHAM, CII or IMC do not require any 'amendments' to usher in Self Regulatory Mechanisms.
Why are they dragging their feet on verbal semantics?
Guilty conscious?

India’s balance of payments still a cause for concern despite first quarter improvement

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.

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Debt-ridden Kingfisher promises to pay staff salaries soon

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

 
New Delhi: A day after declaring a partial lockout, top officials of beleaguered Kingfisher Airlines on Tuesday met chief of the Directorate General of Civil Aviation (DGCA) and promised to pay salaries of the staff held up for last six months in the next few days, reports PTI.
 
Sanjay Agarwal, chief executive of KFA along with its executive vice president Hitesh Patel met DGCA chief Arun Mishra. Agarwal blamed a small section of employees for the mess, saying it had led to suspension of all operations till 4th October. The airline has stopped sale of tickets till then.
 
Agarwal briefed the DGCA about the financial problems facing the crisis-ridden carrier as well as the next steps being taken to restore normalcy.
 
"We have shared the steps which we are going to take in the next few days with the DGCA. We have explained our position to DGCA," Agarwal told reporters after the meeting.
 
Regarding pending salaries, he said, "we will clear the pending salaries in the next few days. I myself haven't got the salary." 
 
Kingfisher has been saddled with a huge loss of Rs8,000 crore and a debt burden of another over Rs 7,000 crore which it has not serviced since January.
 
Several of its aircraft have been either taken away by its lessors or grounded by the Airports Authority of India for non-payment of dues during the past few months.
 
Over 80 pilots and 270 engineers have been on intermittent strikes over the past few months, saying they had not been paid salaries since March this year.
 
The latest agitation launched by the engineers, supported by pilots, began on Friday.
 
Civil Aviation Minister Ajit Singh today made it clear that the airline would not be allowed to fly if safety was compromised.
 
"We will have to look at what their plans are....we will take a decision after reviewing the situation," he said.
 
Singh had yesterday suggested that since Kingfisher engineers were on strike, the airline could get its aircraft certified for flying by other certified engineers.
 
Following this, the airline, which has a fleet of Airbus aircraft, was understood to have initiated discussions with Air India and IndiGo to utilise their certified engineers to check their fleet. However, no firm agreements have yet been arrived at, airline sources said.
 
The Kingfisher officials informed DGCA that they would resume operations from Friday, sources said, adding that the aviation regulator wanted to be "fully satisfied" with their operational parameters.
 
It asked the airline to "explain their operational preparedness" again when they resume flights as safety was of prime concern, the sources said.
 
Kingfisher is understood to have initiated talks with "a couple of airlines" on putting in investments, sources in the know said, adding that the entire process would take two-three months to fructify.
 
Kingfisher is also understood to have informed DGCA that it has been in talks with the Central Board of Excise and Customs (CBEC) and Central Board of Direct Taxes (CBDT) to de -freeze its bank accounts to enable them pay the salaries.
 
About Rs60 crore were stuck in these accounts, which would go a long way to clear salary and other dues, sources said.
 
The airline officials have also informed the aviation regulator that some Indian banks have offered to help it out, but only after the company finds fresh investors and gets investments.
 
The airline has been operating seven Airbus A-320s and three turbo-prop ATRs to fly about 80 flights daily.
 
In a statement late last night, the Vijay Mallya-owned private carrier said it has been forced to declare a "partial lock-out" following a series of "protracted and unabated incidents of violence, criminal intimidation, assault, wrongful restraint and other illegal acts" by some employees.
 
The airline said, "the action by the recalcitrant employees who have regrettably chosen to take law into their own hands forcing a complete paralysis of operations were all unnecessary and unprovoked."
 
"It has been decided that flight operations will be suspended for the next three days, i.e. until 4th October," it added.
 
The airline also claimed that "a vast majority of the staff are willing to cooperate and support the company in these turbulent times." 
 
The agitators had yesterday met top airline officials but did not get any assurance about salary payments.
 
A representative of the striking engineers who was part of the meeting had said, "we had a long meeting with the CEO (Sanjay Aggarwal) but no solution has come out. Rather he threatened a temporary shutdown saying the company did not have funds to pay salaries even for a month."
 

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COMMENTS

rajeshpai

4 years ago

What bunkum!!Where was violence from staff??Also criminal intimidation.White lies from the well paid PR machinery.

The staff have been regularly and repeatedly assured that their salaries will be paid soon.And that day never comes.What has been the sacrifices that Dr Vijay Mallya has been making while his staff are squeezed for months??He continues to enjoy his champagne and caviar at Monaco alright.He is the King of Good Times you see.Poor chap has to struggle to keep up that image to impress foreign airlines to invest in his Great company.

And the poor staff are suckers for such promises.Anyone who is able to find a job has been leaving.Mind you passenger safety is given a go-by with qualified and experienced people abandoning the ship.

Cannot understand how passengers are still buying tickets to fly with KFA.Height of optimism.
It is time KFA is closed down, which has been a product of bad management and promoters lavish lifestyle.
Let banks insist that Dr Mallya sell his personal shares in UBL or United spirits to infuse capital before banks can even talk to him.

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