Fm speech is as follows
Speech of Hon’ble Finance Minister on the Occasion of Dedication
of the Centralized Processing Center (CPC) of the Income Tax
Department, Bengaluru to the Nation on May 29th 2010
It gives me immense pleasure to be here on this occasion of the
dedication to the nation of the Centralized Processing Center (CPC) of
the Income Tax Department in Bengaluru. Bengaluru, the IT Capital and
Silicon Valley of India, was appropriately chosen as the location for the
first CPC. The setting-up of CPC is a big step in the utilization of
technology for bringing in administrative reforms within the Income Tax
Department. I am also happy to note that a Global Brand, Infosys has
been selected by the Department as a partner in implementing the new
initiative, which is highly information technology intensive.
2. The Income Tax Department had initiated computerization in the 90s
with the establishment of the Regional Computer Centers and
distribution of PCs to Officers. However, computerization gained
momentum since 2003-04 with the introduction of Processing Software,
outsourcing of PAN card services and establishment of the Tax
Information Network (TIN) for tax payment and TDS reporting.
3. The objective for technology induction in the Department has been to
enhance the capacity of the department to handle the increase in
numbers of taxpayers and to provide better taxpayer services in a
systematic manner. Over the past few years, the Department has
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increasingly focused on E-Governance initiatives and building the
technological framework to be able to handle challenges of the changing
economic environment.
4. The introduction of electronic filing of I-T returns, e-payment of taxes,
establishment of the national network (TAXNET), and consolidation of
the Regional Computer Centers into the National Data Center have laid
the foundation for the next generation administrative reforms in the
Department.
5. Bulk processing of returns and redesigning the procedures in a
centralized facility was determined to be the most efficient way to
increase the processing capacity of the Department. The CPC project at
Bengaluru was approved by the Union Cabinet at a total cost of Rs 255
Crore over a 5-year period. It should be endeavour of the Department to
achieve economies of scale by automating non-core processes in
partnership with the corporate sector and to attain operational excellence
by high quality and service compliance levels. I am sure Department
would save valuable skilled manpower by using technology intensive
initiatives like the CPC for non-core areas. The skilled manpower so
available can be used for deepening and widening of the tax base and
also for investigations of cross border transactions, which have high
revenue potential.
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6. I am glad to note that the CPC has become operational in a short period
of time and that it has processed over 7 Lakh returns during this period. I
congratulate the Income Tax Department and its partner Infosys for the
speedy execution of the CPC project.
7. The success of these kinds of initiative depends upon implementation as
well as education. The Department faces a huge task of not only
educating its own officers and staff, but also taxpayers. I am informed
that the Department has already taken steps to educate the taxpayers as
well as important stake-holders like State and Central Government
deductors for increasing awareness about the issues, which, if not
addressed properly, may act as a barrier in realizing the full potential of
this Mega IT-Initiative Project.
8. The tax-policy making process has also undergone the substantial
changes with technology induction. I understand that CBDT is making
policies, which are system compatible and can easily be implemented
using the information technology tools. The recent notification of the
SARAL II form by the Department would simplify the task of complying
with the Income Tax reporting requirements for the taxpayer. These
kinds of initiatives are beneficial to the taxpayer as well as Income Tax
Department, as it not only reduces the compliance cost for the taxpayer
but also helps the Department in collating the information for tax policy
planning as well as for sector-based investigations.
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9. For the technology partner Infosys also, it is a unique experience in
implementing a project full of legal and procedural complexities. I am
sure that Infosys will come up to our expectations as well as that of
taxpayers in partnering the Department in delivery of services of the
highest standards and one of the best in the World.
10. The functioning of CPC has been made possible by reengineering key
business processes coupled with automation. The working environment
of CPC is different from that in the Government. Government employees
here have an opportunity to excel while performing duties in this
conducive environment, which is on the lines of the private sector and
highly challenging. I am told that the tasks in CPC are managed by a
small and dedicated team of 31 officers and staff of the Department.
CBDT should ensure that the best talent from the Department is
attracted and retained for this prestigious project. To ensure this, CBDT
may consider designing suitable human resource policy with incentives
within the existing Government rules and regulations.
11. Technological innovation is key to success in addressing issues relating
to voluminous data and repetitive procedures. However, technological
limitations invite criticism from those who are at the receiving end. There
has been some criticism of computerization in the Department on issues
relating to credit of TDS and refunds to the taxpayers. I would like to
mention that even countries like USA started computerization of
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processes in the year 1960s, but they could start processing of the
returns for the first time in the year 2004 on a new computer system.
The Income Tax Department started computerization in the year 1990s
and full scale processing was started in the year 2002-03 after pilot
testing was done in the year 1999-2000. The point I am emphasizing is
that the computerization projects involving complex legislative framework
and evolving international tax jurisprudence are associated with risks
and rewards. We should accept these challenges and should not be
disappointed with failures. We should try out best to deliver the quality
services to the taxpayers keeping in mind the challenges of
technological limitations and continue to innovate to make the existing
processes and procedures more efficient.
12. To adopt best global practices, CBDT is in cooperation with Brazil and
South Africa under India-Brazil-South Africa (IBSA) Forum. Under this
cooperation, one of the areas is relating to risk profiling and
computerization. I am sure that CBDT would continue to take initiatives
like this to adopt best global practices to deliver services to the
taxpayers and at the same time performing the role of a revenue
collecting organization of the Government.
13. Taking forward tax administration reforms, I have announced setting up
two more Centralised Processing Centers during my Budget speech
2010-11, looking to the successful experience of the CPC at Bengaluru.
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I am happy to announce that Income Tax Department has identified two
more locations for setting up CPC at Pune and Maneasar. These two
locations would deliver services to the tax payers in the western and in
the northern region of the country by exploiting the IT friendly
environment.
14. With these words I dedicate the Centralized Processing Center of the
Income Tax Department at Bengaluru to the nation and wish it all
success in the years to come. I also congratulate the officers and the
staff of the Income Tax Department, who have contributed to the
success of this project.
