Chartered Accountants (CAs) , revered as India's ‘Economic Guardians’, are integral to the nation’s financial architecture and an essential ingredient driving the Indian economy towards achieving its goal of becoming a $10 trillion economy in the next few years. Amid evolving business practices of the Big Four – Deloitte, PwC, EY and KPMG – in India, the Indian government seeks to empower domestic CA firms through amendments to the LLP Act, fostering their growth into global-scale audit giants. These initiatives aim to fortify India’s economy, ensuring its resilience and global competitiveness.
It is a fact that today homegrown and locally trained CAs have emerged as indispensable architects of India's economic progress and custodians of its financial integrity. Agreeing with this, S. Ravi, Founder of Ravirajan & Co. & former Chairman of the Bombay Stock Exchange (now BSE), terms CAs as the ‘heart of the economy’. “The CAs drive financial planning, ensure compliance, file returns and oversee books. Chartered accountants are the conscience keepers of the financial system,” he adds. “Despite being a small community with a vast population, their impact is immense. They have a privileged position with a significant role in shaping the Indian economy,” says Rajan.
The conventional role of CAs is also witnessing rapid transformation. “Traditional assurance services, while still essential, are being complemented by a growing demand for comprehensive advisory services. Clients are increasingly seeking holistic solutions that address their strategic, operational, and technological challenges, which is steering the industry towards a more consultancy-focused model,” says Yezdi Nagporewalla, CEO, KPMG India.
Core Role
At the core of a chartered accountant’s role is their expertise in financial management, auditing and taxation. However, their contributions go far beyond these traditional domains. In today’s dynamic economic environment, CAs are expected to be strategic advisors who can navigate the intricacies of financial regulations, mitigate risks and provide insights that drive business growth. Their ability to interpret and apply complex financial data enables businesses to make informed decisions, ensuring long-term sustainability and profitability. In essence, CAs are the linchpins of corporate governance, ensuring that organisations operate transparently, ethically, and in compliance with the law. But there are challenges as well. “Since GST’s implementation in 2017, both the CAs and the GST council are still learning and evolving,” explains Ravi, adding, “The council is proactive, regularly adding new provisions and rules. Staying updated on these fast-changing regulations is crucial, making it a very fast-paced environment for CAs.”
Moreover, the role of CAs in nation-building is increasingly being recognised as vital. India, as an emerging global economic powerhouse, relies heavily on the integrity and accuracy of its financial systems. Chartered accountants are instrumental in maintaining this integrity, acting as watchdogs who safeguard the interests of stakeholders, from small investors to large corporations. Their role in auditing and assurance provides a layer of credibility to financial statements, fostering trust and confidence in the markets. This trust is essential for attracting both domestic and foreign investments, which are crucial for the country's economic development.
Larger Impact
Beyond the corporate sphere, CAs contribute significantly to public policy and economic planning. Their deep understanding of fiscal policies, taxation laws and financial regulations makes them valuable advisors to government bodies. Chartered accountants often work closely with policymakers to design and implement reforms that promote economic stability, enhance revenue collection and drive social welfare programmes. By ensuring that government funds are used efficiently and effectively, CAs play a direct role in improving public services and infrastructure, which are the bedrock of national development.
In the context of globalisation, the importance of CAs has only grown. With India's increasing integration into the global economy, CAs are at the forefront of helping businesses navigate the complexities of international financial reporting standards, cross-border taxation issues, and global mergers and acquisitions. Their expertise in these areas not only helps Indian companies expand globally but also attracts foreign companies to invest in India, further boosting the nation’s economic growth.
Furthermore, the role of CAs in fostering entrepreneurship and innovation is noteworthy. As advisors to startups and small businesses, CAs provide critical financial guidance that helps these enterprises scale and succeed. In a country like India, where entrepreneurship is a key driver of economic growth and job creation, the support of CAs is indispensable. By helping businesses manage their finances, comply with regulations, and optimise their operations, CAs contribute to the overall economic dynamism and resilience of the nation.
