Let me first wish U all a very Happy and fiscally-gratifying New Year! All of us have stepped into an unknown space but strongly hope that the Indian Economy would do much better so that all of us are productively engaged. In contrast to the pedestrian mannerism of entering into the New Year, our Finance Minister literally celebrated the vital statistics of direct taxes, for the first time, surpassing the indirect tax collections in the country. So elated and excited our Finance Minister was on the first day of the New Year that he could not resist the temptation of meeting the newshounds of North Block. He met them in a quickly-convened Press Conference where enthusiastically reeled out the vital components of the Direct Taxes mop-up. But he was, at the same time, highly circumspect in his utterances as he knew it is Budget time and no Finance Minister generally likes to meet media persons in the months of December to January.

However, time has changed and greater transparency is the oft-repeated mantra. So, when a newspaper reporter caught the Minister by his words like 'he attributes the buoyancy in the collections to voluntary compliance by taxpayers' and asked him whether the growing graph of voluntary compliance would lead to moderation of tax rates he quickly sounded non-committal and spoke the way most politician FMs spoke in the past. But having observed his action and words in the past, I am dead sure that more than other reasons like state elections in 2008 and also the possibility of early Parliamentary polls, he is going to attach much greater premium to the present trend of voluntary compliance which has taken not only him but the entire revenue juggernauts by huge surprise as they know it for sure that the present growth rates in service tax or corporate tax or personal income tax are not because of the policy and administrative measures taken in the past one year. It is truly because of much unexpected compliance indices in the economy.

Although the FM did not show any inclination to talk about what he intends to unfold in his Budget Speech but he did exhibit his mature and restrained happiness not about what the bald statistics may show but more because what it was concealing! And for the uninitiated, what it tangibly meant was that the Indian Economy was truly on the right path to maturity and sustained growth cycle. When an economy matures in its all spheres, fiscal compliance automatically grows, and other macro variables look within the four walls of effective control. It also means that the chained potential of growth in the taxpayers' base has got itself freed on the basis of its intrinsic strength. And the same was substantiated by the Ministry when said that 13.4 lakh electronic returns were filed this fiscal, and over 50 per cent was filed voluntarily - an increase of 290 times over last year!

In his fit of happiness and give-away mood, he also sanctioned Rs 200 Crore for infrastructure and HRD in the Income Tax Department. This is what a true leader should do and he did it. To keep the morale of the officers high and encourage them to contribute to the on-going structural change on the fiscal horizons, he also announced his approval to the proposal to set up a full-fledged Directorate of Human Resource Development. Credit also goes to the CBDT Chairman who did not lose time in quickly notifying the Directorate which shall have three divisions of Cadre Management, Performance Management, and Training and Capacity Building. These divisions would be headed by officers of the rank of Additional Commissioners of Income Tax. The Directorate of Income Tax (HRD) will function under the administrative control of the Director General of Income Tax (HRD), New Delhi. It shall be an attached office of CBDT.

Let's spare a few sparse glances at what this Directorate is expected to achieve :

i) To develop and design strategic human resource plans, policies and processes aligned with the goal and vision of the Income Tax Department for ensuring optimal resource mobilisation and delivery of taxpayer services.

ii) To assess and determine the job requirements, job profiles and skills needed for various jobs in the Income Tax Department, and make projections of human resource requirements.

iii) To assist CBDT in designing and implementing policies for systematic career progression, equal opportunity, gender equity, counseling and employee welfare.

iv) To design a scientific and objective performance management system to foster accountability and develop a scientific scheme for linking of rewards to performance.

v) To identify training needs, formulate training policies and facilitate skill enhancement, and to coordinate with other educational/training institutions/agencies in India and abroad for training of officers of the Department.

vi) To foster international co-operation for incorporating administrative best practices in the field of tax administration.

By all standards, a grandiose charter of duties! Even if 25% of these tall goals are realised, interacting with the Income Tax Department would indeed become a pleasant experience for the taxpayers and the tax facilitators in the private sector. Even for the officers who have been at a regular interval quitting the government jobs, less because of the greener grass on the other side of the fence and more because of suffocating working environment and career progression in the IRS Service. Although I am personally for encouraging such a trend as the ultimate gainer is the economy if these officers carry their fiscal expertise to the private sector and help build compliance-oriented culture but the need of the hour in the CBDT was to have such a Directorate. This Directorate also makes a history as it is first such govt outfit which has talked about the humans as resources. Even our fountain administrative ministry which is solely responsible for recruitment and promotion of govt employees has the word 'personnel' in it and God knows, when it would be able to shed it! Like the other sectors in the economy, the Govt needs to treat its employees as human resource rather than just head counts!

Then this Directorate rightly recognises the need for a reward system for quality performance. At present, there is a promotion for everyone whether one performs or not! There is no difference in the salary package for performers and non-performers. This kills the zeal to take initiatives among the officers. Therefore, putting a reward system for quantifiable performance is certainly a step forward in the right direction.

But what surprises me is the cold indifference of the Finance Minister towards the sister Board of the CBDT. So far as revenue is concerned, the service tax growth rate is matching the personal income tax growth rate. Customs is far ahead of its targets. Central Excise is the only damp squib but it was destined to be so because of the various policy measures and overliberalisation without a close-watch system in place. Anyway, what is important is the fact that the FM knows that when he is giving Rs 200 Crore to a new Directorate of HRD in the CBDT, it would dampen the spirit of the CBEC or at least give them a feeling of being rudely discriminated against. Why should FM do it unless he has a plan in his mind? What could be that plan?

Let's go to the New Year straight talk held by the CBEC on last Tuesday. There is a convention that the CBEC Chairman meets his officers and addresses them about his future plans besides wishing them a Happy New Year. Although the Chairman failed to drag himself out of the paan masala orbit and continued to boast of substantial hike in revenue collections from this sector, it was left to one of the Members who simply and plainly walked the talk with the young officers who have several miles to go! Although a few described him as a 'Prophet of Doom' but he did his job honestly by forewarning the youngsters about what is in store for them when the GST comes in 2010. It appears that the FM is looking at a unipolar milestone for both the Boards. Going by the global trend, it is going to happen in India as well when both the Boards are going to be merged into one like the Central Revenue Board in the past and all such Directorates like the HRD would have a mega and vital role to play in placating the ruffled feathers of the officers in the merger ambience.

However, there is a need for major reform and planning on the human resource side in the CBEC. A large number of officers have left the service, and a few dozens have put in their papers recently. Mind it, this is despite the Pay Commission package-in-the-pipeline. This clearly indicates the impact of the malaise within the service. Whenever such a malady sets in anywhere in any organisation, it first drives out the quality which alone can resist and sustain the prevailing edifice. This is where the FM needs to worry as some of his brilliant officers have been leaving him to either serve in the private sector or to experiment with their own novel ideas. No doubt, as a die hard optimist of the reforms process I personally welcome such a trend where even our govt servants have begun to treat the economy as a lab for new ideas but it is a worrying trend for the overall functioning of the revenue services. Let's hope the FM does something rather than keeping his lips stitched for the future date!