How effective is the communication strategy of Indian Prime Minister Dr. Manmohan Singh

Prime Minister Dr. Manmohan Singh is suffering from bad reputation which is very common in the PR and brand management industry. If a brand is not visible or the brand communication is not clear during the crisis period, it would allow people to assume and speculate. This is the same thing happening with the Indian Prime Minister also. 

When Mr. Singh  assumed the office of the Prime Minister even for the second time, people had great respect for him and he was amongst some finest brands which enjoyed huge reputation in the mind of common people. But as the days go ahead, he is slightly but definitely loosing the reputation without notice which has taken a huge time to build. It could be the bad attitude or bad strategy adopted by his advisor(s). 

But, as he is becoming friendly with media and coming before the media to advocate what he has to say facing the brutal questions from the seasoned journalists, he may regain his reputation once again.

This is a very ideal situation of crisis for the UPA - II government in general and the Indian Congress party in particular. The basic thumb rule during the crisis has not been followed. The basic rule of Corporate Communications or Public Relations says that during the crisis "tell it all and tell it fast including first".

The Prime Minister is like a CEO of the country and when his subordinates have failed to minimize the bad noise and negative publicity by the opposition, the Prime Minister himself should understand and gauge the gravity of the situation and could have appeared before the media much earlier. He has earlier initiated the process when he first met the editors from television but that too more than six months back. He should appear before the media frequently and announce or comment on the situation quickly, responsibly and with positive note.

Never late than ever, he has started the process. The goal is all set, the ball is rolling. Let's measure his reputation once again after two or three months. As a professionals, teacher and a learner of Reputation Management and Image Makeover, we would then learn the effectiveness of his communication strategies.

PM's opening remarks at the interaction with newspaper editors

 

Following is the text of the Prime Minister Dr. Manmohan Singh's opening remarks at the interaction with newspaper editors: 

“I think that there is a growing perception that this government is in siege, that we have not been able to deliver on our agenda. An atmosphere has been created in the country - and this I say with all humility – the role of the media today in many cases has become that of the accuser, the prosecutor and the judge.

