Topic: Important aspects of governance, transparency and accountability, e-governance applications, models, successes, limitations, and potential;
3. Higher standards of disclosure for private entities would enable superior supervision and also incentivize better internal governance. The government must make a bolder push for business transparency. Justify. (250 words)
Reference: Live Mint
Why the question:
In a country given to one maze after another of equity cross-holdings, some of them designed as smokescreens, we require clear disclosures on the beneficial ownership of businesses. Hence, this article argues for transparency and regulation.
Key Demand of the question:
To justify the need to regulate the fast growing private sector by pushing for more transparency.
Directive:
Justify – When you are asked to justify, you have to pass a sound judgement about the truth of the given statement in the question or the topic based on evidences. You have to appraise the worth of the statement in question using suitable case studies or/ and examples.
Structure of the answer:
Introduction:
Begin by mentioning the importance of transparency in private entities.
Body:
In the first part, develop a link between higher standards of disclosure with better supervision and better internal governance. Cite examples of scams which happened due to the lack of transparency.
In the next part, suggest how the government can make the bolder push for business transparency. Disclosure-sensitive nature of the markets, harder for promoters to take public limited companies private, minority shareholders issues and enhanced disclosures for debt ridden companies etc.
Also,write about the risks associated with over regulation and over emphasis on disclosure standards.
Conclusion:
Conclude with a way forward.
