“The bill is likely to come tomorrow in the Union Cabinet. I hope it gets passed,” Moily told reporters here. The Bill has already been vetted by the Parliamentary Standing Committee of Finance and also by different ministries.
For the first time, the Bill has introduced ideas like Corporate Social Responsibility (CSR), class action suits and a fixed term for independent directors.
Among other things, it also proposes to tighten the laws for raising money from the public. The Bill also seeks to prohibit any 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 per cent of the average profit of the preceding three years for CSR activities and make a disclosure to shareholders about the policy adopted in the process.
The Companies Bill (2008), which lapsed with the dissolution of the 14th Lok Sabha, was re-introduced in August 2009.
Earlier, while delivering the platinum jubilee commemorative lecture organised by Indian Overseas Bank, Moily said a new competitive policy is likely to be released by December 2011.
“We are coming out with a competitive policy. After passing the Competitive Law, we are coming out with a competition policy. It will be coming out in December 2011,” he said.
Moily said that with the Competitive Policy, inflation would be under 15 per cent, besides increasing the growth rate.
“It will also increase the growth rate and about 5-6 per cent of the GDP will increase,” he said, adding that the policy would also increase competitiveness among banks and financial institutions.
Hailing the Indian banking system for withstanding the crisis during the 2008-09 economic crisis, he said in an era of globalisation, corporate governance becomes a major issue.
“It becomes a prime focus for the share holders. We need to build corporate governance in the country, otherwise there is no future,” he warned.
He said the government, for the first time, was working on developing corporate rating index. “We need to get to work in new area. We are working on our own Corporate Rating Index.” At present, India is following the Corporate Rating Index developed in other countries.
According to him, India is ranked 163 in the Global Corporate Rating Index.