President for stricter laws to tackle unethical corp practices

New Delhi, Jan 25 (PTI) In the face of Rs 7,800-crore Satyam fraud, Indian President Pratibha Patil Sunday said there is a need for stronger corporate governance to tackle "unethical" practices by some firms, resulting in losses to shareholders.

"Some companies that over-extended or functioned in an
unethical manner have caused losses to shareholders. Such
incidences profile the need for stronger corporate governance.
There must be clear principles of accountability when such
losses take place," she said addressing the nation on the eve
of 60th Republic Day.

Patil said, "The richness of a few cannot be at the cost
of depriving others of their due. The traditional Indian
ethics emphasised saving wisely, investing productively and
not borrowing more that the capacity to repay. These hold
valuable lessons for the business world."

Her address reflected the government's concern on issues
like corporate India's biggest fraud in Satyam Computer,
global financial crisis and slowdown in the Indian economy.

Stating that the global economic slowdown, triggered by
some credit and banking institutions causing a "crisis of
confidence", she said there is "need for strengthening
oversight mechanisms for financial institutions, and rules
which are clear, transparent and uniformly applied, is being
actually felt."

She said the instances of financial imprudence, which can
put global welfare at jeopardy, cannot be allowed to happen
again, as "India has been impacted by the global environment".

As governments take necessary domestic measures to ensure
that financial institutions and companies adhere strictly to
high standards and conduct, it should be ensured that they are
accompanied with greater international co-operation, so that
there is coordinated action in this regard, she said.

Reposing faith in the strength of the Indian economy, the
President said it has fundamental strength and resilience to
remain on course for growth.

"We could be one of the nations which can act as an
engine to help revive the global economy," she said and added
the global financial crisis can be an opportunity to reinforce
the structure of our domestic economy.

Noting that stimulus packages announced by the government
would encourage investment, Patil said, "We have a very large
domestic market and by increasing the purchasing power
capacity of all sections of society, our economic development
can be stimulated."

Suggesting that there should be coordinated action for
tackling global economic crisis, the President said, "The need
for having inclusive international architecture cannot be
overemphasied. India would bring to the global discussions
considerable weightage and meaningful contribution for more
credible and viable financial structure."

The President said the government is seeking to address
inequities in the growth process through inclusive approach
that brings within its ambit all regions and all peoples.

"This assumes greater importance in these difficult days
of economic stress," she said adding, "Economic opportunities
should also be accessible to the remotest areas."

The President also suggested that the rural development
can be a very effective vehicle for spreading the benefits of
balanced growth.

"The global spike in the prices of foodgrains last year,
and the resultant fears of shortages and hunger, carries the
message that the nation must, at all times, be focussed on
its agriculture sector and food sufficiency," she said.

"By strengthening our agriculture economy, we can bring
about the upgradation in this sector and also create internal
economic demand," she added. PTI DP
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