India Inc's 'lack of ethics' concerns PM

Amid charges for flouting environment laws by some influential business houses, Prime Minister Manmohan Singh on Tuesday said there was a perceived 'ethical deficit' among some corporates which need to follow fair means in their pursuit.

"I am sure, business leaders are aware that business practices of some corporate houses have recently come under intense public scrutiny for their perceived ethical deficit," he said while addressing captains of industry at India Corporate Week 2010 function in New Delhi.

Some leading industrial houses, mainly engaged in mining and real estate are facing charges of violating environmental laws, while a few others are under public eye for intensive lobbying to influence government policies.

Expressing concern over the way natural resources are being used by industry, Singh said, they need to be "sensitive to the needs and aspiration of common man ... for their long term survival."

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The prime minister cautioned that in absence of adequate resettlement and rehabilitation of project displaced people, faith in industrialisation may erode.

"Our growth process must not suffer because of loss of confidence in industrialisation and development. We need policies and interventions that would minimise livelihood disruptions."

He said increased employability of population through skill development must be central to corporate strategy.

Singh said "ethical and responsible behaviour needs to become the cornerstone of corporate behaviour, as indeed our national outlook."

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Recalling the words of the Father of Nation, he said, "Mahatma Gandhi repeatedly emphasised the importance of not only good ends but also the use of fair means to attain them.

It is the large companies that have to set the pace in this regard. The rest of the corporate sector will quickly follow as a norm."

The companies, he added, must adopt environment friendly measures and "avoid taking shortcuts" which can adversely impact livelihood of the local populace.

The prime minister also said that India's corporate sector is poised to become the Indian economy's main engine of growth.

"India's corporate sector is poised to become the main engine of growth for the Indian economy. The responsibility it carries is, therefore, truly enormous," he said.

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"The ministry of corporate affairs has a mandate to provide an enabling regulatory framework to facilitate the corporate sector to function productively and responsibly, and broadly in line with our national aspirations," he added.

He further said that the streamlining of corporate registration under the MCA21 e-governance scheme has increased convenience and added to the spirit of transparency for the investor and provided end-to-end services to the corporate sector.

"I am happy that the corporate sector has responded positively to the challenge of sustainability and some of the Indian models of integrating sustainability in core business processes are being showcased as the best in the world," he added.

He said that several corporate leaders have already recognised the value of capacity building and skill development and are working with the Government through ongoing schemes and the National Skill Development Corporation.

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"Some industry associations have offered to partner in improving our ITIs and developing skills of youth, particularly those who are poor and marginalized. But such efforts have not reached a scale that could have a visible impact on production processes in our country," he added.

Emphasising that Indian companies are strategically increasing their presence overseas, Dr Singh said: "India has always been a nation of entrepreneurs. Today it is a nation of world class professionals as well."

"The private sector now contributes significantly to all sectors of our economy, including infrastructure development, which until recently was an exclusive preserve of the public sector until a few years ago," he added.

"In recent years, the private sector is also successfully engaged with the government in PPP projects," he added.

The prominent industry leaders present at the function included CII president Hari S Bhartiya, Assocham president Dilip Modi, Ficci past president and Apollo Tyres chief Onkar S Kanwar and Bajaj Auto chairman and Rajya Sabha member Rahul Bajaj.