The government plans to adopt a transparent and interactive process tofinalise a detailed set of rules to be adopted under the new Companies Bill, and will soon seek comments from India Inc and general public in this regard.

The new Companies Bill, which entails sweeping changes in the way the companies operate and are regulated in India, was passed by the Parliament earlier this month and is awaiting President's consent to become a law. 

"While we wait for this new bill to be signed into a law, a process has already begun to frame the detailed subordinate rules and the same would be finalised in a very transparent manner and not through a bureaucratic exercise," Corporate Affairs Minister Sachin Pilot said. 

"Our aim is to usher in an era of less regulations and more compliance and the new rules would be framed in such a way so that they are easily understood and can be easily complied," Pilot told PTI in an interview. 

The new set of regulations would replace a nearly six-decade-old legislation, the Companies Act, 1957, which has been amended at least 25 times and many of its provisions have turned out to be outdated or inadequate. 

Among others, the new bill makes it mandatory for companies to spend on social welfare, empowers investors against frauds committed by promoters, encourages companies to have women directors, and seeks to bring in greater transparency in corporate governancematters such as executive salaries and the role of auditors. 

The new Bill also provides about three dozen new definitions, including for terms such as frauds, promoters, turnover, related parties (to promoters), small companies, associate companies and employee stock options. 

Besides, it provides for a uniform financial year (April-March) for all companies and proposes strong checks against fraudulent money-collection activities through issuance of various securities. 

The Bill requires auditors to be changed every five years to avoid collusion with the management, while rules have also been tightened for appointment and role of independent directors. 

However, most of its provisions would need detailed subordinate rules for their implementation and compliance. 

"We already have a rule making committee, which includes people from industry bodies, legal fraternity and private sector. it is a Government-headed committee, but has got enough participation from all segments of the business world, as well as from among other private citizens," Pilot said. 

"The committee has already started the work on making draft rules. Once the President gives his consent, I intend to put the draft rules on the Internet so that the whole world can see, review, consider and opine about the various aspects of rule making," the 36-year-old Minister said. 

"The real detailing is very very crucial. The law is what it is, but the rules are very critical. Therefore, I want to make sure that it as transparent as possible and not done behind the closed doors. 

"For example, the corporate sector is going to be engaged in the CSR activities under the new rules and the views would be solicited from those people. 

"The industry already has a representation in the rule-making committee, but still I want the draft rules to be put on internet to allow people to give their views. 

"We want to make the new rules as palatable and as acceptable as possible, so that people have the flexibility to do the things we want them to do under the new law," he said. 

While the minister did not give a timeframe for finalisation of the rules, it is expected that these rules should be in place by the end of the current fiscal. 

Pilot said that the parliament has done its job "despite all the criticism we face as politicians not doing their work". 

"Despite all the shouting and acrimony in the Parliament, this is one bill which was able to incorporate the positive response of most political parties," he said, while adding that Lok Sabha had representatives from more than 40 parties and still passed the bill with consensus. 

The minister further said that it is important to make rules "which are compatible with today's economic reality, our work culture, and India's emergence as a preferred investment decision". 

"The subordinate legislation rules are very important and they would be finalised with lot of openness and transparency, so that it shouldn't look like a buearocractic exercise," he said. 

"The idea is to make the laws easy, so that people are able to comply with them and they are easy to understand. There should not be any ambiguity in the regulations," he added.