The PM was speaking at the Conference on Economic Growth in Asia and Changes of Corporate Environment at Vigyan Bhavan in New Delhi.
Dr Singh said that it is the responsibility of the government to ensure that corporate laws match up to global standards. “Govt needs to ensure regulation of stock exchanges is at par with expectations of global investors and that the banking and financial sector is exemplary of efficiency and stability,” he added.
The Prime Minister also reiterated the importance of Corporate Social Responsibility as being fundamental to sustainable growth and said that the new Companies Bill will soon be introduced in the Parliament.
The Companies Bill, which sought to reform the functioning of the corporate sector, was shelved after BJP's opposition to it in the current form. The new Bill incorporates features like class action suits, which will benefit small investors seeking relief from large corporations. It also proposes tighter laws for raising money from the public. It makes insider trading a criminal offence and makes mandatory for companies to earmark 2 per cent of their average profit of the preceding three years for corporate social responsibility activities.
The UPA government had last week taken a decision to allow foreign direct investment in multi-brand retail and aviation and raised the FDI limit in single-brand retail and broadcasting sectors. It had also announced a hike in diesel prices and a cap in subsidized LPG cylinders in a bid to curtail the spiraling subsidy bill.
Yesterday, in another strong 15-minute speech, the Prime Minister explained to the nation the reforms that have hurtled his government into a minority.
"No government liked to burden the aam aadmi or common man," the Prime Minister said, and asked people to trust him and strengthen his hand as “the time has come for hard decisions".
Mamata Banerjee's Trinamool Congress, which was the second-largest member of the UPA coalition, on Friday withdrew support over the government's decision to increase diesel prices and open up the retail sector to foreign mega-stores like Wal-Mart.
Opposition parties have dismissed the PM’s attempt to reach out. “Sitaram Yechury of the CPM said there was “nothing new in the PM's speech.” And the BJP ‘s Prakash Javadekar said, “If PM wanted to show intent, he should have acted against corruption. Instead he has burdened the common man.” And Kakoli Ghosh Dastidar of the Trinamool Congress, which brought this moment to pass, said, “The PM is a gentleman, a learned man. But the Congress has no touch with the common man, though they keep talking about aam aadmi. Cut in subsidy will create problems for the middle class.”
Industry, though, is cheering Dr. Singh’s reforms and wants more. “A very balanced address, he clearly explained that these steps were very necessary. His comparison with 1991 was very apt. I am impressed with the action last week and today's speech; the government has good support. Mamata’s pullout may strengthen the government – the stock market went up and the rupee appreciated. A stronger rupee will lead to lower inflation,” said Adi Godrej, chairman of the Godrej Group and president of CII.
Kiran Majumdar Shaw, CMD Biocon, welcomed the speech as “a very cogent explanation of the urgency for reforms. He reached out to the people to explain how he can't afford India to reach a situation like some European countries where people are losing their jobs. I wish he had done this earlier. We can't have a prime minister who keep large periods of silence.”