Indian industry needs to follow ethical corporate practices: Vice President Naidu

Indian businesses need to follow ethical corporate practices and behaviour for economic growth as few examples are spoiling the image of the industry, Vice President Venkaiah Naidu said on Tuesday.

Addressing members of industry body Assocham, Naidu said that the chambers have the responsibility to promote ethical governance. “This is the point I want to stress today. This is the need of the hour,” he said, adding that with opening up of the economy and improvement in ease of doing business, people are expecting ethical conduct and behaviour.

“Industry also has the responsibility particularly in view of some blacksheeps here and there, doing some mischief, doing some thing here, looting here and then going out of the country, avoiding the law. So, that has sent a very wrong message. May be (there are) few examples, but few examples are spoiling the entire image of the industry, which has done a great service to the country. So, ethical governance is important,” he said.

The Vice President said that following ethical behaviour is simple as it only includes tax compliance, corporate social responsibility and taking care of the members to follow rules and regulations. He said that amid various reforms in the country, business and economy are growing, and in this background, the industry needs to follow it up with ethical governance and behaviour.

Adoption of ethical behaviour as an individual and organisation is essential towards adopting “zero tolerance towards corruption, bribery, and frauds”, he said adding that organisation should create an environment for whistle blowers to report any wrong doing without any fear. “Total tax compliance should be the motto of every corporate, and bodies like Assocham should sensitise its members on this aspect, so that we can have... clean money and clean sleep,” he added.

Weeding out corruption

Naidu said that in all the international forums, all countries must sign the treaties for extradition of fugitives. All countries must come forward to exchange information and sign extradition treaties, he said, adding that in the absence of these treaties people commit misdeed and run away, and then to get them back, a lot of time and energy get wasted.

He said that three things are very important -- climate change on which countries are working; exchange of information about economic offenders and black money; and extradition of economic offenders. “This is the need of the hour in the happenings of the recent past,” the Vice President said.

The government has passed a law this year that seeks to prevent big economic offenders such as Vijay Mallya and Nirav Modi from fleeing the country and evading the legal process.

Talking about the pro-business debate, he said that some people have raised concerns if people are invited in an industry function, but “is there anybody who is against business? Business is part of the growth story of the country.” Both, agriculture and business are important as “unless you improve the economy, you will not be able to improve your welfare agenda,” he said.

The industry plays an important role in nation building and keeping that in mind, government should always interact with industry and they should meet government and place ideas and suggestion for improvements, Naidu said.

Role of reforms

The Vice President said globalisation and liberalisation is throwing up challenges for industry and in this hour, corporates have to reinvent and reposition themselves in not only promoting trade and commerce but also facing these challenges.

The Vice President said that implementation of the Goods and Services Tax (GST) and demonetisation have helped in expansion of formal economy and increasing tax compliance. With financial inclusion drive, the government opened crores of bank accounts of poor people. “Now, it is the duty of the RBI and Income Tax (Department) to verify the accounts (whether the money deposited is) accounted or un-accounted,” he said.

The Vice President said some people are criticising that due to demonetisation, all money has returned to banks, then what is the meaning of this reform. “I am trying to understand and analyse why people are talking (like) this. According to me the purpose of the demonetisation was to see that the entire money comes back to bank. Now, the money has returned to banks with address. What is the problem...Now you have to verify and identify how much is accounted and how much is unaccounted,” he added.

About GST, he said, some people criticise asking where are the results of the reform. He said due to the GST, income tax returns have gone up considerably and no body can deny that fact and also tax rates have come down.

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