Government of India
Ministry of Finance, Department of Revenue
Directotae of Incvome Tax
(organization & Management Services)
Level 5 East Block-2 R.K.Puram, New Delhi-110066
My dear Rajagopalji,
Sub: Vision 2020 document for the Income Tax Department- the road ahead-regarding-
The process of drafting a new vision document- Vision 2020 has been initiated by the Central board of Direct Taxes. A possible 2020 vision of the Income tax Department could be find itself as a professional organization collecting resources fairly, efficiently and effectively; being considerate and responsive towards taxpayers; promoting voluntary compliance. For accomplishing such a version would require a multi-pronged strategy, encompassing people, technology, re-engineered processes for ensuring growth in revenue collection, putting in place an excellent service delivery mechanism and meaningfully communicating with both the internal and external stakeholders.
Here is an opportunity for all of us to put our minds together for charting a road map for the future of the department that would reflect the aspirations of all departmental personnel and other stakeholders.
An office Memorandum highlighting the broad parameters for carrying out this exercise has been sent to all the stakeholders soliciting their suggestions and the same has also been uploaded to irsoffiersonline.org for wide publicity, a copy of which is enclosed herewith for your ready reference.
It is requested that the views of the members of the Association on all aspects of Vision 2020 may kindly be ascertained and the same along with suggestions may kindly be sent to ditdoms.km@gmail.com by 15th of January 2010.
Happy New Year.
Yours sincerely
sd/
F.No. 48/1/2009/KM/DOMS
Directorate of Income Tax (O&MS)
East Block-II, Level-V
R.K. Puram, New Delhi
Dated: 24th December, 2009
OFFICE MEMORANDUM
Subject: Preparation of Vision Document 2020 – Strategy reg.-
The tradition of having a Vision Document in the Income Tax Department in India started with signing of an MOU between the Indian and Canadian Government. The Vision Direct Taxes Document – 2000-2005 was one of the projects under the Direct Taxes Co-operative Working Group of the Indo-Canadian Project of capacity building of Revenue Administration. 2005 Vision document was released by the FM on 7th April, 2000.
2. Vision 2000–2005 earmarked four broad heads for special focus namely:
A) Human Resources Development.
B) Enforcement
C) Simplification and Client Assistance.
D) Modernization`
Further, it also laid down "Our Mission", "Our Values", "Our Global Vision" and "Our Overall Strategies" and also the time bound "objectives" and "Key results".
3. A review of the key results of the Vision 2005 was carried out by the Directorate of Income-tax (O &MS) in 2005 which set the tone for the preparation of Vision Document 2010. Accordingly, after taking into account the suggestions received from the field formations and other stakeholders, Vision Document 2010 was finalised and approved by the Board on 29-09-2005. This document presented a roadmap for realisation of the aspirations and purposes of the Department (Copy of the Vision document 2010 placed at Annexure A). Further, it outlined the Department's Mission, Values, and Overall Strategy. Detailed objectives and strategies to achieve those objectives were specified in the following 3 priority areas:
1 Tax Payers' Services
2 Effective and responsible administration/compliance of tax laws
3 Human Resource Development
4. In the meantime, the Department had also taken a decision to implement Sevottam: A single window system compulsorily requiring registration of receipt of paper returns and all other applications relating to Citizens' Charter items and issuing unique acknowledgement numbers. The charter provided for specific time lines for resolution of services promised to taxpayers. Sevottam is an initiative of the Department of Administrative Reforms and Public Grievances. The income tax department is one of the ten government departments selected by the PMO for fast track implementation of the scheme. A working group was constituted on 20-02-07 under the chairmanship of Member (R), CBDT to review and re-write the 1998 Citizens' Charter. The Hon'ble Finance Minister had given approval to the charter on 24-07-07 after approval of the Board on 13-07-07 (Copy of the Citizens' Charter 2007 is placed at Annexure B). As per the decision of Chairman, CBDT, the charter needs to be revisited every year as and when the system improves.
