Management Accountant Nov 2019

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in November 2019 - The Management Accountant 1

2 The Management Accountant - November 2019 www.icmai.in
Institute Motto
Headquarters असतोमा स गमय From ignorance, lead me to truth Delhi Oﬃce
CMA Bhawan, 12 Sudder Street तमसोमा �यो�त� ् गमय From darkness, lead me to light CMA Bhawan, 3 Ins tu onal Area
Kolkata - 700016 म�योमा�
ृ मत�
ृ गमय From death, lead me to immortality Lodhi Road, New Delhi - 110003
ॐ �ा��त �ा��त �ा��त� Peace, Peace, Peace
www.icmai.in November 2019 - The Management Accountant 3

Editorial vision of “Housing for All by 2022,” and the grant of
infrastructure status to compact, affordable residential
homes saw an increase in the demand for low-cost homes.
T
he real estate sector is one of the most The Securities and Exchange Board of India (SEBI)
globally recognized sectors. The growth has given its approval for the Real Estate Investment
of this sector is well complemented Trust (REIT) platform, which will help in allowing
by the growth of the corporate all kinds of investors to invest in the Indian real estate
environment and the demand for office market. Responding to an increasingly well-informed
space as well as urban and semi-urban consumer base and bearing in mind the aspect of
accommodations. The construction industry ranks third globalisation, Indian real estate developers have shifted
among the 14 major sectors in terms of direct, indirect gears and accepted fresh challenges. The most marked
and induced effects in all sectors of the economy. change has been the shift from family owned businesses
to that of professionally managed ones. Developers have
also undergone major transformations, and the leading
The Indian real estate sector has witnessed high and most trusted developers are looking to provide their
growth in recent times and is expected to contribute valued clientele with added value and holistic living
13 per cent of the country’s GDP by 2025. Retail, experience.
hospitality and commercial real estate are also growing
significantly, providing the much-needed infrastructure
for India’s growing needs.Buyers and investors who Generally, real estate or construction sector is known for
were earlier undecided, are now actively looking for high degree of uncertainty exposed with cost escalation
homes, as the overall real estate market in the country and a commitment in completing projects, however, it
has seen an upward movement. requires a clear and tight control of costs at every stage to
run on the wheel of profits. CMAs here can play crucial
role in real estate accounting and strategic decision-
The Indian real estate and construction sector has making. The CMA practitioners are authorized to act as
witnessed both disruption as well as optimism with a “Valuer” in respect of financial valuation under section
slew of reforms being implemented. Rapidly evolving 2(zz) of the Securities and Exchange Board of India (Real
technology is redefining how real-estate business is Estate Investment Trusts) Regulations, 2014 as amended
conducted and managed in India. Real estate operators
REAL ESTATE INVESTMENT AND CAPITAL MARKETS
on November 30, 2016. As per Section 56 of the Real

are progressively exploring opportunities to harness Estate (Regulation and Development) Act, 2016, Right
this ‘big data’ and develop building automation and to Legal Representation – the applicant or appellant may
resource management systems for commercial and either appear in person or authorize CMA to represent his
private spaces to maximise comfort, environmental or its case before the Appellate Tribunal or the Regulatory
quality and sustainability. Despite all this, there is a Authority or the adjudicating officer, as the case may be.
strong need for public-private-partnerships and private
ventures for improving efficiencies in the real estate
ecosystem. This issue presents a good number of articles on the
cover story theme ‘Real Estate Investment and Capital
Markets’ by distinguished experts and authors. To make
The three major reforms in the recent past – the the issue more informative and stimulating we have
introduction of GST, the launch of RERA (Real Estate included Special Article related to a significant event of
Regulation Act, 2016) and the grant of infrastructure recent times.We look forward to constructive feedback
status to affordable housing properties – have had from our readers on the articles and overall development
a massive and positive impact on the industry. of the journal. Please send your mails at [email protected].
Today, the results of the RERA can be seen – it has We thank all the contributors to this important issue and
increased transparency in real-estate deals, improved hope our readers enjoy the articles.
accountability of builders, which in turn has led to
increased demand from buyers.GST has made it easy
to do business in the country, seeing a marked increase
in infrastructure developments and other real-estate
projects.
The Smart City Project, where there is a plan to build

100 smart cities, is a prime opportunity for the real estate
companies. Under the Pradhan MantriAwasYojana
(PMAY) Urban, more than 8.09 million houses have
been sanctioned up to May 2019.The government’s

Full Page- 197x267.indd 1 10/31/2019 4:20:39 PM
PAPERS INVITED
Cover Stories on the topics given below are invited for ‘The Management Accountant’
for the four forthcoming months
• Technological transformations and diversities in Start ups
• Startup India – the next big theme for Economic Growth
December 2019
• Challenges faced by Startups in India

Subtopics
Startups • Angel Investment Ecosystem in India

Theme
• Edtech Startups: a Ray of Hope for transforming the Learning Experience

and • Healthcare Startups: Fitness & Wellness
Entrepreneurship • Fintech Startups : paving way for a financially smart India with Global Recognition
• AgriTech Startups: leading India’s next green revolution
• Identifying opportunities for growth and addressing constraints for successful, innova-
tive Startups and Entrepreneurship - Role of CMAs
• Leveraging the power of Artificial Intelligence

• Mega Bank Merger Drive: Most preferred technique for attainment of Competitiveness,
Growth and Sustainability
January 2020
Subtopics
• Interest Rate Risk Management

Steering
Theme
• The Digitalisation of SME Financing: Expanding the Rewards and Assessing the Risks
Transformation • Digital Lending: Driving the Next Wave of Loan Innovation
in Banking • Data & Cyber Security in Banking
• Investment opportunities in stressed assets
• Corporate Insolvency Resolution Procedure
• Challenges and roadblocks for the New-Age Banking: Catalytic role of CMAs to rise above
the barriers
• Arbitration and Conciliation (amendment) Act, 2019: Expansion of scope for

the CMAs
February 2020
• Arbitral Award: Challenge & Enforcement

Subtopics
Arbitration and • Institutional, Statutory and Ad-hoc Arbitration

Theme
Conciliation: • Legal issues that arise in the context of Online Dispute Resolution
Challenges and • Arbitration of Intellectual Property Disputes
• Recent Developments in International Commercial Arbitration
Prospects • Arbitration: Significantly Important Supplement to Enhance Ease of Doing
Business
• Making India an Arbitration Hub
• Removing Structural Barriers towards Gender Equality and Women’s Empowerment

• Women Empowerment - the key to achieve Social & Economic growth of the country
• Women in Business Decision-making
March 2020
The Next Gen

Subtopics
• Role of Judiciary in Empowering Women in India

Theme
Women: Equal • Crimes against women- a blot on Gender Equality and Women Empowerment
Rights, • Challenges of Women Entrepreneurship
Opportunities and • Impact of Globalization on Women Entrepreneurship
Participation • Women Entrepreneurship in the Tech-driven era
• Challenges and Hurdles in the Journey of Women Empowerment
• Women & Economy: The Indian Perspective
The Above Subtopics are only suggestive and hence the articles may not be limited to them only.
Articles on the above topics are invited from readers and authors along with scanned copies of their recent passport size
photograph and scanned copy of declaration stating that the articles are their own original and have not been considered
for anywhere else.
Please send your articles by e-mail to [email protected] latest by the 1st week of the previous month.
DIRECTORATE OF JOURNAL & PUBLICATIONS

CMA Bhawan, 4th Floor, 84 Harish Mukherjee Road, Kolkata - 700025, India
Board: +91 33 2454 0086 / 87 / 0184 Tel-Fax: +91 33 2454 0063
www.icmai.in

PRESIDENT’S
COMMUNIQUÉ
CMA Balwinder Singh

President
The Institute of Cost Accountants of India
to participate. I earnestly request all the members

of the Institute to attend this Global Summit of the
Institute in large numbers to show the strength of
CMA profession.
16th National Awards for Excellence in Cost

Management-2018
“
I am pleased to inform that the Institute has
successfully conducted the award presentation
Vidhya Vichari Te Parupkari – ceremony of 16th National Awards for Excellence
in Cost Management on 25th October 2019
Contemplate and reflect upon in New Delhi. Shri Anurag Singh Thakur,
knowledge you will become Hon’ble Union Minister of State for Finance
and Corporate Affairs graced the occasion as
benefactor to others” Chief Guest and Shri Subhash Chandra Garg,
– Adi Sri Granth Sahib Secretary, Ministry of Power as Guest of
Honour of the awards presentation ceremony.
Hon’ble Minister Shri Anurag Singh Thakur and
My Dear Professional Colleagues, Shri Subhash Chandra Garg, Secretary, Ministry
of Power has presented National Awards for
Global Summit 2020 Excellence to 26 awardees. I congratulate all the
I am pleased to announce that the Institute is organizing Awardees for their excellent performance and look
a knowledge-sharing forum in the form of Global Summit forward to the Corporates to inculcate the culture
on 9th -11th January 2020 at New Delhi. The theme of of Cost Optimization.
the summit is “Mission 5 Trillion – CMA as a Cryogenic Hon’ble Minister while presenting the
Force” that aligns with the goal set by Hon’ble Prime 16th National Awards for Excellence in Cost
Minister of India. In today’s business environment, Management 2018 has appreciated the efforts
Management Accountants act as a cryogenic force who are made by the Institute to recognise the significant
very highly productive and show super performance even role of CMA profession in the growth of Indian
in extremely cold and stagnant situations so as to generate Economy. He appreciated the CMA fraternity
adequate force that is required to give a big push to the for the skills and efforts and providing excellent
economy. support to the Government Initiatives.
The Summit will be addressed by eminent persons Guest of Honour, Shri Subhash Chandra Garg
holding high positions in the Government, Industry leaders appreciated the efforts made by the Institute to
and management experts. Many professional Gurus from recognise the significant role of CMA Profession.
USA, UK, Australia, China, Germany, Japan, South Africa, He expressed his satisfaction that the Institute has
South Korea, & Singapore have consented to share their grown and he is proud to be a fellow member of
knowledge & experience at the Summit. About 2,000 the Institute.
delegates, including 150-200 foreign delegates, are expected

PRESIDENT’S COMMUNIQUÉ
I am pleased to share that CMA Chittaranjan

India ranks 63 in World Bank’s Ease of Doing
Chattopadhyay, Council Member, CMA Raju Iyer,
Business Index
Council Member and CMA S.C. Gupta, Secretary
I take this opportunity to congratulate the Government (Acting) of the Institute extended greetings to CMA
of India for all its initiatives leading to improvement in Amitabh Banerjee, Managing Director, Indian Railway
the rank of the Country to 63rd in 2019 survey of World Finance Corporation Ltd on 24th October, 2019.
Bank. The World Bank released its latest Doing Business
Report (DBR, 2020) on 24th October 2019. India has
recorded a jump of 14 positions against its rank of 77 in Students Felicitation and events at Thrissur
2019 to be placed now at 63rd rank among 190 countries I am delighted to share that I had an opportunity
assessed by the World Bank. India’s leap of 14 ranks to be present at the felicitation programme organized
in the Ease of Doing Business ranking is significant by Thrissur Chapter and Profinz Extension Centre
considering that there has been continuous improvement of Thrissur Chapter for the successful students on
since 2015 and for the third consecutive year India is 12th and 13th October 2019 at Thrissur, Kerala. Ms.
amongst the top 10 improvers. As a result of continued Mereena Paul, Co-Founder & HR Head, ESAF Small
efforts by the Government, India has improved its rank Finance Bank graced the occasion as Chief Guest and
by 79 positions in last five years. Shri C P Gireesh, CFO ESAF Small Finance Bank as
Guest of Honour on 12th October 2019 in the event
organised by Extension Centre of Thrissur Chapter.
Companies (Cost Records and Audit) Amendment
Shri K Sankaranarayanan Ex-Governor of Maharashtra,
Rules 2019
Nagaland & Jharkhand inaugurated the event on 13th
The Ministry of Corporate Affairs (MCA), October, 2019 organised by Thrissur Chapter. The
Government of India issued Companies (Cost Records award to the candidate securing first position in the
and Audit) Amendment Rules 2019. Taking swift essay competition was also presented in the event.
action, the Institute took up the matter with Advisor
A member meet with the President was organized
(Cost), Ministry of Corporate Affairs for early release
by the Thrissur Chapter on 12th October 2019 where
of XBRL tool and extension of date of filing of CRA-
various initiatives taken by the Institute for the growth
4. Consequently, the circular for the same was issued
of the Profession and steps to enhance the services to the
by the MCA. Ministry of Corporate Affairs has issued
members and students were discussed at length.
a Beta version of XBRL Tool on the XBRL Portal for
stakeholders to validate their instance documents for Further, I got the opportunity to flag off Go Green
Costing Taxonomy 2019. Interested stakeholders may walk organized by the extension center of Thrissur
visit http://www.mca.gov.in/XBRL/index.html. The Chapter.
consolidated document of Cost Rules updated up to this CMA H Padmanabhan, Council Member, CMA Dr.
amendment has also been uploaded on the Institute’s PVS Jagan Mohan Rao, President SAFA, CMA Jyothi
website for convenience of stakeholders. Satish, Chairperson SIRC of the Institute graced the
events with their benign presence at Thrissur Chapter
and its extension center on 12th and 13th October 2019.
Meeting with VIPs
I am happy to share that I along with CMA
Chittaranjan Chattopadhyay, Chairman, Banking & Thirteenth meeting of the Committee to advice on
Insurance Committee, CMA Neeraj Joshi, Chairman, Valuation Matters
Cost Accounting Standards Board and CMA (Dr) Ashish I wish to inform that I attended the thirteenth
P. Thatte, Chairman International Affairs Committee meeting of the Committee to advise on Valuation
met Shri Pallav Mahapatra, Managing Director and matters held on 3rd October 2019 at Indian Institute of
CEO of Central Bank of India on 23rd October 2019 Management Bangalore at Bengaluru in order to widen
and discussed the role of Cost Accountants in Banking the consultative process and to discuss the present
Sector and also submitted various representations for his scenario, international best practices, prescriptions as
kind consideration. per International Valuation Standards, suitability for the
I am pleased to inform that CMA Biswarup Basu, Indian context and the departures required, if any.
Vice President and CMA Chittaranjan Chattopadhyay,
Council Member of the Institute felicitated Dr. Sugata Roundtable meeting for Valuation Professionals
Marjit, Professor of Indian Institute of Foreign
I am pleased to share that I had an opportunity to chair
Trade (IIFT) and former Vice Chancellor of Calcutta
a Roundtable stakeholder meeting organized by the
University. In another meeting, CMA Chittaranjan
Institute in association with IBBI on 5th October 2019 in
Chattopadhyay, Council Member, CMA Harijiban
Chandigarh to deliberate on Institutional Framework for
Banerjee, Past President felicitated CMA Dipankar Das
Regulation and Development of Valuation Professionals.
Purakayastha, MD & CEO of ABP Pvt. Ltd.

To apprise all the members of the activities / initiatives • State Level ROCCs Meet
undertaken by the Departments/ Directorates of the The Directorate of CAT organised State Level ROCCs
Institute during last month, I now present a brief meet for the States of Andhra Pradesh & Telangana
summary of the activities: and Kerala on 15th & 22nd September 2019 at
Visakhapatnam and Thiruvananthapuram respectively.
BANKING & INSURANCE COMMITTEE The agenda of the meet was to have a discussion with,
and amongst the ROCCs to have a feedback of the
During the month Chairman of Banking & Insurance
CAT Course, to understand the challenges faced by the
Committee connected with the various authorities for
ROCCs in meeting the goals & the ideas to overcome
widening the scope for CMAs. He met Mr. Deepak
those, to maximise the number of admissions in CAT
Godbole, Secretary General, Insurance Institute of
course, and to formulate strategies for expanding
India for working jointly towards the role of CMAs
awareness about the course.
in the Insurance Industry, Dr. J N Misra, CEO, Indian
Institute of Banking & Finance for enhancing the skills The meet at both the places received excellent
of both Banking & Costing professionals, Shri Fernando response from the ROCCs and many ideas, strategies,
de Navarro Menezes, President, Information Systems plans and suggestions for the betterment and expansion
Audit and Control Association for value addition of of CAT course were received during the discussion.
CMA profession and Shri D K Malhotra, Senior Advisor The relevant ones have been noted and being seriously
Retail & Social Banking Department Indian Banking worked upon by the Directorate of CAT. The Directorate
Association for inclusion of CMAs for Entity Proof will hold similar meets in future, in other cities too, to
Certification for opening of Current Account and various get valuable feedback of the stakeholders.
other Certifications. CMA H Padmanabhan, Chairman, CAT Committee
chaired the meeting at Visakhapatnam and the meeting
held in Thiruvananthapuram was chaired by me wherein
DIRECTORATE OF CAT
CMA H Padmanabhan Chairman, CAT Committee was
• New ROCCs also present.
The Directorate of CAT constantly endeavours to
mark its presence evenly in the country by getting the
MEMBERSHIP DEPARTMENT
new Regional Oral Coaching Centres (ROCCs) on
board. In a bid to doing so, it has approved two new I am delighted to share that 118 Associate
ROCCs in the cities of Malappuram (S-208) and Jaipur memberships and 29 Fellowships were granted in
(N-238). It was my pleasure to inaugurate ROCC S-208 the month of September 2019 which was followed
at a function held in Thrissur, in the presence of CMA by granting of 171 Associate memberships and 47
H Padmanabhan, Council Member and Chairman CAT Fellowships in the month of October 2019. I take this
Committee, CMA Dr PVS Jaganmohan Rao, President opportunity to congratulate and welcome all of them.
SAFA and CMA Jyothi Satish Chairperson ICAI SIRC.
The establishment of these new ROCCs shall be a matter MEMBERS IN INDUSTRY COMMITTEE
to cheer for the aspirants of CAT course living in these
Members in Industry Committee organised a
cities and nearby cities and towns.
program on ‘Decoding of Companies (Cost Records
& Audit) Rules, 2014 and its amendments’ on 18th of
• CAT Course under SHE Skills-2019 scheme of October, 2019 at JN Bose Auditorium of the Institute
Government of Kerala Headquarters. The program was graced by former
The State of Kerala has always been the frontrunner Presidents of the Institute CMA Harijiban Banerjee,
of the CAT Course, from where the Institute gets and CMA Kunal Banerjee, Council Member CMA
highest number of admissions in the course. The Chittaranjan Chattopadhyay and Practicing Cost
course in this state ran under the Additional Skills Accountant CMA S. S. Sonthalia. After the inauguration
Acquisition Programme (ASAP) model-an initiative of session, followed the two technical sessions. The first
Government of Kerala, successfully, for a long period. technical session was deliberated upon by CMA Kunal
The association with ASAP will be going for another lap Banerjee, former President of the Institute. The second
as it has approved 12 Centers under its scheme, wherein technical session was deliberated upon by CMA S. S.
a total of 368 students will be imparted CAT course Sonthalia, Practicing Cost Accountant. The members got
training under SHE Skills scheme. A meeting with an excellent opportunity to resolve their enquiries from
ASAP, Government of Kerala in connection with SHE the well renowned and expert speakers on the subject.
Skills-2019 scheme was held on 25th October, 2019 to A seminar by Directorate of Studies was organised
review the progress. on ‘Ease of Doing Business in India for the year
2019- Reforms’ was organized on 30th October 2019

at the Headquarters of the Institute in association with and so on. I am sure the members were immensely
Ministry of Corporate Affairs, Government of India. benefited with these programmes.
CMA Debasish Bandopadhyay, Regional Director,
Eastern Region, Ministry of Corporate Affairs graced the
REGIONAL COUNCIL AND CHAPTER
occasion as the Chief Guest and delivered his address
COORDINATION COMMITTEE
on Ease of Doing Business in India. Shri K G Joseph
Jackson, Registrar of Companies, West Bengal, Ministry As mentioned in my earlier communiqué The Institute
of Corporate Affairs and CMA J C Agarwal, Chairman, has held State Level Chapters Meet in some states to
Pratap Synthetics limited were the Guests of Honour address contemporary issues faced by Chapters. The
of the Seminar. The Seminar was chaired by CMA month of October 2019 witnessed the 6th State Level
Chittaranjan Chattopadhyay, Chairman, Banking and Meeting for the state of Karnataka, held in Bengaluru
Insurance Committee. on 20th October 2019 under the Chairmanship of
CMA H Padmanabhan. It was a State Level Event with
participation from throughout the State with team TRD
PROFESSIONAL DEVELOPMENT & CPD ICAI taking pivotal role. It is decided to support smaller
COMMITTEE Chapters in organising Institute programs on need basis.
I am glad to inform you that on the Institute’s I am confident such State Level Chapters Meets will
representation, IRCON International Ltd. has considered go a long way towards implementing the Institute’s
Cost Accountants for Review and Testing of Internal goals and objectives right down to the Chapters at
Financial Controls work, Sidho Kanho Brisha University micro levels as Chapters are the building blocks of our
included Firm of Cost Accountants for conducting Institute.
Internal Audit and National Bicycle Corporation of India
Ltd. (NBCIL) included for Internal Audit.
TECHNICAL CELL
The first meeting of the Technical Cell for the year
• Representations with Government, PSUs,
2019-20 was held in Mumbai on 1st & 2nd October
Banks and Other Organizations:
2019. The Technical Cell has uploaded on the website of
PD Directorate as a proactive measure regularly the Institute, its responses to around 75 queries placed
sends representations to various organizations for by the members / stakeholders. This will serve as FAQs
inclusion of cost accountants for providing professional on Cost Rules, Cost Audit and related matters.
services. Airport Authority of India, Jamnagar, India
Government Mint Kolkata, Diu Higher Education
Society, Diu College, Satluj Jal Vidyut Nigam (SJVN) • Symposium on Cost Audit by Technical Cell in
Thermal Pvt. Limited, Hutti Gold Mines Company Mumbai on 20th December 2019
Limited, National Backward Classes Finance and The Technical Cell is organising a Symposium on Cost
Development Corporation (NBCFDC), Sidho Kanho Audit in Mumbai on 20th December 2019 at YB Chavan
Brisha University, Ircon International Limited, National Auditorium. Eminent speakers representing various
Bicycle Corporation of India Ltd. (NBCIL), Indian Stakeholders will express their views on the Value
Institute of Management Jammu (IIMJ), National Health addition through Cost Audit & further expectations from
Mission, Uttar Pradesh, Hyderabad Metropolitan Water this mechanism. The Symposium is aimed at showcasing
Supply and Sewerage Board, CSIR- Indian Institute of the value proposition of the Cost Audit Mechanism. I
Petroleum (IIP), Dehradun were sent representations urge the members of the profession to support the event
during the month. The CGST Audit-1 Commissionerate, and make it a grand success. Necessary details are
New Delhi, Garden Reach Shipbuilders & Engineers available on the Institute’s website.
Limited (GRSE), etc., have included Cost Accountants
in their Tenders/EOIs during the month of October 2019.
TAXATION COMMITTEE
During the month, Regional Councils and Chapters
The Tax Research Department has released its 2nd
of the Institute organized 55 programs, seminars and
Anniversary Tax Bulletin (49th Tax Bulletin) on
discussions on the topics of professional relevance and
2nd October 2019. Two years ago the Tax Research
importance for the members such as, The Companies
Department started publishing this bulletin on fortnight
(Cost Records and Audit) Amendments Rules,2019,
basis and within this short span of time this bulletin has
GST - Sabka Vishwas- Legacy Dispute Resolution
become a made-easy for the stakeholders. These Tax
Scheme, Role of CMA In Business Process Excellence,
Bulletins containing Articles on critical issues of Direct
Insolvency & Bankruptcy Code 2016 - The Game
and Indirect Tax, It acts as a single destination for all
Changer, Costing-Fertilizer Industry, Ease of Doing
the Taxation related information, arranged webinars,
Business in India, Income Tax E-Assessment Scheme
seminars, conducted various taxation courses.
2019, Unique Document Identification Number (UDIN),

Two seminars have been conducted this month on Ltd., Maersk Global Service Centres (India) Pvt. Ltd,
Indirect Tax in Kolkata and Pune on the burning topics Tube Investments of India Limited, MECON Limited,
Sabka Vishwas (Legacy Dispute Resolution) Scheme Cipla Ltd., Prism Johnson Limited, Bharat Electronics
2019 and New Return Filing under GST, Intricacies of Limited, Hathway Cable & Datacom Ltd - Reliance
GST Audit. A Handbook on Sabka Vishwas (Legacy Group Company, DEN Networks Limited - Reliance
Dispute Resolution) Scheme 2019 has also been released Group Company, GST Suvidha, Avenue Supermarts
in the Seminar conducted at H.Q Kolkata on 24th Ltd. (D-Mart) and KD Practice, PWC, Capegemini,
October 2019. Beside this, 4 Webinars on the Direct Tata Motors Limited, Grainspan Nutrients Pvt. Ltd., and
Taxes (TDS notices from Dept & Related penalties Sreeleathers participated in these campus placement
and Deductions under Chapter VIA and Indirect Taxes drives and recruited fresh CMAs.
(Annual Return - GSTR 9A and E invoicing & Matching I am happy to announce that series of CMA Extended
process Under GST) have been conducted this month. Campus Placement Programmes will be conducted
The Tax Research Department has celebrated Direct during November and December 2019 at various
Tax Month from 5th September to 5th November, 2019. locations across the country. More new companies have
I appreciate the comprehensive support of Regions, started enlisting for these placement drives to recruit
Chapters for organising Seminars in last 2 months fresh CMAs. I wish all the qualified CMAs of this term
on the topic “Income Tax Act and Direct Tax Code – a very successful and bright professional career ahead.
Expectations and Way Ahead” to celebrate Direct Tax
Month.
INSOLVENCY PROFESSIONAL AGENCY (IPA)
The TRD has submitted a representation in October OF INSTITUTE OF COST ACCOUNTANTS OF
2019 – “Inclusion of Cost Accountants (CMA) for INDIA
GST Related work at Jaipur office under “Domestic
The Insolvency Professional Agency of the Institute
Competitive Bidding” (Tender reference GAIL/C&P/
organized various Round table Interactions, workshops
JPR19AV124/2019-20 E-Tender No 8000015769 dated
and webinars during the month on:
03.10.19)”
• Orientation Program on IBC on 16th October
On 11th October 2019, CMA Niranjan Mishra,
2019
Chairman, Indirect Taxation Committee, CMA Rakesh
Bhalla, Chairman, Direct Taxation Committee along • Roundtable on Verification of Claims on 18th
with CMA Navneet Jain, Former RCM-NIRC met Ms. V October 2019
Usha, Pr. Commissioner (CX), Central Board of Indirect • Certificate Course on Group Insolvency on 19th
Taxes and Customs, Ministry of Finance, Government October 2019
of India. I wish prosperity and happiness to members, students
The Certificate Course on GST (5th Batch) is going on and their family on the occasion of Id-e-Milad,
PAN India basis through Online Mode as well as Offline Kartik Poornima & historic 550th Guru Nanak Birth
Mode. There has been a remarkable response from the Anniversary and wish them success in all of their
Colleges and Universities for the crash course on GST endeavours.
conducted by TRD. Many Colleges are willing to start
the crash course of 32 hours.
Thanking you,
In the month of November a Seminar at Islamic
Center on the Topic “Sabka Vishwas (Legacy Dispute
Resolution) Scheme 2019” is proposed to be organised. Warm Regards,
TRAINING & PLACEMENT DIRECTORATE

I am pleased to share that the Placement Cell of the
Institute has successfully conducted CMA Campus
Placement Programmes at Kolkata, Delhi, Chennai CMA Balwinder Singh
and Mumbai for June 2019 batch of recently qualified
CMAs. November 5, 2019
Reputed companies including ITC Limited – Hotels
Division, Foods Division, Tobacco Division, Nestle,
L&T Construction Ltd, WIPRO, RSM Astute Consulting
Group, Vedanta Limited, Power Grid Corporation of
India Limited, Invenio Business Solutions, CITCO
Shared Services India Pvt. Ltd., Galaxy Surfactants

CHAIRMAN’S COMMUNIQUÉ
TECHNICAL CELL - ICAI
CMA (Dr.) Dhananjay V. Joshi

Former President, ICAI and
Chairman, Technical Cell (Cost Audit, Compliance & Others)
to contribute the cases wherein the companies have been

benefitted by your suggestions / opinions. You are requested
to provide the same in the format of case study as per the
specified guidelines available on the website. It is believed that
such a published document will enhance the value of Cost
Records and Cost Audit mechanism and will also recognize
the contribution of CMAs in the growth of Industry and
economic development of the country. It will also serve as
guidance to the CMAs in identifying the areas of Value Addition
through this Mechanism.
Dear Professional Colleagues, 4. It was suggested by the Technical Cell that in order to improve
Greetings from the Technical Cell of the Institute; the Board Governance and to indicate the sustainability of
I
the Company, some indicators showing the efficiency and
am thankful to the Council of the Institute for reposing faith in
profitability of the Company can be included in a specified
my capabilities and reassigning me the responsibility to Chair
format in the Annual Report without compromising the
the Technical Cell of the Institute for the year 2019-20. I convey
confidentiality of the cost audit data. To suggest the Format
my sincere gratitude to everyone, who supported the activities of the
& Contents of the proposed disclosure of Cost Audit Report
Technical Cell during the previous year. I am sure that the reconstituted
in the Annual Report of a Company keeping an eye on the
Cell will come out with better outputs for the benefit of members,
confidentiality of the Cost Audit Data, a small group of the
profession and the Institute.
Technical Cell was formed which will hold discussions on the
The journey of the Technical Cell (2018-19) started last year from subject matter and present its report within one month to the
Delhi and after convening meetings at Bangalore, Pune and Kolkata it Technical Cell.
culminated in Delhi. I am quite satisfied with the journey of the Cell and
5. As you are aware that the Cost Auditor has to comment on
thankful to the President, Vice-President and the Council for extending
“Adequacy of the system of Internal Audit of Cost Records” in
wholehearted support to the Cell, due to which it could bring out useful
his Cost Audit report, however there is no literature available
publications, respond in a time bound manner to the queries, issue
on the subject. It was also observed that there is a gap in the
advisories & guidelines and organise consultations with the practicing
understanding of the Auditee companies as to the Internal
members of the Institute in order to capture their views and suggestions
Audit of Cost Records. To bridge this gap it is necessary to
on the relevant issues.
provide guidance to the Cost Accountants and Industry on the
I am very happy to inform you that the first meeting of the Technical subject. I myself will take up this responsibility to prepare
Cell for the year 2019-20 was held in Mumbai on 1st & 2nd October 2019. the publication on Internal Audit of Cost Records with the
The Technical Cell has taken up varied issues and intense discussions practical experience and knowledge of our own CMAs. I
took place in the meeting. Some of them are summarized hereunder for request the members of the profession to contribute their inputs
your information: for such publication. The Technical Cell will try to bring out this
1. The Cell decided to upload on the website of the Institute, publication in the Symposium on Cost Audit on Friday, 20th
its responses to around 75 queries placed by the members December 2019 in Mumbai.
/ stakeholders. This will serve as FAQs on Cost Rules, Cost 6. There are various sectors covered under the cost audit
Audit and related matters. The responses will be available on the mechanism, on which development of guidance notes is the need
Technical Cell portal of the website very shortly. of the hour for the benefit of the members and industry such as
2. I firmly believe that the Cost Audit mechanism has a great Ports and Airports. Guidance notes for those prominent sectors,
potential to add value for all its stake holders. Technical Cell which are not covered under the cost audit mechanism, are also
is organising a Symposium on Cost Audit so as to get feedback to be developed by the Technical Cell like Banking; Insurance;
from the Stakeholders on how the Cost Audit adds value for Hotels, Resorts and Serviced Apartments; Warehousing and
them and their requirements from this mechanism which can logistics; Entertainment & Event Management and Information
determine the future developments. With this objective in Technology. I take this opportunity to request the members of
mind the Technical Cell of the Institute is organising this the profession to come forward and take up the responsibility
Symposium on Cost Audit – Stakeholders Value Proposition of developing the Guidance Notes. We will be uploading a
on Friday, 20th December 2019 in Mumbai. There will be comprehensive note on the website for the members / prospective
sessions on Government & Regulators, Industry & Industry resource persons to take up the assignments.
Associations and Society at Large wherein eminent speakers I am looking forward to your constructive suggestions for the
representing various Stakeholders will express their views on the development of profession and institute. Please feel free to communicate
Value addition through Cost Audit & further expectations from with us on [email protected] with regard to your professional
this mechanism. The Symposium is aimed at showcasing the queries, suggestions and imputs.
value proposition of the Cost Audit Mechanism. I request you
I wish grand success in all of your endeavors.
to block your dates to attend the symposium and make it a grand
success. Further details are already on the Institute’s website. With warm regards,
3. It was decided last year that the Technical Cell should document
the suggestions given by our Cost Accountants whether working
in industry or in practice, to their companies or clients subject to
CMA (Dr.) Dhananjay V. Joshi
maintenance of Cost Records or Cost Audit. These suggestions
Date: October 28, 2019
must have benefitted the industry. I once again appeal you

Annexure
APPEAL TO MEMBERS Model Case Study for the Publication of Utility of Cost Audit
Dear Professional Colleagues, 1. Name of the Cost Accountant with Membership number,
firm name, address and email id and contact number.
A
meeting of Technical Cell (Cost Audit, Compliance & CMA Dr. Dhananjay V. Joshi
4923
Others) was held in Mumbai on 1st and 2nd October,
Dhananjay V. Joshi & Associates (Firm Regn No. 000030)
2019. It was reiterated by the Technical Cell that the “CMA Pride”, Ground Floor, Plot No.6, S. No. 16/6, Erandawana Co.
Institute should document the suggestions given by our Cost Op. Hsg. Soc., Erandawana Pune 411 004.
Accountants whether working in industry or in practice, to their [email protected]
companies or clients subject to maintenance of Cost Records Phones: M- +91 9422001082, (020) 2543 6408, 2545 3595.
or Cost Audit. These suggestions must have benefitted the Telefax : (020) 2543 6408
industry. I once again request our members to provide the same
in the format of case study as per the guidelines given below- 2. Photograph with high resolution should be provided by the
1. Name of the Cost Accountant with Membership number, Cost Accountant.
firm name, address and email id and contact number.
2. Photograph with high resolution should be provided by the
Cost Accountant.
3. Name of the company to which the case study refers.
This is optional and you may or may not give the name
of the company. If the name is not provided, it will be 3. Name of the Company to which the case study refers. This
called as ABC Company. If the name is provided, it is is optional and you may or may not give the name of the
the responsibility of the concerned member to obtain the company. If the name is not provided, it will be called as ABC
consent of the company. Company. If the name is provided, it is the responsibility of
4. Industry/ product /sector/ service to which the company the concerned member to obtain the consent of the company.
belongs. ABC Ltd.
5. The write-up is to be given in the following format only
»» Brief Background of the case study (Maximum 200 4. Industry/ product/ sector/ service to which the company
belongs.
words)
Edible Oil – CTA 1507 to 1518
»» Suggestions given by the Cost Accountant (Maximum
150 words) 5. The write-up is to be given in the following format only
»» Benefits derived by the company (Maximum 150
words) a. Brief Background of the case study (Maximum 200 words)-
»» Microsoft Word Document Font Type – Arial, Font The company was the manufacturer of “Vanaspti Ghee, Refined oils
Size – 11 as attachment. and Edible Oils”. The process of manufacture of vanaspati ghee
6. The case study should be forwarded to CMA Tarun Kumar, involves process of hydrogenation. Hydrogen gas was required as an
Joint Director & Secretary (Technical Cell) on email id – input in the process of hydrogenation. Chemical formula of water is
[email protected] H2O basically means that water contains 2 atoms of Hydrogen and
7. The last date for submission of the Case Study is 30th 1 atom of Oxygen. It means two molecules of hydrogen and one
molecule of oxygen. Together they make water. The company use to
November 2019
disintegrate water and hydrogen was separated out and used in the
8. The case studies received will be placed before the process of hydrogenation. The oxygen gas was released in the air.
screening committee of Technical Cell. (words 97)
9. A publication of the Case Studies is planned to be released
in the forthcoming Symposium on Cost Audit at Mumbai b. Suggestions given by the Cost Accountant (maximum 150
on 20th December 2019 as Publication of Technical Cell words)
of the Institute. It was suggested by the Cost Auditors that the oxygen gas which is
10. It is presumed that the cost accountant furnishing the case released in the air can be a product by itself, if it is collected and
study has given his full consent for publication of the same bottled. This can fetch large revenue for the company for which only
by the Technical Cell of the Institute. Ensuring the norms additional cost will be that of bottling plant. The company immediately
of plagiarism will be the responsibility of the member and took the action and carried out technical study, feasibility study and
financial projection and it was established that the suggestion from the
the Technical Cell will not be responsible for the same.
cost auditor will be a large revenue earning activity for the company.
It is believed that such a published document will enhance the Accordingly, based on the suggestions from the cost auditors the
value of Cost Records and Cost Audit mechanism and will also Oxygen plant was set up by the company. (words 104)
recognize the contribution of CMAs in the growth of Industry
and economic development of the country. It will also serve as c. Benefits derived by the company (Maximum 150 words)
guidance to the CMAs in identifying the areas of Value Addition Large revenue and surplus was generated by sale of Oxygen gas
through this Mechanism. cylinders by the company. It was also subsequently noticed that the
A model case study for the guidance of the members is annexed cylinder cost which is in fact a capital item, the cost per cylinder
to this appeal. was less than Rs. 5000/- and hence, the company could claim
We look forward to your full cooperation in this endeavor of 100% depreciation in the first year of purchase of cylinders as per
Technical Cell of the Institute. Companies Act 1956 Sch. XIV. Subsequently, these cylinders were
rented out to the customers and as an industry practice, since the
cylinders are returnable, large cylinder rentals could be collected as
a running income for years together. The cylinders were estimated to
CMA (Dr.) Dhananjay V. Joshi have minimum 10 to 15 years useful life for which the rent could be
29th October 2019 collected. (words 108)

ICAI-CMA SNAPSHOTS
CMA Balwinder Singh President ICAI and Shri. K

Sankaranarayanan Ex-Governor of the Indian state of Maharashtra,
Nagaland & Jharkhand inaugurating Thrissur Chapter events by
CMA Balwinder Singh President ICAI inaugurated ROCC S-208 lighting the lamp. With them are CMA H Padmanabhan Council
at Thrissur along with CMA H Padmanabhan Council Member and Member ICAI, CMA Dr PVS Jaganmohan Rao President SAFA,
Chairman CAT Committee ICAI, CMA Dr PVS Jaganmohan Rao, CMA Jyothi Satish Chairperson and CMA Sankar Panicker VC
President SAFA and CMA Jyothi Satish Chairperson ICAI SIRC ICAI SIRC and CMA T G Sugunan Chairman & MCMs Thrissur
and CMA V P Palanichamy ROCC receiving the Certificate. Chapter.
Interaction of CMA Balwinder Singh, President of the CMA Balwinder Singh, President, CMA Chittaranjan
Institute with the managing committee and staff members of Chattopadhyay, Chairman, Banking &Insurance Comittee, CMA
Bangalore Chapter on 3rd October 2019 in Bangalore. CMA G.N. Neeraj Joshi, Central Council Member and CMA (Dr) Asish Thatte
Venkataraman, Past President of the Institute also participated. met Sri Pallav Mahapatra, Managing Director and CEO of Central
Bank of India on 23rd October 2019.
CMA Chittaranjan Chattopadhyay, Council Member, CMA Raju CMA Debasish Mitra, CMA Chittaranjan Chattopadhyay, Council
Iyer, Council Member and CMA S.C. Gupta, Secretary (Acting) Members and CMA Dr. Debaprosanna Nandy, Sr. Director-Studies,
of the Institute extending greetings to CMA Amitabh Banerjee, Advanced Studies & Placement of the Institute at a meeting with
Managing Director, Indian Railway Finance Corporation Ltd on Mr. Fernando de Navarro Menezes, President, ISACA - Mumbai
October 24, 2019. Chapter at Mumbai.

ICAI-CMA SNAPSHOTS
Dr. Sugata Marjit, Professor of Indian Institute of Foreign Trade CMA Niranjan Mishra, Chairman, Indirect Taxation Committee
(IIFT) and former Vice Chancellor of Calcutta University being along with CMA Navneet Jain, Former RCM-NIRC met Shri Zubair
felicitated by CMA Biswarup Basu, Vice President and CMA Riaz Kamili, IRS, Director (Customs), Central Board of Indirect
Chittaranjan Chattopadhyay, Council Member of the Institute. Taxes and Customs, Ministry of Finance, Government of India to
discuss the role of CMAs’ in Customs.
CMA H Padmanabhan Council Member ICAI as per CMA CMA Niranjan Mishra, Chairman, Indirect Taxation Committee,
Niranjan Mishra, Chairman Indirect Taxation Committee ICAI CMA Rakesh Bhalla, Chairman, Direct Taxation Committee along
request submitting the Institute representation to include CMAs in with CMA Navneet Jain, Former RCM-NIRC met Ms. V Usha, Pr.
Accountant Definition IT ACT to Sri. Asit Kumar Mahapatra IRS Commissioner (CX), Central Board of Indirect Taxes and Customs,
Commissioner of Income Tax TDS Odisha in a program organized Ministry of Finance, Government of India on 11th October 2019.
by Bhubaneshwar Chapter ICAI.
ICAI SIRC Mahatma Gandhi 150th Anniversary celebrations TEAM ICAI SIRC participates in Swachhtha Pakhwada
pledge taken by CMA H Padmanabhan Council Member ICAI, celebrations, October 2nd 150th Mahatma Gandhi Anniversary
CMA Jyothi Satish Chairperson, CMA Rajesh SAI Iyer, RCM ICAI celebrations. CMA H Padmanabhan Council Member ICAI, CMA
SIRC with Members, Students and Officials. Jyothi Satish Chairperson, CMA Rajesh Sai Iyer, RCM, Members
and Officials of ICAI SIRC involved in the Services.

ICAI-CMA SNAPSHOTS
CMA H Padmanabhan Council Member ICAI inaugurated Blood RVO 8th Batch at ICAI SIRC, CMA H Padmanabhan Council
Donation Camp at ICAI SIRC in connection with 150th Mahatma Member ICAI with participants after certificate distribution.
Gandhi Birth Anniversary celebrations along with Dr G M DOSS,
Commissioner IT, Smt. R Anita, Senior AR, ITAT, CMA Jyothi
Satish Chairperson and CMA Rajesh Sai Iyer RCM ICAI SIRC.
CMA Neeraj Joshi, Chairman-WIRC welcoming CMA CMA Neeraj Joshi, Chairman-WIRC welcoming CMA Biswarup
Balwinder Singh, President on his first visit to WIRC Mumbai on Basu, Vice-President on his first visit to WIRC Mumbai on 2nd
2nd October 2019. October 2019.
CMA (Dr.) Dhananjay V Joshi, Former President and Chairman-Technical Cell chairing the meeting of the Technical Cell in WIRC-
Mumbai on 2nd October 2019.
Group photo of the Members and Invitees of the Technical Cell meeting in WIRC-Mumbai on 2nd October 2019.

