Sucheta Dalal :Continuing backlash (13 April 2003)
Sucheta Dalal

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Continuing backlash (13 April 2003)  

On Friday, Air Freight chairman Cyrus Guzdar was to take over as the Western Region Chief of the CII, but Guzdar chose to turn down the offer in a continuation of the fallout over CII’s contretemps with Gujarat CM Narendra Modi.

It may be recalled that industrialists Rahul Bajaj and Jamshyd Godrej had raised some valid issues about the law and order situation in Gujarat at a function where Modi had been invited.

The Gujarat CM had not only lashed out at the CII at the same meeting, but followed it up by boycotting a CII event. Later some Gujarat industrialists led by Karsanbhai Patel of Nirma threatened to break away from the CII and sent it scurrying for cover. Secretary General Tarun Das was dispatched to Gujarat to tender an abject apology and the CII declared that it believes in partnership and not confrontation. But while the CII apparently sees no disconnect in its pusillanimous stand and its constant preaching about good governance, Guzdar decided that he couldn’t bury his personal views about the Gujarat incident even if the CII was doing so.

So he turned down the chairmanship. Incidentally, the CII has become a lot more vigilant about screening participants to its events in order to ensure that uninvited gatecrashers such as Jairus Banaji do not embarrass them with uncomfortable questions addressed to their guests.

Power problem Maharashtra is reeling from power cuts as the mercury soars into the forties, but its policymakers continue to fiddle. On the one hand, politicians across party lines are back to demanding resumption of the controversial and expensive DPC that they helped bring into India. On the other hand, the government has failed to implement a set of specific measures that were to increase non-Dabhol electricity supply. A group of secretaries had promised a 1,000 MW increase in power supply through the following measures: Additional condensers and capacitors were to add 200 MW of capacity while improving output through coal imports were to have added approximately 700 MW to the generating capacity of existing thermal plants. Petroleum Minister Ram Naik, who gets elected from Maharashtra had promised gas for restarting at least 100 MW of Uran’s fully ready power plant which are lying idle for want of raw material. This was in January 2002. After repairs and refurbishing of the plant, 400 MW of power was to be generated at Uran by January 2004. Interestingly, even the big new find of gas off Mumbai High has not persuaded the Petroleum Minister to release gas for his State’s power plants.

SEC v/s SEBI Although the SEBI is modelled on the powerful Securities Exchange Commission (SEC) of America, there was always a huge gap between the powers, capability, reputation and credibility of the two organisations. But the recent spate of accounting scandals in the US and the quick exit of a recent SEC has changed all that.

The SEC these days is hitting the headlines for seeking and getting better powers. Last week the US senate agreed to give SEC more teeth to go after wayward lawyers, accountants and company directors. It will also be empowered to demand financial records from those it is investigating and will be allowed to levy steep fines going up to two million dollars. The difference is that a well-empowered SEC may not hesitate to use its powers while SEBI continues to dither over stringent punishments.

Only in India After a five-year debate, India opted for a multiple depository system, but the National Share Depository Limited (NSDL) has virtually turned into India’s central depository (the other one, ironically is called Central Depository), with its rival getting a very tiny portion of the business. The NSDL, having proved its capability at capturing and maintaining large volumes highly confidential information, is now ready to move on to introducing transparency in other government systems.

Implementation of one of the Kelkar Committee recommendations will see it handling a large volume of tax data, especially the payment and tracking of tax deduction at source. It will also build a massive database encompassing a variety of stock market related information about companies, investors and market intermediaries for the SEBI. Once it takes on these assignments, the NSDL will probably be the first depository in the world to use its core competencies to transform into a massive data collection and management body, rather than remain a mere depository.

-- Sucheta Dalal