5. The commitments made in the Charter were put to test during the pilot run of Sevottam through the mechanism of Aayakar Seva Kendra (ASK) at three locations: Pune (since 18-05-09), Kochi (since 30-07-09) and Chandigarh (since 09-11-09). Valuable experiences have been gained during the process of the pilot run. Hence, it is about time to have a relook at the Citizens' Charter 2007 on the basis of experiences gained at these locations. Further, 2nd Administrative Reforms Commission in its 12th Report published in February 2009, has discussed the 2007 Citizens' Charter of the Income Tax Department The following observations were made by the Commission:
¨ Charter applies uniformly to all field formation in the Department though field units across the country differ on account of work load. Accordingly, there is a need for having citizens' charter at the level of field units
¨ There is also need for specifying certain standards for providing basic facilities to the citizens visiting income tax offices
¨ It is advisable to assess and evaluate the extent to which the time lines in the charter are adhered to
6. As 2009 is coming to an end, it is about time to start the process of drafting a new Vision document. This time it has been decided to go in for a 2020 Vision document with a long term view of 10 years followed by a mid-term review after 5 years ending 2015 and the usual year to year Central Action Plan, thereby having an annual, mid-term and long-term perspective plan for the department dovetailed together. This decision would also have important bearing on the formulation of the future Citizens' charter of the Department.
7. A possible vision of the Income Tax Department in 2020 could be recognition as a professional organization collecting resources fairly, efficiently and effectively, considerate and responsive towards taxpayers, thereby promoting voluntary compliance. To fulfill such a vision, a multi-pronged strategy encompassing people, technology, re-engineered processes with the objective of ensuring growth in revenue collection, backed by quality services to the taxpayers and aided by honest communication with both the internal and external stakeholders would be required. Only such a comprehensive strategy can ensure alignment of short term goals with the long term objectives of the Department and repositioning of the Department as a major contributor to the national exchequer for financing national development programs in the country. A possible road map for such a strategic initiative with details on focal areas, objectives and action points is summarized in Annexure C for consideration of the drafting committee.
8. In order to accomplish this task, the Board has constituted one Core Drafting Committee and six Working Groups to focus on various strategic aspects. The names of the Convenor and members of these Committees/Working Groups are listed in Annexure-D. These Committees/Working Groups deliberate on the strategy enumerated in Annexure C and associate all the stakeholders at apex level viz. Federations of officers/employees associations, professional bodies like CII, ICAI, FICCI, ASSOCHAM etc. Letters have been written to these organisations and their responses would be passed on to the working groups.
An Oversight Board for supervising the implementation of the Vision 2020 has also be proposed and the constitution of the Oversight Board is also given in Annexure D.
While preparing the Vision Document 2020, the developments that have taken place in the intervening period may kindly be considered. For the convenience of the Working Groups and the field formations, an attempt has been made to list out new developments during the last 5 years and is given in Annexure E.
Member (R), CBDT is likely to convene a meeting of all the Convenors in the first week of January 2010 to draw up the plan and the exact date would be communicated soon. The Convenors of various working groups may kindly convene a meeting of the respective groups immediately after the meeting with Member (R). Suggestions received from various stakeholders would be passed on to the respective working groups.
9. All the Chief Commissioners/Directors General of Income-tax have a very vital role at field level in framing Vision Document 2020 and reviewing the department's Citizens' Charter, 2007. It is requested that local Committees may kindly be constituted by associating some forward looking officers and departmental personnel. The local committees may be entrusted with the responsibility of evaluating the achievements of objectives laid down under Vision Document 2010 and to make suggestions on all aspects of Vision Document 2020, namely:
· Focal areas for strategy making
· Selection of strategic goals,
· Linking up of Long, medium and short term goals
· Constitution of Oversight Boards
· Possible Action Points to achieve our long term Vision
While accomplishing this task, suggestions may also be invited from local officers/employees unions and professional bodies including Regional Advisory Committees.
10. Expenditure Budgeting is another important area of work where input from CCsIT/DGsIT is of utmost importance. To have meaningful deliberations on this subject, a note "Expenditure Budgeting- Road map for a new institutional mechanism" appearing in 25th Chief Conferences/Directors Generals Conference booklet is enclosed at Annexure-F for your ready reference.
It would be appreciated if input/suggestions on all these areas are sent to this Directorate latest by 15th of January, 2010 through e-mail at ditdoms.km@gmail.com so that the same could be placed before the Working Groups.
