Fiscal reform needs management minds, Not just balance sheets

Prof D Mukherjee
shiv_k_sharma@yahoo.co.in
The researchers and intellectuals across are observed bewildered to ponder why the government neglects the profession it once proudly created for national economic efficiency in 1950s. Prior to enactment of the New Income Tax Act, 2025, it promised on several occasions since 2009-10 an epoch-making fresh beginning of fiscal administration-simplified taxation, modern legal design, and a renewed vision of compliance and transparency. But amid this legislative reform, a silent omission has sparked deep concern among thousands of Cost and Management Accountants (CMAs): once again, they have been left out of the statutory definition of ‘Accountant’ in much awaited IT Act, 2025.This oversight, though technical in appearance, has far-reaching implications. It not only sidelines an entire profession but also undermines the spirit of economic efficiency that inspired its creation in 1959, when the Government of India and Parliament courageously enacted the Cost and Works Accountants Act and established the Institute of Cost and Works Accountants of Idia(ICWAI) with just 377 members against 4,500 Members of ICAI(1949-50-1958-59) despite strong opposition.
The roots of this profession trace back to the early 1950s, when India’s industrial policy demanded experts who could scientifically manage costs and resources. After years of debate, the Cost and Works Accountants Act, 1959 was enacted-anchored in the belief that cost transparency and managerial efficiency were essential for national growth.Yet, more than six decades later, the same government that once championed the profession appears indifferent to its evolution. The new Income Tax Act, which could have corrected years of exclusion, has instead reaffirmed the narrow definition of ‘Accountant’ to include only Chartered Accountants. In simplicity, the law that once empowered a new erstwhile profession now stands silent on its glorious existence with about 1,00,000 members,For CMAs, this exclusion is not merely a question of pride-it is a matter of professional survival and national efficiency. Their analytical focus on cost, performance, and management systems is indispensable in today’s complex economic environment.
Let us trace out the cost of exclusion. Since 2010, the Institute of Cost Accountants of India (ICAI-Cost) has petitioned successive governments to expand the definition of ‘ Accountant’. Promises were made; committees were formed. But year after year, the final draft of every Finance Bill left CMAs outside the fold.The New Income Tax Act, 2025 continues that pattern. By denying CMAs statutory authority to certify or attest under the Act, the government effectively confines them to a shrinking professional domain. This exclusion not only limits opportunities for CMAs but also deprives the nation of experts skilled in cost optimization, financial analytics, and strategic performance evaluation-areas critical to public finance and industrial competitiveness.
The experts and intelligentsia are seen to be curious – how long this unsettled professional parity would continue. The question of where Cost Accountants stand vis-à-vis Chartered Accountants remains unresolved. While government rhetoric often celebrates professional diversity, policy practice tells another story. CMAs, who are trained in analytical cost management and strategic decision-making, are rarely given equal space in legislative frameworks.This uneven treatment creates a form of institutional imbalance, where one profession dominates certification, while the other is left navigating shrinking territory. The need today is not competition but complementarity-an ecosystem where both professions work together to strengthen national financial governance.
It is an imperative to explore India’s global blind spot.Around the world, management accountancy has emerged as a pillar of economic governance. The United Kingdom, the United States, Indonesia, Papua New Guinea(PNG), Nigeria, Australia, Bangladesh, Pakistan, South Africa, China, Sri Lanka and other countries -all maintain distinct management accountancy profession bodies that coexist with chartered accountancy/certified public accountancy institutions. Indonesia, for instance, established its Institute of Management Accountants viz, the Indonesian Institute of Management Accountants (IAMI) in April 1, 2008, decades after its Chartered Accountants’ body(1957) came into existence, recognizing that managerial and strategic cost management expertise serve different but complementary roles and similar occasion is observed to have been prevalent in Sri Lanka when the Institute of Certified Management Accountants of Sri Lanka(ICMASL) was set up in 2009 after the Institute of Chartered Accountants of Sri Lanka( ICASL ) came into being in 1959. India, however, remains an outlier. Despite adopting designations such as ACMA and FCMA, the Institute’s official name still fails to reflect its management accounting function. The government’s hesitation to formalize this dual identity-often citing overlap with the CA profession-has frozen the evolution of India’s cost and management accountancy profession at a time when the world is moving ahead. To call a spade a spade, when other nations embraced management accountancy as a tool of fostering competitiveness-India, turned its back on its own creation made 66 years ago, being one of the leading pioneers in the discipline of management accountancy profession across the globe.
