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					                      Report
                        On


Formulating the Concept, Principles, and Parameters
   for Performance-Related Incentives (PRI) in
                   Government

                       Study 2


             Ministry of Company Affairs
        Department of Revenue (CBDT/CBEC)




                 Prof. Biju Varkkey


      Indian Institute of Management, Ahmedabad
                      July 2007
                                   List of Contents
                                                                         Page No.


Chapter I      Introduction and background……………………….                     1-3


Chapter II     Performance Related Incentive: Feasibility and Evolving the
               Framework…………………………………………..                               4-39


Chapter III    Ministry of Company Affairs……………………….                     40-117


Chapter IV     Department of Revenue, [CBDT & CBEC]
               Ministry of Finance…………………………………                          118-221

Chapter V      Implementation Plan & Conclusion…………………                   222-237


List of Annexure


Annexure I            Conceptual Framework………………………                      238-243
Annexure II           List and details about Meetings………………              244-249
Annexure III          Outcome Budget (for MCA)…………………                    250
Annexure IV           Action Plan (for CBDT/CBEC))……………..                251




                                                                                    ii
                                     List of Tables
                                                                               Page No.
Table 2.1: PRP Progression and Weights……………………………………                               28
Table 2.2 Scale for measurement……………………………………………                                   33
Table 2.3 PRP Payment Scenario………………………………………........                              35
Table 2.4 Proposed Payment Pattern………………………………………..                                36
Table 3.1: Work performed by the Ministry of Company Affairs…………..                 42
Table 3.2 Total number of employees in Ministry of Company Affairs……               46
Table 3.3 Annual Earning of the Ministry of Company Affairs…………….                  47
Table 3.4 Work norms of the Ministry of Company Affairs………………..                    48
Table 3.5 Organizational structure Headquarter
       (Ministry of Company Affairs)…………………………………….. .                             49
Table 3.6 Performance analysis for Assistant Director
       (Recodification Cell)……………………………………………….. .                                 53
Table 3.7 Performance analysis for Senior/Junior Technical Assistant
        (Recodification Cell)………………………………………………. .                                 55
Table 3.8 Performance analysis for UDC/LDC (Ministry)………………….                      56
Table 3.9 Performance analysis for Section Officer (Budget Section)…….. .          58
Table 3.10 Performance analysis for Senior/Junior Technical Assistant
       (Budget Section)……………………………………………………..                                      60
Table 3.11 Performance analysis for Deputy/Assistant Director
       (Policy Section)…………………………………………………….. .                                    64
Table 3.12 Performance analysis for Senior/Junior Assistant
        (Policy Section)……………………………………………………. .                                    66
Table 3.13 Performance analysis for Section Officer (Inspection Section)....       69
Table 3.14 Performance analysis for Senior/Junior Technical Assistant
       (Inspection Section)………………………………………………... .                                 71
Table 3.15 Performance analysis for Under Secretary (Administration-I)… ..         74
Table 3.16 Performance analysis for Section Officer (Administration-I)…. ..        76
Table 3.17 Performance analysis for Senior/Junior Technical Assistant
       (Administration-I)………………………………………………….. .                                   78



                                                                                          iii
Table 3.18 Organization Structure of RD, Noida…………………………….                    81
Table 3.19 Performance analysis for Regional Director
       (Regional Directorate)……………………………………………....                            84
Table 3.20 Performance analysis for Joint Director (Regional Directorate)..   86
Table 3.21 Performance analysis for Deputy/Assistant Director
       (Regional Directorate)……………………………………………....                            88
Table 3.22 Performance analysis for Assistant Director Audit
       (Regional Directorate)……………………………………………....                            90
Table 3.23 Performance analysis for Senior/Junior Technical Assistant
        (Regional Directorate)………………………………………………                              92
Table 3.24 Performance analysis for UDC/LDC (Regional Directorate)…..         94
Table 3.25: Region wise list of offices of Registrars of Companies (ROC)..    98
Table 3.26 Organization Structure of ROC, Delhi……………...............           99
Table 3.27 Performance analysis for Registrars of Companies…………….             100
Table 3.28 Performance analysis for Deputy/Assistant ROC
       (Office of Registrars of Companies)………………………………..                      102
Table 3.29 Performance analysis for Senior/Junior Technical Assistant
        (Registrar of Companies)…………………………………………..                            104
Table 3.30 Performance analysis for UDC/LDC (Registrar of Companies)          106
Table 3.31: Region wise list of Offices of Official Liquidator……………..         109
Table 3.32 Organization structure of Office of OL (Ahmedabad)…………             109
Table 3.33 Performance analysis for Official Liquidator (Office of OL)…..     110
Table 3.34 Performance analysis for Deputy/Assistant Official Liquidation
       (Office of OL) ……………………………………………………...                                 112
Table 3.35 Performance analysis for Senior/Junior Technical Assistant
        (Office of OL)……………………………………………………...                                 114
Table 3.36 Performance analysis for UDC/LDC (Office of OL)…………..              116
Table: 4.1 Organizational structure of CBDT……………………………….                      123
Table 4.2 Performance analysis for Commissioner (Business range)……….          127
Table 4.3 Performance analysis for Additional/Joint Commissioner
       (Business Range)……………………………………………………..                                 130


                                                                                    iv
Table 4.4 Performance analysis for DCIT/ACIT/ITO (Business range)            132
Table 4.5 Performance analysis for Tax Recovery Officer
       (Business range)……………………………………………………. .                               134
Table 4.6 Performance analysis for Inspector (Business range)…………… .         136
Table 4.7 Performance analysis for Senior/Junior Tax Assistant
       (Business range)……………………………………………………. .                               138
Table 4.8 Performance analysis for Additional/Joint Commissioner
       (TDS range)……………………………………………………….....                                 142
Table 4.9 Performance analysis for DCIT/ACIT/ITO (TDS range)………….            144
Table 4.10 Performance analysis for Tax Recovery Officer (TDS Range)         146
Table 4.11 Performance analysis for Inspector (TDS Range)…………….....          148
Table 4.12 Performance analysis for Senior/Junior Tax Assistant
       (TDS Range)………………………………………………………….                                    150
Table 4.13 Performance analysis for Director (Investigation)……………….          153
Table 4.14 Performance analysis for Additional/Joint Director
       (Investigation)………………………………………………………..                                156
Table 4.15 Performance analysis for Deputy/Assistant Director
       (Investigation) ……………………………………………………….                                158
Table 4.16 Performance analysis for Income Tax Officer (Investigation)…..    161
Table 4.17 Performance analysis for Inspector (Investigation)………………          163
Table 4.18 Performance analysis for Joint Commissioner (Headquarter)…. .     166
Table 4.19 Performance analysis for Administrative Officer (Headquarter)..   169
Table 4.20 Performance analysis for Income Tax Officer (Headquarter)……       171
Table 4.21 Performance analysis for Senior/Junior Tax Assistant
       (Headquarter)…………………………………………………………                                   173
Table 4.22 Performance analysis for Inspector (Headquarter)……………….           175
Table 4.23 Performance analysis for Additional Director (DOMS)…………           178
Table 4.24 Performance analysis for Additional Assistant Director
       (DOMS)………………………………………………………………                                        181
Table 4.25 Performance analysis for Assistant Director Official Language
       (DOMS)………………………………………………………………                                        183



                                                                                   v
Table 4.26 Performance analysis for Senior/Junior Tax Assistant
       (DOMS)……………………………………………………………..                                    185
Table 4.27 Performance analysis for UDC/LDC (DOMS)……………….... ..           187
Table 4.28 Organization structure of CBEC…………………………………                    194
Table 4.29 Performance analysis for Under Secretary
       (Custom and Air Custom)………………………………………….. .                        197
Table 4.30 Performance analysis for Section Officer
       (Custom and Air Custom)………………………………………….. ..                       199
Table 4.31: Performance analysis for Assistant (Custom and Air Custom)…   201
Table 4.32 Performance analysis for UDC/LDC (Ministry)…………………             203
Table 4.33 Performance analysis for Under Secretary (Custom Policy)…….    206
Table 4.34 Performance analysis for Appraising Officer
       (Custom Tariff Unit)………………………………………………….                           209
Table 4.35 Performance analysis for Deputy/Assistant Commissioner
       (Service Tax)………………………………………………………….                               213
Table 4.36 Performance analysis for Superintendent (Service Tax)………….     216
Table 4.37 Performance analysis for Inspector (Service Tax)………………..       218
Table 4.38 Performance analysis for Senior/Junior Tax Assistant
       (Service Tax)………………………………………………………….                               220
Table 5.1 Performance Indicators (used by 12 countries)……………………           226




                                                                                vi
                List of Abbreviations


A.O        :   Assessing Officer
A.A.D      :   Assistant Additional Director
A.C        :   Assistant Commissioner
Addl. D    :   Additional Director
Admin. O   :   Administrative Officer
C’Ate      :   Commissionerate
CBDT       :   Central Board of Direct Taxes
CBEC       :   Central Board of Excise and Customs
C. C.      :   Chief Commissioner
C          :   Commissioner
D          :   Director
D (I)      :   Director (Investigation)
D.C.       :   Deputy Commissioner
D. D.      :   Deputy Director
D’Ate      :   Directorate
D.G. (I)   :   Director General (Investigation)
DOR        :   Department of Revenue
E/A/NA/U   :   Exceeded/Achieved/Not Achieved/Unacceptable
IA         :   Independent Agency
J. C.      :   Joint Commissioner
J. D.      :   Joint Director
LDC        :   Lower Division Clerk
MCA        :   Ministry of Company Affairs
MOF        :   Ministry of Finance
OL         :   Official Liquidator
PPS        :   Per Person Standard
R          :   Range
RD         :   Regional Director
ROC        :   Registrar of Companies



                                                             vii
S.U. (I)   :   Sub-Unit (Investigation)
UDC        :   Upper Division Clerk
US         :   Under Secretary
U (I)      :   Unit (Investigation)




                                          viii
ix
                                            Chapter 1
                 Introduction and background of the assignment


The Sixth Pay Commission appointed by Government of India approached the Indian
Institute of Management, Ahmedabad for conducting series of studies related to the
feasibility of introducing performance related incentive (PRI) in government 1. Director
IIMA assigned the project to a team of faculty members who submitted the formal
proposal to sixth pay commission.


The proposal and initial model suggested by faculty team was approved by the sixth pay-
commission and the study was awarded to IIMA. According to the proposal submitted
and approved, different ministries were grouped into clusters and the commission
specified the ministries to be covered. The list of ministries thus identified for the study is
as follows.


     •   Study 1 is for Cluster I: Ministry of Urban Development & Ministry of Health and
         Family Welfare
     •   Study 2 is for Cluster II: Ministry of Company Affairs & Department of Revenue
         (CBDT/CBEC)
     •   Study 3 is for Cluster III: Ministry of Science and Technology & Ministry of
         Communications and Information Technology
     •   Study 4 is for Defence/ Home
     •   Study 5 is for Railways.


Each study was anchored by teams led by faculty member(s). The office of sixth pay
commission assisted the faculty team with necessary introductions with the ministries and


1
    According to the TOR given to the Sixth pay commission (F) “To make recommendations with
respect to the general principles, financial parameters and conditions which should govern
payment of bonus and the desirability and feasibility of introducing Productivity Linked Incentive
Scheme in place of the existing ad hoc bonus scheme in various departments and to recommend
specific formulae for determining the productivity index and other related parameters.”
Source: http://india.gov.in/govt/paycommission.php


                                                                                                1
other information. Each ministry appointed a nodal officer who served as the point of
contact between the study team and the organization.

Terms of reference of the PRI studies

The study should examine the correct basis of pay increases and their relation, if any, to
performance and productivity of the employees; and examine possibilities of evolving a
direct correlation between PRP and delivery of services to citizens/organization/other
departments, as the case may be.

       The study should evolve measurable, quantifiable criteria for judging performance
       and productivity of different grades of employees in various government
       organizations depending on the nature of their work and the relationship with their
       users/clients.

       The study should, inter alia, examine international best practices in this regard.

       The study should develop a model suited to Indian conditions which is
       transparent, measurable, fosters accountability and is linked to deliverables.

       The study should devise means by which PRI can be introduced in the
       Government. Specifically it should consider the following:

           1. Should PRI be applied to all jobs and all sectors, or higher managerial
               positions /percentage of jobs or sectors to begin with?

           2. Should PRI be individual based or group based?

           3. Should specific percentages be prescribed for restricting number of posts
               to which PRI is given?




                                                                                            2
Study 2: Scope and Framework


The Study 2 covered two ministries, i.e. Ministry of Company Affairs (since renamed
Ministry of Corporate Affairs) and Department of Revenue (CBDT/CBEC).          The
conceptual framework adopted for the study is presented in Annexure I.


Organization of this report


The report is organized in the following manner
Chapter 1       Introduction and General Methodology
Chapter 2       PRI: Feasibility and evolving the framework
Chapter 3 & 4   PRI Frameworks for MCA and CBDT/CBEC
Chapter 5       Implementation plan and conclusion


Project team from IIMA


Prof Biju Varkkey, Faculty Member
Dr. Hrudanand Misra, Research Associate
Mr. Sunil Budhiraja, Research Associate
Ms. Khushi Mehta, Research Associate
Ms. Rashmi Sadanandan, Secretary
Dr. Nirja Sharma, Consultant
Ms. Manisha Mishra, (FPM-II), IIMA




                                                                                 3
                                            Chapter II
Performance Related Incentive in Government: Feasibility and evolving
                                         the framework


What is it?
The common terminology used internationally is Performance related Pay (PRP). The
most direct and simplistic definition of PRP will be that, it is the variable part of pay
which is awarded to individuals, groups or member of organization on periodic basis,
depending on measured performance against set targets. In this report we use the term
Performance Related Incentive (PRI), to signify the motivational objective of the scheme
and also the fact that the variable component is placed over and above the assured
compensation, paid for crossing threshold levels of performance. Variable payment can
be made to individuals, groups or combination, as determined by the PRI policy.


While the traditional pay system considers factors like levels, positions etc as basis for
pay, the performance incentive scheme links pay (or compensation) with measures of
individual, group or organisational performance. While there are wide varieties of
methods used in calculating the same, all schemes assume that the promise of rewards for
performance will provide motivation (incentive) to demonstrate higher performance. Few
systems also incorporate negative movements i.e. when performance decreases below
acceptable threshold, pay diminishes.


Why PRI in government?
Pay for performance is not new to governments. According to the study by OECD 2,
significant number of governments (12 countries) has adopted PRP for government
employees covering both managerial and non-managerial groups. The study observed
that the concept is more prevalent at senior management levels, but increasingly non-
managerial employees are also being covered. PRP is expected to energize, direct or
control employee behavior by linking the amount paid to a measurable performance


2
    OECD 2005, Performance related Pay Policies for Government Employees, www.oecd.org


                                                                                         4
target and its achievement, thereby increasing individual motivation. Other expected
benefits for government through PRI include organizational processes improvement, cost
effectiveness and public service quality improvement.


Though initially considered as a private sector theme, it has gained currency in
governments across the world with more and more governments considering introducing
or linking compensation of government servants with performance. Current thinking in
civil service reforms take the line that civil service reforms should be concerned not just
with reforming the HRM systems (people practices), but focus on improving performance
of the organization. In short, the idea of linking the organization’s performance with
performance of groups and individuals and rewarding employees for achievements is
considered as a powerful tool for improving overall performance of governments.


Components of successful PRI scheme (in government)
The schemes introduced in the government sector (internationally) has not been fully
successful (OECD 2005) due to multiple issues, including factors like high degree of
inherent subjectivity (managerial judgment) in the process, difficulties in defining
performance and arriving at standards and the dynamic nature of performance objectives
in the government. At the same time the World Bank study 3 (August 2001) covering
seven developing countries (focus on revenue departments alone) concluded that there is
circumstantial evidence that the scheme enhanced organizational effectiveness. At the
same time some organizations in countries like New Zealand had even withdrawn the
schemes in some areas since it failed to show results. However, in general the conclusion
arrived that PRP serves as a signal by governments about change, though there will be
implementation difficulties.


Criticisms apart, OECD and World Bank studies covering revenue department in select
developing countries also showed that with a right managerial framework in place
(transparency within the organization, good performance management system clear


3
 World Bank (2001) Salary supplements and bonuses in revenue department, Working Paper 33328 Vol. I
www.wds.worldbank.org


                                                                                                  5
promotions mechanisms and trust in top level management) PRI schemes can help usher
in an organization culture that is more positive. The World Bank study points out that
there has been a measurable impact on recruitment and retention and success of scheme
depends on “legitimacy” i.e. internal and external acceptance of the bonus system. In
short the impact goes beyond giving financial incentive to bringing in changes in the way
employees view their jobs and are made accountable for results. Criticisms and
discontents from employees in countries with PRP (the major stake holders) come not
because the concept is bad, but about the manner in which it were implemented 4. Salary
and its management, affect employees’ lifestyle, careers and relationships. Hence how the
process is managed becomes important. Aligning internal HRM practices to enable and
sustain performance will be the most important for the scheme to work. Hence, if
required a review of HR policies, procedures and practices should precede introduction of
any scheme.


The following are imperatives in a successful Performance Linked Incentive scheme.
1. What is expected performance? - Definition and Goal Setting
2. How is it measured? - Matrices
3. Who is measuring? - Authority
4. How is performance differentiated? - Scales of measurement, frequency
5. How pay distribution happens? – Formula for distribution based on performance
6. How scheme is communicated to employees? - Communication & Education.
7. How are grievances handled? - Scheme Satisfaction.
8. What is the culture and HR polices in the organizational? – Intangibles & enabling
conditions


Few other factors required for successful PRI are harmonious labour management
relations, high morale of employees and also sufficient budgets to make performance
payouts. Operationally the scheme should be simple enough for employees to understand



4
 Kellough, Edward.J. (2002) Pay for Performance in Georgia State Government: Employee Perspective on
Georgia Gain After 5 Years, Review of Public Personnel Administration, Vol. 22, No. 2, 146-166


                                                                                                  6
the link between performance and the payment made and the system that evaluates staff
against target achievement should be reliable and have their confidence.




Brief outline of study 2 and methodology
The background of our study has been discussed in Chapter I of the report. The study
reported here covers a) Ministry of Company Affairs (since renamed Ministry of
Corporate Affairs) and b) Department of Revenue (CBDT/CBEC) under the Ministry of
Finance 5.


The data required for the study was collected from primary as well as secondary sources.
Interviews, questionnaire based surveys and observations were used as primary tools for
collecting qualitative data and mapping the work flow. Secondary data was sourced from
published sources, provided by the nodal officers. The primary data collected was
analyzed to identify common patterns indicative of performance and thus evolving a
suitable PRI framework. In addition we also examined international practices in PRP,
particularly about revenue function (about which published data is available). List of
people contacted for the study is given in Annexure 2. The draft report was presented
before the sixth pay commission on August 6th and the feedback given has been
incorporated in this report 6.


At this point, we would like to caution that the framework thus evolved and presented in
this report has to be further fine tuned and tested before actual introduction of the same in
organizations. Different studies including the World Bank study on PRP in revenue
department reports that involvement of employees and their acceptance are pre-requisites
to success. Later in the chapter we also discuss briefly, the systemic changes required in
the studied organizations to ensure that PRI scheme becomes more successful.




5
    Hence forth collectivity will be referred as ‘organization’.
6
    Inputs from MCA /CBDT/CBEC has been received and considered while writing this report.


                                                                                             7
The global experience cited in the study, indicates (see chapter 5) and we are also
convinced that the ministries / department studied has to be made ready to accept PRI as
a mode of recognizing performance, motivating for higher performance and bringing in
professionalism. Thus the design should also incorporate performance bars that will
ensure that only the best get rewarded. In the absence of such readiness and performance
bar, the scheme may become counter productive and degenerate into one more way to
receive extra payment, without creating any positive effects.


Determining feasibility for PRI in cluster 2
Our analysis in terms of nature of work and its measurability shows that the target groups
(ministries/department) studied by us are amenable for introduction of PRI system.
MCA, CBDT and CBEC function under the framework of independent legislations that
has bestowed discharging statutory duties as primary objectives. The citizens’ charters
published by the organizations specifically mention the deliverables and service delivery
standards that form performance parameters at the organizational level.


Depending on the nature of work, performance measurement parameters can be input
based and/or output based. The nature of work of organizations covered in this study is
such that, output/outcome based measures are available as indicators of organizational
performance.


The outcome budget/annual action plans of MCA and CBDT/CBEC formalize the
performance expectations (may be referred as budgets/targets also) from the
organisations in largely quantifiable terms. The parameters included in the outcome
budget/action plan are in the form of revenue targets, achievement of quantity and time
lines/program mile stones. In the case of MCA, the outcome budget incorporates definite
indicators in terms of response time, achievement of project mile stones etc. For CBDT
and CBEC, annual action plans incorporate revenue and non revenue targets in
measurable terms. In all the above cases, quality of performance is assumed as inherent in
the achieved results. The performance budgeting happens without any reference to
specific/direct measure of quality (or behaviour which is an important indicator for



                                                                                        8
performance when it comes to public/employee interface). The Citizens Charter
published by respective organisation, with indicators for public service places a
framework for public accountability and also stands as quality measure.


The target agencies are organized on multi-tier structure, with field offices at the delivery
end supported by headquarters, intermediate controlling offices and support/attached
offices providing specialized support. Internal systems of communication and control
ensure that the organizational targets (outcome budget/action plans) are cascaded down,
particularly to the field offices and the internal reporting systems captures field level
performance on regular basis and carry the information upwards. These reports form the
basis of controlling performance, though in our opinion data captured in the current
reports are not comprehensive enough to support the proposed PRI scheme (as we discuss
in the later parts of our report).


Another positive dimension of the targeted agencies is the inherent revenue earning
potential, thereby the possibility of creating a finance pool for making PRI payments.
MCA’s annual report reports earnings in the form of fees collected (less expenses the
ministry is highly profitable). At the same time revenue contribution from CBEC and
CBDT are growing and both boards have gained the distinction of being the most cost
effective tax collectors in the world. While both CBEC/CBDT have clear revenue targets
set for them by government of India and the targets have been achieved (rather
overachieved) through the collective/direct efforts of employees 7, in the case of MCA
target setting for revenue earned as a fee is not done since it is not directly related to the
work of employees (controllable work). Here the decision to engage in an action that
brings revenue to MCA is taken by the company without any direct relationship with
efforts of MCA. Hence the outcome budget of MCA is more compliance and program
oriented, with focus on service delivery. Similar uncertainties about revenue collection
exist in case of CBDT/CBEC also, but with huge unexplored potential (especially CBDT)
revenue collection can continue as an indicator of performance.



7
    Revenue collection/fees are related to economic situation of the country.


                                                                                            9
Data related to salary supplied to us by the government shows that there is substantial
additional expenditure incurred in these departments in the form of bonus (paid to
government employees), overtime and honorarium. We have done calculations of PRI
payouts using existing levels of salary, to determine the approximate budget burden to the
units of study, if PRI is introduced. (See Exhibit I)


There are systems existing to capture and report group (ministry/unit/field office)
performance as well as individual performance (ACR is written across the government
for some employee groups). However, general experience indicates that the effectiveness
and credibility of the existing systems (particularly ACRs) are not very high in the eyes
of employees. Here again, the indicators currently used to measure performance are not
comprehensive enough from a PRI perspective. (For example: ACR does not adequately
capture critical performance outcomes like satisfaction levels of users/customers/public,
or fulfillment of citizen charter promises). At the individual level, ACRs are reportedly
very subjective and kept confidential, thus depriving individual of any feedback about
performance on belief in the system’s integrity. Hence, necessary mechanism need to be
developed and institutionalized to capture data required for PRI.


Limitations apart, based on our study, we are of the opinion that it is possible to introduce
PRI in MCA as well as CBDT/CBEC, since it is possible to measure performance
directly or indirectly. While all performance measures cannot be quantified, at some
places judgmental input can substitute for direct quantitative measures, thus necessitating
a combination of objective and subjective measures.


Financial Feasibility


From our data based estimation, we conclude that it is financially feasible to introduce
the PRI scheme in the organizations studied. Considering the potential for revenue/fee
collection in the country, the PRI payout can definitely be made from the additional
revenue earned over and above a base, or savings incurred by the department. The above
is one of the basic principles of PRI i.e. any such scheme should fund itself. (The



                                                                                          10
assumption    here   is   that   participating   ministry/department   will   surpass   the
targets/outcomes set and the target setting happens through a participatory process based
on estimation of potential, understanding of constrains and not an arbitrary processes
with targets being set at unachievable levels or pushed down the organization). In exhibit
Later in the report we discuss about the financial and budgetary implications of
introducing PRI, with actual data factored in.


PRI calculation: The Components.


The nature of government work is team oriented (more precisely work group) and closely
linked with performance of other tiers of the organization. Hence considering individual
or single unit’s performance alone for computing PRI is not suggested. Instead, a hybrid
system incorporating individual as well as group level performance is recommended. The
above can be achieved by incorporating into the PRI design, scores that combine group
and individual performance. We also recommend that a suitable measure of Public
Service Delivery has to be introduced in the PRI framework.


Conceptually, the proportion between weights for individual, public service delivery and
group/organization performance should be different according to positions/levels. Ideally,
the top level should have more of organizational performance and down the line more
weight for individual performance. Public Service Delivery measure will apply across
levels, though unit of measurement will differ. However, considering the current
organization structure, work allocation patterns and work culture of government, to start
with we will prefer a common weightage scheme from top to bottom.


At this point, we would like to emphasize that substantial systemic reorganization,
development of proper MIS and PMS (Performance management system replacing ACR)
will be required to introduce PRI. Within MIS, the existing systems that cascade goals
down and capture performance at end of period will have to be redesigned.               We
understand that current subunit level reporting system is generally monthly and within




                                                                                        11
units even a system of daily diary exists 8. At the individual level, the existing ACR
system will have to shift to a Performance Management System (PMS) that captures
performance on objective and subjective parameters 9.


We would like to emphasize here, one of the objectives behind introduction of PRI
system should be ushering individual performance excellence in government
organizations (please note that we are not meaning to achieve this at the cost of team
work). Suitable system to track, support and record individual performance is required to
be put in place. Hence, we recommend that the current ACR system should be replaced
with a goal based PMS system, where specific role base deliverables (indicators) are set
though a consultative process (organizations will have to take help from experts to
finalize the individual specific indicators) and performance feedback is given periodically
to individuals.


Naturally, the question about subjectivity in performance measure comes up. With focus
on goal setting on objective lines, documentation of performance, transparency and
training the subjectivities can be reduced, if not completely eliminated Employees should
be provided with adequate resources, support for improvement at work and development
of competencies. The recommended PMS should cover all Group A/B and C employees
(at this point for group D it is not suggested). Introduction of PMS will not be an easy
task for the government, where the current ACR system is considered as arbitrary in
practice and considered un-trustworthy. It will also require restructuring of reporting
relationships with proper work definitions and manageable span of controls.


Attitude towards introducing PRI in studied cluster


Performance related incentives are not a totally new concept for government, public
sector, autonomous bodies in India. Existing schemes practiced in different
ministries/agencies are generally output focused and restricted to parts of the organization

8
  In the headquarter office (Department of Revenue) a computer based file tracking system is deployed for
monitoring office work.
9
  PMS being outside scope of the study the same is not covered in the study.


                                                                                                       12
and few categories of employees 10. In most cases the existing schemes have been seen as
a substitute to the bonus scheme of the government.


A different scheme linked with revenue earned and risk taken to earn that revenue exists
in CBDT/CBEC (discussed later). At the state government level, few states like Gujarat,
Rajasthan etc. has introduced performance linked schemes based on objective indicators
for district collectors (Best Collector Awards). The honorarium/ad hoc reward scheme is
also practiced, where limited cash awards are given to employees.


In general, the idea of introducing Performance Related Incentive in Government has
been cautiously welcomed by employees (across the organization) of MCA and CBDT/
CBEC. Common concerns were about the parameters to be used for PRI computation,
subjectivity and unpredictability of target settings and excessive discretion being given to
superior officers. Employees, in general, felt that such a scheme, if implemented, will be
motivator at two levels.           In comparison, group ‘A’ officers (though a section was
skeptical whether such a scheme will come through finally) of CBDT/CBEC were open
to the idea, with a good section believing that they deserve such a scheme. Interesting
part we observed is that few Group A officers had already thought about such a scheme,
and few had developed localized models to measure and reward (non-financially) for
extra/good performance. Since sufficient information is available in the public domain,
they could gather practices and experiences of other governments that had introduced
such schemes. The two motivators in their opinion are:


         a) Ensuring higher (more) pay for employees including themselves: considering
         the fact that quantum of work is increasing and man-power strength is stagnant in
         government, employees (performers 11) are often required to pitch in more. As of
         now there is no formal mechanism to reward such additional performance. Thus
         the PRI scheme will be an avenue to earn more and beyond normal pay and also
         bridge the gap between private sector pay and government pay at least to a limited

10
  Schemes existing in Railways, Posts etc. have been discussed in respective reports.
11
  It is fact that a section of employee is not considered available/suitable for work, either due to lack of
competence or attitude. In effect their work also gets distributed among those who work.


                                                                                                               13
        extent (All sections, particularly group A services (IRS and ICLS) do look at the
        pay commission to take care of the pay gap.)


        b) With PRI, there will be the possibility of identifying performers (individually
        and in groups) and reward them, in place of the current system that considers
        everyone similarly (section of Group A employees were more vocal about this).
        Though formal discussions were not held, the PRI move was viewed by employee
        collectives (associations at national and local levels) as a welcome step, but they
        (particularly representatives Group B/C&D) had reservations about the mode of
        calculations and linkage with individual performance parameters 12. Obviously
        their preference was for group level performance as criteria for PRI. In our
        opinion, getting the buy-in of collectives is necessary for smooth implementation
        of PRI.


At the same time there were reservations expressed about the system that may eventually
be introduced in government.


     a) The strongest reservation was about seriousness of the government about
        introducing PRI. A section of employees whom we had interacted with felt that
        performance measurement at the aggregate and individual levels in government is
        an extremely difficult or impossible task and the system is bound to fail.


     b) Measurement of actual performance (input/output) being the pre-condition for a
        good PRI system, there were concerns raised about efficiency of the existing
        system (concerns about ACR and MIS) in terms of measuring performance
        objectively. While in some areas targets/norms exist, in others they are left open.
        In the absence of proper checks and balances (either by supervisor or through
        audits) there will be possibilities of gaming.



12
  We did not have official/formal interaction with group A employees association. However one of the
groups had submitted their views to the draft report and the same was forwarded by the commission to us.


                                                                                                       14
c) Possibilities of supervisor biases in determining performance, since it will be
   difficult to objectively quantify all facets of work output and hence substantial
   degree of qualitative judgment will be required. With excessive power in the
   hands of supervising officers doubts were expressed that PRI may be used as a
   tool to exhibit favoritism and thus control subordinates, instead of motivating
   them to perform better.


d) There were complaints (particularly from Group A in CBDT/CBEC) about
   uncertainties related to targets (targets are revised in between and sometimes are
   set at higher levels without considering the market potential and other factors).
   Achievable target setting and proper communication of targets is fundamental to
   any PRI system.


e) Lack of sufficient human resources in offices, particularly at support levels due to
   decreased intake and inefficient distribution has overloaded existing employees.
   Many employees complained about overwork due to lack of human resource in
   required numbers.


f) Across offices, we also witnessed inadequacy of minimum required physical
   resources for performance like office space, storage space, office stationary,
   vehicles etc. Conditions of work, both resources and physical work environment
   in most offices are definitely unacceptable. For an effective PRI to work these
   basic conditions have to be provided. (We have discussed this in detail in the next
   section.)


g) Government work is more about team work and inter-agency co-ordination. It
   requires contribution from other agencies to complete the work. In the absence of
   inter-ministerial/departmental accountability it is impossible to achieve desired
   output from one’s work. Particular reference came about dealing with court
   matters or agencies like CPWD, CAG, Parliament etc.




                                                                                    15
     h) While PRI as an additional tool to motivate and reward for higher performance is
        welcomed, apprehensions were expressed about possibility of reduction of
        earnings if work output comes down. The agreeable position was, assured salary
        and PRI over and above it.


Enabling conditions for work: discussion on burning performance constrains
In the course of our study, issues that currently stand in the way of performance and are
expected to stand in the way of PRI came out. Critical issues that were repeatedly raised
during discussions are presented here. Though discussed in the above section, we devote
space here because of the significance we attach to them.


Acute shortage of staff: The single major concern amongst all ministries/boards studied
(MCA, CBDT and CBEC) is about shortage of staff. Acute problem is with support staff,
since almost all the posts of ‘D’ group have been abolished and intake into group B/C is
minimum. For some positions (like appraisers in customs) it has been few years since
recruitment has taken place. Reportedly there is shortage at Group A levels also, because
of mid career attrition which is becoming a serious problem in All India Services.


Shortage of support staff also implies that existing employees are placed at different posts
where their backgrounds do not fit. For example we were told that sometimes a
stenographer is posted as technical assistant. Though staffing norms exists, not a single
office covered in our study had full compliment of staff in place. At the same time
activity levels are increasing, including new activities being introduced but staffing plans
are not revisited. Though technology is expected to smoothen the staff demand, but the
rate of technology absorption has not matched with the requirements and increase in
work load 13.


Work technology: To follow up from the above point, though computerization is
progressing at rapid pace, it has not reached the optimum level required to ensure that


13
  Economic growth tiggers work load increase for MCA, since more companies are registered, go public
etc and for CBDT efforts in widening and deepening the tax base increases the work load.


                                                                                                   16
work gets simplified and accelerated. On one hand though the state of computerization of
MCA officers are better (MCA21 is a benchmark), one cannot say that it is operating at
its best. Common problems encountered are lack of adequate hardware and peripherals
for down the line (field offices, Group C employees), problems of software that are still
to be stabilized, problems in connectivity (both intranet and internet) and lack of training
for staff to use computers optimally rather than as a glorified typewriter. In case of the
department of revenue, software bugs and lack of full connectivity continues as the bottle
neck. There were issues raised about reliability of systems also 14.


Inadequacy of capacity building: MCA and CBDT/CBEC are operating in rapidly
evolving environments requiring high levels of capabilities. In spite of training system
existing and the system attempting to do quality work, it is not able to catch up with the
requirements. Direct entry officers who come through the UPSC examination, goes
through a good induction program, but post that, the training inputs are minimum. On the
other hand, the officers who are promoted from Group ‘B’ to ‘A’ or those who enter
B/C/D groups do not benefit from such intensive training. Thus, on the job learning
comes from self initiative.


Compensation and Rewards: Both the boards studied (CBDT & CBEC) has a reward
policy, but that is limited to investigation wing. The reward policy in the case of CBEC is
considered more successful as there are chances that the person/team gets reward on the
spot (or in a shorter time). But in case of CBDT the reward policy is designed in such a
way that investigation team has wait for long time (8-10 years) to receive the reward.


Career progression opportunities: Lack of smooth career progression opportunities due
to stagnation is a definite demotivaor. While opportunities for Group A direct recruits are
relatively more, seniority orientation over merit also demotivates many.                At the lower
levels, on an average an employee has to wait approximately 8 years to get a promotion
and the number of promotions (automatic) in a career span may be two or three.


14
  During our visit to ROC Delhi, where approximately 1500 companies are registered in a month, the
server remained down for whole day


                                                                                                     17
Office infrastructure limitations: Except some field offices which were constructed
recently, all other offices have infrastructure and space crisis. The ministries claim to be
helpless in improving the situation, since CPWD who is responsible for buildings etc.
operate independently. Problems like lack of computers, communication equipments,
vehicles etc. are very common. We were told that some steps are bring taken to address
issues like lack of vehicles etc, particularly in CBDT/CBEC.