Now that way no Parliamentary democracy can function and I would like to tell you that if you are taking governmental decisions, particularly big macro decisions, we don't know all the facts and yet we have to take decisions. When I was a student at Cambridge, Sir Paul Chambers, who was then the Chairman of Imperial Chemical Industries, came and addressed us on who is a good manager, who will be considered by industry as a good manager.
He told our student group that, in an uncertain world in which we live in, if 5 out of 10 decisions that I take ex-ante turn out to be correct ex-post that would be considered as a job well done. If out of 10 decisions that I take, 7 turn out to be right ex-post that would be considered an excellent performance. But if you have a system which is required to perform 10 out of 10 cases I think no system can be effective and satisfy that onerous condition.
We live in a world of uncertainty and ex-post whether it is the Comptroller and Auditor General, whether it is a Parliamentary committee then they analyse post facto. They have a lot more facts which were not available to those who took the decision.
I am not saying that it is not possible that some people may deliberately do wrong things, but in many cases it would turn out in that sort of a scenario it is very difficult to operate. So we must create in this country an environment in which Governments, Ministers and civil servants will not be discouraged from taking decisions in the national interest when all facts are not known, they will never be known. We take decisions in a world of uncertainty and that’s the perspective I think Parliament, our CAG and our media must adopt if this nation is to move forward.
Our basic task is to deal with poverty, ignorance and disease which still afflict millions and millions of our citizens and whatever the ideological moorings of different parties, there is nobody who would say that you can satisfy all these aspirations of the people except in the framework of a rapidly expanding economy which is able to create 10 to 12 million jobs. For this, we need skilled citizens and we need to put in place a system of skill formation in education which is going to create employable skills which alone can provide our people the security of jobs that they need.
We have put in place an entitlement system. Entitlements have a role, but quite frankly there is a limited role. In the institutions of social security that we are trying to build, there are a large number of leakages in health, in education, and the allocation of subsidies. Our challenge is to plug these leaks and we will do that.
Corruption is a big issue. It has caught the imagination of the people, and we will deal with it. Let me say that while the Lokpal is an essential and desirable legislation, we will honestly work to evolve a broad based national consensus so that we have a viable statute in place which will give us a strong Lokpal. We have differences, there will be differences, but there are mechanisms to resolves these differences.
I certainly respect members of the civil society. It is out of my respect for members of the civil society that whether it is Anna Hazare or Swami Ramdev, I myself took the trouble to interact with them. In February-March itself I had an hour long meeting with Anna Hazare, the Bhushans, both father and son, Kejriwal and Kiran Bedi. They were all there and I assured them that we are committed to come with the bill in the Monsoon Session and it was not a commitment made under duress. I had mentioned it to them at that time itself. I said we will introduce a Bill in Parliament but then it is for Parliament to pass it or amend it and that right cannot be taken away.
In the same way people talk about black money. Black money exists, but if you look at all European countries also the average amount of black money which is talked about is at least 25 % of the economies of a large number of European countries. These are transactions that are not taxed and intended to avoid social security payments. But this is a reality. We can deal with corruption, we can deal with black money but quite frankly it is wrong for anyone to assume there is a magic wand which will lead to an instant solution of these difficult societal problems.
We need system reforms. If the project Nandan Nilankani has promised to design, if the UIDAI can give unique ID numbers to all our residents we would have discovered a new pathway to eliminate the scope for corruption and leakages in the management and distribution of various subsidies to which our people are entitled. But it will take time. It cannot be done instantly.
Four lakh crores or whatever the figures or black money being mentioned…… I do not know what is the basis of those calculations. Whatever is possible is being done. We are in the process of negotiating double taxation avoidance agreements, tax information agreements and we have fought hard in the Group of 20 to see that the secrecy of tax saving banking systems should be modified. This is not a one shot operation. We are doing all that is possible and we could accelerate it. We are committed to pursue all that is fiscally possible to deal with these problems of black money, problems of tax evading money and corruption.
But there are other instruments. Tax evasion is one important source of generation of black money. But there are other issues - narcotics, trafficking in human beings - all these illegal activities…. we need a strong mechanism to track down these criminal elements. But in all these my worry is to avoid a situation when we convert this vast country of over 1.2 billion people into a state where everybody is policing everybody else. We must not bring back the license permit raj which we sought to abolish in 1991.
I think our nation has prospered as a result of that. If you look at the list of top 100 firms today you will find a sea change in that list today. New entrepreneurs have come into the list. These are some of the gains of liberalization which we must cherish, we must nurse and we must develop.
We are committed to a growth rate of 9 to 10 % per annum. Our savings rate is about 34 to 35 % of our GDP with an investment rate of 36 to 37 %. And with a capital output ratio of 4:1 we can manage to have a growth rate of 9%. It requires strong commitment to development and modernization of our infrastructure; a strong commitment to modernizing and making our education system more relevant to the needs of our time; it requires strong commitment to work for a universal health care system. We are now engaged in looking at how insurance can be expanded to cover all elements of our population.
These are some of the priorities of our government. But frankly speaking in our country this constant sniping between government and opposition or if an atmosphere of cynicism is created all round I think the growth impulses, the entrepreneurial impulses of our people will not flourish and that is what worries me. We must do all that we can to revive the animal spirits of our businesses. And the fact that businessmen cut corners is partly a reflection of the loopholes in our regulatory system. We must therefore reform and strengthen the regulatory system where there is a need to do so. And when it comes to the management of natural resources we need a regulatory system but it must be transparent and it must be functional and that is the next step of our government.
Despite corruption in public procurement we are committed to work towards a public procurement law which will make procurement a transparent operation, and will eliminate to the extent possible the scope for corruption.
But in the situation that we are faced today, day in day out I think we are described as the most corrupt government. There have been aberrations. But quite frankly I have been a civil servant all my life, except the last 20 years. What surprises me is not that there are corrupt civil servants but that despite all the temptations, so many of our civil servants remain honest and lead frugal lives and this is the mainspring that we have to tap.
We must punish the wrong doers but we must not paint all civil servants as babus and contemptuously describe them as a despicable class.
These are the concerns that I have and I would like to hear from you what you think of them and what we should be doing.
And let me say on the international front I think the situation is not that positive. The international global recovery is fragile. Even the United States growth rate is faltering. In Europe it is the sovereign debt crisis, the problem of the Greek crisis and whether the Euro-zone will survive or not. If it will not survive it will be a major institutional collapse.
What is happening in the Middle East is of direct concern to us. Apart from the fact that we have 6 million Indians working in the Middle East nearly 70 % of our oil supplies come from the countries of the Gulf and North Africa. What turn these events will take nobody knows.
So we have to swim against this adverse tide and therefore India requires all the energy and all the cohesiveness of our polity to swim against these tides and come out victorious. We can do it. We showed that in 2008 when most people believed that our financial system would also be a victim of the global financial crisis. We put in place correctives and we managed to retain a growth rate of 7% and next year it was back to 8 to 8.5 %. We must have the vision, the ability and the determination to prosper even when the world environment is hostile.
And because nature has blessed us with a large common market, if we can put in place the goods and services tax legislation and if we can remove barriers to interstate commerce that itself will create new opportunities internally for accelerating the tempo of growth.
These are our top priorities, these are national priorities and I invite you as very influential members of our polity to help the government to deal with these problems with courage, with clarity and with determination.”

