India Unlimited: A Corporate Journey

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A customer is the most important visitor on our premises he is not dependent on us. We are dependent on him. He is no an interruption in our work. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favor by serving him. He is doing us a favor by giving us an opportunity to do so.

India’s standing as a rising economic power is closely linked with how we can create opportunities for all. A path that excludes millions of Indians form prosperity is simply not acceptable. The corporate sector must also play an active role in the nation’s socio economic development including agriculture.

India looks to the future with confidence and with hope. We are confident of meeting the domestic and international challenges the domestic and international challenges to fast and inclusive growth I hope to see a decisive change in the pace of our progress to becoming a leading economy in the world.

Thinking is progress Non thinking is stagnation of the individual organization and the country. Thinking leads to action. Knowledge without action is useless and irrelevant. Knowledge with action converts adversity into prosperity.

A fascinating visual account of Indian enterprise and business, India Unlimited: A Corporate Journey traces the exciting evolution of Indian business from the time of the Indus Valley Civilization, focusing in particular on the transformations since the advent of liberalization.

British rule introduced new forms of entrepreneurship and intrepid Indian entrepreneurs established new companies, challenging British conglomerates. The mixed economy model after Independence laid equal emphasis on public, private and small sectors. Corporate India seized the initiative to emerge as an essential partner in development. Family businesses, public sector enterprises, new entrepreneurs and small scale enterprises flourished across the country.

Economic reforms in 199l led to a new phase in the growth of corporate India. Successfully restructuring to address the challenges of globalization, India Inc pushed ahead in all sectors, becoming a powerhouse in the global economy. Economic growth has led to an explosion° in the linkages of corporate India with rural India, with small entrepreneurs and with the world. Today, inclusive growth is a partnership between the government and corporate India. The Ministry of Corporate Affairs with its affiliated bodies plays a key role as facilitator, enabler and regulator.

Through enduring images and lucid prose, this book portrays the dynamism of the Indian corporate sector today and presents the multi dimensional facets of Indian entrepreneurship.

Sharmila Kantha is the author of Building India with Partnership: The Story of CII 1895-2005. Her other publications include two novels just the Facts Madamji and A break in the Circle.

Through the ages, Indian entrepreneurship, with the support of the government of the day, has led the prosperity and progress of each Indian, its diverse historical experiences are immensely valuable to the current discourse, as India seeks to create and sustain an atmosphere that will enable all citizens to achieve their inherent potential. The Ministry of Corporate Affairs has taken the initiative to bring out this book on the journey of Indian enterprise, to commemorate the remarkable achievements of Indian industry and learn lessons from its past to assure its prosperity in future.

The book is being released to mark the second edition of the India Corporate Week, following the success of the first India Corporate Week held from 14 to 21 December 2009. The series of event sunder this banner recognizes the signal role of the Indian corporate sector in driving growth, and endeavors to boost inclusive development.

With India‘s remarkable recovery from the global economic crisis of 2007-09, the worst the world has witnessed since World War II, we can once more envision a high rate of growth. The Prime Minister has spoken about the need to raise the growth level to double digits in the near term. However, he has also cautioned that GDP growth by itself is not a sufficient condition for higher human development. The challenges of poverty, health, education and employability necessitate dedicated and committed intervention by all stake holders.

Growth must reach all sections of society and all regions of India in order to boost human development. Hence, the challenge of ‘inclusive growth’ has been taken up as the central task in our national policy framework. The key strategy to achieve the objectives of inclusive growth would include the synergistic partnership of government, industry and rural India towards the common end of integrating each sector the economy to achieve a common goal. Indeed, India’s global competitiveness depends on effectively leveraging the complementarities and competencies of the entire economic value chain, extending from large corporate enterprises to the rural economy.

In fact, the rural economy has emerged as the fulcrum of the high growth Endeavour. Aided by unprecedented government stimulus measures that boosted purchasing power, rural resurgence demonstrated high dynamism during the worst of the world economic crisis. its resilience and responsiveness in turn gave impetus to the industrial and services sectors. Thus, at a time when global demand weakened, rural India could pick up the slack to power the economy. The bonds between the rural economy and corporate India have strengthened, and this will help drive India’s future growth and development.

Within this scenario, it is important that the government plays the role of facilitator and enlightened regulator in a manner that will amplify the efforts of all economic players. The Ministry of Corporate Affairs, set up in 2004, aims to positively shape the operating environment for corporate India to achieve optimal results. Its initiatives over the years, developed through consultation and stake holder partnership, are proving to be instrumental in improving the business climate in the country.

