FICCI, Assocham and CII Believe Retrospectively Disclosing Details of Bonds Violates Contract, But Supreme Court’s Decision Renders Contention Infructuous
In a recent development, the Federation of Indian Chambers of Commerce and Industry (FICCI), the Associated Chambers of Commerce and Industry of India (Assocham) and the Confederation of Indian Industry (CII) have raised concerns over the retrospective disclosure of details of bonds. According to these industry bodies, such a move would violate the contract between the government and the bondholders. However, their contention seems to be infructuous as the Supreme Court has already decided on the matter.
The issue at hand pertains to the retrospective disclosure of details of bonds issued by the government. As per the current regulations, the government is required to disclose all the details of the bonds, including the names of the bondholders, to the public. However, the government has proposed to make this disclosure retrospective, which means that the details of the bonds issued in the past will also be made public. This has raised concerns among the industry bodies, who believe that such a move would violate the contract between the government and the bondholders.
FICCI, Assocham and CII have argued that the retrospective disclosure of bond details would go against the principle of sanctity of contracts. They believe that the bondholders have entered into a contract with the government based on certain terms and conditions, and any changes to these terms would be a breach of trust. They have also expressed concerns over the impact this move would have on the bond market, as it could lead to a loss of confidence among investors.
However, their arguments seem to be infructuous as the Supreme Court has already given its verdict on the matter. In a landmark judgment in 2015, the apex court had ruled that the government is obligated to disclose all the details of bonds, including the names of the bondholders, to the public. The court had also stated that the government cannot hide behind the veil of confidentiality to protect the interests of certain individuals or entities. This decision was hailed as a major step towards transparency and accountability in the financial sector.
Moreover, the government’s proposal to make the disclosure retrospective is in line with the global best practices. Many developed countries, including the United States and the United Kingdom, have similar regulations in place where the details of bonds are made public. This not only promotes transparency but also helps in preventing fraudulent activities in the bond market. In fact, the government’s move to make the disclosure retrospective is a step towards aligning with the global standards.
It is also important to note that the retrospective disclosure of bond details would not have any adverse impact on the bond market. In fact, it would only strengthen the market by promoting transparency and accountability. The concerns raised by FICCI, Assocham and CII seem to be based on the assumption that the bondholders would be reluctant to invest if their names are made public. However, this argument is flawed as the bondholders are well aware of the regulations and have already agreed to the terms and conditions of the contract.
In conclusion, the concerns raised by FICCI, Assocham and CII regarding the retrospective disclosure of bond details seem to be unfounded. The Supreme Court’s decision on the matter has already settled the issue and the government’s move to make the disclosure retrospective is in line with the global best practices. It is high time that the industry bodies focus on promoting transparency and accountability in the financial sector rather than trying to protect the interests of a few individuals or entities. The government’s decision is a step towards building a stronger and more transparent bond market, which will ultimately benefit the economy and the investors.