What are the differences between Online Reputation Management (ORM) and Search Engine Reputation Management (SERM)?

Whenever I go for a talk or for pitching a new client, I have often been asked the question – what are the basic differences between Online Reputation Management (ORM) and Search Engine Reputation Management.

Online Reputation Management (ORM) is the act of monitoring, addressing or mitigating SERPs (search engine result pages) or mentions in online media and Web sphere content. ORM primarily involves tracking what is written about a client on the Internet, then utilizing sophisticated online and offline techniques in promoting positive and neutral content, while at the same time pushing down those links the sponsor (in most cases business or individuals) may not want to show when their name is searched.

Rather than working to raise link results with a particular search term in order to (ostensibly) generate more commerce or page views, the goal of ORM is to push already highly-ranked negative posts off the results pages so that they are seen by fewer people, thus creating a more positive results environment for the sponsor of the effort. ORM is the specialization in prevention and repair of online reputation threats, and has less to do with directly promoting businesses.

The term arose from a recognition of the importance that influencing how someone or something is perceived based on an internet search has to a business. As the amount of user-generated content on the internet grew, it began to affect internet search results more meaningfully, and the desire to change those results naturally followed.

ORM is related to search engine optimization (SEO) and uses many of the same techniques. However, their goals differ greatly.  Common ORM techniques include online promotional activity through new content creation, involvement in the social web sphere (through forums, blogs, social networking), promotion of existing positive content and building social profiles. Traditional websites and consumer reviews are also monitored. The material monitored can include both professional journalism and user-created content such as blogs and blog comments. More difficult, but nonetheless relevant techniques can include formal "take-down" requests to try to convince site managers to remove negative content, and finally, litigation.

Proactive reputation-building techniques can include responding immediately to public criticism stemming from unannounced changes to a product's capabilities and features; offering free products to prominent reviewers; and writing positive comments and reviews in the guise of customers posting to online forums or review sites. However, most sites attempt to screen out such covert plugs, and rate their contributors based on how highly others value their contributions.

Search Engine Reputation Management (or SERM), on the other hand, is a strategic initiative often adopted by companies and corporate and even more by individuals who seek to proactively shield their brands or reputations from damaging content brought to light through search engine queries. Some use these same tactics reactively, in attempts to minimize damage inflicted by inflammatory (or "flame") websites (and weblogs) launched by consumers and, as some believe, competitors.

Given the increasing popularity and development of search engines, these tactics have become more important than ever. Consumer generated media (like blogs) has amplified the public's voice, making points of view - good or bad - easily expressed.

This is further explained in this front page article in published in the Washington Post, published on July 02, 2007 [http://www.washingtonpost.com/wp-dyn/content/article/2007/07/01/AR2007070101355.html?hpid=artslot]

Search Engine Reputation Management strategies include Search engine optimization (SEO) and Online Content Management. Because search engines are dynamic and in constant states of change and revision, it is essential that results are constantly monitored. This is one of the big differences between SEO and online reputation management. SEO involves making technological and content changes to a website in order to make it more friendly for search engines. Online reputation management is about controlling what information users will see when they search for information about a company or person.

Social networking giant Facebook has been known to practice this form of reputation management. When they released their Polls service in Spring 2007, the popular blog TechCrunch found that it could not use competitors' names in Polls. Due largely to TechCrunch's authority in Google's algorithms, its post ranked for Facebook polls. A Facebook rep joined the comments, explained the situation and that the bugs in the old code had been updated so that it was now possible.

Also until social sites like Facebook allow Google to fully spider their site then they won't really have a massive effect on reputation management results in the search engine. The only way to take advantage of such site is to make sure you make your pages public.

It is suggested [who?] that if a company website has a negative result directly below it then up to 70% of surfers will click on the negative result first rather than the company website. It is important for a company to ensure that its website gets close to the top of search results for terms relevant to its business. In one study, a number one search result attracted 50,000 monthly visitors. The number 5 result only attracted 6,000 visitors in the same time period.

