The code, which will be introduced on an auto pilot basis, will aim to create a new corporate culture and facilitate healthy working relationships. Corporate affairs Minister Veerappa Moily told FE that if relations between competing companies worsen, it could severely damage the countrys investment climate.
Corporate rivalry will affect everyone. It will hurt not just the entity that wants to harm others, but ultimately themselves. This will eventually destroy the entire corporate culture, Moily said.
He said while the post-liberalisation climate has created a competitive business environment, it required certain mechanisms to ensure that rivalries remained healthy. We would like to work out certain systems on an auto pilot or self-regulation basis so that they become a code of conduct. I am applying my mind on that, he said.
The ministry will also seek to improve the trust factor between the government and corporates for a healthy investment climate. If the government does not trust businesses, its like saying parents do not trust their children. I would look upon corporates like a parent, where if they commit a small mistake, our mind should be broad enough to excuse them. I am not here to police the corporate world, he added. Moily, however, said in cases of any serious violations, the government would act firm.
On Monday, finance minister Pranab Mukherjee is meeting top industry leaders including Ratan Tata (Tata Group), Mukesh Ambani (Reliance Industries), Anil Ambani (ADAG), Kumar Mangalam Birla (Aditya Birla Group), Sunil Mittal (Bharti Group) and YC Deveshwar (ITC).
At the meeting the first corporate get-together since the spectrum scam broke Mukherjee is expected to coax the industry into bridging the trust deficit. Earlier this month, telecom minister Kapil Sibal too had spoken out against unhealthy corporate aggression to pocket scarce resources like spectrum.
Moily said if capital continues to stay away, India could join countries like Russia which do not inspire people to invest. (Since) the prosecution on 2G began, people are getting the impression that is it safe to do business here, he said.
In 2010, Indias total foreign direct investment fell to $25 billion, compared with $35 billion in 2009. Ultimately, the unhealthy rivalry between corporates is not good for business. Nothing will happen in this country by suspecting each other. We need to create a trust environment not only among corporate entities but also between the corporate bodies and the government, Moily added.