Social infrastructure limitations: Inadequacy of social infrastructure like housing,
recreation and entertainment were repeatedly raised. The problem is acute for officers
posted in metro cities who face constrains like getting a suitable house, inadequate
medical facilities provided by CGHS, concerns about quality of educational facilities
(Kendriya Vidyalayas) available at various locations, admissions in private schools,
colleges being difficult and expensive, etc.


Discontent with human resource management: Poor human resource management and
cadre management has been cited as caused for de-motivation. There were references
about outdated work processes and inadequate job clarity at A and B levels 15. The
presence of independent agencies that are expected to control and check for violations
have reportedly become a demotivator. The role of CAG, CVC, CBI, Parliament and of
late RTI came up during discussions as inhibitors to initiatives and performance. Group A
officers of the Department of Revenue were particularly sore about the current transfer
policy, that has resulted in high levels of personal discomfort.


Review of existing reward systems


a) Ministry of Company Affairs
There is no existing system to link work performance with pay (measured in qualitative
or quantitative terms) in the ministry. Group C & D employees are eligible for annual


15
  With introduction of MCA-21 and computerization of offices of CBDT/CBEC, process re-engineering is
being planned. MCA has undertaken an OD study and CBDT/CBEC is working on process re-engineering


                                                                                                 18
bonus declared by the Government of India – but the same has no connection with
performance.


We were informed that, few years before Government of India had introduced a special
scheme of extra payment for additional work in some of the offices. This was done on a
project basis and as of now it has ceased to operate. A maximum payment of rupees 2500
per person was fixed by the government and it covered only a section of employees.


b) Department of Revenue, Ministry of Finance (CBDT and CBEC)
Employees (up to a particular level) involved in investigation activities are covered under
a financial reward scheme aimed at encouraging investigation and unearthing dues and at
the same time recognizing the risks involved. The scheme for rewarding CBDT, CBEC
employees based on revenue realization through cases related to IT evasions/custom or
excise duty evasions/anti-smuggling activities, was introduced in 1985 and has been
reviewed from time to time. The scheme is based on the premise that investigating
officers spent extra time and effort in identifying the cases, developing intelligence leads
and takes the risk to bring extra revenue to the government. While the investigation
department takes lead in planning and ensuring success of the action they are helped by
employees drawn from other field formations. Based on actual realization maximum 10
percent of realization revenue is distributed in a proportion between the investigation
department and other participants in the action. (Rewards for informers are separate.)


There is cap of rupees 15 lacs in the entire career span of an officer and also cap on
maximum amount that can be distributed per case. Distribution of the reward takes place
only after all formalities, including legal formalities are completed. Completion of such
formalities take a long time and those eligible for the rewards eventually loose their
motivation, (particularly CBDT) waiting for the rewards to finally come. Because of
transfers those eligible will be moved from the department and then they will have to
follow-up constantly about the rewards due to them. In the process, many of those who
are eligible just give up or continue to wait for the rewards while harboring grudge about




                                                                                         19
procedural unfairness. Since supervising officers in investigation also change, hence there
is no continuous link in following up.


Another common complaint we heard about the process is that often from the top there is
no motivation to recommend for rewards and there is disproportionate distribution of
rewards when compared with the actual contribution. While the discretionary power to
supervisor has been given to ensure that rewards do not become routine, in practice
claiming rewards has become so difficult that it adds to employee’s discontentment.
There is also possibility of conflict of interest between the investigation department and
the assessing officer whose actions post-submission of investigation report is equally
important to realize revenue (CBDT) 16.


Though the posting in the investigation department is considered as an informal
recognition of one’s talent, it is difficult for everyone to get a chance to work in the
department. Naturally the good performers in investigation roles sometimes get multiple
chances to work in the department, leading to feeling of jealousy and allegations about
favoritism.


Though roles like Director General Investigations and Director Investigations are equally
important in the entire investigation activity chain, they are not financially rewarded.
Though specific comments about dissatisfaction on non-inclusion in the reward payment
scheme did not come from them, we could feel the discomfort at those levels also. On the
positive side, few Commissioners/Joint Commissioners whom we met in the course of
our study indicated that postings in the investigation department during early stages of
career and quick clearance of reward amount will serve as a powerful motivator and can
satisfy certain life stage needs of a government employee (like owning a house or
property) 17.




16
   There was a view that this conflict ensures that the investigators create fool proof reports that can stand
judicial scrutiny.
17
   Personal experience of earning rewards shared with us.


                                                                                                             20
The scheme also provides reward for achievement in other areas of work, that are not
informer based cases. These are lumpsum rewards of Rs. 5000 for each case where there
is evidence of hard work, exceptional zeal etc at work. The value of lumpsum award
itself is so less that many preferred not to talk about it.


Future of existing reward schemes: Our View:


In context of suggesting PRI for the organizations studied, question we had considered
was about continuation of existing schemes of rewards, including adhoc bonus payment
existing in some departments.


Our view will be that bonus scheme will continue only for group D employees (MCA,
CBDT/CBEC), with a condition – Attendance and Punctuality should become a pre-
condition for receiving bonus. The system of honorarium payments also will stop for all
groups. Those eligible for overtime will continue to earn the same. The PRI scheme we
suggest later in the chapter will cover group C, B & A employees.


As far as CBDT/CBEC is considered, taking into consideration the special and unique
nature of investigation related work, we would recommend that reward system continues
for investigation work. We strongly suggest that the entire process of assigning rewards
will have to be reengineered, with focus on part of payments (proportionate) linked to
voluntary disclosures and spot payments/recovery and qualitative estimate of deterrence
effect created. A committee can be set up by the respective boards to look into how the
processes can be accelerated and the scheme coverage should be extended to include
Directors also. Employees (Group C/B/A) of the investigation directorate will
additionally be eligible for the PRI scheme that we are recommending.


A section of employees in MCA also perform work similar to investigation work done by
the revenue boards. They also effect unearthing and recovery of unpaid dues and also
create a deterrence effect. To reward this unique task, we suggest that a similar scheme




                                                                                     21
with suitable checks and balances may be started in MCA also. Like in the boards, the
scheme will be over and above PRI we are recommending.


Suggested framework for PRI in MCA/CBDT/CBEC
While recognizing the systematic pitfalls that come in the way of a successful PRI
scheme, we support its introduction in the studied organizations, subject to fulfilling the
following points discussed below.


   a) Getting the organization ready by developing clear job description, reporting
       relationship and performance expectations across all levels (group A to D).
   b) Setting achievable targets at group and individual levels through a consultative
       process at all tiers i.e. from the topmost level to group C. Group D also should be
       communicated targets, in the form of expectations from them.
   c) Developing indicators for measuring target achievements (with help from
       industrial engineers wherever required). Target setting can be based on trends,
       organisational standards including numbers, time taken etc and ratings by external
       agencies or subjective parameters like supervisor judgments/rating.
   d) Internal processes need to be re-engineered to ensure smoothen the work flow.
       Employees have to be supported with minimum requirements for decent work,
       including training and necessary physical and social infrastructure.
   e) Developing a suitable system to track the progress over time (we suggest that the
       current arrangements of monthly reporting for field/attached office continue, but
       also suggest comprehensive review after 6 months for individual and the unit). At
       this stage the targets and achievements may be revisited, but any revision upwards
       or downwards has to be justified.
   f) Introducing a PMS system for all employees covered by the scheme that tracks
       individual target achievements and contribution/performance in qualitative areas.
       The PMS system will thus be a critical data feeder for PRI system
   g) Supervising officers and individuals need to be intensively trained in PMS
       processes to make it function better. To ensure consistency, the next higher level a
       system of moderation should exist (Similar to current system of reporting and



                                                                                        22
           reviewing officers except that moderation will be a more intensive and transparent
           exercise). Moderation will ensure relativity and factor in contextual difficulties
           while evaluating.
     h) Reputed external agencies have to be selected to capture measures of service
           quality, employee satisfaction and public service impact 18. Acceptable standards
           in these parameters need to be set using trend data and benchmarking with best in
           class organizations (including private sector).
     i) A transparent system where data used for PRI decision can be examined by the
           employee, has to be put in place. The system also should have arrangement for
           grievance handling at local level (immediate boss’s supervisor) and organizational
           levels (empowered committee of JS/Addl Secy equivalent).
     j) Buy-in of the PRI system by all stakeholders has to be ensured through
           discussions, communication and training. The system has to be comprehensively
           reviewed after five years of operation.


Coverage for proposed PRI
a) Tiers: We recommend that the proposed PRI scheme has to be universally applicable
to   all     tiers   including    Head     Office     (Ministry      Offices),    Field     Offices     and
Subordinate/Attached Offices.


b) Employee groups to be covered: PRI should include Group A, B and C employees
of the organization, who are in service during the year. In principle all employees will be
eligible to receive PRI and they have to cross a performance bar. The bar is
operationalised in the form of targets (individual/group or both) set before the start of
performance period. Crossing the performance bar is required for receiving PRI so that
the scheme rewards superior performers. The nature of cluster 2 ministries is such that,
when there is national economic growth, a large section of employees can be expected to
cross a reasonable performance bar. At the same time setting an un-reasonable


18
   We discuss about the Sevottam Scheme of GOI later in this chapter. Also note that – the studies agencies
had expressed reservations to external agencies measuring performance. However, we stand by our report
that involvement of external agencies with proven expertise and robust (reliable and valid) tools to measure
is required for PRI. The cost of hiring them has to be met by the concerned ministries.


                                                                                                         23
performance bar can not only demotivate employees, but also trigger negative behavior
and abuse of power. Hence suitable checks and balances need to be built in while setting
the performance bars. (Only full time, regular employees need be covered by the scheme.
If any individual is transferred/exits/resigns/retires in between, pro-rate payment can be
considered. It is also desirable that minimum three months stay in the role will be
mandatory to receive PRI payment.)


c) Quota: The most common method to implement the performance bar is using forced
distribution system 19. This will ensure that only the best of the best performers receive
awards. In the case of cluster 2 ministries, we recommend that the quota may be between
20% to 30% employees, receiving PRI each year. The quota should be fixed in advance
(and communicated) so that employees are aware about the same. In our opinion,
reducing or expanding the quota will reduce the power of discrimination and will impact
effectiveness of the scheme. We also recommend that the quota should be applicable for
each category of employees (not just at aggregate level), though some discretion between
categories may be allowed. The above is necessary to avoid PRI getting skewed to a
specific group. We also suggest that the applicability quota system should be reviewed
every five years.


Intra quota discrimination for exceptionally high performance can also be considered i.e.
those who are performing at the highest get still further rewarded. To start with this
system may be restricted to group A alone.


d) Group PRI (existing Bonus) only for Group D. The alternate option that PRI should
be group based and given to everyone who is in service was examined (using
organizational performance as reference point). We have a different view about its utility
for group A/B & C category. While a group based PRI will be easier to compute and it
will take away the possibilities of many post PRI dissatisfaction issues from happening,
in our opinion it has inherent disadvantages including encouraging of free riding and lack

19
  The alternate system is in-or out, where all employees/groups exceeding the preset performance bar will
be automatically eligible for PRI. In this system, there is possibility that 100% of employees have equal and
absolute chance to receive PRI. In the quota based system, odds are relative.


                                                                                                         24
of connect with performance/productivity increase. Performing individuals who are
already discontent will be badly hit when rewards are also given out uniformly. It will
definitely reduce motivation and desire to excel. Hence we are not recommending the
same for group A/B & C.              We recommend group based PRI system for group D
employees, where the existing bonus system continues with attendance and punctuality as
a qualifying indicator 20. We also do not propose any quota for group D employees. Since
we do not envisage introduction of PMS for Group D, the intra-group reward system will
not be applicable to them also. Those eligible will continue to receive overtime payment.


e) Should PRI be for the real top management? Yes, In our opinion, PRI or similar
rewards should cover the top level of the organizations, like secretaries to GOI/ Revenue
Board Members. While PRI becomes a tool in their hand to incentivize performance, they
should also be rewarded appropriately. Unlike lower levels, performance measurement at
this level should be based on more weight for achievement of organizational goals and
other strategic indicators. We also are of the view that quota should not be applicable for
the group (few in number), but – if organizational goals are achieved to full satisfaction,
then they should be eligible. The scheme should be separately developed, since we have
not examined details in this study.


PRI system architecture


We considered the feasibility and desirability of suggesting both individual and group
measure based architecture for PRI and has come to the conclusion that a combination of
both will be suitable for cluster 2. Since work in the organisations studied are highly team
oriented (rather work group type) and each individual’s performance is connected with
multiple agencies including immediate and higher level team’s performance, we support
the hybrid system of PRI. The hybrid system will cover measures of individual and group
performance with adequate weightings for each. Though conceptually desirable and it is a
common practice (in the private sector) to give differential weightings to individual and

20
  We expect that group D recruitments will eventually diminish and with immediate higher level (group C)
getting PRP befits, there will be natural drive for motivated group D employees to take departmental tests
and move to group C.


                                                                                                       25
group performance according to the positions/levels (in order to factor in the impact
factor of the position on results), to start with we recommend a common pattern of
weights across group A, B and C employees.


While individual performance will be based on performance indicators for which self is
responsible, contributions to group performance at three levels has to be factored in the
PRI model. Public Service Delivery being an important component of government
performance, it is included as one of the three group components for determining PRI.
This approach is necessary to balance immediate priorities with larger organisational
priorities.


First level for group measurement is the immediate team (work group) for which one
contributes (alternately defined as performance of the supervisor’s team of which the
individual is part) and the second level will be larger organization (i.e.
MCA/CBDT/CBEC).            Though      there    are    intermediate     levels,   (particularly     in
CBDT/CBEC) we choose not to consider them in the interest of convenience for PRI
administration. The intermediate levels performance will any way be reflected in the
larger organizations performance. As mentioned earlier, the point is to make connect
between individual performance and achievement of business goals of the higher teams.
Achievement of business goals of higher order teams will be measured from achievement
of business targets set for them. Already there exists process in the studied organizations
for the same and it can be used for PRI purposes (Outcome Budget and Annual Plans)
that are cascaded down. 21


We explored the feasibility of bringing in public accountability for government through a
suitable indicator that can be related to PRI. We have learned that the “Sevottam
Scheme 22”, a system of rating offices based on specific parameters has been approved by
the government and pilot implementation is progressing (details are discussed later).


21
   At MCA/CBDT/CBEC level, annual planning exercise is practiced and based on that plans are cascaded
down. For CBDT there are three annual plans for Customs, Excise and Service Tax respectively.
22
   GOI (2007), Excellence in Public Services Delivery Sevottam, Department of Administrative Reforms
and Public Grievances, Government of India


                                                                                                   26
Hence we suggest that Sevottam rating of the office (or immediate unit where ever
applicable) be considered as an indicator of performance. We recommend keeping it an
independent item with standardized (across levels and organization) weight. Specifically
including “sevottam rating” as a measure is bring in high level of personal accountability
towards public service delivery. The existing system of scores in basic compliance and
quality of process (measured on 5 point scale) can be considered as an indicator of public
accountability (though a elongated scale of 9 or 11 points may better capture the
indicator). We have pre-suggested weights to be allotted to Sevottam rating and it
remains same across the board. Even those working in roles that have no pubic contact
will measured with the same yardstick. 23


We are well aware of the fact that introducing PRI will require organization to be ready
for the process, both systemically and in terms of enabling environment creation.
Developing and stabilizing required systems and creating the enabling environment will
be a time consuming exercise. In our estimation, the time required will be two to three
years.


One option before us was to suggest that organization wait for things to improve and then
introduce PRI. However we have decided against the same since we feel that if
government intents to use PRI to initiate change, then PRI itself should drive internal
changes. Hence PRI may be introduced with immediate effect. At the same time we also
suggest a pilot in each ministry, so that operational issues can be factored in before
implementation of PRI across the organization/


In our opinion it will be more practical to start PRI with higher weights for group
performance (larger organization level) as the basis for calculation and progressively
move to balance individual and immediate team performance as the parameters.
Eventually, PRI will be paid on mostly equal weights for individual and group



23
  In our opinion, the current 5 point scale used by sevottam is inadequate to discriminate. It should be
expanded to give more room for evaluation.


                                                                                                           27
performance indicators. We estimate that stabilization to 50: 50 should take place over 4
years.


Hence our PRI scheme for cluster 2 will have the following components,
A          Individual Rating
B          Sevottam Rating (with pre-assigned weight)
C          Work Team achievement (Department/Office)
D          Larger Organization (Ministry/Board)


The table below (Table 2.2) shows the proposed progress pattern across time and
suggested weights over the time frame.




                              Table 2.1: PRI Progression and Weights


        Weightage (across years)        I          II        III         IV          V
    A.a    Individual                  10%        10%        20%        50%         50%
    B      Sevottam rating*            10%        10%        10%        10%         10%
           (of work unit)
    C      Department (Team)            -         20%        20%        20%         20%
    B      Ministry/Board              80%        60%        50%        20%         20%
           Total (A+B+C)              100%        100%      100%        100%        100%
* Public Service Delivery Quotient


Computing mechanism: Explanation
As presented in Table 2.2, PRI computation takes into consideration performance at four
levels. Details of performance dimensions at each level are discussed here.


Pre-requisite for the system to be operational is having a process for target setting at the
starting of the year. The target setting process should ensure that there are discussions at
different levels (or communication) and the goals are cascaded down. Ideally, the
exercise should happen during start of the financial year itself (currently it happens in


                                                                                          28
June/July, leaving only 9 months for focused work), so that there is sufficient time for
planning the work and spread of nearly 12 months is available.


Our model also expects setting sound performance standards. The performance standards
have to be set through internal IE studies or trend based projections. These standards will
be used to measure accomplishments in areas where results have to be counted for PRI 24.
If standards are weak, then results of PRI will not be as desired by the government.


A. Individual Performance
This represents the individual achievement expected from each employee, measured in
the following dimensions. The expectations are captured by different performance
dimensions and are different for supervisory & non supervisory positions. Multiple
dimensions are used to capture individual performance, so that total performance is
reflected in PRI.


     1.   Regular Activities – As per role requirements, determined by annual plans, job
          descriptions and supervisor/subordinate discussions. Except in few cases,
          achievements can be quantified. (Applicable all categories of employees covered
          by PRI 25).


     2.   Quality of Achievements – Indicators that measure quality of achievements to
          ensure that (1) is sustainable in short/long run. Common measures that can be
          used will be complaints/grievances about work, pendency rate of work
          (late/undone work) and quality of work as determined by superior. (Applicable
          all categories of employees covered by PRI).


     3.   Process Adherence – The indicator to ensure that processes are followed and
          results are sustainable in the long run. Measures include Audit Objections

24
   Defining appropriate standards requires sufficient time and it has to be done scientifically with help of
historical data. In this study we have not attempted to determine the values to be attached for the standards.
However in this study we have presented type of standards that may be used to determine performance
against result areas.
25
   Chapter 3 & 4 discuss performance dimensions in details, for specific roles.


                                                                                                           29
          (external/internal audit 26), Internal Reporting (submission of (accurate) control
          reports in time) and a qualitative measure for delays caused by the individual on
          overall output. This will allow to measure constrains faced in the course of work)
          (For Group A and sections of group B/C.)


     4.   Customer/User & Employee Satisfaction – It represents two important
          dimensions of work i.e. perception of the Customer set and Employee
          (subordinate) set. There may be cases where either one or both are not present.
          To measure, perception ratings have to be conducted by an external, independent
          agency 27. Collecting feedback from customers/user set will serve as an indicator
          of performance, since it is one of the goals of public organizations. The ratings of
          offices under Sevottam also considers customers and employees, but there is
          limited scope for perception data to be included there. Moreover Sevottam will
          be at the macro level; while the satisfaction scores will be derived from the set
          about which self has direct or immediate indirect control. (Group A & some
          sections of B)


     5.   Attendance and Punctuality (Office/Self) – for those with supervisory
          responsibility attendance level of office (s) (with punctuality indicator) under
          jurisdiction will be considered. For others, own attendance level will be the
          indicator. This can be benchmarked against a standard a standard measure based
          on trend. Ideal will be 100%, excluding eligible leave/absences. (All employees
          in A/B for office and C for self. We recommended the measure for group D
          bonus eligibility.)


     6.   Availability/Dependability – qualitative observations for group C staff who have
          their roles limited to execution/carrying out instructions. This can be measured
          by supervisor judgment (group C).


26
  This factor will be difficult to accept, since audit function is viewed as a necessary and irrational evil.
27
  Using external agencies is a common practice in private and public domain. However, this has been
objected to by the ministries/departments in their comments to the draft. We stand by the view of having
reputed agencies and using scientific techniques to measure the same.


                                                                                                                30
     7.   Supervision & Leadership – for those with responsibility for people management
          and resource management (Group A/B) performance in supervision and
          leadership (as viewed by immediate supervisor) is a critical indicator. This has
          to be captured through the Performance Management System.


     8.   Innovation and Contribution - specific role related indicators and special
          contributions by individuals are captured. (Applicable to group A & B).


     9.   Subject Knowledge & Self Improvement – Qualitative dimension for all levels
          (below a threshold level of group A, who is expected to demonstrate the same.)
          This will be measured by the supervisor based on qualitative experience about
          knowledge levels and effort put to update the knowledge and apply it at work
          (sections of group A, B & C.) The PMS can be used to capture this dimension.


     10. Proficiency in computers/software - Measure can be subjective or acquiring
          formal certification from an agency (modalities will have to be worked out). The
          certification will have to be revalidated periodically. (Only for group C).


Group Measures


B. Public Service Delivery Quotient – The unit will be work group of which one is a part
based on Sevottam rating on a combination of basic criterion (100% fulfillment) and
quality of compliance measured on a scale (currently 5 point). A minimum level will
have to be set for achievement for each work unit, to be eligible for PRI (Applicable for
all employees including non public facing). 28 In our model we have pre assigned weights
to this component. The weight for this, will be part of total weight assigned for individual
rating.



28
  Implies that all offices opt for sevottam rating. Suitable internal/external mechanism will have to be set
for measuring achievements. In our opinion, using this as dimension for PRI will improve public
accountability. PRI can start only when offices are sevottam ready.


                                                                                                           31
C Organisational Performance (work group/team)
This parameter is expected to indirectly measure contribution to achieving the work team
goals (not restricted to the work team the person is responsible for). In other words, it will
be performance of the team for which one’s supervisor is responsible for, that will count
here 29. In cases where performances of such teams are not significant or they are
common resources, then the weights assigned will be transferred appropriately. Hence for
ministry work, (C) will not be counted at all and common facilities like Headquarter
admin in Mumbai, the performance of Mumbai Region will be counted.


D. Organisational Performance (Ministry/Board)
Overall achievement of outcome goals/action plan targets for the organization will be
counted. (Annexure III & IV presents the framework for action plan, which can be
divided into revenue & non revenue) This parameter will be applicable for all employees
covered under the scheme.


Allocation of weights within each head
Since there are multiple parameters involved (particularly at individual levels), weights
should be allocated for different performance areas within the major heads described
above. We suggest that the sub-weights may be arrived at through a consultative
mechanism and factor in local concerns. The department for organization studies can
provide general guidelines and there should be some scope for negotiation. In our
suggestion, performance in individual dimension regular (task related) result achievement
(individual areas of responsibility + quality of results) should have minimum 30% weight
at group A level. Depending on levels, weight for the above can move up to 70% (for
Group C). Sevottam rating can have a standard weight across the board. Weights for sub
dimensions of C, D can be equally or proportionally distributed depending on focus
areas.




29
  For Example: a commissioner of CBDT will have the Commission rate’s performance counted in
individual performance and performance of Chief Commissionerate against action plans included here


                                                                                                     32
Scale for Performance Measurement (individual performance)
To ensure that there will be discrimination between performers and non-performers,
individual performance should be measured on a suitable scale. We propose a four point
scale as follows (Table 2.3). 30


                                   Table 2.2 Scale for measurement
           E - Exceeded                    Surpassed the standards (+2 to 5% of A
                                           tolerance)*
           A – Achieved                    Met      the    standards(+/-2     to    5%
                                           tolerance)*
           NA – Not achieved               Not achieved (below tolerance level)
           U - Unacceptable                Less than 80% of target.**
           * Tolerance levels can be decided by a committee on year to year basis. In our opinion, it will
             give a moderating effect
            ** These can be decided by the moderation committee.




The PRI Model

PRI should be paid over and above the assured salary. By assured salary, we mean the
Basic Pay (computed annually) applicable to particular levels.


Mathematically it can be represented as 1 + X model, where 1 refer to the annual gross
payment (comprising of basic + DP + DA + other regular allowances, calculated on
annual basis) and X is the PRI computed as percentage of annual basic pay. We use
annual basic as the basis for calculation, since it will be fixed component and represent
the relative position of the person.




30
     We suggest that using the same scale for PMS will be helpful.


                                                                                                       33
PRI: Financial burden computation.


Deciding on the pool from which reward payment can be drawn is a critical dimension
for the scheme. Since the objective of the scheme is to improve performance and to
reward employees for improvement in performance, the expenses incurred towards
rewarding should come from results of improved performance itself. In the case of study
2, particularly CBDT/CBEC, there is a direct revenue collection component to fund the
PRI. For MCA, though there is earnings from fees (as discussed earlier) the regular fee
component of earning may not be sufficient enough to cover operating expenses and the
bulk contributors – IPO’s – is beyond control of the ministry. One opinion to ensure self
sustainability of PRI in MCA will be to revise the fees to commensurate with expense
pattern (this will require extensive costing exercise and has to be handed at different
levels) and thorough internal efficiency strive to create surplus that will fund the PRI.
Though through operating cost reduction and improving system efficiency, it is possible
to improve performance – how far it is practical needs to be examined. Till then earnings
from IPO fees can fund PRI.


Calculating the financial outlay for PRI requires information on two dimensions (a)
present salary cost 31 (b) performance distribution. If the current ACR rating is taken, we
are informed that more than 90% of employees will qualify for PRI. It is because the
current ACR system fails to discriminate higher performance from average and poor
ones. Hence we have done some simulation of financial burden that is presented in
Exhibit I. Here we have taken different scenarios and computed the financial burden.


We had already mentioned that to ensure effective discrimination between performers
and non-performers, PRI payment should be restricted to defined mass (or quota). This
will ensure that only the best of best performer receive PRI. 32 In our view the quota
should be between 20% to 30% of employees across all levels. PRI and PMS system need


31
   In the private sector, PRP is calculated on the cost to company basis that does not exist in the
government. In government basic salary seems the most stable component to calculate PRP.
32
   Using quota system can lead to allocation about unfairness etc. Organistion should have mechanisms to
deal with the issues. Building robust MIS and having more transparency helps.


                                                                                                       34
to synchronize and the latter should feed the former with required data. This is very
necessary, since any mis-match can affect the credibility of both systems.


We have already mentioned that the PRI payment should be over and above the assured
salary (annual) component i.e. 1 + X model. To bring in public service focus, we also
recommend that minimum rating of “A” in individual parameters and high sevottam
rating for work unit (5 or 4, may be start with for a year 3 also) be used as independent
gates. Thus we present the following scenarios to consider while deciding on PRI.




                           Table 2.3 PRI Payment Scenarios
 Sr.      Individual      Sevottam      Org. (B)     Organization               PRP
 No.
  1       Exceeded        Acceptable     Target         Target               Full Payment
              or            rating      Achieved       Achieved
          Achieved
   2      Exceeded           N.A.         N.A.            N.A.         Only for Individual
          Achieved                                                       achievement
   3     Not Achieved         NA         Target         Target            No Payment
                                        Achieved       Achieved
   4       Exceeded/      Acceptable      N.A.          Target          Proportionate for
           Achieved                                    Achieved       individual Sevottam
                                                                         & organization
   5     Not Achieved     Acceptable      N.A.       Not Achieved         No payment




Modes of PRI Payment


The modalities of payment of PRI also has been considered. The two methods we
considered were (a) Merit increments and (b) Lumpsum payment (bonus)


We recommend PRI payment in the form of annual lumpsum payment (bonus), which
should be computed as multiplier of annual basic pay. In our opinion, such an approach
will be more suitable for study 2 organizations. The HRM system followed here ensures


                                                                                            35
transfer of employees between locations of the same organisation and under the above
practice; the individual receives rewards for immediate work performance and also leaves
a legacy for those who follow. At the same time in the new place of posting, same
individual receives benefits of legacy left by colleague or has the scope to improve
performance and reach acceptable standards. This we believe will encourage reciprocity
(mutual win-win) among colleagues.


At the same time, merit increments awarded to exceptional performers may serve to carry
performance discrimination over longer time. In a rare instance, it may have a negative
effect as not encouraging reciprocity or team work. Introducing merit increments in the
current scale of pay will lead to employees stagnating at top of scale quicker than now,
leading to more discontent. The salary structure will have to move to broad band / open
ended scales if merit increments have to be introduced.            However, for intra-group
recognition of exceptional performance of highly sustainable nature – we suggest that
merit increments for a very limited set of employees may be considered. It will be best if
the same can be recommended as part of general pay commission recommendations,
covering 5 to 10% employees. For top level employees (see reference earlier) merit
increment may be a better option to recognize performance.


The financial payment involved (PRI amount) should not be open ended, but reasonably
capped to ensure that individuals do not get too self centric due to huge financial stakes
involved. Since PRI is evolving, we also recommend that the % of payment (factor that
determines X in the model) increases progressively as shown in Table. 2.5. We have
indicated earlier that PRI should be on the annual basic salary.


           Table 2.4 Proposed Payment Pattern as % of Annual Basic Pay.


    Year 1            Year 2            Year 3            Year 4             Year 5
  15%(trial)           20%                25%               30%               30%




                                                                                        36
Implementation of PRI


We have also illustrated in Table 2.3, the proportion at which the four determinants of
PRI should be considered. At the initial stages more weightage is suggested to
organizational achievements, so that it will help foster team work and prepare one self for
working in a performance linked environment determined by combination of group and
individual performance. Rating bars for individual performance will ensure that free
riding is minimized, since scoring NA or U at individual level makes one in-eligible for
PRI, including share of rewards that may be given because of higher team/organizational
performance. We believe that the above approach also will signal a cultural change in
government, that performance pays and non-performance will be costly.


We also recommend that for the first year a trial scheme (pilot) should be run, where the
system is tested and then cascaded across the organisation. The trials can be initiated on
voluntary basis and it has to start from the field offices. Learning from the same can be
used to cascade the process across all offices of the organisation, in the next cycle. The
experience can also be used to cascade the model to other similar ministries.


At this point we re-emphasize the significance of effective target setting, performance
indicator development, communication and training in the success of PRI system.
Introduction of PMS and above all obtaining commitment of employees to performance
and its consequences will be pre-requisites. Since subjective factors are involved,
supervisors need to be equipped to judge based on observation and application of mind.


We do not rule out possibilities of gaming. Suitable checks and balances, including
regular audit of PRI process and strong signals will be required to discourage gaming.


An internal system for handling grievances related to PRI computation has to be
institutionalized. Concerns should be addressed in time bound fashion at the local level
itself (decentralization) with one higher level for appeals at the organisation level.




                                                                                         37
                                                                            Exhibit 1

                                           Financial Burden for PRI Payment: Year I @ 15%. Of Annual Basic Pay

                                                                Central Board of Direct Taxes
Group             Average     Annual        Number of   15% of       20% of       25% of         30% of                        I Year Additional
                  Basic Pay   Basic Pay     Employees   Employees    Employees    Employees      Employees     Commitment (in Rs.Lakh) Per Annum at 15% for PRI
                                                                                                               15% of        20% of         25% of      30% of
                                                                                                              Employees    Employees      Employees   Employees
A                     15000      180000          4124        618.6        824.8          1031        1237.2       167.022        222.696       278.37         334.044
B                      9000      108000          5966        894.9       1193.2         1491.5       1789.8      144.9738      193.2984       241.623      289.9476
C                      5000       60000         39271      5890.65       7854.2      9817.75        11781.3      530.1585        706.878     883.5975      1060.317
Total (A+B+C)                                   49361      7404.15       9872.2     12340.25        14808.3      842.1543     1122.8724     1403.5905     1684.3086
D*                                              10321                                                           254.61907     254.61907     254.61907     254.61907
Total
(A+B+C+D)                                       59862                                                          1096.77337    1377.49147     1658.2096     1938.9277
        * Bonus @ Rs. 2467 Per Person

                                                            Central Board of Excise and Customs
Group             Average     Annual        Number of   15% of       20% of       25% of         30% of       I Year Additional Commitment (in Rs.Lakh) Per Annum at
                  Basic Pay   Basic Pay     Employees   Employees    Employees    Employees      Employees                            15% PRI
                                                                                                                 15% of         20% of        25% of        30% of
                                                                                                               Employees      Employees    Employees      Employees
A                     15000       180000         2661       399.15        532.2       665.25          798.3       107.7705        143.694     179.6175       215.541
B                       9000      108000        14482       2172.3       2896.4       3620.5         4344.6       351.9126       469.2168      586.521      703.8252
C                       5000       60000        36293      5443.95       7258.6      9073.25        10887.9       489.9555        653.274     816.5925       979.911
Total (A+B+C)                                   53436       8015.4      10687.2       13359         16030.8       949.6386      1266.1848     1582.731     1899.2772
D*                                              16742                                                            413.02514      413.02514    413.02514     413.02514
Total
(A+B+C+D)                                       70178                                                          1362.66374    1679.20994     1995.7561     2312.3023
          * Bonus @ Rs. 2467 Per Person




                                                                                                                                                         38
                                                             Ministry of Company Affairs

Group            Average     Annual      Number of   15% of       20% of       25% of       30% of                       I Year Additional
                 Basic Pay   Basic Pay   Employees   Employees    Employees    Employees    Employees      Commitment (in Rs.Lakh) Per Annum at 15% PRI
                                                                                                          15% of       20% of       25% of       30% of
                                                                                                         Employees    Employees    Employees    Employees
A                    15000     180000          234         35.1         46.8         58.5         70.2        9.477       12.636       15.795         18.954
B                     9000     108000          229        34.35         45.8        57.25         68.7       5.5647       7.4196       9.2745        11.1294
C                     5000      60000          933       139.95        186.6       233.25        279.9      12.5955       16.794      20.9925         25.191
Total (A+B+C)                                 1396        209.4        279.2         349         418.8      27.6372      36.8496       46.062        55.2744
D*                                             265                                                          6.53755      6.53755      6.53755        6.53755
Total
(A+B+C+D)                                     1661                                                         34.17475     43.38715     52.59955     61.81195
        * Bonus @ Rs. 2467 Per Person




                                                                                                                                                39
                                              Chapter III
                          MINISTRY OF COMPANY AFFAIRS
                        (Renamed Ministry of Corporate Affairs)

                  33
Introduction
The Ministry of Company Affairs (MCA) is primarily concerned with administration of
the Companies Act 1956, other allied Acts and rules & regulations framed mainly for
regulating the functioning of the corporate sector in accordance with law. Earlier, the
ministry has been functioning as a department under the Ministry of Finance. It has been
renamed as Ministry of Corporate Affairs vide Presidential notification dated 9th May 07.
In addition to performing duties under the Companies Act and acting as a regulator, the
ministry is also responsible for administering the Competition Act, 2002, which is
eventually expected to replace the Monopolies and Restrictive Trade Practices Act, 1969
under which the Monopolies and Restrictive Trade Practices Commission (MRTPC) is
functioning. Besides it exercises supervision over the three professional bodies namely,
Institute of Chartered Accountants of India (ICAI), Institute of Company Secretaries of
India (ICSI) and the Institute of Cost and Works Accountants of India (ICWAI) which
are constituted under three separate acts of the Parliament. Additional responsibility of
the ministry includes carrying out functions of the central government relating to
administration of the Partnership Act, 1932, the Companies (Donations to National
Funds) Act, 1951 and the Societies Registration Act, 1980.


