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High Commissioner's remarks at the 15th London Global Convention on Corporate Governance & Sustainability global Business Meet at Institute of Director, London on Thursday, 8 October 2015

High Commissioner’s remarks at the 15th London Global Convention on Corporate Governance & Sustainability global Business Meet at Institute of Director, London on Thursday, 8 October 2015 

Rt Hon Sadiq Khan, Mr. Parthasarathy, Mr. Chauhan, and other distinguished speakers, Ladies and Gentlemen,

I am honoured to be with Institute of Directors at this important function, following your inaugural session yesterday.  You have had and will have many distinguished speakers addressing the subject of Effective Corporate Governance and Sustainability.  This is clearly a discussion that is needed globally; and particularly in India today as our new government elected last year takes the economy – and the country – into a new era.   I know that some have begun to express impatience over the conversion of policy to reality on the ground.   All I can say there is a plan of action i.e. a roadmap to get there – to achieve the vision behind the policy framework; it is not a short term plan.     

Building the economy of India in a way which combines features Ease of Doing Business, and corporate partnership as well as social, economic and ecological sustainability is a big task.   A resurgent India which creates a strong, diversified highly developed and powerful economy with capacity for long term growth, as well as rapid growth with strong institutional structure can achieve this.   It is also essential to deal with what has been called the Revolution of Rising Expectations.   Earlier strategies of poverty alleviation must now evolve into programmes for full empowerment of all sections of society. And as Mr. Chakravarti reminded us empowerment is not limited to this generation, but generations still to come.   That is a task in which industry must build a partnership with society if it is to be effective and sustainable.   And Directors and others tasked with corporate governance can provide strong guidance in this direction.    

Hon’ble Prime Minister laid out his plans to implement over the last year the vision for “Make in India”, Digital India and Smart Cities.   These new policies create an enabling environment for fast growth of industry while also ensuring rapid creation of employment opportunities.  The IOD would be aware that in PM’s words last year: “There is a high tide of hope for change” in India.   There are 800 million people under 35 and they have optimism and confidence and demand jobs.  If they are given the opportunity they will prove themselves capable.   Our economy is currently expanding at 7.5% p.a. yet the large sector is reported to be awaiting further positive developments before committing to investment.   What is needed to get business to invest?   There have been changes in policy, in greater Centre-State coordination and moderation of interest rates.   Clearly there are some other signals – both in policy and executive action that would help in the boardrooms where investment decisions are taken; but in general there is need for the ‘long view’ – a perspective on India and it’s increasingly positive outlook over the long term.  Some globally oriented foreign companies already take such a view, which is why India is now attracting the highest FDI levels in the world.  I am sure they will also be encouraged by our commitment to lower the emission intensity of our GDP growth by a third in less than two decades.  A careful analysis would show that, apart from the analysis of alternatives, those who do invest take a view based on sustainability as well as the capacity to exercise corporate governance over the long term – a vital element in the ease of doing business.  

Recently the Finance Minister clarified that the GOI has passed an order – requiring auditors to include in their reports on internal control systems, physical verification of inventories and repayment of dues to financial institutions and banking.   The Companies Act of 2013 has strengthened systems of corporate governance; this new Act is also being altered to meet practical requirements.  

The Committee set up under the Chairmanship of the former SEBI Chief Mr. Damodaran has made recommendations on legal reforms, regulatory architecture, boosting efficacy of regulatory processes, enabling of SMEs, and addressing State level issues.   The DIPP is taking action on the report as it coordinates matters relating to PM’s vision of drastically upgrading India’s country ranking in the list of “Ease of Doing Business”.    

Some immediate steps taken include easing the steps to be taken to set up a company and integrating the procedures across different departments through the E-Biz platform of DIPP.   It is of course clear to all of you that sustainability will require steps beyond the immediate corporate sphere.   It will require addressing the major social, political and environmental challenges that confront all countries today.  India faces many of these issues even more acutely than do some of the more advanced economies.   And India is taking steps to address them.

General Ahluwalia referred to Indo-UK relations and te forthcoming visit of our PM – so I will digress briefly.   Our countries have very old and very strong relations.  Our economic and commercial relationship is one of the pillars of the relationship.  When PM visits we will focus attention on strengthening this pillar.   Trade is still way below potential, but in investment we are doing better.   We are among the top foreign investors in each other’s countries.  As India develops the flagship programme of the PM, the opportunities will expand greatly. 

In this context, let me conclude by noting that you meet here in London, where there is a similar approach to ensuring that business confidence is enhanced and enterprise is made to feel it has opportunity.  It also has peer type of discussions on corporate governance and regulatory provisions affecting it are also well established.  It is also a location with a truly global perspective; so you should in your deliberations be able to have a good exchange of views on corporate governance and sustainability.  I convey my best wishes to you for your deliberations at this conference. 

Oct 26, 2015
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