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Category: Book Review

Book Review

(LEARNINGS FOR NGOs/NPOs INCLUDING BCAS)

Name of the Book: THE MAVERICK EFFECT BY HARISH MEHTA

Author: MR HARISH MEHTA

On 8th February, 2025, I attended the Managing Committee meeting of BCAS as there was an interesting item on the agenda. That was to hear from two people about how “not for profit” organisations can be run and, what are the challenges in doing so and how the same can be overcome.

The two guest speakers who were invited to speak on this topic were Mr. Harish Mehta and Mr. Rajiv Vaishnav.

At the end of the meeting, all those present were handed over a copy of the book “The Maverick Effect” authored by Mr. Harish Mehta. This is an “Inside Story of India’s IT Revolution”. The name of the book intrigued me, and for some reason that I still can’t figure out, I mentioned to Mr. Mehta there and then that I would read this book and then write a book review about it in the BCAJ and send him a copy of that edition of the BCAJ. He was glad to hear this. The editor of the BCAJ was also present at that time, and he agreed to publish the book review. However, it took me much longer to finish the book than I had anticipated. At one social event where I met Mr. Mehta sometime in April, 2025, I reminded him about our meeting at the BCAS managing committee, and he reminded me that he had not yet received the book review. That really prompted me to quickly finish reading the entire book and then start writing this piece.

This is not merely a “book review” but also a note to myself (as one of the active members of the BCAS) and to other leaders (past, present and future) of the BCAS on the lessons that one can learn from the life of Mr. Mehta and his various experiences that he has vividly narrated in the book. In this article, I have tried to highlight various important lessons of life as well as important ways in which nation-building needs to be kept uppermost in one’s mind and actions while creating an organisation like NASSCOM & BCAS.

To begin, let me talk about Mr. Mehta himself. He is one of the founders of NASSCOM. No Indian can afford not to know what NASSCOM is. This body has played a stellar role in creating and sustaining Brand India on the global stage in many ways. He moved from the USA to India at a young age despite having a cushy job there. He began a small business which has, today, grown into a large organisation which is also listed on the stock exchanges. And, of course, he helped build NASSCOM. In this book, he has shared various incidents that give an insight into India’s bureaucracy, politicians, businessmen and, more importantly, leaders who shape the fortunes of millions all over the world.

The first lesson that I learnt from this book is about the importance of collaboration amongst competitors. In the initial days of NASSCOM, there was a crying need for this amongst the software companies of the country. Had they not collaborated in those years, who knows whether NASSCOM would have ever survived and thrived. Here, I would like to quote from the book itself:

The comparison is drawn between the formation of the European Union and NASSCOM:

In both cases, going against their grain, competing entities collaborated for the greater good. NASSCOM’s member companies put India ahead of individual interests. And the people involved were passionate about the causes they stood for.

The next lesson that is very important for me in the context of BCAS is the relevance and importance of core organisational values. The BCAS has always stood out because of the selfless work done by the core group consisting of volunteers and for its values. Many of the volunteers have been associated with the BCAS for several decades. And they have worked for the good of the BCAS without any expectations. Mr. Mehta writes in this book as under:

While each value is important, for me, the three that stand out are: (a) have ‘no personal agenda’, (b) ‘collaborate and compete’, and (c) practice a ‘growth mindset’.

The last value mentioned by him – “practice a growth mindset”, is something that is extremely relevant today for all professionals. For far too long, we have remained docile and meek. For a vast majority of the CA fraternity, “growth” is not something that comes naturally in day-to-day practice. I could be wrong in this judgment. But it is my perception based on interaction with lots of small and midsized CA firms. Apart from the mindset of growth, in today’s times, there is also a crying need for CA firms to “collaborate and compete”. Unfortunately, for several decades, CA firms have only been competing with each other. The time to collaborate is NOW.

Another interesting and relevant aspect of this book is how Mr. Mehta has graciously acknowledged the efforts of various people who passionately contributed to the building of the NASSCOM brand. Mr. Rajiv Vaishnav and the late Mr. Dewang Mehta are two such persons to whom Mr. Mehta has referred to multiple times in the book for their contribution to NASSCOM. This reminds me of the famous words of the former US President Mr. Harry Truman:

It is amazing what you can accomplish if you do not care who gets the credit.

The next important lesson that I could draw from the book and which applies to BCAS with equal force is putting the organisation above the individual. Mr Mehta writes:

NASSCOM was built by a few entrepreneurs, who were driven by the needs of an industry in its infancy. Today, the institution is indeed bigger than any one person or organisation. When we started NASSCOM, we dreamt of making tenfold leaps. We imagined an impossible billion-dollar industry when we were at a mere $120 million. Even when we were at $5 billion, we imagined another unimaginable $50 billion in the next ten years. The actual achievement has far surpassed our wildest imagination.

Neither at BCAS nor at the ICAI level, we have set definite goals in terms of growth of the profession. Unlike the commercial world of software, in the case of the CA profession, no organisation at the national level has set any targets for the profession. Our leaders need to ponder about this. Is there a need to set such targets? Would such an action be in the larger interest of the nation as a whole? Just as the software industry has served multiple purposes for the country, can growth in terms of revenues for our profession as a whole achieve any such altruistic goals at a national level? Obviously, at a firm level, several firms would be setting revenue or profit targets. But at a larger level, there is certainly no such move. Maybe the current and future leaders of the BCAS or the ICAI can think along these lines.

Another very important parallel that I could draw between NASSCOM & BCAS is about the role of each of these wonderful organisations. In the words of Mr Mehta, the role of an organisation like NASSCOM is:

If I could pick one term to describe NASSCOM, I’d say we are trusted catalyst for the IT industry and other stakeholders. We are and will remain independent. We will ensure that there is no vested interest in any outcomes, except the growth of the industry. We thus constantly intervene on myriad issues – from policy to guidelines to skilling, and more. Yet, we stay at arm’s length when it comes to ownership and creating new institutions.

BCAS has always prided itself in being independent and in being a catalyst for the CA profession. It has to its credit several pathbreaking and innovative initiatives that have, later on, been replicated by several other organisations. We have also been at the forefront of advocacy and have been trying to make a difference in the quality of legislations for many decades. The quality of our events and publications has always been appreciated by our members. So, in this respect, we are very similar to NASSCOM. The major difference is that of scale. Maybe, it’s time now to scale up the BCAS and take it to the next level. I am hopeful that the new-age leaders of the BCAS will rise to the occasion.

The next important learning from the book is about dealing with failures. Mr. Mehta has made a very pertinent and moving observation about failure:

The world celebrates success with accolades and trophies, but failure often has no friends. We could change this by encouraging more conversations about how failure is a necessary ingredient for success.

The BCAS, every year, felicitates new entrants to the CA profession by inviting successful students. BCAS has also, in the past, invited those students who have not succeeded in the exams and guided them in how to deal with failure and how failure is part and parcel of life, and, maybe, as mentioned by Mr Mehta, even necessary for success.

The last important point that stood out for me in the book is about the importance of family and relationships. While discussing about whether he has been able to create a “big” company, Mr Mehta dwells on the importance of family and relationships and sums up beautifully by: Finally, to me, the larger metric of success is my family, and the relationships I have nurtured and developed over my life. And with those, I am probably the Biggest 1.

All in all, I found “The Maverick Effect” by Mr. Harish Mehta very interesting, inspiring and useful. I do hope many members of the BCAS – particularly the core group members – will also read this book as we have a lot to learn from NASSCOM and people like Mr. Mehta about how to run a not-for-profit organisation and ensure that the organisation not only thrives but also makes a massive difference for our country which itself is standing on the cusp of a glorious future as we move towards “Viksit Bharat”.

There Is Always A Door …

CA Girish Agrawal, a first-time author, embodies versatility. Besides being a Chartered Accountant, he was an avid footballer in his younger days, followed by being the President of the Leo Club in the mid-twenties and studying law in the mid-forties. He has handled the finance functions in an MNC and is currently an Income Tax Appellate Tribunal Member. I had the privilege of interacting twice with him, once professionally and secondly during the launch of the book.

The author initially indicates that the trigger for writing this book is to express his gratitude through leveraging his “word power” since his life has been extremely rewarding from his childhood in spite of experiencing three major near-death experiences (NDEs), which have made him cherish every moment of his life till date. The book goes on to reveal various facets of his personality in diverse roles ranging from academics, sports, leadership, social welfare and public events, professional pursuits, etc., with several achievements and failures on the way, including the NDEs indicated above; each of which has made him a complete person. He also expresses his gratitude to several persons starting with “My Master” my beloved Maharita, who he considers his biggest source of faith and strength, followed by “my Lord Krishna“, whose practised principles like unconditional love, joy, detached engagement, beauty, energy and enthusiasm, amongst others reverberating through Krishna consciousness intrinsically weaves through his life’s journey lived  so far with all its complexities. He goes on to add  that the book has also been motivated by his completing fifty years since his master says that “fifty is the new zero”.

The first and the longest chapter, titled “In Spite of…” narrates the first and by far the closest of NDEs in the form of a horrific road accident which resulted in severe damage to his spine and several other injuries. He then narrates his feelings and experiences, which transcended him from a chaotic state from the outside into an absolutely blissful, sacred and divine state from the inside for the next 60 hours till the successful completion of the surgery, which he refers to as the “point of reference” for the rest of his life. He goes on to compare time to a stationery rail track. In spite of the severe trauma involved, the author conveys that he has reached the most relaxed state with a feeling of freshness since his intentions were very clear to bounce back since he had to add much to life. The chapter is a lesson for all of us to always adopt a positive and never-say-die attitude, howsoever daunting the situation which ultimately helps one to come out as a winner. Another regular feature of the book is the poetic references, which describe various situations. He concludes the chapter with a very profound quote which reads as under to signify his transformation in life:

“Just when the caterpillar thought the world was over, it became a butterfly”

The remaining part of the book is weaved into a series of compact chapters which describe the various stages of his life and the lessons which he has learnt therefrom.

The next chapter, titled “The Inception”, covers his early school days and goes on to narrate his first NDE when he was hospitalised for kidney surgery, which resulted in life-threatening complications during recovery, which helped him very early in life to develop an understanding of the existential state of living in the form of being alone(where one dissolves into one’s self and goes inside) and being lonely (a feeling of lacking something). He goes on to state the various struggles encountered and how they were conquered through persistence and also several learnings.

The remaining part of the book narrates his life’s journey through various chapters (referred to in bold and italics), which touch upon the early influences and values which his paternal grandfather instilled, the spiritual discipline which kept on miraculously working in his life followed by his varied experiences through meeting various people from different walks and in different stages of life. He goes on to narrate how each of these helped “sowing the early seeds in life”, “exploring unchartered territories”, and “doing everything with devotion”. In the midst of various challenges and struggles, he does not forget to mention that he did “experience happiness” in several things like eating “Mishti Doi”, travelling for sports tournaments and studying with a group of friends for his exams, which helped him advance in his career and resulted in “unleashing his true potential“. In the midst of all this, he touches upon the last NDE during the second wave of COVID-19 19 which hit so hard that he had to be in the ICU, where he witnessed seven deaths around him and how he navigated the subsequent recovery phase with fortitude due to his experiences from the earlier NDEs which he refers to as ” I am having an affair with my life”. He wraps up his experiences by stating the effect of “music in his life” in the form of not only his love for music and his encounter with various legends and the immense source of inspiration it has been but also how it shaped his parenting abilities followed by the mantra of “giving and getting” which he refers to as a “win-win “solution wherein the act of giving is done without the willingness of the giver which can at best be termed as fulfilling his obligatory duty without expecting anything in return. The book concludes with a poem titled “Flowing like a Rive, Mantra of My Life…” which was penned by him during a flight from as indicated to me during the launching of his book.

Each of the chapters and sections provides the reader with a solid perspective on life in the form of perseverance, patience and positive thinking which can overcome even the mightiest of challenges and that one should never give up, which aptly sums up the title of the book.

It is interesting to note the author’s analysis and interpretation of each of the words of the title in a tabular form, which provides deep insights into his thinking process.

To conclude, the book sums up a basic philosophy that life needs to be lived to the fullest in the present, and every moment thereof needs to be cherished without carrying any baggage from the past nor thinking and worrying about the future.

Book Review

Title of the Book: THE ANTHOLOGY OF BALAJI THE CFO LENS:

HOW TO THRIVE IN THE FAST-CHANGING WORLD OF FINANCE

Author: R. RAVIKUMAR

Reviewed by V KUMARASWAMY1

THE CFO LENS, written by Mr Ravikumar (ex-CFO of IBM India), based on discussions with several senior CFOs in the country, is as brilliant as educative, and the discussions are both lucid and practical. I wish I had got this to read when I started my career and once midway through it when I was groping in the dark on where next to go and, more importantly, what to do personally to get there.

The book starts with a welcome emphasis on finance teams using stories and experiences for building convincing arguments when working with business and finance colleagues. Weaving stories around numbers and looking at them from the listener’s perspective can help avoid friction within the organisation. The section of the book on building business acumen will surely help finance professionals position themselves properly and chalk out steps for further self-development and career growth. The contents are a fine illustration of the customer-first approach by the finance function.

The three chapters on managing financials better deal with costs, capital expenditure and balance sheets. The chapter on costs is superb, reminding the reader about some forgotten essentials of the function. Readers would do well to go over it carefully.

The many anecdotes used are very well summarised; the subplots don’t derail the main flow at any stage. They are purposefully handled. So are the experiences of other CFOs whose experiences have been woven well — educative, not overwhelming. A good mix of examples — more from the Indian context is welcome and will make the reader connect more easily with the content.

The topics covered, like handling risks, how business leaders look at things, data visualisation, etc., are more apt for someone in senior or senior middle functions of finance. Being aware of these at a much earlier stage in one’s career would help both the employer and the employee. Whatever the level to which the chapters are appropriate, the basics have been explained well enough for someone junior to start baby steps in following them.

The stories about the birth of Netflix, the disastrous experience at -cross-selling at Wells Fargo and multi-dimensional selling at IBM present to the reader the many ways in which one can win the customer beyond just the price. The examples used of TVS Motors’ persistent push for credit rating to open the doors for bank funding for dealers and Ola’s relentless pursuit till they found an optimal solution told in an impactful way. There are many more examples to hold your interest.

The last section of the book on digitalisation is more about how to use technology for financing core functions rather than about extensions like data mining, technology-enabled optimisation, and expanding the markets for sourcing finance or placing funds. Perhaps the author would add a chapter on this in his revisions. A specific chapter on how to use the book’s nuggets in career planning and planning organisation training programmes would add immense value.

The book is the closest one can get to a practical guide for making the finance professional more productive and effective in the emerging world of finance. It should ideally be made a compulsory reading for all budding finance and accounting professionals and for those who are in mid-career as a refresher. It will surely make their career more satisfying, helping them deliver better value to the organisations, and increase the likelihood of reaching greater heights in general management. I strongly recommend it.

1 Ex-CFO JK Paper; Author of Making Growth Happen in India.

Book Review

Title of the Book: THE ANTHOLOGY OF BALAJI

Author: ERIC JORGENSON

Reviewed by SHIVANAND PANDIT

When I saw a book sub-titled ‘A Guide to Technology, Truth, and Building the Future’, my guardrails went up, and a set of neurons in my brain started firing. Scepticism and wariness set in, because in the volatile world of start-ups, there’s no shortage of founders peddling pitches to investors, and this sounds like one of those claims.

However, my scepticism quickly faded as I flipped through the pages of this book, actually titled ‘The Anthology of Balaji’, written by Eric Jorgensen and illustrated by Jack Butcher. As I delved into just under 290 pages, my initial doubt gave way to a willing acceptance of Balaji’s aphorisms, which are succinctly captured and often humorously conveyed by the author. One such gem is: “Building a billion-dollar company is like assembling IKEA furniture blindfolded — challenging but rewarding!”

Of course, there are some general statements like “The future belongs to those who build it,” “In a world of noise, seek signal,” and “Technology is the ultimate force multiplier.”

If some of these concepts seem familiar, it’s likely because they are. Balaji relies on some classic ideas and modernises them. For example, the traditional 4 Ps of marketing evolve into 6 Ps in his framework: Product — What are you selling? Person — To whom? Purpose — Why are they buying it? Pricing — At what price? Priority — Why now? Prestige — And why from you? While useful, these ideas are not entirely original. However, once you become accustomed to this approach, it becomes easier to follow along.

His insights on technology remind us that it isn’t just about gadgets; it’s about shaping our world. Here are some standout points from these chapters:

a) The Value of Technology: “Technology is the ultimate lever. It allows us to do more with less.”

b) Building What Money Can’t Buy: “The best things in life are not for sale.” Balaji explores how technology creates value beyond mere transactions.

c) Faster, Better, and Cheaper: “Technology drives progress. It accelerates our journey toward a better future.”

d) Unlocking Unseen Value: “Look beyond the obvious. The real magic lies in the hidden potential.”

e) Technology Determines Political Order: “The tools we create shape our societies.” He delves into how technology influences governance.

In the second section, his relentless pursuit of truth urges us to question assumptions and seek clarity:

1) The Power of Radical Honesty: “Truth is liberating. It’s the foundation of trust and progress.”

2) The Art of Independent Thinking: “Don’t be a parrot. Be an original thinker.”

3) Embracing Uncertainty: “The future is a puzzle waiting to be solved. Embrace it.”

In part three — Building the Future — Balaji’s vision goes beyond the present, encouraging us to shape our destinies:

A) Creating New Nations: “Why not? The world needs fresh ideas and experiments.”

B) The Network State: “Imagine decentralised countries, powered by technology.”

“The Anthology of Balaji” is more than just a book — it’s a roadmap to navigate our complex and convoluted world. It’s a guide, indeed. At the beginning of any guided journey, scepticism is natural. One might wonder if this book is a collection of random ideas or an illusion. However, Eric Jorgenson’s compilation of Balaji Srinivasan’s musings takes the reader on a deep dive into the realms of technology, truth, and the future.

What’s commendable about the anthology is its ability to push readers to perceive technology in extraordinary ways. From blockchain to biohacking, Balaji covers a wide range of topics. For those seeking intellectual stimulation, the book offers plenty to chew on. It’s refreshingly honest: Balaji’s dedication to truth echoes the ‘Satyameva Jayate’ philosophy, which means ‘truth alone triumphs’ (yes, I know this might make you sceptical). This exploration of transparency and authenticity may resonate with the yet-unjaded Indian reader. His vision of decentralised governance is also fascinating: imagine India as a network state, powered by blockchain! It’s a bold idea, but isn’t boldness often a precursor to progress?

However, the book does have its drawbacks. There is a fair amount of esoteric language, with references to Silicon Valley jargon and crypto-speak that might perplex uninitiated Indian readers. The humour, which I mentioned earlier, is rather lacklustre. Balaji’s wit is reminiscent of PG Wodehouse’s restrained and polite style, unlikely to provoke a laugh. Additionally, there is a cultural disconnect: his global perspective can sometimes clash with local sensibilities. His mantra of “starting a new country” sounds a lot like a Silicon Valley start-up pitch. In a country that is a cacophony of contradictions rather than a controlled environment, the anthology might not always hit the mark.

In conclusion, “The Anthology of Balaji” is like a typical masala chai — strong and aromatic, but an acquired taste for someone who prefers the more refined and elegant Darjeeling tea. If you’re willing to sift through the jargon and embrace the boldness, give it a read. But remember, wisdom isn’t always presented on a silver platter in an air-conditioned dining room; sometimes, it’s hidden in a roadside dhaba.

Book Review

Title of the Book: EMBRACE THE FUTURE

Author: R GOPALAKRISHNAN AND HRISHI BHATTACHARYYA

Reviewed by SHIVANAND PANDIT

Embrace the Future provides deep insights into the nuanced art of business transformation, steering organisations through the intricate process of adjusting to the constantly shifting landscape of tomorrow.

In this book, the authors offer a profound exploration of the intricate dynamics of organisational change and transformation. Drawing from their wealth of experience and expertise, they delve into fundamental principles crucial for navigating the ever-evolving landscape of business. Through compelling insights and real-world examples, the authors illuminate key strategies for driving sustainable growth and fostering resilience in the face of uncertainty.

Several points deeply resonated with me as I delved into the pages of the book:

UNDERSTANDING THE DYNAMICS OF CHANGE

Within their analysis, the authors delve deeply into the crucial role that agility, resilience and foresight play in the facilitation of successful transformational initiatives within organisations. They emphasise the pressing need for these entities to swiftly adapt to the ever-shifting terrains of their environments, recognising that the ability to remain flexible and adaptable is not merely advantageous but rather vital for their continued existence and relevance.

