By Akshay Kumar
The much touted Company Bill, after 6 exasperating long decades, has been passed by the behemoth parliament of the biggest democracy in the world. When the antecedent version was passed in 1956, independent India had never truly focussed beyond Agriculture, it had just instituted IITs in the very same year, its GDP was lingering at snails pace, and it was reeling under utter poverty and state of demise. Today, after 56 tumultuous years, it has focused, re-focused, and perhaps over-focused sometimes on almost all aspects of its economic, social, political, cultural, historical success and failures, IITs are now globally branded, GDP has time and again skyrocketed and plummeted, rupee has appreciated from level of 118 against dollar to 60. However, the parallels are still standing stall. Still, one-third of Indias population (equivalent in number to overall population in 1956) subsists on Below Poverty Line (BPL) earnings, literacy rate is still lingering at 74%, which considering the 40 year time frame derided by the leaders of independence makes the figure deplorable. China, on the other hand, which became independent in 1949 achieved almost complete literacy rate within the stipulated time frame of ten years, has been marching at over double digit GDP growth rates since the past 3 decades, has attained the per capita income which is five times that of India.
Clearly, the structural, ideological and political differences are stark between the Tiger and Dragon, India, however, has faltered from inception on the essence and vision of its industry vision. Even today 60% of Indias population derives its livelihood from agriculture. Despite employing 52% of its workforce, Agriculture and allied sectors account for meagre 15% to Indias GDP. Industry, on the other hand, accounts for 28% to Indias GDP while employing meagre 14% of the total workforce. Services sector, while employing just 23% of the workforce, accounts for 55% to Indias GDP. Since independence, not even once, in any five year plan, has the agriculture grown at more than 4% in production. Industry, driven by lackadaisical policy and vision, has grown at over 10% in the past decade itself. The growth trends are even higher for the services sector. Hence, given the respective weights each segment shares in the Indian GDP and the prospective potential growth rates of each of them, alone logic should be able to drive the Indias vision and policy for next 2 decades. Industrial towns and townships needs to be developed and then localized, employing local construction resources and practices; the focus has to shift from agrarian to manufacturing and services which are capable of deriving and sustaining high living standards. Such liberalization measures needs to be instituted and implemented effectively in greater measure at grassroots level. Special Economic Zones (SEZs) need to be invigorated, industrial corridors need to be established. In short, radical shift in thinking and vision must occur and they must be complemented by much efficient and hastily legislations that are not lingering over decades.
The legislation of the Companies Bill with such measures as mandate on CSR, incorporating learnings from Satyam fiasco, introduction of class action suit enabling depositors to sue a fraud company, one person company provisions to foster entrepreneurship, keeping a tab on Board of Directors is a welcome move. The legislature should not halt at this point and must bolster the migration path from primary to secondary sectors with enabling legislations and updated mandates on the desired ones.
Akshay Kumar: He is an undergraduate in Civil Engineering from IIT Delhi and, currently, working at Ernst & Young in strategy consulting. He has been engaged in debating for the past 11 years at various levels. Since past 4 years, he has primarily focused on policy and economics debates and research papers and has been engaged at premier global debating platforms such as G8-G20 Group, Harvard debates, EUDC. Recently, he has developed debating models and tested them at national debating conferences
– Akshaykumar.iitd@gmail.com