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Category: From The President

From The President

Dear Members,

The term ‘profession’ traces its roots to the Latin word professio, meaning a public declaration or vow. Historically, this denoted a commitment to a higher ideal beyond personal interest—such as a vow to truth, justice, or service. Classically, professions embodied this ethos, combining specialised knowledge with a binding ethical code and a deep public responsibility.

For centuries, the distinction between a Profession and a Business has been clear. The earliest known explicit distinction of profession ≠ business comes from Plato’s Republic, circa 375 BCE, being clear in its emphasis that profession = service bound by ethics, whereas business = private gain.

The sociologist Émile Durkheim argued that professions emerged as ‘moral communities’ that filled the vacuum of trust in complex, modern societies. Similarly, Max Weber emphasised that professions are not mere occupations but vocations (Beruf)—a calling to serve society through competent and principled action.

The modern accounting profession emerged in the 19th century as industrial economies demanded credible, independent assurance on financial statements. Our own The Chartered Accountants Act, 1949, framed after Independence, enshrines this dual role: to be technically competent and ethically upright, serving both the client and the public interest. Thus, we are heirs to a proud legacy that combines specialised knowledge, ethical codes, and a public fiduciary role—the very definition of a profession.

Over the past few decades, fuelled by the forces of globalisation and perhaps the increasing scale and complexity of global business, the lines between the realms of profession and business have become increasingly blurred. These trends have, over the years, metamorphosed into a section of professionals operating their practices in a business-like manner, aka professional business firms. Whilst a commercial outlook does bring scale, efficiencies and processes, it runs the risk of Profits preceding Purpose and Big overshadowing Good, thereby compromising greater good over personal good.

Max Weber warned that over-bureaucratisation and commercialism can lead to the “iron cage”—a disenchanted profession stripped of its soul. Durkheim emphasised that professions should counterbalance market forces with moral solidarity and not succumb to being a part of it.

Even whilst structured as professional business firms, the ownership interests in such entities continued to be held by professionals. Through a recent wave of change, this fundamental assumption has also changed on its head, as Private Equity (‘PE’) investment finds momentum in accounting and consulting firms. The trend of financial investors owning professional business firms has the potential to rewrite the century-old distinction of Profession: Business, which has been the bedrock of our professional existence. While these developments promise new opportunities and growth, they also present ethical dilemmas and existential questions about who we are, what we stand for, and what future we envision for our profession.

In the calendar year 2024, global PE and venture capital-backed deals in accounting, auditing, and taxation services totalled $6.31 billion across 24 deals, the highest in any year in amount as well as number terms. As of March 2025, 12 of the top-30 U.S. accounting firms had received PE investments, with more firms in discussion. Several significant PE transactions have reshaped the accounting landscape:

– Grant Thornton LLP, a top 10 U.S. firm, announced a significant growth investment from New Mountain Capital, marking one of the largest such deals in the profession.

– Baker Tilly US LLP, another top 10 firm, secured a strategic investment from Hellman & Friedman and Valeas Capital Partners, representing the largest private equity investment in the U.S. CPA profession to date.

– Citrin Cooperman, a mid-sized U.S. firm, was acquired by a Blackstone-led investor group in a deal valuing the firm at over $2 billion. This transaction underscores the increasing valuation and attractiveness of accounting firms to private equity investors.

– In the UK, Unity Advisory, founded by former EY and PwC executives, launched with up to $300 million in backing from Warburg Pincus. Unity aims to challenge the dominance of large firms by offering tax, technology consulting, and M&A advisory services.

– Moore Global, a British mid-tier accountancy group, achieved record revenues of $5.1 billion in 2024, with private equity investments significantly contributing to this growth.

Several mid-tier and regional accounting firms have partnered with PE firms to access capital for technology upgrades, market expansion, and service diversification. The trend is now finding resonance in India. In the Indian context also there have been investments which illustrate the growing trend of private equity investment in accounting firms, bringing both opportunities and challenges.

As stewards of the profession, it is imperative to appreciate this trend and leverage it to advantage through a proactive framework that strikes the right balance between progressive gains and the structural tensions that private equity introduces into a profession like ours. As much as outside financial capital promises scaling-up, consolidation and value-creation, the perils of misalignment of goals, loss of professional autonomy and erosion of ethics and public trust warrant a much deeper debate on its efficacy.

Should professions be treated as businesses governed by market forces and investor returns? Or as ethical practices guided by codes, communities, and public responsibilities? Or an approach that balances both these important considerations?

Closer home, Indian philosophical traditions have long emphasised dharma—the righteous duty of each profession or varna to uphold societal harmony and welfare. Kautilya’s Arthashastra (4th century BCE) provided elaborate ethical guidelines for financial administrators, auditors (samaharta), and treasurers long before modern accounting emerged. The idea was clear: artha (wealth) must be pursued within the framework of dharma (righteous conduct).

Let us ensure that capital serves the profession and the profession serves the public—not the other way around.

With warm regards and steadfast faith in our collective wisdom,

 

CA Anand Bathiya

President

From The President

Dear Members,

Here comes April! The Romans gave this month the Latin name Aprilis, but the derivation from traditional etymology is from the verb aperire, meaning ‘to open’, in allusion to its being the season when trees and flowers begin to ‘open’, the season of Spring in the northern hemisphere.

Closer home at Bharat, April also coincides with the pious month of Chaitra, signalling the start of the harvesting season as well as a new calendar year, i.e. Shak Samvat 1947.

Even closer in the financial sector, April marks the beginning of a new fiscal year for commercial entities. As the largest economy begins its financial year in April, entities in our nation use April to assess their performance from the previous fiscal year with the objective to establish performance metrics for the new fiscal year.

For Chartered Accountants, April signifies the commencement of the busier period of the year as we undertake our professional duties for the companies and clients we serve. As your partner in learning and professional development, your Society has been organizing numerous learning and development events and will continue to do so, aiming to enhance our members’ capabilities in managing their professional responsibilities.

In addition to organizing learning events, BCAS consistently publishes the BCA journal, self-paced e-courses, books, and thought mailers to enhance professional skills further. In April, 4 (four) publications are being released by your Society:

  1.  The BCA Referencer: As a leader in the Referencer format, the BCA Referencer, now in its 63rd year of continuous publication, is renowned for being a high-quality, practical professional resource that assists chartered accountants in improving their effectiveness with ease. The BCA Referencer, featuring three updated modules on Direct Tax, Indirect Tax, and the latest amendments, is now available for booking through the Society’s website. This comprehensive referencer for Chartered Accountants is the result of extensive efforts by over 20 compilers, 5 senior members, and 3 editors, and it deserves significant recognition for their dedication and hard work.
  2.  A Compilation of Thought Mailers: Over the years, BCAS members have consistently shared their insights on topics related to personal and emotional development with our community. We are pleased to announce that a valuable compilation of these thought mailers is now available for purchase as a hard-bound book. Secure your copy today to experience the enriching perspectives presented by multiple contributors in this unique collection. We extend our gratitude to all the authors who have contributed to these Thought Mailers over the years.
  3.  Laws & Business: The much-awaited 6th edition of the publication on “Laws & Business” is being released by your Society this month. This comprehensive work, authored by Dr. (CA) Anup P. Shah, spans nearly 1500 pages across 2 (two) volumes and demonstrates the author’s dedication and expertise. Dr. (CA) Anup P. Shah’s commitment to distilling complex information into accessible content will undoubtedly benefit professionals navigating these critical areas of law. The Society remains grateful for the author’s contribution to our profession. Through this publication, BCAS reaffirms its mission to equip readers with the knowledge required to stay compliant, make informed decisions, and navigate India’s legal landscape effectively.
  4.  Gita for Professionals: The 7th edition of Gita for Professionals, authored by CA Chetan Dalal, is one of the most widely distributed publications from BCAS. In an era of constant change and evolving professional demands, the timeless wisdom of the Bhagavad Gita provides invaluable guidance for navigating modern complexities. This book, now in its 7th edition, highlights the enduring significance of ancient knowledge in today’s world. Since its initial publication, it has successfully bridged profound spiritual teachings with the practical challenges of professional life. The Society extends its gratitude to CA Chetan Dalal for his dedication to sharing the timeless wisdom of the Gita through his insightful writing.

Over the years, the Society has expanded in size and reach, now addressing the needs of various constituents within the community. To remain relevant and provide value to all stakeholders, three distinct cohorts are taking shape at BCAS:

  1.  BCAS Youth: This cohort is designed for newly qualified Chartered Accountants. The objective of the BCAS Youth cohort is to organize events and initiatives that meet the needs of young Chartered Accountants. One such initiative of CAMBA: A certified Management Program for CAs, is being held on the 11th, 12th, and 13th April, 2025 in three different batches to help Chartered Accountants enhance their management skills.
  2. Women @ BCAS: The progress of our profession and nation relies significantly on the support and strength of our women members. We are fortunate to be in a profession where the representation of women is increasing, and at BCAS, we are committed to advancing this cause. On 24th March, 2025, BCAS commemorated International Women’s Day by celebrating strength, success, and empowerment through an event that showcased the life stories of 3 (three) accomplished women role models.
  3. BCAS Nxt: The BCAS Nxt cohort is an ‘of-for-by’ student collective incubated within the Human Resources Development committee towards learning, networking and growth of budding students of Chartered Accountancy. Fresh on the heels of a remarkably successful ‘Tarang 2025’, these young Turks have now progressed to hosting Bootcamps on topics of importance and learning for CA students. A power-packed session on Bank Branch Audit Bootcamp from an article’s perspective was held on 22nd March, 2025, led by student volunteers.

These dedicated cohorts will continue to strengthen their influence in the coming years, addressing the specific needs of their respective constituencies more effectively.

Separately, your Society had the pleasure of hosting and felicitating President CA Charanjot Singh Nanda, President of The Institute of Chartered Accountants of India (‘ICAI’), Prasanna Kumar D, Vice President of ICAI and members of the central council of ICAI for an interactive meeting with the BCAS Core Group. Year-after-year the BCAS Core Group interactive meeting with the ICAI torchbearers has been a platform for sharing thoughts, suggestions and exchange of ideas for the betterment of our profession. The BCAS community engages closely with and complements the activities and initiatives of ICAI, as both institutions relentlessly work towards the professional development of Chartered Accountants.

Back to April, don’t forget to renew your BCAS memberships for this new financial year as we plan for a professionally enriching new financial year ahead. April is also a month wherein our beautiful nation celebrates diversity through our diverse festivals. Let us celebrate diversity and amplify this unique strength of our nation, leading our countrymen to better, happier and purposeful lives. Festive greetings for Baishakhi, Cheti Chand, Chaitra Navratri, Easter, Eid-ul-Fitr, GudiPadwa, Hanuman Jayanti, Mahavir Jayanti, Ram Navami, and Ugadi, amongst many others.

Warm Regards,

 

CA Anand Bathiya

President

From The President

Get out of the way!

– Stop micromanaging economic activity!

– Give entrepreneurs and households back their time and mental bandwidth.

– Regulators should hold themselves to the same standards that they expect of regulated entities.

The preface to the Economic Survey 2024-25 resounds with a bold and decisive call for reform. These foundational principles underscore the broader vision through which our nation’s governing dispensation can truly embrace and enable ‘growth through deregulation.’

The core takeaway from this year’s Economic Survey is the imperative need for a substantial rollback of regulatory excesses, as well as a conscious restraint from layering policies with additional operational conditions under the pretext of preventing misuse. More often than not, such over regulation distorts the original intent of policy measures, hampering rather than facilitating economic dynamism. The Survey makes an insightful case for leveraging India’s deeply ingrained social trust structures to attain scale and efficiency, especially
in its closely connected, kinship-based economic landscape. Each chapter of the Survey reinforces the necessity of ‘simplification and deregulation’ wherever feasible. As Chartered Accountants being enablers of commerce and enterprise, such unequivocal directional clarity in favour of effective deregulation is truly a welcome shift.

Encouragingly, early indicators of this ‘growth through deregulation’ vision are already visible. The conceptualisation of a Deregulation Commission, backed by well-defined terms of reference and coordinated efforts between the central and state governments, is a promising step forward. However, the success of this initiative hinges on its substantive execution rather than merely its structural existence. If implemented with true intent and depth, this deregulation drive can significantly bolster the competitiveness of Indian businesses, enabling them to expand and scale with greater ease and speed.

A Budget with Balance and Direction

The month of February commenced with the high-decibel presentation of the Union Budget 2025, accompanied by the introduction of the Finance Bill, 2025. A strong emphasis on driving consumption-led growth was evident, while an impressive balance has been achieved on the fiscal front. The Society hosted two highly engaging Public Lecture Meetings: one on the Direct Tax Provisions under the Finance Bill, 2025 by Shri CA. Pinakin Desai, and another on the Indirect Tax Proposals under the Finance Bill, 2025 by Shri CA. Sunil Gabhawala. Both sessions were well attended and have since garnered over 15,000 views on the Society’s YouTube channel. Additionally, our esteemed BCAS publication on the Analysis of Union Budget 2025-26 is now available for complimentary download via the Society’s website.

The Much-Anticipated Income Tax Bill, 2025 — Simplification in Form and not Substance?

In her Budget speech, the Hon’ble Finance Minister underscored ‘taxation’ as the foremost lever for ‘transformative reform’ within a broader set of six identified reformative pillars. This set the stage — and expectations — for the unveiling of a new Income Tax Bill, which was subsequently introduced in the legislature a week later.

Given that the palimpsest Income Tax Act, 1961 has governed direct taxation for over six decades, the introduction of the new Bill was anticipated to be a landmark moment — one that would bring forth a contemporary, well-calibrated framework equipped with modern concepts to facilitate real ease of compliance and substantive deregulation.

However, upon review of the Income Tax Bill, 2025, it becomes evident that the ‘simplification’ proposed within it is largely cosmetic. The revisions primarily revolve around improved structural organisation through better grouping of sections and chapters, rather than a meaningful reimagining of substantive provisions. While a detailed analysis does reveal a few high-impact potential changes, many appear to stem from drafting inconsistencies rather than deliberate policy shifts. It is reassuring to note that an ongoing review process seeks to address these inconsistencies, but the broader expectation of a comprehensive transformation in our tax statutes remains unmet.

Undoubtedly, rewriting well-entrenched and settled tax principles is a formidable challenge, and in many cases, an undesirable exercise. However, a more ambitious approach could have been undertaken — one that integrates fresh, progressive thinking into our tax framework in alignment with the overarching theme of ‘growth through deregulation’ as articulated in the Economic Survey. Alas, it appears that the journey toward a truly transformative tax regime is yet to be realised, and we must wait longer for substantive change.

Warm Regards,

CA Anand Bathiya

President, Ayodhya, 28th February, 2025

From The President

Last month, your Society uploaded all videos from the landmark BCAS Reimagine conference to its YouTube channel. Since then, these exclusive videos have accumulated thousands of views in a short period.

In one such video, being a dialogue on ‘The Victorious’ with living-legend Viswanathan Anand, the grandmaster shares insights on his deep passion for leveraging his personal learnings and achievements towards creating a virtuous, self-propelled chess ecosystem in our country. The true impact of this endeavour revealed itself when young GukeshDommaraju, his prodigious pupil, was crowned the youngest world champion in the history of the game.

Often times we underestimate the power of a single person, the power of a single idea and the power of a single organisation. From just one grandmaster in 1987 (being ‘Vishy’ Anand himself) to more than 85 Indian grandmasters today, with 6 out of top-20 world players being Indians and 3 out of top-6 world junior rankings being Indians, it was so apt when chess legend Garry Kasparov commented: “Children of VishyAnand are on the loose”.

Anand’s initiative, being superbly supported by the local government in Tamil Nadu, schools in Chennai, local coaches, capital providers along with technology access, has ushered a new era in Indian chess; it being highly speculated that the 2026 world championship title clash will be an Indian-vs-Indian clash. It’s a moment of pride, satisfaction and inspiration when in a short-span our country leads the world-pack, in a sport that was also historically invented in our beloved country itself, thousands of years ago.

As individuals and as organisations, there remain deep lessons in driving goodness and change through small-but-focussed interventions, powered by a supportive ecosystem. The single-most important reason for this ‘renaissance’ in Indian chess has been the contribution by multiple Indian Grandmasters who are ready to give back to society by creating a further line of champions. As an organisation itself, the BCAS think-tank aligns itself and continuously draws inspiration by such thoughts whilst constantly yearning to bring positive change for the members and the community it serves.

The resurgence of Indian chess, co-incidentally also had the Finance Minister Mrs Nirmala Sitharaman highlight the rise in Indian Grandmasters during her Union Budget speech last year. Whilst a year has gone by and Indian chess has created further records, our country’s excitement to the upcoming Union Budget in 2025 remains consistent.

Union Budget 2025

By the time you read this message, the Finance Minister would also have accomplished her own record of presenting the highest number of consecutive Union Budgets. The budget for the financial year 2025-26 will mark her eighth consecutive Union Budget, a new record in India’s Parliamentary history.

The upcoming annual Union Budget on 1st February, 2025 is also the first full-year budget in the third-lap of the Modi government. In the backdrop of (a) a stable coalition government with runway for next four years, (b) no major upcoming election rush and recent positive wins in state elections and (c) buoyant all-time high tax collections with simplification expectation, seen in contrast to (x) early sluggishness spotted in economic numbers, (y) anxiety in middle-income earners towards impactful taxes and (z) impact of geo-political shifts and Trump effect, the stage is set for this Union Budget to make its presence felt.

Not having the benefit of her thought process and the fine print under the Finance Bill, 2025, I will not risk speculating on the coverage under the Union Budget, but the formal BCAS expectation from the Union Budget, through a pre-budget memorandum has been submitted to the Finance Ministry, copy of which can be accessed at the society’s website. As Chartered Accountants, it will also be of immense interest to understand the outcome of the government’s initiative attempting to simplify the Income Tax Act, 1961.

The annual BCAS Budget Analysis publication is now available for pre-booking and we will strive to roll-out the publication, as soon as possible, post the Finance Bill, 2025 being available. The much-anticipated open-for-all BCAS Public Lecture Meeting on Direct Tax Provisions under Finance Bill, 2025 is scheduled to be held on 6th February, 2025 at 6:15 pm Yogi Sabhagruh, Dadar, Mumbai by learned Shri CA. Pinakin Desai, Past President – BCAS.

NFRA Representation

Separately, the Society has submitted a representation to NFRA regarding the fraud reporting requirements for statutory auditors of regulated entities. The representation focusses on the need to eliminate the duplication of reporting to different authorities, streamline the reporting process and simplify the regulatory framework for entities like banks, insurance companies, and NBFC’s by avoiding multiple reporting.

Open-for-all sessions and the BCAS YouTube Channel

Since inception, the BCAS has endeavoured to conduct open-for-all lecture meetings each month. In the month of January, the BCAS conducted 4 (four) such open-for-all lecture meetings. These sessions on (i) Navigating the Insolvency and Restructuring Landscape, (ii) Managing Challenges in Profession Today: Gita’s Perspective, (iii) Recent Important Decisions under Income Tax and (iv) Return of Trump – What does it mean for America, India and the World, were well received by our community. Most of these open-for-all sessions are also available through the BCAS YouTube channel. Over the years the BCAS YouTube channel has grown into a treasure trove of professional content and knowledge. Last month the BCAS YouTube channel touched a record 1 million views. With an ever-increasing content repository through open-for-all sessions, members not having subscribed, may choose to subscribe the BCAS YouTube channel.

Residential courses – 2025 season

The 2025-season of Residential Refresher Courses (‘RRC’) has officially started with the successful completion of the Residential Leadership Retreat in January. Next up:

1. Members’ RRC: At Lucknow / Ayodhya from 26th February to 1st March, 2025. Registrations closed!

2. IND-AS RRC: At Lonavala from 20th March to 22nd March, 2025.

3. International Tax and Finance Conference: At Jaipur from 3rd April to 6th April, 2025.

4. GST RRC: At Kolkata in June, 2025.

The concept of RRC’s was pioneered by the BCAS. Experience the magic of top-notch learning, networking, thought-leadership and unparalleled bonding at the BCAS RRCs. Join us for your preferred RRC and we look forward to interacting at the RRCs.

Warm Regards,

 

CA Anand Bathiya

President

From The President

Adios 2024!

The landmark calendar year of 2024 has come to a close, marking the 75th anniversary of our esteemed Society. This year has been an opportunity to express gratitude and recognise the numerous contributions made by our Society over the past several decades. It also served to reinforce our commitment and dedication to our Society’s mission for our shared future. The year commenced with the landmark ReImagine mega-conference and concluded on a high note with India’s inaugural CAthon — a marathon run for Chartered Accountants, which attracted over 1600 participants in support of noble causes. On behalf of the entire BCAS team, I would like to extend my heartfelt thanks to all our members and well-wishers for their unwavering support for the various BCAS initiatives throughout the year.

The beginning of a brand-new year is always a good spot to pause and reflect on the year gone by, as well as expectations from the new year. Whilst 2024 gave us new governments at the centre and the state, closer home, the new council of our Institute of Chartered Accountants (‘ICAI’) is also set to get started soon. In this backdrop, we discuss some trends affecting our profession that can seemingly unfold (or accelerate) as we glide into the new year:

i. Evolving Assurance Regulatory Landscape: In 2024, India’s assurance regulatory landscape underwent significant changes, with the NFRA demonstrating its strong intent through various amendments and circulars despite opposing views from other stakeholders. With a new council leading ICAI and the recent opinion from the Solicitor General of India, the outcome of the proposed amendments will be closely observed. Additionally, as the NFRA team expands, it is expected that their monitoring and oversight functions will accelerate, resulting in an increase in Audit Quality Review Reports, inspections, and orders.

The Accounting and Auditing Committee at BCAS initiated a series of webinars in December 2024 focusing on significant auditing standards and recent NFRA orders analysis. Featuring speakers from NFRA, the objective of these webinars was to enhance our members’ understanding of the evolving assurance landscape.

ii. Simplification Effort for Income Tax Act: In 2025, it is anticipated that meaningful amendments will be made to the Income Tax Act, 1961, in an effort to simplify its provisions. As announced by the Honourable Finance Minister in her Budget Speech of 2024, there is considerable expectation regarding the changes that may be proposed in the upcoming 2025 budget. These modifications are likely to be refined over the coming months, with the budget document setting the groundwork for this initiative.

At BCAS, the Direct Tax Committee has established a sub-group to provide suggestions on simplification initiatives. This sub-group will also focus on training and knowledge dissemination for our members following the announcement of these changes. Additionally, in December 2024, BCAS had the honour of hosting Dr. Pushpinder S. Puniha and other members from the Consultative Group on Tax Policy at NITI Aayog, where suggestions were shared on tax policy-related matters.

iii. The fruition of legal challenges under GST: The GST law has travelled through the phases of awareness > implementation > assessments > dispute resolution. Since the dispute resolution process is time-consuming, many important matters, including certain constitutional challenges to GST law, might see conclusion in 2025. It would not be of surprise if legislative amendments are resorted to cover some of these judicial pronouncements, as is the expectation with the Safari Retreats judgment. The commencement of matters at the appellate tribunal level is also expected to gather steam in the coming year.

The Indirect Tax Committee at BCAS recently hosted a comprehensive full-day workshop on recent developments in GST, which included a Brain’s Trust session addressing issues arising from recent judgments. Additionally, the committee is preparing a representation to be submitted to the Union Finance Minister and the CBIC, focusing on specific provisions related to the legal and procedural aspects of GST.

iv. Embedded usage of AI across practice areas: The discussion on AI has transitioned from questioning its impact to examining the extent of its influence. As more AI tools become widely used, AI adoption is expected to increase across all professional practice areas by 2025. It is unlikely that AI will replace accountants entirely, but it is entirely probable that ‘accountants with AI’ will replace ‘accountants without AI’.

At BCAS, our AI mission is to enable members to harness the power of AI rather than perceiving it as an adversary. The Technology Initiatives Committee has embarked on a journey of organising subject-specific AI discussions. Having successfully concluded a session on ‘Transforming Tax Practice through AI’, the team is all set to host an upcoming session on ‘Revolutionising CA Practice through AI’.

v. Acceleration in the trend towards audit-only firms and non-audit firms: The changing regulatory framework, increased stakeholder expectations, and the need for specialised domain knowledge are likely to accelerate the trend of firms focusing their efforts on either audit services or non-audit services. As this distinction becomes more pronounced, it may lead to the formation of audit-only firms that utilise their core assurance expertise to provide conflict-free services.

The forthcoming Members’ RRC in Lucknow-Ayodhya will feature insightful sessions on the topic of the future of firms, raising private equity for professional firms and developing non-conventional practice areas. While registration for the Members’ RRC is closed, individuals can join a waitlist to possibly secure a spot in the event of cancellations.

The BCAS membership extends across over 350 towns and cities in India. In December, the Vice President visited Coimbatore to conduct the first BCAS Townhall. These Townhall sessions, which are held outside of Mumbai, provide an excellent opportunity for the BCAS office bearers to engage with our membership and exchange thoughts. Coupled with the Sherpa initiative, these BCAS Townhalls will help reaching out to the growing diverse membership at BCAS.

This month, we surpassed 25,000 subscribers on our BCAS YouTube channel. The BCAS YouTube channel is a treasure trove of professional knowledge and deep insight on various topics. Now, all videos from the ReImagine mega-conference have been added to the BCAS YouTube channel for the benefit of our community.

BCAS congratulates the newly elected council members of the Institute of Chartered Accountants of India as they embark on leading and guiding our collective efforts towards the betterment of our profession.

Please also join me in congratulating the 11,500 newly qualified Chartered Accountants as they embark on their journey in this esteemed profession, with a promising future ahead of them.

As the new year begins, I hope you have obtained your copy of the BCAS Calendar and Diary. Best wishes for a healthy, happy and fruitful new year ahead. Bienvenue 2025!

CA Anand Bathiya

President

From The President

Dear Members,

Circa 1990: “Here you go. Don’t forget to carry this winter-wear safari-suit jacket with you; it can get really chilly at times,” said Mehta Saheb in a thankful tone to Mr Das, his office stenographer. Handing over his cozy safari-suit jacket to Mr Das, the quintessential Mehta Saheb left his Ballard Estate office at 8:00 pm and took the Mumbai local to his home in Dadar.

Mr Das, a fervent steno, also doubled up as a personal assistant to Mehta Saheb on many occasions. Like the last three years, Mr Das had an important task to accomplish — making sure that he reserved a seat for his managing partner at the annual pilgrimage of practising Chartered Accountants, aka the BCAS Members’ Residential Refresher Course (‘RRC’).

Mr Das stood resolutely in a long, winding queue that extended from the BCAS office to the road bordering Churchgate station, braving the cold winter at 4:00 am before daybreak. Engaging in conversation with those ahead of him — some of whom claimed to have camped out since the previous night — he waited for the BCAS office to open at 8:00 am to start accepting applications. After persistent efforts, Mr Das successfully had his master’s application acknowledged by the BCAS at 2:00 pm. Notably, like many previous years, applications for the BCAS Members’ RRC closed on the same day they were opened.

The accomplishment of having enrolled was like a battle won, and feelings like this one from the 1990s continue to linger in the hearts of thousands of Chartered Accountants from across the country, for they have experienced and participated in countless BCAS RRCs over several decades… a feeling of pride and gratitude to have lived and breathed at the BCAS RRCs.

Although many things have changed since the 1990s, the appeal of attending the BCAS RRC events has remained strong and even grown. This year’s 58th Lucknow-Ayodhya Members RRC experienced house-full registrations well before the early-bird discount period even commenced, which was over 100 days prior to the event date! After persistent cajolery with the venue partner, the BCAS team successfully secured additional rooms to meet the high demand, which is also nearing capacity, as I write. The recently announced 22nd Residential Leadership Retreat has also witnessed encouraging take-off. Over the next few months, the adept committees at the BCAS are planning various subject-specific RRCs for the benefit of our community.

Your Society pioneered the format of RRC. The RRC format promises focused, uninterrupted, collaborative and deep-rooted learning along with professional networking. The format has been ever-so-popular that today, BCAS itself hosts multiple subject-specific RRCs, and many other organisations have also followed suit.

In response to evolving circumstances, our Society has been introducing various learning formats to address current needs. Beyond flagship residential courses, the BCAS stable includes a range of pedagogy formats, including lecture meetings, seminars, workshops, study circles, boot camps, webinars, e-learning, extended duration courses, hybrid learning, certificate programs, talk-and-share sessions, fireside chats, panel discussions, roundtables, etc. Each format is tailored for specific applications and offers varying levels of depth, interaction and coverage. As we progress with our ever-busy professional lives and the increased integration of technology into our daily routines, the way we consume learning content is rapidly evolving. In response to this trend, the Society has green-flagged the project on BCAS Academy. BCAS Academy aims to provide a comprehensive digital learning and membership ecosystem for BCAS members, aligning with the BCAS’s vision of fostering learning and professional development of Chartered Accountants. Stay informed as the dedicated volunteer-led team at the BCAS builds and rolls out BCAS Academy over the coming months.

Continuing with our journey of collaborating with like-minded institutions and amplifying our strengths, your Society and the National Institute of Securities Markets — an education and capacity-building initiative of the Securities and Exchange Board of India, entered into a strategic collaboration. This collaboration is aimed at fostering financial literacy, strengthening capital markets through research initiatives, learning initiatives and deepening the academia-profession interface. Both organisations of repute shall leverage their core strengths towards bridging the capacity and learning gap, thereby improving the robustness of the financial fabric of India. The training and development sessions through this collaboration are intended to provide practical exposure and hands-on experience, ensuring participants are well-equipped to navigate the complexities of the securities markets.

A series of events are scheduled for the upcoming months. With over 17 events planned, there is on offer a diverse array of opportunities tailored to suit everyone’s interests. The landmark BCAS course on Double Taxation Avoidance Agreements is now in its 25th avatar, offering a unique proposition to enthusiasts of international tax. A series of highly relevant sessions on Standards on Auditing and key insights from NFRA orders, featuring speakers from NFRA itself, presents an invaluable opportunity for audit professionals. Additionally, the upcoming lecture meeting on 4th December by market veteran Nilesh Shah will provide our members with thoughts on deciphering the current state of capital markets.

Information regarding other events, including sessions on AI in Tax, Succession Planning, Capital Markets, IBC, Negotiations, Not-For-Profits, CAThon, IFSC matters, etc., are detailed elsewhere in the journal and are also accessible on the Society’s website.

The triennial elections for the central and regional councils of the Institute of Chartered Accountants of India are scheduled for the first week of December. It is imperative that we exercise our voting rights and more so, appropriately. As Thomas Jefferson aptly stated, “We do not have government by the majority. We have government by the majority who participate.”

With warm regards and greetings for upcoming Christmas festivities,

 

CA Anand Bathiya

 

President

From The President

The third-most important challenge facing our profession: ‘Regulatory Considerations’

On 4th October, 2024, our Society had the pleasure of hosting Dr. Ajay Prasad Bhushan Pandey, Chairman of the National Financial Reporting Authority (‘NFRA’), along with other NFRA officials for an interactive session on the evolving assurance landscape. The discussion was particularly timely, following the NFRA circular issued on 3rd October, 2024, which provided interpretations of SA 600 regarding auditors’ responsibilities for group entities.

The Chairman compellingly articulated the imperative for India to establish a world-class audit framework in light of the anticipated growth of the Indian economy as well as the role of Chartered Accountants and Indian firms towards this national cause. This was followed by a panel discussion featuring two past presidents of the ICAI and two seasoned audit partners, along with the Chairman. The insightful dialogue provided numerous takeaways, highlighting an evident shift in the regulatory landscape impacting our profession. Notably, the BCAS Membership Survey also identified ‘Regulatory Considerations‘ as the third-most significant challenge facing our profession, following the challenges of ‘Impact of Technology‘ and ‘Attracting and Retaining Talent.’

A defining characteristic of a Professional is the capacity to deliver high-quality work, unsupervised, which may explain the historical basis for ‘professions’ being initiated through ‘self-regulation’. However, with the passage of time and evolving expectations, ‘independent regulation’ is seen by many as a logical progression from ‘self-regulation’. The Indian auditing profession appears to have progressed from debating the need for independent regulation, to concentrating the debate on its effective implementation. It is towards this cause of effective implementation that a constructive framework of discussion, coupled with consideration of Indian context alongwith following due process of change management, is desirable. As integral components of the ecosystem, both professionals and regulators must collaborate effectively to achieve the shared goal of ensuring and enhancing the financial fabric of our economy.

It is not often that a profession undergoes such a fundamental transformation, but such a phenomenon would expectedly be followed by periods of disruption and altered survival landscape. Although this transformation is most apparent in the audit sector, the evolving regulatory dynamics and expectation gaps are also evident in other practice areas. The concerns around multiplicity of regulators, lack of concerted legal views on contentious matters, trigger-happy law-enforcement machinery and high monetary penalties, make for an onerous occupational hazard. In this backdrop, it is believed that the ICAI has on 18th October, 2024 issued a ‘standard operating procedure to be adopted by police and other law enforcing agencies for investigation, search, seizure, interrogation, detention and arrest of chartered accountants.’

While our exceptional technical expertise and comprehensive training background provide us with a significant advantage in addressing these challenges, aligning our abilities further with contemporary times and needs would clearly be beneficial.

As we spoke about ‘key challenges’ over the last few messages, our Society remains committed to concentrating its efforts on tackling these contemporary challenges, aiding our community in enhancing its relevance. As the saying goes, ‘God gives challenges to those capable of handling it’, and as Chartered Accountants we will adapt, engage and evolve to meet these few worthy challenges.

Meanwhile, the professional development juggernaut at BCAS continues to host contemporary learning events, promoting good policies through advocacy and working towards the interest of our community. Some notable developments include:

i.  Representation on SA 600: The Accounting and Auditing Committee of BCAS provided comprehensive feedback to the NFRA regarding the proposed changes to SA 600. During a personal interaction with NFRA officials in Delhi, BCAS delegates had the opportunity to elaborate on the rationale behind some of their suggestions and the thought process underlying these recommendations. We extend our gratitude to the NFRA team for their patient reception and engaging discussion.

ii.  IIM-Mumbai + BCAS Research kick-off: Extending on our collaboration with IIM-M, the first research project with IIM-M has been successfully green-flagged by BCAS. Led by the Finance, Corporate and Allied Laws Committee at BCAS, the six-month funded-research project will involve dedicated research effort on certain blue-sky concepts under Direct Tax, alongwith their adaptability to the Indian taxation ecosystem. Stay tuned for more updates on this project.

iii. International Tax Think-Tank initiative: Enhancing our efforts towards structured research in International Tax, the International Tax Committee of BCAS has commenced the International Tax Think-Tank initiative. Through this initiative, research fellows under the guidance of subject-matter experts will engage on assorted topics of research interest to churn meaningful research output with diverse applications. This initiative holds a lot of promise to transform our abilities at BCAS to conduct authentic research-backed thought-leadership.

iv. BCASNxt — A Formal Students’ Sub-Group: Chartered Accountancy students form an essential component of the BCAS ecosystem. Throughout the year, BCAS organizes numerous events designed to meet the learning, networking, and career guidance needs of these aspiring professionals. It is therefore fitting to formalise this initiative into a structured, student-led format. With the dedicated efforts of the Human Resources Development Committee at BCAS, we are pleased to introduce the ‘BCAS Nxt’ platform for CA students. I extend my best wishes to the newly appointed student leaders of BCAS Nxt as they assume this significant responsibility.

v.  Bonhomie Events: As the compliance-intensive months of September to November conclude, a series of non-technical events are scheduled for our members in the upcoming months. The Seminar, Membership, and Public Relations Committee is organizing the inaugural ‘CAthon’ on 1st December, 2024 — a marathon effort in every respect. Additionally, BCAS Cricket 2025 will be held on 5th January, 2025, to foster camaraderie and encourage sportsmanship among us. Grab your place in the team soon.

vi.  58th Members’ Residential Refresher Course (‘RRC’): The flagship Members’ Residential Refresher Course in its 58th avatar is scheduled to be held at the culturally rich city of Lucknow. With top-notch speakers and contemporary topical coverage, this edition highlights darshan at the Ram Mandir temple at Ayodhya! With registrations having opened from Dusshera, this limited-seats annual pilgrimage of knowledge is a must attend event.

So, while you consider registering yourself for the Members’ RRC and a visit to Ram Mandir – Ayodhya, may I take this opportunity to wish you and your loved ones a very Happy Diwali and best wishes for a healthy, safe and prosperous new year ahead.

 

Kind Regards,

 

CA Anand Bathiya

President

From The President

Dear Members,

  •  More than 17.76 lakh applications were received for 17,471 police constable posts.1
  •  India needs to create an additional 60 to 148 million jobs by 2030.2
  •  India, on average, grew 6.6 per cent a year in the decade starting in 2010, but the employment growth rate was below 2 per cent, which was below its G20 peers.3

The single largest challenge that stands between present-day India and a developed nation is our capacity to create sufficient employment opportunities and, thereby, leverage our demographic dividend. The Indian economy must generate approximately 7.85 million jobs ‘annually’ in the non-agricultural sector until 2030 to accommodate the increasing workforce; currently, we fall short of this target. Empirical evidence suggests that jobless growth can lead to unintended consequences of income inequality, economic stagnation, lower productivity, strain on public finances, unrest, etc.

While the broader issue of ‘oversupply’ is a significant challenge for our nation, within our community and profession, the situation seems to be more balanced or even tipping in the opposite direction. Converse to the national phenomenon:

-The second-most critical challenge facing our profession was considered that of ‘Attracting and Retaining Talent’;4

– We need more than 30 lakh Chartered Accountants by 2047.5

– In 2023–24, the highest number of jobs were created in ‘services’, of which ‘financial services’ is a major contributor. This trend is expected to continue.6

1 Maharashtra police recruitment drive outcome.
2 Gita Gopinath, first deputy managing director of International Monetary Fund
in conversation with 15th Finance Commission chairman N K Singh.
3 Economic Survey – 2024-25
4 BCAS Membership Survey 2024
5 ICAI president at a press conference in New Delhi on 21st February, 2024
6 Study report by Bank of Baroda.

As our profession and organisations expand, we have a genuine opportunity to bridge this dichotomy by creating significant direct and indirect employment, thus remaining true to our purpose of Partners in Nation-building. Globally, the worrisome trend of a declining number of CPAs entering the profession and a fragile student pipeline — alongside over 75 per cent of current CPAs retiring over the next 12 years — creates a unique opportunity for Indian Chartered Accountants to become the key enablers to the business world.

While external factors can offer support, they are not sufficient by themselves to address the challenge of Attracting and Retaining Talent. A vital aspect of fostering growth and excellence in our profession lies in reflecting on our mindset, approach and strategies to attract and, more importantly, retain talent. During the recent BCAS Lecture meeting on Profession @ 2047, Shri Shailesh Haribhakti highlighted the profound effect of small but meaningful adjustments and their overall contribution to our cause. From my observations, a few recurring themes emerge among successful professionals who excel in attracting and retaining talent:

i. Purpose-driven practices: The cultural fabric of purpose-led ethical organisations contrasts sharply with that of short-term, opportunistic entities. Individuals with integrity seek to affiliate with reputable organisations and align with a clear organisational purpose, substantially contributing to team unity. As professional entities, adhering to our core values of ethics, professionalism and knowledge serves as the most effective method for attracting and retaining top-tier talent. Purpose-driven organisations also embody genuine leadership that emanates from the highest levels.

ii. People over profits: While a business aims for ‘maximisation’, a profession strives for ‘satisfaction’. The line between professions and businesses is becoming less clear, and as professionals, an excessive focus on profits is inappropriate. Incidents where health and lives are compromised due to extreme work pressure and toxic environments cause irreparable harm to organisations, their employees and their families. The culture of prioritising ‘profits over people’ requires a complete reversal, placing the well-being of team members at the forefront. The practice of paying 1.3x and demanding 1.5x effort does not support sustainable well-being in the long run. Evaluating our progress on the axis of good > better > best is more meaningful than focusing on being big > bigger > biggest.

iii. Investing in the future: As managers or owners, we also have the responsibility of acting as trustees for the future of our teams. The position of influence we hold should be directed towards genuinely caring for and improving our team’s prospects. Adopting the perspective of your subordinates often leads to a more balanced approach to important issues. Organisations designed for longevity positively affect thousands of lives over time.

iv. Collaborate with scale: The scalability and security of an expanding organisation inherently attract and retain talent. As teams’ ambitions rise, it becomes essential for organisations to grow and provide long-term career opportunities. Scaling also introduces challenges that test and enhance the capabilities of teams, offering them a chance to reach their full potential.

Fostering an environment where we regard our teams with attention, care and respect, rather than merely as ‘resources’, is crucial in tackling the issue of attracting and retaining talent.

Whilst learning events continued throughout the September month, at your Society, four sub-groups have been constituted with specific terms of reference:

i. SA 600 Working Group: The newly released exposure draft on SA 600 by the National Financial Reporting Authority carries significant implications. At BCAS, a working group comprising distinguished accounting professionals has been formed to examine these proposed changes thoroughly and provide meaningful recommendations.

ii. Direct Tax Simplification Working Group: In her Budget speech, the Finance Minister announced plans to undertake a comprehensive simplification of the current Income-tax Act, 1961. As a leading voice in the accounting and tax field, the BCAS has formed a working group with the aims to (i) propose potential simplification strategies, (ii) assess the drafted simplification initiatives once they are available, and (iii) address the educational needs of our members concerning changes brought about by the proposed simplification measures.

iii. Sherpa Steering Group: The BCAS has members spread over 350 cities and towns throughout India. Last year, we launched the Sherpa initiative with the goal of connecting with our community and enhancing engagement. This initiative enables various BCAS projects to extend their reach to different regions, thus magnifying the benefits of the BCAS nationwide. To support the development of this crucial initiative, a dedicated steering group has been established.

iv. IIM-M + BCAS Joint Steering Group: As you know, the BCAS and IIM Mumbai signed a research-focused MoU last month. To advance this initiative, a joint steering committee featuring leading members from both the BCAS and IIM-M has been established. A list of potential research topics has been finalised, and more developments will follow soon.

Separately, the International Tax Committee submitted its representation to the Reserve Bank of India on draft FEM (Export and Import of Goods and Services) Regulations, 2024. The same can be accessed on the Society’s website.

I would like to take this moment to thank our members for their incredible participation in all the BCAS events during the busy September month, as well as for fully consuming the entire stock of BCAS Referencer publications. The dedication and effort from BCAS volunteers in planning, preparing and executing these initiatives are immense, and the enthusiastic response from our community motivates us to continue striving for excellence.

Greetings and best wishes for the upcoming festive seasons.

Thank you.

 

CA Anand Bathiya

President

BCAS President CA Anand Bathiya’s Message for the Month of September 2024

“Sir, what supplementary courses would you recommend I take alongside my Chartered Accountancy course?” asked a young and enthusiastic student who recently embarked on her Articleship journey. The student was attending an orientation program conducted by her firm to welcome the new 2024 batch of recruits.

The principal, with grey hair and a composed demeanour, articulated to the student, “In our era, we focused on enhancing our ‘technical’ proficiency through courses like masters, legal qualifications, CS, CWA, CFA, and so on. However, today it is crucial for you to also develop ‘technological’ proficiency by deeply understanding, learning and applying modern technologies. Being tech-literate is no longer a choice.”

In current times, technology and Artificial Intelligence (‘AI’) have become ubiquitous, permeating every significant discussion and infiltrating every dialog that matters.

Be it at the BCAS New Chartered Accountants’ Felicitation event, attended by hundreds of newly qualified Chartered Accountants, or the CA Pariskha pe Charcha webinar, attended by CA students in hordes; the theme of Technology somehow found its way into these leading discussions. So-much-so that when a group of BCAS volunteers visited a BCAS Foundation supported school in Umbergaon, Gujarat, they were spell-bound to see deserving primary school kids making live websites and apps with no-code techniques, powered through the BCAS Digital Classroom initiative. [1]

[1] The BCAS Foundation completed an ambitious project of providing Digital Classrooms at various schools. More than 3000 school kids will be beneficiaries of this social initiative.

At the crossroads of these discussions lies our renewed shared realization that wholeheartedly embracing (even better, a bear hug) technology is quintessential for maintaining our professional relevance. A clear reflection of this feature was in the BCAS Membership Survey 2024 where highest number of member respondents rated ‘Impact of Technology’ as the top-most challenge for the profession.

Technology is not alien to us; over the years, both in our personal and professional spheres, we have integrated information technology into our everyday routines. However, the latest advancement in AI promises an even more substantial impact on our lives and careers. OpenAI launched ChatGPT on November 30, 2022. Although ChatGPT is a relatively simple form of AI, it marked a significant step toward understanding AI’s potential to transform not only business but also our everyday activities.

Speculating the impact of AI on businesses, I dare contend that it holds the potential to ignite revolutionary changes. Finding balance in navigating the middle ground between irrational fear—believing AI will render us obsolete—and naive rejection, viewing it merely as a fleeting trend, it is clearly time now to move the needle from questions of ‘Whether’ and ‘Why’ to the more practical considerations of ‘What’ and ‘How’.

The general perspective is that AI will function as an augmentation technology, freeing up our professional time for the critical-thinking tasks that empower us and drive innovation and progress. At the end of the AI wave, a ‘K’-shaped outcome seems emerging, with the adopters benefiting significantly and the ignorant running the risk of professional obsolescence.

AI in finance and accounting is not about replacing accountants; rather, it’s about empowering financial professionals to work smarter, faster, and with unparalleled accuracy. Accountants can leverage AI in various ways to enhance their productivity, accuracy, research and decision-making capabilities. With this emerging technology, the applications of AI and the use-cases in our practices and careers, are only limited by our imagination.

Innovative concepts such as Invisible Accounting (which operates in the background, allowing accountants to focus more on strategic decisions), Continuous Auditing (providing uninterrupted, automated and accurate auditing processes), Active Insight (offering real-time financial visibility for accounting managers and leaders), Smart Documentation (enabling automated documentation and communication with minimal human intervention), Co-Counsel (a virtual research assistant that fills you on facts, figures and judicial precedents, whist you focus on arguments and merits) and Robo Advisor (utilizing language model bots on technical databases to resolve complex client queries without team assistance) are swiftly gaining acceptance.

Although AI, in its present state, might not be able to replace you at your job, the reality is that AI will continue to improve and become more powerful over time, learning increasingly from observing your actions. Coming soon is a contest between You vs. Bot. What steps can we take to reduce the likelihood of being outsourced by machines or replaced by AI? While my guess can be as good as yours, few thought come handy:

i. Being Versatile: It quite seemed a concluded professional debate of a ‘Specialist having an edge over a Generalist’. Whilst this remains largely true, the needle seems to have moved towards more balance. Being a Generalist (or better still, a Versatalist) would mean engaging in solutions over service, which perhaps require elements of judgment, bias into decisions and analyses, an estimation which comes with experience. Building ‘breath’ alongside ‘depth’ certainly seems to have a better odd.

ii. Principle-based vs Process-based: As a chess enthusiast, I was fascinated early on by an AI application when IBM’s Deep Blue easily defeated legendary chess players. Contrasting this triumph, the utilization of AI in self-driving cars and its unpredictable feedback to philosophical questions, appears to follow a pattern. Deep Blue’s dominance in chess arose from its extensive database of historical games and its ability to evaluate millions positions per second, surpassing even the most adept human players. Conversely, AI encounters significant hurdles with automated driving, not because of the inherent complexity of driving, but due to the unpredictable behaviour of human drivers on public roads. In our professional field as well, aligning with the Principle-based approach with possibility of multitude of outcomes, seems to be a wiser. choice than relying on the Process-based approach.

iii. Expertise vs. Efficiency: Conventionally, a professional would strive for mobility from Efficiency-based activities to Expertise-based activities or in absence of it, Experience-based activities. The need for this transition from Efficiency-based activities is further amplified in the face of AI. Being on the side of intellect and intuition is better than on the side of mechanical. Whatever gets ‘process ‘zed can get automated.

Needless to say, we all are a work in progress, and rather than complaining or worrying about a bot replacing me, we will work on staying ahead.

At your Society, a series of initiatives are underway to equip our members to this new reality.

  • The BCAS AI Survey was the first step towards getting more granular understanding and awareness levels of AI within our community. Many of us have participated in the AI Survey, and the insights will greatly assist the Society in refining its learning offerings according to the suggestions.
  • A unique webinar has been planned on 10th September, 2024 on harnessing the power of Co-Pilot and Co-Pilot Studio alongwith a live demonstration on making your own ChatBot. This program is particularly tailored on use-cases for Professional Services Firms and will be a perfect immersion into your AI powered journey.
  • A series of ‘AI pe Charcha’ webinars on AI and its impact on different subjects is being planned by the Technology Initiatives committee for the benefit of our community.
  • To talk about the longer-term effects of technology amongst various other themes, one of the finest thought-leaders of our profession, Shri Shailesh Haribhakti will share his thoughts on ‘Profession @ 2047’ at this open-for-all online lecture meeting on September 25, 2024.
  • In another first, your Society has entered into a collaboration with IIM-Mumbai towards fostering a unique Professional: Academia partnership. This initiative with focus of research, learning, advocacy and strategic initiative; will also work on the digital angle impacting our professional lives.

As we enter the busy September-October season, lets be on the lookout for tasks, processes and engagements that can be leveraged through automation and tune our energies towards expertise and value additive endeavours.

The ‘learning factory’ at BCAS continues at full steam with an array of events planned across the month. Do refer to the Forthcoming Events section and opt for the event of your choice.

BCAS President CA Anand Bathiya’s Message for the Month of August 2024

Dear BCAS Family,

On July 6th, 2024, our Society completed 75 revolutions around the Sun. Our history chronicles the evolution from a small group of dedicated professionals gathering on Wednesdays to what is now the largest and oldest voluntary body of Chartered Accountants in India, with representation spanning over 350+ cities and towns nationwide. It is a fascinating phenomenon as to why, year-after-year, thousands of Chartered Accountants continue to revere our Society as a hub to fulfil their intellectual hunger and admire our Society as a pinnacle in enabling professional development.

The single most important reason for this incredible evolution and longevity of our Society over the last many decades has been the ‘constant urge and effort to stay relevant’. Being an observer of the inner functioning of our Society, I had the privilege to closely witness this continuous process of institutional self-reflection and the enduring drive towards ‘staying relevant’ to our community. This attribute of ‘staying relevant’ hinges on remaining conscious and alert to changing times and changing needs of our community.

It is of no surprise that with great honour, our Society wears the Sanskrit aphorism, “न भयं चास्ति जाग्रत:” (na bhayam chasti jagratah) as its esteemed emblem, signifying that those who remain conscious and alert, have no reason to fear.

Throughout the last decades, our profession has encountered numerous challenges, and our Society has been pivotal in augmenting our community’s ability to meet these challenges head-on and even transform them into opportunities. Our challenges today are much different, both in terms of their nature as well as their impact, and our Society’s role in the face of these challenges is of vital importance.

Last month, we carried out a Membership Survey with extensive participation from our community, gathering their valuable insights. A significant inquiry within the survey asked members: “What are the primary challenges you believe our Profession faces?”. The collected responses have been organized as follows:

While all of the above challenges deserve our undivided attention and dedicated efforts, the challenges related to technology, talent, and regulatory risks particularly distinguish themselves. Each of these will require concentrated efforts involving awareness, learning, upskilling, upgradation as well as advocacy.

Swamped with our July deadlines, September deadlines, October deadlines and deadlines after deadlines, we would need to introspect on these challenges and also our response to these challenges.

Within these challenges, exists the chance to excel and expand our professional pursuits, whether in our practice outfits or in our employment roles. Embracing contemporary technologies, enhancing our talent practices and managing risks will need to be the cornerstone of our efforts in the coming times.

Our Society remains committed to concentrating its efforts on tackling these contemporary challenges, aiding our community in enhancing its relevance.

Budget @ BCAS

Last month, the Indian Tax and finance community experienced a significant day with the presentation of the Union Budget for the fiscal year 2024-25. Speaking at the Public Lecture Meeting on Finance (No. 2) Bill, 2024, Shri CA. Pinakin Desai aptly summarised the budget as ‘On an overall basis, it is a satisfactory budget, with aberrations on both sides’. The Finance (No. 2) Bill, 2024,affecting more than 80 sections of the Income Tax Act of 1961 promises some impactful changes to the status quo.

While the drive towards simplification, streamlining, and standardisation is praiseworthy, specific measures such as the tax implications of share buybacks, the evaporation of indexation benefits, and the increased scope of TDS necessitate a more thorough impact evaluation.

The Society conducted two distinct Public Lecture Meetings on (i) Direct Tax Provisions under Finance (No. 2) Bill, 2024 by Shri CA. Pinakin Desai and (ii) Indirect Tax Provisions under Finance (No. 2) Bill, 2024 by Shri CA. Sunil Gabhawalla, both lectures were very well received and viewed in large numbers. The coveted and unbiased BCAS Budget Analysis is open for ordering and do order your copies soon.

Viksit Bharat

In the session before Union Budget Day, the Economic Division of India’s Department of Economic Affairs, Ministry of Finance, presented the Economic Survey 2023-24 at the Parliament. The Survey largely reflects the robust condition of the Indian economy but openly recognises the distinct challenge that India’s journey towards a developed nation by 2047 represents, compared to China’s ascent from 1980 to 2015. It points out 4 (four) challenges being de-globalization, geopolitical shifts, climate change and artificial intelligence as potential obstacles to maintaining high growth trajectory for India in the forthcoming years and decades.

Each of us holds a share in our progress towards Viksit Bharat, and being members of the intellectual community, it is our responsibility to express our opinions and set forth our views for its development. Our Society has begun a quest to capture the perspectives of varied stakeholders with distinct interests to further define the concept of Viksit Bharat. By organising multiple roundtable discussions as part of its outreach efforts, our Society aims to synthesise these insights into a research paper, which will then be shared with the decision-makers within the Government. Last month, two round tables were conducted, (i) with stalwart Chartered Accountants and (ii) with Chartered Accountancy students and management students, with more discussions being lined up towards this important initiative.

Our Society extends a hearty congratulations to the 20,446 Chartered Accountancy pass-outs and warmly welcomes them into our community. The future looks bright for India and our profession, and we wish them a satisfying and successful professional journey ahead.

Collaboration with BIA

Building upon our agenda to collaborate with peers, our Society has formalised a collaboration with the Bombay Industries Association. Both organisations have had a history of working together, and this formal collaboration outlines a unified strategy for future joint efforts.

In this special Industry:Profession partnership, both organisations, with 75 years of rich history, will combine their resources and capabilities to reinforce the economic structure of Mumbai, Maharashtra, and India. This includes collaborative learning opportunities, advocating for ease of business, offering policy suggestions, and engaging members from both groups.

In closing, I am profoundly thankful for the faith placed in me to serve as the 76th president of the Bombay Chartered Accountants’ Society. Sincere gratitude to CA. Chirag Doshi for his exemplary leadership during the important 75th year of the Society.

Best wishes for the festive season and 78th Independence Day!

BCAS President CA Chirag Doshi’s Message for the Month of July 2024

As I pen down this message for the final time as the President of the Bombay Chartered Accountants’ Society, I am filled with a sense of gratitude and pride. It has been an honour to lead this prestigious institution during its 75th year, a milestone that stands testament to our enduring legacy and unwavering commitment to excellence. This journey has been marked by remarkable achievements, collaborative efforts, and the collective vision of our members, all of which have propelled us to new heights and has reaffirmed the Society as a thought leader in the finance/accounting/tax community. As we look to the future, I am confident that the foundation we have built over the years will continue to foster growth, innovation, and a spirit of camaraderie within our community.

Recently, the election results took an unexpected turn when the NDA secured 293 seats, while the INDI Alliance won 234 seats in the Lok Sabha. Despite been a coalition government, the NDA quickly refocused on “Modi 3.0.” The NDA alliance acted in a very mature manner ensuring within just five days, Prime Minister Narendra Modi and his cabinet ministers took their oaths of office. The key expectation of both B2B sector and B2C sector entities are around ease of business, fast track digitisation, digital infrastructure improvements, faster and easier access to credit facilities, better governance and continuous support. Infrastructure development and research and development expenditure will be pivotal in taking Indian corporates, start-ups and MSME ahead.

This month we had the ICAI torch bearers President CA Ranjeet Kumar Agarwal and Vice President CA Charanjot Singh Nanda along with other Central and regional council members visiting our BCAS office and had an interaction with our office bearers, managing committee, past presidents and core group members. The discussion was very insightful, and many topics related to the profession like impact of technology, globalisation of practices, CA curriculum, articleship, policy related to aggregation of firms and many more relevant topics were also discussed.

During this month our society was also invited to interact with the Revenue Secretary Mr Sanjay Malhotra at the Income Tax Office Mumbai, and we presented our views and expectations in coming times from the Revenue Department.

Our Society concluded an extremely power packed power summit at the Alibaugh with the theme of Walk the talk – Leverage AI, technology capital and collaboration. It was well attended by 90+ CA and the topics ignited lot of requirements the new age practice needs to adopt in the given changing times.

BCAS has also submitted their pre-budget memorandum 2024 -25 to the Hon. Finance Minister of India, highlighting the key concerns affecting the common man and offering recommendations to address them. We recommended reducing the maximum tax rate for individuals to 30% to provide relief to high- income earners, reinstating the exemption for medical reimbursements up to Rs. 50,000 per annum which will help salaried employees cover small and outpatient medical expenses, increasing the threshold for advance tax payment from Rs. 10,000 to Rs. 1,00,000 which will reduce the burden on taxpayers, reinstating the 150% weighted deduction for in-house R&D expenditure to promote innovation and technological advancement, raising the exemption limit under Section 54EC from Rs. 50 lakhs to Rs. 2 crores to provide adequate relief in line with inflation and many other recommendations were submitted. These recommendations aimed to simplify tax compliance, reduce the financial burden on individuals, and promote overall economic growth. We hope they will be considered favourably.