Awardees - 16th National Awards for Excellence in Cost Management 2018
Category I: Manufacturing-Private-Mega
First Second Third
Escorts Limited The KCP Limited - Muktyala ACC Limited
Category II: Manufacturing-Private-Large

First
JK Cement Limited
Category III: Manufacturing-Private-Medium

First Second Third
Shree Cement Limited - Raipur Mahindra Heavy Engines Limited My Home Industries Private Limited
Category IV: Manufacturing-Private-Small

First Second
Zydus Takeda Healthcare Private Shree Digvijay Cement Company

Limited Limited

Category V: Manufacturing-Public-Mega
First Second Third
GAIL (India) Limited - PATA Steel Authority of India Limited Gujarat Narmada Valley Fertilizers &
Chemical Limited
Category VI: Manufacturing-Public-Large Category VII: Manufacturing-Public-Medium
First First Second
Mazagon Dock Shipbuilders Limited Gujarat Alkalies and Chemicals Limited Garden Reach Shipbuilders &
Engineers Limited
Category VIII: Manufacturing-Public-Small Category IX: Banking, Financial Services and Insurance
First First Second
Central Electronics Limited Mahindra & Mahindra Financial ICICI Lombard General Insurance
Services Limited Company Limited
Category X: Transportation and Logistics

First Second Third
GMR Hyderabad International Airport V.O. Chidambaranar Port Trust Central Railside Warehouse Company
Limited Limited

Category XI: Power Generation, Distribution and Transmission Category XII: Infrastructure and
Construction Services
First Second First
Haryana Power Generation Corporation NHPC Limited IRCON International Limited

Limited
Category XIII: Information Technology and Category XIV: Consulting and Others
Telecommunication
First First
Tech Mahindra Business Services MECON Limited

Limited
‘Decoding of Companies (Cost Records & Audit) Rules, 2014 and its Amendments’
A Programme Organized by
The Members in Industry Committee
M
embers in Industry Committee organised a program on ‘Decoding of Companies (Cost Records & Audit) Rules, 2014
and its Amendments’ on 18th of October, 2019 at JN Bose Auditorium of the Institute Headquarters. The program was
graced by former Presidents of the Institute CMA Harijiban Banerjee, and CMA Kunal Banerjee, Council Member
CMA Chittaranjan Chattopadhyay and Practicing Cost Accountant CMA S. S. Sonthalia. After the inauguration session, followed
the two technical sessions. The first technical session was deliberated upon by CMA Kunal Banerjee, former President of the
Institute. The second technical session was deliberated upon by CMA S. S. Sonthalia, Practicing Cost Accountant. All the member
delegates present in the audience showed their utmost eagerness to listen to the expert speakers on the valuable topic. The program
was followed by Question and Answer session, wherein many of the listeners discussed their queries with the expert speakers.

The Tax Research Department in association with PD & CPD Committee of the EIRC of the
Institute of Cost Accountants of India had conducted a Seminar at J. N Bose Auditorium, H.Q
Kolkata, CMA Bhawan on 24th October 2019
Theme of Seminar - “Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019 and Intricacies of GST Audit”
A Handbook named by “Sabka Vishwas (Legacy Dispute

Resolution) Scheme 2019” had been released in the presence of
Sri Roopam Kapoor - Principal Commissioner, CGST & CX,
Kolkata North Commissionerate, Shri K.G.V.N Suryateja -
Joint Commissioner CGST & CX, Office of Pr.CC, Kolkata,
CMA Niranjan Mishra – Chairman of Indirect Taxation
Committee, CMA Pallab Bhattacharya – Chairman EIRC,
CMA Nishant Singh - Chairman PD & CPD Committee of
EIRC and eminent speakers CMA Nahar K. Nimkar, CMA
Shiba Prasad Padhi.
Sri Roopam Kapoor, Principal Commissioner, CGST &

CX, Kolkata North Commissionerate graced the seminar as
Chief Guest and Shri K.G.V.N Suryateja, Joint Commissioner
CGST & CX, Office of Pr.CC, Kolkata had embellished the
seminar as Guest of Honor.
CMA Niranjan Mishra – Chairman Indirect Taxation
Committee, CMA Nahar K. Nimkar, Practicing Cost
Accountant, CMA Shiba Prasad Padhi, Practicing Cost
Accountant, CMA Pallab Bhattacharya – Chairman EIRC,
CMA Nishant Singh - Chairman PD & CPD Committee of
EIRC graced the seminar.
Bangalore Chapter conducted a Seminar on “Direct and Indirect taxes” on 20.09.19
Chief Guest - Shri Ajay Saxena, I.R.S.- Principal Commissioner of Central GST & Customs and Shri Dr. S.V.S.S. Prasad, I.R.S -
Principal Commissioner of Income Tax.
Shri Ajay Saxena, I.R.S. - Principal Commissioner of

Central GST & Customs and Shri Dr. S.V.S.S. Prasad,
I.R.S.- Principal Commissioner of Income Tax, CMA Rakesh
Bhalla - Chairman Direct Taxation Committee CMA Niranjan
Mishra - Chairman Indirect Taxation Committee, CMA H
Padmanabhan - Chairman Region - Chapter Coordination
Committee, CMA Vishwanath Bhat - Treasurer of SIRC and
other dignitaries lighted the lamp.
Shri Ajay Saxena, I.R.S. - Principal Commissioner of

Central GST & Customs and Shri Dr. S.V.S.S. Prasad, I.R.S.
- Principal Commissioner of Income Tax, CMA Rakesh
Bhalla - Chairman Direct Taxation Committee CMA Niranjan
Mishra - Chairman Indirect Taxation Committee, CMA H
Padmanabhan - Chairman Region - Chapter Coordination
Committee, CMA Vishwanath Bhat - Treasurer of SIRC and
other dignitaries graced the seminar.

GLOBAL SUMMIT
Global
Summit
2020
MISSION 5 TRILLION
– CMA AS A CRYOGENIC FORCE
Organised by: January 9-11, 2020

THE INSTITUTE OF
COST ACCOUNTANTS The Ashok Hotel,
OF INDIA New Delhi

GLOBAL SUMMIT
Global
Summit
2020
MISSION 5 TRILLION
– CMA AS A CRYOGENIC FORCE
ABOUT THE THEME
USD 5 Trillion Goal for 2024 set by Honourable Prime Minister of India requires a huge burst of
energy to propel various engines of the economy. The goal of USD 5 Trillion can be achieved
through a clear strategic thinking by the Captains in the Government, Business and Management
Leadership.
The companies and business entities need to reorient their processes for executing the strategies of
the new economy sustainably. This requires the corporate and non-corporate entities to align
themselves with the new visions such as Switching Governance Mechanisms in the Board Rooms
from a Compliance oriented to a Value Creating approach; Adapting Sustainable Development Goals
in Medium, Small and Micro Enterprises; Reorienting the Management Systems towards Sustainable
Strategies; and Implementing Sustainable Strategies both in the Private and Public Sector.
The Summit would be addressed by eminent persons holding high positions in the Government and
Industry leaders. Many professional Gurus cutting across continents will also join them.
The immediate takeaway for the members and Government is going to be with the implementation
of strategies towards the super goal which cannot be with the business as usual approach.
Therefore, there is a need for the new levers which can geometrically escalate the strategic
outcomes to reach the last mile in the Indian demography.
The summit will benefit CEOs, CFOs, Management Accountants and top management team members
of all enterprises operating globally, particularly in Asia.

GLOBAL SUMMIT
PROGRAM
SCHEDULE
“MISSION 5 TRILLION – CMA AS A CRYOGENIC FORCE”
9th January, 2020

9.30AM -
11.00AM Mission 5 Trillion – CMA as a Cryogenic Force
USD 5 Trillion Goal for 2024 set by our Honorable Prime Minister requires a huge burst
of energy to propel various engines of the economy. Viewed in the context of space
technology, a cryogenic material despite being cold in property produces the burst of
Inaugural Session
energy and acts as a Cryogenic Force in the journey towards a tall order. Referring to
this as an allegory, Cost and Management Accountants (CMAs) can become the source
of Cryogenic energy for the economic growth. This is fundamentally due to the
properties (competencies) of CMA oriented towards decision making to drive the future
with economic evaluation skills.
India's Cost leadership in space is now well known. The keynote speaker, Head of
ISRO, will discuss the success story of Cost Management in Space through various
drivers of Technological Efficiencies.
Welcome Address Chairman, Global Summit
Theme Introduction President, Institute of Cost
Accountants of India
Special Address Deputy President, International
Federation of Accountants (IFAC)
Key Note address “Conquering Space through Dr. K.Sivan*, Chairman, ISRO and
Cost and Technological Efficiencies” Secretary, Department of Space
Special Address Hon’ble Minister of Finance &
Corporate Affairs*
Inauguration by Hon’ble Prime Minister of India*
Vote of Thanks Vice-President, Institute of Cost
Accountants of India
11.00AM-
Health Break
11.15AM
11.15AM-
1.30PM Mission 5 Trillion –Strategies
The goal of USD 5 Trillion can be achieved only through a clear strategic thinking by
Session
Plenary
the Captains in the Government, Business and Management Leadership. In this

plenary session eminent speakers from NITI Aayog, Chambers of Commerce, Business
Houses and Management Schools will reflect on the roadmaps towards the vision.
These roadmaps will serve as the Guiding Post for setting the context of CMAs to
channelize their cryogenic calories.
1.30PM-
Summit Lunch
2.30PM

GLOBAL SUMMIT
2.30PM-
4.00PM Mission 5 Trillion – Levers
The implementation of strategies towards the super goal cannot be with the
business as usual approach. We need new levers which can geometrically
Session-I
Technical
escalate the strategic outcomes. This is important as the outcomes of

economic policies should reach the last mile in the Indian demography. This
session will therefore talk about new levers of economic growth such as
Disruptive Technologies, Digital Banking and Startup India Ventures.
Topics:
Disruptive Technologies
Digital Banking
Start-up India
10th January, 2020

9.45AM-
11.00AM Mission 5 Trillion – Driving SDG thru’ CMA
Driving Economic Growth at a blistering pace should also be sustainable achieving
Session-II
Technical
SDG targets as agreed by India in the UN Charter. This would need holistic view of
balancing the non financial outcomes with that of financial results. This being the core
of CMA competency framework, this session would examine different pathways to
economic growth by balancing with societal parameters in the following sectors -
Health For All at Affordable Price; Discarding Single Use of Plastic Cost Effectively; and
Accounting Framework for Water Resources at the macro level.
Topics:
Health for All
Environment – Single use Plastic
Accounting for Water Bodies
11.00AM-
Health Break
11.15AM
11.15AM-
Mission 5 Trillion – Driving Value Creation thru’ Governance
1.30PM
The business entities need to reorient their processes for executing the strategies of
the new economy sustainably. This would happen only if the corporate and non-
Session-III
corporate entities align themselves with the new vision. This session would discuss the
Technical
action required in the following streams - Switching Governance Mechanisms in the

Board Rooms from a Compliance oriented to a Value Creating approach; Adapting
Sustainable Development Goals in Medium, Small and Micro Enterprises; Reorienting
the Management Systems towards Sustainable Strategies; and Implementing
Sustainable Strategies in the Public Sector.
`
Topics:
Boardroom Governance for Value Creation
SDG in MSMEs
Management Systems for Sustainable Strategy
Sustainable strategies in Public Sector
1.30PM-
SUMMIT LUNCH
2.30PM

GLOBAL SUMMIT
2.30PM-
3.45PM
Mission 5 Trillion – Cost Management Strategies/ Tools
The Cost and Management Accounting practices now need extensive deployment as a Cryogenic
force for the challenging times. The need for firing on all cylinders with the CMA energy will be
Session-IV
Technical
examined through the following Streams - Model for Cost Effective Development of Sustainable
Products with Disruptive Life Cycles; Executing Cost Competitive Strategies and Create Value
through new CMA frameworks; Evolving Business Model view of Sustainable Cost Structure as a
new CMA Imperative; and Embedding Performance Appraisal through an External agency into
the Governance Mechanism.
Topics:
Designing Cost Effective Sustainable Products
Strategy Execution Excellence through CMA
Importance of Sustainable Business Model thru CMA
Performance Appraisal – A Tool for Success
3.45PM-
Health Break
4.00PM
4.00PM-
5.15PM
Mission 5 Trillion – Global Cost Management Practices
Globally, Economies which have crossed US Dollar 5 Trillion Targets or are on the Threshold of
Session-V
Crossing offer a fertile ground for us to learn new ideas and also unlearn the past wherever
Technical
they are not relevant for the current order. This Session will have Speakers from such logistics
offering us a fresh thinking - Japanese Costing practices; German Costing Practices; Chinese
Costing Practices; and Korean Costing Practices.
Topics:
Japanese Costing Practices
German Costing Practices
Chinese Costing Practices
Korean Cost Practices
11th January, 2020

9.45AM-
11.00AM
Mission 5 Trillion – Sector Specific CMA Cryogenic Roles
In achieving the Super goal, certain sectors of the Economy are very critical and need to
Session-VI
achieve manifold outcomes. These sectors will require a more focused pumping-in of the CMA
Technical
energy to fuel the processes. This will pose a challenge of how to do it. Such sector specific
critical challenges will be discussed in the following Streams - Agriculture to achieve doubling of
farm Income and Profits; Infrastructure with the focus on Housing for All at affordable prices;
and Effectively deploy Make in India in the Defence Sector with suitable Costing Tools.
Topics:
Agriculture
Infrastructure – Housing for All
Defence
11.00AM-
Health Break
11.15AM
11.15AM-
1.30PM Mission 5 Trillion by 2024
Closing Address President, FICCI / ASSOCHAM*
Valedict
Session
Special Address Secretary, Ministry of Corporate Affairs*

ory
Valedictory Address Hon’ble Minister of State for Finance & Corporate Affairs*
Vote of Thanks Chairman, Organising Committee of Global Summit
* confirmation awaited

GLOBAL SUMMIT
Global
Summit
2020
Chief Patron:
CMA Balwinder Singh, President
Patron:
Global Summit Committee
CMA Biswarup Basu, Vice President
Chairman, Technical Committee:

CMA Ashwin G Dalwadi, Council Member
Chairman, Organising Committee:

CMA Vijender Sharma, Council Member
Members:
CMA Dr. Ashish P Thatte, Council Member
CMA Chittaranjan Chattopadhyay, Council Member
CMA Debasish Mitra, Council Member
CMA H. Padmanabhan, Council Member
CMA (Dr) K Ch A V S N Murthy, Council Member
CMA Neeraj D Joshi, Council Member
CMA Niranjan Mishra, Council Member
CMA P. Raju Iyer, Council Member
CMA Rakesh Bhalla, Council Member
CMA S. Papa Rao Sunkara, Council Member
CMA V. Murali, Council Member
CMA Dr. Dhananjay V. Joshi, Past President
CMA Chandra Wadhwa, Past President
CMA Kunal Banerjee, Past President
CMA M. Gopalakrishnan, Past President
CMA Dr. A S Durga Prasad, Past President
CMA Rakesh Singh, Past President
CMA A.N. Raman, Past President SAFA
CMA Hari Goel, Former Council Member
CMA Anil Sharma, Chairman, NIRC
CMA Jyothi Satish, Chairperson, SIRC
CMA Pallab Bhattacharya, Chairman, EIRC
CMA Ashish Bhavsar, Secretary, WIRC
Shri P Thiruvengadam, Ex. Sr. Director, Deloitte
CMA Dr. Asish Bhattacharyya, IMT Ghaziabad
Prof Shailesh Gandhi, IIM Ahmedabad
Dr. Sanjay Kallapur, ISB Hyderabad
CMA Srinavasan G Naraisimhan, Practicing Cost Accountant
CMA Akshay P Shah, Practicing Cost Accountant
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SPECIAL ARTICLE
FIELD EXPERIMENTS
AND CUSTOMIZABLE
DEVELOPMENT POLICIES:
THE NOBEL PRIZE IN 2019
Dr. Saibal Kar

Professor of Economics
Centre for Studies in Social Sciences, Calcutta
Research Fellow, IZA Bonn
Director (Hon.), Eastern Regional Centre, ICSSR
Managing Editor, South Asian Journal of Macroeconomics and Public
Finance (SAGE)
R
ecently, Prof. Esther Duflo was invited to In the year 2003, Prof. Abhijit Banerjee had given this lecture
the Centre for Studies in Social Sciences, focusing predominantly on how the spread of information
Calcutta, a premier social science research leads to various economic outcomes, some of which are often
institute with strong international repute, to unwarranted socially and politically speaking. This year Esther
deliver the R. C. Dutt Lectures in Economics. Duflo spoke about how an economist with intent to change the
The said lecture series has historically been development outcomes should behave like a plumber on the
adorned by seminar presentations from economists of global site rather than a distant planner and policymaker. The reason
standing persuading audience from various disciplines about for invoking this brief introduction is that both Prof. Banerjee
how the philosophy and mechanism of economic actions touches and Prof. Duflo of the Massachusetts Institute of Technology,
upon the perpetual existence of the mankind. In true sense the now married to each other, along with Prof. Michael Kremer
lectures have been seminal in their approaches and outreach. of Harvard University, and all working intensively with the

SPECIAL ARTICLE
now famous Abdul Latif Jameel Poverty Action Lab (or J-Pal), study. Rothenstein and Wachter comment that while this
have been awarded the highest accolade for contributing to constitutes a strong advantage in favour of RCTs, the process
the subject of Economics. The Nobel committee claimed that still suffers from a number of drawbacks. Early on, it was
the contributions of the trio have helped in addressing poverty recognized that RCTs can be very expensive and hard to
reduction around the world quite significantly. This short article implement successfully. For example, it is not always possible
will try to discuss some achievements of the sustained work in to ensure that everyone assigned to receive a treatment receives
this matter over the last two decades and argue that the main a full dose, while those assigned to the control group receive
tenets of the principle of Randomized Controlled Trials (or RCT) none, though this is the experimental ideal. Sometimes it is not
has a strong relationship with the information gap that lies at the feasible to control participants’ behavior, and many participants
core of failures in implementing policies successfully for any deviate from their intended treatment assignments. In other
given nation. cases, ethical, political, or operational considerations make it
The point would perhaps be best explained by taking recourse undesirable to limit access to alternative treatments. Although
to what Duflo has to state in this matter, which apparently is this can be partly addressed within the basic experimental
the culmination of a ‘movement’ that the use of a scientific paradigm, it does limit what can be learned.
procedure in social science has created for itself. The patience, Concerning glaring issues of generalizability (the results of
the tenacity and the ingenuity that Banerjee , Duflo and Kremer experimentation cannot be replicated across time and space in
has shown over a considerable period of time is no less than many instances); endogenous outcomes (for example, effect on
that of a group of activists with genuine belief in the procedure job training on wages can be observed only for those who have
and its ability to turn around the policy choices facing planners a job, and not for the ones that do not); or, uncontrolled spillover
in most countries. It is only a matter of accident that the largest effects (when treatment and control groups share information,
number of experiments that the trio conducted was about poverty or function within the same time and space, such as job search),
reduction in developing countries, while the procedure is just etc, the present award clearly shows that the researchers have
as good to look into many other aspects under all possible outdone all odds that lessen the importance of RCTs, at least as
circumstances anywhere. far as development polices go.
Indeed, as Jesse Rothenstein and Till von Wachter write, there This may have been possible by what Duflo claims to be
is a very long history of social experimentation in labor markets. the plumber mindset among those who participated in this
Experiments have addressed core labor market topics such movement. Of course, the earlier contributions of experimental
as labor supply, job search, and human capital accumulation, economists and behavioural economists such as John List and
and have been central to the academic literature and policy Richard Thaler have created a convincing basis to approach
discussion, particularly in the United States, for many decades. the development policies later adopted. Duflo, cites an actual
However, from the beginning, the use of random assignment plumbing example to illustrate the point about how an economist
experiments (also known as randomized controlled trials, or must not stop at the point where the policymaker is supposed
RCTs) has been controversial in labor economics. It is now to pick up. In 2007, a firm in Tangiers was building piping and
well-known via the works of Banerjee, Duflo and Kremer that installing toilets in houses. In collaboration with the city, it
the primary and perhaps the most powerful appeal of RCTs offered interest-free loans to poor households to cover the costs
is that they solve the assignment, or selection, problem in of their home water connections. But take-up of the subsidized
program evaluation. In non-experimental studies (also known loan programme only reached 10 percent. The barrier turned
as “observational” studies), program participants may differ out to be an administrative one. Applying for the loan required
in observed and unobserved ways from those who do not a trip to the municipal office with supporting documents,
participate, and econometric adjustments for this selection something many people had little time for. Remember, for poor
rely on unverifiable, often implausible assumptions. With a households, losing a day’s job to comply with administrative
well-executed randomization study, however, the treatment mandates translates into no income for that day and obviously
and control groups are comparable by design, making it will offer little to eat. The various public demands made by the
straightforward to identify the effect of the treatment under governments in poor countries including India leads to similar
Abhijit Banerjee Esther Duflo Michael Kremer

SPECIAL ARTICLE
outcomes, but does not get noticed. So, when the research team school.
started randomly visiting houses and offering assistance by It is easy to acknowledge that there are numerous potential
photocopying the required documents at home and delivering hurdles in policy implementation. Duflo suggests that most
them to the municipal office, take-up for loans rose to 69 bureaucrats are not very good plumbers. And even when they
percent. The lack of attention to the final step of this policy was understand the economics and the merit of a plan, they may
what was lacking, and subsequently fixed. What this does not not be willing to implement the way it has been recommended
explain in full detail is that both the public support and ability or even implement it at all. Ideological and political optics are
to organize something of this nature was made publicly feasible. also crucial considerations for economist-plumbers. Indeed,
It is not that similar occurrences do not happen in India – from for the bureaucrats there could be political and in some cases
immunization carried by ASHA workers in the village on a ideological constraints in modifying policies and plans even
door-to-door visit policy, or the municipal corporation setting when these amount to small changes for the fear of affecting
up a camp near a locality for the neighbourhood to verify their chances of re-election. Safer, and often not so precise, policies
birth and death records would have similar outcomes. This too usually do not create equivalent trouble.
has a cost, nonetheless. It is subtle all over the paradigm of
Presently, it is possible to project that the choice of policies
development that there is a strong public finance aspect to it. If
and potential outcomes suffer from information flow between
the government is not earning enough as taxes from the rich and
different agents, particularly between the government, the
the super-rich, such policies will not be implemented despite
economist-plumber and the individual whose welfare is at the
the best intentions simply due to lack of public funds. In other
heart of the matter. To an audience that has benefited from the
words, this micro picture is an integral part of the large picture.
previous research by Abhijit Banerjee, this does not come as a
During an interview with Duflo given to INSEAD, a French discontinuous effort at experimenting with human behavior and
research centre of international repute, she expanded on connecting it with governmentality. In one of his seminal work,
ways economists can think like plumbers, how they can “pay Banerjee argued that human behavior could often resemble that
attention” to what happens on the ground and tinker to make of a herd of animals which tend to follow the one just ahead of
policy work. Fortunately, economists are already well-placed for it almost blindly. He cites an example from two restaurants in
the job. They tend to spend a lot of time thinking and worrying Cambridge, which have varying reputation for the food they
about the causal effects of policies and they are increasingly serve. It is assumed that one customer knew for a long time that
involved in incentive design. These are crucial considerations restaurant A serves better food than B. However, one weekend
for “design of the tap” work that Duflo argues is one of two when he plans to visit A, he comes across a long line in front
main responsibilities of economist-plumbers; the other being of B, that of customers waiting for their turn to walk in and
“layout of the pipes”. Regarding the layout of policies, Duflo order their food. Restaurant A did not have such a long queue
states that since the increasing adoption of “nudges” in public in front of its gate. The customer in question immediately drops
policy, based on the research of Richard Thaler and Cass his belief that A is actually better than B, because he observes
Sunstein demonstrates potential for economics in “design of B to have a long queue while A had none. Consequently, he
the tap” issues, the remaining work should be relatively easier. undermines his own belief based on prior information and
For example, during her early research career, Duflo established adopts the new one initiating a possible social loss, because the
that if a male Panchayat leader is replaced and substituted presence of a queue in front of B does not necessarily imply
on a long term basis by a female leader, the development that the quality of food has improved unconditionally. It could
outcomes are significantly different. Issues like drinking water, be an outcome of rumor or a short-lived euphoria without
sanitation, schooling all undergo considerable improvements an estimable basis. Banerjee later extends this hypothesis to
when a female leader takes over. This is a stepping stone for explain the East Asian financial and economic crisis, where
offering gender-based reservation for political positions if the sudden withdrawal of foreign investments from Thailand,
government has any concern about health and educational South Korea, Malaysia, Hong Kong, Indonesia, Singapore etc
outcomes among village residents in addition to agricultural precipitated a grave recession. The withdrawal of investments
production and income generating activities. In effect, the by large multinational banks of US origin led all other financial
revelation that switching panchayat leaders by gender could intermediaries to believe that some of the East Asian crisis
deliver development outcomes closer to the levels as desired by will undergo a change in the pattern of governance, including
the government that cannot ensure it via centralized planning is possible coups. If changeover of democratic governments led
about plugging a perpetual policy gap. to freezing of assets created and finances invested by MNCs, it
Duflo further argues that the second part of the plumber’s could only be countered by pulling out of all commitments. It
job description is “layout of the pipes”. These are logistical was further eased by the full convertibility of capital accounts
arrangements that are essential to a policy’s functioning. This in the East Asian countries leading to a long-run economic
can include simple aspects of policy implementation such as crisis. The dependence on foreign capital was substantial in all
money transfers between central governments and far away these countries, which had earlier contributed to high and fast
provinces in developing countries. For pipe layout to be economic growth over several episodes.
effective, economist-plumbers need to carry out experiments. This so-called information asymmetry between the principal
She used RCTs, experiments that contain control groups and agents often leads to other forms of crisis. The inability of a
receiving a treatment compared to other groups receiving no bank manager to measure the risk associated with an investment
treatment, in developing countries to uncover effective ways to in many cases usually leads to adverse selection. For example,
immunise children, reduce rates of malaria and get children into an entrepreneur who is engaged with a rather risk-prone activity

SPECIAL ARTICLE
will be ready to offer a higher interest rate to a bank for a formal other products for disease prevention and treatment of non-acute
loan as compared to a small entrepreneur operating on a low conditions such as bednets for malaria, and water treatment.
risk business. If the bank manager’s objective is to maximize Should the government fully subsidize this treatment? While the
an expected return from a portfolio of investments, given that argument does not come up directly in their proposition, but one
assessment of risk is imperfect, then possibility of adverse could consider such deworming program as an investment by
selection, i.e., selecting the more risky activity for investment the government for its people because once disease free and duly
looms large. While it does not connect directly to development capable of learning and performing better in schools and beyond,
outcomes that Banerjee focused for the next two decades since the government stands a chance to recover its investments in
studying the above phenomenon, but it should be direct to terms of higher output, greater human capital, better per person
argue that growth of small enterprises that lifts millions out productivity, and therefore taxes to spend on several programs
of poverty in developing countries can be jeopardized under and policies that welfare states are engaged with. Indeed, the
such possibilities. It would then require intensive analysis via long-run follow-up evaluation of something as non-critical and
localized experiments to inform both the lending agencies deworming intervention finds that among females, deworming
and the borrowers about the credit space within which better increased the rate of passing the national primary school exit
choices might prevail. In subsequent analysis Banerjee and exam, by almost 25 percent. The children learned through
others have categorically shown that small loans to very poor increased school participation. For Uganda the importance of
people can raise their entrepreneurial efforts by which the deworming program among the children was evaluated for the
individuals can sustain a livelihood over time. After all, public English, Math, and combined test scores comparing treatment
transfers and support cannot be much and may not be available and control. The study found that children in treatment villages
over an indefinite time period, although the recent interest in have significantly higher scores as compared to those in
income support schemes in India for example, has found serious control villages. Effect sizes also more than double for children
enthusiasts in the government for last several years. who were dewormed more than once, but the difference in
However, not all such public support schemes find appropriate coefficients is only significant for Math scores.
interest in the policy quarters. Prof. Kremmer and his co-authors Does it not leave a country with more able younger generation
have long questioned the lack of interest in simple public which would then remain productive over forthcoming
policies that can improve development outcomes reasonably, decades? The government has to treat these interventions as
only if the authorities show a little enthusiasm. Many of the future investments rather than as useless transfers curved out
proposals that these researchers explored are inexpensive in of political compulsion. It is therefore appropriate to link the
view of the wasteful expenditure governments usually engage 2019 Nobel award with an eye-opener for governments in
with. On the aspect of economic impacts of deworming, Kremer poor countries to consider transfers more seriously because it
and Miguel (2007) study the behavioral response to a change in would enrich the country in foreseeable future. If a country is
the price of deworming treatment in the context of the Kenyan not too myopic about future gains coming out of seemingly
school-based deworming program. The implementing NGO unimportant investments now, the future political ambitions of
had a policy of using community cost-recovery in its projects the policymakers would not be jeopardized either. This has to be
to promote sustainability and confer project ownership on a consorted effort after all.
its beneficiaries. Thus, starting in 2001, a random subset of
participating schools were allocated to pay user fees for the
References
deworming treatment, with the average cost of deworming per
child set at US$0.30 (about one-fifth of the cost of drug purchase Esther Duflo, 2017. “The Economist as Plumber,” American
and delivery through this program). The authors find that this Economic Review, vol 107(5), pages 1-26
cost-sharing reduced take up by 80%, from 75 percent to 19
percent. This result is consistent with findings observed for [email protected]
AT THE HELM
Our heartiest congratulations to CMA K Sreekant, an Associate Member of the Institute,

who has assumed the charge of Chairman and Managing Director of Power Grid Corporation
of India Limited (POWERGRID) on 5th August, 2019. Prior to taking up this assignment, he
was serving as Director (Finance) POWERGRID.
K Sreekant a B.Com (Hons.) graduate, Cost Accountant and PGDBM (Finance) is having
more than thirty three years of experience in the power sector involving all facets of Finance
& Accounting function and in particular, long term financial planning, investment appraisals,
formulation of capital budgets, resource mobilization from domestic and international
markets and corporate accounts. Under his chairmanship, POWERGRID has been conferred
with the coveted Maharatna Status by the Government of India on October 23, 2019.
We wish CMA K Sreekant the very best for all his future endeavors.

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COVER STORY
RISK
FACTORS CMA Amit Kumar Arora
OF REAL Assistant Professor

KIET School of Management, KIET Group of Institutions, Ghaziabad
& Research Scholar IGNOU, New Delhi
ESTATE
RETURNS
- A STUDY
Arpit Jain
MBA (Student) - KIET School of Management
KIET Group of Institutions, Ghaziabad
Abstract
This paper is an attempt to highlight the RISKS that are associated with real estate. Why today investors are not feeling safe?
Why investors have a sense of insecurity? In India, we can say that the real estate industry has witnessed very tremendous growth.
But there are many risks which have emerged with it. Through this article, we have put an effort to highlight the various risk factors
associated with real estate returns.
A
Introduction
ccording to Franklin D. Roosevelt “Real estate
cannot be lost or stolen, nor can it be carried
away. Purchased with common sense, paid for in
full, and managed with reasonable care, it is all
about the safest investment in the world”.
We have so many dreams that we wish it may get fulfill, and
every individual has one dream, to own a place where they can
live, and the real estate sector is the one which is working to
fulfill that dream for you. From one corner of the earth to another
there is a real estate sector who is leaving their footprints in
the form of homes, offices, buildings, farms, land, residential
places. The following is the contribution of major eight states to
Pie Chart: India real estate market outlook 2019
the development of the real estate sector. Source: cbre.bh

COVER STORY
Reason Behind the Tremendous Growth of Real Estate in Chennai from Indiabulls Real Estate for around Rs
Sector in India 900 crore (US$ 136.9 million).
The following are some of the reasons behind the fast growth • In February 2018, DLF bought 11.76 acres of land for
of the real estate sector in India: Rs 15 billion (US$ 231.7 million) for its expansion in
• Robust demand Gurugram, Haryana.
In the last few years, we have witnessed that the income of the
customers has increased. Moreover, it has become a preferred Source: Data published by Department of Industrial Policy
asset class for all the investment, urbanization and economic
growth can be considered as the main reason for it. But another side of the story from the investors’ point of
• Attractive opportunities view, it’s horrendous: -
The real estate has given rise to another industry also, there • Black swan moments
is a huge rise in education, Healthcare other manufacturing It has been noticed that demand in the real estate sector started
industries because somehow real estate was promoting these declining in 2013 and in 2016 the demand was an all-time low.
Industries also. This was not a good thing from the investor’s point of view. The
• Policy support major reason that was responsible for this was, in May 2016 the
real estate (Regulation and development) act was made, and six
The government has allowed FDI of up to a hundred percent months later the government has demonetized the old currency
for Township and settlements development projects, which can note, which was having a major impact on the investment in the
act as the catalyst for the growth of the real estate sector. real estate sector.
• High Return on Investment We can’t deny the fact that in the real estate sector most of the
As all the investors are finding the real estate Sector the most investment is made with the black money, and somehow there
profitable sector, they are investing a very huge amount in it, was a restriction on the black money now. Initially, there was a
and with the investment, the real estate sector is increasing at a setback in the market because people were having no cash and
very large scale. they were unable to make any investment.
• Government Initiatives • Higher taxes
The Government of India along with the Government of There are higher taxes which are needed to be paid in the real
respective States have taken a very good step which can help estate sector and which made investors distracted towards the
to increase the development of the real estate sector in India. real estate sector. Moreover, the implementation of good and
The Government of India is working on various projects which service tax from July 2017 as disturbing the whole scenario
can also initiate the development and the growth of real estate of the real estate sector. The government has changed various
sector of India. taxation policies continuously, which has negatively impacted
Smart City project: There is a plan to build 100 Smart Cities, all the investors associated with the real estate sector. Moreover,
the main catalyst for the growth ore are some of the initiatives there are many additional charges which has been paid like
that we can look upon which was made by the government of stamp duty charges, and which constitutes about 20% of a
India property’s value.
Pradhan Mantri Aawas Yojana: under Pradhan Mantri • Excessive supply
Aawas Yojana more than 8.09 million houses have been At one period, there was an excessive supply in the market.
sanctioned up to May 2019, which is the largest figure from There was a mismatch in demand and supply. The Builder has
the view of the growth in real estate sector in India and also developed residential places on a very large scale but demand
providing growth of the citizens of India by providing them is very low. When the growth was very good there was a
home, a place to live in. tremendous increase but it has not stayed for a longer period.
National Urban housing fund: Monetary Fund is the main The developers were failed to analyze the expected demand in
requirement for the growth of any real estate sector, keeping the market which is depicted from the following diagram.
this view in mind Government of India has approved an outlay
of rupees 60,000 crores to promote the growth of the real estate
sector in India.
• Other initiatives
Some of the major investments and developments in this
sector are as follows:
• New housing launches across the top seven cities in
India are expected to increase 32 percent year-on-year
by 2018 end to 193,600 units.
• In September 2018, Embassy Office Parks announced
that it would raise around Rs 52 billion (US$ 775.66
million) through India’s first Real Estate Investment
Trust (REIT) listing.
• New housing launches across the top seven cities in
India increased 50 percent quarter-on-quarter in April-
June 2018.
• In May 2018, Blackstone Group acquired One Indiabulls

COVER STORY
Comparison of Fall in Prices, Number of Residential the website of RERA i.e. types of apartments or plots,
units sold and New Launches in Major Cities 2017: registration information, list of approvals taken and
those remaining, the layout plan, sanction plan, and the
status of the project.
• A promoter’s application will be approved or rejected
within 30 days. If you do not receive any information
regarding this, you can assume that your application has
been approved.
• Developers can take a maximum of 10% of the cost
as advance payment from the buyer after a written
agreement with the buyer regarding the sale of the
property.
• The developers must obtain insurance for the building/
land and the construction of each project.
• All the developers have to deposit 70% of the amount
collected from the buyers for a project into the ESCROW
As we can see from the above table there was a big fall in the account, which can be utilized for the construction.
number of units sold in the real estate sector. The new launches It can only be withdrawn after the promoter receives
are very low as we can see in Hyderabad it is 70% less over certification from an architect, a chartered accountant,
2016, 56% less in Delhi-NCR, a 41% decrease in Bengaluru. and an engineer.
• If there is any default from the side of the promoter or the
Position of Loan on the real estate sector: buyer, both will be liable to pay an equal rate of interest.
• If the promoter causes any losses to the buyer due to
other people laying claim to property (the defective
title of land) which is under construction or has been
constructed, the promoter will have to compensate
the buyer. There is no limitation provided by any law
currently concerning the compensation amount.
• If a person has any problems regarding violation of the
provisions or rules of this Act by a promoter, buyer, or an
agent, they can file a complaint with RERA.
• While an inquiry is taking place, RERA can stop an
agent, promoter, or buyer from continuing any activity
against which a complaint has been raised.
• Developers fail to follow RERA’s orders, they will have
to pay a penalty up to 5% of the evaluated cost of the
property.
• If a company commits an offense under this ACT, any
person who was in charge of the business at the time of
As we can see in the above graph that there is a continuous the offense being committed and the company will be
increase burden on the real estate sector, as the amount of loans held guilty and will be punished.
has increased year to year. All types of banks and financial
• No civil court will have any jurisdiction concerning
institutions have given the loan to the developers of real estate
any matter that comes under RERA or the Appellate
which is increasing at a very high rate.
Tribunal’s jurisdiction. As such, no court can grant an
injunction with regards to any action taken by RERA or
RERA Provisions the Tribunal.
The followings are the provision to be fulfilled by the
developers under RERA: Investors’ Risk with real estate
• The government has made mandatory to register all the The following are the most important risks which are
projects with RERA. associated with real estate for an investor:
• Any project which is found guilty under the inquiry, • General Market Risk-
RERA has the right to cancel the project. The economy depends on the rise and fall in the market.
• A property cannot be sold if it is not registered with Economic factors like interest rates, inflation, tax slabs, and
RERA. various other market factors and condition depend on the market.
• All the developers must provide the project details to This type of risk is usually a systematic risk, it means the entire

COVER STORY
market got affected by such risk. Investors cannot eliminate such viewed before investment, they try to know the trend, its price
risk; they can only control it but up to some extent. Investors with the various changes in the condition or the market situation.
can only put a hedge against the risk, this risk can be minimized Bottom line risk generally means to know and to anticipate such
by only having a diversified portfolio. Suppose an investor has risks that is linked up with the depth and the root of the property.
a portfolio in which diversified property is there and in any case,
any of such factor goes down. Then, in that case, the best part of
Conclusion
the property will help to make a balance or minimized the risk.
So, by diversification investor can put the hedge against bear Real estate should be promoted because it will uplift the
and bull in the market. living standard of Indian citizen and it will promote the growth
and development of the country and it will provide a happy
• Idiosyncratic Risk-
place to live in. All the efforts of the concerned authority of real
These types of risks are concerned specifically with a estate should be promoted in the direction of the upliftment of
particular property. It is based on the risk and returns trade-off all the individuals who are associated with it.
means higher the risk higher will be the return. For example, in
construction on a property, the owner has the risk of investing
the amount in construction with a focus to get a return in the References
form of the rent. So, the risk is always associated with the 1. https://www.financialexpress.com/india-news/unsold-
return. These risks varies from property to property. All the inventory-in-the-real-estate-sector-is-piling-up-slump-
property has its degree of risk and return. So, these are the risk is-aided-by-scepticism-over-rera-and-gst/764943/
that varies by their specific characteristic. These types of risks 2. https://www.bankbazaar.com/home-loan/rera-act.html
include factors like environment risk, political risk, workforce accessed on 29-09-2019.
risk which vary property to property.
3. http://www.forbesindia.com/blog/wealth-
• Credit Risk- management/9-big-reasons-not-to-invest-in-real-estate/
The stability and the income of the property depend on its 4. https://economictimes.indiatimes.com/wealth/real-
value. The credit factor always considers on behalf of the estate/rera-and-you/maharashtra-rera-calls-for-
value of the property. Property under the ownership of a brand action-against-293-projects-lacking-requisite-nods/
or a famous company or individual has more value than any articleshow/64186909.cms
other tenant or the owner because the value of the property is
5. https://www.livemint.com/Money/
associated with this name and brand. If a property has a higher
HcRE0hFQWpyXtduV2Y9wJI/2018-the-year-real-
stability investor will have a willingness to buy and easily
estate-died.html
focused on the property.
• Bottom Line Risk-
[email protected]
If an investor is investing his /her money in the property or
[email protected]
real estate, first they try to get the depth of the property. The
investor will study all the historical information about the
property. Various parameters of the property ate analyzed and
Kind Attention !!!

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COVER STORY
A STUDY ON AWARENESS
WHILE INVESTING IN
REAL ESTATE AND GOLD
Prof. (Dr.) D. B. Bharati

Director, Rajgad Institute of Management Research and Development
Dhankawadi, Pune
Abstract
There are various avenues for investment ranging from risk – less to high – risk. One of the renowned option as investment is real
estate sector. In India, real estate holds key position in providing business and employment opportunities. The intention of this paper
is the integral parts of real estate investments. Further, this paper focuses on the various real estate laws in India. The study also
focuses on the comparison between investment in real estate and gold. This study suggested precautions to be taken while investing
in real estate and investment in gold.