The ministry has a three tier organizational set up, comprising of headquarters at New
Delhi, network of 4 offices of Regional Directors (RD) located at Noida, Kolkata,
Mumbai and Chennai, 20 offices of Registrars of Companies (ROC) and 16 offices of the
Official Liquidators (OL). The official liquidators are attached to various high courts in
India, but under the overall administrative control of the MCA. In addition, the following
offices function as attached offices of the ministry.



33
     Induction material, Ministry of Company Affairs, 2006


                                                                                       40
   •   Company Law Board (CLB)
   •   The Monopolies and Restrictive Trade Practices Commission (MRTPC)
   •   Director General of Investigation and Registration
   •   Competition Commission of India
   •   National Company Law Tribunal (NCLT)/National Company Law Appellate
       Tribunal (NCLAT)
   •   Serious Frauds Investigation Office (SFIO)


MCA is one of the ministries that have already achieved high levels of computerization
and e-governance practices. MCA 21 program is an e-Governance initiative that seeks to
provide citizens, corporates and others, easy and secure on line access to all the MCA
services including filing and registration (excluding those pertaining to closure of
business) throughout the country any time and in a manner that may be determined by the
citizens and businesses as best suited to them. The MCA-21 program aims at improving
the quality of services provide to various stakeholders concerned with corporate sector in
India. A brief outline of the work performed by the ministry is presented in Table 3.1




                                                                                         41
                                Table 3.1: Work performed by the Ministry of Company Affairs
S.No.
1       Legal framework for incorporation as well as proper and efficient functioning of companies
2       Redressal forums for grievances of investors, creditors and others
3       Dissemination of information by issue of press notes and publication of official journal titled 'Company New and Notes'
4       Interaction with professional bodies and business community for continuous feed back regarding general difficulties of
        corporate sector
5       Maintaining in the offices of Registrar of Companies various documents filed by the companies and making available the
        same for inspection by the general public
6       Surveillance over the working of corporate sector by conducting inspections to ensure financial health and compliance with
        statutory rules
7       Investigations into the affairs of companies especially where complaints are received
8       Prescribing the cost audit rules and ordering /approving the appointment of cost auditors in various industries
9       Ensuring compliance with the prescribed accounting standards under the Companies Act
10      Monitoring the development of the professional bodies i.e. the Institute of Chartered Accountants of India, Institute of
        Company Secretaries and Institute of Cost & Works Accountants of India
11      Coordination with other government departments & other autonomous bodies like Security Exchange Board of India, Reserve
        Bank of India and Stock Exchanges etc
12      Settlement of disputes through a quasi-judicial forum i.e. Company Law Board regarding mismanagement and oppression of
        minority shareholders etc
13      Interaction with Monopolies & Restrictive Trade Practices Commission and the Director General of Investigation and
        Registration in connection with Restrictive Trade Practices, Monopolistic Trade Practices and Unfair Trade Practices indulged
        into by unscrupulous companies

Source: Induction material, Ministry of Company Affairs, 2006




                                                                                                                                  42
The Citizen Charter of the ministry details the commitments, expectations and standards
of service promised by MCA that are as follows: 34


Our commitment

We shall carry out our tasks with

       •   integrity and judiciousness,

       •   courtesy and understanding,

       •   objectivity and transparency,

       •   promptness and efficiency.


Our expectations

We expect the corporate sector to be prompt and reasonable in fulfilling their duties and
legal obligations and be true and honest in furnishing information to us.

Our standards

We shall -

       •   Acknowledge applications, returns and all communications within 7 days of their
           receipt.
       •   Resolve expeditiously complaints regarding delay in issue of allotment letters &
           share/debenture certificates, refund of application money, delay in transfer of
           shares & non payment of dividends/interest on shares/ debentures/fixed deposits
           etc. in close co-ordination with agencies.
       •   Ensure that all applications submitted to the Ministry of Company Affairs,
           Regional Directors and Registrar of Companies are processed within the time
           frame.
       •   Be courteous, prompt, effective & provide time bound services.
       •   All services shall be provided without charge or demanding any money other than
           remuneration prescribed by law.

34
     Induction material, Ministry of Company Affairs, 2006


                                                                                        43
We further commit that

   •   All officers who deal with the public will wear name badges and carry an identity
       card in all offices of Regional Directors and Registrar of Companies.

   •   Personal and business information disclosed to us will be kept confidential.

   •   Inspections, investigations and legal proceedings will be initiated only after
       department is satisfied that prima facie evidence exists.

   •   We will provide full information about appeal procedures and the authorities with
       whom appeals can be filed.

   •   We will continuously consult all public interests while reviewing our policies and
       procedures and provide timely publicity of all changes in the law or procedures.

   •   Every possible assistance will be rendered by the Facilitation Centre, of
       Department of Company Affairs, at Shastri Bhawan, New Delhi and in Registrar
       of Companies Offices & all relevant information and details of procedures as may
       be required shall be provided. For this purpose an officer would be designated
       who will not only provide guidance but would also be responsible for hearing the
       public grievances. The name of such officer along with the timing of meeting him
       would be prominently displayed in each of the offices of Registrar of Companies
       and Regional Directors. Similarly, the names of senior officers who could be
       contacted in the case of complaint would be prominently displayed in each of the
       field offices.




                                                                                          44
Scope of the study in MCA
The ministry of company affairs was part of a cluster selected for the study. The scope of
this study in the ministry covered offices of all tiers i.e. the headquarter (ministry),
regional directorates, office of registrar of companies and office of official liquidator. At
this point, the attached/subordinates offices were not considered for the study.


At the headquarter level (ministry) the following sections/cells were identified for our
study. The methodology adopted for the study is discussed in Chapter II of the report.
Multiple sections/cells in the headquarter were selected to factor in diversity of activities
performed by the headquarter and to explore possibilities of any patterns evolving.


   i)      Recodification Cell
   ii)     Budget Section
   iii)    Policy Section
   iv)     Inspection
   v)      Administration-I


In addition, one office each of Regional Director (RD), Registrar of companies (ROC)
and office of Official Liquidator (OL) were identified for the study. The RD office
selected was located in Noida, while the office of ROC and OL were in Delhi and
Ahmedabad respectively. In the above offices, we studied functioning of the whole office
and captured performance parameters of Group A/B/C employees. Some positions were
not mapped because the incumbent was not available.


Staffing of the ministry of company affairs

The annual report of MCA for 2005-2006 shows the total number of government
employees in the ministry for the year 2005-2006 as 1661. The distribution of group A,
B, C and D staff is as shown in Table 3.2




                                                                                          45
        Table 3.2 Total number of employees in Ministry of Company Affairs
                               Group       Total number of
                                        employees (in place)
                               A                  234
                               B                  229
                               C                  933
                               D                  265
                             Total               1661
               Source: Annual Report, Ministry of Company Affairs, 2005-2006


In the offices of OL, some employees are appointed by Hon’ble High Court. These
employees are not considered as ministry (government) employees though they are paid
by the ministry.


Work Norms/Time Lines
The ministry has three distinct work categories – the headquarters functions, the
functions of ROCs and the functions of OLs. According to the outcome budget of the
ministry (2007-2008) there are seven major program areas for the ministry. Each program
has specific targets and timelines while for routine parameters timelines are specified in
the existing Citizen’s Charter (which is being revised by the ministry). While the MCA21
project prescribes service levels for the project operator, the time lines for the disposal of
various items of work under MCA 21 are been finalized. The MCA-21 norms would then
set the delivery standards for the services offered by the ROC office. In the case of OL,
the process of liquidation of companies is determined by functioning of High Courts. We
have been told that at present liquidation process takes over 10 years to complete and OL
office has no role in determining the time frame. According to ministry, the larger issues
involved are being addressed in a comprehensive manner so that companies are able to
wind up in an easy and speedy manner. Different norms followed by MCA is given in
Table 3.4.


From the annual report we see that the ministry has been reporting annual earnings as
shown in Table 3.3. The earnings come from fee for services rendered and the major
contributor is IPO fees. According to ministry sources, it is impossible to set target for



                                                                                           46
earnings, since IPO decisions are taken outside the ministry, by respective companies.
The decision mostly depends on the state of economy, about which ministry has no
control.


           Table 3.3 Annual Earning of the Ministry of Company Affairs
                 Year           Fee (Rs. crore)       Expenditure (Rs.
                                                           crore)
                2001-02             305.38                  35.21
                2002-03             324.30                  36.61
                2003-04             399.69                  50.35
                2004-05             476.98                  46.29
                2005-06             728.22                  74.21
                 Total              2234.57                242.67
               Source: 50th Annual Report, Ministry of Company Affairs




                                                                                   47
Norms followed by the Ministry of Company Affairs are shown in Table 3.4


                                           Table 3.4 Work norms of the Ministry of Company Affairs 35


                                                              Work Norms
     S.No.                                    Particulars of powers and functions                                     Period
              Application for further issues of shares Section 81 (A)(b); conversion of loans into shares - Section
       1                                                                                                              30 days
              81 (3)(b)/ 81 (4) of the Companies Act, 1956.
       2      Payment of dividend without providing for depreciation.                                                 30 days
       3      Application for changes in the Form and contents of balance sheet and profit and loss account -
                                                                                                                      30 days
              Section 211(4).
              Exemption from inclusion of particulars of subsidiaries in the balance sheet of holding company -
       4                                                                                                              30 days
              Section 212 (8).
       5      Application for extension of financial year of a holding company and subsidiary - Section 213.          30 days
       6      Application for ordering investigation of the affairs of the company - Section 237 (a)(i)               60 days
       7      Application for supply of a copy of the investigation report Section 241 (2)(b)                         15 days
       8      Application for approval of increase in number of directors - Section 259                               30 days
              Application for amendment of provisions relating to Managing Director/wholetime Director/Non
       9                                                                                                              30 days
              Rotational Directors - Section 268.
      10      Application for appointment and remuneration of Managing Director/ Wholetime Director/
              Manager - Section 269 (2), 209(3), 310, 311; Director holding office at place of profit - 314 (1B);
                                                                                                                      30 days
              waiver of recovery of excess remuneration paid to Director - 309 (5)(B); Professional Director -
              opinion of Govt - 309 (1)(b).
      11      Application for removal of qualification qua directors - Section 274 (2).                               30 days
      12      Application for appointment of sole-selling agent - Section 294 AA(2)(3)/294 AA(5)(6).                  30 days


35
     Induction material, Ministry of Company Affairs, 2006




                                                                                                                                48
  13     Application for approval of loans or giving guarantee or providing security to directors etc. -
                                                                                                           30 days
         Section 295.
  14     Application for amalgamation of companies in national interest - Section 396.                     60 days
  15     Application for authorizing members to apply to CLB for filing petition of oppression and
                                                                                                           90 days
         mismanagement - Section 399 (4).
  16     Application for auditors of Government Companies - Section 619 (2).                               30 days
  17     Application for extension of time/change of venue for holding AGM by Government Companies -
                                                                                                           10 days
         Section 166 & 210.
  18     Application for extension of time/exemption - Section 58 A(8).                                    15 days
  19     Condonation of delay u/s. 637 B.                                                                  30 days
  20     Appointment of Cost Auditor - 233 B.                                                              30 days
  21     Accounts of foreign companies - exemption u/s. 594.                                               30 days
  22     Power to modify Act in its application to Nidhi etc. - Section 620 A.                             45 days
  23     Grievances/ complaints of the investors/public.                                                   30 days


The organization structure (consolidated) of Headquarters office of MCA is given Table 3.5




                        Table 3.5 Organizational structure Headquarter (Ministry of Company Affairs)




                                                                                                                     49
                                             Secretary (MCA)




       Joint Secretary                         Joint Secretary                   Joint Secretary &
                                                                                 Financial Advisor



   Director (2) Deputy                       Directors (3)                       Director (1)
   Secretaries (2)                           Joint Director (3)                  Joint Director (1)



      Under Secretaries                            Under                           DD (3) CCA (1)
     (11), AD (1) and SA                       Secretaries (4)                     EA (1) Advisor
             (1)                               2DD (2) AD (2)                      (1) AD (2) US (1)




Departments                            Departments                          Departments
Vigilance,   IEPF      &   Corporate   IGC (Professional Institute),        Integrated Finance and
Governance, IPC, Special Cell,         Recodification of Companies          Accounts Wing,
SFIO(Est.), Computerization & e-       Act/Compet. Act/MRTP Act. CL         Disinvestment Wing, FIPB &
governance, CLVI, Admin I,II,III,      IV, CL II, General issues relating   Eco. matters, Capital Market
Cash, CLVII, Parliament Unit, Est.     to Companies Act and others, CL      & SEBI, R&S Division, Cash
Matters – NCLT, CCI, CLB, MRTPC,       III, Recodification Cell , CL V      Audit Branch
Budget, General, Hindi, O&M




                                                                                                           50
Performance Analysis and Frame work for PRP
Table 3.6 to Table 3.33 presents the performance measures and standards that can be used
to measure performance at individual and group (department/office and overall ministry)
levels for different position in MCA. Performance of groups can be measured against
achievement of outcome budget target. It is possible that with application of industrial
engineering tools/trend data more accurate definition of standards can be arrived at and
measurement made against the standards. Such standards are mostly applicable for group
B/C posts 36.


Recodification Cell


This cell was constituted in 2001 for the purpose of making amendments in the
Companies Act 1956.             Till date, five bills have been introduced in the Parliament and
out of five, four have become laws. The cell is headed by a Joint Secretary, supported by
one Director and one Assistant Director. Further, one Senior Technical Assistant and
one Assistant work in the cell as dealing hands. The cell performs the following
functions:


1. Revision of the Companies Act, 1956.
2. Issue of guidelines/circulars for smooth administration of Companies Act.
3. To examine and facilitate the implementation of the provisions of Companies Act
       with parallel provisions in other statutes like the Sick Industrial Companies (special
       provision) Act,1985, Securities Exchange Board of India Act,1922, Securities
       Contracts (regulation) Act,1956, Banking Legislation Act 1949, and other cognate
       legislation
4. Amendment of special provision of Companies Act as required and warranted from
       time to time.
5. Coordinate the working of Expert Committee etc. set up from time to time on
       working of Companies Act



36
     We refer to be above as Per Person Standard (PPS)


                                                                                             51
6. Review and revision of the existing provisions of Indian corporate laws taking into
    account the requirement of the same.
7. Any other matter incidental or ancillary to the administration of the Companies Act.
8. Preparation of Cabinet notes ,draft bills for amendment in Companies Act,1956 and
    all matters up to the stage of obtaining assent of the President after it is passed by
    parliament


Primary data was collected from incumbents in the department, the topmost being
Assistant Director.




                                                                                       52
                                   Table 3.6 Performance analysis for Assistant Director (Recodification Cell)
                                                            Assistant Director 37 (Recodification Cell)
                                                                                                                                 Weightage (across years)
      Key Result Areas                 Measurement Unit         Standard                  Reference       Evaluator      I        II     III      IV      V
                                                                                          unit
A     Individual Results                                                                                                  10%      10%       20%      50%       50%
1     Regular activities 38                                     E/A/NA/U 39
      a) Prepare basic materials       Number prepared and      Actuals and/or            Cell            D
      like cabinet notes, bills etc.   accepted                 Supervisor rating 40
      to amend the Act.
      b) Supporting the                Smooth working of        Actuals and/or            Cell            D
      committees constituted to        committees               Supervisor rating
      discuss the proposed
      amendments
      c) Parliamentary questions       Answering within         100% Compliance           Cell            D
      and VIP references               time
      d) Handling grievances and       Numbers processed in     Actuals                   Cell            D
      complaints                       time
2     Quality of Results               Grievances/complaints    Numbers/reduction         Cell            D
      Achievement                      about work               (Trend)
                                       Pendency Levels of       %                         Cell
                                       different areas
                                       Quality of work          Supervisor rating         Self
3     Internal Process Efficiency
      a) Procedure Adherence           Audit Observations       % Reduction (Trend)       Cell            D
                                       Internal reporting       % reports in time

                                       Delays Caused            Qualitative

37
   Similar framework can be used for measuring Director (Recodification Cell) performance also
38
   Regular activities have been taken from job description and submissions by incumbent/supervisor.
39
   E- Exceeded A- Achieved NA- Not Achieved U- Unacceptable
40
   The nature of work being highly qualitative, numerical indexes other than time lines will not be good indicator. We expect that the supervisor will factor
delays, comprehensiveness etc while making the rating.




                                                                                                                                                                 53
                                                                  (Supervisor rating)
         b) Customer satisfaction        Measure of Customer      % increase over time     Cell           IA
         (perception)                    Satisfaction
         c) Employee Satisfaction        Measure of Employee      % increase over time     Cell           IA
         (perception)                    Satisfaction
4        Attendance & Punctuality of     Records                  Minimum standard         Cell           D
         Office (not individual)
5        Supervision & Leadership        Supervisor rating        Qualitative              Self           D
                                         through PMS
6        Innovation and Contribution
         a)Coordination and Co-       Supervisor rating           Qualitative              Self           D
         operation with other
         offices/peers
         b)Special                    Supervisor rating           Qualitative              Self           D
         Achievements/Initiatives
7        Subject Knowledge & Self     Knowledge level             Qualitative              Self           D
         Improvement
B        Public Accountability
1        Public Service Delivery      Sevottam rating of HQ       Rating                   Headquarter    IA               10%      10%    10%    10%    10%
         Quotient
D 41     Organizational Results (Ministry)                                                                                 80%      80%    70%    40%    40%
         Achievements of outcome      Target v/s                  % achieved               MCA            MCA
         budget (for ministry)        Achievement
                                                                                                          Total
                                                                                                          (A+B+D)          100%     100%   100%   100%   100%




41
     Since the work of ministry (HQ) affects performance of all other tiers, performance of immediate tier (B) is not considered.




                                                                                                                                                           54
                         Table 3.7 Performance analysis for Senior/Junior Technical Assistant (Recodification Cell)
                                                         Senior/Junior Technical Assistant (Recodification Cell)
                                                                                                                        Weightage (across years)
        Key Result Areas                 Measurement Unit         Standard                Reference     Evaluator        I       II      III     IV    V
                                                                                          unit
A       Individual Results                                                                                              10%     10%     20%     50%   50%
1       Regular activities                                        E/A/NA/U
        a) Assisting the supervisor in   Numbers                  PPS 42                  Self          A.D.
        preparing basic materials like
        cabinet notes, bills etc. to
        amend Companies Act
        b) Completion of other work      Target V/S               % achieved              Self          A.D.
        assigned (in time)               Achievement (in time)    Supervisor rating
2       Quality of Results               Grievances/complaints    Number (Trend)          Self          A.D.
        Achievement                      about work
                                         Pendency levels of       %
                                         different areas
                                         Quality of work          Supervisor rating
3       Attendance & Punctuality         Records                  Minimum standard        Self          A.D.
4       Availability for work            Behavioral               Critical Incidents      Self          A.D
5       Dependability for work           Behavioral               Critical Incidents      Self          A.D.
6       Subject Knowledge & Self         Knowledge level          Supervisor rating       Self          A.D.
        Improvement
7       Proficiency in computer          Qualitative              Supervisor rating       Self          A.D.
        applications and software        observation              Pass certificate with
                                         Certification            periodic revalidation
B       Public Accountability
1       Public Service Delivery      Sevottam rating of HQ        Rating                  headquarter   IA              10%    10%     10%     10%    10%
        Quotient
D       Organizational Results (Ministry)                                                                               80%    80%     70%     40%    40%
        Achievements of outcome      Target VS                    % achieved              MCA           MCA
        budget (for ministry)        Achievement
                                                                                                        Total (A+B+D)   100%   100%    100%    100%   100%

42
     PPS- Per person standard arrived through IE studies/trend




                                                                                                                                                      55
                                             Table 3.8 Performance analysis for UDC/LDC (Ministry)
                                                                         UDC/LDC 43 (Ministry)
                                                                                                                                    Weightage (across years)
        Key Result Areas               Measurement Unit         Standard                   Reference      Evaluator          I       II     III      IV      V
                                                                                           unit
A       Individual Results                                                                                                   10%     10%    20%     50%     50%
1       Regular activities                                      E/A/NA/U
        a) Typing, noting and          Number of documents      PPS                        Self           Supervisor
        drafting of documents          (on time)
        b) Dairy and Dispatch work     Numbers (on time)        PPS                        Self           Supervisor
        c) Maintenance of various      Number of                PPS                        Self           Supervisor
        registers/files                registers/files (on
                                       time)
        d) Completion of other work    Target v/s               Qualitative                Self           Supervisor
        assigned (in time)             Achievement              Supervisor rating
2       Quality of Result              Pendency levels of       %                          Self           Supervisor
        Achievement                    different areas
                                       Quality of work          Supervisor rating
3       Attendance & Punctuality       Records                  Minimum standard           Self           Supervisor
4       Availability for work          Behavioral               Critical Incidents         Self           Supervisor
5       Dependability for work         Behavioral               Critical Incidents         Self           Supervisor
6       Subject Knowledge & Self       Knowledge level          Supervisor rating          Self           Supervisor
        Improvement
7       Proficiency in computer        Qualitative              Supervisor rating          Self           Supervisor
        applications and software      observation              Pass certificate with
                                       Certification            periodic revalidation
B       Public Accountability
1       Public Service Delivery      Sevottam rating of HQ      Rating                     Headquarter    IA                 10%     10%    10%     10%     10%
        Quotient
D       Organizational Results (Ministry)                                                                                    80%     80%    70%     40%     40%
1       Achievement of outcome       Target v/s                 % achieved                 MCA            MCA
        budget (for ministry)        Achievement
                                                                                                          Total (A+B+D)      100%    100%   100%    100%    100%

43
     The work of UDC and LDC is same in nature for all the sections, so the general parameters of performance can be same across.




                                                                                                                                                           56
Budget section
The budget section is headed by Joint Secretary, supported by one Director, one Under
Secretary and one section officer. The section has two Assistants and one Upper Division
Clerk as dealing hands. The various functions performed by the budget section are:44
       1. Preparation of revised estimates & budget estimates for headquarters and the field
           offices and preparation of performance and outcome budget.
       2. Appropriation of accounts.
       3. Supplementary demand for grants.
       4. Dealing with audit objections, audit para’s received from various offices (Internal
           & Statutory Audit Reports & Inspection Reports ) Headquarters /RDs/ ROCs/
           OLs/ MRTPC/ DGI&R/ CLB
       5. Control over expenditure
       6. Fixation of final grant and issue of audit orders regularizing the grants
       7. Submission of quarterly reports on expenditure on pay and allowances, etc. to the
           ministry of finance (department of Expenditure, Pay Research Unit)
       8. Grant of House Building/Vehicle/Festival/Bicycle/Fan etc. advances to officers
           and staff employee at headquarters.
       9. Air Travel matters for headquarters
       10. Sanction for refund of fees erroneously deposited by companies etc.
       11. Grant of temporary advances and withdrawals from GPF account to Officers
           /Staff
       12. Delegation of financial powers to field offices.
       13. Issue of sanction orders on grant of Honorarium to staff/ officers at Headquarters.
       14. Opening of new sub-heads and detail heads.
       15. Department related parliamentary standing committee on finance.
       16. Delegation of finance powers rules.


Primary data was collected from incumbents in the department, the topmost being section
officer. Performance analysis of incumbents are given in the following pages.



44
     Induction Material, Ministry of Company Affairs, 2006


                                                                                           57
                                      Table 3.9 Performance analysis for Section Officer (Budget Section)
                                                                  Section Officer 45 (Budget Section)
                                                                                                                            Weightage (across years)
        Key Result Areas              Measurement Unit        Standard                    Reference       Evaluator    I      II      III      IV        V
                                                                                          unit
A       Individual Results                                                                                            10%     10%     20%     50%        50%
1       Regular activities                                    E/A/NA/U 46
        a) Preparation of budget      Number of estimates     Actual Numbers              Section         US
        estimates                     processed
        b) Fixation of demand         Number of cases         Actual Numbers              Section         US
        c) Dealing with audit         Number disposed         Actuals (Trend)             Section         US
        objections
        d) Control over expenditure   Target V/S              % achieved                  Section         US
                                      Achievement
        e) Parliamentary questions    Answering in time       100% Compliance             Section         US
        and VIP reference
        f) Handling grievance and     Numbers processed       % achieved                  Section         US
        complaints.                   v/s Number received
2       Quality of Result             Grievances/complaints   Number (Trend)              Section         US
        Achievement                   about work
                                      Pendency levels of      %                           Self
                                      different areas
                                      Quality of work         Supervisor rating
3       Internal Process Efficiency
        a) Procedure Adherence        Audit Observations      % Reduction (Trend)          Section        US
                                      Internal reporting      % reports in time
                                      Delays Caused           Qualitative (Supervisor
                                                              rating)
        b) Customer satisfaction      Measure of Customer     Not applicable for this post
        (perception)                  Satisfaction
        c) Employee Satisfaction      Measure of Employee      % increase over time       Section         IA


45
     Similar framework can be used for measuring Under Secretary and Director (Budget) performance also
46
     E- Exceeded A- Achieved NA- Not Achieved U- Unacceptable




                                                                                                                                                    58
    (perception)                  Satisfaction
4   Attendance & Punctuality of   Records                Minimum Standard   Section       US
    office
5   Supervision & Leadership      Supervisor rating      Qualitative        Self          US
                                  through PMS
6   Innovation and Contribution
    a)Coordination and Co-       Supervisor rating       Qualitative        Self          US
    operation with other
    offices/peers
    b)Special                    Supervisor rating       Qualitative        Self          US
    Achievements/Initiatives
7   Subject Knowledge & Self     Knowledge level         Qualitative        Self          US
    Improvement
B   Public Accountability
1   Public Service Delivery      Sevottam rating of HQ   Rating             Headquarter   IA              10%    10%    10%    10%     10%
    Quotient
D   Organizational Results (Ministry)                                                                     80%    80%    70%    40%     40%
1   Achievements of outcome      Target VS               % achieved         MCA           MCA
    budget (for ministry)        Achievement
                                                                                          Total (A+B+D)   100%   100%   100%   100%    100%




                                                                                                                                      59
                        Table 3.10 Performance analysis for Senior/Junior Technical Assistant (Budget Section)

                                                     Senior/Junior Technical Assistant (Budget Section)
                                                                                                                 Weightage (across years)
    Key Result Areas               Measurement Unit            Standard         Reference     Evaluator   I     II      III       IV        V
                                                                                unit
A   Individual Results                                                                                    10%   10%      20%      50%       50%
1   Regular activities                                         E/A/NA/U
    a) Making statements related   Target V/S                  % achieved       Self          S.O.
    to budget                      Achievement
    b) Drafting letters and        Numbers                     PPS              Self          S.O.
    documents
    c) File Management             Number of                   PPS              Self          S.O.
                                   registers/files
    d) Completion of other work    Target V/S                  % achieved or    Self          S.O.
    assigned (in time)             Achievement                 Supervisor
                                                               rating
2   Quality of Result              Grievances/complaints       Number           Self          S.O.
    Achievement                    about work                  (Trend)
                                   Pendency Levels of          %
                                   different areas
                                   Quality of work             Supervisor
                                                               rating
3   Attendance & Punctuality       Records                     Minimum          Self          S.O.
                                                               standard
4   Availability for work          Behavioral                  Critical         Self          S.O.
                                                               Incidents
5   Dependability for work         Behavioral                  Critical         Self          S.O.
                                                               Incidents
6   Subject Knowledge & Self       Knowledge level             Supervisor       Self          S.O.
    Improvement                                                rating




                                                                                                                                                60
7   Proficiency in computer     Qualitative          Supervisor      Self          S.O.
    applications and software                        rating
                                Certification        Pass
                                                     certificate
                                                     with periodic
                                                     revalidation
B   Public Accountability
1   Public Service Delivery     Sevottam rating of   Rating          Headquarter   IA             10%    10%    10%    10%    10%
    Quotient                    HQ

D   Organizational Results (Ministry)                                                             80%    80%    70%    40%    40%
1   Achievement of Outcome      Target VS            % achieved      MCA           MCA
    budget                      Achievement
                                                                                   Total(A+B+D)   100%   100%   100%   100%   100%




                                                                                                                                61
Policy Section


The policy section is responsible for all matters related to policies under the Companies
Act 1956. The section is headed by Joint Secretary supported by Director, Deputy
Director and Assistant Director. Two Senior Technical Assistants, one Junior Technical
Assistant and one Lower Division Clerk comprise the next level. The various functions
performed by policy section are 47
       1. Policy matters relating to Companies Act and Rules made there under (including
           amendments) and implementation thereof, (such matters are examined by
           branches concerned in the first instance).
       2. Publication and issue of Circulars/ Notification /Press Notes on Companies Act
           and Rules framed there under.
       3. Clarification/ interpretation of the Companies Act and rules framed there under.
       4. Delegation of powers under the Companies Act.
       5. Reference and practical difficulties faced by the field offices in the
           implementation of Companies Act
       6. References from share holder Association/ Chamber of Commerce/ Study Circles
           etc.
       7. Holding conference of RDs/ ROCs/ OLs
       8. Organizing company law advisory committee meetings
       9. Non-Evacuee companies-matters relating thereto.
       10. General questions relating to fees, additional fees payable under the Companies
           Act.
       11. Reference from other ministries/departments relating to the administration of
           companies
       12. Application for condonation of delay under section 637B (b) in filing returns with
           ROCs
       13. Limited liabilities partnership law
       14. Accounting standards.


47
     Induction Material, Ministry of Company Affairs, 2006, www.mca.gov.in



                                                                                             62
   15. Indian Partnership Act, 1932, Societies Registration Act, 1899-matters relating
       thereto.
   16. The Companies (Donation to National Funds), Act, 1951.
   17. Application for approval as public financial institution
   18. Examination of draft cabinet notes received from other Ministries/Department.
   19. Rationalization of various forms under the Companies Act
   20. Parliament questions concerning CL.V section.

Primary data was collected from incumbents in the department, the topmost being Deputy
Director.




                                                                                       63
                                Table 3.11 Performance analysis for Deputy/Assistant Director (Policy Section)

                                                              Deputy/Assistant Director 48 (Policy Section)
                                                                                                                        Weightage (across years)
        Key Result Areas                 Measurement Unit          Standard             Reference     Evaluator   I     II      III      IV         V
                                                                                        unit
A       Individual Results                                                                                        10%   10%     20%      50%        50%
1       Regular activities                                         E/A/NA/U
        a) Prepare basic material like   Number prepared and       Actuals and/or       Section       D
        cabinet notes etc                accepted                  Supervisor rating
        b) Examining various             Target v/s Achievement    Numbers (Trend)      Section       D
        clarifications/comments                                    or % achieved
        sought by stakeholders on
        various matters
        c) Holding conferences with      Number of conferences     Success rate         Section       D
        RD/ROD/OL
        d) Parliamentary questions       Answering within time     100% Compliance      Section       D
        and VIP reference
        e) Handling grievance and        Number received v/s       % achieved           Section       D
        complaints                       Number processed
2       Quality of Result                Grievances/complaints     Numbers/(Trend)      Section       D
        Achievement                      about work
                                         Pendency Levels of        %                    Section
                                         different areas
                                         Quality of work           Supervisor rating    Self
3       Internal Process Efficiency
        a) Procedure Adherence           Audit Observations         % Reduction         Section       D
                                                                    (Trend)
                                         Internal reporting         % reports in time
                                         Delays Caused              Qualitative
                                                                    (Supervisor
                                                                    rating)

48
     Similar framework can be used for measuring Director (Policy) performance also




                                                                                                                                                   64
    b) Customer Satisfaction      Measure of Customer         % increase over   Section       IA
    (perception)                  Satisfaction                time
    c) Employee Satisfaction      Measure of Employee         % increase over   Section       IA
    (perception)                  Satisfaction                time
4   Attendance & Punctuality of   Records                     Minimum           Section       D
    office                                                    standard
5   Supervision & Leadership      Supervisor rating through   Qualitative       Self          D
                                  PMS
6   Innovation and Contribution
    a)Coordination and Co-       Supervisor Rating            Qualitative       Self          D
    operation with other
    offices/peers
    b)Special                    Supervisor rating            Qualitative       Self          D
    Achievements/Initiatives
7   Subject Knowledge & Self     Knowledge level              Qualitative       Self          D
    Improvement
B   Public Accountability
1   Public Service Delivery      Sevottam rating of HQ        Rating            Headquarter   IA             10%    10%    10%    10%     10%
    Quotient
D   Organizational Results (Ministry)                                                                        80%    80%    70%    40%     40%
1   Achievement of outcome       Target v/s Achievement       % achieved        MCA           MCA
    budget of ministry
                                                                                              Total(A+B+D)   100%   100%   100%   100%    100%




                                                                                                                                         65
                             Table 3.12 Performance analysis for Senior/Junior Assistant (Policy Section)

                                                   Senior/Junior Technical Assistant (Policy Section)
                                                                                                              Weightage (across years)
    Key Result Areas                 Measurement Unit         Standard      Reference     Evaluator     I     II      III       IV       V
                                                                            unit
A   Individual Results                                                                                  10%   10%      20%      50%      50%
1   Regular activities                                         E/A/NA/U
    a) Assisting the supervisor in   Numbers                   PPS          Self          D.D./A.D
    preparing cabinet notes
    b) Assisting in work related     Target v/s Achievement    100%         Self          D.D./A.D
    to Parliamentary questions                                 compliance
    and VIP reference
    c) Completion of other work      Target v/s Achievement    % achieved   Self          D.D./A.D
    assigned                                                   or
                                                               Supervisor
                                                               rating
2   Quality of Result                Grievances/complaints     Number       Self          D.D./A.D.
    Achievement                      about work                (Trend)
                                     Pendency levels of        %
                                     different areas
                                     Quality of work           Supervisor
                                                               rating
3   Attendance & Punctuality         Records                   Minimum      Self          D.D./A.D.
                                                               standard
4   Availability for work            Behavioral                Critical     Self          D.D./A.D.
                                                               Incidents
5   Dependability for work           Behavioral                Critical     Self          D.D./A.D.
                                                               Incidents
6   Subject Knowledge & Self         Knowledge level           Supervisor   Self          D.D./A.D.
    Improvement                                                rating




                                                                                                                                             66
7   Proficiency in computer     Qualitative observation   Supervisor     Self          D.D./A.D.
    applications and software                             rating
                                Certification             Pass
                                                          certificate
                                                          with
                                                          periodic
                                                          revalidation
B   Public Accountability
1   Public Service Delivery      Sevottam rating of HQ    Rating         Headquarter   IA              10%    10%    10%    10%    10%
    Quotient
D   Organizational Results (Ministry)                                                                  80%    80%    70%    40%    40%
1   Achievement of outcome       Target VS Achievement    % achieved     MCA           MCA
    budget of the ministry
                                                                                       Total (A+B+D)   100%   100%   100%   100%   100%




                                                                                                                                   67
Inspection
The inspection section is headed by Joint Secretary, supported by one Director, two Joint
Directors and one Section Officer. The section also has two Senior Technical Assistants
and Junior Technical Assistants each and one Assistant. The various functions performed
by inspection section are 49


1. Ordering of inspection of the companies under Section 209A of the Companies Act,
       1956 and issue of instructions on the inspection report.
2. Technical scrutiny of balance sheets, reference and the matters connected therewith.
3. Ordering/withdrawal of prosecution arising out of inspection reports/ technical
       scrutiny of balance sheets.
4. Investigation of companies and follow up references (Section 235, 236, 237, 238,
       239, 240, 241, 242, 243, 244, 245, 247, 248, 249, 250).
5. Investigation into ownership of shares (Section 187 D & 247)
6. Special audit report under Section 233 A
7. Complaints relating to misuse and diversion of funds and mismanagement of
       companies etc.
8. Application by central government to Company Law Board in cases of oppression or
       mismanagement under Section 401/408 and 388B of the Act.
9. Section 399(4) – Authorizing members to approach Company Law Board on grounds
       of oppression and mismanagement under Section 397/398
10. Review of monthly reports from RDs on working of inspection wings.
11. Parliament questions relating to above subject
12. Joint Parliamentary Committee members


Primary data was collected from incumbents in the department, the topmost being section
officer. Performance analysis of incumbents are given in the following pages.




