“The insurance sector was opened up in 2000. Even 18 years after, the industry has not recorded decent growth or penetrated deep, despite the big potential. A major reason was too much of regulation as in several other aspects of governance,” said R Thyagarajan (RT), Founder-Chairman of the Shriram Group.
Speaking on Protecting Business – Delivering Value at a recent event of the Madras Management Association he pointed out: “mindless regulations slow down development, contribute to performance far below potential and curb initiative. There is no need for a bulky 350 pages of rules for regulating the sector,” said RT. He contrasted the approach of China where the business came first and regulation followed. “In India, we take a lot of efforts to regulate before starting business!
With such regulation the business of insurance is suffers three serious risks – no insurance, inadequate insurance or choosing an improper cover,” said this insurance expert who promoted Shriram Life Insurance Co., Shriram General Insurance Co., and Bharate Reinsurance Brokers among several other finance companies.
“The insurance sector was opened up in 2000. Even 18 years after, the industry has not recorded decent growth or penetrated deep, despite the big potential. A major reason was too much of regulation as in several other aspects of governance,” said R Thyagarajan (RT), Founder-Chairman of the Shriram Group. T L Arunachalam, Director-Global Strategy & Special Projects, Bharat Reinsurance Brokers, made a detailed presentation on cyber risks. RT referred to the insatiable appetite for legislation unmindful of their need or enforceability, so eloquently described by eminent jurist N A Palkhivala in 1991. The observations of this ‘God’s gift to India’ appears still so relevant! We reproduce the address.
PATHOLOGICAL CHANGE MANIA…
On 25th January 1991 the Income-tax Appellate Tribunal completed fifty years of its existence. On its Golden Jubilee it is but fair to record that it has won golden opinions on all sides throughout the half a century that it has functioned. There is no doubt that over this long period, the Tribunal has been manned by some very able individuals. Quite a few of them were fit to adorn any High Court Bench. No other Tribunal in India his won such well-deserved popularity and confidence of the public as the Income-tax Appellate Tribunal.
The problem of tempering power with justice
Administrative justice demands compromise. There is no pre-determined solution to the problem of tempering power with justice. The Tribunal has rightly earned the reputation of tempering judicial power with justice. It has evolved a cheap, quick and informal procedure for doing justice as between the State and the citizen, to the great satisfaction of the litigating public. In other words, it has acted as a Court of law in everything but name, while avoiding the regular process of civil law which is too cumbersome, technical and expensive.
The work and reputation of the Income-tax Appellate Tribunal afford a striking illustration of what Professor H W R Wade said at the end of his book ‘Towards Administrative Justice!’
“No class of people stands to benefit more in the long run from just administration than the administrators themselves, because the State is permeated from top to bottom with the truth that government depends upon the approval of the governed. Fair play in administration will enlist the citizen’s sympathies and will enormously reduce the friction with which the machinery of government works. All good administrators should take care that the machinery is properly tended and that the lubricant of justice is supplied in the right quantity at the right points.”
On this happy occasion I would like to deal with one topic to which I attach the greatest importance from viewpoint of the nation’s progress and well-being and which I have been emphasizing and re-emphasizing over the last thirty years.
Mutilated by more than 3300 amendments in 30 years…
Today the Income-tax Act, 1961, is a national disgrace. There is no other instance in Indian jurisprudence of an Act mutilated by more than 3300 amendments in less than thirty years.
Simple provisions like Sections 11 to 13 (which deal with an exemption of the income of charitable trusts) have suffered no less than fifty amendments.
The tragedy of India is the tragedy of waste – waste of national time, energy and manpower. Tens of millions of man-hours of tax-gatherers. tax-payers and tax advisers – are squandered every year in grappling with the torrential spate of mindless amendments. The feverish activity achieves no more good than a fever.
A striking example is the withdrawal of development rebate and the introduction of initial depreciation in 1974, the withdrawal of initial depreciation and the introduction of investment allowance in 1976, the withdrawal of investment allowance and the introduction of investment deposit account in 1986, and the restoration of investment allowance in 1989! Simple continuance of development rebate would have undoubtedly ensured far more beneficial results both to the exchequer and to the public. But we stubbornly refuse to learn that the acid test to be applied to every fiscal amendment as to every economic policy, is – how far will it bend the talent, energy and time of our people to productive ends and how far will it dissipate them in coping with legal inanities and quarter-baked changes.
