At a recent Express Adda held in Mumbai,Sachin Pilot,Union Minister of State for Corporate Affairs,in conversation with Shekhar Gupta,Editor-in-Chief,The Express Group,spoke about the new Companies Act,contesting elections and Rahul Gandhis ordinance outburst.
On the Mumbai-Delhi disconnect
I think Mumbai has a special character. The word I would use is not disconnect, but a separate identity. Mumbai has a flavour which Delhi unfortunately doesnt,but Delhi is the seat of power. But increasingly,I think,the distance is getting less because India has changed as a country. Mumbai and other cities have played a phenomenal role. The mindsets have changed. Thirty years ago,profit was seen as evil…not something that was encouraged. Today,India has changed. We need to create wealth,we need to invest,we need to create job opportunities,we need to have the government and corporate sector help each other reach the ultimate goal which is to make our economy strong and our country a vibrant nation. It has to be a collaborative effort.
On the rough and tumble of elections
Ive fought two elections. God has been kind because Ive won those two. Fighting elections and winning them is a whole different strategy and a whole different world; because sometimes it is not logical. There are other external circumstances that overtake what you think should be the logical response of people. I happen to represent Ajmer which is,for me,a very new constituency. I went to fight elections in 2009,and in that particular constituency,the BJP won seven times in a row. I dont know what inspired me to do it,but I went there and I asked my party to contest that election. Fighting election on party symbols,convincing voters to vote for you,its not what it seems. People think politicians land in helicopters,wave their hands,give a 10-minute speech and go away. It doesnt work like that. You have to be involved in the lives of people.
On the need for change
In India,we have different yardsticks for politicians and different ones for other professions. Whether its Bollywood,cricket,journalism or business,what happens there is half-a-bit controversy and its over. But for politicians,it becomes a debating point for weeks. They are under more scrutiny because they must lead by example. They take an oath under the Constitution,they are more liable to discharge their duties than anyone else. Politics in India has always been a messy affair but there are people in politics who are good. Im not saying that they are 100 per cent saints; everybody does what they have to and say and do things to get elected. But overall this churning process started in the last few years and I am hopeful that in five or 10 years,something good will come out of this.
On drafting the new Companies Act
The Bill has got 470 sections,1,500 clauses,but the Bill,I must tell you,is a very exhaustive one,which has taken 10 years. We looked at laws in Europe,Australia,America and Britain,and tried to imbibe the best they had to offer,keeping in mind Indias unique landscape in terms of what our companies are made of. Two-third of all our companies are family-owned.
In December 2012,the Lower House approved the Bill. It got consensus from all,including the Communist Party of India. All the naysayers said to me that the Bill would not go through Rajya Sabha and they were right,with all the disruptions and so on. The monsoon session came,and they said its the second last session and it would not get passed. I personally made an effort to reach out to the principal Opposition party. I spoke to all BSP,SP,JD(U) and TMC because all of them have to be on board for us to pass this Bill.
On CSR under the new Act
What is CSR? We are still to decide on the rules,but Im taking the liberty of sharing this with you. Anything that your board feels is beneficial to society can be made a part of CSR. All Im saying is please disclose it on your website. Let the board approve it. It is not up to me to decide what is CSR or not. There are a hundred thousand things people want us to do from saving animals to environment,to cleanliness to ending poverty. If the board of a company thinks that a project is a social investment,let them approve it. There is no Inspector Raj,there is no certificate required from the Government of India. My ministry and officers cant tell you what to do. It is your companys hard-earned money. Please use it with any trust or foundation you want to. If you are not able to spend the money in a particular year,just explain why you couldnt. Im trying to keep the government intervention to the barest minimum possible. It is the best investment you can make.
Modi fought a tough battle to be called the PM candidate for the BJP. Now look at the timeline. Congresss tally was 156 in 2004. In 2009,LK Advani was projected as the prime ministerial candidate from the BJP and NDA. When Advani became PM candidate,our tally became 206. Mr Modi is now the BJPs official PM candidate. When Vajpayee was heading the NDA,there were 22 parties in the alliance. Today there are two Shiv Sena and Badals party. The number of people who are PM aspirants is about 11 in the BJP in the last count. We all know the top leadership of BJP was almost at breaking point because of his (Modis) nomination. He is just a nominee and not the PM by the way. A person who is causing strong likes and dislikes in his party,who is unable to keep his coalition together,someone who many countries in the world will not give a visa to come and visit them. But a person who is so divisive…I think he is very choreographed and his managers do a very good job in putting his face out and marketing it. He certainly gets people to come and listen to him,but will he be able to carry this nation together? Will his leadership not be something that will ultimately prove to be brittle?