COVER STORY
‘F
Introduction agricultural land is subject to land revenue imposed by the State
inance, Religion, Married life Government.
and Salvation’ are the four main ii) Farmhouses: According to a report, the hottest trend in
duties of a man and they are the the country is farmhouses. Bought cheaply by developers, these
pillars of Indian civilization. properties are done up luxuriously and sold off as weekend
These four aspects are based on retreats. On certain kinds of farmhouses there is no need to pay
money. Money is the foundation wealth tax.
of these four principles. iii) Urban Land: It is the best investment avenue available
Unfortunately only two of the against the inflation. The price of urban land has been shooting
four principles survive in today’s modern society. To earn up in every city and town but there are ceilings on urban land
money is man’s nature and there is nothing wrong in having a holdings.
desire to earn money properly and to prosper. Saving money is
iv) House Property: A new national housing policy
the most important aspect, but it is rather more difficult, than
encouraged a common man as well as middle class investors
earning money. Wealth depends on savings. Samarth Ramdas
to invest in house property. It is an attractive investment
says that the one, who spends all that he earns, doesn’t survive
proposition due to the following reasons:
in difficult times. Chanykya said, ‘You become wealthy by
saving bit by bit’.
The term investment means different things to different Characteristics
persons. If one person has given money to some other, it may be • Satisfaction of ownership of residential property. It
his loan, which may be considered his investment for a return. If provides a foundation for the kids in which to grow up
a person has purchased 10 grams of gold for the purpose of price and NEST for the family members.
appreciation, it is his investment. If he purchases a pension or • It provides a stable base from which to operate, whether
insurance plan, it is an investment. Thus there are different types it’s simply a residence or also an office.
of investments for different persons.
• Loans are available for buying and / or constructing a
residential property.
Objectives • Interest on loans taken is tax deductible within certain
The objectives of the study are given below: limits and also repayment of principal amount is eligible
1. To study the characteristics about investment in real for tax deduction or rebate.
estate. • Appreciation in the capital value.
2. To know real estate laws in India. • Exemption from wealth tax.
3. To compare real estate investment and investment in • It provides the possibility of selling at a profit
gold. • It is very difficult to maintain the property. Expenses are
incurred for upkeep and maintenance, insurance and tax
Research Methodology payments.
The study is based on primary and secondary data. • It is not possible to move or shift the property.
Data Analysis Real Estate Laws in India: There are various norms, rules
Real Estate: Real Estate Investment in India is one of popular and regulations to be followed by investors while investing in
avenue. The greatest attraction of real estate investments is that real estate in India. The central acts, the local municipal laws
it acts as a hedge against inflation. In the current scenario, the of each state and union territory and FDI policy 2010 are some
prices of real estate had reached an unsustainable level and of the norms that govern the various transactions and practices
investors are interested in making investment in the form of real in the Real Estate. Sale, lease, mortgage, licence are some of
estate. the transactions that are governed by the above mentioned laws
A street by street knowledge of the market conditions makes and policies. The real estate laws in India are narrated in brief
it perfect for small investors. Real estate is an asset form with as under:
limited liquidity as compared to other investments. The real • The Indian Contract Act, 1872;
estate developments in the country consist of the Constructing • The Transfer of Property Act, 1882;
houses, Townships, Residential Complexes, Office Buildings,
• The Indian Registration Act, 1908;
Shopping Malls and IT Parks. The real estate investments
include agricultural land, farmhouses, urban land and house • The Specific Relief Act, 1963;
property: • The Urban Land (Ceiling & regularization) Act, 1976;
i) Agricultural Land: Agricultural land is the most popular • The Land Acquisition Act, 1894;
tax planning device. The value of agricultural land has • The Indian Evidence Act 1872;
been rising in the country. Agricultural land is exempt from
• The Indian Stamps Act, 1899;
wealth tax and also agricultural income is tax free. However,
• The Rent Control Act;

COVER STORY
• The State Laws governing the real estate; Equity build-up: It is the increase in the investor’s equity
• The Consumer Protection Act, 1986; ratio.
• The Arbitration & Conciliation Act, 1996; Capital appreciation: It means the increase in market value
of the asset over time, realized as a cash flow when the property
• Income Tax Act, 1961;
is sold.
• The Wealth Tax Act, 1957;
Liquidity: The main drawback of investing in real estate is
• The Co-operative Societies Act, 1912; and illiquidity or the difficulty in converting an asset into cash and
• The Multi-state Co-operative Societies Act, 2002. cash into an asset.
• The Real Estate (Regulation and Development) Act Gold: It is said that Gold is the life belt for all seasons,
2016 (RERA) especially the dangerous ones. Gold is the most widely accepted
precious metal which appeals to almost all kinds of investors.
The Laws applicable to Real Estate Business can be divided Investing in gold, in relation to its value, is small and therefore
in five groups: can be stored and concealed without any difficulty. Investing
in gold is highly profitable during inflation, as the prices tend
1. Land Related Laws;
to move up faster. Similarly when there is uncertainty in the
2. Environment Laws; nation the value of gold is likely to go up. In many countries
3. Construction Laws; gold remains an integral part of the social and religious customs
4. Registration Laws; and besides being the basic investment avenue. It has no intrinsic
value. This aspect of gold compelled Henry Ford to say that,
5. Labour Laws. ‘Gold is the most useless thing in the world’. It is very difficult to
store gold in a safe place with the cost involved in such storage.
FDI in Real Estate Sector in India: FDI i. e. Foreign This induces investors to look for alternative investment to
Direct Investment is encouraged in the following sectors in gold. Investment in jewellery leads to loss in investment at the
India: Development of Hotels, Travel and Tourism Industry, time of sale. Thus gold coins and bars are fast moving up as
Hospitality, Development of Township, Development option to investment in gold. The reasons to appeal or attract all
of Commercial Real Estate, Infrastructure development, kinds of investors are:
Construction of Resorts, Constructing Educational Institutions • It is highly liquid;
and Recreational sites, SEZ i.e. Special Economic Zones. The • It is aesthetically attractive;
foreign direct investment (FDI) up to 100 per cent is allowed
with Government’s permission for developing townships and • It has been hedge against inflation;
settlements (Before the budget 2014). The overall Indian • It possesses a high degree to appreciate value;
real estate market is expected to touch US$ 180 billion by • It is used as industrial application;
2020. The real estate dealers are looking forward to influence
• It is purchased by Central Bank and IMF.
the SEZs as well. As a matter of fact, since the year 2005, FDI
in real estate sector in India has earned a promising amount of
US$ 8 billion approximately. Real Estate Investment in India Features of holding Gold or Gold Coins
is not only a bright prospect, but also a potential opportunity to
optimize the benefits of the economic growth in India. • Gold Coins are available in small, little pieces allowing
buying and sell small quantities as per convenience of
A typical investment property generates cash flows to an investors and are easily recognized around the world as
investor in the following manner a Precious metal.
• Gold a store value.
• Net Operating income (NOI) • Gold is acknowledged by most Central Banks around
• Tax Shelter the world and can be used as a medium of exchange.
• Equity Build-up • It is the time-proven hedge against fiat currency
debasement, which our Federal Reserve has patently
• Capital Appreciation
acknowledged as a given in this country
• It is easily portable and movable.
Net operating income: A common measure to judge the
performance of an investment property is NOI. It means the • Gold coins are not subject to property taxes.
income generated by a property by way of rent or other form • Gold Exchange Traded Funds (ETFs) are like mutual.
of income less expenses like taxes, maintenance and other It is an easier and safer mode to buy gold. The charges
expenses. are very less and the gold can be accessed electronically.
Tax shelter: Due to investment in property tax benefits are • Gold suffers capital gains tax as per the IT Act.
available by way of depreciation, repayment of housing loan
and interest on it as well as the loss on one property can be
adjusted against the income of other property.

COVER STORY
Prices of Gold in India: Price in rupees for 10 grams. Suggestions while investing in Gold or Gold Coins
Investment in gold is very popular in India. Since there is no
Assessment year/ valuation Gold rates (standard 24 income as such from holding Gold, there is no liability to pay
date carats) (per 10 gms.) income tax. But gold bullion and jewellery are subject to capital
gain tax and wealth tax. Take care to keep investment in gold
Rs. in bank lockers. Remember gold is a commodity and is worthy
31-3-2012 28,040 only when market is ready to pay for it and investment in gold
31-3-2013 29,610 is a personal matter of an individual. Gold has proved to be the
perfect hedge for inflation.
31-3-2014 28,470
31-3-2015 26,245
Conclusion
31-3-2016 28,340
Life is full of risks. From travelling in an airplane to the
31-3-2017 28,950 simple act of walking to the corner shop, are the inherent
31-3-2018 30,680 risks everywhere. Same is the case with the money invested.
Investments in real estate as well as investment in gold are
Source: https://www.policybazaar.com/gold-rate/, the common investments. It is said that investment in gold is
www. goldprice.org dead investment. However we Indian people are crazy about
investment in gold. It is advised to have a certain percentage
Suggestions while investing in Real Estate of investment in gold to hedge inflation. However, the
investment is real estate is far better than investment in gold.
The wisest investment advice given by the experts to the
Real Estate Investment in India is not only a bright prospect
investors is, ‘buy real estate because they are not making any
but also a potential opportunity to optimize the benefits of the
more of that stuff’. It is suggested that buying an own office and
economic growth in India.
fitting it with air conditioners, fans can be a good investment
because of depreciation available on office space and fittings.
Due to unsustainable level of price it is better to invest in real References
estate. The recommendations made while investing in real 1. Ph.D. thesis of Dr. D. B. Bharati entitled, ‘A study of
estate are: the different schemes of savings among the middle
classes in Pune District’.
• Be careful about land ceiling laws and tenancy laws;
2. Various articles published in Business Standard, The
• Don’t buy at early stage; Economic Times.
• Plan for own house or apartment; 3. www.moneycontrol.com
• Insure the house and its belongings; 4. www.ncreif.org
• Buy or build a house with borrowed money;
• Buy agricultural land to avail wealth tax exemption;
• Risk of armed robbery and violence for farmhouses and [email protected]
• Be careful about land – grab and illegal encroachments.
Let us assure that it is essential to have own house in the

long run. Having an own house one could satisfy the emotional
satisfaction, hence the priority should be given to make real
estate investments.
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COVER STORY
REAL ESTATE CAN BE

A HAVEN FROM STOCK
MARKET VOLATILITY
Dr. Mohammad Khaja Moinoddin

Professor, Dept. of Commerce & Business Management
SRM Group of Institutions
Karimnagar, Telangana
Abstract
Investment in Republic of India has perpetually been a subject matter of concern, however what matters is sensible investment.
Solely a sensible investment has the capability to vary our lives. We tend to all invest in numerous places in order that we tend to get
ample funds for your future. We tend to all pay have completely different choices to speculate in, be it stocks, gold, bonds, government
schemes, etc. however the neatest out of all is assets.
History has been the proof that kingdoms has fought over several battles only for the land. Assets ne’er lose its demand or value;
if truth be told it grows over time. This can be why investment in Indian assets is that the safest and most remunerative choice.
Real estate is usually delineated as being “recession-proof”. However is that actually the case? During this article, we’ll examine
however assets and REITs have traditionally performed throughout bear markets and periods of exchange volatility.
I
Introduction Whether industrial or residential, assets Investment is one the
nvestment in Republic of India has perpetually been foremost crucial choices in Republic of India, there are tons of
a subject matter of concern; however what matters things which require to be unbroken in thought once you do
is sensible investment. Solely a sensible investment your property analysis.
has the capability to vary our lives. We tend to all
invest in numerous places in order that we tend to Here are a few:
get ample funds for your future. we tend to all pay
RERA no, Legal approvals and Licenses
have completely different choices to speculate in, be
it stocks, gold, bonds, government schemes, etc. however the • Location
neatest out of all is assets. • Budget
History has been the proof that kingdoms has fought over • Resale worth
several battles only for the land. assets ne’er loses its demand • Loan Facility and Eligibility
or value; if truth be told it grows over time. This can be
• Job opportunities
why investment in Indian assets is that the safest and most
remunerative choice.

COVER STORY
Objective of the Study VIX – CBOE volatility index

The present paper discusses regarding the choices for The VIX, or Volatility Index, was created by the Chicago
investment once the market is down, to concentrate on the Board of choices Exchange and is employed by analysts to
historic performance correlation of REITs vs. equities, and to live the stock market’s expected value fluctuations or modern
grasp regarding the Preparation for a possible potential bear volatility.
market. The VIX additionally measures each the frequency and
magnitude of value movements up and down over bound
Options for investment in a very down market periods of your time. The a lot of dramatic the worth changes,
the upper the extent of volatility. Additionally to activity short
The average annual come on the S&P 500 has been 13.79%
value swings, expected future volatility lives value changes
over the last 10 years. In June 2019, Forbes noted that this trend
implicit by choices costs while realized volatility is accustomed
of double-digit returns could also be coming back to associate
measure actual historical value changes.
degree finish, because of the danger of rising interest rates, a
drawn-out trade battle between the U.S. and China, and revived
confrontations with Asian country. Historic performance correlation of REITs vs. equities
If and once the exchange becomes unstable, 5 potential Correlation may be a monetary datum accustomed live the
choices for investment before issues begin to occur: degree to that 2 investments or assets move compared to at least
1. Hold money on the sidelines one another. If each move up or down at constant time, they’re
same to be extremely correlative. On the opposite hand, if one
2. Purchase high dividend-paying stocks like Pepsi,
quality moves down whereas the opposite remains stable or
McDonald’s, and Exxon
moves up, correlation is alleged to be low or maybe negatively
3. Add some weight in your portfolio to affordable index correlative.
worth funds since worth stocks, in general, are cheap
relative to alternative stocks
Low correlation and diversification
4. Move into sectors possible to exceed the market, like
aid and energy Real estate has traditionally delivered performance that falls
between equity and bonds – however is underpinned by a bond-
5. Invest in assets investment trusts (REITs)
like yield and with lower volatility compared to equity.
Real estate’s low volatility income offers support for stable
REITs and also the CBOE Volatility Index (VIX) returns with payouts that may grow in line with income, not like
To understand why investment in REITs could also be bonds that disburse a set coupon rate.
a technique to use if the exchange becomes volatile, we’ll Using knowledge collected from the National Council of
1st verify however REITs work and so however the VIX is assets Investment Fiduciaries, Barclays Capital, Wilshire, and
employed to live exchange volatility. J.P. Morgan the report compared the performance of personal
assets to a 60/40 U.S. stock and bond portfolio over the twenty
REITs – assets Investment Trusts worst quarters between 1990 and 2008. In 17 of these 20
quarters, non-public assets investment returns were positive
REITs are the stocks of firms that invest in investment-grade
whereas the portfolio of stocks and bonds was down.
industrial assets like office block and multifamily housing
comes.
Directly investment in high-quality assets needs giant Forward expectations for REITs
amounts of your time, market information, and capital. REITs Of course, past performance is not any guarantee of current
enable investors to avoid the challenges of direct possession or future performance. In Gregorian calendar month 2019,
whereas still receiving the advantages those investment assets NAREIT – the National Association of assets Investment Trusts
offers, together with the potential for continual dividend – reviewed the returns, volatility, correlation, diversification
financial gain and property appreciation. edges, and forward expectations for REITs.
Once the dividend payments are created, investors receive a NAREIT half-track the daily total returns between the
daily financial gain stream from the investment trust, kind of broad exchange and equity REITs for 2018. The REIT-stock
like the continual rental revenue from owning realty directly. correlation ranged from an occasional of forty fifth to a high of
By viewing associate degree Index of investment trusts we regarding hour. Whereas the Financial Times noted that “Stock
are able to compare REIT performance to the exchange as an market slide in 2018 leaves investors contused and wary”,
entire. The MSCI America investment trust Index consists of the low correlation between the exchange and REITs might
equity REITs that primarily own and operate income-producing facilitate to safeguard investors from exchange volatility.
assets. Over the past ten years, the MSCI has provided investors In addition to viewing the recent REIT-stock correlation,
combined annual returns of fifteen.42% vs. 13.79% compared NAREIT also used another methodology to live volatility
to the S&P 500. famed as REIT beta. Beta measures the danger of a selected
quality compared to a benchmark like the general exchange.
as an example, a beta of one suggests that associate degree

COVER STORY
investment moves in conjunction with the market. A beta of Industrial / provision – preparing to sixty million sq. ft. of
one.3 suggests that associate degree quality is three0% a lot of ongoing house are extra until 2020; the portion of evaluation an
volatile compared to the general market, and a beta of zero.7 offer is anticipated to broaden.
suggests that it’s half-hour less. Residential – Sales and new dispatches expected to improve;
modest and center stage to guide in the midst of government
Do REITs price a lot of to speculate in? activities and designer realignment of item blend..
If REITs probably supply shelter from exchange volatility, Capital Markets appetence for Greenfield may reinforce;
one may expect investors to pay a lot of for the privilege of that center resources additionally will in any case be favored; due
anticipated protection. ingenuity and counter-party quality to return into chiseler
center.
By analyzing the VIX Index, volatility measures from the
S&P 500 and Russell 2000 indices, and by using alternative
enquiry strategies. Earlier studies found that general volatility References
risk is not priced into equity investment trust stocks. The 1. Branch Ben; Investments Principles and Practices,
analysis cluster additionally noted that this can be in contrast Longman Financial Services, Second Edition 1989
to what’s determined in typical non-REIT equities like FAANG Chinloy Peter; Real Estate Investment and Financial
stocks and valuable, high dividend-paying stocks. Strategy; 1987
Investors could also be ready to use REITs to hedge their 2. Deloittle & Touche, Understanding REITs, Personal
portfolios against innovations in mixture market volatility. Finance Advisor, July 1997
Typically, REITs aren’t sensitive to mixture volatility found 3. Friedman M. Steven; The REIT as a Strategic Real
in giant S&P five hundred stocks or smaller stocks within the Estate Tool, Commercial Investment Real Estate
Russell 2000. Journal,1998
4. Geurts G. Tom, Nolan Hilary; Does Real Estate Have A
Preparing for a possible market Place in the Investment Portfolio of Tomorrow, Review
The stock index Industrial Average has gone from an of Business, Vol.18 Issue.4, 1997
occasional of 6469 in March of 2009 to 26,599 as of the top of 5. GYO, Esaslar Tebli i, 2004
June 2019. Whereas there’s no such factor as a globe, given the 6. Irwin Hal; REITS and The Real Estate Resurrection;
rotary nature of markets it should not be unreasonable to start CMHC Mortgage Market Trends Thi rd Quarter,1998
getting ready for a market. Landy W. Eugene; Benefits of Dividend Re nvestment
Of the 5 potential choices advised by earlier studies for Plans and Shareholder Investment Plans for
investment in a very volatile exchange, assets supported with Shareholders, Real Estate Investment Trusts and the
fixed-rate debt might shield investors against rising interest Economy; 1996
rates. at the same time, properties with timely rent changes 7. Meretsky Jason, Real Estate Investment Trusts: An
like multifamily will perform well throughout associate degree Analysis of the Investment Vehicle and Income Tax
inflationary period. Implications, University of Toronto Faculty of Law
Review vol.53 No.1,1998
Conclusion 8. NAREIT, NAREIT/PREA Property Investment Strategy,
India Real Estate Market Outlook 2019 Real Estate Symposium, 1998
Office – when a milestone 2018, the field is attempting 9. Raijen Van Laura; Real Estate Investment Structures,
forward to an alternate hearty year as new wellsprings of interest Working Paper, 1998
rise and quality offer enters the market.
Retail - about 10-12 million sq. ft. of offer is anticipated for
the current year, when experiential retail and Omni-channel can [email protected]
in any case reclassify the field.
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COVER STORY
2
IS
CONSIDERATION
OF GLOBAL
REAL ESTATE
INVESTMENT
RISKS WORTH?
Mrs Pahuljot Kaur Harjot Kaur

Assistant Professor Post Graduate Student
Akal University, Talwandi Sabo, Punjab Akal University, Talwandi Sabo, Punjab
Abstract
Real estate investment acts as a collateral security and facilitates easy access to credit. Cross-border real estate investment has
also been on the increase, investors are considering real estate as a global asset class. But there is huge uncertainty in the returns as
high risk is associated with investment. To capture different levels of market risk, it is necessary to identify and measure the factors
leading to this uncertainty, such as country risk, structural risk etc. this paper simply puts the focus on various global real estate
investment risk associated while considering it as an investment option.
R
Introduction 2020’ as Construction Technology year to meet the increasing
eal estate asset will yield long term demand for housing initiated by rapid urbanization. The Union
benefits for investors in developing Cabinet chaired by the PM, gave the approval for “Housing
countries due to the additional need for for All by 2022” in the form of PMAY (Pradhan Mantri Awas
buildings, ancillary units, new airports, Yojana) and schemes consists of actions like rehabilitation
metro, railway stations, offices, shopping of slums of slum dwellers (central grant of Rs. One lakh per
malls, hotels and hospitals. In India, Prime house), promotion of affordable houses for weaker sections
Minister declared ‘April 2019- March of the society through credit linked subsidy or in partnership

COVER STORY
with private and public sectors and subsidy for beneficiary-led countries. Micro and macro factors of the environment cause
individual house construction [1]. fluctuations in grading and risk levels. Size of the economy,
The global investment firm the Xander Group’s private equity income levels, income distribution, personal consumption,
real estate arm Xander Investment Managemet (XIM) has setup population, inflation, financial status (FDI and BOP), banking
industrial real estate platform for India and will invest $250mn and financial system and tax and interest rate affects the GDP
or over Rs 1,780 Cr. [The Economic Times; Dated- Oct15,2019]. of the country. Economic policies namely industrial policy,
“An NRI investment in Indian real estate has doubled from $5 monetary policy, fiscal policy, etc. determine the position of a
billion in 2014 to $10.2 billion in 2018,” according to a report country in the international arena [7]. The computation of various
released in 2018 by 360 Realtors [2]. The Bloomberg analysts components represents the overall risk premium for real estate
believes that portfolio of stocks could yield 22% returns on an investment.
average. Portfolio of stock furnishes international diversification
of investment avenues. Moreover loss of one security can be Country economic risk
compensated from profitable stock thus provides nullifying
The level and volatility of economic performance shapes
effect. Another report by Deutsche Bank reveals that the interest
country’s economy. It varies from time to time, nation to nation.
rate cycle is turning in favor of the real estate sector. [3]
A strong correlation exists between general economic conditions
This has resulted in increase in investments in cross border and real estate investments (real gross domestic product per
real estate market. Real estate investment acts as a collateral capita, GDP per capita growth rate and level of enhancement
security and facilitates easy access to credit [4]. More than half of economic development) [4]. Literacy rate, inflation rate and
of the total retail loan portfolio of the banks comprises housing unemployment rate serves as a tool to gauge economic risk of
loan, as per “Trends and Progress of Banking Report 2016- a country. Larger economies are able to withstand economic
17” [5]. The juncture of the real estate market encompass self- downtrend and are more secured than small economies. In
consumption (or provision), sale to users (market), letting for addition, level of grade of country notably affects investors’
long term and capital appreciations and dividends [real estate decisions in real estate market [7].
stock market] [6]
An economic research on medium term rating (country
grade) and short term rating (country risk level) was conducted
Categorization of Real Estate by Euler Hermes in Q2 2019 as a source of economic analysis
I. Residential real estate consists of new construction which would help in global real estate investments [8]. The
and re-sale homes. Townhouses, high value homes, country possessing higher risk level will lower the real estate
duplexes, triple decker, multigenerational and vacation investments. These guide investors to be more cautious in their
homes are the common categories. investments.
II. Commercial real estate includes medical and The average returns of North Korea, Sri Lanka and Syria
educational buildings, hotels, shopping centres (malls), have been negative while the securities in US and Australia
offices and apartments. As apartments are owned to have outperformed [8]. At a crossroad India’s graded rating is
produce income (used for residential purpose) they are B2 (Q2 2019) due to its potency and flaws. On the flaw side,
categorized as commercial real estate. patchy income distribution, pervasive poverty, inadequate
infrastructure, current and fiscal account deficits, weak
III. Industrial real estate includes manufacturing units
structural business environment and lack of beforehand policies
(buildings and property) and warehouses. These
and measures [9].
buildings can be used to fulfil various purposes like
production, storage, distribution and for research and Red Colour: High Risk countries: Argentina, Zambia, Libya,
development purpose. Venezuela, Sudan, Yemen, Niger, Democratic Republic of
Congo, Ukraine, Iran, Iraq, Syria, Pakistan, Nepal, Mongolia,
IV. Land includes ranches, working farms and vacant land
Solomon Island, Cuba, Bolivia, etc.
(site assembly).
Yellow Colour: Medium Risk countries: Mexico, Uruguay,
Morocco, Oman, Saudi Arabia, India, Egypt, Kenya, Italy,
Global Real Estate Risk China, Hong Kong, Singapore, United Kingdom, Romania,
Risk is the variability in outcome. For that reason returns Cyprus, Malaysia, etc.
of real estate investments are unpredictable. Despite the fact Green Colour: Low Risk countries: Australia, New Zealand,
that uncertainties like political, economic and financial risk, Indonesia, UAE, Taiwan, Thailand, Japan, South Korea,
globalization of markets continues. Individuals who are experts/ Finland, Norway, Germany, Spain, Portugal, Ireland, France,
analysts conduct economy wide analysis to reduce element Poland, Switzerland, Kuwait, Israel, US, Canada, Colombia,
of risk associated with real estate investments and to frame Chile, Peru.
strategies accordingly.
Political and legal environment of a country also plays
crucial role in real estate investments. It is prevailing at a
very high rate in countries like Turkey, Iraq, Algeria, Nigeria,
Afghanistan, Myanmar and Indonesia while it is almost non-
existent in Canada, Australia, US and Western European

COVER STORY
the prices of property making real

estate, an unattractive investment [5].
It is an illiquid sort of investment.
Investors are not financially literate
so undertake traditional mode of
investments. Other reasons can be
protectionist measures being adopted
by host country to protect domestic
investors (nepotism), construction
delays, default by contractors,
repatriation of profits, kidnapping,
ransom, terrorism and corruption,
antiglobalisation movement and caps
on FDI. [7]
Conclusion
Real estate asset will yield
long term benefits for investors
in developing countries due to
Source: Euler Hermes, as of June 25, 2019 (Q2- Country risk map) [8] the additional need for buildings,
ancillary units, etc. due to urbanization. None of the sector of
market is risk free. It is inherited in each and every investment
Structural real estate risk avenue, making its returns erratic. To capture different levels
It is associated with variability and explosive nature of returns of market risk, it is necessary to identify and measure the
and investor’s ability to probe price correctly. It is interrelated factors leading to this uncertainty. Reports of ACE Equity and
to the maturity of the market, transparency and liquidity of real Bloomberg, J.P. Morgan and Deutsche Bank reveals that global
estate assets [4]. The real estate market dynamics have been real estate sector is best sector for investment. It is advised to
affected by the creation of European Monetary Union, the conduct fundamental analysis to reduce risk associated with
unique currency area. The financing system of the countries real estate investments. Regardless of the reality that global
also varies. As in European countries and Japan, bank based real estate investments are prone to several economy wide risk
financing system prevails while countries like Australia, US and factors, constitute a special place in the portfolio of an investor,
Canada are known for capital-market oriented financing system to reap advantage of compensating effect (diversification).
[Centre for European Economic Research]. India is primarily a
cash-transaction oriented economy [7].
References
[1]https://www.pmindia.gov.in/en/news_updates/housing-for-all-by-
Cyclical real estate risk 2022-mission-national-mission-for-urban-housing/
This risk adversely affects the proceeds from investments [2]https://www.livemint.com/money/personal-finance/nri-investors-
as excel during slowdown (recovery phase) or may harvest no in-indian-property-should-look-at-office-segment-1569312858536.html
yields relative to stable markets. Prices of real estate properties [3]https://m.economictimes.com/wealth/invest/real-estate-market-
are determined by the demand and supply forces of the real set-for-a-comeback-5-promising-stocks-from-the-sector/amp_
estate market [4]. Real estate space market is highly segmented articleshow/70000796.cms
upon location and type of property. Demonetization has resulted [4]Jun Chen and Peter Hobbs.(2003). Global Real Estate Risk
in minimum growth in GDP, wage earners are losing jobs, thus Index. The Journal of Portfolio Management. 66-75.
lowering their consumption to meet basic needs (or durable [5]Ms. Jaya G. Prabhu Parrikar. (2018). Affordability in
goods), as follows have affected the Indian economy [5]. Housing Markets in India: An Overview. International Journal of
Multidisciplinary.Vol-03(03). 99-101.
[6]Thierry Theurillat, Patrick Rérat and Olivier Crevoisier. (2014).
Why real estate investments prove to be unattractive?
The real estate markets: Players, institutions and territories.Urban
The property prices should be in aligned with fundamentals Studies. Vol.52(8). 1414-1433.
otherwise it will escort repercussions [subprime market crisis [7]Aswathappa, K. International Business.6e. Chennai:Mc Graw
in US (2007-2008)]. Due to enormous differences among Hill(Inda) Private Limited
international real estate portfolios, investors are paying less [8]https://www.eulerhermes.com/en_global/economic-research/
attention to international diversification. Investors are unfamiliar country-reports.html
with taxes, fees, exotic regulatory barriers, exchange rate risk [9]https://www.eulerhermes.com/en_global/economic-research/
and structures of foreign market. In almost every country real country-reports/India.html
estate stocks provide a weak hedge against consumer price
inflation. [7] [email protected]
In India, income levels of citizens are low as compared to [email protected]

COVER STORY
HOME BUYERS
AND THREE FOLD
PROTECTION SHIELD
OF LAW
Hareesh Kumar Kolichala

Chief Manager (Law)
Union Bank of India
Kolkata
Abstract
The Real Estate sector was largely unregulated. Earlier, home buyers who pooled all their resources and invested in property
were being arm twisted by the builders and were being taken for a big ride. Delay in completion of construction was a common
phenomenon. There was hardly any legal protection to a home buyer as he had to move civil courts for redressal of his grievances
which involved heavy expenses and time. Thereafter, Consumer Protection Act, 1986 came to be enacted which provided him with
some solace but the same was not inexpensive and speedy nor was it specific to the real estate sector. However, there is a complete
change in the scenario. The law has been bolstered in favour of home buyers and now they could get a speedy justice. It has come
in the form of series of measures of the Government like enactment of Real Estate (Regulation and Development), 2016, (RERA),
Supreme Court’s direction, in the case of Jaypee Infrastructure Ltd. allowing the representative of allottees of flats to be part of
the Committee of Creditors under newly enacted Insolvency and Bankruptcy Code, 2016 and subsequent amendments to the Code
including “Home Buyers” as Financial Creditors. The RERA is very stringent, provided safeguards to the buyer of home. The
promoter/builder will be punished for violation of the provisions of the Act. It is clarified by the Supreme Court that a consumer
could get his grievance redressed through any of the enactments, be it Consumer Protection Act, 1986, RERA, 2016 or Insolvency
and Bankruptcy Code, 2016. The Home Buyer has three laws in his arsenal.
T
he Real Estate sector was largely unregulated. and was not adequate to address all the concerns of buyers. .
Earlier, home buyers who pooled all their Delay in completion of construction has become a common
resources and invested in property were being phenomenon. According to the Ministry of Statistcs and
arm twisted by the builders and were being Programme Implementation, out of the 782 construction
taken for a big ride. There was hardly any projects monitored by them, a total of 215 projects were delayed
legal protection to a home buyer as he had to with the time over-run ranging from 1 to 261 months whereas
move civil courts for redressal of his grievances which involved the amount raised from home buyers was significant.
heavy expenses and time. Thereafter, Consumer Protection Act,
Almost all States have enacted laws regulating construction
1986 enacted which provided the real estate consumer with
of Apartments. But, all these enactments did not cover a very
some solace. Yet, it was not inexpensive and speedy nor was it
important area of defining the duties of the Promoter and
specific to the real estate sector. The recourse was only curative
penalties for not adhering to the time lines for completing the

COVER STORY
projects. In the case of Neelkamal Realtors Suburban Pvt. Ltd. 5. To ensure greater accountability towards consumers,
Vs. Union of India [2018(1)RCR(Civil)298], the High Court of and significantly reduce frauds and delays.
Bombay had explained the problems plaguing the real estate 6. To establish a fast-track dispute resolution mechanism.
sector as under:
“181. There was no accountability as to entity or persons The salient features of RERA are as under:
responsible and/or liable for delivering on several projects 1. Section 3 of the Act mandates prior registration of real
that were advertised and in respect of which amounts had been estate projects with RERA.
collected from individual purchasers. What was promised in 2. As per Section 4(l)(D), for registration of the real estate
advertisements/broachers, such as amenities, specifications of project with the RERA, a promoter has to submit an
premises etc. was without any basis, often without plans having Affidavit declaring that, 70% of the amounts realized
been sanctioned, and was far from what was finally delivered. for the real estate project from the allottees shall be
Amounts collected from purchasers were either being diverted deposited in a separate account to be maintained in a
to other projects, or not used towards development at all, and the scheduled bank to cover the cost of construction and the
developer would often be left with no funds to finish the project land cost and shall be used only for that purpose and
despite having collected funds from the purchasers. For a variety the amounts from the said account shall be withdrawn
of reasons including lack of funds, projects were stalled and only after it is certified by an engineer, an architect and
never completed and individual purchasers who had invested a chartered accountant in practice that the withdrawal
their life-savings or had borrowed money on interest, were left is in proportion to the percentage of completion of the
in the lurch on account of these stalled projects. Agreements project.
entered into with individual purchasers were invariably one
3. Section 11 of the Act clearly defined functions and
sided, standard-format agreements prepared by the builders/
duties of the Promoter. As per this provision, the
developers and which were overwhelmingly in their favour with
Promoter shall create a web page on the website of the
unjust clauses on delayed delivery, time for conveyance to the
RERA and update the status of the project quarterly for
society, obligations to obtain occupation/completion certificate
public viewing. The promoter shall make available to
etc. Individual purchasers had no scope or power to negotiate
the allottee of the flats all information such as sanctioned
and had to accept these one-sided agreements.”
plans, layout plans, the stage wise time schedule of
However, there is a complete change in the scenario. The completion of the project. A developer is not allowed
law has been bolstered in favour of home buyers and now they to start selling flats before all building plan approvals
could get a speedy justice. It has come in the form of series are obtained.
of measures of the Government like enactment of Real Estate
4. As per Section 13, a Promoter is barred from receiving
(Regulation and Development), 2016, (RERA), Supreme
any deposit or advance more than 10% of the cost from
Court’s direction, in the case of Jaypee Infrastructure Ltd.
a person without first entering into a written agreement
allowing the representative of allottees of flats to be part of the
for sale with such person.
Committee of Creditors under newly enacted Insolvency and
Bankruptcy Code, 2016 (Code) and subsequent amendments to 5. The promoters are required to post quarterly updates on
the Code including “Home Buyers” as Financial Creditors. the progress of the projects on the RERA’s website.
6. As per Section 18, if the promoter fails to give possession
of an apartment, plot or building within the time specified
Real Estate (Regulation and Development) Act, 2016
in the agreement for sale or due to discontinuance of
Parliament had enacted RERA, 2016 and Sections 2,20-39, his business or for any other reason, the promoter shall
41-58, 71-78 and 81-92 of this Act were brought into force be liable, in case the allottee wishes to withdraw from
from 1st May,2016 and the rest of the Sections were brought the project, to return the amount received by him with
into force from 1st May, 2017, i.e., one year later. The reason interest at such rate as may be prescribed including
for the same was to enable the State Governments and Union compensation as provided under the Act. Further, where
Territories to establish the Real Estate Regulatory Authority, the an allottee does not intend to withdraw from the project,
Adjudication Officer and the Appellate Tribunal. he shall be paid interest, for every month of delay till the
handing over of the possession, by the promoter, at such
The Objects of the Act are described as under: rates as may be prescribed.
1. To regulate the real estate sector to bring professionalism
and standardization Section 19 of the Act provided that the allottee shall be entitled
2. To remove the constraints for the healthy and orderly to obtain information regarding project, stage-wise completion
growth of the industry. of the project, claim refund of the amount if the promoter fails
3. To bring a uniform law to regulate Real Estate sector to give possession of the property as per the agreement.
across the country in the interests of effective consumer Section 20 provided for establishment of RERA by an
protection. appropriate government to enable an aggrieved person to file
4. To provide for the establishment of the Real Estate complaints. The RERA has power to issue orders and directions
Regulatory Authority (RERA) for resolution of disputes to promoters, allottees or real estate agents and impose penalties
and to ensure transparency. or order for payment of compensation or interest. Section 71

COVER STORY
of the Act empowered the RERA to adjudicate complaints and Thereafter, Parliament made amendments to the Section 5(8)
grant compensation within 60 days to an aggrieved person for of the Code conferring the status of “Financial Creditor” on
violation of the provisions of the Act. home buyers and an Insolvency Professional to represent them
in the COC meetings.
Penalties The said amendment was challenged as unconstitutional in
Sections 59-61 provides for levying of penalties on the the above said case of Pioneer Urban Land and Infrastructure
promoter which may extend upto 5-10% of the estimated cost of Ltd. before the Hon’ble Supreme Court of India. However,
the real estate project. Section 59(2) provides that the Promoter Supreme Court had rejected the argument of the Petitioners,
shall be punishable with imprisonment for a term which may upheld the validity of the amendment and held as under:
extend upto 3 years or with fine which may extend upto a further “The RERA is to be read harmoniously with the Code. It is
ten percent of the estimated cost of the real estate project or only in the event of conflict that the Code will prevail over the
with both. RERA. Remedies that are given to allottees of flats/apartments
In the above cited case of Neelkamal Realtors Suburban Pvt. are therefore concurrent remedies, such allottees of flats/
Ltd., the High Court of Bombay had upheld the constitutional apartments being in a position to avail of remedies under the
validity of the Act and dismissed the Writ Petition which Consumer Protection Act, 1986, RERA as well as triggering of
challenged the Constitutional validity of the Act. the Code.”
Therefore, the Act, by providing various safeguards, Therefore, in insolvency proceedings against a Corporate
empowered the consumer and regulated the behaviour of the Debtor, a home buyer is on par with other Financial Creditors
Promoters/builders to ensure that the consumers are not cheated like Banks and has a say in the Committee of Creditors.
or harassed.
Remedy under Consumer Protection Act, 1986
Implementation of RERA Similarly, in the complaints filed by the allottees/consumers
Most of the States have notified RERA in their respective before the Consumer forum, the developers/promoters
States. However, some of the States have not brought the said contended that on enactment of RERA, consumer forum lacked
Act into force in their respective states. The State of West jurisdiction. In the case of Ajay Nagpal Vs. M/s. Today’s
Bengal had notified its own law called “West Bengal Housing Homes & Infrastructure Pvt. Ltd. [CC 1764 of 2017], National
Industry Regulation Act, 2016” (HIRA). In the case of Pioneer Consumer Disputes Redressal Commission held that RERA
Urban Land and Infrastructure Ltd. Vs. Union of India, does not bar the jurisdiction of Consumer Forum.
[2019(10) SCALE 523], Supreme Court had directed such Subsequently, Supreme Court also confirmed in the above
States to implement RERA within a period of three months case of Pioneer Urban Land and Infrastructure Ltd. that an
from the date of the judgement. allottee may invoke any of the Acts, either RERA, Consumer
Protection Act, 1986 or Insolvency and Bankruptcy Code,
Insolvency & Bankruptcy Code, 2016 2016. The proviso to Section 71(1) of RERA provides that an
The consumers of the Real Estate Sector got further boost in allottee may continue with his complaint already filed before
the form of Insolvency and Bankruptcy Code, 2016 (Code). The the Consumer forum or he has the choice to withdraw such
said Code came into force from 1.12.2016. The main object of complaint and file an application before the RERA.
the Code is to resolve the corporate insolvency in a time bound
manner to maximize the value of assets. The Code has been Conclusion
proved to be effective and is a biggest economic reform. Therefore, now, a consumer of Real Estate has got various
The Code differentiated lenders into Financial Creditors remedies to pursue and he may choose his remedy. The newly
and Operational Creditors. Once an application for initiating enacted RERA and the Insolvency and Bankruptcy Code, 2016
Corporate Insolvency Resolution Process is admitted by the are more effective and time bound. The position of the home
National Company Law Tribunal (NCLT), a Committee of buyer has been elevated like never before. The tougher legal
Creditors (COC) is formed and it is this Committee which regime has already put the developers like Unitech Ltd. on the
runs the Company until the Resolution Plan is approved. As mat and the home buyer will have the last laugh with three laws
per Section 21(2), the COC shall comprise only all financial in his arsenal.
creditors and Operational Creditors cannot participate in the
meetings of the COC. Financial Creditors alone have been
conferred with the privilege to take decisions during resolution
[email protected]
process.
IDBI Bank had initiated proceedings under the Code against
Jaypee Infratech Ltd, (JIL), a large real estate developer, before
the NCLT, Allahabad bench. On 11.9.2017, an order was passed
by the Supreme Court in the case of Chitra Sharma Vs. Union
of India [2017]144SCL1(SC)] appointing a representative of
home buyers to participate in the meetings of the COC in order
that their interest is protected.

