 "Money laundering by shell firms a menace to economy: Vice President Naidu")
As the government continued its crackdown on shell companies, Vice President M Venkaiah Naidu on Saturday said money laundering through them is a menace affecting the economy and has a "deleterious impact".
"Money laundering through shell companies is one of the menaces that affects the economy of a country. Money laundering, black money, hoarding, counterfeit all these (are) challenges," he said.
He made the remarks after inaugurating the 'Centre of Excellence' of the Institute of Company Secretaries of India (ICSI) in Hyderabad.
Naidu commended the decision of the ICSI to sensitise all its members and other stakeholders on the "deleterious impact" of shell companies and "shell NGOs".
Earlier this month, the government had said names of over 2.09 lakh firms have been removed from the register of companies for failing to comply with regulatory requirements and action has been initiated to restrict the operations of their bank accounts.
Continuing its crackdown on shell companies, which are allegedly used as conduits for illicit fund flows and tax evasion, the government had said the directors of the de-registered firms would not be able to operate the bank accounts till these entities are legally restored.
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"We are hearing more and more about it in recent days," Naidu said.
Appreciating the efforts of the ICSI in bringing secretarial standards onto statute books and paving the way for good corporate practices, he said such standards are needed in the wake of corporate disputes.
Terming the Goods and Services Tax (GST) as one of the best transformational laws, Naidu said, "Any transformation has some teething trouble, but once the system is put in place, India's growth will be accelerated."
With the implementation of the GST, company secretaries should be well-equipped to deal with challenges arising from its implementation, he said.
"In the wake of globalisation and the increasing role of corporates in driving the economies it has become imperative for professionals like company secretaries to acquire cutting-edge knowledge and skills that are not only in tune with the best practices but also facilitate and promote good corporate governance," the vice president said.
Naidu said apart from setting the benchmark for high standards in corporate governance, such centres should accord high priority to research and innovative practices.
It should be remembered that a strong foundation in ethical values should be the basis for exemplary corporate governance. But before looking elsewhere for lessons in corporate governance, one should look inwards and what better than Kautilya's 'Artha Shastra', he said.
"The principles and practices on economic management written by Kautilya in the 4th century BC are relevant even today," he said.
India, with its inherent spiritual strength, rich traditions and strong value systems, which form the core of many family-run businesses, can emerge as a role model for other countries in corporate governance, he said, adding the practitioners of corporate governance should play leading role in making India a global leader in their field.
He also expressed happiness that the ICSI is in the process of framing an international corporate governance code by bringing forth the teachings of the ancient Indian texts which hold relevance in the modern day corporate scenario.
Earlier, after laying the foundation stone for Regional Vocational Training Institutes (RTVI) here, Naidu said no nation can make progress if women lag behind and with women constituting about 50 per cent of the country's population, every effort has to be made to empower them economically, politically and in every other field.
"Although women constitute 50 per cent of the demographic dividend, the major challenge is to increase their participation in the country's labour force for faster economic growth.
"While there is an additional net requirement of 109.73 million skilled manpower by 2022 in 24 key sectors, it is estimated that only 4.7 per cent of the total workforce in India has undergone formal skill training as compared to 68 per cent in the UK, 75 per cent in Germany, 80 per cent in Japan and 96 per cent in South Korea," Naidu said.
The shortage of skilled workforce could be overcome by imparting vocational training, he added.
"With about 65 per cent of the population below the age of 35 years, this demographic dividend must be fully tapped to spur the economic growth," the vice president said.