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.

No comments: