An old debate
Lead us from darkness into light
Visva-bharati represents India where she has her wealth of mind which is for all. Visva-bharati acknowledges India s obligation to offer to others the hospitality of her best culture and India s right to accept from others their best.
-- Rabindranath Tagore
Accountants are not averse to debates. But they are accustomed to do so in a civilized fashion. To them shedding light comes more naturally than generating heat. They often discuss important issues behind closed doors in polite tones. They are careful to ensure that even if one strikes a note of discord, it is not a strident one designed to give offence.
What is alien to them is shrill cacophony of a political campaign. A tiny fringe based in Chennai has recently raised the decibel level of their political agenda. The vast majority in the accounting profession including the Institute of Chartered Accountants of India(ICAI) has chosen to remain silent in public. The Chennai-based CA Action Committee (CAC) is not any part of The Institute of Chartered Accountants of India. It is affiliated to the Swadeshi Jagaran Manch. It has recently published a so-called White Paper. After reading the publication, I thought I should publicly participate in this debate, inspired by a great Chinese statesman Deng who said we must seek truth from facts and not weave fiction from falsehood.
The White Paper actually pays a backhanded compliment to regulators in the US. It selectively lists out companies and auditors abroad who have been fined or have been given parking tickets. There is not a single case study of conviction or any other punishment to an Indian company, its directors or its auditors. I found this troubling.
Concerns about global issues are legitimate. But a forum that claims itself to be Swadeshi cannot keep its eyes wide shut to the ground realities in India. What kind of an Indian Swadeshi would I be, if I am deeply concerned about the ecological impact of the volcanic eruptions in Hawaii, the dwindling Amazon rainforest in Brazil, the endangered giant tortoise in the Galapagos islands but I am unconcerned about the endangered Royal Bengal Tiger, the preservation of the Taj Mahal and millions of people in my own country who live below the poverty line?
I asked myself why there is no reference to the thousands of vanishing companies in India, the successive stock market scams from Harshad Mehta to Ketan Parekh, the Tata Finance problem, the UTI devastation and the numerous frauds that have impoverished small investors and eroded the asset bases of banks and financial institutions by billions of rupees.
We all know that very few perpetrators of owner-induced frauds and corporate crimes are behind bars. Yet not a whisper by CAC. I was reminded of a slogan during my student days. A ginger group of students taunted their Communist colleagues for their obsession with global issues to the exclusion of local issues. The mock slogan ran like this: Bhultey pari nijer naam,bhulte pari baper nam,bhultey pari desher naam bhulbo nako Vietnam.. Translation: I may forget my own name, I may forget my father's name, I may even forget my country's name but I shall never forget Vietnam. Jokes aside, why does the White Paper not deal with problems in India? Because it is easier to preach than to practice and it is easier to talk, than to walk the talk? Or because the hidden agenda is to settle scores with successful Indian professional firms on the basis of grapes are sour?
A profession divided against itself cannot stand. It is a time for courageous leadership that will do what is right for the profession as a whole keeping in mind the national interest. The test of fire will set apart the leader from the by-stander, the statesman from the petty politician and the wheat from the chaff. The profession of accounting has produced stalwarts in the past and I have a deep belief in its resilience and its ability to steer in the right direction collectively even if a stray shepherd loses his way. As Seneca said, If you do not know to which port you are sailing, no favourable wind will help you.
And favourable winds are blowing in India. With the rapid transfer of accounting back offices to India, the Indian accounting profession is at the cusp of a dramatic leap forward. There are vast uncharted opportunities. I believe we, as a country, have the intellectual capacity, the reservoir of human resources and technological prowess to replicate the success of the IT industry, provided we aspire to be global scale, world class and internationally competitive. We have to transform the accounting profession (and I include all accounting professionals, not just members of ICAI).We have to partner with the IT and BPO industries, become technologically savvy and create globally competitive outfits. But we must begin with mindset. We must scale up our vision from that of a cottage industry to a globally competitive player. For this we must join hands and unite. The size of the prize is several billion dollars. Currently, the BPO segment is estimated by Nasscom to be $2.4 billion and it expected to grow 15 times to $21 and $ 24 billion in the next 6 years. Captive centres owned by large organizations like GE, HSBC, Stanchart, Amex, PwC, Citigroup and a host of other companies today account for about 50% of the BPO business in India.. According to NASSCOM, the finance BPO domain generated revenues of $ 450 million in 2002-03. The kind of finance BPO work coming to India covers the entire gamut of services ranging from simple processes like cheque processing factories to complex financial processes. The bottom- end activities include transaction processing, accounting, and fixed assets, account receivable, account payable, cash application and account reconciliation. The mid-tier activities include accounting operations, general ledger consolidation and full cycle accounting. The high-end includes finance planning and analysis, marketing and decision support. With the Indian BPO industry making giant strides, an unrestricted market access in the West is vital. There is a current backlash against Indians. Over time, it will subside as there is a genuine shortage of qualified people in Europe and the USA. Instead of transporting thousands of people cross-border, the work will be digitized and sent across to India .This is a win/win model.
If we now raise the bogey of banning multinational accounting firms, who are deeply rooted in India, some for over 100 years, then we will face needless retaliation. Is it wise for China to demand protection against toys manufactured in America? China has already established its supremacy in toys in the global markets. It does not need any protection. If a fringe group in China foolishly raises this demand it will actually be playing into the hands of a lobby in America who sincerely believe that Chinese toys should be banned because it is destroying employment in the US!!! Likewise, in Finance BPO, India is the leading light.
Advocating free access is the best strategy that India can adopt in Cancun. Had Karl Marx been alive, he might have changed his Manifesto thus: The world is being divided into knows and knows- not .Knowledge workers have nothing to lose but their xenophobia and ignorance. They have a global market to win. Knowledge workers of the world, unite.