How CMAs can contribute in achievement of VIKSIT BHARAT goals

ICMAI President, CMA Bibhuti Bhusan Nayak

Hyderabad, 27^th October 2024: CMA Bibhuti Bhusan Nayak, President, ICMAI; CMA Dr. K. Ch. A. V. S. Murthy, Central Council Member, ICMAI & CMA Dr. Lavanya Kanduri, Chairperson, ICMAI – Hyderabad Chapter; CMA Venkata Rambabu, Vice Chairman, ICMAI – Hyderabad Chapter; CMA Khaja Jalal Uddin, Secretary, ICMAI – Hyderabad Chapter; & CMA Kirti Gupta, Treasurer, ICMAI – Hyderabad Chapter; briefed media about the transformative initiatives being taken by The Institute of Cost Accountants of India, to align with India’s rapidly advancing economy, at a Press Conference, today at CMA Bhavan, Himayatnagar.

The Institute of Cost Accountants of India (ICMAI) (erstwhile The Institute of Cost and Works Accountants of India) was first registered as “Indian Institute of Cost and Works Accountants” on the 14th June, 1944 under the Indian Companies Act, 1913. On 28th May, 1959, the Institute was established by a special Act of Parliament, namely, the Cost Accountants Act, 1959 as a statutory professional body for the regulation and development of the profession of Cost and Management accountants in India. The Institute is under the administrative control of the Ministry of Corporate Affairs, Government of India.

The Institute is headquartered in Kolkata having four Regional Councils at Kolkata, Delhi, Mumbai and Chennai, 117 Chapters in India and 11 Overseas Centres. The Institute is the largest Cost & Management Accounting body in the world with about 1,00,000 qualified CMAs and over 6,00,000 students pursuing the CMA Course. The Institute is a founder member of International Federation of Accountants (IFAC), Confederation of Asian and Pacific Accountants (CAPA) and South Asian Federation of Accountants (SAFA). The Institute is also an Associate Member of ASEAN Federation of Accountants (AFA) and member of International Integrated Reporting Council (IIRC), UK.

The Institute has a long history of contributing to the economic development of the nation by fostering the growth of cost and management accounting professionals, providing essential expertise in cost management, auditing, and financial consultancy.

Over the years, the role of Cost & Management Accountants (CMAs) has undergone a complete transformation. Today, CMAs are serving the government, policy makers, industry, and the corporate world in building a strong and resilient economy. CMAs have become partners in nation-building, with their role shifting from cost accountants in factories to management accountants in boardrooms. There have also been many milestones, with CMAs now working in fields such as taxation, corporate laws, arbitration, insolvency, valuation, social auditing, independent directorship, banking, and insurance.

CMAs play a crucial and decisive role in business activities and operations, enabling management to make effective decisions and suggest corporate-favored policies and schemes. CMAs assist organizations in accomplishing their objectives by evaluating and improving the adequacy and effectiveness of their operations, internal controls, governance processes, risk management, and control systems. This helps entities improve their performance, efficiency, productivity, profitability, and sustainability.

CMAs also assist the Government and various government authorities in advising on areas such as costing, pricing, and framing appropriate fiscal and tax policies and monitoring them. The importance of the profession of Cost and Management Accountancy in the economic development of the nation is underlined by the fact that the Central Government constituted the Indian Cost Accounts Service in 1978 at par with other Class-I services such as IAS, IFS, etc.

Further, under the Companies Act, the Government has introduced a provision for certain industries including service sector to maintain statutory Cost Accounting records and audit thereof.

With about 1,00,000 qualified CMAs and over 6,00,000 students pursuing the CMA course, the Institute of Cost Accountants of India (ICMAI) has grown to become the world’s largest professional body of cost & management accountants. Being the largest CMA body in the world, ICMAI has been at the forefront of developing competent cost accounting professionals who play a key role in helping the business entities achieve cost competitiveness; improve performance, efficiency, productivity, & profitability; ensure sustainability, and enhance effective utilization of resources deployed by them. The CMAs are also devising cost effective business models with life cycle cost advantages to sustain and perform consistently with economic, environmental, and social balance. Business entities are given professional view and expert inputs enabling the managements to take effective decisions to profess their ability to exist in a volatile, uncertain, complex, and ambiguous business environment.

ICMAI has been providing highly valuable support to the policy makers and Central Government Ministries & organizations in developing cost efficient strategies, systems & manuals. ICMAI has recently developed Activity Based Performance Costing System for Indian Railways that would assist the Indian Railways to correctly & timely measure and assess the performance of different activities or operations. The proposed Performance Costing System will also help Indian Railways to arrive at appropriate pricing or tariff decisions for passenger and freight services; to identify profitable, loss making and non-value-added activities; and to control and improve the business planning, budgeting, resource allocation, resource utilization, and investment decisions.

How CMAs can contribute in achievement of VIKSIT BHARAT goals.

India has made remarkable strides in economic development over the years, emerging as one of the world’s fastest-growing major economies. However, to sustain this growth, it should continue to focus on to achieve development goals.

Cost and management accountants play a multifaceted role in the development of a nation by contributing to efficient resource allocation, informed decision making, improved performance, regulatory compliance, cost control, risk management, and investment appraisal. Our expertise and insights are essential for fostering economic growth, promoting competitiveness, and ensuring financial stability in both the public and private sectors.

Today, most of the businesses are facing major disruptions and VUCA (Volatility, Uncertainty, Complexity, and Ambiguity) challenges. In this disruptive scenario, Cost & Management Accounting has acquired a prime spot in ensuring survival, continuity, and sustainability. The application of Management Accounting can strategically improve an organization’s efficiency, productivity, and outcomes.

As CMAs act as a driving force in all economic activities, they hold top management positions such as Chairman, Managing Director, Director of Finance, Chief Finance Officer, Chief Executive Officer, General Manager, and Finance Manager in MNCs, private and public sectors, state and central governments.

CMAs help in efficient allocation of resources by providing accurate costing information. This ensures that resources are utilized effectively, reducing wastage and improving productivity, which ultimately contributes to economic growth.

CMAs provide valuable financial insights and analysis to management, aiding in strategic decision making. By helping businesses make informed choices about investments, expansions, and resource allocation, we contribute to the overall development of industries and the economy.

CMAs develop performance measurement systems that evaluate the effectiveness of various departments, projects, and processes within organizations. By identifying areas for improvement and optimizing performance, we contribute to overall productivity gains in the economy.

CMAs assess and manage financial risks faced by organizations, such as market risk, credit risk, and operational risk. By developing risk management strategies and implementing internal controls, we help safeguard the financial stability of businesses, which is essential for sustainable economic growth.

CMAs evaluate investment opportunities and assess their financial viability. By conducting cost-benefit analysis and assessing the long-term impact of investments, we help attract both domestic and foreign investment, which is crucial for infrastructure development and economic progress.

It’s important to note that achieving these development goals requires concerted efforts from the government, private sector, civil society and professionals like CMAs as essential contributors to a nation’s development by ensuring efficient resource management, promoting financial stability, and supporting strategic decision-making within organizations. The expertise of CMAs helps create a conducive environment for sustainable economic growth.

The future holds great promise for the profession as it continues to evolve and adapt to the changing business landscape. CMAs will continue to play a crucial role in helping organizations navigate the challenges of the modern business environment and achieve their goals.

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