IDS Technologies (http://www.idstonline.com) provides Search Engine Reputation Management Services using various sophisticated tools and techniques. To provide the effective solutions for brands or Corporate, we first deploy our own Reputation Monitoring Tool (RMT) to gauge how much damage has already been made and the quantum of required management. After measuring, we then propose various methods to be applied to minimize the negative impact of the brand to the client. Once the proposal is accepted, we use various engagement methodologies either for journalists or for individuals sothat the negative influencers and stakeholders can atleast be brought into the state of “neutral”. Those who are already in the “neutral” zone are fed with various information to update their knowledge as well to educate them. The last but not the least is to manage those group which are already in the “Positive” zone for a particular brand. Generally, this group is loyal for the brand  or product or service. But the huge risk associated with this group is that any member can slip either to neutral or negative zone quickly, if not managed properly or engaged meaningfully.

For more details on how IDSTechnologies can help you to manage your brand, please feel free to contact us [info at idstonline dot com] [Input Source: Wikipedia]

Hoodwinking reporters: Don't talk with Journalists but listen to your customers

“As months pass by, public relations executives from across the world are coming up with innovative ways to feed their version of 'finger-licking-news' to reporters. We have seen those who directly pitch stories, others who demand stories, but the latest way, this new breed of PR 'professionals' have employed is certainly shocking,” wrote Sheetal Sukhija on her column “My View” published in the Mid – Day on June 21, 2011.

The columnist went on saying, first they praise your story for the day, 'like' all of your status messages (even when your status message reads 'blah') on social networking sites, drop comments like 'oh so cute' on all your facebook photos and just when you start scratching your head wondering where you know this person from they go for the kill. A badly written press release hits your mailbox and your office direct line and mobile phone does not stop ringing each time the same question. When you are about to pull your hair off and tell the PR off, you stop and think they have achieved what they set out to do, grab your attention for a longer time than you would have given them otherwise.

The writer has also mentioned the interesting way on how PR professionals have taken the route to call the editor-in-chief before the press releases reaches a reporter. She wrote: Yet another interesting way many PR professionals have taken to is calling your boss, before the press releases reaches you. Not only does this make you look like a reporter who is unavailable to the outside world (because otherwise why would you call the editor-in-chief for a frivolous event?), but also makes your superiors think there could be a possible story in it (again, why otherwise would the PR try to reach the editor of the newspaper for such a small event).

But, the process of calling and following up in between Reporter – PR are well known and widely acceptable for mutual benefits. When there is a big event or some celebrity makes his / her presence in any event, it is the reporter who run after the life of a PR professional.

Is it really a new PR tactics or a personal revenge against a specific PR professional  or a mere gossip, let’s not enter into that controversy. But, it is the fact that there are journalists who pull up PR guys for not following up for a Press Release. Furthermore, there are journalists who are hungry for free bees (like cash, gift, food and favour etc) but thanks God there are very few and very nominal in count.

Ironically, there are good, intelligent and sophisticated journalists who have also entered into the profession of PR and Lobbying. Does that mean that they are behaving the same way as the columnist presume? For a journalist, news is the main concern, so there are enough smart PR guys who would only feed what is relevant and newsworthy to journalists and that is not a crime. It is also true that Journalists are in the best position to take a call on what is relevant for its own publication.

Reporter and PR need each other. They are like two sides of a same coin. If a Reporter does not receive any call from a PR guy for a day, the reporter would be like a fish out of water. These two communities need to work together for the benefit of the reader of viewer as a whole.

Keeping the debate aside for a moment, we don’t and can’t understand why PR guys are after Journalists only. Social media has gained and is gaining its popularity. Collectively, social media is having much more reach and acceptance that all print and broadcast media put together.  But it is the old and traditional method followed by our fellow PR guys to chase journalists and reporters for getting the Press Release published.

Since its inception, IDSTPR, a division of IDS Technologies (www.idstonline.com) is advocating to change the mindset of PR professionals. Going before the time, IDSTPR has evaluated what is existing today and what should be the ideal scenario.

As per the analysis of IDSTPR, the existing scenario in the PR profession:

•Talk to Journalists, Media Professionals
•One-to-Many
•Control the Brand
•Push the Message
•Speak as a Spokesman

But, we propagate to change the scenario from the existing one to:

•Talk to Customers, People
•One-to-One & One-to-Many
•Manage the Brand
•Engage the Community
•Speak as a Peer

If the changed scenario is accepted, there would be no journalist who would dare to write a column on “Hoodwinking reporters”. Let’s get together to accept the change.

