LAW RESOURCE INDIA

Clean up the system

Posted in UNCATEGORIZED by NNLRJ INDIA on January 9, 2011
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Pass the Lokpal Bill to investigate charges against politicians, bureaucrats and the judiciary. And SEBI should make norms on corporate governance mandatory

N. R. Narayana Murthy
Chairman of the Board and Chief Mentor, Infosys Technologies

PUBLISHED IN THE TRIBUNE CHANDIGARH

WHAT can we achieve in 2011 that will make this country a better place? I will talk about three to four tasks that are well within our achievability.

First, we need a Lokpal Bill with the Lokpal having full powers to investigate charges against politicians, judges and bureaucrats. The Lokpal should not end up like the Lokayukta of Karnataka, which is just recommendatory. Today, we have two institutions that are supposed to be watchdogs — the Central Vigilance Commission(CVC) and the Central Bureau of Investigation(CBI). Although the CVC is an independent body, it is only recommendatory. On the other hand, the CBI has all the powers but it functions under the direct control of the Central Government and is not effective. Therefore, we have to combine the powers of the CBI and the CVC and create a Lokpal who will have full powers to look into the charges and take action.

I would like the Lokpal to be selected by a committee of nine eminent persons chosen from different walks of life, including a highly respected politician, a retired bureaucrat, a retired military person, an industrialist, an academician, a journalist and a retired judge. The Lokpal should be answerable only to Parliament. Passing the Lokpal Bill is one thing we have to achieve in 2011 because everybody is upset about corruption and we have to solve this problem urgently. Everybody realises that it is extremely important. So, I believe we can get the Bill passed this year.

Second, as regards the corporate sector, the so-called telecom scam has revealed several significant things — one, that even after liberalisation, the government plays an important role in the success of a corporation through licenses. Second, most successful corporations in the domestic markets are in areas which require patronage of the government. Three, corporate leaders still see license-based business as the road to success and put themselves in undesirable situations. In other words, the paradigm we thought would end after the economic reforms of 1991 has not yet ended.

The report of the Committee on Corporate Governance that I headed in 2003 had suggested several improvements in governance and SEBI wanted most of them to be implemented. For example, we had suggested that at least 50 per cent of the board should be independent directors if the Chairman and the CEO is the same person of a corporate board and that a director would not be considered independent after three terms of three years each. We had also suggested that there should be a whistle-blower policy in the company under which any complaint from a whistle-blower would directly go to the Chairman of the Audit Committee, who should be an independent director. We had suggested that the Audit Committee, Compensation Committee and the Nomination Committee should be manned only by independent directors. Corporate houses have been given enough time to implement these recommendations and SEBI should consider making these recommendations mandatory from April 1, to stem corporate frauds. If there is any violation, there should be a fast-track court to quickly decide on the cases of violation of corporate governance. The punishment should be swift and commensurate with the gain. The decision of this court should not be challengeable in a higher court. Unfortunately, we are nowhere near this. For instance, our courts have not even started hearing the Satyam case.

The third area where perhaps we can make some quick gains is in higher education. I know that solving the problem of primary education is not that easy because it is a huge one and has primary involvement of the state governments. We must introduce a Bill to provide full autonomy to higher educational institutions. We also have to clearly define what we mean by autonomy for these institutions. They should have the freedom to choose their faculty, free to decide on compensation for them, free to charge appropriate fees (with suitable subsidies from the government for poor students), and free to choose students. However, there could be some reservations for students based on economic criteria and not on caste.

Universities must have an honours version of every major subject so that meritorious students can indeed take the honours version of the course and the others the normal version. This has been done in universities in the US, where the honours students cover anywhere between two to three times the syllabus in the same period of time compared to those attending the normal version. The honours examination is much tougher and only about 10 per cent of the students in the US get into the honours stream. Such a scheme allows us to strike a balance between the need to provide opportunity to the economically weaker section of society and the need to encourage merit. Today, we do not have a single higher educational institution from India in the top 300 ranks in the Shanghai Index. The Indian Institute of Science is the only institution which is somewhere between 300 and 400 in that ranking. It is very important that we develop many institutions with a high ranking for us to sustain our economic growth. That is going to happen only if we bring full autonomy to these institutions.

The fourth thing we can achieve quickly in 2011 is solving the problem of flight landings in wintry or foggy conditions. Every year, flights to Bengaluru, Delhi and other cities in India get completely messed up during winter months. A large number of people wait at the airports not knowing when they can take off and attend meetings. Solving this is not rocket science. It has already been solved in developed countries. I have landed at London airport on many occasions in zero visibility with the pilot resorting to instrument landing systems to guide him. We have to select a bureaucrat like E. Sreedharan, who built the Delhi Metro, and give him full authority to install the latest landing systems in major airports so that aircraft can land even in zero visibility as they do abroad. It will considerably improve the productivity of the industrial sector and efficiency of the people in senior positions in the government and in private sector.

If we can ensure these things are achieved this year, then we can raise the confidence of our people and I have a feeling that 2011 would be a very worthwhile year when India can move forward and achieve a 12 per cent growth rate.

http://www.tribuneindia.com/2011/20110109/yearreckon/index.htm

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