Talking about my journey during this year, it started with a 5-year plan with 5 pillars. Various new initiatives were undertaken:

  1. Reach – Increase in Social media presence across all platforms, print media coverage, outstation members meeting, PM’s commendation letter praising 75 years journey of BCAS, special invitees to various meetings before current budget, faculty sharing MOU with Comptroller and Audit General of India, Joint events with American Association of Accountants, joint events with IMC, joint programs with BIA and much more.
  2. Professional Development – Adan Pradaan (Mentor-Mentee initiative) with 75 mentees in a year, youth CAMBA event with Atlas University, various seminars on technology, international webinars, seminar on Forensic Accounting & Investigation Standards (FAIS), 75 hours long duration course on Accounting and Auditing, Professional Accountancy courses, Full Day Workshop –Use of Technology in GST Compliance and many more to continuously upgrade the professional skills and many more.
  3. Networking – launch of BCAS Engage platform, Pan India Networking events for members, RRC and other events had networking focus initiatives, NFC cards at Reimagine Conference, Outstation members meet in various cities.
  4. Advocacy / Research and Publications – Research paper on “Ease of Doing KYC”, Study paper on “Disclosure Overload—Issues in Financial Statements”, various representations to regulators, Publication of 75 Laws Relevant for Direct Taxes.
  5. Yuva Shakti – Student event Tarang@75, CAs got talent – JhanCAr was back with a bang and maximum participation, Digital branding seminar, Vibrant BCAS youth WhatsApp group.
  6. CA for Change – Digitalisation of schools in tribal areas, providing science lab, and library cum reading room to schools, creating a BCAS Van by planting 7500 trees in the 75th year.

More than 75 events in one year were organized which included lecture meetings on current topics, webinars, outstation meetings, RRCs, NRRC, students’ events, study circle meetings, workshops, seminars and non-technical sessions and events.

Amongst many initiatives and events, we organised this year, the 75th year celebration event, ‘ReImagine’ stood out as a beacon of our commitment to innovation and forward-thinking. This event brought together thought leaders, industry experts, and our vibrant member community to explore the future of our profession. We delved into topics such as the impact of emerging technologies, the evolving landscape of corporate governance and the importance of sustainable practices in finance and more. The insightful discussions and collaborative sessions not only broadened our perspectives but also equipped us with the tools and knowledge to navigate the challenges and opportunities that lie ahead.

‘Reimagine’ was not just an event; it was a movement that underscored our resolve to stay ahead of the curve and lead with vision and purpose.

Reimagine was about opening vision of the members towards the upcoming vistas, which can be explored with renewed vigour to excel and thereby achieve greater heights in the profession.

The crux of creativity is seeing things from a new perspective. The greatest block to creativity is old judgements. It is time to reprogram your minds. So, try the untried – Mahatria Ra

As I conclude my tenure, I extend my heartfelt gratitude to each one of you for your unwavering support, dedication, and contributions. The milestones we achieved together are a testament to our shared vision and collective efforts. This role has been a transformative experience for me personally. I have learned, grown, and been inspired by the dedication and passion of our members. The camaraderie and collaboration within our society are truly exceptional, and I cherish the memories and relationships formed during this period.

Thank you once again for the incredible honour of serving as your President, I am confident that the incoming President Anand Bathiya and his team of office bearers and managing committee will continue to steer the Bombay Chartered Accountants’ Society towards greater success, nurturing the principles of excellence, integrity, and innovation. Let us continue to work together, fostering a legacy that will inspire future generations of chartered accountants.

To end, I will say:

“Goodbyes are not forever, are not the end.

It simply means I will miss you all until we meet again”.

From The President

Dear BCAS Family,

It is that time again when we all tune in to a single track. Yes, it’s the budget time. When you get this message, the Finance Minister (FM) after enduring grueling hours with her team would have presented the last full budget of the government – repeatedly walking a tightrope to balance a budget between the several populist demands and the financial prudence. While the nation is full of expectations, ideas and suggestions, it is the community of tax practitioners that in particular is keeping its fingers crossed as to see what the budget will offer. While the FM echoes the sentiments of Robert Frost that she has ‘promises to keep and miles to go’, the daunted community of tax payers and the tax practitioners will be happy with even the small steps on the reforms and concessions.

I would like to echo a wish list that has surfaced in conversations with many of you on multiple occasions.

First, we need to have the income tax slabs, deductions and relief benchmarked to the inflation index. Inflation is not a produce of the populace but the fallout of the policies of the government. To punish the honest tax payers with tax on an income that has truncated due to rise in the inflation, is like beating a dumb man for his inability to lend his voice. They both are helpless victims of the circumstance.

Second, there needs to be some concessions for the senior citizens whose contribution as tax payers in their prime earning years to the nation cannot be overlooked. With the nuclear family system gaining more preference the seniors must have income saving capability to support themselves independently. A few graceful concessions on mediclaim limits, pensions and special interest rates will help them give more security.

Third, the ease of doing business is implemented in its true sense in the income tax assessments for the business. Undoubtedly, common man has substantially benefitted by the simplified procedures. However, the same cannot be said about the tax assessments of the business. Increasing appeals is the proof of this. There are approx. five lakh appeals pending at the CIT levels across the country. Add to that the appeals pending with the IT Tribunals, High Courts and Supreme Court and that gives a scary picture of the mindset of those in the administration. Accepting that many of these could be justifiable from the point of view of Revenue, it is by far admitted even at the senior levels of the tax administration that many are infructuous and have their origin in the fear of being labelled as partisan to the assesse. FM must give impunity to the tax administration for encouraging fair and impartial interpretation of the statute and speedy resolution of the issues.

Fourthly, there needs to be an administrative reform that brings about a better coordination between the CPC Bengaluru and the assessing officers. There can be a separate series of articles that could be written about the issues that the assesses face. To name a few, grievances are attended in a mechanical manner and resolution thereof is not in the best interest of the justice, process of online rectification has a lot of restriction in conveying the points of rectification, issue of not allowing credit of TDS of earlier years, whose accounts are maintained on cash basis is a nightmare.

Lastly, the controversial judgement on the Charitable Trust by the Hon. Supreme Court has opened a Pandora’s Box which will completely unsettle the accepted norms of exemption of the income of the Charitable Trust. Before the issue gets out of the hand the FM needs to bring appropriate amendments to the provisions that income can be spent on the primary as well as the related objects of the Trust.

If wishes were horses then beggars would ride is the famous proverb. The irony of the life is when the rightful wishes render you as beggars. I am sure the corridors of the powers do realize the compulsion of the people to seek better system for them and will eventually comply.

Annual Transparency Report
National Financial Reporting Authority (NFRA) has issued a draft of the Annual Transparency Report to be submitted by audit firms every financial year. The implementation of this filing will start with statutory auditors of the top 1,000 listed companies on 31st March.

Audit firms will have to reveal details of their ownership and management structures. The report will cover details about the revenues of the auditor and its network firm for the current and previous years. It will include the statutory audit and a detailed break-up of the non-audit service fees too. It will have to report professional and technical education for the professional staff as also share their working alliances, collaborations, licensing and knowledge sharing arrangements in India or abroad. These and many more details as required will have to be published on the website of the statutory auditor.

The report is stated to be on the lines of contemporary international best practices implemented by independent audit regulators in other geographies. NFRA believes the report will be a lighthouse to ensure high quality audits and preventing conflict of interest by maintaining independence.

The question that arises is while it states ‘what’ is required does it clarify ‘why’ it requires it? Does it in any way improve the quality of audit? Could these aspects have not been covered by the ICAI through its Peer Review mechanism? Is it a direct fallout of requirements that have been considered as best practice in the developed world? Maybe some more introspection and open forum discussion is required before this step is implemented.

Winds of Change
Breaking with the tradition, ICAI has revamped the curriculum after five years, instead of ten, keeping in mind significant changes in GST and the evolving industry requirements. The new course will have a multidisciplinary approach with diverse subjects, that include; AI, Blockchain, Data Science, Traditional Knowledge (proposed by NEP), Psychology and Indian Constitution. And to boost accessibility for students, it is proposed to offer the course in regional languages with computer-based exams. Hopefully this should bear good fruits in future.

Female Power
The CA Final results were out and it is very hearteningto see more young ladies in the toppers’ list. I hope this will encourage many more female students from acrossthe country to aspire to become CAs. With 3.65 lakh CAs and 44 overseas chapters, the ICAI has grown phenomenally to become the second largest accounting body in the world. In a concerted effort, to keep the momentum escalating, ICAI is focusing and investing in education, to fulfil its aim of preparing ‘global professionals’.

Events
BCAS has organised a Public Lecture Meeting on the Direct Tax Law provisions of the Finance Bill, 2023, on Tuesday, February 07, 2023, at Yogi Sabhagruh. I urge you all to make it convenient to attend in person at 06:15 PM at the venue to get insight into nitty-gritties of the provisions from a distinguished speaker CA P. D Desai. Apart from this there are many interesting events lined up in the days to come on various topics viz. Master Class on M & A, Prosecution for Cheque Bouncing, ChatGPT, Audit Quality Maturity Model, Power Summit, International Tax & Finance Conference and Residential Study Course on GST at Gandhi Nagar, Gujarat. For details, please keep a tab on the announcements.

Before I sign off let me wish you all a very happyVasant Panchami with a hope that it brings spring back in our life.

Thank You!

Best Regards,

CA Mihir Sheth

President

From The President

Dear BCAS Family,

The new year is here to welcome us, and so are the several new technologies that are knocking on our door to bring about a massive disruption in life soon. Every beginning implicitly means the end of the old, – however discomforting it is. Over the years of human evolution that we have witnessed, change was slow, gradually impacting the way we lived. However, that was a way back then. Since the last decade, we are all subjected to such a rapid pace of change that disruption has become a way of life than an exception. These disruptions are brought about through innovations made by a few individuals who refuse to accept limitations; who are keen to relook at the challenges and find a solution which can change the paradigm. Years ago, disruption was a word with strong negative connotations, and today it has become the fulcrum of creativity and the springboard to innovation.

Let me talk about a few of the recent disruptions that will change our way of living.

In the arena of energy, scientists in California have crossed a mega milestone by successfully replicating the power of the Sun in the laboratory. – What it means is that for the first time, more energy can be released than what has been consumed. This breakthrough is a leap ahead for the world in accessing green energy without any radioactive by-products. Using the universally abundant hydrogen and limitless, carbon-free supply of energy is possible. In a world dictated by energy-rich countries and companies, this is indeed a giant game-changer, with huge political and economic implications ahead.

In early December, the Artificial Intelligence powered, dialogue-based chatbot – ChatGPT was unleashed, garnering 1 million users in just 5 days. The bot has the remarkable ability to understand and respond in natural language, with incredible accuracy and creativity. It aptly demonstrates the increased ability of machines to imitate humans. With Machine Learning, this ability will escalate drastically…which could lead to some horror-story scenarios, in which machines could enslave humans. For the time being, these new-generation chatbots with their enormous power to process humongous amounts of data will become our personalised, all-knowing teachers…and give engineers at google and other search engines some sleepless nights!

5G is expected to re-invent the way we work, play and live, but most significantly, it will give a huge impetus to the adoption of the Fourth Industrial Revolution. High speed and low latency are the twin hallmarks of 5G that will have huge potential to transform industries. Shop floors with robotics and automated assembly lines will be able to connect seamlessly and streamline production with greater efficiency. Healthcare is another sphere that will benefit immensely from 3D imaging, advanced diagnostics, and wireless connections to robotic surgical tools in near-real time. The Internet of Things will also get a huge shot in the arm, as more devices can get connected, be it wearables, smart refrigerators, autonomous cars or just a laptop, to name but a few.

Moving to finance, we have in Unified Payment Interface (UPI) a disruption that has become an outstanding success, beating the best in advanced countries too. Launched in 2016, to move people away from the inconvenience of cash and the menace of black money, UPI has been widely adopted by banks, fin-techs, merchant establishments and the public. Thanks to UPI, many Indians today no longer carry a wallet in their pockets – but a wallet in their smartphones!

According to data released by the National Payments Corporation of India (NPCI), UPI reported transactions amounting to ₹10.72 lakh crore in August 2022 alone. In FY22, UPI processed more than 46 billion transactions amounting to over ₹84 lakh crore. In comparison, debit card spending stood at ₹7.3 lakh crore in FY22, while credit card spending stood at ₹9.7 lakh crore that same year. Not surprisingly, India has become the acknowledged leader in digital payments…and UPI has become a major disruptor.

Are we ready? Will we be able to accept the increased pace of disruption? I guess we have no choice but to evolve – physically, mentally and emotionally. We will need to grow the wings to soar with disruption.

Events:

A workshop, “ERM 101” on Enterprise Risk Management was organized jointly with the Institute of Risk Management on 3rd December, 2022 at the JIO World Convention Centre. It provided a good learning experience. A lecture meeting was organised on 15th December, 2022 jointly with The Auditors Association of Southern India on “Tax Implications on Reconstitution of Partnerships” with BCAS as Knowledge Partner. It received a very encouraging response. The lecture Meeting on the subject “Value in the Metaverse& Why Metaverse is Inevitable” gave a good insight into the subject.

The new calendar year is beginning with some exciting events on the anvil. A long-duration course on income tax, “Income Tax Ki Paathshala”, from 2nd January, 2023 to 30th January, 2023 will offer guidance on the theory and practical issues to the budding income tax practitioners, Lecture Meeting on “Penalties under Income Tax” will provide an opportunity to understand the practical issues around the subject and ways to deal with them. HRD Committee has planned several activities to stimulate soft skills by organising a workshop on “Effective Public Speaking and Business Presentation Skills” and improving the quality of life by organising a Lecture Meeting on “Learnings from Swami Vivekananda Biography” on 12th January, 2023. A Leadership Retreat is organized on the subject of “Leadership Skills & Management – The Chanakya way” on 14th and 15th of January 2023. The most awaited students’ programme, “Tarang 2K23” under the auspices of Jal Each Dastur Student’s Annual Day Fund, is happening on 8th January, 2023. I request you all to participate and sponsor your interns, students and colleagues. Please do keep a tab on the BCAS announcements to avoid missing any event.

Budget preparations have already started at theFinance Ministry. The Budget and the Finance Bill to be presented on the 1st February, 2023 will be the last by the current government. BCAS has already made recommendations to the Hon. Finance Minister on the number of issues that need to be fixed and clarified for better governance. Let us hope to have a good response to those.

As we leap into 2023, let us be ready to ride the crest of disruption and change, with confidence…always keeping in mind that the future belongs to brave and the stout-hearted. To those who harbour doubts, I would quote Shakespeare from his play ‘Measure for Measure’ where Lucio the protagonist states “Our doubts are traitors and make us lose the good, we oft might win but fearing to attempt”. So, on this note…let me take this opportunity to wish you a Happy New Year full of exciting opportunities and pleasant surprises!

Thank You!

Best Regards,

CA Mihir Sheth

President

Viksit Bharat – Professional Firms

Dear BCAS Family,

Friends, as the month of elections in the largest democracy of the world ends, the results are awaited. The present government advocated vigorously the vision for Viksit Bharat.

At a talk in Mumbai on the role of professionals in Viksit Bharat, our Hon Finance Minister Smt. Nirmala Sitaraman ji, mentioned that Viksit Bharat is not possible without the support of Chartered Accountants in Profession and Industry. India needs 2 big Indian firms of the size of the big fours in the near future. The government is ready to provide all the support needed and needs from all of us a strategy to make it happen. She also mentioned that talks are on with other nations regarding cross acceptance of professional degrees for practicing in other countries.

Revenue of the Big Four accounting/audit firms worldwide in 2023, by function.

  

Revenue of the Big Four accounting/audit firms worldwide in 2023, by geographical region

Number of employees of the Big Four accounting/audit firms worldwide in 2023

One common factor behind successful growth story of all these firms is various mergers and acquisitions of firms worldwide. Other factors which affect the growth and stability of the firms are:

a. Technology – Technology will play a very critical role like workflow management can improve the efficiency and effectiveness of the audits, creating secured client portals wherein client can upload all audit relevant data, data analytics tools, tools those enable continuous monitoring and auditing, cloud based tools for flexibility of working from anywhere, data protection tools and many more. By leveraging technology, CA firms can improve efficiency, enhance client service, ensure compliance, and ultimately drive growth.

b. Competent Employees – Competent employees are essential to a CA firm’s success. They ensure the delivery of high-quality services, enhance client satisfaction, drive innovation, and maintain compliance. By investing in the recruitment, structured training modules, and retention of skilled employees, CA firms can secure a competitive advantage and achieve sustained growth.

c. HR policies – HR policies are vital for the smooth operation and growth of a CA firm. They ensure legal compliance, promote fair treatment, attract and retain talent, and enhance operational efficiency. By fostering a positive work environment, supporting employee development, and managing risks, HR policies contribute significantly to the firm’s overall success and sustainability. Investing in comprehensive and well-structured HR policies is a strategic move that supports the firm’s build a strong, motivated workforce.

d. Continuous Skill Development: Presentation and pitching skills are essential for us to communicate effectively, win new clients, and advance their careers. By investing in developing these skills, we can enhance our professional image, build strong relationships with clients, and differentiate ourselves in a competitive market.

e. Firms audit manual – Audit manuals are vital for CA firms as they provide a structured, standardized approach to conducting audits. They ensure compliance, enhance efficiency, facilitate training, and help manage risks. By maintaining high-quality standards and promoting consistency, audit manuals contribute significantly to the firm’s reputation and success. Investing in comprehensive, up-to-date audit manuals is a strategic move that supports the firm’s long-term growth and stability.

f. Client servicing – Client servicing drives client retention, enhances reputation, fosters revenue growth, and builds trust. By prioritizing client needs, gathering feedback, and providing exceptional service, we can establish long-lasting relationships and a strong competitive advantage.

g. Geographical location – The geographical location of a CA firm plays a critical role in its operational efficiency, client relationships, talent acquisition, and overall growth. By strategically choosing a location that aligns with its business goals, client base, and operational needs, a CA firm can enhance its competitiveness and success. Whether it is proximity to clients, access to talent, or cost considerations, the right location can significantly impact the firm’s performance and reputation.

h. Diverse services offerings – Diverse service offerings are essential for a growth, stability, and competitive advantage. By meeting the varied needs of clients, creating multiple revenue streams, and enhancing client relationships, a firm can secure its position in the market. Investing in a broad range of services not only drives revenue growth but also fosters innovation, attracts top talent, and ensures resilience in a dynamic business environment.

i. Networking – Networking is a strategic tool for CA firms to expand their client base, stay informed about industry trends, and enhance their reputation. By actively participating in networking events around the world we can create opportunities for growth, innovation, and success.

j. Government and ICAI policies and framework: Forward-looking and open government and ICAI policies and frameworks are essential for the sustainable growth and development of the accounting profession. By allowing Indian CA firms to market their services and have investors could lead to positive outcomes if managed effectively. However, it is also essential to balance the benefits with the challenges and implement appropriate safeguards to protect clients, maintain professional standards, and uphold the integrity of the accounting profession.

k. Indian Industry trust: Indian industry trust and support is essential for Indian CA firms to compete effectively against the Big global accounting firms. By leveraging the client base, market presence, and expertise of Indian industries, CA firms can enhance their services, expand their reach, and establish themselves as trusted advisors in the Indian market. Collaboration between Indian industries and CA firms is key to mutual growth and success, driving innovation, competitiveness, and excellence in the accounting profession.

There are various other ways, models, suggestions and recommendations to support Indian firms grow. I would request the members in practice and industry in India and abroad to write back to me on president@bcasonline.org with your valuable inputs and support the drive for a Viksit Bharat professional.

“Coming together is a beginning; keeping together is progress; working together is success.” By Edward Everett Hale

Professionals’ Role in Indian Economy

Dear BCAS Family,

This quarter the theme of the Society is connecting with Industries and members in Industries.

Chartered Accountants play an important role in the business ecosystem by executing functions like Auditing & Assurance, Tax Consultancy, Accounting Services, Accountants & Finance Outsourcing and Financial Reporting. Every business entity has to onboard a CA for managing tasks like Finance Manager, Financial Controller, Financial Adviser or Directors and also appoint for audit of its accounts.

Several recent news and surveys highlight the growing importance of the CAs in the Industry.

Recently the ICAI President articulated, “For everyone trillion-dollar growth in the economy, there is an expected requirement of 1 lakh chartered accountants.” Further he projected that by the time India celebrates its 100 years of independence, the nation would require over 30 lakh new CAs to support its growth trajectory.

As per a report from CFA institute, Finance is considered to be the most desirable, stable sector to work in among 18-25-year-olds, beating tech, health care and education.

As per a Times Now article, Just Dial, reveals a whopping 47 per cent growth in demand of CA and Income tax consultants in FY 2023-24. According to the report non metro cities like Indore (72 per cent), Chandigarh (71 per cent), and Lucknow (59 per cent) saw the highest growth amongst other cities.

As per another news report, the average annual salary of CAs in India works out to approx. ₹7.36 lakh in the campus placement programs by ICAI. The salary packages offered to Chartered Accountants ranges between ₹7 lakh to ₹30 lakh, according to the performance and skill.

Over the years there has been a changing trend of CAs moving from practice to industries. There is a need to understand not only what practice requires from a CA but also what the industry demands. Chartered Accountants play a crucial role in the Indian economy and industries across various sectors.

Here are some key areas where CAs contribute significantly:

Skill Development: CAs contribute to the development of a skilled workforce by imparting training and education in various fields, thereby enhancing the overall productivity and efficiency of industries.

Management and Leadership: CAs in management roles provide strategic direction, manage resources efficiently, and lead teams, which are essential for the growth and sustainability of industries.

Financial Management: Chartered accountants as financial analysts, and investment bankers play a crucial role in managing finances, ensuring compliance with regulations, and advising businesses on financial matters, which are vital for providing growth capital to the industries.

Legal and Compliance: CAs ensure that businesses operate within the legal framework, comply with regulations, and resolve disputes, which are essential for maintaining a conducive business environment.

Sustainability: CAs in today’s sustainability space, play a crucial role in ensuring industries operate in an environmentally responsible manner as well as guide enterprises to adopt social and corporate governance which are essential for sustainable economic growth.

Policy and Advocacy: CAs in policy research and advocacy contribute to shaping government policies and regulations that impact industries, thereby influencing the overall economic environment.

Overall, CAs contribute significantly to the Indian economy and industries by driving innovation, ensuring compliance, managing resources efficiently, and promoting sustainable practices.

Further during the last quarter, I interacted with various leading CFO’s and understood the expectations of Industry from Chartered Accountants whether in practice or jobs. Some expectations which Industry has are:

Technical Skills: CAs are expected to have a strong understanding of their field, including knowledge of relevant technologies, processes, and best practices. They should continuously update their skills to stay relevant in a rapidly changing business environment.

Problem solving skills: CAs should be able to identify issues, analyse problems, and develop effective solutions. This includes the ability to think critically, creatively, and analytically to address challenges.

Leadership skills: Even if not in formal leadership roles, CAs are expected to demonstrate leadership qualities such as proactive approach, decision-making, and the ability to motivate and inspire others.

Continuous learning: Industries are dynamic, and CAs should be committed to continuous learning and development to stay updated with the latest trends, technologies, and practices in their field.

Result oriented: CAs are expected to deliver results, meet deadlines, and achieve goals effectively and efficiently.

Teamwork and collaboration: CAs are expected to work effectively in teams, collaborate with colleagues from diverse backgrounds, and contribute to a positive work environment.

In general, CAs work at leading positions in the accounting & finance departments in the industry. They also go on to lead the enterprises as CEOs and Chairmen guiding them with diverse knowledge gathered over the years. Apart from the fundamental roles, CAs also play an important role in planning & financial strategies, governing pension funds & long-term investments, providing portfolio management services, unification, or takeover, etc.

“The best accountants don’t just see numbers; they see the potential for financial transformation.” – Samantha Wilson

Events at Society:

CAMBA

Our Society has recently finished a 3-day CAMBA course, jointly with Atlas Skilltech University Mumbai. A course well planned by Human Resource Development Committee of the Society, covered all of the elements today’s Chartered Accountants need whether in Industry or in practice. The course was well attended by 100 young CAs from 22 cities of India. The program also had a session on speed mentoring which was well received by each participant. Such courses open up our thinking and makes us think like a leader, a problem solver, and a visionary.

International Taxation (ITF) RRC

At the International Tax Residential Refresher Course.I had an occasion to interact with seniors from profession and industry as well as youth from various cities. The conference was a huge success attended by more than 270 professionals, the most in the recent time for international taxation. This trend of youngsters joining such complex area of profession in itself shows the demand for CA not only in the domestic space but also international space. I congratulate the International Taxation Committee for a very successful RRC in the 75th year of our Society.

Collaboration with C&AG, Western Region

BCAS in collaboration with Regional Capacity Building and Knowledge Institute, Mumbai of Comptroller & Auditor General of India (C&AG), conducted two workshops for the officers of C&AG team on use of AI in Audit and Audit of Consolidated Financial Statements, with the support of Accounting and Auditing Committee of BCAS. This is a new beginning for the Society in the area of knowledge sharing and service towards nation building.

Friends, the biggest festival of democracy, General Elections for Lok Sabha, is on at present. Please vote and participate in this festival enthusiastically. We, CAs, have a great role in Nation Building by exercising our voting right.

Wish you a happy vacation time with your family!

 

Best Regards,

Chirag Doshi

President

Audits of Future

Dear BCAS Family,

As more and more entities are undergoing digital transformation, it is now becoming increasingly important to include the technology tools as part of our audit procedures. The term coined nowadays for the way audits would be undertaken in future is Continuous Auditing.

Amongst firms, especially small and medium sized firms today, there is a struggle for adequate technology staff / support; there is also a lack of understanding of the technological advancements which can ease their execution and lack of technologically proficient staff. The above challenges for such firms are on account of lack of allocation of adequate financial resources to attract skilled staff and / or conduct upskilling / reskilling initiatives for existing staff. Smaller firms are also concerned about the increasing exposure to cybersecurity risks as audit firms’ increased access to clients’ data which is requested, obtained and stored online.

This month, I attended the 1st NFRA international conference. Certain key areas which this conference touched upon were Audit fees charged by auditors are too low and need to be addressed, use of technology in Audits is ever increasing, role of independent auditors and directors needs course correction, importance of training and upskilling of audit staff is need of the hour, amongst others.

At our Society this month, the Accounting and Assurance Committee of BCAS has launched a 75-hour-long duration course in the 75th year of the Society. This course covers the accounting standards (Indian GAAP and IndAS), auditing standards, FRRB observations, NFRA observations, Ethics and Governance and many other relevant topics. This is with the aim of equipping accountants, staff of audit firms and other assurance function intermediates with adequate knowledge for preparation of Companies Act-compliant financial statements and also to bring efficiency in assurance function.

I would also like to touch upon the most critical area for attest function, viz, use of technology in audit processes, considering that the information technology used in business processes is always evolving but changes significantly with new breakthroughs. As the high costs of IT infrastructure are shared through using cloud services, the costs of using technology for business processes are reducing. This has made the use of technology available for smaller organizations that would otherwise not have the resources to do so.

We can expect more entities to start implementing emerging technologies such as continuous integration / deployment, Data lakes, Artificial Intelligence and Machine Learning, and integrating these technologies into core business processes. This change will further increase the relevance of the use of technology within the audit processes.

The new innovations in technology, like collaborative portals, are resulting in a situation whereby the audit clients can directly interact with the technology used in the audit or the result can be presented through the automated portal.

As we move towards automation-based audits, there would be a number of challenges to overcome like technological integration and data analytics, cybersecurity and data privacy, non-financial reporting, remote auditing, talent management and skills development, globalization and cross-border auditing. One of the key challenges globally is to bridge the gap between the new way of auditing and the existing auditing standards. One key aspect of the audit process which cannot be automated is the judgement of the auditor. The reality of technological changes is that deviations will occur, either due to evolvement of new disruptive technologies or due to changes in the way the businesses will function. Whether the deviations occur or not, the involvement of human auditors to provide judgement shall continue; however, the increasing gap between technology and auditing standards needs to be bridged. As audit automation takes the driving seat, this will be the most discussed and relevant topic between auditors and accounting oversight boards of various countries.

The other challenge is that creating tools to automate auditing and the relevant infrastructure requires a significant upfront investment and will likely not yield returns until several years of operation. This challenge can partially be overcome by using low-code development or open source codes, which typically requires less time and investment to create a piece of automation.

The other technical challenges to overcome are related to data completeness and its integrity and also ensuring that the results of the automated procedures produce quality and consistent results. The future audit will, therefore, require an auditor of the future. The current skill set of accounting knowledge needs to be upgraded with knowledge of data analysis and other analytical skills so as to automate our more routine work and be more efficient and effective.

I came across an international Survey done in May 2022, whereby CPA Australia with the support of the Malaysian Audit Oversight Board conducted an online survey of 179 external audit and IT professionals in Malaysia to obtain their perspectives on the use of technology by auditors.

All participants stated that technology is used in external audits in some form. The extent of firms’ usage of technology in external audits largely aligns with the firm’s size and the nature of audit clients. The observations in case of the Big 4 were 65 per cent use technology in audit to a large extent, 34 per cent use it to a moderate extent and 2 per cent with limited use of technology in external audit. In case of other firms that consist of mid-tier and smaller size firms, the results are encouraging although the technology uptake in other firms is slightly lower. Twenty-six per cent use technology in audit to a large extent, 45 per cent use it to a moderate extent and 22 per cent indicated that there is limited use of technology in external audit.

Over 90 per cent of participants embraced the use of four core technologies (cloud technology, digital tools, digital platform and projects, work-flow, or time management system) in managing external audit engagements.

One of the Research papers regarding the audit of the future said to gain a better understanding of processes, and how information flows through the organization, data analytics can be used to follow accounting records through the organization’s business processes. This can be performed as an audit procedure to verify that all information is part of the financial statements.

As markets change and companies evolve, so must the audit function. The use of key technologies such as advanced analytics, artificial intelligence and virtualization, digital twins should be encouraged which in turn help auditors boost their efficiency and deliver a better-quality audit.

Women’s Day Celebrations

This month our Society planned a women empowerment session. The session had two female speakers Ms. NazChougley and Ms. RupalTejani. Concepts like Law of attraction and women as venture were discussed and both of them spoke on the importance and challenges towards empowerment of women in the current scenario. The program was very well received, and I congratulate the Seminar Public Relations and Membership Development committee led by three female convenors for organizing such an impactful and interactive session.

Wishing you a happy summer and a good vacation ahead!

Best Regards,

 

Chirag Doshi

President

BCAS President CA Chirag Doshi’s Message for the Month of March 2024

Future Ready – Finance Professionals

“If you don’t want to be like everybody, then you have to do what nobody has done. Walk a different path, and you’ll create a new destination for yourself.” — Mahatria Ra

 

Dear BCAS Family,

The future awaits with loads of opportunities for persons / entities who want to be different. If we accept that “knowing what we are and what we are not” is critical, then the time for change is now. The pace at which transformation is taking place in our profession and industries across the world, will not wait for anyone, a person or a firm. Firms that fail to define their identity will have the risk of being overtaken by more disciplined firms or watching their own relevance to clients decline. Whereas the firms that embrace the discipline and have the courage to define what they are and what they do will enjoy growth and success.

Traditionally, strategies have always been a fundamental trade-off between scale and relations. Now, technology allows firms to have both, no matter their size. Along with a new wave of cloud-based services, which are available for rent-based or subscription-based models, it is possible for even small firms to access the benefits of scale without investing heavily in assets themselves. Firms of the future will also need innovative and flexible methods of working that support their teams to solve specific problems and move on quickly. Traditional firms were defined by the assets they owned and controlled. Future firms will be defined by the ecosystems they create, the partnerships and the global reach they possess. The Firms of the Future will see the emergence of new ownership models, too.

The new era demands very different skill set and leadership approaches than what has prevailed for the past 40 years. The leaders of the firms of the Future will not only have to run their current engine—as efficiently as possible, but also create new avenues—tomorrow’s engine—that aligns with dynamic client needs, new competitors and new global economics.

Working for a firm of the future will be very different. Many times, it will feel like an investment banking firm more focused on mission-critical roles. At other times, it will feel like a professional services firm, with its ability to rapidly mobilise its resources. If anything is true of the last ten years in India, it’s that the mountains of change we’ve experienced which have left a big mark on the way corporates do business. Accounting firms have seen notable shifts in how they operate and deliver services.

Various elements are impacting the future age firms:

1: Global resourcing

Global resourcing allows accounting firms to access specialised expertise and talent without local or even national talent constraints and provide better service to their clients. By leveraging global talent, firms can increase efficiency and provide more innovative services to their clients.

2: New service offerings and delivery models

Clients now have new needs and firms have to continuously upgrade their skills and talents to stay competitive and adapt to new models of delivering better and more efficient services. Changes will be seen in the near future as to how firms provide their various advisory services, technology consultancy, data analytics, and other value-added services. Firms may also witness changes in their pricing models.

3: Specialization

Steve Jobs was known for saying, “Do not try to do everything. Do one thing well.” Professional firms will also need to adopt this approach whereby they specialise by industry, region, service, and other niches to secure a competitive advantage over their competitors.

4: Client experience

A stronger client-centric approach that focuses onmeeting every client’s unique needs is the path forward for the firms now. Firms might have to increase their team sizes and skills in the area of client relationships and experience.

5: Work-life balance

With parts of the world experimenting with 4-day work weeks, Firms need to understand their human resources capacity, have transparent agreements with staff, and be able to distribute work in a more balanced manner.

6: Partnership and collaboration

Markets are changing with clients expecting inputs for strategic vision, forward-thinking opinions, thought-provoking solutions and more. It will be difficult for firms to meet these needs. Your clients’ needs will continue evolving, and you must stay relevant. You will have to remember that you cannot do everything by yourself and will have to find partners who can help you solve problems for your clients that you can’t.

The firms in denial about the need for change should examine the following six characteristics:1. Partner / manager comfort zones; 2. Artificial harmony; 3. Overconfidence; 4. Herding instinct; 5. Banking on good intentions; 6. Vested anchoring.

To be on the growth path and lead the professional career with confidence and success, I am providing various questions which Practitioners should plan to address:

– Have you defined who you are, in terms of clients or industries served, services offered and specialities? Also, define who you are not.

– Have you reviewed your list of clients to verify that only “ideal client” are being on boarded?

– Of the services listed on your profiles/website, which ones represent areas in which you have critical clients? In which are you truly differentiator, so much so that you distinguish yourself in the marketplace?

– Any work you transitioned out of your firm because it does not fit your long-term strategy or skills requirements?

– Are you aware of the services of your firm that will continue to have reduced profitability because they offer no real competitive advantage?

– Does your services produce data and information but create no real value?

– Are your team members specifically aligned with your areas of focus so that they quickly grow?

– Do you hold partners accountable for your core strategies? Are they working towards a common goal that is in the firm’s best long-term interest or working to meet individual goals?

In the professional services industry, technology has accelerated the pace of change and enabled faster, more flexible service delivery. Firms of the future will have to embrace the change in every aspect from enhanced client experiences and leveraging technology for efficiency to building a more balanced workplace and innovating around service offerings, which will be critical for firms to adapt if they want to stay competitive and grow. Otherwise, experts predict that by 2025, firms that remain loyal to old ways of working will likely have fallen by the wayside

Leadership Retreat

Our Society organised the Leadership Camp at the Deolali Military Camp area at The Leslie Sawhney Training Centre on “Empowering Relationship”. The major takeaway for me was the 4A principle to resolve various professional and personal conflicts. Avoidance, Acceptance, Analysis and Activation. I would recommend members to look forward to more such events by the Human Resource Development Committee.

57th Residential Refresher Course (RRC)

Our Society just witnessed a remarkable 57th RRC on the theme of “Back to Roots”, which had a traditional flavour with new energies. The nostalgic 18+ RRC’s held earlier at the same location were remembered by our various Past Presidents sharing their views on the concept of RRC. Intense Group and Panel discussions, and the Presentation Papers set the academics rolling. This RRC also set the flavour of the future, with around 50% of participants being youth, bringing new energies and enthusiasm through various ice-breaking activities and team building games, treasure hunts in the midst of mountains of Mahabaleshwar, discussion of global opportunities and much more. I have shared my thoughts on how to be future-ready for professionals with just one desire: we have to be in control of our journey as a professional. I would like to conclude with a relevant quote from Manu Smriti, which is apt for attaining happiness:

सर्वंपरवशंदुःखंसर्वमात्मवशंसुखम्।

एतद्विद्यात्समासेनलक्षणंसुखदुःखयोः॥

Everything that is in another’s control is painful. All that is in self-control is happiness.

 

Best Regards,

Chirag Doshi

President

BCAS President CA Chirag Doshi’s Message for the Month of February 2024

“Innovation distinguishes between a leader and a follower.” – Steve Jobs

I am pleased to share with you the outstanding success of our recent Conference ReImagine which took place from 4th to 6th January, 2024 at the Jio World Convention Centre, Mumbai. The event brought together professionals, thought leaders, and experts from Practice and various industries, creating an impactful platform for collaboration, learning, networking, and innovation.

The conference witnessed more than 1000 delegates from 75+ cities and towns. More than 35% were young professionals below the age of 40 years, with an equal number of senior professionals above the age of 60 years participating with full enthusiasm. The Energy, Expertise, and Enthusiasm over the 3 days were mesmerising. On the momentous occasion of the 75th year and the mega conference, our Society also received a commendation letter from the Hon’ble Prime Minister of Bharat, Shri Narendra Modi.

I would like to share key highlights of the ReImagine Conference for the benefit of those who could not be part of this landmark event:

Themes:  The themes planned by the technical committee under the able Chairmanship of CA Shariq Contractor and Co chairmanship of CA Anil Sathe and CA Abhay Mehta were well applauded by all. They were very forward-looking and apt to the current scenario where India is marching towards becoming the third-largest economy in the world. Themes covered various areas of business and services where a finance professional plays a very critical role.

Exceptional Attendance: We witnessed an impressive turnout, with delegates from diverse backgrounds, industries, and geographies. The high attendance reflects the relevance and interest in the themes/topics discussed.

Quality Speakers and Presentations: Our line-up of speakers and pane lists delivered insightful and thought-provoking sessions. Their expertise contributed significantly to the overall success of the conference. We had three Padma Awardees, more than five CFOs of large corporations, CEOs, MDs, Founders, and senior professionals sharing their thoughts and experiences over the 3 days.

Innovative Content: The conference showcased cutting-edge trends, best practices, and innovative solutions. Delegates left with a deeper understanding of emerging opportunities and challenges in the profession and business.

Engagement and Networking Opportunities: Delegates actively engaged in networking sessions, fostering valuable connections and collaborations. The feedback on these interactions has been overwhelmingly positive. The use of technology throughout the 3 days kept the delegates engaged. The conference made use of digital apps to post specific questions to panelists and speakers which were posed before them based on upvoting by participants. There were polls that were conducted digitally.

Positive Feedback: Preliminary feedback from attendees has been exceptionally positive, praising the arrangement, content, and overall experience. The meticulous planning by the celebrations committee under the able chairmanship of CA PranayMarfatia and co-chairmanship of CA UdaySathaye and CA Narayan Pasari was par excellence. We have received numerous expressions of gratitude and satisfaction from all over the globe through various letters, emails, chats, and social media messages.

Media Coverage: The conference garnered significant attention from media houses/agencies, further establishing our Society as a thought leader. The conference was covered in 30+ leading media channels, print and digital. The major coverage was for the keynote session, the digital infrastructure as a game changer, the Use of AI in gathering tax evidence, the Impact of technology on the changing corporate landscape and Ride the Capital market sessions. This demonstrated that the conference met the requirements of current and future times.

Publications: The conference also witnessed the launch of the following books and research papersduring the three days:

  1. Tax Deduction & Collection at Source – Law & Procedure
  2. 75 Laws relevant to Direct Taxes
  3. Ease of Doing KYC – A Study
  4. Disclosure Overload” issues in Financial Statements

75th-year Celebrations: I am thrilled to share an electrifying aspect of the conference that added a vibrant dimension to our celebration. The program also marked the 75th year of BCAS with an evening of the musical fountain show at Nita MukeshAmbani Cultural Center of Jio World, followed by live entertainment by leading Bollywood singer Shaan and his troop. During the evening festivities, the delegates immersed themselves in the joyous atmosphere, dancing exuberantly to the live music that echoed through the venue. The live music performance, carefully curated to cater to diverse tastes, created an energetic ambience that resonated with the spirit of camaraderie and celebration. Delegates and their family members from various backgrounds and professions came together on the dance floor, breaking down barriers and fostering a sense of unity. The lively dance floor was a symbolic representation of the success and dynamism of our organization. It showcased the collective spirit and shared accomplishments that make our community truly special.

Memorable Closing Ceremony: The evening concluded with a memorable closing remark by Vice President CA Anand Bathiya followed by a video displaying the glimpses of 3 days, symbolizing the end of an exceptional conference and the beginning of new opportunities. Delegates left with a sense of accomplishment and pride in being part of our Society.

I would like to express my gratitude to the entire team of BCAS and the volunteers involved in planning and executing this event. Their dedication and hard work were instrumental in achieving such a resounding success.

As we reflect on the outcomes of ReImagine, I am confident that the knowledge shared and connections made will have a lasting impact on our profession and our Society. I look forward to discussing further insights and potential follow-up actions with the Managing committee in the coming month.

Way forward – BCAS @ 75

This Quarter Theme: Future Ready Firms – Innovation, Growth & Succession.

We are living in times when our profession is constantly experiencing change. Change in many ways – change in technology, change in people’s perceptions, change in stakeholder expectations, change in regulations, and so on.

Under these circumstances, CA firms must embrace change positively. This can happen with being future-ready.

Future-ready firms will need to constantly think about innovation in their firms. Innovation in practice management, client services, people processes, and delivery of products. Overall, firms will need to ensure an elevated client experience.

Firms having senior partners need to have a robust succession plan in place to ensure continuity and stability.

Growth will come to firms who embrace these changes – in time and with efficiency.

Here are some themes that BCAS committees and groups shall be focusing on to give effect to some of the above thoughts by way of lecture meetings/seminars/workshops/articles in BCAJ/social media sharing:

– Creating an Innovation culture in the firm
– Practicing systematic innovation
– Succession plan in practice – the how of it?
– Passing on the baton – the do’s and don’ts
– Experience sharing by senior partner(s) of firms having created succession plans and retirement policies and having implemented them
– Merger of practices – consolidation for growth
– Creating a future-ready firm – case studies, successes, learnings
– The key tenets of ensuring sustainable growth for your CA firm
– Building a professional service firm for Growth

“The future belongs to those who prepare for it today.” –  Malcolm X

BCAS President CA Chirag Doshi’s Message for the Month of January 2024

Dear BCAS Family,

At the start of the New Year 2024, BCAS is celebrating its 75th year with a 3-day conference from 4th to 6th January, 2024, with topics on Reimagining the way the World, India, and the Profession will be unfolding in the future.

I, therefore, felt that it would be apt to share my thoughts on the way we can ReImagine to be of relevance going forward as well as be part of the change that we envisage for a better world in the future.

REIMAGINE

Reimagine as a vibrant tapestry of innovation, sustainability, and inclusive growth. Imagine a healthcare system that prioritizes preventive care and embraces technological advancements for universal well-being. Envisage governance that is transparent, accountable, and participatory, fostering a strong democracy. Reimagine the world not just in economic terms but as a beacon of social harmony, cultural richness, and sustainable development, inspiring the overall trajectory of progress.

REIMAGINE INDIA

Envision a nation where diverse cultures and traditions coalesce into a harmonious mosaic, fostering unity amidst diversity. Picture a dynamic economy propelled by cutting-edge technology, entrepreneurship, and green initiatives ensuring a balance between progress and environmental stewardship. See education as the cornerstone, empowering every citizen with knowledge and skills, and bridging urban-rural gaps. Taking a pole position not just in the economic diaspora but also becoming an ambassador of peace and sustainability.

REIMAGINE TAX

Integrate digital taxation models to address the challenges of the modern, globalized economy. Environmental and social impact taxes to incentivize sustainability and fund social initiatives. Simplify tax codes for clarity and reduce administrative complexities.

“One World, One Tax” envisions a unified global tax system, transcending national boundaries for simplicity and fairness. This concept involves a harmonised approach to taxation, minimizing complexities and disparities across countries. It aims to prevent tax evasion, ensure a level-playing field for businesses, and foster international economic cooperation.

“Let us redefine the narrative of taxation, moving from a story of burdens to a tale of empowerment and abundance – where taxes are not only paid but invested in a better future for all.”

REIMAGINE ACCOUNTING AND AUDITING

a. AI for Accounting

Accountants and Chief Information Officers (CIOs) agree that artificial intelligence software is one of the new technologies that will shape the industry’s future.

b. Big Data

Big data has always been preferable for financial experts and accountants whenever it comes to resorting to crucial financial task completion. This technological form is imperative in transforming vital internal data sets into dynamic, secure data analysis.

c. Automated Accounting Process

Automation has drastically changed most industries, and accounting is no exception. The entire management process has become automated with comprehensive solutions. It has helped reduce errors and eliminate confusion.  Since the process relies on computers and servers, businesses tend to fall into money scams and compromised security attacks. This, in turn, raises the demand for in-house auditors to check the financial inputs and data accuracy.

d. Outsourcing the Accounting Functions

Outsourcing is a new way of making advancements in the accounting business. It helps the firms to focus more on their core work rather than worrying over petty issues.  By 2027, the market for outsourcing financial and accounting functions is expected to grow to $56.6 billion.

REIMAGINE AUDIT

“The future of audit is a symphony of innovation, where artificial intelligence and human expertise harmonise to unveil insights that transcend numbers.”
The future of audit is poised for a transformative shift driven by advanced technologies and evolving methodologies. Artificial intelligence and machine learning will play a central role, enhancing risk assessment, automating routine tasks, and providing deep insights into complex data sets. Continuous auditing frameworks will replace periodic assessments, offering real-time monitoring and adaptive risk management. Environmental, social, and governance (ESG) considerations will become integral to audit practices, reflecting a broader commitment to sustainability and responsible corporate practices. The future of audit envisions a dynamic, technology-driven, and collaborative ecosystem that goes beyond financial scrutiny to encompass a holistic evaluation of business performance and ethical standards.

“Audit’s evolution is not just about embracing technology; it’s a commitment to crafting narratives that tell the full story of a company’s impact on the world.”

To stay a step ahead of corporate transformation, auditors must be agile and achieve technological fluency with data and analytics, AI, and robotic process automation.

Way Forward (NFRA)

The establishment of NFRA is a significant step toward improving financial reporting and auditing practices in India. By ensuring transparency, accountability, and adherence to international standards, NFRA contributes to the overall health and trustworthiness of the Indian financial system. However, its success will depend on its ability to navigate challenges, engage stakeholders, and adapt to evolving economic and technological landscapes.

Changing Corporate Landscape – Culture of Innovation and Technology

Cultivating a culture of innovation is essential for organisations aiming to thrive in a rapidly changing environment. It begins by creating an environment that encourages and rewards creativity. When employees feel empowered to think outside the box, share ideas, and experiment without the fear of failure, true innovation can thrive. Collaboration across functional lines and platforms for idea sharing fosters diverse perspectives and sparks innovative solutions.

Technology also plays a vital role in driving innovation and agility in businesses.

“As we look ahead, fintech’s future promises a seismic shift towards democratising finance. Startups are driving this transformation, embodying the spirit of change as expressed by Elon Musk: ‘The first step is to establish that something is possible; then probability will occur.’ Fintech is not just proving the possibility; it’s redefining the probability of financial accessibility for diverse populations globally.”

“As we conclude, we see a narrative of continual evolution, driven by a commitment to innovation, inclusivity, and responsible finance. The words of Steve Jobs resonate: ‘Innovation distinguishes between a leader and a follower.’ Fintech is not just leading; it is pioneering a future where financial technology becomes a force for positive change, shaping a world where finance is a tool for empowerment and inclusion.”

“Also, the Banks of the future are not just witnesses to change; they actively shape a future where banking transcends its traditional boundaries, embracing technological evolution, and fostering financial landscapes that are inclusive, efficient, and resilient.”

Let us celebrate not just our achievements but the spirit of resilience, adaptability, and innovation that defines us as a nation. As we step into this reimagined future, let the journey continue, fuelled by the collective aspirations of a nation that embraces change as a catalyst for progress.

Hope to see you all at the BCAS mega conference – ReImagine, at the Jio World Convention Centre, Mumbai.

From The President

Dear BCAS Family,

 

“Financial literacy is an essential part of knowing how to avoid financial mistakes and devising plans for a secure and strong financial future.” – Tim Pawlenty

 

Financial Literacy is a topic that is extremely important to just about everyone these days. It’s important not only because it impacts everyone, but also because those who lack a sound financial education risk a future of unnecessary instability and hardship.Chartered Accountants can bring a big change in the nation’s future by contributing towards increasing financial literacy.In a tweet, PM Modi said, “On #CharteredAccountantsDay, we honour a professional community that is among our nation’s key financial architects. Their analytical acumen and steadfast commitment are crucial to strengthening our economy. Their expertise helps build a prosperous and self-reliant India.”

 

Measuring Financial Literacy essentially involves measuring a combination of awareness, knowledge, skill, attitude and behaviour necessary to make sound financial decisions and ultimately achieve individual financial well-being. According to the Standard & Poor’s Global Financial Literacy Survey, the world’s largest and most comprehensive global measurement of financial literacy, India ranks 73rd out of 144 countries. In India, only 27 per cent of the population is financially literate, meaning only one out of every five Indians is equipped to deal with one of the most crucial aspects of human well-being.

 

A survey of “Financial Literacy among Students, Young Employees and the Retired in India” conducted by IIM-A, supported by CITI Foundation, reveals that “high financial literacy is not widespread among Indians where less than a quarter of the population have adequate knowledge on financial matters. There is a lack of understanding among Indians about the basic principles of money and household finance, such as compound interest, the impact of inflation on rates of return and prices, and the role of diversification in investments.”

 

In India, many rural communities lack access to financial services and education. As per “Deciphering Financial Literacy in India”, an article published in the Economic & Political Weekly, India also deals with tremendous inter-state differences within the country itself. Metropolitan areas like Maharashtra, Delhi, and West Bengal have financial literacy rates of 17 per cent, 32 per cent, and 21 per cent, respectively. At the same time, states like Bihar, Rajasthan, Jharkhand and Uttar Pradesh, where poverty is rampant, suffer from low financial literacy rates. On the one hand, Goa as a state has the highest financial literacy rate of 50 per cent, whereas Chhattisgarh lacks financial education and has the lowest literacy rate of 4 per cent.

Chartered Accountants can play a vital role in bridging this gap by providing financial education to these communities. By teaching individuals about savings, investments and budgeting, Chartered Accountants can empower them to make better financial decisions and improve their standard of living.

Small and Medium Enterprises (SMEs) are the backbone of the Indian economy, but they often face financial challenges that can hinder their growth. We can help SMEs overcome these challenges by providing financial and accounting advice, including tax planning and compliance, financial forecasting and budgeting.

Many non-profits in India struggle to manage their finances, which can hamper their ability to deliver services to those in need. Chartered Accountants can provide pro bono services to these organisations to help them manage their finances and improve their operations. In fact, it is heartening to note that many CAs are indeed rendering such noble services.

Digital financial literacy is also crucial to empower individuals to navigate digital financial landscapes securely and make informed decisions. The masses should understand online banking, digital payments, online trading, financial apps for expense management and budgeting, e-commerce, digital documentation and more to achieve more financial inclusion.

There is also a growing recognition of the need to incorporate financial education into the school and college curriculum. Integrating basic financial concepts into the education system can help build a foundation for financial literacy from an early age. Our Society has also been working on a financial literacy drive at schools and colleges in Mumbai.

The Indian government has launched several financial inclusion initiatives aimed at bringing financial services to all citizens, especially those in rural areas. Our Society intends to take various initiatives to promote Financial and Tax Literacy amongst the different sections of society, namely Employee Workforce, Police, Doctors, Technocrats, Housewives, Senior citizens, Teachers and Professors, Students, Farmers and Rural Households, MSMEs, Entrepreneurs, Start-ups and Businessmen.

Promoting financial literacy is essential to empower individuals, reduce financial vulnerabilities and foster economic growth.

To take further steps in this direction, members are requested to take Resolution and volunteer to achieve the mission of making citizens around them financially literate.

CHARTERED ACCOUNTANT FOR CHANGE PAST PRESIDENT – SHRI PRADYUMNA NATVARLAL SHAH

Shri PradyumnaNatvarlal Shah, a revered figure in the annals of the Bombay Chartered Accountants’ Society, left for his heavenly abode on 15th November, 2023. Fondly known as Pradyumna Bhai, he served as the BCAS President during the year 1968–69 and was the visionary behind the BCAS esteemed flagship event, “General RRC”. BCAS lost one of its founding leaders, a mentor to many, and one of the pioneers in the 75 years of BCAS history. During his professional journey, he has also been the President of the Institute of Chartered Accountants of India and the Chamber of Tax Consultants. BCAS bows to the yeoman services rendered by the noble soul.

REIMAGINE

On 4th, 5th, and 6th January, 2024, BCAS will organise a mega-conference ReImagine. The conference deals with Reimagining the Profession in this Changing Technological Environment. A total of 15+ thought-provoking sessions impacting the current state of professionals in practice or industry are planned. Thought leaders from all over India and abroad are going to be there, sharing their thoughts on topics like Start-ups; New Age Professional Firms; One World One Tax; Capital Markets; the impact of Technology on Tax, Audit, and other service areas; Changing Corporate Landscape; New Age Economic Wars; the changing roles of CA and many more. I am glad to inform you that Padma Bhushan Shri Kumar Mangalam Birla, Chairman of Aditya Birla Group, has consented to deliver the Keynote address. There will also be a Leadership talk by Padma Vibhushan Shri ViswanathanAnand (Indian Chess Grandmaster).

Participants from more than 100+ cities / towns, youth and seniors from Practice and Industry have registered for this event, providing every participant with a 365-day networking opportunity in just three days. Interaction with various CFOs from the industry over the CFO roundtable dinner and much more will be an additional takeaway.

I would urge the readers not to miss this one-of-a-kind event, which will be extremely beneficial for their professional journeys. It is an event where History meets the Future, Vision meets Thoughts, Network meets Net Worth, and I meet We!

To learn more about the conference and our thought leaders, visit reimagine.bcasonline.org.

I eagerly await ReImagine to welcome you on 4th January, 2024.

From The President

Dear BCAS Family,
 

“Let’s go invent tomorrow instead of worrying about what happened yesterday.” – Steve Jobs.

India is reinventing itself and is gearing up to leap into the future with aggressive digital transformation. The e-initiatives that are enabling India to take rapid strides in transforming itself — from a developing economy to a developed economy — are Unified Payment Interface (UPI), DigiLocker, eSign, Aadhaar-enabled Payment Services, e-KYC, GSTIN, TIN, Aarogya Setu, CoWIN, FASTag, E-WayBill, National Digital Library of India, ONDC and many more.

As per a NASSCOM report, in FY2023, India’s technology industry revenue, including hardware, is estimated to cross $245 Bn. The domestic technology sector is expected to reach $51 Bn, on the back of continued investments by enterprises and the government.

I also read a report and came across a few technologies that would change how we live, work, study, commute and interact: Artificial Intelligence (e.g., creative AI), Quantum Computing, Green Technology (e.g., Autonomous Vehicles), Virtual Offices, Video Conferencing, Robotics, Virtual Reality, Blockchain (e.g., Web3), Spatial Computing, Predictive Analysis, Health Tech, etc.

ONDC — REIMAGINING DIGITAL COMMERCE

A digital initiative of the Government of India, which will be a real game changer and which has the potential to bring power to the masses of India, is the Open Network Digital Commerce (ONDC).ONDC could unleash many things like:

  • Boosting the direct-to-consumer (D2C) ecosystem.
  • Helping self-employed professionals: One of the important aspects of ONDC is how it will put self-employed professionals on the map; self-employed people could more easily promote themselves in an open, inclusive marketplace, attracting attention and business from consumers.
  • Digitalising B2B commerce: Retailers could access a wider distribution network to save time and costs, and improve margins.
  • Taking financial services further: ONDC’s transaction-based data could support innovative new offerings to provide businesses with greater access to credit.
  • Growing peer-to-peer commerce: The decentralised network would enable peer-to-peer commerce among consumers, peer sellers and self-employed professionals.
  • Empowering people with education and skills: More learners and workers could access skills-based education, vocational training, career counselling and career opportunities, which could engender a more equitable, skills-driven labour market in India.
  • Taking India to the world: India’s digital commerce infrastructure could promote cross-border trade via marketplaces, helping MSMEs become discoverable by global consumers and businesses.

For ONDC to transform digital commerce beyond the borders of India, four key enablers should ideally be in place: 1) seamless cross-border payment settlements, 2) stringent grievance redressal systems, 3) a globalised taxonomy, and 4) global cooperation to support digital commerce.

The Indian Government is not leaving any stone unturned to unleash the potential of technology for the citizens of India, thereby transforming India into a Digital Economy. I would like to highlight some of the initiatives in the technology sector taken by the Government of India.

