Month: May

fiogf49gjkf0d

These are depressing times for most Indians – firstly, as the country has been drifting in her economic growth performance, and secondly the spate of scams, scandals, charges and counter charges of corruption cutting across the entire spectrum, add to the woes of citizens. In the last few months, the country has witnessed the eruption of a number of egregious events, and we as citizens not only look for government intervention but question the Government for all the wrongs committed by a few unscrupulous individuals. The Government does take measures both fiscal and others to remedy the situation. At the same time, the Government is demanding that corporates and other organisations become more socially responsible.

In this communication, rather than discussing what the Government and Corporates should do or are not doing, I have attempted to share my thoughts on Social Entrepreneurship and Individual Social Responsibility which can make up for the shortcomings of the bureaucracies and the Government. It may appear to be a new concept in relation to Corporate Social Responsibility, but it is a concept as old as The Golden Rule — Do unto others as you would have them do unto you.

The quote by Hubert H. Humphrey says it all – “The impersonal hand of the Government can never replace the helping hand of a neighbour”.

Social Entrepreneur is someone who recognises a social problem and uses entrepreneurial principles to organise, create and manage a venture to make a social change, and will assess its success in terms of its impact on the Society. A leading example is, Dr. Verghese Kurien, Founder of the Amul Dairy Project, who was amongst the earliest social entrepreneurs, who started a co-operative movement and made it a sustainable project. His vision was big, there was passion in his actions. His terrific leadership sustained the involvement of others in the project at the grass root level. Thus as a Social Entrepreneur, you become the agent of change, by grabbing the new, yet overlooked opportunities, and changing the world for the better.

Whereas, taking the Individual Social Responsibility, you commit yourself towards the community where you live, by taking interest towards what is happening in the community, as well taking an active part in solving some of the local problems. And today, we see individuals are becoming more socially responsible.

I for one believe that various norms of any society are always determined by the norms of the dominant elements in society. As professionals we are part of this dominant element and have a significant role to play in the improvement of all standards of conduct, whether in relation to business or otherwise. We can become role models for a large part of the society. Therefore, the norms we adopt and the manner in which we conduct ourselves will largely determine the norms of our society.

It is time to show that we professionals do not merely discharge a function. We must go well beyond the responsibilities of the function we discharge. We have a responsibility not merely to satisfy the needs of an individual client or employer but also a responsibility to oneself, to obtain satisfaction for the work we do for, and in all cases where public interest is involved, to ensure that the same is safeguarded.

I am sure many of us would be more active in pro bono work, and taking part in various developments in different ways, working through non-profits and citizen groups, by working in the private and government FROM THE PRESIDENT 140 (2013) 45-A BCAJ Bombay Chartered Acountant Journal, may 2013 9 from the president BCAJ sectors to find what is not working, and solve the problems by attempting to improve the system, and where necessary change it.

But really speaking being socially responsible not only requires participation in socially responsible activities and mentoring, but to actually make it a lifestyle. Only through a commitment to embrace and embed social responsibility into your personal value and belief system, you truly become socially responsible in all you do.

In the end, I would say that All Social responsibility is voluntary; it is about going above and beyond what is called for by the law (legal responsibility). Just Remember :

“We make a living by what we get, but we make a life by what we give.” – Winston Churchill.

 “It profits us to profit the non-profits.” – Peter Drucker

With warm regards,

Yours truly,
Deepak R. Shah

fiogf49gjkf0d

Dear Members,

April is a month of audit deadlines. There is a race to declare financial results at the earliest, which puts the fraternity of auditors under tremendous pressure. While I understand that every corporate desires to be in the news, I am unable to comprehend what difference it would really make if audited results are put in the public domain a few days later than they actually are. Those in top management are blissfully unaware of the ground realities, and many a time set impossible deadlines. This is true of audits of public sector undertakings, particularly banks. This year has been no different from the past.

The appointments of bank branch auditors were delayed this year on account of a proposal by banks not to appoint auditors for branches below a particular threshold of advances. What was distressing was that the cause for the banks wanting a reduction in the number of branches audited was the cost of audit. Audit has remained a cost centre to business and industry, which cost is treated as avoidable. When a businessman thinks of cost reduction, he looks at the cost of audit, since he does not perceive it to have a value commensurate with cost. In reality, many audit reports send warning signals to stakeholders, which if recognised and acted upon can change fortunes of a corporate. One reason for this may be the manner of presentation of these reports. Therefore, while audits deliver value, they are perceived to be only an exercise for statutory compliance. It is necessary to change this perception.

