Dear Members,
8.00 PM, November 8, 2016: Prime Minister Shri Narendra Modi – Addresses the nation, not to inform about any launch of an assault on warring neighbour or any terrorist group, but it’s an assault on the twin evils plaguing and decaying the Indian economy for seven decades viz. unaccounted (‘Black”) money and counterfeit money. The deadly weapon for the attack being “DEMONETISATION.”
He thundered “The 500 and 1,000 rupee notes hoarded by anti-national and anti-social elements will become just worthless pieces of paper.” However, he reassured honest people of the country, “The rights and interests of honest, hard-working people will be fully protected.”
Suddenly, the word ‘Demonetisation’ had become both a buzzword as well as a dreaded word amongst Indian citizens from all walks of life. I was deluged with calls seeking clarifications on the effects and impact of such a monumental step taken by the Government. WhatsApp messages have just not stopped since then. The most surprising moment for me was when my son a student of 10th grade also inquired as to what is Demonetisation? Why should hard-earned money in the form of 500 and 1,000 rupee notes suddenly become invalid? How and when will Government replace my 500 and 1,000 rupee notes?
Yes, Demonetisation is a big word, and on 8th November, the full weight of this word was felt in a big way across the length and breadth of India. This move has come on the heels of a much publicized and successful Income Declaration Scheme. Mr. Modi had been cautioning citizens to fall in line and declare unaccounted money under IDS and not to blame him if later stringent steps are taken. However, his warnings were considered as rhetoric and ignored. But as we all know him to be a man of action, the suddenness of demonetisation had the nation scampering to deposit and exchange their notes.
Mr. Modi’s actions echo the spirit of the statement of Abraham Lincoln – “Determine that the things can and shall be done, and then we shall find the way.”
The effects of demonetisation are still hotly debated not just in India but across the world. The entire world has taken notice of such a bold move with bated breath. Its effects on the Indian economy will be felt and analyzed in the times to come.
Though there may be positives and negatives of the move, we as citizens of India should ensure to be part of this initiative of weeding out corruption and terrorism from our country. We all must act as responsible citizens and avoid getting carried away by the naive analysis and prognosis of vested interests who want this initiative to be scuttled so as to unabashedly generate black money and support terrorism on Indian soil. Yes, the Society wholeheartedly supports demonetisation as a means to beat larger evils of corruption and black money.
Trump – Better sense prevails
The other big news that relentlessly dominates the media is from the land of the big apple. Donald Trump, the US President-elect, is working long hours at Trump Towers as he assembles his cabinet and White House team. In addition to very select media interviews, he has enthusiastically embraced new media. He has over 15 million followers on Twitter and is now using YouTube to get his message across.
In a 150 second infomercial, he chalked out his plans for making America great again. With great conviction, he declared, “I want the next generation of production and innovation to happen right here, in our great homeland: America – creating wealth and jobs for American workers.” In his no-nonsense style, speaking directly into the camera, he vowed to create jobs, re-negotiate trade agreements, end restrictions on energy production and impose ban on lobbying.
What’s interesting was his deliberate silence on many issues which he ranted about in his electoral campaign. There was no mention of the Mexican border wall, deporting illegal immigrants, fighting terrorism or confronting Russian aggression. Instead, there was a rather tame statement about directing the Labour Department to investigate visa abuses.
However, tough-talking Trump is adamant about the fate of many acts and treaties that are now on the death row. The Trans-Pacific Partnership that was seven years in the making, Obama’s Affordable Care Act and the Dodd-Frank Law regulating Wall Street are all set to be dumped by Trump. He is also averse to climate treaties and will most certainly pull the US out of the Paris Climate Agreement and nullify Obama’s global warming regulations. I hope Trump’s arrogance doesn’t lead him into destroying other economies and cause irreversible environmental damage.
Stalemate – Judiciary and Government
Back home, the stalemate between the judiciary and government is snowballing, and the situation that is already in shambles is only growing more dismal. The politicians have been critical of the collegium system which appoints judges under the veil of secrecy. To ensure transparency in the appointing process, the Parliament unanimously passed the National Judicial Appointments Commission Act to appoint judges. The Supreme Court struck down the act and continued with the ambiguous process of appointing judges.
The big tussle is over the revising of the Memorandum of Procedure for judicial appointments. The government proposals focused on bringing transparency, objectivity, and accountability to the appointments, but the Supreme Court has shot down most of the proposals. Currently, the system is absurdly opaque. More importantly, there appear to be no definite criteria for the selection of judges.
The legal logjam continues, and the situation appears to be getting alarming. According to official figures, around 30 million cases await hearings in trial courts where 4,432 out of 20,502 sanctioned posts of judges are yet to be filled. In India’s 24 high courts, there are nearly four million cases pending while 478 out of 1,056 sanctioned posts remain vacant. And in the Supreme Court too, there are only 28 judges against the sanctioned strength of 31 judges to tackle around 60,000 cases.
India is having one of the largest judicial systems in the world, the figures for the future only get more mind-boggling. It is estimated in the next three decades, the number of cases in court will balloon to 15 crores and will require at least 75,000 judges to handle them. It is my hope that a solution will be worked out mutually to provide ease of access to justice system. After all, the world, especially the rating agencies, are closely watching India.
Leading from the front – Voicing concerns
BCAS is always known to voice the concerns of the CA fraternity and also if any particular law is unjust or unwarranted. The Society has requested the Finance Minister to scrap the Income Computation and Disclosure Standards (ICDS) and has launched a petition to urge that the ICDS should not just be deferred but should be withdrawn completely.
The Indian Audit Firms (IAFs) have long being impacted by the manner and way of operating in India by the Multinational Audit Firms (MAFs). It was always felt, and rightly so, that there is no level playing field and MAFs have the upper hand over IAFs due to various reasons. Voicing concerns of the IAFs, the Society has also made a detailed representation to the Experts group set up by the Ministry of Corporate Affairs to examine and make a suitable recommendation on the adverse impact on IAFs. The society is also supporting the concept of Joint Auditors. To create more awareness and garner more support to the representation, the Society has started a digital signature campaign through a survey which is receiving an encouraging response.
I request all my dear members to sign these petitions, the link of which is available on the BCAS website, in support of this movement and create more awareness of this campaign amongst fellow professionals. As they say “Drive the change.”
With warm regards,
Chetan Shah