  • Centres of Excellence for:
  • Internet of Things (Gandhinagar, Bengaluru, Gurugram & Vizag)
  • Virtual & Augmented Reality (VARCoE) at IIT Bhubaneswar
  • Gaming, VFX, Computer Vision and AI at Hyderabad
  • Blockchain Technology at Gurugram
  • Design, Development and Deployment of National AI Portal (INDIAai)
  • POC for AI Research Analytics and Knowledge Dissemination Platform (AIRAWAT)
  • Formation of Inter-Ministerial Committee for Development of Robotics Ecosystem in the country
  • Global Partnership on Artificial Intelligence
  • National Program on Artificial Intelligence
  • Artificial Intelligence Committees’ Reports
INDIRECT TAXATION ON GAMING IN INDIA

The latest decision by the GST Council has surprised the gaming industry in India, which is estimated to be worth around $2.8 billion in FY22. Regarding online games in India, taxation and legality largely depend on whether they are considered a game of chance or a game of skill. The Finance Minister has said that the tax will be levied on the entire value. Hence, the tax will essentially be levied on the full face value of the bet placed and not on the gross gaming revenue, which the industry sought.Globally, there are two GST models in the taxation of the gaming industry: Gross Gaming Revenue (GGR) and Turnover Tax Model. As per an article in The Indian Express, GGR is essentially the total amount of money a gambling business brings in through bets, deducting the amount that is paid for the win. Meanwhile, the Turnover Tax Model is the tax levied on income from winnings of real money from online games. Here, the entire prize pool is taxed. Countries such as the UK, Australia, Italy, Sweden, Singapore, Malaysia, etc., follow the GGR Model.

From the experiences internationally, there may have to be a rethink of indirect taxation on gaming in India to ensure its survival and growing contribution to the tax kitty.

HYDERABAD VISIT

I, along with two of our past presidents, CA Uday Sathaye and CA Narayan Pasari, visited Hyderabad to meet members in person and discuss the five-year plan of BCAS. We interacted with them to understand the need on the ground and how BCAS can become a part of their professional upliftment journey. Hyderabad is the ‘city of pearls’, and many professional pearls attended this meeting at the G P Birla Auditorium on 14th July, 2023. Young CAs had also come to attend the meeting with several hopes in their eyes, a thirst for knowledge and dreams to do something new and contribute back to society. Several youngsters were interested in contributing to the research project of BCAS. The other ground requirement was to start a study circle of BCAS in their city. It was also great to interact with our members who had traveled from Secunderabad, Guntur, Madurai, Vijayawada and other nearby cities and towns.MEETING WITH THE REGISTRAR OF COMPANIES

During this month, I, along with CA Abhay Mehta, Chairman of the Corporate and Commercial Laws Committee, and CA Shardul Shah, core committee member, had a meeting with the Regional Director, ROC, Mumbai, Ministry of Corporate Affairs. We had a good discussion with regards to the importance of related-party transactions and ultimate beneficiaries. We shall have more such interactions with ROC team members.BCAS 

BCAS, as its green initiative in its 75th year, has been instrumental in planting 7,500 trees in the drought-prone area of Banaskantha, Gujarat. The area where these trees are planted shall be called BCAS (forest). We appreciate the ground-level support of Vicharta Samuday Samarthan Manch (VSSM) for this initiative of BCAS. We thank all donors for their generous contributions.REIMAGINE

On the 4th, 5th and 6th January, 2024, BCAS has organised a mega-conference, “ReImagining the Profession in the Changing Technological Environment”. The event shall cover many thought-provoking ideas for the future of the finance, consulting, assurance, and taxation professions. The event is open to all Chartered Accountants and other Finance professionals in practice or in the industry. Participants from over 40+ cities and towns have already registered in numbers.While concluding, I would like to leave a thought on technology since this communique is dealing mainly with technology and digital transformation, which India is witnessing.

Lastly, I, on behalf of the Society, congratulate team ISRO for #Chandrayaan3’s successful landing. This is a historic achievement for India’s space development program and the rise of Bharat. Compliments to the visionary leadership of our country.

“Technology is best when it brings people together.” – Matt Mullenweg

Best Regards,

Chirag Doshi

President

From The President

From The President

Dear professional colleagues,

Accounting standards are formulated with a view to eliminate
the use of different accounting policies and practices, thereby ensuring
comparability of financial statements of different enterprises and providing
meaningful information to various users of financial statements to enable them
to make informed economic decisions.

A financial reporting system based on uniform standards
reposes faith of investors and contributes to the economic growth. Further,
global expansion of businesses has made enterprises recognise the advantages of
having a commonly understood financial reporting framework i.e., a single set of
accounting standards across the world.

The IFAC has formulated International Financial Reporting
Standards (IFRS) and has set the goal to achieve international convergence of
financial reporting standards. Presently, 100 countries are using IFRS. Even the
USA is joining in the promotion of and convergence with IFRS. The ICAI has
justifiably opted for convergence of Indian accounting standards with IFRS by
2011.

In the present Indian scenario, different sets of accounting
standards exist viz. standards formulated and pronounced by the ICAI, standards
prescribed u/s.211(3C) of the Companies Act, 1956, as per the advice of National
Advisory Committee for Accounting Standards and standards notified by the CBDT
u/s.145 of the Income-tax Act, 1961.

These different sets of accounting standards issued by
various authorities lead to confusion for the enterprises and the users of
financial statements. The compliance obligation of different accounting
standards on various entities are as under :

  • accounting standards
    notified u/s.211(3C) of the Companies Act are to be compulsorily followed by
    the companies.


  • SEBI (Disclosure &
    Investor Protection) Guidelines, 2000, stipulate that the ICAI standards
    should be followed while preparing the financial statements in case of
    conversion of a firm into a company.


  • the listing agreement
    provides for preparing the financial results as per the accounting standards
    laid down by the ICAI or as applicable to the issuer under relevant statutes.


  • RBI guidelines require
    banks to comply with the standards promulgated by the ICAI, subject to
    provisioning guidelines.


  • Under Income-tax,
    assessees are required to adopt accounting standards notified by the CBDT
    u/s.145 of the Income-tax Act, 1961.


  • Chartered Accountants are
    mandated to ensure compliance of the accounting standards issued by the ICAI.


The differences, though minor, prevailing in the various sets
of accounting standards result in confusion. India too, should aim at adopting
one set of accounting standards at a time when the world is moving towards
convergence. When the standards issued by the ICAI are passed by the Council
having representatives from the Government, would it not be in the interest of
business enterprises and the users to have only one set of accounting
standards ?

Simultaneously, it is imperative that the Revenue authorities
too need to consider and accept the financial statements prepared following the
accounting standards. Tax laws should generally be in harmony with the
accounting standards. The accounting standards themselves are becoming
increasingly complex. When income computation for the purposes of taxation
deviates from the accounting profit, it only adds to the complexity and is bound
to result in litigation. The divergence from the accounting income should be
minimal. Accounting standards should not be defied merely for collecting revenue
at an earlier point of time. In this connection, the following observation of
the Supreme Court in J. K. Industries 165 Taxman 323, are relevant.

“Main object sought to be achieved by Accounting Standards
which are now made mandatory is to see that accounting income is adopted as
taxable income and not merely as the basis from which taxable income is to be
computed.”

While we march towards adopting IFRS, there is an area of
concern regarding application of accounting standards to small and medium-sized
enterprises (SMEs). The present requirement of compliance needs a review. SMEs
find it difficult to implement the complex standards. The concessions given to
SMEs are generally exemption from extensive disclosure and in some cases in
respect of measurement. This is not sufficient. SMEs form a very big component
of the economy and they should not be burdened with unduly heavy cost of
compliance without commensurate benefit. There is a need for change and what is
required is a set of simple accounting standards for SMEs.

With regards,
Rajesh Kothari

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From The President

From The President

Dear Valued Readers,

“Civil Disobedience” – do these words ring bell? Yes, it was
an integral part of India’s freedom struggle. A totally non-violent way of
protesting against British Rule in India!

Something similar happened in Egypt last month. People in
thousands protested nonviolently against thirty years of autocratic rule of
President Hosni Mubarak at Cairo’s Tahrir Square and other centres for weeks and
in less than one month, Mubarak stepped down yielding to the pressure of the
people for democracy. Indeed, the media played its role very successfully in a
short span of time. Youngsters, with the help of social networking media, like
Facebook, Twitter, YouTube etc., managed to spread the message like wild fire.
They were able to take the army on their side and that was a significant
achievement. The winds of freedom then spread across various other Arab
countries in the Middle East encompassing Bahrain, Tunisia, Libya, Yemen, etc.
All these countries are still being ruled by dictators/kings for decades.
Evidently, the underlying spirit in these uprisings is desire for
freedom/democracy. It is said that man is born free. Freedom is the latent
desire of every human being and is recognised as a fundamental right under the
Indian Constitution, amongst numerous others in the world.

One of champions of human freedom in modern times in India
was the legal luminary late Mr. Nani A. Palkhivala who successfully fought the
case of Kesavananda Bharti vs. State of Kerala before the Supreme Court and made
history. One of the Judges commented: “Never in the history of the Court has
there been a performance like that. With his passionate plea for human freedom
and irrefutable logic, he convinced the Court that the earlier Kesavananda
Bharti case judgment should not be reversed.” Rajaji described him as, “God’s
gift to India”. In his fond memory, the Nani A. Palkhivala Memorial Trust, gives
a “Civil Liberties Award” every year. The award was presented this year to
Padmashri Chaman Lal – a brilliant, honest and upright former IPS officer for
protection and preservation of civil liberties in various capacities. He was
instrumental in combating terrorism in the Punjab and ensuring free and fair
elections post operation Blue Star, worked with a difference as the Director
General of Police in Nagaland for which he was given the “Friend of North East”
Award by the Prime Minister, Dr. Manmohan Singh, in 2004. The moot point here is
that
we still have people in India who can and are upholding the values of freedom
and civil liberties of high order.

One of the surest ways to make humans “free” is by imparting
value based education. “Education is the key to unlock the golden door of
freedom” said George Washington Carver. Indeed, education opens up one’s mind as
one is able to read, contemplate and assimilate frozen thoughts and wisdom from
tomes. Our great leaders of freedom struggle are standing monumental examples.
In his annual address to the US Congress at Capitol Hill, President Obama noted
that India would emerge as a Super power in the decades to come, as it believes
in investing vast resources in its educational endeavour, as knowledge is power.
In order to empower the destitute and poor children of our society and bring
about a difference in their lives, the BCAS Foundation in association with
Public Concern for Governing Trust (PCGT) and the Dharma Bharathi Mission, has
decided to launch a novel project called “Teach English”. Under this mission
children from select Municipal and other schools would be taught conversational
English for three months, with one class every week for a duration of three
hours. Volunteers would be trained to teach English. The project has received
overwhelming response from members and their friends and/or families. If you
would like to contribute your services to this noble cause and to redeem your
debt to the society, you are indeed welcome to join the project. Please write to
the undersigned for any information thereon,
at president@bcasonline.org.

UNION BUDGET – 2011-12

It is heartening to note that in the Union Budget 2011-12,
the Government have laid emphasis on the need for universal access to secondary
education as well as increasing the percentage of students acquiring higher
education and skilled training. The allocation for this purpose is Rs. 52,057
crores, which is 24% higher than the current year – a great welcome move indeed.
The implementation of the “Sarva Shiksha Abhiyan”, the Centrally Sponsored
Scheme “Vocationalisation of Secondary Education” to improve the employability
of our youth and pre-matric scholarship scheme for Scheduled Castes and
Scheduled Tribes, are some of the other highly commendable initiatives taken in
the field of education. But what is going to change the scenario is the linking
of 1500 Institutes of Higher Learning and Research in the Country through an
optical fibre backbone to be in place by 31st March 2012 under the National
Knowledge Network (NKN). This would facilitate geographical spread of education
and knowledge seamlessly. It would create the National Knowledge Sharing
Platform and if implemented rightly, may well become a powerful knowledge bank
of unusual dimensions.

Whereas food inflation at 20% and fiscal deficit at 5.1% of
GDP are matters of grave concern, the Economic Survey unveils some reassuring
statistics. The growth of Indian economy at 8.6 % proves that Indian Economy is
on the growth track. The Union Budget 2011-12, envisages several legislations
and numerous reforms are expected in the Financial Sector. The scope of Service
Tax and Excise has been widened. The growing awareness about the environment and
the launch of a ten-year “Green India Mission” is a welcome move. As expected,
not many changes are made in the area of Direct Taxes, in view of the Direct
Taxes Code on the anvil. Concrete measures have been proposed in the Finance
Bill to unearth black money of Indians abroad through introduction of provisions
compelling assesses to provide details of transactions with persons located in
any country or jurisdiction which does not effectively exchange information with
India.

Cricket fever is on along with examination fever. I can
imagine how difficult it is for students to balance between the two. I wonder
how Government could allow playing cricket during examination season, since
cricket has now become more of an entertainment than a sport, which it ought
tobe!

All the same, I wish all students best of luck in their
endeavour.

Regards,

Mayur Nayak

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From The President

From The President

Dear BCAJ Lovers,

Every month, I ponder over what to write about in the
President’s Page. I am conscious of the fact that my illustrious predecessors
have been writing on academic matters and on technical subjects of interest to
members. On the other hand, I have deliberately stayed away from such topics.
The reason for this is that I believe I have got an excellent opportunity to
share my thoughts on other important topics with thousands of professionals in
and outside the country and by writing on topics or issues other than tax,
accounting, auditing etc., I am bringing to the fore issues of importance on
which very little discussion otherwise takes place amongst our profession. The
response that I have so far received from a large number of members has
encouraged me to continue this trend. I sincerely thank all the readers who have
been writing to me and sharing their views.

This month, I happened to attend a very impressive event in
Mumbai. The Business India Award function for the Businessman of the Year 2009
was held on 22nd February. Mr. Aditya Puri, the Managing Director of HDFC Bank,
was the recipient of this prestigious award this time. I learnt a few very
interesting facts about this man, who heads one of the most successful banks of
our country. He does not wear a watch, he does not carry a mobile phone, and
lastly, he leaves office every evening by 5.30. This is an amazing revelation
for all of us. If a poll is taken, I doubt if any CA would be leaving his office
by 5.30 every evening. Whether we are in practice or in industry, we are all
bogged down by our work and consider it mandatory to sit late hours at work. And
here is a man who heads the second largest private sector bank in India and this
gentleman can manage to go home at decent hours every day. Can there be a better
example of time management and also of delegation? Can there be a better person
to emulate than Mr. Puri? The BCAS has been conducting a course on self
development, which includes a session on time management. I invite our readers
to take these matters more seriously.

Another event that I attended was a fund raiser by the Terry
Fox Foundation. This organization, aided by many others in India and across the
world, has raised millions of dollars of funds for cancer research. Terry Fox,
as many of you would know, was a keen sportsman who, at the age of 18, was
diagnosed with bone cancer and had to have one of his legs amputated. Despite
this, he decided to run across Canada to raise funds for other cancer patients.
He ran more than 5,300 kms before he was forced to stop running due to further
spread of cancer in his body. He died at the age of 22. This spirit of being
alive while dying teaches all of us to give more than take. Even in his death,
Terry left a ray of hope for so many other cancer patients like him. He proved
that nothing is impossible if there is a will to achieve the seemingly
impossible. The BCAS Foundation, which is a charitable trust floated by the BCAS
and its leaders, has been conceived to do noble work. This year, we propose to
raise funds for providing educational loans/scholarships to financially weak CA
students. This proposal is still under finalization. I urge readers to loosen
their purse strings and to contribute generously to this cause. Let us spread
education far and wide and particularly amongst the financially weak. Recently,
we have funded the CA course fees for a young and enthusiastic son of a
vegetable vendor. There will be many such deserving cases. Do you have it in you
to come out and do something concrete for such people?

A member of BCAS happened to forward me an interesting
e-mail. It contained an excerpt from an article written by a professor of IIM
Bangalore. It spoke of how the fundamentals of business environment are changing
completely. There are several examples of how completely unheard of business
ideas/products have, virtually overnight, become competitors of well known and
well entrenched products. Such new ideas/products have displaced ideas/products
which were once considered irreplaceable. Thus, for example, it is reported that
the company that sells the largest number of cameras in India is not Sony or
Canon or Kodak but Nokia (through its mobile phones). Similarly, the biggest
name in the music industry today is not HMV or Sa-Re-Ga-Ma but Airtel, which
sells caller tunes that play for 30 seconds. An even more vivid example is the
one about who was the toughest competitor to British Airways in India in 2008?
Singapore airlines? Better still, Indian Airlines? Maybe, but there are better
answers. There are competitors that can hurt all these airlines and others not
mentioned. The answer is videoconferencing and telepresence services of HP and
Cisco. Travel dropped due to recession and people started communicating over
internet and other electronic media – thereby avoiding travel altogether. All
these examples, the author said, lead one to a gem of a question – “who is my
competitor?” Chartered Accountants also need to pay heed to this question. Who
could be a competitor to a CA? Is it an MBA? Is it a CFA? Or is it someone else?
Who knows, the answer could be something as out of the box as “the Internet”.
After all, don’t we have so many web sites offering tax return filing services
at rates which we CAs would not even pay our office boys? So, is it possible
that the internet will replace a CA one day? Possible. At least for compliance
related services. The point that I am trying to drive home is that nobody can
afford to remain complacent and bask in past glory. One can never anticipate the
direction from where competition can come and of what type it would be. At such
times, one needs to have a broad vision. I am reminded of a very illuminating
statement attributed to Swami Vivekananda, who was asked by a blind person, “Can
there be anything worse than losing our sight?” The Swami promptly replied,
“Yes, losing your Vision.” If any of you are interested in reading the mail
referred to above, do write to me and I will forward it to you.

The Budget has been presented to the country by the Finance
Minister and all of you would have already had an overdose of material written
on and about the budgetary provisions. I, therefore, do not intend to add
anything to what the Editor of BCAJ has written.

Encouraged (nay, virtually prodded) by some of the young and
enthusiastic members of the BCAS, I have plunged headlong into social and
professional networking web sites. We now have a presence on some of the popular
networking sites such as Twitter, Linkedin and Facebook. I have also started a
blog on wordpress. I invite readers to join us in the cyber world. I find it
much easier to keep in touch with my contacts there than personally. Also, I
have heard that soon e-mails may go out of fashion! That being the case, I am
preparing myself for the changed environment well in advance! Join me if you
desire.

Sincerely yours,

Ameet Patel

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From The President

From The President

Dear Professional Colleagues,

India has hit the headlines once again. Slumdog Millionaire
has won 8 Oscars including the one for The Best Film, and A. R. Rahman, the
heartthrob of millions for his composition and background score. One really
feels proud to be an Indian.

There have been some comments that the film is really a
British film and only the performers are Indians. I believe that the Awards are
for the excellence in performance and there is no doubt that many of the
performers are Indians. Any film is a team effort and India therefore deserves
the credit and the accolades. I felt really happy for those six children who are
a part of this film. One only hopes that this glory, which the film and its
artists have achieved, results in improvement in the quality of life of all
those kids whose story the film depicts. While today’s newspapers are expectedly
filled with coverage of the Oscar Awards, a story in a reputed daily which was
carried alongside these reports caught the eye. The report stated that even
though public expenditure on health had increased, the percentage of
undernourished children both in the rural and urban areas had gone up — a clear
indication of the fact that the expenditure is not achieving expected results.

Without detracting from the fabulous achievement of the
entire team of Slumdog Millionaire, I feel that the reaction from the government
could have been different. As I write this communication, three States have
already declared this film tax free. One really needs to examine whether these
exemptions achieve the intended results. If the desire is to ensure that more
people watch the film, it would be better to collect the tax and earmark it for
providing facilities to those who cannot afford the luxuries of visiting a movie
theatre today. Passing on the benefit of a tax exemption to the urban elite who
visit the multiplexes, really makes no sense.

The reaction of the public fortifies one feeling that we are
a nation that enjoys celebrations and loves celebrities. We do not tolerate
losers. The moment our cricket team wins a tournament, the cricketers are
worshipped, the minute they lose they are trashed, cursed, their homes attacked.
To the media everything is an event to be milked to the maximum.

The world believes that India is a country with immense
talent. Occasions such as the Oscars for the Slumdog team prove this confidence
is not misplaced. The challenge is to ensure that the achievements, successes,
victories, do not remain merely events, but encourage actual action on the
ground. An A. R. Rahman, Resul Pookutty, Bindra, Sachin, Sania will definitely
inspire the talented youth of this country. It is our duty, and responsibility
of the powers that be, to provide them with the opportunity.

A week before the mega Oscar event, Pranab Mukherjee, the
Finance Minister, presented the interim budget, the last one of this government.
Considering the prevailing economic situation, many were expecting the Finance
Minister to provide substantial tax cuts and other incentives. It would have
been politically expedient, but Mr. Mukherjee refrained from going overboard. He
has provided some marginal tax cuts in excise and service tax, but they were
necessary, and cannot be treated as an election bonanza. He has left the task of
providing a more comprehensive economic stimulus to the next government. By the
time this communication reaches you, election dates may have been announced, and
the nation will prepare itself for another mega event.

In the coming elections let us all vote, and encourage our
friends and relatives to vote. Undoubtedly, our choice may be limited, but we
must exercise our franchise and send the best from the available to parliament
as our representatives. One of the duties of the government is to legislate, but
our politicians have no time for this. At the end of this Lok Sabha, 39 bills
which had been introduced will lapse, while 29 others which had been introduced
in the Rajya Sabha will await action by the next government. Compare this with
the seven bills lapsed at the culmination of the first Lok Sabha. I am putting
down all these thoughts not with a view to criticise but when I witnessed the
Oscar ceremony, I felt that our country has tremendous latent talent. All we
need is better governance.

The entire world is on the threshold of an economic slowdown
or possibly a recession. All economists feel that India is one of the few
countries which will register positive economic growth, while all other major
economies will decline. The world believes that India will be the first off the
block, when the turnaround takes place. We must start believing in ourselves. We
must not let this opportunity pass. We have the potential; if we utilise it, we
will be well placed to lead when the world order changes in the coming decades.
Jai Ho India !

Anil Sathe

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From The President

From The President

Dear BCAJ Lovers,

I begin writing this month’s message while sitting in a hotel
room in another country after a very hectic day full of meetings. I felt that if
I begin the message in a completely new environment, maybe, I will get some
fresh ideas to write about.

At the outset, let me begin by congratulating the
Vice-President of the BCAS CA Mayur Nayak on his unopposed election as the next
President of the BCAS. He is joined by CA Pradip Thanawala who has been elected
as the next Vice-President. The new managing committee too has been elected. The
new team will take charge at the conclusion of the next AGM on 6th July. I must
confess that the thought of having only a few weeks left in office as your
President is a sad thought and I am already wondering how life would be after I
lay down office. But more about that next month.

I am continuing to write this message after returning to
India and flying off straight for a holiday with my family and a few friends.
Sitting in a tranquil place surrounded by mountains, valleys, forests and clouds
floating around, I feel I am in a different world altogether, compared to the
hustle bustle of daily grind in Mumbai. This much-needed break has given me time
to pause and think of the importance of relaxing and taking life easy. The
stress of routine work and constant fight against deadline-driven professional
life does tend to take its toll on one’s physical health. We all need to learn
to take compulsory holidays with our family members. We owe that to our own
selves and to our family members.

At the BCAS, though the year is drawing to an end, there is a
flurry of activities planned for the next few weeks. Responding to the
suggestions received from a few members in pursuance of my request for feedback,
our Indirect Taxes and Allied Laws Committee has planned the 4th Residential
Study Course on Service Tax in the first week of July. I hope that members will
take advantage of this unique course. The HR Committee too has gone ahead with
its annual programme for CA students. Members are requested to motivate and
encourage their students to participate in this very lively event. The
Information Technology Committee has, for the first time, arranged a half-day
seminar on Social and Professional Networking. Personally, I am an avid fan of
networking sites and I strongly believe that going forward, these sites will
become the centre point of communication amongst people. The various networks
created by the BCAS on different sites have met with very heartening response
and we have a reasonably large following on these networks. Therefore, this
seminar could not have come at a more opportune time. I invite readers to
participate in all our activities.

In my last communication, I had touched upon the concept of
networking and mergers amongst practising CAs. I have received responses from a
few members seeking advice on how to go forward with that idea. I intend to work
on this concept with our HR Committee and come up with a useful seminar very
soon.

During my visit to Mauritius recently, I met the Deputy Prime
Minister of that country and also a director of the Investment Board. The
difference in their approach and attitude towards investors and industry as
compared to our country’s red tapism and the bureaucratic approach of our Babus
was so obvious. The Deputy Prime Minister is a Chartered Accountant and was in
practice before he joined politics. The passion with which he spoke about how
their country was going out of the way to create an investor-friendly
environment conducive to the economic growth of the country was something which
I will not forget. I wish we had such people in our Government and public sector
bodies. Citizens would feel much more comfortable and confident of doing
business here. The ever-changing laws of our country make it difficult to plan
ahead. Retrospective amendments to the law seeking to overrule judicial
decisions send a very negative signal to investors and foreigners wanting to do
business in India. One hopes that our economist Prime Minister is able to bring
about much-needed change in India. Also, drawing inspiration from the Deputy PM
of Mauritius, I feel that more and more professionals and educated people ought
to join the mainstream politics so as to help cleanse the corrupt system. It is
not enough for all of us to merely sit back and complain all the time about the
ills of our society. We must do something about it.

Finally, the President-elect of the BCAS Mayur Nayak has
requested me to chair the Information Technology Committee of the BCAS next
year. I am looking forward to this exciting opportunity and hope to be able to
make a meaningful contribution to the BCAS and its members through increased use
of sophisticated technology in the months to come. I can assure you that you
will see much more of the BCAS on the Internet than ever before.

Yours sincerely,

Ameet
N. Patel




President, BCAS

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From The President

Dear Professional Colleagues,


    When I wrote my communication for the May issue, we were in the middle of an election. All pollsters predicted a fractured mandate, with all its adverse consequences. Many of us were reconciled to an unstable government and many compromises that government formation would have required. Fortunately the Indian voter turned out to be far wiser than what the experts expected him to be. We have a stable government in place. Though it is still a coalition government the baggage of allies has become far lighter. This may mark a turning point in our national history. There are huge expectations from this government which is headed by a Prime Minister with a clean image.

    There is hope that the economy will be back on track. Our profession will have a significant role to play in the upsurge of economic activity. The question that we need to ask ourselves is how far are we equipped to meet the demands society will make on us ? In this communication I have attempted to discuss a few of the challenges that we face.

    Our role as book-keepers has diminished considerably. The routine, repetitive work is now taken care of by technology. Armies of accountants have now been replaced by computers driven by intelligent software. However, verification of huge databases is still our responsibility. It is in this area that we face our first major challenge. The new entrants to the profession are techno-savvy but most of the seniors are not. We must harness technology to validate databases. Data security is a subject we must learn. We realise our inadequate knowledge when we have to deal with subjects like information security and system audits. Undoubtedly, a few of us may have acquired the requisite knowledge but many of us have not. The Institute of Chartered Accountants of India (ICAI) already has a subject of this nature in the curriculum and is making efforts to equip existing members. However, far more needs to be done. During the course of our audit we do rely on the work of experts in this area, but our level of comfort will increase only when our members equip themselves with knowledge in these areas.

    The second challenge is the area of accounting standards. The ICAI is the standard setter. One certainly understands that with globalisation, the stake-holders in business are spread over different geographical locations and belong to different countries. In order to ensure that we do better business with each other it is necessary that we speak in the same accounting language. In this context convergence to International Financial Reporting Standards (IFRS) is welcome. However, our leaders must appreciate that while large business houses have significant impact on the economy, in absolute terms their numbers are small. The majority of small/medium businesses have a different perspective, culture and the professionals who service them play a different role from those who service large business houses. Consequently the accounting, audit and documentation standards that apply to these entities must be significantly different from the standards that apply to global business. I am conscious that basic accounting standards and principles must be adhered to. The debate is over ‘what is basic ?’. We have seen that advisors, regulators were responsive to the needs of business in the context of the problems large corporates faced given the unforeseen foreign exchange fluctuations that occurred in recent months. The same degree of sympathy and response must be shown to problems of small/medium businesses and their service providers in adhering to accounting and audit standards. If this does not happen, the standards will be observed more in breach and compliance will be in letter and not in spirit.

    The third challenge is to change the mindset of professionals that their survival depends on statute-based work. We have seen a debate about the methodology of allotment of audits of banks and public sector undertakings, etc. While one entirely supports transparency in appointment of auditors where public interest is involved, the profession must introspect and see as to how it can add value to the services that it delivers. If regulators begin to feel that the services that we provide are only ‘ticking the boxes’, then the statutory mandate will be done away with. I understand that in the UK, audit of small private limited companies is optional. It is only when auditees perceive a value in our services that they receive, that they would be willing to remunerate us handsomely. Today, statute-based compliance cost is considered as a tax by the payer, it must translate into a fee.

    The fourth challenge is adherence to ethical standards. Regulators and other authorities treat our authentication with trust. They expect that we take due degree of care. We must ensure that blatant offenders amongst us are brought to book and action is taken quickly. I entirely appreciate that in some cases our authentication is to be read with certain qualifications due to the inherent limitations of the verification process. The need is to communicate such limitations clearly so that misunderstanding is minimised. We must perform with diligence once we accept assignments. Limiting our effort to make it commensurate to the fee should never enter our minds. Our members must understand the distinction between a profession and a business and the line that divides the two.

    The last challenge is to remain relevant to the society at large. It is a fact that despite all the ills that affect it, the medical profession is respected because it touches the lives of all, of the richest person in a mansion and of the man on the street. Our profession must also consider how it can make available its skill sets to society at large. We must look at environmental audits, energy audits and may be even social responsibility audits. It is only then that the trust and confidence that the public places in the letters ‘CA’ of the English alphabet will be reinforced.

From The President

From The President

Dear professional colleagues,

India’s growing economy, infrastructure growth, booming
market and rising international trade have induced companies to draw up robust
business plans to seize the available opportunities. At the same time, the
companies look for various avenues to raise finance from the public. From the
various available options, Initial Public Offers (IPOs) remain the obvious
choice for garnering resources.

IPOs offer various benefits to companies, like access to
expansion capital, unlocking the value, debt swap, transparency of operations,
etc. India’s booming stock market, at least until early this year, witnessed
many IPOs being oversubscribed. In 2007, 100 companies raised Rs.34,179 crores
from the primary market, while in the first four months of 2008, 18 companies
have raised about Rs.14,908 crores. This shows the rise in the volume of the
IPOs.

Presently, the entire share application money is withdrawn
from the investor’s bank account on his making an application for shares through
IPOs. On completion of the allotment, the company has to ensure that the shares
are credited to the investor’s demat account and excess application money is
refunded through electronic banking channels within 15 days from the close of
the issue. In this process, investor’s money gets locked up without interest
payment for almost a month once he applies in the IPO, while the banks
incidentally use this float during this period.

Recently, SEBI has given ‘in principle’ approval to the new
payment mechanism for IPOs, with the objective to eliminate protracted refund
process. It is an investor-friendly proposition.

Under the proposed system, application money will remain in
the investor’s bank account until the completion of allotment process and his
account will be debited only if and to the extent shares allotted to him. This
concept is based on the ‘lien marking’ process. Under this, once a person
applies for shares, the share application amount is blocked by the bank and a
confirmation is sent to the company about availability of funds. The amount is
transferred from the investor’s account to the concerned company’s bank account
on completion of the allotment process. This system will eliminate the process
of refunding investor’s money as the funds will remain in his account and also
will relieve primary market investors from the anxiety of getting refunds on
non-allotment of shares in public issues.

It is hoped that SEBI will soon work out the modalities in
this regard in consultation with banks. It should also be seen that a large
number of banks get involved and gear up to implement this payment mechanism in
case of IPOs. It is expected that all the drawbacks attached to the earlier
Stock Invest Scheme will be taken care of.

Presently, Qualified Institutional Buyers are permitted to
pay only 10% of the bid application money in IPOs. But, other investors have to
put 100% of the bid amount. This needs correction. With the introduction of the
new payment mechanism, it is hoped that this disparity too would be eliminated.

On this subject, another important issue is with regard to
the share premium at which a company issues its shares. Under the present
regulations, the issue price is evaluated by the merchant banker. The SEBI
Guidelines require the company to file the prospectus that gives all the
relevant information of the company to an investor with regard to management,
business plans, liabilities, risk factors and so on, but in view of the
investors’ level of education in understanding the key parameters of the
business and financial position, it is difficult for a large number of investors
to analyse this information critically and take an informed decision. Recently,
SEBI has made it mandatory to get IPOs graded from a credit rating agency.
However, investors will always have to be watchful in view of the subjectivity
involved in IPO grading.

In spite of the stringent regulations, grey market operations
are in existence. At times, the grey market operations have adverse
repercussions on the listing price of the shares.

A company has to list its shares within 21 days from the
closing of its allotment process. It is felt that a reduction in this period of
21 days will make the primary market more efficient, transparent and may
eliminate or reduce grey market operations in the long run.

The basic philosophy of book building is based on the fact
that the price of any scrip mainly depends upon the perception of the investors
about the issuer company. The process of price determination starts on filing of
red-herring prospectus indicating the price band and inviting offers from
institutional buyers and intermediaries eligible to act as underwriters.
Simultaneously, the issuer company also collects bids from the general public.
After the bidding process is over, issue price is determined based on the bids
received. On determination of the price, the underwriter enters into an
underwriting agreement with the issuer. At this moment, effectively the issuer
company and the underwriter are aware about the total bids received and the
application money/margin collected by the company. Effectively, this undermines
the utility of the underwriting process. We expect that SEBI will consider these
issues in days to come.

At the Society, the transition process has begun for the
ensuing Diamond Jubilee Year. Anil Sathe and Ameet Patel have been elected as
the President and the Vice-President respectively for the year 2008-09. My
hearty congratulations to both of them and I wish them a successful tenure
ahead.

With regards,
Rajesh Kothari

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From The President

From The President

Dear BCAJ Lovers,

had a dream many years ago — it was to head the BCAS as its
President. About 12 months ago, that dream became a reality for me. For that
dream to turn into reality, I had to work hard. I also had to work smart. As
they say, it is not enough to place a ladder against the wall to climb higher —
the wall that is chosen must be the right wall or else you would be headed in
the wrong direction. The past decade and more have been well spent by me in the
service of the BCAS. This august organisation has given me what I could never
have dreamt of in the normal course. I am grateful to all the members of the
BCAS for elevating me to the top position and for reposing confidence in me for
leading the organisation in the year that has flown by. Throughout the year, I
have received overwhelming response from many of you in terms of feedback to my
messages, words of appreciation for some of the initiatives that we were able to
take and also lots of suggestions for improvements. The latter have been taken
up by the office bearers in right earnest and wherever possible, have been
implemented too. As I prepare to lay down office at the AGM on 6th July, I must
place on record my deep sense of gratitude to everyone who touched my life
during this year. Every core group member, every staff member, every person who
wrote to me or who spoke to me — to all of you, my heartfelt thanks.

During the year that has passed by, your office bearers and
other managing committee members have made every effort to bring about
substantial changes in the functioning of the Society. The various initiatives
taken by us were more attuned to raising the bar in terms of quality rather than
quantity. I am acutely aware of the various shortcomings at the Society. We have
a long way to go before we can proclaim that ours is an organisation that runs
smoothly in all respects. But the journey continues and I am optimistic about
the future. Here, I am reminded of a line — “It’s funny about life — if you
refuse to accept anything but the very best, you will very often get it. There
are no speed limits on the road to excellence.”

My fellow office bearer and current Vice-President Mayur
Nayak will be the next President of BCAS. I wish him and the other members of
the managing committee all the very best for a very successful and fulfilling
year. The ethos and the ethics at the BCAS are such that at all times, the
President stands fully supported by a large number of people around who are all
working selflessly and sincerely for a common goal — to serve the BCAS and its
members. I am sure that in the years to come, the BCAS will be steered into
uncharted territories with great finesse by its future leaders. BCAS is known
for its innovation and for its forward thinking. Our visionaries of the past
have drilled this into the minds of the younger members. Such an organisation
must succeed and should succeed. At the same time, we cannot afford to allow
complacency and arrogance to seep into our functioning. The future leaders must
ensure that the BCAS adapts itself to changing times and is flexible enough to
respond to the need of the hour and is also in a position to provide newer
services to the members. Without the will to change, no organisation can sustain
itself in the dynamic environment that we all are living in today.

This is my last communication to you through the BCAJ by way
of the President’s Page. It has been my privilege and honour to have been able
to communicate my ideas, thoughts and views with all of you. The responsibility
of writing for this journal was a very heavy one. I am acutely aware of the wide
reach of this journal and how, in the past, the illustrious Presidents of the
BCAS have adorned these pages with words of wisdom. I hope that I have done
justice to the position that I have occupied and all of you have found at least
something of merit in the messages that I have written.

I cannot proceed further without paying my respect to the
memory of late CA Hiten C. Shah, one of the BCAS managing committee members who
expired suddenly on 14th June. His quiet, selfless and commendable work — in
professional organisations like BCAS as well as social work in remote tribal
areas of Dharampur in Maharashtra — will be remembered by all of us for a long
time to come. We will miss him at the BCAS. May God grant everlasting peace to
the departed noble soul and may his family members get the strength to bear this
loss with fortitude.

The year ahead promises to be a very exciting and challenging
one for Chartered Accountants. Several new laws are expected to come into effect
in the next 12 months. The new Direct Tax Code, the GST Act and the IFRS all
would come into effect soon. The ICAI and bodies like the BCAS would need to
play a very important role in helping their members in coping with this change.
Unlearning the old law and learning the new law will be a challenge for all. At
the same time, the complex question of whether to allow foreign CA firms to
practice in India will also, in all probability find an answer in the coming
months. This too will provide new challenges to Indian CAs. On the other hand,
the increasing importance of India as an emerging economic power and the growing
recognition of the talent, skill and knowledge of Indians in all spheres of life
around the globe herald the oncoming boom in the demand for Indian CAs. Time
will tell how well we are able to respond to all these phenomena.

One aspect in which I feel that CAs are lagging behind and
where we need to focus upon is the use of information technology. The world has
made enormous progress in this direction. The kind of technological tools that
are available for each and every kind of business or profession are mind
boggling. We need to imbibe information technology in our daily lives. Today,
the speed with which young children — even infants — are able to start using
latest gadgets is amazing. If the older generation does not even start to use
latest technology, then the divide between the different generations would be
more stark and wide. As the Chairman of the Information Technology Committee of
the BCAS for the next year, it would be my mission to create an IT wave amongst
the BCAS members. I seek your support and assistance in this regard. The
committee will come up with a detailed action plan soon. And I promise that the
next year will bring with it lot of changes on the IT front as far as our
members are concerned. And you will definitely see more of BCAS on the Internet
and on the various professional and social networking sites.

Finally, as I put down my pen (actually, it’s the keyboard
that I am putting away), I am left with a sense of emptiness in my stomach. I
will miss writing these pages and I will miss receiving your feedback and your
words of appreciation and criticism. These had become a way of life for the past
12 months. But, all good things must come to an end and so must my tryst with
destiny. I am sure that life holds many more peaks for me to climb. I close this
page with an inspiring quote that I read — “That first peak is the best place to
pause and look back, to see if you took the easiest route, to learn the lessons
from the first climb. And it is the best place to examine the terrain ahead, to
change your plans and goals, to take a deep breath and
begin climbing again.” — Michael Johnson.

So, Sayonara friends ! I need to take a deep
breath before beginning my climb again.

From The President

From the President

Dear Professional Colleagues,

“I have never let my
schooling interfere within my education “. These famous words of Mark Twain
would possibly reflect the sentiment of many a successful individual about our
schools and colleges. Over the last fortnight we have been reading the
travails of students, who having passed through school are knocking at the
doors of institutions of higher education. After six decades of independence,
the State is unable even to fathom the magnitude of the problem, let alone
solve it.

The world is facing an
economic slowdown, but it is said that once the upswing starts, India will
lead the pack of developing nations. Its young educated population is said to
be one of its strengths. One really wonders how far this is correct and even
if it is, whether the advantage will last.

I believe that as a
developing nation, we have not given the priority to education, which it
deserves. In any cabinet formation, there are no takers for this portfolio.
The problems that the education sector faces are enormous. I think that they
can be broadly divided into three areas, availability, affordability and
quality.

The media concentrates on the
problems in higher education, but those who face these have crossed the
threshold of school. We have been concentrating on the top of the pyramid,
while ignoring the base. Undoubtedly, we must build many more institutions of
higher education, many more colleges and institutions like ITI which impart
job-oriented education. But these will be utilised by a larger cross section
of the population, only if we have more schools. It is disturbing to read
stories of children having to trudge 5 to 6 kilometres to reach their school.
A vast population of children still does not have school education available
to them. While in urban areas the problems are of admission to college to a
child, in a village, a school with one blackboard, one teacher and a roof that
does not leak, is still a dream. We all talk of physical infrastructure like
roads, bridges and dams. These can be built with monetary investment, but
building a strong foundation of schools will require funding, planning and
above all honest intentions and strong will. We need to invest vast sums in
primary education and ensure that these sums are well spent. In this area the
government needs to involve NGOs both for actually building the
infrastructure, and running primary schools as well as in monitoring
government spending in these areas. One can possibly make a beginning by
asking the government as to where it has spent the education cess that it has
collected for the past 5 years.

The other problem area is
affordability of education. Many are unable to pursue higher education simply
because it is beyond their means. Here, possibly a private-public partnership
will work, if schemes are well-structured and well-monitored. In fact, the
principle of cross subsidisation which is contemplated in health care
services, should also be used in education. A healthy return on investment
should be permitted by recovering fees from those who can afford it, while the
education to the economically weak is subsidised. The schemes must be
transparent and free from political interference. Further, the availability of
educational loans should be increased substantially. The State supports soft
loan schemes to agriculture. It should increase the support to loans for
education with adequate safeguards to ensure that this subsidy is useful to
the nation when the student completes his/her education.

The third aspect is the
quality of education. A major reason for the drop in quality is the standard
of teachers / professors. Except for coaching classes, one does not find the
teaching profession to be remunerative. Consequently, it does not attract
talent. I am conscious that the world over, the teaching profession is
underpaid. This is compensated by social respect and recognition. In our
country even this respect has been on a decline. It is often seen that while
fixing pay scales, the salary of a school teacher is equated with that of a
clerk. In government parlance the grade of a teacher is a clerical grade. I
simply do not understand, as to how a primary school teacher who is expected
to inculcate values in a child, teach him principles of mathematics, and
introduce him to literature can be equated with the salary of a booking clerk
who issues tickets across the window. School education has to become
affordable, but not cheap. It is only if we compensate teachers well, will we
be able to attract talent in this field. If this causes a deficit, the State
must pick up the tab. It is only if we are able to revamp our education
sector, will we be able to dream of a solid future. To quote Franklin
Roosevelt “We cannot always build future for our youth but we can build youth
for the future”.

I selected education as the
subject of my last communication since this is a subject close to my heart.
When this issue reaches you, I will have completed my term as the president of
a body which prides itself as an institution imparting professional education.
I have enjoyed communicating with you in these twelve months. I hope you read
those communications and found the time spent worthwhile. During my tenure I
have been fortunate to have the support, guidance, blessings and good wishes
of a large number of people. I take this opportunity to express my gratitude.
In the next month I will join the rank of ‘past presidents’.

The diamond jubilee year of
the Society is nearing completion. A milestone will soon be crossed. It is as
they say in cricketing parlance, time for the institution to take fresh guard.

Ameet Patel, a dear friend,
the incoming president, will communicate with you. He has dreams and the drive
to turn them into reality. In the words of Victor Hugo, “There is nothing like
a dream to create the future. Utopia today; flesh and blood tomorrow.” With
Ameet at the helm, the Society has a great future. I wish him and his team all
the very best.

Thank you and Good bye

With warm regards,

Anil Sathe


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From The President

From The President

Dear Professional colleagues,

Bombay Chartered Accountants’ Society is entering 60th year.
The recognition it received from various quarters viz. professionals, taxpayers,
and the Government is the testimony of the Society’s successful journey of 59
glorious years. This achievement is the result of efforts of several dedicated
professionals who served the profession before serving self.

However, the Society cannot be complacent. The solid
foundation it has laid over the years is only a part of continuous journey
towards accomplishing its mission. Let us all re-dedicate ourselves to the
progress of our Society which in turn will only benefit each one of us.

Paradoxically, India has gone through a contradictory
trajectory in its global relevance since the visionary Nehru years. Five decades
ago, when India’s economic and military strengths were less dominant, India
brought many distinctive and normative ideas to the global table — be it
disarmament, or non-alignment. Today, in the early 21st century, when India is
recognised as an economic and military power and the Indian
entrepreneur/professional is acknowledged globally, India appears to be devoid
of innovative ideas and thoughts backed by assertive political conviction.

Thoughtful leadership of our profession should actively
involve in formulating International Accounting Standards suited to developing
and developed countries both. The profession can also play an effective role in
formulating consensus views on sharing tax revenues between two countries in the
international trade. The present method of sharing of revenue leaning in favour
of developed countries needs to be neutralised by putting across the various
issues in the right perspective. The profession can play an active role in
evolving equitable transfer pricing regime across the globe.

Today, the profession faces the danger of widening the gap
between what investors and other stakeholders expect from the auditors and what
the auditors do or can actually do. While it is imperative to educate the public
about the auditor’s role and bridge the expectation gap, the profession at the
same time needs to do some introspection, put its own house in order and avoid
situations giving rise to conflict of interests. Even one failed audit causes
great damage to the reputation of the profession. The profession will have to
meet the challenge with impeccable integrity and high ethical standards.

Corruption is one more area of concern. Its global presence
cannot make it acceptable. It has devastating effects — it hinders economic
growth, sustainable development and generates apathy and cynicism. The country’s
moral fabric is its first casualty. Transparency particularly in administration
and decision-making process of the government acts as a great deterrent to
corruption. Though, the RTI and e-governance have started showing positive
results at a slow pace, a lot needs to be done. The profession will have to put
collective efforts to raise the issue of accountability, transparency and equity
at various levels of social and economic systems.

Technological revolution in the present decade has
far-reaching ramification on the profession. The rapid pace of technological
innovation is making the future of global business impossible to predict and it
is rapidly changing the business world. The profession will have to prepare
itself and stand out in this time of technological revolution. The profession
will have to be ready to react, to adapt, to improvise, to innovate at a faster
pace than ever before.

Global inflation rates are climbing to historic levels after
five years of solid growth in the world economy. Inflation has soared to its
highest level in 16 years across the EU, to a 14-year high in Switzerland, a
25-year high in Singapore, an 11-year high in China and a 13-year high in India.
Rising crude oil prices and the food crisis are supposed to be the causes for
this inflationary trend.

The world will have to address this issue collectively.
Economic development the world over has led to large-scale migration of
employment away from agriculture, because industry and services are able to
sustain higher growth and incomes. In India too, growth rates in agriculture
have dipped and its share in national income has halved from about 36% in 1980
to 18% in 2007. India will have to think of various avenues to enhance
agricultural productivity and also explore ways to allow corporate farming and
co-operative farming to ultimately raise productivity. It seems we have
tremendous potential that can be unlocked through new opportunities thrown up by
the current global food crisis.

As I lay down the office of the President of this august
institution, I must say I owe a lot to all of you for giving me this honour. I
have enjoyed communicating to you through this page for the last one year. I
have learnt a lot. The interaction with all of you at various forums has
enhanced my knowledge and experience too. I thank each one of you for your
whole-hearted support in discharging my duties. I would certainly cherish the
memory for ever. Adieu.

With regards,
Rajesh Kothari

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From The President

From the President

Dear Esteemed Readers,

Every year, 3rd December is celebrated as International Day
of Persons with Disabilities, as resolved by the UN General Assembly in 1982.
The objective is to create awareness about various disabilities, the basic
rights of people with disabilities, and the need for rehabilitation of such
individuals so that they remain an integral and contributive part of the
society. In today’s world, disabled persons are either ignored, mocked at, or
sympathized with but are rarely treated normally. Disability is a curse and more
so, if that person happens to be in India, as we do not have necessary
facilities and infrastructure for movement of the physically and mentally
challenged; e.g. we do have seats reserved for the physically handicapped in
buses or trains but getting in and out of these modes of transportation is
difficult. In fact, reaching their access points is a nightmare for those with a
limp or for a person on crutches.

We, as an enlightened and resourceful class in the society,
must shoulder responsibility for the well being and welfare of the disabled.
Given an opportunity, the disabled stand out in many respects. There are many
who have overcome their disabilities with sheer determination, perseverance and
hard work and have become role models for many others. Chirag Chauhan, a young
boy who got paralyzed from the waist below in a gruesome local train blast in
Mumbai on 11th July 2006 completed his studies and has become a successful
Chartered Accountant. A friend of mine, Ameet Thakkar, who is a spastic from
birth with more than 50 % disability, is a successful LIC agent with the
distinction of being a club member.

A blind couple, namely, Muktaben and Pankajbhai Dagli from
Pragna Chakshu, Surendranagar, Gujarat, are taking care of almost 200 blind
women and children. Gopi, an eight year old girl, deaf, dumb and blind like
Helen Keller, is being raised by Muktaben. In the worst earthquake to hit
Gujarat in 2001, BCAS and CTC helped them in small measure to rebuild demolished
houses. Our recent visit revealed that in a ten-year span, they have completed
three buildings with a capacity for 300 inmates, a primary and a secondary
school for the blind and also centres for imparting training in computers, music
and beauty care. Indeed, they have become a source of inspiration for many of
us. If they can do so much with a vital faculty missing, think of all that we
can achieve, having all our faculties intact! My plea is that let us recognize
our Individual Social Responsibility (ISR) and give more than what we take. I am
aware that many of our members are doing good social work. My salutation to
them—one and all. We, at BCAS, are compiling a database of all such
contributors. Please do send in your details in the prescribed format, which can
be downloaded from our website
www.bcasonline.org.

In order to provoke thinking amongst members on some of the
burning issues concerning climate, profession, health, family, nation and the
world at large, a one-pager thought-mailer would be released (only by e-mail) on
the first of every calendar month. The first such thought-mailer for December
2010,authored by Mr. Nawshir Mirza on “What Should a Chartered Accountant do
About Climate Change?” elicited good response. We plan to put across this mailer
on our website with a discussion/bulletin board facility or on Facebook where
members can communicate/share their thoughts and/or observations.

The first-ever joint conference by the BCAS with the
Chartered Accountants’ Association (CAA), Ahmedabad, on 18th and 19th December,
2010, held at Ahmedabad on the Direct Taxes Code elicited an overwhelming
response.

Lately, India has been in the limelight not only for its
booming economy but also for its huge market. Indeed, it is the second largest
and fastest growing economy after China. The size of the Indian economy is about
$ 1.3 trillion and is poised to grow at around 9 per cent annually. India has
thus emerged stronger post the global financial crisis, economic meltdown and
the resources crunch. No wonder, India is emerging as a hot destination for all
UN Security Council Permanent Members looking out for large economic deals.
British Prime Minister David Cameron, US President Barack Obama, French
President Nicolas Sarkozy, Chinese Premier Wen Jiabao and the Russian President
Dmitry Medevedev were amongst those world leaders who visited India in the past
six months. They all put together, secured over $80 billion in deals ranging
from defence, nuclear energy to telecoms and the like.

I am of the view that now is the time for India to play its
cards right so as to emerge as one of the economic leaders of the world. India
must therefore negotiate with the nations of the world from its inherent and
potential strengths to achieve its goals.

Curbing inflation and keeping up the momentum of economic
growth is a tall order for any government. Even with a reputed economist at the
helm, as our Prime Minister, India today is witnessing one of the worst ever
inflations especially in food items. Increase in the prices of petrol and diesel
have a cascading effect on such price rise. Well, measures are under way to
contain the unbridled price rise which is not healthy for proper economic
growth.

We are on the threshold of the new decade 2011-2020. In the
first decade (2001-2010), we were witness to a lot of changes occurring in India
and the world. It is high time for us to take stock of the present situation,
consolidate the same and march ahead with renewed zeal and zest to forge ahead.
It is all right if we cannot place an Indian on the MOON, but it is imperative
to reach every poor Indian and provide him with the basic necessities of life.
It is tragic that day after day, our farmers are committing suicide. Let us
resolve to provide opportunities to the downtrodden, not by reservation, but by
education; not by giving fish to eat but teaching them fishing such that they
can lead a life of dignity. Equality deserves to be achieved not by converting
“haves” into “have nots” but by raising the bar of the “have nots” to “haves”.

To this end, let us frame our new year’s resolution in order
to contribute our might, for the betterment of the poorer sections of our
society. Service to humanity is service to God, is it not!

I wish you all a happy and a prosperous New Year!

Mayur Nayak

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From The President

Dear BCAJ Lovers,


    Christmas is round the corner as I begin writing this month’s President’s Page and New Year would have begun by the time you read this page. My colleagues at the BCAS join me in wishing all of you a very Happy New Year. Hopefully, 2010 will be more cheerful, less stressful and will bring with it good health and peace to everyone.

    Once again, readers have continued to respond to my messages and I have received several mails from members of BCAS echoing the sentiments that I convey through these pages. I am glad that members are spending time in sharing their thoughts. Receiving feedback is very important for us.

    The ICAI elections are finally over and the results are also informally known to us. The unfortunate incident of booth capturing is indicative of the state of affairs. Can things get worse than this? One hopes that the newly elected Council members will readily and expediently work towards improving the image of the Institute as well as our profession. Members of the ICAI are eagerly looking forward to the new team making perceptible changes in the manner in which the organisation is run both with respect to members as also students and in the cleansing operation as far as the image of the organisation is concerned. Let us not forget that the media too is now watching closely the developments at the ICAI.

    At the BCAS, the IFRS Residential Study Course held recently was very well received by the members and other participants. The structure of the programme, the efforts of the paper writers and the excellent group leading by the various group leaders contributed immensely to the value addition that BCAS offered to the participants. One of the participants also voluntarily guided interested participants in doing Yoga in the early morning at the scenic and serene venue. The Indian Merchants’ Chamber had joined with us for this programme and so, we also had a few members of IMC participating in the event. We have also received requests from members from other cities to organise similar courses in their cities. The Accounting and Auditing Committee will take a decision in the matter shortly. We now eagerly look forward to the annual RRC scheduled to begin on 10th January at Gandhinagar in Gujarat. Apart from this, there are a large number of important and interesting programmes planned in the coming months.

    On the economic front, the alarming increase in prices of vegetables, grains and other food materials is very worrying. When even the economically well-to-do citizens are feeling the pinch, one shudders to think about the plight of the less fortunate poor people. One wonders how they would be making both ends meet. Let us hope the Government wakes up to this problem soon and takes corrective action. Similarly, water shortages that are already visible in several parts of the country are going to become worse as days go by. It’s high time we all seriously started conserving water and curbing excess usage. The same applies to electricity and petroleum products also. Global warming alarms are sounding on a daily basis. Is anyone listening?

    The Govt. finally notified the amended Rule 3 of the Income-tax Rules, 1962 with a view to guiding employers in computing the value of taxable perquisites in the hands of employees. The new Rule was long overdue. Having waited so long for this, employers were expecting substantial changes particularly in view of the fact that under the FBT regime, there were a number of items of expenses which were considered as fringe benefits. The new Rule, however, is almost a copy of the old Rule as it stood before the introduction of FBT. This may be interpreted to say that the Govt. clearly erred in taxing several expenses under FBT despite the fact that employees never got any benefit from such expenses. I wonder whether someone can take the Govt. to a court of law for wrongfully taxing employers on such expenses for the past few years. In any case, it’s a matter of great relief that FBT is gone and employees would have to pay tax only on those perquisites on which they were originally paying tax before FBT was introduced.

    Recently, I had the occasion to visit Bangalore for a CPE Conference organised by the Bangalore Branch of SIRC. I met many members of BCAS and was happy to hear good words about the BCAS from them. The goodwill that our founders and past presidents have built over the years is so strong that members from across the country eagerly await our programmes and our publications. The BCAJ, of course, continues to be one of the best professional magazines in the country.

    By the time you would be reading this page, the incumbent team at BCAS would have completed about 6 months in office. We took charge on 10th July, 2009. The six months that have passed have simply flown by. Various initiatives have been taken during this period to improve the administration of the Society. Conscious efforts are being made to make our response time shorter and our staff members are being gradually trained in the various aspects of serving members. Technology is being harnessed aggressively to improve our services. Efforts are also being made to bring about innovation in terms of the subjects and speakers at our programmes. New talent is being proactively discovered and groomed. This also applies with equal force to the future leadership at the BCAS. I invite you to let us know whether you have found any difference in our functioning.

    Finally, I read an interesting news item recently on an international website. It spoke of how the manager of the Hip Hop group “Black-Eyed Peas” seems to have missed a minor detail… for the last ten years or so, he has neglected to file income tax returns on the group’s income of $10 million ! Looks like tax evasion is not restricted to one country alone!

    All the best for a great year ahead.

    Sincerely yours,

    Ameet Patel

From The President

From The President

Dear Professional Colleagues,

As the December issue was going to the press, we witnessed a
ghastly terror attack on Mumbai. My first thoughts came to you by way of post
script printed after my communication. Thereafter our Vice-President Ameet Patel
expressed our anguish through Rabindranath Tagore’s poem. Much has been written
and spoken about the attack. The post mortem of the event will continue. The
reality is that we have lived with and will have to continue to live with
different forms of terror. We can minimise risks, control damage, but cannot
eliminate terrorism.

