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-By Prof. G. K. Agarwal
FCA, FCS, FCMA, Professor


Financial frauds during last three/ four decades have left the Indian economy bleeding profusely. Few have enriched themselves by fraudulently looting the public funds at the cost of millions of honest tax payers and honest citizens. In many cases connivance of top management/ owners, lenders and auditors has been seen, be it Satyam Computers fraud, Neerav Modi fraud, Mehul Chowksy fraud or Jet Airways fraud, etc. Every one looted the public funds. In this write up the author has tried to explain as to what is fraud and how can it be effectively checked or minimized by introducing a mechanism of good corporate governance.

There are many definitions of fraud as well as good corporate governance.The act or course of deception, an intentional concealment, omission, or perversion of truth, to (1) gain unlawful or unfair advantage, (2) induce others to part with some valuable items or surrender a legal right, or (3) inflict injury in some other manner for self-gain at the cost of others. Fraud is a criminal offense which attracts severe penalties and prosecution and punishment is not bound by the statute of limitations. Good corporate governance has been defined as a mechanism to ensure good management on behalf of the company and its shareholders and others stakeholders. It should build an environment of trust, transparency and accountability. One such mechanism includes ensuring

Internal Auditor-a Fraud Buster:

As and when a new corporate fraud becomes a 'Breaking News' the hue and cry starts coming from all corners, whether it be media, government or regulators, about the importance of good corporate governance to check these frauds. The problem of fraud takes ugly dimensions when public funds are involved in the organization because nobody sucks his own blood, it is only the blood of others which is sucked by these enemies of economy. In a situation where public funds are involved in the form of loans or equity it should be mandatory to have an independent internal auditor Although there is a provision in relevant statute to have an internal auditor in a designated organization, there is no mechanism to ensure his independence.

Now the question is as to how his independence can be ensured? It is suggested that a panel of qualified auditors be maintained by some designated central authority appointed by Central Government along with other stakeholders namely, banks, financial institutions, stock exchanges and financial regulators and it should be made mandatory to appoint an internal auditor from this panel by the companies which have accessed public funds in one form or the other and the internal audit report be submitted to this central authority with a copy to relevant stakeholders and financial regulators. These internal auditors should be paid from the corpus maintained by this central authority in which all public stakeholders will be contributory.


It is by this mechanism that a fraud can be checked and its cancerous effect can be taken care by severe medication in the form of strict action inflicted at the very early stage than allowing the disease to spread and allowing the economy to bleed.


-By Dr. Shriram Purankar


The Indian car industry is bad news from the past year as passenger vehicle sales fell by a whopping 17.1%. After July 2018, no month has seen a positive rise in car sales. It's a steep and troubling matter!

The economic growth data indicates that consumer confidence is on a 6 year low and GDP figures are faltering. Additionally, from 1st April 2020, the Supreme Court decided to ban the sale of BS-IV-compliant vehicles. Now, the car companies will have to comply with BS-VI regulations— four years earlier than the original plan.

This preponement of the BS-VI regulations is due to the rising rates of automotive emissions. It's no surprise that from April 2020, Maruti has chosen not to manufacture diesel vehicles. Also, there is a possibility that due to the advent of the shared economy and the influx of millennials into adulthood we are witnessing a structural break in consumer habits. There is a growing body of opinion that suggests that millennials, especially in the US and Europe, do not like owning cars. While, we still don't know much about Indian millennials ' consumption habits, the response to the puzzle of declining car sales could just emanate from it. Furthermore the usage of taxi hailing and ride sharing apps may have caused many from the millennial generation to postpone car purchases.

The tax cut on corporates which was announced on September 20th has created a mini euphoria in the market, as largest chunk of tax payers in the listed company universe are the automakers and auto-component makers. However, these fiscal measures implemented by the government are only temporary in nature and only a major change in consumer optimism and demand will be a cure for the automakers misfortunes. As stated earlier in the article the transition to BS-VI has caused many auto channel partners to be loaded with increased unsold inventory particularly of 2-wheelers and medium and heavy commercial vehicles. Adding further to the woes of automakers, exports, that were a medium of respite due to volatile domestic markets, have also diminished due the global car market slowdown.

Automakers are determined to show a brave face to the slowdown and as the festive season nears many automakers have started to offer discounts. Maruti Suzuki has passed on the gains from tax cuts by announcing Rs. 5000 discount on all ex showroom prices. They have also announced benefits upto 1 lakh on select models, an offer which will be valid until the end of this month. The automakers hope that this will bring down the costs for entry level customers and will prop up demand. Other carmakers have followed Maruti’s pricing strategy of offering discounts. Tata Motors have offered benefits upto 1.5 lakhs for new vehicle purchases and Hyundai motors have advertised that depending on the model benefits may go upto Rs. 95000. One of the leaders in the two-wheeler market Bajaj Auto has also joined the bandwagon by offering Rs. 7200 worth of benefits per motorcycle. Even luxury car-makers have followed suit by offering better financing terms and attractive EMI options to excite the market into buying.

The festive season footfall at the dealership will be the first test to find out whether the slowdown has reached its trough and is beginning to climb out. Despite the reasons for the slowdown a mix of right government incentives, rise in consumer confidence and innovation from the automakers can bring about change in the fortunes of the automotive industry. 


(Source: Brand Equity, The Economic Times, September 25 –October 01, 2019)
An Outlook on Digital Tsunami in the Indian Telecom Industry
- By Dr. Charu Sijoria

Increase in mobile-phone penetration and decline in data cost has made India as the world’s second-largest telecommunications market in terms of total internet users. It has its own history of innovations like emergence of revenue cut-throat messaging apps, GPS-based free services, reasonable price per second tariff plans and most importantly shifting the telecom business model from voice to data.

In the sequence, this industry endorsed its momentous development in years, the entry of Reliance Jio. It was considered as a disrupter in the industry which has amended the rules of the game by offering free voice calls, free roaming services, and filth cut-rate data connectivity unified with affordable 4G handsets.

"We Indians have come to appreciate and applaud Gandhigiri. Now, we can all do Datagiri, which is an opportunity for every Indian to do unlimited good things, with unlimited data.'' These are the words of an Indian business magnate Mukesh Dhirubhai Ambani, Chairman and managing director, Reliance Industries who believes in giving everyone the space to grow in his own way. With this belief, Reliance Jio had a vision of shaping the Indian future by providing end-to-end digital solutions for the society along with bridging the rural-urban gap.

It has changed the impression of considering broadband and digital services as the luxury items rather converted them in to basic necessities to be consumed in abundance by consumers.

In the line, Reliance again came up with an unconventional idea of Jio Fiber which has targeted 35 million customers in its first year of operation. It has laid lakhs kilometers of fiber-optic cables covering cities as well as villages. The two parameters- number of subscribers and market share has made Reliance Jio the largest telecom industry.

Although it took 17 years for Reliance Industries to become the 8thlargest energy company globally but it was just 45 days which Jio took to get the position of largest data carrier in the world.

Reliance Jio is targeting to create the most widespread and imminent network in India and even in the world. This disruptive innovation of Reliance in the telecom industry is possibly the final phase towards achieving the unfulfilled dream of legendary Dhirubhai Ambani- “Karlo Duniya Mutthi Mein".