DIGITAL OBJECT IDENTIFIER (DOI)
Issue: October-2019 [Vol. 54 No. 10]
Issue Page
Name of The Article Name of Author/s Volume Issue DOI Numbers
No. No.
CMA Harijiban 10.33516/maj.v54i10.20-
“Howdy Modi” 54 Oct-19 10 20-21
Banerjee 21p
The US-India Economic Relations: 10.33516/maj.v54i10.22-
Dr. Saibal Kar 54 Oct-19 10 22-25
An Enthusiastic Renewal 25p
CMA Amit Kumar
FINTECH: New Financial Arora 10.33516/maj.v54i10.26-
54 Oct-19 10 26-29
Landscape in India 29p
Ankit Panchal
FINTECHS : The Dark Horse of 10.33516/maj.v54i10.30-
R Sumitra 54 Oct-19 10 30-32
SME Lending 32p
Impact of Financial Technology on 10.33516/maj.v54i10.33-
CMA Harpreet Singh 54 Oct-19 10 33-34
Accounting & Auditing 34p
CMA Rambabu
Genteela
CMA (Dr.) Gaddam
FIN-TECH Adoption by the Indian Naresh Reddy 10.33516/maj.v54i10.35-
54 Oct-19 10 35-38
Banking Sector - A Study Dr. Maloth 38p
Raghuram
Dr. K. Krishna
Chaitanya
Impact of ICT Usage in Detection 10.33516/maj.v54i10.39-
Dr. Deepika Gautam 54 Oct-19 10 39-43
and Prevention of Bank Frauds 43p
Financial Technology and its Scope
Dr. Nilanjana Biswas 10.33516/maj.v54i10.44-
in Higher Education - A Study with 54 Oct-19 10 44-46
(Mitra) 46p
reference to India
Financial Innovation in the MSME
10.33516/maj.v54i10.47-
Sector: An Empirical Study on Dr. Rintu Nath 54 Oct-19 10 47-50
50p
FIN-TECH
FINTECH – An Exploratory Study M. Chandra Shekar 10.33516/maj.v54i10.51-
54 Oct-19 10 51-54
and its Applications Kumaran. R 54p
Digital Transformation – Solution CMA (Dr.) Paritosh 10.33516/maj.v54i10.58-
54 Oct-19 10 58-59
Design for Problem Solving Basu 59p
Standard Costing and Labour Cost CMA Ashwani 10.33516/maj.v54i10.65-
54 Oct-19 10 65-73
Variance Kumar 73p
Global Economic Situation and CMA (Dr.) Subhash 10.33516/maj.v54i10.74-
54 Oct-19 10 74-75
Banking Environment in India Chandra Das 75p
10.33516/maj.v54i10.76-
Tax Titbits CMA S. Rajaratnam 54 Oct-19 10 76
76p
Cost-Benefit-Analysis of Selling of 10.33516/maj.v54i10.78-
Er. Sunil Dasari 54 Oct-19 10 78-82
Third Party Products In Banks 82p
Evaluation of Capacity Assessment CMA R 10.33516/maj.v54i10.83-
54 Oct-19 10 83-86
– A Case Study Venkataramani 86p
Sabka Vishwas (Legacy Disputes
Resolution) Scheme called as
CMA 10.33516/maj.v54i10.87-
SVLDRS - Benefits to Trade 54 Oct-19 10 87-90
V.S.R.M.Kasyapa 90p
and Analysis for the benefit of
Practising Professionals
Issues in Performance Assessment
10.33516/maj.v54i10.91-
Framework: A Case of Konkan Abhishek Banerjee 54 Oct-19 10 91-94
94p
Railways

DIGITAL TRANSFORMATION
– STARTUP ECOSYSTEM
AND
PEOPLE CENTRIC SOLUTION
DESIGNING
CMA (Dr.) Paritosh Basu

Senior Professor
NMIMS School of Business Management
Mumbai
I
Indian Startup Ecosystem 8 WH Principles of Solution Designing
ndian startup ecosystem has presented so far twenty- In the second issue of this column design thinking has been
seven Unicorns. But none of them, in true sense, have written about. The author seeks readers’ indulgence to introduce
used any deep dive technology. NASSCOM in one his ‘8WH Principles’ that can help designing people centric
of its recent reports1 has indicated that circa 1,200 solutions with unique features of ‘innovention’. This process
Indian startups are engaged in innovative solution involves finding answers to the following questions ahead
designing with applications of deep technology of ever-emerging ground realities of dynamic domestic and
such as AI, ML, IoT, Blockchain, AR and VR. Mr, Jayanth international marketplaces:
Kolla, founder of a deep tech research and advisory firm, is • What are the latent and unique necessities of
of the view that these technologies render designed solutions stakeholders, society and humanity at large?
“smart, intuitive, self-reliant, customised and most importantly,
• Which solutions are presently available and what gaps
continuously improving,” Those are the harbingers of ‘Digital
are there in meeting users’ present and unforeseen
Transformation 2.0’.
unique requirements?
Interactions with many startups reveal that ‘Startupians’ in
• Who are the present service providers, target customers
India suffer from fear psychosis of failing and burning cash.
and what are their pain points, for which no remedy has
The Indian startup ecosystem, unlike in developed countries,
been offered so far?
hardly provides scope to make mistakes, not to speak of a free
and independent environment with incentivisation of mistakes • When the solution for the identified unique problem(s) is
also. They are more driven by the kick of innovation and not to be delivered, updated and upscaled with a sustainable
‘innovention’. Some of them are also driven by ‘Me Too Startup’ revenue model?
syndrome. An ‘innoventive’ mind brings in the element of • Where are customers located, for what value and up to
invention, i. e., something distinctively new with people-centric where the horizon of marketplace can be extended with
many-in-one solution design. Such unique products can cause or without any variation in solution design?
‘destruption’ (destructive disruption) and make competition • Whose regulations are to be complied with, for which
irrelevant with unique products and the first mover’s advantage. stakeholders, and what all risks are to be proactively

covered? central data storage server. Officials can now better perform
• Whom should the user contact in case of troubles faced analytics to study accident patterns. Road signals are more
while using the solution? being centrally controlled and synchronised that allows better
management by tracking traffic profile at different time slots.
• Whether any better solution is being offered / prepared
They also extensively use digital media for intensive awareness
by competitors anywhere in the world with superior
campaign and handle violators by sending notices, collecting
performance and unlimitable competitive advantages?
fines and tracking progress through digital platforms.
• How to minimise risks of value destructions, assess and
In December 2018 the Municipal Corporation of the same
track users’ delight and ensure sustainability?
city issued the birth certificate of a new-born baby through a
Technology does not have ethics, morality, compassion, Blockchain platform. This digital facility will be the simplest,
emotional intelligence and value generation skills for a common cost effective, yet safe and secured method for identity
man. Technologists have. Therefore, it is imperative for solution management of a human being throughout his / her life.
designers to ensure that imperatives for these human qualities
One of the top ten strategic technology trends, as identified
are never compromised. They must not allow applications
by Gartner5, is ‘Human Augmentation’. Digital scientists will
of such powerful digital tools with ulterior motives to harm
leverage technology to augment inherent physical and cognitive
humanity. The core principles of ‘Digital Empathy’2, tested
capabilities of a human being by implanting and / or hosting
with cognition, compassion, and emotion, must be maintained
a digital device on his / her body, such as a wearable device.
to enhance user experience and benefits for all.
That digitally enabled item will be connected to a smart phone /
It will be useful to quote Mr. Bernard Marr3, one of the top device. Cognitive augmentation will help accessing information
global influencers of digital technology. He says, “Since AI and utilising applications on traditional computer systems and
algorithms are built by humans, they can have built-in-bias by the emerging multi-experience interface in smart spaces. Major
those who either intentionally or inadvertently introduce them benefits will be for aged people who will be able to lead a
into the algorithm. If AI algorithms are built with a bias or the much better, safe and meaningful life. This will also improve
data in the training sets they are given to learn from is biased, processes for farmers engaged in animal husbandry.
they will produce results that are biased. This reality could lead
to unintended consequences like the ones we have seen with
discriminatory recruiting algorithms and Microsoft’s Twitter Webliography
chatbot that became racist.” 1. https://www.livemint.com/technology/tech-news/why-
CXOs need to understand the difference between outstanding india-needs-deep-tech-startups-11572250462873.html
technologies, and organisational priority for alignment of 2. http://www.timherglotz.com/digitalisation/why-
those with its vision, mission, culture and strategies before empathy-matters-in-the-digital-age/
implementing those in real life systems. Success will dependent 3. https://www.linkedin.com/pulse/what-negative-impacts-
on analytically crafted change management with agile strategies. artificial-intelligence-ai-bernard-marr/?published=t
This author suggests ‘RAGE Analysis’ as the first step for
4. https://indianexpress.com/article/cities/kolkata/
making an organisation future ready with successful digital
safe-drive-save-life-how-kolkata-made-its-roads-less-
transformation. CXOs may conduct ‘Required, Available,
accident-prone-6090688/
Gap and Essential’ analysis before deployment of digital
tools and platforms. This will help focussed attention with 5. https://www.techrepublic.com/article/hyperautomation-
needful alignment of those and trained manpower for attaining human-augmentation-and-distributed-cloud-among-
organisational objectives in order of priority. top-10-technology-trends-for-2020/
Digital Solutions for Common People

Acute lower respiratory infections and pneumonia kills about [email protected]
one million children every year worldwide. Unfortunately, about
5% of global population has access to higher level of treatment
starting with X-Ray imaging. Scientists of John Hopkins School
of Medicine5 have reinvented Stethoscope, the two centuries
old instrument and symbol of medical treatment. They will
soon successfully equip general physicians to diagnose such
killer diseases more effectively through extensive use of AI
and connecting a small digitally enabled tool to a smart phone.
The process of diagnosis will no longer be expensive and time-
consuming.
Kolkata traffic police4 could reduce road accidents and deaths
by 34% and 30% from 2015 to 2,456 and 294 respectively
in 2018 by using 3 Es, viz., education, engineering and
enforcement through digital platforms. The department has its

Interview
CMA Sunil Chacko
CFO
Cochin International Airport Limited
Mr. Chacko is a Fellow Member of The Institute of Cost Accountants of India. He had served as a Chairman, Southern India
Regional Council of Institute of Cost Accountants of India (2007-08) and Chairman, Cochin Chapter of Institute of Cost Accountants
of India (2003-04). He was also a Member of Southern India Regional Council of Institute of Cost Accountants of India (2004-
2011). He is having more than 31 years of industrial experience in different organizations. Mr. Chacko is presently working as
CFO in Cochin International Airport Ltd. (CIAL) and Director of Cochin Dutyfree and Retail services Ltd. Joined CIAL as CFO
in April 2014. Before that worked in Kerala Minerals and Metals Ltd. (KMML) as Executive Director till April 2014 with overall
responsibility of Finance, Marketing, Corporate Affairs and Internal Audit etc. Prior to that, worked as Financial Controller (CFO)
of Travancore Cochin Chemicals Limited (TCC). Served TCC Ltd. from the year 1990 to 2008 in different capacities. He was a
Professional Associate to Enterprise Reforms Committee (ERC) of Govt. of Kerala (2002-04). Further, served as Guest Faculty in
professional institutions and presented papers for national and international seminars and workshops.
Q1. The unique rehabilitation package, the astonishing is planning to privatise 25 more airports in the next phase.
public participation and a sustainable business model have Therefore CIAL will also aggressively participate in the
made Cochin International Airport Limited (CIAL) - the bidding and want to consolidate its position in the airport
company which operates the airport - an international brand. infrastructure space, though the process will take some time.
Where do you see your organization Cochin International CIAL has already established it as a socially responsible
Airport Ltd. 5-years from now? and committed organization in the last 25 years of existence.
We are carrying the society along with us while targeting the
A: Cochin International Airport started operations in 1999 in corporate growth. For example, we experienced a severe
a humble manner with annual passenger traffic of seven lakhs flood in August 2018, by which the airport operations were
and it was a tremendous and eventful journey thereafter over closed for 15 days. All flood mitigation programmes and
the years. We have joined the 10 Million Passenger Traffic measures focus on the safety of the airport, but our master
Club in the year 2017-18. At present, we are the fourth busiest plan emphasises interalia protection of the villages and towns
airport in the country in terms of international passenger around the airport from the natural calamities.
traffic. The last five years’ of the company really existed as we
could facilitate large capacity additions both in International Q2. Keeping in mind the demands of stakeholders, what
and Domestic terminals to cope-up with the growth in the are CIAL’s expansion plans?
aviation industry in the country. We are targeting exponential
growth in the same manner for the coming five years. The A: As outlined earlier, we have created capacity taking into
fruits of major investments in the last five years will be consideration the passenger traffic growth projections for the
mostly reaping in the coming years. Accordingly, we expect next 20 years both in international and domestic terminals. So
substantial increase in the turnover, may be to the tune of 2-3 the monetisation of unutilised land available with the company
times in aero and non-aero revenue by 2024. is the first agenda now. We have already diversified into sectors
The capacity addition in Indian airline business is sharp such as power, inland water ways, retail and MRO and we are
in contrast to other sectors. Scheduled carriers in India are in the threshold of generating sizeable revenues out of these
adding atleast 30 aircrafts by this year end and the Government diversified activities.

INTERVIEW
Apart from diversification, we are also sensing the Q5. How economic slowdown is creating headwinds for
opportunities in constructing or operating new green field airlines sector?
or brownfield airports. We are actively exploring to grab
opportunities within the airport sector. In the long run, we A: In the Indian context, affordability of air fares to
need to double our revenues out of airport operations and an passengers and aircraft load factor is the prime determinants
equivalent stream of revenue to be generated out of diversified of airline sustainability. The economic slowdown has caused
activities. the decline in the affordability and is surely going to affect
The airport is operating with a single runway which can passenger volumes too. If slowdown continues, it will surely
cater to the growth of traffic for another 15-25 years. However impact the industry for a short to medium term. As indicated
we are seriously proceeding with the plan of acquiring earlier, we expect a larger impact in view of the Gulf crisis and
sufficient extent of land and develop it for the construction of our sizeable dependence on Middle East traffic.
secondary runway well in advance now.
In spite of operating in the infrastructure sector, CIAL Q6. What are the probable challenges airports may face
has a track record of constantly paying high dividend to its in terms of attracting new airlines and routes in the years
stakeholders. Our revenue and bottom line planning are also in to come?
accordance with the high expectations of our stakeholders.
A: Airlines want minimal airport costs in their cost of
Q3. What are some of the key emerging constraints (if any) operations as they face stiff uncertainty in other major costs
you are facing in successfully implementing your strategy? such as fuel which is uncontrollable to them. Meantime,
cost of construction and maintenance of airport operations
A: The slowdown in the economy has already impacted especially the cost of security and safety is also increasing
in the traffic growth in all major airports in the country. The disproportionality in the hands of airport operators. Attracting
airports in Kerala including Cochin International Airport have new routes and retaining airlines under these circumstances
large dependency on the Arabian Gulf bound passengers. The is the biggest challenge Apart from that world over, regional
decline of Middle East economies definitely will have strong disturbances, global economic slowdowns are also a cause of
influence on the traffic growth projections. worry in retention and attracting new airlines.
Incidentally, the business friendliness of economic eco It is understood that Government of India is trying to rewrite
system in the country is still trailing behind the expectations. the aviation policies including bilateral agreements and Open
All attempts for simplification of tax regime are not really Sky policies. Hopefully the much awaited changes may
fruitful, especially in view of unsettled tax disputes, which are provide the required flexibility for marketing the airports in a
of decades old and involving huge amounts refund claims. bigger way.
The construction of a new runway definitely involves
acquisition of land from the common public, which is always a Q7. The Government of India has launched regional
nightmare for any industry across the country, especially in the connectivity scheme named UDAN (Ude Desh ka Aam
present legal frame work including environmental regulations. Nagrik) to make flying affordable for common man. How
much impact it’s having on this Airlines business?
Q4. India’s aviation industry is largely untapped with huge
growth opportunities. How are you planning to seize the A: The implementation of the scheme and development of
opportunities? local airports will definitely lead to establishment of regional
hubs in the country. This will also encourage Middle Income
A: Smaller airports in India receive only a limited Group in the society to utilise the facilities of air traffic more
number of flights in a week, and the costs of air travel are and more in the coming years.
disproportionally high considering the per capita income. UDAN needs to view more on the unlocking of latent
A “smart product mix”, i.e. the establishment of good demand from Tier 2 and Tier 3 cities of India. This will spurt
integration between aviation and other service and commodity the overall future demand of aviation in India. The UDAN
sectors, is required. For example, developing state-of-the-art has ensured connectivity to unconnected regions and also
air transport facilities would not only be a sensible move for ensures affordable flying to passengers in that segment. The
competitiveness. real favourable impact of the scheme will be unveiled only
Therefore, there is tremendous scope for Improvements after few years. Perhaps this scheme has helped us to retain the
in airport infrastructure. Installation of advanced air traffic positive traffic growth despite slowdown in the economy.
control and air navigation systems, better safety and security
services will incentivise more air travel in the country. Q8. Is technology the only way forward in improving the
Our existing model ensured modular development of airport customer service?
infrastructure on a viable basis. We would like to utilize our
expertise and resources to replicate in the case of new green A: Though technology is imperative in enhancing the
field or brown field airport projects are received in our hold. customer service, it cannot be regarded as the only way
Even though we are located at the southern-most tip forward. Airports are not virtual worlds but are a point
of the sub-continent, we are surrounded by a handful of of interaction of humans, which requires comfort and
smaller airports. Therefore, our long term intentions include personalised experience. We believe in providing customised
development of Cochin International Airport as a Regional and personalised experience to our travellers. Technology
Hub. We hope that with our extensive connectivity to all can surely assist us in this regard, however, emphasize is on
major centres in the Middle East, South East Asia and all major development human skill and their competence suitable for
airports within India, this dream will become a realty soon. airline and airport industry, especially in view of the fact that

INTERVIEW
India has the availability of large human resources. deployment of scarce resources leading to cost control, cost
However, efforts are going on for simplifying the process reduction and cost consciousness. Please suggest in what
of air traffic by using technological developments and ways Cost and Management Accountants (CMAs) may offer
innovations, especially in view of intricate security concerns. their expertise more effectively in this quest?
The government’s Digi Yatra scheme, which envisaged to
provide hassle-free movement of passengers for boarding is A: Airport Industry in India though attracted heavy infusion
a good example. It is a fact that noting can replace human of capital investments has not so far rendered adequate levels
interaction, even in the era of artificial intelligence. However, of return except in the case of Cochin international airport,
technological innovations will add value to the services this could be achieved only on account of cost effective airport
extended to the passengers. As far as CIAL is concerned, we constructions, optimisation of operating expenses and efficient
have been continuously adopting the world-class and most utilisation of resources. Evidently, this is the way forward
modern technology to save time and money and also to ensure to ensure adequate level of return from this Industry. In this
Total Passenger Satisfaction, by enhancing the safety and regard, CMA can definitely contribute substantially.
security aspects. Further, in the years to come, we have to develop a number
of Tier-2 and Tier-3 functional airports in the country at
Q9. The Cochin International Airport Limited (CIAL) affordable costs. The skills and expertise of CMA professionals
has been selected for the Champion of Earth Prize-2018, will be handy in implementation of these facilities. Such
the highest environmental honour instituted by the United an attempt is very important in extending the facilities,
Nations. What more eco-friendly and cost-effective measures technological advancement and easy travel to the under
are you planning to make our Nation proud? privileged masses in the country.
It is accepted that making the goods and services affordable
A: Our entire terminal constructions, air-conditioning is the key initiative required for overcoming the hurdles of
systems, lighting systems, water management system are slowdown. The expertise of professionals in the strategic cost
already designed in the most energy efficient, technology management and target costing will definitely be an advantage
oriented, eco-friendly and cost effective manner. In the solar in achieving this, especially in a price sensitive society like
front, we are already generating power above our requirements ours.
and transferring the surplus production to the State Electricity
Board. We are also about to commission a 4MW small hydel Q11. What are the various ways your organization can
project allotted to us. The first time in the world entire airport integrate with our Institute for the diverse avenues in
parking facility is now converted into a solar car port. We have professional development matters?
also provided charging facilities for the electric vehicles in our
carport. Further, we are seriously in the process of converting A: One primary area where airport industry and institute can
all our vehicles running in the airside to electric fuel so as to align is the area of Airports Economic Regulatory matters. As
minimise airside emission. of now, professional institutes play a limited role in framing
Our diversification activities include development and and implementing the regulatory cases of the Industry.
revival of inland water ways of Kerala, by partnering with the Apart from that, CIAL being a pioneer in the field of cost
Government of Kerala, primarily intended to shift a substantial efficient airport construction and its viable operations, the
portion of road traffic to water ways, which will certainly various verticals of this model can be documented and can be
reduce the carbon emissions in the State of Kerala. made as reference for development of cost efficient airport in
Innovations and social transformation orientations are in the India.
DNA of CIAL. This is a part of the culture inculcated by our Our airport is already utilizing the expertise of CMA
founder Managing Director, Shri V.J. Kurian, who continues professions by engaging them in various key positions and
to lead this organization in this Silver Jubilee year now. It is employing the members and trainees at corporate level and in
certain that we will come out more with innovative initiatives the subsidiaries.
in the years to come. The Institute can think of more and more publications of
handouts focusing on aviation industry, which is going to be a
Q10. The CMA professionals are trained to be cost major driver of the economic development of the country. The
competitive, utilize available resources in an efficient and expertise of the member professional working in this industry
cost-effective manner through cost optimization, efficient can be utilised for this purpose.
Kind Attention !!!
UGC Approved List of Journals has been revisited by UGC-CARE (University Grants Commission - Consortium
for Academic and Research Ethics) w.e.f. 14.06.2019. We are in the process of getting enlisted in it and will inform as
soon as we get enlisted.

COST - OPTIMIZATION
VALUE CREATION THROUGH

COST-OPTIMIZATION
CMA A Mathews
Registered Valuer
Bangalore
Abstract
A big opportunity to create value in an enterprise is by cost-optimization. Cost-optimization succeeds if it is driven by top
management and is run by cross-functional teams. Valuers need to critically examine such initiatives when valuing an enterprise.
V
aluation of enterprises can be done by we have common size analysis of the company’s cost structure,
valuers who view the enterprise from the potential areas for a further deep-dive analysis are identified.
outside and determine the value of that Take the example of a services company where manpower
enterprise. Typically, such valuers would cost is the single largest cost, and is therefore the single largest
be investment analysts, credit rating opportunity to save on costs.
agencies, etc. Valuation can also be done
by those who are within the enterprise, who look at creating
enterprise value from within. We examine below role of those Saving Manpower cost requires
creating value from within the enterprise. • an analysis of the profiles of people to see if there is a
Value creation can be done through revenue enhancement, or right fit for the job
through changes in the cost structure, though it is typically done • Identify market salaries of these profiles
by following a holistic approach. • Make a demand and supply assessment
In order to identify the opportunities to create value, there has • Identify the pools from which recruitment can be made
to be a critical analysis of the enterprise in comparison to
• Identify the cost of recruiting, with productivity metrics
others in the industry, and the performance of the enterprise
over time. This requires using the E-I-C model, i.e., assessing • Create a manpower model, showing the skill profiles of
the economy, the industry and then the company. A common the organization
size analysis would enable comparison of the enterprise with • Create a cost model over time
others in the same industry and against itself over time. Based • Get a sense of the cost of managing the organization
on the analysis, we get insights about the industry growth rates structure, such as organization development cost,
vs the company’s growth rate, the high performers and laggards training costs, recruitment costs, engagement costs.
in the industry, the cost structures in the industry, industry
segmentation, customer segmentation, an assessment of product
features and positioning in relation to competition. Cost-optimization requires
Focusing on value creation through cost-optimization, once • defining the processes

COST - OPTIMIZATION
• measuring available data watch to be kept on revenue growth, and market forces,
• analyzing the data and contract wins by the company vs competition.
• identifying improvement opportunities
Transport costs in the services industry
• controlling the process of improvement.
Typically transportation is seen as a benefit offered to
employees, and is typically wasteful in nature, due to the lack of
This fits in very neatly into the DMAIC framework, used for accountability for utilization of the service being provided. To
Six Sigma improvements. quote from our experience, optimizing transport costs involved
Cost - optimization succeeds if it is driven by top analyzing the costs to identify the drivers of transport costs.
management, using inter-functional teams and sustainable value These drivers are:
is created by ensuring the processes created are manageable
• Shift timings
over time. Sponsorship of the cost-optimization initiatives
should be done by the CEO. The ideal inter-functional team • Mode of transport
would be program managed by the quality function, who have • Cost per trip
the experience in the DMAIC and Six Sigma frameworks. Each • Vendor consolidation
cost-optimization program should be set up as a Six Sigma
• Capacity utilisation
project.
Projects need to be identified, and parceled among the
A holistic approach needs to be followed in optimizing
interested parties. The programs that have the maximum
costs. Since it is a very touchy topic, as it results in employee
impact, should necessarily involve the CFO.
dissatisfaction, it needs to be driven by consensus across the
To continue with our example of optimizing manpower cost: organization. The first step to optimizing costs is to consolidate
• In a service delivery framework, a pyramidal structure shift timings, with most employees coming in to work or leaving
of manpower is essential. The span of control between at the same time. This enables better capacity utilization. The
layers determines the average cost of the delivery second step is to identify the size of vehicles to be used, based on
pyramid. Typical accounting work requires a ratio the capacity need, as well as availability from vendors. Once the
of 1:6, while a delivery framework for sales order optimal vehicle size has been identified, the contracting needs to
processing would be 1:16. be done on the basis of the right metric (e.g., cost per trip, cost
• The average cost of each layer has to be defined, as also per head). Extra frills in transportation need to be removed (air-
the expected age of each layer. conditioning, use of taxis during the day). The ideal method to
optimize costs is to place the responsibility on the employee, to
• A promotion policy needs to be outlined. Typically,
manage his own spend on transport, by putting the amount into
manpower promoted from within, costs less than
his paycheck, and asking him to pay for transport. Optimizing
external manpower.
costs is not a responsibility to be placed on the vendor, since
• Training costs: Optimization of training costs it is abdicating organizational responsibility. Assessing costs
requires running training batches at optimum capacity, and returns from the vendor perspective needs to be done, to
determining whether trainers will be in-house or ensure that cost per trip fixed is realistic, and is sustainable. The
external, number of training programs, number of entire process of vehicle allocation, and manpower allocation
training days for manpower, etc. to vehicles is a process that needs automation and timely
• Hiring costs: Optimization of hiring cost, requires an intervention from a transport team well-versed in logistics to
ABC analysis of vendors used in hiring, reducing and ensure that the transport department is well run, with high levels
consolidating the vendors, putting in place incentives to of employee satisfaction, while optimizing costs. In the process
improve hiring quality and retention of hires (best fit), of cost-optimization, it is necessary to fight the larger battles,
defining the productivity norms for in-house recruiting and let the smaller battles be lost, to ensure that the entire
teams, etc. organization sees a process of give and take, while arriving at
• Manpower planning: Since financial planning is done the optimal solution for transportation.
by the CFO’s office, and typically, the constraint in Following the principles outlined above, it is possible to
planning is sales driven, the other plans, including the reduce transport costs by as much as 60%.
manpower plan, are derived from the sales plan. The
Manpower plan needs to be aligned to the sales plan,
Pricing of services to customers
with a high degree of flexibility built in, to cater to the
change in sales estimates. De-risking the plan: Means One may wonder what is the connection of pricing to cost-
of de-risking the manpower plan should be identified, optimization. Firstly, the relevant cost structure needs to be
such as working out optimistic, realistic and pessimistic an input into pricing. Secondly, the cost assumptions made
scenarios, and building out the manpower plan to suit in pricing need to be clearly spelt out, and made known to the
the most likely scenario. This would result in the most delivery teams, with a clear cut mandate to the delivery team
optimal holding cost of manpower, without loss of to remain within cost assumptions, and with a means for the
revenue. finance team to monitor. This process of ‘controlling’ ensures
the sanctity of the pricing process, with a linkage of pricing to
• Caveats: optimizing manpower planning requires a close

COST - OPTIMIZATION
business realities. Simultaneously, the finance team is mandated take operating decisions that affect costs. Decision-making
to be attuned to market deliverables. should never be pushed into the finance function, nor should
the timeliness of decision-making be adversely affected by
Improving utilization of infrastructure asking for validation from the finance function. The feedback
When the utilization of space is measured and monitored, it loop should be sufficient to ensure that the controller’s job in
is possible to optimize utilization of space. A coordinated effort ensuring cost control is met. In certain instances, where there
needs to be undertaken using key personnel from procurement, is a lack of organizational discipline, or too many satisficing
technology, inhouse architects and the planning team. The decisions being taken by operating managers, who are unable
design of space can be optimized by taking a modular approach to achieve cost targets, the prior approval of costs moves from
to infrastructure in terms of the seating capacity of engagement operating teams to the finance teams. In such cases, the finance
floors, the network design, location of hub-rooms, availability team needs to be adequately staffed to ensure timely decision-
of digital / ip phones. A forecast of space requirements over 3 making. Therefore, the role of the finance team comprises
years can also done, given the infrastructure creation timeline of pulling out analytics of costs vs budgets, enabling managers to
18-24 months. With these inputs, space utilization can be moved assess where they are going wrong, or ensuring data is available
up from 70% to 95% over the period of 3 years, resulting in a to managers taking decisions, in a timely manner.
cost improvement of 1% of revenue.
Valuation of an Enterprise post cost-optimization
Improving Days Sale Outstanding It is possible that an enterprise is expected to be valued,
In my experience, using six sigma methodology (DMAIC – AFTER considering the impact of cost-optimization. If a
Define, Measure, Analyse, Improve, Control), key members of valuer is expected to provide an independent viewpoint on such
the accounts receivable team were tasked with improvement initiatives, he will need to consider the following factors before
in DSO. They defined the scope of the improvement sought, deciding on whether enterprise value is likely to be enhanced:
assessed how improvements could be done – such as changing • Credibility and commitment of the management team in
billing cycles, reducing cycle time for invoice generation, driving cost-optimization.
coordination with account managers to ensure prompt delivery • Likelihood of achievement of the cost-optimization
of invoices into client payable systems, tracking and following initiatives, by comparing industry metrics against the
through with account managers for overdue invoices; and based specific company’s metrics.
on the improvements implemented, improved the DSO by about
• Clarity in definition of the initiatives, the degree of
5 days, with a key member earning a black belt in the process.
planning that has gone into the programs, and progress
against objectives outlined.
Moving operations to low cost centers and optimizing
• Sustainability of the cost structure achieved, post the
costs
initiatives.
A typical suggestion is to cut costs by moving operations from
higher cost locations to lower cost locations. Based on study of
competitive advantage, its normally apparent that India is the An assessment of the value creation arising out of the cost-
lowest cost economy with the appropriate skills being available. improvement initiatives, in relation to the total value of the
In case there are other geos that are chosen, they would be enterprise should also be done, as a sensibility check, since
chosen on the basis of language or technical skills availability. such initiatives should not be relied upon to provide the bulk of
Within the country, one may decide whether to move from a the enterprise value. As with all valuations, a healthy dose of
higher cost location to a lower cost location. Firstly, one should realism is required.
identify the key variables in taking such decisions
• space and infrastructure availability
• availability of skilled manpower [email protected]
• availability of surrounding infrastructure
• transportation costs
• connectivity
• client compatibility (clients may be co-located).
Secondly, moving projects and costs to new locations should
become an organization mandate, and all functions should work
towards the common objective. This would be a long term
strategic cost initiative, that sees results over a span of 3-5 years.
It is possible that in initial years, costs may actually be higher.
Improving business decision-making

A Key Component in the optimization journey, is making
available sufficient information to the operating managers who

MONEY - DIGITAL CURRENCY
DIGITAL CURRENCY AND ITS

IMPLICATIONS FOR INDIA
CMA (Dr.) Manpreet Kaur

Associate Professor
Bharati Vidyapeeth Institute of Management and Research
New Delhi
Abstract
The demonetization of currency in year 2016 by Modi government revolutionized the movement towards usage of digital payment
methods in India. Though it was strenuous decision for country like India where 90% of the transactions are in cash, people adopted
digital mode of payments in short span of time. The adoption of digital methods for payments is facilitated by phenomenal increase
in ownership of smart phones and presence of user friendly payment modes like PAYTM and BHIM UPI. The paper tries to explore
the global trends in digital currencies in selected countries and tries to examine the implications of digital currency for India through
T
SWOT analysis.
he demonetization of currency in year 2016 of smart phones and presence of user friendly payment modes
by Modi government revolutionized the like PAYTM and BHIM UPI.
movement towards usage of digital payment Though, initially people in India were reluctant to use digital
methods in India. The decision to demonetize system, but it has come to stay largely due to its prevalence in
bank notes of Rs 500 and Rs 1000 aimed at i) many developed countries of the world and ease of use. Over
lowering cash circulation in the country which the years, focused effort has been made to develop national
is directly related to black money and corruption ii) eliminating payment infrastructure and technological platforms through
fake currency and iii) reducing terrorism funding. Though it Immediate Payment Service (IMPS), Unified Payments
was strenuous decision for country like India where 90% of interface (UPI), Bharat interface for money (BHIM), Bharat
the transactions are in cash, people adopted digital mode of bill Pay system(BBPS) or Aadhaar enabled payment system
payments in short span of time. The adoption of digital methods (AePS). As a result, there is substantial increase in retail
for payments is facilitated by phenomenal increase in ownership electronic payments which, in turn, led to decline in currency

in circulation as a percentage of GDP. India spent nearly can pay their bills and salaries, send remittances, buy goods and
$ 90 million to print currency notes in 2018 (RBI Report). services and can also manage official government identification
Due to transition from physical currency to digital mode, the documents digitally. It is immensely useful for countries like
concept of digital currency becomes inevitable. The rapidly this where the population having access to banking services is
changing landscape of digital payments and rising banknote substantially less in number. The major limitation is that this
bill is reinforcing the authorities to digitalize and think on system is interoperable only in Tunisia. Also, government has
the possibility of introducing fiat digital currency. The issue no plans to expand it further.
of volatility associated with crypto currencies like bitcoin or Senegal
ethereum can be handled by digital currency as it is backed by By the end of 2016, the regional bank for francophone west
an asset like gold or fiat. The introduction of digital currency issued a digital currency named as eCFA (CFA Franc). The
will not only help reduce the cost of printing currency, provide unique feature of eCFA is that it enables central bank to control
transparency in monetary transactions besides helping going money supply just like physical currency. Further, it is tied to
cashless. In this regard, an interdepartmental unit has been the fiat currency of the West African nation, one of two African
formed by Reserve Bank of India to study the feasibility and regional currencies backed by the French treasury and pegged to
desirability of Central Bank Digital Currency (RBI Annual the euro, yet compatible with neighboring countries. As a result,
Report 2017-2018). The findings of this report are not yet made central bank is able to stabilize the purchasing power of entire
available to public. region rather than country alone.
Kenya
Technology behind digital currencies-Blockchain Kenya’s mobile money system, M-PESA, launched in 2007 by
Blockchain is the future of finance industry which will Safaricom is used by 17 million Kenyans representing two-third
revolutionize the financial dealings in the times to come. A of adult population. It is estimated that around 25% of country’s
blockchain is a digitized, decentralized, public ledger of all gross national product flows through it. (The Economist, 2015).
cryptocurrency transactions. Blockchain Technology is also Initially the system was designed to allow microfinance loan
named “The Trust Machine” as it allows people having no repayments but later on broadened to become a money transfer
confidence in each other to collaborate without intervention scheme. After signing up on the portal, a person hands over
of central neutral authority (The Economist, 2015). Through cash to Safaricom’s agent who credits it to M-Pesa account of
this technology, market participants can keep track of digital that person. The notable feature of the system is that it enables
transactions without central recordkeeping which can be withdrawal from another agent who checks the amount of funds
downloaded automatically by each computer connected to the in account before handing over cash. Workers who are working
network. Digital currency will do for financial transactions what in cities can send money to their families in rural areas easily,
an email does for communication. As a result, it is expected safely and quickly through this system. It helped in reducing
that it will bypass the centralized financial infrastructure in its poverty and raising the GDP by offering opportunities for small
entirety. It is expected that block chain technology can reduce businesses and its social value.
costs in cross border transactions and in securities trading. Sweden
Blockchain technology can function at two levels:- Private According to Bloomberg Billnerg 2018, the central bank of
blockchain, where banks become the custodian of cryptographic Sweden aims to develop electronic currency named as e–krona,
keys, and public blockchain, where each participating user acts which will constitute a prepaid value without interest and
independently. transaction will be traceable.
Estonia
Global Trends in Digital currencies Estonia in the Baltic States is extremely blockchain friendly,
The attitude of countries regarding adoption of digital using that technology in several levels of government services.
currencies is different irrespective of their economic conditions. For example, their entire healthcare system is on the blockchain.
Although there is greater interest manifested in digital currency, Even U.S. President Donald Trump is an e-resident of Estonia.
many countries still refrain to implement it due to limitations And, the release of the so-called “Estcoin” seems to be on the
like security, availability of technology, adaptability, legal horizon awaiting implementation. However, being a member of
issues, role of central bank etc. Few countries have taken care the European Union (EU), Estonia is legally obligated to use
of the legal issues pertaining to digital currencies and modified the Euro as its national currency. As a consequence, it is facing
their legislation accordingly. For instance, E-money balances difficulty in assigning value to an Estcoin to move forward on
are denominated in the currency issued by Central bank and can the proposal.
be easily exchanged or redeemed at par (EU Legislation, 2015). China
The current status of digital currencies in some select countries In order to enhance control over its financial system, People
is mentioned below: Bank of China is planning to introduce its own digital currency.
Till August 2018, bank had 44 blockchain related patents (IPR
Tunisia Daily China Trade Publication). The introduction of the digital
Tunisia pioneered the field of digital currency with currency in China will be gradual which will be used initially
introduction of eDinar in 2015 based on the concept of block for making and receiving payments only. It is expected that
chain. La Poste (Tunisia’s national postal service) is an investment products will be outside the ambit of currency to
authorized financial institution licensed by its national bank to minimize the impact on monetary policy (Bloomberg news
issue this e-currency pegged to the national currency. Tunisians 2018). China will use the concept of mobile wallet for digital

currency. Difference between cryptocurrency and Digital currency

Russia
Russia is planning to introduce its national digital currency Basis Cryptocurrency State backed digital
between 2020 and 2021. The main objective of this initiative currency
is to create a reliable international payment system not tied to Meaning Currency which is Currency in non-
US dollar. The Financial Market Committee of Russia plans to encrypted , non- physical form but
introduce digital ruble, which is encrypted from of country’s physical and transmitted backed by regulatory
fiat currency. electronically authority
Japan Examples Bitcoin, Etherum, Digital fiat currency
The cash dependent economy like Japan is one of the top Litecoin etc. like Em-cash, Petro
crypto friendly nations of the world. Several banks in Japan and M-Pesa
are launching their own digital currencies which are pegged 1;1 Transaction Monitored by Ledgers Monitored by
with the Japanese Yen to enable users to make payments with path in the block chain regulatory authority
their smartphones and free cash transfers between users. maintained by users
Dubai Structure Decentralised Centralised
Dubai has successfully launched its government backed Volatility Highly volatile as it not Less volatile as it
cryptocurrency as Emcash to enable customers to pay for goods backed by any asset backed by asset like
and services. UAE will be the first nation to have fully functional gold or reserves
state digital currency system. Instead of single authority, it Regulation User regulated Regulated by Central
is joint management by three organizations, Pundi X which authority
supplies digital payment devices (xPOS) to retailers, DLT is Third Party Not required as other user Validated by third
provided by Ebooc Fintech and Loyalty Labs and Dubai’s credit Involvement validates the transaction party or custodian like
bureau is looking after the financial aspect of the currency. when he pays bank
Venezuela Record Data is recorded Privately recorded on
The Government of Venezuela issued a government backed publically digital ledger
digital currency named Petro backed by the oil reserves of the Data Sharing Data is shared by all Restrictive sharing
country in order to provide respite from hyperinflation prevailing participating nodes
in the economy. In spite of suspicion regarding the currency Transparency Cryptocurrencies are Not transparent
raised by Reuters, leaders claim it as real and they have pushed transparent as anyone as information is
Venezuelans to use it for executing financial transactions. can see the transaction of confidential
other user
SWOT analysis of Digital Currency in India Legal No legal laws and Regulate by legal
framework standards framework in many
countries like EU
(E-money directive),
US and China
The way forward

Digital currencies are integral part of fintech revolution
which will impact many areas including payment & settlement
systems and services. Though this concept of digital currency
is less persistent now, it will emerge and disrupt the existing
processes and systems (how). Since inception, India’s stance
on crypto currencies hasn’t been encouraging. This was evident
from RBI directive to halt dealings in cryptocurrencies leading
to fall of ZEBpay, India’s largest crypto exchange, by disabling
deposit and withdrawal in Indian rupees. However, it is revealed
that the move was not backed by enough research. Also, the
report of the committee set up for determining the feasibility
of digital currency is still awaited. Though RBI is apprehensive
about crypto but it has no doubt in the utilization of distributed
ledger technology in payment and settlement solutions and
the power of Machine learning and Artificial intelligence.
Currently, RBI shelved its plan to develop digital currency
due to lack of understanding and preparedness in dealing with
it. However, 11 Indian banks are planning to collaborate to
develop new blockchain system in order to facilitate financing
needs of MSMEs (Economic times, Jan 28). A dedicated district
in Telengana is planned to be formed in association with Tech
Mahindra to be named as “Block chain district”. For country

like India, digital currencies can be introduced initially for retail 6. Kumar P. and Kumar V. (2019), Cryptocurrency: The
transactions with in accessible security features and can be used scene in India. Available at https://www.livemint.com/
later for investment transactions. Central bank can examine the money/personal-finance/opinion-cryptocurrency-the-
viability of using digital currency in combination with existing scene-in-india-1552473571058.html
systems or providers. It can be said in conclusion that the block 7. Bank of International Settlements (2015), Committee on
chain will rule the economies all over the world in years to come Payments and Market Infrastructures report on Digital
and its adoption is necessitated either by compulsion or choice. currencies.
8. Das Shaktikanta (2019), Opportunities and Challenges
of FinTech, Keynote Address delivered at NITI Aayog
References Fintech Conclave 25 March 2019.
1. Dharampalan, J and Grey Rohan (2017), THE CASE
9. Aitken, R. (2018), Does Venezuela’s Oil-Backed
FOR DIGITAL LEGAL TENDER The Macroeconomic
‘Petro’ Have The Power To Showcase National
Policy Implications of Digital Fiat Currency, ecurrency
Cryptocurrencies? Forbes.
Ltd.
10. Kurmanath KV (2018), Telangana, Tech Mahindra ink
2. Mehta Ivan (2018), India contemplates introducing
MoU for India’s first Blockchain district, Available
a national digital currency to avoid printing money,
at https://www.thehindubusinessline.com/info-tech/
the next web. Available at https://thenextweb.com/
telangana-tech-mahindra-ink-mou-for-indias-first-
hardfork/2018/09/06/indias-central-bank-mulling-own-
blockchain-district/article24595587.ece
digital-currency/, accessed on 13 May 2019.
11. Manikandan, A (2019), ICICI, Kotak, Axis among
3. Christopher, Nilesh (2018), RBI panel to study
11 to launch blockchain-linked funding for SMEs,
feasibility of digital currency, Economic Times.
Available at https://economictimes.indiatimes.
Available at https://economictimes.indiatimes.com/
com/markets/stocks/news/icici-kotak-axis-among-
news/economy/policy/rbi-panel-to-study-feasibility-of-
11-to-launch-blockchain-linked-funding-for-smes/
digital-currency/articleshow/65601646.cms
articleshow/67718025.cms
4. PTI (2019), Economic Times, Available at https://
12. Esteves, R (2018), Is Russia on Its Way to Adopting Its
economictimes.indiatimes.com/news/economy/finance/
Own State-Backed CryptoRuble?
currency-in-circulation-as-percentage-of-gdp-declines-
since-demo-finmin-official/articleshow/68598744.cms 13. O’Keeffe, D (2018), EmCash – The Worlds First
Government Backed Cryptocurrency Going Live In
5. Pani, Priyanka (2019), RBI shelves plan to
Dubai
launch digital currency. Available at https://www.
thehindubusinessline.com/money-and-banking/
rbi-shelves-plan-to-launch-digital-currency/ [email protected]
article25883102.ece
OBITUARY
The Institute and its members deeply mourn the demise of CMA Nathulal Jain who left us for his heavenly abode on 8th
October 2019 at his residence.
CMA Nathulal Jain, in his illustrious career spanning about 50 years, had left an indelible mark on the profession of Cost
and Management Accountancy. In the truest sense, he could be acknowledged as one of the flag bearers of the profession in
the entire North East region in general and Guwahati in particular. His initiatives in the formation and running of Guwahati
Chapter shall be remembered with reverence. He had his schooling from Rajasthan and graduated from Jadavpur University
of Kolkata. He qualified as a Cost Accountant in the year 1966 from Kolkata and started practice. He had a brief stint with
Accountant General (Audit), Kolkata for about 3 years. He was also an advisor with the KVIC, Guwahati. He took proactive
part in including Cost Accountants as Auditors under the AVAT Act and was successful in his efforts.
May his family have the courage and strength to overcome the loss.

