The then Finance Minister Manmohan Singh had to "pronounce" liberalisation polices in 1991 as it was "inevitable" and "compulsory" as New Delhi had to pledge gold with Bank of England, Moily said.
"But any of such (liberalisation) measures always should go along with other preparations," Moily told a seminar on "the future of corporates in India," organised by television channels ETV Kannada and ETV Urdu here last night.
Since India had not put in place "that kind of a mechanism" along with the liberalisation policies, growth has happened without restrictions. While growth is good, it has many other components like inclusivity, regulations and it has to be sustainable, he said.
"If you want that growth should be sustained, there is a process of governance ....the process of destroying anti-competitive forces. And growth will have to go (happen) along with many other regulatory practices," Moily said.
Noting that the Companies Act of 1956 is a "very old act," he said the country should have come out with a new act, replacing it altogether, much earlier. Now, the Companies Bill of 2011 is on the anvil.
"Immediately after 1991, first thing we should have done is destroying the 1956 Act, come out with a new act. Then many of these problems (corporate frauds) you see today would not have been there," Moily argued.