AUGUST 28, 2008
By Shailendra Kumar,
LAST week the Union Cabinet gave its nod for creation of more than 500 new posts over the years in the Ministry of External Affairs.The rationale was to expand the regiment of Indian diplomats who are projected to be much more active from geo-political and global trade viewpoints in the coming years. With India ascending in its geo-
political and economic status, our diplomats indeed need to play a sheet-anchor role in securing better economic and military deals in future. So far so good.
But the issue this Column would like to broach is that of the need for a holistic approach and a comprehensive vision on all round requirements of the Indian economy over a longer horizon of time. Yes, the hint is towards the creation of certain posts for Customs and Income Tax as well in certain key trading partners of India. The size of the Indian economy has already moved into trillion dollar
segment. With 20% growth rate in the exports basket, its external trade sector is going to be worth more than USD 300 billion in next few years.
In terms of foreign investment, India is already one of the most favoured destinations for highly mobile global capital. India has got Double Taxation Avoidance Agreements (DATA) with about 70 countries. And in next five years this number would be anywhere between 115 to 130. Going by the present rate of signing FTAs, India will have more than 40 such agreements in place, including Comprehensive Economic Cooperation Agreements. India has already entered into many Customs Cooperation Agreements. In other words, apart from a jump in the number of diplomats, India would also require many more revenue service officials being posted overseas at
critical stations for multiple purposes like information-gathering,investigation, intelligence, anti-dumping documentations and a human link with the commerce and revenue wings of the contracting states.
Ideally, the Union Cabinet should not blindly sanction certain diplomatic posts. It should be guided by the concept of a 'Model Embassy Staffing Pattern'. In other words, whenever an embassy in a particular country is expanded, along with the posts of diplomats, other posts should also be automatically sanctioned. Along with the
posts for IFS and IAS, other posts for services like Customs, Income Tax and Trade should also be approved to take care of the holistic needs of the economy. Such a model approach would obviate the need for individual Ministry to initiate proposal for creation of certain posts for revenue or commerce.
Keeping in mind the mercurial economic and trade scenario, both the Revenue Boards should be doing extensive homework now so that creation of certain posts at key stations could be deliberated upon and sanctioned by the Cabinet. CBDT has already got a couple of posts sanctioned but it represents the baby step towards the much larger requirements in future from transfer pricing and DTAA viewpoints. CBEC has also moved a proposal for creation of eight more posts in some of the trading partners of India which have the potential to become mega trading states for our exports, imports and investment. Some of them are Brazil, South Africa, Turkey and others.
Let's now move a little away from the futuristic requirements of the economy and take a look at the present arrangements. CBEC has at present eight overseas posts at critical stations like London, New York, Singapore, Brussels, Dubai, Hong Kong, Moscow and Kathmandu. This is also known as COIN (Customs Overseas Intelligence Network)
posting. These are Customs posts, designed to be instrumental in gathering information not only related to Customs and NDPS but also national security. The officers posted to these slots indeed play a very critical role, including the one, related to cases of VAT refunds after large-scale shopping at places like Harrods in London.
Netizens may recall the cases booked against the Big 'B' and some of the noted politicians and industrialists who had walked away with expensive goodies without paying duty at Indian airports. FICN (Fake Indian Currency Note) seizure cases could be another example. So serious has become the problem of FICN in recent years that the
Parliamentary Committee is seized of the issue and serious thoughts being given by the Govt to counter this insidious phenomenon.
Let's now go to the two-fold issues related to these posts. One is that these posts are known as under-cover posts. Why? In today's world of transparency where India has also acceded to the demand of many countries for posting their Customs officers in New Delhi, why should India continue with the Cold-War nomenclature of ''under- cover posts'' for the Customs? The need for doing away with such an
outer cover is more pronounced in the light of the fact that
wherever these officers are posted, they interact with the local Customs of that country and also become a Member of informal clubs of Customs Attaches for regular exchange of information and interaction. When all such facts are known to the host country, where is the need for an ''under-cover''?
It is time now that India junks such under-cover shell and let these posts be known as Customs posts. Once it happens this can also take care of the recurring problem in selection of officers by the Ministry of Finance and the MEA. What has been happening at present is that there is no laid down guidelines and transparency in the selection of officers for these posts. This inevitably results in
political lobbying and bureaucratic string-pulling. Once a list is finalised with meritorious and semi-meritorious candidates, the MEA comes into the picture for final approval. It is so because these are under-cover posts under the diplomatic category. Since MEA wants to lord over its own turf, naturally any panel recommended by the MoF appears to be challenging or diluting its authority! So, it
often rejects the panel and sends back the same to the MoF with certain queries. Such exchange of gibberish correspondence delays the selection which leads to granting of extension to those who have completed their tenure and are ready to come back. Finally the issue ascends to the ministerial level and gets sorted out! This is what has happened with the present panel shuttling between the MoF and MEA for the past three months.
Now the bigger question is : When the Finance Minister can afford to put a detailed Transfer-cum-Posting Policy for domestic posts, why cann't he approve a transparent selection guidelines and also posting policy for officers who come back to India after completing their tenure? There is apparently a desperate need for such a policy to avoid - first, an annual clash with the MEA officials and secondly, a delay in the selection. Such a transparent guidelines
would also do a world of good to merit in the service which often gets short shrift.
Let's now go to the categorisation of stations for certain benefits to the officers. At present all stations are equally important for the Customs. However, practically it is not correct. Some of the stations are definitely more important or harsher than others, depending on the volume of trade, geographical proximity to India and the degree of diplomatic camaraderie between two countries. The UN regularly keeps revising the status of stations in terms of harsh posting for its personnel. Once a station is declared harsh, personnel posted there become entitled to certain additional benefits like the one in North-East in India. Such a practice in tune with the UN's regular revision would do justice to the needs of officers who get posted to harsh stations.
Here comes up one more issue related to the implementation of the transfer policy of officers coming back from overseas posting. Since overseas posts are treated as Station A, these officers on return are necessarily posted to Station B & C irrespective of the fact that whether that overseas post was harsh or unfriendly. Secondly, the MoF does not believe in utilising the expertise gained by these
officers during their overseas stints while negotiating Customs deals or investigation in important cases. They are blindly posted to mofussil towns. It is indeed unfair.
Let's hope the Finance Minister does take note of the changing condours of time and needs of the economy and does what he should have done along with the General Transfer Policy. A fair and transparent selection criteria should be put in place and the CBEC should get full authority to select officers for its own overseas posts like the CBDT. This is important more in the light of the fact that many more such overseas posts would be created in future, a
clear-cut line of control and authority should be evolved right from the beginning before it becomes a bone of contention between two Ministries.
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