Relief for India Inc - Government of India unlikely to make CSR mandatory

In what could be termed as a relief for India Inc, a top Government of India official on June 20 said the government did not wish to make corporate social responsibility (CSR) spend mandatory, but would instead come out with ‘flexible', ‘directional' guidelines, reports PTI.

“There is no way the government wants to mandate it. If we make it mandatory there can be thousand and one ways to bypass it,” Corporate Affairs Secretary D. K. Mittal said at a meeting organised by the Bombay Chamber of Commerce and Industry on CSR, here in Mumbai.

The government would come out with ‘forward looking' CSR spend guidelines, he said, adding, “It will be only directional and not mandatory. We want it to be flexible. But once the new norms are in, firms will have to disclose their CSR spends or non-spending.”

“Like elsewhere, we want the new Companies Bill to include the CSR code and we want corporates to mandatorily disclose in their annual reports the codes which they adhere to or do not adhere to,” Mr. Mittal said.

To the question what difference guidelines would make if CSR was not going to be made mandatory, he said the new Bill would make the whole process more transparent. The new Companies Bill would be tabled in the monsoon session of the Parliament scheduled to commence from August 1, 2011. The 2 per cent compulsory CSR spend proposal, mooted by Mr. Deora's predecessor Salman Khurshid, had sparked off an intense debate, with majority of corporates favouring voluntary CSR spend. 

At the same event, Chief Election Commissioner of India S Y Qureshi talked about CSR and highlighted the “double standards” of the corporates who were “generous only when it comes to political donations, because there is a lot to be gained from that.” He also said corporate India has no right to complain about governance deficit or political corruption “when you don’t even bother to get out of your homes on a polling day."

With the conformation from the top government officials, the year long discussions whether to make CSR mandatory or not has been put on rest for ever. Earlier in several occasions Government of India has advocated strongly to make CSR mandatory and published Voluntary Guidelines for CSR during late 2009.

Though the former minister Salman Khurshid advocated strongly for minimum two per cent spending for the cause of Environment or Sustainable Development for the society, the present minister may not be falling on the same line. The reason could be pressure from the big corporates on the present minister who may have succumbed under the repeated requests or threats and allowed companies to pollute environment. Whether Team Anna listening?

Honeymoon with Mauritius is over, India Inc looking for Singapore

After Mauritius, is Singapore gaining popularity for India Inc?

Singapore is now becoming a preferred destination for India based companies after the Government of India has decided to review Indo-Mauritius tax pact.

As many as 120 India-based companies are incorporating offices in Singapore every month, taking advantage of the city state as a gateway to Asia-Pacific markets.

Mr Rangarajan Narayanamohan, the chairman of the Singapore Indian Chamber of Commerce and Industry (SICCI) said that the chamber is now seeing as many as 120 Indian origin companies incorporating Singapore offices every month. He was talking with reporters while launching of the annual corporate awards campaign for Indian businesses in Singapore recently.

Mr. Narayanamohan said that the community of Indian businesses has grown to 5,000 in Singapore as of this month, up from 4,000 a year ago.

Meanwhile, India has resumed talks with Mauritius to revise the existing tax treaty and have a double taxation avoidance agreement that will help track black money, Indian Finance Minister Pranab Mukherjee said on June 21, a day after the Indian stock market crashed 364 points over fears of a review hitting foreign inflows.

The minister tried to downplay the issue saying Indian and Mauritius had been negotiating the agreement for the last few years but the talks were suspended for some time.

Indian equities markets slumped on June 20, on speculations that the two countries would soon have a new tax treaty that might affect investments by foreign institutions in India. The benchmark Sensex had slumped around 2%.

Market analysts fear that foreign institutional investors would offload even more from Indian markets once the treaty becomes operational.

Investment in climate change adaptation big business opportunity

A majority of corporate leaders around the world feel that investing in areas related to climate change adaptation offered a good business opportunity.

Businesses worldwide are beginning to see the risks and economic impacts of more frequent and intense storms, water scarcity, declining agricultural productivity and poor health, reports UNI, a news agency from India.

Climate adaptation offers competitive advantages to businesses worldwide, says a new report, Adapting for a Green Economy: Companies, Communities and Climate Change, jointly released by the UN Global Compact, the UN Environment Programme (UNEP), Oxfam and the World Resources Institute.

In response to a survey of global businesses, 86 per cent described responding to climate risks or investing in adaptation as a business opportunity.

Drawing on the results of a 2010 survey among companies engaged in Caring for Climate, the joint climate action platform of the UN Global Compact and UNEP, the study makes the business case for private sector adaptation to climate change in ways that build the resilience of vulnerable communities in developing countries.

