MAGIC IN 10 YEARS 1990 TO 2000 CE due to Technology
In January 1991, India struggled to finance its essential imports, especially of oil and fertilisers, and to repay official debt. So India pledged 23 tons of gold in London to pull economy back from the brink.
DIGITAL TECHNOLOGY SHAPES NEW BHARAT
DIGITAL REVOLUTION-1: Around 1990S a new technology called INTERNET was introduced. It changed the way trade was done in the world. India benefitted a lot through IT industry, Business Process Outsourcing (BPO) and globalisation. Infosys, TCS, Wipro, HCL and others became Indian MNCs in a short time. Thanks to the patriotic leadership of Prime Ministers PV Narasimha Rao and Atal Behari Vajpayee, India within 10 years rose from a borrowing country to a lending country. Indian diaspora expanded as every country wanted Indian IT professionals. Indians also played a significant role in developing digital hardware. Pentium chip by Vinod Dham, Universal Serial Bus (USB) by Ajay Bhat and Mpeg4 (Video card) by Arun Netravali made mobiles more powerful, smaller in size and much affordable. The greatest innovation of digital world was Fiber Optics by Dr Narendra Singh Kapany which enabled huge data transfers extremely fast.
DIGITAL REVOLUTION -2: You-Tube, WhatsApp, Facebook, Instagram and Twitter introduced in 2007-2008 changed the world as never before. World became much more inter-connected. Many Indians became the CEOs of American Tech giants like Microsoft, Google, IBM, Adobe etc. Government of India laid fibre-optic cables all across Bharat including Andaman and Nicobar islands. This enabled India to lead the world in digital technology. Total downloads by Indians is more than the sum total of downloads by USA and China. 40% of digital transactions in the world are by India. Indian UPI (Universal Payment Interface) is in demand in other countries. India has more startups per year than other countries.
DIGITAL REVOLUTION -3: Artificial Intelligence and ChatGPT introduced in the year 2020 is taking the world by storm. From 2020 onwards in spite of corona pandemic and Ukraine war, India has been producing world’s maximum UNICORN companies every year. Unicorn companies are those that reach a valuation of $1 billion (approx. IRs 8,000 Cr) without being listed on the stock market and are the dream of any tech startup. Indian unicorns are now spreading to Dubai, Singapore, Australia, Europe and other parts of the world. In 10 year time span, they will push Bharat to No.2 position. Both China and Japan are ageing countries and the real GDP of China measured independently with the help of AI shows that its GDP is slightly above that of Japan. Hence Bharat will overtake Japan and China in GDP within ten years.
Case for Big FIVE with an Indian Face
India produces world’s largest number of Charted Accountants and many are from Jodhpur, Jaipur, Udaipur, Chennai and Amdavad. Indian CAs run successful companies in most international cities and are also CFOs of many MNCs. Similarly India produces world’s largest pool of IT professionals and they are in vantage positions in many corporates and administrations around the world. India is also in the forefront of Digital Technology.
India has evolved from agriculture economy to industrial economy to service economy to now digital economy. The digital world enables real-time communication and collaborations, intelligent machines, (and also intelligent equipment and devices), predictive models and simulations and high speed communications and networks. ChatGPT, an AI driven chatbot, introduced in November 2022, will also help Indian, because we have the largest pool of digital professionals in the world.
The Problem with Big Four
The Big Four namely Deloitte, Ernst & Young (EY), KPMG and Price Waterhouse Coopers (PwC) have been controlling Indian businesses for too long. The Big Four or other such companies do not limit their services to auditing. They also provide taxation advisories, legal services, management consultations, and even financing! This creates a conflict of interest. If one of them gives taxation advise and also audit the same company, will they give any adverse or poor report. Deloitte issued a clearance statement to IL&FS which later went bankrupt, taking away Rs 95,000 Crores investor money to dust. Deloitte was handed a five-year ban from its business. Earlier SEBI barred PWC in 2018 for two years, citing its similar role causing the Satyam Scam. India is seeing a lot of corporate frauds in current times. DHFL, Karvy, FIS India, Yes Bank and PMC Bank are just a few to be named. India needs a new set of credible auditing companies that challenge this oligopoly and turn it into a competition based on the quality of auditing. This will enrich the entire Indian corporate governance scenario.
Fortunately, Grant Thornton’s Walker Chandiok & Co is now auditing India’s fourth most number of companies, subduing the PWC. This has managed to break the hegemony of the Big Four for the first time. Hopefully, more Indian auditing companies like Singhi Group, MZSK, and Haribhakti & Co would rise to the occasion and ensure that the trust in the auditing firms builds up. Though currently they audit only 10-15 listed companies of Nifty-500 unlike 60-70 of the Big Four, yet they can fill in the vacuum that is developing due to the mistrust on the Big Four.
TIME IS RIPE FOR BIG FIVE WITH AN INDIAN FACE
With Indian diaspora growing bigger and stronger, technology becoming deeper and wider and government becoming proactive, Indian auditing companies can capture many world markets as well.
Let us think big, let us think Digital.
[1] https://insider.finology.in/economy/an-oligopoly-to-break