49
     Induction Material, Ministry of Company Affairs, 2006, www.mca.gov.in




                                                                                      68
                                       Table 3.13 Performance analysis for Section Officer (Inspection Section)

                                                                      Section Officer 50 (Inspection)
                                                                                                                          Weightage (across years)
         Key Result Areas                Measurement Unit         Standard         Reference            Evaluator   I     II      III       IV        V
                                                                                   unit
A        Individual Results                                                                                         10%   10%     20%      50%            50%
1        Regular activities                                       E/A/NA/U
         a)Ordering of inspection of     Number of instructions   Numbers          Section              J.D.
         companies under section         issued for               (trend)
         209A and issue of               inspections/inspection
         instructions on the             reports
         inspection report
         b) Technical scrutiny of        Number disposed v/s      Norms for        Section              J.D.
         balance sheet                   number received          scrutiny
         c) Follow up with RD and        (Cases) Target v/s       % achieved       Section              J.D.
         companies inspected by          Achievements
         RD
         d) Review of monthly            Number of reports        % compliance     Section              J.D.
         reports generated by RD         reviewed
         e) Parliamentary questions      Answering within time    100%             Section              J.D.
         and VIP reference                                        Compliance
         f) Handling complaints          Number of complaints     % processed      Section              J.D.
         from investors related to       received v/s processed
         misuse and diversion of
         fund by companies
2        Quality of Result               Grievances/complaints    Number           Section              J.D.
         Achievement                     about work               (Trend)
                                         Pendency levels of       %                Section
                                         different areas
                                         Quality of work          Supervisor       Self
                                                                  rating

50
     Similar framework can be used for Director and Joint Director (Inspection) also




                                                                                                                                                     69
3        Internal Process Efficiency
         a) Procedure Adherence        Audit Observations        % Reduction    Section       J.D.
                                                                 (Trend)
                                       Internal reporting        % reports in
                                                                 time
                                       Delays Caused             Qualitative
                                                                 (Supervisor
                                                                 rating)
         b) Customer Satisfaction      Not applicable for this post
         (perception) 51
         c) Employee Satisfaction      Measure of Employee      % increase      Section       IA
         (perception)                  Satisfaction             over time
4        Attendance & Punctuality      Records                  Minimum         Section       J.D.
         of Office                                              standard
5        Supervision & Leadership      Supervisor rating        Qualitative     Self          J.D.
                                       through PMS
6        Innovation and Contribution
         a)Coordination and Co-      Supervisor rating          Qualitative     Self          J.D.
         operation with other
         offices/peers
         b)Special                   Supervisor rating          Qualitative     Self          J.D.
         Achievements/Initiatives
7        Subject Knowledge & Self    Knowledge level            Qualitative     Self          J.D.
         Improvement
B        Public Accountability
1        Public Service Delivery     Sevottam rating of HQ      Rating          Headquarter   IA              10%    10%    10%    10%     10%
         Quotient
D        Organizational Results (Ministry)                                                                    80%    80%    70%    40%     40%
1        Achievements of outcome     Target V/S                 % achieved      MCA           MCA
         budget (for ministry)       Achievement
                                                                                              Total (A+B+D)   100%   100%   100%   100%    100%


51
     May not be a good indicator.




                                                                                                                                          70
                   Table 3.14 Performance analysis for Senior/Junior Technical Assistant (Inspection Section)

                                                     Senior/Junior Technical Assistant (Inspection)
                                                                                                                 Weightage (across years)
    Key Result Areas              Measurement Unit        Standard             Reference      Evaluator   I     II      III       IV        V
                                                                               unit
A   Individual Results                                                                                    10%   10%      20%      50%       50%
1   Regular activities                                    E/A/NA/U
    a) Examining the              Target v/s              Number (trend) or    Self           S.O.
    investigation reports         Achievement (in time)   PPS
    received from
    SFIO/RD/Individuals
    b) Technical scrutiny of      Number disposed v/s     Number (trend) or    Self           S.O
    balance sheets                Target                  PPS
    c) Assisting section Office   Support for answering   100% completion      Self           S.O.
    in dealing with               (Numbers)
    Parliamentary questions
    and VIP reference
    d) Completion of other        Target v/s              Qualitative          Self           S.O.
    work assigned (in time)       Achievement             Supervisor rating
2   Quality of Result             Grievances/complaints   Number (Trend)       Self           S.O.
    Achievement                   about work
                                  Pendency Levels of      %
                                  different areas
                                  Quality of work         Supervisor rating
3   Attendance & Punctuality      Records                 Minimum Standard     Self           S.O.
4   Availability for work         Behavioral              Critical Incidents   Self           S.O.
5   Dependability for work        Behavioral              Critical Incidents   Self           S.O.
6   Subject Knowledge & Self      Knowledge level         Supervisor rating    Self           S.O.
    Improvement




                                                                                                                                            71
7   Proficiency in computer     Qualitative observation   Supervisor rating   Self          S.O.
    applications and software                             Pass certificate
                                Certification             with periodic
                                                          revalidation
B   Public Accountability
1   Public Service Delivery    Sevottam rating of HQ Rating                   Headquarter   IA              10%    10%    10%    10%         10%
    Quotient
D   Organizational Results (Ministry)                                                                       80%    80%    70%    40%         40%
1   Achievement of outcome     Target v/s            % achieved               MCA           MCA
    budget of the ministry     Achievement
                                                                                            Total (A+B+D)   100%   100%   100%   100%        100%




                                                                                                                                        72
Administration-I

The Administration-I section is headed by Joint Secretary, supported by one Director, one
Under Secretary and one Section Officer. The section has two Assistants and two Upper
Division Clerks as dealing hands. Different functions performed by Administration-I
section are:

   1. Establishment matters relating to all Groups-A officers at the Headquarters.

               Central Staffing Scheme posts (US/DS/Dir/JS/Secretary)
               ICLS posts [ AD(I)/DD(T)/DD(I)/JD(A)/JD(I)/JD(L)/JD(T)/JD(R)/DII]
               IES Posts (AD/DD/JD- R & S, EA)
               ISS Posts (AD/DD-MRU)
               ICAS Posts (AD/DD/Adv.-Cost)
               Ex-cadre post of Director (R&S)

   2. Establishment matters relating to different jobs.

               Officers of the Central Secretariat Service (CSS)
               -   Section Officer
               -   Assistant
           •   Officers of the Central Secretariat Stenographers Service (CSS)
               -   Sr. PPS; PS; PA; Stenographer Gr. D
           •   Central Secretariat Clerical Service (CSCS)
               -   UDC Grades
               -   LDC Grades
           •   Stenographers (General Central Service) (Ex-cadre) (PS to PT, Steno
               Grade I & II

   3. Creation of posts and establishment matters relating to the office of the Ministry
      of Company Affairs

Primary data was collected from incumbents in the department, the topmost being Under
Secretary. Performance analysis of incumbents are given in the following pages.




                                                                                      73
                                        Table 3.15 Performance analysis for Under Secretary (Administration-I)

                                                                        Under Secretary 52 (Admin)
                                                                                                                 Weightage (across years)
          Key Result Areas                    Measurement Unit         Standard          Reference   Evaluator   I       II        III      IV    V
                                                                                         unit
A         Individual Results                                                                                     10%      10%      20%      50%   50%
1         Regular activities                                           E/A/NA/U
          a) Establishment matters related    Number of matters        Actuals and/      Section     D
          to group A service                  cleared V/S total        or Supervisor
                                              matters referred         rating

          b) Handling grievance and           Number processed in      Actuals           Section     D
          complaints from employees           time
2         Quality of Result Achievement       Grievances/complaints    Numbers           Section     D
                                              about work               (Trend)
                                              Pendency levels of       %                 Section
                                              different areas
                                              Quality of work          Supervisor        Self
                                                                       rating
3         Internal Process Efficiency
          a) Procedure Adherence              Audit Observations       % Reduction       Section     D
                                                                       (Trend)
                                              Internal reporting       % reports in
                                                                       time
                                              Delays Caused            Qualitative
                                                                       (Supervisor
                                                                       rating)
          b) Satisfaction (of employees) 53   Measure of               % increase        Group       IA
          (perception)                        Satisfaction             over time         A/others
          c) Employee Satisfaction            Measure of Employee      % increase        Section     IA
          (perception) (section)              Satisfaction             over time

52
     Similar framework can be used for measuring Director (Admin) performance also
53
     Average satisfaction of Group A service officers/other headquarter staff can be used here.




                                                                                                                                                  74
4   Attendance & Punctuality of      Records                  Minimum       Section       D
    Office                                                    Standard
5   Supervision & Leadership         Supervisor rating        Qualitative   Self          D
                                     through PMS
6   Innovation and Contribution
    a) Coordination and Co-           Supervisor rating       Qualitative   Self          D
    operation with other
    offices/peers
    b) Special                        Supervisor rating       Qualitative   Self          D
    Achievements/Initiatives
7   Subject Knowledge & Self          Knowledge level         Qualitative   Self          D
    Improvement
B   Public Accountability
1   Public Service Delivery           Sevottam rating of HQ   Rating        Headquarter   IA             10%    10%    10%    10%    10%
    Quotient
D   Organizational Results (Ministry)                                                                    80%    80%    70%    40%    40%
1   Achievement of outcome budget Target V/S                  % achieved    MCA           MCA
    (for ministry)                    Achievement
                                                                                          Total(A+B+D)   100%   100%   100%   100%   100%




                                                                                                                                     75
                                  Table 3.16 Performance analysis for Section Officer (Administration-I)

                                                                    Section Officer (Admin)
                                                                                                                Weightage (across years)
    Key Result Areas                      Measurement Unit        Standard        Reference   Evaluator    I     II       III       IV     V
                                                                                  unit
A   Individual Results                                                                                    10%    10%      20%       50%    50%
1   Regular activities                                            E/A/NA/U
    a) Establishment matters related to   Number of matters       Actuals and/    Section     U.S.
    group A service                       cleared v/s total       or Supervisor
                                          matters referred        rating

    b) To examine and scrutinize          Number disposed v/s     Actuals and/    Section     U.S.
    cases submitted by dealing hands      number received         or Supervisor
                                                                  rating

2   Quality of Result Achievement         Grievances/complaints   Numbers         Section     U.S.
                                          about work              (Trend)
                                          Pendency levels         %               Section

                                          Quality of work         Supervisor      Self
                                                                  rating
3   Internal Process Efficiency
    a) Procedure Adherence                Audit Observations       % reduction    Section     D
                                                                  (Trend)
                                          Delays caused           Qualitative
                                                                  (Supervisor
                                                                  rating)
    b) Satisfaction (of employees)        Measure of              % increase      Group       IA
    (perception)                          Satisfaction            over time       A/others
    c) Employee Satisfaction              Measure of Employee     % increase      Section
    (perception of                        Satisfaction            over time                   IA
    section/subordinates)                 (department)
4   Attendance & Punctuality of           Records                 Minimum         Section     U.S.
    Office                                                        standard




                                                                                                                                      76
5   Supervision & Leadership          Supervisor rating       Qualitative   Self          U.S.
                                      through PMS
6   Innovation and Contribution
    a)Coordination and Co-operation   Supervisor rating       Qualitative   Self          U.S.
    with other offices/peers

    b)Special                         Supervisor rating       Qualitative   Self          U.S.
    Achievements/Initiatives
7   Subject Knowledge & Self          Knowledge level         Qualitative   Self          U.S.
    Improvement
B   Public Accountability
1   Public Service Delivery           Sevottam rating of HQ   Rating        Headquarter   IA              10%    10%    10%    10%        10%
    Quotient

D   Organizational Results (Ministry)                                                                     80%    80%    70%    40%        40%
1   Achievement of outcome budget     Target VS               % achieved    MCA           MCA
    (for ministry)                    Achievement

                                                                                          Total (A+B+D)   100%   100%   100%   100%       100%




                                                                                                                                     77
                    Table 3.17 Performance analysis for Senior/Junior Technical Assistant (Administration-I)

                                                       Senior/Junior Technical Assistant (Admin)
                                                                                                                 Weightage (across years)
    Key Result Areas                Measurement Unit        Standard             Reference     Evaluator   I     II     III          IV          V
                                                                                 unit
A   Individual Results                                                                                     10%   10%     20%         50%         50%
1   Regular activities                                      E/A/NA/U
    a) Assisting section officer    Target v/s              % achieved or PPS    Self          S.O.
    in dealing with all admin and   Achievement
    establishment work
    b) Completion of other work     Target V/S              % achieved or        Self          S.O.
    assigned (in time)              Achievement
                                                            Supervisor rating
2   Quality of Result               Grievances/complaints   Number (Trend)       Self          S.O.
    Achievement                     about work
                                    Pendency Levels of      %
                                    different areas
                                    Quality of work         Supervisor rating
3   Attendance & Punctuality        Records                 Minimum              Self          S.O.
                                                            Standard
4   Availability for work           Behavioral              Critical Incidents   Self          S.O.
5   Dependability for work          Behavioral              Critical Incidents   Self          S.O.
6   Subject Knowledge & Self        Knowledge level         Supervisor rating    Self          S.O.
    Improvement
7   Proficiency in computer         Qualitative             Supervisor rating    Self          S.O.
    applications and software       observation
                                    Certification           Pass certificate
                                                            with periodic
                                                            revalidation
B   Public Accountability
1   Public Service Delivery         Sevottam rating of HQ   Rating               Headquarter   IA          10%   10%     10%      10%       10%
    Quotient




                                                                                                                                            78
D   Organizational Results (Ministry)                                             80%    80%    70%    40%        40%
1   Achievement of outcome       Target VS     % achieved   MCA   MCA
    budget of the ministry       Achievement
                                                                  Total (A+B+D)   100%   100%   100%   100%       100%




                                                                                                             79
                                         Regional Directorate

Introduction 54

The four Regional Directorates (RD) have jurisdiction over respective geographic
regions, each region comprising specific number of States and Union Territories.
Directorates are headed by Regional Directors (RD). Each RD supervises the working of
offices of the Registrars of Companies and the Official Liquidators located in the region.
They also maintain liaison with the respective state governments and the central
government, in matters relating to administration of the Companies Act 1956. They
interact regularly with agencies like the Stock Exchange and SEBI for promoting
awareness and protection of the investors in securities market.

Certain powers of the central government under the Companies Act 1956 have been
delegated to the Regional Directors. An important activity of the Regional Directors
office is inspection of companies under section 209A of the Companies Act. Inspection is
undertaken to detect mis-governance and violations of various sections of the Companies
Act. For this, there is an inspection unit attached to the office of every Regional Director.
Beside this, the Regional Directors function as the link between ministry headquarters
and the offices of the Registrar of Companies and Official Liquidator. As supervisory
officer, RD assists and guides the field offices in proper implementation of the provisions
of the Companies Act.

The four directorates are located in the four important cities of India, and are known by
the city names.

           RD, Northern Region (Noida)
           RD, Eastern Region (Kolkata)
           RD, Western Region (Mumbai)
           RD, Southern Region (Chennai)

In consultation with ministry, we selected Regional Directorate Northern Region which is
situated in Noida for the study. The region is headed by Regional Director, who is

54
     Induction material, Ministry of Company Affairs, 2006



                                                                                            80
assisted by three joint directors, two assistant directors and one deputy director. The
organization structure (consolidated) of RD office (Noida) is given in table 3.18.

                      Table 3.18 Organization Structure of RD, Noida


                                      Regional Director (1)




 Joint Director (3)                Assistant Director (2)              Deputy Director (1)
 Legal/Technical/                         (Audit)/                        (Inspection)
    Inspection                         (Inspection)




        S T A (2),                         U D C (2),                 Superintendent (2),
        J T A (2)                          L D C (2)                  Stenographer (4),
                                                                      Hindi Translator (1)




Performance dimensions for Regional Directorate 55

The work responsibility of regional directorate (thereby Regional Director’s key result
areas) can be divided into two (a) Statutory (Regulatory) and (b) Managerial, Ministerial
and Administrative. Details of KRA’s are reproduced below.

      a. Regional Director perform statutory functions such as
        • Inspection of companies under section 209A of Companies Act and submit
            reports to ministry
        • Exercising various delegated powers given to RD, as given

               o Rectification of name of company under section 22 of Companies Act
                      1956


55
     www.mca.gov.in


                                                                                             81
             o Power to dispense with "Limited" in name of charitable or other
                 company under section 25 of Companies Act 1956
             o Provisions as to resolutions for appointing or removing auditors under
                 section 225 of Companies Act 1956
             o Board's sanction to be required for certain contracts in which particular
                 directors are interested under section 297 of Companies Act 1956
             o Power to compromise or make arrangements with creditors and members
                 under section 391
             o Provisions for facilitating reconstruction and amalgamation of companies
                 under section 394 of Companies Act
             o Composition of certain offences under the section 621A of Companies
                 Act 1956

   b. Regional Director performs Managerial, Ministerial & Administrative functions
       as follows:

       •   Supervision of ROC and OL offices
       •   Submit reports to ministry about the performance of ROC and OL.
       •   Management of Regional Directorate
       •   Analysis of work

Apart from the inspection role (section 209A), activities of RD office include processing
of application/petitions under various provisions of the Act. The nature of work is mostly
desk oriented (except on site inspection and work related to court) and it requires high
degree of knowledge about the Act and effective co-ordination with multiple agencies.
Employees (specifically Group A and section of B) handle multiple activities
simultaneous and hence find it difficult to concentrate on specifies for extended time.
Hence, it is practically difficult to compute and apply time norms for many activities,
though there are some guess- estimates shared with us. Hence before implementing PRP,
standards will have to be realistically fixed.




                                                                                       82
Though inspection is an important activity of RD, it does not have powers to
independently initiate inspections. While it takes up cases referred by agencies, routine
inspections are done, based on the criteria prescribed by ministry. The criteria include:


       1. Size of the company
       2. Turnover of the company, and
       3. Other criteria prescribed under the Companies Act 1956.


During our study, we were told that it is difficult to put exact time for inspection work.
Completion of work also depends on various factors external to the office and officers,
including type of company, their co-operation and availability/workload of RD
employees to handle the work matters. RD officers inspect different types of companies
and their observations about time require is given below:


       1. Listed companies ( takes more time) 56
       2. Large companies (takes more time)
       3. Unlisted companies (takes normal time) 57
       4. Small companies (takes normal time)
       5. Medium companies (takes normal time)
       6. RD also inspect Public Sector Undertakings (takes normal time)




Primary data was collected from incumbents in the department, the topmost being
Regional Director. Performance analysis of incumbents are given in the following pages.




56
     more time means the work to be completed 45 days
57
     normal time means the work to be completed 15-20 days


                                                                                            83
                                 Table 3.19 Performance analysis for Regional Director (Regional Directorate)

                                                                 Regional Director (Regional Directorate)
                                                                                                                        Weightage (across years)
        Key Result Areas                 Measurement Unit              Standard         Reference     Evaluator   I     II      III      IV        V
                                                                                        Unit
A       Individual Results                                                                                        10%   10%     20%      50%       50%
 1      Regular activities                                             E/A/NA/U
        a) Regular inspections under     Target v/s Achievement        % achieved       R.D’Ate       JS
        Companies Act
        b) Complaint based               Target v/s Achievement        % achieved       R.D’Ate       JS
        inspections/IPO scrutiny
        c) Prosecution cases initiated   Number initiated v/s Total    % initiated      R.D’Ate       JS
                                         scope
        d) Liquidation cases             Numbers                       % initiated      R.D’Ate       JS
        completed and reports filed
        e) Number of cases pending       Numbers                       Targeted         R.D’Ate       JS
        more than 1 year                                               numbers
                                                                       Pendency level
2       Quality of Result                Grievances/complaints         Numbers          R.D’Ate       JS
        Achievement                      about work (total)            (Trend)
                                         Pendency level                %                R.D’Ate
                                         Quality of work               Supervisor       Self
                                                                       rating
    3   Internal Process Efficiency

        a) Procedure Adherence           Audit Observations             % reduction     R.D’Ate       JS
                                                                       (Trend)
                                         Internal reporting            % reports in
                                                                       time
                                                                       Qualitative
                                         Delays caused                 (Supervisor
                                                                       rating)




                                                                                                                                                   84
     b) Customer satisfaction       Measure of Customer         % increase     R.D’Ate   JS
     (perception)                   Satisfaction                over time
     c) Employee Satisfaction       Measure of Employee         % increase     R.D’Ate   JS
     (perception of RD              Satisfaction                over time
     employees+ROC+OL)
     d) Regional budget/resource    Target v/s Actual           Within         R.D’Ate   JS
     management                                                 budget
4    Attendance & Punctuality       Records                     Minimum        R.D’Ate   JS
     (Office + ROC + OL)                                        standards
5    Supervision & Leadership       Supervisor rating through   Qualitative    Self      JS
                                    PMS
6    Innovation and Contribution
     a) E-governance friendliness   Extend of usage             % usage        Self      JS
     and promotion                                              Qualitative
     b) Customer education          Number of programmes        Trend based    Self      JS
                                    conducted                   or
                                                                Achievement
     c)Special                      Supervisor rating           Qualitative    Self      JS
     Achievements/Initiatives
7    Subject Knowledge & Self       Knowledge level             Qualitative    Self      Expected at this level, hence not included as a measure
     Improvement
B    Public Accountability
 1   Public Service Delivery        Sevottam rating             Rating of RD   R.D’Ate   IA              10%       10%       10%      10%          10%
     Quotient                                                   and
                                                                constituents
C    Organizational Results (Regional Directorate)                                                                 20%       20%      20%          20%
1    Achievement of internal      Target v/s Achievement        % achieved     R.D’Ate   Ministry
     action plan
D    Organizational Results (Ministry)                                                                   80%       60%       50%      20%          20%

     Achievement of outcome         Target v/s Achievement      % achieved     MCA       MCA
     budget
                                                                                         Total           100%      100%      100%     100%         100%
                                                                                         (A+B+C+D)




                                                                                                                                               85
                                   Table 3.20 Performance analysis for Joint Director (Regional Directorate)

                                                                Joint Director (Regional Directorate)
                                                                                                                           Weightage (across years)
     Key Result Areas                 Measurement Unit         Standard             Reference            Evaluator    I     II       III      IV       V
                                                                                    Unit
A    Individual Results                                                                                              10%   10%     20%      50%       50%
 1   Regular activities                                        E/A/NA/U
     a) Number of inspections         Target v/s Achievement   % achieved           Section/department   RD
     under Companies Act
     b) Number of prosecution         Target v/s Achievement   % filed              Section/department   RD
     cases filed

     c) Processing application        Target v/s Achievement   % achieved           Section/department   RD
     petitions under Companies
     Act
     d) Number of cases pending       Numbers                  Target (Trend)       Section/department   RD
     more than 1 year
     e) Number of quires handled      Target v/s Achievement   % achieved           Section/department   RD
                                      or                       (Trend)
                                      Actual Numbers
     f) Compounding matters           Target v/s Achievement   % achieved           Section/department   RD
                                      or                       (Trend)
                                      Actual Numbers
     g) Other routine activities      Target V/S Achievement   % achieved           Section/department   RD
                                                               Supervisor rating
 2   Quality of Result                Grievances/complaints    Numbers (Trend)      Section/department   RD
     Achievement                      about section
                                      Pendency level           %
                                      Quality of work          Supervisor rating    Self
 3   Internal Process Efficiency

     a) Procedure Adherence           Audit Observations       % Reduction          Section/department   RD
                                                               (Trend)
                                      Internal reporting       % reports in time




                                                                                                                                              86
                                      Delays Caused            Qualitative
                                                               (Supervisor rating)
        b) Customer satisfaction      Measure of Customer      % increase over        Section/department   RD
        (perception)                  Satisfaction             time
        c) Employee Satisfaction      Measure of Employee      % increase over        Section/department   RD
        (perception)                  Satisfaction             time
    4   Attendance & Punctuality of   Records                  Minimum Standard       Section/department   RD
        Office
    5   Supervision & Leadership      Supervisor rating        Qualitative            Self                 RD
                                      through PMS
    6   Innovation and Contribution
        a) Customer education        Numbers of initiatives    Supervisor rating      Self                 RD
        b)Special                    Supervisor rating         Qualitative            Self                 RD
        Achievements/Initiatives
    7   Subject Knowledge & Self     Knowledge level           Qualitative            Self                 RD
        Improvement
B       Public Accountability
 1      Public Service Delivery      Sevottam rating           Rating of the office   R.D’Ate              IA          10%    10%    10%    10%    10%
        Quotient
C       Organizational Results (Regional Directorate)                                                                         20%    20%    20%    20%

1       Achievement of internal      Target v/s Achievement    % achieved             R.D’Ate              Ministry
        action plan
D       Organizational Results (Ministry)                                                                              80%    60%    50%    20%    20%

1       Achievement of outcome        Target v/s Achievement   % achieved             MCA                  MCA
        budget
                                                                                                           Total       100%   100%   100%   100%   100%
                                                                                                           (A+B+C+D)




                                                                                                                                             87
                           Table 3.21 Performance analysis for Deputy/Assistant Director (Regional Directorate)

                                                         Deputy/Assistant Director (Regional Directorate)
                                                                                                                         Weightage (across years)
     Key Result Areas               Measurement Unit            Standard         Reference        Evaluator   I         II      III        IV       V
                                                                                 Unit
A    Individual Results                                                                                           10%   10%     20%        50%      50%
 1   Regular activities                                         E/A/NA/U
     a) Number of inspections       Target v/s Achievement      % achieved       Section/depart   RD
     under Companies Act                                                         ment
     b) Number of IPO scrutiny      Number disposed v/s         % achieved       Section/depart   RD
     cases                          number received (norms)                      ment

     c) Number of cases pending     Numbers                     Trend            Section/depart   RD
     more than 1 year                                                            ment
     d) Monitoring of vanishing     Number of cases filed       Trend            Section/depart   RD
     companies                                                                   ment

     e) Handling                    Numbers resolved v/s        % achieved       Section/depart   RD
     query/clarification            Numbers received                             ment
 2   Quality of Result              Grievances/complaints       Numbers          Section/depart   RD
     Achievement                    about section               (Trend)          ment
                                    Pendency level              %                Section/depart
                                    Quality of work             Supervisor       ment
                                                                rating           Self

 3   Internal Process Efficiency
     a) Procedure Adherence         Audit Observations          % Reduction      Section/depart   RD
                                                                (Trend)          ment
                                    Internal reporting          % reports in
                                                                time
                                    Delays Caused               Qualitative
                                                                (Supervisor
                                                                rating)




                                                                                                                                               88
     b) Customer Satisfaction      Measure of Customer         % increase      Section/depart   RD
     (perception)                  Satisfaction                over time       ment
     c) Employee Satisfaction      Measure of Employee         % increase      Section/depart   RD
     (perception)                  Satisfaction                over time       ment
4    Attendance & Punctuality of   Records                     Minimum         Section/depart   RD
     Office                                                    Standard        ment
5    Leadership and Supervision    Supervisor rating through   Qualitative     Self             RD
                                   PMS
6    Innovation and Contribution
     a) Customer education         Programs held               Qualitative     Self             RD
                                   (successfully)
     b)Special                     Supervisor rating           Qualitative     Self             RD
     Achievements/Initiatives
7    Subject Knowledge & Self     Knowledge level              Qualitative     Self             RD
     Improvement
B    Public Accountability
 1   Public Service Delivery      Sevottam rating              Rating of the   R.D’Ate          IA          10%    10%    10%    10%        10%
     Quotient                                                  office
C    Organizational Results (Regional Directorate)                                                                 20%    20%    20%        20%
1    Achievement of internal      Target v/s Achievement       % achieved      R.D’Ate          Ministry
     action plan
D    Organizational Results (Ministry)                                                                      80%    60%    50%    20%        20%

1    Achievement of outcome        Target v/s Achievement      % achieved      MCA              MCA
     budget
                                                                                                Total       100%   100%   100%   100%       100%
                                                                                                (A+B+C+D)




                                                                                                                                       89
                          Table 3.22 Performance analysis for Assistant Director Audit (Regional Directorate)

                                                           Assistant Director Audit (Regional Directorate)
                                                                                                                         Weightage (across years)
     Key Result Areas                 Measurement Unit              Standard        Reference      Evaluator   I         II     III       IV        V
                                                                                    Unit
A    Individual Results                                                                                            10%   10%       20%        50%   50%
 1   Regular activities                                             E/A/NA/U
     a) Internal audit of OL office   Numbers                       % achieved      Section/depa RD
                                      Target v/s Achievements                       rtment
     b) Objection/paras               Numbers                       % achieved      Not a genuine measure
                                      Target v/s Achievements
 2   Quality of Result                Quality of Audits             Supervisor      Self           RD
     Achievement                                                    rating
                                      Pendency level                %               Section/depa
                                                                                    rtment
                                      Complaints/grievances         Numbers         Section/depa
                                      about work                    (Trend)         rtment
 3   Internal Process Efficiency
     a) Procedure Adherence           Audit Observations            % Reduction     Section/depa   RD
                                                                    (Trend)         rtment
                                      Internal reporting            % reports in
                                                                    time
                                      Delays Caused                 Qualitative
                                                                    (Supervisor
                                                                    rating)
     b) Customer Satisfaction         Measure of Customer           % increase      Section/depa   RD          Not applicable for this post
     (perception)                     Satisfaction                  over time       rtment
     c) Employee Satisfaction         Measure of Employee           % increase      Section/depa   RD          May not applicable for this post
     (perception)                     Satisfaction                  over time       rtment
 4   Attendance & Punctuality of      Records                       Minimum         Section/depa   RD
     Office                                                         Standard        rtment
 5   Leadership and Supervision       Supervisor rating through     Qualitative     Self           RD
                                      PMS




                                                                                                                                                    90
6    Innovation and Contribution
     a) Special                   Qualitative              Supervisor      Self      RD
     Achievements/Initiatives                              rating
7    Subject Knowledge & Self     Knowledge Level          Qualitative     Self      RD
     Improvement
B    Public Accountability
 1   Public Service Delivery      Sevottam rating          Rating of the   R.D’Ate   IA          10%    10%    10%    10%    10%
     Quotient                                              office
C    Organizational Results (Regional Directorate)                                                      20%    20%    20%    20%
1    Achievement of internal      Target v/s Achievement   % achieved      R.D’Ate   Ministry
     action plan
D    Organizational Results (Ministry)                                                           80%    60%    50%    20%    20%

1    Achievement of outcome       Target v/s Achievement   % achieved      MCA       MCA
     budget
                                                                                     Total       100%   100%   100%   100%   100%
                                                                                     (A+B+C+D)




                                                                                                                             91
                   Table 3.23 Performance analysis for Senior/Junior Technical Assistant (Regional Directorate)

                                                 Senior/Junior Technical Assistant (Regional Directorate)
                                                                                                                       Weightage (across years)
     Key Result Areas               Measurement Unit        Standard             Reference    Evaluator     I         II      III       IV        V
                                                                                 Unit

A    Individual Results                                                                                         10%   10%      20%      50%       50%
 1   Regular activities                                     E/A/NA/U
     a) Processing of various       Number processed        % achieved           Self         DD/AD
     applications                                           PPS
     b) Reporting and               Target v/s              % achieved           Self         DD/AD
     communication                  Achievement             PPS
      c) Completion of other work   Target v/s              % achieved or        Self         DD/AD
     assigned (in time)             Achievement (in time)   Supervisor rating

 2   Quality of Result              Grievances/complaint    Number (Trend)       Self         DD/AD
     Achievement                    s about work
                                    Pendency Levels of      %
                                    different areas
                                    Quality of work         Supervisor rating
 3   Attendance & Punctuality       Records                 Minimum Standard     Self         DD/AD
     levels
 4   Availability for work and      Behavioral              Critical Incidents   Self         DD/AD
     attitude
 5   Dependability for work         Behavioral              Critical Incidents   Self         DD/AD
 6   Subject Knowledge & self       Knowledge level         Supervisor rating    Self         DD/AD
     improvement




                                                                                                                                                  92
     7   Proficiency in computer        Qualitative               Supervisor rating      Self      DD/AD
         applications and software 58
                                        Certification             Pass certificate
                                                                  with periodic
                                                                  revalidation
     B   Public Accountability
     1   Public Service Delivery      Sevottam rating             Rating of the office   R.D’Ate   IA          10%    10%    10%    10%    10%
         Quotient
     C   Organizational Results (Regional Directorate)                                                                20%    20%    20%    20%

     1   Achievement of internal        Target v/s                % achieved             R.D’Ate   Ministry
         action plan                    Achievement

  D      Organizational Results (Ministry)                                                                     80%    60%    50%    20%    20%
 1       Achievement of outcome         Target v/s                % achieved             MCA       MCA
         budget                         Achievement
                                                                                                   Total       100%   100%   100%   100%   100%
                                                                                                   (A+B+C+D)




58
     if work does not involve use of computers, points may be distributed elsewhere




                                                                                                                                           93
                                 Table 3.24 Performance analysis for UDC/LDC (Regional Directorate)

                                                          UDC/LDC (Regional Directorate)
                                                                                                              Weightage (across years)
    Key Result Areas                Measurement Unit        Standard       Reference       Evaluator     I     II       III       IV      V
                                                                           unit
A   Individual Results                                                                                  10%   10%     20%      50%       50%
1   Regular activities
    a) Typing, noting and           Number of documents     PPS            Self            Supervisor
    drafting of documents
    b) Dairy and Dispatch work      Numbers                 PPS            Self            Supervisor
    c) Maintenance of various       Number of               PPS            Self            Supervisor
    registers/files                 registers/files

    d) Completion of other work     Target v/s              Qualitative    Self            Supervisor
    assigned                        Achievement
                                                            Supervisor
                                                            satisfaction
2   Quality of Result               Pendency levels         %              Self            Supervisor
    Achievement
                                    Quality of work         Supervisor
                                                            rating
3   Attendance & Punctuality        Records                 Minimum        Self            Supervisor
                                                            Standard
4   Availability for work           Behavioral              Critical       Self            Supervisor
                                                            Incidents
5   Dependability for work          Behavioral              Critical       Self            Supervisor
                                                            Incidents
6   Subject Knowledge & Self        Knowledge level         Supervisor     Self            Supervisor
    Improvement                                             rating




                                                                                                                                           94
7   Proficiency in computer      Qualitative        Supervisor         Self      Supervisor
    applications and software                       rating
                                 Certification      Pass certificate
                                                    with periodic
                                                    revalidation
B   Public Accountability
1   Public Service Delivery      Sevottam rating    Rating of the      R.D’Ate   IA           10%    10%    10%    10%    10%
    Quotient                                        office
C   Organizational Results (Regional Directorate)                                                    20%    20%    20%    20%
1   Achievement of internal      Target v/s         % achieved         R.D’Ate   Ministry
    action plan                  Achievement

D   Organizational Results (Ministry)                                                         80%    60%    50%    20%    20%
1   Achievement of outcome       Target v/s         % achieved         MCA       MCA
    budget                       Achievement
                                                                                 Total        100%   100%   100%   100%   100%
                                                                                 (A+B+C+D)




                                                                                                                            95
                                       Registrars of Companies

Introduction 59

Registrars of Companies (ROC) are appointed under Section 609 of the Companies Act
1956. Each ROC has jurisdiction covering different the various States and Union
Territories and vested with the primary duty of registering companies floated in the
jurisdictional area and ensuring that such companies comply with statutory requirements
under the Act. These offices function as registry of records relating to the companies
registered with them. The records are available for inspection by members of public on
payment of the prescribed fee. 20 ROC’s operate all over the country and the central
government exercises administrative control over these offices through the respective
Regional Directors. The main function of the Registrar of Companies under the
Companies Act, 1956 are:

(i) Making names available to the promoters for formation of new companies and also to
the existing companies for changing their names, keeping in view the guidelines issued
by the central government in this regard.