''Business can only thrive in stable and enabling environments," says Georg Kell, Executive Director of the UN Global Compact.''Climate adaptation offers a pathway to help communities that are already feeling the devastating impacts of climate change.

At the same time, it creates a wealth of new opportunities for the private sector'' The study suggests actions that companies and policy makers can pursue to catalyze and scale up private sector engagement.

Confirming the notion that the climate threats many communities face are also business risks, 83 per cent of companies surveyed responded that climate change impacts pose a risk to their products and service.

''Businesses are facing increasing challenges from the rise in extreme weather events, such as droughts, heat waves and floods,'' said Manish Bapna, Managing Director, World Resources Institute.

In this changing environment, companies that move first to address the risks and develop innovative strategies to adapt to climate change are likely to be the winners and gain a competitive advantage moving forward.

The study recommends, among others, that businesses integrate climate adaptation into core strategic planning and build a portfolio of climate-resilient goods and services. Addressing policy makers, the authors call for stronger policy and finance commitments to adaptation, financial and risk-reduction incentives to stimulate the market, and for new forms of public-private partnerships.

Communities around the world are already dealing with the impacts of climate change. Since they depend on community members as suppliers, customers and employees, and need to count on local services and infrastructure to be able to operate efficiently, the well-being of communities on the frontlines of climate change and the viability of companies are intricately intertwined, said Raymond C Offenheiser, President of Oxfam America.

''There are multiple reasons why the world urgently needs a transition to a low-carbon, resource efficient Green Economy, including climate change and adapting to its impacts. This report underlines that climate-proofing is not just a responsibility of governments, but should be at the centre of more and more companies' business models and forward-looking corporate strategies,'' said Achim Steiner, UN Under-Secretary-General and UNEP Executive Directorhe added.

''We live in a world where extreme weather events on one day can move food and fuel prices the next, impacting vulnerable and poor communities and a company's supply chain. We also live in a world where infrastructure established decades ago will become increasingly at risk to events such as storm surges and high winds, that in turn threaten the viability of the business-as-usual models, he said. (Source: UNIIndia.Com)

How to track your website visitors

Many of us know about online counters and trackers, they are an invaluable tool for seeing exactly what visitors are doing on our websites, where they are coming from and where they go after visiting you.

Basically we install a piece of javascript code on our website and the tracking service starts to keep track of all visitors to your website. Most of the time we can also get a visible visitor counter to entertain those visiting your website.

This is not the most valuable use of a counter though. A counter let's you see how many visitors you have on different days, what keywords they use to find your website on the search engines, what website sends you the most traffic, what country your visitors are from and much more.

The two trackers I've used myself are 

Statcounter

Google Analytics

Of the above I  use statcounter on all my sites, mostly because I like that you can see exactly how a visitor moves through the website, step by step. That's something you won't get from Google Analytics. 

On the other hand Google Analytics will give keywords info for a much longer time, and for free. Even though statcounter have a free plan, most of the time you want to move on to one of the paid plans to get enough data.

Identify Steps Necessary for Introduction of Accrual Accounting: Indian Finance Minister

Indian Finance Minister Mr. Pranab Mukherjee has said that a robust comprehensive and transparent accounting system is a must for any government. He was inaugurating a day- long national conference of the State Finance Ministers on “Accrual Based Financial Reporting in Government”, on Jule here today. Shri Mukherjee stated that accrual based financial reporting in the Government is an important initiative in the reform of the system of accounts and financial reporting in the public domain. He said that the Government has already accepted the recommendation of the Twelfth Finance Commission for introduction of the accrual accounting in principle. Accordingly, the Government Accounting Standards Advisory Board (GASAB) in the Office of the Comptroller & Auditor General of India has prepared an operational framework and a detailed road map for its implementation.

The Finance Minister stated that we should focus on areas which foster transparency, Parliamentary accountability and are of use to decision makers in government. He said that the Government today needs more comprehensive financial information, while taking decisions about the feasibility of financing the services it wishes to provide and for planning the future funding requirements of asset maintenance and replacement.

The Finance Minister said that the relevance of accrual accounting has to be looked at from the overall perspective of public financial management. He said that accrual accounting has to be assessed against the prevalent accounting practices, for improving the effectiveness of planning, policy making and budgeting process of public resources.

Mr. Mukherjee said that based on the knowledge gained through some pilot studies and the experience of some other countries, it was clear that introduction of accrual accounting is not going to be an easy task. He said that we need to clearly identify the critical and the preparatory steps which need to be taken. While doing so, the requirements and the capacity of the third tier of governance, at the level of local bodies, should be borne in mind. Adequate support and guidance would have to be provided by both Central and State Governments, he said.