Central to their argument is the notion that a comprehensive understanding of the dynamics of change is paramount for leaders. By grasping the nuances of these dynamics, leaders can effectively anticipate and respond to fluctuations within the market, thereby positioning their organisations strategically amidst uncertainty. This proactive stance enables leaders to steer their organisations towards growth opportunities, leveraging their foresight to capitalise on emerging trends and navigate potential challenges with resilience.

In essence, the authors advocate for a holistic approach to change management — one that prioritises agility, resilience and foresight as indispensable attributes for organisational success in an ever-evolving landscape. Through this lens, leaders are empowered to not only adapt to change but also to embrace it as a catalyst for innovation and growth.

NAVIGATING DISRUPTION AND INNOVATION

In a world characterised by disruptive forces and rapid technological advancements, organisations must embrace innovation as a means of staying competitive. Gopalakrishnan and Bhattacharyya showcase how successful organisations leverage disruption to their advantage, using it as a catalyst for transformation. Through compelling case studies, they illustrate practical frameworks for fostering a culture of innovation, embracing emerging technologies and seizing new opportunities in the marketplace.

EMPOWERING LEADERSHIP AND COLLABORATION

Effective leadership plays a pivotal role in driving and sustaining organisational transformation. The authors underscore the importance of empowering leaders who can inspire and mobilise teams towards a shared vision of the future. They provide valuable insights into leadership practices, communication strategies and change management techniques essential for navigating complex transformation journeys. Furthermore, they emphasise the significance of collaboration, highlighting how cohesive teamwork fosters innovation and drives organisational success.

CULTIVATING A LEARNING MINDSET

Central to the book’s philosophy is the notion of continuous learning and adaptation. Gopalakrishnan and Bhattacharyya advocate for a growth mindset, encouraging individuals and organisations to embrace lifelong learning as a cornerstone of success. They offer actionable advice and practical tools for cultivating a culture of learning, experimentation and adaptation. By fostering a mindset of curiosity and openness to new ideas, organisations can stay ahead of the curve and thrive in an ever-changing environment.

SUSTAINABLE GROWTH AND IMPACT

Beyond pursuing short-term gains, the authors stress the importance of sustainability, ethics and social responsibility in driving meaningful business transformation. They explore how organisations can align their objectives with broader societal goals, making a positive impact on the world while achieving business success. By embracing their broader purpose and integrating sustainability into their core practices, organisations can create lasting value for stakeholders and contribute to a more sustainable future.

To conclude, Embrace the Future serves as a comprehensive guide for leaders, change agents and organisations embarking on the journey of transformation in an era of unprecedented change and opportunity. With its profound insights and practical strategies, the book equips readers with the tools they need to navigate uncertainty, embrace innovation and drive sustainable growth in today’s dynamic business landscape.

Book Review

ESG and BRSR Reporting: A Comprehensive Guide by CA Kishore M. Parikh is a remarkable book that delves into the intricate world of Environmental, Social, and Governance (ESG) practices and Business Responsibility and Sustainability Reporting (BRSR). The author introduces innovative theories and presents complex topics in a concise and accessible manner. The book commences with a focus on the environment, where the author defines global risks as adverse circumstances that may lead to loss or injury.

Chapter 1 introduces the concept of ESG, emphasising that it encompasses not only environmental considerations but also broader aspects affecting various stakeholders such as customers, suppliers and employees. The pillars of ESG — environmental, social, and governance factors — are outlined, providing a comprehensive understanding of the framework. In the Environmental Pillar, the author provides examples of ESG considerations, ranging from air and water quality to climate change and nuclear radiation. Social factors, such as community relations, diversity and employee engagement, are also covered, along with governance factors like leadership, corruption and compliance. The book offers insights into environmental awareness in Vedic literature and updates global events such as COP26 and COP27, highlighting the advantages of incorporating ESG standards. Additionally, it explores country-wise ESG disclosure regulations and mandatory reporting worldwide. The book includes classic case examples and studies to enhance understanding. It showcases companies that address ESG issues and concludes with an analysis policy effects that demonstrate leadership in ESG performance.

Chapter 2 focuses on sustainability, covering the Brundtland Commission’s establishment, the triple bottom line (people, planet, profit), and the Circle of Sustainability with its economic, ecological, political and cultural domains. It discusses the benefits of sustainability reporting, a sustainable development timeline and the 5Ps for sustainable development. The book discusses the correlation between eradicating poverty and ensuring planetary conditions for sustainability and growth. It presents a deep understanding of sustainability and climate change on a global scale.

Chapter 3 shifts to the Climate Disclosure Standards Board, highlighting exposure drafts and industry-wise disclosure requirements for various sectors, such as consumer goods, financial, and technology. The author covers several organisations, including CDSB, IIRC, TCFD, SASB, VRF, ISSB, and the Global Reporting Initiative, providing an overview of their roles and impact. The chapter also incorporates government initiatives like the Social Stock Exchange and discusses audit assurance standards and their advantages.

Chapters 4 and 5 focus on the Social Stock Exchange — SEBI and global perspectives and audit and insurance related to ESG practices. They also detail the types of social audits, including economic, environmental, and human rights audits.

Chapter 6 explores BRSR, covering events leading to its development, national voluntary guidelines and principles of responsible business conduct. It discusses the practical challenges of BRSR adoption in India and provides case studies illustrating BRSR standards from various listed companies.

Chapter 7 introduces BRSR Lite for unlisted companies, emphasising its voluntary nature. The book provides a structure for BRSR Lite, including principles related to integrity, sustainability, employee well-being, stakeholder interests, human rights, environment protection, advocacy, inclusive growth and consumer engagement. The concluding section highlights recent regulatory developments, focusing on SEBI’s mandate for BRSR reporting for the top 1,000 listed entities since 2021. The book emphasises the significance of BRSR assurance, mandatory from 1st April, 2024, enhancing transparency, accountability and sustainable business practices.

In conclusion, ESG and BRSR Reporting: A Comprehensive Guide is an invaluable resource for executives, investors and sustainability professionals. With a blend of theoretical analysis, practical guidance and real-world examples, the book serves as a roadmap for organisations committed to integrating BRSR reporting into their operations and fostering positive change worldwide.

Book Review

Title     :  ?Emerging Issues in International Taxation‘

Author :  H. Padamchand Khincha

 

International tax law is recognised as a
critical pillar in supporting the growth of the global economy. In an
increasingly connected world driven by the forces of globalisation and
technology, governments are finding the old structure of international tax laws
to be inadequate to cope with increasing legal arbitrage opportunities and
aggressive tax planning. This has resulted in a coordinated and comprehensive
action plan thereby triggering a flurry of developments in the field of
international tax. This book endeavours to deliberate upon critical
international tax aspects under the following six topics.

 

1.  Cross-Border Outsourcing

     In respect to cross-border
outsourcing, the discussion is restricted to generic issues arising in the
service sector and seeks to provide a tertiary view of both inbound and
outbound outsourcing.

 

2. Structuring of EPC Contracts

     EPC contracts are in trend
and newness in its operation has been the integration of multiple fields making
it an (in) divisible complex, matrix. These aspects have been articulated in the
backdrop of tax, commercial and statutory aspects. The nuances in tax treaty
applications and tax withholding have been discussed along with some case
studies.

 

3.  Inbound and Outbound
Investment Structuring – Impact of specific anti
avoidance rules including indirect transfer and Place of Effective Management
(POEM)

 

The book focuses on two amendments, mainly
indirect transfer as introduced in Finance Act, 2012 and POEM amendment brought
out by Finance Act, 2015 to determine the residential status.

 

This chapter is more of a ‘return to basics’
and deals with certain important and relevant terms such as through, transfer,
value, directly and indirectly.

 

The second part of this chapter dives into
the realm of POEM theorem with a lucid explanation of its intent. The author
discusses that a meeting that typically involves discussion, debate, approval,
supervision and execution can have a significant impact in reckoning the
residence of the company itself. The segment closes by demonstrating the
transition of the residence rule from ‘control and management’ to ‘POEM’ and
the interplay (nay friction) with the tax treaties.

 

A flashback to the ‘Direct Tax Code’ that
sought to bring in this concept helps to understand the Indian perspective for
the purpose of residence determination.

 

4.  Equalisation levy

     This chapter provides a
detailed commentary on various provisions governing the equalisation levy,
certain nitty-gritty and finer aspects that remain unanswered. The author
highlights that such legislation has raised more questions than answers. It
ends with a tertiary view of digital economy taxation across the globe and
covers flavours of 21 countries.

 

5.  Inbound Investment, General
Anti Avoidance Rule (GAAR) & Treaty Anti-Abuse Provisions

     This chapter has dealt
with the intent behind the legislation of GAAR that gives statutory recognition
to the philosophy of ‘Substance over Form’. It is divided into (i)
applicability, (ii) consequences, (iii) power of the statute; and (iv)
compliance and other aspects.

 

6.  Permanent Establishment
(PE) & Attribution of Profits – Issues & Recent Developments

     In this chapter, the
author has focussed on the Hon’ble Supreme Court’s decision in the case of
Formula One. The impermanence in a Permanent Establishment is the highlight of
this ruling. In the second part, the author discusses the interplay of
bilateral tax treaties, the multilateral instruments and a brief perspective on
PE in digital commerce.

 

By drawing on contributions from a range of
regimes, the book aims to provide a more balanced international approach. The
book gives elaborate illustrations by providing a diagrammatic flow of
transaction and tax implications thereof in India and outside with updated
judicial precedents.

 

Further, the issues arising in each of the
above chapters have been elucidated comprehensibly which in turn can help
professionals with practical analysis of real-world situations. However, the
content of the book could have been improvised by providing suitable options
for implementation on the issues raised. Further, the book may not sustain
readers’ interest as tax treaties are given as Annexures between chapters.

 

In a nutshell, the range of topics in the
book reflect extensively for international tax academics and practitioners. The
book covers more traditional international treaty topics, including chapters on
a static interpretation of treaties. One of the most exciting contributions is
the use of historical materials in interpreting tax treaties. _

Book Review

Title     : ‘Happiness is all we want’

Author :  Ashutosh Mishra

Happiness is a journey, not a destination.

Seldom do we find books that revolve around how to
practise the art of living a simple happy life. 
Quotes like ‘Happiness can be found’ or ‘Do more of what makes you
happy’ more often than not find a place only on our mobile wallpapers or
Whatsapp statuses.  Are we really
fetching things and moments that make us happy or are we just hurrying to
strike things off our ‘to do lists’ that we prepare for ourselves every night?
And even if we are getting things off our bucket list, are we taking a moment
out of our lives to introspect through the journey and feel content of the
same?

In today’s mad 
rush of materialism and the glamour of ‘modern living’, each one of us
invite unwanted complications  and fail
to pay heed to our mental and physical well-being.  And till the time we realise that it’s
probably the time to take care of our health, it is either very late or it’s
the time when we are already facing an existential crisis. This need not
necessarily be the case with a CEO of a multinational company or a struggling
artist in the Entertainment Industry. Cases as naïve as those of teenagers
trying to juggle academics and social life at the same time or cases as
delicate as retired senior citizens trying to find ways to pass their time,
would all find simple techniques to seek answers to their dilemmas through the
reading of this book.

‘Happiness is all we want’ is one of those that
would prove to be a good read for people across all generations for the simple
fact that it would either leave a smile on your face or would help you smile a
little more in your life.

‘Happiness is all we want’ not only convinces you
to start living your life a little more meaningfully than you already are, but
also shows and tells you how.

In the very beginning of the book, the author
makes a sincere effort to define Happiness in the most untainted and
unpretentious form. ‘Happiness is staying in the moment and utilising
opportunities to be happy from all that we do in our daily lives’, he says. He
compels us to ponder on why we have structured the goals of our life in a way,
where we have given material success the highest priority and mental wellbeing
the lowest, while in reality the former is achievable only if the latter is
attained.

Having said a lot about what the book preaches,
it’s mandatory to mention the one thing that differentiates this book from most
of the others in its genre. It is undoubtedly the intricate explanations on how
to, not just relate, but to also use this book and make the best out of it.
Also it makes it all the more easy to use the book via the concise ‘Things to
do’ and ‘Things to ponder’. It shows how to add a little bit of sane method to
the madness in our lives. It concentrates on the three pillars of our
existence. It tells us how to train, tame and tackle our mind, body and soul.
Though, prima facie the context and subject may seem to be a very heavy
read, especially after a busy day at work. More often than not, it would be a
leisure read, for there are instances from our lives that would make us smile
and grin at more times than we imagined it to.

The author, 
Ashutosh Mishra, an MBA from XLRI Jamshedpur and Mechanical Engineer
from IIT Delhi, through his abundant experience of corporate life, shares his
personal experiences that make us realise that there is much more to life that
can make us content, than the luxuries which give us temporary pleasures which
neither add value to our lives nor to our well-being. The book gives elaborate
illustrations on various techniques like Yoga, Physical Exercises and a Healthy
Diet, that would bring peace and relaxation in our stressful lives.

Having applauded the content of the book, the
language fails to compel the reader to hold on to the book for a very long
time. A little bit of beating around the bush provokes you to jump to the ‘Wake
Up Stories’ and ‘Practical Tips’ directly, instead of giving the book a
thorough read.

In a nutshell, the book would definitely help us
in redefining the idea of happiness in our lives and also change our
perspectives about success. But in the end, everything boils down to how much
of a religious effort we put to better our minds and souls and not leave it to
a casual read.  The best way to
acknowledge the author and celebrate the book, would be to regularly implement
the recommendations given in the book to which we can relate the most at
appropriate times in our lives. And that is when the success of the book would
be measured in the true sense.

Book Review

Title: Bean Counters – The Triumph of the
Accountants and How They Broke Capitalism

Author: Richard Brooks


A well-researched book that starts with tracing the history of double entry
booking keeping and its growth, need and usefulness to the industry from 1200
AD to its present state. It vividly traces the growth in stature of the “bean
counters” in the US, UK and European countries. A reader will find interesting
history of formation and merger and consolidation of firms leading to the Big 4
firms in its current avatar.

 

Interesting observations on the political
influence across countries of the Big 4 will be both a delight and an eye
opener for any serious reader and observer on the stature and influence of the
Big 4, while the same firms (in spite of rotation) controlling 99% of the
market. The styling of Big 4 in US and UK makes interesting reading which the
author details out in the book.

 

A view pre and post 1980 on the defined role
of Auditors by the author cannot but be missed by the reader where he observes
that “for generations members of these huge influential practices considered
themselves who happened to be in business but beginning 1980 they saw
themselves as businessmen who happened to be in profession.”

 

The author observing that the displaced key
performance indicators of Big4, being revenue growth and improved profit
margins followed by measures of staff and customer satisfaction while exposing
false accounting, fraud, tax evasion and risks to economies’, (everything that
the society might want from accountants) not featuring at all as a performance indicator of the firms, raises a basic question on the
very model that the firms have now become.

 

The observation on devising of legal
structure of the firms for worldwide domination while escaping the
responsibility away from home by the HQ by distancing itself from local
misdeeds elsewhere in the world, while profitably exploiting the name, brand
and commercial networks spills the beans of the operation of the Big 4. For the
few past decades all the firm’s global growth coming from selling more
consultancy services while its talent of turning any change into fee earning
opportunity discloses the growth strategy. In the digital age, cyber security is
the latest major growth engine for the firm’s consultants and now audit fees
worldwide account for 39% while it is 21% in UK making them consultancy firms
with auditing sidelines, rather than the other way around.

 

The author’s observations on the manner in
which the British Accountancy firms converted to LLP by stating it as “a shabby
episode in accountancy history” will not be missed by a reader. When the
Companies Act 1989 allowed accountants to operate as limited liability
companies, the partners were more wedded to the partnership for the tax
advantage that came with being self-employed rather than company directors.

 

The ease of sending money across borders in
the age of financial liberalisation allowed the multinational companies to
break up businesses and park more profitable parts where they would be lightly
taxed and the “bean counters showing them (the companies) how to do it by
exploiting their expertise thereby siphoning billions of euros from hard
pressed economies” shows the bean counters in poor light. It is interesting to
note that the users of such services are leading multinational multibillion
dollar companies, goes to showcase the inter dependency of the multinational
and the Big 4.

 

A list of hundreds of active tax products
under various acronyms by the bean counters makes the author opine that “in
simple truth these were little more than shams.”

The author’s bold statement on the mastered
art of “revolving door” of senior personnel brings closeness that breeds
uniform market oriented view of the public and provides an insight into the
prevalent practice. “So smoothly and frequently the revolving door is spun that
it creates a realistic hope amongst ministers and mandarins that subject to
keeping them happy the Big 4 will present career opportunities to supplement
their pensions.”

 

The 2008 financial crisis proved to the
contrary the assertions of President Bush that “era of false profits are over”
just six years earlier, speaks volumes about the unreformed and unrepentant
approach and influence of the Big 4. The author clearly links a clear nexus
during the period in the US towards lobbying donations to senators and
Congressmen through political action committee by the Big 4 employees hitting
record levels and the reforms being blocked fairly easily.

 

The author has very pertinent and far
reaching suggestions that cover separation of accounting and consultancies,
having strong independent regulations, bring in transparency, suggesting public
auditing of major institutions of the government, ending the “quadropoly” which
brings accountability demands an immediate detailed relook.

 

The book published this year by
AtlanticBooks, UK comes in at the most appropriate time for India when read in
the backdrop of recent Hon. Supreme court judgement of February 2018 and the
vision of the Hon. Prime Minister of India, on Indian Audit firms becoming
world leaders. Any serious reader and well-wisher of audit profession of our
country will find that this book serves a road map towards establishing a new structure
of the audit profession by learning from the mistakes of the West so very well
documented in book.  

 

BOOK REVIEW

“CRASH –
Lessons from the Entry and Exit of CEOs” by R. Gopalakrishnan

 

Mr. R.
Gopalakrishnan is a well-known corporate leader, management author and adviser
who needs no introduction. However, a few words about him will be useful to the
young reader.

 

He is the
author of best-selling books such as The Case of the Bonsai Manager, When
the Penny Drops: Learning What’s Not Taught and A Biography of Innovations:
From Birth to Maturity.

 

Interestingly,
Mr. Gopalakrishnan
studied physics at the University of Kolkata and Engineering at IIT Kharagpur.
He also completed an Advanced Management Programme at Harvard Business School.
Apart from serving as Chairman of Unilever Arabia, M.D. of Brooke Bond Lipton
and Vice-Chairman of Hindustan Lever, he has been Executive Director of Tata
Sons and several Tata group companies. At present he is Corporate Adviser, the
Mindworks, and is actively engaged in both instructional and inspirational
speaking.

 

While many
people talk about the path to the top of organisations, very few are honest
about how difficult it is to stay at that position. Mr. Gopalakrishnan
analyses the ‘software’ challenges which leaders confront every day and shares
the insights he has gained while developing, managing, investing in and
supervising a variety of companies. He points out that great leaders continue
to excel not just because of their skills and intelligence, but also by
connecting with others using emotional competencies like empathy and
self-awareness.

 

The book is
divided into two parts. In Part One, which has five chapters, the author
explores some pertinent questions: Is company performance a surrogate for
leadership and CEO performance? If a company falters, is it related purely to
the CEO’s performance? Conversely, if a company does well, does it redound to
the credit of the leader?

 

Mr.
Gopalakrishnan
observes that to be successful, a CEO requires cognitive intelligence as well
as intuitive emotional intelligence – which means that he or she must possess a
responsive sense of empathy for the views of various stakeholders. In his
experience, once a person gets into a leadership role, there are forces that
cause his or her emotional intelligence or sense of empathy to shrink. This
poses a real and hidden challenge to the leader, a challenge for which he or
she is unprepared. The power of a leader ‘damages’ his / her brain. This damage
cannot be totally avoided, but its pernicious effects can be mitigated.

 

He then goes on
to examine why power causes this kind of brain damage. He asks: What brings out
the best in a person? Perhaps a need to challenge one’s capability? He opines:
When leaders feel that their intelligence is being tested rather than being merely
incentivised through money, their motivation is triggered. Money helps, but
ambition is aroused by internal drives and challenges. This is what people in
leadership positions experience when they assume a bigger responsibility.

 

The author
further observes that power causes a significant behavioural change in leaders.
Leaders tend to be self assured; but they need to be so if they have to lead
their people; however, the line that divides self-assuredness and
over-confidence is a thin one. The leader’s confidence can be rooted in logic
and data, or it can be rooted in feelings and emotions. If his / her confidence
is based on the best available data, then the leader comes across as authentic.
This is a positive form of self-confidence. If the leader’s confidence is not
data-based, he / she may seem impetuous or someone who is not rooted in
reality. This is a negative form of self-confidence.

