TFS Gulf 
- Hi, I am Madhukar Hiregange, Founder of the 700+ member firm H N A & Co., and Council Member at ICAI.
- India has over 100,000 CA firms, yet most CA Firms are struggling…While the Big 4 walk away with ₹10,000 crore mandates.
- The big question is why? ICAI’s bureaucracy and the Big 4’s iron grip have designed the CA profession in India to stay small.
- Here’s the truth no one likes to say out loud.
Why are CA firms in India struggling?
Survival mindset. As of October 2025, there are more proprietorship firms (72,696) in India than partnership firms.
I would say almost 90% are led by first-generation entrepreneurs, who typically come from economically challenged or middle-class backgrounds.
They prefer protected, predictable income, which usually comes from assignments like bank audits or cooperative audits.
They might be safe, but they will not help you scale. And that’s the mindset holding them back from scaling.
The “Satisfaction” Trap. Many think, “I have a car, two houses. I am ready to retire.” This tendency to slow down too early prevents us from using experience to scale further.
Over the past four years, I also stepped away from active consulting work.
(Guilty) Sometimes I can’t help but wonder how much more I might have achieved if I hadn’t.
Trust Issues: Financial insecurity makes promoters’ first instinct to protect themselves rather than join hands with others.
Without collaborating beyond their circle, firms cannot grow exponentially.
Diversity gap: “No Non-CAs” rule. Today, client problems cut across tax, tech, data, law, strategy, operations, risk, and digital transformation.
Having a diverse set of talent/partners is no longer optional.
But ironically, the very structure of our profession doesn’t fully encourage it.
Yes, technically, firms can hire non-CAs as employees, but they are not welcome when it comes to Partnership, ownership, leadership, or decision-making power.
For example:
- I can’t make a brilliant engineer a partner
- I can’t give a tech-whiz equity
By barring non-CAs from leadership and ownership, we are essentially cutting off the very limbs we need to climb higher.
Not keeping up with the new trends. There is a massive disruption happening in all industries, and our profession.
Business models that looked solid yesterday are collapsing overnight.
We’re seeing it happen to our own clients.
- Valuations dropping
- Margins shrinking
- Legacy businesses are struggling to survive
- Startups outpacing decades-old companies with half the team and ten times the tech
And yet, many firms in our profession are still operating as if “nothing” has changed.
The next issue is more structural. We simply don’t follow the best practices and standards that Big firms follow:
- Global professional standards
- Structured methodologies
- Strong documentation
- Consistent quality frameworks
And naturally, clients trust them with bigger assignments.
Good news: For the first time, ICAI has started a dedicated group on consulting standards, and I’m serving as the convener.
But let’s not pretend this is a breakthrough. Had ICAI acted 10 years ago, Indian firms would already be playing in the ₹1,000–10,000 crore league.
But the elephant in the room…
Big 4’s influence
The Big 4 today have an almost unbreakable stranglehold on government contracts.
Most large government tenders often come with almost unattainable criteria:
- Have a minimum revenue of ₹500 crore. The government is now trying to help by breaking down large tenders into smaller bits. But many Indian firms still won’t qualify; we must move to an Alliance Model!
- Massive teams
- Pan-India presence
- Deep tech infrastructure
The Poaching Cycle: They acquire you as you grow or poach your best talent, so you can’t grow.
Unfair Systems: They build relationships by helping bureaucrats’ families with global placements. Audit work is often acquired on “influence,” not merit. ICAI has tried to bring transparency, but it hasn’t worked.
The ICAI Dilemma
I say this as an ICAI Council Member –‘ ICAI is a bureaucratic bottleneck. It’s obsessed with control (forms, branding, etc.).’
Another question I get asked often…Is the ICAI council unethically influenced by the Big 4? It is unfortunate, but true.
The Big 4 operate outside the strict purview of the ICAI, while domestic firms are bound by every regulation. This is a primary reason why Small and Medium-sized Practitioners (SMPs) aren’t growing.
Also read: Compliance services 400% growth: Most in-demand service line at Bengaluru CA Firm
So what now? What CA Firms should do?
The business environment has changed. And if we don’t change with it, we risk becoming irrelevant.
Here’s a personal example:
When I started, compliance work made up almost 90% of what we did. Today, it’s barely 10–15%. Why? The attest function is becoming less and less lucrative and more and more risky.
