Jan 9, 2016

Time for an RMS at DGFT?

DGFT is the body that deals with international trade policy making in India. Apart from making broad contour of policy, and issuing import export code; a mandatory document to start imports/exports in India, it also implements various tax nullification schemes (AA/DFIA), capital goods upgradation scheme (EPCG) and few schemes to offset infrastructural inefficiencies(MEIS/SEIS). It also runs a complaint resolution mechanism (chapter 8) in the area of international trade. DGFT implements various schemes through its field offices across the country. 

DGFT field offices are severely understaffed in the recent times. The retiring staff have not been replaced, under the plea that computerisation leads to better productivity. While the argument of computerisation leading to higher productivity is true in general; it is not automatically applicable if the underlying workflow is not changed. DGFT processes the file manually even today, with each file moving along with the notes like a normal, non-computerised, file. The workload has also increased in recent years with number of applications peaking with the recently expired quinquennial policy. 

Therefore, the following might be a proposal worth consideration/debate:

Proposal

A risk management system (RMS) on the lines of popular RMSs seen in other departments such as customs/central excise might be envisaged. The idea is to use parameters such as track record of exporters, status of exporter, value of scrip, nature of product and so on, in order to arrive at a risk factor, which then would decide if the file can be processed without any physical verification at RA, and the scrip/authorisation/EODC issued without any scrutiny on self-declaration basis. It goes without saying that there must be a random post-facto verification. Those who fail RMS risk factor have to follow normal work flow which involves scrutiny or processing as done currently. 
RMS can be a software, which runs each time an application is received and arrives at a risk factor. If the number falls in green zone, an automatic approval ensues without any interference, else the file goes through normal route. 

This is elaborated with some imaginary RMS criteria for few work-processes below:

EODCs:
A status holder, who has closed more than 20 EPCG applications in past, may be allowed to close his EPCG cases on self-declaration basis. On submission of documents online/offline, an EODC is generated automatically without any delay. Similar criteria might be adopted in redemption of Advance Authorisation. The criteria might be fine-tuned, but the intent is to reward exporters who are regular, and who know the procedure well enough to have closed enough past cases. 
Fresh AAs/EPCGs: 
Similar criteria may be evolved, and the licenses issued same day online. 

Incentive Scrips: 

Similar to Drawback issue by customs. May issue online scrips based on self declaration for people who meet RMS criteria, and the rest may follow normal workflow till they start ticking RMS criteria.