New Delhi: Prime Minister Manmohan Singh on Tuesday said Indian firms will not be able to compete in the world market unless they follow the globally recognised norms for transparency in running of businesses.
“Few bothered about corporate governance and transparency in accounting and management in the era of protectionism, but such laxity is no longer possible,” Singh said addressing members of the Institute of Chartered Accountants of India (ICAI), the country’s accounting regulator which is celebrating its diamond Jubilee.
Singh said corporate governance was not getting enough attention in India. “Unless Indian firms come to be recognized worldwide for good corporate governance, they will not be able to compete globally in an increasingly integrated world,” he said.
Chartered accountants are the watchdogs of the shareholders’ democracy, the Prime Minister said and added that the role of the accounting profession is critical in lending credibility to financial markets.
“Market participants, investors and shareholders look to you for high quality information, which ensures market discipline and foster confidence of various stakeholders,” he added.
Calling for appropriate accounting system for Panchayati Raj Institutions, Singh asked ICAI to meet the need of skilled accounting personnel for the growing rural economy.
“A proper accounting system for funds received and spent by panchayat institutions will be critical to making decentralisation a success,” Singh said.
With the presence of chartered accountants even in the remotest parts of the country, financial inclusion and access to finance for the rural poor could be facilitated, he said.
Singh said his government has placed great emphasis on the devolution of financial and administrative powers to panchayat institutions.
The Prime Minister also asked ICAI to focus its attention on creating a second tier of accounting qualification, which could meet the emerging demand for skilled accounting personnel in the rural economy and in the medium and small sectors.