Honestly, unless you have no other choice, I don’t think firms should continue to rely heavily on this area anymore.
Give up your Certificate of Practice (COP).
The attest function is becoming less lucrative and more risky, stifled by oversight bodies.
To make your clients happy, you need to give them ideas, not just a signature!
You can still be fully ethical, but you don’t have to be afraid of anything.
By stepping out of ICAI’s regulatory control, you can:
- Take in Non-CA Equity
- Raise Private Equity
The Bifurcation strategy
If you want to hold onto your ICAI registration and keep your Certificate of Practice (CoP), you must bifurcate your practice into two different legal entities:
- Attest and Compliance: A traditional partnership firm under ICAI
- Consulting, Outsourcing, and Advisory: A private limited company
In a private limited structure, there are no “fetters.”
You have no government or ICAI restrictions on how you brand, how you raise capital, or who you take as partners.
Collaborate & later merge with like-minded firms
Another way to scale is through collaborations, which I call the dating phase.
The idea is simple:
- Work together on complex assignments.
- Refer to each other.
- Pay each other fairly for services.
For example, if I focus on GST services, I should collaborate with firms that have expertise in:
- International tax
- Foreign Exchange Management Act (FEMA)
- Intellectual property
- Real Estate (Regulation and Development) Act, 2016 (RERA)
This is where alliance structures like AOPs (Association of Persons) can be beneficial.
Here’s my advice: partner only with firms that have 500–1,000 professionals and ₹200–500 crore in turnover.
Why? Because scale wins mandates, or else big-ticket assignments, especially government contracts that may be untouchable for smaller firms.
Once trust is built, move to a formal merger.
If you’re merging, partner with a firm that already has some global presence.
Creating Alliances with foreign firms
Indian CAs are incredibly sharp.
Technically strong.
Great problem solvers.
But sometimes we fall short on process, planning, and consistency.
That’s where foreign firms can help us by bringing in discipline, structure and most importantly, the infrastructure.
Financial Discipline
Indian firms often distribute all profits. And without capital, you can’t scale.
- No investment in technology
- No hiring strong talent
- No expansion
Growth needs retained earnings.
Tap into “Billion-Dollar” niche services
We are sitting on goldmines that we aren’t tapping because we haven’t upskilled.
- AI Ethics & Certification: 90% of AI models are “black boxes.” They are unsafe and uncertified. Chartered Accountants, with our history of “black box” verification in audit, are the perfect people to certify AI integrity. This is a billion-dollar industry.
- GCC Consulting: We can build wings of 100+ professionals specifically to service Global Capability Centres.
- Digital Transformation: Transform your own firm first, then sell that system to your 10,000+ clients.
- Virtual CFO & Strategic Outsourcing: Move away from routine “low-level” tasks that AI will soon eliminate. Focus on high-value domain knowledge.
Also read: Building a CA Firm in a tier 2 city in India and merging with Singhi & Co
What must the Government do?
Prime Minister Modi knows critical information shouldn’t sit in Western-headquartered firms and wants a “Made in India” Big 4.
The Government’s initiative is fantastic, but they are not biting the bullet. They are still influenced by the Big 4.
Intent isn’t enough; we need:
Company Law Reform: Allow CA firms to become scalable corporate structures. We need large-scale reforms, especially in the finance and consulting space. Small adjustments here and there won’t help.
The “China Model”: Force the Big 4 to be transparent. In China, they must have local partners and disclose quarterly earnings. Why don’t we do the same?
Space, not control: In the 90s, the government gave IT firms strong policy support.
It gave the sector tax breaks, SEZ benefits, and export incentives, and, most importantly, stayed out of the way.
That’s how TCS, Infosys, and Wipro became global giants.
They need to do the same for us.
Reform the tendering process. Today, many tenders indirectly favour only the largest players. Smaller but capable Indian firms don’t even get a fair chance.
We need:
- Permissive system
- Merit-based system
- Democratic, merit-driven selection process
Wrapping up…
This is why I say if you want to build a ₹100-1000 crore firm in the next 5 years:
Get out of the ICAI’s control.
Give up your COP if you have to.
You can build a private limited company where you can take in an engineer as an equity partner or raise ₹100 crores in private equity to build the tech you need.
You won’t be stifled by unnecessary regulations.
If we don’t change the rules of the game ourselves… We will remain stuck in the ₹10–20 crore bracket while the global firms walk away with the ₹10,000 crore mandates!
