Sunday, February 19, 2017

Judiciary-Heal thyself while reforming all and sundry

As someone who has earlier studied law(during professional courses in accountancy and company secretaryship), I've been avidly following the practice of law. While judicial activism is a welcome trend to fill the institutional void in the executive and legislative branches, it should now extend to fill the judiciary and legal professional itself. For example, below points

  1. Refusal of Supreme Court to disclose information on judges's financial status etc under the Right to Information Act-do note this decision cannot be litigated as the Supreme Court is itself the final legal arbiter in India
  2. Hearing celebrity/high profile cases out of turn while allowing other cases to languish for a long time. There needs a transparent mechanism to decide out of turn vs regular cases, else the spectre of speedy justice for some will exist.
  3. Judicial Appointments-The existing collegium mechanism has its documented faults in preventing nepotism etc. The Modi government should be lauded for sticking to its guns in this regard
  4. Blatantly favouring the legal professional: Whether it is about levy of service tax on advocates, restricting tax tribunal hearings only to legal professionals, entry of foreign law firms in India, asking censorship cuts in already approved Movie Jolly LLB 2 which lampoons the legal profession, these decisions favour the legal profession in India, at the cost of other stakeholders
  5. Non transparent court ordered appointments: In the case of BCCI Committee of Affairs, the Supreme Court ordered appointments of 4 professionals who would be remunerated and not on a honorary basis. This appointment was not competitive or application based, unlike say a normal UPSC appointment. 
  6. Caustic remarks during proceedings/inability to tolerate critiques: While judges routinely pass strictures during hearings like Sahara case, BCCI, if there is critiques by even retired judges,like M Katju the courts take offence and initiate contempt proceedings. Is this fair?
  7. Revision of allowances/pensions: The Courts award merit increases to themselves-to be fair this is done by the legislature also. But is this fair?
The following points if fixed, would go a long way for judges to be perceived truly as neutral arbiter

Politicians and bureaucrats should be subject to the risks public face

  1. Minimum qualification/guidelines for bureaucrats should be applied to their political bosses. For example, codes on conflict of interest, corruption proceedings for accumulating assets disrportionate to known sources of income
  2. Fit and Proper Norm for political party leadership-NOT just elected representatives
  3. Democracy within the party-Regular inner party elections under independent observer
  4. Performance linked pay and redundancies/exits without golden parrachutes-Pay Commission hikes to be accompanied by exits, to avoid life long employment promise. After all, pay commission salaries are good compared to private sector entry norms
  5. Piercing the corporate veil to avoid remote control from jails: Be it Lalu Yadav controlling the RJD from jail, or Sasikala now ruling the AIDMK from jail, prisons do not end the rot. So extending the ban on political party 

Saturday, February 18, 2017

ICAI 67% member fee increase in 2017-Is this fair?

As a member of the ICAI(Institute of Chartered Accountants of India), I visit their website to keep updated with events. During that time, I noticed an announcement of fee hike The numbers were quite high so I decided to analyze the impact on ICAI finances. For this, I looked at the annual report  With total income of 66624 lakhs, the operating surplus of 6820 lakhs represents a surplus of nearly ~10%. Interestingly, nearly 50% of this surplus is generated from classroom training programs(excess of receipts over costs) of 3729 lakhs.

The member fee income for 2015-16 was Rs 5636 lakhs. The approximate breakup of this is analyzed in the 5th column which assumes all members to be below 60, and charged the statutory slabs-this is almost the reported fee. If we replace the tariffs with the proposed one, the institute's income increases by nearly 3800lakhs to 9339 lakhs, which represents nearly 50% of the operating surplus

The question is that for a revenue source accounting for just under 10% of the overall receipts, is it fair to increase member fees without a public consultation, justification and updates on efforts to do cost management? Otherwise, we risk a bulging bureaucracy with Pay Commission Indexed salaries.

Friday, February 17, 2017

The tale of 2 young Presidents & dynasties-ICAI vs ICSI

Recently, the ICAI elected Mr Nilesh Vikamsey as its President and Mr ND Gupta(Jr) as its Vice President. Mr Vikamsey's brother was the ICAI President around a decade ago, while his father was on the ICAI Central Council decades ago. While for Mr Gupta, his father was the ICAI President in 2001. While Nilesh has come up the hard way of WIRC-Central Council-President, Mr Gupta was directly elected to the Central Council in 2010 without even contesting his regional council elections(NIRC), and is now catapulted to the Vice President post, which all know is a stepping stone to the Presidency post in a year. I cannot think of any other ICAI President in recent history, who has been able to achieve this milestone of direct elections to the Central Council without any 'great' individual achievements.

In sharp contrast is the election of Mr Sham Lal Agarwal as the ICSI President. While Mr Agarwal is quite young and with just 12yrs practice, he came up the pyramid of chapter-Regional Council-Central council, and won support by his work, without any visible family heritage or godfathers.