(ii) Registration of new companies and issuing Certificates of Incorporation

(iii) Issuing Certificates for Commencement of Business to Public Limited companies
formed under the Act.

(iv) Registration of documents required to be filed under the Act with the ROC

(v) Maintaining the document files containing all the registered documents relating to
the companies falling under the jurisdiction of the ROC, and making them available to
the public for inspection during the working hours prescribed in this regard, on payment
of the prescribed fees.

(vi) Issuing certified copies of registered documents on payment of the prescribed fees


59
     Induction material, Ministry of Company Affairs, 2006


                                                                                          96
(vii) Submission of reports to the Company Law Board (CLB) in respect of petitions filed
under section 17, 141 and 397 of the Act.

(viii) Submission of reports to MCA on applications filed under section 58A (8),
269/198/309 and 212(8) of the Act.

(ix) Submission of reports to RD on petitions filed under section 391/394 of the Act

(x) To attend investor grievances.

(xi) Submission of reports to RD/MCA on follow up action taken in respect of the
findings of inspection carried out under section 209A of the Act & inspection under
Section 209A of the Act.

(xii) Furnishing information to MCA/RD in connection with Parliament Questions

(xiii) Furnishing reports on any other matters called for by MCA/RD.

(xiv) Striking off names of defunct companies ensuing compliance of the provisions of
Section 560 of the Act.

(xv) Filing of prosecutions before the court of the Metropolitan Magistrate in respect of
violation of the provisions of the act, in exercise of the powers conferred under Section
621 of the Act.

(xvi) Processing of compounding applications filed under Section 621A of the Act for
onward transmission to the compounding authorities.

Apart from the functions mentioned above, the powers in respect of the following
provisions of the Act are also delegated to the ROC

(1) Allowing change of name of a company under Section 21 of the Act.

(2) Conversion of companies from private to public under Section 31/44 of the Act.




                                                                                       97
 (3) Conversion of companies from public to private under Section 31/43A (2A) of the
 Act.

 (4) Registration of Special Resolutions passed under Section 17 of the Act.

 (5) Extension of time to hold Annual General Meetings by non Government companies
 under section 166 of the Act.

 (6) Extension of financial year under Section 210(4) of the Act

 (7) Settlement of claims under Section 205B of the Act

 (8) Settlement of claims under Section 555(7)(b) of the Act.

 (9) Extension of time for presentation of share transfer deeds under section108 (1D) of
 the Act.

 (10) Technical Scrutiny of Balance Sheets

 The location of all 20 ROC’s and their administrative authority are given in table 3.25
 and the organization structure and staffing of an ROC (Delhi) is given in table 3.26

        Table 3.25: Region wise list of offices of Registrars of Companies (ROC)

Northern Region           Eastern Region        Western Region         Southern Region
ROC Delhi                 ROC Kolkata          ROC Mumbai              ROC Chennai

ROC Kanpur                ROC Patna            ROC Ahmedabad           ROC Bangalore

ROC Jalandhar             ROC Cuttack          ROC Gwalior             ROC Hyderabad

ROC J&K                   ROC Shillong         ROC Goa                 ROC Ernakulam

ROC Jaipur                         -           ROC Pune                ROC Coimbatore

            -                      -                      -            ROC Pondicherry


                Source: Induction material, Ministry of Company Affairs, 2006



                                                                                        98
                  Table 3.26 Organization Structure of ROC, Delhi




                                 Registrar of Companies (1)




           Deputy ROC (4)                          Assistant ROC (6)




         S T A (6)                U D C (24)              Stenographer (1)
         J TA (24)                L D C (13)              Hindi Translator (1)
                                                          Hindi Officer (1)
                                                          Assistant (1)




Primary data was collected from incumbents in the department, the topmost being
Registrar of Companies. Performance analysis of incumbents are given in the following
pages.




                                                                                    99
                                           Table 3.27 Performance analysis for Registrar of Companies

                                                              Registrar of Companies (Registrar of Companies)
                                                                                                                             Weightage (across years)
         Key Result Areas               Measurement Unit               Standard            Reference   Evaluator   I         II      III       IV         V
                                                                                           Unit
 A       Individual Results                                                                                            10%   10%      20%      50%        50%
  1      Regular activities 60 (Statutory)                             E/A/NA/U
         a) Registration of                Number of cases handled     Numbers (Trend)     ROC         RD
         companies/issuing certificates
         etc
         b) Filing of petitions            Number of cases filed       Numbers (Trend)     ROC         RD
         c) Scrutiny of balance sheet      Numbers                     Norms for           ROC         RD
                                                                       scrutiny
         d) Identify vanishing           Number of companies           Supervisor rating   ROC         RD
         companies                       identified
         e) Number of cases pending      Numbers                       Trend or            ROC         RD
         more than 1 year                                              Achievement
         f) Investor grievances          Number attended v/s           % achieved
         (ROC total)                     Number received
     2   Quality of Result               Grievances/complaints         Numbers (Trend)     ROC         RD
         Achievement                     about work
                                         Pendency levels of            %                   ROC
                                         different areas
                                         Quality of work               Supervisor rating   Self
     3   Internal Process Efficiency
         a) Procedure Adherence          Audit Observations            % Reduction         ROC         RD
                                                                       (Trend)
                                         Internal reporting            % reports in time
                                                                       Qualitative
                                         Delays Caused                 (Supervisor
                                                                       rating)

60
     The list is partial




                                                                                                                                                        100
         b) Customer satisfaction       Measure of Customer         % increase over    ROC    IA
         (perception)                   Satisfaction                time
         c) Employee Satisfaction       Measure of Employee         % increase over    ROC    IA
         (perception)                   Satisfaction                time
     4   Attendance & Punctuality of    Records                     Minimum            ROC    RD
         Office                                                     standard
     5   Supervision & Leadership       Supervisor rating through   Qualitative        Self   RD
                                        PMS
     6   Innovation and Contribution
         a) E-governance promotion     Extend of usage              % of usage         Self   RD
                                                                    Qualitative
         b) Customer education         Number of programmes         Trend based        Self   RD
                                       conducted
         c)Special                     Supervisor rating            Qualitative        Self   RD
         Achievements/Initiatives
     7   Subject Knowledge & Self      Knowledge level              Qualitative        Self   Expected at this level, hence not included as a measure
         Improvement
     B   Public Accountability
     1   Public Service Delivery       Sevottam rating              Rating of the      ROC    IA             10%        10%       10%       10%         10%
         Quotient                                                   office (ROC)
     C   Organizational Results (Regional Directorate) 61                                                               20%       20%       20%         20%
     1   Achievement of internal      Target V/S Achievement        % achieved         RD     MCA
         action plan
     D   Organizational Results (Ministry)                                                                   80%        60%       50%       20%         20%
     1   Achievement of outcome       Target V/S Achievement        % achieved         MCA    MCA
         budget
                                                                                              Total          100%       100%      100%      100%        100%
                                                                                              (A+B+C+D)




61
     ROC is part of RD’s core team. Hence performance of RD will be counted for PLP.




                                                                                                                                                   101
                  Table 3.28 Performance analysis for Deputy/Assistant ROC (Office of Registrar of Companies)

                                                          Deputy/Assistant ROC (Registrar of Companies)
                                                                                                                           Weightage (across years)
     Key Result Areas               Measurement Unit            Standard               Reference     Evaluator   I         II      III      IV        V
                                                                                       Unit
A    Individual Results                                                                                              10%   10%      20%     50%       50%
 1   Regular activities                                         E/A/NA/U
     a) Number of new               Number of cases disposed    % achieved             Section/dep   ROC
     companies registered                                       Number (Trend)         artment
     b) Registration of documents   Number of documents         % achieved             Section/dep   ROC
                                    registered                  Number (trend)         artment
     c) Scrutiny of balance sheet   Number processed            As per norms           Section/dep   ROC
                                                                                       artment
     d) Number of                   Number attended v/s         % achieved
     queries/questions handled      number received
2    Quality of Result              Grievances/complaints       Numbers (Trend)        Section/dep   ROC
     Achievement                    about work                                         artment
                                    Pendency levels of          %                      Section/dep
                                    different areas                                    artment
                                    Qualitative work            Supervisor rating      Self
3    Internal Process Efficiency
     a) Procedure Adherence         Audit Observations           % Reduction           Section/dep   ROC
                                                                 (Trend)               artment
                                    Internal reporting           % reports in time
                                                                 Qualitative
                                    Delays Caused                (Supervisor rating)

     b) Customer Satisfaction       Measure of Customer          % increase over       Section/dep   IA
     (perception)                   Satisfaction                 time                  artment
     c) Employee Satisfaction       Measure of Employee          % increase over       Section/dep   IA
     (perception)                   Satisfaction                 time                  artment




                                                                                                                                               102
        Attendance & Punctuality of   Records                     Minimum         Section/dep   ROC
4       Office                                                    Standard        artment

    5   Leadership and Supervision    Supervisor rating through   Qualitative     Self          ROC
                                      PMS
    6   Innovation and Contribution
        a) E-governance               Extend of usage             % of usage      Self          ROC
                                                                  Qualitative
        b) Customer education         Number of programmes        Trend           Self          ROC
                                      conducted (with             Target
                                      attendance)
        c)Special                     Supervisor rating           Qualitative     Self          ROC
        Achievements/Initiatives
    7   Subject Knowledge & Self     Knowledge Level              Qualitative     Self          ROC
        Improvement
B       Public Accountability
1       Public Service Delivery      Sevottam rating              Rating of the   ROC           IA          10%    10%    10%    10%    10%
        Quotient                                                  office
C       Organizational Results (Regional Directorate)                                                              20%    20%    20%    20%

1       Achievement of internal      Target v/s Achievement       % achieved      RD            MCA
        action plan
D       Organizational Results (Ministry)                                                                   80%    60%    50%    20%    20%

1       Achievement of outcome        Target v/s Achievement      % achieved      MCA           MCA
        budget
                                                                                                Total       100%   100%   100%   100%   100%
                                                                                                (A+B+C+D)




                                                                                                                                  103
                Table 3.29 Performance analysis for Senior/Junior Technical Assistant (Registrar of Companies)

                                                Senior/Junior Technical Assistant (Registrar of Companies)
                                                                                                                       Weightage (across years)
    Key Result Areas               Measurement Unit        Standard          Reference     Evaluator         I         II      III        IV       V
                                                                             Unit

A   Individual Results                                                                                           10%   10%      20%      50%       50%
1   Regular activities
    a) Work related to technical   Support for answering   PPS               Self          Dy ROC/AROC
    scrutiny
    b) Work related                Number                  100%              Self          Dy ROC/AROC
    parliamentary questions                                Compliance
    c) Completion of other work    Target V/S              % achieved        Self          Dy ROC/AROC
    assigned (in time)             Achievement             Qualitative
                                                           (Supervisor
                                                           rating)
2   Quality of Result              Grievances/complaint    Numbers           Self          Dy ROC/AROC
    Achievement                    s about work            (Trend)
                                   Pendency levels         %
                                   Quality of work         Supervisor
                                                           rating
3   Attendance & Punctuality       Records                 Minimum           Self          Dy ROC/AROC
                                                           standard
4   Availability for work          Behavioral              Critical          Self          Dy ROC/AROC
                                                           Incidents
5   Dependability for work         Behavioral              Critical          Self          Dy ROC/AROC
                                                           Incidents
6   Subject Knowledge & Self       Knowledge level         Supervisor        Self          Dy ROC/AROC
    Improvement                                            rating




                                                                                                                                                  104
7   Proficiency in computer      Qualitative            Supervisor         Self   Dy ROC/AROC
    applications and software                           rating
                                 Certification          Pass certificate
                                                        with periodic
                                                        revalidation
B   Public Accountability
1   Public Service Delivery      Sevottam rating        Rating of the      ROC    IA            10%    10%    10%    10%     10%
    Quotient                                            office
C   Organizational Results (Regional Directorate)                                                      20%    20%    20%     20%

1   Achievement of internal    Target v/s Achievement   % achieved         RD     MCA
    action plan
D   Organizational Results (Ministry)                                                           80%    60%    50%    20%     20%
1   Achievement of outcome       Target v/s             % achieved         MCA    MCA
    budget                       Achievement
                                                                                  Total         100%   100%   100%   100%    100%
                                                                                  (A+B+C+D)




                                                                                                                            105
                               Table 3.30 Performance analysis for UDC/LDC (Registrar of Companies)

                                                              UDC/LDC (Registrar of Companies)
                                                                                                                      Weightage (across years)
    Key Result Areas              Measurement Unit                  Standard           Reference   Evaluator    I     II      III       IV        V
                                                                                       unit
A   Individual Results                                                                                          10%   10%      20%      50%       50%
1   Regular activities
    a) Typing, noting and         Number of documents               PPS                Self        Supervisor
    drafting of documents
    b) Dairy and Dispatch work    Numbers                           PPS                Self        Supervisor
    c) Maintenance of various     Number of registers/files         PPS                Self        Supervisor
    registers/files
    d) Completion of other work   Target V/S Achievement            Qualitative        Self        Supervisor
    assigned
                                                                    Supervisor
                                                                    rating
2   Quality of Result             Pendency levels                   %                  Self        Supervisor
    Achievement
                                  Quality of work                   Supervisor
                                                                    rating
3   Attendance & Punctuality      Records                           Minimum            Self        Supervisor
                                                                    standard
4   Availability for work         Behavioral                        Critical           Self        Supervisor
                                                                    Incidents
5   Dependability for work        Behavioral                        Critical           Self        Supervisor
                                                                    Incidents

6   Subject Knowledge & Self      Knowledge level                   Supervisor         Self        Supervisor
    Improvement                                                     rating
7   Proficiency in computer       Qualitative                       Supervisor         Self        Supervisor
    applications and software                                       rating
                                  Certification                     Pass certificate




                                                                                                                                            106
                                                         with periodic
                                                         revalidation
B   Public Accountability
1   Public Service Delivery      Sevottam rating         Rating of the   ROC   IA          10%    10%    10%    10%         10%
    Quotient                                             office
C   Organizational Results (Regional Directorate)                                                 20%    20%    20%         20%
1   Achievement of internal     Target v/s Achievement   % achieved      RD    MCA
    action plan
D   Organizational Results (Ministry)                                                      80%    60%    50%    20%         20%
1   Achievement of outcome      Target v/s Achievement   % achieved      MCA   MCA
    budget
                                                                               Total       100%   100%   100%   100%        100%
                                                                               (A+B+C+D)




                                                                                                                      107
                                  Office of the Official Liquidator

Introduction 62

The Official Liquidator is appointed by the Central Government under Section 448 of the
Companies Act, 1956. OL officer are attached to Hon’ble High Courts for the purpose of
conducting liquidation proceedings of those companies which are ordered to be wound up
by the High Court. The OL is headed by Official Liquidator, who is an employee of the
Ministry of Company Affairs. Functionally the Official Liquidator is under the
supervision and control of the High Court, but administratively is under the control of the
Central Government through the Regional Director, Ministry of Company Affairs.


The Primary function of the Official liquidator is to administrate the assets of companies
under liquidation, sale of the assets and realization of all debts of companies in
liquidation for the purpose of distributing the same among the various creditors and other
shareholders of the companies and to finally dissolve such companies after the affairs are
completely concluded. When a company is put to winding up by an order of the High
Court, the Official Liquidator attached to the said High Court takes possession of the
company’s assets, books of accounts, etc. and liquidates the company as per the further
orders of the High Court. The procedure of liquidation is prescribed under the Companies
(Court) Rules, 1959. These rules are approved by the Honorable Supreme Court of India
and notified by the Central Government.


The duties and powers of the Official Liquidator are laid down in Section 457 of the
Companies Act, 1956. They are mainly of, filing of claims against, the debtors for
realization of the debts due to the company, sale of movable and immovable assets of the
company taken possession by the Official Liquidator, institute criminal complaints and
misfeasance proceedings against the former Directors of the company for their acts and
omissions, breach of trust etc., invitation of claims from the creditors, adjudication of
claims and settlement of list of creditors, payment to creditors by way of dividend and
settlement of list of contributories wherever necessary, and payment of return of capital


62
     Induction Material, Ministry of Company Affairs, 2006


                                                                                       108
 where the company’s assets exceeded its liability and finally dissolve the company under
 Section 481 of the Companies Act,1956. Table 3.31 lists the location of offices across the
 country. For the present study we selected OL Ahmedabad (Western Region India)
 Office. The organization structure of the OL office is given in Table 3.32

               Table 3.31: Region wise list of Offices of Official Liquidator

Northern Region          Eastern Region         Western Region          Southern Region
Allahabad                Kolkata               Mumbai                   Chennai

Chandigarh               Patna                 Ahmedabad                Bangalore

Delhi                    Cuttack               Indore                   Hyderabad

J&K                      Guwahati              Goa                      Ernakulam

Jaipur                   -                     Nagpur                   -

               Source: Induction material, Ministry of Company Affairs, 2006

             .Table 3.32 Organization structure of Office of OL (Ahmedabad)


                                          Official Liquidator (1)




                    Deputy official                            Assistant official
                    Liquidator (1)                             Liquidator (1)




              Senior Technical          Upper Division              Cashier (1)
              Assistant (1)             Clerk (1)                   Stenographer (1)
              Junior Technical          Lower Division              Hindi Translator (1)
              Assistant (3)             Clerk (7)                   Office Superintendent (0)

 Primary data was collected from incumbents in the department, the topmost being
 Official Liquidator. Performance analysis of incumbents are given in the following pages.


                                                                                       109
                                       Table 3.33 Performance analysis for Official Liquidator (Office of OL)
                                                                     Official Liquidator (Office of OL)
                                                                                                                                Weightage (across years)
         Key Result Areas                Measurement Unit          Standard              Reference        Evaluator   I         II     III       IV        V
                                                                                         Unit
 A       Individual Results                                                                                               10%   10%     20%      50%       50%
  1      Regular activities                                        E/A/NA/U
         a) Processing of appeals        Number processed          % achieved            Office of OL     RD
         from stakeholders and
         decisions of High Court
         b) Possession and valuation     Realistic value           (Audit objections)    Office of OL     RD
         of assets
                                                                   Supervisor rating
         c) Conducting auction sale      Number of auctions (as    Qualitative           Office of OL     RD
                                         per schedule)             Supervisor rating
         d) Number of liquidation        Numbers                   Trend or Target       Office of OL     RD
         cases completed in the year
         e) Number of cases pending      Numbers                   Trend or Target       Office of OL     RD
         more than 1 year
         f) Handling                     Number attended v/s       % achieved            Office of OL     RD
         queries/questions from          Number received
         public etc
         g) RTI/parliament questions     Answering within time     100% compliance       Office of OL     RD
     2   Quality of Result               Grievances/complaints     Numbers (Trend)       Office of OL     RD
         Achievement                     about work
                                         Value realized through    Revenue               Office of OL
                                         auctions 63               realization (trend)
                                         Loss prevention           Supervisor rating     Office of OL
                                         Pendency levels           %                     Office of OL
                                         Quality of work           Supervisor rating     Self
 3       Internal Process Efficiency
         a) Procedure Adherence          Audit Observations/High   % reduction           Office of OL     RD
                                         Court observations        (Trend)

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     May not be a robust indicator




                                                                                                                                                   110
                                       Internal reporting         % report in time
                                       Delays caused              Qualitative
                                                                  (Supervisor rating)    Self
         b) Customer Satisfaction      Measure of Customer        % increase over        Office of OL   RD
         (perception)                  Satisfaction (Creditors)   time
         c) Employee Satisfaction      Measure of Employee        % increase over        Office of OL   RD
         (perception)                  Satisfaction               time
 4       Attendance & Punctuality of   Records                    Minimum standard       Office of OL   RD
         office
 5       Leadership and Supervision    Supervisor rating          Qualitative            Self           RD
                                       through PMS
 6       Innovation and Contribution
         a) Co-ordination with High    Qualitative (feedback      Supervisor rating      Self           RD
         Court/other agencies          from High Court)
         b)Special                     Supervisor rating          Qualitative            Self           RD
         Achievements/Initiatives
         c) E-governance promotion     Extend of usage            % of usage             Self           RD
                                                                  Qualitative
 7       Subject Knowledge & Self     Knowledge level             Qualitative            Self           Expected at this level, hence not included as a measure
         Improvement
 B       Public Accountability
 1       Public Service Delivery      Sevottam rating             Rating of the office   Office of OL   IA              10%        10%       10%       10%        10%
         Quotient
 C       Organizational Results (Regional Directorate) 64                                                                          20%       20%       20%        20%
 1       Achievement of internal      Target v/s Achievement      % achieved             RD             MCA
         action plan                                                                                    or Ministry
 D       Organizational Results (Ministry)                                                                              80%        60%       50%       20%        20%
 1       Achievement of outcome       Target v/s Achievement      % achieved             MCA            MCA
         budget
                                                                                                        Total           100%       100%      100%      100%       100%
                                                                                                        (A+B+C+D)



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     OL is part of RD’s core team. Hence performance of RD will be counted for PLP.




                                                                                                                                                         111
                         Table 3.34 Performance analysis for Deputy/Assistant Official Liquidation (Office of OL)

                                                       Deputy/Assistant Official Liquidator (Office of OL)
                                                                                                                          Weightage (across years)
     Key Result Areas                Measurement Unit              Standard        Reference        Evaluator   I         II     III      IV         V
                                                                                   Unit
A    Individual Results                                                                                             10%   10%     20%     50%        50%
 1   Regular activities                                             E/A/NA/U
     a) Compliance with court        Numbers complied with          Actuals        Section/depart   OL
     orders and taking action                                       (100%          ment
                                                                    expected)
     b) Conducting auction sale      Number of cases handled v/s    % achieved     Section/depart   OL
     and sale proceeds               Total cases                                   ment
     c) Winding up proceedings       Target V/S Achievement         % achieved     Section/depart   OL
                                                                                   ment
     f) Handling queries/questions   Number attended v/s           % achieved      Section/depart   OL
     from public etc                 Number received                               ment
     e) RTI/Parliament questions     Answering in time             100%            Section/depart   OL
                                                                   compliance      ment
2    Quality of Result               Grievances/complaints about   Numbers         Section/depart   OL
     Achievement                     work                          (Trend)         ment
                                     Value realized through        Revenue         Section/depart
                                     auction                       realisation     ment
                                     Loss prevention               Supervisor      Section/depart
                                                                   rating          ment
                                     Pendency levels               %               Section/depart
                                                                                   ment
                                     Quality of work               Supervisor      Self
                                                                   rating
3    Internal Process Efficiency
     a) Procedure Adherence          Audit Observations/High        % reduction    Section/depart   OL
                                     Court observation             (Trend)         ment
                                     Internal Reporting            % report
                                                                   submitted
                                     Delays Caused                 Qualitative




                                                                                                                                              112
                                                              (Supervisor
                                                              rating)
    b) Customer Satisfaction      Measure of Customer         % increase over   Section/depart   OL
    (perception)                  Satisfaction                time              ment
    c) Employee Satisfaction      Measure of Employee         % increase over   Section/depart   OL
    (perception)                  Satisfaction                time              ment
4   Attendance & Punctuality of   Records                     Minimum           Section/depart   OL
    office                                                    Standard          ment
5   Leadership and Supervision    Supervisor rating through   Qualitative       Self             OL
                                  PMS
6   Innovation and Contribution
    a)Special                     Supervisor rating           Qualitative       Self             OL
    Achievements/Initiatives
    b) E-governance promotion     Extend of usage             % of usage        Self             RD
                                                              Qualitative
7   Subject Knowledge & Self     Knowledge level              Qualitative       Self             OL
    Improvement
B   Public Accountability
1   Public Service Delivery      Sevottam rating              Rating of the     Office of OL     IA          10%    10%    10%    10%         10%
    Quotient                                                  office
C   Organizational Results (Regional Directorate)                                                                   20%    20%    20%         20%
1   Achievement of internal      Target v/s Achievement       % achieved        RD               MCA
    action plan
D   Organizational Results (Ministry)                                                                        80%    60%    50%    20%         20%
1   Achievement of outcome       Target v/s Achievement       % achieved        MCA              MCA
    budget
                                                                                                 Total       100%   100%   100%   100%        100%
                                                                                                 (A+B+C+D)




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                         Table 3.35 Performance analysis for Senior/Junior Technical Assistant (Office of OL)

                                                       Senior/Junior Technical Assistant (Office of OL)
                                                                                                                     Weightage (across years)
     Key Result Areas              Measurement Unit            Standard             Reference     Evaluator   I     II      III       IV          V
                                                                                    Unit
A    Individual Results                                                                                       10%   10%      20%      50%         50%
 1   Regular activities                                        E/A/NA/U
     a) Technical scrutiny of      Number processed v/s        PPS                  Self          Dy/A OL
     documents                     target
     b) Comply with High Court     Numbers                     % complied           Self          Dy/A OL
     orders
     c) Preparation of various     Number of reports           PPS                  Self          Dy/A OL
     reports                       prepared                    or
                                                               Supervisor rating
     d) Completion of other work   Target V/S Achievement      % achieved           Self          Dy/A OL
     assigned (in time)                                        or
                                                               Supervisor rating
2    Quality of Result             Grievances/complaints       Number (Trend)       Self          Dy/ A OL
     Achievement                   about work

                                   Pendency levels             %

                                   Quality of work             Supervisor rating
3    Attendance & Punctuality      Records                     Minimum              Self          Dy/A OL
                                                               standard
4    Availability for work         Behavioral                  Critical Incidents   Self          Dy/A OL
5    Dependability for work        Behavioral                  Critical Incidents   Self          Dy/A OL
6    Subject Knowledge & Self      Knowledge level             Supervisor rating    Self          Dy/A OL
     Improvement




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7   Proficiency in computer      Qualitative              Supervisor rating   Self           Dy/A OL
    applications and software
                                 Certification            Pass certificate
                                                          with periodic
                                                          revalidation
B   Public Accountability
1   Public Service Delivery      Sevottam rating          Rating of the       Office of OL   IA          10%    10%    10%    10%     10%
    Quotient                                              office
C   Organizational Results (Regional Directorate)                                                               20%    20%    20%     20%
1   Achievement of internal      Target v/s Achievement   % achieved          RD             MCA
    action plan
D   Organizational Results (Ministry)                                                                    80%    60%    50%    20%     20%
1   Achievement of outcome       Target v/s Achievement   % achieved          MCA            MCA
    budget
                                                                                             Total       100%   100%   100%   100%    100%
                                                                                             (A+B+C+D)




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                                        Table 3.36 Performance analysis for UDC/LDC (Office of OL)

                                                                UDC/LDC (Office of OL)
                                                                                                      Weightage (across years)
    Key Result Areas                       Measurement       Standard      Reference     Evaluator    I       II        III      IV     V
                                           Unit                            unit
A   Individual Results                                                                                10%      10%      20%      50%    50%
1   Regular activities                                       E/A/NA/U
    a) Typing, noting and drafting of      Number of         PPS           Self          Supervisor
    documents                              documents

    b) Dairy and Dispatch work             Numbers           PPS           Self          Supervisor
    c) Maintenance of various              Number of         PPS           Self          Supervisor
    registers/files                        registers/files

    d) Completion of other work            Target V/S        Qualitative   Self          Supervisor
    assigned                               Achievement       Supervisor
                                                             rating
2   Quality of Result Achievement          Pendency levels   %             Self          Supervisor

                                           Quality of work   Supervisor
                                                             rating
3   Attendance & Punctuality               Records           Minimum       Self          Supervisor
                                                             standard
4   Availability for work                  Behavioral        Critical      Self          Supervisor
                                                             Incidents
5   Dependability for work                 Behavioral        Critical      Self          Supervisor
                                                             Incidents
6   Subject Knowledge & Self               Knowledge level   Supervisor    Self          Supervisor
    Improvement                                              rating




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7   Proficiency in computer             Qualitative       Supervisor         Self           Supervisor
    applications and software                             rating
                                        Certification     Pass certificate
                                                          with periodic
                                                          revalidation
B   Public Accountability
1   Public Service Delivery             Sevottam rating   Rating of the      Office of OL   IA           10%    10%    10%    10%     10%
    Quotient                                              office
C   Organizational Results (Regional Directorate)                                                               20%    20%    20%     20%
1   Achievement of internal action      Target v/s        % achieved          RD            RD & MCA
    plan                                Achievement
D   Organizational Results (Ministry)                                                                    80%    60%    50%    20%     20%
1   Achievement of outcome budget       Target v/s        % achieved          MCA           MCA
                                        Achievement
                                                                                            Total        100%   100%   100%   100%    100%
                                                                                            (A+B+C+D)




                                                                                                                                     117
                                                 Chapter IV

                         Department of Revenue, [CBDT & CBEC]
                                   Ministry of Finance


Department Overview 65

The Department of Revenue functions under the overall administrative direction and
control of the Secretary (Revenue). It exercises control in respect of matters relating to
all the Direct and Indirect Taxes through two statutory boards, namely, the Central Board
of Direct Taxes (CBDT) and the Central Board of Customs and Central Excise (CBEC).
Each board is headed by a Chairperson who is also ex-officio Special Secretary to the
Government of India. Matters relating to the levy and collection of all direct taxes are
looked after by CBDT and those relating to levy and collection of customs and central
excise duties and service tax fall within the purview of CBEC.

CBDT has six full time members and CBEC has five full time members. The members of
boards are ex-officio Additional Secretaries to the Government of India.

Scope of the study

Both CBDT and CBEC under department of revenue (ministry of finance) were part of
the cluster selected for the study. Both boards have a multi-tier structure and selected
offices from both boards i.e. (CBDT and CBEC) were studied to achieve the objective
stated in Chapter I.


The Central Board of Direct Taxes (CBDT) is organised in three tiers i.e. Ministry
(headquarter) office, field formations and directorates (Attached Offices). The general
nature of work performed at the three tiers has been defined (by the act and office
manual) 66. Final selection of offices for the study factored in the differences.




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66
     Our experience is that specifications in the office manual are not strictly followed


                                                                                            118
In CBDT we selected the following:


   •   From field formations

           1. Commissionerate of Income Tax, Business Range Ahmedabad
           2. Commissionerate of Income Tax, TDS Range Bangalore.
           3. Director General (Investigation), Delhi
           4. Selected sections of Admin Headquarter, Mumbai.

   •   From the directorates (Attached Offices)
           o Office of Director of Organization and Management Services (DOMS),
              Delhi


We also made visits to field office at Baroda and NADT, Nagpur as part of the study. The
visits gave us more insight into working of the department and performance indicators.


The Central Board of Excise and Customs (CBEC) is also organised in three tiers i.e.
Ministry (headquarter), field formations and directorates (Attached Offices). From CBEC
we selected the following:
   From the ministry (headquarter level) the following sections/cells were selected.
       1. Customs Coordination Section (Custom- III Section)
       2. Customs Policy Section (Custom - IV Section)
       3. Air Customs Section (Custom-VI)
       4. Custom Tariff Unit


   At the field formation level
       1. Commissionerate of Service Tax, Delhi was selected for the study.


   We also visited Custom office, Cochin International Airport and NACEN, Faridabad.
   Our analysis is presented in two parts. Part I deals with performance analysis of the
   Central Board of Direct Taxes and Part II deals with Central Board of Excise and
   Customs.


                                                                                       119
                                          Part I

                            Central Board of Direct Taxes

Introduction 67

Organization and Functions

The Central Board of Direct Taxes is a statutory authority functioning under the Central
Board of Revenue Act, 1963. The officials of the board in their ex-officio capacity also
function as a division of the Ministry of Finance, dealing with matters relating to levy and
collection of direct taxes and formulation of policy concerning administrative reforms
and changes for the effective functioning of the income-tax department.

Historical Background of C.B.D.T

The Central Board of Revenue as the Department apex body charged with the
administration of taxes came into existence as a result of the Central Board of Revenue
Act, 1963. Initially the board was in charge of both direct and indirect taxes. However,
when the administration of taxes becomes too unwieldy for one board to handle, the
Board was split up into two, the Central Board of Direct Taxes and Central Board of
Excise and Customs with effect from 1.1.1964. This bifurcation was brought about by
constitution of the two separate boards u/s 3 of the Central Boards of Revenue Act, 1963.

Composition and Functions of C.B.D.T

The Central Board of Direct Taxes consists of Chairman and six members. The Chairman
and Members of Central Board of Direct Taxes are assisted by Joint Secretaries,
Directors, Deputy Secretaries, Under Secretaries and ministerial staff to carry out their
day-to-day functions.

The second part of the CBDT is its field formations or field offices (major chunk), which
consists of Region, Charge, Range, Circle and Wards. These field formations are headed
by Chief Commissioners and followed by commissioners. To monitor and assist the day-

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today functioning of field formations, the CBDT is assisted by the attached offices
/directorates. The total sanctioned staff strength of CBDT is 59682.

The Citizen Charter of CBDT that details various promises and expectations by CBDT is
given below 68

We seek

TO BE FAIR

       •    By being impartial and objective.
       •    By collecting taxes as per the law.

TO BE HELPFUL

       •    By being courteous and efficient.
       •    By displaying names, designations, telephone numbers and locations of the
            officials dealing directly with the public.
       •    By informing taxpayers as to their rights, duties, entitlements and obligations
            under the law.
       •    By providing information, leaflets, forms, etc. at the Information & Facilitation
            Counters.
       •    By providing information regarding procedures and authorities for legal remedies.

TO BE EFFICIENT

       •    By settling tax matters promptly and correctly.
       •    By handling personal and business information/ materials furnished to the
            department confidentially and as permitted by the law.
       •    By acknowledging all communications from taxpayers on the spot and in any case
            within 7 days and furnishing final replies within 30 days.
       •    By redressing all complaints and grievances within 30 days.


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                                                                                              121
   •   By issuing Income Tax Clearance Certificate u/s 230 of Income Tax Act within 7
       working days and that u/s 230A of Income Tax Act within 30 days.
   •   By disposing of all rectification applications u/s 154 of Income Tax Act within 30
       days.
   •   By giving effect to appellate orders within 30 days of the receipt of such orders.
   •   By issuing refunds within 30 days of determination.

WE EXPECT YOU

       To be prompt, honest and accurate.

   •   To pay taxes in time.
   •   To quote Permanent Account Number (PAN)/ GIR Number in all your returns
       and correspondence.