A mechanism has to be devised, whereby material findings in the course of audit are collated and brought to the notice of not only the powers that be, but also the general public. This is not easy; but if done, the public would become aware of the value of the job that we auditors perform. The public uproar that the recent reports and findings of the Comptroller and Auditor General of India have created is an illustration.

The expectation gap is something that is being discussed for a long time. While the profession must be alive to the expectations of society, the limitations under which an auditor functions must also be brought to the fore. We must point out to stakeholders of business that an audit is an exercise for providing assurance, and hence is neither an investigation nor a fault-finding mission. In fact, a public awareness campaign on a continuous basis must be carried out to ensure that the public understands the job that we perform and the value that we add.

While I am sure that most of us are doing a commendable job, it would be foolish for us to rest on our laurels. We must continuously upgrade our professional skills, and to that extent I am a supporter of the concept of continuous professional education. We at the Society continuously strive to provide excellent programmes for upgradation of members’ knowledge and skills. One such programme on Developments in Accounting, Auditing and Taxation was organised at Kolkata, jointly with the DTPA Chartered Accountants study circle of Eastern India Regional council of the ICAI. Many a time one finds that our colleagues treat a CPE programme as an idle formality, and find ways and means to comply with the letter of the regulation while killing its spirit. While this is true for some professional colleagues, organisers of such programmes must also ensure that education remains the prime objective of these programs, and no collateral purposes are allowed to creep in.

Coming back to the issue of allotment of audits by statutory authorities, I would request my colleagues to strive to give value in the professional jobs that they perform, rather than worry about work allotted by a regulatory body. If we give value, rewards will follow. While it protects the interests of the members, the Institute of Chartered Accountants of India (ICAI), our alma mater should take upon itself the responsibility of changing the perception of our profession with both the public and the authorities, for this is a task that an institution is equipped to carry out, rather than individuals. While one need not lobby for work, a sustained effort to change our image will go a long way in enhancing respect for our profession that it richly deserves. In order to do so, it may call for some necessary changes in the regulatory framework of the profession.

It has been some time since the change of guard at the ICAI. Recently, we at the BCAS had an opportunity to interact with the President and Vice President of the ICAI during their visit to the Society’s office. The current President of the ICAI concurred with the subject of education, which is close to his heart. We at the BCAS are confident that during his tenure he would address many of the issues that have been raised in this communication. We wish him and his team success in their endeavour!

With Warm regards,
Pradip K. Thanawala

fiogf49gjkf0d

Dear Valued Reader,

The new financial year began with a bang for India, as the Indian Cricket team romped home with the coveted World Cup in One Day International on 2nd April, 2011 at Wankhede Stadium, Mumbai. The entire nation plunged into frenzied celebrations, and why not, after all, history was repeated after 28 years. Several lessons can be learnt by all of us, especially CA students, by observing the way India won the game in the final match:

(i) The game is entirely a mind game. If you can control your nerves during crucial moments, you are sure to win. So dear students, keep your cool on the eve of and during the examinations;

(ii) Some ‘overs’ are bound to go maiden or low-scoring; Keep your spirit high, even when you feel low while studying at times and writing your examinations;

(iii) It is always better to score high in the first few ‘overs’ and keep the scoreboard ticking to keep the tension away, lest the asking rate goes up; similarly, keep a good pace of study from the beginning and while writing answers, maintain an equally good pace from the beginning;

(iv) Do not panic even when there are googlies and/or some early blows (as it happened when both Sehwag and Sachin got out on low scores); it happens even while writing exams, one or two initial papers or answers may misfire, but you should not lose your nerve on that account. Be like a river which always flows in one direction and never in the reverse.

(v) Do not give up until the last ball is bowled. Many exciting matches, including the first World Cup T20 by India, were won on the last ball. It may happen that your last answer and/or paper may get you through the exams, provided you stay on the field.

Eradication of Corruption:

The corrupt politicians looked askance when Anna Hazare began his fast unto the death from 5th April 2011 in support of the Jan Lokpal Bill which is to be enacted to strengthen the fight against corruption. As his fast progressed, support to Hazare from all sections of civil society, particularly the youth, kept on increasing. As the fight against corruption was turning into a nationwide uprising, Government acquiesced. A Committee comprising Members of Parliament and from civil society has been formed to draft a Bill, for passing a law against corrupt people in power which has eluded us for the past 42 years. Not all politicians are interested in enacting a law which could incriminate the political class as such.

