The Hindu Business Line : Comprehensive new company law soon: PM

MCA 21 launch
e-governance plan would free seven lakh Indian companies from statutory paper filing and end Inspector-Raj.
Banks, FIs to benefit from online availability of information relating to companies.

New Delhi , March 18

While reiterating the commitment to promote greater transparency and efficient governance, the Prime Minister, Dr Manmohan Singh, on Saturday said that the Government would soon bring in a comprehensive new company law.

"Our Government is committed to formulating a comprehensive new company law and work on the report of the Irani Committee has been completed. We will be bringing a new Bill to Parliament in the next few weeks," he said.

In his address after launching the e-Governance project MCA 21, the Prime Minister said the new company law would focus on promoting greater transparency and good governance in firms while at the same time giving them greater independence in operations. The new law would be a comprehensive revision of the 50-year old company law, he added.

The Prime Minister also said that the Government would expedite the adoption of the accounting standards in alignment with the international accounting standards so that the disclosure norms are on par with global best practices. Dr Singh asked the Ministry of Company Affairs to look into issues such as limited liability partnerships, which are essential business structures in the emerging knowledge economy. He also asked the Ministry to make the Competition Commission fully functional, as it was an essential element in the architecture of a modern market economy.

MCA 21 would free seven lakh Indian companies from statutory paper filing and end Inspector-Raj, the Prime Minister said. The programme would benefit the corporate sector by providing a hassle-free and efficient interface with the Government, he added. ``The project provides for cross-referencing of financial statements of companies filed with the Registrar of Companies and other regulatory institutions such as tax authorities, the RBI and the SEBI. This will be a one-stop filing window," he said.

Dr Singh said that banks and financial institutions should benefit from online availability of information relating to companies and could use it for improving their credit evaluation procedures and the overall quality of credit extended. The financial sector should explore the possibility of standardising formats to enable secure interaction between banks and the Government, he added.

The Prime Minister asked the Ministry of Company Affairs to create appropriate institutional mechanisms and knowledge resources to use the data archive and generate reliable statistics pertaining to the corporate sector.

He envisaged a major role for public-private partnerships with the launch of MCA 21, which marked the launch of the first mission mode project under the National e-Governance Plan.

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