There is a new law with new problems. Much has changed, and much will stay the same.
Irrespective of which side of the political spectrum you are on, it is hard to ignore the excitement around the 2014 general elections. Opinions, loyalties and interestingly, this time round, judgment bordering on ridicule if you haven’t voted—are rife across the board. Glances at the index finger are noticeable enough to invite justification from those who have non-inked ones. The underlying buzz is that this is an election like never before, it is going to change the course of India’s destiny and it is hugely irresponsible to not participate in this wave of unprecedented change.
Even for the disinterested, the hype seeps through.
However years of disappointment and disillusionment with the political system have taken their toll and skeptics are quick to point out that ‘the more things change, the more they stay the same’. And therefore they discount the current mood with a sense of déjà vu.
While I would like to dismiss their cynicism unequivocally, I can’t. There is a ring of truth to their observations and here’s why.
Amidst the humdrum of politics and imminent change, a few days ago, I was leading a CFO India Network discussion on the impact of the new Companies Act on mergers and acquisitions (M&A). The panel was constituted of a senior CFO, a partner from one of the Big 4, and a leading corporate lawyer. To begin with, very quickly, the panel outlined the one big positive of the Act—that it is likely to improve overall governance over time. But as they peeled into the Act, they pointed out how a new vocabulary that needs clarifications and interpretations has emerged to replace the old one. The use of the term ‘reasonable’ continues in this brand new Act leaving CFOs, CEOs (and, equally importantly, Independent Directors) as worried as before. The tax implications of some of the new provisions for M&A (specifically cross-border mergers) remain to be deciphered—and therefore the case-by-case approach will continue to give sleepless nights to many. Overall, the operating environment for the honest corporate still remains tough and the cost of doing business, if anything, is higher.
As if this wasn’t bad enough a realisation, the complete absence of rancour in the audience is what left me stunned. Not a murmur of complaint against an Act that has remained woefully shy of its promises. No expectation from the Government to have delivered a better piece of legislation after all this time. No real desire to push for an optimal outcome. The room resounded with a quiet resignation to the way things have been, and the way they are likely to be.
In fact, as is wont to happen at such forums, the conversation veered to other areas as well—to the overall nature of laws and regulations in India, the loopholes and the challenges of implementation, the discretionary powers of interpretation, the powers of the taxman among others. The underlying sentiment—there is a new Act, and with new problems. Much has changed, and much will stay the same.
In the midst of what could be a historic political shift, should we sit back and accept this as inevitable?
Or can we change our mindset and do our bit to ensure that the change is real as opposed to cosmetic—not just of the political party in power. Can we demand that change in government is accompanied by a change in the way things are? As a self-confessed optimist I certainly think so. But what do you think?