I am particularly pleased that MCA21, the e-governance project of the Ministry that delivers electronic real time services to corporate, has taken off well. Since 2006, all registration of companies and otherservices are being mandatorily conducted online, and new innovations have helped to dramatically reduce time and increase efficiency. I am also happy that the Ministry seeks to promote the linkages of corporate and rural sectors.

As Indian industry embarks on a new era of global growth in conjunction with the rural economy, it is useful to take stock of its passage through times and highlight its many achievements. I am confident that this pictorial book will add to the understanding of the corporate sector in an entertaining and accessible manner.

I congratulate Shri R Bandyopadhyay, Secretary, Ministry of Corporate Affairs and his dedicated team of officers for taking the commendable initiative of successfully bringing out this coffee table book depicting the exciting and remarkable growth of corporate India over the years, on the occasion of India Corporate Week 2010.I also commend the efforts of the officials of National Foundation for Corporate Governance for their support in making this publication possible. I extend my sincere appreciation to Penguin Books India and Smt. Sharmila Kantha for bringing out this colorful and interesting depiction of the great Indian corporate journey.

The Ministry of Corporate Affairs is an engaged and committed partner in the growth endeavor of corporate India, being a friend, enabler, integrator, educator and regulator. The primary objective of the Ministry of Corporate Affairs is to guide and shape the evolving of government and business towards meeting the common aspirations of inclusive growth and development. Rural India, home to almost two-thirds of India’s 1.1 billion people, has, in particular, been lagging in economic development, although resurgence in rural growth has been witnessed in recent years. A strong and committed partnership of tee government and the corporate sector can be an instrument for spreading inclusive growth with equity. The Ministry aims to strengthen the symbiotic linkage of government, rural India and corporate sector, which taken together, constitute the fulcrum of the inclusive growth process.

The first ever ‘India Corporate Week’ was celebrated from 14-21 December 2009 with the theme Corporate Sector and Inclusive Growth’. During this week 124 programmes were conducted by various signalizations like national level trade and industry bodies, including the Confederation of Indian Industry(CII), the Federation of Indian Chambers of Commerce and Industry (FICCI), the Associated Chambers of Commerce and Industry of India(ASSOCI-IAIVI) and professional institutions like the Institute of Chartered Accountants of India (ICAI), the Institute of Company Secretaries of India (ICSI) and the Institute of Cost & Works Accountants of India (ICWAI) in different parts of the country. The general issues discussed in all these seminars or workshops were related to corporate governance and corporate social responsibility. In the concluding function held on 21 December 2009 at Vigyan Bhawan, New Delhi with H.E. the President of India as the chief guest, the Ministry of Corporate Affairs had launched two voluntary guidelines, one on ‘corporate governance’ and the other on ‘corporate social responsibility’ for all the corporate enterprises to follow. The basic objective was to sensitize the corporate sector with the changes taking place around the globe and also to make them more responsive.

Subsequently, during the last year, hundreds of meetings, seminars, workshops have been organized, in which discussions centered on the issues of corporate governance and corporate social responsibility. Various other countries and international organizations also took note of these guidelines and there has been a series of delegations who have visited the Ministry during this period and discussed the subject with the Minister and the Secretary.

The Ministry of Corporate Affairs, under the stewardship of the Corporate Affairs Minister has taken two mottos namely: i) corporate growth with enlightened regulations; and ii) corporate sector with inclusive growth. Whatever we have been doing during this period are directly related to this vision of the Ministry.

When we speak of enlightened regulations, we mean that whenever any rules, regulations, codes or Acts are revisited, a greater number of stakeholders would be consulted. In line with these objectives, when the basic law of the land governing the corporate sector namely the Companies Act 1956 is getting replaced by a new Act, this process of consulting a large number of stakeholders has been followed at each and every stage.

Laws and Regulations

The Companies Bill 2009, which was re—introduced in the Lok Sabha in August 2009 to replace the existing Act would have far-reaching implications for the corporate environment in India and would bring it in line with evolving developments in the world and in the country. The Bill was referred to the Parliamentary Standing Committee on Finance, who after consulting all the stakeholders submitted its report on 31 August 2010. The report covers, among others, major areas of corporate governance such as independent directors, auditors’ responsibility and corporate social responsibility.

The Limited Liability Partnership (LLP) Act, which was enacted by the Ministry in January 2009 to give legal status to businesses under a partnership agreement as separate entities, has since its inception registered almost 3000 LLPs, as of November 2010. The new legislation provides an alternate corporate business vehicle offering a platform for unleashing the potential of knowledge and service sectors. This form has the feasibility of a partnership and the limited liability of a company. A helpful website also has been created to offer relevant information and enables electronic services.