The Finance Minister said that in order to facilitate a gradual and seamless transition to accrual accounting, GASAB could prepare guideline notes in various areas of accrual accounting for the assistance of the officials in all tiers of governance. As much of the data needed for accrual based accounts resides with the administrative managers, we would need to build up the capacity of administrative units along with the staff of accounting organizations, he said.

In his concluding remarks, the Finance Minister Mr. Pranab Mukherjee stated that the implementation of accrual accounting system would need strong Information Systems with an IT backbone. The computerization efforts being made in various departments of Central and State governments need to be synchronized so that there is compatibility. He solicited the full cooperation from all State Finance Ministers and Finance Secretaries of States in ushering in this important reform, which will go a long way in improving the financial reporting and fiscal discipline of the governments.

The Finance Minister also released a brochure on “Operational Guidelines for Accrual Based Financial Reporting” at the Conference.

Speaking on the occasion, the Comptroller and Auditor General of India (CAG), Mr. Vinod Rai said that the conference was a step forward in building consensus on providing guidelines which will help all stakeholders in moving towards better financial reporting through accrual accounting. In fact, he said that the conference was in response to the need expressed by some of the states for training and guidance in this migration process. As a step towards accrual accounting, several statements in the Finance Accounts of the states have been introduced from last year. Shri Vinod Rai said that various Central Government organizations like Railways, Department of Posts etc., are conducting pilot studies to move towards accrual accounting. Several municipal corporations have moved over to maintenance of accounts in accrual format. In addition, so far, 21 State governments have conveyed their acceptance, in principle, to move towards accrual accounting, he said. He stated that a few states have constituted Task Force on transition to accrual accounting and some states have asked for assistance from GASAB for training and providing guidelines.

Following is the text of the speech of Finance Minister Mr.  Pranab Mukherjee delivered while inaugurating the conference on “Accrual Based Financial Reporting in Government”:

“It gives me great pleasure to be here with you at this Conference on the issue of accrual based financial reporting in the Government. This is an important initiative in the reform of the system of accounts and financial reporting in the public domain. As you are aware, the Government has already accepted the recommendation of the Twelfth Finance Commission for introduction of the accrual accounting in principle. Accordingly, the Government Accounting Standards Advisory Board (GASAB) in the Office of the Comptroller & Auditor General of India has prepared an operational framework and a detailed road map for its implementation.

The relevance of accrual accounting has to be looked at from the overall perspective of public financial management. It covers a broad spectrum of activities including budget preparation and execution, internal controls, accounting and financial reporting, internal audit, audit by the Comptroller & Auditor General of India, monitoring and reporting arrangements. Moreover, accrual accounting has to be assessed against the prevalent accounting practices, for improving the effectiveness of planning, policy making and budgeting process of public resources.

At the heart of the any fiscal management system is the accounting system, which maintains the basic records of government transactions. A robust, comprehensive and transparent accounting system is a must for any government.

Government accounting and financial reporting in India has a history of several centuries. Our current accounting system derives its form and substance largely from cash based accounting procedures. This system has worked well over the years and has the advantage of simplicity and provides a wide variety of information. However, there is scope for improving the content and quality of the cash based accounting system so as to reflect the financial health of governments more appropriately. We have to keep in mind that, today, it is not only the Parliament and the government that require accounting information, but there are other important stakeholders including citizens, analysts and national and international financial institutions. In this age of awareness and information revolution, an average citizen and a social activist wants information to assess the financial health and performance of governments in delivering public services and development schemes for the benefit of the society at large.

One area where our accounting system needs further improvement is with regard to having an adequate framework for accounting the assets and liabilities of the Government. Although the FRBM Act at the Centre and State levels now prescribe maintenance of asset registers, systems have to be put in place for proper detailing and updating of these records. There has to be an effective method for tracking assets created out of public money. Without that the accountability of departments in managing government assets would get diluted. I have asked that a strong IT based system for recording assets be established to strengthen the existing disclosures under the FRBM Act.

Another area of inadequate reflection of government liabilities in our accounts relates to pensions. In case of pensions only yearly expenditure is reflected in the accounts, but future liability of the government is not accounted for. Calculation of future pension liabilities is indeed a difficult task as it depends on longevity of individual pensioners. The assumptions for this calculation have to be carefully made. Similarly, it is often pointed out that the present system does not account for goods and services received but payment not made, revenue demand raised but not realized etc. There are multiple views on these issues, both theoretical and of practical nature. We need to be careful while addressing these issues. We should focus on areas which foster transparency, Parliamentary accountability and are of use to decision makers in government. I feel that, today, the Government needs more comprehensive financial information, while taking decisions about the feasibility of financing the services it wishes to provide and for planning the future funding requirements of asset maintenance and replacement.

