Birla seeks level field for CAs

In the first instance of corporate India backing domestic chartered accountants (CAs) in their demand for a level-playing field vis-a-vis multinational accounting firms, Kumarmangalam Birla has said India has undermined its negotiating capacity in the WTO by opening up the consulting services to overseas firms without any reciprocity arrangement with foreign countries.

At a convention of CAs organised by the S Gurumurthy led Chartered Accountants Action Committee in Bangalore last week, Birla called for regulatory changes and an equal opportunity for Indian CAs within the country and outside to take on competition and emerge as a global force to reckon with.

Addressing over 1,000 CAs, the chairman of the AV Birla group said, "I am surprised that many countries in the EC economy even prescribe citizenship or permanent residence as the qualification for setting up practice as professional accountants. What seems to be even more odd is the fact that the negotiations in the WTO on the opening of the services sector are yet to commence, but the consultancy sector has been virtually fully opened for foreign CA firms in India, without any kind of reciprocity whatsoever to the Indian CA firms."

According to Birla, this must be rectified so that the Indian CAs did not suffer continued loss of opportunity within the country and abroad.

He said he was surprised that even after over a decade since the reforms started, the requisite changes in the regulatory regime of the CA profession were not made to enable Indian CAs compete effectively with the foreign firms in India.

"For instance, I did not know that the rules in India did not allow more than 20 partners for a CA firm where as the foreign CA firms can have any number of partners. I did not also know that the Indian regulation did not allow the CA firms to network with each other. Further, it did not allow the CAs to network with other disciplines, that is, inter-disciplinary professional models are not allowed in India," he said.

Birla said it was necessary that these changes were brought about expeditiously so that CAs hwere were allowed to restructure their professional firms and acquire the requisite infrastructure of size and quality to be able to offer the full range of services.