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Finance Ministry faces hurdles in downsizing

Hema Ramakrishnan

Shaji Vikraman

NEW DELHI, May 20

THE Government's move to kickstart the exercise of cutting flab in the Finance Ministry in line with the recommendations of the Expenditure Reforms Commission (ERC) may prove to be only a partial success as one of the Ministry's own wings has opposed any further downsizing.

The two boards under the Revenue Department -- the Central Board of Direct Taxes (CBDT) and the Central Board For Excise and Customs (CBEC) -- have clearly indicated that they should be kept out of the ERC's ambit.

Their logic is that rightsizing has been independently carried out in one case and will be undertaken in another in due course.

The CBDT has, for instance, pointed out that there is no case for further downsizing since it has already completed restructuring the Income-Tax Department based on the approval of the Union Cabinet last year. The CBEC, too, is firming up its own restruc turing plan, which will be forwarded to the Cabinet for approval.

The restructuring exercise in the IT department, which began in September last year, entailed reduction in the staff strength from 57,989 to 55,234, a 4.75 per cent decline (or 2,752 personnel in absolute terms). The phase-out, mainly of supervisory staf f, is being done through the normal process or attrition or non-fulfillment of vacancies.

The objective of the restructuring exercise was to enhance productivity and improve efficiency through induction of information technology and improving career prospects at the senior level.

The Cabinet's approval was subject to the condition that there would be an assured increase in revenue generation and re-training of the existing staff in information technology would be completed over the next five years.

Officials reckon that given the increasing work load in tax administration, any further pruning would only turn out to be counter-productive. Indirect hints have also been given to the Government that the Revenue Department should not be forced to take t he blame if it is unable to increase tax mobilisation, after the flab-cutting exercise.

The ERC, which has submitted its report on the Department of Economic Affairs (DEA), is expected to now come out with reports on the Department of Revenue and the Department of Expenditure, which may well not cover the two boards.

In the case of DEA, the Government has already abolished the post of Special Secretary (External Finance). A new division -- covering the financial sector combining the insurance, banking and capital markets divisions -- will be in place by July, when th e present Special Secretary (Banking), Mr Devi Dayal, retires.

A handful of posts at the level of deputy secretaries and directors have also been abolished in the department. However, the process of cutting jobs in the Economic Division of the Ministry is yet to take off.

According to sceptics in the Government, on the ground, this grandiose plan of downsizing has not meant any paring of jobs, but just abolishing a post when an officer completes either his tenure or retires.