January 2019


CA. Sunil Gabhawalla

Dear Members,

At the outset, let me take this opportunity to wish you a Happy New Year 2019. 2018 is a year which will be remembered in the history of accountants and finance professionals for a variety of reasons both good and not so good.


The year started with the unravelling of a massive scam of unsubstantiated LOUs issued by the Punjab National Bank. Though it is traditionally an off balance sheet exposure, the role of the auditors was widely discussed and criticised. This, followed by the recent ILFS episode, brought to forefront various systemic issues and to some extent the inefficacy of the audit process. While the ICAI has acted fast on such issues, one thing which is evident is that the profession of chartered accountancy has taken a turn which needs immediate course correction.


Overambitious expansion plans and / or systemic diversion of funds by corporates coupled with bad lending decisions by banks resulted in an alarming ratio of NPAs, which to some extent were window dressed. However, recent trends suggest a good recovery ratio of such NPAs. It appears that the new Insolvency and Bankruptcy Code is now deriving the desired results. Despite the same, there are lots of issues surrounding the banking sector resulting in a virtual liquidity crisis with major public sector banks being under the prompt corrective action plan of the Reserve Bank of India.


The tiff between the Reserve Bank of India and the Government apparently on issues ranging from PCA and liquidity crisis to the withdrawal of reserves took an ugly turn. This was immediately followed by a change in guard at the helm of RBI.

The year also did not augur too well in terms of growth in the economy. Unemployment continues to remain an issue. Farm debt and waivers became an election issue. Coupled with many other factors, it resulted in change in Governments in a few States. Perhaps such incidents made the Government rethink on some of the policies surrounding GST. The GST Council in its 31st Meeting brought in a slew of measures to simplify the burden of the businesses and also reduced the rate of GST on many goods and services.


The results of the Central and Regional Councils of the ICAI have been announced. Our congratulations to all the winners. The task before the winners is clearly cut out. The Regional Council members will have to strive hard to improve administrative efficiencies and provide better member services including disseminating knowledge to the members. The Central Council members have a much onerous duty to perform to provide thought leadership, ensure effective representation and also take concrete efforts for the overall development of the profession. The Society is always available to provide constructive suggestions in this regard and work hand in hand with the Institute.


The year ended with a series of high profile weddings be it Bollywood or industry tycoons. Each of these weddings entailed a lavish display of wealth. While such expenditure is a personal choice and is also helpful in generating domestic employment to some extent, one wonders at the disparity in the wealth which becomes so apparent and visible and is further fuelled by social media.

As we proceed towards 2019, all eyes will be on the General Elections. Will it be a contest fought on the agenda of development and growth or will caste, religion and populism take priority? It is for the nation to decide. We as professionals can initiate an informed debate and convince our circles of influence to cast their vote.


After hectic professional season, this period is relatively relaxed in terms of professional work. It is perhaps time to ponder on some larger issues facing the profession. It is also time to sharpen the knowledge base. The Society has lined up a series of events which are relevant for the membership at large. I trust the members will take the benefit of the same.


Yours truly


CA. Sunil Gabhawalla


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