Firms may get fiscal sops for affirmative action: Khursheed

Corporate affairs minister says government is open to considering the proposal.

Corporate Affairs Minister Salman Khursheed said his ministry would push for affirmative action in the corporate sector through fiscal incentives.

Affirmative action is part of the United Progressive Alliance (UPA) government’s agenda for the next five years.

“Now, the concentration is entirely on reservations, which is only a subset of the affirmative actions possible. I would like to build a consensus on this issue and the government is open to the idea of fiscal incentives,” he said in an interview with Business Standard.

“Though fiscal sops are not within my control, I am sure the government will be open to considering this to address affirmative action,” he added.

Khursheed, however, ruled out introducing laws that will make affirmative action, such as reserving jobs, mandatory for firms, adding that incentives provide the right signals to achieve the objective.

The minister's remarks come against strong opposition to a proposal for job reservations in private companies by the previous UPA government.

Soon after that proposal was made, a report by a panel headed by the Confederation of Indian Industry, headed by Tata Sons Director J J Irani, opposed any laws mandating job reservations in the private sector.

Instead, the industry volunteered to take forward the affirmative action agenda through job training and supporting entrepreneurs from disadvantaged sections of society.

Several Indian companies, including software firms, have followed this up with initiatives under their corporate social responsibility (CSR) programmes.

Khursheed added that these measures needed to be encouraged through fiscal incentives.

Companies Bill in this session
Meanwhile, Khursheed said the new Companies Bill, which will introduce a major overhaul of corporate law, will be introduced in the forthcoming Budget session of Parliament without major changes from the one that was tabled earlier, said Khursheed.

The Companies Bill, 2008 was introduced in the previous Lok Sabha and has now lapsed.

“Any change that may be required can be tackled through the parliamentary process. We hope to pass this Bill in eight to 10 months,” he said.

He added that the Bill had strong disclosure provisions that will take care of the issues raised by the Satyam scandal. The Bill, however, was prepared before Satyam founder Ramalinga Raju confessed to accounting fraud on January 7.