EXPLORING
CONSUMERS
ADOPTION OF
MOBILE WALLET IN
KOLKATA
Saba Parveen
Assistant Professor & HOD
Seth Anandram Jaipuria College
Kolkata
Abstract
Technological advancement in digitalisation has changed the way business is done nowadays. The mobile payments market in
India is growing at a rapid pace, as a result of growing smart phones and internet penetration. The present study aims to identify
the factors that influence consumers in adopting Mobile Wallet and various risk and challenges faced by the users of Mobile Wallet.
A structured questionnaire was prepared and data was collected from 120 respondents and the obtained data were analysed using
ANOVA to get the statistical result. It is found availability, safety and accessibility plays an important role in adoption of mobile
wallet.
D
Introduction establishment only. It does not permit cash withdrawal or
igitalisation and high technological redemption.
advancement have changed the way; the (ii) Semi-closed Wallet: These are payment instruments
business is done and has also influenced which are redeemable at a group of clearly identified merchant
the purchasing behaviour of consumers. location/establishments which contract especially with the
In this new digital era, mobile phones are issuer to accept the payment instrument.
fast becoming a tool that acts as a catalyst (iii) Semi-open Wallet: These are payment instruments
for digital payment solutions. To reduce cash transactions and which can be used for purchase of goods and services at any card
promote payments through digital means, the Government has accepting merchant locations (point if scale terminals). These
cleared a proposal withdrawing surcharges’, service charges instruments do not permit cash withdrawal and redemption by
and convenience fees on cards and digital payments. This the holder.
will help to gradually reduce the size of unbanked population
(iv) Open Wallet: These are payment instruments which can
thereby bringing them under financial inclusions.
be used for purchase of goods and services and also permit cash
MW is an electronic prepaid account, where a registered withdrawal and ATMs.
user can preload a certain amount of money with any service
Paytm, Mobikwik, Freecharge, Oxigen, and Citrus are few
provider which can be used for anything from grocery to movie
leading MW companies in India.
tickets without having to swipe a card. It is digital equivalent
to physical wallet in which we store cash and make payments
from. According to RBI, four types of wallets are there:- Literature Review
(i) Closed Wallet: These are payments instruments generally 1. D.H Shin (2009) conducted a study to examine
issued by business establishments for use at their respective consumer’s behavioural intention to use mobile wallet.

After testing with SEM, the result showed that in Student 50 41.67%
addition to perceived security, social influence and trust
Business 10 8.33%
ease of use and perceived usefulness have significant Occupation
effects on user’s attitude towards mobile wallet. Service 40 33.33%
2. Norman Shaw (2014) made a study to identify the Profession 20 16.67%
reason of not having wider acceptance of applications Below 10,000 50 41.67%
that enable Smartphone users to replace Plastic Payment 10,001 -
cards. Analyzing with Smart PLS the result showed that Monthly 34 28.33%
25,000
perceived usefulness has the most significant influence Income
25,001 - 35000 26 21.67%
on consumer acceptance.
Above 35,000 10 8.33%
3. Sanaz Zarrin Kafsh (2015) had carried out a study
to identify the factors that influence the consumer’s (Source: Primary data generated from questionnaires attached
adoption of mobile Wallet and the result showed that at the back)
there is a relationship among perceived ease of usage,
perceived usage and perceived security in predicting the Interpretation
adoption of mobile wallet. It is inferred from the above table that out of the total
4. Hanudin Amin (2009) conducted a study to know the respondents taken for the study 58.33%, 25% and 16.67% of
factors encouraging bank customers to adopt mobile the respondents are in the age group 18-30 years, 31-45 years
wallet and found that perceived usefulness, perceived and above 45 years. 58.33% of the respondents are male
ease of use, knowledge about mobile wallet and and 41.67% of the respondents are female; out of the total
perceived expressiveness are important determinants of respondents 50% are graduate, 16.67% are post graduate and
mobile wallet acceptance. 25% are having professional degree; 8.33% of the respondents
are business men, 33.33% are service holder and 16.67% are
Objectives of the study are doing private jobs. 28.33%, 41.67%, 21.67% and 8.33% of the
respondents belong to the monthly income slab of Rs. 10001-
i) To study the factors that influence consumers in adoption
25000, below Rs.10000, Rs. 25001-35000 and Rs. 35000 per
of mobile wallet.
month respectively.
ii) To study the factors refraining the consumers to adopt
mobile wallet.
Anova Table
Methodology
Table 2: Show analysis of various factors that affect the
The current study is based on primary data collected from selection of Mobile wallet as a mode of payment with
120 respondents from Kolkata districts of West Bengal. The
reference to different age groups.
respondents were the users of Mobile Wallet. A well-structured
questionnaire was designed to collect the information from the
respondents for the month of November 2018- January 2019 H0: There is no relation between factors that affect selection
and analysed by using statistical tool ANOVA through excel. of Mobile wallet as a mode of payment and age group.
H1: There is relation between factors that affect selection of
Analysis and Interpretation Mobile wallet as a mode of payment and age group.
Table 1: Demographic Analysis Factors

Sum of
df
Mean
F Significance
Square Square
Between
No. of 24*7 340 4 85 7.727 0.00417
Basics Category Percentage Service Groups
respondents available
Within
For 110 10 11
18 - 30 Years 70 58.33% Groups
making
payments Total 450 14
31 - 45 Years 30 25.00%
Age Between
Above 35 290 4 72.5 2.224 0.13923
Groups
20 16.67% Shopping
Years
offers and Within
326 10 32.6
Male 70 58.33% Discounts Groups
Gender Total 616 14
Female 50 41.67%
Between
School Level 10 8.33% Hassle Groups
52.667 4 13.1667 0.326 0.85401
Graduate 60 50.00% free

Within
mode of 403.33 10 40.3333
Groups
Education Post Graduate 20 16.67% Payment
Total 456 14
Professional
30 25.00%
Degree

Between Interpretation
340 4 85 7.727 0.00417
Groups
Safe and
secure
From the above table, it is clear that security and dependence
Within
mode of
Groups
110 10 11 on internet connection is below 0.05, so it can be concluded that
payment
there is a statistically significant difference in the mean between
Total 450 14
occupation and mode of payment. Here H1 is accepted.
Between
550.27 4 137.567 5.488 0.01332
Groups
Anywhere
and anytime
access is
Within
250.67 10 25.0667 Findings
possible Groups
Total 800.93 14
• Paytm wallet is most popular among the users of mobile
wallet in Kolkata and it can soon become an alternate
Source: Primary data
choice for online payments.
Interpretation • Availability, safety and accessibility play an important
role in adoption of mobile wallet and users of Mobile
From the above table, it is clear that Service availability, Safe
wallet are satisfied with the service provided to them
and secure mode of payment and accessibility is below 0.05,
so it can be concluded that there is a statistically significant • Security and connectivity are the important challenging
difference between age group and factors affecting selection of factors for the users and one of the major reasons for less
mobile wallet as a mode of payment. Here H1 stands. adoption of Mobile Wallet.
Table 3: Shows analysis people face some barriers while • 24*7 service availability are the most liked feature
using Mobile wallet as a mode of payment with reference to among the users of Mobile Wallet.
different occupation.
H0: There is no relation between some barriers while using A Comparison of Mobile Wallet Adoption among different
Mobile wallet as a mode of payment and different occupation. cities of India or in India
H1: There is relation between some barriers while using
Mobile wallet as a mode of payment and different occupation. Researchers Results of the researchers
Dr. S. Manikandan et al., Brand loyalty and convenience
Probable Sum of Mean Significance
(2017) 150 respondents of shopping play a important role
df F
barriers Square Square value from Chennai in adoption of Mobile Wallet.
Between
255 4 63.8 2.315 0.1049 R Varsha et al., (2016) Secured Privacy and Secured
Groups
It is fraud 300 respondents from transactions are important
and risky Within
operation Groups
413 15 27.5 Tamil Nadu determinants for preferring
Mobile Wallet.
Total 668 19
There Between
Vipul Patel (2017) Performance Expectancy, Effort
282.5 4 70.6 1.971 0.1509
are many Groups 274 respondents from Expectancy and Facilitating
online
stores that Within Ahmadabad Conditions were determinants
537.5 15 35.8
doesn’t Groups factors.
offer
Mobile Total 820 19 Khusbu Madan et al., Performance Expectancy, Social
wallets
(2016) 210 respondents Influence, Perceived Value,
Between
Groups
186.5 4 46.6 1.99 0.1479 from Delhi Perceived Regulatory support,
Sometimes
your Promotional Benefits and
wallet may Within
hacked by Groups
351.5 15 23.4 Facilitating Conditions were
someone
determinants factors.
Total 538 19
Danger Between Dr. Ramesh Sardar This study will help in devising
178.5 4 44.6 1.783 0.1849
of losing Groups (2016) appropriate strategies for Mobile
your
money Within
375.5 15 25
60 respondents Wallet companies to tap the
if you Groups from Jalgaon city of potential customers
lose your
smart Total 554 19
Maharashtra
phone
Between
Groups
239 4 59.8 2.978 0.0539 Limitations
Security Within • The research area was restricted only within the city of
301 15 20.1
Groups Kolkata. This may not reflect the exact behaviour of the
Total 540 19 market.
Between
431.5 4 108 6.027 0.0043 • The study may suffer from selection bias as we are
Groups
It’s depends
on the
relying only on primary data.
Within
Internet 268.5 15 17.9
Connection Groups
Total 700 19 Conclusion and Recommendation

Source: Primary data Smartphone’s and Government policy of demonization acts

as a catalyst for increasing the usage of mobile wallet as a adoption of the mobile wallet. Journal of Retailing and
payment mode and for the development of new applications Consumer Services, 21(4), 449-459.
in the field of mobile based payment services. The study 5. Doan, N. (2014). Consumer adoption in mobile wallet:
observed that respondents prefer using mobile wallet because a study of consumers in Finland.
of its availability, safety and anywhere accessibility. However,
6. Thakur, R., & Srivastava, M. (2014). Adoption
security and dependence on internet remains their major
readiness, personal innovativeness, perceived risk and
concern. For making mobile wallet popular, education to
usage intention across customer groups for mobile
customers about the benefits of mobile wallet is required and
payment services in India. Internet Research, 24(3),
programmes should be conducted to create awareness among
369-392.
the non-users and some feature of Mobile Wallet should be
made so simple that it could be understood by everyone. 7. Rathore, H. S. (2016). Adoption of digital wallet
by consumers. BVIMSR’s Journal of Management
Research, 8(1), 69.
References
8. Seetharaman, A., Kumar, K. N., Palaniappan, S., &
1. Shin, D. H. (2009). Towards an understanding of the
Weber, G. (2017). Factors Influencing Behavioural
consumer acceptance of mobile wallet. Computers in
Intention to Use the Mobile Wallet in Singapore.
Human Behavior, 25(6), 1343-1354.
Journal of Applied Economics & Business Research,
2. Padashetty, S., & Kishore, K. S. (2013). An Empirical 7(2).
Study on Consumer Adoption of Mobile Payments in
9. Singh, N., Srivastava, S., & Sinha, N. (2017). Consumer
Bangalore City-A Case Study. Researchers World, 4(1),
preference and satisfaction of M-wallets: a study on
83.
North Indian consumers. International Journal of Bank
3. Madan, K., Madan, K., Yadav, R., & Yadav, R. (2016). Marketing, 35(6), 944-965.
Behavioural intention to adopt mobile wallet: a
developing country perspective. Journal of Indian
Business Research, 8(3), 227-244.
4. Shaw, N. (2014). The mediating influence of trust in the [email protected]
CONGRATULATIONS!!!
Our heartiest congratulations to CMA R. Rakesh Shankar Ravisankar, a Fellow Member of the Institute, who has been
conferred with Best Researcher Award in appreciation and recognition of outstanding contribution in the field of Research and
Development from ESN Research and Publication Group in Chennai.
He is engaged as Assistant Professor in the Department of Commerce, Dwaraka Doss Goverdhan Doss Vaishnav College,
Chennai. His research papers have been published in several journals.
We wish CMA R. Rakesh Shankar Ravisankar the very best for all his future endeavors.

PUBLIC SECTOR ACCOUNTING
DEVELOPMENTS AND
CHALLENGES IN PUBLIC
SECTOR ACCOUNTING
CMA (Dr.) Niranjan Mahendranath Shastri CA Khushboo Jain

Associate Professor Accounts Officer
NMIMS, Indore Campus Indian Institute of Management, Indore
Abstract
In Public Sector Accounting system, steps have been initiated for shifting from cash system to the accrual system of accounting
together with double entry system of accounting but the complete adoption is a long process and will take time. In this study an
attempt is made to discuss the concept of public sector accounting, history of the public sector accounting in India, present status of
public sector accounting in India and other countries. This article also discusses major developments and challenges in complete
adoption of accrual system in India and other countries. This article concludes with the present status of public sector accounting
i.e. a mix of cash system and accrual system in some organizations, full adoption of accrual in some organizations and some are
still working on cash system of accounting. There are many Challenges in the complete adoption of accounting standards as per
requirement of public sector and full conversion to accrual system and all these challenges needs special attention.
(J
1. The Concept of Public Sector Accounting Public accounting system which includes:
ones, 2000) “There is a range of meaning a. Conformity of the transactions and disbursements in
given to the phrase ‘Public Sector’. This accordance with the applicable rules
is significantly more than a matter of b. Transparency and due diligence in transactions.
semantics because different disciplines,
c. Proper planning and control toward utilization of public
reflecting different world-views, define the
money
public sector differently.
d. Evaluate the costs incurred and the benefit derived from
(Adams, 2004) Defined the concept of public sector
it.
accounting as a “process of recording, communicating,
summarizing, analysing and interpreting government financial
statements and statistics in aggregate and details; it is concerned 3. History of Public Sector Accounting
with receipts, custody and disbursement and rendering of (Khumawala, 1997) After independence, the complete
stewardship of public funds entrusted”. governmental accounting system was under the total control and
supervision of the Central Government & rules has developed
2. Objectives of Public Sector Accounting on gradual basis. Controller and Auditor-General (CAG) has
recommended the standard format for governmental accounts
(Ofordile, 2013) This study provide the main objectives of
and based on that President has made it compulsory to follow

the format as mentioned in the Article 150 of the constitution. like time of transaction are recognized based on its occurrence.
“In 1980, under the Controller General of Accounts (CGA), an The accrual system works on the basis of double entry book
organization was created in the Ministry of Finance, Department keeping system where every transaction has two aspects.
of Expenditures. This organization has been separated from Whereas cash system of accounting recognizes the transactions
the Audit Department and reports directly to the Comptroller on cash basis. The transaction for receipt and payment is
Auditor-General”. accounted in the books on the basis of actual event of receipt
or payment.
4. Regulations in Public Sector Accounting in India
6 (ii). Development of International accounting standards
(Secreteriat, Comm.on Public Fin.& Govt. Accounting, 2010) and generally accepted accounting principles for public
sector accounting
“The Government accounting system in India is rule based and (Committee on Public Finance and Govt. Accounting, 2017),
follows primarily cash basis of accounting. The preparation of The IPSAS Board (IPSASB) is working on the development
government accounts in prescribed format in India is governed of international public sector accounting standards for proper
by the Government Accounting Rules, 1990 (GAR) framed preparation and presentation of transactions and events in
under Article 150 of the Constitution of India. Accordingly the general purpose financial statements.
Government Accounting Standards Advisory Board (GASAB) The board is considering IFRS (International Financial
was constituted by the C&AG for the Union and States”. Reporting standards) as base for development of IPSAS.
(Wynne, 2004) Various accounting standard boards are
5. Position of Public Sector Accounting making best efforts to make private sector GAAP applicable to
5 (i). Existing position of Public Sector Accounting in the public sector but these principles cannot be made applicable
other countries as it is and requires modification as per requirements of the
Status of accounting system of various countries are discussed public sector accounting.
below:
(Ellwood & Susan, 2016) This study discussed the evolution 6 (iii). Improved importance and research in the field of
of basic framework of The International Accounting Standard public sector accounting
Board’s (IASB) which was introduced in 1989. The IPSASB (Goddard, 2010)“Public sector accounting research (PSAR)
has issued its own conceptual framework in 2014, and this has has become a well-established field with researchers publishing
played very important part in development of public sector in dedicated journals such as Financial Accountability and
accounting at global level. Management (FAM), based in the UK and the Journal of Public
Various other countries has started following International Budgeting, Accounting and Financial Management (JPBAFM)
Financial Reporting Standards (IFRS) and International Public in the US.
Sector Accounting Standards (IPSAS). (Newberry, 2015)The adoption of IFRS throughout the world
is one of the biggest developments at the political level. This has
5 (ii). Existing position of Public Sector Accounting in resulted due to the delegation of powers to the various bodies
India preparing and developing the accounting standards.
(Secreteriat, Comm.on Public Fin.& Govt. Accounting, 2010),
“Government Accounting Standards Advisory Board (GASAB) 6 (iv). Importance of Conservatism in Accrual system for
at its Fifteenth meeting held on 30 July 2008 took a landmark public sector accounting
decision to develop Accrual basis Accounting standards for (Glöckner, 2016) When the accrual based financial statement
Government. 21 State Governments have expressed their are used for budget preparation, conservatism should also be
agreement to migrate to Accrual Basis. The Standards will be kept in view. This would help stakeholders as well as the entity
issued as ‘Indian Government Financial Reporting Standards as this increases the transparency in the public sector accounting.
(IGFRS)’ will be applicable to Government of India and State (Rossi, Cohen, Caperchione, & Brusca, 2016) Accrual
Governments in the preparation of accounts under Accrual basis accounting is adopted for preparation of financial statements
accounting”. and accounts at all levels of public sector accounting in a
country, does not mean the it has been developed at all the levels
6. Developments in Public Sector Accounting of government. In many countries including India, the reforms
There has been much development over the years in public are under adoption stage.
sector accounting in India as well as in other countries. The
biggest change has been that the steps have been initiated for 6 (v). The role of management in public sector accounting
Conversion from Cash to Accrual Accounting System & Single (Todericiu, R., Stanit, & A., 2016) Public management has
to Double Entry Book Keeping. modernized recently in all the major European countries &
management plays a very important role on in the public sector
6 (i). Conversion from Cash to Accrual Accounting System accounting by focusing on the implementation of new policies
& Single to Double Entry Book Keeping in the system.
The two terms of accounting i.e. ‘Cash’ & ‘Accrual’ refers to (Ionescu L. , 2017) The increased importance of management
two difference system of accounting. has been immerged in the last decades. The same is because of
There are defined rules and procedures for both the systems efforts put in by government and continuous improvement in

the system and effective administration, to make the optimum for the existing accounting system, and standards for accrual
utilization of public resources, control the public expenditure, basis under the nomenclature of Indian Government Financial
review and analyze the information collected from accounts Reporting Standards (IGFRS)”.
department.
(Zaman G & Ionescu L.,, 2016) “Management and public 9. Challenges in Public Sector Accounting
sector accounting in the central and local administration are “The Twelfth Finance Commission in its report submitted
strongly connected. Accounting techniques are important as to Government of India at Chapter 14- Institutional Changes
an efficient instrument for public management and for fighting and Reforms had recommended introduction of accrual-based
corruption in the public sector”. system of accounting. The Government has accepted this
recommendation in principle and GASAB has been asked to
6 (vi). Different accounting policies around the world for draw a detailed road map and operational framework for its
public sector accounting implementation”.
There are different accounting policies prevailing in different
countries across the world. Some Countries are now following 9 (i). Challenges in Public Sector Accounting in India
cash system and some has already shifted to accrual system of Like other countries, there is ongoing process of shifting
accounting. Mostly developed countries are following accrual over from cash system to accrual system for public sector
system of accounting and some are using mixed system of accounting. The switchover in between two systems is not
both cash and accrual accounting that can be termed as new simple but involves several complexities and challenges. Key
development in the field of accounting. challenges in convergence are mentioned below:
(Félix Madrid García, 2014) Discussed the Standardization
and Accounting Convergence. improvements in the public (Committee on Public Finance and Govt. Accounting, 2017)
sector accounting system is being made continuously so that • To adopt relevant and correct accounting policies
the same principles and standards can be made applicable for in consistent with applicable rules and accounting
the preparation of governmental accounts at all differential standards.
levels. This will also increases the comparability of the financial • To adopt the accrual system in line with cash system of
information across all levels. budgeting adopted by the government as comparison
between the two will be difficult.
7. Status of adoption of Public sector accounting in the • Shifting from current value method to historical method
world of valuation.
(Cavanagh, Flynn, & Moretti, 2016)“International Monetary • Absence of non-availability of technical resources.
Fund has conducted the study and it reveals that on status • Shifting to accrual system will require “change in
of convergence from cash based method to Accrual based thinking” and improved communication across all the
accounting system. In 2015, 41 governments (21%) have levels.
completed the transition, 16 government (8%) accounts are
working on modified accrual basis, 28 governments (17%) are 9 (ii). Challenges in Public Sector Accounting in other
working on modified cash basis, and 114 governments (57%) countries
are still working on pure cash accounting system”. Many Challenges and barrier are also there in other countries
(Committee on Public Finance and Govt. Accounting, as pointed out in various studies made and some of those ate
2017), Accrual accounting is mostly used in developed discussed here:
countries. OECD countries have developed system with accrual (Ionescu L. , 2018) In current era number of employees are
accounting system except some exceptions. Some countries have increasing due to complex processes which has resulted in
developed the modified system of accounting and following wastage of resources thereby affecting efficiency of employees.
the same. In United States (“US”), the separate Governmental The reason for the same includes lack of communication, lack
Accounting System is designed. In France and New Zealand of qualified accounting professionals.
the development of accrual accounting was a strong priority for (Harun, 2007). There is need of independent body or
the government and governments are now moving from IFRS organization for the preparation for public sector accounting
to IPSAS. in Indonesia. The reason is government’s non interest due to
lose of control over process & shortage of qualified professional
8. Development of Standards for Public sector Accounting/ with the requisite skills.
Government accounting in India (Sellami & Gafsi, 2019) This article analyzed the impact of
(The Institutte of Chartered Accountants of India, 2019) environmental factors based on which any country is deciding
“C&AG have constituted Government Accounting Standards the adoption of the International Public Sector Accounting
Advisory Board (GASAB) with the support of Government Standards (IPSAS).
of India in the backdrop of the new priorities emerging in the (Rossi,, Jorge, Jesus, & Caperchione, 2015) This study reveals
Public Finance Management and to keep pace with International that there is lack of accountability under the existing system of
trends. The new priorities focus on good governance, fiscal public sector accounting and system further needs a switch to
prudence, efficiency & transparency in public spending”. IPSAS as this will increase the accountability. Further there is
“GASAB develops accounting standards under cash basis also a need to control the public sector expenditure and deficit.
known as Indian Government Accounting Standards (IGAS) (Félix Madrid García, 2014) “This paper has analyzed the

following recent changes that have been occurred in the public 64 (Sharma, 2017)”. Thus Millennials are going to
sector accounting: form substantial proportion of workforce in growing
• Standardization and accounting convergence; economies like India. Millennials have grown up with
• Consolidation of financial statements; today’s era of fast changing technology which has
• Management indicators and additional information for lowered their level of patience. They expect immediate
disclosure”. feedback from their managers & they are uncomfortable
with rigid corporate structures and dislike information
(Barton, 2005), This study has provided a review that the silos. Cash based system may create a Skill gap for such
standards of private sector cannot be applied to public sector as Millennials. Skill gap is not only harmful for career
its as pattern of working, mode of operation and requirement of prospects of the employee but also create hindrances for
private sector (business sector) and public sector are different firm performance, value and growth (Shastri, Wadhwa,
and accordingly standards must be amended or separately & Rampal, Skill Gap in Accounting Education for
prepared by respective accounting standard boards as per the Prospective Managers, 2018). Cashless system helps in
requirement of relevant public sector. bridging the skill gap. (Shastri & Vaidya, Cashless India:
The Way Ahead, 2019).
10. Conclusion and the way ahead • India is all set to grow towards a cashless economy,
Cash System of Accounting has been in existence from the however financial literacy, basic awareness about
time of independence. Single entry system of accounting was digital transaction alternatives, robust IT and telecom
in place with cash system. Measures have been initiated from infra, high end IT security and Government incentives
long time to switch over to accrual system with double entry certainly needs to be uplifted (Shastri & Vaidya,
system. Some public sector organizations have already made Cashless India: The Way Ahead, 2019). This hold true
a switchover to double entry method with accrual system not only for monetary transactions system but also to
of accounting and some are working on hybrid system of Public Sector Accounting System where a shift from
accounting. cash based system to accrual system is quite inevitable.
The process of full conversion from cash system to accrual • According to (Eccles, 2001) “companies with fuller
system needs special concern as this is very relevant part for disclosure win more trust from investors e.g. (Shastri,
efficient and effective implementation of required changes under Shastri, & Agrawal, Mandatory Cost Audit and
public sector accounting. Following empirical evidences also Investor Trust, 2015) found that Mandatory cost audit
support the argument of need for shift from cash based system enhances investor trust. But it has the potential to do
of accounting to cashless or accrual system of accounting in so directly if investors are educated about cost audit
India’s Public Sector:- and its reports are made public through innovation in
reporting mechanism”. Since cashless system also
• Rather than coming out with public offerings
brings better disclosure and transparency, it is likely to
government is looking at inorganic growth options viz.
improve investor trust. Again this holds true not only
Mergers & Acquisitions of State Owned Enterprises.
for monetary transactions system but also to Public
HR management is very important for inorganic growth
Sector Accounting System where a shift from cash based
i.e. It is very important to bring coordination in HR
system to accrual system is quite evident because it will
issues even for better synergy in Mergers &Acquisitions
lead to better disclosure practices.
(Shastri & Shastri, 2014). Employee engagement which
is one of the important HR issues has a significant Switch over form cash accounting to accrual accounting
positive impact on firm value (Shastri & Rajpurohit, would help the stakeholder in decision making and assessing
Employee Engagement Analytics: Enhancing the the long term financial aspect of the decision taken for various
Firm Value, 2017). Use of technology is important in policy matters. It will also help government in allocation of
engaging millennial employees (Shastri & Rajpurohit, resources. Finally it may be summed up that accrual system will
Engaging the Millennials: Need of the Hour for Indian increase accountability, authenticity and transparency in public
PSBS, 2018). Thus cashless system which is technology sector accounting system. It is likely to say that benefits are
based helps a firm in improving engagement levels of many and cannot be quantified.
its employees. It can be inferred that cashless system
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View. Instittute of Chartered Accountants of India.

1�� Batch will commence from November 2019

TAXATION
TAX TITBITS
CMA S. Rajaratnam
Retd. Member
Income Tax Appellate Tribunal
Advocate & Tax Consultants
Chennai
A
brief review of the impact of Insolvency and bailment has also created practical difficulties.
Bankruptcy Code, 2016 (IBC) indicates that The recent decision of NCLT that pendency of a suit cannot
its objects to promote availability of credit justify rejection of application by IBC limits the rights of a
and balancing of interest to shareholders, potential creditor, so is the exclusion of corporate guarantor.
customers and such others are yet to be It is, therefore, not surprising that the orders of NCLT had to
realised. It is moving in a direction contrary be held to be not an objection to continuing pending suits for
to the objective of making ease of business possible. There recovery as observed by the Supreme Court in Innoventive
is no timely resolution on application of the Code especially Industries Ltd. v. ICICI Bank (2018) 1 SCC 407. A false and
in matter of constitution and functioning of Insolvency Law overstated claim was inferred from a conclusion gathered from
Committee. the CBI and not on its finding on the relevant facts.
National Company Law Tribunal (NCLT) before which an The precedents indicate that the banks could not expect the
application is filed is meant to ensure implementation as a intended benefit under this law meant to benefit them. The
regulatory authority in charge of IBC. The guarantors are shut objective of timely resolution of insolvency is still a distant
out from any remedy for reasons, which are not clear, while dream. Attachment of property even during enquiry is another
workmen have a right to invoke this law. The right is limited to complaint against the committee. The manner in which NCLT
operational creditors as understood by NCLT already creating and its committee as a regulatory body is functioning raises
controversies before NCLT as for example regarding the the unanswered question in Roman law “Who will guard the
scope of inclusion or otherwise of certain assets under section guards?” which can now be conjugated in the present law to
18(1)(f) of the Code and limiting the right to operational read “Who will regulate the regulators?”.
creditors. The effect of moratorium has given rise to different
interpretation. The exception under section 18(1)(f) in respect
of assets owned by third party in possession of corporate [email protected]
debtor by way of trust or contractual arrangement including
AT THE HELM
Our heartiest congratulations to CMA Ms. H.K. Joshi, a Fellow Member of the Institute, who
joined The Shipping Corporation of India Ltd. (SCI) on 5th February, 2015 as Director (Finance)
and was also appointed as CFO of the Company w.e.f the same date and upon the completion of
tenure of CMD SCI on September 11, 2019, Ms. Joshi is now holding additional charge of CMD,
SCI.
In July 2015, she was honoured with “CMA CFO Award 2014” from the Institute. She has
been the recipient of “The Most Influential CFOs of India Award” from Chartered Institute of
Management Accountants, UK for two successive years, 2015 and 2016. She has also been awarded
with “The Tenth India CFO Awards – Excellence in Finance to enable a Turnaround” hosted by
International Market Assessment India Private Limited in association with Pierian Services in May
2016. On 3rd of February 2018, she has been conferred with the Best Woman Employee Award 1st
Place (Executive Category) by the Forum of Women in Public Sector (under the aegis of SCOPE).
We wish CMA Ms. H.K. Joshi the very best for all her future endeavors.

INFRASTRUCTURE
COMMUNITY CROWD FUNDING

FOR CIVIC-INFRASTRUCTURE
PROJECTS IN INDIA
- A CONCEPTUAL MODEL
Dr. Abhishek Sinha

Assistant Professor
Vignana Jyothi Institute of Management
Hyderabad
Abstract
This research conceptualizes funds raising for civic infrastructural projects in India where civic infrastructure crowdfunding is
conspicuous by its absence.
If India wants to become a global powerhouse it is important to have state of the art infrastructure. The same cannot be achieved
without public participation. Philanthropists from across the globe with “India Connect” must contribute to this idea.
I
Introduction 50 trillion of projects under implementation, according to
nfrastructure growth is of paramount importance CMIE Capex database in 2018. It makes the job of managing
for community development and nation building and supervising these projects more difficult. Public private
for India. There is a deficit of $ 26 trillion in total partnerships require considerable state capacity to award and
requirement of funds to meet targeted infrastructural manage contracts. Hence managing the construction of these
growth in Asia by 2020 (Asian Development Bank, infrastructure sector assets in timely manner is difficult.
2015). Hence, India needs innovative methods of Following are three factors that have impacted implementation
crowd funding. of socially viable projects in India. These problems include:
Civic crowd funding is a form of crowd funding wherein local 1. Lack of Public Support – The public engagement in
inhabitants along with the administration, finance infrastructure socially viable projects are low.
related to community service. It is in the early stages of 2. Red-tapism – Most of the projects which start with
development in developed countries where people engagement fanfare, in the long term suffer from dearth of activities.
along with funding makes it an interesting field of study (Davies The present government has understood and taken
R.,2014). In some countries crowd funding for civic projects cognizance of this phenomenon.
is gathering momentum. The countries include United States,
3. Gap between policy and implementation.
United Kingdom and Brazil. However, civic crowd funding is
conspicuous by its absence in India. In 2016 budget the government of India allocated 2% of the
total outlay on social spending. However, there was a huge
under-utilization of the allocated funds.
Challenges of building infrastructure in India
The aggregate investment in infrastructure in India is INR

INFRASTRUCTURE
depends on the ability to attract potential investors from the

community. Following is the snapshot of the same.
Figure 3: Snapshot of Spacehive.com
Demand Side Analysis

It may not be feasible to finance all the projects with the
Figure 1: The Problem Triangle
help of community funding (Bellfame, 2014). Globally a lot of
companies and non-government organizations attempt to raise
Viable Civic Infrastructure Crowdfunding Project
money through community funding. However, if one visits the
It is not possible to fund all civic infrastructure projects with community funding website, he would realize that the failure
crowdfunding (Aggarwal, 2011). The field research points rate is abysmally high. For example, in the case of kickstarters.
out at certain differentiators that would decide the success or com, a fund-raising website in the United States as on 25th
failure of the project. The parameters include scope of projects, August 2018 the rate of failed projects was approximately 66%.
repeatability, direct and indirect benefits and amount of funding Approximately 87% of these projects are not able to procure
requirement as important determinants for determining the even 20% of their requirements. The civic fund-raising websites
viability of the project to get funded. In the United States and in the United States and UK have a success rate at around 50%.
developed countries certain projects such as parks and gardens Thus, there is a need to understand factors which would make
have attracted maximum attentions. the project successful from demand side.
The viability matrix is aimed at creating a metrics which
Spacehive.com – Would it work in India? would help decide whether a project is viable to be sponsored
Spacehive.com specializes in generating funds for the civic through community funding.
projects. To substantiate, patrons could help generate fund to Local Engagement (Intrinsic Value)
repair a dilapidated dispensary through the website. A new
suburban area could get drinking water through contribution
from interested party. Spacehive.com has raised more than
£2.1 million funds for 331 projects in the last six years of its
existence. Following are the demand and supply dynamics of
community investing at spacehive.com. The project success rate
is 50%.
Figure 4: Demand Side Viability Matrix – Crowdfunding

Infrastructure in India
Supply Side Dynamics

“Why should George Soros and Bill Gates have all the fun,
deciding where charitable money goes?” – Ethan Zuckerman,
Director, Center for Civic Media, MIT
Figure 2: Fund Raising Dynamics of Spacehive.com
Figure 5 captures the factors that impact willingness to
contribute. According to well documented research in finance
Case in the point is a recent project where £337,000 was there exists a “home bias” which means there is a higher
collected in 80 days to save Ancoats dispensary in the Greater probability of transactions taking place between people of same
Manchester area. The total budget for the project is £370,000 geographical area. In the online crowdfunding platforms, also
and there is still 20 days left. If £33,000 is not collected the this bias exists. (Lin, M. and Viswanathan, S., 2015). Hence,
project would be vanquished. Hence, the raising of funds Investment from Indian diaspora is expected to increase in the

INFRASTRUCTURE
long run. marginalized could be financed.

The difference between the haves and have-nots has increased
considerably over the last few years. According to the 2016,
References
Credit Suisse Wealth Report the lower half have access to only
one percent of the global wealth while the top 10% hold more 1. Asian Development Bank website
than 89% of the wealth. Bain Consultancy Report has also been 2. Agrawal, A. K., Catalini, C., & Goldfarb, A. (2011). The
prepared on the same line. This has also led to an increase in geography of crowdfunding (No. w16820). National
Bureau of Economic Research.
the philanthropic activities of “haves” segment of the society.
In India, the story is no different. Figure 5 captures factors 3. Bain Consultancy Report on “Philanthropy Report India
-2017”
impacting philanthropy.
4. Belleflamme, P., Lambert, T. and Schwienbacher, A.,
2014. Crowdfunding: Tapping the right crowd. Journal of
business venturing, 29(5), pp.585-609.Belleflamme, P.,
5. Credit Suisse Wealth Report 2016
6. Davies, R., 2014. Civic crowdfunding: participatory
communities, entrepreneurs and the political economy of
place, BA, Oxford University. MIT (PhD thesis)
7. How do we make civic crowdfunding awesome? August
2012 Retrieved from http://www.ethanzuckerman.com/
blog/2012/08/10/how-do-we-make-civic-crowdfunding-
awesome/
8. https://www.kickstarter.com/help/stats
9. Lin, M. and Viswanathan, S., 2015. Home bias in online
investments: An empirical study of an online crowdfunding
market. Management Science, 62(5), pp.1393-1414.
10. Mayer, M., 2016. Civic crowdfunding and local
government: an examination into projects, scope, and
Figure 5: Conceptual Model - Directing Philanthropy for implications for local government (Doctoral dissertation,
funding infrastructure Old Dominion University).
11. Ordanini, A., Miceli, L., Pizzetti, M. and Parasuraman,
Conclusion
A., 2011. Crowdfunding: transforming customers into
The future of any developing country hinges on the investors through innovative service platforms. Journal of
sustainable growth which in turn depends on the success of service management, 22(4), pp.443-470.
social programs. The government must think of proactive and 12. Winston C (2006). Government failure versus market
innovative ways of making these programs work. One such failure: Microeconomics policy research and government
solution is community funding for civic projects. This would performance. Washington, DC, USA: The Brookings
not only help seamless running of the program but also help Institution.
increase the public engagement in the projects. However,
only those projects where government’s involvement can be [email protected]
OBITUARY
The Institute and its members deeply mourn the demise of CMA Aditya Kumar Mukhopadhyay, one of the oldest members of
the Institute who left us for his heavenly abode on 14th September, 2019 at his residence.
He was a professional with profound knowledge in Accounting and Finance. He served in various positions in Jessop
India Ltd and retired in 1984 as Manager, Accounts. Post retirement he was engaged in various activities including coaching
accounting aspirants and all of his disciples earned good name in their respective fields.
May his family have the courage and strength to overcome the loss.

