?I think people will give the UPA a third chance?

In this Idea Exchange, minister of

state for corporate affairs (independent charge)

Sachin Pilot talks about the Companies Bill, the mandatory CSR clause in the Bill and the future leadership of the Congress party. This session was moderated by DK Singh of

The Indian Express

DK Singh: One after another the allies of the UPA have been quitting. First it was Mamata, now DMK…does the fault lie with the ally or is it the inability of the Congress party to run a coalition government?

Congress party has maintained a stable political government for the past nine years with allies. Unfortunately, there are some allies who are not with us any more. But the future is pregnant with possibilities and we will always try and make sure that we work with our allies and take anybody on board who is willing to work with us for the betterment of our country. I don?t think it is a matter of finding fault with allies. There are also political compulsions related to the states that has led to one or two allies not being with us anymore. Let?s talk about the Opposition for a moment. BJP is the principal Opposition party. Now being in Opposition and to get everybody together should have been an easy task. But if you look at the numbers in the NDA in the past five years, Om Prakash Chautala to Naveen Patnaik and now Nitish Kumar also, I mean, the NDA themselves have become very loose despite being in the Opposition. So there goes the question that which political party between Congress and BJP has more glue to which allies can stick around.

Shruti Srivastava: Post-Sahara case, have you identified companies which have violated the private placement aspect of Companies Law. What action have been taken against such companies?

Many companies have misused the private placement aspect of the Companies Law in the past. In the new Companies Bill, we?ve made it far more stringent for these companies to come out clean by way of disclosures. Private placements are required for companies to raise capital without getting listed. There are restriction of how much and where you can do it. There have always been loopholes in law, which people have exploited. We need to tighten those loopholes. We have tried to work less on firefighting post event. But more effective would be to make sure that people are able to recover their money. I have just signed MoUs between department of IT, finance ministry, the economic intelligence unit and our own technology unit within SFIO to make sure that we collate the data. There?s a huge amount of data available. You combine the data to know where the pressure points are and where the red flag go up.

MK Venu: These chit fund companies have deep links with the local politicians. We?ve seen it in UP, Bengal. How do you deal with it?

If anyone is out of the ambit of law, whether he?s related to politician or related to minister, it doesn?t matter. We are going after people who are not following the law. We are doing this to save investor because we should create an environment in this country so that people have a confidence that their money is safe. Again the MoU that we signed recently was about how to detect money that is flowing in for that is not to be used in terror activities and funding of crime and this is the multi-stake holder thing.

Ashish Sinha: Companies Bill talks about setting of national financial reporting authority. ICAI already exists and they have expressed their displeasure about NFRA on several occasions. What will be the role of ICAI when NFRA comes into existence?

It is wrong to say that anyone is against anything. When the Bill was in the making, ICAI was certainly a large stakeholder providing its inputs. The objective behind creating NFRA is to make sure that there is proper regulation, effective action and there?s far greater transparency because if you want to have an effective mechanism you got to be able to create constitutional authority, which can then create standards and can pinpoint when there?s a violation. It is an overarching body. It is not that ICAI won?t have any work to do. But we want more effective reporting system. NFRA has been well thought of in the Bill. It hasn?t come out overnight.

Shobhana Subramanian: You said you are doing less regulation but for Corporate Social Responsibility (CSR) you have put a mandatory condition of 2% of net profit. Shouldn?t it be voluntary for companies?

Since independence, there have been companies that have done phenomenal work in giving back to society. If you really go through the Bill and read it properly, it says that if you are profitable, please spend 2% of your profits in whichever area you want to. It is not regulated. And there?s no inspection and no utilisation certificate. The Bill also states that if you can?t spend the money, report the reasons and disclose it on our website. The government really doesn?t interfere in that. I think it is good that companies themselves get to create the space in the mind of people in the areas they work.

Ashish Sinha: But MCA will be providing penal provisions for those who don?t comply. Doesn?t that amount to enhancing the government?s role?

If you can?t spend the money please report it to shareholders and put it on the website. And if you don?t do it then it attracts Section 134 of the law and the various penal provisions. It is part of the law.

ARUN S: With regard to the Walmart lobbying issue, what are the measures the government is taking to tackle lobbying?

The word lobbying has no definition. In the law it doesn?t have any definition. So, what activities qualify as lobbying we have to device as a government and as a society. I?ll give you an example. If you are working in a rural area making a canal or a school building then 20 people may come and tell me that this is the wrong way to do as there?s more water here or there. They are raising concerns. So, they are lobbying with me not to spend money in a particular area. That is not wrong. We must discuss how to define lobbying. After there?s a clear definition, like in the US and Europe, if companies don?t comply with them, then there?s trouble. And as far as the Walmart case is concerned, there?s a committee which is looking into the case, and in a month and a half that report should be out.

Ashish Sinha: On the issue of appointment of independent directors, the Bill says the government will decide on a list of people for companies to select from. Does the new Bill increase government interference in company matters?

I think the less the government?s interference, the better it is. We should have less regulation and full compliance. But if there is less compliance then we must take strong actions so that the message goes out that you can?t flout the law. For the record, we are not making it mandatory for companies to select independent directors from this pool. But we?ll help in creating this database so that companies can choose. What we have mandated now is for certain class of companies to at least have one woman director on the board. Now, we have started the concept of one-person company where you do very less paper work and still get the benefits of a company. Government is actually trying to step back.

Surabhi: India ranks 132nd in the World Bank?s list of ease of doing business out of 185 countries. What kind of measures can be taken to improve these ratings so that more FIIs, and FDIs flow in?