Tackling Challenges
Seen as the ‘heart of the economy’ and ‘conscience keepers’ of the financial system, many CAs have gone on to head banks, participate in politics, work in the film industry and are big industrialists. “Despite being a small community with a vast population, their impact is immense. They have a privileged position with a significant role in shaping the Indian economy,” says former BSE Chairman, S. Ravi, as he explains how the role has become much more challenging. Now, CAs must navigate numerous regulatory and statutory changes, especially with GST. There are interpretation issues and divided opinions that complicate compliance. Ensuring the department agrees with our compliance efforts is a significant task. “Since GST’s implementation in 2017, both the CAs and the GST council are still learning and evolving,” Ravi adds. The council is proactive, regularly adding new provisions and rules. Staying updated on these fast-changing regulations is crucial, making it a very fast-paced environment for CAs.
Charanjot Singh Nanda, Vice President of the Institute of Chartered Accountants of India (ICAI) agrees with this. He talks about the growing role of CAs in India from being pillars of nation-building to “global partners”. That is why the code of ethics for the ICAI now integrates global standards from the International Federation of Accountants with India’s unique requirements. “Our stringent ethical standards ensure integrity and professionalism among CAs. We maintain a zero-tolerance policy towards professional misconduct, conducting impartial inquiries to uphold the highest standards set by our predecessors,” says Nanda.
As businesses globalise, ICAI is ensuring that Indian CAs remain globally relevant, he adds. As mentioned before, Indian CAs are transitioning from nation builders to global partners. Knowledge of US GAAP, IFRS and international laws is crucial as Indian businesses expand globally, Nanda explains. “Our curriculum and certificate courses are tailored to train members in these areas, facilitating seamless integration into global accounting practices. ICAI encourages globalisation to enhance service delivery and relevance for our clients worldwide,” he says.
Commenting on some of the current challenges and their solutions, Ranjeet Kumar Agarwal, President, ICAI points out that while the business environment is thriving, as reflected in the growth of the stock market, tax collections and the overall growth, the challenges with tax laws and GST laws persist. “We are representing these concerns to the government. However, financial and tax literacy is also extremely critical for India. The government is also involved in skill-building initiatives. More needs to be done, but as ICAI we are committed to contributing significantly,” Agarwal adds.
Big 4’s Mega Contribution In Nation Building
In India, the auditing and consultancy business is undergoing a profound transformation, shifting from the more traditional role of auditing, taxation and compliance work to decisive roles that are multi-dimensional and more decisive. This shift is driven by rapid technological advancements and the necessity for businesses to navigate increasingly complex environments. The integration of AI, data analytics, and cloud computing is now essential for providing actionable insights and facilitating informed decision-making. Furthermore, the rising emphasis on sustainability and ESG (Environmental, Social, Governance) criteria indicates a broader industry movement where businesses prioritise not only financial outcomes but also their societal impact. “At KPMG India, we are at the forefront of this consultancy evolution, leveraging our global expertise and local insights to redefine the future of assurance and consulting,” says Nagporewalla.
Romal Shetty, CEO, Deloitte South Asia comes from the same school of thought. “Consultancies like Deloitte play a pivotal role in driving business growth, generating employment, and enhancing productivity. Our India inbound programme attracts significant foreign investments, helping global clients establish businesses, Global Capability Centres, and manufacturing units, thus bolstering economic stability,” says Shetty. The leading consultancies are acting as intermediaries between businesses and governments, ensuring regulatory compliance and promoting ethical practices.
Experts say the vast talent pool uniquely positions the large consultancies, including the Big Four, to attract inbound work. There is unison on how India’s market holds significant, untapped potential, offering abundant opportunities. These big consultancies, therefore, are ably equipped with the capability to deploy technology at scale. Experts point to the large quantum of investments made by India in infrastructure while maintaining fiscal discipline. And this has been happening at a time when many markets have slowed down. There is also a unison in views that India is poised to remain the fastest-growing large economy for some time to come. The consultancy leaders remain optimistic about the growth potential the country offers. Just as India’s economic growth and macro stability will continue so will the ongoing momentum in job creation, skill development, and proactive measures towards energy transition. “The best is yet to come,” quips Shetty of Deloitte, a sentiment agreed by many.
(Additional Reporting by Arjun Yadav)
