The Cabinet on Thursday approved the Companies Bill 2011 which, once approved by Parliament, will replace half-a-century-old Act, in a step that is expected to improve transparency and regulation of business houses in Asia's third-largest economy.
"The Cabinet has cleared Companies Bill, 2011. It is likely to be tabled (for consideration and passage) in the ongoing Winter Session," a Corporate Affairs Ministry official said after the Cabinet meeting.
The Bill, which has already been vetted by the Parliamentary Standing Committee of Finance and also by different ministries, seeks to update the company law in line with the best global practices.
The suggestion for earmarking a part of a company's profit for CSR was floated by the Parliamentary Standing Committee on Finance, which scrutinised the Companies Bill, 2009.
The Companies Bill (2008), which lapsed with the dissolution of the 14th Lok Sabha, was reintroduced in the Lok Sabha in August, 2009. Subsequently, in August 2010, the Parliamentary Standing Committee on Finance gave its report after examining the provisions of the law.
The Bill, which was originally introduced in Lok Sabha in 2008, lapsed because of change of government. It was reintroduced in August 2009.
Cabinet approval on the Companies Bill, 2009, was pending as the Finance Ministry and MCA failed to reach a common ground on powers to be delegated to the Securities and Exchanges Board of India (Sebi) in case of regulatory overlaps.
Finance Minister Pranab Mukherjee, Planning Commission Deputy Chairman Montek Singh Ahluwalia and Corporate Affairs Minister Veerappa Moily were asked to discuss and iron out issues. The ministers have come to a consensus on the issue, sources in the know said.
According to them, the Finance Ministry and Sebi have sought review of the provisions which conflicted with the Sebi Act. Apparently, it has been decided that Sebi's view will be upheld in cases where jurisdictions conflict.
RG
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