New Delhi: The corporate affairs minister, Dr Veerappa Moily today questioned the system and the parameters being followed by the global credit rating agencies and said they need to redesign their system for rating an economy at an ASSOCHAM event held in New Delhi today.

“There is no tsunami on Indian economy and its finances as is being portrayed by some credit rating agencies which must redesign their parameters of rating absolutely on the economic criteria and not on political criteria, evidently as an element of political criteria has entered into the credit rating agencies which is unfair, impossible and unacceptable,” said Dr Moily while addressing a national conclave on ‘Governance, Risk Management & Compliance (GRC)’ organized by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).

“I really don’t believe in the system being followed by these global agencies and I don’t think that a comment or a reflection on the leadership of a respective country can be a subject matter of the credit rating agencies which should keep themselves confined to the economic parameters,” said the corporate affairs minister.

Talking about the New Companies Bill, the minister said that he is hopeful that the bill will come up in the monsoon session of the parliament. “The Parliamentary Standing Committee has submitted its report to the speaker who is yet to forward it to the ministry and we will work on it as soon as it arrives, but cannot comment as to what all recommendations are contained there in.”

Sharing his views on the corporate social responsibility (CSR) obligations provisions to be incorporated for the first time in any enactment, company law anywhere in the world, Dr Moily said, "I am not aware of any kinds of amendments that are there and until it comes to us I will not be in a position to give a call as to whether the CSR will continue to remain voluntary or not."

“We’ve worked out a very acceptable formula on the CSR, the one which is acceptable to the corporate bodies, all the industries and the country as a whole,” said Dr Moily. “At the same time, we are also providing a cushion in order to ensure that the compliance of CSR will also form the part and parcel of the responsibilities of the respective companies.”

On being quizzed about his views on Competition Commission of India (CCI) attracting criticism for being an anti-industry and imposing harsh penalties on certain industries, Dr Moily said, “If the Governance, Risk Management & Compliance (GRC) norms are followed in totality by all industries and corporate bodies, perhaps they will not get into these contingencies.”

“Ultimately the rule of law will have to be ensured and compliance is very important as non-compliance of the rules and regulations would mean that you are not in the regime of rule of law,” said the minister. “Effective governance has become the key differentiator between good and bad economies and thus, implementation of the GRC framework is the need of the hour to ensure overall benefit of the economy.”

Acknowledging that the government is facing certain setbacks in terms of the economic growth, the corporate affairs minister said that “Economic slowdown in India is a temporary phenomenon caused by certain international and domestic developments and the government is aggressively working to restore the growth trajectory back on its rising path, besides, there is a wider consensus that Indian economy has strong fundamentals to face these challenges and I can assure that within next two-three months things will certainly turn around.”

“The threat of an economic slowdown in India may give investors pause, but on a company level fund managers continue to see long-term opportunity, thus, the task to revive the economy is clearly cut out and we are already in action to accomplish this task within a time-bound manner,” said Dr Moily.

Speaking during the ASSOCHAM conference, Mr. Ashok Chawla, chairman, CCI said, “India is not very far behind in terms of structure, architecture and regulations. What we really lack quite often is the inner strength and the capacity to follow in spirit but there are the things which cannot be treated as routine items."

Others who spoke during the event included - Mr Bhasker Chatterjee, DG & CEO, Indian Institute of Corporate Affairs; Mr Anil Agarwal, past president, ASSOCHAM; Ms Preeti Malhotra, chairperson, ASSOCHAM National Council for Corporate Affairs; Mr S.C. Aggarwal, co-chairperson, ASSOCHAM National Council for Capital Markets.