11. Board desires that this prestigious project of framing Vision Document 2020 along with the new Citizens' Charter be finalised well in time and submitted to the Hon'ble Finance Minister so that the same could be included in his Budget Speech, 2010. To meet this target all Working Groups are requested to finalise the vision in the respective areas latest by 5th of February, 2010.
(Nilimesh Baruah)
Director of Income-tax (O&MS)
Encl: As above
Copy to: 1. PS to the Chairman, CBDT
2. PS to All Members, CBDT
3. All CCsIT/DGsIT
4. All the Members of the Working groups as per Annexure D.
5. To the DBC, to be uploaded on the website.
Our Mission
To promote
compliance with
Direct Tax Laws
through quality
taxpayer service
encouraging voluntary
compliance and
firm administration.
Our Values
| Integrity | Being honest and transparent in our dealings with taxpayers and others. |
| Responsiveness | Being sensitive, and understanding in all our dealings so as to foster mutual trust. |
| Fairness | Being objective and reasonable in our actions and decisions. |
| Excellence | Striving for highest standards of performance through continuous learning. |
| Accountability | Ensuring that our actions stand the test of scrutiny. |
| Innovation | Continuously seeking new ways to achieve our mission. |
| Professionalism | Competency and |
Our Overall Strategy
As an organisation, we aspire to achieve professional excellence. For this we will strive to change outdated practices, procedures, systems and attitudes.
Modernisation and inculcation of the will to change, will characterize our efforts over the next five years. Change initiatives will be undertaken in following sectors to achieve our mission:
· Taxpayer Services
· Effective and responsible administration/compliance of tax laws
· Human Resource Development
Taxpayers Services
Our vision : To make available top quality service to taxpayers so as to enable them to meet their tax responsibilities.
| Objective | Strategy |
| 1. To enable taxpayers to meet their normal tax obligations in a convenient manner without visiting Income Tax Office. | To Set up facilities so that taxpayers can do the following from their homes/offices, (including through internet):
(i) Obtain all direct tax related information including forms etc.
(ii) File PAN application and obtain PAN on demand.
(iii) Prepare and file returns of income/TDS.
(iv) Pay taxes and track status thereof.
(v) Get refunds by credit to their bank accounts.
(vi) Reply all assessment related queries except where personal attendance is necessary.
(vii) File petitions and track status thereof. |
| 2. To simplify tax law and procedures | Carry out simplification of Income Tax Act and complete Business Process Re-engineering of the departmental processes so as to make these taxpayer friendly and amenable to efficient automation. |
Effective and
Responsible Enforcement
Our vision : To move towards extensive use of non-intrusive and automated techniques for ensuring compliance with tax laws.
| Objective | Strategy |
| 1. Intelligence network | a) Creation of automated databases of financial information, and integrating these with similar databases of other fiscal and connected agencies.
b) Use of data warehousing techniques for identification of patterns of tax leakages.
c) Use of risk assessment techniques to identify and select cases for scrutiny. |
| 2. Moving towards non-intrusive enforcement | a) Carrying our surveys and searches to check organized tax frauds.
b) Publicising deterrence mechanism and convictions.
c) Streamlining the procedure for successful and quick prosecution of tax offenders. |
| 3. Enhancing quality of scrutiny assessments | To make available quality information to Assessing Officers in cases selected for scrutiny, through use of data warehousing and data mining techniques. |
Human Resource
Development
Our vision : Create a workforce committed to strive for and achieve professional excellence.
| Objective | Strategy |
| 1. Mobilisation of adequate manpower | a) CBDT to be an independent Revenue Agency.
b) Creation of Directorate of Human Resource Development for implementing modern human resource management practices.
c) To redefine the skill requirements in a modern technology environment.
d) To develop appropriately skilled manpower at all levels.
e) Review of manpower requirement for achieving the requisite service levels. |
| 2. Enhancing performance | a) Modernization of Income Tax offices.
b) Recognition of outstanding performance including taxpayer service.
c) Operational vehicles for every Range and at every station.
d) Residential accommodation for all.
e) Augmentation of corpus of Employee Welfare Fund.
f) Observing Income Tax Day annually on 24th July. |
| 3. Developing responsive tax administration | a) Sensitisation through awareness programmes.
b) Regular quality review of performance.