The significant aspect of this agitation is participation by young Indians, the aam aadmi, who are simply fed up with corruption in their daily lives.

Protest marches and support emerging from every nook and corner of the country to Hazare resembled like the movement against corruption started by Loknayak Jai Prakash Narayan in the 70’s which provoked Mrs. Indira Gandhi to declare a national emergency. The government this time was wiser and swift to act before the situation got out of control. As always, there are diametrically opposite views in respect of this awesome uprising. The fact however remains that people of India are tired of rampant corruption and the plethora of scams reported in the press, day in and day out. People watched, helplessly and hopelessly, the spectacle of their being looted by powerful politicians and their cronies and they found an outlet in this agitation to voice their frustration. Evidently, they found the idea of punishing politicians exciting enough to come out in the open against the cancer of corruption in public life.

Chartered Accountants, both as taxpayers and tax practitioners are worst hit by the menace of corruption. We, therefore, took the lead to support Anna Hazare. An appeal was made to members to support the cause. I sincerely thank all those who rallied in response there to.

Corporate Membership:
BCAS made history on 13th April 2011 when its General Body at the Extraordinary General Meeting passed a resolution providing for Corporate Membership. Any Company or Limited Liability Partnership (except CA firms in LLP form) can nominate two or more CAs, being its directors/employees as Associate Members of BCAS. A formal launch of Corporate Membership is on the anvil.

History at Midnight:
Similarly, the Government of Maharashtra created history at midnight on Wednesday 20th April 2011 by unanimously passing a bill providing fifty percent reservation for women in the Panchayats and Zilla Parishads.

India of course is full of paradoxes. On the one hand, women are worshipped as Goddesses; on the other, they are harassed and tortured to death by in-laws. Domestic violence perhaps would rank the highest amongst all kinds of human rights violations in this great, ancient country. In stark contrast, passing of women’s reservation bill assumes significance. It is a general perception that women have better understanding of social issues than men and therefore fifty per cent reservation will give them an opportunity to deal with these issues in an effective manner. Let us hope and pray that with the presence of women at the grassroot level, our politicians also would learn some decency in that they would measure their language and behave as becoming persons with a head on their shoulders.

Invitation to young members to take active part in BCAS activities:
Time mellows and imparts maturity. Naturally, persons with seniority and/or grey heads occupy seats of power to guide institutions. Time is never stagnant. And so, the old order need to yield place to the new crop of would be saviors/grey heads and thus the cycle goes on without let up.

I make this pointed reference here for the reason that young professionals are future leaders and they must come forward purposefully to shoulder the responsibilities of BCAS. New ideas from the young and maturity on the part of their seniors would blend well to carry forward the institution in furtherance of the laudable objectives for which the BCAS was founded.

Come one, come all. This is a clarion call to all those who can contribute their mite to make BCAS stronger, healthier and make it as a tool or vehicle to promote the common good of the profession and the citizens.

Very soon the Society will undertake the activity of formation of the Core group for 2011-12 and therefore, I invite both young and senior members to come forward and volunteer for participating in multifarious activities of the Society.

I wish you all a happy vacation with your loved ones.

fiogf49gjkf0d

Dear members,

With the Indian summer in full bloom, scorching heat is pervading throughout the country and has pushed behind glimpses of the pleasant weather witnessed earlier due to the erratic climate. A similar scene is perhaps being enacted in the political spectrum that has suddenly become very heated.

Even though the Loksabha passed the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Bill, 2015 [the LARR (Amendment) Bill, 2015] on 10th March, 2015, the debate over it seems to be continuing putting the ruling NDA alliance in a tight spot. An extremely unfortunate and sad incident of the death of a protestor has further vitiated the atmosphere.

My discussions about this grave issue with few CA friends made me realise as concerned citizens that we need to understand the issues involved in the greater detail and its impact the nation’s economic development.

The land acquisition process hitherto carried out under the Land Acquisition Act, 1894 has been viewed as unfair, bureaucratic and inadequate. As per reports, over 50% of the land acquired between 2006 and 2013 for SEZs lie unused. The CAG in its report has commented that the land appeared to be the most crucial and attractive component of the SEZ scheme and listed many cases where the land acquired was sold off or put to other uses.

