The Hindu Business Line : One more attempt to slim company law

THE NEW boss of the Department of Company Affairs, Mr Prem Chand Gupta, Union Minister of State (Independent Charge) for Company Affairs, has highlighted some interesting statistics. Such as that Rs 300 crore is spent annually by way of compliance by companies to the various Act provisions; that the Registrar of Companies has to deal with 30 million documents every year and also keep the same in custody for five years; and that some four lakh companies out of the seven lakh companies registered are defunct.

In his speech at the Merchants Chamber of Commerce in Kolkata, the Minister minced no words about downsizing, not companies but the law itself, from 658 provisions in the existing Act to less than 300, before the end of the month, because the present Companies Act, enacted in 1956 (and arguably the largest in the world) is unsuitable to today's environment despite numerous amendments carried out so far.

`Concept Paper' that would be born July-end, aiming to recast the law, is slated to morph into Bill and so on after two months of discussion, if all goes well. One would have expected to find Mr Gupta's Kolkata speech, spelling out his bold initiatives for a fledgling Ministry, posted on the DCA's Web site. But no, you would rather find among what is new "the comprehensive Annual Maintenance contract of Gestetnor make copy printer of the Department".

It appears the Minister has lamented that none of the big chambers, such as FICCI or CII or Assocham, or any of the professional institutes has sent in any suggestions with regard to the changes required to be made in the Companies Act.

On that, however, there can be counter-claims from bodies such as the Institute of Chartered Accountants of India — that they had sent in their views to the Ministries of Finance or Law, to which the DCA had belonged once upon a time. It is quite likely that many of the ICAI's suggestions might have got buried in the Companies Bill that has had a history of miscarriages.

On the ICAI's site, one finds too many things happening, even if you don't find `unpalatable' things such as what the Union Law Minister, Mr H. R. Bhardwaj told the accountants on July 1, the CA Day: "I am worried that you (CA firms and legal firms) would be superceded by outsiders."

There could be one more reason for the ICAI to go into hyper mode, in response to Mr Gupta's call to revise company law: The CA Bill that is still hanging fire.

AccountSpeak@thehindu.co.in

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