 

How and why
does power damage the leader’s brain? What happens in cases of behavioural
change? Does the person change because of power, or because of being placed in
a radically different context? Or is it that the people around view him / her
through a separate set of lenses? The author puts it simply, and shorn of
jargon – that leaders loose a bit of their emotional capacities, those very
emotional capacities that were essential to their rise. That holding power
changes the way they process their world. They became impulsive, less
risk-aware and less adept at seeing things from other people’s perspective. In
other words, power blinds the leader to others’ perspectives, power turns the
leader into an abstract thinker, power leads to unrealistic optimism about
goals and power leads to the view of the world in terms of goals already set.

 

Mr.
Gopalakrishnan concludes
that power intoxicates and it impairs human judgement: in short, the
acquisition of power causes ‘brain damage’. Every leader, whether in politics,
in society or business, is vulnerable to this danger. Several leaders learn to
cope with the inevitable threats and dangers, but many fail. They become
victims of the affliction.

 

Thus, in Part
One of the book the author examines the above questions and issues on the basis
of his extensive study of the available literature on the subject, and his long
years in business in leadership positions.

 

Part Two of the
book, divided into 15 chapters, tells similar stories of various well-known
business leaders, such as Carly Fiorina at HP; Jamie Dimon at JPMorgan Chase;
Vikram Pandit at Citigroup; John R. Walter at AT&T; Lee Iacocca and Mark
Fields at Ford Motors; Michael Ovitz at Walt Disney Company; G. Richard Thoman
at Xerox; Jim Donald at Starbucks; Travis Kalanick at Uber; Chris Viehbacher at
Sanofi; Ramesh Sarin at Voltas India; Klaus Kleinfeld at Arconic; Anshu Jain at
Deutsche Bank; and Vishal Sikka at Infosys.

In the
Epilogue, the author quotes Thomas Middelhoff, a top-notch, famous executive in
Germany, CEO of the German media giant Bertelsmann, later found guilty of
misusing corporate funds and sentenced to three years in jail on charges of
embezzlement and related tax frauds. After his release from jail and in an
interview to Financial Times in May, 2018 he said, “I was out of touch
with reality and thought that certain rules did not apply to me.

 

Ability brings
you to the top, but character keeps you there”. He admitted that a key flaw in
his character was constantly craving public attention and affirmation. Over the
years, he felt that he had been carried away by narcissism and hedonism.

 

The book is
based on the author’s extensive study and research on the subject, which is
borne out by the copious notes at the end of the book running into about 30
pages wherein he has given references to all his sources.

 

Filled with
anecdotes and analysis of various situations CEOs may find themselves in, and
unconventional advice to help them, Crash: Lessons from the Entry and Exit
of CEOs is for veteran leaders as well as for those who aspire to start
their own ventures. The book is useful not only to CEOs and other senior
management executives, but also to every person who is running even a small or
medium-sized organisation.

BOOK REVIEW

“CRASH –
Lessons from the entry and exit of CEOs” by Shri R. Gopalkrishnan

 

Shri R. Gopalkrishnan is a
well known Corporate Leader and Management Author and Advisor and needs no
Introduction. However, a few words of Introduction will be useful to a Young
reader.

 

He studied physics at
University of Kolkata, Engineering at IIT Kharagpur. He has attended advanced
Management Program at Harvard Business School. He has served as the Chairman of
“Unilever Arabia, M.D. of Brooke Bond Lipton, Vice Chairman of Hindustan Lever,
and as the Executive Director of Tata Sons and several Tata Group Companies.
Presently, he is a Corporate Advisor. He is actively engaged in both
Instructional and Inspirational Speaking. He is the author of bestselling books
such as The Case of the Bonsai Manager, When the Penny Drops: Learning
What’s Not Taught, and A Biography of Innovations: From Birth to Maturity.

 

While many people talk
about the path to the top of organisations, very few are honest about how
difficult it is to stay at that position. Shri R. Gopalakrishnan
analyses the ‘software’ challenges, which leaders confront every day, and
shares the insights he has gained developing, managing, investing in and
supervising a variety of companies. The author shows that great leaders
continue to excel not just because of their skills and intelligence but also by
connecting with others using emotional competencies like empathy and
self-awareness.

 

The book is divided into 2
parts- Part One has 5 chapters and Part 2 has 15 Chapters.

 

In part One of the book,
the Author explores many pertinent questions: Is company performance a
surrogate for leadership and CEO Performance? If a company falters, is it
purely related to CEO performance? Conversely, if a company does well, is it a
definite credit to the leader?

 

The Author observes that to
be successful, a CEO requires cognitive intelligence as well as an intuitive
emotional intelligence – which means he or she must have a responsive sense of
empathy for the views of various stakeholders. In his experience, once a person
gets into a leadership role, there are forces that cause his or her emotional
intelligence or sense of empathy to shrink, This poses the real and hidden
challenge to the leader, a challenge he or she is unprepared for. The power of
a leader damages his/her brain. The damage cannot be totally avoided, but its
pernicious effects can be mitigated.

 

The Author then goes to
examine why power causes brain damage. He examines: What brings out the
best in a person? Perhaps a need to challenge one’s capability? He
opines: when leaders feel that their intelligence is being tested rather than
being merely incentivised through money their motivation is triggered. Money
helps, but ambition is aroused of internal drives and challenges. This is what
people in Leadership positions experience when they assume a bigger
responsibility.

 

The Author observes that
power causes a significant behavioural change in leaders. Leaders tend to be
self assured, they need to be so if they have to lead their people and the line
that divides self-assuredness and over confidence is a thin one. The leader’s
confidence can be rooted in logic and data, or it can be rooted in feelings and
emotions. If his /her confidence is based on the best available data, then the
leader comes across as authentic. It is a positive form of self confidence. If
the leader’s confidence is not data based, the leader may seem impetuous or
someone who is not rooted in reality. This is negative form of self confidence.

 

The author
goes on to examine how and why power damages the leader’s brain. What happens
in cases of behavioural change? Does the person change because of power or
because of being placed in a radically different context? Or do the people
around the new leader view him/her through a separate set of lenses?
The Author puts it simply, and shorn of jargon, that Leaders loose a bit of
their emotional capacities, those very emotional capacities that were essential
to their rise. That holding power change the way leaders process their world.
They became impulsive, less risk–aware and less adept at seeing things from
other people’s perspective. That power blinds the leader to others’
perspectives, power turned the leader into an abstract thinker, power leads to
unrealistic optimism about goals and power leads to the view of the world in
terms of goals already set.

 

The Author concludes that
power intoxicates and it impairs human judgement-in short the acquisition of
power causes brain damage. Every leader whether in politics or society or
business is vulnerable to this danger. Several leaders learn to cope with the
inevitable threats and dangers, but many fail. They become victims of
the affliction.

 

Thus, in Part One of the
Book the Author examines the above questions and issues on the basis of his
extensive study and review of the available literature on the subject, and his
long years in business in leadership positions.



In part Two of the book,
divided into 15 chapters, it tells similar stories of various well known
business leaders who exited from their CEO positions for one reason or
another : Carly Fiorina HP at HP, Jamie Dimon at Citibank, Vikram Pandit at
Citigroup, John R. Walter at AT&T, Lee Iacocca & Mark Fields at Ford
Motors, Michael Ovitz at Walt Disney Company, G.Richard Thoman at Xerox, Jim
Donald at Starbucks, Travis Kalanick at Uber, Chris Viehbacher at Sanofi,
Ramesh Sarin at Voltas India, Klaus Kleinfeld at Arconic, Anshu Jain at
Deutsche Bank, Vishal Sikka at Infosys. It is pertinent to note that none of
the aforesaid leaders had to exit either due to moral turpitude or financial
misdemeanour.

 

The Author narrates an
incident involving a heated exchange between J.R.D. Tata and a Senior Director,
A.D. Shroff, who sent his resignation from the Tata Group. The matter was
patched up by J.R.D with a great sense of egalitarianism and humility,
in his letter to A.D. Shroff, dated 23.08.1951:

 

“I was surprised and
upset at receiving your letter. I do not remember exactly the words I used
during the somewhat heated exchange at the agents’ meeting but my complaint to
you was merely that an argument you used to score a debating point over me was
not an honest one. That is surely a far cry from questioning your honesty and I
am surprised that you interpreted it in that way.

 

You have a
right to resent my speaking angrily or showing your discourtesy as a result,
and for that I sincerely apologize, but if friends and associates decided to
part every time they had an argument, life would become
very difficult.”

 

In the
Epilogue, the Author quotes Thomas Middelhoff, a top–notch and famous executive
in Germany, CEO of the German media giant- Bertelsmann, later on found guilty
of misusing corporate funds and sentenced to 3 years in jail on charges of
embezzlement and related tax frauds, after his release from the jail from an
interview by Financial Times in May 2018, “I was out of touch with reality and
thought that certain rules did not apply to me. Ability brings you to the
top, but character keeps you there.” He admitted that a key flaw in his
character was constantly craving public attention and affirmation. Over the
years, he felt that he had been carried away by narcissism and hedonism.

 

The book is based on the
Author’s extensively study and research on the subject, which is borne out by
copious notes at the end of the book running in about 30 pages wherein he has
given references to all his sources.

 

Filled with anecdotes,
analysis of various situations CEOs may find themselves in and unconventional
advice to help them, Crash: Lessons from the Entry and Exit of CEOs
is for veteran leaders as well as for those who aspire to start their own
ventures. This book is useful not only to CEOs and other Senior Management
Executives but also to every person who is running even a small or medium size
Organisation.

 

BOOK REVIEW

‘PRINCIPLES’ – by Ray Dalio

 

Ray Dalio, one
of the world’s most successful investors and entrepreneurs, shares the
unconventional principles that he has developed, refined and used over the past
40 years to create unique results in both life and business – and which any
person or organisation can adopt to achieve their goals.

 

In 1975 he
founded an investment firm, Bridgewater Associates. Forty years later,
Bridgewater has made more money for its clients than any other hedge fund in
history and grown into the fifth most important private company in the US,
according to Fortune magazine. Dalio has been named in Time
magazine’s list of the 100 most influential people in the world. Along the way,
he discovered a set of unique principles that have led to Bridgewater’s
exceptionally effective culture, which he describes as ‘an idea meritocracy
that strives to achieve meaningful work and meaningful relationships through
radical transparency.’ It is these principles, and not anything special about
Dalio, that he believes are the reason behind his success.

 

In the book,
Dalio shares what he has learned over the course of his remarkable career. He
argues that life, management, economics and investing can all be systemised
into rules and understood like machines. The book has hundreds of practical
lessons built around his cornerstones of ‘radical truth’ and ‘radical
transparency’; these include the most effective ways for individuals and
organisations to make decisions, approach challenges and build strong teams. He
also describes the innovative tools the firm uses to bring an ‘idea
meritocracy’ to life, such as creating ‘baseball cards’ for all employees that
distil their strengths and weaknesses and employing computerised
decision-making systems to make believability-weighted decisions. While the
book brims with novel ideas for organisations and institutions, Principles
also offers a clear, straightforward approach to decision-making that Dalio
believes anyone can apply, no matter what they’re seeking to achieve.

 

Here, from a
man who has been called both ‘the Steve Jobs of investing’ and ‘the philosopher
king of the financial universe’ (CIO magazine), is a rare opportunity to
gain proven advice unlike anything you’ll find in the conventional business
press. He kicks off by explaining that ‘Good principles are effective ways of
dealing with reality’ and that ‘To learn my own, I spend a lot of time
reflecting.’

 

The book
consists of three parts. In the first, titled ‘Where I’m coming from’, Dalio
looks back at his career and the founding of Bridgewater. ‘Life Principles’ is
the name of the second part and covers Dalio’s approach to life’s challenges
and opportunities. And part three covers Dalio’s ‘Work Principles’.

 

Let me share my
key takeaways from Principles, starting with Dalio’s Life
Principles:

 

Embrace reality
and deal with it –
Dalio shares an important equation which in his view makes for a successful
life: Dreams + Reality + Determination = A Successful Life. For the
‘reality’ component of this equation to work, Dalio encourages readers to be
radically open-minded and radically transparent.

 

Pain +
Reflection = Progress
– One can see how someone like Dalio has gone through his own share of pain to
get to where he has reached.

 

Using the
5-step process to get what you want out of life – Start with having clear goals (step 1),
followed by identifying but not tolerating the problems that stand in
the way of your achieving those goals (step 2), then you accurately diagnose
the problems to get at their root causes (step 3), design plans that
will get you around them (step 4) and, finally, do what’s necessary to
push these designs through to results (step 5). Dalio depicts this as a
continuous process and readers can benefit from applying this model to achieve
their goals.

 

Understand
that people are wired very differently – Dalio stresses the fact that all people are
wired differently and zooms in on the differences between left and
right-brained thinking.

 

Dalio’s Work
Principles are dominated by the concept of an Idea Meritocracy –
i.e., a system that brings together smart, independent thinkers and has them
productively disagree to come up with the best possible collective thinking and
resolve their disagreements in a believability-weighted way. He successfully
implemented an ‘Idea Meritocracy’ at Bridgewater and shares the components of
such a system in his book:

 

Idea
Meritocracy = Radical Truth + Radical Transparency + Believability – Weighted
Decision-Making

 

Radical
Truth – Talking openly
about our issues and have paths for working through them.

 

Radical Transparency – Giving everyone the ability to see
everything. Radical transparency reduces harmful office politics and the risks
of bad behaviour because bad behaviour is more likely to take place behind
closed doors than out in the open.

 

Believability – Dalio defines believable people as
‘those who have repeatedly and successfully accomplished the thing in question
– who have a strong track record with at least three successes – and have great
explanations of their approach when probed.’

 

Thoughtful
Disagreement – The
concept of Believability is closely linked to the art of Thoughtful
Disagreement; the process of having a quality back-and-forth in an open-minded
and assertive way to see things through each other’s eyes.

 

Weighted
Decision-Making – At
Bridgewater, employees have different believability weightings for
different qualities, like expertise in a particular subject, creativity,
ability to synthesise, etc. Dalio explains that in order to have a true Idea
Meritocracy one needs to understand the merit of each person’s ideas.

 

Prerequisites
for an Idea Meritocracy
– To have an Idea Meritocracy three conditions need to be in place.
Firstly, put your honest thoughts on the table. Secondly, have thoughtful
disagreement. Thirdly, abide by agreed-upon ways of getting past disagreement.

 

Mistakes are
part of the game –
Dalio has a refreshing outlook on the role and value of mistakes, which he
treats as ‘a natural part of the evolutionary process’. It’s important in this
respect to assess whether people recognise and learn from their mistakes. Dalio
distinguishes between people who make mistakes and who are self-reflective and
open to learning from their mistakes, and those who are unable to embrace their
mistakes and learn from them.

 

Get people
to focus on problems and outcomes – Assign people the job of perceiving problems, give them time to
investigate and make sure they have independent reporting lines so that they
can convey problems without any fear of recrimination. To perceive problems,
compare how the outcomes are lining up with your goals. Dalio also offers some
valuable tips on how to best diagnose problems.

 

Avoid the
‘Frog in the boiling water’ syndrome – Apparently, if you throw a frog into a pot of
boiling water it will jump out immediately, but if you put it in water at room
temperature and gradually bring it to a boil, it will stay in the pot until it
dies. If one uses this syndrome as a metaphor for professional life, it
signifies people’s tendency to slowly get used to unacceptable things that would
shock them if they see them with fresh eyes.

 

Don’t just
pay attention to your job – Instead, pay attention to how your job will be done if you’re no
longer around. Dalio talks about the ‘ninja manager’ as ‘somebody who can sit
back and watch beauty happen, i.e., an orchestrator. If you’re always trying to
hire somebody who’s as good as or better than you at your job, that will both
free you up to go on to other things and build your succession pipeline.’

 

I feel that
Dalio’s principles can provide great direction for all people working in
organisations big or small. His reflections on things such as transparency and
decision-making will be valuable to anyone reading this great book.

 

The book is
aesthetically beautiful in the design and typography, making it a real treat to
read. I really appreciate the biography section of the book that solely focuses
on Ray Dalio’s life and journey towards where he is today. It offers you a
brief insight into what made him the person he is today. Even very humbling experiences,
such as being the only person left in the company that he built and having to
start all over again.

 

In Principles: Life and Work,
Dalio shares the principles that have led to his success. Told with honesty and
enlightening examples, Principles is a fascinating look at how
Dalio has created the largest and most successful hedge fund in the world. You
need only read the first few pages to discover the uniqueness of his approach;
he encourages readers to doubt everything, suggesting that radical open-mindedness
is the best way to learn.

Book Review

Title: Bond to Baba – Successful
Strategies

Author: Ninad Karpe, Chartered Accountant


James Bond, Formula 1 racing, Alexander the Great and Baba Ramdev – what do
these have in common? If I were asked this question two weeks ago, I would
admit that I don’t see anything in common. If, however, I were asked this
question today, I would say ‘Strategy lessons for business’. Bond to Baba is
the latest book on business strategy by Ninad Karpe, who is a Chartered
Accountant and has led Aptech, one of India’s largest education
companies.

 

Before you frown on the subject of ‘business
strategy’ due to its perception as a subject meant exclusively for thinkers,
senior executives and management gurus; Bond to Baba is one book that has
simplified strategy to make sense to a 12 year – old while exploring enough
depth to add value to a seasoned business executive. The book addresses success
stories from films, sports, history and politics; explores the causes of
success in each of these stories, bridges it to what businesses can learn from
them and summarises them into timeless lessons for business.

 

Bond to Baba has been published in 2018 by Popular
Prakashan, one of India’s leading publication houses, and retails at INR
250. It is also available on Amazon in paperback and Kindle editions. As of
August 2018, this book has been rated 4.5 out of 5 stars by more than 66
reviewers and has swiftly made its way to the list of ‘Memorable business books
of 2018’ by Amazon.

 

The book begins with exploring the James
Bond movies and the factors that have caused the franchise to appeal to
generation after generation. If you think you are a Bond fanatic, think twice!
Ninad has picked up a surgeon’s knife to analyse scenes from Bond movies in
minute detail and linked them to lessons for business. He addresses how the
James Bond brand has been reinvented and represented through the past decades
to keep it updated to evolving expectations of the audience. I am browsing
through Netflix archives as I type this to watch Spectre and Skyfall once again
to experience Ninad’s observations.

 

The book then moves on to explore what
businesses can learn from Formula 1 races. Ninad is a Formula 1 enthusiast for
more that 20 years and amalgamates his depth in the sport as well as business
to produce business lessons. He explains that businesses can learn about
agility, efficiency and exploiting data from Formula 1. “If it takes less than
two seconds for a (pit stop) crew to change four tyres, can we justify a delay
beyond 24 hours in responding to an email?” This is a statement in the book
which is worth pasting on the walls of every office in the world.

 

The book has also elucidated lessons from
history which can be applied even in a contemporary business scenario. The
description of the Battle of Gaugamela, where Alexander’s forces go head to
head with King Darius, was so picturesque that I was transported to that
battlefield in 331 BC and forgot that I was reading a book on business
strategy. In this section, the reader learns that the right strategy, agility
and understanding the opponent can help win the war even with a deficiency in
resources.

 

Ninad has sought inspiration for this book
not just in James Bond, but also in movies like Bahubali and Sairat. In fact,
the lessons that this book presents from these moves are analogous but yet, in
sync. Bahubali can teach businesses to think big, quite literally; while Sairat
can teach businesses to think local. A large vision and local thinking are both
sine-qua-non for any business to flourish in the long run.

 

The book educates the reader about the art
of brand extension by exploring the story of none other than Baba Ramdev. He
maintains that companies must be clear about and enhance their core competency
which is yoga for Baba Ramdev while high quality beverages is the core
competency of Starbucks. This section deliberates on other tools like high
visibility and brand extension that helped Baba Ramdev and his pet company,
Patanjali touch revenues of INR 105,610 million.

 

After business lessons from movies, sports,
food, history, and godmen; perhaps the only gamut remaining untouched was
business lessons from politics. The readers will not be disappointed to find
that the book also dwells on the political stints of Hardik Patel and Arvind
Kejriwal. Ninad explains how Hardik did not evolve his strategy as he gained
more political mileage and hence faded into oblivion not soon after he rose.
Through Arvind Kejriwal’s rapid rise to popularity, he explains the important
and forgotten essence of simplicity. By focussing on something as simple and
relatable as ‘corruption’, Kejriwal could swing the masses in his favour and go
on to become the Chief Minister of Delhi.

