India is exploring a model for multidisciplinary partnerships (MDPs) that would leave member oversight with existing professional regulators, rather than place such companies under a single umbrella authority, the Economic Times reported.
People aware of the discussions told the publication that the proposal under consideration would allow each statutory body to supervise and discipline its own members inside these businesses.
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That would mean bodies representing chartered accountants, company secretaries and cost accountants, among others, could act against their members in cases of professional misconduct.
The idea is to let professionals from different fields work under one company structure. The Corporate Affairs Ministry’s draft thinking includes lawyers, engineers, architects and actuaries, along with chartered accountants, company secretaries and cost accountants.
A key complication is that these professions are governed by different licensing authorities. That has sharpened the need for a clear supervision mechanism before such companies are allowed.
One of the sources told the newspaper that some regulators, including those for the legal and engineering professions, may resist any arrangement where their members are answerable to another body.
“Allowing respective watchdogs to regulate their respective members is, therefore, a viable option for MDPs,” he said.
The push for MDPs is part of a wider government effort to help build large Indian professional services companies.
The report said stronger scale could help domestic players compete in the global audit and consultancy market, which it valued at $240bn (Rs23tn).
At present, India’s rules do not permit such partnerships easily. Last year, the Corporate Affairs Ministry issued an office memorandum inviting comments from stakeholders on whether the structure should be introduced.
Since then, discussions have continued on the rules required to govern these companies and make the model workable in commercial terms.
The report added that the absence of large local companies has left India’s audit and consultancy market largely in the hands of the ‘Big Four’ – EY, Deloitte, KPMG and PricewaterhouseCoopers – as well as Grant Thornton and BDO.
Fewer than 1% of accounting practices in the country have more than ten partners. The government wants more Indian accounting and consultancy practices to expand, develop capability and compete internationally.