The overall organization of CBDT is given in Table 4.1




                                                                                       122
                      Table 4.1Organization Structure CBDT

                                                Secretary




  Member          Member        Member Audit             Member        Member              Member Revenue
Income Tax      Investigation    and Judicial           Legislation   Personnel              and Audit




              Ministry                              Directorate              Field Formation


                                                   Director General        Chief Commissioner


             JS/ Commissioner                       Additional DG            Commissioner


               Director/DS                         Addl/Jt Director       Addl/Jt Commissioner


             Under Secretary                      Dy/Asst Director        Dy/Asst Commissioner


              Section Officer                           SIO                       I.T.Officer


               Ministerial                              I.O.                      Inspector
                                                                                                            123
Performance Analysis

Performance analyses of the offices/positions studied are given in the next pages. Apart
from field data we have used published data about roles of headquarter (ministry) offices
and field offices also to derive performance areas

Headquarter (ministry) 69

As discussed earlier the CBDT is headed by the Chairman and six members, who are
been assisted by the ministerial staff consisting of Joint Secretary, Directors, Under
Secretaries and other ministerial staff. The major functioning of ministry are:


       1. Policy regarding discharge of statutory functions of the CBDT and of the
            Government under the various direct tax laws
       2. General Policy relating to:
       3. Set up and structure of Income Tax Department;

                •    Methods and procedures of work of the CBDT
                •    Measures for disposal of assessments, collection of taxes, prevention and
                     detection of tax evasion and tax avoidance
                •    Recruitment, training and all other matters relating to service conditions
                     and career prospects of all personnel of the Income-tax Department
                •    Laying down of targets and fixing of priorities for disposal of assessments
                     and collection of taxes and other related matters
                •    Write off of tax demand exceeding Rs.25 lakhs in each case
                •    Policy regarding grant of rewards and appreciation certificates.

                The board HQ sets annual action plan, in consultation with government and
                cascades targets down to field offices.




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                                                                                              124
Field Formation 70

The core of CBDT is its field formations or field offices, which consists of Region,
Charge, Range, Circle and Wards. Each of the above operate to achieve Action plan
targets set for them (revenue and non revenue)


In the study we covered two ranges in Commissionerate of Income Tax. They are
Business Range Ahmedabad and TDS Range Bangalore. Ranges were selected because
they are cutting edge of action plan realizations.


In addition to the ranges, we also studied office of Director General (Investigation), Delhi
and selected sections of Admin Headquarter, Mumbai.


Business Range, Commissionerate of Income Tax (Ahmedabad)

The commissionerate under which the business range falls is headed by Commissioner of
Income Tax (CIT). The business range is headed by Additional Commissioner supported
by Assistant Commissioner, Income Tax Officers and Tax Recovery Officer. Further, the
range is work supported by inspectors and tax assistants.


Activities of Business Range, Ahmedabad are

            Processing of returns
            Scrutiny of cases
            Search and Survey action
            Initiating prosecution
            Passing of orders raising the demand and Collection
            Current demand/Arrear collection
            Action on audit objections
            Verification of non-filers
            Giving effect to appellate/revision orders
            Preparation for appeal

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                                                                                        125
           Representing in appeal cases
           Redressal of grievances


The activities of the range and achievement expected of the range are decided through a
formal planning process that is top down 71. The targets are cascaded down based on
action plan for respective years and work of the range revolves mainly around meeting
the action plan targets, that can be categorized into Revenue and Non revenue related
(our clarification for purpose of analysis).


Primary data was collected from incumbents in the range, the topmost being
Commissioner (Business Range). Performance analysis of incumbents are given in the
following pages.




71
     Across levels there were concerns raised about top-down nature of target setting


                                                                                        126
                                                 Table 4.2 Performance analysis for Commissioner

                                                                  Commissioner 72 (Extrapolated)
                                                                                                                                Weightage (across years)
      Key Result Areas                   Measurement Unit         Standard             Reference      Evaluator       I         II      III      IV        V
                                                                                       Unit
 A    Individual Results                                                                                              10%       10%     20%      50%       50%
 1    Regular activities                                          E/A/NA/U 73
      a) Action Plan (Revenue)           Target v/s               Revenue              C’Ate          C. C.
                                         Achievement              collection 74
      b) Action Plan (Non Revenue)       Target v/s               % achieved           C’Ate          C. C.
                                         Achievement
      C) Grievances redressal            Processed                % achieved           C’Ate          C. C.
      (referred cases)                   successfully v/s
                                         received
 2    Quality of Result Achievement      Grievances about         Number (Trend)       C’Ate          C.C.
                                         range working
                                         Pendency level of        % of
                                         work                     cases/revenue        C’Ate          C.C.
                                         Confirmation of
                                         claims/demand in
                                         appeals 75
                                         Quality of work          Supervisor rating    Self           C.C.
 3    Internal Process Efficiency
      a) Procedure Adherence             Audit Observations       % Reduction          C’Ate          C. C.
                                                                  (Trend)
                                         Internal reporting       % reports in time

                                         Delays Caused            Qualitative

72
   Similar framework can be used for measuring Chief Commissioner performance also
73
   E- Exceeded A- Achieved NA- Not Achieved U- Unacceptable
74
   While implementing PRP, the fact that this their may be possibility for gaming happening (at all levels) should be kept in mind
75
   If objectively done, this can be a good indicator, but revenue bias in decisions may affect the figure




                                                                                                                                                           127
                                                            (Supervisor
                                                            rating)
        b) Customer Satisfaction      Measure of Quality     % increase over    C’Ate          IA
        (perception)                  of Service.           time
        c) Employee Satisfaction      Measure of             % increase over    C’Ate          IA
        (perception)                  Employee              time
                                      Satisfaction
4       Attendance & Punctuality of    Records              Minimum             C’Ate          C. C.
        Office                                              Standard
5       Supervision & Leadership      Supervisor Rating     Qualitative         Self           C. C.
                                      through PMS
6       Innovation and Contribution
        a) Collection Cost            Cost of Collection    Against CBDT        C’Ate          CBDT
                                                            average with
                                                            adjustments
        b) Coordination and Co-         Supervisor rating   Qualitative         Self           C.C.
        operation with other
        offices/peers
        c) Special                     Supervisor rating    Qualitative         Self           C.C.
        Achievements/Initiatives
        d) Education Programs/ PR      Number of programs   Attentive level,    C’Ate          C.C.
        initiatives (measure to widen                       subjective rating
        tax base)
    7   Subject Knowledge & Self       Knowledge level      Qualitative         Expected at this level, hence not included as a measure
        Improvement
B       Public Accountability
1       Public Service Delivery        Sevottam rating      No of ranges        C’Ate          IA             10%       10%       10%     10%   10%
        Quotient                                            rated (%)
C       Organizational Results (Chief Commissionerate)                                                                   20%       20%    20%   20%
1       Action Plan (Revenue)           Target v/s          Revenue             C.C’Ate        CBDT
                                       Achievement          collection
2       Action Plan (Non Revenue)      Target v/s           Other parameters    C.C’Ate        CBDT
                                       Achievement
D       Organizational Results (CBDT)                                                                         80%        60%      50%     20%   20%




                                                                                                                                                128
1   Action Plan (Revenue)       Target v/s    Revenue            CBDT   MOF, DOR
                                Achievement   Collection
2   Action Plan (Non Revenue)   Target v/s    Other parameters   CBDT   MOF, DOR
                                Achievement
                                                                        Total       100%   100%   100%   100%   100%
                                                                        (A+B+C+D)




                                                                                                                129
                        Table 4.3 Performance analysis for Additional/Joint Commissioner (Business Range)

                                                         Additional/Joint Commissioner (Business Range)
                                                                                                                 Weightage (across years)
    Key Result Areas                Measurement Unit           Standard            Reference   Evaluator    I     II        III       IV          V
                                                                                   Unit
A   Individual Results                                                                                     10%   10%      20%       50%           50%
1   Regular activities                                         E/A/NA/U
    a) Action Plan (Revenue)        Target V/S                 Revenue             Range       C
                                    Achievement                collection
    b) Action Plan (Non Revenue)    Target V/S                 % achieved          Range       C
                                    Achievement
    C) Grievances redressal         Processed                  % achieved          Range       C
    (referred cases for range)      successfully v/s
                                    received
2   Quality of Result Achievement   Grievances about           Number (Trend)      Range       C
                                    working
                                    Pendency of work           %                   Range       C
                                    Confirmation of            % cases/revenue     Range       C
                                    claims/demand in
                                    appeals
                                    Quality of work            Supervisor rating   Self        C
3   Internal Process Efficiency
    a) Procedure Adherence          Audit Observations          % Reduction        Range       C
                                                               (trend)
                                    Internal reporting         % reports in time
                                    Delays Caused              Qualitative
                                                               (Supervisor
                                                               rating)
    b) Customer Satisfaction        Measure of Quality of       % increase over    Range       IA
                                    Service.                   time
    c) Employee Satisfaction        Measure of Employee         % increase over    Range       IA
                                    Satisfaction               time




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4       Attendance & Punctuality of     Records                  Minimum             Range            C
        office                                                   Standard
5       Supervision & Leadership        Supervisor Rating        Qualitative         Self             C
                                        through PMS
6       Innovation and Contribution
        a) Collection Cost               Not advised to use this as an indicator because of wide differences different between ranges. For a commissionerate cost is
                                        expected to balance, hence suggested for commissioners and above
        b) Coordination and Co-         Supervisor rating         Qualitative          Self            C
        operation
        c) Special                      Supervisor rating        Qualitative          Self            C
        Achievements/Initiatives
        d) Education Programs/ PR       Number of programs       Attentive level,     Range           C
        initiatives (measure to widen                            subjective rating
        tax base)
7       Subject Knowledge & Self        Knowledge level          Qualitative          Self            C
        Improvement
B       Public Accountability
1       Public Service Delivery         Sevottam rating          Rating of the        Range           IA              10%       10%         10%        10%         10%
        Quotient                                                 office
C       Organizational Results (Commissionerate)                                                                                20%         20%        20%         20%
1       Action Plan (Revenue)           Target V/S               Revenue               C’Arte         C.C.
                                        Achievement              Collection

2       Action Plan (Non Revenue)       Target V/S               Other parameters     C’Arte          C.C.
                                        Achievement
D       Organizational Results (CBDT)                                                                                 80%       60%         50%        20%         20%
    1   Action Plan (Revenue)           Target V/S               Revenue              CBDT            MOF, DOR
                                        Achievement              Collection

    2   Action Plan (Non Revenue)       Target V/S               Other parameters     CBDT            MOF, DOR
                                        Achievement
                                                                                                      Total           100%      100%        100%       100%        100%
                                                                                                      (A+B+C+D)




                                                                                                                                                             131
                                  Table 4.4 Performance analysis for DCIT/ACIT/ITO (Business range)

                                                               DCIT/ACIT/ITO (Business Range)
                                                                                                                       Weightage (across years)
    Key Result Areas               Measurement Unit          Standard               Reference     Evaluator     I       II       III       IV          V
                                                                                    Unit
A   Individual Results                                                                                        10%      10%      20%       50%         50%
    Regular activities                                       E/A/NA/U
1
    a) Action Plan (Revenue)       Target v/s                Revenue collection     Circle/Ward   AC/JC
                                   Achievement
    b) Action Plan (Non            Target v/s                % achieved             Circle/Ward   AC/JC
    Revenue                        Achievement
    C) Grievances redressal        Processed successfully    % achieved             Circle/Ward   AC/JC
    (referred cases)               v/s received
2   Quality of Result              Grievances about          Number (Trend)         Circle/Ward   AC/JC
    Achievement                    working including
                                   Rectification petitions   %                      Circle/Ward   AC/JC
                                   Pendency of work          % Cash                 Circle/Ward
                                   Confirmation of           Number (Trend)         Circle/Ward   AC/JC
                                   claims/demand in
                                   appeals
                                   Quality of work           Supervisor rating      Self          AC/JC

3   Internal Process Efficiency
    a) Procedure Adherence         Audit Observations         % reduction (Trend)   Circle/Ward   AC/JC
                                                             Qualitative
                                   Internal reporting        % report in time
                                   Delays Caused             (Supervisor rating)
    b) Customer Satisfaction       Measure of Quality of     % increase over time   Circle/Ward   IA
                                   Service
    c) Employee Satisfaction       Measure of Employee       % increase over time   Circle/Ward   IA          Not recommended because of small unit
                                   Satisfaction




                                                                                                                                             132
4   Attendance & Punctuality of   Records             Minimum standard       Circle/Ward   AC/JC
    Office
5   Supervision & Leadership      Supervisor rating   Qualitative            Self          AC/JC
                                  through PMS
6   Innovation and Contribution
    a)Technology absorption       Computer and e-     % of computerization   Circle/Ward   AC/JC
                                  commerce use
    b)Special                     Supervisor rating   Qualitative            Self          AC/JC
    Achievements/Initiatives
7   Subject Knowledge & Self     Knowledge level      Qualitative            Self          AC/JC
    Improvement
B   Public Accountability
1   Public Service Delivery      Sevottam rating      Rating of the office   Range         IA          10%    10%    10%    10%     10%
    Quotient
C   Organizational Results (Range)                                                                            20%    20%    20%     20%
1   Action Plan (Revenue)       Target v/s            Revenue collection     Range         C
                                Achievement
2   Action Plan (Non Revenue)   Target v/s            Other parameters       Range         C
                                Achievement
D   Organizational Results (CBDT)                                                                      80%    60%    50%    20%     20%
1   Action Plan (Revenue)         Target v/s          Revenue Collection     CBDT          MOF, DOR
                                  Achievement
2   Action Plan (Non Revenue)     Target v/s          Other parameters       CBDT          MOF, DOR
                                  Achievement
                                                                                           Total       100%   100%   100%   100%    100%
                                                                                           (A+B+C+D)




                                                                                                                              133
                               Table 4.5 Performance analysis for Tax Recovery Officer (Business range)

                                                           Tax Recovery Officer (Business Range)
                                                                                                                     Weightage (across years)
    Key Result Areas              Measurement Unit             Standard               Reference    Evaluator    I      II       III      IV       V
                                                                                      Unit

A   Individual Results                                                                                         10%   10%      20%      50%       50%
1   Regular activities                                         E/A/NA/U
    a) Notices issued             Number of notices            PPS                    Range        A.C./J.C.

    b) Attachment order issued    Numbers                      PPS                    Range        A.C./J.C.
    d) Recovery effected          Target v/s Achievement       % achieved (revenue)   Range        A.C./J.C.
                                  (Revenue)
2   Quality of Result             Grievances/complaints        Number (Trend)         Range        A.C./J.C.
    Achievement                   about work
                                                                                      Range        A.C./J.C.
                                  Pendency levels              % pending
                                                                                      Self         A.C./J.C.
                                  Quality of work              Supervisor rating
3   Internal Process Efficiency
    a) Procedure Adherence        Audit Observations           % reduction (Trend)    Range        A.C./J.C.
                                                               Qualitative
                                  Internal reporting           % report in time
                                  Delays Caused                Supervisor rating
    b) Customer Satisfaction      Measure of Customer          % increase over time   Range        A.C./J.C.
                                  Satisfaction
4   Attendance & Punctuality       Records                     Minimum Standard       Range        A.C./J.C.
5   Supervision & Leadership      Supervisor rating through    Qualitative            Self         A.C./J.C.
                                  PMS
6   Innovation and Contribution
    a) Performance in auctions    Maximum value                Supervisor rating      Self         A.C./J.C.
    b) Special                    Supervisor rating            Qualitative            Self         A.C./J.C.
    Achievements/Initiatives




                                                                                                                                           134
7   Subject Knowledge & Self   Knowledge level          Qualitative            Self     A.C./J.C.
    Improvement
B   Public Accountability
1   Public Service Delivery    Sevottam rating          Rating of the office   Range    IA          10%    10%    10%    10%     10%
    Quotient
C   Organizational Results (Commissionerate)                                                               20%    20%    20%     20%
1   Action Plan (Revenue)      Target v/s Achievement   Revenue Collection     C’Arte   C.C.
2   Action Plan (Non Revenue)  Target v/s Achievement   Other parameters       C’Arte   C.C.
D   Organizational Results                                                                          80%    60%    50%    20%     20%
    (CBDT)
1   Action Plan (Revenue)      Target v/s Achievement   Revenue Collection     CBDT     MOF, DOR
2   Action Plan (Non Revenue)  Target v/s Achievement   Other parameters       CBDT     MOF, DOR
                                                                                        Total       100%   100%   100%   100%    100%
                                                                                        (A+B+C+D)




                                                                                                                           135
                                      Table 4.6 Performance analysis for Inspector (Business range)

                                                                Inspector (Business Range)
                                                                                                                 Weightage (across years)
    Key Result Areas                Measurement Unit        Standard       Reference    Evaluator           I     II       III       IV       V
                                                                           Unit
A   Individual Results                                                                                     10%   10%     20%      50%       50%
1   Regular activities                                      E/A/NA/U
    a) Processing of returns and    Number of returns       PPS or         Self         A.O/Supervisor
    subsequent actions              processed               Supervisor
                                                            rating
    b) Assisting AO in search and   Number of searches      PPS or         Self         A.O./ Supervisor
    seizure                         participated/assisted   Supervisor
                                                            rating
    c) Contribution to revenue      Actual revenue          Trend          Self         A.O./Supervisor
                                    realized (without
                                    claims)
    d) Successful completion of     Target v/s              Supervisor     Self         A.O./ Supervisor
    work assigned (in time)         Achievement             rating
2   Quality of Result               Pendency levels of      %              Self         A.O./ Supervisor
    Achievement                     different areas

                                    Daily diary upkeep      % compliance

                                    Rectification           Number
                                    petitions/appeals/com   (Trend)
                                    plaints
                                    Quality of work         Supervisor
                                                            rating
3   Attendance & Punctuality        Records                 Minimum        Self         A.O./ Supervisor
                                                            Standard
4   Availability for work           Behavioral              Critical       Self         A.O./ Supervisor
                                                            Incidents




                                                                                                                                            136
 5      Dependability for work           Behavioral               Critical           Self       A.O./ Supervisor
                                                                  Incidents
 6      Subject Knowledge & Self         Knowledge level          Qualitative        Self       A.O./ Supervisor
        Improvement
 7      Proficiency in computer          Qualitative              Supervisor         Self       A.O./ Supervisor
        applications and software                                 rating
                                         Certification            Pass certificate
                                                                  with periodic
                                                                  revalidation
 B      Public Accountability
 1      Public Service Delivery      Sevottam rating              Rating of the      Range      IA                 10%    10%    10%    10%    10%
        Quotient                                                  office (Range)
 C      Organizational Results (Range)                                                                                    20%    20%    20%    20%
 1      Action Plan (Revenue)        Target V/S                   Revenue            Range 76   C
                                     Achievement                  collection
 2      Action Plan (Non Revenue)    Target V/S                   Other              Range      C
                                     Achievement                  parameters
 D      Organizational Results (CBDT)                                                                              80%    60%    50%    20%    20%
 1      Action Plan (Revenue)        Target V/S                   Revenue            CBDT       MOF, DOR
                                     Achievement                  Collection
 2      Action Plan (Non Revenue)    Target V/S                   Other              CBDT       MOF, DOR
                                     Achievement                  parameters
                                                                                                Total              100%   100%   100%   100%   100%
                                                                                                (A+B+C+D)




76
     Impact of inspector’s work will be felt in the Range’s performance




                                                                                                                                               137
                          Table 4.7 Performance analysis for Senior/Junior Tax Assistant (Business range)


                                                            Senior/Junior Tax Assistant (Business Range)
                                                                                                                          Weightage (across years)
    Key Result Areas               Measurement Unit             Standard             Reference   Evaluator           I     II       III       IV      V
                                                                                     Unit
A   Individual Results                                                                                              10%   10%     20%      50%       50%
1   Regular activities                                          E/A/NA/U
    a) Assisting AO in assessing   Returns processed/data       PPS or               Self        A.O./ Supervisor
    returns and data entry         entered                      Supervisor rating
    b) Assisting AO in scrutiny    Numbers                      PPS or               Self        A.O./ Supervisor
    of cases                                                    Supervisor rating
    c) Maintenance of various      Number of registers/files    %                    Self        A.O./ Supervisor
    registers/files                maintained (regularly
                                   updated)
    d) Completion of other work    Target v/s Achievement       Supervisor           Self        A.O./ Supervisor
    assigned (in time)                                          satisfaction
                                                                (revenue)
2   Quality of Result              Pendency levels              %                    Self        A.O./ Supervisor
    Achievement                    Quality of work              Supervisor rating
3   Attendance & Punctuality       Records                      Minimum              Self        A.O./ Supervisor
                                                                standard
4   Availability for work          Behavioral                   Critical Incidents   Self        A.O./ Supervisor
5   Dependability for work         Behavioral                   Critical Incidents   Self        A.O./ Supervisor
6   Subject Knowledge & Self       Knowledge level              Supervisor rating    Self        A.O./ Supervisor
    Improvement
7   Proficiency in computer        Qualitative                  Supervisor rating    Self        A.O./ Supervisor
    applications and software
                                   Certification                Pass certificate
                                                                with periodic
                                                                revalidation
B   Public Accountability




                                                                                                                                               138
1   Public Service Delivery     Sevottam rating          Rating of the      R      IA          10%    10%    10%    10%     10%
    Quotient                                             office (Range)
C   Organizational Results (Range)                                                                    20%    20%    20%     20%
1   Action Plan (Revenue)       Target v/s Achievement    Revenue           R      C
                                                         collection

2   Action Plan (Non Revenue)   Target v/s Achievement   Other parameters   R      C
D   Organizational Results (CBDT)                                                              80%    60%    50%    20%     20%

1   Action Plan (Revenue)       Target v/s Achievement   Revenue            CBDT   MOF, DOR
                                                         Collection
2   Action Plan (Non Revenue)   Target v/s Achievement   Other parameters   CBDT   MOF, DOR
                                                                                   Total       100%   100%   100%   100%    100%
                                                                                   (A+B+C+D)




                                                                                                                      139
II     Commissionerate of Income Tax (TDS Range Bangalore)


The TDS Range, Bangalore is headed by Additional Commissioners supported by one
Deputy and two Assistant Commissioners. The department strength includes four Income
Tax officers and one Tax recovery officer. Further range is supported by Inspectors and
Tax Assistants.


Functioning of TDS Range Bangalore
       Processing of TDS statements
       Analyzing the mismatches
       Issue of show-cause notice
       Analyze the reply and passing the order
       Raising the demand and Collection
       Initiating penalty
       Levying penalty
       Initiating prosecution
       TDS Enquiry
       Verification/inspection/survey
       TDS Statement scrutiny
       Passing of orders
       Current demand/Arrear collection
       Action on Audit objections
       De-duplication of TAN
       Verification of non-filers
       Giving effect to appellate/revision orders
       Issue of TDS refunds
       Attending to rectification applications
       Preparation for appeal
       Representing in Appeal cases
       Redressal of grievances
       Taxpayer Education Programmes


                                                                                     140
Primary data was collected from incumbents in the department, the topmost being
Additional Commissioner. Performance analysis of incumbents is given in the following
pages.




                                                                                  141
                           Table 4.8 Performance analysis for Additional/Joint Commissioner (TDS range)

                                                         Additional/Joint Commissioner (TDS Range)
                                                                                                                Weightage (across years)
    Key Result Areas                Measurement Unit         Standard            Reference   Evaluator   I     II       III        IV          V
                                                                                 Unit
A   Individual Results                                                                                   10%   10%       20%       50%         50%
1   Regular activities                                       E/A/NA/U
    a) Action Plan (Revenue)        Target v/s               Revenue             Range       C
                                    Achievement              collection
    b) Action Plan (Non Revenue)    Target v/s               % achieved          Range       C
                                    Achievement
    C) Grievances redressal         Processed                % achieved          Range       C
    (referred cases to range)       successfully v/s
                                    received
2   Quality of Result Achievement   Grievances about         Number (Trend)      Range       C
                                    range working
                                    Pendency of work         %                   Range       C
                                    Confirmation of
                                    claims/demand in         % of
                                    appeals                  cases/revenue       Range       C

                                    Quality of work          Supervisor rating   Self
                                                                                             C
3   Internal Process Efficiency
    a) Procedure Adherence          Audit Observations        % Reduction        Range       C
                                                             (trend)
                                    Internal reporting       % reports in time
                                    Delays Caused            Qualitative
                                                             (Supervisor
                                                             rating)
    b) Customer Satisfaction        Measure of Quality of    % increase over     Range       IA
                                    Service.                 time




                                                                                                                                         142
    c) Employee Satisfaction        Measure of Employee      % increase over    Range           IA
                                    Satisfaction            time
4   Attendance & Punctuality of     Records                 Minimum             Range           C
    Office                                                  standard
5   Supervision & Leadership        Supervisor rating       Qualitative         Self            C
                                    through PMS
6   Innovation and Contribution
    a) Collection Cost              Not advised to use this as an indicator because of wide differences between ranges. For a Commissionerate it balances out.
    b) Coordination and Co-         Supervisor rating        Qualitative          Self            C
    operation with other
    offices/peers
    c) Education Programs/ PR       Number of programs      Attentive level,     Range          C
    initiatives (measure to widen                           subjective rating
    tax base)
    d) Special                      Supervisor rating       Qualitative          Self           C
    Achievements/Initiatives
7   Subject Knowledge & Self        Knowledge level         Qualitative          Self           C
    Improvement
B   Public Accountability
1   Public Service Delivery         Sevottam rating         Rating of the        Range          IA              10%        10%        10%        10%         10%
    Quotient                                                office
C   Organizational Results (Commissionerate)                                                                               20%        20%        20%             20%

1   Action Plan (Revenue)           Target v/s              Revenue              C’Arte         C.C.
                                    Achievement             Collection

2   Action Plan (Non Revenue)       Target v/s              Other parameters     C’Arte         C.C.
                                    Achievement
D   Organizational Results (CBDT)                                                                               80%        60%        50%        20%             20%
1   Action Plan (Revenue)         Target v/s                Revenue              CBDT           MOF, DOR
                                  Achievement               Collection
2   Action Plan (Non Revenue)     Target v/s                Other                CBDT           MOF, DOR
                                  Achievement               parameters
                                                                                                Total           100%       100%       100%       100%        100%
                                                                                                (A+B+C+D)




                                                                                                                                                       143
                                  Table 4.9 Performance analysis for DCIT/ACIT/ITO (TDS range)

                                                               DCIT/ACIT/ITO (TDS Range)
                                                                                                                      Weightage (across years)
    Key Result Areas              Measurement Unit         Standard               Reference     Evaluator   I        II      III       IV           V
                                                                                  Unit
A   Individual Results                                                                                      10%      10%      20%       50%         50%
    Regular activities                                     E/A/NA/U
1
    a) Action Plan (Revenue)      Target v/s               Revenue collection     Circle/Ward   AC/JC
                                  Achievement
    b) Action Plan (Non           Target v/s               % achieved             Circle/Ward   AC/JC
    Revenue)                      Achievement
    C) Grievances redressal       Processed successfully   % achieved             Circle/Ward   AC/JC
    (referred cases)              v/s received
2   Quality of Result             Grievances about         Number (Trend)         Circle/Ward   AC/JC
    Achievement                   working
                                  Pendency level           %
                                  Confirmation of          % of cases/revenue     Circle/Ward   AC/JC
                                  claims/demand in
                                  appeals
                                  Quality of work          Supervisor rating      Self          AC/JC
3   Internal Process Efficiency
    a) Procedure Adherence        Audit Observations       % reduction (Trend)    Circle/Ward   AC/JC
                                  Internal reporting       % reports in time
                                  Delays Caused            Qualitative
                                                           (Supervisor rating)
    b) Customer Satisfaction      Measure of Quality of    % increase over time   Circle/Ward   IA
                                  Service
    c) Employee Satisfaction      Measure of Employee      % increase over time   Circle/Ward   IA          Not recommended because of small unit
                                  Satisfaction
4   Attendance & Punctuality of   Records                  Minimum standard       Circle/Ward   AC/JC
    office




                                                                                                                                           144
5   Supervision & Leadership        Supervisor Rating      Qualitative            Self          AC/JC
                                    through PMS
6   Innovation and Contribution
    a) Education Programs/ PR       Number of              Attendance levels,     Circle/Ward   AC/JC
    initiatives (measure to widen   programs/participate   subjective rating
    tax base)
    b) Coordination and Co-         Supervisor rating      Qualitative            Self          AC/JC
    operation with other
    offices/peers
    c)Special                       Supervisor rating      Qualitative            Self          AC/JC
    Achievements/Initiatives
    d) Technology absorption        Use of IT/e-commerce   % of usage
7   Subject Knowledge & Self     Knowledge level           Qualitative            Self          AC/JC
    Improvement
B   Public Accountability
1   Public Service Delivery      Sevottam rating           Rating of the office   Range         IA          10%    10%    10%    10%     10%
    Quotient
C   Organizational Results (Range)                                                                                 20%    20%    20%     20%
1   Action Plan (Revenue)       Target v/s                 Revenue collection     Range         C
                                Achievement
2   Action Plan (Non Revenue)   Target v/s                 Other parameters       Range         C
                                Achievement
D   Organizational Results (CBDT)                                                                           80%    60%    50%    20%     20%
1   Action Plan (Revenue)           Target v/s             Revenue Collection     CBDT          MOF, DOR
                                    Achievement
2   Action Plan (Non Revenue)       Target v/s             Other parameters       CBDT          MOF, DOR
                                    Achievement
                                                                                                Total       100%   100%   100%   100%    100%
                                                                                                (A+B+C+D)




                                                                                                                                   145
                                  Table 4.10 Performance analysis for Tax Recovery Officer (TDS Range)

                                                                Tax Recovery Officer (TDS Range)
                                                                                                                       Weightage (across years)
    Key Result Areas                Measurement Unit              Standard               Reference   Evaluator   I     II      III       IV        V
                                                                                         Unit

A   Individual Results                                                                                           10%   10%      20%      50%       50%
1   Regular activities                                            E/A/NA/U
    a) Notices issued               Number of notices             PPS                    Range       A.C./J.C.
    b) Attachment orders issued     Numbers                       PPS                    Range       A.C./J.C.
    d) Recovery effected            Target v/s Achievement        % achieved
                                    (Revenue)                     Amount
2   Quality of Result               Grievances/complaints         Number (Trend)         Range       A.C./J.C.
    Achievement                     about work
                                                                                         Range       A.C./J.C.
                                    Pendency levels               % pending
                                                                                         Self        A.C./J.C.
                                    Quality of work               Supervisor rating
3   Internal Process Efficiency
    a) Procedure Adherence          Audit Observations            % reduction (Trend)    Range       A.C./J.C.
                                                                  Qualitative
                                    Internal reporting            % report in time
                                    Delays Caused                 (Supervisor rating)
    b) Customer Satisfaction        Measure of Customer           % increase over time   Range       A.C./J.C.
                                    Satisfaction
4   Attendance & Punctuality         Records                      Minimum Standard       Range       A.C./J.C.
5   Supervision & Leadership        Supervisor rating through     Qualitative            Self        A.C./J.C.
                                    PMS
6   Innovation and Contribution
    a) Performance in auctions      Maximum value                 Supervisor rating      Self        A.C./J.C.
    b) Special                      Supervisor rating             Qualitative            Self        A.C./J.C.
    Achievements/Initiatives
7   Subject Knowledge & Self        Knowledge level               Qualitative            Self        A.C./J.C.




                                                                                                                                             146
    Improvement
B   Public Accountability
1   Public Service Delivery    Sevottam rating           Rating of the office   Range    IA          10%    10%    10%    10%     10%
    Quotient
C   Organizational Results (Commissionerate)                                                                20%    20%    20%     20%
1   Action Plan (Revenue)       Target v/s Achievement   Revenue Collection     C’Arte   C.C.
2   Action Plan (Non Revenue)   Target v/s Achievement   Other parameters       C’Arte   C.C.
D   Organizational Results (CBDT)                                                                    80%    60%    50%    20%     20%
1   Action Plan (Revenue)      Target v/s Achievement    Revenue Collection     CBDT     MOF, DOR
2   Action Plan (Non Revenue)  Target v/s Achievement    Other parameters       CBDT     MOF, DOR
                                                                                         Total       100%   100%   100%   100%    100%
                                                                                         (A+B+C+D)




                                                                                                                            147
                                       Table 4.11 Performance analysis for Inspector (TDS Range)

                                                                 Inspector (TDS Range)
                                                                                                                   Weightage (across years)
    Key Result Areas               Measurement Unit        Standard       Reference      Evaluator          I     II      III        IV       V
                                                                          Unit
A   Individual Results                                                                                      10%   10%      20%      50%       50%
1   Regular activities                                     E/A/NA/U
    a) Processing of returns and   Number of returns       PPS or         Self           A.O/Supervisor
    subsequent actions             processed               Supervisor
                                                           rating
    b) Assisting AO in search      Number of searches      PPS or         Self           A.O./ Supervisor
    and seizure                    participated/assisted   Supervisor
                                                           rating
    c) Contribution to revenue     Actual revenue          Achievement    Self           A.O./Supervisor
                                   realized                or (trend)


    d) Successful completion of    Target V/S              Supervisor     Self           A.O./ Supervisor
    work assigned (in time)        Achievement             rating

2   Quality of Result              Work pendency levels    %              Self           A.O./ Supervisor
    Achievement                    of different areas

                                   Daily diary upkeep      % compliance

                                   Rectification           Number
                                   petitions/appeals/com   (Trend)
                                   plaints
                                   Quality of work         Supervisor
                                                           rating
3   Attendance & Punctuality       Records                 Minimum        Self           A.O./ Supervisor
                                                           Standard
4   Availability for work          Behavioral              Critical       Self           A.O./ Supervisor
                                                           Incidents




                                                                                                                                              148
 5       Dependability for work          Behavioral               Critical           Self         A.O./ Supervisor
                                                                  Incidents
 6       Subject Knowledge & Self        Knowledge level          Qualitative        Self         A.O./ Supervisor
         Improvement
 7       Proficiency in computer         Qualitative              Supervisor         Self         A.O./ Supervisor
         applications and software                                rating
                                         Certification            Pass certificate
                                                                  with periodic
                                                                  revalidation
 B       Public Accountability
 1       Public Service Delivery     Sevottam rating              Rating of the      Range        IA                 10%    10%    10%    10%    10%
         Quotient                                                 office (Range)
 C       Organizational Results (Range)                                                                                     20%    20%    20%    20%
                                                                                             77
 1       Action Plan (Revenue)      Target V/S                    Revenue            Range        C
                                    Achievement                   collection
 2       Action Plan (Non Revenue)  Target V/S                    Other              Range        C
                                    Achievement                   parameters
 D       Organizational Results (CBDT)                                                                               80%    60%    50%    20%    20%
 1       Action Plan (Revenue)           Target V/S               Revenue            CBDT         MOF, DOR
                                         Achievement              Collection
 2       Action Plan (Non Revenue)       Target V/S               Other              CBDT         MOF, DOR
                                         Achievement              parameters
                                                                                                  Total              100%   100%   100%   100%   100%
                                                                                                  (A+B+C+D)




77
     Impact of inspector’s work will be felt in the Range’s performance




                                                                                                                                                 149
                             Table 4.12 Performance analysis for Senior/Junior Tax Assistant (TDS Range)


                                                               Senior/Junior Tax Assistant (TDS Range)
                                                                                                                                Weightage (across years)
    Key Result Areas               Measurement Unit              Standard             Reference   Evaluator          I         II      III        IV       V
                                                                                      Unit
A   Individual Results                                                                                                   10%   10%      20%      50%       50%
1   Regular activities                                           E/A/NA/U
    a) Assisting AO in assessing   Returns processed/data        PPS or               Self        A.O./ Supervisor
    returns and data entry         entered                       Supervisor rating
    b) Assisting AO in scrutiny    Numbers                       PPS or               Self        A.O./ Supervisor
    of cases                                                     Supervisor rating
    c) Maintenance of various      Number of registers/files     %                    Self        A.O./ Supervisor
    registers/files                Maintained (regularly
                                   updated)
    d) Completion of other work    Target v/s Achievement        Supervisor           Self        A.O./ Supervisor
    assigned (in time)                                           satisfaction
                                                                 (revenue)
2   Quality of Result              Pendency levels               %                    Self        A.O./ Supervisor
    Achievement                    Quality of work               Supervisor rating
3   Attendance & Punctuality       Records                       Minimum              Self        A.O./ Supervisor
                                                                 standard
4   Availability for work          Behavioral                    Critical Incidents   Self        A.O./ Supervisor
5   Dependability for work         Behavioral                    Critical Incidents   Self        A.O./ Supervisor
6   Subject Knowledge & Self       Knowledge level               Supervisor rating    Self        A.O./ Supervisor
    Improvement
7   Proficiency in computer        Qualitative                   Supervisor rating    Self        A.O./ Supervisor
    applications and software
                                   Certification                 Pass certificate
                                                                 with periodic
                                                                 revalidation




                                                                                                                                                     150
B   Public Accountability
1   Public Service Delivery     Sevottam rating          Rating of the      R      IA          10%    10%    10%    10%     10%
    Quotient                                             office (Range)
C   Organizational Results (Range)                                                                    20%    20%    20%     20%
1   Action Plan (Revenue)       Target v/s Achievement   Revenue            R      C
                                                         collection
2   Action Plan (Non Revenue)   Target v/s Achievement   Other parameters   R      C
D   Organizational Results (CBDT)                                                              80%    60%    50%    20%     20%

1   Action Plan (Revenue)       Target v/s Achievement   Revenue            CBDT   MOF, DOR
                                                         Collection
2   Action Plan (Non Revenue)   Target v/s Achievement   Other parameters   CBDT   MOF, DOR
                                                                                   Total       100%   100%   100%   100%    100%
                                                                                   (A+B+C+D)




                                                                                                                      151
Director General (Investigation), Delhi

The department is headed by Director General Investigation. The units and sub units in
the office are headed by Additional/Joint Director and Deputy/Assistant Director
respectively. They are further supported by income tax officers, inspectors and tax
assistants. The department draws on resources (particularly people) from other offices in
the search and seizure operations.


