Friday, July 06, 2012

PM’s statement on red tap and tax matters, what it means for bureaucracy

PRIME Minister Manmohan Singh's statement on “no arbitrariness in tax matters” and cutting red tap in government have direct impact on bureaucracy. In a rare email interview to a national daily, Hindustan Times, Singh gave enough hints that he was not happy with the tax matters.
Here are two major points that Singh said in that interview and what those mean for Indian bureaucrats:
PM said: “We will work towards improving the response time of government to business proposals...”
What It Means: Buoyed by two recent investment proposals, one of Coca Cola and other by Swedish furniture company IKEA, PM (or PMO to be precise) may ask other departments to go fast on clearances. But it may lead to confrontations too. Already, the DIPP officials are reportedly not happy with IKEA putting a condition that it would fulfil government's sourcing requirements only after 10 years. It remains to be seen how the negotiations between IKEA and DIPP shapes up particularly in the backdrop of the IKEA promising an investment of euro 1.5 billion to set up 25 stores.
PM said: “We want the world to know that India treats everyone fairly and reasonably and there will be no arbitrariness in tax matters…”
What It Means: It obviously refers to the Vodafone case and finance ministry’s decision to amend laws with retrospective effect to ensure that the British telecom company pays over Rs 10,000 crore tax even after winning the case in Supreme Court. The taxmen have always argued that India can’t be seen as a tax haven which was publicly endorsed by former finance minister Pranab Mukherjee in several forums. PM’s words also hint at what BoI had predicted a fortnight ago: Taxmen may lose their clout in coming days.
Pranab as President: Why IRS officers could be orphans again

Why ACC is upset with CBI?
While approving the Central deputation tenure of Ashok Kumar, a 1982 batch Tamil Nadu cadre IPS and joint director in CBI, the Appointments Committee of the Cabinet (ACC) in its order dated July 3, 2012 said: “The Appointments Committee of the Cabinet has also directed to convey its displeasure to CBI for the undue delay in submitting the present proposal with the further direction that a successor may be proposed to be appointed within this period of extension.” The statement is interesting as the extension which is till July 4, 2012 is actually over one day after the order.

Action and Appointments
a) Ms Anu J Singh, a 1985 batch IRS-IT official, has been appointed as joint secretary and financial adviser in the Council of Scientific and Industrial Research in place of Ms Vandana Srivastava, a 1978 batch IDAS officer on her premature reversion to the parent cadre on October 28, 2012.

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