COST GOVERNANCE
COST GOVERNANCE
IN HIGHER EDUCATIONAL
INSTITUTIONS IN INDIA
- A STUDY
Dr. Sankar Paul

Assistant Professor
Department of Commerce, Hooghly Mohsin College
Hooghly
Abstract
The paper seeks to examine the cost governance in Higher Educational Institutions relating to Central Universities in India.
Total amount of fund and total amount of operating expenses for the year 2016-17 in all the Central Universities in India have been
shown. Indian Universities are financed by Government grants or subsidies and academic receipts and tuition fees contribute little
to the finances. Operating expenses in Central Universities of India are increasing over the years. So, Indian Universities have fund
crunch to meet the huge amount of operating expenses. Students financial assistance, research projects are worst suffered due to
budgetary reductions. Central Universities in India should implement the strategies from the view points of academic, administrative
and students to reduce the huge amount of operating expenses like eliminating academic programs with poor enrolments, reducing
University purchases etc. Finally, Central Universities should implement long term strategies for reducing budget gaps or manage
costs.
“A
Introduction education trends reflects that the higher education sector is
ll around the world, the pace currently facing its greatest financial challenge. Indian higher
of change in higher education education sector is not an exception. Costs in higher education
is accelerating. In the face sector have risen substantially. This paper exhibits the cost
of continued increases in governance in Central Universities in India. Most of the Central
participation, demographic Universities in India are funded by Governments. For Central
change and – in the West at Universities in India, the challenge seems insurmountable as
least – profound fiscal crises, higher education institutions discriminate cost cutting may have an adverse impact on the
are increasingly being required to raise funds from students as quality of education provided. So sizeable amount of funding gap
opposed to relying on transfers from governments. Indeed, the is been seen among the Central Universities in India.
face of policy change is coming so quickly that it is difficult to
keep track of all the relevant developments in different parts of Role of UGC and Central Universities in India
the world” (Marcucci and Usher, 2011: p.1).
University Grants Commission (UGC) was set up in 1953 and
The above quote in the introductory section on global higher was constituted as statutory body under the Act of parliament in

COST GOVERNANCE
1956 to determine and maintain standards in Public Universities

Sikkim 1 Sikkim University
in India. The major initiatives taken by UGC in its XII plan
guidelines for the Public Universities are: Tripura 1 Tripura University
• UGC in its XII plan guidelines provides funds for Uttar Pradesh 5 Aligarh Muslim
University industry linkage. University
• Setting up Centres for Prevention and Promotion of Babasaheb Bhimrao
University
Endangered language in Central Universities.
Banaras Hindu
• Provide funds for human Resource Development Centres
University
(HRDCs) and Regional Centres for capacity Buildings
(RCCBs). Rajiv Gandhi National
Aviation University
• General development assistance to all central and State
University of Allahabad
universities in India.
West Bengal 1 Visva Bharati
Table 1: No. of Central Universities in India Uttarakhand 1 Hemwati Nandan
Bahuguna Garhwal
University
States/UTs No. of Name of the Central Tamil Nadu 2 Central University of
Central University Tamil Nadu
University
Indian Maritime
Arunachal 1 Rajiv Gandhi University University
Pradesh
Rajasthan 1 Central University of
Assam 2 Assam University Rajasthan
Tezpur University
Punjab 1 Central University of
Telangana 3 English & Foreign Punjab
Languages University
Orissa 1 Central University of
Moulana Azad National Orissa
Urdu University
Kerala 1 Central University of
University of Hyderabad Kerala
Delhi 5 Indira Gandhi National Karnataka 1 Central University of
Open University Karnataka
Jamia Millia University Jharkhand 1 Central University of
Jawaharlal Nehru Jharkhand
University
Jammu & 2 Central University of
South Asian University Kashmir Jammu
University of Delhi Central University of
Madhya Pradesh 2 Dr. Harisingh Gour Kashmir
Vishwavidyalaya Himachal Pradesh 1 Central University of
The Indira Gandhi Himachal Pradesh
National tribal Haryana Central University of
University Haryana
Maharashtra 1 The Indira Gandhi Chhattisgarh 1 Guru Ghasidas
National Tribal Vishwavidyalaya
University
Bihar 3 Central University of
Mizoram 1 Mizoram University South Bihar
Meghalaya 1 North Eastern Hill Mahatma Gandhi central
University University
Manipur 3 Central Agricultural Nalanda University
University
Gujarat 1 Central University of
Manipur University Gujarat
National Sports Total 48
University
Nagaland 1 Nagaland University Source: www.ugc.ac.in/ List of Central University.
Pondicherry 1 Pondicherry University

COST GOVERNANCE
Objectives of the Study Research Methodology

»» To show the total amount of Fund in all the Central The entire study is based on both exploratory and empirical
Universities in India over the year 2016-17. in nature. Data has been collected from the available annual
»» To highlight the total amount of operating expenses of reports/annual accounts for the year 2016-17 of each of Central
all the Central universities in India over the year 2016- Universities in India. Moreover data has been collected from
17. Ministry of Human Resource Development MHRD), Govt. of
India and UGC.
»» To identify the areas or activities which have been
affected by budgetary reductions in all the Central
Universities in India. Data analysis, Presentation and Findings
»» To highlight the strategies for reducing the operating 1. To show the total amount of Fund in all the Central
expenses in all the Central Universities in India. Universities in India over the year 2016-17
»» To highlight the long term strategies for reducing budget In this section, we have shown the total amount of fund in all
gaps or manage costs in all the Central Universities in the Central Universities in India over the year 2016-17. Fund is
India. collected from Government as grants or subsidy or Universities
have academic receipt and other income.
Table 2: Total Amount of Fund in all the Central Universities in India over the year 2016-17.
Grants/ % of
% of
Name of Academic Subsidies Academic
Other Income Total Fund Government
States/UTs Central Receipts from Receipts and
(Rs.) (Rs.) Grant on
University (Rs.) Government Other Income
Total Fund
(Rs.) on Total Fund
Central
University of 9672524 331537000 76916027 418125551 79.29125575 20.70874425
Jammu & Jammu
Kashmir Central
University of 22395208 292426589 47936636 340363225 85.91603544 20.66376119
Kashmir
Arunachal Rajiv Gandhi
80787536 6129841 51039830 137957207 4.443291607 95.55670839
Pradesh University
Assam
92417266.26 778798134 28854083.89 900069484.2 86.52644576 13.47355424
University
Assam
Tezpur
124310227 615021000 58566576 797897803 77.08017213 22.91982787
University
The English
and Foreign
15836408 646224975 63949431 726010814 89.01037871 10.98962129
Language
University
Moulana
Telangana
Azad
183764273.3 856500000 71488194.73 1111752468 77.04053057 22.95946943
National Urdu
university
University of
75433370 2325621361 68638930 2469693661 94.16638985 5.833610147
Hyderabad
Jamia Millia
Islamia 189505271 3706903557 176496638 4072905466 91.01373916 8.986260841
University
Jawaharlal
Nehru 69957474 3327247303 166140799 3563345576 93.37425271 6.625747292
Delhi University
South Asian
32167925 787599667 1171480 820939072 95.93886975 4.061130252
university
University of
954040785 4535349679 150053936 5639444400 80.42192382 19.57807618
Delhi

COST GOVERNANCE
Dr. Harisingh
Gour 246786781 900551861 108040768 1255379410 71.73543343 28.26456657
Visvavidyalaya
Madhya The Indira
Pradesh Gandhi
National 13906293 1024677287 42509580 1081093160 94.78159005 5.218409947
Tribal
University
Mizoram
Mizoram 83077159 727338834 60369285 870785278 83.52677203 16.47322797
University
Central
Agricultural 3828713 805483346 36095089 845407148 95.27756512 4.722434876
Manipur University
Manipur
164332995 932960399 18141836.43 1115435230 83.64092989 16.35907011
University
Nagaland
Nagaland 54421024 834363624 6317012 895101660 93.21439802 6.785601984
University
Pondicherry
Pondicherry 178012876 1450426294 58092352 1686531522 86.00054461 13.99945539
University
Sikkim
Sikkim 15849547 408035603 51467613 475352763 85.83848349 14.16151651
University
Tripura
Tripura 58373589.87 729644257.7 40486689 828504536.5 88.06762371 11.93237629
University
Aligarh
Muslim 287980647 8643446641 145502713 9076930001 95.22433951 4.775660493
University
Babasaheb
Bhimrao
Uttar Pradesh 158894413 536387381 53628087 748909881 71.62242008 28.37757992
Ambedkar
University
Banaras
Hindu 529713946 8092447639 1950336160 10572497745 76.54243901 23.45756099
University
Visva Bharati
West Bengal 43736687.32 2248421531 32078421.33 2324236640 96.73806413 3.26193587
University
Indian
Tamil Nadu Maritime 6977147 325886637 1023295204 1356158988 24.03012035 75.96987965
University
Central
Rajasthan University of 13277101.75 262918150.6 20534539.11 296729791.4 88.60524226 11.39475774
Rajasthan
Central
Punjab University of 18610091 261946128 4202764 284758983 91.98871454 8.01128546
Punjab
Central
Orissa University of 9650448 97706980.2 101197396.3 208554824.5 46.84954204 53.15045796
Orissa
Central
Jharkhand University of 66964909 378323000 39571880 484859789 78.02729956 21.97270044
Jharkhand
Central
Himachal University
5686916 120000000 54399453 180086369 66.63469349 33.36530651
Pradesh of Himachal
Pradesh

COST GOVERNANCE
Guru
Ghasidas
Chhattisgarh 82763252 515667092 30700110 629130454 81.96505013 18.03494987
Visva
Vidyalaya
Central
University of 16960585 251311202.6 69277141.52 337548929.1 74.45178489 25.54821511
Bihar South Bihar
Nalanda
18139477 152421236 10519106 181079819 84.17350804 15.82649196
University
Central
Gujarat University of 6030683 198586069 3615973 208232725 95.36736793 4.632632071
Gujarat
Source: Annual Reports/ Annual Accounts of the Central Universities over the year 2016-17.
Central Universities in India are primarily financed by Govt. Assam University 1058588919
of India as Grants or Subsidies through the Department of Assam
Ministry of Human Resource Development and UGC. So, most Tezpur University 830371431
of the Central Universities in India are depended on Government The English and
funds in every year through budget allocation. Tuition fees, Foreign Language 946942883
Admission fees and other academic receipts contribute very University
little to the finances of all the Central Universities in India. Moulana Azad
Telangana
Table 2 has shown that 20 Central Universities out of 35 Central National Urdu 1524628115
Universities belonging to States/UTs have more than 80% university
funds as grants or subsidies coming from the government. So, University of
2596843796
Government funds are the major source of fund for most of Hyderabad
the Central Universities in India. On the other hand, academic Jamia Millia
5991619779
receipts and other income of most of the Central Universities Islamia University
in India are very little. So, Universities’ own fund is not Jawaharlal Nehru
significant. It contributes only 4% to 33% of the total fund of the 5184969905
Delhi University
University. It signifies that most of the Central Universities in
South Asian
India depend on Government grants through budget allocation 787612852
university
in each year. It is not possible for the University to meet huge
University of Delhi 8820586752
amount of operating expenses out of government funds. So,
Budget gap is seen in all the Central Universities. If recession Dr. Harisingh Gour
1198987701
may happen, then obviously government cuts budget allocation Visvavidyalaya
for the Central Universities. Madhya Pradesh The Indira Gandhi
National Tribal 260293862
University
2. To highlight the total amount of operating expenses
of all the Central Universities in India over the year Mizoram
Mizoram 1342168183
2016-17 University
In this section, total amount of operating expenses in all the Central Agricultural
1282844631
Manipur University
Central Universities in India over the year 2016-17 has been
shown. Operating expenses are salary of staff, rent, repairs & Manipur University 892800739.3
maintenance, finance cost, depreciation etc. Nagaland
Nagaland 884883267
University
Table 3: Total Amount of Operating Expenses of all the Pondicherry
Pondicherry 1585999704
Central Universities in India over the year 2016-17 University
Sikkim Sikkim University 486273813
Name of Central Operating
States/UTs
University Expenses (Rs.) Tripura Tripura University 843634003.7
Central University Aligarh Muslim
273731999 45614141118
of Jammu University
Jammu & Kashmir
Central University Babasaheb
346162825
of Kashmir Uttar Pradesh Bhimrao Ambedkar 662337422
University
Rajiv Gandhi
Arunachal Pradesh 1100319038
University Banaras Hindu
10694674186
University

COST GOVERNANCE
Visva Bharati expenses in all the Central Universities in India.

West Bengal 2222923726
University Central Universities in India are facing huge amount of
Indian Maritime operating expenses every year. So, Universities must adopt the
Tamil Nadu 987936356
University following strategies to reduce the operating expenses from the
Central University view points of Academics, Administrative and Students.
Rajasthan 318065691.5
of Rajasthan
Central University Table 4: Strategies for reducing Operating Expenses in all
Punjab 261946128
of Punjab
the Central Universities
Central University
Orissa 155596253.3
of Orissa
Academics Administrative Students
Central University
Jharkhand 242270801 Exploring Using technology Requesting donors
of Jharkhand
collaboration for cost efficiency to allow restricted
Central University
Himachal Pradesh of Himachal 155878480 opportunities gifts to be used for
Pradesh for academic other purposes
programs with
Guru Ghasidas other institutions.
Chhattisgarh 581619384
Visva Vidyalaya
Consolidating Reducing utilities Reducing number
Central University redundant units/ costs of graduate
278673999.9
Bihar of South Bihar
departments/ assistantships
Nalanda University 284095897 faculties
Central University Reducing part Exploring Reducing funding
Gujarat 267359251
of Gujarat time lecturer’s collaboration for student
position opportunities for activities
Source: Annual Reports/ Annual Accounts of the Central administrative
Universities over the year 2016-17. services with
other institutions
Operating expenses in Central Universities are staff payment, Eliminating Reducing Eliminating
academic expenses, administrative expenses, finance cost, academic part time graduate
repairs & maintenance, depreciation etc. Universities over the programs with administrative assistantships
year have to pay the operating expenses. These costs are the poor enrolments staff positions
burden of the University against of which huge amount of funds Collapsing course Limiting overseas Reducing amount
should be required. Table 3 shows the amount of operating section into fewer, travel of scholarships
expenses of all the Central Universities in India. From the above larger sections
table, it has been seen that most of the Central Universities have
Reducing elective Reducing
huge amount of operating expenses to pay off. Universities
course offering University
in India should adopt some strategies to reduce the operating
purchases
expenses over the years.
Increasing Outsourcing more
teaching load for administrative
3. To identify the areas or activities which have been full time academic services
affected by budgetary reductions in all the Central staff
Universities in India Outsourcing Reducing
The following areas or activities are worst suffered by more academic maintenance
budgetary reductions in all the Central Universities in India; programs expenses
• Faculty/ staff travel Reducing required Promoting early
• Student Financial Assistance course offering retirement for staff
• New academic staff recruitment Reducing Reducing
permanent permanent
• New administrative staff recruitment academic staff administrative
• Access for under-represented groups (socio economic positions staff positions
background, minority students)
• Ongoing research projects 5. To highlight the long term strategies for reducing
• Academic programs and course offering for students budget gaps or manage costs in all the Central
Universities in India.
• Academic staff exchange program
In order to reduce budget gaps or manage costs, Central
Universities should implement the following strategies;
4. To highlight the strategies for reducing the operating
• A strategic review of academic support services should

COST GOVERNANCE
be conducted. allocation from government. Central Universities in India

• A strategic review of institution operations should be should implement long tern strategies for reducing budget gaps
conducted. or manage costs over the years. Universities should also focus
on strategies like outsourcing more academic program, reducing
• A strategic review of course schedules and calendars to
maintenance expenses and reducing amount of scholarships for
ensure full use of facilities should be conducted.
students for reducing operating expenses over the years.
• A strategic review of online/ distance education should
be conducted.
References
• A strategic review of outreach/ continuing education/
1. Siraj, SitiAlawiah, Ahmed, Nik. Nazli, Ismail, Suhaiza,
extension programs should be conducted.
Cost Management in Public Higher Education
• A strategic review of academic programs should be Institutions in Malaysia: Challenges in Financial
conducted. Sustainability, Kulliyyah of Economics & Management
• A strategic review of research niche areas should be Sciences IIUM.
conducted. 2. Ahmad, A. R., Farley, A., and Kim-Soon, N. (2013),
• A strategic review of student support service should be Funding reforms in Malaysian public universities:
conducted. Transitions towards competitive funding, Australian
• A strategic review of tuition fee level should be Journal of Basic and Applied Sciences, 7 (10), 553-561.
conducted. 3. Ahmad, A.R., Farley, A., and Naidoo, M. (2012), An
• Enrolments in specific areas should be decreased. examination of the implementation federal government
strategic plan in Malaysian public universities,
• Operations/ services should be outsourced (e.g. IT
International Journal of Business and Social Science,
services, bookstores).
3(15), 290-301.
4. Amran, F. H., Rahman, I. K. A., Salleh, K., Ahmad,
Conclusions
S. N. S., and Haron, N. H. (2014), Funding trends of
The present study examined the cost governance in Central research universities in Malaysia, 164, 126-134.
Universities in India. The study also highlighted the total
5. Cameron, K., and Smart, J. (1998), Maintaining
fund and total amount of operating expenses in all the Central
effectiveness amid downsizing and decline in
Universities in India over the year 2016-17. The studies also
institutions of higher education, Research in Higher
showed the various strategies for reducing operating expenses
Education, 39(1), 65-86.
and long term strategies for reducing budget gaps or manage
costs. It has been seen that Central Universities in India are
exclusively financed by having grants or subsidies from Central Websites
government. Tuition fees and other academic receipts contribute 1. www.ugc.ac.in
little to finances of the Universities. Operating expenses of all 2. www.mhrd.gov.in
the Central Universities in India are increasing significantly. So,
3. Websites of all the Central Universities in India.
Central Universities in India don’t have ample fund to meet huge
amount of operating expenses. As a result, areas like student
financial assistance, new academic staff recruitment, research [email protected]
projects have been worst suffered by having reduced budget
AT THE HELM
Our heartiest congratulations CMA (Dr.) Paresh Shah, a fellow member of the Institute being
conferred for “Life Time Achievement Award” announced by Global Outreach Research and
Education Association for his post-doctoral research and acknowledging globally at large,
the Modern Approach of Accounting (Accounting without Debit and Credit). The said work
is highly appreciated by University of Oxford, England, United Kingdom, and published by
Oxford University Press (Very recently third edition has been published, and highly accepted
by European Countries, and US based countries).
He is member of six international editorial board and eleven national editorial board. He
is also member of Board of Studies of three Universities. Till date recipient of six globally
recognized awards related to research, teaching and authoring. He has also conducted nine
colloquia at International conferences.
We wish CMA (Dr.) Paresh Shah the very best for all his future endeavors.

PROFESSIONAL ETHICS
ETHICAL ISSUES FOR

GOODS AND SERVICES TAX
PRACTITIONERS
Kritika Tekwani Dr. Rinku Raghuvanshi

Research Scholar, Management Associate Professor, Management
Bhartiya Skill Development University, Jaipur Bhartiya Skill Development University, Jaipur
Abstract
GST is a new indirect tax, implemented in July 2017. Persons who are doing business, dealing with taxes, and filing returns are
still confused about GST and its guidelines. This paper highlights the GST practices which are performed by the GST practitioner
and ethical issues related while performing these practices. This study suggests that GST Practitioners have to follow professional
ethics to fulfil all compliances correctly and ethically.
T
Introduction European Union, New Zealand, Australia, Organization for
ax practitioners are professional experts in Economic Corporation and Development, etc.
tax practices. They work on behalf of their
client. These practitioners help businesses Goods and Services Tax Practitioners (GSTP)
in various areas such as registration, returns, GSTP is a person who is authorized by the Government to
refund, cancellation, etc. Tax practitioners furnish tax information on behalf of their client as per section
are directed to ethics, code of conduct, and 48 of the CGST Act. A person is certified as a GST Practitioner
various standards as per their area of practice. after fulfilling all the eligibility and conditions as per the rule
24 and 25 of the GST Act. GST Practitioner has to file various
Goods and Services Tax forms which are available on the GST portal including GST
This new tax came with effect from July1, 2017 through the PCT-1, GST PCT-2, GST PCT-3, etc. GST Practitioners work
implementation of 101st amendment in the Indian Constitution. as an e-mitra and known as a GSTP. GSTP has to pass the
The structure of indirect taxes as existing up to 30-6-2017, which examination which is organized by NACIN (National Academy
includes various taxes like VAT, entertainment tax, luxury tax, of Customs, Indirect Taxes & Narcotics), in terms of sub-rule
service tax, surcharge, etc., merged into GST. The main reason (3) of rule 83 of the CGST Act, 2017, vide Notification No.
behind the implementing this tax is to merging all these indirect 24/2018.
taxes in a single indirect tax and eliminating the cascading tax
effect. Goods and Services Tax law includes unique principles, Literature Review
these principles are influenced by the indirect tax system of The Author has reviewed various papers to get more

PROFESSIONAL ETHICS
knowledge about the GST and tax practitioners. A few studies work on behalf of their clients so it is there duty to perform all
have been conducted to show the ethical issues related with the the activities in an ethical way.
tax practitioners. Some of these are listed below.
Objectives of the study
Devi Seema (2016)1 studied, “Goods and Service Tax in 1. To know the practices of GST.
India: A SWOT Analysis” discussed the history of the Indian
2. To identify ethical issues for GST Practitioners.
taxation system, Manu Smriti system, Kautilya’s Arthasastra on
Taxation, and GST structure. This study discussed the strength,
weakness, opportunity, and threats of GST. Strengths include Methodology
the elimination of cascading effect and the increase in GDP. This study is Descriptive in nature. This research study
Researcher presumed that alcohol, real estate, & electricity will used secondary data, which has been gathered from books,
be exempted from GST, and it will be based on dual taxation websites, reports, journals, conference papers, magazines, and
charged by the Government. Weaknesses include GST is based other published data from government and non-government
on IT and people are not very much habitual of technology and institutions. The researcher analyzed and interpreted the
this will be costly to the Government. Opportunities include that secondary data to validate the objectives of the study.
it will reduce the transaction cost and will bring transparency in
the system. Threats include interstate supply will be treated like Discussion/ Analysis
export/import and on this supply, Integrated GST will be levied.
This research paper discusses the GST practices, eligibility
This study concluded that GST would help the Government,
to become a GSTP, ethical issues for GST Practitioners, and
Exporters, Customers, Importers, etc.
actions against GSTP.
Doyle Elaine et. al. (2014)2 studied, “Ethics in Tax

1. GST Practices
Practice: A Study of the Effect of Practitioner Firm Size”
and discussed the duty of practitioners & ethical issues related GST Practitioners perform various practices on behalf of their
with the tax practices. Researchers categorized practitioners registered taxpayers. These practices are as follows.
in two categories which include large practitioners and small
practitioners. This study found that the ethical perception of Table 1: GST Practices
tax practitioners varies with the size of the firm. Large tax
practitioners follow the tax avoidance method for the big
GST Description
multinationals. This study used primary data and interview Practices
method for the collection of data. This study is carried out on
tax practitioners of Ireland. This study concluded that large Registration Migration from VAT/Service Tax to GST
tax practitioners and small tax practitioners both use the same Regular/Composition Scheme
Input Service Distribution (ISD) registration
ethical and moral reasoning while performing tax practices.
Casual Taxable Person registration
TDS/TCS
Rupa R (2017)3 in her research entitled “GST in India:
Refund Excess amount in GST cash ledger
An Overview” found various challenges which hinder the
Excess amount in ITC ledger
implementation of GST effectively. The researcher discussed Recipient of Deemed Exports
the history of GST in the world and found that GST was first IGST (Integrated Goods and Services Tax)
implemented in France in 1954. Singapore has an only a
single rate of tax and Standard rate of GST in the world ranges Reverse Entries of RCM
Charge Supplies made with URD (Unregistered
between 15-20%. This study discussed four slabs of GST like
Mechanism Dealer)
5%, 12%, 18%, and 28%. The author showed the three pillars of
(RCM) Inward supplies liable to reverse charge
it, which include CGST, SGST, and IGST. This study is entirely
based on secondary data. This study concluded that GST will Supply Place of supply
improve the functioning of businesses and firms will become Time of supply
more organized as compare to the earlier tax system. Nature of supply
Delivery of goods or services
Assessment Regular/Special Assessment
Yetmar, S.A. & Eastman (2000)4 studied, “Tax Practitioners’
& Audits Department/Special Audit
Ethical Sensitivity: A Model and Empirical Examination”
and discussed five factors that affect tax practitioners’. These Amendments Tax Rates
all factors are related to ethical interest. This study suggested by GST E-Way Bills
that practitioners should consider ethical issues while taking Council Return Format
decisions and use the correct course of action because they Levy of taxes CGST
perform all tax practices on behalf of their clients. SGST
These studies discussed GST which includes dual indirect tax IGST
structure, where Central and State Government work mutually.
After the reviewing of literature, it is found that tax practitioners

PROFESSIONAL ETHICS
properly and correctly.

Valuation Discount/bad-debts
Depreciation/ITC (Capital Goods)
Returns Regular Scheme: GSTR1, GSTR2, GSTR3, 4. Actions against Unethical Practices run By GSTP
GSTR3B, Annual Return Goods and Service Tax Practitioner does misconduct in
Composition Scheme: GSTR4 connection with any process under the GST Act, 2017 then
Stock details in TRAN1, TRAN2, TRAN3 the authorized officer can give SCN (Show-Cause Notice). If
the Goods and Services Tax Practitioners is found guilty or not
2. Eligibility criteria for becoming GSTP (Goods and performing their work in ethical way and misconduct while
Services Tax Practitioner) presenting the case of their registered client, then GSTP’s
enrollment or registration number will be canceled. The
(i) A person who is graduate or postgraduate in commerce,
authorized officer will give reasonable time to defend or present
finance, banking, law, business studies.
their case in Form GST PCT-04, If GSTP fails to do so then
(ii) A person who is retired from the CTD (Commercial the authority has the right to declare GSTP disqualified under
Tax Department) of any state or of the Central Board of section 48 to perform any practices of GST.
Excise and Customs (now it is CBIC).
(iii) A person who qualified other examination directed by Conclusion
the Government. Goods and Services Tax as it’s a new tax so Government
After identifying the eligibility criteria, it has been observed of India has started various training programs to train GST
that there is no need of any experience to become a GSTP. A Practitioners for the performance of the activities to make
fresh graduate can handle the practices of the client so there is all the compliances easy for the business and hassle-free.
a chance of making errors while filing the return or doing the GST Practitioner performs GST practices on the behalf of its
registration. registered client so it is the duty of GSTP to perform all the
activities or practices in an ethical way. GSTP should file all
the returns and forms (GSTR1, GSTR2, GSTR3, GSTR4,
3. Ethical issues related to GST Practitioners
GST PCT-1, GST PCT-2, etc.) in a proper way. GSTP’s are the
Furnishing wrong details professional practitioners so they have to follow professional
The GST Practitioner prepare all statements on behalf of the ethics to fulfill all compliances ethically.
registered person, and confirmation comes on the registered
mobile number/ e-mail, however failure to respond on such References
confirmation, it is treated as a deemed confirmation. So at this 1. Devi Seema. (2016). Goods and Service Tax in India:
time, it is the duty of GSTP to get the confirmation from the A SWOT Analysis. International Journal of Research
registered person. –GRANTHAALAYAH, Vol.4 (Iss.12), December 2016,
ISSN- 2350-0530(O), ISSN- 2394-3629(P).
Responsibility for the correctness of details
2. Doyle Elaine, Frecknall Jane –Hughes, & Summers
GSTP works on behalf of the client but an obligation for the
Barbara.(2014). Ethics in Tax Practice: A Study of the
correctness of any particular field in the GST return or in other
Effect of Practitioner Firm Size. Journal of Business
GST forms remains with the registered taxpayer only because
Ethics, 122:623–64.DOI: 10.1007/s10551-013-1780-5.
that person is registered under GST. GSTP is not responsible for
the correctness of any particular, so it is the ethical duty of GST
3. Rupa R. (2017). GST in India: An Overview.
Practitioner to furnish all the detail correctly.
International Education & Research Journal, Vol. 3,
Issue 2, February 2017, E-ISSN No: 2454-9916.
Tax evasion
GSTP should enter proper ITC (Input Tax Credit) of CGST, 4. Yetmar, S.A., & Eastman. (2000). Tax Practitioners’
SGST, and IGST. GSTP should not claim more ITC against the Ethical Sensitivity: A Model and Empirical
liabilities if ITC is not available. Examination. K.K. Journal of Business Ethics, 26: 271.
https://doi.org/10.1023/A:1006294517573.
GST updates
Government of India is making changes in GST for the
convenience of traders, manufacturers, exporters, consumers,
[email protected]
etc. Goods and Services Tax Practitioners should update
themselves with the updates in Goods and Services Tax practices
(Tax rates, return formats, threshold limits, RCM, etc.).
Representation of case
GSTP is allowed to represent the case of the taxpayer who is
registered under GST before any officer, department, authority,
and tribunal. So it is the ethical duty of GSTP to represent case

SOCIALLY RESPONSIBLE INVESTING
SOCIALLY RESPONSIBLE
INVESTING
Jasbir Singh Matharu

Associate Professor
Institute of Management Technology, Nagpur
Abstract
Socially Responsible Investing (SRI) is the process of integrating personal values and societal concerns into investment decisions.
In India, assets deployed under SRI stood at USD 30 billion in 2017. BSE Limited currently has two prominent indexes namely S&P
BSE 100 ESG index and S&P BSE Carbonex. National Stock Exchange has launched indexes called NIFTY100 ESG and NIFTY100
Enhanced ESG Index in 2018. Most of the indexes based on SRI have performed better than the overall market. Thus it may make
sense to invest in schemes which are socially responsible.
S
Introduction advertising, business relations with suppliers, customer health
cheuth (2003) defines Socially Responsible and safety, customer privacy, gender equality, or corporate
Investing as “the process of integrating personal social responsibility beyond the minimum required. Governance
values and societal concerns into investment criteria include financial transparency, board structure and
decisions”. Socially Responsible Investing independence, business ethics, conflict of interests etc.
(SRI) is also known by various other names such Global Sustainable Investment Alliance (GSIA) is an alliance
as Sustainability Investing or Sustainable and of seven sustainable investment organizations of the world.
Responsible Investing or Sustainable, Responsible and Impact According to GSIA, socially responsible investing could be
Investing. done on the basis of
SRI takes into consideration environmental (E), social (S) a. negative screening such as exclusion of companies
and governance (G) factors to select companies for creation producing alcohol or companies that are into business of
of portfolios. Thus socially responsible investing is popularly gambling
known as ESG investing. Environmental criteria include b. positive screening such as investments based on ESG
use of natural resources, waste and effluent management, criteria
environmental pollution, contribution to global warming etc.
c. theme based investing such as clean energy, water,
Social criteria would include community development, ethical

sustainable agriculture SRI in India is evolving over time. Ministry of Corporate

d. impact investing or community investing that aims to Affairs (MCA) announced their theme of responsible business
generate specific beneficial or environmental effects, in 2008. After consultations with various government bodies,
tries to make a positive impact by investing that large businesses, MSMEs, and feedback from various national
benefit the community or investing in clean technology as well as international agencies, the National Voluntary
enterprises. Impact or community investing attempts to Guidelines (NVGs) were released in July 2011. In August
give back to the community by helping the less fortunate. 2012, Securities and Exchange Board of India (SEBI) came
out with the idea of Business Responsibility Report (BRR) and
mandated its inclusion in the annual reports of the 100 largest
Evolution of SRI companies (on the basis of market capitalization). BRR was a
According to the report by Deutsche Bank Group (2012), report on how the companies have adopted responsible business
SRI started with ethical investing, in the 1960s in the United practices based on the NVGs. Under SEBI (Listing Obligations
States (US), which prohibited investing in gambling, alcohol and Disclosure Requirements) Regulations 2015, SEBI made
or tobacco. In the 1980s, mutual funds in the United States BRR compulsory for the largest 500 (in terms of market
invested based on both positive and negative screening. In the capitalization) companies.
1990s, the funds started to incorporate social and environmental
factors and this came to be known as Socially Responsible
How to invest?
Investing. Domini Social Index was formed in 1990 to measure
performance of such funds. In 2000s SRI included governance Generally investors invest through mutual funds but there are
in addition to environmental and social factors. very few socially responsible funds available to the investors.
Tata Ethical Regular Fund, Taurus Ethical Fund and Reliance
United Nations launched the Principles for Responsible
ETF Shariah BeES are a few names. There are instances where
Investment (PRI) network in 2006 with around 100 signatories
the fund was launched but did not succeed. One such example
(now there are around 1900). There are six principles
is the JM Ethical Fund.
that investors are expected to follow which would help to
incorporate the ESG factors in their investment decisions. So if investors cannot invest through mutual funds, the way
The Global Reporting Initiative (GRI) is an organization that out for the investors is to buy stocks of companies that follow
promotes reporting of sustainability practices. It was launched the ESG criteria. The investors can thus invest in companies
in 1997 and as per a report by KPMG Survey of Corporate which are a part of the indexes based on socially responsible
Responsibility Reporting 2017, “93% of the world’s largest 250 investing, floated by stock exchanges. Both the National Stock
corporations report on their sustainability performance”. United Exchange (NSE) and BSE Limited (earlier known as Bombay
Nations, with other partners, launched The Sustainable Stock Stock Exchange) floated such indexes.
Exchanges (SSE) initiative in 2009 to promote “sustainable BSE Limited (BSE) currently has two prominent indexes
capital markets”. According to SSE Initiative’s Report on namely S&P BSE 100 ESG index and S&P BSE Carbonex. The
Progress 2018, 78 stock exchanges have joined hands to S&P BSE 100 ESG Index mirrors the S&P BSE 100 but does
promote the idea of sustainable markets. not invest in companies having business of tobacco, nuclear
weapons, landmines etc. S&P BSE Carbonex is also based
S&P BSE 100 but the weights of the individual companies are
How big is SRI?
changed according to amount of greenhouse gas emissions and
According to the Report on US Sustainable Responsible and their carbon policies.
Impact Investing Trends 2018 by US SIF, SRI grew from USD
NSE has launched new indexes called NIFTY100 ESG and
8.7 trillion in beginning of 2016 to USD 12 trillion in beginning
NIFTY100 Enhanced ESG Index in 2018. NIFTY100 ESG
of 2018. This is about 26% of the total US assets (i.e. USD 46.6
is based on NIFTY 100 but the weights of the constituent
trillion) under professional management. According to Global
companies are changed on the basis of its ESG score. ESG
Sustainable Investment Review 2016, USD 22.89 trillion of
score is impacted by factors such as whether there are any
assets, worldwide, are deployed under socially responsible
controversies related to ESG factors or whether a company is in
investment. If we categorize these investments, negative
the business of gambling, tobacco, alcohol etc.
screening has the largest share followed by strategies using ESG
criteria. Impact investing has been growing over the years, even
though the amount of funds invested is not very large. Performance of SRI indexes in India
The performance of SRI indexes on BSE Ltd. have been
SRI in India calculated for the one year, three year and five year period
ending on 31 January 2019 and compared with three benchmark
According to Oxfam India and cKinetics report, in India,
indexes, namely, S&P BSE Sensex, S&P BSE 100 and S&P
assets deployed under SRI, in 2017, stood at USD 30 billion
BSE 500. The holding period returns have been shown in the
as compared to USD 22.89 trillion worldwide, a mere 0.14%
table 1. 5 year returns are not shown for the ESG index as the
share. Of this USD 30 billion, USD 25 billion are in equities
base date of the index is 30 April 2014.
and about USD 5.1 billion in green bonds. The investment in
SRI assets was about USD 13 billion in 2012. This shows an
increase of about 19% per annum.

Table 1: Holding Period Returns of BSE indexes One sees that both the ESG indexes have given higher risk
adjusted returns than the benchmark indexes.
S&P
S&P BSE S&P BSE S&P S&P BSE BSE 100
SENSEX 100 BSE 500 CARBONEX ESG
Conclusion
Index Most of the indexes based on SRI have performed better than
1 year 0.97% -3.07% -7.06% -2.89% -1.10% the overall market. Thus it may make sense to invest in schemes
3 which are socially responsible. Though there are very few
37.88% 36.82% 35.46% 38.17% 40.03% socially responsible mutual fund schemes available but looking
years
5 forward we may see more funds launching such schemes when
58.45% 61.32% 65.70% 61.71% - there is more awareness about incorporating environmental,
years
social and governance factors into investments. More astute
For the last one year, Carbonex and BSE 100 ESG index investors may study and invest in individual companies that give
have been able to generate higher returns than the BSE 100 adhere to the ESG factors. One caveat though, some companies
and BSE 500 but not the Sensex. For the last three years, both worldwide have been found to indulge in ‘greenwashing’ i.e.
BSE Carbonex and BSE 100 ESG index have outperformed the companies claiming to be more environment friendly than they
benchmark indexes. For the five year period, BSE Carbonex is really are.
able to beat the Sensex and the BSE 100.
In Table 2, annualized returns for the 3 year period are References
computed and adjusted for the risk taken. 1. DB Climate Change Advisors, Deutsche Bank Group,
(2012). Sustainable Investing: Establishing Long-Term
Table 2: Risk-adjusted Returns of BSE indexes for 3-year Value and Performance. Retrieved from: https://www.
period db.com/cr/en/docs/Sustainable_Investing_2012.pdf
2. Global Sustainable Investment Alliance (2016). The
S&P Global Sustainable Investment Review 2016. Retrieved
S&P
S&P BSE S&P S&P BSE BSE 100
SENSEX
BSE
BSE 500 CARBONEX ESG from: http://www.gsi-alliance.org/wp-content/
100
Index uploads/2017/03/GSIR_Review2016.F.pdfSchueth, S.
Risk- (2003). Socially Responsible Investing in the United
adjusted 1.05 0.99 0.95 1.03 1.09 States. Journal of Business Ethics, 43(3), 189-194.
Return
3. KPMG’s Global Center of Excellence for Climate
Annualized
Standard 12.15% 12.54% 12.67% 12.53% 13.01% Change and Sustainability (2017). The road Ahead:
Deviation The KPMG Survey of Corporate Responsibility
Annualized Reporting 2017. Retrieved from: https://assets.kpmg/
12.77% 12.46% 12.03% 12.93% 14.13%
Returns content/dam/kpmg/xx/pdf/2017/10/kpmg-survey-of-
corporate-responsibility-reporting-2017.pdf
The BSE 100 ESG index has given the highest risk adjusted 4. Oxfam India and cKinetics (2017). Drops before the
returns and beaten all the benchmarks. The BSE Carbonex has rain? India Sustainable and Responsible Investing
been able to generate higher risk adjusted returns than the BSE Landscape 2017. Retrieved from: https://www.
100 and BSE 500 but not the Sensex. responsiblebiz.org/wp-content/uploads/2018/03/Drops-
Annualized returns of the NSE’s indexes, Nifty 100 ESG Before-the-Rain-India-Sustainable-and-Responsible-
index and Nifty 100 ESG Enhanced index, have been calculated Investing-Landscape-2017-Oxfam-India-cKinetics.pdf
from April 2011, their base date, and shown in Table 3. The 5. Sustainable Stock Exchanges Initiative (2018).
returns have also been adjusted for risk. They are compared to 2018 Report on Progress: A paper prepared for the
the benchmark indexes namely, Nifty 50, Nifty 100 and Nifty Sustainable Stock Exchanges 2018 Global Dialogue.
500. Retrieved from: http://www.sseinitiative.org/wp-
content/uploads/2018/10/SSE_On_Progress_Report_
Table 3: Risk-adjusted Returns of NSE indexes FINAL.pdf
6. US SIF Foundation (2018). Report on US Sustainable
Nifty 100 Nifty Responsible and Impact Investing Trends 2018.
Nifty Nifty
Enhanced 100 ESG Nifty 50
ESG Index Index
500 100 Retrieved from: https://www.ussif.org/files/Trends/
Trends%202018%20executive%20summary%20
Risk
FINAL.pdf
adjusted 0.58 0.59 0.53 0.58 0.56
return
Annualized
Standard 15.75% 15.78% 15.16% 14.94% 15.08%
Deviation [email protected]
Annualized
returns 9.08% 9.27% 8.05% 8.61% 8.51%

NATIONAL PENSION SYSTEM
NATIONAL PENSION
SYSTEM (NPS)
CMA Mohd Asif

Assistant Manager (Finance)
NHDC Limited, R&R Office, Khandwa
Abstract
NPS is a Government approved voluntary defined contribution pension scheme. Due to its tax saving features, it is going to become
one of the best tax saving instrument after PPF (Public Provident Fund). One who is not covered mandatorily under NPS scheme,
and in liquidity crunch then he may invest in NPS if he is coming under tax bracket of 20% or 30% for saving tax of Rs.10400/- or
Rs.15600/-(as the case may be).
N
National Pension System (NPS) can be invested/withdrawn as and when required basis. Tier-II
ational Pension System (NPS) may be account cannot be opened without opening tier-I account and it
said as Government approved, voluntary will also close once you request for closure of Tier I account.
defined contribution pension scheme which Units under Tier II account will be redeemed and amount will
is being controlled/managed by PFRDA be transferred to the given bank account.
(Pension Fund Regulatory Development The contributions of NPS are managed by 8 Pension Fund
Authority). NPS covers New Pension Managers (PFM) appointed by PFRDA. Subscriber may invest
Scheme and Atal Pension Yojna. Before the implementation in NPS through below mentioned fund managers:-
of NPS, a defined benefit pension was in existence but later 1. HDFC Pension Management Company Limited
it was stopped by the government for those employees who 2. UTI Retirement Solutions Limited
joined government services on or after 01.01.2004. Any Indian 3. Kotak Mahindra Pension Fund Limited
citizen including NRIs who are in the age group of 18 to 65 4. LIC Pension Fund Ltd
years can invest suo motto in this scheme. An unique Permanent 5. SBI Pension Funds Private Limited
Retirement Account Number (PRAN) is being allotted to every 6. ICICI Prudential Pension Funds Management Company
subscriber for NPS. There are two types of NPS Account:- Limited
Tier I:- Contributions done under Tier-I account are eligible 7. Birla Sunlife Pension Management Limited
for additional tax deduction, details of which are enumerated
below. Tier-I account matures at the age of 60 years but it can Investment Portfolio under NPS:- Under NPS, Subscribers
be continued till the age of 70Years. Withdrawal from this have the option to select allocation pattern for their investment
account can be made only for the specified purposes which are across various asset classes. The following options are there-
also enumerated below. All the Tax benefits are applicable for (A) Active Choice: In this option investment can be done
investments in Tier I account only. in the following category of assets:-
Tier II:- Subscribers can invest an additional amount in Tier »» In Equity (E): Investment in equity is always
II NPS Account but No tax deductions/benefits were available considered as ‘High risk – High Return’
in this account till the announcement of Budget 2019. In Budget investment option as the funds are invested in
2019, the government proposed to allow contribution made by equity Subscriber can choose to invest up to 50%
government employees to Tier II account for income tax benefits (Maximum) in this class
under Section 80C, provided that the money is to be locked in »» Corporate Bonds (C): In this option, Funds are
for a period of 3 years, meaning thereby no tax deduction/benefit invested in fixed income bearing instruments
will be available for the private sector employees or other »» Government Securities (G): In this option, Funds
subscribers. Tier II account is like a bank/investment/mutual are invested only in Government Securities
fund account or like a mutual fund investment in which amount (B) Auto Choice- Life Cycle Fund: In this option, the

funds are invested as per the age of the subscriber and according the aggregate amount of deduction u/s 80C, 80CCC &
to pre-defined ratio. The investment will be higher in equity 80CCD(1) cannot exceed Rs.1,50,000/-. If contribution
at a younger age and will be moderated progressively to get to NPS is made by the individual who is not an employee,
a balance among high, medium and low risk investment. For then deduction up to 20% of his Gross Total Income
example, till the age of 36 years, allocation in equity would be shall be allowed under section 80CCD(1). However
50% in “E” , 30% in “C” and 20% in “G” asset class and after an employee or any other person contributing in NPS,
the age of 36, the allocation will starts decreasing from “E” and can claim additional deduction of Rs.50000/- u/s
“C” and increases in “G” till it reaches 10% in “E” & “C” and 80CCD(1B) in respect of his contribution made, means
80% in “G” asset class. this contribution is over and above the overall ceiling
limit of Rs. 150000/- U/s 80CCE. This deduction of
Annuity: - An Annuity is a contract for deferment payment. 80CCD(1B) can be claimed even if no claim has been
Basically it is a plan that pays a regular income/pension to its made under Section 80CCD(1). As per the proposal of
subscriber. After completing the age of 60 years or for starting Budget 2019, Investment made in Tier-II account by
Annuity, the subscriber will have to start/purchase annuity from any government employees will also be eligible for
the following companies which are registered with PFRDA:- deduction u/s 80C and it shall have lock-in period of 3
1. HDFC Standard Life Insurance Company Limited years.
2. Star Union Dai-Chi Life Insurance Company Limited (B) Tax benefit to Corporate:- Employer’s Contribution
3. Life Insurance Corporation of India Limited towards NPS up to 10% of salary (Basic + DA) is
4. ICICI Prudential Life Insurance Company Limited deductable as ‘Business Expense’ from their Profit &
5. SBI Life Insurance Company Limited Loss Account.
(C) Tax benefit on partial withdrawal:- Amount withdrawn
Annuity schemes available under NPS:- up to 25% of Employee’s contribution is exempt from
1. Annuity for life– In this scheme, subscriber shall get tax u/s 10(12B). Partial withdrawal exemption is limited
payment of annuity till his life. It ceases on death of the only up to 25% of an employees’ contribution, means
annuitant and no return of purchase price is allowed to exemption cannot be availed by the non-employee
the nominee. subscriber.
2. Annuity for life with return of purchase price on (D) Tax benefit on lump sum withdrawal:- After attaining
death– In this scheme, subscriber can get monthly the age of 60 years, up to 60% of the total corpus
pension/Annuity during his life time. On death of the withdrawn in lump sum is exempt from tax.
annuitant, payment of Annuity ceases and the purchase
price is returned to the nominee. Withdrawal from NPS account:- Amount can be withdrawn
3. Annuity payable for life with 100% or 50% Annuity from Tier-II account as and when required basis as there is not
payable to spouse on death of annuitant– In this any lock-in-period in Tier-II account (except the budget 2019
scheme, subscriber payment of annuity is ceases on proposal for government employees). In case of withdrawal
death of the Annuitant and, full or half (as the case may from Tier-I account, there are some restrictions/conditions
be)Annuity is paid to the surviving spouse during life which are given below:-
time. If the spouse predeceases the annuitant, payment (A) Full/Partial Withdrawal:- After attaining the age of 60
of Annuity will cease after the death of the annuitant. It years, if the corpus of the NPS is up to Rs.200000/-, then
can be with or without the return of the purchase price. full amount can be withdrawn. In other case only 60% of
4. Annuity for life increasing with the simple rate of corpus amount can be withdrawn and the balance 40%
3% p.a.- In this scheme, subscriber can get payment of has to be mandatorily invested in buying an Annuity plan
annuity till he/she is alive and payment of annuity ceases (pension plan) that would provide a regular monthly
on death and no return of purchase price is allowed to pension. The lump-sum amount withdrawn (i.e. 60% of
the nominee. the accumulated corpus) is now Tax free as per section
5. Annuity guaranteed for 5,10,15,20 years and for life 10(12A) of Income Tax Act 1961. Rest 40% which has
thereafter- In this scheme, subscriber shall get annuity to be utilized in purchasing the Annuity plan is also Tax
and after his death during the guaranteed period, annuity free but monthly Income/Pension received from this
is paid to the nominee till the end of the guaranteed Annuity plan is fully taxable in the year of receipt of
period after which the same ceases and no return of pension under income from other sources as per the slab
purchase price is allowed to the nominee. In case rates of the individual. If a person is a NPS subscriber for
subscriber gets payment of annuity till he is alive even at least 3 years then only he can make partial withdrawal
after the guaranteed period, then annuity will be ceased up to 25% of his contribution. Partial withdrawal from
after his death and no return of purchase price is allowed Tier-I account is allowed only for specified purpose like
to the nominee. critical illness, marriage of children & acquiring higher
education of the children (including legally adopted
Taxability of NPS Contribution child)/technical or professional skill of self, starting
(A) Tax benefit to Individual:- Employer’s contribution a new business, purchase/construction of residential
to NPS is firstly included under Salary Income of the house in his name or spouse name, if he is not having
employee and then deduction u/s 80CCD(2) is allowed any residential house/flat in his name or joint name other
up to the 10% of salary (Basic +DA/DP+ Commission than ancestral property etc. This partial withdrawal is tax
if paid on fixed percentage of turnover). Employee’s free only if it is related to an employee, meaning thereby
contribution to NPS up to the 10% of salary is allowed other subscriber will not get tax benefit/exemption in
as deduction u/s 80CCD (1) but as per section 80CCE, case of partial withdrawal [As per Section 10(12B)].

