Finance execs at Municipal bodies optimistic about smart cities, finds ACCA
MUMBAI/NEW DELHI, December 20, 2016: Over 70 per cent of executives from the accounts and finance departments at various municipal corporations across the country are cautiously optimistic about the government’s ambitious plan to build 100 smart cities, says a 40-city survey conducted by UK-headquartered ACCA (Association of Chartered Certified Accountants), the global body for professional accountants.
Accounting and finance professionals constitute an important component in the roll-out of smart cities as municipal corporations and urban local bodies across India are expected to raise INR 48,000 crore over the next few years to match the central government’s allocation towards developing such cities.
The survey was conducted with 40 respondents from accounts/finance and another 40 from general operations relevant to that city’s smart city plan during June-July 2016.
Significantly, 73 per cent of the finance executives were cautiously optimistic, while 27 per cent were pessimistic. However, even those with a pessimistic view described the concept of smart cities as good; their pessimistic view was largely linked to doubts about the realisation of the concept rather than the idea itself.
Respondents also listed the main issues that would critically influence the development of smart cities over the next three years. Fund raising and availability of talent was the top challenge, followed by legal framework (the large number of clearances, documentation for public private partnership (PPP) contracts, etc.), and project management issues linked to tight deadlines set by the Smart Cities Mission. Other concerns included political intervention and coordination – across the centre, state and municipal government, and between departments within a municipality.
Other key findings of the survey indicated that there is an overall shortage of staff within accounting teams. In half the cities surveyed, between 61% and 70% of permanent posts within accounts and finance lie vacant. In terms of need for skills enhancement and training for accounting staff ‘budgeting, planning and forecasting’ emerged as a key area requiring attention, followed by ‘cost and expenditure management’ as the second most commonly cited area.
ACCA’s global chief executive Helen Brand OBE, said, ‘Developing smart cities requires a step-change in the way cities are governed and managed. A key part of this improvement will involve capacity building at city level in the field of accounting and finance.’ She added, ‘India requires a shift in the traditional financial reporting role of accountants in local government towards greater emphasis on financial planning, forecasting, scenario planning, commercial awareness, risk management, and skills building to ensure that public services are provided as efficiently as possible.’
Report author Narayanan Vaidyanathan, who develops ACCA’s research and insights with a focus on the future direction of business and accountancy, said, ‘The discourse around smart cities talks extensively about the role of government and technology providers; but there is an important third leg in the picture which is the finance and accountancy community. This report highlights the urgent need for professional accountants to develop their own digital capability and understanding in order to provide the expert guidance (in areas like cost-benefit analysis for example) and strategic counsel necessary to shape the city of the future.’
The Indian Smart Cities Mission is a complex, multi-year and multi-dimensional initiative (operating across sectors from water to transport, and across cities with widely differing profiles). It will require all arms of government to work efficiently within and between themselves, and externally with private players. This involvement relates to how accountants are required to get things right on a continuous basis, so that the ambitious goals of the Smart Cities Mission are not just achieved in the short term, but also sustained in the long term.
– ends –
For media enquiries, contact:
Aradhana Agrawal, Adfactors PR
M: + 91 99300 13188
E: aradhana.agrawal@adfactorspr.com
Notes to Editors
About ACCA
ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. It offers business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.
ACCA supports its 188,000 members and 480,000 students in 178 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 100offices and centres and more than 7,110 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.
Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. It believes that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. ACCA’s core values are aligned to the needs of employers in all sectors and it ensures that through its range of qualifications, it prepares accountants for business. ACCA seeks to open up the profession to people of all backgrounds and remove artificial barriers, innovating its qualifications and delivery to meet the diverse needs of trainee professionals and their employers. More information is here: www.accaglobal.com