 

I enjoyed the classic and contemporary
examples and every section provoked me to think how it is linked to business
lessons and strategy. As a reader, I was also looking forward to the author’s
experience in applying these business lessons in his professional life owing to
his rich experience of running an international company. I am hopeful that the
readers will have the opportunity to read about them in one of his future
books. This book, meanwhile, can be described as a fun to read, informative
document which will leave you thinking long after you have devoured it and
parked it on your shelf.

 

Today, books don’t command the monopoly they
once did for being the only sources of knowledge. They face competition for
attention from videos, audiobooks, podcasts and high quality blogs. Bond to
Baba delivers content in bite sized capsules with the right blend of stories
and analysis. It avoids unnecessary management jargon or excess beating around
the bush. In these aspects, it is one of the easiest to read books I have come
across and the kind of book we need today.  

 

Book Review

Title: Indian Taxation Decoded – An MNC
perspective

Author: Ketan Dalal, Chartered Accountant

 

Of late, newer business models have been
transforming conventional ones and increasing industry competitiveness, while
digital economy has taken over traditional brick and mortar enterprises. India,
along with the other emerging markets, is at the centre stage of this
disruption.

 

With the Indian government’s focus on
reforms through schemes such as ‘Ease of Doing Business’ and ‘Make in India’,
and FDI liberalisation (including in retail), the country is becoming an even
more important investment destination for global MNCs.The traditional image of
India is changing from that of a cost saving location (cheap processing and
outsourcing work) to that of a digital technology hub.

 

The government’s efforts to convert the
informal sector into formal, through regulatory and tax reforms have been noted
and recognised by the international business community and various fora.

 

In such a scenario, it is important for tax
professionals dealing with MNCs to be well versed with various tax and
regulatory issues in India. A lot of material is available on the said topic,
but it is spread out and not inter-linked. This book, titled “Indian Taxation
Decoded – An MNC perspective” by Ketan Dalal, is a welcome guide on the topic
providing a comprehensive framework of tax and regulatory aspects, laid out
briefly and yet methodically.

 

The book covers tax and regulatory aspects
for MNCs operating in India under the following chapters:


1.   Chapters I to IV – Introduction,
Residential Status, Taxation of foreign companies, India’s Treaty Network &
Key issues

The chapters cover
the basics of taxation (encompassing residential status, various heads of
income, India’s tax landscape, determining the residential status, presumptive
tax regimes, GAAR etc.) which could be a helpful read for an individual with
limited understanding of MNC taxation issues. These chapters contain the key
issues, setting the tone to what follows in the book.

 

2.   Chapters V & VI – Business Connection,
Permanent Establishment, Business income, Royalty and FTS

 

The key issues for an MNC operating in India
revolve around the aforesaid topics. The chapters discuss the concepts in
detail covering the relevant landmark and recent judgements, the tax
implications, quantum of taxability (i.e. attribution of income) etc. The
impact of changing business models on taxability as Royalty and FTS, has also
been touched upon.

 

3.   Chapter VII – Transfer Pricing – The India
Landscape

 

While some
parts of Transfer Pricing implications are covered in other chapters, this
portion covers the basics of Transfer Pricing regulations in India, spanning
from adoption of the regulations in India, definition of ‘international
transaction’ and ‘associated enterprises’, the various methods prescribed for a
benchmarking analysis and determination of the most appropriate method. The
chapter goes on to throw light on the concept of Specified Domestic
Transactions, Dispute Resolution Mechanism. The chapter endeavours to also
cover the more recent topic of OECD Base Erosion and Profit Shifting (BEPS)
Action Plan (AP) 13. The chapter also covers some landmark rulings and judicial
precedents, which are good to have in hand for any new reader.

 

The chapter starts at the very basic and
gradually builds up to give the reader an all-encompassing synopsis of the
Transfer Pricing environment in India.

 

4.   Chapters VIII & IX – Taxation of
Expatriates and Foreign-Held Domestic Entities

 

With a significant increase in movement of
human capital in and out of India, the topic has greater significance in
today’s times. The chapter provides a detailed commentary on various tax
provisions impacting the inbound and outbound expatriates as well as the
employer.

 

The chapter on foreign held entities deals
with tax and regulatory issues impacting corporates and LLPs of foreign MNCs in
India. The chapter is broadly divided into (i) Tax regime for domestic entities
(ii) Computation of taxable income (including general and specific deductions
available, thin capitalisation rules, ICDS, etc.) and (iii) Tax rates.

 

5.   Chapter X – Mergers and Acquisitions

 

With an increase in
M&A activity, this chapter covers the key tax and regulatory provisions
impacting the said activity (encapsulating Mergers, Demergers, Share
acquisitions, Business acquisitions) of MNCs in India. The fact that this
covers cross border MnA as also by the Indian arms of MNCs makes it
particularly useful.

 

6.   Chapter XI – Sectoral Issues

 

In this chapter,
the author has discussed direct tax aspects involving certain nuances and
peculiarities relevant for sectors such as Shipping, Aviation, Media and
Entertainment, BPOs and KPOs, E-commerce, Infrastructure and Financial
services.

 

7.   Chapters XII & XIII – Procedures and
Compliances, Non-tax Regulations

 

The chapters
encapsulate the procedures and compliances as laid down in income-tax law and
cover certain relevant non-tax laws (such as Companies Act, LLP Act, SEBI Act,
Stamp duty regulations, FEMA and the Competition Act) which may be relevant for
a preliminary understanding by the personnel of an MNC operating/ looking to
setting up operations in India.



8.   Chapter XIV – Tax Management in India

 

The chapter covers
the practical aspects from a tax and regulatory perspective that an MNC should
take cognisance of, while operating in India. This chapter throws light on
certain softer nuances of business, such as practical issues of facing tax
litigation in India, beefing up an in-house tax team and the considerations to
be paid heed to, while choosing a tax advisor for the MNC.

 

9.   Chapter XV – Goods and Services Tax

 

The chapter covers
the basic provisions of the newly introduced GST law from the perspective of
MNCs and their India presence, at a broad and conceptual level.

 

Holistically, the book helps provide an
understanding of all tax and related laws from a bird’s eye view. By
interlinking the various tax and regulatory provisions impacting an MNC in
India, the book offers a fresh perspective of tax and regulatory issues in
India from an MNC standpoint.

 

The summary provided at the beginning of
each chapter and the key takeaways at the end of each chapter explain the
content of the topic in brief. The Appendices provided by the author are
reader-friendly and helpful for references at any point of time. What makes the
book truly unique from what otherwise is available in the market, is the
summary coverage of pertinent rulings, relevant to the topics covered. However,
certain repetitions of topics / judgements could have been avoided by the
author or covered in a focused manner. Having said this, the book serves as a
one-stop reference guide for anyone, whether with a well-read tax background or
not, who would like to get an understanding of dealing with MNCs’ tax and
regulatory issues in India. The book would serve as a ready reckoner to
students as well.


The author, who has vast and long experience
in this field, has dedicated the book to his father, thanking the latter for
“giving me the wings to fly”. The book probably just does the same, to someone
who wants to understand the complex world of the Indian tax regimen in a
simplified and lucid manner.  

 




BOOK REVIEW

“Democracy
on the Road – A 25-Year Journey Through India” by Ruchir Sharma

 

Ruchir
Sharma is the head of the Emerging Markets Equity team at Morgan Stanley and is
responsible for managing
over $ 25 billion (as AUM or assets under management). He has been with the
firm for 19 years and
is currently a member of the executive committee of Morgan’s investment
management division.

 

The
World Economic Forum in Davos selected him as one of the world’s “Top Young
Leaders” in 2007. In 2012,he
was named one of the top global thinkers by Foreign Policy magazine. And
Bloomberg said in 2015 that he was one
of the “Top 50 Most Influential” people in the world.

Ruchir Sharma has been
writing for many years, drawing on
his travels as a global investor. He typically spends one week every month in a
different emerging market where he meets
leading CEOs and top politicians, among others. He writes for the New York
Times, Foreign Affairs, The Wall Street
Journal, Financial Times and The Times
of India.

 

His
first two books, Breakout Nations (2012) and The Rise and
Fall of Nations (2016), were both international bestsellers.

 

Passionate
about politics, he is part of an informal group of senior editors and writers
who travel extensively before major
state and national elections; logging over 1,000 miles in 4 to 5 days, they
meet with the nation’s top leaders
to get a first-hand feel of local politics. At times this group calls itself
the “limousine (or Cadillac) liberals”.

 

In
Democracy on the Road, Ruchir takes readers along on his travels
through India. On the eve of the landmark 2019
election, he offers an unrivalled portrait of how India and its democracy work,
drawing from two decades on the
road, chasing election campaigns across every major state, travelling the
equivalent of a lap around the earth. Democracy takes
readers on a rollicking ride with this merry band of scribes as they talk to
farmers, shopkeepers and
CEOs from Rajasthan to Tamil Nadu and interview leaders from Narendra Modi to
Rahul Gandhi.

 

Few
books have traced the arc of modern India by taking readers so close to the
action. Offering an intimate glimpse into
the lives and minds of India’s political giants and its people, he explains how
the complex forces of family, caste and community, economics and development, money
and corruption, Bollywood and godmen have conspired to elect and topple leaders
since Indira Gandhi. The most encouraging message from his travels is that while
democracy is retreating in many parts of the world, it is thriving in India.

 

The
book is divided into 6 parts and 40 chapters. Starting from his childhood and
student days, it provides a
ringside view of Indian elections from 1998 onwards. The concluding part, “Back
in Balance”, deals with the current
political situation in which Ruchir summarises his observations, offers his
conclusions and shares the
wisdom gained from a close assessment of Indian elections as an international
investor.

 

Here
are some nuggets from the cauldron of Indian electoral politics:

  •  “The odds are
    against Indian politicians holding on to their offices. In theory, the seated
    government has big     advantages,
    starting with the fund-raising capacity to meet the ever-growing expenses
    involved in fighting an     election.
    It can dole out favours and contracts…”
  •  “Yet,
    incumbents don’t usually win, challengers do. Voters, though glad to pocket
    expensive campaign gifts,     still
    vote their own minds.”

  •  “Ultimately,
    power resides not with the candidates or their moneybags but with the Indian
    voter.”
  •  “Small shifts
    in the vote, or the allegiance of one small alliance partner, can make or break
    state or national     governments.
    It all looks like a recipe for instability.”

  •  “But minority
    governments, built on compromises among rival parties, are not a special
    problem of Indian     democracy.
    They are a standard feature of parliamentary democracy.”

  •  “A multi-party
    parliamentary democracy can produceserial political and economic crises, as in
    Italy, but also     long-term
    success, as in Germany.”

  •  “Have weak
    minority governments hurt India’s development? History suggests not. The
    economy limped along at the so-called ‘Hindu rate of growth’ under mostly
    strong Congress governments until the 1980s, then started to reform and pick up
    speed under the weak coalition governments that followed.”
  •  “India has so
    many parties because it has so many different communities, separated by caste,
    religion, tribe     or
    language and each one wants its own representative.”

  •  “While in some
    opinion polls Indians express a growing desire for a strong leader, unshackled
    from an     often
    gridlocked parliament, the electoral reality is that the country rebels against
    domineering political bosses.”

  •  “Ever since
    Indira Gandhi imposed the Emergency and fell in the backlash, no Prime Minister
    has been able     to
    gain political momentum without triggering fears that they were growing
    dangerously strong and inspiring the     fragmented
    opposition parties to unite…Modi may face a similar obstacle.”
  •  “Supporters
    praise Modi for raising India’s stature in the world. But more than once we
    have seen Indian     leaders
    lionised by the global elite from Mumbai to New York, only to be thrown out by
    the Indian voters who care     more
    about the government’s impact on their daily lives.”
  •  “Voters express
    impatience with the pace of progress and at unresponsive democracy, but not all
    take it out on     politicians
    with the same intensity.”

  •  “When do seated
    leaders buck the odds? While single factors such as high inflation, spiralling
    corruption     scandals,
    or a united opposition can bring down the incumbent, winning is more
    complicated;….to win,     political
    parties have to pass a series of tests.”
  •  “A shortlist
    culled from my years on the road would include tests of community, family,
    inflation, welfare,     development,
    corruption and money. They are not equally weighted. For all the social
    progress that India has made,     community
    identity is still the key to politics.”
  •  “Understanding
    the dynamics of caste and religion down to the local and personal level is the
    necessary     condition
    for winning, but it is often not sufficient.”

  •  “Family
    dynasties pervade our politics. Though it is bitterly critical of the Gandhi
    dynasty, the BJP has many     leaders
    with children active in politics.”

  •  “More and more
    single politicians are rising to power on the argument that freedom from family
    ties protects     them
    from the temptation to profit from office. The cultural winds suggest single
    candidates will maintain their     advantage
    going forward…”
  •  “The point is,
    there is no consistent formula: Candidates can pursue any mix of development
    and welfare models,     but…the
    elections will remain as unpredictable as a ‘cat on the wall, which way will it
    jump’?”

  •  “Alongside
    inflation, corruption is the other big incumbent killer, though it works in
    strange ways…one of     the
    supreme ironies of Indian politics is that corruption charges seem to hurt more
    than convictions.”

  •  “In other
    emerging countries politicians may come back after a jail term, but rarely does
    time in the lock-up     provide
    a career boost the way it does in India.”

  •  “Winning
    campaigns need to understand the ties that bind Indian voters to community and
    family, their     frustration
    with government and the slow pace of economic progress, the pain of rising
    prices, and their     sense
    of disgust with both corruption and the justice system…Often, challengers
    prevail by simply watching     the
    incumbent fail one or more of these tests.”

 

The
author concludes on a positive note. He opines that the bigger lesson is that
there are many reasons for optimism. India’s
political DNA is fundamentally socialist and statist. The same socialist DNA
runs through the veins of all the leading parties.
There is no real support for systematic free-market reform, either amongst the
voters or the political elite, and no sign
of what is generally considered good economics will ever become a consistent
election-winning strategy. The more powerful
a politician gets, the more voters expect, and the more frustrated they get
when those expectations are not met. India
does not grow as one economy, it grows as many, less like the United States
more like the European Union. It is less a
country than a continent, more diverse in its communities and languages than
Europe or the Middle East.

 

The
real strength of our democracy – both economic and political – lies in its
diversity. In no country are the community
and the family roots of political battles more complex or intense, or the
behind-the-scenes battles to build
winning alliances more fierce.

 

Finally,
Ruchir says the 2019 election is being cast as a nationwide showdown between
Modi and the rest, a referendum
on India’s appetite for a strong man’s rule and commitment to democracy…and
the outcome will depend on whether
the opposition parties work together to unseat him.

The 2019 ballot will offer
a choice between two different political
visions, one celebrating the reality of many Indias and the other aspiring to
build One India. Clearly, when democracy
is in retreat worldwide, it is thriving in India.

BOOK REVIEW

“Indian
Accounting Standards (Ind AS) – Interpretation, Issues & Practical
Application” by Dolphy D’Souza, Chartered Accountant

 

Many years ago
the author had published two small pocket-edition books on accounting
standards. From those days till now, we have seen the ever-widening scope of
accounting standards. These two volumes, and they are voluminous, contain
exhaustive guidance to help understand the principles and practices prescribed
by these ‘principle-based’ accounting standards. It goes without saying that
Ind AS has made accounting not just complex but also complicated and
treacherous.

 

The author has
been an eminent writer and contributor to the BCAJ on a monthly basis
for more than 16 years. He has been involved in the standard-setting process at
the ICAI as well as at the IASB. Hence his ‘word’, to be fair, carries both
weight and value.

 

Coming to the
book under review, it is structured to cover all Ind AS’s. Specifically, it
contains a special segment of about 350 pages on the new Ind AS 115/116. It
handles these with illustrations, examples, issues as well as the author’s
response and that, too, industry wise. A section that covers the
differentiation between IFRS and Ind AS is of particular academic interest
especially for first-time users. The book is replete with numerous
illustrations and examples. Some of the examples feature actual working cases
and solutions with comments.

 

Ind AS’s are
particularly complicated when one comes to Financial Instruments (FI). The book
devotes 250 pages to FIs. Business combination draws particular attention.
Charts, explanations of definitions, accounting, group re-organisation issues
and more offer the clarity that one seeks. The book also covers MAT aspects
under Ind AS.

 

The book
reproduces the text of both Ind AS and ICDS. A handy illustrative financial
statement blending Schedule III and Ind AS in the accompanying CD makes it
especially beneficial for preparers. The last part of the book consists of some
useful analytical articles on perennial themes such as acquisition date vs.
appointed date, demerger accounting, FAQ on PPE, consolidation of trusts, GST
accounting and more.

 

Although there
is enormous literature on IFRS and quite a bit on Ind AS, this book carries it
in two volumes and a CD loaded with practical resources. The author deserves a
pat on the back for writing on a subject which is in a constant state of flux
(changing, blurry and ephemeral). I am sure that this book, like Dolphy’s
previous works, will remain a handy tool for both practitioners and preparers.

BOOK REVIEW

“Advice & Dissent – My Life in Public Service” by Y.V.
Reddy

 

Dr. Y.V. Reddy is well
known as an economist and the 21st Governor of the Reserve Bank of
India (2003-08). In 2010, the President awarded India’s second highest civilian
honour, the Padma Vibhushan, to him. At present he is Honorary
Professor, Centre for Economic and Social Studies (CESS), Hyderabad. After
completing his M.A. in Economics from Madras University, he obtained a Ph.D.
from Osmania University, Hyderabad. Joining the Indian Administrative Service
in 1964, he rose to the position of Secretary (Banking) in the Ministry of
Finance in 1995. He moved to the Reserve Bank of India in 1996 as Deputy
Governor and then to the International Monetary Fund in 2002 as Executive
Director on the Board. He was also the Chairman of the 14th Finance
Commission of India.

 

Looking back at his long
career in public service, he says that he was firm and unafraid to speak his
mind but avoided open discord. He writes about decision-making at several
levels and gives an account of the debate and thinking behind some landmark
events and some remarkable initiatives of his own whose benefits reached the
man on the street.

 

Reading between the
lines, one recognises controversies on key policy decisions which reverberate
even now. The book provides a ringside view of the licence permit raj, drought,
bonded labour, draconian forex controls, the balance of payments crisis,
liberalisation, high finance and the emergence of India as a key player in the
global economy.

 

As RBI Governor from 2003
to 2008, he presided over a period of high growth-low inflation, a stable rupee
and ample foreign exchange reserves – a far cry from the 1991 crisis he lived
through and describes in vivid detail, when the country had to mortgage its
gold to meet its debt obligations. He is credited with saving the Indian
banking system from the sub-prime and liquidity crises of 2008 that erupted
shortly after his term at RBI ended. Dr Reddy provides insight into the
post-crisis reflection undertaken by several global institutions on the
international monetary system and the financial architecture. In addition, he
describes the preparation of the 14th Finance Commission report,
which he chaired, and which is considered a game changer.

 

During his time as RBI
Governor, his cautious approach to markets was often at loggerheads with the
eternal market optimism of Mr. P. Chidambaram. The author presents a
fascinating narrative of his last five years in government, covering the
foreign exchange crisis of 1991 and the liberalisation initiated by the late
Mr. P.V. Narasimha Rao. However, he does not seem to sense the concomitant rise
in economic crime, hawala dealings and export earnings falsifications.
He was an early supporter of gold import liberalisation.

 

In essence, he believed
that the RBI must always counter the Finance Minister’s large fiscal deficit
with a tight monetary policy so that the nation does not face inflation. The
tension between the FM and the RBI is eternal and systemic. No government has
yet won an election on promises or achievement of economic growth and sound
money. The political belief is that only economic populism can win elections.

 

Dr. Reddy’s crowning
achievement, of course, was keeping India out of the global financial storm of
2008. His correct reading of the global economic situation was aided by his
innate market scepticism and he was able to take early steps against the
overheating of the economy even in the face of political opposition. The nation
must remain ever grateful to him for this. However, his cautious approach to
markets was destined to face resistance from the eternal market optimism of Mr.
Chidambaram. After several cat-and-mouse encounters, the then FM and the
political class lost faith in him and denied him further extensions.

 

He offers explicit
counsel in his book:

(1) “Never compromise
long-term professional credibility while pursuing advocacy that the compulsions
of immediate circumstances demand.”

(2) “This idea of
drawing from various beliefs and ideologies and arriving at what appears to be
an appropriate solution to the context became the guiding principle for me.”

(3) “Respect for people
without reference to hierarchy.”

(4) Speaking a local
language introduced a level of informality and personal connect in discourse.