The Land Acquisition Act, 1894 empowered the Government to acquire land for ‘public purpose’ as the justified reason for the acquisition of private lands, but provided inadequate safeguards against forced acquisition or for proper resettlement and rehabilitation. The phrase ‘public purpose’ was not explained properly in the act, and its determination was entirely left to the Executive. Various studies have established failure on the part of the State machinery in showing any empathy towards the rural people who lose lands and livelihood.

Given increasing discontentment, the Government adopted the National Rehabilitation and Resettlement Policy, 2007 and initiated the process to amend the land acquisition law and provide for effective safeguards and adequate rehabilitation and resettlement. This process culminated in the enactment of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 [the LARR Act, 2013]. This 2013 law required the compulsory consent of the landowners – 80% for private projects and 70% for public-private partnership projects. It also made the Social Impact Assessment (SIA) necessary for all projects with very few exceptions. This 2013 law has been perceived to have made the land acquisition process extremely difficult. It has been blamed for stalled projects and labelled as a roadblock to the development.

The land issues coincide with the severe crisis faced by the farmers. A study by the Centre for Study of Developing Societies (CSDS) conducted last year has reported that given an option, over 60% of farmers would prefer to migrate to cities as that would give them access to better education, health and employment avenues there. They cited reasons such as inadequate income, bleak future and stress, for giving up farming.

Despite a significant growth India has witnessed in last two decades or so, it continues to depend significantly on agriculture. The 4th Annual Employment and Unemployment Survey Report for 2013-14 published on 7th January 2015 estimates that approx. 47% persons (all India) are employed in the primary sector consisting of agriculture, forestry and fishing.

A research report by McKinsey published in February 2014 states that there are too few job opportunities outside the farm sector, a factor that limits the economic opportunities available. It estimates that a faster shift of labour from farm to non-farm jobs (matching China’s pace) could have lifted 10 crore more people above the Empowerment Line, a line marginally higher than the Poverty Line, from 2005 to 2012.

Amartya Sen, the well-known Nobel Laureate in economics, opines that prohibiting the use of fertile agricultural land for industries is ultimately self-defeating. He further argues that in countries such as Australia, the US or Canada, where agriculture has prospered by increasing productivity and efficiency, only a very tiny population is involved in agriculture. When people move out of agriculture, total production does not go down; rather, per capita income increases. Sen makes a case that for the prosperity of industry, agriculture and the economy, India needs industrialisation.

The above discussion brings us to the conclusion that the creation of job opportunities remains an important goal for any government. Increasingly, this goal is becoming more challenging. The Economic Survey for 2014-15 avers that there has been a decline in long-run employment growth in the 2000s relative to the 1990s along with a decline in the employment elasticity of growth.

In order to address the challenges of reviving the limping economy and push for the creation of jobs, the present NDA Government brought this 2015 amendment to the LARR Act of 2013. It attempts to make the land acquisition less onerous and thereby to ease the cost of doing business in India.

The amendment mainly exempts projects in five categories such as defence and infrastructure from the mandatory consent provision. It also permits the government to exempt projects in these five categories from the requirement to conduct a Social Impact Assessment and certain restrictions on the acquisition of irrigated multicropped land and other agricultural land.

Past bureaucratic hurdles, inordinate delays and abuse of law have resulted in the widespread reservation in the masses against the land bill. As a result, there is widespread opposition to vesting of any additional discretionary power. It is imperative that the present Government to manage the tightrope walk well and navigates this piece of crucial reform through the legislative process. It is equally essential for the Government to improve urgently the governance and infuse confidence amongst the suffering lot. Let’s hope the promises made and expectations raised by the NDA Government will come true.

On the other front, the issue of applicability of MAT on foreign companies is getting vexed. The tax administration seems to be further drifting from the coveted objectives of predictability, stability and certainty so vehemently espoused in the reports of the Tax Administration Reforms Commission (TAR C).

Talking about summer heat, this is also the time for exam fever. I hope all of you whose children have appeared for school/college examinations are now breathing easy and that the children will fare very well in the exams. Best wishes to those children appearing for their CA examinations.