It is not the first time that our country has faced a terror
attack, nor is it the first time that so many innocent citizens have lost their
lives. But the reaction of the public has however been significantly different.
Whenever an attack took place in the past, our neighbour was blamed, the
security personnel lambasted and thereafter many of us went about their business
as if nothing had happened. This time persons in the power were held responsible
and there is an effort to ensure a continuous accountability of those in public
service. Though it may sound harsh, the difference in the reactions is probably
on account of the fact that terror has now reached the doorstep of the elite.
They were forced to descend from their ivory towers because those towers are no
longer safe. The feeling of being insulated from such mishaps has vanished.

There is a feeling of anger and anguish within all sections
of the society. It is justified, but very little will be achieved if it is
directed only towards bureaucrats, politicians and their ilk. We should be
angry with ourselves too. Since independence, we are a nation of citizens
who clamour for rights, but are not as conscientious when it comes to performing
our duty. There will of course be honourable exceptions, but otherwise it is
true of most of us. We all want to make government officials and the politicians
accountable, but we must pause and ponder as to how many of us are in a position
to render an honest account of ourselves to society. We must appreciate that
persons whom we hold responsible are not aliens from another planet, but are one
of our own breed.

The show of solidarity, the lighting of candles and meetings
to express sympathy were all necessary because these help to soothe the emotions
that had been aroused due to the tragedy. But if true lessons are to be learnt,
much more needs to be done. As an immediate measure, the needs of the victims
must be ascertained and catered to. Some of them will need emotional support
which only family members and friends can give, but others will need financial
support both in the short term and for longer duration as well.

In the medium term the need is to create awareness about
security and vigilance. The railway police at the CST were criticised because
their weapons did not fire as they had not been used in years. It is easy to
point a finger, but we must ask ourselves some questions and there will be
unpleasant answers. Many of us live in high-rise buildings, but the disaster
management systems (if any have been installed) have not been used in years. We
may not have war, but will face a number of warlike situations. Are we prepared
for that ? I think that a year of compulsory military or paramilitary training
will go a long way in creating mental toughness, discipline and patriotism
amongst the youth. The aspect of security needs to be brought into focus on a
continuous basis so that, being vigilant becomes the second nature.

The root cause of why ten individuals could wreak the havoc
they did is that those in public service are not accountable. A large majority
of the public is busy in earning their daily bread while the elite get their
work done through resources. Creating a permanent platform where citizens remain
vigilant and make the powers that be accountable, will be a real challenge. For
that, a proper infrastructure needs to be put in place. This activity will
require substantial funding as well as the commitment of a large number of
individuals. After witnessing the tragic events of 26th November, every person
has the urge to contribute but is at a loss to decipher the course of action
that he can take.

What role we professionals in general and Chartered
Accountants in particular have to play ? I would divide our role into two parts;
one is our role as ordinary citizens. As citizens, we should contribute to a
number of organisations who have come forward, to aid the victims. This
contribution could be financial as well as of our time. Our role however does
not end there. We are professionals who have through training, acquired specific
skills. In order to ensure that citizens continue to care, a robust
infrastructure is required. Our enthusiastic past President Mr. Narayan Varma is
associated with a group of citizens which is contemplating a platform that will
be supported by various Non-Government Charitable Organisations. This effort
needs not only funds but committed support. We the members of the Society
through modalities that will be worked out will support this new platform. We
may communicate with you to understand what commitment the members of our
Society can make.

So much for the events of the recent past. The year 2008 has
been a mixed bag. While the economy was surging ahead in the first two quarters,
the last two have seen a sharp downturn. People are slowly coming to terms and
realising that this slowdown is here to stay for a while. For us, professionals,
the year ahead promises to be exciting as well as challenging.

Even though we have witnessed a national tragedy, I am
confident of a resurgent India. So let us hold our heads high and salute all
those who laid down their lives in the year gone by and welcome 2009. I hope it
brings cheer to all.

With warm regards,
Anil Sathe

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From The President

From the President

One of the seven social sins
as enunciated by Mahatma Gandhi was “Politics without Principles”. In good old
days, our political leaders led a principle centered or value based life. There
was a time when Union Minister Lal Bahadur Shashtri resigned from the cabinet
owning moral responsibility after a railway accident. Jai Prakash Narayan,
co-founder of Praja Socialist Party, quit the party in 1957 when he found that
tickets were distributed on the caste basis and forging ahead to pursue
Sarvodaya (good of all) and Lokniti (Polity of the people) as opposed to Rajniti
(Polity of the State).

Today, food inflation is
skyrocketing and our Agriculture Minister remains unperturbed. Farmers are
committing suicide and Ministers are busy in Rajniti. The head of the Vigilance
Commission (CVC) is under a cloud. Government is unable to declare names of the
holders of secret bank accounts overseas. Accountability is nowhere to be seen.
Punishment to culprits is illusory. Judiciary is our only ray of hope and the
Supreme Court’s pointed questions over 2G scam, secret bank accounts overseas,
CVC etc. have put the Government on the defensive. Despite the spate of scams
and corruption charges hurled about, none of the Ministers resigned voluntarily.

The law and order situation
has gone haywire. There is no safety for whistle blowers. RTI activists are
being killed without compunction. On 25th January 2011, Yashwant Sonawane,
Additional Collector Manmad region (Maharashtra) was burnt alive by the oil
mafia. If this be the fate of a Collector, what about the amm aadmi and what can
he expect at all?

An open letter written by 14
eminent citizens of India on 17th January 2011 aptly describes the present day
scenario. They have amongst other things, expressed grave concern over the
widespread “governance deficit” in every sphere of national activity, namely,
government, business and other institutions. They have alleged that misuse of
discretionary (decision making) power is widespread under extraneous influences.
They have demanded urgent steps to arrest the “malaise of corruption, which is
corroding the moral fabric of the nation”.

In Sanskrit there is a
saying that “Yatha Raja, Tatha Praja” (meaning as is the Ruler so is the Ruled).
Therefore, it is imperative that good governance should start from the top.
People in democratic set up today think it is the opposite – as are the people
so are its representatives e.g. the president/prime minister etc. forgetting
that the primary quality of a leader is his being a role model. The entire
Ramayana is written on this theme, and Rama consistently guarded his character
lest it be anything less than perfection (Maryada Purushottam) – a role model.
The Chief Minister of Bihar, Nitishkumar has set an illustration by first
declaring his assets and then demanding others, his ministers and bureaucrats to
follow suit.

We have a unique example of
Mr. Narayanamurthy, a great visionary, who created an empire which has not
touched him as the lotus remaining untouched by mud. His simplicity and
governance are worth emulating. On 7th and 8th January 2011, members of BCAS and
Karnataka State Chartered Accountants’ Association (KSCAA) visited the Campuses
of Wipro, Bangalore and Infosys, Bangalore and Mysore as part of a study tour.
The vastness of Mysore campus of Infosys and the world class training and other
facilities provided therein widened the horizons of participants. It was amazing
to see how one visionary with his enabling team could achieve in a single
lifetime and that, too, without any strings attached. No wonder, companies like
Infosys and Wipro have brought laurels to home. The participants of the study
tour also visited the manufacturing facilities of Toyota at Bangalore. Thanks to
CA. Padamchand Khincha who arranged these memorable events.

The results of CA Final are
out and as usual, there is more remorse than elation notwithstanding the fact
that the result percentage is now better than last time. The lack of formal
coaching may well be the reason for the poor performance. The ICAI’s initiative
to commence Live Virtual Classes at 25 centres in 22 cities across our country
is indeed laudable.

I think we need to reexamine
our present evaluation system which is more of a memory test. It does not matter
how much a student works hard for the entire year; what really matters is that
which he is able to reproduce at the examination hall. May be, the examinations
prepare us to keep our cool/equilibrium during the critical moments of our life.
What worries one is that a student scores 50 marks in a particular subject in
one attempt but gets five marks in the same subject in the subsequent attempt
–one is up against such an inexplicable result, naturally. Maybe, we need live
with the present system until we find a more balanced and rational way of
evaluation wherein performance of a student is reckoned over a period of time
and not just in three hours. This is true not only of CA examinations but also
of other examinations. As far as the CA curriculum is concerned, we all need to
conjoin our minds and help ICAI in evolving a better system of evaluation. The
problem has been identified and its solution cannot be late in arriving. I
appeal to readers to send their suggestions in this regard to president@bcasonline.org.

The much awaited Residential
Refresher Course (RRC) organised by BCAS was completed successfully at Matheran.
More than 200 members participated. The concept of two parallel sessions, one on
Service tax and the other on International tax elicited good participatory
response. RRC Nostalgia – an audio, visual and live programme, on one of the
evenings, kindled memories of the past RRCs. BCAS TV has been launched whereby
members from far off places would be able to benefit from recorded videos, for a
nominal subscription.

A number of activities have
been planned in the next two months. BCAS has designated February 2011 as an
“Internal Audit Month” wherein many programmes in the field of Internal Audit
are scheduled. The idea is to equip our members in this important and emerging
area of practice.

February is the month for
presentation of the Union Budget in Parliament. The winter session was a wash
out, with opposition demanding Joint Parliamentary Committee (JPC) to
investigate the 2G spectrum scam. Let us hope that Parliament would function
meaningfully during the Budget session and transact various important businesses
listed on its agenda, God willing.

Every year the fifth day (Panchami) of the Indian month Magh (this year it is on 8th February), being the first day of spring is celebrated as Saraswati Pooja day. Hindus on this occasion worship Saraswati – the goddess of knowledge, music and art. I pray that Maa Saraswati gives wisdom to all of us to work for the progress and betterment of our nation and humanity at large.

My greetings to you all on the onset of spring (Vasant Paanchami)!

From The President

From The President

Dear BCAJ Lovers,

I began writing this page immediately after returning from
the 43rd RRC of the Society. This year, as you are aware, we went to Gujarat for
the first time and assembled at Gandhinagar in a beautiful resort. There were
about 250 of us from all over the country. The camaraderie among all our members
and the excellent rounds of group discussions and general assembly were the
highlights of the RRC. The excellence achieved by our Seminar & PR Committee
members in organisation of such mega events was very much in evidence
throughout. The RRC was attended by several Regional Council members and two
newly elected members of the Central Council of the ICAI. We also had
participation of several members of various Branches of Regional Councils of the
ICAI. We also had a record turnout from cities other than Mumbai. I welcome all
the new members, who became our members recently, who attended the RRC. I am
sure that they will be our members for a long time to come. A full report on the
RRC, accompanied by photographs is printed in this journal. The Seminar and PR
Committee is now looking at organising more activities in the months to come.

It is said that time flies. I entirely agree with this
statement. It is now six months since I took over as the President of BCAS.
These six months have been very satisfying and the wonderful co-operation that I
have received so far from all our members is very touching. I look forward to
the next six months with the same amount of enthusiasm and vigour that I began
my term with.

Recently, I watched two Bollywood movies, which I felt were
very meaningful. The first was “Paa” and the second was “3 idiots”. The first
movie brought out the best in one of the most successful actors the world has
seen. At the age of nearly 67, he has enacted the role of a 13 year old and that
too with a fatal disease. The extraordinary efforts of Mr. Bachchan are worth
emulating. They tell us that nothing is impossible in this world and that one is
never too old to try out new roles in life. The stories doing the rounds about
the time taken to put on his special make-up and to remove it and the pains that
he took to play this particular character teach us that hard work and total
dedication are what bring success. On the other end of the spectrum, the Vidhu
Vinod Chopra movie saw another brilliant actor conveying an excellent message to
one and all. Aamir Khan exhorted viewers to pursue excellence rather than
success. The entire educational system today has moved in the direction of
pushing students towards a very high pressure life. There is constant peer
pressure and the fear of failure is very strong. The recent news reports of
suicides by several school and college going children are shocking and are a
rude awakening call for all of us. In such a scenario, this movie could not have
come at a better time. The importance given by coaching classes to passing the
exams rather than focussing on gathering knowledge is a malaise that is
destroying the very fabric of India’s strong educational system. Today, if India
is considered a strong economic force, it is because of our past educational
system, which has consistently been producing a large force of intelligent,
English speaking graduates, engineers, doctors, lawyers, accountants and other
professionals. Regrettably, in my opinion, looking at the quality of the current
crop of graduates, I am not sure how long India can be perceived to have an
advantage. The film, “3 idiots” is trying to awaken us. It’s for us to open our
eyes. I do hope our students have seen these films and have appreciated and
understood the socially powerful messages. If they have, then we can all say
with conviction that “all izz Well!”

The BCAS is proposing to lead an initiative to reduce the
consumption of paper. For this, we propose to encourage our members to receive
our communication by e-mail instead of physically. This will substantially
reduce the consumption of paper. As we are all aware, every sheet of paper
manufactured results in destruction of large tracts of forest land. This is
resulting in hazardous global warming, which has become a major international
problem. At present, we have a print order of about 8,000 copies of newsletters.
To begin with, even if we are able to reduce this by 20%, we would be saving
considerable quantity of paper. Therefore, our members will shortly receive a
request to permit us to discontinue sending printed newsletters. This of course,
is entirely optional and we will continue to send printed newsletters to those
who do not reply to us or those who do not wish to discontinue the receipt of
printed copies. Thereafter, we will replicate the process for notices and for
annual reports. I believe that every revolution has a humble beginning. I invite
you to join the BCAS in this noble initiative of reducing the consumption of
paper. Let us try to go paperless to the furthest extent possible.

Like last year, this year too, I participated in the Dream
Run, which is a part of the Mumbai Standard Chartered Marathon, along with a few
other members of the BCAS. The experience is truly exhilarating. Seeing
thousands of Mumbaikars spiritedly turning out in bright colours and holding
flags and placards and participating with such a fantastic spirit of
togetherness, is a heart warming experience. Many of our members even
participated in the full Marathon and in the half Marathon. My heartiest
congratulations to all of them for running this gruelling race.

The Finance Minister is preparing for the annual Budget and
so is BCAS. Our budget lecture meeting to be addressed by Mr. S.E. Dastur and
the budget publication are already planned out. The lecture meeting will be on
3rd March at Dadar in Central Mumbai in the evening. We once again look forward
to the solid support that our members have given us in the past for the same.

Sincerely yours,

Ameet Patel

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From The President

From The President

Dear Professional Colleagues,

I write this communication to you having returned from the
42nd Residential Refresher Course (RRC) at Goa. More than 230 delegates from all
over the country participated in the deliberations. The experience was
undoubtedly enriching. It must however be accepted that the shadow of Satyam
loomed large upon the minds of participants.

The editorial deals with the various issues that arise in
regard to the audit function, the perception of the public regarding auditors in
light of the Satyam episode. I will therefore refrain from dwelling on the
subject. I must however state that in my view the situation is serious. Not only
should the ICAI act quickly but it must be seen to act. I am conscious that
there are, and there will be limitations on the speed and extent of actions of
the Institute. I also recognize that a regulator must act with responsibility
and that taking any step without the requisite evidence may cause injustice. I
only hope that these facts are brought to the notice of the public.

The RRC ended on 26th January, 2009 and we rendered the
national anthem. Every time the national anthem is rendered or recited, there is
a surge of patriotism. We feel proud to be Indians. Fifty-nine years ago we
constituted ourselves into a republic. Our nation has now entered the diamond
jubilee year. The next year we will be celebrating the diamond jubilee of our
republic. In the last fifty-nine years how have we fared in regard to the goals
we set out to achieve ?

The Preamble to the Constitution reads

WE, THE PEOPLE OF INDIA, having solemnly resolved to
constitute India into a SOVEREIGN SOCIALIST SECULAR DEMOCRATIC REPUBLIC and to
secure to all its citizens :

JUSTICE, social, economic and political;

LIBERTY of thought, expression, belief, faith and worship;

EQUALITY of status and of opportunity;

and to promote among them all

FRATERNITY assuring the dignity of the individual and the
unity and integrity of the Nation;

Fifty-nine years ago we promised our citizens justice,
liberty, equality and fraternity. Let us look at our performance in each one of
these parameters.

Justice — It is said that justice delayed is justice denied.
On that test alone we have failed miserably. Let alone the time lag, many forums
of redressal are simply not accessible to a vast majority. Judicial
pronouncements are delivered after decades, but many a time do not result in
justice because there is no action by the executive. While it is true that it is
this pillar of democracy that has suffered the minimum decay, justice as
contemplated by the founding fathers of the Constitution is still a mirage.

Liberty — Do our citizens have liberty of expression ? On the
contrary, we seem to have become extremely intolerant. Those whose beliefs do
not conform to beliefs of groups who are powerful, are throttled sometimes
physically. The standards of public morality are set by these groups. They wield
this power because some of them occupy high public office, or on account of
brute force of a mob. Women who constitute half of our citizens have severe
limitations on their freedom and the State seems to be helpless.

Equality — After six decades, disparities both social and
economic persist. On the social front there has been some degree of alleviation,
but on the economic front the gap has widened. Even opportunities are unequal.
Primary education which would have acted as a leveller is not available to vast
majority. As far as higher education is concerned, reservation was expected to
provide relief, but it has been substantially abused, and has created far more
acrimony than the benefits it has bestowed.

Fraternity — We call ourselves Indians, but permit
politicians to divide us on lines of religions, languages, and regional
aspirations. Fraternity is displayed only when a crisis looms large and is
forgotten the moment it blows over.

So our report card is rather dismal. What then is the
solution ? The solution lies in asking questions both to ourselves and the
powers that be and seeking answers again and again from ourselves and those who
are responsible for taking action. For too long we have remained silent. We seem
to have forgotten that 59 years ago we constituted ourselves into a democratic
republic. A democracy can survive and flourish only if every citizen
participates.

So the need is to participate in the democratic process and
it is not limited to elections. It means being accountable to society and
holding others accountable. It is not possible for an individual to carry on
this activity as a sustained programme. In the aftermath of the 26/11 tragedy
very senior and responsible citizens have formed a platform ‘Citizens take
Charge’. It seeks to ask questions and elicit an account from ourselves and the
authorities. Vigilance should become a habit. All of us should join either this
or any similar forum. The name of the forum is not important, the cause that it
promotes is.

I am an eternal optimist. This country has had a glorious
past, and if all of us take a step forward together, I am sure it will have a
brilliant future.

With warm regards,
Anil Sathe

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From The President

From the President

From the President

Dear Esteemed Readers,

This year’s Deepawali was remarkable, with President Barrack
Obama visiting India. There were many firsts associated with his visit. He is
the first US President to visit India in his initial term, first to spend so
much time in India, first to visit Mani Bhavan in Mumbai and the first US
president to say "Jai Hind" in the Indian Parliament. Tonnes of paper have been
used up by newspapers and hundreds of hours of discussions have been aired by TV
channels in analysing what were the takeaways for India on Obama’s visit. In my
view, the biggest takeaway for India is President Obama provoked us to realise
our own intrinsic strength, as he rightly regarded India as the "rising global
power".

He said: "India is an ancient civilisation of science and
innovation. A fundamental faith in human progress. This is the sturdy
foundation upon which you have built ever since that stroke of midnight, when
the Tricolour was raised over a free and independent India. And despite the
skeptics who said that this country was simply too poor, too vast, too diverse
to succeed, you surmounted overwhelming odds and became a model to the world.
India has succeeded, not in spite of democracy; India has succeeded because of
democracy."

I think this revelation is the biggest-ever gain for India.
Is it not an irony that outside observers can perceive our strength better than
us? I am reminded of Dr. Abdul Kalam who said, "Why are we in India so
embarrassed to recognise our own strengths, our achievements? We are such a
great nation. We have so many amazing success stories but we refuse to
acknowledge them. Why? India must stand up to the world. Because I believe that
unless India stands up to the world, no one will respect us. Only strength
respects strength. We must be strong not only as a military power but also as an
economic power." The Indian leadership must recognise this and negotiate
with other nations from a position of strength; be it talks with neighbours or
trade negotiations with other countries of the world.

After the stupendous success of the Commonwealth Games, India
broke its own performance record at the 16th Asiad Games in Guangzhou, ranking
6th and bagging 64 medals, including 14 gold.

However, with the dazzling opening and spectacular closing,
together with a record win of 416 medals including 199 gold, China proved that
it is simply super in playing games as well as organising them. The major
reasons for such a poor performance by India in contrast with a one billion plus
population are the lack of good sports facilities and recognition of merit.
Consequently, parents do not encourage children opting for a sports career. A
majority of our sports persons are part-timers, with some other main occupation,
resulting in a lack of professionalism. The handful of people pursuing sports as
their career become victims of corruption and red-tapism. I hope that the way
the states have started competing with each other in good governance; they will
compete in sports as well. If corporate India patronises sports in a big way, a
lot can still be achieved.

The recent results of the Assembly elections in Bihar have
proved that "Good Governance is Good Politics". Earlier, Governments in Gujarat
and Chhattisgarh returned to power, surmounting anti-incumbency sentiments, by
securing positive votes as a reward for development and good governance. The
restraint shown by people, post the Ayodhya verdict, and the use of the Right

to Information Act to unearth scams and bring accountability in administration
shows that people are rising above the politics of caste, creed and religion.
The people of India are interested in peace and prosperity.

We are living in an era of scams. Each day a new scam
surfaces — bigger than the preceding one. First CWG, then Adarsh, 2G spectrum,
Cidco Land deal and now, "loan-mela" by LIC Housing Finance and others.

In a path breaking development, India has revised its
bilateral tax treaty with Switzerland whereby Indian authorities would be able
to obtain information about account-holders in Swiss banks from January 2011.
Under the revised pact, India will be able to obtain information not only in
case of tax frauds, but also in cases of tax evasion.

In respect of activities by the Society last month, members
can refer to the section "Society News". Nonetheless, the more notable amongst
them were the number of webinars on XBRL, the first ever three-day intensive
study course on XBRL from 12th to 14th November 2010, and the two-day course on
Direct Taxes Code on 26th and 27th November 2010. All the programs elicited
overwhelming participation.

The DTC course began with homage to the people who lost their
lives in the ghastly terror strike on Mumbai on 26th November 2008. A lot needs
to be done not only to heal the wounds of those who were afflicted but also to
prevent their recurrence. The solution is aptly found in the BCAS logo which
reads, "uk Ò¸ke pLrh txzr" meaning "the vigilant have no fear". We must be
vigilant not only in making our leaders accountable and working towards safety
and security of the masses but also by contributing our might in helping them
achieve this. Then and only then we would be able to see India as dreamt by the
great poet Rabindranath Tagore who wrote:

Where the mind is without fear and the head is held high

Where knowledge is free

Where the world has not been broken up into fragments

By narrow domestic walls

Where words come out from the depth of truth

Where tireless striving stretches its arms towards
perfection

Where the clear stream of reason has not lost its way

Into the dreary desert sand of dead habit

Where the mind is led forward by thee

Into ever-widening thought and action

Into that heaven of freedom, my Father, let my country
awake

Let this be our prayer and motto for the ensuing decade.

Last but not the least, season’s greetings and best wishes
for a prosperous 2011!

Regards,


Mayur Nayak

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From The President

From the President

Dear BCAJ Lovers,

As I begin writing this month’s President’s Page, the news
of the sad, sudden and premature death of Mr. Rahul Roy, a past president of
the ICAI at a young age of 46 was received by me with shock and sorrow. He
expired as a result of cardiac problems. This news comes close on the heels of
the news of the passing away of Mr. Ranjan Das, the CEO & MD of SAP India —
again at a very young age of 42 years. He died of a heart attack.

I did not know either Mr. Roy or Mr. Das personally. Yet,
their passing away has disturbed me. The reason being that what happened to
them (and what will now happen to their family members) can happen to any one
of us. Today, most people and specifically professionals are living highly
stressful lives and there are no signs of any changes happening even in the
distant future, leave aside the near future. I had already referred to this
aspect in the last month’s message. But the recent tragedies have prompted me
to communicate again on the same topic.

What are the typical lifestyles of most of us today ? In
large cities like Mumbai, I perceive the following scenarios :




  •  Physical stress caused by several factors — long
    working hours, very long and tiresome travel time (from home to office and
    back); uncomfortable physical working conditions (including cramped work
    spaces leading to bad body postures; several hours of working on computers;
    lack of physical exercise, irregular eating habits; long gaps between meals;
    frequent travel plans; lack of adequate sleep.



  •  Mental stress caused by constant work pressure;
    unplanned work schedules leading to haphazard time management; always having
    to deal with deadlines;



  •  Stress caused by the dilemma of witnessing
    corruption through consistent interaction with Govt. departments and
    taxpayer non-friendly actions and behaviour of bureaucrats.


The above are, of course, only a few important aspects.
There would be many more. But the main point to be noted is that, in general,
most of us are facing at least some, if not all, of the above situations in
our lives today.

Is there anything that we can do to deal with the above ?
Let us not forget that today, we are trying to cope with and adjust our lives
to this constant stress. But our children are born and are living in this
environment from day one. For them, stress will become a way of life from
birth itself. This is a very dangerous and scary scenario. Let us all strive
to change our life-styles. Slowing down the pace of life, reducing the number
of working hours, spending more time at home and also doing regular physical
exercises are a few basic things that we must work on immediately. The time to
act is now. There is no time left to delay this any longer. Can we not work
from homes (technology is there to allow us to do so) on at least 1-2 days a
week instead of travelling long distances ? Can we spare one day in a month to
get rid of useless papers from our table-top and cabinets, so that our offices
are not unduly cluttered up ? We sit at our office desks for almost 8-10 hours
a day. Have we spent any time and efforts to find out whether the seating
arrangement is suitable to our health ? Is your chair comfortable ? Is
the distance between your head and your computer screen adequate ? Are your
arms and wrists in the right position while you type on your keyboards ?
Nothing that I have mentioned involves rocket science. It’s just that we
simply don’t feel it is important enough or urgent enough to pay attention to.
Most readers would be paying for annual maintenance contracts for their
computers, fax machines and other equipments. What about the regular
maintenance of the most complicated equipment in the world — the human body ?

If you agree with me, please refresh your memory and
recollect what happens when stress reaches breaking point. Hopefully, this
will jolt some of the readers into action.

I guess, it’s time to move on to less morbid topics. The
IFRS month of the BCAS was kicked off on 25th November by Mr. N. P. Sarda, a
past president of ICAI and a person who must have taught thousands of CA
students what costing means (I remember standard costing even today, only
because he made it appear to be so simple). It’s always a pleasure to hear
him. He was at his best on 25th when he spoke on IFRS. The IFRS RRC that we
have arranged in mid December has received an overwhelming response. I am glad
that we took the decision to devote an entire month for IFRS-related events. I
thank the members of BCAS who have supported the Society at all times and have
made our programmes so successful.

One year has elapsed since the dastardly terrorist attacks
in Mumbai on 26th November, 2008. The memories of those 3 eventful days still
haunt most Mumbaikars even today. Has anything really changed since then ?
Have our authorities learnt any lessons ? Are we any bit safer today than what
we were a year back ? I wonder. We all need to get involved and be a catalyst
to bring about change in society.

Social networking sites have become a rage nowadays. Not
only youngsters but even seniors are taking to these sites in thousands every
day. The BCAS recognises the power and the potential of such sites in bringing
people from all over the globe together. I am determined to make BCAS known to
Chartered Accountants across the world through the medium of such sites. I
seek your support in harnessing this extremely powerful technological tool to
unleash the power of networking amongst professionals. Let us all get together
and form a cohesive force that thinks together, acts together and brings about
social and economic changes for the improvement of our society in general and
our laws in particular. A CFO of a company recently wrote to me after reading
my previous month’s President’s Page. He complimented me on what I had written
but commented that, as usual, there was nothing in the message relating to
members in industry. I agree with him and will devote some time from now
onwards in making efforts to draw CAs in industry into the BCAS fold. How I
will go about this and when I would achieve this — I am not sure. But what I
do know is that where there is a will, there is a way.

Finally (and I know that the Editor of BCAJ is going to be
pleased with me for restricting the size of this month’s message to about
1,000 words !), I hope that readers have voted in the ICAI elections. At the
BCAS, we tried our best to make a difference in these elections. Let us hope
that we get dynamic leaders who will lead the profession forward into a new
horizon, leaving behind the inglorious moments that we have been witnessing
for the past few months. Eternal optimism ? May be !


From The President

From The President

“If you think for positive things in life, you will find
them.”

Over the last few months I have got used to hearing gloomy
predictions, meeting people with worry and concern writ large on their face, and
walking into business meetings which discuss a bleak future. So, when I bumped
into an old friend from the IT sector beaming from ear to ear, I was pleasantly
surprised. I enquired whether he had got a promotion. “No, in fact I have been
asked to take long leave, possibly some time before they show me the door !” he
laughed, “But I have never enjoyed life more than I have in the last month. I
just learnt what a great family I have. I have experienced a number of joys
because I stopped to pause and ponder something which I have not done in the
last ten years. As for my job, I will find a new one when I lose the one that I
have.” His words really set me thinking. I marvelled at his attitude. Any other
person would have grieved that he was about to lose his job and here was my
friend having a whale of a time with his family. It was all due to a positive
attitude.

If one really makes an analysis, the economic slowdown has a
large number of positives. The first is that we will all start to think and act
rather than react. When life is going at full pace we all tend to react to
situations; when things slow down we will have to be proactive and make things
happen, a habit which many of us have forgotten in the recent past.

The second positive is a welcome change in the mindset. The
situation has now forced us to do away with the linear mode of thinking. The
thought process of most people, especially those who belong to our profession is
to rely on precedent and predict the future. We tend to bench-mark everything on
past performance and past experience. Recent events have proved that the past is
not necessarily an indicator of future. Once we make a break from the past, we
will recognise and rediscover our ability to innovate. Some of the business
failures in the United States have not been on account of the financial crisis
but a sheer failure to innovate and deliver the products that the consumer
needed.

Another very significant positive fallout of the financial
turmoil is the recognition of the need to save in generation next. I saw this
manifestation when I visited a young relative of ours who is working with a
large KPO. A management graduate, she used to try and convince me that spending
drove economic activity and therefore needed to be encouraged. I was therefore
surprised to learn that she had decided not to go on her annual foreign jaunt,
but would settle for a short holiday in Kerala. I enquired as to whether her job
was safe. “Yes it is as of now, but who knows ?”

Having dwelt upon all these positives on the human front, I
think the single most important lesson that we have learnt is that the western
world is not infallible, and the United States is certainly not. For long, a
large part of the world has looked upon the U.S. as a powerful, super rich
saviour, whose actions were to be emulated. For more than six decades the US has
played the role of Big Brother. The follies that the institutions in the US and
the rest of the western world have committed have not only been witnessed by the
rest of the world, it is likely to suffer from their acts of commission and
omission in the next few years.

On the professional front, I believe this slowdown is a great
opportunity to sit down and introspect. Many of us have been accepting the
unending flow of professional work without paying heed to the creaking
infrastructure and the strain on our existing systems. Some of the problems the
profession has been facing are on account of lack of training of articled
students and staff.

In the next few years the government will have to increase
its spend on infrastructure in general, while we must invest our time and effort
enhancing the knowledge-base of our staff, remembering to upgrade our own
skills. Multidisciplinary firms are a reality. We must explore these
possibilities and network. When the inevitable turnaround comes, we must be
ready to seize all opportunities.

We must end 2008 on a cheerful note. Do not let the prophets
of doom bother you. Go on a holiday with your family and friends. If you are in
‘Aapli Mumbai’, enjoy whatever ‘winter’ the city offers you. Goodbye 2008 and
welcome 2009.

With warm regards,

Anil Sathe

P.S. :

As this issue goes to the press, the country has been facing
one of the gravest terrorist attacks. In the past two days we have seen in the
media, exemplary courage, and supreme sacrifice from the security personnel,
hotel staff, ordinary citizens, who beyond all were Indians. We salute these
brave individuals. We only hope that the powers that be, recognise this
sacrifice and act quickly, decisively. It is a time that we stand united and
show the world that our buildings can be attacked and weakened but our spirit
can never be. We the BCAS family are with those who lost their near and dear
ones. For those who are battling for their lives, we pray for a speedy recovery.
We pledge our support in the huge tasks that lie ahead. It is our duty not only
as professionals, intellectuals, but as concerned citizens of this great
country. We must demand competent governance from those in power. If we all
contribute our mite, India will emerge as a strong, vibrant nation.

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From The President

From The President

Dear Esteemed Readers,

It is indeed a matter of pride and pleasure for me to put
across my thoughts as the newly elected President of this august body. I
visualise your expectations, having been addressed by some of the luminaries in
the profession in the past through this column. Well, it is my privilege to
communicate with you for the next twelve months and I shall strive my utmost to
meet with your expectations.

It is heartening to have received so many compliments from
all over the country upon assumption of office as President of BCAS redounding
to the credit, reputation and popularity that the Society enjoys in the
profession. I sincerely thank one and all for their expression of love,
affection and consideration to me and the BCAS.

Communication is complete when it is well received, so I look
forward to your feedback and suggestions for improvement not only in respect of
my writings but also in respect of any branch of activity of the Society. You
are also at liberty to raise issues concerning the profession as well as social
causes and macro issues concerning citizens at large that you would like to be
addressed by the Society. I believe that intellectuals generally carry greater
responsibility of Nation-Building. Swami Chinmayananda had said : “This Nation
suffers more from the passiveness of good people than aggressiveness of bad
people”. The result is evident in the quality of our national leaders (if at all
they can be called as such). We, therefore, need to become aggressively good. We
must not take injustice lying down. We must take lead in restoring peace and
communal harmony, spreading education amongst the poor and prevent mother earth
from the hazards of global warming by turning it green. We intend to take up
this year many such initiatives which could provide our members opportunities to
participate in nation-building activities along with members of their families.

One area where professionals need to contribute their mite is
in eradication of corruption. Lack of accountability on the part of Government
employees is one of the reasons for this cancerous growth. The Society has
represented to the Government on several occasions to bring about accountability
in the Income-tax Department and has repeated its demand, especially in the
context of the proposed Direct Tax Code. The DTC proposes to introduce General
Anti Avoidance Rules (GAAR) with wide powers to officers. Gandhiji said, “Power
corrupts, and absolute power corrupts absolutely”. Indeed, there is a need for
matching accountability with bestowal of authority. Lack of accountability
coupled with wide powers would worsen the vulnerability of the hapless
taxpayers. The need is to address the issue from the other side of the coin,
i.e., taxpayers must not be lost sight of. To quote Gandhiji again, “There is
enough in the world for man’s need, but not for man’s greed”. According to one
estimate, if only the black money parked abroad by Indians (politicians
included) can be brought back to the country, it can wipe out our external debt.
There can be no two views that tax evasion should be dealt with severely.
However, it should not be at the cost of innocent taxpayers. More often than
not, tax- payers indulge in corruption to buy peace of mind. Given an
opportunity of clean administration and fair assessment, the majority of the
taxpayers would not encourage corruption. In this regard professionals also
carry the responsibility to encourage and support ethical practices. However,
the tug of war is on between the Income-tax Department to extract more from
taxpayers on the one hand, owing to unreasonable targets set for tax collection,
and the inclination of the taxpayers to save more due to greed/provision for the
rainy day on the other. In this context, the approach and transparent
functioning of the Reserve Bank of India is to be appreciated. It is one of the
finest institutions of India. How I wish this culture spreads to every
department of Government.

Computerisation and use of related technology may well be one
of the ways to reduce corruption. Recently a newspaper covered a report about
the wonders wrought by the Government of Chhattisgarh by computerising the
Public Distribution System (PDS). This is how the miracle worked. Chhattisgarh
first created a network of computers across the State, which covered 146
development blocks in 18 districts where details of every beneficiary are put
online. Each beneficiary can also keep track of food stocks through SMS, which
is sent immediately after a PDS shipment is sent from a distribution centre to a
local fair-price shop. SMS informs the beneficiary of everything, including the
date, time, the vehicle number and the stock.

The fair-price shop owners received incentives to stop
pilfering food stocks, and commission for each shop was increased from Rs.8 to
Rs.30 per quintal, with shipments tracked online.

The Public Distribution System is one of the largest leakages
of public money fuelling corruption. It is estimated that there are 23 million
fake ration cards eligible for subsidised food and civil supply. Each fake card
guzzles Rs.8500 of the annual subsidy. With computerisation, regular reviews and
frequent verification, the Government of Chhattisgarh cancelled 1.3 lakhs (below
poverty line) cards during 2002-09. Thus, the reforms in PDS have resulted in a
whopping saving of Rs.100 crore plus, for the State Government so far.

This clearly shows what technology can do or achieve with
political will. Dr. Raman Singh, the Chief Minister of the Chhattisgarh is an
Ayurvedic Doctor and has been re-elected for his good work. The motto of his
Government is aptly reflected on the official website of the State : ‘http://cg.gov.in’ :
“Our focus is on two areas — good governance and good infrastructure. If we can
provide these two, the rest will follow.”

On the ensuing 65th Independence Day, let us all resolve to
contribute our mite to rebuilding India.

Coming back to brass tacks, one of the focal areas this year
would be to bring BCAS to your doorstep by organising various programmes for the
benefit of members in the far-flung suburbs of Mumbai and other important towns
in India. We also intend to organise focussed programmes for members in Industry
and to this end, a Focus Group on ‘Corporate Affairs and Members in Industry’
has been formed. We wish that the benefit of the Society’s activities and the
Journal reach to more and more members, which is why I hereby appeal to our
readers to inform their friends, colleagues and peers about BCAS and its
activities. I am happy to inform you that members from Ahmedabad, Hyderabad,
Indore, Nashik and Surat (who attended the recently concluded Residential Study
Course on Service Tax) have promised to induct new members in order to spread
the activities of the Society. The Study Course was attended by about 80
participants and the level of discussion and bonding amongst members were simply
unparalleled.

I do not wish to deal with other focal areas as the same have
been dealt with in my inaugural address to members published elsewhere in this
Journal.

On the BCAS’s Founding Day Celebrations held on 6th July 2010, the Chief Guest, CA Keki Mistry, Vice-Chairman and the CEO of HDFC Ltd., addressed our members on ‘Lessons from the Global Financial Crisis and the Role of Housing in the Indian Economy’. He shared his optimism for India’s growth in housing sector over the next decade or so, resulting from, inter alia, the demographic advantages and strong banking norms for lending in the housing sector. The lecture was webcast and people around the world watched it live.

The first lecture meeting of the Society for 2010-11 was addressed by the past President of the Society, CA Pinakin Desai on 14th July 2010 on the subject of ‘Recent Developments in Direct Taxation’. It received an overwhelming response, with many members returning home for want of space. I sincerely regret the inconvenience caused to them, but members can simply resort to listening to this lecture from the Society’s website.

By the time you would receive this edition of the Journal, the hectic schedule of July must have been over and the festive August must have made its entry.

It is said, “Coming together is a beginning, keeping together is progress and working together is success”. Let us work together to make BCAS a more powerful force to be reckoned with, comprising proactive, pragmatic and progressive chartered accountants determined to make a positive difference to the profession and the country for a better tomorrow, God willing.

In conclusion, let me wish you all —

A Happy Independence Day, for this memorable day is yonder and it is fitting that we dedicate ourselves — thought, word and deed at the altar of freedom, liberty and independence we all cherish.

So be it.

From The President

From the President

Dear BCAJ Lovers,

It is my proud privilege to
address my first communication to you as the newly elected President of BCAS.
I am daunted by the huge responsibility that is cast upon me and I hope to
complete the year ahead with ease on the back of unstinted support of members
and well wishers of this august body. The large number of congratulatory
messages that I received on my assuming the post of President have left me
speechless. I am thankful to every one of them.

The BCAS year 2009-10 has
begun with a very encouraging event. For the first time in its history, the
BCAS celebrated its Founding Day by combining it with the Budget lecture
meeting. S. E. Dastur, as usual, addressed a packed house of more than 2,000
people in his inimitable style. Apart from these people, a large number of our
members and others also took advantage of the lecture by viewing it online on
a real-time basis. We had arranged a live webcast of the AGM and the lecture
meeting for the benefit of a larger audience. This facility was welcomed by
several members and the response that we received is truly amazing. The web
statistics show that people from USA, UK, Switzerland, Singapore and UAE also
watched the webcast, apart from the large number of our members from all over
the country. This has given us the reassurance that we need and, in future, we
hope to bring more programmes to our members through webcasts.

In the year ahead, we hope to
usher in certain changes at the Society to improve its functioning and also to
reach out to more and more people. We will also strive to encourage younger
members to come forward and take up leadership positions in the Society.

Budget 2009 was preceded by
the usual hype on the part of media. But, it turned out to be much ado about
nothing. Considering the fact that the Finance Minister has promised to table
the new Direct Tax Code very soon, the large number of changes announced in
the Budget could have been held back. The minor tinkering with the threshold
limits will hardly make any difference to the tax payment by individuals.
However, the abolition of surcharge is welcome. The salaried class in the
higher income group will stand to benefit by this change. The abolition of the
infamous FBT will hopefully close a painful chapter in the history of the
Indian tax regime. However, one major grievance that most tax professionals
would have against the Finance Minister would be the manner in which the
Finance Bill is sought to be converted into law. Hardly any time has been set
aside for discussion on the floor of the Parliament. It is obvious that due to
lack of time, the possibility of professionals and trade bodies making
representations to the Government and the chances of the Finance Minister
having the time to read such suggestions are very remote. This is most
unfortunate and does not augur well for a healthy manner of legislation.

The postponement of the new
rules for TDS was expected and was badly required. The unnecessary hurry with
which the CBDT has tried to bring in such sweeping changes without putting in
place the infrastructure to implement the changes could have easily been
avoided. One hopes that in future, the Govt. consults professionals before
taking such decisions. The CBDT must realise that in order to bring about
major changes, it is essential to first win the confidence of the tax-paying
community. In contrast to the attitude of our CBDT, I was amazed to read about
the US Govt.’s proposal to bring in mobile telephone expenses under Fringe
Benefit Tax. There, when the Govt. wanted to bring in one item of expense
under the FBT, the proposal has been placed on the IRS website for public
comment for more than 2 months ! The new rules for remittance of funds out of
India are now in place. The system appears to be working well. However, one
will have to wait and watch how the Income-tax department uses the information
that it will collect. Let us hope that this is not used by them as one more
tool for hounding honest taxpayers and deductors.

The ICAI has recently set up
a Women Steering Group. This group is dedicated to serving women
Chartered Accountants and female students aspiring to be the members of the
ICAI. This is a welcome development. A few years ago, the BCAS had conceived
the idea of creating a special forum for women CAs and it had met with a good
response. Recently, it is observed that the percentage of girl CA students and
lady members has risen considerably. I am sure that with ICAI now taking up
this initiative in a big way, more ladies will stand to benefit.

Finally, as I write this
page, the media has reported that the lone terrorist captured alive during the
Mumbai terror attacks has confessed to his crime. Finally, justice will be
done and the perpetrator of a heinous crime will be suitably punished. This
will not bring back the hundreds of lives which were lost on those fateful
days of November. But at least the world now knows for sure what our
neighbours have been up to.

Ameet Patel

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From The President

From The President

Dear Professional Colleagues,

I wish you all a very happy Diamond Jubilee Year. The Bombay
Chartered Accountants’ Society celebrated its 59th founding day and entered the
Diamond Jubilee Year. I am grateful to all of you for having reposed your trust
in me, and bestowing on me the honour of being the president of this august
institution in a landmark year. I am conscious of the responsibility that this
office carries and I will make every effort to discharge it to the best of my
ability.

I have already expressed my thoughts for the ensuing year in
my acceptance address at the Annual General Meeting, which appears elsewhere in
this issue. To recapitulate, the thrust areas would be




  • A
    comprehensive programme for students — our future.



  • Programmes to reach out to members in industry.



  •  
    Events/programmes to make the busy professional a complete individual.



  • To spread awareness of the activities of the Society among the public.



In this year, various committees of the Society and the
Diamond Jubilee Celebration Committee headed by K. C. Narang and Narayan Varma,
will organise number of programmes to celebrate this year. One of them will be
the Diamond Jubilee Conference scheduled on 8th November 2008. I would request
you to mark the date in your diary.

As I write this piece, the Government has just won a trust
vote. The high-voltage drama which commenced three weeks ago has ended.
Newspapers are filled with stories of how events unfolded in the Parliament.
Many citizens feel that the actions of many to whom we have entrusted the
responsibility of governance, are shameful. When such events occur we feel sad,
but that sadness does not translate into action.

We must share a part of the blame. When enlightened citizens
shy away from public duty, the nation suffers. Corruption is one of the greatest
ills that our country suffers from. The short-term remedy is to keep the members
of the public well informed. To meet that objective, the Right to Information
Act is serving as an excellent tool. However, I fear that its overuse may blunt
this weapon and unscrupulous users may reduce its credibility. In the long term,
an educated citizen will act as a great check to the spread of corruption. I am
under no illusion that education will eradicate this evil, being aware that it
exists in most developed countries where the entire public is expected to be
well educated. It will however, act as a strong deterrent.

In this context of education, I must commend the ‘Teach
India’ initiative. Projects like this must receive all the support they deserve.
I appeal to each one of you, your relatives and family members to enrol for the
programme in whatever capacity possible. We at the BCAS must also find ways and
means and explore as to how as an organisation we can contribute to this cause.

This brings me to the aspect of education in our profession.
Over the last year or so, the curriculum has been changed in a manner that
students entering the course are of a far younger age. Like every change, this
change has had its share of criticism. Every change has its own advantages and
problems. While the technical content of the curriculum is at the same level
that it was earlier, there is little provision to take care of the inherently
lower levels of maturity of the students. The young students joining the course
are bright and many of them are focussed on their careers. However, the
significance of the practical training that is imparted during the period of
articleship is not fully appreciated. This results in conflict and a great gap
between the expectations of students and their employers. The need of the hour
is counselling of students, their parents and Chartered Accountants as well.

This year is also the Diamond Jubilee Year of our alma mater,
the Institute of Chartered Accountants of India (ICAI). The ICAI entered its
Diamond Jubilee Year on 1st July 2008. We at the Society are just 6 days
younger. The Society has always believed that it can play a role complementary
to that of the ICAI. The selfless devotion of its founders, its illustrious past
presidents, its enthusiastic core group have made the Society a premier
institution. In this Diamond Jubilee Year, it is this brand image of the BCAS
that we have to protect, promote and enhance.

For the success of the programmes that the Society will
undertake, I will need your support and I am sure I can bank on it. What I need
further is your response and feedback. Please feel free to communicate with me
or my team, about your thoughts, suggestions and yes, your criticism, for I am
sure that you have the interests of the Society at heart.


With warm regards.
Anil Sathe

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From The President

FROM THE PRESIDENT

Dear BCAJ Lovers,

I am beginning to understand
the true meaning of the phrase “the pen is mightier than the sword”. With every
passing month, the feedback and responses to my page appear to be increasing in
frequency and in the amount of positive energy that they convey to me. I am very
thankful to all those who have continually sent me their views.

As I begin writing this month’s
page, we have just had an extraordinary event that the BCAS organized on 25th
March. At the Late Dilip N. Dalal Oration Fund Lecture meeting, we felicitated
some of the Mumbai based rank holders at the last CA Final examinations. We also
released the updated RTI publication authored by our past president Mr. Narayan
Varma. The highlight of the evening was BCAS’ felicitation of CA T.N. Manoharan,
past president of the ICAI on his being conferred the Padma Shri Award by the
Government of India. He then spoke on “Satyameva Jayate – Learning from the
Satyam Experience”. Every word he spoke came straight from his heart and touched
a chord in the hearts of everyone present. When he sat down, he got a standing
ovation – something which I have not witnessed during my long association with
BCAS. We at BCAS are proud of our member Mr. Manoharan and wish him many more
such achievements in future.

All of you would, by now, be
well aware that the IPL cricket matches are going on in full swing in various
corners of the country. I would like to talk about cricket at this time. And now
that I have your attention (considering what a cricket crazy nation we are), let
me clarify that it’s not the runs and wickets that I ant to talk about. But the
lessons that we all must learn from the IPL and its promoters.

Cricket, as you know, is an old
game. The basic objective of each team is to make more runs than the other team.
There are set rules of the game. What has IPL done for the game and for others
that is different? Cricket was once ruled by 5-day test matches. As the years
passed, test matches were replaced in terms of popularity by One Day
Internationals with 50 overs. Later, we graduated to day and night matches and
today, we have T-20 matches. Is there a difference? Has life changed for
everyone concerned (and also for those not concerned)? The answer is a loud and
clear YES! Let us see what changes have come about.

People no longer have the time
and the patience to watch 5-day test matches and, in many cases, even ODIs. They
want shorter matches so that their working hours do not get affected
substantially. Then, someone thought – why should the clothes worn by cricketers
be plain-jane white clothes? Why can’t they wear colourful clothes? So, IPL got
bright designer clothes for cricketers. What’s more, the colour of the balls,
bats and stumps too have changed to livelier ones as compared to before. Now we
have large screens in the stadium and spectators can see action replays there
too. Similarly, in order to help umpires take the right decision, we now have
third umpires. This reduces the possibility of unfair decisions.

How are the players affected?
They get tons of money, first of all to be selected in any team and then when
they play, they get money to endorse products. Secondly, because there are so
many teams, there is a requirement for so many more cricketers. This gives more
youngsters a chance to play. This, in turn, allows the selectors a larger pool
of cricketers to choose from while deciding on the national teams. Ultimately,
this raises the bar as far as performance is concerned. Even foreigners get to
play in the matches.

What do the spectators get?
They get complete entertainment. Every match gives a result so there is no
chance of a disappointing draw. There is ample scope for being innovatively
dressed and painted up to catch the cameraman’s eyes. There are event managers
at the stadium entertaining the people with songs, music and what not! People at
home get to watch Bollywood and other celebrities talking about and cheering
their teams.

The popularity of cricket
matches has started wooing people away from movies. This, in turn, has lured
movie stars to cricket and we now have several stars owning various teams. Even
industrialists are taking interest in the game. A classic example of multi
disciplinary partnership! Both professions stand to gain from this merger.

I can go on and on. But this
page is not allotted to me to talk about cricket. Let me come to the point. What
can we CAs learn from the IPL phenomenon? What can BCAS as an organization
learn? What can ICAI learn?

The most important lesson to be
learnt is to understand that people change over the years and so do their
preferences and wants. Every new generation thinks and acts differently. We have
got to understand that and learn to adapt to those changing needs. We cannot
afford to provide our services in the same manner as we used to do 20 years ago
or the way our senior CAs used to do. We need to understand the changing market
dynamics and try to latch onto the same. We also need to understand that loyalty
is fast becoming a thing of the past. Today, just as we have fans switching
loyalties from one team to another (and so also cricketers going from one team
to another when they are paid more), the time has come when our new clients
(especially the foreign ones) too don’t get emotionally attached to their CA or
the firm. The same is also the case with our staff. Time and again, we have read
news items bout high profile members moving from one reputed organization to
another. Is this not a reflection of the times that we are living in today?
Today, salary is the deciding factor in many cases while selecting a career. Let
us accept it and be prepared to pay what the market is offering. If we don’t, we
have no business to complain that we are not getting good staff. And why don’t
we offer higher salaries? Because, we complain that we don’t get higher fees.
And why don’t we charge higher fees? Maybe, we are afraid of losing our clients.

IPL tickets cost thousands of rupees today. That was not the case with test match tickets and ODI tickets. Yet, people pay these kind of charges. Why does that happen? It happens because they perceive a certain value for money when they go for such matches. The game is the same, the rules are the same, the objective is the same. But the value has gone up. Do we CAs know and understand our own value? Are we able to position our services well in the eyes of the public? I don’t need to spell out the answer to this one. The value of a profession is directly proportionate to the value of its members. We individuals are responsible for what our profession as a whole is perceived to be by others. We elect our leaders and our leaders decide our policies and our code of conduct and our rules and regulations and we follow these rules. How others see us depends on what face we show them. Have we bothered to take a look at our faces in the mirror to find out what others are seeing?

The marriage between Bollywood and sports has helped both. This classic merger is staring us in the face. Have we taken a step to create such win-win situations with other professions? We have only been reading about it but nothing concrete has emerged.

IPL has used latest technology to the fullest extent for marketing itself. Virtually, all the popular ways of communication have been used to the advantage of Brand IPL. This has, in the words of Mr. Lalit Modi, made the IPL a billion dollar enterprise. Have we, as CAs, whether personally or collectively as an organization, used technology effectively? IPL has been eminently successful in magnetically pulling all strata of people to it. If someone did not go to the IPL, then IPL reached out to that person. That is a clear message for organizations like the BCAS. We must reach out to people. If they don’t come to us, we have to reach out to them. We need to find out what the members of our profession want and also how far they are willing to travel to get what they want. If our members live in the suburbs of Mumbai, then we have to go to the suburbs. If not, be ready to accept falling numbers at our programs. This holds true not only for BCAS but for all other organizations. Today, IPL has become a symbol all over the cricketing world. Mr. Modi is known and respected by cricketers across the globe. Can BCAS become such an organization? Do we have it in us to capture the imagination of young CAs all over the world? Can we become a catalyst in changing the face of the profession? Do we have a Lalit Modi amongst us who can turn the picture on its head or the world on its head? Only time will tell!

I am aware that this message is highly debatable and many of you may not agree or may not want to agree. As always, I am open to discussion. I look forward to your feedback. In the meantime, we can all keep guessing and hoping and praying as to who will win IPL Season 3!

From The President

From The President

Dear professional colleagues,

Indian taxpayers live in an
atmosphere of uncertainty with regard to various tax issues, e.g., applicability
of tax rates, chargeability of income to tax, allowability of claim for
expenses, liability to deduct tax at source, retrospective amendments and so on.
These uncertainties and consequential tax risk become apparent if one looks at
high pitched assessments, conflicting judicial decisions, abnormal delay in
settling tax disputes and above all the trend to change tax laws with
retrospective effect.

Indian taxpayers as well as the
global investors consider this as high risk. Business plans, profit estimation,
cash flows, etc., go haywire when the unexpected tax demand is raised on the
taxpayers particularly when the law is amended with retrospective effect. Along
with the tax liability there is additional liability for mandatory interest for
non-payment of advance tax or delayed payment of tax for the relevant year.

The Finance Bill, 2008,
presented before the parliament has the distinction of introducing many direct
tax proposals to be effective from earlier dates. The reason given for these
retrospective amendments is that they are proposed to clarify the legislative
intent. Now, it is a moot question as to how the taxpayer will be able to
ascertain the legislative intent behind insertion or modification of any
provisions in the statute.

Once the judiciary including
apex court interprets the law after analysing the statute, one wonders whether
it is ethical and equitable for the Government to amend the law retrospectively
under the guise of legislative intent.

The trend of retrospective
changes in the law destroys the trust between the Government and the taxpayer.
If the Government genuinely wishes to develop atmosphere of mutual trust with
the taxpayers, it must refrain from bringing retrospective changes in law for
small revenue gain. No regulation can be truly effective unless it is
accompanied by ethical approach.

Any inequitable action of the
Government that shakes taxpayers’ confidence will not help the nation in the
long run. When a taxpayer who succeeds in the apex court after a long drawn
legal battle is compelled to pay tax on account of retrospective change in the
law, he considers it to be mockery of justice and equity. The Government, after
losing the tax matter in the Court should not become a winner by changing the
rules of the game through retrospective amendment. At least the retrospective
changes should spare those who have succeeded at the appeal stage.

One does not question the power
of the legislature to make retrospective amendment, but one believes such power
should be used sparingly and that too only for extra-ordinary matters. It should
not be used merely to overrule every single judicial development that causes
discomfort to the administration.

That apart, the taxpayer is
burdened with the levy of mandatory interest under sections 234A and 234B on
additional tax liability due to retrospective change in the law without any
justification. Such an interest burden is unjust. There should be in-built
provision in the law for not charging interest in case of increase in tax
liability due to retrospective amendments to the law.

Accountability, a virtue for a
good administration and good governance is yet to be brought on the statute.
Accountability as applicable to the taxpayer should equally be made applicable
to the tax collector. Accountability, if introduced, will certainly infuse
confidence amongst the taxpayers. Today, the taxpayer is liable for penal
consequences for any default committed by him. Similarly, tax administration
should also be made responsible for any lapse on its part.

Instead of bringing much
awaited accountability in the administration, the Finance Bill, 2008, seeks to
provide that a notice issued by an income tax authority will be presumed to have
been served in a proper manner and in time, if the assessee co-operates or
appears in the assessment proceeding.

Such co-operation will validate
the assessing officer’s lapse in serving a valid notice. The irony of this
proposal is that the assessee who co-operates in the assessment proceeding in
spite of improper service of notice is penalised for his cooperation. Such
procedural changes in the law to cover up the lapses of the tax officials have
demoralising effect on the taxpayers.

At the end, any taxpayer
prefers to have reasonable estimate of its tax consequence. He should be in a
position to manage tax risk without having any unexpected or unreasonable impact
on liquidity, profitability, cost structure and future investment plans.
Unexpected tax burden due to retrospective amendments shakes the confidence of
the taxpayers.

Various retrospective
amendments including proposal to modify the penalty provisions, are proposed in
the Finance Bill, 2008. The Society has made representation to the Finance
Minister on such issues. It is hoped that the Society’s representation to the
Hon’ble Finance Minister would be considered in right earnest and the tax
proposals will be modified before they are enacted into law.

With regards,
Rajesh Kothari

levitra

From The President

From The President



Dear Esteemed Readers,

July and August were
eventful months not only for the Chartered Accountancy profession but also for
the world at large. In so far as our profession is concerned, the deadline for
filing income tax returns kept most of our fraternity busy till July 31, which
was extended by four days up to August 4, 2010.

The results of the CA
examinations were released in the last week of July, of which the outcome is
“Thodi Khushi, Jyaada Gam”, with the overall passing percentage falling
below double digits. The results were tough as seen from the trend of the past
few years; worse, it was toughest in recent years. Many bright students meet
with failure in CA examinations for the first time in their life. Examination
results invariably cause frustration, depression and a crisis of confidence. In
order to motivate students and help them take examinations in the right
perspective, an inspirational talk by renowned film and stage actor, Anupam Kher,
on the topic “The Power Within” was organized at K. C. College on 16th August
2010, which elicited a very good response.