(5) Economists often
advocate the desirable. Bureaucrats focus on what is feasible. It is possible
to begin with the search for the desirable, then move towards the feasible,
while at the same time assessing the costs and benefits of the distance between
the two. This is a way of reconciling and balancing the feasible and desirable,
always keeping the desirable in view. Similarly, starting from international
best practices, one can assess how the Indian situation is different. The goal
should be to move towards policies that are tailored for our requirements while
being consistent with international best practices. Or, to put it another way,
match the international best practice, but in our context.

(6) At the end of the
day, a key to realising reform is to make the powerful feel the pain of the status quo.

 

POLICY LESSONS – Dr. Reddy offers a very useful primer for prudent
liberalisation of the external account for any country. Recognising and
establishing the hierarchy of capital flows is very important for ensuring
financial stability.

 

“Low inflation, low
non-performing assets of the banking sector, and low fiscal deficit are key to
fuller convertibility.” Again, he is quite right and hence, on this basis,
India is a long way off from capital account convertibility.

 

Further, Indian imports
are related more to the level of economic activity rather than the exchange
rate. Policy makers should make a note of this. A weaker exchange rate might
push up the import price without discouraging it and encouraging domestic
production.

 

India’s dalliance with
high growth rates has always ended in tears – in the Eighties, in the
mid-Nineties and between 2003 and 2008. Frankly, the economy is not ready. As
to why this is so, read his comments on the features of the Indian society and
economy mentioned earlier.

 

Dr. Reddy is rather forthright on the farm loan waiver that
the UPA government announced in 2007. He thinks it was against the financial
reforms. He felt that reform of the domestic banking system was a pre-condition
for liberalisation of the banking sector for foreign ownership.

 

Thanks to his experience at
the IMF and from his keen observations, he had become increasingly wary of
financial liberalisation and the role of international financial conglomerates.
It is not hard to imagine the sources of pressure that were brought to bear on
the Indian Finance Ministry.

 

Reform of the domestic banking system is an unfinished task
for him. He feels that several public sector banks did not come under the
Banking Regulation Act and hence RBI could not regulate them effectively. He
also did not want RBI nominees on the Board as it would mean conflict of
interest. His recommendations on the procedures for the appointment of members
to the Boards of Public Sector Banks and to the positions of Chief Executive
Officers have not been heeded by governments. Unfortunately, this is still the
case. The Bank Boards Bureau has been dormant and ineffective. Governance of
Indian public sector banking leaves a lot to be desired and yet, many still
want to preserve it as it is, without any reform!

 

ON CENTRAL BANK INDEPENDENCE – Government ownership of
the banking system is one of the reasons why he feels that the so-called
independence of the Central Bank is constrained. He dedicates several pages to
the subject, dividing it into three aspects: operational, policy and
structural:

  • Operational independence for the Central Bank:
    He favours it.

  • Policy matters: In consultation with the
    government.
  • Structural matters: In close coordination with
    the government.

 

He admits that he was
prepared to ‘irritate’ and ‘frustrate’ the sovereign but not defy it. As a
legal construct of the government, without a constitutional authority, he is
clear that RBI cannot be equal to its creator.

 

Dr. Reddy ends the book on a high note with a chapter on his
stewardship of the 14th Finance Commission. He points out that the
former President, Mr. Pranab Mukherjee, had praised him for addressing many
fundamental issues with his work on the Commission. That is quite an apt note
to end the book by a man who has indeed addressed many fundamental issues on
monetary policy, too – hierarchy of capital flows, capital account
liberalisation, financial sector liberalisation, etc.

 

Leavened with his irrepressible sense of humour,
“Advice
and Dissent” is a warm, engaging account of a life that
moves easily from a career in the districts as a young IAS officer to the
higher echelons of policy making, in a trajectory that follows the changes in
the country itself. To the reader’s delight, the narrative is interspersed with
often deeply ironic vignettes and humorous tales of encounters with the high
and mighty.

BOOK REVIEW

BRIDGITAL NATION: SOLVING TECHNOLOGY’S
PEOPLE PROBLEM – By N. Chandrasekaran and Roopa Purushothaman

 

The authors of this book are as
illustrious as they come. While Mr. N. Chandrasekaran is the Chairman of the
Board, Tata Sons Pvt. Ltd., Ms Roopa Purushothaman is Chief Economist and Head
of Policy Advocacy at the Tata Group.

 

Its theme is India @ 2030 and the
probable situation is best described as follows: India is among the top three
economies of the world. All Indians use advanced technology to do their work,
or to get their job done. All Indians have access to quality jobs, better
healthcare and skill-based education. Technology and human beings co-exist in a
mutually-beneficial ecosystem.

 

This reality is possible. It is within
reach. With Bridgital.

 

The book provides an interesting
perspective on what might be an effective means of tapping India’s vast
underutilised human resource base. It advocates three transformational
requirements, Technology, Talent and Vision as important
foundations to help solve people’s problems with major technological
transformation.

 

It is also an attempt to understand how
technology could help India navigate this crucial transition period. It is
apparent that there are two primary challenges that need urgent attention: Jobs
and access to vital services. Whether in education, healthcare, the
judiciary or any other field, the problems remain the same – both resources and
skilled people are scarce. And this is what holds India back from reaching its
full potential. The authors say these issues can be labelled India’s Twin
Challenges: Jobs and Access.

 

JOBS


India has a massive jobs challenge on
its hands. It is expected that 90 million people will come of working age
between 2020 and 2030. In other words, the number of Indians reaching working
age will be four times that of the US, Brazil and Indonesia combined. India’s
particular challenge is the existing levels of skill and education. For
example, only one in around 50 workers has any kind of formal vocational
training.

 

ACCESS

But jobs are only one half of the
problem. The other is a critical shortage of access to vital services. We may
not know it by name, but we are living witnesses to the access challenge – the
overcrowded classrooms and doctors’ waiting rooms; the legal cases that go on
for decades; and countless middlemen and agencies that help make sense of it
all.

 

The access challenge puts services such
as quality healthcare and education out of the reach of millions, a situation
that has arisen in large part because there aren’t enough qualified people.

 

Addressing this challenge will bear
fruit almost immediately. It will mean shorter wait times. It will mean faster
justice. It will mean better quality healthcare and education. It will make
people feel less like a crowd, more like they matter. It will improve the
quality of life.

 

According to the authors, the twin
challenges can be addressed with the help of two strategies to be
complemented with a Bridgital approach:

 

(1) Bringing women to the workforce
(the ‘XX’ factor)


The authors observe that in India a
woman’s path from education to work is often permanently interrupted – by
marriage, family wishes, children, societal pressures. According to the data,
nearly 120 million women in India have at least a secondary education but do
not participate in the workforce.

 

Women will form an important part of
the pool of Bridgital workers. What will it take to bring them to work?
Smart policies focused on childcare provision and parental leave, and promoting
attitudinal shifts in society around working women are good places to begin.
The last decade of experience and research has brought this opportunity to the
fore. India now needs to shift gears and understand better how to make paid
work available to and worthwhile for women. With a more balanced educational
profile, the country can address a key part of the skills gap it faces. For
this to happen, the access barriers to women’s employment need a serious
overhaul.

 

(2) Entrepreneurs everywhere:
Preparing the ground for thriving entrepreneurship throughout the country


Capturing India’s entrepreneurial
spirit means a transformation of vision away from the culture of
micro-management. The fact is that the country must embrace SME growth. Growth
will come not from pushing hard, but from removing the obstacles that confront
SMEs.

 

A certain level of judicious
risk-taking accompanies this growth mindset. SMEs require supervision, not
suspicion. Smart risk management doesn’t force more control, more rules and
more policies, but improves oversight of existing rules while simplifying them.

 

Entrepreneurship can flourish
everywhere through the development of Bridgital clusters that integrate
and extend a range of digital business services to which many SMEs lack access.
Bridgital clusters, coupled with greater use of digital governance to
transform the relationship between SMEs and the bureaucracy can positively
channel the entrepreneurial spirit inherent throughout the nation.

 

‘BRIDGITAL’
NATION


India needs a new approach that views Artificial
Intelligence (AI) and automation as a human aid, not a replacement for human
intervention. If this is done, automation in India will look nothing like
it does anywhere else and it is this approach that is called ‘Bridgital’.
By turning a challenge into an opportunity, by seeing India’s access
challenge as the engine of employment generation, it builds a
technology-based bridge between the dual parts of the Indian economy.

 

The authors very aptly suggest that
technology alone isn’t the answer; it has to be configured and adapted to the
demands of the situation. Bridgital works best when roles and services
are deconstructed and re-imagined and when the delivery of the tasks they
contain is redesigned.

 

In the Bridgital world,
technology does not disrupt an existing market as much as it creates an
entirely new one. When services are re-imagined through twenty first century
technological advances, an additional layer of workers emerges who can
intermediate both technology and existing resources for larger numbers of
people.

 

The authors again and again reiterate
that the future will be one of humans and technology working together. It’s
this future India will have to anticipate, design and prepare for, keeping its
young workforce, limited infrastructure and linguistic and cultural differences
in mind.

 

Bridgital provides the unprecedented ‘bridge’
between jobs and access, while the ‘XX’ factor and ‘Everywhere
Entrepreneurship’ bolster both sides of the scale, thus multiplying the impact
on jobs and access. India needs to solve the twin challenges for hundreds of
millions, but the beauty of a technology-driven approach is that scale can take
hold.

 

Bridgital will provide new opportunities to meet
the needs of small and medium businesses.

 

ROLE OF
EDUCATION


A combination of education and exposure
can improve awareness and acceptance of entrepreneurship as a viable career
path. The goal of entrepreneurship education isn’t simply to make it more
appealing, but to change the way the students think. The right curriculum can
improve non-academic skills such as creativity, persistence and teamwork and
can encourage comfort with risk-taking. These skills are crucial to success in
a future of work that is likely to be deeply entrepreneurial in spirit.

 

Entrepreneurship education is different
from core school subjects which are traditionally teacher-led and tested with
exams. With entrepreneurship education, the focus is not as much on learning
concepts as it is about building skills such as the ability to collaborate and
communicate. These skills cannot be taught and tested like core subjects but
can be developed through a learning-by-doing approach.

 

DATA PRIVACY


The authors recognise that data
privacy, the foundation of any Bridgital approach, is a necessity.
India is in the process of recognising individuals’ rights over their personal
data. As it does so, it needs to ensure that data can be accessed only by
people who are authorised to do so, but without stifling researchers who need
it. At the same time, India requires an authority that can provide redress for
unauthorised access to data.

 

To summarise, this book is a perfect
combination of an expert in technology sitting with an economist to write
digital solutions to India’s economic problems.

 

One felt, while
hearing the 2020 Budget speech of the Finance Minister, that she was deeply
impressed by the book, especially the boost to the concept of ‘entrepreneurs
everywhere’.

 

The book has narrated real-life
situations (with names changed) to show how digital solutions have successfully
tackled several challenges, such as the transformations at AIIMS and Kolar
which prove that the principles that underpin Bridgital can be applied
anywhere and by anyone, whether in the fields of agriculture, logistics, judiciary,
education or financial services.

 

Finally, let’s recall the Prime Minister’s statement while releasing the
book: ‘Technology is the bridge between aspiration and achievement. When
technology becomes a bridge, it leads to transparency and targeted delivery’.

 

BOOK REVIEW

HDFC BANK
2.0: FROM DAWN TO DIGITAL – By Tamal
Bandyopadhyay

 

Finally,
here is a book that narrates the transformation of HDFC Bank from a startup in
1994 to striding across the Indian banking sector like a colossus in a little
over two decades. The bank celebrated its twenty fifth anniversary in 2019.

 

Tamal
Bandyopadhyay is one of India’s most respected writers and columnists on
finance. He tells the exciting tale of how HDFC Bank has transformed itself
with its digital foray. It chronicles how India’s most valued lender faced its
toughest challenge of turning itself into a digital bank.

 

The author
has made it clear that his objective is not merely to write the bank’s history
but to tell the story of the making of a successful bank, born after economic
liberalisation and reinventing itself continuously to expand its reach and
remain ahead of the competition. It tells the story of HDFC Bank in the context
of the overall banking space in India, which has been changing dramatically
with new products, new ideas and technology and, of course, the pile of bad
loans that is forcing the industry to take a re-look at loan appraisal and risk
management. It is divided into three parts – The Digital Journey, The Flashback
and The Puri Legacy.

 

THE DIGITAL JOURNEY

The strategy
was to provide speed, use technology to do credit and risk management at scale,
improve the consumer experience and apply Artificial Intelligence (AI) to
massive amounts of data for prediction and decision-making. It could provide
far more convenience to customers and it was also believed that with full digitisation
the bank could reduce its operational costs. It was truly a win-win situation.
The digitisation drive has resulted in slashing of documents’ movement, saving
two million sheets of paper every month and shrinking the cost-to-earnings
ratio to 40% from 49% between 2012 and 2018.

 

The HDFC
Bank 2.0 journey began with MD Aditya Puri’s trip to California in September,
2014 to see the developments and innovations in technology and to understand
their impact. He came back convinced that his bank had to move fast and take
advantage of digital disruption. He had seen how the fintech companies, the new
kids on the tech block, were getting into fund transfers, mobile banking and
shopping. They could build products to give quick loans and provide a lot of convenience
and a slick user interface to customers on their phones. Aditya and HDFC
Bank decided that they would rather disrupt themselves than be disrupted.

 

It was also
important that the bank combined global trends in technology like smartphones,
AI, the cloud, etc. with the state-of-the-art infrastructure that India had
built as digital public goods – Aadhaar, e-KYC, Unified Payments Interface
(UPI) and other elements of the India stack.

 

This enabled
the bank to launch new products quickly that could be targeted across the
country, at both urban and rural customers. For example, the 10-second loan is
a genuine innovation based on the principle of ‘paperless, presence-less and
cashless’ banking. It is a great example of combining the traditional strength
of the bank in credit underwriting and risk management with the latest
technology. HDFC Bank has taken this innovative approach to car loans, loans
against securities, loans against mutual funds and, with increased data about
small businesses coming in after the implementation of the Goods and Services
Tax (GST), similar products could well be rolled out for small business lending
as well.

 

As a part of
digitisation, in 2015 the bank introduced a fully integrated marketplace
platform, an aggregator called SmartBuy, hosting links to various sites
catering to shopping, travel, etc., with 3,000 to 4,000 registered merchants.
The first bank in India to do so, HDFC Bank clocked Rs. 40 billion from this in
2018. Clearly, India’s most valued lender has been turning itself into a
digital bank not in a superficial manner but by driving fundamental change. All
this is taking place at warp speed – around 85% of all its transactions were
digital in 2018.

 

THE FLASHBACK

This part
deals with the making of the bank, viz. its conceptualisation, the team
building and the startup fervour of the initial days.

 

The idea of
floating a bank occurred to Mr. Deepak Parekh and the HDFC Board in 1987. The
starting point was to initiate non-mortgage opportunities for HDFC, then engage
in housing financing. In 1993, soon after the liberalisation of India’s economy
in 1991, the Reserve Bank of India issued guidelines on the entry of new
private banks. HDFC Bank was incorporated in August, 1994 and got the banking
licence in January, 1995 along with nine others such as ICICI, IDBI, UTI, Times
Bank, Centurion Bank, IndusInd Bank, etc. In February, 1995, Mr. Manmohan
Singh, the then Finance Minister, inaugurated HDFC Bank’s corporate office at
Worli.

 

Aditya
Puri, ex-Citibank, was appointed as CEO with his first 13 men, the lucky 13,
who shared the same vision of creating a bank with a difference and
believing that they would be working in the best bank in India. Most of
them, earlier with Citibank and Bank of America, left their lucrative positions
and global opportunities, took pay cuts for this vision and joined the startup
private bank. The first bank to give stock options to its employees, HDFC Bank
used this route to create a balance between short-term rewards and long-term
sustainable value creation. And the money did come their way as the bank and
the stock did phenomenally well. Aditya gave the lucky 13 the freedom to
bring their own people to the bank, people who would share the same dream and
passion. But he had one caveat – not too many people could be hired from
particular banks, as this would make it difficult for HDFC Bank to evolve its
own culture.

 

The book
contains many inside stories of the Natwest misadventure and the two mergers by
HDFC Bank, viz., Times Bank and Centurion Bank of Punjab, with all the minute
details.

 

The author,
with his rich experience in the banking space, makes two critical observations
worth mentioning:

1. When one gauges a bank, there are three key
things to look at – profitability, growth and stability. There is also the
critical component of trust. One associates the idea of a bank with
something one can trust – that ‘You can bank on somebody’.

2. Globally, banks have never failed because of
lack of technology, or great products or people. What the failed banks
really missed was risk management – they did not manage the risks well.
Herein comes the understanding of the risk-reward trade-off, or balancing of
business growth with the risk taken in delivering it.

 

THE PURI LEGACY

What makes Aditya, the longest-serving
Managing Director of any bank globally, different from his peers? The author
tries to analyse this by pointing out that Aditya, B.Com. and a qualified
Chartered Accountant, is a common-sense banker with a strong belief
that common sense and curiosity are far more important than anything else in
banking. One of the most remarkable things about him is his eye for detail. He
and HDFC Bank have been known for spotting trends and then executing plans with
lightning speed, scale and, yet, with proper risk controls. According to
Aditya, HDFC Bank is not a bank anymore but a financial experience.
Under his leadership, from a life-cycle bank, HDFC Bank is transforming itself
into a lifestyle bank.

 

He is good at maintaining
work-life balance by following a principle of doing extraordinary things in an
ordinary way. In spite of heading such a large institution he leaves office by
5.30 pm regularly and spends time with his family. He never delegates. He
empowers.

 

He has always been ahead of the
curve and had foreseen the digital banking revolution and knew a convergence
would happen and people would want everything on the phone. However, it is
pertinent to note that he does not use a mobile phone and email for himself!

 

Under his leadership, the bank
has shown that with an agile leadership which has foresight and flawless
execution at speed and scale, even a giant bank can take on the nimblest of
startups and become a pioneer and market leader. It is an object lesson on how
incumbents in many industries can respond to the digital disruption that is
staring at them.

 

The Puri
legacy is all about an institution which will continue to grow and go to the
next level with the same drive, value, ethos and culture, and with the same
consistency.

 

Book reviewer’s
notes

Mr. Deepak Parekh was never on
the Board of the bank despite being closely involved in creating it, including
lending the brand name ’HDFC’ at no cost! It can be said that it was his
conceptualisation, vision and leadership ability to give space to the CEO to
grow and develop.

 

The key lesson, both from the bank and the book, is
that freedom for professional managers, non-interference by the board and the
promoter, and a passion for success are more important than ownership.

BOOK REVIEW

I ‘INDIA 2030: THE RISE OF A RAJASIC NATION’ – Edited by Gautam Chikermane Reviewed by Riddhi Lalan, Chartered Accountant

The world, beset by uncertainties and crumbling under the weight of a global pandemic, has now ushered in a new decade with socio-economic disturbances, sluggish growth and global disorder. This new decade shall surely mark the resurgence of a new world order and the revamping of the old. India 2030: The Rise of a Rajasic Nation is a book to read if you are curious about what the next ten years might hold and how India can charter its course towards 2030.

In the words of Editor Gautam Chikermane, Vice-President of Observer Research Foundation, ‘In the 2020s, the world will look at India to provide inner stability in outer chaos. It will bring out and turn into action the collective journeys of 1.3 billion souls. It will create new civilizational-spiritual narratives. It will pour out and share its knowledge of the intellectual-philosophical traditions in ways not seen before, through mediums that are still evolving. All this it will do while becoming the world’s third largest economy, a regional power and a shaper of world events. This it will do in an era of constant Black Swan events.’

What is intriguing is the use of the term ‘Rajasic Nation’. In his introductory essay Gautam talks about how the nation has been under the pressure of tamas – inertia, inactivity and dullness – since the war of Kurukshetra. Independence and the surge of nationalism were expected to see the transformation from tamas to rajas – action, force and passion. As these transformations take time to gather momentum, he expounds that the last seven decades were a preparation for the domination of rajasic forces that the 2020s shall witness.

He has comprehensively woven together essays by Abhijit Iyer-Mitra, Ajay Shah, Amish Tripathi, Amrita Narlikar, Bibek Debroy, David Frawley, Devdip Ganguli, Justice B.N. Shrikrishna, Kirit Parikh, Manish Sabharwal, Monika Halan, Parth Shah, R.A. Mashelkar, Rajesh Parikh, Ram Madhav, Reuben Abraham, Samir Saran, Sandipan Deb and Vikram Sood into a single volume that looks towards the next decade leading to 2030, beautifully describing the nuances and complexities of various subjects ranging from health, politics, justice, defence, economy, education, intelligence, science and technology and foreign policy.