c) Ensuring accountability at all levels. |
| Objective | Strategy |
| 4. Enhancing professional excellence | a) Knowledge and skill upgradation in information technology.
b) Create training, deputation opportunities and leave reserve.
c) Minimum five weeks training for everybody every five years with proper evaluation system.
d) Persons trained in special programmes should impart training of skills learnt.
e) Broadening of skills/vision through deputations.
f) Impart training through online and offline programmes.
g) Develop NADT as Policy Development Centre. |
| 5. Providing fair and caring administration | a) Dissemination of information of current initiatives in personnel and other matters.
b) Provide a forum for exchange of ideas regarding infrastructure, legal issues and personnel policies.
c) Effective Grievance Redressal Mechanism for employees.
d) Prompt disposal of representations and petitions. |
Annexure-B
CITIZENS' CHARTER
INCOME TAX DEPARTMENT
GOVERNMENT OF INDIA
MARCH, 2007
A DECLARATION OF OUR COMMITMENT TO EXCELLENCE IN SERVICE TO TAX PAYERS
Our Mission:
To promote compliance with Direct Tax Laws through quality taxpayer service encouraging voluntary compliance and firm administration.
We believe:
- in transparency and fairness
- in voluntary compliance
- in encouraging and assisting taxpayers
We aim :
- to provide information, leaflets, forms etc. at the information and facilitation counters as well as on website www.incometaxindia.gov.in and to organize awareness programme.
- to issue refund alongwith interest, if any within 9 months from the end of the month in which the return complete in all respects is received.
- to give effect to appellate/revision order within 45 days from the date of receipt of the appellate/revision order by the A.O.
- to dispose of rectification application within 2 months from the end of the month in which the application is received.
- to issue refund including interest, if any, arising from proceedings other than Section 143(1), within 30 days of its determination.
- to acknowledge communications from taxpayers.
- to allot PAN within 15 days of receipt of PAN application.
- to dispose of application seeking extension of time for payment of tax or for grant of installments within one month from the end of the month in which the application is received.
- to issue tax clearance certificate under section 230 of the I.T. Act immediately on the date of receipt of application or latest by the following working day.
- to dispose of application for recognition/approval to provident fund/superannuation fund/gratuity fund within 3 months from the end of the month of its receipt.
- to dispose of application for grant of exemption or continuance thereof to institutions (University, School, Hospital etc.) under section 10(23C) of the I.T. Act within one year.
- to dispose of application for approval to a fund under section 10(23AAA) of the I.T. Act within 3 months from the end of the month of its receipt.
- to dispose of application for registration of charitable or religious trust or institution within 4 months from the end of the month of its receipt.
- to dispose of application for approval to Hospitals in respect of medical treatment of prescribed diseases within 90 days of its receipt.
- to dispose of application for grant of approval to institution or fund under section 80G(5)(vi) of the I.T. Act within six months from the date on which application was made.
- to dispose of application for no deduction of tax or deduction of tax at lower rate as early as possible but not later than 30 days of its receipt.
- to redress/dispose of a complaint/grievance within 2 months from the end of the month of its receipt.
- to dispose of application for transfer of case within 60 days of the receipt of application
For better services, we expect our taxpayers:
- to obtain PAN/TAN and quote the same correctly in all returns, challans and correspondence.
- to file all statutory returns, completely and correctly well within due dates in proper jurisdiction.
- to pay due taxes well in time.
- to quote Bank Account Number, MICR Code and other Bank details in returns of income to facilitate issue of refunds.
- to be fair and prompt in complying with all proceedings under Direct Taxes Statute.
- to intimate change of address to the Assessing Officer.
- to quote PAN of all deductees in TDS Returns
Complaints and Grievances
Citizens can lodge their complaints/grievances at all Facilitation Counters/Tax Payer Service Centers functioning in all Income Tax Office buildings
For Telephone numbers and e-mail ids of Facilitation Counters/Tax Payer Service Centers, please log on to www.incometaxindia.gov.in
Annexure-C
Strategy in preparation of Vision Document 2020
| Strategy Focus | Objectives of the Strategy | Action Points | ||
| People | Personnel should exude professionalism, accountability, high morale, self esteem and high level of integrity in the discharge of their functions. Should be adequately equipped and trained to cope with the increasing pressure of work, the changing face of business and technology.