As I am about to complete writing this page, the news of the devastating earthquake in Nepal and also parts of India, one of the worst in recent times, has deeply saddened us. It is a grim reminder of the mankind’s frailty against the fury of nature. At the same time, the human race continues to come together, show resilience to rise again and recover. Let’s direct our prayers and thoughts to the brave people of Nepal and help them in any way we can.

Once again, I look forward to receiving your feedback and views.

With warm regards,

fiogf49gjkf0d

Dear members of BCAS family,

Chai-Chunauti-Chunav

By the time this President’s page reaches your desks, the bulk of the voting would have been over and post counting on 16th May 2014, we will all see round two of this long winding tamasha. Horse trading will begin if no clear majority emerges. But that’s another story. All of us were so caught up with this well-orchestrated frenzy that talking about anything else was just not possible. We have done our bit by voting. Now, it’s out of our hands. Phew! But this message is not about that.

Trimurti

Our Government consists of three branches; the Executive, the Legislative and the Judiciary. According to the Constitution, the Legislative branch is to make the laws, the Judicial branch is to review the laws and make sure that they are Constitutional, and the Executive branch is to enforce the laws. We have all seen and read a lot about the current state of our Executive and the Legislative. I haven’t read much about the Judiciary. By the 73rd and 74th amendments to the Constitution, the Panchayat Raj system has become an institution for local governance, which makes our Judiciary very unique. We are all aware about the statistics of the pending cases, the pace of the discharge cases and many other issues that fraught our legal system. A Judicial Reform is the next big leap in our evolution that we are all waiting for. But this message is not about that.

UttejitUchhatamNyayalay

My message is about the emerging role of the Supreme Court (SC) in India. But before I progress, a few disclaimers:

1. These are my personal views and not that of the Bombay Chartered Accountants’ Society.

2. In the unlikely event of this message causing any kind of legal or other issue, the Editor of this journal be completely absolved of any repercussion.

3. I have the highest respect for our judiciary, in particular the Supreme Court.

4. Contempt of Court is not intended. As we all know, according to the Constitution, the role of the Supreme Court is that of a guardian of Constitution and that of a federal court. The Supreme Court has extensive original jurisdiction in regard to the enforcement of the fundamental rights. The Supreme Court also has the power to take cognisance of matters on its own.

NyayikSakriyata

The SC has come a long way since then. It has been playing an exemplary role in our democracy in discharging its constitutional duties. Nature abhors vacuum and hence, in recent times, time and again, we have seen that the SC has gone beyond deciding on the legality of a case. Many judgments have preambles which are ‘sermons’ to the Executive, Legislative or the society. Here are a few examples of such recent judgments which were sent to me by my friend CA. Anup Shah (he is an unwitting partner to this and he too maybe absolved).

1. Sahara’s case: the Court has placed Subroto Roy under its custody and is personally monitoring the repayment schedule proposed by Sahara.
2. Black Money / Liechtenstein Bank Accounts Case – the Court has again pulled up the Government for failing to reveal the names of all Liechtenstein Bank Account Holders.
3. 2G Case – Spectrum Allocation Case was personally monitored by the Apex Court.
4. Open Spaces in Mumbai –6 mt. wide open skirting around building projects and minimum 10% of project to be kept open to the sky.
5. Lal Batti – The Supreme Court slammed the indiscriminate use of the Red Beacon on Cars.
6. Vishaka’s Case: The Supreme Court laid down the law on Sexual Harassment in the absence of any legislation on the subject at that time.

One respects all the judgments and most of these sermons. But doesn’t this reek of Judicial Activism? Black’s Law Dictionary defines judicial activism as a “philosophy of judicial decision-making whereby judges allow their personal views about public policy, among other factors, to guide their decisions.”India has a recent history of judicial activism, originating after the Emergency which saw attempts made by the Government to control everything, including the judiciary. During the emergency period, the Government passed the 39th Amendment, which sought to limit judicial review for the election of the Prime Minister. Subsequently, the parliament, with most opposition members in jail during the emergency, passed the 42nd amendment which prevented any court from reviewing any amendment to the Constitution with the exception of procedural issues concerning ratification. A few years after the emergency, however, the SC rejected the absoluteness of the 42nd Amendment and reaffirmed its power of judicial review in the Minerva Mills case (1980). Another example of activism is the Public Interest Litigation which was an instrument devised by the courts to reach out directly to the public, and take cognizance though the litigant may not be the victim. Suo moto cognisance allows the courts to take up such cases on its own.