On fighting the BJP
The BJP as a political party does not exist in Tamil Nadu,Kerala,Andhra Pradesh,in the Northeast,Kashmir and in many parts of the country. Its the main opposition party but it does not have a presence in 10 or 11 states. Can Modi deliver MPs for Tripura,Nagaland and other parts where the party does not exist? Even people who are sympathisers of BJP say that Vajpayee had a certain charisma,he would take people along,and yet at its peak,the BJP did not cross 170 or whatever the number was. Politics is about numbers; whoever will get the majority will form the government. I am confident,with whatever we have done,we will go ahead with our heads held high,with the policies we have made,the laws we have passed,I have faith in our democracy and I am sure UPA-III is a reality.
On the climate of despair
The last one-and-a half year has been bad for various reasons. I think things could be better,we need to do more. The economy has certainly slipped. I am the last one to say that we are doing wonderful things with our economy. But there are many circumstances that are beyond the governments control,and it has affected us negatively but should we then sit back and close our shop and say this is all over? I’m not one of those people. I take full responsibility for all the bad things which you think have happened,but I also want you to credit us with the good things that have happened in the last 10 years. People have got more money in their pockets. There have been more social investments than ever before. There have been more schemes and programmes,budgets and policies made that one would not have thought 10 years ago.
Well,the truth is that in the last year or so a lot of political capital has been spent on things other than the positive reform agenda. Every government has to do fire fighting. I think the governments intent and idea is to keep following the idea of reforms,to open up more,to have more investments,to make things less cumbersome. Have we been fully successful? I dont think so. Can we do more? Certainly. This is a challenging time. We are cutting back on our expenses,we need to get more investments in,we have to change the policies. We have done a few things the Pension,the FDI,the Companies Bill. They have all been well received by the economy. I think it has given some confidence to the investors,both domestic and foreign.
Rahul (Gandhi),Milind (Deora) and you are close to each other. What happened recently (Rahuls outburst against the ordinance on convicted lawmakers)? Was it a one-off venting,or is this a start of something big? What do you think led to this?
This issue was talked about in all party meetings,and we asked all parties to discuss and comment. Many MPs thought that the appropriate thing for this country to do is to establish some sense of justice where something must be done about people who are criminals. So Rahul Gandhi,as Vice President of the Congress party,spoke out. And he spoke not as an individual but addressed the gathering on what he felt his views were as Congress VP. I dont think there is some game theory to it,or a larger agenda. Milind has also talked about this because hes representing Mumbai. He said what he had to say.
Sandeep Kothari,Fund manager,Fidelity Singapore:
Lack of coordination among various ministries and bureaucracy has impacted the economy severely. If you come back to power with lesser number of seats,what happens to the economy then?
I think what the economy and people in the corporate world want is clarity on policy,a landscape that is visible and which is long term. This constant tinkering and going back and forth and the retrospective,the change of policy and addition-subtraction rattle investors. It must be our duty first to inspire confidence in our Indian corporates. Why must I go looking for FDI all over the world if my own corporate houses are losing faith in our system?
The Companies Bill is coming to be substantially known as a CSR bill and not a Company Law Bill. Is there really a heart behind wanting investments to come? You may not like to hear this,but it is not coming. There is no predictability,there is no credibility. People change,projects are started and closed down…
The taxation policy,the environment law and the FDI policy are not part of the Companies Act. This Act is only for compliance for companies to have financial regulations,to work in a regulatory environment that we have created. Can the Company Law single-handedly attract investments? Not possible. It has to be a comprehensive ecosystem of the Finance Ministry,the Commerce Ministry,the state governments,the Land Bill that is just being passed. All these things have added to the plus and minus of the investments that are coming or not coming. The CSR has certainly overtaken the debate because it is perhaps the most talked about aspect of the Company Law. But if you look at the details,to my mind it certainly gives more confidence because there is much more transparency and openness.
Transcribed by Priyal Dave,Kevin Lobo,Meenakshi Iyer,Shahid Judge and Tabassum Barnagarwala