Students are our future and
we, members of the profession, should shoulder the collective responsibility to
make them first and foremost good human beings, responsible citizens and better
Chartered Accountants. A sense of longing to contribute to the society what one
receives therefrom must be inculcated in students early in their career. It was
heartening to read the news in the Times of India dated 25th August 2010, that
Mr. Asit Koticha, Chairman and Founder Promoter of ASK Group and ex-student of
Poddar College donated Rs. 32 crores to the University of Mumbai and promised to
raise a further Rs.70 crores to help the University build a world-class
Convention Centre and other facilities.

It is said, there are two
certitudes in life; namely, death and taxes. Taxes are levied and collected from
times immemorial. However, the origin of income tax law is found in the Bill
passed by the Legislative Council of India for imposing duties on profits
arising from property, professions, trades and offices. It received assent from
the Governor General of India on 24th July, 1860. Mr. James Wilson, Privy
Council Member and Founder of the world-acclaimed magazine, “The Economist” was
the architect of taxation in India.

On 24th July 2010, the
Income tax Department celebrated the 150th anniversary of Tax Laws in India. On
that occasion, the Finance Minister, Mr. Pranab Mukherjee, dedicated to the
nation the revised Citizen’s Charter. While the Charter expects Indian citizens
to be truthful, prompt and regular in paying taxes, it reaffirms that there
shall be equity and transparency in tax administration. The Finance Minister in
his address on the occasion remarked as follows:

“One area of concern is
litigation with taxpayers. Department is filing appeals in a routine manner
without careful thought and examination, leading to the Department earning the
dubious distinction of being the biggest litigant within the Government of
India.”

The aforenoted comment says
it all.

The Chairman CBDT, Mr. S.S.N.
Moorthy, unveiled the Service Quality Policy and has expressed commitment to
promote voluntary compliance with Direct Tax Laws through quality taxpayer
service and fair and firm administration. He also conveyed that the Department
would endeavour not only to be transparent but also fair in its processes. Let
us hope that both, the Income tax Department and the Citizens at large would
comply with the revised Charter, both in letter and in spirit.

Some other disturbing
developments were the flash floods in many states of Northen India, agitations
in the Kashmir valley and the rising inflationary trend. We need to learn that
the environmental imbalances are causing floods in deserts and heat waves in
cold climes such as Eastern Europe – a topsy-turvy condition of sorts. The
uproar in Kashmir Valley needs to be dealt with firmly. It is high time that all
political parties rise as one to the occasion and find an acceptable and
practical solution to the problem. The time is ripe to deal firmly with our
neighbour in the matter of Kashmir, which is the root cause after all. The
goodness of India is seen as its incompetence. Even Gandhiji said: “I would
prefer violence any day to cowardliness.” Non violence and peace should be
practised from a position of strength.

The rising inflation is a
matter of concern for one and all. It is widening the divide between the “haves”
and the “have nots”. A major chunk of the Indian population live below the
poverty line, which would prove that prosperity of economic development has not
penetrated down to the grass root level. The need of the hour is “inclusive
growth” i.e. growth and prosperity for all sections of the society. When our
Members of Parliament find it difficult to survive and unabashedly unite to
increase their pay three times, what about poor people across the country? In
good old feudal days when subjects were in difficulty or facing hunger, the then
Kings used to practise austerity and donate generously for the welfare of the
suffering masses. Today, it is the opposite. Our MPs and MLAs rush to increase
their emoluments at the cost of poor. In the recently concluded 14th ITF
Conference at Udaipur, the Keynote address was delivered by Sriji Arvind Singhji
Mewar, the descendent of the Royal Dynasty of Udaipur. He regards himself as the
76th custodian of the House of Mewar. The moot point here is that Sriji and his
predecessors regarded themselves as custodians or trustees as Gandhiji said and
not owners. According to them, the real owner is Lord Eklingji (Shiva), their
Ishta Devata (ancestral deity) and they were merely trustees. The principle of
“trusteeship” was enunciated by Gandhiji. If every wealthy person lives by this
philosophy, nobody would be poor on this earth. A small beginning has been made
at BCAS. Through the efforts of the Past President Shri Pradeep Shah, members
donated a dialysis machine to the Muljibhai Patel Society for Research in
Nephrology which costs Rs. 5 Lakhs. BCAS would be instrumental in organizing two
free eye camps for cataract operations at Vansda, Dist. Valsad, Gujarat, whereby
100 plus villagers would be benefited. Efforts are on to raise funds to fund
community service projects for the Matunia village in fond memory of the Late
Shri Hiten Shah, who had a dream of transforming this backward village. Any
member who is willing to contribute to such good projects is always welcome.

The panel discussion on Service Tax went off very well. More than 85 members attended. The seminar on NBFC on 14th August was also well attended with participation from across the country. The 14th ITF Conference at Udaipur set new standards both academically and administratively. The feedback for all programmes is very encouraging.

I conclude my message with New Year greetings to the Parsis and best wishes to readers from different faiths during the oncoming festive seasons of Ramadan, Paryushan and Ganesh Utsav.

JAI HIND

From The President

Dear BCAJ Lovers,

    You may have read the BCAS Vision Statement. There are four limbs to it. One of them deals with students. It says that “BCAS shall provide to students an environment conducive to the pursuit of knowledge, and encourage them to achieve their potential to become complete Chartered Accountants.”

    Lately, we have been conducting many programmes for the benefit of students. Recently, we had organised an Annual Day for our Students’ Forum. The HR Committee worked very hard for this event and the efforts bore fruit when more than 150 young, enthusiastic and bright students gathered under one roof and had a wonderful time. My brief presence there took me down the memory lane and I recollected my student days — both in college as well as during articleship. As the cliché goes, I thought about the “good old days”.

    When I compare my student days with the days that our present students are facing, I find a huge difference. Earlier, the pressure on students was much lesser. First of all, very few students did their articleship along with their graduation. I, for one, could have begun my articleship after successfully passing the Entrance Examination. But I was asked by my principal late Mr. S. V. Ghatalia to first complete graduation and then join his firm as a student. I am ever so grateful to him for giving me this advice. This not only allowed me to enjoy my college life and take part in several activities (which, in turn, have helped me a great deal in life), but also made me more mature and capable of handling the various assignments that were allotted to me during the articleship. At the same time, because we students already had the basic knowledge of tax and audit and a few other laws, we did not have to attend coaching classes. This in turn, saved us a lot of time. We were all able to leave our homes in the morning at decent timings and also reach home when our parents were awake.

    In contrast today, our students are leading completely different lives. They insist on starting articleship during the graduation process. When I tried to reason with my own daughter and convince her to first become a graduate and then start articleship, I nearly started a war in the family ! Because they go to college and also for articleship, the students are out of their homes for long hours. Also, for reasons best known to them, they believe that without attending coaching classes, they cannot pass the CA examinations. And so, they also go for classes. Thus, in effect, an average CA student would leave his/her house in the morning at around 6.30 a.m. and return at around 10 p.m.

    Further, the focus of today’s students is only to pass the CA examinations. They forget that the period of articleship is supposed to be the time when they have to gain know-ledge from their principals and seniors. Instead of aiming at absorbing knowledge and experience, the students channelise their energies only towards the examinations. In the process, the most important aspect of articleship i.e., learning, is either ignored or given secondary importance by the students. Also, attention span is very short nowadays. Although the younger generation is far more smart than the earlier generations, when it comes to common sense and grasping of fundamental principles, the present generation is far behind the ‘oldies’. This, of course, is a sweeping statement. But I am willing to begin a debate on this.

    What is it that we CAs can do for our students ? Can we make life less stressful for them ? Can BCAS do something that will supplement the efforts of the ICAI in providing the students with much more than merely a degree ?

    I believe that BCAS certainly has a very important role to play — nay, it is our duty to do something for the students. We need to bring about a paradigm shift in the thinking process of our students. First of all, we need to remove from their minds the wrong notion that without coaching classes, they cannot pass the examinations. Secondly, the students need to be mentored carefully. Today, their focus is to pass the CA examinations. The golden opportunity of gaining knowledge and experience during the articleship days has been sacrificed at the altar of examination-oriented approach. Many students make compromises in the quality of work that they do (or, in some cases, don’t do) during the articleship. I appeal to BCAS members to mould their students in the right direction. Let us impart not only technical training relating to taxes and accounting standards. Let us also educate them on how to become fine human beings apart from becoming fine professionals. Let us spend some time on how to make them good leaders and exemplary members of society in general. This year, at the BCAS, we will make sustained efforts to reach out to the students and create a sense of belonging in them towards the BCAS. Help me in taking this mission forward by enrolling your students for our programmes. Also, now that the Final CA examination results have been declared, I hope your students have qualified as Chartered Accountants. As they step into a new world and begin their careers, it would be a fitting gesture on your part to gift them an entry into BCAS. I invite you to gift one year’s membership of the BCAS to your successful students.

    The recently concluded ITF Conference organised by the International Tax Committee of the BCAS was a resounding success despite the fact that participants and their family members were very worried about the repercussions of going to Lavasa which is very near Pune where the H1N1 virus is currently playing havoc with normal life. Thankfully, everything went off well for us. We would now be focussing on the new Direct Tax Code which was unveiled recently by the Finance Minister for public debate. The Annual Referencer of the BCAS which is a prized possession for many will be released shortly. The BCAS has also made two representations on tax matters — one to the Finance Minister and the other to the CBDT. Copies of the same would be printed in the BCAJ.

    Lately, certain mails have been doing the rounds on the Internet which have cast our parent body — the ICAI and also its top leadership — in very bad light. One hopes that the controversy is resolved very soon. Ultimately, mud slinging of this kind and washing of dirty linen in public is bound to hurt our profession and, thereby, all of us. The ICAI elections would soon be held in early December. Let us all resolve to exercise our valuable franchise and that too wisely. Ballot is the biggest weapon in a democracy. Let us not waste it. We have worked hard to become Chartered Accountants. Can we allow a few people to let that hard work go down the drain ? Rabindranath Tagore once said — “You can’t cross the sea merely by standing and staring at the water”. Now is the time to act !

From The President

From The President

Dear Professional Colleagues,

Many of you will now be gearing up for the busy month ahead.
This year the due date for filing of corporate returns and the returns of those
assessees who are liable to tax audit has been advanced by one month. Whatever
the reason, it will leave us free to enjoy the festival of lights, though we may
have to work a little harder. One often marvels at the effort that chartered
accountants make to ensure that their clients comply with the law, while clients
themselves are in total bliss having delegated this job to the hapless
professional. We need to educate clients that while it is our duty to aid and
assist them to comply with the law, it is primarily their responsibility.

Recently the media was filled with reports of the legal
battle waged by a young couple. The lady was pregnant with a child which had
been diagnosed with a serious health problem and had few chances of leading a
normal life if born into this world. The time up to which medical termination of
pregnancy was possible had passed and the lady sought the Court’s permission to
do so. The case has many nuances which have already been discussed threadbare. I
would only salute the young lady and her husband for the respect they showed for
the law. While the order of the Court was not what she wanted, it brought to the
fore the inadequacies and limitations of the law, which will hopefully be
addressed in the future.

While on adherence to laws, many of us seem to employ double
standards. We expect others to comply with rules and regulations, while we flout
them with impunity. It is this duplicity which creates confusion, particularly
in young impressionable minds. I am reminded of an incident which occurred just
two days ago. I was driving my daughter to school early in the morning. The
signals had just started operating. I waited at the red signal, and the man
behind me started honking. I showed him the red signal. He overtook and broke
the signal, berating me on the way. I was saddened by his behaviour more due to
the fact that seated next to him was his young son, studying in the same school
as my daughter’s. The school would have taught him to wait at a red signal,
while his father not only broke the signal, but was critical of someone who was
abiding by the rules. This behaviour would obviously leave the child confused.
Such confusion may have tragic consequences in future.

Why do people break laws ? Personal and immediate gain is one
of the obvious reasons. The second is when people find that continuous violation
leads to no retribution. The third is when laws are so complex and ill conceived
that it is almost impossible to comply with them or the cost of compliance is so
high that a person is almost forced to flout them. The fourth is when the law is
totally out of sync from the ground realities or has become archaic with the
passage of time. It is the problems/issues that arise in the third and fourth
category that the government has to address at the earliest.

Finally there is an issue of the efficiency of the justice
delivery system, and the attitude of the administration. One often finds that
improving the judiciary is not on the priority list of politicians. This is
possibly because bringing about a change in the system is a painfully slow
process and it is difficult to show tangible progress in a short time. A lot of
time of the bureaucracy and the legislature is wasted in drafting laws and
enacting them, when in fact, it would be better to concentrate on ironing out
the problems in existing laws and trying to ensure that they are administered
more efficiently. The government must allocate far greater resources for
ensuring a better quality of presiding officers, better equipment in courts, and
increasing the use of information technology as a tool. Habitual litigants must
be dissuaded from clogging courts while genuine public interest litigation needs
to come to the fore.

What is true of general law is equally true of revenue
statutes. A new direct tax code is to be introduced. A similar exercise was
undertaken a decade ago, and the result is well known. Instead of embarking on
such projects it may be worthwhile to iron out the problems in existing
regulations. To illustrate, it took the government close to a year to realise
the hardship that tax deductors were facing in trying to comply with the
mandatory PAN percentage for filing TDS returns. I am conscious that such
problems will always arise, but they could have been solved earlier if the
administration had shown the right approach and attitude.

We are in a profession where we advise clients on compliance
with commercial and tax laws. In both, the dividing line between avoidance and
evasion is thin. Every professional needs to be clear about what his role is and
apprise the client about the same. This responsibility and role definition is
extremely important and needs to be well documented. Many of us are weak in this
area and should take remedial measures.

I will stop here and leave you to the arduous task of
completing your tax audits. As good professionals, we must encourage our clients
to comply with laws, and agitate for their rights before judicial forums. Out of
all the pillars of democracy it is this one which despite suffering some damage,
is serving as a lighthouse among otherwise murky and muddy waters !

With warm regards,

Anil Sathe

levitra

From The President

From The President

Dear Esteemed Readers,

Well, by the time you receive this message, the majority of
you folks will be relaxing from post September tax work. We, especially CAs,
need to learn to relax. After a day’s hard work (often putting in more than 10
hours), it is not uncommon to find a CA carrying some work to do at home. The
reason for this state of affairs is that we are unable to work in water-tight
compartments. In my childhood, I had learnt a poem, “Work while you work,
play while you play, it is way to be happy and gay”. Unfortunately, we not only
take work home but also whilst on vacation. As a result, we return home
exhausted despite the vacation. Let us stop being workaholics and start living,
which is all about balancing. In the words of Brian Dyson, CEO of Coca
Enterprises (1959-1994), “Imagine life as a game in which you are juggling five
balls in the air. You name them – work, family, health, friends, and spirit –
and you’re keeping all of these in the air. You will soon understand that work
is a rubber ball. If you drop it, it will bounce back. But the other four balls
– family, health, friends, and spirit are made of glass. If you drop one of
these, they will be irrevocably scuffed, marked, nicked, damaged, or even
shattered. They will never be the same. You must understand that and strive for
balance in your life”.


It reminds me of one of the seven habits of highly effective
people, as discussed by Stephen Covey, i.e. “Begin with the end in mind”. Let us
work toward our goals in different areas of life rather than concentrating on
only one area of life.

Generally, CAs and taxmen are perceived to be practical,
being occupied with so-called boring figure work. They are perceived to be
non-creative, being away from art and culture. Labeling a class of people one
way or the other is not appropriate. Art and culture is a matter of individual
traits and tastes. The Income tax Department is celebrating 150 years of its
existence, to commemorate which, a unique Art Exhibition was organized at the
Prince of Wales Museum in Mumbai during 24-27 Sep. 2010. I had the privilege of
witnessing the creativity of the IT officials. The Art Exhibition displayed
paintings, essays, books and poetry— all the work of taxmen. It was heartwarming
to see the different facets of the taxmen’s collective personality. We were
already aware of the word picture (by delivering well-articulated assessment
orders) by some smart taxmen; this Art Exhibition showed the picture painted.
Our compliments to one and all artistic taxmen and also to the Income tax
Department.

Today, we are living in an era of all-pervading negativity.
Television channels, in their quest to beat each other, are sensationalizing
news and scaring people. For TV Channels, every news is breaking news. Most of
the news is picked up from police files resulting in more of a crime reporting.
Flood or drought, fire or earthquake, any small or big incident is projected as
the beginning of an end of the world i.e. Pralay, in 2012. As it is,
India is struggling with floods in North India, unrest in the Kashmir valley,
attacks by Maoists, terror threats and epidemics such as Malaria, Dengue and
Swine Flu. To add to this, irresponsible TV Channels, and some newspapers are
thoughtlessly adding fuel to the fire. More than natural calamities, this
country suffers from perverted TV serials, which tend to sully our
national/social fabric. The aam junta tries to find solutions to their problems
through TV serials; what is worse is that they (especially teenagers) identify
themselves with the stars of these serials. This is dangerous, as extra marital
affairs, cheating and betraying in families are the corner stones of most of the
prime time TV serials. In the name of reality shows, all unreal things are
projected which is socially detrimental. It is a patent misuse of freedom of
expression. Well, if the power of media is rightly and wisely used, it can make
politicians and bureaucrats accountable and provide good entertainment to tired
souls. The media being the most powerful medium of communication and capable of
influencing the masses, should exercise restraint of the highest order and
discharge its social responsibility.

We must contribute our might to spread positivity. The Right
to Information Act is a powerful weapon in the hands of ordinary citizens to get
justice and instil accountability in public servants.

The much awaited Direct Tax Code (DTC) was introduced in
Parliament on 30th August, 2010 in its new avatar. Critics say it is old
wine in a new bottle. After a lot of hue and cry about the first version, the
second version of the DTC seems to be taking care of many
objections/representations made in the first draft. However, the amendments are
falling short of expectations. Any way, the law is unfolding and the Government
would welcome suggestions. Let us hope that representations from professional
bodies and trade associations are given due consideration before the DTC becomes
the law. Stringent General Anti Avoidance Regulations (GAAR) should not be
introduced without proper checks and balances lest they become a handle to
harass innocent tax payers. Provisions relating to Safe Haven and the likes
should be embedded in GAAR to provide relief to Micro, Small and Medium
Enterprises (MSMEs). “Place of effective Management” should be clearly defined
in order to avoid litigation in respect of determination of residential status
of foreign companies. Notwithstanding these irritants, CBDT deserves kudos for
simplification of the tax law (DTC) to be effective from 1st Aril 2012.

Coming back to the BCAS, last month, there was a lull in the
society’s activities as it was busy season. However, a few notable events took
place such as the workshop on “How to Conduct a Tax Audit”, addressed by Messrs
Anil Sathe and Himanshu Kishnadwala, and a Lecture Meeting on Transfer Pricing
by Vispi Patel. Two Webinars were held on the subject of “Introduction to XBRL”
on 11th and 22nd September 2010. The Webinars elicited good participatory
response from local and outstation members as well as those staying overseas.
The Webinars were conducted by Vinod Kashyap. It was the first time such a
Webinar was organised, thanks to the painstaking efforts by the “Infotech and 4i
Committee”. XBRL stands for Extensible Business Reporting Language, which is a
language for electronic communication of business and financial data, which is
revolutionising business reporting around the world. It offers major benefits to
all those who have to create, transmit, use or analyse such information. XBRL
India is facilitated by the Institute of Chartered Accountants of India (ICAI).
Members of XBRL India include various regulators such as RBI, IRDA, SEBI, MCA,
BSE and NSE. CAs can play a role in the implementation of XBRL and this may well
be a new avenue of practice.

Last but not the least, the countdown has begun for the
Commonwealth Games. Let us hope that our athletes bring back to India its lost
glory.

And now that the verdict on the Ayodhya dispute is finally
out, let us pray that people will respect it and maintain communal harmony – the
core essence of India’s cultural heritage.

Tathastu! Amen! So Be
It!


From The President

From the President

Dear BCAJ Lovers,

By the time you get this issue of BCAJ in your hands, the
busy month of September would have been over and you would be a bit relaxed.
The wonderful festival of Diwali would be round the corner. I wish all readers
a peaceful, joyous and memorable festive season.

The views expressed by me regarding today’s students in my
last month’s President’s Page have touched a cord in many readers’ hearts. I
have received calls from several persons including a past president of ICAI
complimenting me on accurately bringing out the plight of students. I am glad
that readers are alive to this serious issue. I hope that more and more people
take a lead in guiding and mentoring the children of today so that we have
better human beings, capable professionals and able leaders tomorrow.

The elections to the regional and central councils of ICAI
have now been announced. The first week of December will see hotly contested
elections. If the past is anything to go by and if reports that are trickling
in are to be believed, the elections this time will see many more candidates
and intense campaigning across the country. Elections in our country – be they
political ones or the ones that take place in professional and other
organisations like ICAI, generally have one feature in common – a lot of
people interested in contesting and very few people interested in voting.
Candidates cry themselves hoarse in inviting, cajoling, imploring voters, to
come out and vote. And voters simply stay at home. This year too, most of us
would have by now been approached by someone or the other, who is planning to
contest the elections. Already, the media of sms, e-mails, facebook, groups,
etc., have started being used by some such persons. Unfortunately, the
enthusiasm shown by the contestants is not shared by the voters. Every
election sees a dismal voter turnout. Not even 50% of professional voters in
the country deem it fit to spend a few minutes to fulfil their moral duty to
go and vote. Why does this happen? First of all, what is it that attracts so
many people to contest the ICAI elections ?

If I don’t have the time and inclination to vote, I have no
moral right to complain about the leaders that get elected. This holds good
for every one of us. We must vote. The recent developments at the ICAI, which
all of us are well aware of, in view of the widely circulated e-mails, are
highly deplorable. When elections are round the corner, it offers all of us a
golden opportunity to set our house in order. Let us all carefully analyse the
credentials of each candidate and then vote for the most competent and
deserving one(s). Hopefully, the ICAI elections would not be fought on caste
and communal lines. Hopefully, the results of elections would not be dependent
on the power of influential candidates backed by large firms or political
parties. Hopefully, ICAI will create a platform for all candidates to appear
before their voters and present their views and thereby allow voters to judge
for themselves whom to vote for and whom not to vote for. Last time, the BCAS
had decided to organise an event titled “Know your Candidates”. However, the
same could not be held on account of the restrictions placed by ICAI on the
candidates appearing in such programmes. This is most unfortunate and I
strongly urge the Central Council to reconsider this particular issue and, if
necessary, to amend its election guidelines to allow candidates to meet their
voters on a common platform. Even during the political elections, we have seen
such programmes being held. It is not enough for ICAI to merely send a
standard booklet giving academic and other achievements of the various
candidates. It is the need of the hour for ICAI to permit the voters to
collectively meet the candidates on a common platform and let the voters judge
the candidates on the basis of personal interaction. In fact, if our leaders’
yoga sessions could be telecast on a TV channel, why not a panel discussion of
the candidates? The future of our profession is dependent on its leaders. If
our leaders are not worthy, our future is hazy.

I urge every member of our Institute who reads the BCAJ to
wake up and take the ensuing elections seriously. Let us rise to the occasion
and vote this time to make a difference. Let us seriously consider the merits
of each candidate and then elect only good, competent and selfless people. Let
us question every person who approaches us for our vote as to why he/she is
contesting the elections. There have always been lurking allegations about
using one’s position in the Council for obtaining empanelment and allotment of
bank and PSU audits or for helping others in doing so. The ICAI must bring out
a clarification on this issue. The ICAI members have every right to question
the ICAI as well as its leaders. After all, that is what democracy is all
about. Several of the sitting and aspiring Council members are my friends. To
all of them as well as to all others, my message is simple and common – prove
your worth and genuineness to me if you want my vote. There is also one
controversial matter that has been at the back of my mind for a long time. I
would like to vote only for the candidate who promises me that he/she would
strive for getting BCAS programmes recognised for CPE credit purposes. This of
course is something which cannot be decided by one or two council members.
However, I have yet to come across any candidate who has actually promised to
make efforts in this behalf. Where there is a will, there is a way. I am
searching for the person with the will. Many BCAS members whom I meet, often
ask me why the BCAS programmes are not recognised for CPE credits even though
they are excellent in terms of quality. My answer to them is to go and ask
this question to the ICAI council members. Maybe, now that elections are round
the corner, it would be a good time to ask this question. This applies with
equal force to programmes organised by other sister organisations which have
been doing fantastic work for their members.

The mystery of the Direct Tax Code is slowly getting known
to all of us. By now, several programmes have been held across the nation on
this subject. One hopes that this Finance Minister reads the Representations
that are made. One also hopes that the large number of mistakes, problems and
anomalies that have been discovered will be rectified when the final version
is unveiled.

The Accounting and Auditing Committee of the BCAS has come
up with an ambitious plan of an IFRS month in December, 2009. We would be
focussing on IFRS during that month. The enthusiastic members of the committee
are excitedly planning for the same. Plans for the annual RRC are also in
progress. You will read more about all these in the days to come.

The BCAS has always excelled in arranging programmes on
technical matters. I would now like the organisation to also help and guide
its members in running their own offices more efficiently and in a better
manner. Practice Management is something that most small and medium sized
firms do not pay much attention to. In the September issue of BCAJ, there is an article on HR. I am hopeful that we will be able to carry more such articles in future on the subject. If smaller firms are serious about facing the challenges from larger firms and global firms, they need to drastically improve their internal systems and processes. BCAS would play the role of a catalyst in this matter, as usual. I invite your feedback on the same.

Have a great festive season.

Sincerely yours,

Ameet Patel
President

From The President

From The President

Dear Professional Colleagues,

When this issue of the Journal reaches you, the deadline for
completion of audits and filing of returns will have just passed. You, along
with your partners, colleagues and staff, must have burnt midnight oil (in some
parts of the country literally) to comply with this deadline. You will have
placed in the hands of your clients, and other stake holders, your reports which
are expected to contain your opinion as to whether the financial statements show
a true & fair view and whether the particulars which you have verified are true
and correct.

The audit process which you follow, and which culminates in
your report is expected to comply with certain assurance standards. The accounts
which are audited have to be compliant with accounting standards. Over the past
few years we have seen, in many forums, protracted debate over the extent of
disclosure required in the accounts. The tenor of discussion often is that if an
opinion need not be expressed according to the letter of the law or if a
disclosure is not required, such an opinion should not be expressed or a
disclosure should not be made.

According to the classical definition of the role of an
auditor, he is required to express his opinion as to whether on the basis of
generally accepted accounting principles (GAAP), the financial statements show a
true and fair view. Today these GAAPs have to be read with accounting standards.
In respect of corporate entities the accounts have to comply with the standards
prescribed by the Central Government in consultation with the National Advisory
Committee on Accounting Standards. Non-corporate assessees have to follow most
of the accounting standards prescribed by the Institute of Chartered Accountants
of India. Non-compliance attracts a qualification in the auditor’s report. Some
of these standards are so complex that Chartered Accountants have to debate
interpretation of some of their aspects. In most cases neither the owner/
promoter nor his ill-equipped accountant understands the true import of these
standards. In this scenario, General Purpose Financial Statements at times lose
their purpose of communicating the state of affairs to the reader.

I am conscious of the fact that businesses have become global
and competitive. Measurement and reporting standards have to have an
international acceptance, since the financial statements of entities doing
global business have to be interpreted by users in different countries. However,
the number of entities carrying on such scale of activity is minuscule compared
to the number of entities whose accounts are subjected to audit under one
statute or the other. My only concern is that in the quest for standardisation
and perfection, we should not make presentation of accounts and related
disclosure requirements so complex that the expectation gap between what the
society expects from us and what we deliver becomes so large that we cannot
bridge it.

The accounting standards and reporting requirements mandated
by various statements have the objective of standardising the measurement of
accounting estimates, various disclosures and the manner in which opinions are
expressed by auditors. This is done to make financial statements by various
entities comparable and understood by all users in the same way. However, in
trying to achieve this objective, if both, financial statements and the reports
thereon become lengthy and incomprehensible, it defeats that very objective.
Once this happens, these statements and reports are put away for future
reference but are rarely referred to. It would be interesting to note that the
tax audit report has been with us for twentyfour years. Yet a note from the CAG
dated 31st July 2008 exhorts revenue officials to read this report and in the
same breath asks action to be taken against professionals who have issued
erroneous reports.

Over the years, regulatory authorities, if I may use the
term, ‘outsourced’ responsibility to the auditor. The auditor is required to
comment on or report on aspects which are inherently the domain of the auditee
or the regulatory authorities. With the onus on the auditor being increased
substantially, he may tend to comply with the letter of a regulation rather than
the spirit. He may side-step the regulation, rule or reporting requirement, if
he can do so with some justification and adequate protection. Often more
attention is paid to documentation and working papers, rather than verifying
accounting records to form an opinion. Audit then becomes a compliance ritual
and the soul of audit which is an expression of opinion in regard to the true
and fair view, is lost. It is this opinion that a reader is looking for. The
world accepts that accounts are essentially estimates. The assurance that it
expects from us is that these estimates are made bonafide and in compliance with
the generally accepted accounting principles. If there is something amiss, the
attention of the user must be drawn to that fact. This assurance or if I can use
the term ‘blowing of the whistle’, must be in the simplest form.

I think there is a need to extensively deliberate upon these
issues and find solutions quickly. The International Accounting Standards Board
(IASB) is already in the process of formulating IFRS for SMEs. The only issue is
what constitutes a small and medium enterprise would be materially different in
different countries. If compliance is to be encouraged, India should take the
lead in formulating these simpler standards for SMEs. Stringent measurement and
reporting standards should be restricted to those entities where the users of
those statements and reports can understand them and appreciate their nuances.

If the reports are for different users with different
objectives, distinct formats of both financial statements and reports can be
contemplated. There will be problems in doing this but I am sure they can be
sorted out. For a vast majority of entities, especially non-corporate, the
disclosure requirements should be far simpler as should be the reporting
formats. This will strengthen the faith of the public in our profession which
has been repeatedly shaken in the recent past due to failures of corporate
giants.

All what I have said above actually passed through my mind
during this September. I felt that before we commence audits for the new year it
would be appropriate to leave my thoughts on the subject with you.

This year the advancement of the due date has left us free to enjoy the
festival. I take this opportunity to wish all readers and their families a happy
Diwali and a very prosperous and happy new year !

Anil Sathe

levitra

From The President

From The President

Dear Esteemed Readers,

At the outset, my greetings to all of you on the ensuing
happy occasion of Deepawali – the festival of lights, which we celebrate to mark
the victory of ‘Good’ over ‘Evil’. The Ramayana notes that the people of Ayodhya
celebrated ‘Deepawali’ by lighting lamps and distributing sweets to mark the
victory of Rama over Ravana. Later, during King Vikram’s reign, this celebration
was linked with the New Year, which is why it has become a popular festival for
millions in India.

The war within the Ramayana is symbolic. Every person has a
battlefield within, where there is a constant fight between good and evil. We
have to conquer all our negative emotions with a positive attitude and courage.

On a positive note, India can take pride in the successful
organisation of the Commonwealth Games. The world was stunned by the spectacular
opening as well as by the scintillating closing ceremony. The depiction of
cultural and traditional India, marking the opening ceremony, was one of the
most creative ways which the world would never forget. The Commonwealth Games (CWG)
“aerostat”, unveiled at the inauguration ceremony, was another star attraction.
Our athletes and sports persons brought pride to the country by winning
sufficient number of gold medals to keep India at second position. The power of
creative visualization was evident as India achieved its targeted second
position. India is now poised to make its mark at the forthcoming Asiad Games in
China between 12th and 27th November 2010.

However, the huge expenditure of about Rs. 70,000 crores for
the CWG is mired in allegations of massive corruption. I think India did a
fantastic job in CWG but for the corruption, which has not only tarnished the
image of our country, but has also made the life of the aam aadmi
miserable to the core. Isn’t it an irony that the apex court had to comment that
“it is high time that the Government fixes price tags of bribes for getting work
done from the Government Department?” In spite of such severe strictures, our
spineless politicians remain unruffled. The gravity of “corruption” is aptly
shown in the Marathi film, “Ek Cup Chya”. This film, with English
subtitles, screened at BCAS for the benefit of its members on 6th
October 2010 is about an honest bus conductor who receives an abnormally high
electricity bill and how he fights the mighty system and the “babus”
through the weapon of “Right to Information Act”. He succeeds ultimately, but
the amount of hardships and sacrifices that he and his family have to endure for
treading the path of truth and honesty is memorable indeed. Mrs. and Mr. Julio
Ribeiro (Ex Police Commissioner) were amongst the distinguished guests at this
movie screening.

India is a land of paradoxes. On the one hand, tonnes of food
grains get spoiled due to improper storage facilities. On the other hand, almost
one third of its population is starving. Several orders and directions from the
Supreme Court to distribute food grains to the poor and needy have not
fructified. Another area of concern is conversion of thousands of hectares of
agricultural land into non agricultural use in the name of development. With a
one billion plus population and low productivity, India would find it extremely
difficult to feed its teeming populace in future, unless such conversion is
halted forthwith.

On 1st October, 2010, BCAS, jointly with IMC, had
an interactive meeting with the Commissioners of Service Tax department S/s
Ravichandran and K. K. Sharma, at which several issues concerning service tax
compliances and policy matters, including implementation of e-filing, etc. were
discussed. The meeting was a step towards co-operation and discussions between
professionals and revenue authorities which would go a long way in developing an
atmosphere of mutual trust and support. At the end of the meeting, both parties
felt the need to meet more often and exchange views as everyone is in the
learning curve, the law being in the developing and unfolding stage.

On 12th October, 2010, the BCAS Foundation,
jointly with the Public Concern for Governing Trust and IMC, celebrated the 5th
anniversary of the Right to Information Act at the IMC. Hon’ble Justice Suresh
Hosbet, former Judge of the Mumbai High Court, was the chief guest of the
evening. In his keynote address, he emphasized on the need for well informed
citizens such that they can participate in the affairs of the country. He
referred to various decisions of the Supreme Court, which are helpful in better
understanding of the RTI Act. Amongst other notable speakers were S/s Suresh
Joshi, retired Chief Information Commissioner, Maharashtra, Julio Ribeiro and
Narayan Varma. An educative and instructive street play on the RTI Act was
enacted by young artists of the “Umang” Group.

On the unique day “20102010”, a lecture meeting on the topic
of “Taxation of Real Estate – Some Important Aspects including Project
Completion Method, S. 50C, development and Redevelopment & 80-IB (10)” addressed
by Past President, Mr. Pradip Kapasi, elicited an overwhelming response with
about 400 members attending at the IMC.

A study course on FEMA organized by the International
Taxation Committee of the Society on 22nd and 23rd October
2010 also received a very good response, with more than 100 members attending
and benefiting therefrom.

It is said that October heat is worse than summer. Mumbai
experienced unprecedented heat this month, contributing to epidemics such as
Malaria and Dengue. Widespread construction and consequent debris and filth have
only added fuel to the fire. BCAS lost one of its dedicated and hardworking core
group members, Mr. Manesh Gandhi, on 10th October 2010. He succumbed
to Dengue after a brief illness of just two days. In him, the Society has lost a
committed member of the Taxation Committee and Convenor of the Study Circle on
Direct Tax Laws. May his soul rest in eternal peace!

The much awaited Residential Refresher Course has been
finalized at the picturesque and lush green hill station of Maharashtra, namely,
Matheran, during 22nd to 25th January 2011.

The Noble Peace Prize for 2010 has been awarded to Mr. Liu
Xiaobo, who is a political prisoner in China. He believes that freedom of
expression is the foundation of human rights. In China, he fought for this right
and got imprisoned, whereas in India, we not only enjoy this right but often
times, abuse it and get away with it. In life, we don’t value a thing which we
get easily. It is high time that we realise the value of freedom of expression
and use it wisely. This applies to every walk of life, be it professional,
political or personal. Someone has aptly said, “As per Biological Science, the
hurt on tongue gets healed very fast, but as per Science of Knowledge, hurt
caused by tongue never gets healed.”

I conclude wishing the readership a happy Deepawali and a
prosperous New Year, once again.

From The President

From the President

Dear BCAJ Lovers,

As I sit down to write this month’s column, the wonderful
festival of lights has just ended. I am now resuming office after a 4-day
holiday during which I relaxed, spent time with my family, met a lot of friends
and relatives and ate lots of food which is bound to make the weighing scale
groan if I have the guts to stand on it to check my weight. I am sure that all
of you too would have similar experiences. Diwali is like that — it tempts you
to be on a ‘forbidden trip’.

After a relaxing break, we all will once again get back into
the rut. Most CAs live an extremely hectic life and a very stressful one at
that. We have moulded ourselves into workaholics who take on the world’s
troubles on their shoulders. We allow our clients to force ourselves to work at
the absolute last minute and, in the process, create extremely stressful
conditions for ourselves. If a client’s case is selected for scrutiny, the sky
falls on our heads while the client is blissfully watching the latest Bollywood
movie or going for a 5-star cruise. Is this fair ? Is this required ? Is this
warranted ? Why are CAs such a meek lot ? Why do we not raise our voices loud
and clear ? Why do we get bullied into the corner every time ? Is there not
anything that we can all collectively do to reduce stress and make our lives
more relaxed ? Is there a problem of time management or is there a problem of
the ‘chalta hai’ attitude ? Can we not write to our clients in the month of
March every year itself and ask them to be ready with their accounts by April or
May end ? Can we not educate our clients about the advantages of being online as
far as their accounting and taxation goes ? This problem is faced not by small
practitioners alone. I have seen even the big accounting firms facing the same
stress and last minute chaos that sole proprietors and 2-3 partner firms face.
This clearly reflects a larger problem which pervades the profession at large.
Something needs to be done on an emergency basis. I invite views and feedback of
readers and assure you that BCAS will act promptly on suggestions received.

The ICAI elections are drawing closer. My thoughts expressed
in the October issue have drawn several responses. All of them agree with my
views. Of course, very few candidates have bothered to send in their feedback.
Obviously, their energies are directed at vote gathering. At BCAS, we earnestly
request every member to vote in the ensuing elections. While we cannot force
anyone to go and vote, we can certainly impress upon our members the need to
vote intelligently. I hope that the percentage of voting is high this time.

I was thinking about my wish list for the new team that will
take charge at the helm of affairs at ICAI. Some of the important matters that
need urgent attention are :


  • Allowing
    creation of multi-disciplinary partnership firms so that CAs can team up with
    other professionals and offer a broader spectrum of services to clients.



  • Allowing
    our members to convert their existing partnership firms into LLPs.




  • Aggressively creating new areas of practice for our members so that over
    dependence on bank and PSU audits is done away with. This will automatically
    have a positive impact on our profession.



  • Deciding
    once and for all whether global firms should be allowed to practise in India
    or not.




  • Improving the public image of the CA profession.



  • Taking a
    fresh look at our existing Code of Conduct. There are several provisions
    particularly dealing with marketing one’s services, use of logos, use of
    photographs on one’s website, use of name of one’s international network on
    the stationery, etc. which are archaic and not in sync with global trends. If
    we are serious about sending a message to the international fraternity that
    Indian CAs are of global standards, then we need to seriously have a relook at
    our rules and regulations.




  • Revisiting the issue of CPE credits. Conceptually, one cannot find fault with
    the ICAI expecting every member to be academically updated. However, the
    manner in which the entire system is being administered leaves a lot to be
    desired. The first and most important issue that needs to be dealt with in
    this connection is the monopoly that the ICAI has taken upon itself in
    organising programmes that fetch CPE credits to its members. This needs
    serious rethinking. I wonder what are the norms followed in other countries. I
    find it very difficult to digest the fact that when a programme is organised
    by a Regional Council of the ICAI with a speaker Mr. A, it gets CPE credit
    whereas another programme arranged by any other professional organisation on
    the same topic with the same speaker fetches no CPE credits. Is this fair ?
    Similarly, if I start a study circle with 100 members today and register it
    with ICAI, that study circle will get immediate recognition for CPE purposes.
    On the other hand, a study circle of BCAS which has been in existence for
    several years does not get any recognition. In the same manner, programmes
    arranged jointly by ICAI and other organisations too do not get any CPE
    credit.



  • Bringing
    about electoral reforms in the ICAI. At present, the voter turnout is
    generally very low. Can we not allow our members to cast their votes online
    instead of having to travel to the booths for voting ? This would allow many
    members who are not in India or who are travelling out of their cities to cast
    their votes. Similarly, if I find that none of the candidates deserves my
    vote, why can I not say so by casting a ‘No Vote’ ? This matter is already
    generating a lot of discussion at the national level. Let ICAI take a lead in
    this matter and allow its members to make bold statements.



  • Finally, please do something for our students. Every few months, there is a change in the CA course. Not only the students but even the principals find it difficult to keep track of these changes. Can we not have some stability in this matter? Also, our CA course is a peculiar one where the entry is kept very simple but the exit is extremely difficult and painful. We are welcoming thousands of students with open arms into the CA course. But the number of students who ultimately qualift) is very small. This is something which needs to be urgently looked at. In comparison, the Engineering or the Medical courses are very different where entry is very difficult, the number of seats is limited, the entrance tests are very stringent and only the top few get admissions. But the number of students who ultimately qualify is quite high. This reduces frustration amongst the students. We are all aware of the large number of CA students who keep on appearing for the examinations every 6 months only to fail and appear again.

    I sincerely hope that whoever wins the ensuing elections takes note of the above few important action points.

    Finally, let me end by sharing with you the news about the wonderful work that the BCAS Foundation is doing with respect to Right to Information Act. We have recently been part of two important events – celebration of the 4th Anniversary of the enactment of the RTI Act and a Press Conference where Shailesh Gandhi shared his views. Both the events were very encouraging. We also had the occasion to host an interaction with noted social activist Ms. Aruna Roy, a recipient of Magsaysay award and who is considered instrumental in the enactment of the RTI Act seeing the light of the day.

    I have, as usual, run out of space and even though I have lots to write about, I have to stop.

    More next month.

From The President

From The President

Dear Professional Colleagues,

I am proud to place in your hands, this special issue of the
Diamond Jubilee year with the theme ‘Challenges of Change — Always Ahead’.

Charles Darwin, the renowned scientist said,

“It is not the strongest species that survive, nor the most
intelligent, but the one most responsive to change.”

Change is the only thing that is certain in life, and yet
most changes are normally treated with circumspection and many a time with
suspicion. Most of us are averse to change and treat it as a threat. This is
presumably because we carry the baggage of the past and use the prism of the
present to predict the future. Anything that has an image different from what we
have seen earlier is perceived as a danger rather than a challenge to be
accepted. An adult will be worried or be suspicious of the object while a child
will grab it. This signifies the difference in attitudes. A child treats
something new as an opportunity, while an adult is likely to see it as a hurdle.

Every change evokes a reaction. The challenge is to ensure
that the positive reactions outnumber the negative ones. We are today in a world
where every day brings about a change which is a huge challenge. We are
witnessing tumultuous changes in the economy.

Institutions that have looked invincible have crumbled
against the onslaught of economic downturn. What is the primary cause of this
debacle ? It is the belief that the past will dictate the future. Consequently
some institutions that felt that the growth story was eternal have faltered.
Those who were able to predict the economic avalanche (though their number is
few) have become wealthier; those who saw it coming have escaped with minor
bruises. So the moral seems to be that you have to accept that there will be a
change, face that challenge and if possible, try and remain ahead of the change.

What is true in the economic scene is equally true on
professional front. There is substantial change in the nature of services that a
chartered accountant renders as well as the expectations of the client from him.
Today a client is not satisfied just with compliance of laws and regulations but
wants some value addition for the remuneration that he pays. With the advent of
technology and increase in size of the corporate, there is risk in audit. There
is a feeling in some quarters that in the zeal to mitigate that risk, the basic
soul of audit, the expression of opinion is being lost. In the accounting field
the adoption of the concept of fair value is being advocated strongly by some.
Acceptance of this concept may change the accounting scene totally. However,
looking to the current economic scenario, the breed of those who are against
this concept is increasing, while its votaries are also possibly having second
thoughts.

With laws constantly being amended, a professional has to
continuously hone his skills to remain abreast of the amendments. The
composition of the profession has also changed in the last decade. With
employment pastures growing greener, the numbers of those who join whole-time
practice have reduced considerably. Consequently, while opportunities have
increased, the number of those who have the ability to seize them has dwindled.
This situation is however likely to change. With recession looming large and
employment opportunities on the wane, the number of self-employed professionals
is likely to increase. Clients today require a wide range of services and expect
them to be available under one roof. Multidisciplinary firms are now a reality.
While today the number of disciplines in which such firms can have partners is
limited, the same will increase in future.

Throughout its existence, the Society has seen the profession
face many challenges. The Society has always met these challenges squarely. The
reason why it has earned the respect of its members is that it has attempted to
foresee the challenges of change and tried to equip its members to remain ahead
of them. It appreciated the need for continuing professional education long
before it became a buzzword. It recognises that students are the future and has
always strived to cater to their needs. It is the first to start an E-learning
course. A number of visionaries have contributed to this Society to make it an
institution of excellence. However, the one distinct factor that makes this
institution stand apart is the tradition that it has inculcated. Its presidents
do not turn their back on the institution as they lay down their office, but
make a transition to being mentors.

It is with the good wishes and support of these individuals
that our team has organised a Diamond Jubilee conference at which this special
issue will be released. The issue contains a number of thought-provoking
articles on a wide variety of subjects including those to which, I have made a
reference in the foregoing paragraphs.

I am confident you will enjoy reading it.

Wishing you a happy and prosperous new year.

Anil Sathe

levitra

From The President

From The President

Dear BCAJ Lovers,

Over the past 9 months, through these pages, I have been able
to share thoughts that have convinced many members to spare some time in writing
to the BCAS with suggestions and feedback. The mails received by me in the past
one month have brought many constructive ideas. Due to the sheer numbers, it has
not been possible to reply to each person individually. However, members may
rest assured that BCAS is taking note of the various suggestions and efforts are
being made to translate the suggestions/feedback into action. Some of the
responses are being reproduced in the journal under the title “Members Speak”.

Recent press reports said that at a campus placement
conducted by ICAI, a fresh CA was hired by a foreign company at a staggering
starting salary of Rs.70 lakhs per annum. There was also another news item which
contended that many companies now prefer MBAs over CAs.

Both these pieces of news are important and interesting for
CAs. What remuneration a person is able to command depends on the perceived
value of that person in the eyes of the payer. The value of an individual CA is
also dependent on the value of the profession at large. Over the years, there
has been raging discussion on how CAs get less remuneration than other
professionals and how one category of professionals is perceived to be scoring
over CAs. I believe that we CAs are responsible for the state of affairs that we
find ourselves in today. Have we ever paused to reflect on why one firm of CAs
gets double (or many times more) the fees for what seems to be the same
service ? Have we ever tried to analyse the reasons why one firm is able to get
higher hourly rate of fees as compared to another ? Why is that many highly
intelligent CAs earn far lesser than less qualified business persons ? Let us
ask ourselves why, despite the fact that the total number of CAs in the country
is a minuscule percentage of the total population and therefore, there is a
limited availability of CAs in India; despite the tremendous amount of client
loyalty that we enjoy and despite the fact that we have so much work that the
Govt.’s policies and laws generate for us and despite the fact that we are able
to add substantial value to our clients, why is it that most of the times, many
CAs feel that the financial returns that we get are not commensurate with the
efforts that we put in and with the value that we bring to the table for the
clients ?

This apart, there is also the fact that one firm of CAs or
one CA stands out as compared to other firms or other CAs. Most CA firms or most
practising CAs are rendering the same type of services to their clients. Yet,
there is a perceptible difference between what one CA/firm achieves in terms of
revenues, type of clients, quantum of work, quality of work, quality of staff,
etc. What is it that makes each of us different ?

Traditionally, many CAs were not accustomed to charging fees
based on the number of hours spent for an assignment. Then, spurred by the
growth of the larger firms and their system of charging by the hour, many
smaller firms too started charging fees on hourly basis. Even our Institute has
recommended a certain scale of fees for certain types of assignments based on
hourly rates.

My personal view is that hourly basis of charging is a very
inefficient way of charging. It breeds inefficiency since the focus is on the
number of hours spent and not on bringing in efficiency to reduce the number of
hours spent. Also, it does not factor in the value that a CA adds to his client.
Therefore, I humbly suggest to readers to consider the concept of value pricing.
One must charge fees based on the value that one feels he/she is adding to the
client. We need to educate our client about the value of the work that we do for
them. Unless the client is aware of what are the repercussions of a CA’s work
not being done properly, that client will never understand the value of the CA’s
efforts. For this reason, it would be a good idea for a CA to create well
thought-out presentations on important areas of one’s practice and show such
presentations to a prospective client. There are a number of websites devoted to
value pricing which may be of interest to some of you.

Another area of practice management that I feel very strongly
about is the need for CAs to network amongst each other and to build their
capacities. The ICAI has been strongly advocating the concept of mergers and
networks amongst CAs. Unfortunately, the members have been slow in adapting to
this. Considering the high costs of running a practice in terms of real estate
and salaries, the complexities of today’s ever-changing laws and the resultant
need to focus on a few (if not one) areas and specialise in the same instead of
trying to be a jack of all trades etc., there is a crying need for smaller
entities to get together and form a larger entity.

In a large metro like Mumbai, we have, for the past few
years, witnessed large-scale consolidation amongst various firms. There have
been many mergers amongst smaller firms and many “take overs” by the Big 4.
However, whenever I meet members from smaller cities (as I did recently in
Lucknow, Kanpur, etc.), I learn that CAs continue to practise there as smaller
entities. The concepts of mergers and networking have not yet become very
popular there. Merger of CA firms does involve many complex issues. However, I
believe that if a person is willing to, for a moment, let go of the attachment
to one’s own name and focus on future growth, everything else is likely to fall
in place. As the larger firms grow in strength, it will become more and more
difficult for smaller firms to cope with the increased volumes of work, complex
and frequently changing laws, shortage of good staff and growing requirement
from clients for a one-stop shop for diverse services. Those who are content
with their current quality of practice may continue with their existing size and
set-up. But circumstances beyond their control will definitely continue to
affect their functioning and, maybe, their survival. The BCAS has offered
networking and merger prospects to many of its active members. I hope that other
members too see the merit in looking beyond their own turf and joining hands
with like-minded professionals.

On other fronts, the Icelandic volcano disrupted more than
90,000 flights to/from Europe resulting in what seems to be a greater financial
impact than even the 9/11 attacks. One hopes that life will return to normal
very soon. The IPL saga has turned into a very ugly tamasha. Every day we hear
of new developments. In the context of what I had written last month, many
members have now questioned my choice of comparison of IPL with our profession.
I may only say that it was only the concept of change that I had tried to
highlight and not the concept of IPL. Let us all try to imbibe change without
the dishonesty, corruption and all other ills that seem to have got attached to
the present drama that is unfolding before our eyes.

As usual, I look forward to receiving your views and feedback
on what I have written. I hope that all of you whose children have appeared for
school/college examinations are now breathing easy and that the children will
fare very well in the exams. Do enjoy the summer holidays with your family members and have a great time.

From The President

Dear Professional Colleagues,

    As I write this communication, the election to the Lok Sabha is in full swing. On 16th May, the results will be declared and we will hopefully have a new stable government in place. One wonders whether it will be different from its predecessor governments.

    As the news of the voting percentage of the first two phases of election came in, it was disappointing to note that voting percentage had dropped in comparison to last election. Even more disturbing was the fact that voting percentage in urban areas was lower than in rural areas. Therefore, in the educated and elite there is apparent indifference towards the election process. The number of voters would have increased since the last Lok Sabha election, and the literacy levels would have also improved. The apathy of the educated voter seems to be unchanged.

    A large number of groups, non-government organisations and the media have all been exhorting the public to vote but the effect seems to be minimal. Despite the fact that election day is a public holiday, the voting booths are at convenient locations in most places, people simply do not seem to be interested. This lack of interest is not unique to the election to the parliament. A Chartered Accountant, who is a member of the Institute of Chartered Accountants of India is a professional who is highly educated. He ought to be interested about the regulation of the profession to which he belongs. However, in the case of elections to Regional and Central Councils of our Institute, the voting percentage never crosses 50.

    There could be a number of reasons for this, but the most important reason appears to be total disconnect between institutions, the leaders that run them, and the people who are or have been members of those institutions, i.e. the stakeholders. The sense of ‘belonging’ is on the decline. We often talk of our political leaders not having national interest at heart. I believe that a ‘nation’ is not an independent concept. It is made up of concentric circles beginning from individuals, their families, neighbours, cities, regions and States.

    Readers will pardon me if I sound too philosophical but I think that this sense of belonging comes from the heart and not the head. We have gradually become a little too self-centered. Many of our actions are on the basis of a cost benefit analysis. Consequently, if the institution does not give one any future benefit, the person feels he has neither an obligation nor does he have any attachment towards it. There would of course be, honourable exceptions to this. When I was reflecting on the contents of this communication I tried to recall the extent of my participation in or contribution to the school that I passed out from or the college that I graduated from. Sadly, it is virtually nothing. For this, one can always give a number of reasons, but they will not change the fact. Having said this, one must also accept that institutions also have to take a fair share of the blame. Many of them have lost their focus, are no longer serving the purpose for which they were incorporated.

    If democracy has to become more meaningful, institutions that make up the entire system must become responsive, and willing to change. They must become more transparent and inclusive. This change should occur not only in fact but also in perception. Individuals on their part must come forth and give whatever they can to the institution. They must participate in the affairs of the institution. There needs to be installed a mechanism, whereby this participation is facilitated on an ongoing basis. Education must also instil this sense of belonging among the coming generations.

    Coming back to Elections 2009, it is heartening to note that some professionals have taken the plunge and are contesting as independent candidates. Irrespective of the result, this participation has to continue. Citizens must continue to be involved in the governance process on a continuous basis. It is only then that accountability that has reached abysmal low level, will improve. We will then fare better in terms of human satisfaction or happiness index that welfare organisations measure.

    When one reads the news or watches the various channels, one gets a depressing feeling. However, there is hope. I witnessed the national anthem being played at a small function. The seniors in the audience stood to attention, while a college student was talking on the cell. A child, possibly his younger brother, tugged at his sleeve and asked him to switch off the cell as the anthem was being played. These children with impressionable minds are young Indians and are our future. We owe them a debt. Let us attempt to repay it.

    With warm regards,

    Anil Sathe

From the President

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Dear Members,

Come February and anxiety builds up. Every section of the Society talks about the Budget, and is waiting for the Budget with lot of expectations.

 I would like you all to ponder over the following Questions, which I often pose before myself and struggle to find answers to it.
• Why do we show so much eagerness and concern for the Budget to be presented ?

• Has the Budget not become an non-event ? If I rightly recollect, in 2006-2007, our present Finance Minister, who was Finance Minister during that period, expressed that he wants the Budget to be an non-event.

• Whether the ritual of presenting the Finance Bill is a Farce ?

I know that our’s is a country of rituals, but it’s time to end the Budget Speech tradition. It serves no purpose. Over the years, it’s been reduced to merely presenting more of a general economic survey and policy statements. The Finance Minister presents the Budget outlining key estimates and proposals. Many times, the gap between the Finance Minister’s speech on the floor of the House and what comes out in fine print may render this ritual to be nothing but a farce.

And the reason why I think in that direction, is based on some of the recent announcements which are made prior to the Budget, and I don’t see any reasons or logic to announce it prior to the Budget, and that they can’t wait till the Budget:

• Deferrment of implementation of GAAR until 2016 announced in mid January.

• Announcement of raising the Import Tariffs on Yellow metal and Duties on Gold ore in the last week of January.

• Across-the-board increase in passenger train fares, in January – a move that will add about 66 billion rupees to the railway revenue. The timing of the increase did raise questions, as it comes less than two months before the railway budget. As you are aware that the Revisions in train fares are usually announced in the rail budget and are implemented from April 1, when India’s fiscal year starts. But the early announcement was with the objective to limit opposition protests since Parliament was not in session.

If that’s what it is, perhaps it’s time to do away with the tradition altogether.

Today, everyone knows that the Tax laws are bad, but administration is worse. It is pitiable that the Economic reforms to strengthen the basis of our economy are being consistently ignored. The Government’s attitude to disrespect the judiciary is becoming a new trend. Furthermore, the Government is under constant pressure or is forced to withdraw or water down it’s Budget proposals, and even policies which are in the interest of the country. Sometimes, it struggles to implement it’s own proposals under the pretext of a review.

Considering the present situation, it’s high time that the following issues which need to be tackled and implemented, be taken up with the Government :

• Why is there a secrecy around the Budget making process?

• Why the pre-budget and post-budget memorandums sent by professional organisations in the interest of the Tax paying public at large for rationalisation, simplifications and reducing hardship are not being deliberated or debated with representatives of such bodies? As there is no inclination for the same, there is a feeling expressed that the process of memorandum making is becoming somewhat of a futile exercise.

• Why is there no machinery to consider proposals on a continuous basis and review the provisions regularly and periodically?

• Why the system is not equipped to make the best use of proposals received from various professional bodies in their right perspective?

• Why can’t we unite to seek our right for accountability in Government Departments?

Let’s hope a day will come where there would be an end to such farce, and a time will come where the Government in power has the courage to share with the country, from the heart, what it truly feels, their true, unedited understanding of the state of the nation and the party’s unexpurgated vision for the country.

Let’s hope that we see stable tax rates, a commitment to fiscal discipline and more reforms focusing on the economic revival in the forthcoming Budget. And await the answer to speculation going around that this would be an ‘Election Budget’ laden with sops and handouts.

