Public Policy – 2

I had blogged on the matter and the wisdom of the tax notice being sent to Vodafone at this stage. Unusually, I had also engaged with some of those who had commented on my article in ‘Swarajya’.

While I still feel that there is a strong prime facie case of mala fide, it is also a case of organisational failure. Both are not mutually exclusive. While I had commented on the failure of leadership at the Ministry of Finance (MoF) in the Government of India, I could have been more specific. This blog post is an attempt to fix that gap.

There should be clear guidelines on delegation of powers and for escalation of matters. It could be a monetary limit beyond which the notice is ‘approved’ by someone higher up in the hierarchy before it is sent out. Companies have the ‘four eye’ principle. On sensitive or high-value matters or both, there should be four or even six eyes looking at the matter.

The Revenue Secretary should also be having a dashboard that he monitors every day. Vodafone litigation/arbitration, retrospective taxation, MAT, Permanent Establishment, Transfer Pricing cases – are some examples (not an exhaustive list) of the issues that he should be overseeing personally for they affect the investment climate and impinge on the assurances given by the Prime Minister to foreign leaders and businessmen.

Therein lies the value of training and reinforcement in instilling a sense of ownership in all organs of the government, of the goals of the government. Foreign Direct Investment is not just the goal of the Department of Industrial Policy and Promotion (DIPP). Similarly, enhancing the image of the country is not the task of the Embassies and High Commissions alone.

Matters such as these matter.

The Organisational Structure, Processes and Training in the bureaucracy should be geared to achieving the government’s overall goals and not just the goals of the silo concerned. When they come into conflict, there should be clear guidelines on which ones take precedence and why.


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