Assisted Access to e-governance services-will this be its Waterloo?

Corporate and Tax laws/procedures have been significantly modified to allow for e-governance. Some examples are mentioned below

• All excise/service tax returns must be filed online irrespective of amount etc
• Significant chunk of income tax returns are filed online 
• All company law forms/returns are filed online, and payments
• Many state VAT laws now mandate electronic filing of returns/audit reports/registration

To ensure greater data integrity, the initial mandate was that certain practising professionals(CA, CS,CWA) could pre-certify the filing, using their digital signature. But the issue then rose about accessibility. After all, not all are techsavvy, even fewer have a good broadband connection etc. Therefore, the concept then arose of Certified Filing Centres(CFCs) for both corporate and tax laws, which essentially provide administrative support for filing including scanning, uploading, reformatting etc. The primary responsibility of the filing remains with the filer though. These CFCs may be run by professionals themselves or by private parties.

The Code of Conduct of the respective professional institutes may ensure good quality work by professional run CFCs but the issue is whether this is sustainable? After all, such work does not need a CA to do it, and would result in higher fees than compared to non CA/CS/CWA doing it.

But if one throws open CFCs to persons not regulated by their respective professional councils, then the issue comes about compensation for erroneous filings etc. No amount of security deposit can really suffice, nor can the amount be readily computed. To strike the balance between public interest(lower fees) and information integrity, a good midway could be online checks/validations which would avoid gross errors, as well as random confirmations in case of outlier numbers. This is done for TDS returns, MVAT returns etc, and can be extended to all. I'm sure the IT industry would be ready to help set up and design forms allowing for live validation checks and confirmations. If this is not done, then the inevitable errors when publicized, may lead to loss of faith in the new system

So what are priority sectors anyway?

A careful listener of the annual Union Budget speech(and related commentary/analysis) would hear the term 'priority sector' used(overused?) ad-nauseum, in the context of tax relief, subsidies, soft loans etc. Some known sectors are textiles, agriculture, renewable energy, gems etc. While the rationale for some of these are political like for sugar(powerful barons in Maharashtra/UP) or wheat(powerful farmers in Punjab/Haryana), the reality is that some are prompted by quite logical considerations.  The National Manufacturing Policy of Oct-11(http://dipp.nic.in/English/Policies/National_Manufacturing_Policy_25October2011.pdf) gives an interesting analysis of priority sector, in the context of proposing sector specific interventions. To quote from Section 7 of that document,The priority sectors as identified in the Planning Commission and NMCC papers are:-
a) Employment intensive industries like textiles and garments; leather and
footwear; gems and jewellery; and food processing.
b) Capital goods like machine tools; heavy electronic equipment; heavy transport, earth moving and mining equipment; high technology equipment like telecom, power, ICT and electronic hardware.
c) Strategic industries like aerospace; shipping; IT and electronic hardware;
renewable energy; solar, wind etc; defence equipment.
d) Industries where India enjoys a comparative advantage like automotive; pharmaceuticals.

While the socialist legacy of India politics would explain (a), (b) & (c), the post liberalization budgets have slowly begun to push sectors where India has a comparative advantage viz (d). One would like to believe that the above sectors are favoured for logical reasons, and not just for crony capitalism. Hence, the purpose of this post to try giving some credit to the Govt.

Legalizing speed money-the global trend?

Today, we had a guest lecture by one of India's renowned intercultural consultants, Sreemathi Ramnath(http://www.linkedin.com/pub/sreemathi-ramnath/4/946/539). While mentioning the different cultural attitudes towards bribery, she made a distinction between speed money(paying to get your legal right faster) and bribery(getting what you are not entitled too). I dissect this issue further in this post.

1. Any temple of repute has a 'special darshan' where well heeled(or well connected) devotees can avoid standing in the serpentine Qs, and instead finish their darshan in a jiffy. Initially, this used to outrage me because if devotees are not equal before God, then where else are they equal? Then it struck me that those in a hurry would devise some way to break the Q, and end up enriching the guardians/priests. Instead, this system ensures that the temple grabs that economic surplus. 
2.  Another example is the tatkal reservation system in trains, which replaced the earlier manual manipulation of reservation charts to benefit those in a hurry. Now, tatkal transparently allocates seats to those willing to fork up that extra bit of money. 
3.  Even for that citizenship identity(the passport), those in a hurry can pay an extra fee and legally get their application processed faster.
4. Inventors in a hurry to publicize their patents, can pay the Patent Office an extra fee to get their patents published on a priority basis(and thereby signal their belief in its commercial utility and validity). 
5. The Ministry of Company Affairs can now approve company formation in less than a day, provided the applicants use a professional to pre-certify the application forms. Granted that the professional runs the risk of penalties and disbarment for wrong filing, but for the most part in routine cases, this provision allows the professional to extract a 'rent' from the company-a refined version of speed money. The applicant pays the professional extra fees, so that the processing is done faster

But then, this practice is not that new fangled. Banks, Photography studios and courier agencies have a hallowed tradition of charging more for faster delivery. The modern science of activity based costing has merely justified this practice, as has another favorite consulting jargon of value based pricing. 
Takeaway:-Try spotting more such practices around you, and do not get pissed off. It is just economic logic-the system captures the rent instead of corrupt people within the system.

Well intended policies,unintended consequences

1. People are better educated, live longer and face a better quality of life
2. Phrased this way, this is difficult to argue with these propositions. 
3. But when thought of as
1. Poorly educated unemployable students unwilling to get their hands dirty with 'real work', deferring joining the workforce for masters degrees of questionable value. 
2. People living healthier life, consuming more food/resources AND facing income deficit in their old age, with more claimants on land. 
3. Infrastructure encouraging more cars, higher fuel import/subsidy bill, pollution etc
4. Then it would show how the healthcare, education & infrastructure boom may implode India
5. Already, some signals of these consequences are apparent
1. Farmers in the grain belt(Punjab/Haryana) incurred more wage cost due to competition from NREGA, so they suffered lesser yields AND higher costs, so now want a drastic hike in MSP, which will increase inflation, and in turn the inflation linked NREGA wage. Vicious cycle
2. The war for minerals being played out in the poorest tribal areas, is partly due to this increase in resource demand, due to consumerism

      As one of those consumers in the above post(though better educated hopefully!), I cannot really condemn         this income levelling measure. All I can say is that if the consequences of some policies were thought out
     and debated as extensively as the Lokpal Bill is, these effects may have been reduced.