International experience in accrual accounting has been varied with mixed results. We have to recognize that success stories are not many. I understand that some pilot studies have been undertaken in selected state government departments and other entities. Based on the knowledge gained through these pilot studies and the experience of some other countries, it is clear that introduction of accrual accounting is not going to be an easy task. In fact, we need to clearly identify the critical and the preparatory steps which need to be taken. While doing so, the requirements and the capacity of the third tier of governance, at the level of local bodies, should be borne in mind. Of course, adequate support and guidance would have to be provided by both Central and State Governments. An incremental and phased introduction of accrual systems would therefore be appropriate. As I mentioned in my speech at the 150th anniversary of the institution of Comptroller & Auditor General of India, there are many challenges in view of the complex nature of administration and accounting in a diverse nation as India and these will have to be carefully factored in.

I am happy to note that two Indian Government Accounting Standards (IGAS), namely, IGAS-1 on Disclosure Requirements for Guarantees and IGAS-2 on Accounting and Classification of Grants in Aid proposed by GASAB have already been notified by the Government and work on some more standards is underway. In order to facilitate a gradual and seamless transition to accrual accounting, GASAB could prepare guideline notes in various areas of accrual accounting for the assistance of the officials in all tiers of governance.

The most important element on which the success of accrual accounting hinges is the capacity of the people who would be preparing the accounts in accrual form. As much of the data needed for accrual based accounts resides with the administrative managers, we would need to build up the capacity of administrative units along with the staff of accounting organizations.

The implementation of accrual accounting system would also need strong Information Systems with an IT backbone. The computerization efforts being made in various departments of Central and State governments need to be synchronized so that there is compatibility. The IT systems should be able to seamlessly integrate with each other. The Central and the State governments should take ownership of this initiative in accounting reforms. I solicit full cooperation from all Finance Ministers and Finance Secretaries of States in ushering in this important reform, which will go a long way in improving the financial reporting and fiscal discipline of the governments. While institutions like Comptroller & Auditor General of India through GASAB can provide the technical support, it is the executive that has to take the lead in the implementation process with a view to succeed.

The daylong conference being held today provides a very useful platform for exchange of views. The conference will benefit from the interventions of State Finance Ministers. I am sure there would be many valuable takeaways from today’s deliberations.

In conclusion, I am sure that together we will be able to build a robust modern accounting system that will promote more efficient financial reporting and serve as a vital tool for decision makers in the government. I would like to thank Shri Vinod Rai, for organizing this conference and to the State Finance Ministers for coming here to be a part of these deliberations. I wish this endeavour all success.”

Suit against Indian diplomat in NY - will he ask for diplomatic immunity now?

Prabhu Dayal, the Indian Consul General in New York, has been accused of treating a former domestic help as a slave and making sexual advances, charges rejected by him as "complete nonsense".

Santosh Bhardwaj, Dayal's former maid, has filed a forced labour-suit against him for making her work for long hours everyday at USD 300 a month, confiscating her passport and letting her sleep in a storage closet. She has also alleged him of making sexual advances reports Press Trust of India.

"I filed the complaint because I want to be paid for all the labour I provided and for all the injustice I suffered - and I want my passport returned," Bhardwaj (45), the mother of four children, said.

"The Dayals did not treat me fairly," she said in a statement issued by the Legal Aid Society, which is representing her.

Dayal, however, has rubbished the charges against him saying "Complete nonsense".

Recently, India was asked to waive immunity or recall a senior envoy from the UK, where he was accused of wife-beating.

Now the question would arise, will Dayal also ask for diplomatic immunity or should diplomatic immunity be provided to Dayal against whom labour suit is pending.

Diplomat immunity is not a license to do anything wrong. It is true, Indian law takes long to catch the wrong doers (like Manu Sharma who killed Jessica Lal). But it is not so in America. The legal system is better placed in the US. Let us not forget that President Bush daughter was arrested. Even in the most recent case, Dominique Strauss-Kahn was also arrested.

Indian diplomats who are the front face of the government and the country as a whole are many a times being caught on wrong foot. What is the reputation that they are carrying for themselves as well as for the country?

[A post by IDSTPR http://www.idstonline.com]