`Reforms without regulations led to frauds, scams`
India would have been able to avoid corporate frauds and scams in high places had it put in place regulatory mechanisms and certain policies, Veerappa Moily said.
Bangalore: India would have been able to
avoid corporate frauds and scams in high places had it put in
place regulatory mechanisms and certain policies, along with
the introduction of liberalisation regime in 1991, Corporate
Affairs Minister M Veerappa Moily has said.
The then Finance Minister Manmohan Singh had to
"pronounce" liberalisation polices in 1991 as it was
"inevitable" and "compulsory" as New Delhi had to pledge gold
with Bank of England, Moily said.
"But any of such (liberalisation) measures always should
go along with other preparations," Moily told a seminar on
"the future of corporates in India," organised by television
channels ETV Kannada and ETV Urdu here last night.
Since India had not put in place "that kind of a
mechanism" along with the liberalisation policies, growth has
happened without restrictions. While growth is good, it has
many other components like inclusivity, regulations and it has
to be sustainable, he said.
"If you want that growth should be sustained, there is a
process of governance ....the process of destroying
anti-competitive forces. And growth will have to go (happen)
along with many other regulatory practices," Moily said.
Noting that the Companies Act of 1956 is a "very old
act," he said the country should have come out with a new act,
replacing it altogether, much earlier. Now, the Companies Bill
of 2011 is on the anvil.
"Immediately after 1991, first thing we should have done
is destroying the 1956 Act, come out with a new act. Then many
of these problems (corporate frauds) you see today would not
have been there," Moily argued.