The Centre is setting the ground for another overhaul of the Companies Act 2013. According to a press statement released by the Ministry of Corporate Affairs last week, the government has constituted a committee to revisit several provisions of the Act. Under this arrangement, a 10-member expert group has been given 30 days to work out whether some offences punishable with fine only or punishable with fine or imprisonment may instead be considered 'civil wrongs' or 'defaults' only.

This is a welcome step. According to experts, there are several provisions related to strict penalties and imprisonment under the Act, and it has also been a long-drawn demand of the Indian industry for going off with them. While the government has been working vigorously to improve ease of doing business in the country, this step can certainly help boost the business environment significantly. Additionally, private sector investment, which is yet to pick up steam, can be expected to get encouragement from the move.

The official release adds that the committee will also review the provisions relating to non-compoundable offences and recommend whether any such provisions need to be re-categorised as compoundable offence. Additionally, it says the government will work on laying the broad contours of an in-house adjudicatory mechanism where penalty may be levied in a Mission Mode Project (MCA21) system driven manner so that discretion is minimised. Again, these proposals deserve applause.

When the Modi government came to power, review of the Companies Act was one of the top demands of the Indian industry, and so the measure proposed last week is a long overdue--but better late than never. Noticeably, it seems--considering the fact that the committee has been asked to submit its report within 30 days--the Centre now wants to quickly incorporate the proposed changes, giving relief to the Indian industry from blind application of the unduly harsh provisions of the Act.

I invite your opinions.