The India Finance Code (IFC) Bill seems to be going the way of its controversial predecessors, such as the Direct Taxes Code (DTC) and the uniform GST proposals.
Different interests have ensured that the proposals are watered down, often illogically, and then delay them endlessly arguing on the very illogical changes thereby protecting the status quo.
The Finance Code deserves better. The commission headed by Justice BN Srikrishna has done a monumental job studying nearly a hundred laws and regulations and taking into account numerous erudite views, including that of the concerned regulators.
Most of the present issues have been addressed in the code and the accompanying recommendations. Provisions have also been made for periodic reviews given the dynamic nature of the sector. The most important feature of the Bill is that it addresses issues of the consumer. It provides him with protection in clear terms, which most of the present laws are found wanting.
Several events such as the Cobrapost expose on the laundry operations of banks, the Business Standard story on the Russian ponzi king Sergey Mavrodi making inroads in India and finally the Saradha scam have brought to the fore deficiencies in the present system.
The fact that such practices and schemes were present and thriving under the nose of so many regulators is not a great advertisement for status quo. But, the saddest part is that even after external agencies brought these to the fore, there has not been a credible response as the ultimate beneficiaries and the real masterminds are roaming free.
The Cobrapost expose was just a demo of the modus operandi. What about several thousands of accounts that have been opened in such manner over the past many years? Where is all the money? Which century will the Income Tax Department make these people pay? The Russians have been arrested. But, how will you prosecute them? Less said about Saradha, the better. For a law to be respected, the violators must face punishment. Instead, we are hearing pearls such as "these entities are illegal, therefore by definition unregulated".
Given the state of affairs, the new finance code is our best collective effort to date. Should we let it rot?
The Securities and Exchange Board of India chairman said the agency needed more powers. The Reserve Bank of India governor is now saying enforcement is a bigger issue than regulation. Maybe he was suggesting that even new laws, when these come into force, will be shabbily enforced leading to more Cobras and Mavrodis.
So, shall we sit and watch? Our problem seems to be that we are not sure what such a huge change will do to ourselves. We are not sure that this is good. We do not want to make the choice.
In Man of Steel, Clarke Kent faces a similar predicament. He has the opportunity to change the world. He has to choose between his two worlds: An old dying world, where he was born and a new, promising one where he has arrived.
Kent goes to the church for the answers. The priest asks him about his dilemma. The Man of Steel tells him that he is not sure if he can trust Zod, the commander from his home planet Krypton. But he is also not sure if he can trust the people of earth either. As he walks away, the priest says: "Kent, at first it's a leap of faith. The trust part comes in later." The government may not be a Superman but it sure can take a leap of faith.