Keeping this thought in mind, this annotation could either be considered a book of ideas, a guide for citizens, a handbook for policy-makers, or simply a collection of essays. At first it may seem partly like crystal-gazing and partly a wish list; on a closer reading, it turns out to be a scientific and strategic estimation of the future based on an analysis of historical and current facts. While ten years is a long time frame to look at, especially in an era when tomorrow seems to be as different from today as one’s imagination allows, the extrapolation of the future based on the current patterns and trends makes for interesting reading.

The underlying theme of optimism and assertiveness that emerges from it does not distract the reader from the challenges that the nation must overcome in the next decade. This is evident in most of the essays.

The essay on health by Rajesh Parikh points out that the less sensationalised problems of lifestyle, climate change, pollution and existing infections have been killing us from long before the advent of the novel corona virus. He also describes the looming danger of bio-terrorism and anti-microbial resistance. According to him, Artificial Intelligence (AI) and nature’s wisdom will be the future of healthcare.

The essay on economy by Bibek Debroy shows how the existing policy, focusing on inequality rather than inequity and wealth redistribution rather than wealth creation, is flawed. He points out that the policy shall now shift to wealth creation to reduce inequity. While inequality will still exist, that does not matter as long as the absolute standard of living improves.

In his essay on justice, B.N. Shrikrishna touches on the collegium system which will change in the 2020s. He unabashedly points out that the justice system resembles a mansion in utter disrepair and stresses the need to focus on technology, educating citizens about enforcing their rights, further strengthening the independence of the judiciary, the rise of the written word against oral arguments and faith in fiat justitia ruat caelum.

Abhijit Iyer-Mitra, writing on defence, gives an interesting insight into the Balakot strike, highlighting the flaws of the current defence system. He has listed nine trends that will dominate the defence sector in the 2020s. These include a shift from offsets to work share, empowerment of Medium, Small and Micro Enterprises (MSMEs), privatisation and bifurcation of economic and security policy, among others.

Amrita Narlikar brilliantly brings out how the pandemic has taught certain nations that ‘weaponised inter-dependence’ is not just an academic theory. Emphasising the importance of India’s stubborn adherence to principles and values, she predicts that a new robust and deeper multilateralism shall replace the old one, based on a commitment to shared principles reinforced by India.

In his essay on energy, Kirit Parikh predicts three concurrent trends: a fall in energy intensity at the level of industries, increasing use at the household level and greater use of clean energy. Pointing out that the share of renewable energy is currently low, he postulates that India’s rising energy consumption will be cleaner, greener and more sustainable compared to that of the rest of the world.

Manish Sabharwal gives us a thought-provoking line: ‘The problem in India is not unemployment but employed poverty’. Predicting a shift towards productivity, he highlights the key areas that will bring the required change, viz., increased formalisation, urbanisation, industrialisation, better governance and higher skills. The problem, he believes, is that we have created corporate dwarfs which remain small instead of babies that can grow. This will change by 2030.

Amish Tripathi in his essay on soft power, calling out the downsides of consumerism and individualism, anticipates that India could be a strange confluence of both materialism and spiritualism. He highlights how the Indian spiritual path helps us to be liberal while still being traditional. India will become a source of soft power that is gentle, compassionate and inclusive. It will reset the new principles of global co-existence.

Each essay in this compilation highlights the importance of strong and exemplary policy formulation along with disciplined implementation of these policies. We, as citizens, play a role in influencing such policies and manifesting the collective rajasic force emerging within us, too. As overwhelming as it seems, this idea is thought-provoking. It is for this that the book is worth a read both for the common citizen and policy-maker alike.

‘Philosophers have described the world in thousands of ways. The point, however, is to change it.’ This Karl Marx quote referred to by Manish Sabharwal in his essay is an appropriate description of what this book is about. Thought leaders from twenty diverse fields attempt to describe what 2030 could look like for India. Together, they lay out a path for the nation’s evolution in the coming decade. The point, therefore, is the synchronised efforts of the citizens and the policy-makers to take forward this daunting yet adventurous journey towards 2030.

Only time will tell whether this is a book of mere wishful thinking, a collection of informed predictions for 2030, or a prophecy for 2030. To some readers it may seem tilted towards the right and exceedingly optimistic. However, this illuminating book gives positive vibes that there are better times ahead and a hope that India will emerge as a ‘Developmental Superpower’ even while grappling with constant internal disruptions and uncertainties. For someone interested in comprehensively understanding the implications of the historical and current trends in various subjects and influencing policy-making, this book makes a good read.

II ‘INDIAN ACCOUNTING STANDARDS (Ind AS) – Interpretation, Issues & Practical Application’ by Dolphy D’Souza, Chartered Accountant
Reviewed by Bhavik Jain, Chartered Accountant

Many years ago the author had published two small pocket-edition books on accounting standards. From those days to now, we have seen the ever-widening scope of accounting standards. These three volumes, and they are really voluminous, contain exhaustive guidance to help understand the principles and practices prescribed by these ‘principle-based’ accounting standards. It goes without saying that Ind AS has made accounting not just complex but also complicated and treacherous. This fifth edition containing 3,000 pages of analysis, including a third volume containing reference and application material, make a must-have compilation for preparers and auditors of financial statements.

The author has been an eminent writer and contributor to the BCAJ every month for more than 18 years. He has been involved in the standard-setting process at the ICAI as well as at the IASB. Hence his ‘word’, to be fair, carries both weight and value.

Coming to the book under review, it is structured to cover all Ind AS’s. Specifically, it exhaustively covers new Ind AS 115, 116 (more than 300 practical illustrations and examples each) and guidance on the new definition of business under Ind AS 103. It handles these with illustrations, examples, references to EAC opinions, ITFG/IFRIC interpretations, where necessary and issues as well as the author’s response and that, too, industry-wise. A section that covers the differentiation between IFRS and Ind AS is of particular academic interest especially for first-time users. The book is replete with numerous illustrations and examples. Some of the examples feature actual working cases and solutions with comments.

Ind AS’s are particularly complicated when one comes to Financial Instruments (FIs). The book devotes more than 600 pages to them. Business combination draws particular attention. Charts, explanations of definitions, accounting, group re-organisation issues and more offer the clarity that one seeks. The book also covers tax implications arising from Ind AS Accounting.

The book reproduces the text of both Ind AS and ICDS. It also gives significant changes made in the Draft ICDS on Real Estate Transactions vis-a-vis the Guidance Note on Real Estate Transactions issued by ICAI, making it handy for the Real Estate Sector. Electronic copy of the illustrative financial statement blending Schedule III and Ind AS makes it beneficial for preparers, especially during Work from Home / Remote Working situations. The last part of the book consists of some useful circulars / notifications on Ind AS issued by Securities and Exchange Board of India, related to Banking and Insurance Sector and Company Law such as the format of publishing financial results, formats for limited review / audit reports, clarification on ‘appointed date’ under the Companies Act, 2013 and more.

This book carries an enormous amount of content packed in three volumes with practical resources. The author once again deserves a pat on the back for writing on a subject which is in a constant state of flux (changing, blurry and ephemeral). I am sure that this book, like Dolphy’s previous works, will remain a handy tool for both practitioners and preparers.

BOOK REVIEW

BE BETTER BIT-BY-BIT
Author Nishith Goyal
Reviewed by Riddhi Lalan, Chartered Accountant

A journey of a thousand miles begins with one step – Lao Tzu. The beginning is significant but the journey is the determinant of success. But what to do if the journey tires you? What to do if it gets lonely? What to do if you face hurdles? Well, try reading Be Better Bit-by-Bit!

The author, Nishith Goyal, is a Chartered Accountant and a life-cum-self-transformation coach. In his book, he not only motivates the reader to begin the journey but also focuses on the consistency and constancy in the journey.

This self-help book has a very simple philosophy at its heart – small and consistent improvements. ‘This book is about breaking down the journey into bite-sized, chewable goals and actions’, claims Nishith. While introducing the philosophy behind his book, he has raised some thought-provoking questions and propositions. For a person like me who thinks that the adventure of life is in its randomness and in the unknown, this book may seem a little non-conformist. However, there was one self-realisation paragraph on not wanting to feel embarrassed that struck just the correct chord in me – ‘What are the five things that I did in the last twelve months of which I am proud? Every time the answer leaves me amazed at how clarity of thought can bring our goals close to us. My mind now is accustomed to this question and supports me every time I take on something new because my brain does not want to feel embarrassed when I answer this question.’

A practical guide to self-development, the book starts with a detailed insight into its philosophy which is inspired by the Japanese Kaizen meaning continuous improvements. The illustrative non-theoretical expounding of this philosophy filled with anecdotes is engaging. Many of us tend to avoid change by just making excuses. The Limbic System of our brain, or the Chimp brain which has been conditioned to fear change through our evolution, is the real reason for our resistance to change, says Nishith. He elaborates that the Chimp’s fear of failure is the reason for us not fighting the resistance to change. His ‘Bit-by-Bit’ philosophy attempts to precisely target such resistance. Baby steps towards change that may seem insignificant at the start, but by the power of compounding will significantly tantamount to a noticeable improvement. Well, die-hard Warren Buffet fans know how compounding multiplies wealth!

Want to run a marathon? Start with a fifteen minutes’ run daily. Wish to read 50 books? Target five to ten pages daily. Want to write a book? Start with writing two pages a day. Want to join the 5 a.m. club? Wake up 15 minutes before your normal waking time. Nishith advises that we start with small steps and do so consistently so that they do not overwhelm the Chimp brain. The author has supplemented the philosophical explanation of the importance of the extensively accepted tools of self-improvement – Self-Awareness, Mindfulness, Meditation, Reading, Journaling and Morning routines – with practical tips and exercises to imbibe each element in our daily routine. The art of journaling as a technique of self-awareness and self-development is a recurring theme of the book, and rightly so. Those who have read Jim Collins’s Great by Choice will be reminded of ‘the 20 miles march’ – staying on course on bad days and not over-exerting on good days.

Describing self-awareness as a lifetime journey, Nishith has enumerated certain prompts like answering questions on self, mind-mapping, journaling, mirror gaze technique, writing an obituary or eulogy for oneself, as also practising mindfulness through gratitude, breathing exercises, window-gazing, de-cluttering and the water exercise. He has elaborated on certain useful tips to make commuting less irksome and steps on having a productive morning routine which sets the tempo for the entire day. The scientific explanation on rapid eye movement (REM) and non-rapid eye movement (NREM) stages of sleep along with simple tips of sleeping better (quality, not quantity) was a revelation for me. While Nishith’s running journey is an inspiring story, only running as a self-development technique was lost on me. He mentions physical exercise in general but mainly focuses on running which disrupted the flow of the book for me.

Throughout the book, Nishith has drawn from his own life experience of taking baby steps towards a journey of self-improvement. His shift from normalcy towards being a marathon runner, balancing a full-time corporate job with life and self-transformation coaching, reading hundreds of books, writing articles and at the same time enjoying quality family time, is an inspiring story. This he has done, he mentions, by practising each of the elements of self-improvement consistently over a span of three years – every day, bit-by-bit.

Nishith’s love for reading and continuous efforts towards self-improvement are evident from the collation of ideas emanating from inspirations drawn from a large number of books that he has referred to in the bibliography. The 31 questions on self-awareness from The 5AM Revolution by Dan Luca; principles of mind mapping from Finding Your Element by Ken Robinson and Lou Aronica; the Seed Exercise as a self-awareness exercise and the Water Exercise as a mindfulness exercise from The Pilgrimage by Paulo Coelho; and tips to better sleeping from Sleep Smarter by Shawn Stevenson, amongst others, including articles on the Medium, these may be familiar to some readers. If one has already read a number of self-help books, this book may just seem a retelling. Since the core focus is on journaling and, more specifically, writing and reading, creative arts like drawing and painting as self-awareness activities remain largely unexplored.

Even then, while most self-help books seem imposing, Be Better Bit-by-Bit is a subtle imposition through a perfect blend of theory, life experiences and short stories, techniques, practical tips and actions. The simple language, backed by the author’s own trials, is comfortable and friendly to the mind. It is like a display of self-development techniques from which you can pick and prepare a bouquet of the ones that suit you. To know which ones work for you, for each of the techniques, Nishith has designed certain exercise space in the book and activities that the reader can practise while reading the book. Not all the techniques may make it to the bouquet and no two bouquets may be the same.

Be Better Bit-by-Bit is Nishith’s attempt to guide the reader to start taking those baby steps towards a journey of self-development and achieving the goals. The tone of the book is friendly and motivational. It does not seem over-imposing or merely a non-practicable theory at any point. This book is a good starting point for someone who is a beginner in the self-help genre, or someone who has read self-help books but never got around to practising it. Atomic Habits by James Clear published in 2018 will be a good complementary read along with this book.

BOOK REVIEW

HARSH REALITIES – THE MAKING OF MARICO

Authors: Harsh Mariwala and Ram Charan

Reviewed by Raman Jokhakar, Chartered Accountant

The unique cover of the book strikes you when you first hold it in your hands. It’s a transparent plastic jacket where part of the title is printed on the plastic jacket and part on the hardbound cover. ‘Transparency. Always. The very basis of my life. My work’ writes Mr. Mariwala on the second cover. And that is what the book is really about. The wordplay of the title – mixing maker with Marico – makes the book more enticing for the reader.

I was delighted to one day receive an email from Mr. Harsh Mariwala (HM) mentioning about the release of his book and requesting my address to send it. He had graced the BCAS Annual Day celebrations as the Guest Speaker on 6th July, 2016 when my term as the President of the Society was coming to a close. In his email he described (t)his book as: ‘It encapsulates my journey, the challenges I faced, the risks I took and learnings from not only my successes but, more importantly, my failures. It is meant for entrepreneurs, business leaders, professionals & students who will relate to the Marico story, and the learnings therein.’ I was delighted to request him to sign and send the book, to make it a collectable although I would have loved to buy it and have the author sign it in person if it were not for the Covid times.

The book is divided into 21 chapters and has more than 200 pages. It tells the tale of ‘what determines success’, ‘scaling up’, ‘about failing’, ‘creating right to win on a perpetual basis’ and not only building a business but ‘impetus to give back to the society. To make a difference.’ In other words, almost everything one would dream of going through in one’s lifetime.

The book is co-authored by his coach Ram Charan, who summarises, analyses, unpacks, distils the wisdom at the end of the chapters.

Like most businesses around the world, Marico had roots in a large joint family business that was cohesive and bonded. Although HM was amongst the eight boys of his generation and eldest grandson of the senior-most Mariwala, he and other cousins felt difficulties in realising their business aspirations within the model created by the previous generations. They sat down and decided to carve out the family business of Bombay Oil Mills into subsidiaries where they could find space for their vision and aspirations. A great process to amicably split yet stay tied, and chart one’s own course…

We all know that some Marico brands are household names in India for a few generations now. Those who grew up in the 1990s know of the strong buzz Marico advertisements created, through shock, attention-gripping commercials.

Although I cannot write about everything nor summarise all chapters, I have tried to share the juice from important themes and key learnings. An important chapter that grabbed my attention was about hunting for talent. How to be a gravitational power that would attract the best, make the organisation that would survive him. HM shares how a Chief HR Officer was his first acquisition target. The chapter chronicles hiring people who knew much more than he did. He notes that this strategy paid off when Marico’s turnover grew from Rs. 80 crores to Rs. 648 crores in ten years from 1990 to 2000, giving a CAGR of 24%.

The chapter on Shared Vision and Unique Culture covers setting the tone across the organisation. HM was particularly influenced by reading stories of successful companies and biographies of well-regarded business leaders. The lessons from those stories he MARinated with his own thoughts and crafted the core beliefs of the company which eventually took shape as 3Ps – People, Products and Profits. It is fascinating that ideas of Dharma from Bharatiya ethos moved through these ideas. I remember having visited HM’s office and seeing Sanskrit verses etched on the walls of the passageway leading to his office. The author shares in detail the principles and practices of Marico and how it went on to spot the gaps between values and practices to ensure that its people walked the talk. A 5E model of continuous improvement was set up to sustain and enhance culture, which consists of Educate, Engage, Enable, Evaluate, and Evolve. In short, culture is taken as a competitive advantage and a force that drives decisions, actions and behaviour on a perpetual basis.

The middle section of the book walks you through the brass tacks of transformation, challenges… and growth. Inspiring stories one would love to read: of building brands like Parachute (the most copied) and Saffola; of agony of family separation, and Organising for Growth and Scaling (Marico’s Rs. 236-crore market cap in 1996 multiplied 190 times by 2020). The episode of Hindustan Lever (HL) wanting to take over Marico is full of movie material where Dadiseth threatened to turn Marico into history if HM didn’t sell out. This was the time when Coca Cola had bought Thums Up. But how nimbleness and strategy worked for Marico is to be read from the book (and not here) when post the war for market, Parachute came out stronger against the giant HL, gaining 4% additional market share to 52%, Marico gaining better strategic health and reputation. An important lesson that must be pointed out is about having a coach in Prof. Ram Charan at various stages. The ideas of building a brand extension in Saffola and making it suit Indian taste buds make some obvious yet innovative stories where western breakfast brands have not clicked. The overseas expansion theme has several anecdotes where Marico captures 82% market share in Bangladesh, and where the Unilever director wants to put their soaps in shops that sold Parachute although Unilever were in Dhaka since the 1800s.

The chapter on managing the capital markets is particularly ingenious. About splitting the Kaya business out, to having cartoons along with newspaper reports and keeping cheeky humour alongside reporting on performance. HM’s approach to using Board and governance as a competitive advantage where he would pre-empt practices before they were mandated by law. HM selected competencies and then selected Board members who fit the bill.

Imagine a company that reached a value of Rs. 25,000 crores in 25 years and its scrip outperforming the FMCG index had to plan for the most contentious challenge – the future leadership where the founder had to give up the ‘cocaine’. A chapter deals with how the founder had to find people who had foresight, competencies, were steeped in organisational culture and purpose and who would enhance profitability, respect and growth. A tall order! HM did step back while handing over the hot seat to a non-family professional to assume that responsibility. This, in the words of the author, was the toughest call he had to make. The last two of three chapters take one through purpose beyond profit and personal social responsibility. Of numerous initiatives and investments. The final chapter lists out Milestones and Maxims that I would like you to read in the book. A rich list coming straight out of rich, wide and deep experience.

After reading the book, which is an easy read, one feels like having gone through a live life story of a man, his endeavours and a business. As HM writes in the end about his perpetual quest to do more, BE more and make a difference. The takeaways from the book are countless like the shades in a rainbow, and enlighten every reader, no matter which station of life she is at. By the time you reach the end of the book, you will get a feeling of your mind opening a bit more, just like a parachute which works only when open!

BOOK REVIEW

ATOMIC HABITS Author James Clear

Reviewed by Veena D’Souza, Chartered Accountant

This book is jam-packed with philosophy, psychology and practicality. I learned just as much about the brain, genes and identity as I did about habits. There are many things that you know at the back of your mind, but once you see it in writing, something inside you clicks and you have that very satisfying ‘Aha! It’s magical!’ moment.

I simply love how James Clear in his book Atomic Habits explains the workings of human behaviour, discussing ground-breaking topics on human behavioural psychology and neurology. He explains precisely how and why it is that we form certain habits and patterns in our lives. The book breaks down the process of habit-formation and provides an extremely practical framework to implement small improvements to your already existing routine, cultivating it for greater efficiency and growth.

A few things that really stuck with me while reading the book:


1. Identity change first, the rest will follow
The ultimate form of intrinsic motivation is when a habit becomes a part of your identity. It’s one thing to say I’m the type of person who wants this. It’s something very different to say I’m the type of person who is this – James Clear

I used to tell myself, ‘I want to start reading books!’ I used to always try but stop mid-way. After struggling for almost eight years, I successfully finished reading the book Atomic Habits by James Clear. However, it was ironic that my first book taught me how not to make it my last and implement the reading habit with simple strategies.

The simple cues that the book teaches helped to shape my habits as a reader.

So if a non-reader like me could do this, after implementing some simple tricks which Clear has beautifully articulated in the book, it proves that it can be applied to many different facets of life to implement good habits and slowly phase out the bad ones.

Today, I would call myself a reader and this identity change helps me to continue reading other books.

2. The 1% rule
It is so easy to overestimate the importance of one defining moment and underestimate the value of making small improvements on a daily basis – James Clear

The 1% improvement says that first, you need to understand everything about your work, break it down into small easily achievable tasks and improve it by just 1% every day. This can give significantly better results in the long run.

3. The 1st Law of Behavioural Change is to make it obvious, and the two most common Cues are Time and Location. The Implementation Intention is: I will (Behaviour) at (Time) in (Location) – James Clear

Clarity > Motivation: Many people think they lack motivation when what they really lack is clarity. It is not always obvious when and where to take action.

We often tend to procrastinate on some easy but important tasks. I am no different. My habit of procrastination even led to financial losses at times which further increased the baggage of tasks leading to the vicious cycle of further procrastination.

However, the implementation intention formula helps to realistically perform the behaviour. The difference is that the behaviour that was previously decided to be performed is now given the precision of when and where it is going to be performed.

4. Valley of disappointment
We often feel that progress should come quickly to us, that a task we begin should soon yield benefits for us. In reality, the results of our efforts are often delayed, not by a few days, but months, maybe even years, until we realise the true value of the previous work we have done.

In ‘Clear’ terms, the level of disappointment faced by us when we don’t get results is the ‘Valley of disappointment’.

5. Environment is the invisible hand that shapes human behaviour
In this way, the most common form of change is not internal, but external: we are changed by the world around us. Every habit is context dependent – James Clear

We drink more water if we keep a bottle of water handy around us while we study / work, etc. This is because we create an environment around us that helps us to develop a habit of drinking water regularly.

6. Focus on systems
Clear says that instead of focusing on goals, focus on systems. Goals are your end results. For example, I want to be fit and healthy; whereas a system is a process of how to achieve the goal more systematically and smartly.

Systems > Goals: ‘My results had very little to do with the goals I set and nearly everything to do with the systems I followed.’

When you fall in love with the process rather than the result, you don’t have to wait to give yourself permission to be happy. You can be satisfied anytime your system is running.

7. Focus on taking action, not being in motion. You don’t want to merely be planning. You want to be practising – James Clear

I used to plan to work out every day. Before 2020, I never acted much on my plans, it was only motion and didn’t include actions, the progress thus being very static.

I realised it was easy to be in motion and convince myself that I am making progress but in reality, I wasn’t. In 2020, I converted my motions into actions, starting with little cues like shopping for sportswear which tempted me to use them and eventually leading me to diligently work out which now has become part of my everyday life.

On reading this chapter of the book that says ‘Walk slowly, but never backwards’, it dawned on me to pick habits that I polished and acted on to make my plans of working out real.

8. If you want to master a habit, the key is to start with repetition and not perfection – James Clear

Frequency > Time: There is nothing magical about time passing with regard to habit formation. It doesn’t matter if it’s been twenty-one days or thirty days or three hundred days. What matters is the rate at which you perform the behaviour.

I am currently learning to play a musical instrument. I often used to wonder how effortlessly people play an instrument, some learn it within months, while others take years of practice. This is where the key of repetition got stuck with me and made me realise that I need to practise to excel and learn the instrument. It’s not about the amount of time I have been performing a habit, but the number of times I have been performing it.

There are many further wisdom-filled one-liners, habit-formation formulae that Clear has mentioned in the book which clearly provide a lot of self-help tips that one can inculcate in one’s life.

The book is smooth and easy-flowing. The concepts of each chapter tie together beautifully and compound in such a way that the entire reading experience is seamless. The author is able to deduce seemingly complex, scientific and psychological jargon into easily understandable and relatable terminology for the layman.

The book teaches HOW TO
* Make time for new habits (even when life gets crazy),
* Design your environment to make good habits easier and attractive to implement and bad habits unattractive to get rid of,
* Environments that affect habit formation and how to overcome frictions… and much more.

I would recommend this book to anyone wanting to change certain aspects of their current lifestyle, inculcating some new habits or getting rid of a few others. Reading it will effectively convey how a daily improvement of just 1% can yield extraordinary results in your life.

BOOK REVIEW

THINK LIKE A MONK
(Published: September, 2020)

Author Jay Shetty

Reviewed by Jini Jain, Chartered Accountant

Jay Shetty is an award-winning host, motivational speaker and author who has been featured in ‘Forbes 30 under 30’1. During his teenage years, he found himself in wrong company but when offered an opportunity, he redeemed himself by grabbing it. At school one day, he happened to hear a monk deliver a talk that made him realise that he wanted to grow as a person and explore a new way of living. And he started living with monks and to like monks!

He later returned to ‘normal’ life on the advice of his mentor Gauranga Das so that he could share his experience and wisdom with the world. This book delineates the experiences that he underwent in the three years that he lived a monk’s life.

Think like a Monk is in many ways a self-help guide but more than reflecting on positivity, it makes you ponder on many other aspects that are essential to lead a happy and peaceful life in the urban set-up. Many people tend to be averse to the idea of a self-help book being a guide on how to live and feel that if they have read one, then why choose to read other such books? I would simply put it like this – while the premise of self-help books is somewhat similar, it is the art of narration and engaging the reader that makes the difference.

This book compels the reader to contemplate on certain introspective questions – Do we really know who we truly are? What do we want to become? What are we seeking? What is it that we truly value? The problem most of us face is that we do not intentionally decide on our values. In other words, we don’t pick what we deem as important. Usually, we simply accept and inherit what our society and the environment have sown and reinforced. When we live our lives trying to impress others based on values that we did not consciously choose, the result more often than not is fatigue and stress. A striking metaphor which his mentor Gauranga Das uses to illustrate what is self-identity is – ‘Your identity is a mirror covered with dust. When you first look into the mirror, the truth of who you are and what you value is obscured. Clearing it may not be pleasant but only when that dust is gone can you see your true reflection.’

The next question that comes up is why should we think like monks? Whenever we attempt a new sport or a new profession, we always look up to the masters in that field to know and adopt their thinking, habits, philosophy, etc. Similarly, monks are the experts when it is about training our minds and living a life with purpose. Jay Shetty makes a profound statement: ‘If you want to train your mind to find peace, calm and purpose, monks are the experts. Monks aren’t born monks. They are people from all sorts of backgrounds who have chosen to transform themselves. Becoming a monk is a mindset that anyone can adopt.’

Jay posits that humans have two mindsets: a monkey mind and a monk mind. These two mindsets are interchangeable. He brings out the stark contrast between the two. A monkey mind is one that overthinks and procrastinates, is distracted easily, seeks short-term gratifications, demands and feels entitled, is self-centred and is angry, worried and fearful. On the other hand, the monk mind looks for meaning and genuine solutions, controls and engages energy wisely, is enthusiastic, determined, patient, compassionate and collaborative. Controlling the monkey mind is not easy but it is possible; the author describes how to inculcate the monk mind throughout the book. The book is an effort to free you from the hypnosis of social conditioning and urge you to become the architect of your own life.

The book is divided into three sections – Letting Go, Growing and Giving – three seemingly simple fundamentals forgotten by most of us. We have to first let go of all the unwanted baggage that we probably are not even aware of hauling. Letting go creates the space to grow ourselves by training our minds. Finally, with our growth, we are better equipped to serve those around us. It would be correct to say that many concepts he touches upon are not new for us but he reminds us beautifully why we need to practice them continuously. Jay manages to move beyond abstract terms to practical wisdom with the fascinating stories from his time as a monk and the learnings that he imbibed from each episode. His book is full of anecdotes of his experiences during his years as a monk and how the principles can be applied in our modern, fast-paced society through the concepts and techniques that he has elaborated. Jay is not merely driving us into any fictional world of all things nice. He makes it relatable for the reader to identify himself in similar situations and overcome his mental roadblocks. No, the book does not promise overnight miracles. What it does promise is a sense of calm and how a change of attitude is all that it takes to have better clarity about who we are. Combining ancient wisdom with the practicalities of today, it provides essential guidance for travelling a balanced path to success and building relationships.

My favourite part of the book is when Jay talks about detachment. It is human nature to get attached to people and to material possessions. He states, ‘Detachment is not that you own nothing, but that nothing should own you. The greatest detachment is being close to everything and not letting it consume and own you. That’s real strength!’ Another great part is where he explains humility with the concept of salt. Radhanath Swami in a temple talk in London said that ‘We should be like salt – salt is so humble that when something goes wrong it takes the blame and when everything goes right, it doesn’t take credit. Nobody says that the meal had the perfect amount of salt’. An instant response to that would be ‘It’s easier said than done’. Indeed true! We all read and then try to implement, but we lack consistent efforts. In the words of James D. Wilson, a renowned author, ‘Knowledge is not power, knowledge plus action equals to power.’ Only our constant and conscious attempts can bring about a change in the way we perceive the outer events.

To conclude, Think like a Monk is a book that offers both conventional as well as unconventional wisdom in an attempt to make our lives more peaceful and purposeful which in turn can lead to more productivity. Some parts of the book seemed a little dull to me due to repetitive narration. However, considering the other great offerings of the book, it is certainly recommended to readers. Anxiety, negativity, disappointment, stress, deteriorating quality of relationships, media clutter, device overdose and inadequate sleep are ailments that bother most of us. In that sense, this book can help improve the quality of life of the twenty first century individual. Choose this book if you have not read this genre in a while, or if you need a change in your perspective of looking at the current events in your life. I leave a quote from the book by the famous poet Kalidasa as food for thought:

‘Yesterday is but a dream. Tomorrow is only a vision. But a today well lived makes every yesterday a dream of happiness and every tomorrow a vision of hope.’

12 Mantras of Effortless Leadership

Author: CA PAWAN KR AGARWAL

Reviewer: CA ZUBIN F. BILLIMORIA

CA Pawan Agarwal, a first-time author besides being a Chartered Accountant, also completed his LLB and LLM at the age of 57 and 60. He is also a member of Lions International, the world’s largest NGO. The initial reaction of any reader could well be – one more book on leadership! However, once you start a deep dive into the book, a realisation dawns on you that this book is different from several other books on the topic.

The author makes it clear that the book is a simple amalgamation of his understanding gained from reading more than a hundred books comprising autobiographies and biographies of Indian heroes and leaders. The book is divided into three parts – part one being the introduction in which he describes the woes of a first-time author in all humility; the second part is the heart of the book in which he encapsulates 12 mantras of successful leadership that stand out for their simplicity and common sense, without getting into complicated theoretical research which several management thinkers and gurus are prone to do, and the third part is the bonus mantras from Dr. Habil Khorakiwala; reproduced from his book Odyssey of Courage: The Story of an Indian Multinational.

In the first part, the author candidly admits that the book is a reflection of his learnings from hundreds of accomplished people, experts, books, and leaders. This finds reference at several places throughout the book, as also his habit of taking notes whilst reading; having more than 1,000 pages of handwritten notes jotted down over the last decade! His habit struck an immediate chord with me, being similar to my habit, but may not go down well with the current millennials who are glued to the electronic and digital media, as well as with the environmentalists who want to conserve natural resources like paper! The spiritual side of the author is articulated when he states that leadership is a mindset that is the source of one’s motivation. He indicates that The Shrimad Bhagavad Gita (SMB) is his favorite scripture, the quotes from which find a place in several of his leadership mantras in part two. In order to strike a chord with the common reader, the following extract from the book is pertinent to note. “Leadership does not mean that you are a manager, CEO, politician, or the president of a social organisation. You can lead everywhere and wherever you are at present. You lead in your personal life, job, business, and peer group. Even a child is a leader if he is passionate and eager to learn and grow. A housewife is a leader who manages a family and the household, nurtures kids, and is aware of social surroundings.”

The author begins the second and main part of the book discussing the 12 mantras (a term which he specifically emphasizes instead of chapters) of effortless leadership by setting the tone as under:

“Mantras, to be effective, must be understood properly.”

“Read the chapter three times and then make the mantras your daily ritual. Let them penetrate the depths of your unconscious mind. It does not matter whether you chant aloud, mentally, or just listen to them.”

“Soon you will begin to see your leadership skills in each area of your life reach a new level.”

Each of the mantras mentioned subsequently begins with a quotation in the context of the mantra by renowned spiritual and political leaders and motivational thinkers like Guru Mahatriaji, Mahatma Gandhi, Lal Bahadur Shastri, Sardar Patel, Dr. Abdul Kalam, Dale Carnegie, etc. The summary or takeaways at the end of each chapter is a unique way to help readers digest the content of that mantra, which the readers are encouraged to follow to gain the maximum.

Mantra 1 – “I Have a Mindset of Positive Thinking” is at the core of the rest of the mantras since according to the author without the adoption of this mantra the rest of the mantras would be of no use. It talks of the power of positive thinking in the form of a positive response which makes one proactive as opposed to negative thinking which is a reaction to a situation, the choice of either being with each of us.

Mantra 2 – “I Lead by Example by Leading Myself First” refers to several leaders in different fields who lead by example and mandate a detailed and concrete plan and policy, and practice walk the talk to implement the same. It emphasizes the authenticity of a leader whereby actions should speak louder than words. Reference to the famous incident of Dr. Kalam wherein he went to the house of a scientist and took his son for an exhibition since the scientist father was engrossed in his work, bears testimony to this mantra.

Mantra 3- “I Am a Motivating Force Behind My Team” emphasises the need for human connections and interactions together with undertaking a SWOT analysis to increase the effectiveness of the entire team and treating it like his family. It concludes by prescribing one golden rule; delegate but do not micro-manage.

Mantra 4- “I Have a Questioning Mind- I Question Every Answer” puts into focus asking the right type of open-ended empowering questions which elicit positive replies coupled with the art of active listening without which questions are powerless.

Mantra 5- “I Use My Sentiments to My benefit; I am Emotionally Intelligent” would help a leader to deal with people from different cultures and ignite hope and optimism despite challenges, by touching upon the concepts of self-awareness, self-management, social awareness, and relationship management as propounded by psychologist Daniel Goleman and emphasizes that one should never ignore emotional discomfort and suffocation amongst team members.

Mantra 6- “I Give More Than I Receive; I Am Servant Leader” is a mantra that particularly interested me as it is based on the author’s nearly three-decades-long association with Lions International. It touches upon temptations to receive awards, gifts, honours, etc. as being detrimental to effective leadership and talks of service to humanity and always giving more than what you receive. The concluding takeaway of “to be a master, first, you have to be a servant” has a very profound message.

Mantra 7- “Personal Initiative Is My Dictum; I Take Massive Action” starts with the importance of self-education particularly in the context of our education system and touches on the importance of a positive mindset and having a goal to know your why as well as a burning desire to alleviate one’s self from the ordinary to the sublime. He introduces the concept of the wheel of life or the life balance wheel to understand which parts of our life need more energy.

Mantra 8- “I Have Absolute Faith in My Beliefs; I Know My Purpose!” touches on the path of spirituality, humility, and prayers as a positive force and knowing your why which acts as a guiding light to keep track of our leadership journey. He concludes that Enthusiasm is the Electricity of Life which provides us the springboard to develop confidence and excel as a leader.

Mantra 9- “I Believe in the Culture of the Community- I Am connected!” is relevant in the current digital age whereby according to the author “we are more connected digitally than ever before but we seem to feel isolated and disconnected more personally than ever. We need community.” The author draws inspiration from the Buddhist Sangha which means a group of friends, community, or an affinity group that in the context of our diverse culture, will lead to a proper alignment of values, beliefs, mission, and goals.

Mantra 10- “The Only Thing constant in Life is Change; I Evolve Daily!” makes it imperative for us to reinvent, re-create and change consistently and adopt out-of-box thinking. The author exhorts us to use the left brain and the right brain simultaneously; representing the creative side and the imaginative side, respectively resulting in a golden brain ultimately helping us to consistently innovate and adapt to changes.

Mantra 11- “I Am Quick to Give Credit and Take Responsibility!” is very difficult to adopt in practice since a majority of us use blame as a handy defence mechanism. Applying this mantra in practice requires us to forego our ego.

Mantra 12- “I Enjoy Financial Freedom. I always Live in Abundance!” is a unique mantra that brings out the CA in the author and deals with financial empowerment. He discusses this mantra by giving his own 12 sub-mantras such as having a rich mindset; tax planning, investing wisely, tracking and creating wealth, and having multiple sources of income, amongst others. Two takeaways stand out; firstly, financial planning is each person’s individual responsibility even if you hire the best of brains and secondly, never fall into a debt trap and use credit cards only in emergencies which may not be music to the ears of financial consultants and the millennials!

To conclude the 12 mantras are age-old pearls of wisdom that are very much a simple reflection of our regular life and would help to bring out a perfect leader in each of us, without having to dwell into complex theories by management thinkers and gurus! Reading this book would bring back one to the basics in the midst of the complications and stress that one is forced to deal with.

BOOK REVIEW

FORENSIC INVESTIGATIONS AND FRAUD REPORTING IN INDIA

Authors: Sandeep Baldava and Deepa Agarwal

Reviewed by Satish Shenoy

A home without books is like a body without a soul. My major investment in life is books. I was delighted when my professional colleagues Sandeep and Deepa gave me this book, fresh from the press. Something inside me instantly told me that I need to read this book cover to cover. Our minds are truly shaped by the books we read.

Here are a few thoughts on the book.

This book, aimed to benefit a cross-section of professionals, including Forensic Practitioners, Independent Directors and Audit Committee Members, CEOs / CFOs / CHROs, Statutory Auditors, Internal Auditors, Corporate, Legal, Accounting and Compliance teams and students alike, introduces all the essential ideas that are to be found in the work of Forensic Investigations and Fraud Reporting in India in a concise and straightforward manner. Each activity is described not only in terms of its relevance but also the science and reasoning that underpins it.

Be insatiably curious. Ask ‘why’ a lot – and that’s exactly what the authors did. While employing examples from Forensic Investigation, the book uses principles and ideas applicable to most of the forensic sciences. The authors examine the role of the investigator, describe the fundamental methods for investigation, discuss the optimal way to organise evidence and explore the most common reasons why some investigations fail. The book provides case studies that exemplify proper communication of findings. Concise and illustrative, this volume demonstrates how scientific methods can be applied to investigation in ways that avoid flawed reasoning while delivering convincing reconstruction scenarios. Investigators can pinpoint where things went wrong, providing valuable information that can prevent another catastrophe.

As I dived deep into the book, I told myself, ‘Don’t read the book and be a follower, read the book and be a student’. Covering a range of fundamental topics essential to modern Forensic Investigation, the book presents contributions and case studies from the personal files of experts in the field. It discusses the intersection of law and forensic science, how pieces of information become evidence and how courts decide whether an item or testimony is admissible. It provides insights on how practitioners must follow evidence all the way from the incident scene to laboratory analysis and even on to the judicial authorities. Going beyond theory to application, the book incorporates the wisdom of the authors who discuss anonymous real life case studies and their rich experience in the subject. Each chapter begins with an introduction and ends with a conclusion. The ‘Expert Speak’ sections at the end of a few chapters showcase contributions from high-profile experts in the field.

Life is like a book – don’t jump to the end to see if it is worth it. Going by the size of the book, I was indeed tempted to jump to the end. But my daughter Sneha read my mind (she has this uncanny knack) and remarked, ‘Daddy, just enjoy every page of it and you will find the script more interesting and exciting’. The words hit me like it was the last word said on the subject. So let me continue…

A practical, accessible and informative guide to the science of Forensic Investigations and Fraud Reporting, the book has 20 chapters very logically divided and covering the fundamentals of White Collar crime; Ethics, Integrity and Fraud; Governing Framework including roles and responsibilities of Stakeholders towards prevention, detection and investigation; Financial Statements Fraud, including roles and responsibilities of Statutory Auditors; Evolution, types, methodology and approach to FRM and Forensic Investigation; Frauds at Financial Institutions, including banks; Forensic Standards; Cyber Fraud Risks with illustrative examples of reporting. I particularly enjoyed the case studies which encompassed various facets of business such as procurement, critical information leakage, phishing, window dressing and fund diversion – the learnings are immense. I also appreciate the ease with which the roles of the Boards, the Internal Auditor, the CFOs and other CXOs are explained. The emphasis on the science of law enforcement, how evidence is gathered, processed, analysed and viewed in the courtroom and more, were a delight. This informative book also includes an extensive index, adding to its usefulness. It contains over 100 case studies, case laws and examples.

Good books are like good company. As I read the book, I got the feeling that I am in good company – well done, Sandeep and Deepa. Forensic document examination is a long-established specialty and its practitioners have regularly been shown to have acquired skills that enable them to assist the judicial process. The book introduces all the essential ideas that are crucial in the work of the Forensic Document Examiner and Fraud Reporting in a concise and straightforward manner. Each examination type is well described in detail in chapter 12.

The reader will be able to relate the different kinds of interpretative skills used by the document examiner to those used in other forensic disciplines. Besides being an invaluable text for readers, the book will also be a useful reference for researchers new to the field or practitioners looking for an accessible overview.

