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Is the cost auditing regulatory measure of the GOI, negatively affect the real estate, healthcare and educational sector?
00:07
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, Healthcare 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 sectors 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, healthcare 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?
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6 comments
AS mentioned there, There is no restrictions in the manufacturing and exporting process in china, because of this we all know How much china became popular, like it is a world's factory. Good explanation.
ReplyDeleteHi Tiwary, As there is no restrictions in China companies are providing are not having much value in the market. Price is less for china products but quality is also very poor. For example none of the china product is much popular like I phone or Samsung. But China products makes a huge demand, the only reason is lesser price and more applications.
DeleteVery well narrated on this topic by showing the difference between India and the other countries. Thanks for the information.
ReplyDeleteVery informative post. There should be proper justification to all the departments in some depts. like health care and Real estate it is effecting in a negative way.
ReplyDeleteFrom where did you get this information. It helped me. Thanks for blogging this. Even education also now became like a huge profit business zone other than real estate.
ReplyDeleteEducation became like business, With the name of techno schools, they are offering more school fees. I do not have much idea about this GOI topic. But i can say one thing like Owing an apartment is as much as costlier like child education.
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