| · Continuous up-gradation of skills · Need-based training · Development of a single consolidated website for the entire Department for knowledge management and other utilities · Prompt redressal of employee grievances · 360 profiling of personnel for effective deployment · To come up with concrete proposals for departmental personnel under 1% incentive scheme and Welfare Fund · Time bound promotion and a reasonable transfer policy | ||
| Structure | To create a functional structure to align with the changing business needs for ensuring delivery of output on real time basis. | · To develop integrated problem solving mechanism based on collaboration across functional areas · To have a new mechanism for consolidated Expenditure Budgeting for the entire department | ||
| Technology | To Introduce latest technology and upgrade it for time to time for efficient functioning. | Use of latest technology at the cutting edge level for enhanced productivity ensuring security of the system
| ||
| Process | To have simple, transparent and technology driven processes. | Harness technology to implement re-engineered processes
| ||
| Communication | To develop faster & honest communication with internal as well as external stake holders with a view to develop sense of participation and ownership | · To come up with a Public Relation policy. · Ascertaining the aspirations of both taxpayers and tax officials to develop a shared vision. · Use of all communication channels for reaching out to the taxpayers
| ||
| Quality | To ensure fair and prompt striving service, for continual quality improvement with a view to provide top class services to tax payers. | To further develop taxpayer services under the umbrella concept of Sevottam by combining all new initiatives including the online taxpayer services
| ||
| Growth | To ensure growth in revenue collection, widening and deepening of tax base by following non-intrusive yet effective and meaningful enforcement strategy. To monitor cross-border transactions and inflow of capital, money laundering and exchange of information under treaty obligation To reduce protracted litigation by building up consensus on contentious issues through knowledge sharing
| To develop a revenue forecasting model
To identify the potential growth area including revamping of TDS mechanism
To identify new emerging areas posing threat to the existing tax enforcement and regulatory mechanism
To come up with risk management methodology
To develop mechanism for utilization of data by adopting data mining techniques
To develop a robust knowledge management mechanism with mechanism for discussion forum
A fully functional research unit along with a Data base on legal issues agitated before higher appellate authorities
| ||
Annexure-D
Members of Core Drafting Committee/Working Groups
| Name of the Committee/ Working Group | Name of the Chairperson/Convenor | Other members of the committee | Corresponding Oversight Board |
| Core Drafting Committee | Mr. Durgesh Shankar, Member (R), CBDT | Convenors of various working groups Mr. Nilimesh Baruah, DIT (O&MS), Member Secretary Co-ordinating team: Mr. Nitin Gupta, CIT (IT&CT), Ms Mona Singh, Director (ITCC) Mr. Anshuman Patnaik, Director (Budget)
| Full Board |
| Working Group on People Strategy & Expenditure Budgeting | Mr. S.S. Rana, DG (HRD) | Mr. S. Ravi CIT, Trivandrum Mr. Krishna Saini, CIT, Baroda Mr. Binay Kumar Jha, DIT (HRD) Mr.Ravi Ramachandran, Addl DG II, NADT
| Chairman, CBDT Member (P), CBDT Member (IT), CBDT
|
| Working Group on Structure and Process Strategy | Mr.Qaiser Shamim, DG (BPR) | Mr. Swatantra Kumar, CIT, Kochi Mr. Akhilesh Ranjan, CIT, Shimla Ms. Rashmi Saxena, DIT (BPR) | Chairman, CBDT Member (L&C), CBDT Member (A&J), CBDT
|
| Working Group on Technology Strategy | Mrs.Lakshmi Prasad, DG (Systems) | Mr. D.S. Saxena, CIT IV, Ahmedabad Mr.Gopal Mookherjee, DIT (Systems) IV Mr. Harish Kumar, DIT (Sys) III Mr.Ravi Agarwal, DIT (Sys) II Mr. Parneet Sachdeva, CIT (A), Hyderabad
| Chairman, CBDT Member (L&C), CBDT Member (IT), CBDT
|
| Working Group on Communicat-ion and Quality Strategy | Mr. Kalyan Chand, DG (Admn) | Mr.R. Raghu CIT-IV Ahmedabad, Mr. K.C. Jain, DIT (Infra) I Mr. Amitabh Kumar, DIT (PR, PP & OL) Mr. Suresh Kumar, CIT (A), Jalandhar
