• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

K.R. Srivats

NEW DELHI, April 18

SMALL and medium - sized firms of chartered accountants have cause for cheer. Their concern over losing turf in the accounting services space to large foreign players in the coming years has reached the ears of the Government.

India has now taken a position that it would not for the time being accept requests for commercial presence of foreign accounting firms. In the World Trade Organisation (WTO), negotiations are being conducted on services sector through the request-offer process.

The request-offer process is continuous and would result in finalising the schedule of commitments, which would then be applicable on a most favoured nation (MFN) basis to all the WTO members.

"We are going by the advice of the professional bodies - ICAI, ICWAI and ICSI. Our current position is that there will be no acceptance of requests under Mode 3 (Commercial Presence) in the ongoing GATS negotiations in the accounting services. There will also be no offer made by us under mode 3," a senior Department of Company Affairs (DCA) official said.

The DCA has forwarded a request list on accounting services to the Department of Commerce for transmission to the Indian negotiators at Geneva.

The request list is understood to have made a case for extensive liberalisation in the mode 4 (movement of natural persons), which is considered to be an important mode of supply of services for India.

The DCA official maintained that India's stance on not encouraging commercial presence of large foreign players (`Mode 3') in the accounting services sector was not a `defensive one'.

An industry official pointed out that even after five decades of the enactment of the Chartered Accountants Act, there were only 34 firms, which commanded a size of about 12 partners each.

"There are no large Indian firms who can take on the foreign service provider in our own turf. We have not been allowing incorporation of companies. This approach of not inviting larger players will not be in the long term interests of growth of the profession," a chartered accountant said. There are about 70,000 practicing chartered accountants in the country.

The DCA official, however, said that the department does not necessarily agree with the approach on Mode 3.

"But the professional bodies are in favour of such an approach. The issue is slightly complicated. We need to remove certain structural impediments before taking up an aggressive stance on Mode 3," the official said.

Article E-Mail :: Comment :: Syndication

Stories in this Section
Turf protected; small CA firms can breathe easy

Copyright © 2003, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line