Apart from this, withdrawal from NPS account shall be Author’s View on Investment in NPS
allowed maximum of three times during the lifetime of »» As per my opinion, one who is not covered mandatorily
NPS Tier-I account. The request for withdrawal shall be under NPS scheme, and he is not in liquidity crunch then
submitted by the subscriber to the central record keeping he may invest in NPS if he is coming under tax bracket
agency or the NPS trust for processing through their of 20% or 30% because by investing under NPS, he will
nodal office. be allowed to claim deduction of Rs.50000/-, resulting
(B) Pre-mature Exit – A subscriber can exit from NPS saving of Rs.10400/- or Rs.15600/-(as the case may be)
only after completion of 10 years. In case of pre- in the same year. It means his net investment would be
mature exit from NPS, subscriber can withdraw up to Rs.39600/- or Rs.34400/- (as the case may be). But the
20% of the corpus in lump sum and he has to invest at amount invested in NPS will be BLOCKED till attaining
least 80% of the accumulated corpus for purchasing an the age of 60 Years, so this Option is advisable if the
Annuity that would provide a regular monthly pension. person may spare/lock his funds till attaining the age of
However, if the total corpus is less than or equal to 60 years. However the amount can also be withdrawn
Rs. 1,00,000/-subscriber can opt for 100% lump sum before the age of 60 years as explained above, but it is
withdrawal. advisable to invest suo motto in NPS only in case you
(C) Upon Death of Subscriber – In this situation, the entire are having a fund which you can block till attaining the
accumulated pension corpus (i.e.100%) would be paid age of 60 years, else PPF investment may be used as
to the nominee/legal heir of the subscriber. However an safer investment. If a person who is an employee and
option to purchase the Annuity is also available to the in the age group of 57 years or more and not covered
nominee of the deceased if he desires so. mandatorily under NPS, then it is advisable to him to
invest under NPS till attaining the age of 60 years as in
Option to the subscriber on attaining the age of 60 Years:- this situation his funds would get blocked only for 2 or 3
1. He may differ withdrawal and stay invested in NPS up years and he can get additional tax benefit as explained
to 70 years of age. Deferment can be done only for lump above and can withdraw full amount as full amount can
sum Withdrawal or only for Annuity or for both lump be withdrawn in case corpus is less than or equal to
sum as well as Annuity. Rs.2,00,000/-
2. If he does not wish to continue/defer NPS account, he/ »» Under NPS, since Pension is based on Annuity purchased
she can exit from NPS. He/she can initiate exit request which is linked with stock market so your pension will
online and start receiving pension. depends on performance of stock market viz-a-viz your
Fund Manager. So there is possibility that on the same
Summary amount of annuity purchased by two difference people
S. at the same time, one might get higher pension and other
Particulars Tax Treatment might get lesser, depending on the performance of NPS
No
fund. So care must be taken while deciding your fund
Partial withdrawal up to 25% of
1
employee’s contribution
Exempt manager.
»» As per my view, Tax benefit/deduction should also
Partial withdrawal in other case be allowed in case of investment made under Tier-II
2 Fully Taxable
(i.e. for non employee subscriber) account of NPS by a non government employee or other
3
Amount received on closure of his
60% Exempt subscribers and exemption on partial withdrawal u/s
account or opting out of the NPS 10(12B) should be extended to non-employee subscriber
Amount received on death of the also. Since monthly pension which is being received on
4 Fully Exempt
employee to his nominee the basis of Annuity purchased at the time of exit, hence
Taxable in the year tax deduction from Gross Total Income should also be
Pension received from the annuity given for the amount invested in purchasing the Annuity.
5 of receipt as Income
plan purchased No clarification has been given any where about the
from Other Sources
Amount received from NPS but
taxability of amount received from NPS at the time of
6 invested in purchasing the annuity Exempt closure/exit if a subscriber did not claim deduction u/s
in the same year 80CCD.
Deduction allowed up
to 10% of salary or
References
Contribution to NPS by the
7 20% of GTI subject
subscriber u/s 80CCD(1) 1. NSDL Website i.e. https://npscra.nsdl.co.in
to limit of section
80CCE 2. Income Tax Website i.e. https://www.incometaxindia.
Deduction allowed up gov.in
Contribution to NPS by the
8 to 10% of salary for
Employer u/s 80CCD(2) Disclaimer: The content of this article are solely for informational
employee
purpose. It does not constitute professional advice. The author does
Contribution to NPS by the Deduction allowed up not accept any liability for any loss/damage of any kind arising out of
9
subscriber u/s 80CCD(1B) to Rs.50000/- above information. While due course has been taken in preparing above
Contribution to NPS Tier- Max. Deduction is information, the existence of mistakes/omissions herein is not ruled out.
II account by Government Rs.1,50,000/-(i.e. (Source used Internet mainly NSDL website.
10
Employer u/s 80C (As per the within the limit of Sec
proposal of Budget 2019) 80C) [email protected]

Down The Memory Lane
November 2009
International Seminar organized on ‘Role of Cost and Management Accountants in Regional Economic Development’ organized
by SAFA and ICWAI at Vigyan Bhawan in New Delhi on November 26, 2009
Seen in picture from L To R: Mr. K.R.S. Sastry, past President, SAFA; Mr. V. Kalyanaraman,
Past President, SAFA & ICWAI; Mr. G.N. Venkataraman, president, ICWAI; Mr. Salman
Khurshid, Hon’ble Minister of State for Corporate Affairs; Mr. Komal Bahadur Chitracar,
Vice President, SAFA; Prof. Lakshman R. Watawala, Past President, SAFA and President,
Institute of Certified Management Accountants of Sri Lanka and Mr. B.M. Sharma, Vice
President of ICWAI
Hon’ble MoS for Corporate Affairs, Mr. Salman Khurshid addressing on the occasion of
International Seminar organized by SAFA & ICWAI
Shri G.N. Venkataraman, President, ICWA of India addressing the Inaugural Session of
International Seminar organized by SAFA and ICWAI in New Delhi on November 26, 2009
On occasion of inauguration of CMA, Oman in technical collaboration with ICWAI

during 15th & 16th November 2009, seen in picture from left to right: Mr M.M. Khan,
H.E. Anil Wadhwa, Ambassador of India in Oman, Mr. G.N. Venkataraman, President of
ICWAI and Mr. Yusuf Sulaiman Al Rawahi, Ministry of Manpower Oman
On occasion of All Kerala Cost Convention 2009 organised by Thrissur Chapter, seen
from Left to Right are:S/shri A.V.N.S. Nageswara Rao, Chairman, SIRC; N.P. Sukumaran,
Past President, ICWAI; Sunil Chacko, Past President, SIRC; G.N. Venkataraman,
President, ICWAI;K.S. Srinivas, IAS, Chief Guest; M. Gopalakrishnan, CCM, ICWAI and
C.A. Thulsidas, Chairman, Cochin Chapter
Seen from Left to Right: Shri K.R.S. Sastry, Adviser, IPE and Past President SAFA; Shri
Shekhar Agarwal; Shri C. Ramkrishna, ED, AMDISA; Dr.R.K. Mishra, Director, IPE; shri
R. Bandopadhyay, IAS, Secretary, MCA;Shri G.N. Venkataraman, President, ICWAI; Shri
S. Thiagarajan, Director(F), NMDC Ltd. And Dr. Shefali Gautam, President, AIMS on
occasion of release of Souvenir at Conference on Cost Audit and Enterprise Governance
held at Hyderabad on 13.11.2009. The National Conference was organized by IPE &
ICWAI was the Knowledge Partner

November 1999
11th AFA is being hosted by Philippines Institute of Certified Public Accountants on 24th to 27th November 1999 at Davao City,
Philippines
Mahesh Shah President ICWAI is seen with Danilo A. Principe President, PICPA at
Philippines
Mahesh Shah President ICWAI is seen along with Roberto F. De Ocampo Financial
Secretary of Philippines
Silver Jubilee Commemoration Lecture at Bangalore Chapter held at Hotel Ashok

on 27 November, 1999 on Information Technology Bill 1999-Ramification for
Professionals. From Left A.V.S. Moorthi, Chairman-PDC; Sanjay Dasgupta, Secretary-
Information Technology, Govt. of Karnataka; S. Venkanna, Chairman-Bangalore Chapter
and A. Om Prakash, Secretary, Bangalore Chapter
November 1989
The Northern India Regional Cost Conference was hosted by Udaipur Chapter on 4th
& 5th November 1989 at Hotel Hill Top Udaipur, on the theme “Nehru’s Philosophy
in Economic Development of India”. Seen in picture: Chief Guest Dr. (Miss) Girija
Vyas, Minister of State for Tourism and Woman Development, Finance & Taxation, Govt
of Rajasthan.; Shri A.C. Wadhawan CMD (HLL) with President ICWAI Shri J.K. Puri,
Chairman NIRC Shri R.J. Goel, Chairman & Secretary Udaipur Chapter Shri K.V.K.
Seshavataram & Shri Parwal
Seminar on Omani Taxation Law was jointly organised by Oman Japan Friendship Association Rusayl Industries Estate Authority
and the Oman Overseas Centre of the Institute on 11th November 1989
H.E. Suleiman Bin Muhanna Al Adawi Acting under Mr. John Adcock speaking on Omani Mr. Michael J. Muston speaking on Omani
Secretary of Financial Affairs in the middle and Mr. Taxation Law Taxation Law
John Adcock & Moorestephens is to his right and Mr.
Michael J. Muston of Coopers & Lybrand is to his left

November 1979
Management Development Programme for officers in the
Finance and other divisions of the Ordnance Factory Board
held on 19th November, 1979 at J.N. Bose Auditorium of the
Institute. Mr. B. M. Prabhu delivering the Inaugural Address,
seated from Left to Right:- Mr. H. P. Ray Chaudhury, Director,
Professional Development; Mr. P. Rajagopalan, Member,
Ordnance Factory Board; Mr. V.S. Bhir, Member, Ordnance
Factory board; Mr. N.K. Roy, President, ICWAI; Mr. N.K. Bose,
Central Council Member, ICWAI; Mr. S. Swaminathan, Controller
of Defence Accounts (FYS); Mr. S.N. Ghose, Secretary, ICWAI
Regional Cost Conference organized and hosted by the Bhopal Chapter of Cost Accountants on 03rd & 04th November, 1979 at
the Technical Teachers’ Training Institute’s Auditorium
Shri K. Santhanagopalan, Chairman, Bhopal Chapter outlines the activities of the Chapter.
Left to Right: Shri V. Sunderajan; Shri Pramod Parkhi, Hon’ble Minister Commerce
Industries and Power Shri Kailash Joshi, Chief Guest; Shri N .K. Roy, President, ICWAI;
Shri K.B. Chakaraborti; Shri Rakesh Mehra
Shri Rajendra Dharkar, Hon’ble Minister for Local Govt., Law and Regulations, M.P.,
Chief Guest addressing the Session on ”Why Madhya Pradesh”. Left to Right: Shri
Pramod Parkhi, Shri N.K. Roy, Dr. Sarin, Shri K.B. Chakaraborti, Shri J.K. Mehta, Shri
Sugdev, Hon’ble Minister Shri Rajendra Dharkar
November 1969
On 30th November 1969 the Silver Jubilee of the Institute was celebrated in SIRC. Shri H.V.R. Iengar past governor of Reserve
Bank of India and Chairman & MD of EID Parry Ltd inaugurated the celebration. Shri H.V. R. Iengar addressing on the same
Source: Extracted from the various issues of The Management Accountant Journal

INSTITUTE NEWS
Donation Camp and requested him to inaugurate and grace as “Chief
EASTERN INDIA REGIONAL COUNCIL Guest” on the occasion. To develop relation with department GST,
Central Excise & Customs, Bhubaneswar Zone, CMA Saktidhar
EIRC had observed the Direct Taxation Month on the Theme Singh, chairman of the chapter and CMA BibhutiBhusan Nayak,
“Income Tax Act and Direct Tax Code – Expectations & Way vice chairman, EIRC met Shri Naresh Penumaka, IRS, Hon’ble
ahead” by organizing a seminar on the Topic “Compliance under the Chief Commissioner, GST, Central Excise and Customs,
Income Tax Act 1961 in the present scenario” on 26th September Bhubaneswar Zone & Shri Sanjeev G Dewalwar, IRS, Commissioner
2019 at its premises. Shaikh Shamsher Alam, IRS, Additional , GST, Central Excise & Customs, Bhubaneswar Zone on August
Commissioner of Income Tax was the Chief Guest on the occasion. 24, 2019 and also discussed for conducting GST Annual Return and
CMA Shyamelendu Bhattacharjee, Additional Assistant Director, Audit Seminars by the chapter in association with departments for
Income Tax (Former) and CMA Tapan Kumar Biswas, Practicing CMA members and stakeholders. Students of the chapter celebrated
Cost Accountant were the Guest Speakers. CMA Biswarup Basu, the Teachers day at the conference hall of the chapter on September
Vice President, CMA C.R.Chatterjee, CCM, CMA Arundhati Basu, 5, 2019. To discuss various professional development issues, CMA
Chairperson – Members in Industry Committee and RCM, CMA Saktidhar Singh, Chairman of the Chapter and CMA Uttam Kumar
Asish Banerjee, RCM and CMA Pallab Bhattacharyay, Chairman- Nayak, Secretary, EIRC met Shri Pratap Chandra Sarangi, Hon’ble
EIRC were also present in the seminar. The RCMs & CCMs Union Minister of State (Independent Charge), Micro, Small and
elaborated the role of CMAs as Accountants in the Income Tax Act Medium Enterprises, Animal Husbandry, Dairying and Fisheries,
1961 & in the new Direct Tax Code and explained Shaikh Shamsher Govt. of India at Bhubaneswar on September 6, 2019. The chapter
Alam, IRS, Additional Commissioner of Income Tax the need of organised successfully 12-days soft skill and communication skill
inclusion of CMAs in the Accountant definition u/s 288(2) of the development programme at its premises to enhance the employability
Income Tax Act 1961 & in New DTC. CMA Biswarup Basu, CMA skill of the Intermediate CMA students of the chapter on September
C.R.Chatterjee, CMA Arundhati Basu and CMA Asish Banerjee 20, 2019. CMA Ajay Kumar Samal, chairman, career counseling
had a discussion with the Addl CIT regarding a joint programme and students Training Committee coordinated the entire programme
with EIRC of ICAI-CMA & the Income Tax Department for the .The chapter organized one career counseling program at Kamala
general public awareness on various aspects of Direct Taxation for Neheru Women’s College, Bhubaneswar on September 11, 2019
the ease of doing business. Shaikh Shamsher Alam, IRS, Additional through a seminar on GST-Overview. CMA Mukesh Chaubey,
Commissioner of Income Tax addressed the august gathering on chairman, PD Committee of the chapter guided the students and
modifications made by the Income Tax Department for ease of highlighted about career prospectus in CMA Course and clarified all
filing. He elaborately explained the e-assessment procedures & the queries of the students. CMA Dr. Prafulla Kumar Swain,
the ease of filling & compliances under Income Tax Act 1961. Professor in Finance, SOA University and one of the senior members
CMA Shyamelendu Bhattacharjee, Additional Assistant Director, of the chapter delivered on GST-Overview and interacted with the
Income Tax (Former) discussed about the various sections related students.The chapter successfully conducted pre-placement
to compliances under the IT Act,1961 and CMA Tapan Kumar orientation programme from September 11, 2019 to September 22,
2019 for June 2019 term qualified students.The Chapter organized a
Biswas, Practicing Cost Accountant highlighted the duties of the
seminar on “GST-Annual Return” in association with Department of
tax payers, Prompt payment of Advance Tax, Timely deduction and
CGST, Bhubaneswar Zone and Tax Research Department of the
payment of TDS,Prompt and accurate compliance in response to
Institute on 12th September, 2019 at CMA Bhawan, Bhubaneswar
departmental notices.
for members and stakeholders to mark its Closing Ceremony of
Golden Jubilee month. Shri Bijoy Kumar Kar, IRS, Principal
Commissioner of CGST, Central Excise & Customs, Bhubaneswar
Zone inaugurated and graced the seminar as “Chief Guest” and
CMA Niranjan Mishra, Council Member and Chairman, Indirect
Taxation Committee, ICAI graced the Seminar as “Special Guest”.
Shri Sribas Nath, Asst Commissioner, CGST, Central Excise &
Customs, Bhubaneswar Zone and CMA Shiba Prasad Padhi,
Practicing Cost Accountant had delivered on the topic in detail as
“Resource Person” on the occasion. CMA Saktidhar Singh, chairman
of the chapter delivered welcome & key note address and CMA
Himoj Mishra, secretary of the chapter extended formal vote of
thanks.The Chapter organized “Bankers and Borrowers’ Meet on
13th September, 2019 at CMA Bhawan in association with Oriental
Bank of Commerce.Sh. Taufique Alam, Deputy General Manager
and Circle head, Oriental Bank of Commerce, Bhubaneswar graced
and inaugurated the program as “Chief Guest”. Shri Dillip Kumar
Pattanayak, Asst. General Manager & Cluster Head of MSME,
Oriental Bank of Commerce, Bhubaneswar and CMA Niranjan
Swain, Advocate, Odisha High Court & Tax Consultant were the
“Resource Persons” on the occasion. CMA Niranjan Mishra,
THE INSTITUTE OF COST ACCOUNTANTS OF INDIA Council Member and Chairman, Indirection Committee of the
BHUBANESWAR CHAPTER Institute and CMA Bibhuti Bhusan Nayak, Vice Chairman EIRC
graced the function as “Special Guest”. The chapter successfully
As a part of the Brand Building Activity, CMA Saktidhar Singh, organized a seminar on “Practical Aspects on GST- Audit” in
Chairman of the Chapter and CMA Uttam Kumar Nayak, Secretary, association with Tax Research Department of ICAI on 19th
EIRC met Dr. Sudhansu Sarangi, IPS, Hon’ble Commissioner of September, 2019 at CMA Bhawan, Nayapalli, Bhubaneswar to mark
Police, Bhubaneswar-Cuttack, Bhubaneswar on August 22, 2019 to its Closing Ceremony of Golden Jubilee. Shri Sanjeev G. Dewalwar,
have a discussion for association of Commissionerate of Police, IRS, Commissioner of GST-Audit, Central Excise & Customs,
Bhubaneswar – Cuttack with the Chapter for organizing Blood Bhubaneswar Zone inaugurated and graced the seminar as Chief
Guest. CMA Anil Sharma, Chairman, NIRC & Sr. Partner M/s SDM

INSTITUTE NEWS
& Associates, Cost Accountants delivered on the topic as “Resource Singh, chairman of the chapter highlighted about the series of
Person”.The chapter has organized a seminar on Corporate activities undertaken by the chapter for the betterment of CMA
Governance on the theme “Current Economic Scenario- Opportunity Students, General Students, CMA Members, Stakeholders and
& Challenges” on September 24, 2019 at CMA Bhawan. CMA V. Society at large to mark not only in the closing month of golden
Murali, Council Member and Chairman, Corporate Laws Committee jubilee but also activities organized in the entire golden jubilee year.
of the Institute delivered on the topic as “Resource Person” on the As part of Professional Social Activity/ CSR Activity and to mark
occasion. CMA Niranjan Mishra, Council Member and Chairman, the Closing month of Golden Jubilee of the Chapter, just after
Indirect Taxation Committee graced the seminar as “Special Guest”. completion of the CMA Green Mini Marathon, one Traffic
CMA Saktidhar Singh, chairman of the chapter delivered welcome Awareness Campaign has been organized by the chapter at
and key note address. To discuss on various professional issues and Bhubaneswar Smart City on September 28, 2019. To memorialize
to invite to the seminars of the chapter, CMA Saktidhar Singh , the closing ceremony of Golden Jubilee as well as 50th Annual
chairman of the chapter met Dr. Arun Kumar Sahoo, Hon’ble Function - 2019 , the chapter has organized a Mega Blood Donation
Cabinet Minister of Agriculture & Farmers’ Empowerment, Camp in association with Commissionerate of Police, Bhubaneswar-
Fisheries & Animal Resources Development & Higher Education, Cuttack, Odisha on September 29, 2019 at its premises at CMA
Govt. of Odisha, Bhubaneswar on September 24, 2019. The Chapter Bhawan. This was the last activity among the series activities
has successfully organized a Seminar on “Amendment on Direct organized by the chapter to mark its closing ceremony month of
Tax, TDS, Filing of Return and E – Assessment” in Association with Golden Jubillee. ShriAnanta Narayan Jena, Hon’ble MLA,
Commissionerate of Income Tax, Bhubaneswar Zone & Tax Bhubaneswar (Central) constituency and Ex-Mayor of Bhubaneswar
Research Department of ICAI on September 27, 2019 at CMA Municipality Corporation inaugurated the Mega Blood Donation
Bhawan, Nayapalli, Bhubaneswar to mark its Closing Ceremony of Camp in the presence of CMA H Padmanabhan, Council Member
Golden Jubilee cum 50th Annual Function-2019 and observance of and Chairman, RCs & Chapters Coordination Committee and CMA
Direct Tax Month as per notification of the Institute. Shri Asit Niranjan Mishra, Council Member and Chairman, Indirect Taxation
Kumar Mohapatra, IRS, Commissioner of Income Tax (TDS), Committee, CMA Saktidhar Singh, chairman of the chapter and all
Bhubaneswar Zone inaugurated and graced the occasion as “Chief members of managing committee. The chapter has celebrated its
Guest”. During his address, he praised a lot to the various initiatives “Closing Ceremony of Golden Jubilee cum 50th Annual
taken by the chapter and Tax Research Department of the Institute. Function-2019 and Students Felicitation Function” on September
CMA H Padmanabhan, Council Member & Chairman, RCs & 29, 2019. Shri Ananta Narayan Jena, Hon’ble MLA, Bhubaneswar
Chapters Coordination & CAT Committee graced the occasion as (Central) Constituency inaugurated and graced the Closing
“Special Guest”. CMA Niranjan Mishra, Council Member & Ceremony of Golden Jubilee-2019 cum 50th Annual Function-2019
Chairman, Indirect Taxation Committee graced the occasion as and “Students Felicitation Function” as “Chief Guest”, CMA H
“Guest of Honour”, CMA Niranjan Swain, Advocate, Odisha High Padmanabhan, Council Member & Chairman, RCs and Chapter
Court and Tax Consultant, Bhubaneswar and Shri Suman Sundar Coordination & CAT Committee graced the Occasion as “Special
Sahoo, Income Tax Officer (TDS) were the “Resource Persons” on Guest”. CMA Niranjan Mishra, Council Member and Chairman,
the occasion. Shri Suman Sundar Sahoo, delivered on “Amendments Indirect Taxation Committee of the Institute and CMA Pallab
in Direct Tax, TDS & Filing of Returns” and CMA Niranjan Swain Bhattacharya, Chairman, EIRC graced the occasion as “Guest of
delivered on “E-Assessment”.The RCs & Chapters Coordination Honour” during inaugural session. CMA Saktidhar Singh, chairman
Committee of the Institute organized All Odisha Chapters meet at of the chapter delivered welcome address and highlighted in brief
CMA Bhawan, Bhubaneswar in association with the chapter on about various Students, Members and other activities undertaken by
September 28, 2019, where representatives from six Chapters at the chapter to mark its closing month of Golden Jubilee. CMA
Odisha participated and shared their valuable constructive Himoj Mishra, secretary of the chapter extended formal vote of
suggestions and also appraised their difficulties. CMA H thanks during inaugural session. The chapter observed Swachhta
Padmanabhan, Chairman, RCs and Chapters Coordination Pakhwada on October 2, 2019 to commemorate 150 years Birth
Committee presided over the meeting in the presence of CMA Anniversary of Mahatma Gandhiji. Department of Commerce,
Niranjan Mishra, Council Member and Chairman, Indirect Taxation Bhadrak (Auto) College, Bhadrak has organized a Professional
Committee and CMA Arup Sankar Bagchi, Secretary, RCs Awareness Programme on October 16, 2019 by inviting
&Chapters Coordination Committee of the Institute.To highlight representatives of three professional bodies (Cost Accountants of
series of activities organized by the chapter to mark its Closing India, Chartered Accountants of India & Company Secretaries of
Ceremony of Golden Jubilee cum 50th Annual Function -2019, a India). Theme of the seminar was “Future of Commerce Education:
press meet has been organized on September 28, 2019 at CMA Issues and Challenges in 21st Century”. On behalf of the chapter,
Bhawan, Bhubaneswar. On the occasion, CMA H Padmanabhan, CMA Dr. Prafulla Kumar Swain, Professor in Finance, SOA
Council Member and Chairman, RCs & Chapters Coordination University and one of the senior members of the chapter and Shri
Committee, ICAI and CMA Niranjan Mishra, Council Member and Hemanta Kumar Biswal, AAO of the chapter represented. CMA Dr
Chairman, Indirect Taxation Committee of the Institute highlighted P K Swain delivered on career prospectus in CMA Course and Shri
various initiatives taken by the Institute not only for the betterment H K Biswal highlighted about the course curriculum.
of the CMA profession but also for the stakeholders. CMA Saktidhar

INSTITUTE NEWS

RAJPUR CHAPTER
The Chapter organized a seminar in consequence of its Annual

CMA Members Meet on “CMA PROFESSION IN INDIA’S
GLORIOUS DESTINATION” on 12th October, 2019 at Kolkata.
The main speaker of the seminar was CMA Biswarup Basu,
Vice President of the Institute and other speakers included CMA
Chittaranjan Chatterjee, CCM, CMA Pallab Bhattacharya,
Chairman, EIRC and CMA Abhisek Singh, RCM. Some members
suggested new areas of practice for CMAs, such as certification of
CSR activities of companies, certification of maintenance of cost
records in every industry, etc. CMA Pallab Bhattacharya, Chairman,
EIRC answered some specific questions from members on the
above subjects specially on GST and DTC. CMA Chittaranjan
Chatterjee, CCM in reply to members’ opinions stated from council
side that in each and every area of practice by a CMA is under active THE INSTITUTE OF COST ACCOUNTANTS OF INDIA
consideration of the council and council is taking every possible SOUTH ORISSA CHAPTER
step for the benefit of the profession. Being Chairman of Banking
and Insurance Committee of the Institute, he informed about the The Chapter conducted the 150th birth day celebrations of
people and places where he interacted, specially in insurance sector. Mahatma Gandhi on 2nd October 2019.Plantation of saplings were
The programme ended with a vote of thanks by CMA S.N. Das, conducted and members, staffs and faculties co-operated with much
chairman of the chapter to all the members. enthusiasm. Debate competitions among students were conducted
and in the evening the chapter conducted ‘Plastic Free India’ event.

INSTITUTE NEWS
at Guwahati by all the three professional bodies. The Chapter was

THE INSTITUTE OF COST ACCOUNTANTS OF INDIA one of the organizers. The session was attended by the Regional
CUTTACK JAGATSINGHPUR AND KENDRAPARA Director, Deputy Director and Registrar of Companies of the North
CHAPTER Eastern Region.
The Chapter had organised an evening talk on “Assessment
Procedure” on 28th Sept 2019 as part of the observance of Direct
Taxation Month. Sj. Kishor Chandra Mohanty, Dy Commissioner
of Income Tax had graced the occasion along with CMA. H
Padmanabhan, CCM & Chairman, Regional Council and Chapter
Coordination Committee and CMA Niranjan Mishra, CCM and
Chairman, Indirect Taxation Committee.Chairman of the Chapter
CMA. L.K. Mishra had coordinated the seminar.

GUWAHATI CHAPTER
The Chapter organised a seminar on Direct Taxation on the JAMSHEDPUR CHAPTER
theme ‘Income Tax Act and Direct Tax Code – Expectations and
Way Ahead’ on 28th September at Guwahati. The seminar was The Chapter organised one day seminar on Income Tax Act and
organised for capacity building among the members and also Direct Tax Code - Expectations and Way Ahead on 28th September
to put across the reasonableness of the request of the Institute 2019 in the Auditorium of Centre for Excellence. The seminar
to include Cost Accountants in the definition of ‘Accountant’ started with lighting the lamp by the Principal Commissioner of
under the Income Tax Act. Shri B.C. Medhi, Joint Commissioner Income Tax, Sri Avinash K Sahay, IRS, Sri R C Nandrajog, Ex-Vice
of Income Tax, Guwahati graced the occasion as Chief Guest. President, Tata Steel, Chairman CMA Jyoti Prakash, Vice Chairman
Advocate Brajesh Sharma, Treasurer of Tax Bar Association, who CMA Ramesh Sharma, CMA K N Choubey and Treasurer CMA
was present in the meeting, was also of the opinion that he found Piyush Kedia. Chief Guest Sri Sahay talked about the challenges
Cost Accountants, who handled direct taxation matters, capable being faced by the Govt of India and by Income Tax Department
of interpreting the Income Tax Laws and analysis of the financial and the need to have the code at the earliest. The speakers on the
statements. Chairman of the Chapter, CMA Rana Bose, made an occasion were CMA Kamlesh Kumar who spoke on TDS. It was
elaborate presentation showing that Cost Accountants have similar followed by presentation on Exemption of Non-Profit Organisations
curriculum and training system for their students and they are by Shri Saibal Sengupta, ITO. CMA K N Choubey proposed the
equally competent in the areas of accountancy, audit, corporate laws, vote of thanks.
direct as well as indirect taxation and the members are subjected
to same disciplinary mechanism, professional ethics, accounting
and auditing standards and accordingly are fully competent to
take up audit work prescribed under the Income Tax Act. CMA
Mrityunjay Acharjee, Sr. Vice President of Balmer Lawrie& Co.
Ltd., was the resource person for the seminar and he spoke in length
about how the profession of Cost and Management accountancy
can effectively contribute and provide value added services to the
business, industry and the nation as a whole under the new Direct
Tax laws if Cost Accountants are included into the definition of
‘Accountant’ under the Income Tax Act. Students who passed the
Intermediate and Final Examinations of the Institute held in June
2019 were also felicitated in the function. An interactive session
with the officials of Ministry of Corporate Affairs in respect of Ease
of Doing Business was organized jointly on 21st September 2019

INSTITUTE NEWS
NORTHERN INDIA REGIONAL COUNCIL

KOTA CHAPTER
The Chapter organised a seminar on sabkavishwas(Legacy

Dispute Resolution Scheme) 2019 at Lagat Bhawan, Kota. CMA
Akash Agarwal, chairman of the chapter was the key speaker of
the seminar. The Chapter organized a felicitation programme on
September 8, 2019 for CMA passed out students at CMA Bhawan
Kota. CMA Akash Agarwal, Chairman of the chapter and all
management committee and other members participated in the
program. The Chapter has organised Plantation Programme on
September 15, 2019 at CMA Bhawan Kota. The Chapter organized
a Seminar on “New Income Tax Rules that impact on TDS w.e.f
01-09-19 on 15th September, 2019. Key Speaker, CMA J. P. Sarda,
Practicing Cost Accountant discussed about this topic in details.The
Chapter has organised a seminar on Insolvency and Bankruptcy
Code,2016 on 21st September 2019 at CMA Bhawan, Kota. Ms
Karishma Rastogi (Grievance Officer), Shri Vishnu Upadhyay
(Speaker), Shri Umesh Sharma (Chief Gen. Manager, IBBI) were
the guests of honor of the programme.The Chapter had organised
a seminar on “Progressive Reforms undertaken by the Ministry
for ease of doing business in India” on 21st September 2019 at
CMA Bhawan, Kota. Key Speaker, CMA Akash Agarwal, Cost
Accountant discussed about this topic in details.

NOIDA CHAPTER
The Chapter organized a program on” Income Tax Act and Direct
Tax code”. Chairperson of the chapter CMA Swati Chaturvedi
said that the program was attended by more than 100 participants.
Dignitaries on the dais were guest of honour, CMA Rakesh Bhalla,
CCM and Chairman, Direct Tax Committee of the Institute. CMA
AnuragGoel Past Chairman, Speaker - CMA Mushtaq Ahmed,
CMA Swati Chaturvedi, Chairperson, CMA B Ashok Patra- Vice
Chairman, CMA Pawan Dixit, secretary of the chapter. The Role of
Cost Accountants in Direct Tax was discussed in details. Guest of
honor CMA Rakesh Bhalla CCM and Chairman of the Direct Tax
Committee of the Institute informed the members of the various
steps taken by the Institute to strengthen the Cost Accountants
profession by signing various MOUs with professional bodies at
domestic and international level. The speaker, CMA Mushtaq
Ahmed guided the participants by sharing his practical experiences
and motivated the members to venture in the field of Financial
Accounting and Taxation in order to strengthen the base of CMA
profession.

INSTITUTE NEWS

CHANDIGARH PANCHKULA CHAPTER
The chapter organised an Industrial tour for CMA Final students

at Kurali near Chandigarh. Students showed keen interest while
visiting two unique industries viz M/s. Bharij Fabricators- Bullet
Proofing Unit and M/s. Guru Nanak Forgings-an Auto spare parts
unit located at Focal Point, Chanalon district Mohali. CMA DS
Bhatia, chairman of the chapter accompanying the students assured
students of such visits in future also.
SOUTHERN INDIA REGIONAL COUNCIL
SIRC organised study circle meetings at its premises on various

topics like Business Analytics, Remuneration To KMPs -Legal &
Practical Aspect and many eminent dignitaries were the speakers
of the meetings from 6th September to 27th September 2019. Pre
Placement Orientation Programme for June 2019 Batch CMA Final
pass outs was held at its premises from 12th September to 23rd
September 2019. The programme was formally inaugurated by
CMA Mrs. Jyothi Satish, Chairperson – SIRC on 12th September
2019. The function was graced by CMA H. Padmanabhan, CMA
P. RajuIyer, Council Members, CMA JyothiSatish, Chairperson-
SIRC, CMA Rajesh SaiIyer, RCM-SIRC and CMA Arup S.
Bagchi, Sr. Director, Membership – Membership & Infrastructure
of the Institute. On 29th September, 2019, a certificate distribution
function was arranged at its premises for the participants of RVO
– Education Course on Valuation (8th Batch) of the Institute. CMA
H. Padmanabhan, Council Member participated in this event and
distributed the course completion certificate to all the students.

INSTITUTE NEWS
Practicing CMAs in Arbitration & Conciliation Act” at Bengaluru

Chapter Premises by CMA Guruprasad V, Management
VISAKHAPATNAM CHAPTER
Consultant, CMA Sreepada H. R. - Chairman BCCA, CMA Kumar
H.N – Secretary, CMA Jayarama A.V - M.C. Member - BCCA on
The Chapter had organized a Professional Development Meet 14th September 2019. Allowable and Disallowable expenses under
on Companies Act, 2013 with special reference to Chapter IX Business Profit & Gain Direct Tax Code (DTC) by CMA KUMAR
Accounts of Companies on 14th Sept 2019 and State Level Chapters S, Corporate Accounting & Financial Management (Practical
Meet- Andhra Pradesh & Telangana on September 15, 2019 at the Aspects) by CMA ANIL B SHENOY on September 14, 2019. GST
chapter. CMA Dr.CMA PVS Jagan Mohan Rao, President SAFA, overview by CMA T K JAGANATHAN & GST Practical Issues
CMA H. Padmanabhan, CMA S. Papa Rao, CMA Jyothi Satish, by CMA VENKANNA on September 15, 2019. Filing of Income
Chairman SIRC, CMA K. Panduranga Rao, CMA M. Ramakrishna, Tax Return, TDS Statement and Online Filing, List of Income
Chairman of the chapter, CMA S. Ramprasad, Secretary of the Tax Exemptions, Computation of Income under Head ‘Salaries’,
chapter attended the Meet. Capital Gain by CMA VIJAY KUMAR C.S & ERP Knowledge
by CMA SUBRAMANI on September 17, 2019. Company Laws
(Special emphasis to Companies Act 2013), Securities Market/
International Finance by CMA VIVEK MISHRA on September
18, 2019. Assessment Procedure under Income Tax Act 1961” at
Bengaluru Chapter Premises by CMA Mahesh Kumar, Practicing
Advocate - Practicing Cost Consultant, CMA Jayarama A.V - M.C.
Member - BCCA, CMA Kumar H. N - Secretary on 18th September
2019 .Direct Interaction with HR/Finance Heads of various
organizations, (Group Discussion & presentation by students to
HR and Finance Heads) by Mrs. Keerthana on September 19, 2019.
Emerging issues: Valuation, Insolvency & Bankruptcy Code on
September 20, 2019. Advanced Excel/Power Point Presentation -
ERP Knowledge by Mrs. RAJINI SINGH & Cost Sheet Preparation/
Companies (Cost Records and Audit) Rules, 2014/Cost Accounting
Standards by CMA VENKANNA on September 21, 2019. GST
by CMA Vishwanath Bhat & Valedictory Session – Certificate
Distribution on September 22, 2019. Inauguration of Fifth Batch
GST Certification Course, at its premises on September 15, 2019.
Shri.Rajesh Kumar, IRS, Asst. Commissioner of Central Taxes,
Bengaluru, CMA. Sreepada H. R. - Chairman of the chapter, CMA
Kumar H N- Secretary, CMA Vishwanath Bhat – Treasurer SIRC,
CMA T. K. Jaganathan, CMA Ragavendra B.K- MC Member of the
chapter inaugurated the programme.

BANGALORE CHAPTER
The Chapter organized Swatch Bharat on the occasion of Mahatma

Gandhi & Sri Lal Bahadur Shastri Jayanthi on 2nd October, 2019.
The programme was organised in coordination with “Abhyudaya
Kalika Kendra”. Chairman, CMA Sreepada H.R., Vice-chairperson,
CMA Manjula B. S., Secretary CMA Kumar H.N., MC Member,
CMA Jayarama A.V. along with members and staffs participated
in the programme.The Chapter organized professional development
meet on September 7, 2019 on Sabka Vishwas - (Legacy Dispute
Resolution) Scheme, 2019 (SVLDRS)”. Two Practitioners’ Meets
were organized on September 2019.Inauguration – Pre orientation
Programme by Shri K L Subramanya & Communication Soft
Skill Training by Mrs Keerthana on September 11, 2019 and
Shri K. L. Subramanya, Deputy Secretory, Department of Higher
Education, GOK, CMA. Sreepada H.R. - Chairman of the chapter,
CMA Vijayalakshmi K R – Coaching Chair Person, CMA Satish
R – Treasurer of the chapter, CMA Kumar H.N – Secretary, CMA
Pranabandhu Dwibedy - MC Member attended the programme.
Technical Session: Basics of Accounting by CMA Shiva Kumar T
A, Audits in Corporate World by CMA SriramA N on September
12, 2019. All IND AS (in detail) & Standards with IFRS by CMA
VINAYAK PAI on September 13, 2019. “New Opportunities for

INSTITUTE NEWS

TRIVANDRUM CHAPTER
The Chapter celebrated Swacha Pakhwada to commemorate

the 150th Birth Anniversary of Mahathma Gandhi. A meeting
was arranged in the CMA Hall of the chapter in which CMA S
Hariharasubramanian, the senior most member of the chapter
and a contemporary of Mahatma Gandhi presided over. CMA
Joseph Louis, chairman, CMA Prasanth S, vice chairman,
CMA S Hariharasubramanian, senior member, CMA Students,
Kumari Khadeeja Sulthana A, Dince Bosco, Surya, Liji
Thomas, Paul V Silas, Anjana Mohan, Draupathy Raj, also
spoke on Mahathma Gandhi. The meeting concluded with vote
of thanks by CMA PranaveJayan, secretary of the chapter. Large
number of students and members participated in the function.
The chapter celebrated “Hindi Divas” on September 29, 2019.
CMA N P Sukumaran, the former president of the Institute was
the chief dignitary in the dais. CMA Joseph Louis, chairman of THE INSTITUTE OF COST ACCOUNTANTS OF INDIA
the chapter, in his inaugural address stated that study of Hindi COCHIN CHAPTER
will augment national integration and voluntary study of Hindi
along with English and mother tongue should be an accepted The chapter conducted a 3 day communication and soft skill
language formula. CMA N P Sukumaran, former president training programme for the intermediate students from September 24,
of the Institute also emphasised the importance of Hindi as a 2019 to September 26, 2019. The chapter celebrated Gandhi Jayanti
National language. on October 2, 2019. Vice Chairman of the chapter, CMA Suresh
Kumar K.P. presided over the meeting.The Taxation Committees of
the Institute decided to observe Direct Taxation Month throughout
India from 5th September 2019 to 5th October 2019. In connection
with this, the Managing Committee of the chapter arranged a
professional development programme with the theme of “Income
Tax Act and Direct Tax Code – Expectations and Way Ahead”.
The programme was opened by CMA Anil Xavier, chairman of the
chapter and the session was handled by CMA Ramesh kumar M.N.,
Assistant Registrar, Cochin University of Science and Technology.
The chapter in association with Confederation of Indian Industry
with the patronage of SIRC organized and conducted a two day
workshop on TCM Tools. CMA Anil Xavier, chairman of the
chapter welcomed the speakers and participants and introduced the
programme to all. The seminar was inaugurated on 11thOctober
2019 which was followed by the keynote session given by CMA
Sankar P. Panicker, vice chairman, SIRC. CMA P. Thiruvengadam,
Rtd Senior Director – Management Consultancy Services, Deloitte

INSTITUTE NEWS
Touche Tohmatsu, India Pvt. Ltd, CMA (Dr) K. Prasanna Sai, THE INSTITUTE OF COST ACCOUNTANTS OF INDIA
Director, Valcon Management Consultants and Mr. M. Nagesh TIRUCHIRAPALLI CHAPTER
Babu, Principal Counsellor, Confederation of Indian Industry were
the eminent speakers who handled the sessions. To commemorate 150th Birth Anniversary of Mahatma Gandhi
and to promote Swachta, a function was organized by the chapter
on 2nd October, 2019. The function was well attended by CMA
Members and students. CMA C. Subramanian, chairman gave his
welcome address. CMA K. Rajagopal, SIRC Member addressed the
gathering and CMA M. Venkataraman, Vice – Chairman introduced
the Chief Guest Dr. V. Gopalakrishnan, former CEO, BHEL,
Trichy. Dr. V. Gopalakrishnan, Chief Guest, addressed the gathering
and shared his thoughts about Mahatma and Swachta. CMA P.
Manoharan, secretary of the chapterrendered vote of thanks.