| Chairman, CBDT Member (R), CBDT Member (Inv), CBDT
|
| Working Group on Growth strategy | Mr. Milap Jain, DG (Inv) | Mrs. Anita Kapur, JS (FTD) Mr. Shailendra Handa, DIT (Inv), Delhi Mr. Sunil Gupta, CIT (J), CBDT Mr.Sanjay Kumar, CIT XX, Kolkata
| Chairman, CBDT Member (A&J), CBDT Member (R), CBDT
|
| Working Group on Citizens' Charter | Mrs. Sudha Sharma, DG (Vig) | Mr. K.K. Tiwari, CIT V, Pune Mrs. Anuradha Goyal, CIT, Kochi, Mr. A.K.Kaushal, CIT II, Chandigarh Mr. Rajib Hota, CIT III, Coimbatore | Chairman, CBDT Member (P), CBDT Member (A&J), CBDT
|
Annexure-E
Developments taken place in the recent past
¨ Emergence of the direct tax revenue as the highest contributor to the exchequer of Govt. Of India
¨ In principle approval of the Business Process Re-engineering report by the Board
¨ Setting up of a new Directorate of Human Resource Development
¨ Adoption of Sevottam as a model for achieving excellence in public service delivery mechanism
¨ Cross-functional approach for problem solving adopted for implementing Sevottam in order to bring in integrated problem solving approach for improving taxpayer services
¨ Acknowledging knowledge as the institutional asset of the Department and the need for creating an institutional memory, knowledge management initiative was started in 2008 manifested in publication of two volumes of "Let us Share – A Compilation of Best Practices and Orders"
¨ Distribution of certificates and memento to the contributors of "Let us Share" for acknowledging good work done by the departmental personnel
¨ Recognition of Innovative Best Practices in the area of administrative domain developed by departmental officers by having a separate section on Best Practices in the book "Let us Share".
¨ An institutional mechanism has also been put in place for discussing innovative practices in the department in an annual workshop at NADT. The second workshop in the series helped to identify 5 such innovative practices to be nominated for PM's award of excellence by the Board for the first time
¨ Migration from a two-tier to a three-tier architecture for ITD and other applications
¨ Consolidation of 36 regional databases to one national database
¨ E-filing of returns for Corporates and some other specified taxpayers is firmly in place
¨ Setting up of Central Processing Centre at Bangalore for bulk processing of returns
¨ A series of online taxpayer services such as Refund Banker scheme at selected locations, facility for obtaining tax credit statement in form 26AS, tracking of refund etc
¨ Setting up of Large taxpayer units at selected locations
¨ 360 degree profiling of taxpayers to facilitate real time investigation and setting up of forensic lab
¨ Implementation of Right to Information Act 2005
¨ Going a step forward to encourage transparency in the functioning of the Department, a public version of the book "Let us Share" was distributed to taxpaying public
¨ New Direct Tax Code is out for public debate
¨ The second major cadre-restructuring exercise is under way
¨ 1% incentive scheme and welfare fund for employees is operational
¨ A new transfer policy is in the pipeline
¨ Document identification number as proposed by the new Finance Act by incorporating section 282B and other legislative changes having impact on the Vision document
¨ India gaining importance as a favoured destination for Multinational Corporation with dramatic increase in cross-border transactions and inflow of foreign investments into the country.
Expenditure Budgeting: Road Map for a new Institutional Mechanism
Expenditure budgeting for tax administration requires special attention as the expenditure is specifically incurred for improving Direct Tax Collection which now contributes almost 55% of total Tax Collection of the Central Government. However, due attention has not been paid to this process of "Expenditure Budgeting" in our department. This paper proposes an institutional mechanism for preparing a consolidated "Expenditure Budget" for the income tax department through a process of consultation between a nodal agency of CBDT and the 110 budgetary authorities across the country.