The Institute of Cost Accountants of India (formerly ICWAI), an Institution of the Herculean importance and potential in strategic excellence is practically seen in limbo. The Institute of Cost Accountants of India has been striving to modernize its identity and expand its professional role. Yet, without legislative backing for its name change to The Institute of Cost and Management Accountants of India, its brand remains legally ambiguous.This uncertainty has taken a toll: student enrolments are declining, young professionals face fewer career avenues, and the Institute’s representation in new regulatory arenas-like RERA, GST, cooperative, MSME and public sector audits-remains minimal. The result is a cycle of stagnation where government indifference feeds institutional weakness, and institutional weakness reinforces government apathy.
Indian cost accountants have hardly any significant passport to the world as three seems to have the glaring gap lying in global recognition. Unlike Chartered Accountants, who enjoy Mutual Recognition Agreements (MRAs) across several countries, Indian CMAs have no such arrangements with leading management accountancy bodies except CIMA (UK).Without MRAs, Indian CMAs are denied global mobility and collaboration opportunities. Their skills, though aligned with international standards, remain confined within national boundaries-an irony for a country that aspires to be a global hub for financial and accounting services. The professional designation ‘Cost Accountants’ seems to be as obsolete as dinosaurs in the evolutionary history of cost and management accountancy profession.
The New Income Tax Act, 2025 should have been an opportunity to right historical wrongs. Instead, it reinforced an outdated professional hierarchy. But all is not lost-policy renewal is still possible.India needs to revisit its approach to professional governance. The inclusion of CMAs in the definition of “Accountant” would not only restore equity but also strengthen fiscal oversight and cost efficiency. Likewise, formal approval of the Institute’s name change would align India with global best practices and clarify its professional identity.Equally vital is institutional diplomacy. The Institute, supported by the Ministry of Corporate Affairs, must pursue global recognition through MRAs and collaborations with international management accounting bodies. Awareness campaigns, academic partnerships, and policy dialogues can help reshape the public perception of CMAs as strategic business partners rather than mere ‘cost auditors and India once created a profession in the national interestmust now rescue it in the same spirit. In this context, anybody may refer to the parliamentary debates during December 9, 1958 to February 18, 1959 and subsequent debates till May 28, 1959
It is now a wake-up call for the nation to reclaiming the 1959 Vision-when Parliament passed the Cost and Works Accountants Act , it did so in the face of intense lobbying and opposition. The government then believed that cost transparency and managerial efficiency were matters of national importance. That conviction built an institution that contributed quietly but decisively to industrial accountability and economic discipline for decades.Today, that same institution finds itself sidelined by neglect and inertia. The New Income Tax Act, 2025 may be a technical reform, but symbolically it represents a retreat from that early vision.Reviving the Cost and Management Accountancy Profession is not about institutional rivalry-it is about strengthening the economic architecture of the nation. At a time when India is seeking to make its industries leaner, its governance smarter, and its economy more resilient, ignoring the very professionals trained to achieve these goals is both peculiar and counterproductive. Therefore, India must reclaim the vision of 1959-not as nostalgia, but as a necessity. The name change of the Institute of Cost Accountants of India to the Institute of Cost and Management Accountants of India is urgently recommended so that the Descriptive Letters ACMA/FCMA after the names of the members and abbreviation ‘ICMAI’ currently in use are significant and meaningful, at least, if the Ministry of Corporate Affairs (MCA) is really interested to justify the existence of cost and management accountancy profession in India against the prevailing global trends and practices.
(The Columnist is a Bangaluru based Educationist, and a Management Scientist)

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