Functioning of Investigation office, Delhi 78

The Director General of Income Tax (Investigation) performs the following functions:
       1. Supervision and control over the Directors of Income Tax (Investigation),
           Commissioners of Income Tax (Central) and Commissioner of Income Tax (CIB).
           In Mumbai and Delhi, CCIT (Central) exercises control over CIT (Central).
       2. Fixing of overall sanctioned strength of each Directorate, CIT (CIB) and Central
           Circle.
       3. Selection of officers up to the level of Addl./Joint DIT in consultation with cadre
           controlling Chief Commissioner of Income Tax (Central).
       4. Computerization


Primary data was collected from incumbents in the department, the topmost being
Director (Investigation). Performance analysis of an incumbent is given in the following
pages.




78
     Manual of office procedure, Directorate of Income Tax, 2003


                                                                                         152
                                           Table 4.13 Performance analysis for Director (Investigation)

                                                                     Director 79 (Investigation)
                                                                                                                          Weightage (across years)
        Key Result Areas              Measurement Unit        Standard          Reference          Evaluator   I         II       III       IV        V
                                                                                Unit
 A      Individual Results                                                                                         10%   10%      20%       50%       50%
 1      Regular activities                                    E/A/NA/U
        a) Number of search and       Numbers                 Variable (Trend   D’Ate (I)          DG (I)
        surveys ordered/executed                              based
                                                              projections)
        b) Quantum of Revenue         a)Unearthed b) Seized   Revenue earned    D’Ate (I)          DG (I)
        recovered                     c) Voluntary            Focus more on
                                      Disclosed               (c) ∗∗
        c) Number of TEP’s            Number of TEPs          %                 D’Ate (I)          DG (I)
        disposed                      disposed v/s received
        d) Reports approved           Numbers                 Supervisor        D’Ate (I)          DG (I)
        (appraisal and others)                                rating
        e) Facilitating               Success rate            Supervisor        Self               DG (I)
        informer/officials involved                           rating
 2      Quality of Result             Grievances/complaints   Number (Trend)    D’Ate (I)          DG (I)
        Achievement                   about units/sub units
                                      Confirmation of         % revenue         D’Ate (I)
                                      findings by AO          confirmed
                                      Quality of work         Supervisor        Self
                                                              rating
 3      Internal Process Efficiency
        a) Procedure Adherence        Audit Observations      Reduction (%)     D’Ate (I)          DG (I)
                                      Internal reporting      % reporting in
                                                              time

79
     Similar framework can be used for measuring Director General performance also




                                                                                                                                                     153
        b) Search party satisfaction   Satisfaction levels      Reward               D’Ate (I)        DG (I)
        (perception) 80                                         distribution
                                                                % increase
                                                                satisfaction level
        c) Employee Satisfaction       Measure of Employee      % increase over      D’Ate (I)        DG (I)
                                       Satisfaction             time
 4      Attendance & Punctuality       Records                  Minimum              D’Ate (I)        DG (I)
        of office                                               Standard
 5      Supervision & Leadership     Supervisor Rating          Qualitative          Self             DG (I)
                                     through PMS
 6      Innovation and Policy Contribution
        a) Coordination and Co-      Qualitative                Supervisor           Self             DG (I)
        operation with other         Observation                satisfaction
        offices
        b) Focus on target groups    Against                    % covered            Self             DG (I)
                                     targets/instruction
        c) Special                   Supervisor rating          Qualitative          Self             DG (I)
        Achievements/Initiative
 7      Subject Knowledge & Self Knowledge level                Qualitative          Expected as prerequisite at this level, hence not included as measure
        Improvement
 B      Public Accountability
 1      Public Service Delivery      Sevottam Rating            Rating of the        D(I)             IA                10%        10%       10%       10%   10%
        Quotient                                                office
 C      Organizational Results (DG Investigation)                                                                                  20%       20%       20%   20%
 1      Search and surveys           Number of searches         Trend                D G (I)           CBDT
        conducted (All over India) conducted
                                     Total revenue              Trend
                                     unearthened and spot
                                     collection
 2      Number of TEP disposed        Number of TEP             % achieved           D G (I)           CBDT
        successfully (total)         disposed/received



80
     This information will have to be collected separately from those involved in search.




                                                                                                                                                             154
3   Satisfaction levels about  Number of               % reduction   D G (I)   CBDT
    search                     grievances/complaints
                               received and found
                               correct
D   Organizational Results (Board)                                                         80%    60%    50%    20%    20%

1   Action Plan (Revenue)       Target v/s              Revenue      CBDT      MOF, DOR
                                Achievement            Collection
2   Action Plan (Non            Target v/s             Other         CBDT      MOF, DOR
    Revenue)                    Achievement            parameters
                                                                               Total       100%   100%   100%   100%   100%
                                                                               (A+B+C+D)




                                                                                                                       155
                                 Table 4.14 Performance analysis for Additional/Joint Director (Investigation)

                                                              Additional/Joint Director (Investigation)
                                                                                                                                 Weightage (year)
        Key Result Areas                Measurement Unit            Standard             Reference        Evaluator   I     II       III     IV       V
                                                                                         Unit
A       Individual Results                                                                                            10%   10%      20%     50%      50%
1       Regular activities                                          E/A/NA/U
        a) Search and surveys           Number completed            Trend or %           Unit             D (I)
                                                                    executed
        b) Quantum of revenue           a)Unearthed b) Seized c)    Actual collection    Unit             DG (I)
        recovered                       Voluntary Disclosed         Focus more on
                                                                    (c)
        c) Gathering information for    Qualitative                 Usefulness and       Self             D (I)
        search/survey                                               timeliness
        d) Number of TEP’s disposed     Receipt v/s disposal        % processed          Unit             D (I)
    2   Quality of Result Achievement   Grievances/complaints       Number (Trend)       Unit             D(I)
                                        about unit/sub unit

                                        Pendency levels of          %                    Unit
                                        different areas
                                        Confirmation of report by   % of revenue         Unit
                                        AO                          confirmed
                                        Quality of work             Supervisor           Self
                                                                    satisfaction
3       Internal Process Efficiency
        a) Procedure Adherence          Audit Observations          Reduction (%)        Unit             D(I)
                                        Internal reporting          % reporting in
                                                                    time
        b) Search party satisfaction    Satisfaction levels         % increase           Unit             D (I)
        (perception)                                                satisfaction level
                                                                    Reward
                                                                    distribution
        c) Employee Satisfaction        Measure of Employee          % increase          Unit             IA
                                        Satisfaction




                                                                                                                                                156
4       Attendance & Punctuality of          Records                    Minimum            Unit      D (I)
        office                                                          standard
5       Supervision & Leadership for      Supervisor rating of          Qualitative        Self      D (I)
        Team                              demonstrated abilities
    6   Innovation and Policy Contribution
        a) Coordination and Co-           Supervisor rating             Qualitative        Self      D (I)
        operation with other offices
        b) Focus on target groups         Against targets/instruction   % covered          Self      D (I)
        c) Special                      Supervisor rating               Qualitative        Self      D (I)
        Achievements/Initiative
    7   Subject Knowledge & Self        Knowledge level                 Qualitative        Self      D (I)
        Improvement
B       Public Accountability
1       Public Service Delivery         Sevottam rating                 Rating of the      Unit      IA          10%    10%    10%    10%     10%
        Quotient                                                        office
C       Organizational Results (Directorate)                                                                            20%    20%    20%     20%
1       Search and surveys conducted    Number of searches              Trend              D G (I)   CBDT
        (All over India)                conducted
                                        Total revenue unearthened       Trend
                                        and spot collection
2       Number of TEP disposed           Number of TEP                  % achieved         D G (I)   CBDT
        successfully (total)            disposed/received

3       Satisfaction level about search   Number of                     % reduction        D G (I)   CBDT
                                          grievances/complaints
                                          received and found correct
D       Organizational Results (Board)                                                                           80%    60%    50%    20%     20%
1       Action Plan (Revenue)          Target v/s Achievement           Revenue            CBDT      MOF, DOR
                                                                        Collection
2       Action Plan (Non Revenue)         Target v/s Achievement        Other parameters   CBDT      MOF, DOR

                                                                                                     Total       100%   100%   100%   100%    100%
                                                                                                     (A+B+C+D)




                                                                                                                                        157
                                 Table 4.15 Performance analysis for Deputy/Assistant Director (Investigation)

                                                               Deputy/Assistant Director (Investigation)
                                                                                                                           Weightage (across years)
        Key Result Areas                 Measurement Unit         Standard         Reference         Evaluator       I      II       III       IV      V
                                                                                   Unit
A       Individual Results                                                                                           10%    10%      20%      50%      50%
1       Regular activities                                        E/A/NA/U
        a) Search and surveys            Numbers conducted        Numbers          S.U.              A.D./J.D. (I)
        conducted successfully                                    (trend based)
        b) Quantum of revenue            a)Unearthed b) Seized    Revenue          S.U.              DG (I)
        recovered                        c) Voluntary Disclosed   unearthed
                                                                  Focus more on
                                                                  (c)
        c) Gathering information (pre-   Number of cases          Number of        S.U.              A.D./J.D. (I)
        search enquiry)                  perused                  successful
                                                                  cases
        d) Number of TEP’s disposed      Total cases v/s          % processed      S.U.              A.D./J.D. (I)
                                         processed
        e) Number of appraisal reports   Numbers                  % confirmed      S.U.              A.D./J.D. (I)
        prepared
    2   Quality of Results               Grievances/complaints    Number           S.U.              A.D./J.D. (I)
        Achievement                      about sub-unit           (Trend)

                                         Pendency levels of       %                S.U.
                                         different areas
                                         Quality of work          Supervisor       Self
                                                                  rating
    3   Internal Process Efficiency
        a) Procedure Adherence           Audit Observations       %                S.U.              A.D./J.D.(I)

                                         Internal reporting       % reports in
                                                                  time
        b) Search party satisfaction     Satisfaction levels      Reward            S.U.             A.D./J.D. (I)




                                                                                                                                                 158
         (perception)                                                 distribution
                                                                      % increase
                                                                      satisfaction
                                                                      level
         c) Employee Satisfaction          Measure of Employee        % increase      S.U.      IA
                                           Satisfaction
 4       Attendance & Punctuality of       Records                    Minimum         S.U.      A.D./J.D. (I)
         staff                                                        Standard

 5       Supervision & Leadership for      Supervisor Rating of       Qualitative     Self      A.D./J.D. (I)
         Team                              demonstrated abilities
 6       Innovation and Policy Contribution
         a) Coordination and Co-          Supervisor rating           Qualitative     Self      A.D./J.D. (I)
         operation with other offices
         b) Special                       Supervisor rating           Qualitative     Self      A.D./J.D. (I)
         Achievements/Initiative
 7       Subject Knowledge & Self         Knowledge level             Qualitative     Self      D(I)
         Improvement
 B       Public Accountability
 1       Public Service Delivery          Sevottam rating             Rating of the   S.U.      IA              10%   10%   10%   10%         10%
                                                                      office
 C       Organizational Results (Directorate) 81                                                                      20%   20%   20%         20%
 1       Search and surveys conducted    Number of searches           Trend           D G (I)   CBDT
         (All over India)                conducted
                                         Total revenue                Trend
                                         unearthened and spot
                                         collection
 2       Number of TEP disposed           Number of TEP               % achieved      D G (I)   CBDT
         successfully (total)            disposed/received
 3       Satisfaction level about search Number of                    % reduction     D G (I)   CBDT
                                         grievances/complaints
                                         received and found
                                         correct

81
     Directorate will be a better indicator for measuring aggregate performance.




                                                                                                                                        159
D   Organizational Results (Board)                                               80%    60%    50%    20%         20%
1   Action Plan (Revenue)          Target v/s    Revenue      CBDT   MOF, DOR
                                   Achievement   Collection
2   Action Plan (Non Revenue)      Target v/s    Revenue      CBDT   MOF, DOR
                                   Achievement   Collection
                                                                     Total       100%   100%   100%   100%        100%
                                                                     (A+B+C+D)




                                                                                                            160
                                 Table 4.16 Performance analysis for Income Tax Officer (Investigation)

                                                            Income Tax Officer (Investigation)
                                                                                                                     Weightage (year)
     Key Result Areas              Measurement          Standard             Reference    Evaluator       I     II       III      IV    V
                                   Unit                                      Unit

A    Individual Results                                                                                   10%   10%      20%      50%   50%
 1   Regular activities                                 E/A/NA/U
     a) Assisting search and       Numbers              PPS                  Self         A.D./J.D. (I)
     surveys
     b) Gathering information      Number of cases      PPS                  Self         A.D./J.D. (I)
                                   perused
     c) Number of (Y&Z             Target v/s           %                    Self         A.D./J.D. (I)
     categories) TEP processed     Achievement
     and accepted
     d) Number of appraisal        Numbers              PPS                  Self         A.D./J.D. (I)
     reports prepared
     e) Completion of other work   Target v/s           Qualitative          Self         A.D./J.D. (I)
     assigned                      Achievement          Supervisor rating
2    Quality of Results            Pendency Levels      %                    Self         A.D./J.D. (I)
     Achievement                   of different areas
                                   Quality of work      Supervisor
                                                        satisfaction
3    Attendance & Punctuality      Records              Minimum              Self         A.D./J.D. (I)
                                                        standard
4    Availability for work         Behavioral           Critical Incidents   Self         A.D./J.D. (I)

5    Dependability for work        Behavioral           Critical Incidents   Self         A.D./J.D. (I)
6    Subject Knowledge & Self      Knowledge level      Qualitative          Self         A.D./J.D.(I)
     Improvement
7    Proficiency in computer       Certification        Pass certificate     Self         A.D./J.D. (I)
     applications and software                          with periodic
                                                        revalidation
B    Public Accountability




                                                                                                                                            161
1   Public Service Delivery      Sevottam rating    Rating of the   S.U. (I)   IA          10%    10%    10%    10%    10%
                                                    office
C   Organizational Results (Directorate)                                                          20%    20%    20%    20%

1   Search and surveys          Number of           Trend           D G (I)    CBDT
    conducted (All over India)  searches
                                conducted
                                Total revenue       Trend
                                unearthened and
                                spot collection
2   Number of TEP disposed       Number of TEP      % achieved      D G (I)    CBDT
    successfully (total)        disposed/received
3   Satisfaction level about    Number of           % reduction     D G (I)    CBDT
    search                      grievances/compla
                                ints received and
                                found correct
D   Organizational Results (Board)                                                         80%    60%    50%    20%    20%
1   Action Plan (Revenue)       Target v/s          Revenue         CBDT       MOF, DOR
                                Achievement         Collection
2   Action Plan (Non Revenue) Target v/s            Revenue         CBDT       MOF, DOR
                                Achievement         Collection
                                                                               Total       100%   100%   100%   100%   100%
                                                                               (A+B+C+D)




                                                                                                                        162
                                 Table 4.17 Performance analysis for Inspector (Investigation)

                                                            Inspector (Investigation)
                                                                                                              Weightage (year)
    Key Result Areas            Measurement       Standard             Reference   Evaluator       I     II       III      IV    V
                                Unit                                   Unit

A   Individual Results                                                                             10%   10%      20%      50%   50%
1   Regular activities                            E/A/NA/U
    a) Number of search and     Numbers           PPS or Trend         Self        AD/DD(I)
    surveys assisted
    b) Gathering information    Number of cases   Number or PPS        Self        AD/DD(I)
    (enquiries)                 assigned and
                                completed
    c) Completion of work       Target v/s        Qualitative          Self        AD/DD(I)
    assigned (in time)          Achievement       Supervisor rating
2   Quality of Results          Revenue           % of cases or        Self        A.D./J.D.(I)
    Achievement                 potential         revenue leakage
                                realized          identified
                                Pendency level    %
                                Quality of work   Supervisor rating
2   Attendance & Punctuality    Records           Minimum              Self        A.D./J.D. (I)
                                                  Standard
3   Availability for work       Behavioral        Critical Incidents   Self        A.D./J.D. (I)
4   Dependability for work      Behavioral        Critical Incidents   Self        A.D./J.D. (I)
5   Subject Knowledge & Self    Knowledge level   Qualitative          Self        A.D./J.D. (I)
    Improvement
6   Proficiency in computer     Qualitative       Supervisor           Self        A.D./J.D. (I)
    applications and software                     satisfaction
                                Certification     Pass certificate
                                                  with periodic
                                                  revalidation
B   Public Accountability




                                                                                                                                 163
1   Public Service Delivery        Sevottam rating   Rating of the      S.U. (I)   IA          10%    10%    10%    10%    10%
    quotient                                         office
C   Organizational Results (Directorate)                                                              20%    20%    20%    20%
1   Search and surveys conducted    Number of searches   Trend         D.G. (I)    CBDT
    (All over India)                conducted
                                    Total revenue        Trend
                                    unearthened and
                                    spot collection
2   Number of TEP disposed           Number of TEP       % achieved    D G (I)     CBDT
    successfully (total)            disposed/received
3   Satisfaction level about search Number of            % reduction   D G (I)     CBDT
                                    grievances/complai
                                    nts received and
                                    found correct
D   Organizational Results (Board)                                                             80%    60%    50%    20%    20%
1   Action Plan (Revenue)          Target V/S            Revenue       CBDT        MOF, DOR
                                   Achievement           Collection
2   Action Plan (Non Revenue)      Target V/S            Revenue       CBDT        MOF, DOR
                                   Achievement           Collection
                                                                                   Total       100%   100%   100%   100%   100%
                                                                                   (A+B+C+D)




                                                                                                                           164
Headquarter Mumbai

The headquarter office is a common resource center for all offices in Mumbai. The
administration section is headed by a Joint Commissioner. The section is supported by
administrative officer, income tax officer, inspector, tax assistants, UDC and LDC.


Role of Admin Headquarter office, Mumbai

The functioning of administration headquarters can be categorized into four segments:


   1. Infrastructure
           Providing & Managing
           Maintenance
           Employee welfare


   2. Manpower Management
           Allocation of manpower
           Preparation of Profile
           Training
           Deputation
           Promotion


   3. Budgetary Function
   4. Protocol & Miscellaneous
           Senior officer visit
           Maintenance of Guest house


Primary data was collected from incumbents in the department, the topmost being Joint
Commissioner. Performance analysis of incumbents is given in the following pages.




                                                                                      165
                                      Table 4.18 Performance analysis for Joint Commissioner (Headquarter)

                                                                  Joint Commissioner 82 (Headquarter)
                                                                                                                    Weightage (across years)
          Key Result Areas                 Measurement Unit       Standard              Reference       Evaluator   I      II      III       IV    V
                                                                                        unit
 A        Individual Results                                                                                        10%     10%     20%     50%    50%
 1        Regular activities                                      E/A/NA/U
          a) Providing, managing and       Achievement level      % requests            Headquarter     C
          maintenance of infrastructure    of user satisfaction   attended
                                           Request handling        Average time
                                           time                   taken to respond
          b) Staff allocation, training,   Achievement levels     % cases attended      Headquarter     C
          deputation and promotion

          c) Allocation of Budget          Budgeting              % reduction in        Headquarter     C
                                                                  expenses
 2        Quality of result achievement    Pendency levels        %                     Headquarter     C
                                           Quality of work        Supervisor rating
 3        Internal Process Efficiency
          a) Procedure Adherence           Audit Observations      % Reduction          Headquarter     C
                                                                  (Trend)
                                           Internal reporting     % reports in time     Headquarter
                                           Delays Caused          Qualitative
                                                                  (Supervisor rating)   Self
          b) User Satisfaction             Measure of Quality     % increase over       Headquarter     C
                                           of Service.            time in employee
                                           (Internal)             satisfaction
                                                                  (Mumbai region)




82
     Similar Framework Can be Used for measuring commissioner and chief commissioners performance also




                                                                                                                                                  166
          c) Employee satisfaction        Measure of           % increase over        Headquarter      C
                                          employee             time
                                          satisfaction
                                          (department)
 4        Attendance & Punctuality of      Records             Minimum standard       Headquarter      C
          office
     5    Supervision & Leadership        Supervisor rating    Qualitative            Self             C
                                          through PMS
 6        Innovation and Policy Contribution
          a) Cost management              Achieve budget       Per employee cost       Headquarter     C
                                          target
          a) Coordination and Co-          Supervisor rating   Qualitative             Self            C
          operation with other
          offices/external agencies
          b) Special                  Supervisor rating        Qualitative             Self            C
          Achievements/Initiative
 7        Subject Knowledge & Self    Knowledge level          Qualitative             Expected at this level, hence not included
          Improvement
 B        Public Accountability
 1        Public Service Delivery     Sevottam rating          Rating of the office    Headquarter     IA              10%          10%   10%   10%    10%
          Quotient
 C        Organizational Results (Mumbai Region) 83                                                                                 20%   20%   20%    20%
 1        Action Plan (Revenue)         Target v/s             Revenue                 Mumbai          C.C.
                                      Achievement              Collection              region
 2        Action Plan (Non Revenue)     Target v/s             Other parameters        Mumbai          C.C.
                                      Achievement                                      region
 D        Organizational Results (CBDT)                                                                                80%          60%   50%   20%    20%
 1        Action Plan (Revenue)           Target v/s           Revenue                 CBDT            MOF, DOR
                                          Achievement          Collection
 2        Action Plan (Non Revenue)        Target v/s          Other parameters        CBDT            MOF, DOR


83
     Since the HQ functions as common resource




                                                                                                                                                      167
Achievement
              Total       100%   100%   100%   100%    100%
              (A+B+C+D)




                                                      168
                                Table 4.19 Performance analysis for Administrative Officer (Headquarter)

                                                              Administrative Officer (Headquarter)
                                                                                                                   Weightage (across years)
    Key Result Areas             Measurement Unit            Standard              Reference     Evaluator   I     II      III       IV       V
                                                                                   unit
A   Individual Results                                                                                       10%   10%      20%      50%      50%
1   Regular activities                                       E/A/NA/U
    a) Assisting JC in           Smooth working of           Number of             Headquarter   J.C.
    various administrative       department                  employees handled
    activities                                               (PPS)
2   Quality of Result            Grievances/complaints       Number (trend)        Headquarter   J.C.
    Achievement                  Pendency level              %
                                 Quality of work             Supervisor rating     Self
3   Internal Process Efficiency
    a) Procedure Adherence      Audit Observations            % Reduction          Headquarter   J.C.
                                                             (Trend)
                                 Internal reporting          % reports in time
                                 Delays Caused               Qualitative
                                                             (Supervisor rating)
    b) User Satisfaction         Measure of Quality of       % increase over       Headquarter   J.C.
                                 Service (Internal)          time in employee
                                                             satisfaction
                                                             (Mumbai region)
    c) Employee satisfaction     Measure of employee         % increase over       Headquarter   J.C.
                                 satisfaction (department)   time
4   Attendance &                  Records                    Minimum standard      Headquarter   J.C.
    Punctuality of office
5   Supervision &              Supervisor rating             Qualitative           Self          J.C
    Leadership                 through PMS
6   Innovation and Policy Contribution
    a) Cost management           Achieve budget target       Per employee cost     Headquarter   J.C.
    a) Coordination and Co-      Supervisor rating           Qualitative           Self          J.C.
    operation with other
    offices/external agencies




                                                                                                                                           169
    b) Special                Supervisor rating        Qualitative            Self          J.C.
    Achievements/Initiative
7   Subject Knowledge &       Knowledge Level          Qualitative            Self          J.C.
    Self Improvement
B   Public Accountability
1   Public Service Delivery  Sevottam rating           Rating of the office   Headquarter   IA          10%    10%    10%    10%      10%
    Quotient
C   Organizational Results (Mumbai Region)                                                                     20%    20%    20%      20%
1   Action Plan (Revenue)     Target v/s Achievement   Revenue                Mumbai        C.C.
                                                       Collection             region
2   Action Plan (Non          Target v/s Achievement   Other parameters       Mumbai        C.C.
    Revenue)                                                                  region
D   Organizational Results (Board)                                                                      80%    60%    50%    20%      20%
1   Action Plan (Revenue)     Target V/S               Revenue Collection     CBDT          MOF, DOR
                              Achievement
2   Action Plan (Non          Target V/S               Other parameters       CBDT          MOF, DOR
    Revenue)                  Achievement
                                                                                            Total       100%   100%   100%   100%     100%
                                                                                            (A+B+C+D)




                                                                                                                                    170
                               Table 4.20 Performance analysis for Income Tax Officer (Headquarter)

                                                            Income Tax Officer (Headquarter)
                                                                                                              Weightage (across years)
    Key Result Areas           Measurement Unit        Standard               Reference     Evaluator   I     II      III      IV         V
                                                                              unit
A   Individual Results                                                                                  10%   10%     20%      50%        50%
1   Regular activities                                 E/A/NA/U
    a) Processing various      Number of bills/files   PPS                    Headquarter   Admin.O.
    files/ bills
    b) Completion of work      Target V/S              % completed            Self          Admin.O.
    assigned                   Achievement

2   Quality of Result          Grievances/complaint    Number (Trend)         Headquarter   Admin.O.
    Achievement                about work
                               Pendency level          %
                               Quality of work         Supervisor rating      Self
3   Internal process efficiency
    a) Procedure Adherence      Audit Observations      % Reduction (Trend)   Headquarter   Admin.O.
                                                       % reports in time
                               Internal reporting      Qualitative
                               Delays Caused           (Supervisor rating)
    b) User Satisfaction       Measure of Quality of   % increase over time   Headquarter   Admin.O.
                               Service                 in employee
                                                       satisfaction (Mumbai
                                                       region)
    c) Employee satisfaction   Measure of employee     % increase over time   Headquarter   Admin.O.
                               satisfaction
4   Attendance & Punctuality   Records                 Minimum standard       Self          Admin.O.
    of office
5   Supervision &              Supervisor rating       Qualitative            Self          Admin.O.
    Leadership                 through PMS




                                                                                                                                         171
6   Innovation and Policy Contribution

    a) Coordination and Co-   Supervisor rating   Qualitative            Self          Admin.O.
    operation with other
    offices/external agencies
    b) Special                Supervisor rating   Qualitative            Self          Admin.O.
    Achievements/Initiatives
7   Subject Knowledge &       Knowledge Level     Qualitative            Self          Admin.O.
    Self Improvement
B   Public Accountability
1   Public Service Delivery   Sevottam rating     Rating of the office   Headquarter   IA         10%    10%    10%    10%     10%
    Quotient
C   Organizational Results (Mumbai Region)                                                               20%    20%    20%     20%
1   Action Plan (Revenue)     Target v/s          Revenue                Mumbai        C.C.
                              Achievement         Collection             region
2   Action Plan (Non          Target v/s          Other parameters       Mumbai        C.C.
    Revenue)                  Achievement                                region
D   Organizational Results (Board)                                                                80%    60%    50%    20%     20%
1   Action Plan (Revenue)     Target V/S          Revenue Collection     CBDT          MOF, DOR
                              Achievement
2   Action Plan (Non          Target V/S          Other parameters       CBDT          MOF, DOR
    Revenue)                  Achievement

                                                                                       Total      100%   100%   100%   100%    100%
                                                                                       (A+B+C+D




                                                                                                                              172
                              Table 4.21 Performance analysis for Senior/Junior Tax Assistant (Headquarter)

                                                       Senior/Junior Tax Assistant (Headquarter)
                                                                                                                   Weightage (across years)
    Key Result Areas                 Measurement Unit        Standard              Reference     Evaluator   I      II     III      IV      V
                                                                                   unit
A   Individual Results                                                                                       10%    10%    20%     50%     50%
1   Regular activities                                        E/A/NA/U
    a) Processing and scrutinizing   Target v/s               PPS                  Self          Admin.O
    bills                            Achievement
    b) Maintenance of various        Number of                PPS                  Self          Admin.O
    registers/files                  registers/files
    c) Assisting supervisor          Target v/s               PPS                  Self          Admin.O
                                     Achievement              or Supervisor
                                                              rating
2   Quality of Result Achievement    Grievances/complaints    Number (Trend)       Self          Admin.O
                                     about work

                                     Pendency levels          %

                                     Quality of work          Supervisor rating
3   Attendance & Punctuality of      Records                  Minimum              Self          Admin.O
    Staff                                                     Standard
4   Availability for work            Behavioral               Critical Incidents   Self          Admin.O
5   Dependability for work           Behavioral               Critical Incidents   Self          Admin.O
6   Subject Knowledge & Self         Knowledge Level          Qualitative          Self          Admin.O
    Improvement
7   Proficiency in computer          Qualitative              Supervisor rating    Self          Admin.O
    applications and software
                                     Certification            Pass certificate
                                                              with periodic
                                                              revalidation
B   Public Accountability
8   Public Service Delivery          Sevottam rating          Rating of the        Headquarter   IA          10%    10%    10%     10%     10%
    Quotient                                                  office




                                                                                                                                            173
C   Organizational Results (Mumbai Region)                                                        20%    20%    20%    20%
1   Action Plan (Revenue)         Target v/s     Revenue              Mumbai   C.C.
                                  Achievement    Collection           region
2   Action Plan (Non Revenue)     Target v/s     Other parameters     Mumbai   C.C.
                                  Achievement                         region
D   Organizational Results (Board)                                                         80%    60%    50%    20%    20%
1   Action Plan (Revenue)          Target V/S    Revenue Collection   CBDT     MOF, DOR
                                   Achievement
2   Action Plan (Non Revenue)      Target V/S    Other parameters     CBDT     MOF, DOR
                                   Achievement
                                                                               Total       100%   100%   100%   100%   100%
                                                                               (A+B+C+D)




                                                                                                                       174
                                     Table 4.22 Performance analysis for Inspector (Headquarter)

                                                              Inspector (Headquarter)
                                                                                                               Weightage (across years)
    Key Result Areas             Measurement Unit       Standard               Reference     Evaluator   I      II     III      IV      V
                                                                               unit
A   Individual Results                                                                                   10%    10%    20%     50%     50%
1   Regular activities                                  E/A/NA/U
    a) Assisting in department   Target v/s             PPS                    Self          Admin.O.
    work                         Achievement
    b) Maintenance of            Number of              PPS                    Self          Admin.O.
    registers/files              registers/files
    c) Completion of work        Target V/S             % completed            Self          Admin.O.
    assigned (in time)           Achievement (in
                                 time)
2   Quality of Result            Grievances/complaint   Number (Trend)         Self          Admin.O.
    Achievement                  about work

                                 Pendency level         %

                                 Quality of work        Supervisor
                                                        satisfaction
3   Attendance & Punctuality     Records                 Minimum standard      Self          Admin.O.
4   Availability for work        Behavioral             Critical Incidents     Self          Admin.O.
5   Dependability for work       Behavioral             Critical Incidents     Self          Admin.O.
6   Subject Knowledge & Self     Knowledge level        Qualitative            Self          Admin.O.
    Improvement
7   Proficiency in computer      Qualitative            Supervisor             Self          Admin.O.
    applications and software                           satisfaction
                                 Certification          Pass certificate
                                                        with periodic
                                                        revalidation
B   Public Accountability
1   Public Service Delivery      Sevottam rating        Rating of the office   Headquarter   IA          10%    10%    10%     10%     10%
    Quotient




                                                                                                                                            175
C   Organizational Results (Mumbai Region)                                                    20%    20%    20%    20%
1   Action Plan (Revenue)      Target v/s    Revenue              Mumbai   C.C.
                               Achievement   Collection           region
2   Action Plan (Non Revenue)  Target v/s    Other parameters     Mumbai   C.C.
                               Achievement                        region
D   Organizational Results                                                             80%    60%    50%    20%    20%
    (Board)
1   Action Plan (Revenue)      Target V/S    Revenue Collection   CBDT     MOF, DOR
                               Achievement
2   Action Plan (Non Revenue)  Target V/S    Other parameters     CBDT     MOF, DOR
                               Achievement
                                                                           Total       100%   100%   100%   100%   100%
                                                                           (A+B+C+D)




                                                                                                                    176
Directorate of Organization & Management Services (DOMS)

In the study we covered the office of Director of Organization and Management Services
(DOMS) which is an attached office of the board. This directorate is assigned the job of
Administrative Planning, Organizational Development, Management Information
Systems and Work Measurement Unit.


The office is headed by Director, supported by one Additional Director and two Assistant
Directors. The total working strength of the staff is 48




Functions of Directorate of Income Tax (Organization & Management
Services):

   1. Conduct of organization and management studies
   2. Carrying out continuous review of work procedures for improving methods and
       management practices. The Directorate seeks to identify deficient areas and
       devises more efficient methods of work.
   3. Laying down work/staffing norms
   4. Assisting the CBDT in formulation of the Action Plan for the Income-tax
       department and its appraisal by regularly monitoring the performance of the field
       offices vis-à-vis the target set for them. On a monthly basis the Directorate
       collates Central Action Plan statement showing the figures of collection/reduction
       of arrear and current demand of corporation tax/income-tax and progressive
       workload and disposal of income tax assessments. The directorate also monitors
       the performance of the field offices vis-à-vis the quarterly targets set for them.
   5. Monitoring the utility of existing forms, registers etc.

