Tuesday, March 01, 2016

Babus and Budget: Disinvestment department to be called DIPAM; Jaitely clips discretionary power of taxmen

Bureaucrats Behind the Budget
AFTER renaming the ministry of agriculture as the ministry of agriculture and farmers welfare — a politically correct name, the government on Monday announced the renaming of one more department, the department of disinvestment. The disinvestment department, which is one of five departments under the ministry of finance, will now be known as DIPAM— Department of Investment and Public Asset Management. Finance minster Arun Jaitley while presenting his 3rd Union Budget on Monday also empowered NITI Aayog to…
identify Central Public Sector Enterprises (CPSEs) for strategic sale. NITI Aayog had replaced the earlier Planning Commission of India over a year ago.
Jaitley further said in his Budget speech that a new policy for management of government investment in public sector enterprises, including disinvestment and strategic sale, has been approved.
“We have to leverage the assets of CPSEs for generation of resources for investment in new projects. We will encourage CPSEs to divest individual assets like land, manufacturing units, etc. to release their asset value for making investment in new projects. The NITI Aayog will identify the CPSEs for strategic sale”, FM said in his Budget speech. 
The department of disinvestment which will now be known as DIPAM, was initially set up as an independent ministry in December 1999 to carry out sale of government assets by the Atal Bihari Vajpayee-led National Democratic Alliance (NDA) government. Later, in May 2004, it was turned into a department under the ministry of finance. 
Meanwhile, Jaitley's Budget further made two key points which are related to bureaucracy. 
First, FM talked about setting up of the empowered committee constituted to examine the 7th Central Pay Commission report, adding that he had made necessary interim provisions in the Budget. The report, if implemented as it is, will require Rs 1.02 lakh crore in the fiscal, 2016-17. That amount includes the payouts for about 14 million railway employees, the provision of whom was separately made in the Rail Budget, which was presented on February 25. 
Secondly, FM made an attempt to what he says “substantially reducing the discretionary power of the tax officers” as regards to levying of heavy penalty for concealment of income. “At present the Income-tax Officer has discretion to levy penalty at the rate of 100% to 300% of tax sought to be evaded. I propose to modify the entire scheme of penalty by providing different categories of misdemeanor with graded penalty and thereby substantially reducing the discretionary power of the tax officers. The penalty rates will now be 50% of tax in case of underreporting of income and 200% of tax where there is misreporting of facts”, FM said.

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