Dear Members,
The curtains have finally come down on direct tax and corporate law compliance season of FY 14-15. I hope that with the work season cooling down, the weather turning cooler, you all will have some time to relax, reflect and rejuvenate.
Cause for concern
Terror struck again. Since a major city was the target, it caused major furore. A wave of intolerance rhetoric also took centre stage in parts of the media. As intellectuals, we are trained to separate substance from form. It is time for us to pause and assess and see what really matters to us and what difference we can make. My personal understanding is this – anything that creates DIVISIONS will eventually result in CONFLICT. Although human race has amassed tremendous amount of knowledge, we remain fragmented and insecure to the extent that we still kill fellow humans1. Yes, the situation is grim and therefore requires concerted EFFORT . In context of the Paris event, the Dalai Lama put the responsibility on us, saying, prayers will not help, and people should not expect God to sort out the problems created by humans. It is the responsibility of each of us that every division, especially in our minds, is challenged, tested and left only in its right place.
Menace of unemployment
Last month I wrote on unemployment. This is actually a ticking time bomb. With a large unorganised sector (85% of workforce) and data about it not captured adequately, issues get further magnified. Three problems – unemployment, unemployability and the sheer numbers, pose a challenge.
The last Economic Survey of India brings out some startling statistics. No major state in India has achieved more than 6.2% employment from registered manufacturing in last 30 years2 . It further talks about declining industrialisation. Productivity is lowest in unregistered manufacturing and therefore the prospects of its transformation are grim. Although, the returns on education are increasing, the supply of requisite education is ‘notoriously inadequate’. According to government figures, fewer than 5% of India’s 487 million workers have received any formal skills training. In other industrialised countries, this figure is closer to 60%. Add to that the trend of automation and robotics in every manufacturing sector, which can eventually shift the manufacturing bases back to where the markets are. On the other hand, global demand is waning, industrial overcapacities remain bloated. These could prove to be strong challenges for the ‘Make in India’ program.
Chasm between the underprivileged and the wealthy
Juxtapose this to the findings of a recent research report3. 1% of Indian population holds 53% (36.8% in 2000) of the country’s wealth and it will continue to head in that wrong direction. 10% of Indians own 76% (65.9% in 2000) of nation’s wealth. The lower half of the pyramid owns only 4.1% (5.3% in 2000) of the country’s wealth. Even though in the last 15 years, the increase in absolute value of wealth was $2.284 trillion, the top 10% took 81% of it. Unless we deal with this riddle with rapid, simple, and out of the box approach, reversal of this trend could remain a mirage.
Regulators & Regulations
Your Society was invited to meetings with the Mumbai Income Tax Department and RBI. The Tax department has launched e-Sahyog which is being popularised and the members are requested to look up for more data on the portal of the department. The RBI is going digital for certain FDI filings such as FC GPR, FC TRS etc. If the stakeholders, participated well we might see mandatory e-submissions of these RBI forms soon. Even at present, you can file them through EBiz portal.
A special mention must be made about the announcement by the Prime Minister on performance appraisal system in which weightage will be given to a deadline bound quality assessments by the Income Tax Department. With this, the regular assessments of both assessees and officers will eventually become balanced and fair. The PM also spoke about online assessments becoming a reality. Some of this has already begun in northern suburbs of Mumbai, we are informed.
With Bihar election results, the government will be pushing harder for faster reforms. Some recent steps include – committee formation, with a short timeline, to suggest simplification of tax laws, invitation of comments on ICDS implementation, consensus building on GST bill passage, amongst others.
Your Society and Profession
I am sure that each one of you will go out to vote for ICAI elections. The voter turnout in the last election was not befitting the stature of our profession. The challenges before the profession are serious and several. The ICAI recently posted a letter on its website regarding an issue created about appearance by CAs before the tax authorities. These amongst others, are serious challenges faced by the entire profession. A strong, wise and sound Central Council is what we need.
I hope each one of you will be as active as you can, if not already, and write to the Council about your dreams, expectations and what you are willing to work for. I wish to share a few expectations:
1. Technical consultation and discussions on key technical matters be recorded and placed in the public domain. This will serve all stakeholders, show case the technical inputs from various participants in standard setting, and bring about inclusion, transparency and confidence.
2. Further attempts be made to up the competencies of the CAs to a much higher level in both Technical and Ethical spheres. True and long term branding can only come from how a CA performs on the ground. Competence and Credibility alone will create a better image of the profession and ICAI can be an enabler, but it’s a two way street.
3. E nd the CPE monopoly and make it broad based. We all know that today even if you took a course at an IIM or at Harvard, they will not be eligible for CPE. In spite of so many other courses being equivalent and relevant to individual professional education, they are delinked from CPE. With passage of time, such mechanism does not sound reasonable, contemporary and congruent with international best practices.
Your Society has put a new material on its website in the free section. Paper books from past Residential Refresher Courses, Residential Study Courses and other study material is now on the website of the Society. We have put several videos on You Tube channel of the Society. Please subscribe (free) to BCAS You Tube channel and receive update on your email as soon as a new video gets placed there.
Although Diwali and Indian New year just got over, Gregorian New Year holidays are only a few weeks away. Every holiday season calls for giving. For giving makes our consciousness expansive. In the Indian tradition there is a beautiful verse, a thought that brings down every division. May I leave you with its message that we all need every day of the year 2016:
