BCAS President CA Narayan Pasari's Message for the Month of March 2018

Dear Members,

By the time you read this, India must have enjoyed and celebrated its most awaited colourful festival of Holi. This year I would like to extend my Holi Greetings, with a prayer for the entire country…that as winter turns into spring, we may all be rejuvenated and allow good to triumph over evil in our lives and the world around us. I also hope that as we splash and frolic in multiple colours, may we accept the diversity of all people and grow together.

Let’s dive into the month that was…beginning with the Budget 2018. It was a witty person who once said, “A budget is what you stay within if you go without.” Our FM Shri Jaitley had to walk a delicate tightrope in allocating adequate resources to only the most compelling issues. The media had a field day in reporting the Budget and all the views and criticism that was generated, but I believe this year’s Budget is an effective and very viable stepping-stone for the economy. It has a very judicious mix of populist initiatives and disciplinary measures that will continue to spur growth in the years ahead. Agriculture, rural development, MSME and the world’s largest healthcare program were the key features of the budget.

With a total expenditure of Rs.24.4 trillion, the fiscal deficit is set to escalate marginally to 3.3% of the GDP in the year ahead. But that was not the big dampener that sent the stock exchanges spiraling downwards. It was the much-anticipated Long Term Capital Gains Tax of 10% without the benefit of indexation. Both individual and institutional investors dumped stocks causing the Sensex to crash over 1100 points wiping around 9.6 lakh crore in just three market days.

This was coincidentally the start of the global mayhem. The US Dow collapsed unexpectedly and dramatically sending ripples across the world. This situation was inexplicable as the World Economic Forum at Davos reported optimism in the growth of the global economy. Trump’s tax reforms were seeing results as corporate earnings and jobs were growing. So, what was spooking the markets? Was it the hardening of US interest rates? Or the expected $1 trillion deficit compounded by dropping tax revenues?

However, a positive aspect was the unanimous agreement of top global leaders at the ET Global Business Summit that India is poised to be a $10 trillion economy by 2030 – that’s four times the current GDP. India could tap into the tailwinds generated by the world economy that’s currently growing at 3.9% to surge ahead at 9% in the years ahead. E-Commerce could also be a key driving force of India’s growth story. With higher internet penetration, e-commerce sales could balloon to $150 billion in 10 years.

India’s meteoric growth will also propel innovation, which will in turn accelerate growth. To achieve all this, India will need to streamline its tax structure, improve digitisation and infrastructure as well as skill its workforce. With international confidence running high, we need to seize the opportunity and reclaim our position as a leading economy in the world.

The talk of the country for the past few weeks has been the PNB scam of Rs 114 million and growing. This perfectly orchestrated scam has devastated PNB’s share value by 25% and has dragged down several other public-sector banks. In the wake of the PNB scam, some more frauds have been unearthed; raising some very pertinent questions.

Hon. PM Shri Modi expressed his displeasure as he declared, “the system will not tolerate loot of public money”. He also took the regulatory institutions to task saying that they need to discharge their responsibility with utmost sincerity and integrity. FM Jaitley too found fault with RBI, management of PNB and the auditors for being unable to detect the scam. He said that, “If you periodically have frauds of this kind the entire effort of ease-of-doing business goes into the background”. He has asked the supervisory agencies to introspect and deploy additional systems to prevent any further recurrence.

The government has made it clear that CAs cannot get away just by citing red flags. It is exploring measures to fix auditor responsibility in frauds. In response to the alleged lapses on part of auditors, ICAI has been proactive. It has served show-cause notices to the auditors. It has requested RBI to share a list of corporate borrowers with over Rs. 2,000 crore loan outstanding in PSBs so that their accounts can be examined for any violation. It has also requested SEBI and CBI to share their findings to enable it to act against any chartered accountant involved in fraud.

After this spell of not-so-good news…here’s a rainbow. Schools in Delhi are soon to have ‘Happiness Classes’. Experts debate on whether it’s a subject that can be taught, but a Good Life course in Yale on similar lines has achieved unexpected popularity. Here are some details that could help us spark some happiness in our lives too!

The course underlines that a pivotal factor of our happiness is our intentional effort – especially practising gratitude and kind behaviours. It cites research which suggests that changing life circumstances won’t make us happy…to be happy we need to consciously work on it. Students are taught that in making others happy, you can make yourself happy. Students use tools from psychology to live their happiness goals. In addition to readings and assessments, the students are encouraged to ‘rewire’ through a series of exercises that make them happier, healthier and resilient. It’s still a new concept, but I hope it catches on and spreads to schools and colleges across India.

This year, Mr. S. E. Dastur, Senior Advocate addressed his last & the 30th BCAS Public Lecture Meeting on ‘Direct Tax Provisions of the Finance Bill, 2018’. Three decades is a long time in any organisation's time span. We at BCAS, were fortunate enough all these years to avail of his masterly analysis year after year. This year apart from the 1,000+ personally present, we had more than 11K viewers from 13 different countries who joined us through Live Screening.

As the Society enters its 69th year of existence, we continue to acknowledge your affiliation with us and value the same. Hope you find this platform adding value and nurturing you to groom yourself in the profession. I request to please renew your Membership & Subscription for the coming financial year 2018-19 to avoid any disruption of BCAS membership benefits. Kindly note, the renewal notice along with the form has been sent to your addresses.

The Society has lined up number of programs in the months of March and April. I request members to take benefit of the same.

Wishing you a Happy Gudi Padwa, Ram Navami, Mahavir Jayanti & Good Friday!

Feel free to write to me on president@bcasonline.org

With kind regards

CA. Narayan Pasari


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