Prof D Mukherjee
Preserving India’s professional specialization for a ‘Viksit Bharat’ and purposed merger of three giant professional bodies rumoured by some quarters is misnomer and misguided as this write up aims to argue why India needs independent ICAI, ICMAI and ICSI to compete globally. The partitioned India has systematically built the pillars of her economic governance through a well-considered legislative framework. Among the most notable institutional developments was the establishment of three distinct statutory professional bodies, each crafted to address a specific functional domain essential to the nation’s industrial and economic growth and governance.
The Institute of Chartered Accountants of India (ICAI), was constituted through the Chartered Accountants Act, 1949, to ensure financial accountability and audit discipline, providing a backbone for corporate financial reporting, statutory audit, and tax-related assurance. Ten years later, in 1959, recognizing the vital need for cost efficiency and industrial competitiveness, the Parliament enacted the Cost and Works Accountants Act, leading to the formation of the Institute of Cost Accountants of India [ICMAI(formerly ICWAI)]. A particularly noteworthy historical fact is that Late G. Basu, a distinguished CA and CMA served as President of ICMAI during the landmark year of 1959, when the Act was passed by the Parliament . His commitment to professional diversity and deep understanding of India’s economic imperatives played a pivotal role in establishing cost and management accountancy as a distinct profession. Later, in 1980, the Institute of Company Secretaries of India (ICSI) was created under CS Act to serve the increasingly complex legal and compliance landscape of corporate India.
Each of these professional bodies was envisioned with a unique mandate, deliberately separated by the Indian Parliament to foster specialized expertise and to ensure that India’s professional infrastructure would evolve in harmony with global best standards and practices, tailored to the country’s diverse and dynamic needs It is an imperative to understand that the recently surfaced question of merger has been in media not due to professional inefficiencies but owing to perceived overlapping domains and turf conflicts. However, these are legislatively settled issues involving distinctive uniqueness of CA, CMA and CS professions for over 75, 65 and 45 years respectively. These institutions were constitutionally established after extensive consultation, debates, and empirical analysis by the Government of India, not merely to exist, but to serve unique roles in the Indian economic ecosystem. As such, the proposal for merger seems to contradict decades of carefully constructed policy architecture. Rather than a natural evolution, such a move would resemble a forced consolidation that undermines the very foundation of specialized economic services in India.
On wake of informal proposal of merger, it is pertinent to ask the-newsmakers whether the specialized roles and the core competencies of India’s three premier professional bodies of Chartered Accountants (CAs), Cost and Management Accountants(CMAs) and Company Secretaries(CS) become redundant in today’s fast-evolving global economy ? Against this, the professionals with high degree of wisdom across the globe categorically answered- ‘absolutely not, and would India prefer walking backward pre-F.W Taylor(1856-1915) age ?’ Again, answered -‘absolutely not as their roles are always crucial and have never been more critical ‘.
Financial reporting and statutory audits are fundamental to investor confidence and fiscal transparency. In the post-COVID world, marked by increasing economic volatility and corporate fraud, the demand for credible financial disclosures and audits has only grown. CAs, with their expertise in these areas, remain indispensable. Similarly, cost and management accounting including strategic cost management have become more demanding and indispensable globally. In an intensely competitive global market, Indian businesses need precise product and service costing, performance evaluation cost optimization, cost control and cost systematic cost saving mechanisms. This is the domain where CMAs excel and provide unmatched proficiency. Corporate governance and regulatory compliance are now more essential than ever particularly after the Cadbury Committee Investigation under chairmanship of Sir Adrian Cadbury, 1992 followed by enactment of Sarbanes Oxley Act, 2002. With stricter regulations from bodies like SEBI, MCA, and RBI, and mounting expectations from global investors on ESG (Environmental, Social, and Governance) issues, CSs play a crucial role in ensuring robust governance and compliance. Rather than weakening these functions through mergers, India should focus on strengthening them. The country’s ambition to become a $5 trillion economy depends on the specialized skills of CAs, CMAs, and CSs, working together yet independently in national interest.
Instead of pursuing a counter productive merger of India’s three premier professional bodies, the government must address the growing overlaps and jurisdictional ambiguities that often lead to professional conflict. These overlaps, which sometimes appear to be systematic encroachments, ignore the specific roles assigned by legislation. CAs should focus on financial reporting, audits, and direct taxation. CMAs, on the other hand, specialize in strategic cost optimization and robust management accounting, strategic metrics, indirect taxation, and cost audits and CSs are the experts in corporate law, governance, and compliance management and secretarial audit as the exclusive domain of the CS profession. However, real-world practices show inconsistencies. For instance, CAs are often assigned construction and RERA costing certifications and many more core costing domains which should rightfully belong to CMAs. Similarly, when ICAI claims management accounting and many core domains of CSs it raises the question of why tax audits or corporate law certifications aren’t extended to CMAs or CSs. This unequal and unhealthy distribution of responsibilities is the root of conflict and bone of contention among these three giant professional bodies . Merging the bodies won’t resolve these issues-it will centralize confusion and exacerbate governance dysfunction .Rather than diluting these uniquely specialized professions through mergers, the nation must invest in strengthening each domain. India’s journey toward becoming a $5 trillion economy and a Viksit Bharat by 2047 hinges on leveraging the distinct expertise of CAs, CMAs, and CSs, working synergistically but independently, for optimal national impact.
Globally, specialized professional bodies not only coexist but also thrive. The prevailing trend across nations is to promote domain-specific expertise rather than consolidate all functions under a single authority. Even smaller economies recognize the necessity of distinct institutions for financial accounting, cost and management accounting, and corporate governance. Sri Lanka, with a population of just 2.32 crores, exemplifies this model. It has three independent statutory bodies: CA Sri Lanka for financial accounting and audits; CMA Sri Lanka, established by an Act of Parliament in 2009 to focus on cost and management accounting; and the Institute of Chartered Corporate Secretaries of Sri Lanka for governance and compliance. The formation of CMA Sri Lanka-supported by Mr. Lakshman Watawala, a dual-qualified Chartered and Management Accountant-was not a fragmentation but a strategic enhancement of specialization. His contribution mirrors that of Late G. Basu in India, being both , a CA and CMA, who, as ICMAI President from 1956 to 1962, played a pivotal role in sowing the seed of institutionalizing cost and management accountancy profession. It was during Basu’s leadership that the Cost and Works Accountants Act was enacted in 1959.Such precedents underscore a global consensus: specialization elevates governance, enhances professional standards, and bolsters economic integrity.
In India, the issue is not the existence of multiple professional institutions but the overlapping of roles. Costing-related tasks and assignments such as RERA certifications, infrastructure costing and many more are often assigned to chartered accountants, though these clearly align with expertise of cost and management accountants. If ICAI asserts authority over cost and management accounting and corporate governance compliances, logically, ICMAI and ICSI should also be authorized to conduct tax audits and corporate compliance-yet they aren’t. This inconsistency fuels institutional friction. Rather than pursuing a merger, the government should delineate and reinforce each body’s jurisdiction, correcting past overlaps. Consolidating ICAI, ICMAI, and ICSI would not strengthen but dilute India’s professional framework. As India aspires to a $5 trillion economy and a ‘Viksit Bharat’ by 2047, it must deepen professional specialization, not erode it. Strength lies in preserving the autonomy of ICAI, ICMAI, and ICSI, enabling them to collaborate without losing identity. Just as the Howrah Bridge stands strong through coordinated support structures of multiple pillars, India’s professional institutions must coexist independently. The government’s role should be to facilitate synergy-not enforce uniformity.
(The author is an Educationist, a Management Scientist , an Independent Researcher)
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