ARTICLE
Gracy Singh
2nd Dec 2023
Corporate scandals does really endanger the economic progress of the country
1.Introduction
In recent past country is witnessing huge number of corporate scandals all over the country. Almost with the frequency of 1 to 2 years, at least one corporate scam is coming to light.
It is known fact that after Government organisations, public sectors, banks and other Government run financial institutions like LIC, GIC, are playing a dynamic role in advancing the countrys growth economically and industrially. On the other hand, private sectors too contributing maximum to the growth of the country.
The private corporate sector has stretched its tentacles maximum in all fields of public confidence in showing employment, and in providing minimum infrastructure like public health, road transport as well as air transport and also in encouraging savings in the form of shares and paving the way for making huge investments in corporate houses and thereby contributing for the economic and industrial growth of the country to some extent.
The statutory provisions enshrined in our Companys Act, 2013 as well as repealed statute allows the private corporate sectors to raise their fund to run their business through the issue of shares and debentures. It means the private corporate sector is completely running its business with public raise their investments in these sectors, they be able to grab the profits and can reach to saturation levels at the earliest by throwing some facilities to the public as a pray.
The time when the public are growing their confidence in these sectors, these sectors begin to take advantage of the situation and start to capture the market by adopting malpractices and abusing their powers and positions.
Any private company, at the time when it is flourishing, becomes closer to politicians for certain advantages which are publicly screened. This is actually the time where the people and government have to be vigilant and take initial steps to curb any unwanted and unwarranted risks. But both will not concentrate much during such initials stages until the situation goes beyond clutch. When the risk alarms high, then the people start to realise the reality and starts screaming.
At the initial stages of our independence we used to have socialistic features of economy where complete hold over the land and properties would be in the hands of state and the state was considered expansion of the country (population wise), the government supplied goods and services since were not meeting the demands of public, inviting the private sector to the public field has become inevitable. According privatization was introduced successfully in all services. However, the private sectors at the time of their entry into the public life used to be very sincere, serious, dedicated towards their duties and also could reach the expectations of people and also government. Even till today certain big corporate giants like Tata motors, Tata Steel, Reliance, Google India Pvt, Ltd, Forbes Marshall Private Limited etc proved their excellence in their respective fields. It may be a challenging time to prove themselves that they are on par with the government and be able to show security to the public in all fields. But few companies which have taken undue advantage of the situation collapsed the system to some extent.(1)
2. If in all the corporate scandals, the accused persons are getting acquittals in spite of having sufficient evidence on record, what type of signals it be passing to the public both nationally and internationally?
If the above situations are recurring day by day without proper control or measures, the zeal of investors to make investments will get completely hampered. It directly affects the financial positions of the companies and in turn production be declined and in turn affects our per capita income and finally affects our GDP. This decline of GDP rate is again a negative indication to the foreign countries and will not show much interest in dumping their investments in our country. Therefore, our ambition in inviting foreign investments under the slogan Make In India of our beloved Prime Minister Modis may become a nightmare.(2)
3. Whether the administrative measures are taken in time ?
My point is as and when there is a little apprehension that there is a suspected scam, quick administrative measures are to be resorted to and can see that the situation is not crossing our hands.
For example whenever there is a hint that something malpractice is doubted, immediately the concerned board of directors are to be replaced with new ones, regular auditing with transparency must be done to yield the desired purpose. Even if judicial actions are taken, they must be continued till the culprits undergo the punishments without letting them to escape the judicial clutch.
4. Conclusion
In the light of above, we need to be very careful in seeing that the foreign eye on the Indian Market is not getting erased in making productive investments and it must be instead welcoming. We have to be vigilant in setting up the corporate entities because Corporate sectors do contribute maximum to countrys growth and can yield huge purposes to all people in all fields provided if they are properly safe guarded with frequent scrutiny and random checks so as to be out of the hands of bureaucrats. Otherwise these scandals will definitely endanger our progress economically and industrially. Let us all beware of the situation and do contribute something for the productive growth of our country.
5. Citation
1. Avijayalakshmi,"Corporate scandals does really endanger the economic progress of the country" available at:https://www.legalservicesindia.com/article/2375/Corporate-scandals-does-really- endanger-the-economic-progress-of-the-country.(last visited on 2nd Dec 2023)
2.Larry D.Thompson,"The corporate scandals, Why they happened and Why they may not happen again" available at:https://www.brookings.edu/articles/the-corporate-scandals-why-they-happened- and-why-they-may-not-happen-again. (last visited on 2nd Dec 2023)
