Finance and Company Affairs Minister Jaswant Singh announced on Friday that a high-level committee would be set up for strengthening the regulatory and penal provisions for the corporate sector.
"India is in the process of promoting the best corporate governance practices. We are also liberalising corporate laws for allowing greater business freedom and reducing compliance cost," Singh said while announcing the constitution of the committee at the Pravasi Bharatiya Diwas function.
The committee, to be set up by the department of company affairs over the next few days, will also look at the regulatory framework governing private limited companies and partnership firms and will recommend whether they can be excluded from the purview of the Companies Act and the guidelines issued by the Institute of Chartered Accountants of India.
Officials said the government proposed to make the norms governing companies transparent and at the same time enhance penalties.
A committee under the chairmanship of Shardull Shroff is already looking at the issue of enhancing penalties.
"That panel is looking at penalties in isolation. This will be a super-committee that will provide a comprehensive set of recommendations on liberalising areas of corporate law on the one hand and strengthening the provisions related to the regulatory framework and penalties on the other," a government official said.
Officials said the Singh had recently asked the DCA whether private limited companies could be brought out of the DCA's ambit.
They, however, said the chairman of the new committee and the names of the other members were yet to be decided.
A formal announcement is expected in the next few days once the terms of reference are finalised.
"We are trying to bring together the best brains in various areas so that we can get a credible and unbiased opinion," said an official.