RANIPET VELLORE CHAPTER
The Chapter organized a special campaign at Arni S. V. Nagaram,

Thiruvanamalai District on September 27, 2019 to visit the famous
Handlooms process for Pattu Silk sarees with banners depicting
the ideology of Gandhiji. The weavers spent their valuable time to
explain about the process of Handlooms for CMA students. With
guidance from Management committee, Mr. A. Sivakumar, Asst Co
coordinator of the chapter presented the memento to the Khadi/Silk
weaver who keeps our tradition and makes us to remember Father
of our great nation.

INSTITUTE NEWS

HYDERABAD CHAPTER
The Chapter inaugurated Pre-Placement Orientation Programme

on September 14, 2019 and CMA N. Rajasekhar, Executive Director
- CFO & Secretary, Shantha Biotech was invited as a Chief Guest.
He had given his valuable suggestions to the recently qualified
students. A Career Guidance Programme with Members of Advisory
Board was organized on September 14, 2019 and the Board,
comprising of CMA Dr. A. S. Durga Prasad, CMA N. Srinivasan,
Sri V. V. Parasuram had taken up questions and gave suggestions
to CMAs for their career building. 5th batch of the GST certificate
course was inaugurated by the chapter on September 15, 2019. The
Chapter conducted an interaction program for awareness about the
progressive reforms undertaken by MCA for Ease of Doing business
in India for the year 2019. Shri M.P. Shah, Regional Director and
Shri Ramesh Chandra Mishra, Registrar of Companies discussed
about MCA Initiatives in Ease of Starting a Business, Ease of doing WESTERN INDIA REGIONAL COUNCIL
Business, Ease of Closing business on September 16, 2019. The
Chapter conducted a programme on Income Tax and Direct Tax WIRC organized felicitation function for the students who
Code – Expectations and way Need as a part of observance of Direct completed Foundation, Intermediate and Final in June 2019
Taxation Month on September 21, 2019. The program started with a Examination, on 16th September 2019 at Sydenham College
discussion on amendment rules in income tax by Shri Y.V.S.T. Sai, Auditorium, Mumbai. CMA Neeraj Joshi, Chairman WIRC,
IRS, Commissioner of Income Tax and Judicial Member. CMA Dr. CMA (Dr.) Ashish Thatte, CCM, CMA Chaitanya Mohrir, RCM-
Rajendra Prasad Talluri presented a power point presentation on the WIRC, CMA Vinayak Kulkarni, RCM-WIRC were present on
recent amendments in the Taxation Laws (Amendment) Ordinance, the occasion. CMA Chittaranjan Chattopadhyay, CCM was also
2019 dated 20th Sep 2019, some proposal in the Direct Tax Code present for the occasion. CMA Kedar Narayan Upadhye, Global
and key features of the E-Assessment Scheme 2019.The Chapter CFO, CIPLA Ltd was the Chief Guest of the programme. WIRC
organized a valedictory session of pre-placement orientation also felicitated all the Rank holders from the Western Region on
programme on September 22, 2019 and CMA Dr. K.Ch.A.V.S.N. this occasion. WIRC organized Faculty Meet on 14th September
Murthy, Central Council Member was the chief guest, CMA 2019 and the objective of the programme is to address the issues
D.L.S. Sreshti, past central council member and CMA D. Surya which the students, faculty and other stakeholders are facing during
Prakasam, past chairman of the Chapter were the special guests of conduct of oral coaching classes with the core objective to improve
the programme. CMA VSRM Kasyapa explained the objectives of the standard of coaching services. The meeting was an interactive
the Legacy Dispute Resolution Scheme on September 28, 2019. He event for the faculties to address their concerns.Chairman stated
explained in details about litigation, arrears, investigation, enquiry, that the Council has target to start dedicated full time classes at
audit and voluntary disclosure. Mumbai like ICSI. He also stated that 15 months articleship
training would be made compulsory for the newly passed students
in course of time. He requested to provide the modalities of crash
course for the students. CMA Neeraj Joshi, Chairman WIRC, CMA
(Dr.) Ashish Thatte, CCM, CMA Ashsih Bhavsar, Hon. Secretary
WIRC, CMA Vinayak Kulkarni, RCM-WIRC were present on the
occasion.WIRC organised Series of CEP Programmes on GSTR 9
& 9C - a Detailed Analysis from 1st to 15th October 2019 at its
Office. Mr. Pratik Shah was the speaker of the programme.

INSTITUTE NEWS

AHMEDABAD CHAPTER
To celebrate Direct Taxation month, the chapter had organized a

seminar on October 2, 2019. The session was chaired by Mr. Haren
Bhatt, chairman of the chapter. CMA Dakshesh Choksi, chairman of
PD & P Committee welcomed speakers, members and students and
briefed about technical session. The speaker CMA Dr. P G Tulsian
& Mr. Saumya Sheth were felicitated by offering memento. The
Chapter celebrated 150th Birth Anniversary of Mahatma Gandhi
on October 2, 2019. CMA Haren Bhatt, Chairman welcomed
CMA Ashish Bhavsar, Hon. Secretary of WIRC, office bearers,
members, family members, staff, participants & their parents
and briefed about Essay competition and Drawing competition.
CMA Ashish Bhavsar advised to contribute towards clean and
healthy environment not only to present but also for on our future
generation. CMA Malhar Dalwadi, Secretary proposed vote of
thanks.The chapter had organized felicitation function on August
30, 2019 at Haribhai Auditorium for all the students who have
passed Foundation, Intermediate and Final examination of June
2019 and faculties. CMA PD Modh, chairman of oral coaching
committee welcomed dignitaries on dais, managing committee
members, faculties, students and their parents and gave brief about
student’s activities carried out for students and how to get success in
examination. CMA Haren Bhatt, chairman of the chapter felicitated
chief guest to Dr. K B Rao and CMA Ashish Bhavsar, secretary, THE INSTITUTE OF COST ACCOUNTANTS OF INDIA
RCM of WIRC by offering memento & bouquet and explained about NAVI MUMBAI CHAPTER
chapter’s activities for members and students. CMA Ashish Bhavsar
congratulated all the students and explained about opportunities
for the job in industries, Govt and PSU sector. Dr. K B Rao, Chief The Chapter organized a cleanliness drive and tree plantation
Guest advised students to work in job efficiently, effectively and in as part of the Swachh Bharat Pakhwada on October 2, 2019
co-operative manner. CMA Kushal Desai, Jt. Treasurer proposed at K.B. Patil College, Vashi. The speaker for this event was
vote of thanks. The chapter organized pre-placement Orientation vice chairman of the chapter, CMA VaidyanathanIyer. The
Training Program for the fresh CMAs pass out in June’19 exam programme commenced with the speaker emphasizing on the
during September 10, 2019 to September 21, 2019. 12 days Pre- importance of cleanliness in day to day activities at home and
placement Orientation program was inaugurated by CMA Amitabh in society. The chapter conducted a CEP programme on the
Banerjee, ED of Cadila Pharmaceuticals Ltd on 10th Sept’19.
topic “TDS Provisions” on 29th September 2019 at K.B. Patil
CMA Nikunj Shah, Vice Chairman and Chairman of Training &
Placement Committee welcomed chief guest, dignitaries on dais College, Vashi on the occasion of the “Direct Taxation Month”
and students and gave introduction of chief guest. Chief Guest celebrations. The speaker for this event was CMA Virag Shah,
CMA Amitabh Banerjee explained about various opportunities in Practicing Cost Accountant. The chairman of the chapter,
CMA profession. The chapter had organized inauguration function CMA Sirish Mohite introduced the speaker to the audience
of 5th batch of GST course on September 21, 2019. CMA Ashish and the programme commenced with the speaker examining
Bhavsar gave brief about syllabus, schedule and opportunities for the existing TDS Provisions and the recent amendments with
practice in GST. its implications. The speaker analyzed the consequences of
failure to deduct TDS citing provisions of interest, penalty,
imprisonment etc. Sec 271, 272, 276B.CMA VaidyanathanIyer,
vice chairman of the chapter proposed the vote of thanks.

INSTITUTE NEWS

NASIK OJHAR CHAPTER
The Chapter celebrated felicitation programme for all passed

students on 31st August 2019 at Nashik. The programme started
with introduction of Chief Guest of CMA Sunetra Ganesan by
chapter committee member CMA Nikhil S. Pawar. Chairman of the
chapter, CMA Dipak Joshi welcomed and felicitated chief guest as
well as all successful students on behalf of the chapter. The Chief
Guest also guided students and also cleared importance of CMA
degree in their corporate life. Vote of thanks was delivered by CMA
Swapnil Kharade, secretary of the chapter.CMA Arpita Fegde,
CMA Mayur Nikam , Treasurer, CMA Dipak Jagtap and CMA
Kailash Shinde and other members of the chapter were present
at the programme.The Chapter successfully conducted 3 days
Communication & Soft Skill Training programme in the month of
September for Intermediate Students. Various programmes were
conducted during the 14th to 16th September, 2019. During this
three days programme, Industrial Visit was also arranged by the
AURANGABAD CHAPTER
Chapter to “Sahyadri Farm Producer Ltd” Mohadi, Nashik. All
managing committee members and staffs actively participated in
A seminar on “Assessment Procedures under the Income Tax the programme.
Act, 1961 and TDS Law & Practice” was organized by the Chapter
on 27th September, 2019. Shri Vijay Netke, IRS, Dy. Commissioner
of Income Tax, Aurangabad graced the occasion as the chief guest.
Chairman of the chapter, CMA Parag Rane made a presentation on
Sec 288(2) in which definition of Accountant needed to be modified
to include the Cost Accountant. CMA Arun Agrawal, speaker
explained “Assessment” proceeding including search, seizure
and gave tips as how to face the same. Another speaker, CMA
Suresh Pimple explained regarding “TDS-Law and Practice”, an
inseparable part of collection of income tax in modern times. CMA
Pravin Mohoni and CMA Srushti Bedekar conducted proceedings
of the program. The program ended with thanks from secretary of
chapter, CMA Kiran Kulkarni.

INSTITUTE NEWS
Secretary of the Chapter welcomed all the participants. CMA Bharat

THE INSTITUTE OF COST ACCOUNTANTS OF INDIA Savani, Vice Chairman & CMA Bhanwarlal Gurjar, member of the
BARODA CHAPTER Chapter offered the flowers and memento to the faculty CA Mehul
Shah, who is a Practicing CA at Surat. CA Mehul Shah guided all
The Chapter arranged a seminar on ‘How to face an Interview’ the participants about the startup programme and its advantage in
on September 5, 2019. The speaker was Ms.Mausam Madam. Direct tax and other various laws. CMA Kishor Vaghela, Member
CMA KartikVasavada felicitated the speaker. An Evening talk on of the Chapter presented formal vote of thanks.
‘Different aspects of GST’ was arranged on September 14, 2019.
The speaker was Mr.MukeshJhanwar. The event was inaugurated
by CMA Nilesh Mistry and vote of thanks was given by CMA
Dilip Athawale. The Chapter started GST Certification Course –
Batch 5 on September 15, 2019. The guest was CMA V M Rao,
GM F&A, PGCIL, Vadodara. CMA HardikDiwanji, chairman
of the chapter felicitated the guest. The chapter also conducted
industrial orientation programme for CMA Final year students.
CMA Mitanshu Shah delivered his valuable lecture to the students
on September 27, 2019. The chapter jointly arranged programme
with FGI. ShriAnurag Thakur, Hon’ble Minister of State for
Finance & Corporate Affairs, was invited for discussion on various
issues relating to industries. CMA Hardik Diwanji, chairman of the
chapter felicitated him.
INDORE DEWAS CHAPTER
The Chapter organised CEP Program on 21st September, 2019 at

Hotel Surya, Indore for observing Direct Taxation Month with MR.
Devesh Gupta (Joint Commissioner, Indore). Renowned speakers
were CMA Harshad Deshpande (Western India Regional Council
member), CMA ANIRUDDH GUPTA (Chairman of IDCCA OF
WIRC OF ICAI) and Prof. Nakul Shrivastava (Tax Expert).

SURAT SOUTH GUJARAT CHAPTER
The Chapter organized a CEP on the subject of “Recognition of

Startups, its Advantage in Direct Tax and Various other laws” on
22nd September 2019 at Chapter’s Premises. CMA Nanty Shah,

STATUTORY UPDATES
DIRECT & INDIRECT TAXES UPDATES - OCTOBER 2019
* CBDT notifies Corrigendum to Income
Tax Notification No. 48/2018 dated
14/09/2018- (related to notifying Gujarat
Water Supply and Sewerage Board’,
Gandhinagar, a Board constituted by
Government of Gujarat, under section
10(46)) - For “Grant received from state
CMA Rakesh Bhalla government” read “Grant received from
Central Council Member Government, Local Bodies and Other
Chairman, Direct Tax Committee Government Agencies” (Notification
Member, Indirect Tax Committee No. 81/2019 dated 21st October, 2019)
The Institute of Cost Accountants of India * CBDT exempts cash withdrawal by
the authorised dealer and its franchise
agent and sub-agent; and Full-Fledged
DIRECT TAXES UPDATES Money Changer (FFMC) licensed
by the Reserve Bank of India and its
franchise agent from TDS under Section
Recent circulars/ notifications/ rules/ clarifications/News
194N (TDS on cash withdrawals)
subject to conditions (Notification No.
* Clarifications in respect of option exercised under section 115BAA 80/2019 dated 15th October, 2019)
(related to lower rate of 22%) inserted through The Taxation Laws
* Central Government designates
(Amendment) Ordinance, 2019 - related to allowability of brought
Special Court in the State of
forward loss on account of additional depreciation; and allowability
Karnataka u/s 280A(1) (Notification
of brought forward MAT credit. (Circular no. F, No. 142120/2019-
No. 79/2019 dated 11th October, 2019)
TPL dated 2nd October 2019)
* Central Government notifies ‘Kerala
* Central Board of Direct Taxes hereby directs that the Income-
Bamboo, Kattuvalli and Pandanus
tax Authority of Regional e-Assessment Centres (read as ReAC)
Leaf Workers’ Welfare Fund Board’, a
hall exercise the powers and functions of the Assessing Officer
Board constituted by the Government of
concurrently to facilitate the conduct of e-assessment proceedings
Kerala, u/s 10(46) in respect of specified
(Notification No. 77/2019 dated 3rd October 2019)
income (Notification No. 78/2019 dated
* CBDT sets up ReACs under the e-assessment Scheme 2019 (Order 9th October, 2019)
no. F No. 187/7/2019-ITA-I dated 3rd October 2019)
* CBDT invites application for
* Agreement between the Government of the Republic of India and prescribing eligible electronic
the Government of the Kingdom of Morocco for the avoidance of payment mode u/s 269SU (provides
double taxation and the prevention of fiscal evasion with respect that every person having a business
to taxes (Notification no. 84/2019 dated 22nd October 19) turnover of more than Rs 50 Crore
* Central Government notifies IDFC Infrastructure Finance shall mandatorily provide facilities for
Limited as an infrastructure debt fund for the assessment year accepting payments through prescribed
2020-21 and subsequent assessment years (Notification No. 83/2019 electronic modes) (FTS- 1275045/2019
dated 21st October, 2019) dated 18th October 2019)
Income Tax Compliance calendar – November 2019
Date Things to remember

7th November -Due date for deposit of tax deducted/collected for the month of October, 2019. However, all sum
deducted/collected by an office of the government shall be paid to the credit of the Central Government
on the same day where tax is paid without production of an Income-tax Challan.
14th November Issue of TDS certificate u/s 194IA and 194IB
15th November - Issue of quarterly (July to September 2019) TDS certificate in respect of withholding on payments
other than salary in Form 16A
- Due date for furnishing of Form 24G by an office of the Government where TDS/TCS for the month
of October, 2019 has been paid without the production of a challan
- Due date for furnishing statement in Form no. 3BB by a stock exchange in respect of transactions in
which client codes been modified after registering in the system for the month of October, 2019

STATUTORY UPDATES
30th November - Filing of income tax return and other certifications (in Form 3CEB) for taxpayers subject to TP
compliance, for the tax year 2018-19
- Challan-cum-statement for TDS u/s 194IA and 194IB for the period October 2019.
- Report in Form No. 3CEAA by a constituent entity of an international group for the accounting year
2018-19
- Country-By-Country Report in Form No. 3CEAD by a parent entity or an alternate reporting entity or
any other constituent entity, resident in India, for the accounting year 2018-19.
- Statement of income distribution by Venture Capital Company or venture capital fund in respect of
income distributed during previous Year 2018-19 (Form No. 64)
- Statement to be furnished in Form No. 64D by Alternative Investment Fund (AIF) to Principal CIT or
CIT in respect of income distributed (during previous year 2018-19) to units holders
- Due date to exercise option of safe harbour rules for international transaction by furnishing Form
3CEFA
- Due date to exercise option of safe harbour rules for specified domestic transaction by furnishing Form
3CEFB
- Due date for filing of statement of income distributed by business trust to unit holders during the
financial year 2018-19. This statement is required to be filed electronically to Principal CIT or CIT in
form No. 64A
- Due date for e-filing of report (in Form No. 3CEJ) by an eligible investment fund in respect of arm’s
length price of the remuneration paid to the fund manager.
- Application in Form 9A for exercising the option available under Explanation to section 11(1) to apply
income of previous year in the next year or in future (if the assessee is required to submit return of
income on November 30, 2019)
- Statement in Form no. 10 to be furnished to accumulate income for future application under section
10(21) or 11(1) (if the assessee is required to submit return of income on November 30, 2019
- Submit copy of audit of accounts to the Secretary, Department of Scientific and Industrial Research
in case company is eligible for weighted deduction under section 35(2AB) [if company has any
international/specified domestic transaction]
- Statement by scientific research association, university, college or other association or Indian scientific
research company as required by rules 5D, 5E and 5F (if due date of submission of return of income is
November 30, 2019)
- Due date for claiming foreign tax credit, upload statement of foreign income offered for tax for the
previous year 2018-19 and of foreign tax deducted or paid on such income in Form no. 67. (if due date
of submission of return of income is November 30, 2019).
Important cases decided

INDIRECT TAXES UPDATES
* Letters in refutal of allegations contained in GST
news items cannot be treated as admission of
non- disclosure (M/s Goodyear India Ltd. Vs CIT
(Supreme Court)-16/10/2019)
- GST Compliance Calendar – Returns for the M/O
Oct. 2019 to be filed in Nov. 2019
* After conclusion of proceeding u/s 147, AO cannot
take aid of Exp 3 to section 147 to make any addition
(M/s JDC Traders Pvt. Ltd. Vs DCIT (ITAT Delhi)- Return Last Date
11/10/2019) GSTR-1 Outward supply 11th November
* Term “Recovery” includes adjustment thereby for the month of 2019
reducing demand (Volvo Group India Pvt. Ltd Vs October 2019
DCIT (ITAT Bangalore)- 14/10/2019) GSTR-5 Non-resident 20th November
foreign taxpayers 2019
return for
the month of
October 2019
GSTR-6 Input service 13th November
distributor for 2019
the month of
October 2019

STATUTORY UPDATES
Self-invoice
(issued by
GSTR-7 Tax Deducted 10th November 5 recipient for 30 NA NA
at Source for 2019 unregistered
October 2019 RCM suppliers)
GSTR-8 Tax Collected 10th November Total 250 130 40
at Source by 2019
e-commerce
operator for • ITC on invoices and debit notes uploaded by taxpayers
October 2019 (`70+ `40) = `110
GSTR-3B Summary return 20th November • ITC on invoices and debit notes not uploaded by
tax payment for 2019 taxpayers (`30+ `10) = `40
the month of • Restriction for ITC availment = 110 X 20% = `22
October 2019
In the above example, out of ITC of `40 not reflected in
Notifications and Circulars
GSTR-2A of the recipient, the taxpayer is eligible to claim ITC
Central Goods and Services Tax Rules, 2017 (‘CGST Rules’) of `22 only.
vide Notification No. 49/2019-Central Tax dated October 9,
2019. Vide this amendment, the Government has inserted Rule
Vide Notification No. 49/2019-Central Tax dated October 9,
36(4) in the CGST Rules to provide restriction on availment of
2019, the Government has amended Rule 61(5) of the CGST
Input Tax Credit (‘ITC’).
Rules to make Form GSTR-3B a return under Section 39(1)
of the Central Goods and Services Tax Act, 2017 (‘CGST
Restriction Act’) where due date of filing return under Form GSTR-1 or
ITC on invoices and debit notes not uploaded by the suppliers Form GSTR-2 is extended. The amendment has effectively
in GSTR-1, shall not be available to the extent it exceeds 20% replaced Form GSTR-3 with Form GSTR-3B with effect
of ITC on invoices and debit notes uploaded. from July 1, 2017.
Applicability The impact of this retrospective amendment on last date to

The restriction shall apply on invoices and debit notes avail Input Tax Credit (ITC) for FY 2017-18 and FY 2018-19-
uploaded by the suppliers (including supplies made by registered Notification No. 10/2017-Central Tax dated June 28, 2017
suppliers covered under reverse charge mechanism). amended Rule 61 of the CGST Rules to provide that if filing of
return under Form GSTR-1 or Form GSTR-2 is extended, then
the return under Section 39 of the CGST Act shall be filed in
Non-applicability Form GSTR-3B.
The transactions of ISD, import of goods, import of services,
other reverse charge procurements from unregistered suppliers The last date of availing ITC under Section 16(4) of the
(where the suppliers do not upload invoices and debit notes). CGST Act is earlier of:
The restriction same can be understood by way of following 1. Due date of filing of return under Section 39 for March
illustration: of succeeding year (FY 2017-18) and for September of
succeeding year (FY 2018-19 onwards); or
(Inward supplies other than 2. Date of filing of annual return.
Section 17(5) of the CGST Act) (Tax amount in `)
With this amendment, the date of return under Section 39
ITC ITC not shall be due date of filing Form GSTR-3B. Hence, the last date
S. No.
Document for
ITC
reflected reflected of availing ITC shall be earlier of:
availing ITC in GSTR- in GSTR-
2A 2A
• FY 2017-18 – April 20, 2019 or date of filing of annual
return
Tax invoice
• FY 2018-19 – October 20, 2019 or date of filing of
(including
1 issued by 100 70 30 annual return
registered RCM
suppliers) With this amendment, taxpayers who took credit of FY 2017-
2 Debit note 50 40 10 18 post April 20, 2019 will need to reverse the same. Similarly,
3 Bill of entry 50 NA NA the taxpayers will not be allowed to avail ITC for FY 2018-19
ISD invoice (not
post October 20, 2019.
4 relevant for this 20 20 -
computation) Case Laws
Confiscation of conveyance and goods – Hearing and

STATUTORY UPDATES
passing of speaking order mandatory: Observing that of Section 7 of the CGST Act nor is it covered under the term
principles of natural justice were violated by the adjudicating ‘business’ of Section 2(17). The Authority observed that such
authority, the Gujarat High Court has set aside the order of activity cannot be treated as an activity done in the course of
confiscation of conveyance and goods, earlier found to be not business or for the furtherance of business as applicant was
in possession of mandatory documents. The Court noted that not in the business of providing insurance. It also noted that
petitioner was not afforded opportunity of hearing inasmuch said insurance scheme was optional for the employees and that
as matter was kept for hearing on 28-8-2019 but the impugned non-provision of such insurance would not affect applicant’s
confiscation order was passed on 24-8-2019. It also observed business. [In RE: Jotun India (P) Ltd. – 2019 VIL 296 AAR]
that the confiscation order was not a speaking order and did
not reflect the reason as to why the officer had concluded on No ITC in respect of goods or services attributable to
confiscation. The impugned order was also found to be silent incentives provided to dealers: Karnataka AAR has denied
as regards which provision was violated and which clause ITC in respect of goods or services which are attributable to
of Section 130 was attracted. The Court also noted that the the incentives provided in the form of gifts to the dealers and
departmental officer had levied more than the maximum fine painters under various incentive schemes run by the applicant,
leviable in terms of Section 130(2) of CGST Act. The matter a manufacturer of paints. The applicant incentivized its dealers/
was remanded for decision afresh. [Sitaram Roadways v. State painters by providing them goods or services in the form of
of Gujarat – 2019 VIL 510 GUJ.] gifts or foreign or local trips and itself procured such goods or
services on payment of applicable tax. The Authority referred
Refund of IGST after adjusting higher rate of duty to Section 17(5)(h) of the CGST Act, 2017, which provides
drawback: Kerala High Court has directed the department to that ITC in respect of goods disposed by way of gifts shall
adjust the amount already availed by the petitioner on account not be available. Further, Circular No. 92/11/2019-GST, dated
of higher rate of duty drawback and pay the balance of IGST 07.03.2019, wherein it was clarified that “ITC shall not be
payable to the petitioner on account of exports. The petitioner available to the supplier on the inputs, input services and capital
was earlier granted drawback of Central Excise component and goods to the extent they are used in relation to the gifts or free
denied refund of IGST paid on zero-rated transaction, during the samples distributed without any consideration”, was also relied
transition period. The Court noted that the department did not upon. [In RE: Surfa Coats (India) Pvt. Ltd. – 2019 VIL 30
deny refund of IGST to petitioner, an exporter, on a zero-rated AAR]
transaction under Section 16 of IGST Act but contended that the
petitioner had already drawn higher rate of duty drawback and Customs
was supposed to refund the same. [G NXT Power Corp. v. UoI
– 2019 VIL 456 KER] Case Laws
Anti-profiteering – Discount due to slump in market is No late fee for delay in filing Bill of Entry where importer
not passing of ITC benefit: Accepting the DGAP report that takes all efforts to clear goods within reasonable time:
assessee-respondent availed additional benefit of ITC of 2.42% CESTAT Chennai has held that late fee imposed on the appellant
after implementation of GST as ITC ratio to the turnover for delay in filing of Bill of Entry was not proper, since the delay
during the pre GST period was 2.06% as compared to the had occurred only because the original importer had failed to
post GST period, where it was 4.48%, NAPA has directed the clear the goods. The Tribunal observed that present importer
respondent-builder to pass the benefit of ITC to the flat buyers. had taken efforts to get the IGM amended, get the earlier Bill
The Authority rejected the plea that amount had been passed to of Entry cancelled within a reasonable time and filed the new
home buyers as shown in their ledger. It observed that there was Bill of Entry within three days from the cancellation order of
no evidence to prove that the amount was released because of the earlier Bill of Entry, and hence could not be saddled with
ITC benefit. Further, NAPA was of the view that entry was made the late fee. CBIC’s standing order that the late charges due to
on account of the discount which the assessee had offered to the delay in filing the Bill of Entry has to be considered judiciously,
buyers due to slump in the market. It also rejected the plea that was also relied upon. [ECOM Gill Coffee Trading Pvt. Ltd.
it was difficult to calculate ITC in real estate business as benefit v. Commissioner - Final Order No. 41155/2019, dated 30-9-
of ITC was available during the whole period of construction 2019, CESTAT Chennai]
however the sale of houses was not linked to it. It observed that
the assessee had obtained the completion certificate and hence
DFIA – Benefit available even when specific name of import
complete details of ITC availed as well as the turnover realised
product not mentioned in licence: Observing that there was
were available. [Gaurav Gulati v. Paramount Propbuilt (P)
no doubt that the green cardamom was used in making biscuits
Ltd. – Order dated 26-9-2019 in Case No. 47/2019, NAA]
and pickles as flavouring agent and food additives, respectively,
CESTAT Ahmedabad has rejected the department’s plea that
Recovery of parental health insurance premium from
since specific name of the product was not mentioned or ITC
employees is not “supply”: Maharashtra AAR has held that
(HS) did not match in the DFIA licence, benefit thereunder was
providing mediclaim policy to parents of employees through an
not available. It noted that the imported goods were covered
insurance company and recovering 50% of insurance premium
under the broad description in the licence. The Tribunal also
from employees is not a supply of service. The AAR was of
noted that there was no requirement of any actual use and that
the view that such provision neither satisfies the conditions
the only requirement was that whether the goods are capable

STATUTORY UPDATES
of being used in export goods. [Pace Ventures Pvt. LTD. v. surrender charges in case of pre-mature termination of ULIP
Commissioner – 2019 TIOL 2959 CESTAT AHM] policy were not liable to service tax. It observed that the service
tax was leviable only on management fee or fixed charges as
Valuation - Ship demurrage charges are not includible: approved by the IRDA or levied by the insurer, whichever was
Following the decision of the High Court of Orissa in the case higher. The Tribunal in this regard noted that the legislature had
of Tata Steel v. Union of India & Ors. [W.P. (C) No. 7917 of clarified by substituting, on 1-7-2010, clause (ii) in Explanation
2009], where in the Explanation to Rule 10(2) of the Customs to Section 65(105)(zzzzf) of the Finance Act, 1994, that service
Valuation (Determination of Value of Imported Goods) Rules, tax was leviable only on management fee or charges. Further,
2007 was struck down as ultra vires, being beyond the scope of observing that explanation was meant for clarifying the provision
Section 14 of the Customs Act, 1962, to the extent it includes of the main section and accordingly had retrospective effect, i.e.
demurrage charges in the assessable value of imported goods, normally effective from the date of the statute, unless otherwise
CESTAT Delhi has held that ship demurrage charges are not provided, CESTAT set aside the demand of service tax for the
includible in the assessable value of the imported goods. The period 1-10-2008 to 30-6-2010. [Max Life Insurance Co. (I)
Tribunal in this regard noted the fact that the department had not Ltd. v. Commissioner – 2019 TIOL 2884 CESTAT DEL]
produced any ruling to the contrary. [Jubilant Life Science Ltd.
v. Additional Director General (Adjudication) - Final Order Repeal of VAT Act – Savings clause saves all rules,
No. 51288/2019, dated 3-10-2019, CESTAT Delhi] regulations, orders, notifications, etc.: Section 78 of
Maharashtra Goods and Services Tax Related Laws
Refund available even in absence of payment challan: A (Amendments, Validation and Savings) Act, 2017, which
claim of refund was denied on the ground that the duty payment saves Section 64 of Maharashtra Value Added Tax Act, 2002 is
challans were not been produced. CESTAT Ahmedabad constitutionally valid. Bombay High Court has held that by virtue
however observed that the amount had been deposited, received of Section 78 of State GST Savings Act read with Section 19 of
by the department through banker’s cheque and had also been Constitution (One Hundred and First Amendment) Act, 2016,
realized, and that no challan was taken by the assessee. It was the VAT Act, the rules and regulations, and notifications issued
held that even in the absence of challan, where such payment thereunder continue to have effect including for assessment,
has been made correctly, the assessee was entitled for refund. reassessment, production and inspection of accounts and
[Deep Exports v. Commissioner – 2019 TIOL 2933 CESTAT recovery of any tax under the VAT Act, relating to any period
AHM] before the appointed day of the State GST Act. The Court was
of the view that to survive the repeal, there is no need of specific
mention of subordinate legislation in the saving clause and that
Central Excise, Service Tax & VAT
saving provision is both explicit and expansive. It held that a
saving clause saves all rules, regulations, orders, notifications,
Case Laws form, certificate and notices, appointments and delegation of
powers issued under the VAT Act. [Magma Fincorp Ltd. v.
Withdrawal of exemption from duty/tax – Principle of State of Maharashtra – 2019 VIL 372 BOM].
promissory estoppel not invokable if public interest so
warrants: 3-Judge Bench of Supreme Court has held that the
inapplicability of doctrine of promissory estoppel is established
when the larger public interest demands so. Observing that pan [email protected]
masala (with or without tobacco) was found to be one of the
causes of oral cancer, the Court was of the view that withdrawal Information Source - M/s LKS, CBIC.gov.in., various
of exemption for said items was in the larger public interest. internet websites including Income tax website, Dailyhunt,
Setting aside the High Court order, the Apex Court reiterated Deloitte, livemint.com, related links and various notifications,
that an exemption notification does not make the items which circulars, orders, press releases and other sources-many thanks
are subject to levy as items not leviable to such duty. It only to all.
suspends the levy and collection, and that such an exemption
by its very nature is susceptible of being revoked or modified
or subjected to other conditions. The Court noted that under the
General Clauses Act, an authority which has the power to issue
a notification has the power to rescind or modify the notification
in the like manner, and that supersession or revocation of an
exemption notification in public interest is an exercise of the
statutory power by the State under the law itself. [Union of
India v. Unicorn Industries – Judgement dated 19-9-2019 in
Civil Appeal No. 7432 of 2019, Supreme Court]
No service tax on surrender charges for pre-mature

termination of insurance policy: CESTAT Delhi has held that

TECHNICAL CELL (Cost Audit & Statutory Compliances)
SYMPOSIUM ON
“COST AUDIT - STAKEHOLDERS VALUE PROPOSITION”
Theme of the Symposium:

The Cost Audit mechanism has a great potential to add value for all its stake holders. Technical Cell
of the Institute is organising a Symposium on Cost Audit so as to get feedback from the
Stakeholders on how the Cost Audit adds value for them and their requirements from this
mechanism which can determine the future developments. With this objective in mind the
Technical Cell of the Institute has organised a Symposium on Cost Audit – Stakeholders Value
Proposition.
Program Details :
Day & Date : Friday, 20th December 2019
Timing : 10.00 am to 05.00 pm
Venue : Y B Chavan Auditorium, Nariman Point, Mumbai, Maharashtra 400021
Delegate Fee : Rs. 100 (incl of GST) For Institute Members
CEP Credit : 4 Hours (FOUR Hours)
Brief Program Schedule :

From To Duration Program
09.30 am 10.00 am 30 min Registration
10.00 am 11.30 am 90 min Inauguration
11.30 am 01.00 pm 90 min Technical Session 1 - Government &
Regulators
01.00 pm 01.45 pm 45 min Lunch Break
01.45 pm 03.15 pm 90 min Technical Session 2 - Industry & Industry
Associations
03.15 pm 03.30 pm 15 min Tea / Coffee Break
03.30 pm 05.00 pm 90 min Technical Session 3 - Society at Large
Eminent speakers representing various Stakeholders will express their views on the Value addition
through Cost Audit & further expectations from this mechanism.
The Symposium is aimed at showcasing the value proposition of the Cost Audit Mechanism. You
are requested to block your dates to attend the symposium and make it a grand success.
This is the First Announcement of the Symposium, a detailed schedule and further information will
soon be made available.
With best regards
CMA (Dr.) Dhananjay V Joshi

Former President and
Chairman, Technical Cell of the Institute (2019-20)

(STATUTORY BODY UNDER AN ACT OF PARLIAMENT)
EXAMINATION TIME TABLE & PROGRAMME – DECEMBER 2019
FOUNDATION COURSE EXAMINATION
Foundation Course Examination Syllabus-2016

Day & Date
Time 2.00 p.m. to 5.00 p.m.
Tuesday,
Fundamentals of Economics & Management
10th December, 2019
Wednesday,
Fundamentals of Accounting
11th December, 2019
Thursday,
Fundamentals of Laws & Ethics
12th December, 2019
Friday,
Fundamentals of Business Mathematics & Statistics
13th December, 2019
Examination Fees
Inland Centres ` 1200/-

Foundation Course Examination
Overseas Centres US $ 60
1. The Foundation Examination will be conducted in Offline, descriptive (Pen & Paper) mode only. Each paper
will be of 100 marks and for 3 hours duration.
2. Application Forms for Foundation Examination has to be filled up through online and fees will be accepted through
online mode (including Payfee Module of IDBI Bank).
3. STUDENTS OPTING FOR OVERSEAS CENTRES HAVE TO APPLY OFFLINE AND SEND DD ALONGWITH THE FORM.
4. (a) Students can login to the website www.icmai.in and apply online through payment gateway by using Credit/Debit
card or Net banking.
(b) Students can also pay their requisite fee through pay-fee module of IDBI Bank.
5. Last date for receipt of Examination Application Forms is 10 th October, 2019.
6. Examination Centres: Adipur-Kachchh(Gujarat), Agartala, Agra, Ahmedabad, Akurdi, Allahabad, Asansol,

Aurangabad, Bangalore, Baroda, Berhampur(Ganjam), Bhilai, Bhilwara, Bhopal, Bewar City(Rajasthan),
Bhubaneswar, Bilaspur, Bikaner (Rajasthan), Bokaro, Calicut, Chandigarh, Chennai, Coimbatore, Cuttack, Dehradun,
Delhi, Dhanbad, Duliajan (Assam), Durgapur, Ernakulam, Erode, Faridabad, Ghaziabad, Guntur, Guwahati, Haridwar,
Hazaribagh, Howrah, Hyderabad, Indore, Jaipur, Jabalpur, Jalandhar, Jammu, Jamshedpur, Jodhpur, Kalyan, Kannur,
Kanpur, Kolhapur, Kolkata, Kota, Kottakkal (Malappuram), Kottayam, Lucknow, Ludhiana, Madurai, Mangalore,
Mumbai, Mysore, Nagpur, Naihati, Nasik, Nellore, Neyveli, Noida, Palakkad, Panaji (Goa), Patiala, Patna,
Pondicherry, Port Blair, Pune, Raipur,Rajahmundry, Ranchi, Rourkela, Salem, Sambalpur, Shillong, Siliguri, Solapur,
Srinagar, Surat, Thrissur, Tiruchirapalli,Tirunelveli, Trivandrum, Udaipur, Vapi, Vashi, Vellore, Vijayawada,
Vindhyanagar, Waltair and Overseas Centres at Bahrain, Dubai and Muscat.
7. A candidate who is completing all conditions for appearing the examination as per Regulation will only be
allowed to appear for examination.
8. Probable date of publication of result: 21st February, 2020.
* For any examination related query, please contact [email protected]
CMA S. C. Gupta
Secretary (Acting)

RNI NO. 12032/1966 Postal Registration No.: KOL RMS /139 /2019 – 2021
‘D’ Number MH/MR/TECH/47/10/2019
License to post without prepayment, WPP License No.: MR/TECH/WPP/KOL RMS/354/2019
Posted at Mumbai Patrika Channel Sorting Office, Mumbai - 400 001
Posting Dates: 10th, 11th & 12th day of each English month only
Date of Publication: 10th of every month

Management Accountant Nov 2019

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www.icmai.

in November 2019 - The Management Accountant 1

www.icmai.in November 2019 - The Management Accountant 3

on November 30, 2016. As per Section 56 of the Real

The Smart City Project, where there is a plan to build

6 The Management Accountant - November 2019 www.icmai.in

• Challenges faced by Startups in India

Startups • Angel Investment Ecosystem in India

• Edtech Startups: a Ray of Hope for transforming the Learning Experience

• Leveraging the power of Artificial Intelligence

• Interest Rate Risk Management

• Arbitration and Conciliation (amendment) Act, 2019: Expansion of scope for

• Arbitral Award: Challenge & Enforcement

Arbitration and • Institutional, Statutory and Ad-hoc Arbitration

• Removing Structural Barriers towards Gender Equality and Women’s Empowerment

The Next Gen

• Role of Judiciary in Empowering Women in India

DIRECTORATE OF JOURNAL & PUBLICATIONS

8 The Management Accountant - November 2019 www.icmai.in

CMA Balwinder Singh

to participate. I earnestly request all the members

16th National Awards for Excellence in Cost

www.icmai.in November 2019 - The Management Accountant 9

I am pleased to share that CMA Chittaranjan

10 The Management Accountant - November 2019 www.icmai.in

www.icmai.in November 2019 - The Management Accountant 11

12 The Management Accountant - November 2019 www.icmai.in

TRAINING & PLACEMENT DIRECTORATE

www.icmai.in November 2019 - The Management Accountant 13

CMA (Dr.) Dhananjay V. Joshi

to contribute the cases wherein the companies have been

14 The Management Accountant - November 2019 www.icmai.in

www.icmai.in November 2019 - The Management Accountant 15

CMA Balwinder Singh President ICAI and Shri. K

16 The Management Accountant - November 2019 www.icmai.in

www.icmai.in November 2019 - The Management Accountant 17

18 The Management Accountant - November 2019 www.icmai.in

Escorts Limited The KCP Limited - Muktyala ACC Limited

Category II: Manufacturing-Private-Large

Category III: Manufacturing-Private-Medium

Category IV: Manufacturing-Private-Small

Zydus Takeda Healthcare Private Shree Digvijay Cement Company

www.icmai.in November 2019 - The Management Accountant 19

Category X: Transportation and Logistics

20 The Management Accountant - November 2019 www.icmai.in

Haryana Power Generation Corporation NHPC Limited IRCON International Limited

Tech Mahindra Business Services MECON Limited

www.icmai.in November 2019 - The Management Accountant 21

A Handbook named by “Sabka Vishwas (Legacy Dispute

Sri Roopam Kapoor, Principal Commissioner, CGST &

Bangalore Chapter conducted a Seminar on “Direct and Indirect taxes” on 20.09.19

Shri Ajay Saxena, I.R.S. - Principal Commissioner of

Shri Ajay Saxena, I.R.S. - Principal Commissioner of

22 The Management Accountant - November 2019 www.icmai.in

Organised by: January 9-11, 2020

www.icmai.in November 2019 - The Management Accountant 23

ABOUT THE THEME

24 The Management Accountant - November 2019 www.icmai.in

“MISSION 5 TRILLION – CMA AS A CRYOGENIC FORCE”

9th January, 2020

the Captains in the Government, Business and Management Leadership. In this

www.icmai.in November 2019 - The Management Accountant 25

escalate the strategic outcomes. This is important as the outcomes of