Finally got reply from ICAI to my RTI query on the expenditure being incurred on contructing buildings for the past couple of years and it has revealed some interesting info....sample this:
1. 58 building projects sanctioned between Feb 5, 2008 and Feb 11, 2010. From Kashmir to Kanyakumari, building projects have been sanctioned all over the country...no discrimination against any state!
2. 44 of 58 building projects have taken off in last 2 years and atleast the land seems to be in place for these 44 projects.
3. Rs 69cr expenditure to be incurred on constructing these buildings...BUT this does not include the cost of contruction for 24 building projects, since they have not yet been estimated! As per my estimation, assuming a very modest Rs 2cr average contruction cost for these 24 buildings, total cost of all building projects will work out to roughly Rs 117cr!!!!!!!!!!! ( one of my stock broker friend said " this is more than capex of many listed cos!!!!! " ......maybe we should list ICAI as well :)
4. Since many of these building projects are in cities and towns where it would be tough to locate even 100 odd CAs and therefore impossible to raise enough money from local CAs to finance the building cost, the President has shown his benevolence. The President has distributed a largesse/donation of Rs 18.5cr to these building projects from ' President 's Discretionary Fund!!'
If you are a junkie like me who wants to know all the exotic locations where these buildings are gonna come up , leave your mail id in the ' Comments ' section and i will mail you the ICAI reply to my RTI, along with the relevant attachments.
This is my first post and just the begining of a long battle to reform our ICAI 's functioning.
Hi Arun
ReplyDeleteExcellent initiative from your side, good that someone is raising the hand with a fearless approach ...
Good initiative. Happy blogging...
ReplyDeleteI think having a good infrastructure for CAs and students is necessary. But it is crucial to understand the sources for this CAPEX and need especially at smaller locations where a large facility is not required (considering say current and expected growth of members overs say next 10-15 years).
ReplyDeleteArun - Is there any criteria applied while making a decision on CAPEX ?
What are the sources of funds for these outlays?
Ameya - Sources of funds is mainly ' Students Fees '... very few building projects are member financed! It is not clear as to whether any criteria has been applied for selecting location where buildings should come up. If one looks at the 58 locations, even a branch with just 100 members has been given a 10,000 square feet building and so has a branch with 5,000 members!!!!!!
ReplyDeletecheers
arun
Hi Arun,
ReplyDeleteGood initiative from you to check the actions of ICAI. Its necessary to keep the Committee on their toes, lest they may think that no one would question them. Having said that, my opinion though differs from yours.
Who remembers visiting the Pune office of ICAI in the late 90s? I remember, such a shabby office and in such a shabby location (close to a red light district). It didn't fit the image of ICAI.
I don't think ICAI is doing anything wrong by making these investments. It was long overdue.
Each office location deserves a good office. Even if currently 100 odd members reside in the location. But eventually the numbers will increase. Haven't we all complained about lack of futuritic action. Haven't we all thought of why they don't make 8 lane highways to accomodate future traffic increase. So isn't it better to dig a well before you are thirsty. Another way of looking at it is, in these small towns, where ICAI may not be well known among the students, the presense of an office, will attract more new students.
I've never looked at the Balance Sheet of ICAI. But I suppose the excess cash would be invested in term deposits and mutual funds. Is there anyone who would say the price of realestate doesn't increase in India? It increases, infact in Geometric proportion. So all these assets sitting on ICAI balance sheet will increase substantially over time. Hope no one will complain about it.
Interms of criteria applied for selecting location. A realestate decision is never going to be 100% controversy free. Its impossible to make a decision that will make 100% of the members happy. According to me, selection criteria is a subjective process and will not be perfect. Even if the locations are slightly out of town, over the next 10-20 years the urban sprawl will catch up. Imagine if ICAI had bought huge land in say Vasai (Mumbai) 20 years back, what would the situation be today?
What would be of concern to me, is there any scam in handing out the construction contracts or in making the land purchase? A few crores here and there perhaps is unavoidable (as much idealistically we want to deny it) but is there any major anomaly in contracts?
So to reiterate, I don't find anything wrong with ICAI decision, unless we are able to find some major impropriety in handing out contracts.
Please keep you the good work Arun. It won't be long before you are on the Executive Committee.
Cheers,
Kumar
hi Kumar....
ReplyDeleteit is healthy differences of opinion that keep any democracy alive and kicking.......but my 2 bit on ur reply:
1. If we so badly need the buildings then hy arent the members contributing much?...eg - our own pune branch building.....not even 20% of the roughly 5000 odd CAs in Pune have contribute to the Rs 5cr building project!! which means barely 20% of the members are keen on a buildiing!!!!!!!!!
2. for how long will the ICAI run out of students' fees??????????? we are increasing students' fees in geometric proportion every year...ICAI earned almost Rs 175cr from students fees in FY09 and a meagre Rs 30cr from Membership fees!!!!!!!!!! The membership fees are insufficient to cover even the cost of CA journals!
3. Fundamental question - are we a technical body or a real estate company?????? we were once known for our technical competency...soon we will be known for our architectural marvels!
cheers
arun
Hi Arun,
ReplyDeleteIt is really nice to find that someone is taking efforts to bring transperency into the system. I appreciate your effort, would also like to lend my support in what so ever manner you require it.
I strongly feel that buildings are required, if Institute plans to impart classroom training in future. If thats not the purpose and they are erecting buildings just like the way religious trust are establishing temples and churches then there is a problem with this CAPEX.
Secondly, with regard to your contention that less than 20% of the Pune members have contributed to the project; I think why would CA Memebers pay, as they hardly use ICAI infrasturtcure (correct me if this is not the fact)and besides that they are paying study circle fees for Continuing Professional Education.
Its ok if they have quadrapled the student fees, because CA still remains the cheapest as well as the toughest course available in the country. So it had really not affected the affordability of the course.
Thirdly, if Institute has so much of money and it has so much of collection from student, then they should make the CA Curriculum more intresting and interactive (Just look at the CA Modules, they look so boring and ugly) and more improtantly consitent.
In summary, we should further inspect into the objective behind setting up the buildings and practicality of such an objective.
Cheers !!
Navin.
navinranka@gmail.com
Sir, could u send me the ICAI's replies to u regarding your RTI.
ReplyDeletesushant1002001@gmail.com
Hi Sushant,
ReplyDeleteSurely can share...can you drop in a mail to :
arungiri@gmail.com, along with your name and membership no.
cheers
Do you know that ICAI spent Rs.20 Crores of project parivartan and now it is dumped. HP ran away alongwith Infosys. Infosys was paid huge consultation charges.
ReplyDelete