With Warm Regards,

Yours truly,
 Deepak R. Shah

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FROM THE PRESIDENT

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Dear Members,

It’s a matter of great honour to pen a message for a prestigious Journal like BCAJ, and I was fortunate in putting across my thoughts and views on topics or issues related to our profession or developments in the Society, that concern us and to which we seek answers. I have enjoyed communicating with you over such issues, and getting valuable feedback and inputs in these twelve months, and I do hope you enjoyed my communications as much as I enjoyed writing them.

When this issue reaches you, I will have completed my term as the President of a body which prides itself as an institution that provides a foundation of knowledge, skills and professional values that enables CAs and CA students to continue learning and adapt to changes throughout their professional lives.

It is said that :

If you want to walk quick, walk alone

If you want to walk far, walk together.

I have understood the importance of this saying in the last one year. In this issue, I would like to share with you all, some of my learning and feelings in my journey as the President of this august body, which I would cherish for the rest of my life. It is an experience that is useful in one’s day to day life and in carrying out our duty and responsibilities, may it be towards clients, colleagues, family or friends.

The Value of Teamwork : Teamwork is at the heart of great achievements. If you want to reach your potential or strive for the seemingly impossible, you need to become a team player. If you lead a team, then you must convince your teammates to sacrifice their individual goals for the good of the group. And the most important quality you need to practice is the ability to understand how people think and feel. As you work with others, recognise the truth that all people, whether leaders or followers, have something in common. The ability to look at each person, understand and connect with him is a major factor in successful relationships.

A leader needs to figure out which button to push with each individual person on his team. One person will respond well to being challenged; another will want to be nurtured, another will need frequent follow-up. One of the important factors is to inspire others and make them feel good. That is important because people will go further than they thought they could when someone reposes faith and tells them they can. And the fact of life is : Individuals play the game but teams win championships.

To create an atmosphere of teamwork, one should understand the importance of peaceful coexistence. You would agree with me that thoughts, belief, and objects are infinite in their qualities and modes of existence, so we may not be able to see, understand all of them.

Often you have to face the situation when there is a disagreement. And whenever there are disagreements, naturally there are differences which may lead to conflict. Conflict is omnipresent. This conflict happens due to a multiplicity of viewpoints, and that truth and reality are perceived differently from diverse points of view, and that no single point of view is the complete truth. The common example is : A half glass of water can be called either half full or half empty. Both these views are correct. It is important how you look at it. Most of the time we believe that what we know or what we believe is the correct belief and understanding. Therefore, we may not be ready to listen to and understand the other person’s viewpoints and therefore arguments happen. Not only do we start arguments but we also want to win them. In this attempt of winning the argument we may lose friends, or hurt someone or spoil our relations with people. So, the moot question is – How do we overcome such a situation or resolve the conflict? The simplest answer would be – you either convince others or you get convinced by them. If both these things do not happen then we should learn to agree to disagree. Thus, we can coexist with differences.

The other important aspect one should never forget or one should always realise that we are dependent on others till we say goodbye to this world. With gratitude in our hearts, life becomes richer and more joyful. If we are able to return an act of kindness, it enhances our nobility. Many of our troubles could be eliminated if we could focus more on the blessings received and be grateful to others. I for one believe that the culture of saying thanks is slowly vanishing in our day to day humdrum of life. So, let us make a point to foster it consciously in our own personal lives.

In the end I would say that I thoroughly enjoyed each and every moment of this great opportunity which I got to lead, and advance the professional organisation of an immense repute like BCAS, the memories of which I will cherish for the rest of my life. Also during my tenure I have been fortunate to have the support, guidance, blessings and good wishes of a large number of people. I take this opportunity to express my gratitude to all. And above all I am thankful for the continuous and consistent support and cooperation from you all members and the CA fraternity at large. All regular activities of the Society continued to receive full attention during the year, and the attendance at our programmes reaffirms our faith in this continued journey of BCAS vision to be a principle-centered and learning-oriented organisation to promote quality service and excellence in the profession of Chartered Accountancy.

The new Team at BCAS for 2013-14 has been elected. My congratulations to Mr. Naushad Panjwani, and Mr. Nitin Shingala on being elected as the President and Vice-President respectively. Your continued support, suggestions and feedback to the newly elected team at BCAS for 2013-14 will help them offer improved and increased services.

Thank you and goodbye.

With warm regards.

Deepak R. Shah

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FROM THE PRESIDENT

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Dear Members,

Our country is passing through a phase of slowdown or a no growth economy. The unchecked monetary accumulation in the form of black money and the increasing poverty (the rich and poor gap) has been extensive over the past few years. At such a stage, the various questions that bother us are: Who is responsible for the same? Why, even after 65 years of Independence, and despite having abundant resources and talented people, are we still at the stage of a developing country? In the scenario of globalisation and industrialisation, why should our country lag behind? Why should we tolerate our flawed education policy, which makes nothing other than providing the sheet of paper that is called a degree? Why is half the population below the below poverty line, what are the reasons for increasing unemployment, which results in people getting frustrated, and increase in criminal activities and hindering of overall progress.

There are a number of factors that can be attributed to the situation. But the most important one is our political system and the persons who are at its helm. Our political system has some weak points and just because of that, our politicians have become the kings of the political system. They are ruling our political system. They just think about power, money, life after retirement and hence, we come across innumerable cases of scams, rather than welfare of the society. The fact is that political leaders are taking undue advantage of public wealth, the wealth of the common people.

Ours is a democratic country and to a large extent, the system of coalition government especially for the last two decades has given rise to new tactics of saving the government rather than reviving the country. And because of these coalitions as well as opposition parties, it often takes a long time (almost years) to pass certain bills or implement policies like; FDI in multi brand retail, Companies Bill, Lokpal Bill, Grievance Redressal Bill etc. (these are a few examples of the same).

It is said that, a system is as good as the people manning it. Our political system consists of the representatives elected by us. Thus, blaming the political system directly for being in such a sorry state of affairs is solely due to the negligence or wrong voting or non-voting policy of the people.

It is the people or we as citizens, who don’t have the collective courage to go against the people who try to finish our democratic tradition, knowing well that we have elected our representatives to echo our feelings, fulfill our needs and to support us always. Today, common people fear entering politics. Alas, the people have allowed the soul and the principle values of our freedom fighters that their life demonstrated to die. Weonly put up pictures of freedom fighters on the wall and name the streets after them, without learning anything from their life.

One should know one’s responsibility towards the country and one should know one’s rights. When each and every individual know’s his own role towards the society, we will be a leading country in the world.

I think it is always important to see the core of the situation before analysing the surface of it. Firstly, we have to change the inner world (ourselves), then the outer world (politicians) will change automatically. So the solution is, that we have to return to good values and not allow ourselves to be misguided. There will always be bad elements who will misguide, the problem is our willing participation in allowing evil to win over good.

At the same time, certain reforms should be brought in: like a candidate stanting for an election should not have even a single case filed against him and investigating agencies like CBI should be given autonomy as against being under the control of the government. We can see that many CBI cases haven’t been solved yet due to political pressure due to vested interests of the leaders.

Also to a large extent, the manner in which election campaigning is done is itself a cause for worry. Politicians openly indulge in vote-bank politics. They target the vulnerable poor population which represents 60% of our population. As a result of which, wrong people, who are just interested in promoting their own welfare, are elected. But, now it’s not the time to remain ignorant and just be a spectator. I hope there will be a strong appeal for electoral reforms in the near future.

Is it not the time to move a step forward and see that our political system does not puncture our country’s values any more, and is not an obstacle to the Indian growth?

So, it’s time to rise up. We should all gear up for the ensuing elections, motivate our talented youth to break the shackles and show that our country can no more be manipulated by any politician – either regional or national.

It’s time to think differently and prepare ourselves to usher in some radical changes.

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From the President

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Dear Members,

By the time this issue reaches you, the Finance Bill, 2013 would be out and everyone would be engrossed in discussing and evaluating the implications and changes brought in the Bill, and attending Lectures and Seminars by the experts.

The most important event post-Budget, that almost all professionals look up to, is the talk of Mr. S. E. Dastur on Direct Tax Provisions of the Finance Bill. Year after Year, Mr Dastur from the BCAS platform, addresses the crowd of almost 3500 to 4000 at Yogi Sabhagruha, Dadar (E), and many more watching a live webcast. This year’s talk of Mr Dastur would make a history in BCAS books, as it would be his 25th talk for BCAS. It’s a treat to the mind and ear, to hear Mr Dastur analysing the budget provisions . The members and others in the profession who missed his live talk can watch the same on BCAS Web TV.

The other stalwart in the field of Indirect Taxation, Mr. Vikram Nankani, will address on Indirect Tax Provisions of the Finance Bill, 2013 on 13th of March at IMC.

While you make your analysis and study of the Finance Bill, 2013, we too at BCAS start gearing up and work for it’s most prestigious and acclaimed Publication, BCAS Referencer 2013-2014, which is in its 51st year and would be released in June 2013. At this juncture, let me share that the BCAS Referencer 2012-2013 App is now available for download both on Android and Apple store.

After the presentation of the Budget, once the anxiety is over, every section of the Society talks about the impact of the Budget, who are the beneficiaries and who are the losers. But all discussion ultimately ends with the most sensitive issue and that is Inflation.

Let me illustrate the same with recent reports after the presentation of the Rail Budget on 26th February. Railway Minister Mr Pawan Kumar Bansal has tried to take a small step by linking freight tariffs to oil prices, to make railways viable.

 But, India Inc has expressed concern over the hike in freight rates, which they feel will add to the gloom in an already depressed business environment which may lead to higher inflation. Also, the issues surrounding government spending, and the massive deficit, always brings the topic of inflation to the forefront. The subject of inflation has remained an emotionally charged topic of debate over the last several years.

But I for one always pose before myself and struggle to find answers to a few Questions, like:

What is Inflation, and why is Inflation so widely feared ?
How does Inflation impact one’s life ?
If it’s a major concern, why hasn’t it been tackled systematically ?
Why the Government has failed to curb Inflation ?
Why Reported Inflation seems different than Reality ?
Is Inflation the Endless Farce ?

I would like you all to ponder over the above Questions, in the light of the following thoughts:

We all, while talking about money and the price of goods and services, use the word “inflation” quite regularly. But honestly speaking, few know what it actually means, what it measures and how it is calculated.

We often hear an older person talk about how different things were 40-50 years ago. It only costed five rupees to see a movie. A house only costed about Rs. 100-250 per sq. ft. In the intervening years, prices have risen, sometimes drastically. Seeing a movie in the theatre now costs about Rs. 200-350; and a house costs about Rs 10,000-50,000. From 1973 to now, an Indian pays 48 times for one litre of fuel. That’s inflation.

Many economists argue that a low steady rate of Inflation as opposed to zero or negative rate is good for the economy. They advocate that “Inflation is the grease on the wheels of the economy”.

On the other hand, the common man is least interested in knowing either the WPI/CPI or the calculations thereof. What he wants is a reasonable price and that he is not made to pay a higher price for the same item every next time he goes to market.

What common men or consumers don’t realise is that once a price increases, any future drop in inflation doesn’t have an effect on the earlier price. It just means that we will pay slightly less on the increase going forward.

For me, inflation is one of the catch phrases that’s heard all the time and is an inevitable threat to our material wellbeing.

Considering the present scenario and the political instability in our country, and the fear of future inflations hanging in the air, it would not be wrong to say that the future Law of Inflation would be : Whatever goes up will go up more & more.

I would end with a Quote by Milton Friedman:

“Inflation is Taxation without Legislation”.

With Warm Regards,
Yours truly,
Deepak R. Shah

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FROM THE PRESIDENT

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Dear members of BCAS family,
On this 15th August, after a long time, I wasn’t enjoying my usual Independence Day holiday. No movie, picnic, cards or eating out. Instead, I was in Jaipur, hosting the BCAS ITF Conference. I was going over the arrangements for the conference with Nitin Shingala and the other coordinators. As we went to inspect one of the open air venues, we saw the Indian flag fluttering in a wet Jaipur morning. The hotel staff had just concluded the flag hoisting ceremony. I instantly rued the missed opportunity of being there. Gosh! I hadn’t attended a flag hoisting ceremony in so many years.
The realisation shamed me. A volley of thoughts ran through my mind, all of them violently shaking me up. Last month, I had attended a celebration of the US Independence Day in India. The joy and vigour with which it was being celebrated in India amazed me. And here I was, an Indian, in India, but not a witness to any flag hoisting, national anthem singing or celebrations. To be honest, there wasn’t any joy that I was feeling on this occasion. Does it mean that I and others who felt like me are not patriotic?
I love my country. I get goose bumps when I hear or recite our national anthem. I am fiercely protective of anyone criticising my country (and unfortunately, it is fellow Indians who criticise the most). If this is not patriotism, then what is?
But I don’t feel any different on the Independence Day than any other day. It may not appeal to you and I apologise for the same, but this is an honest confession. Is it just me not valuing my independence or is it because I don’t feel independent in an independent India? On 15th August 1947, we gained ‘Independence’ from the British Raj. We were earlier ruled by someone we did not choose, we now get to elect the people who rule us. That bit has surely changed. Let us think back on how that has changed India…
History tells us that under the British Rule, we were suppressed, oppressed and exploited. Even today, there is abject poverty, lawlessness, corruption, communalism, casteism, rising crimes against women and children, hunger, exploitation and what not. I wonder if those affected by these factors feel ‘Independent’. How does a child, deprived of her right to education, enjoy her independence? What does Independence mean to the scores of children suffering from malnutrition or to the farmers who committed suicide out of poverty?
We have read that under the British Rule, we toiled to fill the Queen’s coffers. Is our toiling to fill Swiss Bank lockers any different?
We were fighting for Independence from the British Raj then. Most of us continue to fight for independence from corruption, poverty, crime, lawlessness and communalism. Some fight for a separate state and some for autonomy. Some through agitation and some through violence. I fear that at this rate, we may be on the way to become the next USSR.
Today’s “freedom fighters” (the conscience keepers) are won over by fear, force or just lured. The Press had no freedom then. Today this ‘freedom’ can be bought over. There were communities that were suppressed then. After six decades of independence, they still cry ‘reservations’.
Think honestly, how many of us really celebrate the Independence Day? Some old timers maybe, but what about the youth? Is Valentine’s Day celebrated more?
On the economic front, many opine that we have gone back to the scenario similar to that prevalent in the preliberalisation days. On the socio-political front have we gone back to the pre-Independence days? Is this state of mind on account of the events of the last few years?
This year’s front page news was about the mumbling PM and grumbling PM-in-waiting. Will next year’s front page news be about the roaring Indians and soaring Economy? Will we see true freedom soon? Freedom from oppression, suppression, corruption, poverty, illiteracy, inequality, hatred and hostility? This Independence Day I didn’t sing Tagore’s National Anthem. But I did read his Gitanjali as a prayer.

Jana Gana Mana
Thou art the rulers of the minds of all people,
dispenser of India’s destiny.
Thy name rouses the hearts of Punjab, Sind, Gujarat
and Maratha,
Of the Dravida and Orissa and Bengal;
It echoes in the hills of the Vindhyas and Himalayas,
mingles in the music of Yamuna and Ganga and is
chanted by the waves of the Indian Sea.
They pray for thy blessings and sing thy praise.
The saving of all people waits in thy hand,
thou art the dispenser of India’s destiny,
Victory, victory, victory to thee.

Gitanjali
Where The Mind Is Without Fear
Where the mind is without fear and the head is
held high
Where knowledge is free
Where the world has not been broken up into
fragments
By narrow domestic walls
Where words come out from the depth of truth
Where tireless striving stretches its arms towards
perfection
Where the clear stream of reason has not lost its
way
Into the dreary desert sand of dead habit
Where the mind is led forward by thee
Into ever-widening thought and action
Into that heaven of freedom, my Father, let my
country awake.

I look forward to the day when we celebrate our Independence day with pride, joy and in complete freedom. This is possible. Possible if we the citizens dream it, wish, desire, toil and command it. It will happen. Hopefully soon.

Here’s wishing everyone happiness and love.

With Warm Regards
Naushad A. Panjwani

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FROM THE PRESIDENT

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The wait for Sachin’s elusive hundred continues, the one for the Lokpal Law is hopefully over. After a delay of more than four decades the Lokpal Bill has been passed by the Lok Sabha. For close to the past one year this subject was the matter of debate and discussion among all sections of the public. The bill in the form that it has been passed may not satisfy all but I believe that it is a good beginning. Law making is a process and one cannot wait for the “perfect” law for which hardly exists. This sentiment was echoed by the Finance Minister as he wound up the debate on the Bill before the vote thereon. The bill has still to pass through the Rajya Sabha but one hopes that it will do so. What was heartening to note was that the government accepted some of the suggestions made.

What one needs is a proper implementation and enforcement of this Lokpal legislation. The challenge before the leaders of the movement against corruption, is to keep up the pressure to ensure that the administrative mechanism for the Lokpal is set up early. Let us hope that the government acts proactively on this issue.

The last two months of 2011, saw the government awakening from the slumber that it was in. The FDI in retail had to be kept in abeyance due to lack of support from the allies in the UPA, but I think the policy will be introduced in the near future. For some other policy initiatives one may have to wait for the forthcoming assembly elections to end.

Apart from the Lokpal bill, two other important pieces of legislation are pending approval of Parliament. These are the Companies Bill 2011 and the Direct Tax Code. Out of them the Companies Bill was introduced and has been referred to the select committee. As far as the Direct Tax Code is concerned the report of the committee has yet to be received after which it is hoped that the suggested amendments will be made in the bill and the same will may be discussed in the budget session.

The year 2012 will probably see the enactment of these two laws both of which are of great importance to our profession. The Direct Tax Code has already been sufficiently debated and deliberated upon. One now awaits its passage through parliament. The Companies Bill have a significant number of changes as compared to the Companies Act 1956. Many of these have already been debated and discussed and the deliberations will continue for a long time to come.

The bill provides for a number of changes like rotation of auditors in regard to a certain class of companies, the prohibition for a statutory auditor to render other services to the auditee etc. There could be a number of views on these proposals. However, I wish to draw attention to the two most significant changes for auditors. The first is the change the role of the National Advisory Committee on accounting standards (NACAS) to National Financial Reporting Authority (NFRA). This authority will now have the power to investigate cases of professional misconduct. This virtually takes away the disciplinary mechanism from the Institute of Chartered Accountants of India (ICAI). One wonders whether such a change is advisable. There is no denying the fact that there is a perception among the public that the profession is soft on its members. There could be two views in that regard as well, but to set up another forum is hardly the solution. The second most important proposal is the duty cast on the auditor to report fraud to the Central Government. Undoubtedly the proposal uses the words “in the course of performance of his duties as an auditor” in the context of such reporting, but once the proposal becomes law it may mark a shift in the classical role of an auditor. I am sure that the ICAI will make the necessary representation but other stakeholders must also make their views known. Let us hope that the representations of all stakeholders concerned will be duly considered by the Parliament when the Companies Bill and the Direct Tax Code bill ultimately become law.

As I conclude this communication, I am reminded of the stories that were doing the rounds a few days ago that the world will come to an end in 2012. One needs to ignore all such “prophecies”. All prophets have also said that India is on its way to become a super power. But merely believing in prophecies will take us nowhere. If all of us have self belief, and work hard towards our goals, the coming year will be joyful and prosperous for us and our country. Let us hold hands, recite our century old national anthem and be proud to be Indians!

Leaders are more powerful role models; When they learn than when they teach..

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FROM THE PRESIDENT

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Dear members of BCAS family,

I have been out of practice (pun intended) for many years now since I joined the industry. I had almost forgotten how busy practicing CAs get in a few months in a year. Come September and they become unavailable to friends and family and are completely at the service of their clients. As most of the active core group members, including the office bearers are practicing Chartered Accountants, the activities at BCAS were a wee bit slow.

So a text from my daughter gave me time to reflect on a few things. But first her text; “Papa, can we reschedule our dinner tonight, please? I am so sorry but have to go for dinner with a few friends. Thank you for your understanding!”

The text got me thinking. Yes, I was upset that I couldn’t spend quality time with her, as I had planned. Then why was I not angry? And it struck me… It was the three golden words that she used in her text which set the tone of the text as a very polite request. What if her text read – “Dad, am cancelling dinner. Meeting my best friend for her birthday”?

What am I talking about? What else but the three magic words – Sorry, Please and Thank You! Please–Order someone to do something and they may do it grudgingly, but request that person and you will see him smile. Notice the change in demeanour between ordering an employee to fetch a file and requesting him to get the file. Think about how you felt when you were summoned and how you felt when your presence was requested. What is it about “please” that pleases us and changes the equation between two persons? The fact is that we often take relationships for granted and order people to do things for us instead of requesting them to do us a favour. What is the response from the other person? A wife feels inferior, children are scared and employees are disdainful. A short and simple “Please”, makes the other person feel gracious.
Sorry–They say, “to err is human…” and we do exercise this right. But it takes a lot of courage to accept our mistakes and apologise for them. Saying sorry does not make a person any inferior. In fact, the person is perceived as being honest and is respected. Sorry expresses so many feelings—“I am sorry” – apology, “I am sorry for your loss” – sorrow/sympathy, “I am sorry I said that” – regret, “It’s a sorry situation” – pity. Many of us would have realised the importance of sorry at one point of time or another. For those who have not yet realised its significance, here’s a perspective – Australia, a whole nation, commemorates the mistreatment of a part of its population by having a “National Sorry Day” every year on 26th May, since 1998!

Thank You – Not a day goes by without us taking help from another person, be it family, friends or colleagues and even strangers. Have we ever acknowledged the favours we took? Did we thank the liftman for dropping us at the right floor while we were busy on a call? What about our staff which works round the clock to help us meet deadlines? Do we thank our parents for their fabulous upbringing? Have we thanked our wife for managing the house so efficiently while we are busy at work? Did we remember to thank our husband for supporting our career when husbands in other houses don’t let their wives work? These are small acts of kindness and easy to overlook.

From the time we start our day till we step into our bed for a good night’s sleep, we have taken a number of favours. However, how many times do we thank the other person truly? Why not be free and generous in saying Thank You! Express your gratitude! It does not take away your credit, but definitely makes the other person happy and more willing to help you the next time!

These three simple words can work wonders for people. Genuine use of these words in day-to-day communication with people brings a definite change in the way people respond. Then it doesn’t matter if it is business or personal life.

How do we feel when we are wronged and the other person doesn’t apologise for it? How about not being thanked for a favour? And how about being ordered and not requested to perform a task?

Doesn’t this sound rude?

There is a saying we learnt in school —“Do unto others as you would like others to do unto you”. If I am not polite in my dealings with others, do I have any right to be offended by their rudeness? At the same time, if I am gracious, polite and sensitive, does the other person have any reason to be rude to me?

These three short and simple words sure have a lot of power. They can make a friend out of a foe.

Don’t they add a touch of kindness in this increasingly busy world? In a life which is becoming more and more mechanical, these words help to make relationships human.

These are not just tools for communicating but also for connecting. Many people find ways to express these sentiments in innovative ways. Munnabhai gives his Jaadu ki jhappi. My friend, Lt. Gen. Ata Hasnain has his “10 handshakes-a-day” rule.

I am brought out of my reverie by a knock at my office door by the peon. I ask for a cup of tea and after a split-second, remember to say “please”.

Kudos to the person who invented these three magic words!

Here’s wishing everyone happiness and love.

With Warm Regards

Naushad A. Panjwani

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FROM THE PRESIDENT

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

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

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

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

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

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

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

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

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

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

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

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

With warm regards,

Yours truly,
Deepak R. Shah

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FROM THE PRESIDENT

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Dear members of BCAS family,

On 5th November 2013, the Indian Space Research Organisation launched Mangalyaan into the earth’s orbit on its 780 million kms journey to Mars from its launch base at Sriharikota. India is only the 4th country in the world to have successfully achieved this. It is indeed a proud moment for all Indians. Amidst all the other achievements and accolades related to this project, the one significant aspect which impressed me was the cost of the project; ? 450 crores, a fraction of what expeditions of other countries cost. This proves a point that India has technological wherewithal to carry out complex projects, innovating on the way. Congratulations to Dr. K. Radhakrishnan and his team for this achievement.

India has an abundance of entrepreneurial resources. But individual enterprise can achieve precious little if the environment is not enabling. There are many shackles that need to be broken. The state needs to play its role of the facilitator. In the times of elections, everyone has their wish list. I have mine too.

India has gained a name for itself for IT/ITES. But its true potential is in the manufacturing services. That’s where value addition happens. That’s where we can use our natural resources and the abundant skilled labour to its potential. And that’s where capital creation will happen. And this sector needs liberalisation in Land, Labour and Licences.

Licence means a permit from an authority to own or use something, do a particular thing, or carry on a trade. After the initial spurt of liberalisation, we have stopped opening up our economy. Whether it pertains to investments, way of doing business, transfer of ownership, access to national natural resources etc. There are restrictions needing multiple permits for most aspects of businesses. One-window-clearance is unheard of. The next government should commit itself to creating an enabling, facilitative, non-interfering and progressive environment.

Labour laws are another area which needs liberalisation. Traditionally, the state has always tried to control the labour force. Reasons are obvious; vote bank, extortion and what not. There are over fifty national laws and many more state-level laws. These laws have hampered the growth of the formal manufacturing sector. According to a World Bank report in 2008, heavy reform would be desirable. The executive summary stated,

“India’s labor regulations – among the most restrictive and complex in the world – have constrained the growth of the formal manufacturing sector where these laws have their widest application. Better designed labor regulations can attract more labor- intensive investment and create jobs for India’s unemployed millions and those trapped in poor quality jobs. Given the country’s momentum of growth, the window of opportunity must not be lost for improving the job prospects for the 80 million new entrants who are expected
to join the work force over the next decade.”

Gone are the days of Zamindari and Maaliki. Labour needs no protection. There are ways to prevent exploitation. Inclusive growth will ensure that capital and labour work in tandem.

In my opinion, land is going to the biggest spoiler for the India Story. Everybody believes in the India story. Some are hugely optimistic, some cautiously optimistic and then a few are cynics. The chief constituents of our GDP are agriculture, services and manufacturing. The contribution of Agriculture to the GDP in terms of percentage will only keep shrinking as other sectors grow faster. More and more agricultural land is being converted to NA for non-agricultural purposes. Moreover due to the restrictive nature corporatisation or cooperative farming is a non-starter. Any progress in agriculture will involve improving yields hence more harvests in a year and more crops from same land. Agriculture will then not be constrained for want of land.

Services are another major contributor to the GDP, who will soon reach a plateau as they are not capital intensive and thrive on cheap labour. Such contracts will flow to other developing countries as labour and real estate become expensive in our country. Even otherwise, this sector is largely urban-centric, as it needs qualified labour and infrastructure. The availability of land for this sector can be easily addressed partly by improving infrastructure and connectivity to peripheral areas or by simply changing Development rules by granting higher FAR/FSI. Vertical development suits this segment. So there seems to be no constraints to this sector for want of land. Same is the case for residential development. High-rise, high-density is a solution to address scarcity of land.

The manufacturing segment will raise its share in GDP significantly. India has great enterprise, talented workforce, availability of many raw material, natural resources and cultivable, development of ports and other infrastructure. However, land for manufacturing segment has special requirements. This facility needs horizontal development, which means it needs higher ground coverage as compared to any other development. The high-rise concept cannot work here. Also, it needs to be away from cities and farms. Hypothetically, if the manufacturing segment doubles its output in the next ten years, it will need twice the land that this segment occupies today. Where is this land? The Land Acquisition Bill makes getting land thatmuch more difficult. The states are shying away from helping aggregation. The courts are taking pro-farmer stands. Barring a few states like Gujarat, no state is in a position to allot land for manufacturing when investors are queuing up with opportunities of setting up large facilities in India. Industrial development Corporations are failing to make land available for manufacturing. In a place like Chakan, off Pune, MIDC has over 7,000 applications pending for allotment of land. SEZ’s, a great vehicle for organised manufacturing, have fizzled out.

Hence, availability of land will be a major bottleneck to India’s growth story.

Solutions are obvious. There is no rocket science. We are not lacking in ideas. We are lacking in our political will. Politicians are playing their game of vote banks. Growth can only benefit all. Thus, I would like my next government to promise liberalisation of Labour, Licences and Land. Here’s wishing everyone happiness and love.

With Warm Regards

Naushad A. Panjwani

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From the President

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Dear Members,
Human rights are today a buzzword.
The basic rights to which all humans are entitled, include the right to life, liberty, freedom of thought and expression, and equality before the law. These rights exist in theory at the national and international levels. The rights of its citizens are to be protected by governments. This requires compliance with laws by the people and the enforcement thereof by the authorities.

It is interesting to note that in the ancient world, the concept of universal human rights was not prevalent. Ancient societies had “elaborate systems of duties, concepts of justice, political legitimacy, that sought to treat human dignity, as being entirely independent of human rights”.

But today, what is meant by a “right”, is itself controversial, and the subject of continued philosophical debate. The strong claims made that human rights are universal, or that they exist independently of legal enactments, has provoked skepticism and criticism.

I thought of this topic on Human Rights for obvious reason of recent rape incidents in the capital. The incident received international coverage and was condemned by one and all. It was a horrendous act.

I fail to understand that when all human beings are born free and equal, why do persons show such scant regard for the dignity of others? Why does a person at the slightest provocation turn into a beast?

The abuse of women is probably a universal phenomenon. It exists virtually everywhere, breaking barriers of caste, creed, religion and geographical barriers of nations. The extent and degree may differ but its existence cannot be denied.

I believe that the story of women’s struggle for equality belongs to no single feminist nor to any one organisation, but to the collective efforts of all those who care about human rights.

The Judicial committee set up by the Central Government on 22.12.12, headed by J.S Verma, a former Chief Justice of India, to suggest amendments to criminal law to sternly deal with sexual assault cases, has urged the public in general and particularly eminent jurists, legal professionals, NGOs, women’s groups and civil society to share “their views, knowledge and experience, suggesting possible amendments in the criminal and other relevant laws to provide for quicker investigation, prosecution and trial, as also enhanced punishment for criminals accused of committing sexual assault of an extreme nature against women”.

It’s time to understand that it is our responsibility to nurture the younger generation and imbibe in them a mindset that treats the other gender with dignity and respect. Let us act in bringing about a change.

The real solution lies in making women aware of their rights and getting them into the habit of exercising them regularly. In fact, in our country, it is not only women’s rights, but so many others are trampled over with impunity. The result is not a revolt but meek, passive acceptance. For example, I would like all our members to ponder whether we as CAs exercise our Rights?

There are various occasions/situations when we get frustrated over many issues that we face day in day out during our practice, may be in the Tax department or dealing with clients.

Let me try to lista few of the areas where we don’t exercise our rights:

• We CAs most of the time are shy to raise our bills in advance or send reminders for our fees.

• We in the Tax Departments read the Citizen’s Charter displayed on the walls, but we don’t raise any voices to get it implemented.
• We often wait for hours and hours in the Tax Department, and still don’t convey our anguish on time being wasted.
• We don’t resist where timings of duty are not adhered to, or internal meetings of tax officials are called at their convenience in spite of noticing a big queue outside, and still we patiently sit on benches.
• We fight and visit for months and years for our client’s refunds with a smiling face, for their legitimate dues, but still cannot enforce those rights.
• We CAs sacrifice our Rights and don’t raise our voices in a fear of harassment to our clients.

I am not sure whether you will agree that, we ourselves are to be blamed. I strongly feel that young CAs have perceived such plight, and that is why they prefer industry or jobs rather than traditional practice. So what is the solution? Is there any, or it is our fate to see the same thing happen again and again? This can change only after we all start practicing what we preach and exercise as our rights.

So this New Year let’s talk about what we want or how do we live our professional Life. I believe it’s time to change. You can’t expect to do things the same way for the rest of your life. Sometimes, we forget that in order to change something, we ourselves need to change. For example you cannot get a new job by not looking or not developing your skills, and you cannot lose weight if you continue doing no exercise or by not having a nutritious diet.

I will end by quoting Max Dupree – “We can’t become what we need by remaining what we are”.
Wish you all a Happy, fearless and rightful New Year.

With Warm Regards,
Yours truly,
Deepak R. Shah

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From the President

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Dear members of BCAS family,

1. Economists (businessmen) use politics to further their conflicts.
2. Conflicting groups use economics to further their politics.
3. Politicians use conflicts to further their economics (Conflict could read as anything from religion, caste, creed, race, region (domestic or international), gender, economic groups, ethnicity, cultural and many more.) Which of these statements rings a bell for you?

For me the third statement makes a lot of sense. To this statement let me add a couple of other beliefs.

1. In the Indian context, until 1947 all public figures were freedom fighters. Post independence the freedom fighters either sank into oblivion or became politicians. The freedom fighters may have differed in their ideologies but had the same purpose at heart; that of independence. Nation before self was the way of life that they lived. This breed, in my opinion, is extinct. Those who call themselves freedom fighters are in reality separatists being guided and funded by those with vested interest.
2. A politician can achieve the best of what he wants only if he is elected. To be elected he needs funds. These funds are huge (official and otherwise). These funds come from somewhere and there are no free lunches. Hence it’s a debt to be repaid with interest at a later date. An elected politician controls assets (tangible and intangible) for which many businessmen would potentially be willing to give gifts for favours. This power is too tempting for most to fritter away. Somehow he is obliged to grant favours in lieu of the funds that he had received for his election. Now it’s payback time.

One may argue that there would be those who would pump in their own money. For what purpose I would ask? Love of the country and public service are laughable reasons. It is an investment!

Hence in my opinion no politician can claim to be 100% clean. Taking money for self or for party is one and the same.

What is my point?

My point is that they function just like corporates. Corporates have a direct agenda of economic furtherance. Politicians need “conflicts” to further their economics. And hence, I’m not taken in by this pro or anti wave that’s building up pre-election. I am following the developments and observing the conduct of these politicians, as our constitution needs us to elect somebody to run this country. So I have to choose that party which appeals to me the most or I should say, I have to select the party that I detest the least. Just like I would choose between Pepsi and Coke or between Colgate or Pepsodent. But though these products are marketed aggressively there are boundaries, rules, laws and consumer protection norms. The companies fight it out and not the consumers. I haven’t seen a single instance of a fan of a particular brand fanatically arguing with his friend who uses some other brand.

Also I’m disturbed by the fact that people so easily give their destinies and pin their hopes on these politicians to come and bring prosperity to them.

Now take the sentence “Politicians use conflicts to further their economics”. Take your favourite politician and see if this is true or not. If there is any such political partyor following this norm please do let me know and I will vote for it blindly. If there isn’t a single party like that, then let’s choose our respective parties quietly and vote on the day of the election and be done with it. Why do we want to be their salesmen? Why should this salesmanship be so aggressive? Why should it brew hatred? Why should we spew venom on behalf of these corporate political parties? Why try convincing each other about which is a better party? Instead why not convince a non voter to vote? And then allow him to choose who he wants to vote for. You are intelligent. You are controlled. You know where to draw the line after a heated argument. But the line is thin. The threshold is too low. Circumstances arise and lives are lost in this mindless “salesmanship” and we have played our role in it. You may console yourself by saying that you didn’t yourself resort to violence. But can you keep your hand on the heart and say that your intensity of “salesmanship” was less than of that of the person who partook in the actual violence. Even when the violence has occurred and you are reading the newspaper, do you look for identifying the victims and the aggressor to see to which ideology they belonged and form your opinion based on that? If the victim matches your beliefs then the victim deserves your sympathy. And if he had beliefs contrary to yours then he must have been the instigator and deserved the death. If the aggressor is from your belief, then he is innocently framed and if from a contrary belief to yours then he is guilty without trial. You and I are not bad people in our day to day lives. This is the low of inhumanity these corporate political parties have dragged us to. For their cause, for furthering their economic growth and at the cost of your humanity. Please ponder. Please go to the depth of the matter. Please understand the power and lure of economic greed before you get sucked into their agenda of self development. Nobody cares for you and me.

Is this true of Indian politics alone? I am sure you agree that it’s universal. If greed is universal then so is politics. Let me give you an example of how naive we are in the context of politics and here let me talk about cross border politics. Players: India, China and Pakistan. India and Pakistan have been in conflict from the time the two-nation theory was born. If anybody has been along the LOC you will realise that a large chunk of this region is barren wasteland. No economic value to either. Yet both these countries are spending huge amounts in fortifying and manning these lands. Countless lives on both sides are lost every year on skirmishes that occur time and again. So where does economics come into this? Before we understand this let’s see how China is placed. For all it’s economic might, China has a very circular and long connectivity to the Middle East and West. It is completely landlocked on its western side. It has no access to any sea on its west. It’s cargo has to go from its eastern coast on a long route past the Indian Ocean. Hence they are building a road from their western borders through a willing Pakistan straight to the Middle East. Cutting down on time and cost. China has already annexed a large portion of land from India and the rest of the access that it needs falls in the Pakistan side of the LOC. Hence conflict between India and Pakistan must not be resolved lest India denies access for this road. For China’s economic growth it will buy Pakistan’s support by way of aid, alms and arms to strengthen them militarily against India. What ideology? What belief? What conflict? Pure economics!

So what’s the solution? Choose that party that spews no hatred. Talks of uniting Indians. The difficult part is that all are the same. Just the degree changes from time to time.

Cast your vote without costing any lives.
Here’s wishing everyone happiness and love.
With Warm Regards
Naushad A. Panjwani

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From the President

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Dear Members,

The judiciary is a vital organ of any democratic setup responsible to provide, fair and expeditious justice to all. We citizens of India look upon our constitution for ensuring “Justice to all“. Everyone wishes that Justice which is the soul of a democratic society must be administered without fear or favour. Integrity, impartiality and intelligence are some of the important characteristics of the independent judiciary in a democratic setup.”

For many decades the Indian judicial system was considered to be above all forms of corruption and was expected to the last bastion of truth in a country that is plagued with lies and deceit. Can we say it is still the same?

The general impression is that Indian Judicial System is hostile towards the common man and general public but hospitable to rich, powerful and dishonest. When caught, a rich and powerful criminal would say, “I am innocent and I have full faith in our judiciary. It would do justice to me.” Do you call that justice is done, when he goes scot free from the courts, despite every bit of evidence against him. This has been state of affairs with all the scams and scandals, which came into public domain, in the recent years. As an ordinary citizen one always wonders – Why should a technicality allow an apparent crime to go unpunished, and if that is so why should one waste taxpayers money spent on investigation for years on end? Should we take it that Legal system in India favours the powerful people? A few known cases, like bail to Kalmadi and A. Raja , the lenient treatment to two MLAs who thrashed a cop, and the cop was suspended seem to strengthen the belief.

There is also the attitude of Society that dissuades persons from going to law enforcers. Even today, a visit from the police at your home for any reason encourages gossip in the entire locality. This negative societal bias coupled with the lack of reach has contributed to such negative thoughts for the judicial system. The responsibility for this cannot be attributed to any one individual or party, but must lie with the system itself which is not alive to local needs and problems.

Indian judicial system has been facing many problems and challenges in the course of dispensing justice. The major problem is the proceedings are lengthy and this delays the disposal which in turn leads to accumulation of cases and corresponding delay. The other problems are lack of efficiency in proper interpretation as well as implementation of laws. Apart from shortage of Judges the division of jurisdiction is also not proper and this is leading to an increase in the burden of the higher judicial forums including the Supreme Court. There are many other challenges and problems faced by the Indian legal system, which makes us think :

Whether our judicial system is turning weak ?

Are there any prospects of reform?

Despite all the above questions bothering us, we have a tremendous faith in Indian judiciary. Most of us believe that our judiciary is responsible and will provide fair and expeditious justice, and is the guardian of fundamental rights of the citizen. To me a legislation like the RTI Act gives much needed confidence.

It is the need of hour that legal and judicial setup be streamlined right from lower level so that the gradually deteriorating confidence of common man in the judiciary could be restored.

Over the past few years we do find increase in use of technology for in the judiciary for Data Storage. There are also structural reforms which might help in recruiting more judges and also spreading the reach of the courts to the remotest regions. Substantial improvement is required in the functioning of the courts, in order to minimise the time in disposing off the cases. Practically seen, there is no time limit fixed for arguing cases. Cases are being argued for months altogether in Indian Courts, while in USA, counsels are given exact time to argue the case. The number of holidays in India is far too much not only in judiciary, but in almost all departments.

Also it’s time to adopt and look at Alternate dispute resolution forums. Many structural reforms are required to improve the working standard of the judiciary so that the importance of this vital organ is not reduced and the confidence of people is not eroded further.

 Lest you feel depressed by the thoughts that I have expressed let me end on a more cheerful note. Friends, there is a misconception people have about CAs, that we are of a very serious type, shy, reserved, and only workaholics. In reality this is not true, but we are only labelled as such. Many of us have great talent in other fields like instrumental music, singing, dance, dramatics, mimicry etc., but which is not known to the world. I am sure you all will agree that we professionals should showcase our hidden talents and show others that we are not only bookworms. Thinking How & When ?

Membership & Public Relations Committee of your Society has planned a BCAS Variety Programme on Friday, 7th June 2013 on the occasion of release of BCAS Referencer 2013-14. So let’s make the beginning and prove that we can do lot more than finance and calculations. I appeal to all of you to participate and also motivate your family members, fellow professionals or students to take part in the Variety performance show. Let’s prove to the world in this New financial Year that we are different !

With warm regards,
 Yours truly,
Deepak R. Shah

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FROM THE PRESIDENT

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Dear members of BCAS family,

It is a great honour to be elected the 64th President of the Bombay Chartered Accountants’ Society. Amongst the many projects, programmes and activities that I shall be leading, I particularly look forward to the privilege of contributing to BCAJ which is one of the most prestigious professional Journals, subscribed by many and read by many more.

The arrival of monsoons every year brings happiness all across. Unfortunately this year, the monsoons have wreaked havoc in Uttarakhand. It is one of the larger national tragedies in recent times and the largest the Himalayan ranges have ever witnessed. The rescue operation is over and relief has started. Those stranded have been rescued, the missing found and the dead accounted for. The rehabilitation work will start now but the redevelopment will take a long time; maybe years. BCAS Foundation has made an appeal for donations towards redevelopment work and the funds have started trickling in. In the past, the Foundation has conducted some exemplary rehab work in Gujarat for the earthquake and for the tsunami work in Tamil Nadu & Pondicherry. Like in the past,the Foundation will identify a school or two that need rebuilding and take responsibility to help resume education. I have no doubt that all of you will contribute generously in helping the poorest of the poor.

We all saw what happened in Uttarakhand. We witnessed nature’s fury and the devastation that it can cause. Nature is impartial. The most advanced nations witness earthquakes, floods, tsunamis, tornados, cloudbursts, droughts and what not. These are natural phenomena. But what happens thereafter many a times is a shame on humanity. And that demonstrates the true evolution of a nation. I have a few questions in mind:

1. Have we lost our sensitivity? Are we so accustomed to death, devastation and tragedies of this scale that we have stopped feeling for those affected? Have we become immune? Are we moving from one”breaking news” to another at breakneck speed? What about some feelings, sensitivity, compassion and the urge to lend a helping hand? Are we clannish, casteist, communist and think in terms of “our people” and “theirs”? This is the land of Gods where some go to pray and wash away their sins. Alas, the lives and livelihood of the locals have been washed away.

2. In times of calamity, people come together forgetting their differences and join hands to tackle the disaster calmly, collectively, selflessly and effectively. But what I saw and read coming from the political class was a tragedy of equal proportion. Blaming, criticising and wasting time and resources. Shameful! The politicians indulging in this is not surprising. But we citizens getting dragged into this and mouthing our lines and displaying our political leanings rather than our human side is sickening. It is a time to do good. To share a small fraction from our wealth with those who have lost everything. I’m getting to hear about a few citizens who have rushed there to personally take part in rehabilitation. But those of us who cannot go personally must send our contribution. If you believe in the government then contribute to the Prime Minister or Chief Minister’s Funds. If you feel for the selfless services of the armed forces and appreciate the yeoman’s work done by them, even at the risk of their own lives, then contribute to the army welfare funds. Or else, find a good organisation like BCA Foundation and contribute to their efforts. Those of us who have contributed will know what I mean when I say that there is immense satisfaction when we give. Then the need to be part of unnecessary criticism just disappears.

3. Then there is this thing about comparing our redevelopment efforts with those of advanced nations like the USA and Japan. Most of us come from modest to middle class backgrounds. Don’t we know the difference between the haves and the have-nots? Obviously, the wealthy have better options and opportunities. Same is the case with nations. We are a developing nation. We do not even have enough resources to provide for the hungry and malnutritioned in normal times. It was not a long time ago that we were dependent on aid from the developed nations. Let us stop expecting our governments to have endless resources for rehabilitation for such tragedies. It will happen one day, but that day is not today. It may take a little longer if you factor in the corruption, misgovernance and ineffiencies. Let us recognise this and do what we have to do ourselves.

4. It is sadly comical to see the poor management of rescue operations. It is frustrating. It is heartbreaking. It is disgusting. It is the kind of politicians we elect who form these inefficient governments. There are things we are dependent on the government for. But there are so many things for which we ourselves are responsible for. Our businesses, our communities and our families much more. The question is, are we good managers? Have we prepared ourselves against any calamity? Do we have our disaster recovery plans in place? Have we provided for business continuity plans? What will we do if there is a fire in the office? Or a heart attack in the family? No government here. Us. Think about it. It is scary. Time to change our outlook and approach.

Amongst all the mayhem, one great positive visual was that of the youth from all walks of life rising to the occasion and taking a lead in most activities connected to rescue and rehabilitation. It is estimated that in 7 years the median age of India’s population will be 29 years and that we will be a country with the largest youth population. 29 is an age when we are in our prime. Bodies are young, minds are fresh, energies are high and ideals pure. But this brings with it the necessity to provide a conducive environment to flourish and go in the positive direction. Give them the opportunity and guidance and we will see China-like results, give them angst and rob them of the opportunities and you will have the Taliban.

While the median age of India is getting younger, BCAS’s average membership is growing older. New CAs need to become our members. They need to be drawn in to do voluntary work. Their views, ideas and contribution are necessary for BCAS’s growth. Their needs have to be identified and fulfilled. The organisation must reach out. It is only when we extend our hand can we expect a handshake. I am happy to note that there are a few enterprising young members in the thick of action at BCAS and I look upon them to grow their tribe and take BCAS to the next level.

Here’s wishing everyone happiness and love.

With Warm Regards
Naushad A. Panjwani

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From the President

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Dear Members,

As I write this communication, there is a widespread expression of anger and disappointment about the steep petrol price hike. While one understands that the government may have had its own compulsions, what is incomprehensible is the manner in which the prices were raised. The increase was announced immediately after the Parliament session concluded. If the government had to take the nation into confidence the best place to do so was the floor of the Lok Sabha.

Considering the current economic scenario, any price increase would lead to criticism of the leadership. The hallmark of a leader is to be able to explain unpopular decisions to the public. However to be able to convince the people to accept unpalatable actions a leader has to have credibility. Sadly no one among the government seems to possess it. Even if one accepts that the government cannot have control over oil prices and foreign exchange fluctuations it is within its power to make the price mechanism transparent. Back of the envelope calculation will make it apparent that a large component of the price that a petrol consumer pays is by way taxes to the Central and state governments and not cost of petrol. A citizen would not mind paying taxes if the money was well spent. Unfortunately that is not the case. A significant portion of government spending reaches the coffers of corrupt bureaucrats, politicians and their respective agents. The remaining is purportedly spent but spent most inefficiently. This is the primary cause of resentment.

In this rather gloomy atmosphere, one must commend the role that the media plays. Undoubtedly there are some excesses and some trials by the media which unnecessarily do irreparable harm to reputations. But given the information and facts that it brings to the fore this is a cost that which one will have to pay till Indian democracy matures. The recent effort by Amir Khan in his program Satyameva Jayate, is indeed laudable. There may be a debate about its impact on the resolution to the problem but there is no doubt that it substantially increases the awareness in regard to these maladies and that definitely is a welcome first step.

While on the power of the media, one must also note the change that the Finance Minister was compelled to make in the provisions of the Finance Bill before it became an Act. The representations in regard to the impact of the proposals in regard to the general anti-avoidance rules were considered by the powers that be and the provisions have been postponed for one year. One hopes that wisdom prevails and the said rules are introduced only after the requisite redressal mechanisms are available to taxpayers. The Finance Minister has stated that the Direct Tax Code after considering the recommendations of the standing committee will be placed before the Parliament in the monsoon session. One hopes that the bill will finally goes through the Parliament so that efforts made by professional do not remain an exercise in futility.

In its endeavour to keep its members updated on developments in the professional arena the Society has released a number of publications. Among them the yearly Referencer has been extremely popular. This publication is celebrating its golden jubilee and the 50th Referencer is proposed to be released on 14th June 2012. The Society has had a glorious past but has always has had its sights firmly set on the future. In keeping with this principle characteristic of the Society the theme of the Referencer is “Back to the Future”. I am sure most of you would have already booked your copy of this Referencer. If you have not done so I would earnestly request you to do so. While the Referencer has always been a great utility to all professionals this year’s copy promises to be a collector’s item.

Talking about the future, the students of today are professionals of the future. The Society has therefore always done its bit to ensure that these future chartered accountants become not only good professionals but responsible citizens. The Society organised a mega event – an Annual Day for students, which was attended by more than 300 students. The event was a great success. Around this time last year I was preparing to assume the responsibility of leading this august institution. I have now started preparations to hand over reins to the new team which has been elected for the ensuing year. Deepak Shah would be the President for the next year, and Naushad Panjwani will be the Vice President. I wish both of them and the new team success for the coming year.

With Warm Regards,
Pradip K. Thanawala

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From the President

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Dear Members,

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

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

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

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

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

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

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

With Warm regards,
Pradip K. Thanawala

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From the President

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Hope and expectation

Dear Members,

The months of June and July are months of hope and expectation. The entire nation is hoping for a good monsoon, students who appeared for their CA examinations are hoping for a good result, and there is both hope and expectation that the change of guard in the Finance Ministry will bring cheer to a beleaguered economy.

As far as the rains are concerned, they have a knack of playing truant. In fact they defy the Meteorological Department with such unfailing regularity that when a near normal monsoon was predicted, one started worrying. The month of June has passed without much rain and as usual, Prophets of doom have started predicting a severe drought.

While it is true that no one has any control over the weather gods, very little seems to have been done in reducing the dependence on the monsoon for water requirements of both agriculture as well as domestic consumption. While one appreciates that increasing the area of land under irrigation is a long-term measure, developing water storage facilities for human consumption, conserving and ensuring minimum use of water are measures that will avert a crisis.

While there is uncertainty over the way the monsoon will behave, it appears certain that the former Finance Minister Mr Pranab Mukherjee will assume office as the President of India. As he prepares for the presidential election the charge of the Finance Ministry has been taken by the Prime Minister Mr Manmohan Singh. One only hopes that as Finance Minister we will see a decisive Mr Singh and not a person bullied by his allies. He is credited with ushering in major reforms, which brought India back from the brink in 1992. Though the situation is not as grave there is need for certain urgent policy measures. The business community has huge expectations from him. In his new innings we expect him to introduce some long overdue economic reforms even at the cost of forcing the nation into an early general election. This is an opportunity for him to change public perception of being a weak Prime Minister to a true leader.

A leader needs to take responsibility for his acts of commission and omission as well as those of his juniors. In the recent fire that gutted three floors of Mantralaya, we saw the blame game in full swing. No Minister was willing to take responsibility for the unfortunate event. While the enquiry into what caused the fire will progress at its own pace and come to some conclusions, what one needs to see is whether the powers that be will learn from the mistakes of the past. This is one characteristic that we need to learn immediately. It is not as if one cannot learn from past mistakes and tragedies. Post 9/11 the U.S. tightened its security to an extent that it did not spare any individual.

It is this sense of adherence to rules and accountability that makes the difference between, a small fire being doused immediately and the disaster we witnessed. One hopes that the government will mend its ways and avoid the recurrence of such events. This issue of the BCAJ is a special issue on professions. We belong to the profession , members of which ,Society expects to have integrity and discipline. Sadly these two qualities are on the wane, among the public in general and our profession is no exception.

I believe that we may acquire all the technical skills, update our knowledge but if our members, do not imbibe these two qualities success will be short lived. As I had said at the outset this is a month of hope and expectation. My tenure as the President of this august institution will end on 6th July 2012 when I will be handing over the baton to the President elect Mr Deepak Shah. Post 6th July I expect some respite from the hectic schedule which I have had for the past one year.

From the month of August of last year I have had the opportunity of communicating with you through this page. I have enjoyed this monthly endeavour. I hope my readers have found the effort worthwhile. In my innings as the President I made a sincere attempt to ensure that the prestige of this Institution was maintained. In my small way I have tried to add some new programs.

 I am conscious that I have left substantial unfinished agenda for my successor. I am sure that he will be able to complete them with support from his enthusiastic team. It is now time to bid adieu. It is said that that one should not feel sad about saying good bye, for it is the interregnum between two meetings and with friends meeting is a certainty irrespective of the interval.

Therefore bye till we meet again in person!

With warm regards,
Pradip K. Thanawala

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FROM THE PRESIDENT

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Dear readers, Just before we celebrated the festival of lights, we lost two iconic personalities, both of international stature, albeit in different fields. The first was the demise of Steve Jobs a name one identified with Apple, and the second was the death of our own Jagjit Singh. Both made a difference to our lives one by making the world more accessible and the other by soothing our frayed nerves and lifting our spirit by his melodious music.

The exit of Steve Jobs will be remembered by all of us for a long time to come. He was always full of new ideas and was a great thinker. He said “Innovation distinguishes between a leader and a follower”. It is this lack of innovation and leadership which is at the root of many of our current problems. People heading organisations, States and the country need to act differently. Whenever we face a problem we all tend to look at history for solutions. Despite all the talk of new thought our leaders take decisions based on precedent. It is here that we need a change and a break from the past.

Let me illustrate this. To meet the challenge of inflation the Reserve Bank of India, has at regular intervals increased the interest rates. Despite four or five increases in the past few months inflation is not showing any signs of being tamed. This is not to say that I have any other solution to offer. However I believe that it is necessary for the regulator to look at other options, deregulation being one of them. To that extent freeing of the savings rate is a step in the right direction. But this step by the Reserve Bank of India may not be sufficient. What we also need is for the government to step on the accelerator as far as the reform process is concerned. It is true that every decision of the government will be under intense public scrutiny but that does not mean, that to avoid public gaze one stops taking decisions altogether. The government must quickly come out from its stupor.

At the level of organisations including our very own we need to think differently. For over six decades the Society has played a pivotal role in updating its members about professional development, increasing their knowledge base and sharpening their skills to ensure that they render service of the highest quality. All the programmes of the society, its seminars, workshops, lecture meetings, publications as well as its flagship the Journal have maintained high standards of quality. However I must be candid and admit that the response is not the same as it was a decade ago. I think there is nothing wrong with our content we only need to rethink the manner and form in which we deliver it.

What I am trying to drive that is that if one is to change for the better it is necessary to look at what the future holds and innovate rather than look at history. Undoubtedly one learns lessons from history but even that is written with reference to the context which was in the mind of the author. To quote Winston Churchill “History will be kind to me for I shall write it”. Therefore while our glorious past must make us proud let us think and act differently for a bright future.

It is nearly 4 months since the time that I took over as the President of the society, and I thought that the middle of the year is the right time to share my thoughts with you in regard to what I mentioned in the foregoing paragraphs. What we miss at the society is a feedback from members. I would urge all of you to write to me about what we should do to ensure that the society continues to serve you to your satisfaction.

With warm regards,

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FROM THE PRESIDENT

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Dear Members,

By the time this issue reaches you, the mood would be to make plans to celebrate the last festival of the year 2012 – Christmas. It’s time for parties full of fun and high spirits. It’s that time of the year, where everyone is waiting for the year to end and eagerly looking forward for a new and fruitful 2013, by taking vows, setting goals and challenges for the coming year.

The Ministry of Finance has also started formulating plans and proposals for the Union Budget 2013-2014, and has invited suggestions from various Professional bodies and Industry and Trade Associations with respect to direct and indirect taxes. Many of our members must have assisted various industry and trade associations in formulating the suggestions. At BCAS, we are in the process of preparing the Pre-Budget Memorandum, and I invite suggestions on issues or areas that are of concern to large Tax payers, and which if accepted or implemented can bring a sigh of relief.

In order to develop our Society into a learning organisation besides the ongoing professional activities, the entire BCAS team, full of innovative ideas, determination and oneness of purpose, will continue to redefine the manner in which our Society operates towards achieving its vision and mission, albeit maintaining its values and traditions in 2013 as well, and will work towards giving value to members.

We have immensely benefited by the expert guidance and suggestions from our seniors and all of you, and I once again urge you to provide your feedback and suggestions on areas, where you would like your Society to progress and march ahead.

Last month, the death sentence given to Ajmal Kasab, the lone surviving terrorist involved in the 2008 Mumbai attacks, was executed after due process of law and a full and transparent trial. But still, for the victims’ kin, the loss of their dear and near ones is irreplaceable. By awarding the death sentence and executing it, India sent a clear message to the world that anyone who commits an unruly act of terror will not be spared.

Considering the judicial process in our country, the execution of Kasab within a period of four years after commission of the crime, is welcome, and one hopes will act as a precedent. Expeditious disposal of cases related to terrorism must become a rule and not remain an exception. Thereafter, speeding up of the judicial process must percolate to all other pending litigations.

