The Hindu Business Line : India Inc wants expert panel to be formed to review laws

INDIA Inc has urged the Government to consider constituting an expert committee to review various laws, and more particularly those that have a bearing on the corporate sector.

"It is widely felt that India's legal and judicial system has not kept pace with changing needs. Ever increasing population, increasing number of laws, rise in industrial activity and other changes are resulting in inordinate delays in disposal of cases. This is especially the case in the emerging competitive business scenario where there are likely to be a number of jurisdictional and interpretational disputes. Hence, reforms in the legal and judicial systems have assumed added significance and need urgent attention," says the Federation of Indian Chambers of Commerce and Industry (FICCI).

In a discussion paper for a seminar on `Reinventing the Indian legal system for achieving double digit economic growth' to be organised by FICCI and the Bar Association of India (BAI), the Chamber said that, "To attain double digit growth we will need to have appropriate market mechanisms for provision of quality infrastructure facility at competitive prices and improved flow of credit and reforms in the agriculture sector. Reforms in the areas of labour, entry and exit provisions of firms and more importantly in our legal and judicial system would also be needed."

The paper also discusses the need to considerably simplify and rationalise the procedural laws to facilitate quick compliance. "Rules and procedures should be drafted in an easy and understandable language to avoid varied interpretations. It should be self-contained and explanatory," the Chamber said.

Labour laws in particular need to be remodelled to provide enough flexibility to the entrepreneurs to rationalise their work force to facilitate optimal utilisation of human resources with a view to improving upon their productivity and thereby achieving competitive edge.

It further stressed that besides labour reforms, it is equally important to suitably amend legal provisions to facilitate easy exit of companies with a view to encouraging new investments and providing better utilisation of the existing assets of the sick units.

"An efficient bankruptcy law with foreclosure provisions will be a major step in this direction. This will help in reducing industrial sickness and also help in reducing the non-performing assets of the banking sector," the paper said.

In the competitive economy, corporate takeovers and amalgamations are frequently taking place to acquire a broad spectrum of operating units and achieve faster growth in turnover and profits. Further, integration of Indian economy with global economy has created newer opportunities for frequent interface between corporates the world over. However, growth opportunities can be encashed only under the condition of political stability and sustained economic and legal environment.

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