The Hindu Business Line : Complacent India Inc

"INDIA Inc cuts sorry figure in households," blares a headline in a popular daily. The report that follows should be disturbing both for the Securities and Exchange Board of India (SEBI) and the federations of Indian industry, business and commerce.

A survey conducted by the Investor Education and Protection Fund in collaboration with the Society for Capital Market Research and Development under the auspices of the Ministry of Company Affairs has found that 50 per cent household investors, regardless of income or age, are sceptical of the sense of accountability of company managements, and 44 per cent hold the view that they cannot rely on company auditors to prevent fraud.

Those who believe that company managements are taking more care of the interests of household investors today than in the past form less than 22 per cent.

The four biggest worries of investors are price volatility (30 per cent), price manipulation (20 per cent), corporate mismanagement and fraud (17 per cent) and misconduct of brokers and insider trading (16 per cent).

The only ray of hope is that half the 5,908 respondents, comprising graduates , salaried class and self-employed, were reported to be "positive about current efforts being made to improve corporate governance, even though tangible results are yet to be achieved."

The disenchantment with India Inc could not have been brought to light in a more telling manner. Recently, a cable company was in the news for unconscionable delays in refunding to customers deposits that had matured several months earlier.

During the harrowing days of unprecedented floods in Mumbai, electric supply and distribution by the private players broke down, while the public sector Maharashtra State Electricity Board maintained its supply uninterrupted.

It is the common experience of both investors and customers of India Inc that business-houses are no less insensitive and unresponsive to grievances and complaints than government bureaucracies.

On the other hand, public sector enterprises such as NTPC, BHEL, VSNL and Metrowater in Tamil Nadu and Karnataka are quicker than some constituents of India Inc in attending to customers.

SEBI would do well not to take the efficiency and ethics of India Inc for granted but subject it to periodical performance audits.

B. S. Raghavan

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