JiskaKaamUsikoSaaje

The original intent was that the three branches would be able to check and balance one another so that no single branch would be able to claim too much power. And this balance is sought to be changed time and again. At times the SC takes on the Legislative (Eg: drafting the Vishaka Guidelines) and the Executive (Eg: taking Subroto Roy in the SC custody) roles. The SC can uphold or overturn decisions of all lower courts. This highest of courts can make decisions that cannot easily be overturned. But the Legislative tends to reign supreme and the retrospective amendments post Vodafone judgment is an example of how the Government of India, instead of accepting the SC verdict, made retrospective amendments in the Incometax Act to nullify the effect of Vodafone’s case.

The trend has been supported as well as criticised.The New York Times author Gardiner Harris sums this up as “India’s judges have sweeping powers and a long history of judicial activism that would be all but unimaginable in the United States. In recent years, judges required Delhi’s auto-rickshaws to convert to natural gas to help cut down on pollution, closed much of the country’s iron-ore-mining industry to cut down on corruption and ruled that politicians facing criminal charges could not seek re-election. Indeed, India’s SC and Parliament have openly battled for decades, with the Parliament passing multiple constitutional amendments to respond to various SC rulings.”

We are glad that there is at least one wing of the government which has a conscience and has the courage to act upon it.Having said that, this trend is neither intended nor desired. If each wing of the government discharged its role diligently then this debate and tussle would not arise. We need the courts to discharge their primary duties, an area where there is a lot of scope for improvement. The vast number of pending cases is an area that needs highest attention. If the courts get distracted by activism then this issue will only get more severe. Justice delayed is justice denied.

Errata: In my previous communique I erroneously referred to Mr. Nandan Nilekani as CA. Correct examples would have been Mr. Rahman Khan,
Mr. Suresh Prabhu, Mr. Piyush Goyal and Mr. Harish Salve. I thank my friend Narayan Pasari for pointing out this error.

Here’s wishing everyone happiness and love.

With Warm Regards
Naushad A. Panjwani

fiogf49gjkf0d

Dear Members,

Greetings! It is already summer! The heat waves have been severe in many parts of the country. Bhubaneshwar, breaking a 30 year record with the temperatures touching 45.7°Celsius in April. Mumbai recorded 38°Celsius in April. About a quarter of our countrymen, spread in 10 states, are facing severe water shortage. For those of us, who receive water on tap, should certainly not take it for granted, and should rather be mindful of our water usage and support relief measures of which I have written later in this page.

ICAI Leadership visits BCAS & ICAI
The ICAI President Mr. Devaraja Reddy and Vice President Mr. Nilesh Vikamsey, both members of the Society, were kind enough to accept our invitation and visited the BCAS on 23rd April 2016. It was a wonderful opportunity to interact and exchange ideas with the leadership of our profession, get to understand their vision and extend our support in endeavours that will strengthen the profession as a whole. Both were candid, open and emphatic about challenges and pathways ahead. The new council has 15 first time entrants and we can expect a fresh set of ideas from that larger leadership. One notable development this year has been setting up of Digital Transformation initiatives which will result in superior and faster member services and experience.

You may be aware that recently Bank of Baroda cancelled the existing panel of internal auditors without giving any reasons on 30th March and launched an RfP for FY 2016-17 setting an eligibility condition of having an audit practice of Rs. 150 Cr in FY 2014-15. Obviously this is unprecedented and would disqualify most firms. The ICAI issued a notification, which was timely and required. It is worth taking a note that there could be more than what meets the eye.

The Guidance Note of CAR O 2016, was issued in record time of less than 30 days of the issue of the CARO 2016. This is commendable and deserves a special mention. I congratulate the AASB teams that worked behind the scenes. I am given to understand that several other GNs are on their way such on implementation issues in Ind AS, ICDS.

Tax Payer Data
The CBDT released an interesting paper giving data of Direct Tax collection, Contribution of Direct Taxes to total tax collection, Tax-GDP Ratio, Pre and Post Assessment collections, Cost of collection, Number of effective assessees, and disposal of cases. Although the basis and details are not adequate to decipher the exact impact, it’s a good start to see this statistically. We hope that this will develop further. You can refer to the document at: http://www.incometaxindia.gov.in/Documents/Time- Series-Data-Final.pdf

Although there is increase in number of assesses from 4.36 Cr (11-12) to 5.16 Cr (14-15) resulting in 18% growth in 3 years, it still is a low number. The cost of collection has remained around 0.60% for last 10 years in spite of rise in the tax collection by more than 3 times.

