Announcing the cancellation of registration of over one lakh companies and identification of 37,000 shell firms for suspected generation of black money and money laundering, Prime Minister Narendra Modi on Saturday warned of “more tough action” against firms helping in hiding unaccounted wealth.
Giving clear signals that the government has not at all softened its fight against black money, Prime Minister Narendra Modi said here on Saturday that tough action would be taken against companies found indulging in tax evasion and that the government would step up its fight against black money holders.
Addressing a function at the Institute of Chartered Accountants in India here on Saturday gathered from across the country, he asked them to do some soul searching and weed out elements who assist those stashing money abroad and evade taxes.
The Institute of Chartered Accountants of India (ICAI) is the national Professional accounting body of India. ICAI is solely responsible for setting the auditing and assurance standards to be followed in the audit of financial statements in India.
It also issues other technical standards like Standard on Internal Audit (SIA), Corporate Affairs Standards (CAS) etc. to be followed by practicing Chartered Accountants. It works closely with the Government of India, Reserve Bank of India and the Securities and Exchange Board of India in formulating and enforcing such standards.
This was the prime minister’s first public speech, which received thunderous applause after the country embarked upon a new tax regime with the inauguration of the Goods and Services Tax, or GST through a special midnight session in Parliament on Friday.
Modi said, “If you know anyone with black money, warn them that they will not be spared,” he told the CAs who kept cheering him through his 45-minute speech at an event organized by the Institute of Chartered Accountants of India (ICAI.
Modi disclosed that data mining post demonetisation so far showed that over three lakh registered companies indulged in suspicious dealings.
“Those stashing black money abroad are going to face further difficulties. You CAs tell them the law. I have launched two cleanliness campaigns -one for cleanliness and the other for cleaning up of the economy. Post-demonetisation data mining is on continuously in banks.
“The activities of over three lakh registered companies have raised questions. This number may go up. Forty-eight hours before the launch of GST, the registration of one lakh companies was canceled and 37,000 shell companies have been identified for suspicious activities,” he said.
“People with black money will face more difficulties when Switzerland begins automatic information exchange on real-time basis with India in two years,” he said, adding the impact of steps to check black money was clear from the last year’s figure of Swiss banks where Indians’ money deposits have gone down by 45 percent.
Telling the CAs that they were no less patriotic than others, he asked them bluntly, “would not some of your own community have helped those thieves and those who looted the country? Couldn’t you identify them? Those who held their hands and showed sympathy with them, have you identified them?”
He compared CA’s to ‘sage monks of the economy’ who will show the Indian economy the way to success.
“While stating that there are four goals of a human being, dharma, arth, karma and moksh, Modi said that in the economy, it would not be wrong to say that chartered accountants are rishi munis (saints).
“The signature of the Prime Minister does not carry the same weight as yours. Your signature in audit reports is sacred. It is a testimony of truth and trust. On your signature, poor people invest money in mutual funds and companies and when they collapse, the poor also collapse. Do not let this trust be destroyed or impacted,” Modi said.
The Prime Minister asked the “economic doctors” to marginalize those who err professionally.
He said there are 2.72 lacs CAs in the country and over two lakh Article Assistants, (Along with others associated with the profession, the total of the community comes to eight lakh people.
An Articled Clerk/Assistant, also known as an articling student, is an apprentice in a professional firm; generally, the term arises in the accountancy and legal professions.
Raising questions before the community of CAs, Modi said while they conduct their own examinations, issue certificates and take disciplinary action, he had noticed that only 25 CAs have been acted against in several years.
“I am told there are a lot pending matters in this regard but such a situation in a highly qualified community is a matter of concern. After 1947, today the country is preparing for a new journey with one nation, one market, one tax. During Independence struggle, eminent personalities who were lawyers gave up their practice and joined the fight for freedom sacrificing their youth.
“Now you have a role laid out before you. As ambassadors of change, you have to usher in the economic freedom by upholding the principle of what is right and rejecting what is wrong.
“Today we are at an important point in history. After Independence and country’s unification, the country is beginning a new journey towards economic integration. The biggest responsibility is of CAs in the transformation towards eliminating black money, corruption and tax evasion.
He said GST is for national reconstruction and it is for the CA’s to help in realizing it.
Modi said CAs also have a big role in the implementation of the Bankruptcy and Insolvency law enacted recently and they can make a big career from insolvency practice.
Finance Minister Arun Jaitley, other ministers as well as bureaucrats were present at the function which was also telecast at various city capitals.
Concluding the event, Modi spoke of the ‘Big 4’ accounting firms. He urged the audience that by 2022, which also marks 75 years of Indian independence, that there should be an Indian firm on this prestigious list. “People talk of the Big 4 accounting firms. Sadly, there is no Indian firm there. By 2022, let us have a Big 8, where 4 firms are Indian,” he said.
According to reports, the Big 4 top global accountancy firms are PwC, Deloitte, EY, and KPMG.