Written in an easy-to-understand format, this outstanding guide by two of the leading professionals with wide experience in Forensic Investigations and Reporting introduces you to the basics of Forensic Investigation and Fraud Reporting. It teaches us excellent ways to make our investigation solid and successful. It is packed with valuable information about the details of collecting, storing, and analysing all types of physical evidence.

Life is a book of mysteries; you never know which page will bring a new twist; so keep on reading and happiness will come suddenly – this is precisely what I felt when reading this book. Most investigations begin at the end of the story, namely, after the collapse. In many instances, information about the last event and the starting event is known reasonably well. Information about what occurred between these endpoints, however, is often unclear, confusing and perhaps contradictory. Chapter 13 explains how scientific investigative methods can best be used to determine why and how a particular event occurred and how it is to be reported.

Rules related to admissibility of evidence in India (13.6.4.3) explore the legal implications of forensic science – an increasingly important and complex part of the justice system. In the ‘Expert Speak’ section of chapter 13, Aditya Vikram Bhat, Senior Partner, AZB & Partners, brings out the different facets of applicability and importance of attorney-client privilege.

Assessing the strengths and limitations of each kind of evidence, the authors also discuss how they can contribute to identifying the ‘who,’ ‘how,’ and ‘whether’ questions that arise in criminal prosecutions; they draw on the depth of their Forensic Investigation and Fraud Reporting experience to provide a well-rounded look at these increasingly critical issues. Case studies have very effectively brought the issues to life and show how forensic science has been used in real-world situations.

The reader will learn how real-world forensics experts work every day in fields as diverse as Biology, Psychology, Information Technology and more. If you are interested in a forensics career, you will find out how to break in and the education you will need to do the type of forensics work that interests you the most. Written for the true forensics fan, the book does not shy away from the details – why are frauds committed (1.7), Evolution of Fraud (1.8), Definition of Fraud (chapter 2), Integrity and Ethics (chapter 3), Reporting Regulations under various statutes (chapter 4), Role of Directors (chapter 6), Role of Internal Auditors (chapter 7), Financial Statement Frauds (chapter 9), Identification of Frauds, including role of whistle-blowers (chapter 10), Types of Forensic Investigation in India (chapter 12), Audit vs. Forensic Investigation (chapter 14), Forensic Accounting and Investigation Standards by the ICAI (chapter 18), Cyber Fraud Risk and the Auditor’s Role (chapter 19) and lastly the Illustrative Reporting (chapter 20). What more can one ask from one book?

The book includes coverage of physical evidence, evidence collection, crime scene processing, pattern evidence, fingerprint evidence, questioned documents and computer and digital forensic evidence. The authors’ 40-plus years of investigation, forensic science laboratory experience, regulatory compliance and auditing experience is brought to bear on the application of forensic science to the investigation and prosecution of cases.

A truly international and multi-disciplinary compendium of current best practices authored by the ones amongst the best in the profession, the book covers current trends and technology advances in various disciplines including forensic science. The book serves as an invaluable resource and handbook for forensic professionals, auditors and directors, audit committees and CEOs / CFOs / CHROs in India

Let me list a few new learnings for me from the book – The Fraud Diamond Theory (1.7.2), Theory of Dark Triad Personality (1.7.3), Robinhood Fraudsters (1.7.4), Working of a Ponzi Scheme (Amit Garg ‘Expert Speak’), the Social Psychology of Corruption (3.4), SOX Section 302 (6.2.7), Whistle-blower complaints – CVC (10.14), some of the rules related to Admissibility of Evidence (13.6.4.3), few Insights in using Predictive Analytics for Fraud Prevention (15.6.6) and few aspects of Common Security Elements that entities may use to prevent or detect a cyber-attack (19.6.1).

I particularly liked the way that important topics were handled and here are a few examples – Case studies of White Collar Crime (1.7.6), Social Psychology of Corruption (3.4), Management’s Responsibility to
prevent Fraud (5.2), Internal Auditor in Spotlight (7.6), Stages of Identification of Fraud (8.5), Financial Statement Frauds (9.6), how to Mitigate Common Fraud Risks (9.9), Best Practices for an effective Whistle-blowing Mechanism (10.15), Impact of Whistle-blowing Systems (10.16), Learnings from Arthasastra (11.3 and 11.4), the entire chapters 12 to 14 (which to my mind are the fulcrum of the book), Case Studies on Banking Frauds (16.9 to 16.12), chapter 17 on Case Studies (real life examples based on the rich experience of the authors) and chapter 18 on ICAI Standards (which I am so proud to be an integral part of).

I read with great interest chapter 19 on Cyber Risk which appears towards the end. I must mention that the focus is limited to the role of auditors but the topic deserved more attention. Perhaps the authors will delight us with this and more in the next edition.

Let me read the mind of the authors before they started this book project, ‘If there is a book that you want to read but has not yet been written, write it.’ That’s precisely what Sandeep and Deepa have done.

A few final take-aways:
* It is better to fail with honesty than succeed with fraud.
* One best book is equal to hundred good friends.
* That’s the thing about books. They let you travel without moving your feet.
* A clear sign we are stupid is if we do not read new books.
* The problem with a good book is, the moment you read that last word, you wish you hadn’t.
Well done, Sandeep and Deepa. I am proud of you.

TAXATION PRINCIPLES AND APPLICATIONS

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TAXATION
PRINCIPLES AND APPLICATIONS
A Compendium
Author: Dr. Parthsarathi Shome
Publisher: LexisNexis
Price Rs. 1,495.00

All of us as Chartered Accountants are busy with the interpretation and application of Revenue Legislations. We do not normally make a contribution in the Legislative Tax Policy and Planning, except at the time of presenting the pre-budget or post-budget memorandum. Dr. Parthsarathi Shome’s latest book, however, takes us even a step prior to Revenue Legislation and the thought process behind Taxation Policy and Planning.

Dr. Shome has rich experience as an internationally acclaimed Research Scholar in the Fiscal Policy and planning and during his illustrious career spanning four decades, has made several research studies and given presentations at various international forums. The present book is a selective compendium of his work in the field. As a result, what we come across in the book is a progressively changing thought on Fiscal Legislation.

Divided into seven main chapters, the book starts with an overview of Taxation system from earliest days of Ramayana and Mahabharata, and later on, Kautilya. The early economic principles from Mahabharata and Ramayana depict the social responsibility of the King. One finds that even after many centuries, these principles are even valid today. Dr. Shome in his research has touched upon these principles, of course with changing trends.

In the later chapters, he has analysed in depth the incidence and distribution effects of Taxation, efficiency effects of Taxation, an overview of VAT , GST and customs duty. In the entire analysis, GST appears to be the darling of the policy makers and scholars and Dr. Shome is no exception. In the process, he has also touched upon some innovative schemes of taxation such as Financial Transaction Taxes, Global Carbon Tax, cash flow tax, asset base of tax popularly known at many places as MAT , the much criticised and later on jettisoned from our country, the Fringe Benefit Tax etc. He has examined these innovative measures both from the point of view of policy framing and administration. Before the general elections in our country early this year, there was a talk of abolishing all taxes and in its place imposition of only one Banking Transaction Tax. A theoretical analysis of the said measure of taxation also finds a place in his book. He has of course not forgotten the problems of small and medium size taxpayers from both the sides.

The book also contains the country’s and regional experiences in the process and his analysis mainly concentrates on Latin America and Asia, because of the traditional tag of developing and underdeveloping economies in these regions.

The last chapter of his book is devoted to the exclusive study of Tax Administration, concentrating on the process of a discussion on countering tax evasion, including the famous, tedious TDS. The use of information technology in tax management and administration also finds a place towards the end, but it is touched on the surface. Perhaps, in his next compendium, Dr. Shome may be making a reference to Tax Administrative Reform Commission, which he is chairing at the moment. As we all know, the Government of India had set up the TAR C in August, 2013. In its first report, TARC has suggested radical changes in tax administration. The key suggestion, if implemented in its true spirit, the taxpayer may be treated as a valued customer. Such a radical change will require a drastic change in attitude. The ingrained attitude of arrogance on the part of revenue officials needs to be deeply buried.

Dr. Shome has made a very valid and valuable reference to Spengler’s Contemporary hypothesis, which is reproduced below because of its importance, “ Increasing political stimulation of man’s wants beyond his capacity to supply them has generated forms of disorders. Wants generated by political means are bound to outstrip a community’s economic capacity to satisfy such wants and hence must give rise to increasing frustration of man’s expectations. This ascendance of political over economic want-generation, together with the disorder, which comes in its wake, may be numbered among the progeny of the two Pelopennesian wars which sundered the world of European civilisation and polity between 1914 and 1945.” (p 7).

In today’s world, the people’s Kings have taken the places of hereditary Kings. A continuous aspiration to become the people’s King is reflected by a group known as the political party. Politics, therefore, demands a continuous show of moon to the public at large, thereby increasing the actual and perceived wants in geometrical proportion. This necessitates a need for continuous higher tax collection since it is a main source of revenue for governance. This relationship of economics of tax policy and planning and political necessity for faster and increased collection through such a policy has given rise to political dominance over economic principles. This has given rise to complex economic policies for generating tax revenue.

Although the book avoids reference to political overtones, it describes in detail various complex and multiple models of Source vs. Residence, DTAA issues, Transfer pricing, base for taxation whether expenditure or income, final destination points of taxation. The policy and planning is therefore truly complex. Dr. Shome has through his writing skills tried hard to soften the complexity. Since it is a compendium, there is repetition at some points because the thoughts have been expressed at various times and various places, but in the context of the book it appears to be unavoidable.

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Comprehensive Commentaries on FCRA 2010

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Title : Comprehensive Commentaries on FCRA 2010

Author : Manoj Fogla

Pages : 444

Price : Rs.895

Foreign Contribution Regulation Act is a complex piece of legislation, often not fully understood by trustees as well as practising Chartered Accountants. There is very little literature available on this subject and there is hardly any book that deals with the subject in depth. Therefore, this book fills a void and is a welcome attempt to provide information and interpretation on FCRA for the benefit of all persons affected by this Act and in particular, voluntary organisations receiving foreign funding and contribution.

The book seeks to address the need, particularly of grassroot level organisations, which are doing yeoman work but struggle to understand the nuances of this legislation where the consequences of non-compliance can be severe. The book also discusses applicability of FCRA to unregistered ‘Self-help Groups’ and ‘Communitybased Organisations’.
The first chapter of the book is appropriately ‘Frequently Asked Questions (FAQs) on FCRA’. The book is comprehensive in its coverage and is divided into 46 chapters. Though the book does not have an index it has detailed contents, facilitating the search for the relevant information.
The book covers all the controversies under FCRA ranging from opening of multiple bank accounts, deposits from commercial transactions, applicability of the law to liaison offices, operation of revolving funds, anonymous donations, admission of foreigners on the Governing Board, etc. It also covers various procedural aspects, including procedure for obtaining and renewal of registration, prior permission for accepting foreign contribution, change in bank account, etc. It also has a chapter on online filing of application for registration giving a step-by-step process to be followed along with the screen shots at every stage.
It has 30 Annexures, including a useful Annexure tabulating the relevant provisions under the old FCRA, 1976 and under the current FCRA, 2010. An interesting Annexure reproduces the Charter issued by the Ministry of Home Affairs providing guidelines for Chartered Accountants auditing organisations covered by FCRA.
Though, the book is comprehensive in its coverage, the analysis and commentary is very often of a basic skeleton nature. One would have hoped for a more indepth analysis and discussion on topics, (and there are several of those in FCRA) where there could be more than one interpretation.
Perhaps that is done intentionally in favour of simplicity and to provide in an easy-to-read language all relevant information to persons covered by this enactment.
The book is published jointly by Financial Management Service Foundation (fmsf) and Voluntary Action Network India (VANI). The author and the publishers need to be complimented for spreading awareness on this opaque subject and fulfilling a crying need.
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The Professional

Title:    The Professional
Author:    Subroto Bagchi, Gardener and Vice-Chairperson, MindTree Limited
Price:    Rs.399
Publisher:  Penguin (Portfolio)
Author’s official website : http://www.mindtree.com/subrotobagchi

The Satyam episode led to some uncomfortable situations for us CA-professionals. The general public did tend to paint us all with the same brush. It may have led to some uncomfortable encounters at networking events when people came up to us during the tea-break and questioned us about ‘our profession’. Hopefully we will never have to face such a scenario again.

This incident brought to the forefront the moot question. Does having a professional qualification (say: the much coveted CA tag), make one a professional?

The answer is no. Anyone can with the right amount of hard work (and luck, as most of us CAs would like to add) can acquire a professional degree. However, it is the ability to stay true to ourselves and our vocation that makes us a true professional.

Subroto Bagchi, Gardener and Vice-Chairperson to the Board, MindTree Limited in his latest book ‘The Professional’ answers this important question: What does it take to be considered a true professional in any field?

‘The Professional’ comprises of seven distinct parts and the author does tell us to read each part sequentially in the order it is presented in the book, so as to get the maximum benefit from it. Each part comprises of short narratives drawn from real-life – both positive and negative examples – covering various professions and work-life scenarios. These narratives comprise situations which you and I have encountered/witnessed or are most likely to encounter or witness as we move up in our professional careers.

Part 1, explains the concept of integrity and how and why it is the key stone of professionalism, In fact, during the c.ourse of writing this book, Subroto Bagchi reached out to a group of people whom he admired for their professionalism and asked them to share the qualities of a professional. Integrity was a quality that topped. Little wonder then, that integrity is also the key stone of this book.

In Part 2, we move on to read about self-awareness and learn some valuable lessons, which include the power to say NO, which can be daunting when we have not yet risen in our career and the need to be generous, gracious and courteous to others when we are at the pinnacle of our professional career. Part 3 deals with basic qualities that make one a well rounded professional. Subroto Bagchi calls the first three parts, the foundational pillars.

As people become more experienced they have to deal with a larger volume of work, responsibilities and complexity. Yes, Part 4 and 5 provide us tools to cope with this. Integrity also makes good business sense and Subroto Bagchi describes this with ample illustrations, those of his own and those which he witnessed. The Abilene Paradox, where people agree to do strange things, when they suppress their own voice and simply go along with what everyone else is saying has been well described in the back drop of the Satyam episode. Yes, the voice of dissent plays a very important role and this is not the same as unconstructive criticism or plain whining.

All of us increasingly have to operate in global market-place. Part 6 guides us on how best to do so. Based on his experiences, Subroto Bagchi touches upon important facets of : Inclusion and Gender, Cross Cultural Sensitivity, Governance, Intellectual Property and Sustainability. Towards the end of the book is a chapter titled ‘The Unprofessional,’ with a list of ten markers of unprofessional conduct, such as: Missing a deadline, Non-escalation of issues on time, Non-disclosure, Not respecting privacy of information, Not respecting ‘need to know’, Plagiarism, Passing on the blame, Overstating qualifica-tions and experience, Mindless job-hopping and Unsuitable appearance.

There is no beginning or end in being a professional it is a life-long learning curve. Yet, this book provides a handy, well illustrated, tool-kit to be a better professional. Ultimately Professionalism boils down to individual choice, and indeed it is for you and me to continue on the path towards becoming a better professional.

A paragraph in the book aptly states this: ‘A doctor becomes part of an insurance fraud. A policeman colludes with a criminal. A lawyer bribes a judge. In each instance, the professional breach is justified as the price to be paid to be part of a system. The truth is, it is an individual choice”.

Subroto Bagchi in his book adds : ” … Society on the while may not always put a premium on the practice of professional values and hence most people do not incorporate it into their lives. But practising professional values is about who you are and what you want to be known as – a professional or merely professionally qualified. And, in the end, even the most corrupt society hails the ones that choose to be different.”

This itself, gives me hope.  Amen.

Subroto Bagchi speaks to BCAS members:

No one can become a professional just by acquiring a so-called professional degree or diploma. Some practising individuals who have a professional education behind them and a few years of experience, think that they are professionals. Neither qualification nor just the skill makes you worthy of being called ‘a professional’. In reality, it requires much more than that. That capacity, to build a professional reputation, which only a few can, comes from building ‘affective regard’ for your profession, it comes from conscious practice of unique tenets of a profession, it is about sustained self-regulation.

In the end, professionalism is about personal choices we must make, prices we have to be willing to pay and sometimes, choosing the right over the convenient is a difficult thing, even a risky thing. But it is that quality which separates the legends from the ordinary mortals.

Integrity is one of the key attributes of a good professional. It is here that organisations such as the Bombay Chartered Accountants Society (BCAS) have a huge role to play. Integrity can be taught. It is because the idea is based on the principles of natural justice. It is our natural state. Most people, most of the times are reasonable, they want to live in harmony and that means they have a natural affinity for fairness. When people are given an understanding of the concept of integrity and the power of self-regulation, most people can lead a life without contradictions. I have also seen people change for the better when they are given the right environment and the knowledge. The seeds of integrity can be sown in the minds of young CA students and CAs through collective efforts, such as by the BCAS.

RBI Governors: The Czars of Monetary Policy

Author: GOKUL RATHI – Chartered Accountant
Reviewer: RIDDHI LALAN – Chartered Accountant

 

RBI plays a significant role in the country’s economic development and financial system. In addition to its crucial role in the country’s monetary policy, RBI regulates the banking sector and manages foreign exchange reserves. “RBI Governor” is the person who helms this all-important and formidable institution, burdened with onerous responsibilities.

In the 86 years of its existence, RBI has been led by 25 eminent scholars, each influencing the economic and monetary policy with a distinct style. For a long time, the Governors have contributed tirelessly behind the scenes and only recently, have stepped into the spotlight. “RBI Governors: The Czars of Monetary Policy” highlights the importance of these eminent men and their contribution to moulding the country’s financial system.

CA Gokul Rathi has been closely associated with the banking sector as an auditor, consultant and board member. Based on his observation of the banking sector during the last three decades, Mr. Rathi, a Chartered Accountant, has conducted elaborate research while penning down this book on men whose signatures appear on the country’s currency. Gokul traces back the origin of this book to 2007-08 when he was impressed with the deft handling of the Indian economy before the global financial crisis by Dr Y. V. Reddy.

The book introduces the 25 Governors that have led this powerful institution and their academic and professional background. Without presenting an analysis, Gokul sets forth an account of the events that occurred during the tenure of each Governor in terms of the key decisions taken and their impact, their achievements and disappointments. It reflects on the country’s banking and financial journey through important phases and events – nationalisation of the banks, priority sector lending, foreign exchange regulations, liberalisation, banking sector reforms and demonetisation, and changing political scenarios – from a different perspective.

The book expounds on the Governors’ role in managing the balance of payments, assuring price stability in the country, promoting rural banking, encouraging foreign investment and various other schemes and reforms. Gokul narrates instances highlighting the crucial role that the Governors have played in navigating the county’s economy through choppy waters on the route to development. Steering the economy through foreign exchange crisis, stock market and financial scams, inflation, unorganised banking sector and global financial crisis, the growth story modelled by each Governor makes for an engaging read. The context in which crucial decisions that forever changed the course of the country’s financial policy were made has been appropriately emphasised.

The book also throws light on the relationship and exchanges between the RBI and the Government (i.e., the Governor and the Ministry of Finance) and its impact on the institution’s autonomy. The manner in which each Governor balanced the equation with the Government, handled the times of political uncertainty and its impact on the autonomy and powers of RBI make for an interesting read. While some have clashed with the political leadership at various times, others have maintained diplomacy and cordially managed it. However, true to his word, Gokul does not venture into an analysis but only mentions instances of differences and, therefore, refrains from any bias.

Gokul has sourced the historical facts and accounts from the official History of the Reserve Bank of India, Vols. 1 – 4 (1970 to 2013), as well as memoirs and autobiographies of the former Governors. The lucid language in which an account of the RBI Governors is presented makes it easy to read and comprehend even for persons with limited financial knowledge. The anecdotes and trivia on the history of RBI and the Governors at the end of some chapters make the book more engaging.

This book is of value for anyone who wishes to understand the history of the banking sector and the financial journey of the country at an introductory level as well as to students of economics. Gokul has done justice in coherently cataloguing the events that occurred during the tenure of each Governor. Sources cited for the information contained in the book act as a guide to anyone who wishes to delve into the subject more deeply. While the professional achievements are briefly mentioned, a more detailed account of each Governor’s personal life could have added inspirational value to the book for me. Nevertheless, numerous interesting facts and stories about RBI and Governors have been brought to light in the book. Gokul’s endeavour to succinctly place before the public, the contributions of the Governors pivotal role in the country’s economic journey is truly commendable.