With profound grief I have to inform you that Mrs. Vandana M. Randive, Sr. Accounts Manager of BCAS, working since last 17 years, passed away at a young age of 43 on 23-11-12 after a short period of illness. It is understood that stress was a major cause of this unfortunate and untimely incidence. May her soul rest in eternal peace and may God give her family the strength and courage to bear this irreparable loss.

This is definitely an eye opener for all of us. We must not only accept the fact that today we all are living under some stress or the other, but also take concrete steps to reduce that stress. It may seem that there’s nothing you can do about stress. The bills won’t stop, there will never be more hours in the day, and your career and family responsibilities will always be demanding. But you have more control than you might think. In fact, the simple realisation that you’re in control of your life is the foundation of stress management. Managing stress is all about taking charge: of your thoughts, emotions, schedule, and the way you deal with problems.

To identify your true sources of stress, look closely at your habits, attitude, and excuses:

  •  Do you explain away stress as temporary (“I just have a million things going on right now”) even though you can’t remember the last time you took a breather?

  •  Do you define stress as an integral part of your work or home life (“Things are always crazy around here”) or as a part of your personality (“I have a lot of nervous energy, that’s all”).

  •  Do you blame your stress on other people or outside events, or view it as entirely normal and unexceptional?

Until you accept responsibility for the role you play in creating or maintaining it, your stress level will remain outside your control.

I hope that in the New Year, you all will ponder over this and pay greater attention to your life and stressful situations, which in turn will have a larger impact on one’s health and will help to lead a healthy life. Just remember – We Work for a Living and not Live for Working.

Incidentally, the Theme for BCAS Calendar 2013 is “HEALTHCARE”. Good Health is a kind of Freedom, and being healthy gives us the freedom to live our life the way we want. The 12 months interlaced with subtle preambles of healthcare will guide you throughout 2013 towards Health and wellness.

I would end by a saying of our famous leader Mahatma Gandhi – “It is Health that is real wealth and not pieces of gold and silver”.

Hope you all had a wonderful 2012 and wish you all much purposeful and prosperous 2013 !!

With Warm Regards,
Yours truly,
Deepak R. Shah
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From The President

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Dear Members,

By the time this issue reaches your hands, most of you would be feeling relaxed after the hectic days in the end of September. This year Ganesh Chaturthi festival being in the second fortnight of the month, everybody would have faced difficulties and pressure situations. But, surely Lord Vignaharta was there to take care of all the stress. Every year when the deadline approaches, there is a clamour for extension of the date. I would earnestly request each one of you to ask a question to oneself – Do we really need the extension? I am sure the answer would be ‘no extension’, as the scenario would be the same for next month also. The only solution is to educate clients, chalk out systematic schedules, and accept assignments that are within our capacity.

Friends, it’s time to rejoice now and put aside all the stressful & negative experience, and celebrate the positive spiritual vibrations emanating from the coming holy festivals of Navratri & Dussera.

On the Society front, I am happy to share with you that the most eagerly awaited event – our 46th RRC – to be held this year at Bangalore, has received an overwhelming response, and enrolment was closed within a week of it’s announcement. I congratulate our Seminar Committee for the same, and I am sure members enrolled will have a great time. The International Taxation Committee and Taxation Committee of BCAS has forwarded the representation on draft report of the Expert Committee on GAAR, and we do hope that the issues covered in the representation will be considered by the Committee.

I have received various emails and feedback from members suggesting organisation of programmes and events at bigger venues, as they could not attend the programme as enrolment was closed. At the outset, I on behalf of BCAS am thankful to all for attending the programmes in large numbers. We have taken note of the inconvenience faced in the past few months, but my only request to all would be to enrol well in advance and not to wait till the last date. Your early action will help us to take remedial action to the extent possible. At this juncture, I would also urge members to enrol for WEB TV facility offered by BCAS, as then, one can watch the important seminars or lecture meetings posted on the WEB TV. I with all earnestness request all our esteemed readers and members to continue their feedback.

I would like to take this opportunity in this month’s communiqué to delve upon an issue that is on our minds, but has taken a back seat and that is of ‘Being Human’. In a society, where the barometer of happiness is judged through one’s wealth and riches, being ‘human’ is a rare quality.

This issue is aimed at getting us working professionals to take a second out from our busy lives to contribute to the society at large, for what is a professional who has no heart and only a mind? There are endless questions that bother us, but none more pertinent than those that follow:

 Is it right to charge a person who lives below the poverty line for a fatal illnesses like cancer ? Is it right to charge a client more than what he has been serviced for ? In charging fees, should one charge fees commensurate with service or according to the ‘ability to pay’ principle ? The so called ‘realists’ would say ‘yes’ and in their truculent manner, state that it is essential to do so to survive.

The Chartered Accountants Act, 1949 gives an overview of what is ethical and what isn’t, but there is only one guide book which shows us what we should do and what we shouldn’t and that is our conscience. And though we, who are deemed to be the smartest minds in the professional world can manipulate documents and numbers, can we sleep in peace when we know the ‘best practices’ that are being followed aren’t what they should be?

The world has become a place where there is growing interdependence amongst nations, where the previously existing fissiparous tendencies have given way to a cordial environment, where individuals now work without any cultural barriers. In such a global workspace, it is important that we as Indians and especially chartered accountants should set the benchmark. And for me, that would be being human along with being witty. For that would definitely take us places. Here is a real life example:

One of the more heart-warming stories involves a young man, his dying grandmother, and a bowl of clam chowder from Panera Bread. It’s a little story that offers big lessons about service, brands, and the human side of business — a story that underscores why efficiency should never come at the expense of humanity.

Brandon Cook, from Wilton, New Hampshire, was visiting his grandmother in the hospital. Terribly ill with cancer, she complained to her grandson that she desperately wanted a bowl of soup, and that the hospital’s soup was inedible. If only she could get a bowl of her favourite clam chowder from Panera Bread! Trouble was, Panera only sells clam chowder on Friday. So Brandon called the nearby Panera and talked to store manager Suzanne Fortier. Not only did Sue make clam chowder specially for Brandon’s grandmother, she included a box of cookies as a gift from the staff.
It was a small act of kindness that would not normally make headlines. Except that Brandon told the story on his Facebook page, and Brandon’s mother, Gail Cook, retold the story on Panera’s fan page. The rest, as they say, is social-media history. Gail’s post generated 500,000 (and counting) “likes” and more than 22,000 comments on Panera’s Facebook page. Panera, meanwhile, got something that no amount of traditional advertising can buy — a genuine sense of affiliation and appreciation from customers around the world.
Marketing types have latched on to this story as an example of the power of social media and “virtual wordof- mouth” to boost a company’s reputation. But I see the reaction to Sue Fortier’s gesture as an example of something else — the hunger among customers, employees, and all of us to engage with companies on more than just dollars-and-cents terms. In a world that is being reshaped by the relentless advance of technology, what stands out are acts of compassion and connection that remind us what it means to be human.
All of us cannot be philanthropists and open a ‘Being Human’ NGO, for we have our own lives to look into, but we definitely can do something, which would give us a sense of satisfaction which material things will not, and I am sure our auditor i.e. God would want to see a healthy balance sheet.

At BCAS, few of our members actively involve themselves, in activities that are being carried out by BCAS Foundation. One such activity is “Chalo English Sikhaye” , where the volunteers teach English to students of Standard 5th to 8th, studying in vernacular schools. There are a lot of other activities which are carried on by BCAS Foundation with other similar organisations. Any member who is interested, may volunteer and join hands with other fellow colleagues for the good cause.

I wish all the luck to Team India, and let’s hope that they lift the World Twenty-20 Cup.

With Warm Regards,

Yours truly,

Deepak R. Shah

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From the President

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Dear Members,

Be Jagrat , Be Vigilant !


I thank you all for making this year special, for electing me as your 64th President, and giving me opportunity to serve the Society, and share my views with all fellow alumni of this profession. It is my honour and privilege to accept this position.
In my acceptance address at the AGM held on 6th July, 2012 I have highlighted the focus areas, and the Annual Plan for 2012-2013 was placed before the members. The said speech is reproduced in this issue in the column “Society News”.
The Annual Plan for the Year 2012-2013 which was laid out in AGM had 3 focus areas:- Relationship, Membership and Mentorship. I urge all members to come forward and share your views and expectations, and join the new Team, as we build relationships, increase membership, and expand our mentorship program.
As we enter the year 2012-2013 I would like to thank you for your continued support to BCAS. In fact, it has been your participation and encouragement that has helped us evolve to serve you better. We take immense pride in keeping you at the core of all our activities and innovations.

I had stated in my speech that the times in which we live, one has to be JAGRAT – to be alert or vigilant at all times. Also one has to move forward in the right direction to reach the goal.

There is a group of famous verses in Sanskrit that ends with the call – “Tasmat Jagrat Jagrat”. If due to lack of alertness, you take a false step, one will suffer an irreversible fall. This is true as much in the case of individuals as much as in that of nations.
We would be celebrating 65 years of India’s Independence on 15th August. As one of the oldest surviving civilization, India has experienced every malady that history has thrown up and through her unique , mature wisdom discovered and applied suitable remedies. It is a hard won legacy which has been achieved not just by way of an accident but by a continuous struggle against heavy odds. India has been able to preserve her soul and protect her identity through all the vicissitudes of time. That is why when the American President Barack Obama visited India, and addressed our parliament he said “ My confidence in our shared future is grounded in the respect for India’s treasured past – a civilization that has been shaping the world. Indians unlocked the intricacies of human body and the vastness of our universe. India not only opened our minds, she expanded our moral imagination.”

Our forefathers have created institutions like the judiciary, the independence of which we must zealously protect, and whose decisions we must respect however severe our disagreement with them. The constitution has created a system of checks and balances. We must recognize the wisdom of our ancestors and preserve the system and not dismantle it.

Such an effort at dismantling the system has been recently witnessed in the Finance Act 2012, bringing in most inappropriate policies like GAAR, and also by its action of retrospectively amending the law to supercede the Supreme Court’s verdict. Such policies and measures has its own negative impact, which has been noticed in the form of devaluation of rupee, loss of confidence by foreign investors, creating an environment which is not conducive to growth. So Vigilance-Jagrat becomes critically relevant in this context.

Let us hope that problems plaguing the economy as well as problems on tax front would be addressed, in the backdrop of incumbent in the finance ministry, and Mr Pranab Mukherjee moving to Rashtrapati Bhavan as the 13th President of India.

No matter where the economy is headed, or even when the nature of reforms in laws brings with it the general negative mood, we Chartered Accountants will have to be Jagrat, especially when you are part of the globally acclaimed CA profession. We all will have to keep pace with the change, and to overcome the challenge.

The next couple of years for CA’s are expected to be challenging years as compared to the past. We have witnessed large scale changes in the Finance Act, 2012 and many more are expected in the near future in major areas of practice. As a consequence of this, the demand for professionals is bound to be on the rise, and would offer tremendous scope to increase their level of practice.

The purpose of BCAS is to assist professionals in advancement and success in their careers, and prepare oneself to meet new challenges. I believe that it always pays to invest in one’s own career. It enables you to explore new avenues in practice.

At BCAS, our efforts will be to keep on innovating and explore new ideas while planning and carrying out various activities. We would endeavour to see that knowledge content created in various programs, reaches to the maximum through the medium of WEB TV.
At the society, we would also constantly endeavour to represent at various levels to see that hardship and inconvenience caused on account of administrative apathy is reduced. We will be vigilant and expect that you will respond in the same manner.

Before I sign off, I congratulate all those who have qualified as CAs, and becoming part of this noble Profession. At this juncture, I invite you all to be active with the BCAS family consisting of 8600 and more co-members, to realise a greater level of knowledge sharing on a continuous basis, and to sharpen your skills, and keep adding to the value you wish to create. Come and experience the intrinsic value of your decision to have joined the Society.

With Warm Regards,

Deepak R. Shah

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From the President

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Dear readers,

The year 2011 draws to a close. As I write this communication there is a mention in the media of the third anniversary of the dastardly attack by terrorists in Mumbai popularly known as 26 /11. Have things changed. For those who lost their near and dear ones on that day life would never be the same again. However for others that day has merely remained a memory. For some time individuals, organisations kept up the pressure on the government to take serious look at security concerns. Gradually the public went back to its daily struggle for existence and 26/11 was forgotten. Like many other events we now remember the event on anniversary days. There will be a number of reasons for this but the fact leaves one sad. Most of the much-publicised security measures have remained only on paper. As long as this attitude continues we will always be soft targets waiting for another attack to occur.

While the attack in Mumbai is now history, the attack on an eminent leader of Mr. Sharad Pawar brought to light many facets of those whom we term as leaders in public life. While the attack needed to be denounced in the strongest terms and it was, the events thereafter were avoidable. The comment on the attack by a person who is today considered an icon of the movement against corruption brought forth his serious limitations. I believe that the comment was an off-the-cuff remark and a clear mistake. After all every leader is human and is prone to make errors. The best thing to do was to accept the mistake unreservedly. This does not appear to have been done with ego probably being the obstacle. Many may perceive this to be a very harsh assessment but for me the comment is the culmination of the instrangient attitude of the person and those who surround him. It is absolutely essential that the persons leading this movement against corruption do a serious introspection for if they fail to frame a proper strategy, the energy that the movement has been able to galvanise will be frittered away. I hope those in charge of the movement make the necessary changes so that it does not lose focus.

It is now clear that the Direct tax code and GST will not meet their appointed dates. Though there could be substantial debate about the necessity of the Direct tax code itself the delay in implementing it as well as much other legislation is puts a question mark on the sincerity of the government. Innumerable man-hours of bureaucrats, professionals and others have been spent in drafting discussing and suggesting amendments to these proposed legislations. If they do not become law all this effort will go down the drain.

For the past year or so the government seems to be in a deep slumber. None of the decisions regarding policy initiatives which were a part of the UPA manifesto have been taken. One reason for this lack of decision making is said to be the fear of bureaucrats who are afraid of their decision being subject to public scrutiny and malafide intent being attributed to them. To an extent this is on account of the media glare on any event. Anything that goes wrong is attributed to an erroneous decision and an investigation is promptly ordered. We must also accept that it is only those who act will make mistakes. It is often easy to find fault with decisions in hindsight. As long as an action is taken bona fide and with due care the person must not be held responsible if the decision turns out be erroneous. People must understand the distinction between error and fraud.

One way of avoiding this inaction on account of fear is to make the decision making process as transparent as possible. If the rationale behind decisions is made known to the public much before the consequences of the decision occur this may help all concerned. One of our past Presidents always says that change is the only constant thing in life. For nearly two decades Mr.Ratan Tata has been the leader of one of the largest industrial house is in our country. His actions have taken the Tata Empire to new heights. One was therefore curious to know as who would take his place. What one liked most about that change in the leadership of this group was the manner in which it will take place. Mr. Ratan Tata had announced his date of retirement well in advance and his successor has been named a year before Mr. Tata calls it a day. This is the manner in which the baton should be passed. Our political class and others need to take a leaf out of Mr. Tata’s book. If there is an age of retirement for industrialists there ought to be one for those who run this country. We hope that Mr Cyrus Mistry who will now head the group will maintain the standards of ethics, integrity and excellence which his predecessor has set.

The year 2011 has seen turmoil and turbulence in public life. However without churning there is no Amrut. Though there are dark clouds on the economic horizon I am sure that they will pass. I am an optimist. The nation was disappointed when the little master was unable to complete his century of centuries on his home ground. However while achieving that milestone on his own turf would have gladdened hearts, to achieve it overseas and against a challenging side will give him greater satisfaction. Let us wish him all success and hope that his achievement will enable us to begin 2012 on a high note. I take this opportunity to wish all readers a very happy and prosperous 2012!

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FROM THE PRESIDENT

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Dear Members,

This has been a rather disappointing month. The Railway budget presented in Parliament raised so much controversy that one wondered whether the Finance Minister would be able to keep his scheduled date for presentation of the Budget. Perhaps, the Railway budget was to an extent a precursor of what was to follow. Although the speech of the Finance Minister on the floor of the house while presenting the budget did not inspire much confidence, after one read the fine print in the Finance Bill one felt really devastated. Much has already been said about the Budget. In fact, the editorial discusses retrospective amendments and questions their advisability. At the Society, we have already made our post-budget representation, and we hope that our voice will be heard in the corridors of power.

Talking of representations I often hear a refrain among many professionals, particularly the younger lot, that making such representations is an exercise in futility. Being an eternal optimist I do not concur with this view. I believe that as an institution of professionals it is our duty to bring to the notice of lawmakers the difficulties and problems that would arise if the provisions are enacted in the form they are proposed. The manner in which such a representation should be made, so that it attracts the requisite attention, can be discussed, but the making of representations cannot be dispensed with. It is often said that communicating with a stubborn bureaucracy is like banging your head against a wall. Many a time this is true, but there are exceptions. In a majority of cases the head is likely to suffer injury, but sometimes the ball will give me one.

Recently, all taxpayers are facing substantial hardship with their refunds being adjusted against non-existing demands. The Society has continuously been following both on formal and informal basis this issue with the authorities concerned. We were pleasantly surprised by the response of some officials in Mumbai as well as some of their counterparts in Bangalore. Although the effect of their action may not be all pervasive, even if it brings solace to some taxpayers, the representation of the Society and its efforts will have been rewarded. We hope that many more proactive officials are appointed in relevant positions, so that some of the hardships faced by taxpayers will be mitigated.

While the Budget has failed to provide any relief, the news of various scandals continues unabated. The anger and frustration of the Indian public is mounting, but it needs to be channelised, or else it will give way to despondency or indifference. Unfortunately, those who are currently spearheading the fight against corruption seem to have lost all clarity of purpose. One had hoped that after the break that they had taken, they would marshal their resources in a more efficient way and with better purpose. In a battle against corruption, the media hype can never replace a well-knit organisational structure. Some rounds of a battle against corruption may be won by sporadic action, but to win the war one will require a well thought-out strategy and substantial patience. One does not find this in the existing leadership of the movement against corruption.

Finally, one of the legends of Indian cricket Rahul Dravid called it a day. I have always admired the grace with which he carried himself both on the field and off it. There are very few cricketers for whom one can use the term gentleman, and Raul Dravid is one of them. The world has always been fascinated by the achievements of Sachin Tendulkar, but we forget that many a time the master was able to achieve what he did on account of the strength of the “wall”. I join the entire nation in saluting this fine person. In fact, politicians have quite a few things to learn from this man. He played life with a straight bat and retired with grace. If many of our politicians emulated his example their parties, and the nation would thank them.

Last July, you had entrusted me with the responsibility of leading this organisation. I have tried to shoulder the responsibility to the best of my ability. My only regret is that our members and the readers of this Journal do not express themselves about what they feel about the organisation. It is only if we at the Society hear from you that we will be able to change track if we are going wrong. I would be very happy to receive bouquets of praise, but I am also willing to face brickbats, because I am sure that they will be well intentioned and in the interests of the Society. It is only when there is total silence that we office bearers worry whether we are traversing the right path. Therefore, it is my earnest request to all of you to please communicate with me or any of the office bearers with your feedback.

We are coming to the close of what has been a turbulent financial year. All of you have worked very hard and deserve a small break. So let us look forward to a small vacation before we begin the daily grind in the new financial year. Therefore, before I sign off, let me wish all of you a very happy and prosperous new financial year!

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FROM THE PRESIDENT

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Dear readers, This is my first communication to you after having assumed office as the President of the Society. I am conscious that this is an honour and a great responsibility. I am sure that with your good wishes, the support of my predecessors, my team of office bearers and the BCAS staff, I will be able to measure up to the confidence you have reposed in me.

In my address as the incoming President, I had stated that if the Society’s programmes are to be carried out with the same zest and zeal, younger entrants to the profession must join the Society. As I pen this communication, the CA final results have just been declared. My congratulations to all those who have been declared successful. Three young girls have bagged the first three positions in the merit list. At a time when the media is filled with gender bias even among educated sections of the public, this is heartening news. Like in many other fields women are poised to make a mark in our profession. As per the statistics of the Institute of Chartered Accountants of India (ICAI):

? For 50 years since Independence, 8% of CAs were women

? The number of women CAs will increase to 30% in the next decade from the current 16%

? In the decade 2000-2010, 16% of the 1,70,000 CAs in India were women.

It is my earnest desire that these young talented chartered accountants should join the Society. This will make the programmes of the Society even more vibrant.

Mergers and acquisitions among professional firms is the order of the day. In that light the announcement of ICAI to recognise limited liability partnerships (LLP’s) is significant. Notifications in that regard will follow. I believe this is a great opportunity for many medium-sized firms to network, collaborate and eventually merge. The Society is alive to these developments, and a power summit was held a couple of months ago to facilitate interaction between professionals who wish to take steps in this direction. If the number of large firms undergoes an increase, the quality of service will be enhanced.

The progress as regards new tax legislation seems to have slowed down considerably. The report of the Select Committee of the Parliament on the Direct Tax Code bill (DTC) is yet to reach the Parliament. It is unlikely that DTC will be passed before the end of this year. If that happens the DTC may have to be postponed by at least a year. Even on the GST front the efforts to build a consensus do not seem to have made much headway. One only hopes that all political parties give the necessary priority, as the absence of this legislation is increasing both, tax cost and compliance cost.

While new tax legislations are making slow progress, the accounting standards are also causing some concern. We already have IFRS, and Ind AS. On the auditing front internal audit standards have also been prescribed. We have just been informed that CARO 2011 will replace the existing CARO 2003.

While we are on accounting and auditing standards, I believe that our profession needs to seriously introspect on the multiplicity of these standards and their relevance to the users of financial statements. We are rendering a service and the authentication function that we perform should have utility for the users of the financial statements. Undoubtedly the users of our services have different needs and it is virtually impossible to have tailor-made legislation or regulation to meet individual requirements. However while framing accounting standards this aspect of the matter must be considered. The financial statements that we authenticate must be comprehensible to the readers of those financial statements. In this connection, CARO 2011, which will probably prescribe different reporting requirements for different categories of companies, is most welcome. This may be a step in the right direction and different users will get the type of assurance they require and the type of information they desire.

When this issue reaches you, our country will be on the threshold of celebrating its 64th Independence Day. Despite the large number of problems that our country faces, one is absolutely certain that we have come a long way since 1947. There can be a debate on whether we will become an economic superpower or not, but it is certain that India has become relevant to all the nations of the world. For the last two decades, barring a couple of years we have witnessed sustained economic growth. I hope that we will be able to control the inflationary trends, particularly food inflation. As in every developing country, we face problems of disparity in distribution of wealth. The distribution of the fruits of economic growth is unequal.

It is this economic disparity that extremist elements exploit. The continuous terrorist attacks on our country in general and our city in particular are a cause for grave concern. As the commercial capital, the city of Mumbai will always be a target for those who want to create disharmony among us and disrupt our lives. The recent serial bomb blasts on 13th July 2011 are a sad reminder of this fact. We need to force our government to take all the necessary steps to prevent any such recurrence. As individuals we should remain vigilant.

Before I sign off, I appeal to all readers to give their feedback, on all the activities of the Society including this Journal. At the Society we strive for excellence. If we are informed of the areas of improvement it will help us. Remember, this is your Society and by informing us and making suggestions you will be helping yourself and your colleagues.

I take this opportunity to wish all readers a very happy and peaceful Independence Day. Jai Hind !

With warm regards,

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FROM THE PRESIDENT

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Dear Valued Reader,

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

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

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

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

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

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

Eradication of Corruption:

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

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

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

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

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

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

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

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

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

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

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

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

With warm regards,
Mayur B. Nayak

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FROM THE PRESIDENT

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Dear Valued Reader,

“If you want to make God laugh, tell him about your future plans” – Anonymus.

Indeed, man proposes, God disposes.

The way tsunami struck Japan on 11th March, 2011, and the consequent devastation in a very short span of time has proved the supremacy of nature over mankind. Thousands of people died and properties worth billions of dollars destroyed. What followed turned out to be one of the worst catastrophes in human history, perhaps next only to the manmade nuclear holocaust in the last century. But kudos to their spirit and resilience, the Japanese are facing this tragedy simply bravely – a lesson to be learnt by India and the whole world.

A tsunami like provision in the Finance Bill 2011 – 12 relates to “Point of Service Tax Rules” providing payment of service tax on accrual basis, rather than the existing system of cash basis (i.e. Payment of service tax on receipt basis), has been deferred for the time being. BCAS, in coordination with various other similar organisations, lodged a strong protest against the proposed changes, which coupled with provisions of prosecution on failure to raise invoices within 14 days of rendering services, would have created chaos amongst the professional fraternity. We appealed to the Finance Minister as well as the Prime Minister to have a relook. And we also had an opportunity to meet personally the Chairman CBEC to explain our concern in this regard.

The proposed Rules, for the time being, have been deferred till 30th June 2011 and would be introduced with effect from 1st July 2011 after certain modifications. BCAS, as also other professional bodies (including Lawyers, Architects, Tax Practitioners etc.), have requested that professionals be allowed to continue with the cash system for discharging service tax liability as hitherto. And the professionals may be allowed to rise “Tax Invoice” at the time of receipt of payments, as in vogue in UK and other western countries. I heartily thank all those who extended whole-hearted support to BCAS in this behalf and appeal to them to continue with our joint efforts until fair and rational provisions are put in place.

It is rather unfortunate that, as in the past several years, the Union Budget 2011-12 was passed by the Lok Sabha without any discussion. The opposition walked out of the House capitalising on “cash-for-vote” revelation, by the Wiki leaks. When I read through the memorandum in the Finance Bill explaining the amendments (especially those with retrospective effect), which states that the “amendment is sought to carry out the intention of the Parliament, I wondered as to whose intention it is really! For, when Finance Bills are passed by the Parliament, without any debate or even going through the rationale of a provision, how can one establish Parliament’s intention? Theoretically, it may be that the Parliament wanted a particular change made; but in effect, bureaucrats run the country, as most members of the Parliament have neither the time nor the inclination nor are they equipped to understand the legislative process and the concomitant implications. It is a sorry state of affairs, in that heavier responsibility is cast on professionals, trade and commerce to remain vigilant so as to protect the interests of the people and tax paying public. Indeed, vigilance is the price of liberty. I am reminded of the BCAS logo which says:”na bhayam chAsthi jAgrathaha”, meaning one is vigil need have no fear.

The biggest roadblock to India’s development is the “Reservation Policy”, based on caste, creed and religion. It divides the populace and makes for communal disharmony. Today, we find reservations in almost every walk of life, be it education, employment, politics and so on. Reservations, if any, should be based on economic criteria only, regardless of caste, creed and religion. Reservation in education has led to brain drain for decades. Recently Jats are demanding caste-based reservation, taking the Government to ransom. The Gurjars of Rajasthan secured reservation resorting to violent protests and disrupting normal life. It is high time that the Indian Constitution is amended to bury the cancerous “Reservation Policy” once and for all. Verily, the road to hell is paved with good intentions!

I congratulate CA G. Ramaswamy and CA Jaydeep Shah for taking over the reins of the ICAI as the President and the Vice-president respectively for the year 2011-12. I compliment CA Srinivas Joshi and CA Bhailal Patel for taking over as the Chairman and Vice-Chairman of WIRC of ICAI respectively. The ICAI President, CA G. Ramaswamy, has unveiled his detailed and ambitious plan of action encompassing diverse areas of the profession such as branding of the profession, Members in practice, industry, students, international initiatives etc. We extend our whole hearted cooperation in his endeavour not only in enhancing the image of the profession but also serving CAs across the globe.

A lecture meeting on “currency wars” addressed by CA Rashmin Sanghvi in February 2011 elicited very good response from members, in addition to generating a lot of interest in the arena of international economics and politics. Most recent wars were fought for different reasons though labelled “Justice and Peace”. Control of “oil” was one of the prime reasons for these wars. The recent attack on Libya by NATO is also viewed as such. The bigger crisis looming large in the horizon is scarcity of water. Indeed, “Water Crisis” could hit planet earth much sooner than the apprehended “oil crisis”. There is a dearth of potable water in the Middle East. Verily, water has assumed gigantic dimension. No wonder then that the World celebrated International Water Day on 22nd March 2011. The water crisis would be severer in overpopulated countries like India and I shudder to think about it, in the light of our gross neglect to tackle the emerging crisis. Well, sooner we realise, the better for all of us.

In my message for the month of February 2011, I referred to difficulties experienced by CA students in their exams and results. In order to help them prepare properly for their exams, CA. T. N. Manoharan, addressed them live through a webcast on 14th March 2011 on “How to prepare and write for CA Examinations”. The said video is now available for watch freely on the bcasonline.tv. This has already been watched by more than 3000 students/members. Along with this, we have put up the video of Anupam Kher’s motivational talk on “Power Within” delivered on 16th August 2010.

We are embarking on a new Financial Year. The past Financial Year will be remembered as the year of inflation, games and scams.

Let us pray that may the new Financial Year usher in peace and prosperity for one and all.

Regards,
Mayur Nayak

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FROM THE PRESIDENT

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Dear Members,

Those who stay away from the election think that one vote will do no good: ‘Tis but one step more to think one vote will do no harm. – Ralph Waldo Emerson

Always vote for principle, though you may vote alone, and you may cherish the sweetest reflection that your vote is never lost. – John Quincy Adams

Let these words of great minds inspire you, and you will get an answer to the basic questions which I am sure must be in your minds:

“Must one vote?”

“Should one vote?”

Elections of our Institute are scheduled for the 7th & 8th December. They are just a month away. At this juncture I would like to share my views on our duty and role, and why each one of us should vote.

We live in a democracy and that means we get a say in who runs our country, and how Your country is run. This is equally true with our Institute.

Today, we are surrounded with an unstable Government, political games being played everywhere. We come across cases of frauds that cannot be digested and which we never imagined would take place. Here, our fraternity is being looked at with great expectations, and our Institute has to play a big role in such a situation. When we say the Institute, it is we who play a major role, as we elect a few amongst us to represent us in the Institute. So the onus is on us to select a right candidate and the right team. It is we who can make a difference by selecting the right team, and that is possible when we get involved in the process. The first step towards that is to exercise our right and discharge our duty to vote, by taking the right and rational decision and casting a meaningful vote.

Remember elections are more than a process of voting for someone to represent us. It is a right and a responsibility. We cannot give up the power and let other people make our decision by not casting our vote. We need to keep our eyes open and make the decision ourselves.

It is very easy to be blasé about our right to vote and take a “whatever, who cares” kind of attitude about it, but if you ask me, not to vote is to abdicate our responsibility. Surely, voting involves some time , effort and cost. However, not casting your vote may result in the right candidate not being elected and that is too steep a price to pay.

Surely, the two basic questions posed earlier will come to your mind. So let me attempt to help you find the answer to that.

In my view, and as I look at it, voting is not an ethical obligation. Nor it is compulsory by the Act; voting is something as an Individual may do, not something we must, like pay taxes and attend school, and now after becoming CA’s attend seminars to get CPE hours. Many democracies have tried compulsory voting. Belgium, for example, introduced such a requirement as early as 1892, Argentina in 1914. Some later rescinded these measures, and whereever they remain they are not always vigorously enforced. In countries where this right exists, people do not value it and in others where it does not, people are literally dying to be able to cast a ballot and make a difference.

I, for one would think of voting as a prime duty. And as a Chartered Accountant, I would surely not like measures which compel me to go & vote, eg Vote and get “x” no of CPE hours. I believe that forcing people to vote will not encourage them to learn about the consequences of their vote. I believe in the old philosophy that says, “If you don’t vote, you can’t complain.” It was true then, and it is true now.

Today, most of the voters wonder whether One Person’s Vote Really Matters, but the fact remains that “every vote counts.” When you do not vote, you do not participate in a democratic process and your action not to vote might harm you, and will give a feeling that the things that matter to you are moving away. It’s the question of your professional security.

A healthy democracy requires an educated and engaged population, and we are amongst that fortunate lot. So I would urge that each one of you should go to the polling place on Election Day and vote, as we are highly educated and respected all over, and we should set the standard of the highest turnout ratio, so that in the forthcoming parliamentary elections, the government should quote our example to motivate the rest of the population .

My earnest request to all is – “Educate yourself on the issues and candidates, then vote. All of this is your civic duty.” But “just vote” is succinct.

And do remember the words of Andrew Lack: “Bad officials are elected by good citizens who do not vote”.

At BCAS, looking at the statistics of low turnouts in the past for voting, it would be our endeavour to get people to vote, not for anyone in particular, but as an expression of civic virtue. Vote for the candidate of your choice, but vote, and fulfill your duty of a responsible professional.

At BCAS, we would make all attempts to share with you, views of seniors and other professionals, on election and what they feel about the whole process, and how one can make a difference. If you can come up with better ways to encourage members to vote and otherwise participate in the democratic process, please do write to me at president@bcasonline.org.

With Diwali just round the corner, it’s time to celebrate with loved ones and friends. I am sure everyone would have made plans to be with family and friends to enjoy the festival of lights.

I on behalf of the entire BCAS family take the opportunity to wish each one of you and your family a very HAPPY DIWALI & HAPPY NEW YEAR.

With Warm Regards,
Yours truly,
Deepak R. Shah

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FROM THE PRESIDENT

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Dear Valued Reader,

The vacation is in full swing. It is time to relax and rejuvenate. Time to spend quality time with family.

Survival of the fittest is the order, especially in today’s materialistic world where we can lose track of the essence of life. The ultimate goal of life is happiness. We think that if we are successful, we would be happy, but for achieving success the price that we pay is ‘happiness’. Again in the process of gaining material possessions, we lose spiritual wealth. We earn name, fame and wealth at the cost of folks who matter the most in our life. As someone has beautifully put, “It’s good to have money and all the things that money can buy, but it is also good to make sure that you have not lost the things money cannot buy.” The point I am driving at, is that we should strike a balance between work and life.

The results of the recent assembly polls have proved people are fed up with corruption and bad governance. Communism has lost its relevance even in the country of its origin, and is naturally on the decline in India. The model has failed in India as West Bengal, which was ruled by the Communist Party for over three decades, has remained one of the most backward Indian states.

According to Karl Marx, “Communism is the riddle of history solved, and it knows itself to be this solution”. Communist thought stems from the belief that the division of human populace into ‘executive class’ versus ‘working class’ has given rise to ‘haves’ and ‘have-nots’; wherein the former always exploits the latter. Therefore, the ideology propounds a classless and stateless society, where decisions on what to produce and what policies to pursue are made in the best interests of the whole of society — therefore ‘rule of, by, and for the working class’, rather than the elitist class controlling wealth and everyone else working under them for wages. Communism aims at providing resources to each person according to his needs, and not necessarily according to merits. Seniority is preferred over merit.

Capitalism, on the other hand, is the other extreme, wherein survival of the fittest is the lone criteria. ‘Merit’ is supposed to rule over other criteria in every sphere of life, but we all suffer from human weaknesses such as nepotism, partiality, jealousy, etc. The solution, perhaps, lies between these two extremes. And therefore, India adopted the socialistic pattern of society and ‘mixed economy’, where existence of public and private sector side by side was recognised. It was expected that the Government would collect revenue from the rich through progressive taxation and redistribute the wealth to the poor and needy, through welfare measures. The aim was to have the best of both worlds. However, we ended up with the worst of both. Many public sector undertakings had remained inefficient, and private sectors were complacent till 1990, when India perforce had to opt for liberalising the economy — a move towards capitalism.

In the recent state assembly polls, Mamta Benerjee in West Bengal and J. Jayalalitha in Tamil Nadu notched incredible landslide victories. Leadership is not a status but an awesome responsibility, especially when people vote you to power with a thumping majority. Let us hope both these ladies live up to the expectations of their respective electorates by delivering good governance, as ‘good governance is good politics’ has been amply illustrated in the past by various Chief Ministers.

In order to inculcate leadership qualities in students, BCAS, under the auspices of Amita Memorial Leadership Development Fund, organised a full-day course on Leadership on 21st May 2011. Imparting of training by practical examples, role-modelling on communications, etc. was received very well by the students.

The recent unpalatable comments by the Central Minister, Jairam Ramesh, about the quality of faculty at IIT/IIM not being world -class have sparked an avoidable controversy. As per media reports, Mr Ramesh had said, “There is hardly any worthwhile research from our IITs. The faculty in the IITs is not world class. It is the students in IITs and IIMs who are world-class.” Indeed there is a dearth of research scholars and there is need for reforms in our educational systems and more so, in state-run institutions. However, IIT still remains an attractive career option for students. The overall passing percentage has remained below 3%, as in the past.

What is heartening to know is that the mathematical wizard Prof. Anand Kumar and his team from Bihar, are coaching IIT aspirants from the weaker sections of society, totally free of cost. They started this educational initiative in 2002, known as ‘Super 30’ under which 30 meritorious students from the economically backward class are being provided free food, lodging and are coached for a year to take IIT-JEE, which is considered to be one of the toughest written examinations in India. Till date, 236 students have cleared IIT-JEE as a part of this initiative. This year, 24 out of the ‘Super 30’ students have cleared their examinations. The successful candidates include sons of truck drivers, milk vendors, marginal farmers, grade IV railmen, chaatwallahs and so on. Salutations to Prof. Anand Kumar and his team, who are putting leadership into action and making positive contributions to society. I am sure these 236 students in turn, would make the needed difference to others, for this cycle to go on and on. There is an old proverb, “If you want to feed a man for a day, give him a fish, but if you want to feed him for life, teach him to fish.” Indeed, education is a means to free people from their poverty, financial as well as mental.

Increase in petrol prices is heating up the economy and any increase in oil prices would have a snowballing effect. The irony is that neither the Central nor the State Governments are willing to let go of their share of income, which together accounts for nearly 43% of oil prices (Source: The Economic Times, dated 18th May, 2011). Diesel, which has been subsidised for socio-political reasons, continues to bleed oil corporations. Even though some economists favour strengthening of the Indian Rupee, which can somewhat ease pressure on import price of oil, it is not resorted to for the reason that exports could become non-competitive. The RBI indeed is walking on a tight rope. The immediate solution obviously lies in the reduction of duties on oil, and revenue generation through fiscal reforms in other spheres.

The new Managing Committee at BCAS has been elected. I congratulate CA. Pradeep Thanawala who has been elected as President, and CA. Deepak R. Shah, Vice-President of the Society. I compliment other office bearers and members of the Managing Committee.

I wish you all a happy summer, followed by rains, and until we meet next . . . .

Regards,
Mayur Nayak
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FROM THE PRESIDENT

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Dear Valued Reader,

It is invariably difficult to pen the first and the last messages. In the first message, one is a bit nervous as how to start, where to start from etc. whereas in the last message one is baffled as where to end, since one has a lot to share with. The year passed by in a jiffy. And today, I communicate with you for the last time as a President of this august body. One learned judge said: “Language is at best an imperfect instrument for human expressions and feelings”. I, too, find “language” grossly inadequate to express my feelings at this moment, yet let me venture out to convey some of my thoughts for whatever they are worth.

It is said, “This life is a gift of God to us and how we live is a return gift from us to God”. Likewise, the BCAS Presidentship was a boon to me and I hope, I have been able to make some difference, which may be regarded as a return gift from me to the membership. All good things come to an end, and for me, the BCAS Presidentship has come to an end. “One year” may be a small period in the life span of an organisation; but it would certainly leave some lasting imprints in my life. I enjoyed every moment of my tenure. Blessings from elders/seniors, good wishes from peers and colleagues, unstinted support from the Core Group members and the BCAS staff have filled my life with positive emotions of love and gratitude. Encouraging feedback from members about various events, President’s messages and new initiatives; memories of working as a team with core group members; togetherness and brotherhood amongst office-bearers are permanent treasures which I shall cherish throughout my life. I thank one and all for contributing so much to enrich my life.

The month of June 2011 was an eventful month for the Society in many respects. An Education Tour to Europe, from 30th May to 12th June 2011, received an overwhelming response from overseas Universities and Educational Institutions. In all 21 delegates participated. Personally, I learnt many lessons from this tour. Punctuality, importance of time, cleanliness and commitment, are some of the qualities that I learnt from the Europeans, whereas team spirit, adjustments, crisis management and brotherhood etc. are some of the other qualities I learnt from my fellow delegates. Humility and warm reception from great personages such as Prof. Dr. Lehner of Munich University, Prof. Dr. Reimer of Heidelberg University and Prof. Dr. Kees Van Raad of Leiden University touched the cockles of my heart. I learnt an important lesson which is, one should be like a Mango tree which bends as it bears more and more fruits or like a Banyan tree which allows many more trees to grow within and around its periphery in such a manner that no one can identify the originating roots.

Back home, the Government bounced upon Baba Ramdev and his disciples who were on fast to pressurise the Government for effective steps to curb rampant corruption, with the result that, the agitation had to be withdrawn.

It is indeed unfortunate that there are no visual proofs of concrete steps from the Government to eradicate deep rooted corruption. The law and order situation is worsening day by day and attacks on whistle blowers and/or activists of “Right to Information”, who try to unearth scams or corrupt practices are on the rise. It is learnt that all important files pertaining to the scam tainted “Adarash Co-operative Housing Society” have gone missing. Day light murder of journalist, Mr. Dey, on the streets of Mumbai, reveals the precarious law and order situation in the financial capital of India. The less said, the better it is for the State of Uttar Pradesh, where violence against women is a daily feature. Some drastic steps are called for, to restore the waning confidence of masses in the political system or law and order machinery.

A group of about ten members from BCAS visited the tribal areas of Dharampur, Kaparada and Vansda in south Gujarat on 19th and 20th June 2011 for tree plantation and “lokarpan” of the Faco Machine at the Sant Ranchoddasji Bapu Eye Hospital at Vansda where at least 50 patients are operated for cataract every Sunday. Even after 63 years of independence, most of the tribals live in abject poverty. They are still deprived of basic necessities of life, such as food, shelter and clothes. Many of them live in sub-human conditions.

India is a land of contrasts. On the one hand, we find modern cities, with latest malls and fashion shops, five star hotels and lavish apartments, whilst on the other; we find abject poverty and slums. The recent hike in the diesel, LPG and kerosene prices can only worsen the economic conditions of the poor.

The latest available report (2010) on the India’s high net worth individuals reveal that it had only about 1,27,000 people comprising 0.01% of the population whose combined net worth was close to one-third of India’s Gross National Income. The gap between “haves” and “haves not” is widening by the day which may lead to civil unrest and increase in crime unless the Government puts in place an effective policy for inclusive growth. That is why Gandhiji coined the word “Antyodaya” i.e. upliftment of the poorest of the poor. Our aim should be the betterment of those who are at the bottom of the pyramid. The BCAS is involved in some projects for the wellbeing of destitute/nomadic/tribal people who are at the lowest stratum of society. Those of you interested may write to the Society at bca@bcasonline.org.

The rest of the month was eventful with lecture meetings on XBRL and filing of income tax returns. A full day seminar on 18th June 2011 on “Laws Impacting Financial Services” elicited good response from the industry and the practicing members alike. On the same day, in the evening a much awaited “BCAS Referencer 2011-12” was released at the hands of the Vice Chancellor of the University of Mumbai Dr. Rajan Welukar. The theme of this year’s reference is “Gandhi Governance” and to suit the occasion a musical concert titled “Jago Hindustani”, comprising patriotic songs was organised which was very well received. Gandhiji’s teachings are perhaps more relevant in this century than the earlier one. Dr. Raghunath Mashelkar, in his celebrated book entitled “Timeless Inspirator-Reliving Gandhi”, has captured kaleidoscope of experiences of 45 distinguished personalities from different walks of life, (such as scientist, industrialist, sports person, social worker, bureaucrat etc.) about Gandhiji’s philosophy and relevance in their lives. According to Dr. Mashelkar what is relevant today is Gandhian Engineering (More from, Less for More) anchored on the two important tenets – affordability and sustainability. When governance as such in public offices is at its low, Gandhian Governance holds the key for betterment and hope. In this context the theme selected by the Membership and Public Relation Committee deserves handsome compliments.

CA. Mohandas Pai speaking on the occasion of the Dilip Dalal Oration Lecture at the Patkar Hall on 29th June 2011 on the subject of “India @ 2030” echoed the necessity of inclusive growth, need for change in the paradigm to accept change and use of technology for growth and development of India. He said that India is poised for the most challenging and exciting times ahead with opportunities galore for youngsters.

Well, friends its time for me to bid adieu. I have experienced tremendous growth, writing to you month after month. I am extremely thankful to you for your encouraging feedback and I shall be missing my monthly communion with you all. Well, I must say that I have had a very satisfying year with support from learned readers.

May God guide you all!

So be it!

Regards,
Mayur Nayak

From The President

Dear Professional Colleagues,
Financial Year 2008-09 has gone by. To most of us the year has been one which will be remembered for a long time to come, particularly on account of events that occurred on the business and economic fronts. The first quarter of the financial year had the hangover of the heady growth that had been witnessed in the earlier years. In the second quarter, the bad news had started arriving. The crisis deepened in the third quarter and by the fourth, all businessmen, economists, professionals were convinced that we were in for difficult times. The debate now centres on how long the turnaround will take.

Apart from the doomsday predictions on the economic front, a mammoth fraud was revealed in the form of Satyam. Much has been written on the subject and I do not intend to add to the same in this communication. Three months have passed and we have very little authentic information as to the extent of the fraud, the manner in which it was committed and at whose door the blame lies.

There have been various reactions to this mega fraud from the industry, the regulators, the profession and the government. Some of the reactions are knee-jerk ones. There is a proposal which has been reported in the press that an entity which is being audited will have to restate/rectify accounts to give effect to the qualifications by the auditor. In my understanding, the roles of the auditor and auditee are today well defined. The respon-sibility of preparing financial statements is of the auditee, and the job of the auditor is to express an opinion on those financial statements. A change in this position will have far-reaching consequences. I appreciate that the opinion of the auditor needs to be respected, and should be disclosed / reported in a manner that it can be easily understood by users of financial statements. For that purpose various ways of reporting and other modalities should be thought of When an auditor blows the whistle, it must be in a manner that users of the financial statements hear it loud and clear. If they pay no heed, it will be their responsibility. Any change in the classical role of the auditor is perhaps uncalled for. The auditor after all expresses an opinion on the accounts. We as auditors must humbly accept that there could be a bona fide difference of opinion and in all humility appreciate that the auditor’s opinion may not be necessarily right. I am sure the Institute will consider all these aspects and deal with the proposal appropriately.

While the news on the economic front is depressing, I do not endorse efforts to change policies, so that unpleasant consequences of economic downturn do not reflect in the financial statements of corporates. While one understands the reluctance on the part of business houses to disclose weak financial position at times the adverse results are on account of ‘errors’ of judgement, to put it mildly. Many corporates had taken positions in currency derivatives. Theses have resulted in their incurring losses. There may also have been other losses due to fluctuations in currency rates. If there has been a financial impact it must be reflected in thefinancial statements. It would not be appropriate to sweep it under the carpet. At a time when we are advocating greater transparency, there seems to be no reason to disturb existing accounting norms which have been formulated after great thought. Admittedly, the losses are due to exceptional circumstances; but if events leading to losses have occurred in the year under review, their impact needs to be accounted for in the same year. It would not be prudent to wish away the reality in the hope that next year the problem will disappear. Consistency is a well-established principle in the accounting world, and we should not sidestep it for short term. It is only because financial statements are prepared on a consistent basis, that they become comparable and this aspect should be borne in mind when accounting standards are amended.

As far as banks are concerned, many of their assets have eroded in value due to the difficult economic situation. Many borrowers are unable to adhere to repayment schedules. Banks have rightly supported the borrowers by rescheduling the loans. However, if assets have really becomesub-standard or bad, the corresponding loss must be provided for. Merely liberalising the provisioning requirements will only postpone the problem and possibly aggravate it. Instead, it may be advisable to revise capital adequacy norms.

By the time I write my next communication, the general elections will be in progress. There is substantial disenchantment with the political class. All are yearning for change and many citizens’ groups are taking various initiatives, some of which I have referred to in earlier communications. It however takes substantial time for a change to occur. To expedite the change, the educated and the elite will have to shoulder far greater responsibility. The least they can do in this election is vote. I, therefore, appeal to all readers, their friends and families to exercise their right offranchise, for I am sure that if they do exercise it, they will make the right choice.

So do enjoy your vacation, but only after you have voted !

With warm regards,

FROM THE PRESIDENT

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Dear Members,

The month of February is normally a month in which professionals, businessmen and the media are affected by “budget fever”. On 28th of February , each year the finance minister rises to place before the parliament his expenditure proposals for the ensuing year, and how will he proposes to meet them by way of tax collections and other receipts.

Over the last decade or so, on account of the media hype that surrounds the presentation of a budget it has become an event that is awaited by all. The manner of presentation of a budget has gradually changed over the years. Each finance minister wishes to leave his own mark on the budget. This year there is a change in the date on which the budget will be presented on account of the elections in various states which are scheduled to be held in February. The February budget fever will now raise its head in the month of March.

The year that has gone by has indeed been a difficult one for the ruling government particularly on the economic front. The Finance minister has had to walk the tightrope between two challenges, the first being spiralling inflation and the second being the faltering economy. In regard to the first the government seems to have met with some degree of success while on the latter the failure seems to be continuing. Most core sectors are showing a slowdown in growth which is bound to affect the projected rise in GDP. As a corollary the, share markets have remained depressed and consequently the government has been unable to meet its disinvestment targets. Coupled with this, the growing outlay on subsidies is going to make a hole in the government’s finances. The fiscal deficit therefore is going to cross the budgeted figure. The Reserve Bank of India and has also had to strike a fine balance between regulating money supply to check inflation and in ensuring the requisite liquidity in the money markets to meet demands of business. Consequently in the last announcement by the Reserve Bank of India in regard to monetary policy we found a easing of the CRR norms while the interest rates remained unchanged.

To an extent one can sympathise with the UPA government since some of the problems that it faces are not its own creation but they have been compounded by a total policy paralysis. The government has failed to introduce the policy initiatives which it was expected to do. In regard to these matters it has been unable to keep its flock together, let alone the take the opposition into confidence. The last session of Parliament was devoted to the Lok Pal issue and even that bill has now not seen a passage through the Rajya Sabha. The passing of the Bill would not have ended corruption but at least the government would have sent out a signal that it was a serious in tackling the root of the problem. Unfortunately we are today back to square one on this issue.

Since the Lok Pal Bill took centre stage in the last session, much other important legislation did not get the requisite attention that it deserved. One hopes that now the parliament will get down to the serious business of debating upon and passing the legislations like the Companies Bill and the Direct tax code, the latter being the one which the finance ministry seems to be keen on passing. While the Direct Tax code (DTC) may not be become law in the immediate future it is virtually certain that some provisions of the DTC will find their way into the ensuing budget. One expects that the general anti-avoidance rules will form part of the Finance Bill in this year. If that happens, and the provisions do not have adequate safe guards their introduction would open the floodgates to litigation.

On the direct tax front the Vodafone judgement by the apex court has upset the government’s calculations in a substantial manner. Given the tenor of the Bombay High Court judgement a major section of tax professionals, businessmen and even sections of the media believed that this decision would go the government away. That it did not do so is an indicator of the independence of the last bastion of democracy in our country that is the judiciary. The judgement is being dissected and analysed by professionals for it lays down many significant principles of law. One expects that the effect of the judgement will be overcome by amendments to the law. One cannot have any grudge on the government’s right to legislate if it does not agree with the law laid down by the Supreme Court. One only hopes that these amendments will be prospective in nature and not retrospective because amendments made retrospectively to nullify the effect of Supreme Court judgements tend to undermine the authority of the judiciary. Not being able to collect the tax, which the government believes it is entitled to, will aggravate the problem of a fiscal deficit. However, upholding the independence and moral strength of the judiciary is far more important.

Over the last few years our profession has been facing a lot of flak. As I had said in my last communication the perception of the role of the auditor in the minds of the public as well as other stakeholders is reflected in the proposed amendments to the Companies Act. Both the public and the regulators have substantial expectations from the audit profession, but neither appreciates the limitations within which an auditor functions. The expectation gap instead of being bridged is widening. One expects that the profession will face a lot of new challenges of this nature in future.

In this background it is heartening to note that the powers that be, on the occasion of Republic Day, have recognised the role of Chartered Accountants in Society. The Padma Shri award has been conferred upon Mr. Y. H. Malegam, a doyen of our profession. Mr. Malegam has a number of achievements to his credit and in our profession he stands tall in every sense of the term. Every young Chartered Accountant would look up to Mr. Malegam for his commitment to the profession. One admires him not only for his intellectual abilities but also for the impeccable manner in which he is conducted himself in public life. I have heard number of people in different walks of life shower praise on this great personality. The words of the governor of the RBI at the conference of the Western India Regional council of ICAI, and the utterances of Mr. Chandrababu Naidu, former chief minister of Andhra Pradesh at our recently concluded residential refresher course are two such recent occasions. On behalf of all members of the BCAS and readers of the journal I take this opportunity to heartily congratulate Mr. Malegam on his achievement and wish him a long and healthy life. In his receiving the award the profession has been honoured.

On this happy note let me sign of off with the hope that many such awards are received by many other deserving members of our profession!

Happiness is when what you think, what you say, and what you do are in harmony
— Mahatma Gandhi

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From the President

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Dear readers,

The events of the past few days makes one feel that India is passing through turbulent times. We are witnessing a strong movement led by Shri Anna Hazare against corruption, with the passing of the Jan Lokpal bill as its immediate aim. We have seen a whitewash of the Indian cricket team in the recently concluded Test series in England. Our country has also felt the tremors of downgrading of the US economy by Standard and Poor the renowned rating agency.

However, I believe that there is one common thread running through these three different events occurring in different countries. That common factor is the weightage that society is giving to the quantum of money one earns and spends, irrespective of the manner that it is earned and the way that it is spent. We have seen a gradual downfall in the value system with a corresponding rise in the importance of wealth. There are many other reasons for corruption but the social recognition that wealth has is a very significant factor. It is on account of the desire to earn the maximum money in the shortest possible time that people adopt undesirable means and our cricketers are no exception. In the US there is uncontrolled spending and consumption, without paying heed to earning abilities. This results in borrowing beyond one’s ability to repay and its consequences have already been experienced by the world.

However, even if one is worried at the turn of events there is still hope. From 13th of August the BCAS had arranged its International Tax and Finance Conference at the Infosys training centre in Mysore. The experience of those four days is something that all participants will cherish for a long time to come. The foresight with which this institution has been built makes one’s heart swell with pride. We were fortunate to experience the world class facilities of the centre as well as the high ethical standards of its creators. It is institutions like these that will ensure that India’s march towards becoming a global power continues unhindered.

Coming back what one witnessed on the streets of Mumbai, scenes which were also replicated all over the country is evidence of the fact that the youth of this country want a change and they are willing to participate in an agitation for that purpose. It is this enthusiasm that needs to be harnessed so that many other illnesses that face this country can also be addressed. I would suggest that those in charge of the agitation at Delhi pay heed to this aspect and use their resources to give direction to this large pool of youth energy.

In the wake of Shi Hazare’s agitation many other aspects have taken a back seat. Important bills and initiatives like the Direct Tax Code, GST and the Companies Bill are hardly being discussed. I am, however, sure that eventually these will have to receive attention. Society has made various representations in this regard and one hopes that the government will consider the views of the society before these bills become final acts.

At the micro level, the Society has been live to the problems that members face while complying with the requirement to file returns electronically. A large number of returns were filed electronically last year and the number has more than doubled this year. Unfortunately, the processing of these returns has created a number of problems. To address these, the Society had organised a visit to the Central Processing Centre, Bangalore and had interacted with the officials there. I am happy to note that the response was very positive and some issues have already been sorted out and others will also be addressed through further interaction in the near future.

Apart from the requirement to file returns electronically, the Ministry of Corporate Affairs has also made furnishing of accounts mandatory for a certain class of companies in the new business reporting language XBRL. The Society has already organised a couple of programmes to increase member awareness and will continue doing so in the days to come. This requirement which is applicable to a limited number of companies in this year will be extended in the coming years to other companies. The new schedule VI has already been notified and the Society has also held a lecture meeting to discuss various issues emanating from the same.

When this communication reaches you, many will be engrossed in carrying out tax audits so that they can meet the 30th September deadline. We will be celebrating the festival of Ganapati in the coming week. Lord Ganesh is the God of wisdom and learning. I pray that the elephant God will give all members the encouragement to continue their learning and give wisdom to those in power to enact laws that are fair!
With warm regards,
Pradip K. Thanawala, CA
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FROM THE PRESIDENT

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Telangana – India’s 29th state – February 2014
Mumbai – India’s 51st state – January 2050

Dear members of BCAS family,

Bhavya Bharat:
It is said, by many analysists, that India will overtake USA in 2050 to become the second largest economy. I believe that. Many sceptics do not believe that we can achieve this on GDP basis. But I am sure many will agree that we may have more states than USA by 2050 with Mumbai becoming the 51st state of India.

Back Stroke:
There is intellectual outrage at the formation of Telangana all across; of course, outside Telangana, that is. One stroke of line across the map and conflicting emotions are displayed. Some shed tears for fear of loss of livelihood, while on the other side, a gush of happiness upon hope of progress and prosperity. Not to forget the show of indignation by us who are nowhere affected by this stroke. This is also being referred to as a master stroke by Sonia Gandhi. Will this stroke strike down the chances of Congress being stricken down by the opposition in this ensuing election? Time will tell. Going by precedence, it did not help Atal Bihari Vajpayee to come back to power when in 2000 he struck not one, not two but three strokes to bring into existence Chhatisgarh, Jharkhand and Uttarakhand.

Bharat Nirmaan:
India must be one of those rare countries whose boundaries, both external and internal has been constantly changing.

