The Hindu : Front Page : Don't add to noisiness of polity, Pranab tells corporates

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Saturday, Dec 11, 2010
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Don't add to noisiness of polity, Pranab tells corporates

K. Balchand

NEW DELHI: With the telecom and other corporate sector wars spilling over into the polity, Union Finance Minister Pranab Mukherjee on Friday criticised the increasing “noisiness” of politics and obliquely asked business houses to be more restrained and ethical in their practices.

Mr. Mukherjee's cryptic remark came at the end of his address to a meeting of Assocham. While wishing the captains of industry in the audience prosperity, the Minister said: “Democracy has become noisier; perhaps a little silence is called for.”

His remark took most industrialists present at the function by surprise. Coming as it did a day after the public spat between Tata group chairman Ratan Tata and Rajya Sabha MP Rajeev Chandrasekhar, many felt the Minister's advice was directed at the corporate sector.

Underlining the need for ethics in business, Mr. Mukherjee hoped that they would not push the single agenda of maximisation of profit and shareholder value at all costs.

He stressed upon the need for greater integrity in branding, advertising and marketing, and in every realm of business.

Pointing out that the global financial crisis revealed gaps in the functioning of vital elements of the financial markets, including corporate boards, Mr. Mukherjee said that in most cases there was serious misalignment of interests between managements and boards, and identified these as the root cause behind the crisis.

He said they were expected to be responsible risk-takers, balancing entrepreneurial impulses with fiduciary responsibilities. “Failure to adhere to prudent norms or corporate governance ultimately led to the demise of several multinational corporations in the context of the global financial crisis,” he said.

As regards the economy, Mr. Mukherjee aimed at an 8.75 per cent rate of growth during the current fiscal, but cautioned against debt crisis in Europe, particularly because it accounts for 36 per cent of India's exports.

He underlined the need to increase exports to bring down fiscal deficit to the desirable level of three per cent in the years to come, adding that he was hoping to get it down to 5.5 per cent by the end of the current fiscal and 4.1 per cent in the next fiscal.

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