CHANGE – SPEED, EXTENT AND IMPACT
For centuries, we have thought LINEAR for growth. In recent times the growth has been EXPONENTIAL. The primary engine of this shift is the INNOVATION LIKE NEVER BEFORE. So unprecedented that it has created opportunities to leverage tools that can make an idea into a reality.

Let me explain. In 1980s the apps that your smart phone has today, would cost about $900,000 in retail. Kodak, rated as one of the top 5 brands in the world (till 1990), employed 145,000 people (in 1988), accounted for 90% of film and 80% of camera sales in America in 1976, had peak revenues of $16 billion (in 1996), but filed for bankruptcy in 2012 with 17,000 employees. In contrast, Instagram in 2012 was sold to Facebook at $1 billion, and today is valued at $35 billion. Kodak thought that its business was of chemicals and paper, whereas Instagram thought – that people wanted to store their memories (through photos) and it fulfilled that need. Paper and Chemicals were no longer needed with advancement of technology. Kodak thought that it was not worthwhile to switch from making 70 cents on a dollar to 5 cents in digital, although it invented the digital camera in 1975. A 132 years old complacent monopoly, therefore, faded forever in 2012.

The story tells us a number of things: Change – Speed – Impact. One study says that between 2010- 2020 about further 3 billion people will have access to internet. This itself, is a phenomenal opportunity. Today you can reach almost anyone, anytime, without any difficulty. Today, almost every THING is better, faster, accessible and cheaper than what they were years ago. Material has lost out to dematerialisation (tickets, paper, photos, for example), and there is huge emphasis on DEMOCRATI SATION – more and more people having access to things that seemed out of reach some years ago. Are we moving from a scarcity mindset to an era of abundance? Technology, being intangible, and changing so fast, cannot be controlled or regulated. One can control nuclear arms or drugs, but not human curiosity which drives technology. This is not causing change, but turbulence. In January, San Francisco’s largest yellow cab company was reported to be filing for bankruptcy due to Uberisation. Being UBERED is not relevant to taxi business alone, but it will reach professional services too!

Revamping of BCAS Office into a Learning Centre
In the last several months, we have launched several projects to strengthen the infrastructure at the Society. One of them was to convert the existing office into a learning centre and give more space to the administrative and support staff of the Society elsewhere. We have reached a milestone in that direction by finally converting the BCAS office at Jolly Bhavan into a learning centre which will accommodate about 90-100 people in the hall and also seat people in the overflow area outside. The renovated premises will have better infrastructure including facilities for recording and live streaming. This will allow us to have more events in house and use of technology to reach out to members where they are.

Water and Drought
To counter the drought situation, your Society is reaching out to its members through BCAS Foundation, to collect funds to support the drought affected. It will launch an appeal this month for urgent action required. We request you to support the appeal in whatever measure you can to participate in the relief work.

On the other hand, a recent water footprint numbers speak of a tragic saga. As per recent reports, 2173 litres are required for growing 1 kg of rice and we have exported 37.2 lakh tonnes of basmati. About 2 trillion litres of water out of this would be ground/surface water. Therefore, according to this report, India remains virtual exporter of water. The obvious says – we should export what we have in abundance and import that which is scarce. So the question here is should we continue to do this?

It is quite clear that there are adequate amount of water resources but not adequate amount of thought at a strategic level to see that our farmers do not suffer and die due to water shortage. Clearly, the situation is not a natural phenomena alone but has significant man made inputs.

Times have always been challenging, perhaps they will remain so for all time. There have always been opportunities, and they will remain so for all time to come. Challenges and Opportunities are embedded in the same continuum. Yet within that turbulence of change, we have Choice – to be courageous, giving, and grateful. There is something that each one of us can do, each day, to make a small difference. I leave you with the words of Tom Hanks:

When I was a kid, only Batman had a cell phone. He had a car phone. I was like: Man, can you imagine having a car phone? But technology has not altered our lives, other than how we go about them. We are still in the position of waking up and having choice: DO I MAKE THE WORLD BETTER TODAY SOMEHOW; OR DO I NOT BOTHER?

Wishing you a magnificent day, and more to come!