A quick recap:
It can be debated as to who amongst Ashoka, Akbar and the British gave shape to India the way it was prepartition. I have just finished reading Empire of the Moghals by Alex Rutherford and as per the author, Akbar ruled over the largest empire bordering from Samarkhand in the North, Persia in the West, Bengal in the East and Deccan in the South. Much of the North and West was lost by the Moghals very early. Pakistan and what is now called Bangladesh was separated when we attained Independence. In all, 562 princely states joined to form India. The external boundaries as we see today were crystalised as late as in 1962 when the former French and Portuguese colonies in India were incorporated into the Republic as the union territories of Puducherry (Pondicherry), Dadra and Nagar Haveli, Goa, Daman and Diu.

Bharat Punarnirmaan:
Then started the internal reformation. Bombay split into Maharashtra and Gujarat in 1960. Haryana and Himachal Pradesh were carved out from Punjab in 1966. Add to that the conversion of Union territories like Sikkim and Goa to States.

Bharat Bhugol Bhavishya:
But this is not the end. There is a proposal lying with the central government to create Avadh Pradesh, Bundelkhand, Paschim Pradesh, and Purvanchal from Uttar Pradesh. Agitations are on for a separate Bodoland, Gorkhaland and Vidharbh.

And surely, Telangana will not be the last state. Brace yourselves for many more. And there’s nothing wrong in it. All the new states mentioned above have prospered post-separation. There seems to be merit in it. Governing large states is difficult, particularly with ethnic differences and neglect of large populations. America has 50 states while it’s population is just a quarter of ours. China has 34 provinces for a population marginally larger than ours. Thus, if a segment of populace feels alienated and neglected and feel their prosperity is possible, then who are we to object? Statehood is okay, separatism is a no-no.

Bharat Vibhajan:
There are separatist movements in J&K. The Akali movement is still active from North America. Will India disintegrate like the USSR? I am confident that will never happen. We are all bound together by a strong nationalist bond. Just like our joint families are becoming nuclear families, so is our country going through the same phase.

Andhra Bhojan Bhavishya:
Coming back to Telangana and Andhra Pradesh, being a foodie and with Andhra cuisine being one of my top favourites, I am awaiting clarity on whether my favourite dishes like palakura pappu, thotakura, iguru and Kodi Guntur will now be called Andhra dishes or Telangana dishes? Will know when I next go to my favourite jaunt at Andhra Bhavan in Delhi for Andhra Meals. I am sorry for sounding selfish but that’s the only interest I have in this episode.

My father studied a different map in school, I studied another while my daughter studied yet another. I am sure my grandchildren will study a completely new map.

Here’s wishing everyone happiness and love.

With Warm Regards

Naushad A. Panjwani

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FROM THE PRESIDENT

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Dear readers,

Glass half empty or half full?

If one were to believe all the reports coming in over the last one month it would be easy to conclude that India was in the midst of a national crisis. Everything that could go wrong was going wrong. Over the last year or so scams were breaking out with a regularity that would put a railway timetable to shame. A nation that was celebrating a World Cup victory in its ‘national’ pastime, cricket had failed to win a single match against England on a miserable tour. The economy which had recovered from the 2008 crisis seemed to be floundering. Inflation was worsening and there seems to be no respite on the horizon.

A discussion in a group of friends set me thinking. Just six months ago I had persuaded the only son of a friend of mine to return to India after having completed his education explaining to him that this was the country of his dreams and not the west. In a recent conversation the young lad asked me whether I still believed what I had told him six months ago.

I think it is really a question of perception as to whether the glass is half empty or half full. The media seems to report only those stories which garner the highest TRP ratings. Corruption has been the buzz word for the last few months. It is undoubtedly true that it is a malaise that has been eating into our national fabric for over six decades and has now reached alarming proportions. However, that does not mean that there are no honest citizens left. Every day one hears stories of individuals who have shown exemplary honesty and courage. These events do not even get a mention, let alone be reported in the media. Every time there is ‘breaking news’ on television it is of an accident, a scam, a robbery or a murder. Has everything good stopped happening in this country? I think the media needs to show far more restraint and balance than it has been showing at present. There are many positive things happening, they need to be not only reported, they need to be highlighted.

While corruption needs to be exposed we also need to tell the world that we have a judicial system where even the high and mighty land up in jail. The system undoubtedly has substantial lacuna, and is painfully slow, but in retrospect it may still be a better system than the instant justice that is being handed out in other parts of the world. Ours is a judicial system where the accused has the fullest opportunity to present his case and not a system where the administrators decide as to who the criminal is and dispense justice.

Undoubtedly the economic growth has slowed down substantially and is a cause for concern, but it is heartening to note that we have an RBI Governor who while listening to what the Government says does not bow to its demands. One may disagree with the actions of the regulator, but the fact that he is independent is indeed satisfying. We may have fallen from grace in our national pastime, that is cricket, but we are possibly on our way to regaining our strength in hockey.

I think in these hard times there needs to be a change in attitude. Society must bring all problems to the fore and focus on solving them, but as it tackles the ills it must also focus on the positive things that happen. I am in entire agreement with what the spokesman of a prominent national party said in a panel discussion on television. When asked as to why representatives insist on disrupting the Parliament rather than focussing on the problems and debating them, he candidly admitted that people who rush into the well of the Lok Sabha get far more publicity than those who make well-researched speeches. If the media is going to reward and report triviality, then that is what we are going to get.

What is true of the attitude of society is equally true of laws and regulations. The law must undoubtedly punish the wrongdoer, mete out severe punishment if the offence so warrants, but must also have provisions to reward compliance. We see newspapers filled with the advertisements of the Income-tax Department calling upon citizens to do their duty and pay tax. While all law-abiding citizens would undoubtedly comply with the law, such compliance must be commended not by way of a ‘sanman’ letter but by way of some action which actually shows that the State cares. While a person is penalised for deducting tax late or not depositing it within time, there is no credit of tax in the deductor’s own case for having deducted tax properly and in time. Collection of revenue is the duty of the State. When it transfers this obligation to its citizen, I believe it is in the fitness of things that if the citizen does a good job he deserves a reward. I am conscious that many of my professional colleagues and even seniors may not agree with this concept, but I believe that this is something that is worth trying.

I am an eternal optimist and I am of the view that we are on the threshold of change. While we must recognise the evils that face us and do our best to eradicate them, it is essential that we encourage those who have achieved something of note. We need to believe that the glass is half full and will get filled up soon, rather than say that it is half empty and it will get drained in future.

I deliberately gave vent to my feeling in my communication for this month, because I felt that in the month of October most of you would have more time on your hands to ponder over what I had said. All of you have been through the grind for the last entire month trying to fulfil your duty towards your clients, the lawmakers and the regulators. It is time to take a break and unwind a little. There can be no better way to unwind than a dance in the approaching Navaratri festival, meeting friends and relatives and enjoying the festival of lights.

I take this opportunity to wish all readers a joyful Navaratri, a happy Dassera, Diwali and a prosperous New Year!

With warm regards,

Pradip K. Thanawala
C A

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FROM THE PRESIDENT

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Dear Members, As I write this communication the assembly elections are in their final phase. The results are expected on 6th March, and they will have an impact on the future of the UPA government. The election results will be followed by another mega event, the presentation of the Union Budget on 16th March, for the year 2012- 13. While it is true that much of the hype that surrounds a budget presentation is created by the media, its importance cannot be ignored. While there are many more ways in which a government can bring in policy reform, a budget is an indication of the thinking of the government.

At the Society we make a pre-budget representation to the government with regard to the direct and indirect tax proposals. At the beginning of the financial year it was felt that the Direct Tax code (DTC) would be passed and consequently there would be no significant amendments in the Finance Bill as far as direct taxes are concerned. The DTC now having been postponed by at least one year, some of the proposals contained therein may well find a place in the budget. The DTC proposals have already been extensively debated and the thinking of the finance minister in that regard will be known on 16th March. In this communication I am taking the opportunity to air my thoughts about what I would expect from the finance minister of this great country in regard to proposals other than those related to taxes.

The primary aspect of worry is the burgeoning fiscal deficit. The government needs to control and restrict its administrative expenditure severely. In terms of quantum the saving may not be significant but it sends a message to the public that the government is serious about controlling the deficit and keeping it within the range of budgeted figures. In the bureaucracy there is urgent need to cut flab. Successive pay commissions have made government emoluments attractive, but none of them have addressed the problem of the waning efficiency.

Subsidies, including fertiliser subsidies form a substantial part of the government’s outlay. I believe that it is time that the government did a serious rethink on its strategies in regard to subsidy. Most of the subsidies have turned out to be inefficient in as much as they are a drain on the exchequer and yet do not reach the intended beneficiaries. The existing system needs to be phased out and a system whereby monetary assistance flows directly to beneficiary must be put in place. The UID system may facilitate this process. This would reduce the levels of corruption and make subsidies effective.

Education and health need to get a substantially increased allocation on par with infrastructure. We constantly talk of India’s demographic advantage. That advantage can be converted into well distributed economic prosperity only if quality education is made affordable. The government has legislated on the Right to Education, but it must not remain only on records. Public health systems in most states are in disarray. In this regard Central assistance is the need particularly in the smaller states. These are state subjects but the necessary impetus must be given by the Centre.

On account of political compulsions many big-ticket reforms have been put on the back burner. Irrespective of the assembly results, the government must bite the bullet. The disinvestment process has suffered substantially on account of inaction by the Centre. I am a firm believer in the maxim that the government has no business to be in business. Most of the Public sector undertakings need enterprising leadership. The government must unlock its capital invested in these undertakings so that the funds for infrastructural development are easily available.

And finally the budget must give agriculture its due share. This does not mean giving a loan waiver as the government did some time ago. What it really means is a sustained reform process for modernisation of agriculture. While growth in the agricultural sector as well as its contribution to the GDP is not satisfactory, the importance of agriculture can never be understated. The land use for primary agriculture is constantly reducing. This has implications well beyond short term economics. A nation should be reasonably independent in respect of its food requirements if it is to retain its stature in global politics. This is one aspect that the finance minister needs to consider.

Apart from the above, another aspect that is in a way unrelated to the budgetary exercise is government accounting. Business is expected to follow global accounting norms and the latest accounting standards. In fact, a lot of the problems in regard to government finance and government expenditure would be in the public domain if it is shifted from the cash method of accounting to accrual. However, this will be the subject matter of a separate communication.

For the time being let me wish readers a Happy Holi, and let us hope that in my next piece I can welcome a path-breaking budget.

Honest disagreement is often a good sign of progress.

— Mahatma Gandhi

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FROM THE PRESIDENT

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Dear Members,

Kudos, to our young TEAM INDIA for lifting the ICC Under 19 Cricket World Cup. As of date, India holds both the Senior and Junior O.D.I. World Cup titles. A proud moment for every Indian.

The months of August and September are festival months. Last month, we saw different festivals being celebrated all across the country. Rakshabandhan, Janmashtami, Nowruz, Ramzan Id, and Paryushan were celebrated with the same zest. This diversity of culture is one thing of which we are proud of. These festivals were celebrated by distinct religious groups, while Independence day was celebrated by one and all.

With Ganesh Chaturthi less than a fortnight away, millions of devotees of the elephant god are eager to celebrate the 11 day long festival, which is observed with great fervour. I pray to Lord Ganesha to shower his blessings on all, to overcome the hectic Audit season without any stress.

On the Society front, I am happy to share with you that the Indirect Tax and Allied Laws Committee of BCAS had made a timely representation to the Government of Maharashtra, on the most debated and controversial issue of VAT Liability on builders and developers, on the sale of Flats in construction buildings. This tax affects a large number of flat purchasers across the state. In response to the said representation, the office of the Commissioner of Sales Tax, has released FAQ which would be of great help.

Last month, we had various programmes like seminars and lecture meetings on varied topics of current interest, and the ITF Conference at Goa. I, on behalf of the Society, am grateful to all those who contributed to the success of these events. The enthusiastic participation of members motivates us to plan more programmes. I would request you all to give your suggestions and feedback, which will help us to serve you better and give what you desire.

In this communiqué, I would like to express my thoughts on issues related to our youth, in general and to those in our CA fraternity in particular. The idea arose when I read an article last month about United Nations’ International Youth Day (IYD) which is celebrated worldwide on 12th August.

Just as other awareness days, it is an awareness day meant as an opportunity for the Government and others to draw attention to youth issues worldwide, and to develop and engage in partnership with and for the youth. Many activities and events take place around the world on IYD to promote the benefits that young people bring to the world.

Talking about our Youth, we have pretty amazing statistics. 51% of Indians are less than 25 years of age. Recently, the Indian Government drafted a proposal to cap the age of ‘youth’ at 30 – scaling it down from previous limit of 35.

Young people represent a growing class, that is yearning to have its voices heard and make its presence felt. Today, the feeling is that we have failed to provide young people our constant support, and the opportunity to realise their basic aspirations. Their growth is hampered by the problems we all face, from security issues and the economy to changes in governments and society.

We have all witnessed, over the last few years, that the youth are shaping the political landscape in other countries. It has been seen that young people are driving innovations, and economic and social entrepreneurship in every region of the world. I believe that the best solutions to our problems will come from supporting and harnessing the energy and creativity of our youth.

Today, everyone sees in the youth a lot of talent and innovative minds. At the same time we do feel that the attitude of the Youth constantly harp on the line – if it directly doesn’t affect our life, it’s not our problem.

So the challenge before us is to find out : What does the young Indian care about the most ??

Coming to the Youth in our Profession, as per the latest statistics, as of April 2012, ICAI has more than 192,000 registered members, out of which around 53% are below the age of 35, and around 12% in the age group of 35-40. Further, the number of youths wanting to take up CA is increasing as never before and we have about 10 lakh CA students.

Hon’ble Prime Minister Mr Manmohan Singh recently said, “An Indian CA is recognised worldwide as being among the best and the brightest in the profession, and I sincerely hope the best is yet to come.”

The young CAs have a distinct advantage today. Almost all the major laws where CAs work (in Industry or practice) are changing substantially , viz Ind AS( IFRS), Service Tax, Companies Bill, Direct Tax Code , Goods and Service Tax. The older CAs have issues of time, as also unlearning what they have learnt and practised for number of years. New CAs will not be carrying the same burden viz., they will have time to learn the new changes and will also have an open mind to accept the same. So, together we need to work towards developing the necessary knowledge, insights, network & commitment to take advantage of these opportunities. Thus, the world of young CA is expanding its horizon.

At the same time, we see that young Chartered Accountants today face pressing challenges such as high level of competition, placements, etc on account of recession in industry, and to some extent because of Government policy paralysis. The only soothing factor is that we CAs are better off than others.

The other issue is that a majority of our young CAs prefer to work in the industry rather than to be in practice. They also shy away from taking up responsibilities and involve themselves in giving their much needed services to voluntary bodies.

It is incumbent on the seniors in profession – to mentor and to cultivate the next generation. It is only through the guidance and support that we can equip young people with the skills, resources, and networks they need, while also empowering them to be agents of change in our profession, and in turn building our nation.

We should thus stand with young CAs everywhere, so as to work to build a brighter future together. For that, a majority of us have to come on board and contribute in developing these young creative minds.

I firmly believe that the full potential of these young CAs has to be tapped and constantly be supported by the experienced ones.

Let us attempt to discover ways to make them more actively involved in making a positive contribution to our noble profession.

I would end by an Inspirational Quote by Swami Vivekanand, that our youth should remember :

“Struggle hard to get money, but don’t get attached to it”.

With warm regards
Deepak R. Shah

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FROM THE PRESIDENT

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Dear members,

The on-going Supreme Court hearing in the case of Ram Jethmalani & Others vs. the Union of India has once again brought to the forefront, the issues of black money and illicit accounts in overseas banks. The likely disclosure of the complete list of those who have stashed black money abroad has triggered speculations that some prominent names, including those of politicians, may figure on this much-awaited list.

In the interim order [2011] 339 ITR 107 (SC) in this case, the Supreme Court remarked,

“The quantum of such monies may be rough indicators of the weakness of the State, in terms of both crime prevention, and also of tax collection. Depending on the volume of such monies, and the number of incidents through which such monies are generated and secreted away, it may very well reveal the degree of softness of the State.”

The Court also stated that the softer the State is, the greater the likelihood that there is an unholy nexus between the law-maker, the law-keeper, and the lawbreaker. It expressed concerns about the incapacity and failure of the State, declining moral authority and increase in volume and extent of tax evasion.

This judicial intervention in 2011 pushed the Government into a corner. Over the years the various governments did make attempts to investigate/study the problem, but rarely was any action taken to stem the menace.

• India finally ratified the United Nations Convention against Corruption (UNCAC) in May 2011 after dillydallying for about six years.

• In 2011, the Government commissioned a study to assess the quantum of black money stashed in India and abroad. This study by the National Institute of Public Finance and Policy (NIPFP), National Council of Applied Economic Research (NCAER) and National Institute of Financial Management (NIFM) is yet not complete.

• The Chairman, CBDT headed Committee, set up to examine measures to tackle black money in India and abroad, submitted a 109-page report in March 2012. It stated that there is no dearth of laws to deal with the menace of the black money. The Committee suggested strengthening of the existing agencies, both in terms of manpower and other resources, along with the improvement in coordination amongst various agencies.

• The Ministry of Finance published a 108-page White Paper on black money in May 2012 that presented different facets of black money and its complex relationship with the policy and administrative regime in the country. It also reflected upon the remedial measures by way of policy options and strategies to address the issue of black money and corruption in public life. The White Paper elaborates on working with the Global Forum on Transparency and Exchange of Information for Tax Purposes and through the Double Tax Avoidance Agreements and the Tax Information Exchange Agreements in dealing with black money stashed abroad.

It is ironical that the Government moves only when prodded by intense pressure brought through the judiciary or by international organisations. Even then the Government’s response, more often than not, is halfhearted, and the implementation tardy as is evident from the following examples.

• In the instant case, the UPA Government refused to follow the Supreme Court’s direction to constitute a Special Investigation Team (SIT) and its application to set aside this direction was rejected in March, 2014.

• Delays in implementation of international standards on anti-money laundering lead the Financial Action Task Force (FATF) to raise concerns about effectiveness of the Prevention of Money Laundering Act, 2002.

• India needs to address the issue of private sector corruption from both a legislative as well as practical perspective to fully comply with the requirements of the UNCAC. Internationally, significant anti-bribery legal framework has evolved over the last 15 years.

• The UNCAC requires criminalisation of bribery of national public officials, foreign public officials and officials of public international organisations.

• The OECD’s Anti-Bribery Convention focuses on the ‘supply side’ of the bribery transaction and has established legally binding standards to criminalise bribery of foreign public officials in international business transactions.

• The G20 too has established anti-corruption working group and announced anti-corruption action plan.

• In 2013, the OECD, the UN and the World Bank jointly published “Anti-Corruption Ethics and Compliance Handbook for Business.” The objective of this publication is to serve as a useful, practical tool for companies seeking compliance with anti-corruption measures and includes business guidance instruments illustrated using real life case studies.

Greater expectations from independent external auditors are emerging in this crusade against bribery and corruption.

The OECD Council’s “Revised Recommendation on Combating Bribery in International Business Transactions” requires an independent external auditor, who discovers indications of a possible illegal act of bribery, to report this discovery to management, and, as appropriate, to corporate monitoring bodies and to the competent authorities. The OECD’s consultation paper on this subject admits limitations in current Standards on Auditing in meeting the above recommendations, specifically those equivalent to SA 240 “The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements” and SA 250 “Consideration of Laws and Regulations in an Audit of Financial Statements.”

The Indian Government has been echoing similar sentiments expecting the auditors to contribute more in this anti-corruption fight. In his address at the International Conference organised by the ICAI in January, 2012, the then Union Minister of Corporate Affairs Dr. M. Veerappa Moily called upon the ICAI and its members to take the lead in the fight against corruption.

Increasingly, auditors are being entrusted with greater responsibilities as experienced recently with the Companies Act, 2013. The audit profession has never shied away from assuming greater responsibility. What is necessary is that, when an auditor discharges his obligation in this regard, the regulators should take the requisite action against the perpetrators of crime, protect the auditor and in deserving cases commend him. This will result in professionals doing their duty in accordance with the spirit of the law and not just the letter of the law.

The BCAS, as a principle centred organisation, under the leadership of the indefatigable Narayan Varma has been supporting the fight against corruption through RTI, a major tool in the fight against corruption, and various other activities regularly reported in the BCAJ. Many other prominent Chartered Accountants too are contributing to the fight against corruption in different ways.

Let us hope that the Modi Government extends a Clean India campaign for the eradication of black money and corruption, to help the Nation overcome this evil as well.

With warm regards,
Nitin Shingala

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From The President

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Dear Members,

Greetings of the Season! October this year was unusually sultry at least here in Mumbai. However, the season has been ‘hot’ not just in the meteorological sense. The political climate has been hot with large number of hot seats at stake in Bihar. The professional scene is also hot with ICAI elections on 4-5 December. The fraud reporting landscape has been hot too, with a new type of scandal breaking out, from none other than the Volkswagen group.

As a patriot, the theme of India keeps on playing in my mind. Although India is such a wild, ever changing mix of positives and negatives of all hues, there is something about our country which makes us feel deep down that we will surmount it all. When we read statistics we can just skim through the magnitude and complexity of the challenge at hand. One theme that really fascinates me is the theme of gainful employment for all. Not only from the economic angle but also from every other perspective we can imagine.

Today, the generally accepted number of people who join the workforce is about 1.2 crore (12 million) each year (it could actually be higher). The job creation is barely 25-30 lakh jobs per year. Although, we frequently hear comparatively less relevant numbers such as stock indices, this indicator is downplayed. Yet, it is perhaps one of the biggest internal threats, which could potentially be an epidemic that could potentially become unmanageable, both economically and socially. A recent Hindustan Times report (25th August 2015) stated that a Chhattisgarh government department received 75,000 applications for 30 posts of peons. However, the startling fact is not the disproportionately large number of applications compared to openings, but what the commissioner of that department said “several engineers and post-graduates in arts and science also applied for the job”. The reality on the ground level seems to be serious. Unless the jobcreation, and that too for better paying jobs, is faster than people entering the job market, we are likely to pay with social instability.

Of course the role of the government and expected speed of reforms cannot be over emphasised, when our population is turning younger1. Although the Make in India program seeks to address this and the Prime Minister himself playing the role of its ambassador for attracting investment from across the globe, the challenges are very steep. Today the capacities across the world are excessive in almost every sector, demand is not growing as one would like, credit is not cheap in India and ease of doing business has only gotten better by some 4 points as per the latest World Bank Report.

Let’s start to look at this from the perspective of reliability of data on employment. Since policy making and all that follows thereafter depends heavily on data, measurement needs to be accurate and valid, to be reliable. With a large unorganised sector and a bunch of government agencies producing this data at long intervals and with incongruous basis and results, this data is all that is there.

The Conundrum gets even more complex when you look at some data points. When one looks at the GDP growth in the manufacturing sector, the employment growth in this sector is much lesser than the value add. Another data point is the estimated addition of 54 million people to the working age population coming from UP, Bihar, MP and Rajasthan between 2011 to 2021. More developed states like Maharashtra, Gujarat etc. are likely to add 22 million people. To deal with such possibilities, a reliable basis and real time measurement is imperative. There is a well known axiom – you can only change that, which you can measure. This measurement and mapping project perhaps requires the thrust like the ADHAAR project.

A direct fall out of unemployment could be the souring of the ‘demographic dividend’ story, if we do not look at this many faced monster of: job creation rate – skill development2 gap – hands without work3 – unorganised sector – lack of data reliability– low ease of doing legitimate business – inflation and the structure of labour force, we are headed for some trouble. The price of unemployment arising from low GROWTH could be worse than higher price due to INFLAT ION. From the Chhattisgarh news, the choice seems quite clear and I hope that the Reserve Bank understands the difference between not having any wage to buy food vs. eating less due to high prices.

4th and 5th December are big days for the Chartered Accountant fraternity. We all will have the opportunity to elect the people we want to be led by. Leadership has emerged as one big challenge in our country. Now that most of us have faced the barrage of messages wishing us for every possible reason, we now have the opportunity to cast our vote for the right candidates. I hope you will be able to make your choice wisely – firstly to decide to vote and then decide to select the appropriate person. I wish that as a fraternity we make a choice that is based on competence and credibility of the candidates, a choice that will rise above every other divisive factor. The questions that we need to ask before we choose is – Will this candidate be fit to lead and pave the way for the profession? Does he/she have the integrity, energy and capability to make the right decisions for the profession as a whole? I hope we bring the best central council possible in these challenging times for the profession.

Every holiday season calls for giving. Giving of gifts, good wishes, prayers and blessings bring out the spirit of the season. Giving, not only to the known, the near and dear ones, but also to those who may need our giving so much more! I hope we can keep this on our minds this holiday season to make it truly blessed for that part of us that is in all. I support the midday meal scheme, a wonderful initiative that is curing the menace of hunger, education and malnutrition, all at once. Just as I found this program, I am sure you too will find a project that you can relate to and support in a measure that you possibly can.

Wishing you and your family a joyous Diwali! May your dreams come true and may you help others fulfil their dreams this New Year. Amen!

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FROM THE PRESIDENT

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Dear members, 

In the landmark decision delivered on 25th September 2014 in the matter of the National Tax Tribunals (NTT) Act, 2005, the five judges bench of the Supreme Court declared the NTT Act as unconstitutional mainly on the grounds that the basic structure of the Constitution will stand violated if while enacting the legislation pertaining to transfer of judicial power, the Parliament does not ensure that the newly created court/tribunal, conforms with the salient characteristics and standards, of the court sought to be substituted. And that the constitutional conventions, pertaining to constitutions styled on the Westminster model, will also stand breached, if while enacting the legislation pertaining to transfer of judicial power, conventions and salient characteristics of the court sought to be replaced, are not incorporated in the court/tribunal sought to be created.

In this decision, the Supreme Court also held that allowing Chartered Accountants to appear on behalf of a party before the NTT would be unacceptable in law. The Supreme Court has stated that in their understanding the Chartered Accountants would at best be specialist in understanding and explaining issues pertaining to accounts which fall purely in the realm of facts, whereas the determination at the hands of the NTT is shorn of factual disputes. It observed that the NTT has to decide only ‘substantial question of law’ arising from not only the income tax laws but also a wide range of family, trust, corporate and other laws. This decision draws support from a compilation of 96 different income-tax case laws that involve substantial questions of various laws. The Supreme Court found it difficult to appreciate the propriety of representation, on behalf of a party to an appeal, through a Chartered Accountant and unfortunately bracketed them with the Company Secretaries.

With due respect to the Supreme Court, these observations seem to be misplaced. The Hon’ble Mr. Justice R. V. Easwar, then Judge of Delhi High Court, in an address, has acclaimed the contribution of chartered accountants in shaping of the Income-tax Appellate Tribunal (ITAT), and I quote: ‘Several chartered accountants have worked as Members of the Tribunal in its long history of almost 72 years. There were some who became its President…

The Income-tax Act has entrusted a significant role to the chartered accountants. It has reposed immense confidence on them to certify the various claims for deductions…

…With their incisive analysis of the accounting aspect of the case, they have, if I may acknowledge with respect, admirably fulfilled the role expected of them. This is not to say that their judicial insights are any less than the judicial members. Over a period of years they also acquire a grip over the legal aspects of the case and they are second to none in conforming to the judicial norms and discipline in the discharge of their functions.’The expertise of Chartered Accountants has been recognised widely,and they are permitted to appear before not only the direct and indirect tax forums but also under other laws.With international taxation issues gaining prominence and evolution of specialised areas such as transfer pricing, a Chartered Accountant with his vigorous training and resulting expertise brings significant value tothe judicial process pertaining to the revenue matters.It is unfortunate that the highest court has not taken into consideration the pivotal role played by Chartered Accountants in ITAT as well as in their contribution in administration of tax and other laws.

Also, the Supreme Court has not addressed the core issues that plague the judicial redressal system, such as unfathomable delays and multiplicity of proceedings resulting from the existence of multiple appellate levels. The uncertainties and complexities in the judicial redressal system get further compounded by conflicting opinions at various appellate forums having independent jurisdiction across the country.

It is pertinent to note that the idea of the NTT was first mooted in 1955 by the first law commission chaired by Mr. M. C. Setalvad in 1955 and reiterated by the Wanchoo Committee in 1970 and by the C. C. Choksi Committee in 1977. The dilatory, cumbersome reference procedure which caused enormous delay in disposal of tax litigation was the main reason behind them making this recommendation. As an interim measure to the above recommendation, the Choksi Committee suggested, the desirability of constituting Special Tax Benches in High Courts to be comprised of judges with special knowledge of tax law to deal with the large number of pending tax cases.

In this decision, the Supreme Court has once again raised concerns about the growing tribunalisation of justice and rightly so. As per one count, over 100 tribunals have been setup to date by the Central and various State Governments.The Report of the Arrears Committee (1989-90), popularly known as the Malimath Committee Report, stated that the overall picture regarding the tribunalisation of justice in our country is not satisfactory.These concerns remain valid even today.

The NTT and other decisions such as in the matters of 2G and Coalgate also raise concerns about legislative and regulatory capabilities of the legislature and the executive. Commenting on the Companies Act, 2013, Justice A. K. Sikri lamented that this legislation exposes the lack of expertise in legislative draftmaking. He also said that indeterminate laws make the courts struggle to find the intent of legislature where 90 % of the parliamentarians don’t even know when the law comes, what is the law and the same is not even debated.

The BJP in its election manifesto has promised a wide range of measures to ensure justice which is prompt and accessible.It is high time the Government undertakes these comprehensive legal reforms promptly and not restrict itself to cleaning only outdated laws.

Prime Minister Modi launched the ‘Make in India’ initiative to boost our manufacturing sector and aims to improve India’s rank from 135 to 50 in ‘Ease of Business’ ranking. He is sensitising his team and his bureaucracy to not create unnecessary barriers to business and spur positivity and inspire confidence among manufacturers. In this backdrop, it appears that transforming the rigid and mechanical bureaucracy seasoned over decades will be an uphill task. The recent experience with the CBDT where it prolonged extending the due date for filing of the return of income despite a large number of representations until pressurised through various High Courts decisions, is a case in point.

At a recently held Advanced FEMA Conference, organised jointly by the BCAS and the Chamber of Tax Consultants, the Chief Guest Mr. G. Padmanabhan, the Executive Director of the Reserve Bank of India (RBI), accepted that the FEMA regulations have become too complex and require a comprehensive review. The Conference provided an opportunity for participants, many from outstation, to raise their difficulties with concerned officials from the RBI directly and expert analysis from the excellent faculty.

The much deserved extension and ensuing season of festivals give us an opportunity to take a break from the routine of multi-tasking and rushing from one deadline to another and instead spend quality time with our loved ones. Let us embrace these celebrations with open hearts and relearn how to enjoy life.

Wishing you all a happy and joyous Deepavali!

With warm regards,

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From The President

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Dear Members,

I hope most of you have recovered from the
September pressure. This year was particularly overwhelming, with first
time audits under the Companies Act, 2013, Tax Audit, ITR filing and
Black Money filings all falling at the same time. As usual, the
government did not issue forms in time nor did it relent to extension
requests. The apathy on this topic has become a stable and predictable
feature. In spite of two courts giving directions, the insistence on not
extending the timeline continued. The Revenue Ministry seemed to
disregard the verdict of the Courts as well as request from taxpayers.

The apathy of Revenue Department is such that they would want assessees
to comply, whereas the rules are different for them. Endowed with
administrative privileges and powers, their share of responsibility is
disproportionately low. The way revenue laws are drafted and
administered, appear to be unfavourable for the citizens. The scariest
part of revenue law making today is, that it has become a legitimate way
to unleash excesses on citizens. A tax payer citizen, who is at the
core of this democracy, is now a victim of the very mechanism that is
meant to serve him. If there was the slightest sense of FAIRNESS and
CONSIDERAT ION of the overall situation a taxpayer was placed into, the
department would have suo motu extended the time line. Isn’t it a bit
too much, to ask for fairness and equality, a taxpayer has to go to the
Court. MOF took 4 months to issue new forms for the year that ended in
March 2015, yet it is unwilling to give one more month to tax payer to
carry out their filing. Add to that, the intermittent changes in the
utility even in the last few days. The most bizarre part of the whole
drama was when a press release came from CBDT on 1st October morning,
extending the ‘due date’ by 1 month. I leave to your good sense to
juxtapose all this against the talk about building a STA BLE, PREDICTA
BLE and NON ADVERSARIAL tax regime.

At the BCAS we celebrated the
INTERNAT IONAL RIGHT TO KNOW DAY and 10 years of RT I in India. As we
all know, RT I is the strongest instrument in the hands of our people to
protect, preserve and nurture justice, liberty and equality envisioned
and guaranteed by our founding fathers. Right to know is part of our
fundamental rights. The desire to know and the desire to use that
knowledge are seminal. Since RT I came into force, we have come a long
way asking for information that remained hidden in the secrecy lockers
of the government. Today about 50-80 lacs applications, are made each
year, seeking information. RT I has been a game changer for citizens’
rights and has put a spotlight on the government to move towards the
goal of transparency driven accountability. The struggle today is about
‘information’ – of receiving it for millions whose lives are impacted
whereas not parting with it for few thousands in the seat of power to
keep their chairs. The key note speaker at RT I event Mr. Nikhil Dey,
ended his talk with a very potent quote of Jeremy Cronin – ‘Now we need
to speak truth to power, we now need to make truth powerful, we now need
to make the powerful truthful’. Each one will have to decide whether he
wants to be in the majority who only wishes for the change or he wants
to be in the minority who will become the change they seek!

Talking of
information, India is marching ahead of the rest of the world in the
area of information technology (IT). The way things are moving, IT could
be the singular redeemer for the destinies of 1.25 billion people. The
MEGATREND S we are seeing will create a tectonic change at a never
imagined pace. Our countrymen, without going through desktops, laptops
or tablets will leapfrog into a different orbit through a little gadget
in their hands. A smart phone, available from Rs. 2500 is at the centre
of this revolution in making. Here are a few samples, taken from a
recent conference, that we need to pay heed to:

Increase in Electronic Clearing – For the first time electronic clearing is on par with paper clearing. The National Payments Corporation of India (NPCI, www.npci.org.in) has created IMPS, an instant clearing product. It was created in 2011 and in 3 years it overtook ‘money order’ (established 1880, and dead now) volumes. IMPS has 1/3 remittance market in India. IMPS will overcome Debit and Credit Card Sales very soon. India has Rs. 800-900 billion remittance market today.

Digital Wallet – Today 900 million Mobile users carry out 3 – 3.5 billion mobile recharges of small values. Digital Wallet has tremendous potential in numerous areas of making transactions through mobiles.

Today DBT (Direct Benefit Transfer) Program of the government for LPG subsidy alone makeup to 3 million transactions a day or 1 billion transaction a year, reaching 120 million customers. This saved Rs. 15000 crore ($2.5 billion) for the government according to the Prime Minister’s Independence Day speech. If this is extended to fertilisers, food, water, etc., it can reach 4 billion transactions and transfer Rs. 300,000 crore ($50 billion).

11 Payment Banks are given licences. This is perhaps the greatest regulatory innovation in recent times. They cannot offer loans but can take money up to Rs. 100,000 and work through mobiles. They will make you do cashless, cheque less, card less transactions.

Today highest E-Commerce transactions are happening in India (and 40% of all transactions are happening through mobile)

The winning formula is 1 billion ADHAAR (900 million already) by 2016 and 1 billion Mobile phones. This magic recipe will result in online authentication, instantaneous bank account opening, instant KYC, and two way credential check (will work as credit card and PIN both). Such two way authentication is nowhere in the world – a single click 2 factor authentication. Most of you will know ADHAAR based e-verification of ITRs this year. Credential checking will be like never before.

The dream of universal banking is closer to reality than ever before. Jan Dhan Yojana has created some 180 million bank accounts in a short time. With 1 billion ADHAAR, 1 billion bank accounts and 1 billion mobile phones the economic landscape of the country will be changed both in size and pace.

Smart Phones will do the work of payment for the payer and for the Merchant it will serve as a receiver of that payment. Unified Payment Interface of NPCI will perhaps make POS Machines, ATM s redundant.

Take for example – PAYTM . It gives you a Person to Merchant payment. PAYTM that began in 2010 is doing more number (volume) of purchase transactions than any bank in India – in ONLY 5 YEARS. But there will be Person to Person wallet also happening soon. Any ‘wallet’ to any ‘wallet’ transaction. This P2P Transaction system will be launched in December 2015 and could reduce cash movement drastically.

Although there will be ATM s and Bank Branches, every person will be an ATM . If a person wanted currency note he could transfer to the persons standing next to him on a local train and in return get a Rs. 100 note from his fellow traveller. Well you could be buying your sabzi with your mobile soon and won’t have to carry your wallet at all!

Digital Locker – This is a mega innovation happening. Check out their website digitallocker.gov.in

In short,
soon all your banking could be on mobile! This explosion of innovation
affecting 1 billion people will be extraordinary for our nation’s financial
services history. The IT super power, making IT work for its citizens. An
unimaginable transformation is waiting to happen for India. Even this tax
filing season you would have seen, how digital prowess worked wonders, through
the e-filing portal. We are entering a new world of digital disruption for a
digital billion. I hope this will change our collective destiny forever, for
good.

From the President

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Dear members of BCAS family,

It is nearing the year end as I write this communique. Christmas and New Year are round the corner. Festivities are in the air. Many colleagues and friends are going for their vacations. Some coincide with the vacations of their children and some availing leaves before they lapse. Whatever the reason, there’s a lot of family time. A lot of happiness. A time to take stock of the year gone by. Time to make New Year resolutions and plans. Today the GM of BCAS sent me a list of proposed BCAS holidays for my approval. Likewise my office HR is finalising the holidays for our various offices.

A list which has numerous festivals. Many birthdays of Gods and Godly figures. Some occasions to commemorate victories of good over evil and freedom from slavery. All reasons to celebrate and spread happiness. Barring a couple of days of mourning the death of founders of religions, all reasons to cheer and make merry. These are formal occasions to be happy. Add to these the birthdays, anniversaries, births, promotions and many other events in our personal lives. The society that we are a part of presents us with ‘ocassions’ to be happy. Being happy is mandated. So what happens on the remaining days? Are we happy without a societal diktat? A lot of what one has read, heard, discussed and believed comes to mind.

Mind has thoughts. The heavy traffic of thoughts, some nice and some not so nice, sucks on the energy and creates a state of restlessness. Man needs a structure, a guidance if you may, to reduce the pace of thoughts, channelise them and organise the pace to be able to maintain sanity. Most of us throng to religions to satisfy this need. Many scriptures talk of this. Many modern thinkers have studied and tried to rationalise this. Some have even prescribed ways to bring peace of mind and happiness. Triumph of good over evil is the universal strand running through most religions. The most motivating and optimist belief that all will be well in the end is a very important and powerful thought that keeps us going. Then there are variants. Meditation is another way to control the mind through reaching a state of nothingness.

No thoughts. Sufism follows a similar belief, that of entering into a trance where one feels one with the God. Chanting too probably has the same impact. Various ways to achieve the same objective – control over thoughts. Hence by inference, thoughts are disturbing. May be not all, may be the pace of thoughts, the quality of thoughts and the conscious hierarchy of thoughts. I don’t know much about the chakras and kundalis but there’s a science in the segregation of various thoughts and their hierarchy. I recently had a conversation with a friend which gave me some insights into Buddhism. Buddhism believes that one is responsible for one’s own happiness or unhappiness. There are four needs that need to be fulfilled to attain happiness. The degree and hierarchy is not defined.

1. Health – it is our dharma to maintain a healthy body which houses our mind.

2. Wealth – money is important but how much and how is your choice. A simple arithmetic formula is: Resources ÷ Needs. The lesser your needs the lesser the resources needed. If the needs exceed the resources then there’s mental disturbance.

3. Relationships – there must be peace and contentment with the relations around you.
(1) Have fewer but deeper relationships and
(2) Reduce the expectations to a level where there is never any disappointment. Forgiveness plays an important part here.

4. Peace with self – this probably is the most important aspect. Morals, ethics, acceptance, detachment all are ends to reach this state. Such a simple approach. In modern times, one can see a similar analysis done by the Psychologist Abraham Maslow through his famed Need-Hierarchy theory. He ranked needs into 5 categories and concluded that as each need is satisfied, one moves from the lower needs to higher needs.
Starting from bottom and going up, these are:
1. Physiological needs – air, water, food, clothing
2. Safety needs – safe housing, job security, safety of family, property etc.
3. Belonging needs – Need for acceptance in society, family, friends, community
4. Esteem needs – respect, appreciation, recognition, rewards, etc.
5. Self-actualisation need – Peace with self.

As can be seen, it is universally recognised that left to itself, the mind can cause a havoc. Mind needs to be tamed. Thoughts need to be organised. Needs to be recognised, defined, prioritized and satisfied. Moving from one level to another. It is true that we are responsible for our own happiness. The solutions are not external. Happiness does not come from outside. What is common between meditation, music, sports, chanting, etc?

All are aimed at controlling the mind and it’s thoughts and sharpening the focus to think clearly. This makes it easy to believe that happiness is a state of mind. (No, I am not inspired by the politician who recently said something similar in the context of poverty). The other observation is that some of us are besieged with problems, much more than the others. These problems deny us the opportunity to be happy. If we were to categorise our problems into those that are God-given and those that are self-created, we would realise that the former are far fewer than the latter. Terminal illness, natural calamities, accidents caused due to negligence of others could all be in the former category.

Fights, rashness, badmouthing others, carelessness, disregard to safety, crimes, revenge, jealousy and many such are self-created problems. Apart from bringing grief along with them, they also suck your energies into resolving them and thus denying you the opportunity to do something more satisfying or self-actuating. So another mantra to be happy is to create as little problems for oneself as possible and save your strength and energy for battling challenges thrown by nature or the Almighty. Many of our griefs are due to our attachments. In many cases one has seen that on the loss of a person or possession, people lose the will to live and start living in a perpetual state of misery.

Hence if you notice, all scriptures and thinkers concur on the state of detachment being the ultimate level of a happy mind. Not very easy. Very few would have reached this elevated state of mind. Is this the state of mind they call Moksha? If proof is needed that the mind wanders, then this write up of mine is an apt example. How a list of festivals led my mind to wander into so many directions. Need to put into practice all that I have read, heard, discussed, pondered or propagated.

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FROM THE PRESIDENT

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Dear members,

It is indeed a great honour and aproud privilege to be bestowed with the responsibility to be the 65th President of an outstanding organisation that the Bombay Chartered Accountants’ Society (BCAS) is. The task of walking on the path carved out by the stalwarts who have led this august institution in the past and reach new milestones is formidable. In this journey, one has the unstinted support of seniors, colleagues and other members. Your warm messages of welcome and support enthuse me. The roadmap for the BCAS for the new and coming few years takes into consideration continuity from the past and expectations of various stakeholders. My acceptance address, delivered at the AGM and reproduced in this issue of journal, highlights this…

The new BCAS year began with Shri Dastur presenting his annual budget speech for a record 26th time. A packed audience of more than 2,000 listened to his comprehensive analysis of the direct tax provisions of the Finance (No.2) Bill, 2014 with rapt attention and admiration. The BCAS has started live webcast of the annual budget meeting since 2009. This year’s live webcast was viewed by over 1,500 logins simultaneously. In many offices, the live webcast was projected on a screen and watched by large groups making it difficult to estimate the total number of viewers. The feedback from the viewers is very encouraging. We will continue to adapt to changes in the technology and ensure that the BCAS continues to reach out to a larger number of the members and shrinks the geographical distances.

The Indian economy has been going through challenging times. This has culminated in lower than 5% GDP growth for two consecutive years, 2012-13 and 2013-14. Sub-5% GDP growth for two years in succession was last witnessed a quarter of a century ago in 1986-87 and 1987-88. The manufacturing sector suffered the most with the growth plummeting from 8.5% in 2011-12 to 1.2% in 2012-13 and 0.5% in 2012-13. With hope to see Achche Din, India gave a decisive mandate in favour of Modi Government and the expectations from the new Government are sky high.

In the budget speech, the Finance Minister Mr. Arun Jaitley referred to aspirational Indians and the neomiddle class demanding better living standards. Also described as an aspirational volcano, the rising India is now assertively demanding improvement in quality of governance that includes better infrastructure, more opportunities, greater choices, and enhanced safety and security. In the past, there have been always gaps in promises made by the ruling combine and the deliveries on ground. The Finance Minister has used to the word “growth” 31 times in one of the longest budget speech in history. It is important that the new Government pursues an all-inclusive growth agenda relentlessly and aggressively to channelise energy of young and rising India in the right direction.

The tax proposals in the Finance Bill carry a significant imprint of the bureaucracy. The tax compliance and dispute resolution remain painful and attempts to address these concerns seem to be inadequate. Aware that the budget will be required to be approved in a very short time, the team BCAS worked very diligently to submit its post-budget memorandum on direct tax and indirect tax proposals. Once again, the Parliamentarians have rushed in approving the Finance Bill without critical and detailed examination of various provisions, some of which appear to have not been thought through entirely. Until and unless the legislative process becomes truly participative and collaborative, the confusion created through continuous tinkering of the laws and bureaucratic red tape will remain a challenge and ease of doing business in India, a mirage!

Several finance ministers have stressed on the need for friendly and conducive tax administration. However, in reality this remains a distant goal. The report of the Committee for Reforming the Regulatory Environment for Doing Business in India chaired by Mr. M. Damodaran submitted last year states: “Despite protestations of an improvement in mind-set, the needless adversary relationship between assessing authorities and the taxpayers continues to be a fact of life. This is further compounded by a perverse incentivisation system in which gross tax collections are treated as a major indicator of good performance.”

The following statistics in this year’s budget documents perhaps quantify the scale of this challenge. The statement of Revenue Forgone states that the Incometax Department received 6,18,806 corporate returns electronically up to 31-03-2014 for the financial year 2012-13, i.e., assessment year 2013-14. These companies reported total corporate tax payable of Rs. 2.64 lakh crore inclusive of dividend distribution tax. In comparison, the receipts budget states the collection of corporation tax at Rs. 3.56 lakh crore during FY 2012-13. Does it mean probably Rs. 1 lakh crore of tax, i.e., nearly 28% of gross corporate tax receipts, is excess collected allegedly through coercion which the government is required to refund subsequently with interest? It is pertinent to note that the tax refunds excluding interest have been increasing over last several years. It amounted to Rs. 83,766 crores during financial year 2012-13 as stated in Report No. 10 of 2014 pertaining to direct taxes by the CAG.

The Tax Administration Reforms Commission (TAR C) in its nearly 600 paged First Report has detailed several actions to enhance effectiveness and efficiency of the tax administration including steps required to contain and obviate the disease of corruption. There is no dearth of ideas, suggestions and plans. The current disturbing state of affairs has resulted from lack of commitment, sincerity and determined efforts. There is a greater need to start the cleansing process from higher echelons.

Our Prime Minister Narendra Modi inspired the cadre of his party with the slogan “Congress mukt Bharat” and achieved a historic win. The citizens of India now hope the Modi Government and the elected representatives will push for “Corruption mukt Bharat” with greater vigour that will herald truly happy celebrations of the Independence Day for the country.

Wishing you a very happy Independence Day in advance!

With warm regards,
Nitin Shingala

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From the President

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Dear members,

With the POTUS (President of the United States) in LOTUS Land as the Chief Guest for the first time at the Nation’s 66th Republic Day celebrations, there couldn’t have been a louder endorsement of India’s growing global importance. It was indeed a step closer in bringing the world’s largest and oldest democracies together. Let’s hope this defining partnership in the 21st Century will lead to greater good, not only for the two Nations, but also for the World at large.

At our first Republic Day in 1950, the architects of our Constitution gave us the longest written and best possible framework that has kept India moving forward as a Nation, even though, there have been 99 amendments so far and the 100th amendment is in the offing. It may be noted that the Constitutional Amendment Bill for the GST is listed as the 122nd Amendment Bill as several previous bills have lapsed.

Regrettably, the awareness about provisions of our Constitution amongst masses remains inadequate, especially about the rights and the duties of Citizens. Besides the customary grand parade on the Republic Day, it is important for the Government to organise programmes to enhance awareness about our Constitution. The BCAS did publish a concise book titled “Fundamental Rights and Duties of Indian Citizens” under Citizens’ Education Series a few years ago aimed at informing citizens about their fundamental rights and duties under the Indian Constitution, as also how to enforce them, say, by filing a petition under Public Interest Litigation process or invoking provisions of Right to Information Act, as expedient, from time to time. India can grow into a developed nation only when its population is transformed into Citizens.

At the recently held ET Global Business Summit, the Hon’ble Prime Minister Narendra Modi upped the ante and invoked the dream of transforming India’s economy from $ 2 trillion to $ 20 trillion. This vision is indeed courageous, ambitious and inspiring. Its pursuit will indeed transform the whole of India. Several international experts at this summit have endorsed the Prime Minister’s vision. The Nobel-prize winning economist Paul Krugman hailed India as a country of the future. Noted scholar Nassim Nicholas Taleb, a distinguished professor of risk engineering at New York University and University of Oxford, remarked, `Democracy makes India more robust than China’.

Nassim Taleb, who has also authored thought provoking and much acclaimed books – Black Swan and Anti- Fragile, makes interesting points that one cannot forecast anything or everything and that forecasting has killed more businesses than anything else. The massive decline in oil prices of over 50% in a very short span of six months, sinking to its lowest levels in over five years, could not have been foreseen by anyone. Such an enormous crash is considered the black swan event of 2014. The falling oil prices are a bonanza to a developing country such as India that relies heavily on oil imports. However, the low prices appear to suggest that the world has not been able to recover fully from the economic crisis, and the global growth could remain a challenge. In an increasingly interdependent world, this does not bode well for any country including India.

The black swan event such as the one above, does raise questions about various financial decision-making and valuation models we frequently use where the shortcomings of underlying assumptions are largely overlooked. Taleb emphasises the need to be antifragile where the cost of error is small and benefits are big. With growing uncertainties, the accountants too will need to continue to evolve in their tools and techniques to overcome Black Swan challenges for their clients and for themselves.

As per recent statistics, there are approx. 60,500 firms registered with the ICAI. Out of this, nearly 97% firms are small or medium sized practices (SMPs) with almost 70% being proprietary concerns and the balance 27% with up to five partners. As such, the CA profession in India is largely dominated by SMPs and is highly fragmented. Only 244 firms have more than 10 partners. The largest firm has 29 partners.

In contrast, a 2014 survey of accounting firms in the UK shows at least 12 firms where the number of the partners exceeds 100. The number of partners at the largest firm is over 1,000. Interestingly, there are only 6,962 registered audit firms as at 31st December 2013 despite there being over 3,27,000 members of various accounting bodies in the UK and Ireland.

What will be the impact of various changes in various fields such as technology, economy and regulatory environment on our profession? Would rotation of auditors and other restrictions under the Companies Act, 2013 prove to be a Black Swan event for our profession? The rate of change coming from so many different directions must lead us to the conclusion that the future will be nothing like the past. Apparently, time seems to be running out for the mom-and-pop firms. In order to survive and thrive, the Chartered Accountants, especially those running SMPs, will need to adapt quickly and collaborate, and that will require the Chartered Accountants to hone their management skills substantially.

At a lecture meeting held recently, our member Milind Kothari discussed in detail the winds of change the CA profession is facing and shared his experience in successfully strategizing for growth. This vital area of practice management, often overlooked as the SMPs get caught in day to day grind, has been a theme of the annual Power Summits that the Information Technology and 4i Committee has been holding for last several years. I am glad the BCAS is playing an active role and has been a catalyst for meaningful collaboration amongst a large number of firms and members.

A pioneer in collaborative learning, the Residential Refresher Conference (RRC) remains the flagship event of the BCAS and continues its gallant march towards the Golden Jubilee. At the recently concluded 48th RRC at Udaipur, the participants acclaimed the high standard of the technical papers and the faculties. With nearly half of the participants from outside Mumbai and from across India, even the RRC provided an excellent opportunity for pan-India networking.

With barely few weeks left for the presentation of the Union Budget by the Finance Minister, the expectations are running high as this will be the first full-fledged budget of the new Government headed by the Hon’ble Prime Minister Shri Narendra Modi.

The BCAS too is preparing for the annual lecture meeting to be addressed for the record 27th year by respected Mr. S. E. Dastur, Senior Advocate. This meeting will be held on 4th March as usual at Dadar in Central Mumbai and will coincide with the release of our Budget Publication. Team BCAS once again looks forward to receiving your overwhelming support as in the past.

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From the President

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Dear members,

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

With warm regards,

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From the President

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Dear members,

At the time of writing this column, the reviews of the first year of Shri Narendra Modi led NDA government are hogging the media limelight with loads of claims and counterclaims, analysing its performance in different areas. A critical factor for any government to succeed is – how well it can transform and direct the bureaucracy in attaining its stated promises.

Believed to be the world’s largest bureaucracy, the Central and various State Governments engaged about 6.4 million employees at all levels as per the report following the first Civil Services Survey conducted in 2010. Notorious for inefficiency, corruption and red tape, the Indian bureaucracy was rated to be the worst in Asia as per an international study conducted in 2012. The study also held it responsible for most of the complaints that the business executives have about India.

The transformation of bureaucracy is not a new challenge and, in fact, was faced by every government in the past. Pandit Nehru considered his inability to change the colonial administration to be his greatest failure as India’s first Prime Minister, identifying it as one of the leading causes of India’s inability to solve the problem of poverty (Tenth report of the Second Administrative Reforms Commission (ARC) released in November 2008).

This ARC report also quotes Mrs. Indira Gandhi, who said, “The problem of administration has added to the difficulties of the country. All along the line, administration has deteriorated – at the Centre, in the States, and even in the lower rungs of the governmental setup. Toning up would have to be done, new procedures might have to be evolved, and even fresh recruitment at all levels would have to be considered”.

The ARC report further states categorically that the change in the civil service has to be drastically transformative, uncompromising and a clean rupture with the past. It admits that the functioning of the civil service is characterised by a great deal of negativity, lack of responsiveness to what the people want and the dictates of democracy. There have been about fifty Commissions and Committees at the Union Government level to look into what can be broadly characterised as administrative reforms since Independence. However, all these efforts have yielded very little .

Globally, the advanced countries have been pushing to reshape rigid, hierarchical nineteenth-century bureaucracies into more flexible, decentralised, citizen-responsive civil services, compatible with today’s technological and economic requirements. Major factors such as performance management, meritocracy, Outcomes/Outputs Framework, etc. are driving the changes.

In various studies, a consensus has emerged that “Performance Agreement” is the most common accountability mechanism in most countries that have reformed their public administration systems with the details of the annual performance agreements and the results of the assessment by the third party being provided to the legislature as a part of the Performance Budget/Outcome Budget.

The United States of America started experimenting with performance management of its staff a long time ago. In 1912, an appropriations act directed the U.S. Civil Service Commission to establish a uniform efficiency rating system for all agencies. Subsequently, the Performance rating Act passed in 1950 required establishment of appraisal systems within all agencies and set three summary rating levels: Outstanding, Satisfactory, and Unsatisfactory.

The Civil Reforms Act of 1978 established the Office of Performance Management (OPM). A regular extension and changes/updates have been the key features of the performance management process deployed in the USA.

The Indian government followed a traditional system of Annual Confidential Report (ACR) where at the end of a pre-set period (usually a calendar year), achievements of the officer were recorded with complete secrecy of the exercise most of the time. The ACR was replaced with the Performance Appraisal when the government notified the All India Services (Performance Appraisal Report) Rules, 2007 replacing the All India Services (Confidential Rolls) Rules, 1970. The reforms in this vital process have been terribly slow. In 2009, the Performance Management Department (PMD) was set up in the Cabinet Secretariat to roll out the Performance Management and Evaluation System (PMES).

As per a very recent news report, the income tax department has decided to overhaul its annual performance appraisal system for tax officials, relying on the quality and effectiveness of their work and not plainly on the quantum of tax demands raised. Let us hope this is well implemented and is effective in achieving its stated objective of reducing frivolous tax demands and becoming taxpayer friendly.

An eminent economist V. K. Ramachandran says: “One of the most important lessons of the economic history of modern nations is that the most crucial requirements of social transformation can only be delivered by the public authority. A government that does not pay for skilled personnel to deliver education, health and land reform is one that condemns its people to under-development.”

In its 2014 manifesto, the BJP committed to taking up administrative reforms as a priority. While the new government has taken several steps such as online bio-metric attendance system, engagement with and empowerment of the civil service, this challenge of vitalising the bureaucracy is huge and a major impediment to realising the NDA government’s ambitious goals such as “ease of doing business in India” and “make in India”. Let us hope that this government achieves a significant success on this front, that will truly help deliver their promise of “minimum government, maximum governance”.

Separately, this is also the annual season of performance appraisal in most mid and large sized firms of chartered accountants following the closure of the financial year. With talent management becoming a major challenge, it is high time that accountants embrace the performance management and appraisal systems wholeheartedly. The performance reviews when done correctly can be positive, and constructive interactions will allow team members to know where they stand and what they need to do to achieve more. They also motivate people to achieve their potential and to contribute more effectively to their firm. Several institutes of chartered accountants, including Australia and England & Wales, have issued a detailed guidance on this subject. I hope the ICAI takes the lead in this area as well and helps the firms in India with required guidance, tools and techniques.

On the BCAS front, I congratulate the Vice President Raman Jokhakar on his unopposed election as the next President. I also congratulate Chetan Shah, on his election as the next Vice President. The managing committee for 2015-16 too has been elected. The new team will take charge at the conclusion of the next AGM on 6th July. Only a few weeks are left before I hand over the reins to young and energetic Raman. And the thoughts about how life will be after that fill my mind, having spent last six years as an office bearer. But more about that next month.

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