We don?t deserve to be 132nd on any list. But I think the kind of scale, scope, depth that this country has to offer, being 132nd doesn?t do justice to us. For that reason, we have set up a committee headed by the former Sebi chairman, Damodaran. He is giving us the report by the end of March. I have told him that it should be a very short report on what we need to do. Improving the ranking also includes doing a lot of things. Let?s face it, we need 12 million new jobs every year just to maintain the current level of employment. The government can?t give jobs. The jobs have to created by the private sector and no large economy has ever grown on the strength of its blue-chip companies, it is the SMEs who do manufacturing, these companies are the engine for growth for any large economy.

YP Rajesh: Do you think there?s a morality problem as large corporates contribute to the trust run by the family of former corporate affairs minister?

I think Moily has clarified it in a very clear-cut statement he has issued. If the auditor of the corporate and its board is satisfied with the work being done, then it doesn?t matter whether the person is an actor, singer or a politician. Anyway, Moily has clarified. I am not here to comment on it.

Rishi Raj: CCI was started with much fanfare but most of the areas where they have acted, the companies have gone on to appeal to the appellate tribunal. So far, in any of the cases, not even a single rupee in penalty has been collected. What can be done to tackle this? Don?t you think the law should provide for the companies to deposit a certain percentage of fine and then fight on legally at appellate forum?

Well, at this time I can just take this suggestion. There are some courts where you have to deposit 25% of the penalty fine and then you can appeal. That?s not the process we are following right now. A lot of fine has been imposed, but then people have moved courts.

Manu Pubby: You are the first minister to be a regular officer in the TA (Territorial Army). Have you been able to find time to go for training and interact with the people there?

Yes, I have. TA requirements are that we need to spend 32 days in a year. I have about 10 days and luckily for me the unit is in Delhi. I may also be able to find time and go there. That?s the commitment, so one has to. The question is not that you can find time. The question is how you find time. And it?s not that tough.

Dilip Bobb: Shouldn?t political donations made by the corporates be more transparent?

All registered parties show their donations. In fact, the companies get tax benefits on political donations. Whatever cash parties get, they disclose in their statement. It is a transparent mechanism.

DK Singh: As a Congress leader, do you think that Rahul Gandhi is not interested in taking over as the PM. Whether he?s inclined to take up the job?

What is very clear is that he?s not hankering for the position. There are many people who are aspiring to be the contenders for the PM position. Gandhi said that it was not important who occupied the position, it was about his philosophy and ideology and for the organisation and the country. He has said that he was not making it a focal point of what he wanted to do.

Coomi Kapoor: Like the BJP doesn?t know who will be its PM candidate, is it the same situation with the Congress?

Well, we don?t have a presidential form of election where you declare your PM candidate. The BJP did that in 2009 when they declared Advani as their PM candidate. Even now, there are over a dozen candidates in the BJP, who aspire to be the PM candidate and with all this publicity, the situation is still not clear for the BJP whether a name will be finalised. Manmohan Singh will be there till 2014. We are not in 2014, we are in 2013, we have a PM today, who will see us through and he will complete 10 years as PM. We are confident that we will form a UPA III government.

DK Singh: Is it fair to assume that Rahul Gandhi may not be the PM candidate of Congress? Is he in the reckoning for the

PM?s post?

I can?t say that. Everybody fights an election to win. Nobody fights to lose. We have done enough work and people know the reality. I think people will give the UPA a third chance.

What does reckoning mean, please define. Is he not qualified to be the PM? It is not my job to rule him out or rule him in. All I mean is that he?s not in politics just to become a minister or PM.

ManEEsh Chhibber: You just said one dozen people in the BJP aspire to be the PM. Don?t you find that ironic whenever the issue of the family comes in the Congress, all leaders are expected to step back. You know, if Rahul Gandhi chooses to be the PM, it is for the taking not the asking. What kind of democracy is this?

In the past 24 years, has there been a Gandhi who has been the PM of India? Twenty-four years is one quarter of a century. Was Dr Singh from the Gandhi family? Was Narasimha Rao from the Gandhi family? Complete unanimity in leadership gives us cohesion to work unitedly and defeat our political opponents. That?s a strength. If it was becoming PM alone, Mrs Gandhi could have done it easily in 2004. The point is that they have made us win elections and have chosen not to become PM.

Ambreen Khan: I want you to detach yourself just from the party and as a young politician where do you drive your inspiration from? And what kind of inspiration you drive from Narendra Modi? And If you have to switch gear for the Congress party and to create a turning point, what would be those recommendations?

I don?t think I am changing paradigm of things in this country. I am too small a person to do that. But in my own way, I am able to bring about a positive change, even if it?s half a per cent, I go to sleep content with the things I have done. In my own constituency, I have been an MP for four years. This is a constituency which my party didn?t hold for 25 years. Getting wishes of people is far more rewarding than any laurels or certificates. This is what drives me. Frankly speaking, when it comes to Modi, I don?t draw any inspiration from him, but I do admire his relentless obsessiveness for trying to reach the PM?s post at any cost. I mean it takes something to be so driven. It is okay to be the CM three times. I think it is great he has a hat trick of election victories, but so has Sheila Dikshit, Tarun Gogoi, and Jyoti Basu was elected as CM five times, but he didn?t bang his chest all over the world. So, I think success must be accompanied by humility and let destiny and your hard work guide your path. In my humble view, the post of the PM has come to people who have worked the least hard for it and people who have worked very very hard for it have never got it.

He?s done everything that he could do, even almost adorning a skull cap, to make his chances bright. And about the gear shifting part, it is already happening. In the past two months, there have been counts of activities at all levels and you will see the impact of those changes in the next few weeks and months. If we all work unitedly in the Congress party, which we are doing under Rahul Gandhi and Sonia Gandhi, we?ll definitely come again.

Transcribed by Rajat Arora and Himani Kaushik