MCA21 e-Governance Initiative

To facilitate effective corporate functioning, a comprehensive, end-to-end e-governance solution covering all aspects of incorporation and regulation of companies, the ‘I\/ICA21 e—Governance Project' was launched under the National e-Governance Plan to provide easy and secure access to MCA services in an anywhere—any time mode. The project, which received the Prime Minister’s Award for Excellence in Public Administration, is designed to fully automate all processes related to the proactive enforcement and compliance of the legal requirements. With this service delivery time reduced, certainty and reliability of services improved along with improvement in transparency. Since16 September 2006, the project is running successfully with new facilities like the issue of digital certificates being added from time to time.

With a view to making the entire process paperless, reducing time consumption and increasing the efficiency of service delivery, e-stamping has been introduced. Earlier, one could file documents online but the stamp duty had to be paid physically. Now, through this e-governance system, most states have agreed to add e-stamping as a process of e-governance. MCA is also trying to resolve the issue of correcting mistakes online and introducing additional features regularly to make IVICA21more adaptable and user—friendly.

International Financial Reporting Standards (IFRS)

The Ministry is committed to the transition of Indian companies from Generally Accepted Accounting Principles (GAAP) to International Financial Reporting Standards (IFRS) by 2011. Convergence of IFRS is on schedule, and India is set to contribute a large number of excellent accountants to the world of business. The vision on convergence includes a set of financial reporting systems and a regulatory framework, fulfillment of G 20 commitment at lower compliance cost and accessibility of financial information to global investors. MCA, in addition to supporting institutions in dissemination and providing training on IFRS, has formed a Core Group on IFRS with a wide representation of stakeholders for mutual consultation on issues such as capital markets, role of regulators and convergence of standards.

In July 2010, the India—Japan Forum was inaugurated and a Memorandum of Understanding was signed between the Core Group on IFRS of the MCA and the IFRS Council, Japan. This will enable leadership of the two prominent economies of Asia and serve as a model for cooperation for the region. The collaboration will facilitate discussion on legal and regulatory issues as well as capacity-building, information sharing and knowledge creation. It acknowledges the need for continuous evolution of measures for sustaining and enhancing the levels of transparency and fairness. The two sides agreed to set up a Joint Working Group of the Core Group and IFBS Council to facilitate interaction through subgroups on capacity—building and joint representation of common issues to the International Accounting Standards Board.

Investor Education

India is a fast growing developing country, and the endeavor of the Ministry has always been to see that the growth of the corporate sector is not unnecessarily hindered by any rules, laws or regulations; at the same time the Ministry wants to involve a large number of common people in this phenomenal growth of the corporate sector. In order to achieve that, this year the Ministry has planned 3,000 ‘Investor Education Programmes in various parts of the country. The significance of 3,000 programmes can be appreciated when we note that the highest number of such programmes ever conducted was 300 during the last year. However, in order to achieve this, the entire concept of the ‘Investor Education Programme’ has been transformed. Earlier, it was a little known programme of the Ministry of Corporate Affairs; now it is a national programme involving eighteen national level organizations. By November, 2010, as per our report, more than 2700 such programmes have already been conducted.

In order to have a permanent impact and bring more and more people across the country to understand the basics of the capital markets and take part in its growth process, the Ministry has published a very concise book with the help of experts titled Beginners Guide to the Capital Market in English and got translated to Hindi and twelve regional languages. We have also allowed and encouraged different organizations to print this book and distribute it amongst its members or to common people free of cost without any copyright charges. For the trainer-training programme, the Ministry has brought out a comprehensive book Investors Guide to the Capital Market. Apart from this, we have a very we developed website on investor's education namely; www.iepf.gov.in, which has been accessed thousands of people throughout the country. In order to make the ‘Inclusive Growth’ a reality, we have also got this website translated into Hindi and twelve regional languages, in order to help the English-knowing persons to access the website with ease. The entire objective of the Ministry car summed up as ‘Informed Investor is an Asset to the Capital Market’.

Corporate Governance

Good corporate governance practices are a fundamental requirement for sustainable business that seeks to promote long-term value to the shareholders and stakeholders alike. The Ministry has of late promoted a number of initiatives for promoting good corporate governance practices which are very essential for inclusive growth. The corporate Governance voluntary guidelines addresses a number of current concerns in the area of corporate governance.

The national foundation for corporate Governance (NFCG) a not for profit trust that fosters good corporate governance has during 2009-10 undertaken series of events to disseminate the two voluntary guidelines on corporate governance and sustainability both at the level of individual corporation and for the economy as a whole.