India has witnessed an excellent equity market performance in 2014, with the combined market capitalisation of India’s publicly listed companies on BSE touching the Rs.100 lakh crore(One followed by fourteen zeros) mark during November. India now ranks 9th on the league table of market capitalisation with an increase of 39 % so far this year. By far, this is the highest growth in this year compared to the other nine countries in the top 10 list.
Even as the Indian stock market has achieved this remarkable feat, the primary market, considered as a benchmark for new capex in the economy, continues to languish. The capital raised through public and rights issues in 2013-14 by the private sector amounted to Rs.11,681 crore of which capital raised through IPO’s consisted only of Rs.1,236 crore. The comparable data for the half year ended September 2014 at Rs.4,335 crore and Rs.1,031 crore respectively, shows no significant improvement. In stark contrast, the capital raised by the private sector 20 years ago during 1994-95 was much higher at Rs. 26,417 crore even as India’s GDP has increased by nearly ten times over these 20 years.
Another worrisome factor is the very low investment inequities by retail investors. While India reports very high household savings rate of over 20 %, less than 1 % of India’s population invests in equities. The proportion of these total household savings that make it to capital market is less than 2 %.
The below par performance of the primary market remains a concern and is also a symptom of structural bottlenecks faced while doing business in India. The jobless growth witnessed under UPA-I Government reaffirms the need for structural reforms and qualitative improvement in governance to usher in sustainable growth.
A vast majority of today’s youth graduating through rote learning prefer to be job-seekers rather than becoming job-givers and compound this challenge. Even Chartered Accountants are not an exception to this. In the last ten years ending 31st March 2014, the total membership of the ICAI increased by 1,13,055, out of which 80,363, i.e., 71 % of the members opted not to obtain a certificate of practice.
Indeed, it is time for the Modi Government to accelerate the much-promised reforms. The ‘Make in India’ campaign needs to go beyond the rhetoric and ensure de-bottlenecking of procedural and bureaucratic hurdles. The Finance Minister has promised that a whole set of second-generation reforms will be unveiled in the next Union Budget.
Every year, the Taxation and Indirect Tax Committees invite suggestions from the members for inclusion in the prebudget memorandum. The response, however, has been not so encouraging. The dedicated team of committed volunteers at the BCAS burns the mid-night oil to prepare a thoughtful pre-budget memorandum and submits the same to the Government authorities. Let us hope that the new Government will give due consideration to all the suggestions received and implement the deserving ones.
It appears that most Citizens are happy to complain but do not come forth to contribute and respond to government initiatives. This is partly due to inertia and partly due to cynicism. It remains to be seen how the new initiative by Prime Minister Modi through www.MyGov.in is able to bring about a change in this attitude.
The recent enactment of mandatory voting by persons in local body elections by the Government of Gujarat has erupted into a controversy with liberals, calling it totalitarian and some lawyers calling it unconstitutional. The Fundamental Duties of the Citizen in Article 51A of part IV of our Constitution were enacted by the 42nd Constitutional Amendment Act, 1976. Experts are of the view that the constitution does not make any provision to enforce the performance of these duties. Perhaps, we need to take a revisit to this issue and strike an equitable balance between the rights and the duties of the Citizen.
At the recently concluded G20 Brisbane Summit in Australia, a major concern remained around the uneven global recovery not delivering the jobs needed. The leaders agreed to a detailed action plan, aimed at raising the global growth, to deliver better living standards and quality jobs for people across the world. They have set up an ambitious goal of lifting G20’s GDP by at least an additional 2 % by 2018.
The G20 Summit also acknowledged that corruption continues to represent a significant threat to global growth and financial stability. It destroys public trust, undermines the rule of law, skews competition, impedes cross-border investment and trade, and distorts resource allocation. The summit reaffirmed its commitment to building a global culture of intolerance towards corruption. The action plan outlined includes ensuring transparency of beneficial ownership, combating bribery through effective criminal and civil laws and enforcement, private and public sector transparency and integrity and international cooperation. The Summit also identified high-risk sectors such as extractives sector, customs, fisheries and primary forestry, and construction sectors and resolved to identify and develop international best practices to address the risk of corruption. The elaborate agenda of the G20 Summit has resulted in a compilation of a long wish list. The critics have termed the 800-plus policy proposals as a catalogue of measures that are old, vague or unlikely to be implemented and that G20 has failed to deliver on its 2010 commitments. It remains to be seen how G20 Summits travel beyond the annual sojourn and photo opportunities.
The residential programmes pioneered by the BCAS have gained immense popularity over the years. For the past several years, the residential programmes dedicated to specialised subjects such as International Tax, IFRS and Service Tax, are being organised for the targeted group of participants. Last year, the BCAS team pioneered innovation once again. Two residential programmes dedicated to specific age groups were organised-Senior Chartered Accountants’ Meet for seniors above the age of 60 years and Youth RRC for young chartered accountants below 35 years. Both these programmes received encouraging response and are being repeated in 2015 as well.
The conclusion of the annual tax filing season for AY 2014-15 brings a much needed relief to the members. It is time to enjoy the winter chill and ring in the New Year. At this time of the year, we eagerly look forward to the much coveted Annual Residential Refresher Course for learning and bonding in a relaxed atmosphere.This time the 48th RRC will be held from 8th to 11th January 2015 at the scenic Udaipur, and we look forward to seeing some of you there.
