By IANS
Ahmedabad : India cannot have “honest enterprises” based on the principles of corporate governance as corruption has become a high profit business, former central vigilance commissioner N. Vittal said Saturday.
“Corruption flourishes in our country because under our judicial system, punishment for crimes is very low. There is an estimate that only six percent of criminal cases end in conviction,” Vittal said while delivering a lecture on ‘Corporate Governance – A 360-Degree Approach’ at the Ahmedabad Management Association here.
He said courts in India have to go by the evidence before them. “It is possible to be legal but not ethical.”
Corporate governance in essence meant transparency and accountability in operations and they must be internalised and maintained. “Corporate governance only through bureaucratic and legal measures will not be a good thing,” Vittal said.
“The whole idea of corporate governance is to ensure that there was transparency in the system so that there is accountability to protect the interest of all stakeholders. This aspect has to be appreciated in the context of 360-degree angle,” he noted.
Analysing the farm loan waiver scheme from the corporate governance angle, Vittal said: “We will have to see whether this action would bring lack of corporate governance in the agriculture sector business of the banks.”
No thought has been applied to the basic issue of why the loans had been taken in the first place. These waivers were setting precedents harmful to healthy and sustainable growth in agriculture, he said.
Unless the rule that the borrower must return the money is observed, “there will be no creation of wealth needed for achieving further growth”, Vittal added.