Expenditure management should be viewed as a tool for strategic management. The expenditure budgeting in the income tax department is meant for improving revenue collection. Expenditure budget should therefore be the financial mirror of the department's strategic choices. Hence, the institutional design of the budgeting process is crucial for achieving that particular outcome of mobilization of maximum revenue collection. In order to achieve the target revenue collection, strategies are deployed which could be in various functional areas such as: Building capacities for processing of returns, improving infrastructure for offering better taxpayer services, knowledge management for improving effectiveness of the personnel, performing compliance activities, building network of information system, developing infrastructural facilities and so on and so forth. In other words, these strategies relate to Tax Administration operations as well as for capacity building for the entire department. Accordingly, expenditure budget is used for implementing these broad strategies.
However, in the case of income tax department in India, there is a disconnect between the deployment of strategies and formulation of expenditure budget by various budgetary authorities in the absence of a "consultative forum" for facilitating a two-way communication process between strategies adopted by the Board and its financial implications for the individual budgetary authorities. As of now, there is no nodal agency to communicate the broad strategies of the Board for augmenting revenue and incorporation of the same in the expenditure budget proposals of budgetary authorities. Since individual budget proposals are prepared in a fragmented manner on an incremental basis, expenditure budget preparation is not examined comprehensively. Budget proposals are made and approved in fragments, the consolidated expenditure budget of the entire income tax department cannot be construed as the financial mirror image of the department's strategies. This shortcoming can be removed by having a nodal agency for preparing a consolidated expenditure budget for the department with proper communication with the individual budgetary authorities about the programs and policies of the department and their financial implications for individual budgetary authorities. The individual budgetary authorities can continue to receive separate budgetary approvals from IFU and function as independent authorities but at the same time, proper reconciliation is done at the organizational level. The following steps would be required to put this institutional mechanism in place:
Ø Set up a nodal agency for preparing a consolidated expenditure budget for the entire department with one to one mapping between departmental strategies for improving revenue collection and budget requirement for an individual budgetary authority. Once the consolidated budget is prepared after proper reconciliation, the individual proposals can be forwarded to the IFU
Ø The mandate for the agency would be to ensure provisioning of budget at the level of individual budgetary authority for national projects which an individual budgetary authority may not be in a position to do, for example, an initiative like Sevottam if decided by the Board to implement at various locations, this nodal agency would communicate the possible financial implications to various budgetary authorities in advance and would ensure that provisioning is made appropriately at the appropriate time
Ø To document department wide resource allocation across various activities and various budgetary authorities
Ø Since most of the high impact projects are not necessarily annual, the nodal agency would help the individual budgetary authorities to shift from annual planning for one year to budgeting for extended time horizon
Ø As per a news item appearing in Economic Times on 4th August 2009 with the caption "ax Sleuths unable to curb evasion despite Data Deluge" the total quantum of high value transactions in the financial year 2007-08 has been reported to be Rs. 55,70,261/- Crore. This information is with various CIB Directorates across the country. If policy decision is taken to make effective utilization of this information with a specific game plan, allocation of budgetary resources can be planned as per availability of information across various directorates. The same new item has also reported that Rs. 1,03,809/- Crore as "tax revenue raised but not realized". Here again, the outstanding arrear across various budgetary authorities and resource allocation can be specifically provided for to take up necessary steps for effecting recovery.
Ø The nodal agency would start the consulting process with the independent budgetary authorities in the month of August before the 5-monthly actual expenditure is submitted to IFU along with Budget estimate for the next fiscal year and Revised estimate for the current fiscal year in the month of September every year. The importance of the budget proposal in the month of September is missed out by the individual authorities in the absence of information relating to national projects having a bearing on their expenditure budget. Consultations would be made by the nodal agency with the individual budgetary authorities around the crucial dates for expenditure budget preparations.
Benefits of the new Institutional Mechanism:
ü It would help CBDT to formulate policies after taking into account the financial implications for various budgetary authorities. As a corollary, implementation of each project or strategy would be easier with identification of budgetary authorities and the stakeholder
ü New mechanism would be a high breed variety combining both bottom-up and top-down approaches to meet the special requirement of the income tax department
ü It would ensure alignment of departmental policies with financial budgeting. All budgetary authorities would be informed about the national projects having bearing on their budgetary allocation
ü It would help in implementation of projects with identification of cross functional teams in advance
ü With documentation of the link between resource allocation and strategy applied, justification for funds would be stronger in our budget proposals
ü Components of good governance, namely, accountability, transparency and participation would be ensured
---