Hello everyone. I am Praveen Sharma and I welcome you all on CAclubindia.com.
Once again, we are here with a very special guest!
A man with a great vision, strong integrity and hard discipline with a firm belief and an inclusive growth of accountancy profession. Being a fellow ICAI member with the prudent professional foresight and more than 28 years of immaculate professional standing is being chosen as the supreme torch- bearer of the accountancy profession. We are here with CA M. Devaraja Reddy, the President of the Institute of Chartered Accountants of India (ICAI) for the year 2016-17.
Thank you!Sir, my first question to you is - What is your mission as the President of this revered Institution?
I am very happy that I have taken my charge on 12th Feb as a president of this esteemed institute. And you know, that CA institute is a regulatory body and at the same time taking the education model also. But as a education or regulatory; we have to see the Indian finance side - how it has to be corrected properly and in the process we have to get regulatory confidence and public trust. To have this, we are having a mission and we are going ut-most with all international bodies, the way we are having IFAC in which there are 135 countries as regulatory, we are one of the founder body. With this, having all expertise, we are importing knowledge to all our students here to make them the world class students. World class members will generate from students. With this, the profession will have high standard ethical values so that here and there public are feeling that CA profession is not upto the mark. We have to erase that and we have to showcase; infact, we have public confidence, trust is everything but we were shy earlier not coming to the public forum and informing what we are - that mission we are taking. By the time 2030, surely in India there would be 10 lakh students, and 10 lakh members requirement would be there. That's why; very seriously we want to upgrade the skills of the professional members through our continuous process of educational programme and upgrading our student's knowledge at international standard. At the same time, we are very missioned - the Govt. of India is in a single entry system and we want to make it double accounting system. So, we want to go in road; particularly in railway and defence. Double Accounting system - it helps the economy a lot. At the same time, profession will also get a lot of opportunity. This is one of my mission to see that Indian government takes all department, state and central level - the double accounting system which helps at transparent level and we will have a clarity for the ministry and more accountability across the country from government servants.Honourable Prime minister emphasised a lot on the role of a CA in the society. While addressing the nation he also mentioned CAs have a social responsibility to take care of societies health. As a partner in nation building, ICAI has been contributing and collaborating with the govt. in many initiatives. Would you like to mention some?
If you observe, we got Republic on 26th January, 1950 whereas CA Act was passed on 1st July 1949 - one year before our Republic Day declaration. That means the importance of CA profession is so much that for each government to run, it has to collect revenues. That revenues - it is not possible to collect through government servants - they want a connecting bridge or link, that link is Chartered Accountant profession; whatever the laws - Companies act, IT act, Sales tax, whatever revenue tax act, it has to a knowledge to the general public taxpayers. At the same time, adherence, paying timely advance tax, timely paying self-assessment tax, timely attending the notices, it is not humanly possible by the government servants or government missionary. So, this profession is helping at large. That's why, our Hon'ble Prime Minister Modi ji recognized our importance, how we are working for so many years - from the day we got the independence, the profession is helping continuously. At the same time, recognizing this, if you see the Swachh Bharat Scheme, all the individuals are there as missionaries whereas the CA institute is one missionary and at the same time, this income disclosure scheme has specifically mentioned our Piyush Goel, Suresh Babu and Arun Jaitley ji that CA professionals see that this knowledge goes to everybody. If they take it seriously, then this scheme will be successful. Honestly to the request of the Prime Minister, this income declaration scheme is being taken very seriously. Even, yesterday, we conducted our CA 1st day July where we invited Defence Minister - Manohar Parrikar. He also agreed and said that he had taken lot of benefits when he was Chief Minister of Goa. He has taken his entry tax, central excise, customs many of the issues where the advice of the Chartered Accountants helped him more than the advice of the civil servants, particularly in implementation of many financial schemes of his Goa government. So, as a defence also, he says lot of confusion is there, somehow the budgetary problems are there. He himself advocated that Chartered Accountant should come forward and advice how the ministry works. The ministry is taking lot of initiatives, lot of whatever thought process that are coming in, even the IT - pre-budget, post-budget they are taking and particularly one of our professional members - Suresh Prabhu is a railway minister and has given the railway budgets under ARF (Accounting Research Foundation), we are taking double accounting system of all railway projects, the Kapurthala project, all northern region, we have done. It is very acceptable, the officials who have doubted that double accounting system affects their individuality or their positions, they all are very happy - the way, we have explained the system to them. Now, the entire ministry is very happy to roll-up across the country, all the zones to go double accounting system. We are sure that by the end of next year - March, entire railways are going to adopt double accounting system - it is one of the contributions by the profession to him and the opportunity given by Suresh Prabhu as a railway minister, and if you observe generally the cabinet also, two CA's - Piyush Goel and Suresh Prabhu are at important positions. That is the way, the Prime Minister is making this affect and many of the schemes - wherever is there, different ministries has also started working. Recently, power cup position also, we have given entire accounting suggestion module - they are taking. Many of the places - municipal corporations also taking. That way, we had not started now helping the Government but the day we attained independence, we had started working with the government in different roles. Now also, we are helping and even in banking systems also. People say NPS has also formed because of negligence. It's not because of negligence of auditors but the change of RBI norms; our Reserve Bank of India said off let the vacant and made all the norms changed. If they had made these norms 5 years, 6 years back, this gravity will not be there. Second is, appointment of chartered accountants by independent bank chairman-s is also affecting if Reserve Bank / Finance Ministry / CNDJ / Banking Panel if it takes, then definitely, still working conditions will improve better for the betterment of the nation.And there is, one more initiative that is Go-Green !!
So, Go-Green, we are taking paperless and worldwide there is awareness and here also we are helping the ministry, even Swachh Bharat Scheme also, we are taking a lot of responsibilities. We are having 154 branches and nearly another 100 chapters. Everywhere the members are explaining the Modi ji's plans everything - Make India, Ease India schemes also, we are percolating to all the people. Particularly, somehow the parties where the Piyush Goyal ministry has taken target projects everywhere, voluntarily our members are coming and doing the Auditing work and we are helping the government in quality and proper utilisation of funds of these schemes which are allocated and wherever donated. Even recently the new companies act, 2% all corporates have to send for social responsibility, public utility benefit, there that corporate social responsibility, we are helping particularly the companies, at the same time, the ministry also in various schemes; we have made proper standards and the way we are assisting the government as a professional social responsibility, all ministry everybody is very happy. Whenever the professional bodies are conducting a programme, they are allowed to come and join as chief guest, as guest of honours. This shows how the profession is associating with the government, in helping the economy and reaching the poor and needy, in equal distribution of the earned-profits. Our mission is not that some rich people, some GDP has to be increased. GDP should be distributed between the rich and poor also, uniform equality maximum possible that is one of our missions which we have taken and giving the government good suggestions from time-to-time.Even the President also mentioned, quoting the motto of ICAI that - A CA is a watchman who actually can help in curbing the Black money issue.
Yes, because there are two issues within the country, whatever is happening, Chartered Accountant role is there, we are doing it. Out of the country, we are not having any observations - there we are failing, but within the country, not as a watchman we as a blood hounds. whatever the information we are giving and one thing I can say - not only helping the government, Indian industries now flourish - it is one of the big importance for the Indian industries world- wide. This is happening because of chartered accountancy. There is a saying that behind success of a man, there is a woman behind, like-wise behind success of a businessman, entrepreneur, a CA is there.Sir, GST Law had been passed by lok sabha and is before Rajya Sabha for its approval. The Ministry of Finance has released the draft Model of GST. The provision for audit under Section 42 (4) of the said Model of GST Law may also be examined as a landmark opportunity for professionals. Can you throw some light on these opportunities?
For example, GST makes uniform trading so that equity distribution of employment opportunities, business distribution makes government more comfortable - State & Central governments relations will also improve. Many types of smuggling activities, illegal transactions will be reduced to zero level because of uniform tax system on the account of GST. Now, in GST, in the beginning itself, the CA profession is involving with various countries, in drafting the background material, we have assisted the government a lot, we are having a separate community - indirect tax community - all the expert people are helping the ministry in all different places. Even, we are giving the training across the country - different states, central state levels, so in importing training to them, background material is very much, audit which is giving provision to the auditors, it helps the government to have less time, otherwise going through detailed subject verification where some officials are not having proper knowledge, they may not be in a position to verify the GST provisions properly or not a form. As a self-regulated body which is more accountable and responsible, if we certify, if they take that information, 80% of their work will be reduced. At par, even in the IT department also, now our provisioned tax audit, government is taking only 2% of verification. Here also, if we do the audit, our certification test, it is very much beneficial to government.
It did not increase the staff-base which is very high cost, recently also, one more pay commission has come; the government budget is going to increase year by year like anything. So, in this juncture, taking the help of the chartered accountant, definitely the government helps so in one way the chartered accountants are helping the economy to collect the proper revenues and in turn there is one law in Physics named Newton's Law - 'For every action, there is a reaction'. So, we are helping the government in proper collection of revenues. In the process, we are getting some opportunity in form of consultancy. What I personally feel, the benefit which a chartered accountant is getting is incidental but having the appointment of chartered accountants for certification, the government is getting a lot of benefit in implementation of scheme and bringing awareness to the business community, at the same time government collecting the revenues and more than that government infrastructure, particularly staff will have a lot of less affect cost wise.Sir, ICAI is coming up with new syllabus for Chartered Accountancy Course. Please share latest updates on "Revised Scheme of Education & Training".
I you observe now the modern world, everything is changing. Change is only certain. The change is so much, so fast that sometimes the exponent, so there is no exception for education also. The way, the world has become a small global village, the way different countries' currencies' are coming and the way the technology is increasing, sometimes we have seen the type-writer, now we have to show our children where is the type-writer and paper or photo; type- writer is not there, telephones are missing, earlier it used to take 2 to 3 months to take a telephone, now a cell-phone gets delivered to you at a phone call. The way technology is improving, this has come to CA activities also, physical writing of books of accounts has gone, now computers have come, everything we are doing through computerisation. So, in the process to be updated, at a world-class level, our syllabus also, we are re-visiting and what is the need of the regulators, what is the need of general public, how we can go internationally; keeping this in view, we have made a committee for review of education training, we captured all the people's requirements and we have designed a new syllabus - a new scheme, this we forward to the Ministry of Corporate Affairs, the ministry had agreed and then it goes to the Ministry of Laws which approved it and now it has come. In the new scheme, instead of 10th class, a student now has to reach to the 12th class, that new scheme, instead of calling CPT, we are calling Foundation, so now after 12th class, there has to be foundation, after passing foundation, he will be doing CA inter and final. And, then again at the parallel time, students who are from middle-class family, who may be not that comfortable whether he can complete CA or not, he can join through degree route. A person who completes his degree, he can also join CA without doing the Foundation. This is very helpful for the middle- class students. I will advise as a President, every student across the country, if he comes through degree route, more knowledge, more practical training everything is possible. Once he qualifies, the maturity level will increase. But here only, one clinch is there - commerce students will be allowed at 55%, non-commerce students should have 60%. So, that way the new scheme is going to address everything. We are taking IT initiatives, latest tax laws, latest GST and a new syllabus named IFRS - all the schemes we are making latest and more relevant. If you observe now, 30,000 CA's are across the world because of Indian standards of CA syllabus. Now the syllabus is increasing, Indian CA is going to be a global CA. The new syllabus, we are thinking in the next council meeting, we are going to approve; it goes to the ministry just as a formality, as a public observation, we have to go to the ministry - the ministry will notify, we are expecting our Prime Minister Modi ji's appointment time so that through his hands, we want to launch the syllabus because 8,50,000 students are going to be benefitted, and in other way by 2020, 10 lakh CAs are required for Indian and abroad, whereas presently, we have 2,50,000. It's going to be one of the happening visions, you said earlier what is your vision for this, so making an upgraded syllabus, good students - also one of my visions; and we are going to achieve it shortly within 2 to 3 months.We hope that would happen but don't you think that there are frequent changes in the structure also. For e.g; GMCS One now has been scrapped, on this you will suggest?
If you see the CA syllabus, it's a distance education more. A student should be there for 3 years articleship period. See, initially, when we made it, many students thought that before joining the articleship, they will complete the GMC, so that's why we made before his joining - the orientation and the 100 hours ITT training, then he can go for register in articles. GMC will be done at comfortable level. Unfortunately, all the students after joining the CA articleship, they are disturbing their principal auditors and they are coming into the GMC. So, that's why we thought that again GMC is of 2 ways- General Management Communication skill - once the student knows how to study CA course and immediately, he is going into the industries, audits, everything, how to act, how to do audit - we are giving idea about GMC. Another type of GMC has been created - how to make drafting, how to discuss with the clients, everything, that's why we made a new structure - GMC I; we made entire syllabus in the orientation, so now a student has to complete 100 hours of orientation, ITT training and orientation of 15 hours, this orientation includes GMC I also. So, in that way a student is reduced from the burden of paying a fee of Rs.4,500 also and he is saving time and principal auditor need not waste his time also - student also can continue his 3 years of articleship period. It is only an improvement, it's only a part of the curriculum, changing something is not a disturbance and if you see the syllabus, we had changed it only 7 8 years back, now only it has been changed, it's only some coaching institutions who want to defame the institute and comment that the results are not proper, institute is changing the syllabus; it is to protect the scheme, to showcase that the results are not well, it is to attract the students, it is a gimmick made by the coaching institution.Sir, What are the opportunities for students after becoming Chartered Accountants? Also how your new initiative "Career Ascent" along with Campus Placement Programmes will help students and members.
If you see in India - what is the highest standard course, what is the highly
intelligent or toughest course - people say 'CA'. So, then this toughest CA,
whether you use it or not, I can say what is the value of gold. See, the gold is
always appreciable - safety, security, you can use anywhere, you can even
invest in a bank and take the loans, you can make jewellery, likewise CA course
is multi-purpose. You can work in India or abroad, you can start yourself as
independent practice, you can work for a private industry or can join
government, so the knowledge which ampersands is an entrepreneur, is a
professional, is a good CEO, finance manager - is a business solution. That's
why if we take all Indian private industries, government or private
managements, top level of CFOs, CEOs top level in finance is a Chartered
Accountants. If you go for government, now government also thought all
finance departments they want to take Chartered Accountants. Internationally,
if we go in middle-east countries, the Chartered Accountants role is very high,
the CAs are more entrepreneur soluters. If you go for software IT industries,
hardware engineers are there - project implementation, client designing,
customerization - chartered accountants are helping so that's why the scope is
very high - sky is the limit and just now, I also mentioned that 10 lakh CAs are
required by 2020. We are now in 2016, so by within 4 years, there is a
requirement of another set of lakhs of CAs. We have now 2,50,000 CAs,
another 7,50,000 CAs are required. The way it is and again more
entrepreneurship is also there. So, even a Chartered Accountant is having a
financial support, as Prime Minister is having small entrepreneurs, business
models where 'Make in India' things also, as individual chartered accountants
can make their own business, activities they can guide, that's why Indian CA
today, the way the standards were percolated, he is acceptable across the
country, the benefits are high, I will advise any CA, any member to join CA but
one thing is there - His vision, mission should not pass CA it should become a
passion so I request to every CA student who coming into CA course - he
should do articleship seriously, he should make use of the tools and resources
which are giving under our board of studies; we are having cloud campus, we
are having suggested answers, study materials - all these things - reading,
doing serious articles, he becomes a world class professional. With this, he can
survive anywhere; he cannot even only survive, he can see that 1000 to 2000
families will survive because of his skills. That is what today a CA can deliver;
this is how the students start his journey services, not going to the coaching
institutions - I want to suggest.
You can see we have a committee of members from the industry. This committee takes campus interview 2 times because we are having examination on May and November. After examination is over, results are coming - immediately we are conducting campus interview - all big companies like Tata, Birla, even software companies - they want a world class finance person in their field. Any business decision making, data strategic analysis is most important - a CA is competent to analyze on the information. It is not only inhouse, competitors, world what is happening, unless and until the information comes, they cannot survive. So, the recruitment process is very high, students are getting very good pays - starting minimum 9 lakhs, minimum is 6 lakhs, the way it is going from 8 to 9 lakhs per annum and there are students who are getting 70 lakhs per annum also (may be) Singapore, Malaysia, so the industries which are having their branches in foreign countries, it is going to be 70 to 80 lakhs per annum also and within these years, there's going to be a bright future for them. So, that's why the employment opportunity is very high and for your information, we are having 28 chapters; wherever a CA is there, more than 50 people or from 50 to 100 people is starting a chapter, that chapters also offers a lot of opportunities and for each chapter, we are making a mentor. We are having 32 council members - each council members out of those youngsters who are voluntarily entering council members - each council member is taking care of one or two chapters, so wherever employment opportunities are coming, we want to link them, so this way as a President this year by March next year, I want to see that 5000 to 10000 CAs get outside employment opportunities also by doing very actively through career council committee through our international affairs committee.
So, members particularly, we should keep in mind one thing that we are working for the society; we are not working for us - working for us should be incidental. In the process of enhancing quality, accounting certification, auditing assurance standards, each helps regulators to take properly and in order to help the citizens and people to understand everything properly, we have to upgrade our skills. The knowledge which you acquired at the date of passing is not relevant as day-to-day passes; so I request all the members - involve in the continuous educational programme, update their skills - not only subject-wise, technology is also important; have a passion to that profession, in turn we can get the confidence of public. Public trust is most important - in order to get this trust, we have not only to adhere our knowledge, we have to adhere ethical values and standards also which the profession has made. If you adhere, you are helping your profession, you are helping your family, you are becoming a brand ambassador with the profession, in turn we are becoming the partners in nation building. So, I would request all my colleagues that in order to get public confidence, upgrade your technical skills, follow ethical values with code & conduct and once again I request - let any student who freshly want to join the course come through degree route as it helps their professional knowledge more.Sir, we are very sure that the profession will definitely help the country in building on itself. Once again, I thank you for having this warm & a very insightful conversation.
I am also extremely thankful to CAclubindia for giving me an opportunity to share my thoughts which may help many young friends and colleagues who may change their thought process, who may allow and may make use of my thought process. Thank you very much.