PM's address at the Inauguration of India Corporate Week 2010
It gives me immense pleasure to participate in the inaugural function of India Corporate Week 2010. This is a commendable effort which brings together the government, the corporate sector and professionals to deliberate upon issues of great importance.
The first India Corporate Week was celebrated last December on the theme “Corporate Sector and Inclusive Growth”. I note with satisfaction that the Ministry of Corporate Affairs has taken many important initiatives in the year that has since gone by. A particularly significant initiative addresses the critical aspect of investor awareness through over 3200 investor education programmes. I compliment my colleague, Shri Salman Khurshid, the Minister of Corporate Affairs and his team for these efforts.
The theme of this year’s India Corporate Week is “Sustainable Business”. I am told that as part of its celebrations, over 400 programmes are planned across the country, highlighting corporate governance, corporate social responsibility, and ethical business. There will be special focus on “corporate growth with enlightened regulations” and “corporate sector and inclusive growth”. These areas reflect the importance that our government and our society gives to making our growth processes inclusive and simultaneously encourage the spirit of adventure and enterprise.
India has always been a nation of entrepreneurs. Today it is a nation of world class professionals as well. Indian companies are strategically increasing their presence overseas and their presence is being felt all over the world. Indeed we are witnessing the emergence of the Indian multi-national on the global corporate stage. The private sector now contributes significantly to all sectors of our economy, including infrastructure development, which until recently was an exclusive preserve of the public sector until a few years ago. In recent years, the private sector is also successfully engaged with the government in PPP projects. India’s corporate sector is poised to become the main engine of growth for the Indian economy. The responsibility it carries is, therefore, truly enormous.
The Ministry of Corporate Affairs has a mandate to provide an enabling regulatory framework to facilitate the corporate sector to function productively and responsibly, and broadly in line with our national aspirations. I am happy that the Ministry has, in a short period initiated many projects to fulfil this mandate. The streamlining of corporate registration under the MCA21 e-governance scheme has increased convenience as well as added to the spirit of transparency for the investor and provided end-to-end services to the corporate sector. The Competition Commission is engaged in enhancing competition in the market place. The updation of Company Law, the introduction of limited liability partnerships under a new law, efforts to converge with International Financial Reporting Standards, and widespread investor education are all creative and worthwhile initiatives. The Voluntary Guidelines issued by the Ministry on Corporate Governance and Corporate Social Responsibility have evoked interest I have been told internationally.
Let me also take this opportunity to reaffirm our Government's commitment to providing an enabling environment conducive to the growth of the corporate sector in our country. We wish to provide a level playing field for private businesses, free from fear or favour. I am aware of the nervousness in some sections of the corporate sector arising out of the powers conferred upon Governmental authorities to tap phones for protecting national security and preventing tax evasion and money laundering. While these powers are needed in the world that we live in, they have to be exercised with utmost care and under well defined rules, procedures and mechanisms so that they are not misused. We must also look for solutions through technology to prevent access of telephone conversation to systems outside the institutional framework of government. Legal mechanisms already exist and they are in place. They need to be strengthened for more effective enforcement. I am asking the Cabinet Secretary to look into these issues and report back to the Cabinet within the next one month.
Businesses, by their very definition, need to be profitable. But the manner in which they use natural resources and the extent to which they are sensitive to the needs and aspirations of the common man is also critical to their own long-term survival and growth. Sustainability of business therefore includes not merely economic sustainability in the narrow sense of the term but social and environmental sustainability as well. Indeed, financial capital needs human, social and ecological capital to be viable in the long term sense of the term. Market activity that concentrates wealth without empowering the poor and the deprived is also unacceptable ethically. I am sure our business leaders are aware that business practices of some corporate houses have recently come under intense public scrutiny for their perceived ethical deficit.
I am happy that the corporate sector has responded positively to the challenge of sustainability and some of the Indian models of integrating sustainability in core business processes are being showcased as the best in the world. Many Indian companies have started reporting their actions for ensuring sustainability. An increasing number of companies are today bringing out sustainability reports.
There are very welcome signs of the Corporate sector’s increasing engagement with India’s hinterland economy, where the majority of our people live. This has consolidated linkages between the rural and urban sectors of our economy, between agriculture and manufacturing, and between regions. Most significantly, the bonds between large companies and small and medium enterprises, cooperatives, and new entrepreneurs are growing. I understand many companies are coming out with innovative business models that engage farmers in rural India as entrepreneurs. All this strengthens our nations efforts for making our growth more inclusive – a growth that benefits all regions and all sections of our society, particularly the poor and the under-privileged. I would like to take this opportunity to highlight some ways in which you can ensure sustainability through your corporate strategies.
First, increasing the employability of our population through effective skill development must be central to corporate strategy and not merely an afterthought resulting from difficulties in recruitment. This can also help integrate the weaker sections of our society into the mainstream economy even as industry is assured of ready to go well trained personnel. While the government has a vital role to play in the field of education and training, it cannot deliver alone. Corporate India has to be an active partner in our efforts. I am very happy that several corporate leaders have already recognized the value of capacity building and skill development and are working with the Government through ongoing schemes and the National Skill Development Corporation. Some industry associations have offered to partner in improving our ITIs and developing skills of youth, particularly those who are poor and marginalized. But such efforts have not reached a scale that could have a visible impact on production processes in our country.
Second, resettlement and rehabilitation of project affected families and ensuring that there is no adverse impact on livelihoods due to environmental degradation are major issues to be addressed by our corporate enterprises. Our growth processes must not suffer because of loss of confidence in industrialization and development. We need policies and interventions that would minimize livelihood disruptions. Affected populations must see a stake for themselves in transiting to alternative lifestyles. Long term benefits to them must outweigh the immediate costs they may have to bear. Companies must also adopt environmentally friendly measures and avoid taking shortcuts that adversely impact livelihoods and worsen the quality of living of the affected local populace. We have many examples of success in the areas of management of waste, conservation of habitats and energy efficiency. These must be adequately disseminated and encouraged.
Finally, ethical and responsible behavior needs to become the cornerstone of corporate behaviour, as indeed our national outlook. Ethics encompass a wide sphere of actions, economic, social and human, involving the consumer, labour, society at large and the government. Mahatma Gandhi repeatedly used to emphasise the importance of not only good ends but also of the use of fair means to attain them. It is the large companies that have to set the pace in this regard. The rest of the corporate sector will quickly follow as this becomes a national norm.
Our Corporate culture must be attuned to the universally accepted values of good governance – accountability, transparency, responsibility and responsiveness to stake holders. Our corporate endeavours have to be consonant with the demands of our eco system and the expectations of Indian democracy. The economic reforms of the last two decades have opened up many new opportunities. But just as over bearing controls stifle initiative; dogmatic adherence to extreme models of non-regulation can also be disruptive to sustainable growth. Ours is the middle path. We believe we must trust Corporate India as indeed you must trust us.
Modern day concepts like Corporate Social Responsibility and sustainable business are not borrowed from developed economies but have been nurtured over the millennia by our rich ethical traditions. It is indeed, now for us to add to the global repositories of evolving concepts by imprinting India’s unique flavour on them. As India continues its journey towards economic prosperity and growth. I am sure Corporate India will contribute to our efforts to fulfil the dreams of the aam adami. Let us rededicate ourselves to this national task today.
With these words, I wish you all success in your deliberations and your endeavours. May your path be blessed.