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Tax on Go


CBEC Cadre Review: A 'Royale' Battle between Rs 732 Cr vs Rs 68000 Cr, and the latter loses?
By Shailendra Kumar, Founder Editor (July 25, 2013)
Jun 07, 2021

THE doctrine of exhortation usually works well in the private sector. But it necessarily fails in the Government sector! But, why? Let's find its answer from a live issue confronting the UPA Government. When it comes to the need for collecting more revenue so that fiscal deficit could be contained, the usual exhortation to revenue officers from their bosses in the North Block is to do their job in a business-like fashion. What do they mean by the term business-like? One of the pedestrian interpretations by applying the principles of Mimansa or Maxwell could be that one must focus on one's performance to get the desired worldly results. And the performance takes into account the basic principles of input-output ratio, and when the output is more than the input, it can be construed as business-like. But when it comes to following the same principle in the domain of political governance, our political masters as well as their trusted bureaucrats tend to generally forget the business-like approach.

If that is not so how can one explain the inordinate delay in implementing a very simple 'administrative business' proposal - Spend Rs 732 Cr and get back Rs 68000 Cr! Yes, I am referring to the proposal of CBEC Cadre Review. As back as in May, 2012, the Department of Expenditure had issued an OM to grant waiver to the CBEC proposal when there was a freeze on creation of new posts. Since the proposal was all about earning extra revenue for the exchequer, the waiver was granted to spend Rs 732 cr to implement the detailed restructuring proposal, promising an additional annual revenue of Rs 68,000 Cr per annum. In fact, the first approval was granted by the Department of Expenditure in May, 2011. It was followed by a meeting of the Finance Minister and the DoP&T Minister. In April, 2012, the first note was sent to the Committee of Secretaries (Cos). The file was shipped to the DoP&T, and then it followed the oscillatory path between the DoP&T and the North Block to answer the queries raised at regular intervals. After one year, yet another approval was taken from the Department of Expenditure in June this year, and a fresh CoS note was sent. Finally, on July 13, the file was sent to the Cabinet Secretariat for fixation of date for CoS meeting. Mind it, this is after the CoS has approved the CBDT case and the Group of Ministers has also evolved certain principles to give its nod to the Apex, HAG+ and HAG grades posts, and the same was followed by the Union Cabinet.

Let's now take a quick look at the highlights of the final draft of the proposal:

++ Reinforcement of cadre strength by 17442 posts (The existing strength is 66808);

++ Introduction of two new grades - Apex (16 in number) and HAG+ (38 in number) (Initially, the numbers were 23 & 72 respectively);

++ Upgradation of all 47 HAG posts to 54;

++ Setting up of a new Directorate of International Customs (Such a Directorate is the need of the hour to coordinate India's efforts with the WCO, WTO, WIPO and others);

++ Given the volume of litigation, there is a proposal to upgrade the Directorate of Legal Affairs to HAG+ level;

++ 2118 temporary posts (non-cadre) for five years have been proposed to overcome stagnation in Group B Gazetted. This is to clear stagnation;

++ The number of Central Excise Commissionerates is proposed to be enhanced from 93 to 119; for the Customs from 35 to 60 and the Service tax from 7 to 22;

++ 45 new Audit Commissionerates are proposed to be set up, and the number of Customs Commissionerate (Preventive) to be jacked from 34 to 60;

++ The number of LTUs to be increased from 4 to 8;

++ To provide promotional avenues to officers, the Board has proposed additional posts of 5160 Superintendent & 5040 posts of Inspector;

++ There is a proposal to enhance the strength of CAO (Group A) from 155 to 349 and Administrative officer levels by 616 posts from existing 984 to 1600.

Going by the contribution of service tax (CBEC collected Rs 1.32 lakh crore last fiscal) and the fact that the services sector is going to account for more of GDP in the coming years, the focus is required to be more on creation of Service Tax Commissionerates rather than Customs. In place of 45 Audit Commissionerates the CBEC should have gone for a few more of Service tax commissionerates as it is too early to have so many Audit Commissionerates when it is a well established culture in the Department to ignore the DG (Audit) except for the audit within the commissionerates. No doubt, audit is the future of the Department to meet its revenue targets but the CBEC will have to do more spadework before creating an independent commissionerate. At present, the state of affairs is that if one is posted to Audit Directorate, one either feels discriminated or angry with oneself for having no political or corporate clout to get a field posting. A live example is the about-to-be issued Commissioners' promotion order , which is believed to be held up because there are too many claimants for Commissionerates like Noida . Therefore, the CBEC should first re-orient the mind of its officers towards the Audit and then it should create so many Commissionerates. May be it should go for the same once the GST implementation becomes imminent and certain. At present it needs more hands and greater focus to improve service tax collections a la Negative List and correct the declining PLA/CENVAT ratio , which should be the major worry for the North Block. And one of the reasons can be the growing tendency to claim service tax credit for everything.

As regards the Group B promotions, the CBEC first needs to do justice to the existing vacancies. It is learnt that as many as 400 posts of ACs are vacant. And a quick decision-making to fill them up can help the morale of a good number of Group B officers, who have been waiting for their promotion for more than two decades. Worse, even if the Union Cabinet approves the Cadre Review, given the long history of ad hoc promotions the CBEC may require more than two years to hold Review DPC and then implement the new proposal. Strangely, the process of regularisation of ad hoc promotion has been moving at a snail's pace. Since ad hoc means no right to deputation of equivalent rank, which means a major blow to their self-esteem. Regular promotions from Group B to Group A from 1997 has been hanging fire.

In a nutshell, the morale of the CBEC officers in the field formations has been at its rock-bottom at a time when the FM wants them to ensure 19% growth in their revenue collections. The CBEC has been facing agitation from Group B and C officers in some part of the country at regular intervals. But, nothing appears to be really moving at a pleasing pace in the CBEC personnel wing. Ad hocism remains the reigning 'monarch', and all those who occupy the hot seats for brief periods in the Board appear to be whispering - Long Live Adhocism!