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admin | February 26, 2016
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Expect A Booster Budget 2016

I wonder why we all should be worried about Budget 2016 ?
What Options do the FM has ? He has to come out with renewed promises, smartly use the words Development, Investor friendly, Agriculture, Rural Development, Health, Empowerment, Rurban, NAREGA ( perhaps a new name might be suggested ), Education etc . Than present a statistically consistent and correct numbers for the allocations to each sector. Reveal some further details that are absolutely necessary, like Fiscal Deficit, Revenue targets ..and not many more . And End with a poem or a quote , which is a bit catchy .
I am not ridiculing the massive efforts, but am trying to emphasis that do not expect a sea change when the goings are quite good . I would like to draw a special attention to the fact that the GOI exchequer , after meeting the revenue expenditures, will not and can not have any sizeable surplus. If the government wants to live upto its promises and expexctations. It must have judged the ability and possibility of its own set up to deliver the planned projects and implement the schemes. So What Can We Expect ?
Naturally an investor friendly, corporate friendly , tax payer ( the Savers) friendly, FII friendly, Multi national friendly budget to invest in the economy .It will have to give SOPS to local industries, Start Ups ,the Rural and Rurban Dwellers nad the Common Man .

So it is elementary my dear friends, if there is even a common sense wisdom, the FM will present a budget that will be a booster doze for the economy with a lot of energy which is being wasted.

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admin | February 17, 2016
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The NPA Volcano

I feel RBI deserves full credit for digging the surface of the NPA Volcano before it is too late. We as a nation and I in my individual capacity should be and are proud of their action.

A lot is being talked about NPA and therefore I prefer to be brief and to the point.

1. There is a need to redefine and large and willful defaulters. Their wings have to be curtailed. Some of the ways of curtailing or disciplining them can be :

a) Appointment of auditors should be by consortium of lenders. They should be provided additional special terms of reference.

b) The majority in the Board in no case should be with thedefaulting promoters’ group. Even without holding majority in the Board, the promoters can and should run the unit well within the permissible limit.

c) If, the above fails to remedy the situation, the management should be completely taken over and for that matter, out banking system will have to create a pool of professionals and other promoters with proven track record.

2. Over a long period of my career as a professional CA and with the experience of being professional independent director in one of the nationalised banks, I have seen that the name of the ‘consultant’, ‘adviser’ etc functionaries who peddled the Loan is not referred to in the files once the loan is disbursed and turns into NPA. In fact, there should be a directory of consultants etc. who have played a role during the relevant period.I am sure a clear track will emerge.

3. We need to bring in an element of incentive towards the loan which did not get converted in to NPA. The bank officers responsible and associated with such accounts and also the Borrowers need to be given incentives.

4. A time has come to have a relook at the constitution of the boards of the nationalized banks.Too much presence of Controlling authorities bring an element of undue influence as well.

5. As a practitioner, at BIFR, I also observed the tremendous delays in settling ( if at all it is settled ) a bad loan. The entire legal structure and the legal system needs to be re looked. Mere changing of law ( as envisaged in the amended Companies Act 2013 ) will not be adequate. The parties and institutions involved in delivery of justice needs a closer look. This includes the role and manning of DRTs, ARCs , Legal and other professional fraternities’.

These are some stray observations, but the fact remains that in the Banking Sector a major operation is required.If defaulting promoters are allowed to get away with Restructuring the Loan portfolios and Banks are saved through Injunction of more Capital what I fear is that there would be an indirect incentive for a willful defaulter to first commit a default and then take the bonanza of large scale write-offs and settle it.

Even the banks appear to be in a mood to declare a huge NPAs so that more capitalization is justified.

I am sure the readers will appreciate what I’m trying to point out.

Category: Finances, General, Uncategorized |
admin | May 22, 2015
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Truly Smart Cities

A lot is being talked about “Smart Cities” these days without really knowing what is a Smart City . Everyone seems to be just talking about the better amenities and robust infrastructure that is to be created . But these are mere physical parameters. To be called smart needs some other additional characteristics like the quick decision making process, effective redressals of any complaints or defficulties etc as well ,which alongwith these physical parameters and robust infrastructures should be benchmarks of a Smart City. To be “Smart” . I hope our Smart Policy makers will smartly incorporate these elements in the Governance Systems of the planned Smart Cities
Therefore, I feel that unless we improve the decision making process , the system and ease of providing opportunities and facilities to its habitats, it is premature to really call a City as a Smart City.

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admin | September 24, 2014
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Audit is not the Solution

Currently , after a long time, we are witnessing some debates and discussions on “Audits”.. thanks to some startling revelations by ex CAG, Mr . Vinod Rai. Reading his book, indeed was a pleasure for a professional auditor like me . The book set my thoughts rolling

There are broadly two types of “Wrong Doings” which are revealed

1… That the Revenues have been under recovered , which can lead to huge Undue Enrichment of Private sector entities, and
2… That there are Excessive, unjustifiable expenses, leading to huge Undue Enrichment of Individuals/ corporates

now , here is a “Heads I Win and Tails You Lose ” type of situation.

If you plug the loopholes in revenue collection, than the funds get exposed to undue spending from the Government exchequer ! There seems to be a game of “Catch Me If You Can”, going on against the Auditors , not only in Public Sector , but also in the Private Sector. This is really demoralizing and frustrating in deed.

so what do we gain ? We need to plug all loopholes . This takes us to the basic moral fabric of the society .Unless that is strengthened, even thousands of Vinod Rais will get frustrated .

Category: General, Uncategorized |
admin | September 22, 2014
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PERFORMANCE AUDIT …. WHY NOT FOR LISTED COMPANIES ?

I was reading the recent book ” not just an Accountant ” by Vinod Rai .
An excellent book, worth a read for all auditors, in particular . It narrates the plight and complexities of the task of an auditor very lucidly.

one thing which I clearly noticed was that the real complex findings of the CAG emerged out of the Performance Audit that the CAG is called upon to perform as an auditor . The reason is simple. He is supposed to audit the Revenue and expenses for and on behalf of the people of India. It is the matter related to spending public funds and use of public resources.Hence he is called upon to look at the propriety aspect of the expenditure and conduct performance audit.Quite rightly so .

I am sure you will agree that even the large and listed companies, to a huge extent use public funds and resources. Why should we shy away from getting the Propriety aspect of the audit and performance audits when it comes to regulating audit requirements of such companies . Who should conduct such audit, what should be the Terms of Referance, periodicity and circulation of such reports etc can be brought out for debate and serious mind needs to be be applied at relevant level sonner than later .

Category: Finances, General, Political, Uncategorized |
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