Amendments to new Companies Act may not be needed: Sitharaman

Sitharaman, who is the Minister of State for Corporate Affairs, has been steering efforts of the ministry in addressing concerns over the Companies Act, 2013 —whose many provisions came into effect from 1 April. The Corporate Affairs Ministry, which is implementing the Act, has already initiated various measures, including minor as well as substantial changes to rules related to the Act.

‘If all this (steps are) already on course and people feel the relief which is being offered with all these (changes), amendments may not even be necessary... that is the way in which we have perceived the whole process,’ Sitharaman said.

Asked whether the ministry has set any time frame on possible amendments to the Act, she said the government would first wait for the impact of changes that are being made before taking a final view.

‘... we have made a good progress in terms of addressing the concerns on Companies Act,’ the minister said.

Many stakeholders have raised concerns over certain provisions of the new Act, that replaces the nearly six-decade old legislation.

According to her, the government would like to wait and see what impact the changes are having.

‘... if the impact is a great sense of relief may be after six or seven months we would want to find out if amendments are at all necessary... But if at that time, if they (stakeholders) still think you have to do it, we will take a call then,’ Sitharaman said.

On reviving SEZ and manufacturing sector,  she said new foreign trade policy (FTP) will focus on ways to boost manufacturing sector and exports besides addressing the SEZ issues.

‘The refreshing thing about this time’s policy will be to understand where our strength lies, what are the challenges available. Manufacturing will be at the core of it...SEZ would also figure in the FTP,’ Sitharaman said.

She said the FTP till now has been only a compilation of schemes to boost exports and regulate imports.

The minister said the FTP for 2014-19 would also mention about the schemes and incentives besides ensuring that the announcements are WTO compliant and ‘making sure that international obligation are not violated’.

The policy is expected to be announced by the end of this month. ‘We have been reviewing SEZs not just for pushing exports but also because many of them who have already come and played into the SEZ are facing a lot of difficulties,’ she said. The government is looking at the demands of SEZ developers and units on minimum alternative tax (MAT) and dividend distribution tax (DDT), she added. Industry is time and again demanding roll back of MAT and DDT, saying imposition of the duty has adversely impacted the growth of these zones.

‘The Finance Minister was very seized of the matter. I am sure something would come out of it. Because it is going to hurt SEZs. The way in which we are looking at in the commerce (ministry), I will certainly be requesting the Finance Minister to sooner rather than later definitely look at the matter. They have been a very big deterrent for the SEZs,’ she said.

Besides, the commerce ministry is also reviewing issues related to infrastructure for non-core uses of the SEZs, non-export component like the residential and healthcare accommodation, use of land within the SEZ for non-core purposes.