At the first glance, it seems rather radical of the GOI to
enact a directive and ordinance requiring a strict cost audit and check on
formerly untouched and unregulated sectors of organizations that are into
housing, Health care and Education.
The GOI prophesizes that this move will bring in a much
needed transparency in these sectors to quell abate and allay the practices of
price fixing and exploitation of consumers who may be real estate tenants, or
patients or students of the so- called paid management quota seats.
The notification has at the same time created a strict
schedule by means of which the costs of production (as applicable), the margins
earned, sales and operation activities on a monthly, quarterly or annual basis;
should be maintained in cost records.
A senior member of the institute for chartered accountants
remarked that the move would help consumers by making the market more
approachable to them, and prevent exploitative situations from occurring.
However, other sectors like automobiles, electronics,
electrical, paint, paper, textiles and glass would be spared from this move.
The Indian IT outsourcing and servicing sectors did not have
such restrictions on them historically speaking and bloomed and mushroomed into
the bulwark of the national economy nowadays.
However the manufacturing and export sector did not have such
restrictions on them as a result of which China is today known as the world’s
factory precisely because of less impingement of the Chinese government.
Nevertheless, in the past the GOI created four broad a sector
on the basis of which auditing was carried out. The first namely were
strategically important companies that were into atomic, defense and space
industries, the second category includes companies that were directly regulated
by the central government. These include logistics; big telecom; transmission
and supply of electricity, industrial metals, roads, agro-industrial
manufacturing units amongst many others of similar ilk. Furthermore cross
disciplinary companies having a turnover of 50 Crores and above would be
candidates for the audit given that this measure would hope to fix toll
charges.
In the categories after these were companies that provided
public service directly in the form of education, pharmaceuticals, hotels,
health care and the like.
By close observation it would seem that this draconian
ordinance is fit for the socialist India of the 60’s and the 70’s and not for a
modern emerging corporate intensive power that our country has to become in
order not just to propagate it’s reason of existence but also to defend itself
in times of need.
The government should not act as judge, jury and executioner
for the flower of the youth of India who derive a livelihood from these very
companies. Don’t you think?