Primary data was collected from incumbents in the department, the topmost being
Additional Director. Performance analysis of incumbents is given in the following pages.




                                                                                            177
                                        Table 4.23 Performance analysis for Additional Director (DOMS)

                                                                 Additional Director 84 (DOMS)
                                                                                                                         Weightage (across years)
         Key Result Areas               Measurement Unit      Standard            Reference       Evaluator       I       II     III      IV      V
                                                                                  unit
 A       Individual Results                                                                                      10%      10%        20%   50%   50%
 1       Regular activities                                   E/A/NA/U
         a) Number of procedural        Number of studies     100% completion     O&M             D
         and management studies 85      initiated and         within time         Department
                                        completed in time.    (acceptance)
         b) Pending studies              Number of studies    Clearance of        O&M             D
         completed (extended)           completed             backlog             Department
         c) Formulation of staffing     Number of             Numbers             O&M             D
         norms                          assignments                               Department
                                        completed
         d) Assisting CBDT in           Contribution in       Qualitative         O&M             D
         preparation of Action Plan     action plan           Feedback from       Department
                                                              CBDT
         e) Coordination and Co-        Quality of            Qualitative         Self            D
         operation with other offices   interaction/
         and field formations           response from field
 2       Quality of Result              Feedback about        Supervisor          O&M             D
         Achievement                    utility/ quality of   satisfaction        Department
                                        study
                                        Quality of work       Supervisor rating   Self

 3       Internal Process Efficiency

         a) Procedure Adherence         Audit Observations    % Reduction         O&M             D
                                                              (Trend)             Department

84
     Similar framework can be used for measuring Director (DOMS) and Director General (Admin) performance, with different weights.
85
     Does not include studies on staffing norms, which are shorter and standard assignments




                                                                                                                                                      178
                                         Internal reporting      % reports in time

                                         Delays Caused           Qualitative
                                                                 (Supervisor rating)
         b) Employee satisfaction        Measure of               % increase            O&M          IA
                                         Employee                                       Department
                                         Satisfaction            Number of
                                                                 grievances
 4       Attendance & Punctuality        Records                  Minimum               O&M          D
         of office                                               Standard               Department
 5       Supervision & Leadership        Supervisor rating       Qualitative            Self         D
                                         through PMS
 6       Innovation and Contribution
         a) Special                      Supervisor rating       Qualitative            Self         D
         Achievements/Initiatives
         b) Organization Projects        Progress in projects    Project milestone      Self         D
         (coordination nodal role)                               achieved
         c) Effectiveness of studies     Cost saving potential   Estimates 86           O&M          D
                                         Time saving                                    Department
                                         Customer                Supervisor rating
                                         satisfaction
 7       Subject Knowledge & self        Knowledge level         Qualitative            Self         D
         improvement
 B       Public Accountability
 1       Public Service Delivery         Sevottam rating         Rating of the office   O&M          IA   10%   10%   10%   10%   10%
         Quotient                                                                       Department




86
     Quantification of these parameters may be difficult/costly (but not impossible).




                                                                                                                                    179
C   Organizational Results (Directorate)                                                              20%    20%    20%    20%
1   Number of                     Target v/s    % Accepted/          Directorate   Director
    projects/studies/assignments  completion/   completed                          General
    taken and completed           acceptance
    (accepted)
D   Organizational Results (Board)                                                             80%    60%    50%    20%    20%
1   Action Plan (Revenue)        Target v/s     Revenue Collection   CBDT          MOF, DOR
                                 Achievement
2   Action Plan (Non Revenue)    Target v/s     Other parameters     CBDT          MOF, DOR
                                 Achievement
                                                                                   Total       100%   100%   100%   100%   100%
                                                                                   (A+B+C+D)




                                                                                                                             180
                                  Table 4.24 Performance analysis for Additional Assistant Director (DOMS)

                                                                Assistant Additional Director (DOMS)
                                                                                                                         Weightage (across years)
        Key Result Areas                   Measurement          Standard              Reference        Evaluator    I     II       III      IV      V
                                           Unit                                       unit
A       Individual Results                                                                                         10%     10%     20%      50%     50%
 1      Regular activities                                      E/A/NA/U
        a) Number of procedural and        Number of studies    % completion          Section/depart   Addl.D.
        management studies conducted       initiated and        within time and       ment
                                           completed in time    accepted

        b) Analyzing various statistics    Number of reports    % completion          Section/depart   Addl.D.
                                                                                      ment

        c) Central action plan (CAP I &    Submission of        Compliance level      Section/depart   Addl.D.
        CAP II)                            reports              (100%)                ment

        d) Coordination and co-operation   Response rate for    Qualitative           Section/depart   Addl.D.
        with other offices                 requests             observations          ment
                                                                Compliance with
                                                                request (%)

2       Quality of Result Achievement      Feedback about       Supervisor rating     Section/depart   Addl.D.
                                           quality                                    ment
                                           Quality of work      Qualitative           Self
                                                                (Supervisor rating)


    3   Internal Process Efficiency
        a) Procedure Adherence             Audit                % reduction (Trend)   Section/depart   Addl.D.
                                           Observations                               ment
                                           Internal reporting   % reports in time




                                                                                                                                           181
    b) Employee satisfaction             Measure of          % increase over        Section/depart   Addl.D.
                                         Employee            time                   ment
                                         Satisfaction
4   Attendance & Punctuality of          Records             Minimum Standard       Section/depart   Addl.D.
    office                                                                          ment
5   Supervision & Leadership             Supervisor rating   Qualitative            Self             Addl.D.
                                         through PMS

6   Innovation and Contribution
    a) Special                           Supervisor Rating   Qualitative            Self             Addl.D.
    Achievements/Initiatives
    b) Handling organizational           Progress in         Project milestone      Self             Addl.D.
    projects (coordination/nodal role)   projects            achieved

7   Subject Knowledge & Self           Knowledge level       Qualitative            Self             Addl.D.
    Improvement
B   Public Accountability
1   Public Service Delivery            Sevottam rating       Rating of the office   O&M              IA          10%    10%    10%    10%    10%
    Quotient                                                                        Department
C   Organizational Results (Directorate)                                                                                20%    20%    20%    20%
1   Number of                          Target v/s            % Accepted/            D’Ate            Director
    projects/studies/assignments taken completion/           completed                               General
    and completed (accepted)           acceptance

D   Organizational Results (CBDT)                                                                                 80%    60%   50%     20%    20%
1   Action Plan (Revenue)                Target V/S          Revenue                CBDT             MOF, DOR
                                         Achievement         Collection
2   Action Plan (Non Revenue)            Target V/S                                 CBDT             MOF, DOR
                                         Achievement         Other parameters
                                                                                                     Total
                                                                                                     (A+B+C+D)   100%   100%   100%   100%   100%




                                                                                                                                      182
                             Table 4.25 Performance analysis for Assistant Director Official Language (DOMS)

                                                           Assistant Director Official Language (DOMS)
                                                                                                                   Weightage (across years)
        Key Result Areas               Measurement Unit           Standard            Reference        Evaluator   I      II      III       IV   V
                                                                                      Unit
A       Individual Results                                                                                         10%     10%     20%     50%   50%

1       Regular activities                                        E/A/NA/U
        a) Organizing workshops,       Number of programs         Target v/s          Section/depart   Addl.D.
        competitions and meetings      organised/follow up        Achievement         ment
        (official language policy)
        b) Completion of other         Target v/s Achievement     Qualitative         Section/depart   Addl.D.
        work assigned                                             Supervisor rating   ment

    2   Quality of Result              Feedback of progress of    Qualitative         Section/depart   Addl.D.
        Achievement                    work                       Supervisor rating   ment
    3   Internal process efficiency
        a) Procedure Adherence         Audit Observations         % reduction         Section/depart   Addl.D.
                                       (following guidelines)     (Trend)             ment
                                       Internal reporting         % reports in time

        b) Extend of official          Target v/s Achievement     % achieved          Section/depart   Addl.D.
        language use                                                                  ment
        c) Employee satisfaction       Measure of Employee        % increase over     Section/depart   Addl.D.
                                       Satisfaction               time                ment
    4   Attendance & Punctuality       Records                    Minimum             Section/depart   Addl.D.
        of office                                                 standard            ment
    5   Innovation and Contribution
        a) Special                     Supervisor rating          Qualitative         Self             Addl.D.
        Achievements/Initiatives
        b) Coordination and Co-        Supervisor rating          Qualitative         Self             Addl.D.
        operation with other offices




                                                                                                                                                 183
    c) Rating by external        Supervisor rating         Qualitative        Section/depart   Addl.D.
    agencies/awards                                                           ment
6   Subject Knowledge & Self     Knowledge level           Qualitative        Self             Addl.D.
    Improvement
B   Public Accountability
1   Public Service Delivery      Sevottam rating           Rating of the      O&M              IA          10%    10%    10%    10%    10%
    Quotient                                               office             Department
C   Organizational Results (Directorate)                                                                          20%    20%    20%    20%
1   Number of                    Target v/s completion/    % Accepted/        Directorate      Director
    projects/studies/assignments acceptance                completed                           General
    taken and completed
    (accepted)
D   Organizational Results (Board)                                                                         80%    60%    50%    20%    20%
1   Action Plan (Revenue)         Target v/s Achievement   Revenue Collecti   CBDT             MOF, DOR
                                                           on

2   Action Plan (Non Revenue)    Target v/s Achievement    Other parameters   CBDT             MOF, DOR
                                                                                               Total       100%   100%   100%   100%   100%
                                                                                               (A+B+C+D)




                                                                                                                                       184
                                 Table 4.26 Performance analysis for Senior/Junior Tax Assistant (DOMS)

                                                           Senior/Junior Tax Assistant (DOMS)
                                                                                                                    Weightage
     Key Result Areas              Measurement         Standard                Reference    Evaluator   I     II     III      IV   V
                                   Unit                                        Unit
A    Individual Results                                                                                 10%   10%    20%     50%   50%
 1   Regular activities                                E/A/NA/U
     a) Collection and             Number of reports   PPS                     Self         A.A.D.
     compilation of data
     b) Completion of other        Target v/s          Qualitative             Self         A.A.D.
     work assigned                 Achievement         Supervisor
                                                       satisfaction
2    Quality of Achievement        Grievances/compla   Number (Trend)          Self         A.A.D.
                                   ints about work

                                   Pendency levels     %

                                   Quality of work     Supervisor
                                                       satisfaction
3    Attendance & Punctuality      Records             Minimum standard        Self         A.A.D.
4    Availability for work         Behavioral          Critical Incidents      Self         A.A.D.
5    Dependability for work        Behavioral          Critical Incidents      Self         A.A.D.
6    Subject Knowledge & Self      Knowledge level     Qualitative             Self         A.A.D.
     Improvement
7    Proficiency in computer       Qualitative         Supervisor rating       Self         A.A.D.
     applications and software
                                   Certification       Pass certificate with
                                                       periodic revalidation

B    Public Accountability
1    Public Service Delivery       Sevottam rating     Rating of the office    O&M          IA          10%   10%    10%     10%   10%
     Quotient                                                                  Department




                                                                                                                                   185
C   Organizational Results (Directorate)                                                       20%    20%    20%    20%
1   Number of                    Target v/s    % Accepted/          D’Ate   Director
    projects/studies/assignments completion/   completed                    General
    taken and completed          acceptance
    (accepted)
D   Organizational Results (CBDT)                                                       80%    60%    50%    20%    20%
1   Action Plan (Revenue)         Target V/S   Revenue Collection   CBDT    MOF, DOR
                                 Achievement
2   Action Plan (Non Revenue)     Target V/S   Other parameters     CBDT    MOF, DOR
                                 Achievement
                                                                            Total       100%   100%   100%   100%   100%
                                                                            (A+B+C+D)




                                                                                                                    186
                                      Table 4.27 Performance analysis for UDC/LDC (DOMS)

                                                                UDC/LDC (DOMS)
                                                                                                                   Weightage (across years)
    Key Result Areas             Measurement Unit            Standard               Reference   Evaluator    I     II      III       IV         V
                                                                                    unit
A   Individual Results                                                                                       10%   10%      20%      50%       50%

1   Regular activities                                       E/A/NA/U
    a) Typing, noting and        Number of documents         PPS                    Self        Supervisor
    drafting of documents
    b) Dairy and Dispatch work   Numbers                     PPS                    Self        Supervisor
    c) Maintenance of various    Number of registers/files   PPS                    Self        Supervisor
    registers/files
    d) Completion of other       Target V/S Achievement      Qualitative            Self        Supervisor
    work assigned                                            Supervisor rating
2   Quality of Result            Pendency levels             %                      Self        Supervisor
    Achievement
                                 Quality of work             Supervisor rating
3   Attendance & Punctuality     Records                     Minimum standard       Self        Supervisor
4   Availability for work        Behavioral                  Critical Incidents     Self        Supervisor
5   Dependability for work       Behavioral                  Critical Incidents     Self        Supervisor
6   Subject Knowledge & Self     Knowledge level             Supervisor rating      Self        Supervisor
    Improvement
7   Proficiency in computer      Qualitative                 Supervisor rating      Self        Supervisor
    applications and software                                Pass certificate
                                 Certification               with periodic
                                                             revalidation
B   Public Accountability
1   Public Service Delivery      Sevottam rating             Rating of the office   D’Ate       IA           10%   10%      10%      10%       10%
    Quotient




                                                                                                                                         187
C   Organizational Results (Directorate)                                                                  20%    20%    20%     20%
1   Number of                    Target v/s completion/   % Accepted/          D’Ate   Director
    projects/studies/assignments acceptance               completed                    General
    taken and completed
    (accepted)
D   Organizational Results (Board)                                                                 80%    60%    50%    20%     20%
1   Action Plan (Revenue)        Target v/s Achievement   Revenue Collection   CBDT    MOF, DOR
2   Action Plan (Non Revenue) Target v/s Achievement      Other parameters     CBDT    MOF, DOR
                                                                                       Total       100%   100%   100%   100%    100%
                                                                                       (A+B+C+D)




                                                                                                                          188
                                               Part II


                        CENTRAL BOARD OF EXCISE AND CUSTOMS 87


Central Board of Excise & Customs (CBEC), Department of Revenue, Ministry of
Finance is responsible for formulation of policy relating to levy and collection of indirect
taxes namely, Customs duty, Central Excise duty and Service tax. CBEC also exercises
overall supervision over Customs, Central Excise and Service tax field formations located
across the country.


CBEC deals with the tasks of formulation of policy concerning levy and collection of
customs and central excise duties, service taxes, policy relating to prevention of
smuggling and evasion of duties and all administrative matters relating to Customs,
Central Excise, Service Tax and Narcotics (to the extent under CBEC purview). The
board discharges various tasks assigned with the help of field organizations namely Chief
Commissionerate of Customs and Central Excise and Commissionerate of Customs and
Central Excise having approved jurisdictions. The next tier of field offices with fixed
jurisdictions serves as the revenue collecting arms. CBEC also ensures that taxes on
foreign & inland travel are administered as per law and the collection agencies deposit
the taxes collected to the exchequer promptly.

For performing the administrative and executive functions related to CBEC, the
following attached/subordinate offices assist the board: -

        •   Directorate General of Inspection & Audit
        •   Directorate General of Revenue Intelligence
        •   Director General of Anti-evasion
        •   National Academy of Customs , Excise and Narcotics
        •   Directorate of Organization & Management Services
        •   Directorate of Statistics and Intelligence


87
     http://finmin.nic.in


                                                                                        189
      •   Directorate of Preventive Operations
      •   Directorate of Publicity and Public Relations
      •   Directorate General of Vigilance
      •   Central Revenues Control Laboratory
      •   Directorate of Valuation
      •   Directorate of System and Data Management
      •   Directorate General of Service Tax

The Citizen Charter that details commitments, expectations and standards of service
                                         88
promised by CBEC is given follows

Our Commitment

We shall carry out our tasks with

      •   integrity and judiciousness
      •   courtesy and understanding
      •   objectivity and transparency
      •   promptness and efficiency

We shall encourage and assist voluntary tax compliance by our clients.

 Our Expectation

We expect you to be prompt and reasonable in fulfilling your duty and legal obligations
and be true and honest in furnishing information to us.

Our Standards

We shall

      •   acknowledge     declarations,       intimations,   applications,   returns   and   all
          communications on the spot and in any case within 7 days of their receipt.

      •   respond to all communication within 15 working days of its receipt.


88
     www.cbec.gov.in


                                                                                             190
  •   settle any disputes relating to declarations or assessments within 10 working days
      of receipt of your written or oral explanation.

  •   refund amounts due to you within 30 working days of receiving a valid claim.

  •   pay any duty drawback due to you within 48 hours of the export of the goods in
      case of electronic declarations and 15 days in case of paper declarations.

  •   release, where your declaration relating to any consignment is complete and
      correct,

  •   in case of exports, within 8 hours of filing an electronic declaration or within 24
      hours of filing a paper declaration.

  •   in case of imports, within 24 hours of filing an electronic declaration or within 72
      hours of filing a paper declaration.

  •   complete excise registration formalities within 48 hours of receiving your
      application.

  •   return to you the input duty documents on which MODVAT credit has been
      availed of within 7 days of your submission.

  •   complete examination and clearance of your export consignment at your factory
      premises, whenever you seek such a facility, within 8 hours of receiving
      intimation.

  •   give you 15 days advance intimation before we undertake audit of your records.

  •   In case of likely or inevitable delay in decision making or when an issue is
      disputed, we shall promptly communicate the reasons on our own initiative.

We Further Commit That

  •   all uniformed officers who deal with the public will wear name badges and carry
      an Identity Card.

  •   personal and business information disclosed to us will be kept confidential.


                                                                                      191
•   clearance of consignments will be withheld only after explaining the reasons for
    the same and we will give you full opportunity to explain before passing any final
    order.

•   assesses in the small scale sector will be visited only with proper authority from
    senior officers.

•   your tax compliance record will be recognized and security/ surety will not be
    insisted upon.

•   passengers can walk through customs expecting courtesy, fairness and
    consideration.

•   baggage of international passengers will be opened only after explaining the
    reasons and in their presence.

•   we will help in repacking baggage if we have made you unpack them.

•   we will explain the reasons if we need to search you and offer our own search
    before it.

•   investigations and penalty proceedings will be initiated only after senior officers
    of the department are satisfied that prima facie evidence exists

•   the investigating officer will explain the legal provisions and your rights and
    obligations.

•   seek confirmatory information by personal contact.

•   no seized document will be withheld beyond 60 days except where they are to be
    relied upon in departmental proceedings.

•   we will provide full information about appeal procedures and the authorities with
    whom appeals can be filed.




                                                                                   192
   •   we will continually consult all commercial interests while reviewing our policies
       and procedures and provide timely publicity of all changes in the law or
       procedures.

   •   every possible assistance will be rendered by the Public Relations Officer in the
       Divisional Office/Commissionerate Office/Custom House (the name and
       telephone number of the Public Relations Officer will be prominently displayed at
       such offices) by providing all relevant information and details of procedures as
       may be required.

   •   our performance will be measured against these standards and independent
       surveys of clients' perception and assessment of our performance and the results
       will be publicized through the media.

Complaints and Grievances

We will promptly acknowledge your complaints and within 30 working days of their
receipt, provide final replies. If you have a complaint or grievance you may also take up
the matter with the Public Grievances Committee headed by the Commissioner and/or the
Zonal Grievances Committee headed by the Chief Commissioner.

The organization structure of CBEC is given in Table 4.28. For this study we covered
selected sections/cells of ministry (HQ) and the service tax Commissionerate at Delhi.
We also visited Air Customs Cochin and NACEN as part of study

The target setting for CBEC and its field offices follow the same process as CBDT. In the
case of CBEC, there are three separate action plans for Excise, Customs and Service Tax
respectively. Separate cadres exist for excise and customs at group B and C levels.. The
field offices are also separate, unless it is specifically mandated for another service to
handle the work.




                                                                                         193
                                 Table 4.28 Organization Structure CBEC
                                             Secretary




Member C. EX. &          Member Personnel   Member Customs        Member               Member Legal &
  Service Tax               & Admin            & Inv              Budget                 Computers




              Ministry                           Directorate                 Field Formation


                                               Director General             Chief Commissioner


          JS/ Commissioner                      Additional DG                 Commissioner


             Director/DS                       Addl/Jt Director            Addl/Jt Commissioner


          Under Secretary                     Dy/Asst Director             Dy/Asst Commissioner


           Section Officer                          SIO                      Superintendent


             Ministerial                             I.O                        Inspector
                                                                                                        194
Headquarter (CBEC) 89

The basic functions of the Headquarter office (CBEC) are:


       •    Policy formulation
       •    Policy interpretation
       •    Monitor policy implementation
                o Ensure trade facilitation
                o Ensure compliance with laws
                o Achieve optimal balance between facilitation and compliance


We studied the following sections/cells, whose performance analysis is presented in the
following pages



Customs Coordination Section (Custom- III Section):

This section is headed by one Director, supported by one Under Secretary and one
Section Officer. The total strength of the staff including US is 9. The section performs the
following activities:

       1. Monitoring the performance of the field formations of customs in all areas of work
            including arrears of custom duty and disposal of unclaimed goods through all
            periodical reports and action plans,
       2. Monitoring working of CRCL and infrastructure and equipment requirements of
            CRCL.
       3. Co-ordination of all works in the Customs Wing.
       4. All complaints / grievances from the trade


       5. Compilations of statements of pending VIP references, Parliamentary Assurances,
            implementation of Annual Action Plan, other periodical returns, reports of various
            Committees, Trade Statistics

89
     http://finmin.nic.in


                                                                                          195
   6.   Estimates Committee and other Committees of Parliament, their study tours and
        the related work
   7.   All policy issues concerning management of hazardous waste including framing
        of guidelines on import/testing of dangerous/hazardous chemicals
   8. Prohibitions and Restrictions under Section 11 of the Customs Act, 1962
   9. All miscellaneous matters concerning customs that concern more than only one
        particular Section


Air Customs Section (Custom-VI)

This section is headed by one Director, supported by one Under Secretary and one
section officer. The total strength of the staff including US is 7. The section performs the
following activities

   1. Grant of special permission for landing of aircrafts on international flights at
        places other than notified airports.
   2. Baggage Rules, Transfer of Residence Rules, Tourist Baggage Rules.
   3. Matters relating to clearance of passengers at Airports.
   4. Integrity Management at the Airports - Handling complaints against the staff and
        officers of Customs posted at the international Airports.
   5. Policy relating to import of gold and silver, import of fire arms, etc.
   6. Customs House Agents Licensing Regulations.
   7. Port Trust Act, Arms Act, Antiquities Act and other allied Acts.
   8. Write off / abandonment of claims with regard to irrecoverable duties and
        penalties and fines.




                                                                                         196
                                 Table 4.29 Performance analysis for Under Secretary (Custom and Air Custom)

                                                    Under Secretary 90 (Custom Coordination and Air Custom)
                                                                                                                        Weightage (across years)
       Key Result Areas            Measurement Unit            Standard              Reference   Evaluator        I     II      III       IV       V
                                                                                     unit
A      Individual Results                                                                                         10%   10%     20%      50%       50%
1      Regular activities                                      E/A/NA/U
       a) Custom coordination      Number of reports           Actuals or            Section     D
       work                                                    supervisor rating
       b) Clarification about      Number received v/s         Number (Trend)        Section     D
       Baggage rules, Transfer     Number processed
       of residence rules and
       tourist baggage rules
       c) Parliamentary            Answering within time       100% Compliance       Section     D
       questions and VIP
       references
       d) Handling grievances      Number received v/s         % achieved            Section     D
       and complaints from         number cleared
       Trade                       for further action
2      Quality of Result           Grievances/complaints       Number (Trend)        Section     D
       Achievement                 about section

                                   Pendency level              %                     Section

                                   Quality of work             Supervisor rating     Self
3      Internal Process Efficiency
       a) Procedure Adherence      Audit Observations           % Reduction          Section     D
                                                               (Trend)
                                   Internal reporting          % reports in time
                                   Delays Caused               Qualitative
                                                               (Supervisor rating)

90
     Similar framework can be used for measuring Director (Custom Coordination and Air Custom) performance also




                                                                                                                                                   197
       b) Customer satisfaction   Measure of Customer          % increase over       Section       IA
       (perception)               Satisfaction                 time
       c) Employee Satisfaction   Measure of Employee          % increase over       Section       IA
       (perception)               Satisfaction                 time
4      Attendance & Punctuality Records                        Minimum Standard      Section       D
       of Office
5      Supervision &              Supervisor Rating            Qualitative           Self          D
       Leadership                 through PMS
6      Innovation and Contribution
       a)Special                  Supervisor rating            Qualitative           Self          D
       Achievements/Initiatives
7      Subject Knowledge &        Knowledge level              Qualitative           Self          D
       Self Improvement
B      Public Accountability
1      Public Service Delivery    Sevottam rating of HQ        Rating                Headquarter   IA              10%       10%      10%       10%    10%
       Quotient
D      Organizational Results (CBEC) 91                                                                            80%       80%      70%       40%    40%
1      Action Plan (Revenue)      Target v/s Achievement       Revenue Collection    CBEC          MOF, DOR
2      Action Plan (Non           Target v/s Achievement       Other parameters      CBEC          MOF, DOR
       Revenue)
                                                                                                   Total           100%      100%     100%      100%   100%
                                                                                                   (A+B+D)




91
     Since ministry section function as common resource pool to entire board, for (B) immediate organization the performance of CBEC will be covered




                                                                                                                                                       198
                            Table 4.30 Performance analysis for Section Officer (Custom and Air Custom)

                                                       Section Officer (Custom Coordination and Air Custom)
                                                                                                                     Weightage (across years)
    Key Result Areas              Measurement Unit           Standard               Reference      Evaluator   I     II      III       IV       V
                                                                                    unit
A   Individual Results                                                                                         10%   10%     20%      50%       50%
1   Regular activities                                      E/A/NA/U
    a) Preparation of various     Number of reports         % achieved              Section        US
    reports                       prepared
    b) Assisting US to deal       Supporting in             100% compliance         Section        US
    Parliamentary questions       answering in time
    and VIP references
    c) Assisting US to handle     Number processed v/s      % achieved              Section        US
    grievances and complaints     Number received
    from trade
2   Quality of Result             Grievances/complaints     Number (Trend)          Section        US
    Achievement                   about section

                                  Pendency level            %                       Section

                                  Quality of work           Supervisor rating       Self
3   Internal Process Efficiency
    a) Procedure Adherence        Audit Observations         % Reduction (Trend)    Section        US

                                  Internal reporting        % reports in time

                                  Delays Caused             Qualitative
                                                            (Supervisor rating)

    b) Employee Satisfaction      Measure of Employee       % increase over years   Section        IA
    (perception)                  Satisfaction
4   Attendance & Punctuality      Records                   Minimum standard        Section        US
    of Office
5   Supervision & Leadership      Supervisor Rating         Qualitative             Self           US




                                                                                                                                          199
                               through PMS
6   Innovation and contribution
    a)Special                   Supervisor rating       Qualitative          Self          US
    Achievements/Initiatives
7   Subject Knowledge & Self Knowledge level            Qualitative          Self          US
    Improvement
B   Public Accountability
1   Public Service Delivery     Sevottam rating of HQ   Rating               Headquarter   IA         10%    10%    10%    10%     10%
    Quotient
D   Organizational Results (CBEC)                                                                     80%    80%    70%    40%     40%
1   Action Plan (Revenue)       Target v/s              Revenue Collection   CBEC          MOF, DOR
                                Achievement
2   Action Plan (Non            Target v/s              Other parameters     CBEC          MOF, DOR
    Revenue)                    Achievement
                                                                                           Total      100%   100%   100%   100%    100%
                                                                                           (A+B+D)




                                                                                                                             200
                              Table 4.31: Performance analysis for Assistant (Custom and Air Custom)

                                                   Assistant (Custom Coordination and Air Custom)
                                                                                                            Weightage (across years)
    Key Result Areas          Measurement Unit            Standard            Reference   Evaluator   I     II      III       IV       V
                                                                              unit
A   Individual Results                                                                                10%   10%     20%      50%       50%
1   Regular Activity                                      E/A/NA/U
    a) Assisting section      Numbers                     PPS                 Self        S.O.
    officer in preparing
    various reports and
    returns
    b) Completion of other    Target V/S Achievement      Qualitative         Self        S.O.
    work assigned (in time)                               Supervisor
                                                          satisfaction
2   Quality of Result         Grievances/complaints       Number (Trend)      Self        S.O.
    Achievement               about work

                              Pendency levels of          %
                              different areas

                              Quality of work             Supervisor
                                                          satisfaction
3   Attendance &              Records                     Minimum Standard    Self        S.O.
    Punctuality
4   Availability for work     Behavioral                  Critical Incident   Self        S.O.
5   Dependability for work    Behavioral                  Critical Incident   Self        S.O.
6   Subject Knowledge &       Knowledge Level             Qualitative         Self        S.O.
    Self Improvement
7   Proficiency in computer   Qualitative                 Supervisor          Self        S.O.
    applications and                                      satisfaction
    software                  Certification               Pass certificate
                                                          with periodic
                                                          revalidation
B   Public Accountability




                                                                                                                                           201
1   Public Service Delivery Sevottam rating of HQ   Rating               Headquarter   IA         10%    10%    10%    10%    10%
    Quotient
D   Organizational Results (CBEC)                                                                 80%    80%    70%    40%    40%
1   Action Plan (Revenue)    Target V/S             Revenue Collection   CBEC          MOF, DOR
                             Achievement
2   Action Plan (Non         Target V/S             Other parameters     CBEC          MOF, DOR
    Revenue)                 Achievement
                                                                                       Total      100%   100%   100%   100%   100%
                                                                                       (A+B+D)




                                                                                                                               202
                                             Table 4.32 Performance analysis for UDC/LDC (Ministry)

                                                                         UDC/LDC 92 (Ministry)
                                                                                                                          Weightage (across years)
        Key Result Areas               Measurement Unit         Standard                   Reference      Evaluator       I      II      III       IV   V
                                                                                           unit
A       Individual Results                                                                                                10%       10%   20%     50%   50%
1       Regular activities                                      E/A/NA/U
        a) Typing, noting and          Number of documents      PPS                        Self           Supervisor
        drafting of documents          (on time)
        b) Dairy and Dispatch work     Numbers (on time)        PPS                        Self           Supervisor

        c) Maintenance of various      Number of                PPS                        Self           Supervisor
        registers/files                registers/files (on
                                       time)
        d) Completion of other work    Target v/s               Qualitative                Self           Supervisor
        assigned (in time)             Achievement              Supervisor rating
2       Quality of Result              Pendency levels of       %                          Self           Supervisor
        Achievement                    different areas
                                       Quality of work          Supervisor rating
3       Attendance & Punctuality       Records                  Minimum standard           Self           Supervisor
4       Availability for work          Behavioral               Critical Incidents         Self           Supervisor
5       Dependability for work         Behavioral               Critical Incidents         Self           Supervisor
6       Subject Knowledge & Self       Knowledge level          Supervisor rating          Self           Supervisor
        Improvement
7       Proficiency in computer        Qualitative              Supervisor rating          Self           Supervisor
        applications and software      observation              Pass certificate with
                                       Certification            periodic revalidation
B       Public Accountability
1       Public Service Delivery        Sevottam rating of HQ    Rating                     Headquarter    IA              10%       10%   10%     10%   10%
        Quotient




92
     The work of UDC and LDC is same in nature for all the sections, so the general parameters of performance can be same across.




                                                                                                                                                        203
D   Organizational Results (CBEC)                                                    80%    80%    70%    40%    40%
1   Action Plan (Revenue)       Target V/S    Revenue Collection   CBEC   MOF, DOR
                                Achievement
2   Action Plan (Non Revenue)   Target V/S    Other parameters     CBEC   MOF, DOR
                                Achievement
                                                                          Total      100%   100%   100%   100%   100%
                                                                          (A+B+D)




                                                                                                                 204
Customs Policy Section (Custom - IV Section)

This section is headed by one Director, supported by one Under Secretary and one
section officer. The total strength of the staff including US is 5. The section performs the
following activities

   1.       Customs Procedures regarding -
        •     Clearance of goods at Ports/ Airports/ICDs.
        •     Customs duty Refund Cases at all Customs Houses
        •     Transshipment of goods
        •     Inland Container Depots, Container Freight Station - appointment of and
                 o Procedures relating to Containerization
                 o Coastal Trade including procedure and regulation under Chapter
                     XII of the
                 o Customs Act, 1962
        •     Imports of goods through courier mode
   2.       Implementation of Kyoto Convention.
   3.       Standardization of Customs Forms.
   4.       Delegation of powers of Adjudication of Customs Officers.
   5.       Appointment of Officers under the Customs Act, 1962
   6.       Re-importation of goods of Indian origin under Section 20 of the Customs Act,
             1962
   7.       Quality Control on export commodities.
   8.       Matters concerning Customs and Central Excise Advisory Council, Customs
             Advisory Committee and Port Advisory Committee, Various Standing
             Committees, Inter-Ministerial Standing Committee for setting up of
             ICDs/CFS,    Export    Promotion   Board       chaired   by   Cabinet   Secretary




                                                                                          205
                                      Table 4.33 Performance analysis for Under Secretary (Custom Policy)

                                                                 Under Secretary 93 (Custom Policy)
                                                                                                                        Weightage (across years)
        Key Result Areas            Measurement Unit               Standard               Reference   Evaluator   I     II      III       IV       V
                                                                                          unit
A       Individual Results                                                                                        10%   10%     20%      50%       50%
1       Regular activities                                         E/A/NA/U
        a) Issue related to         Number of notifications        % achieved             Section     D
        custom procedures           issued v/s number required
        b) Standardization of       Number of forms/acts v/s       % achieved             Section     D
        Custom forms/other          target
        issues related to Act
        c) Parliamentary            Answering within time          100% Compliance        Section     D
        questions and VIP
        references
        d) Handling grievances      Number processed               % achieved             Section     D
        and complaints
2       Quality of Result           Grievances/complaints          Number (Trend)         Section     D
        Achievement                 about section

                                    Pendency level                 %                      Section

                                    Quality of work                Supervisor rating      Self
3       Internal Process Efficiency
        a) Procedure Adherence Audit Observations                   % Reduction (Trend)   Section     D
                                    Internal reporting             % reports in time
                                    Delays Caused                  Qualitative
                                                                   (Supervisor rating)
        b) Employee                 Measure of Employee            % increase over time   Section     IA
        Satisfaction (perception)   Satisfaction


93
     Similar framework can be used for measuring Director (Custom Policy) performance also




                                                                                                                                                   206
4   Attendance &              Records                     Minimum Standard     Section       D
    Punctuality of Office
5   Supervision &             Supervisor rating through   Qualitative          Self          D
    Leadership                PMS
6   Innovation and Contribution
    a)Special                 Supervisor rating           Qualitative          Self          D
    Achievements/Initiatives
    b)Coordination and Co-    Supervisor Rating           Qualitative          Self          D
    operation with other
    offices/peers
7   Subject Knowledge &       Knowledge level             Qualitative          Self          D
    Self Improvement
B   Public Accountability
1   Public Service Delivery   Sevottam rating of HQ       Rating               Headquarter   IA        10%    10%    10%    10%    10%
    Quotient
D   Organizational Results (CBEC)                                                                      80%    80%    70%    40%    40%
1   Action Plan (Revenue)     Target V/S Achievement      Revenue Collection   CBEC          MOF,
                                                                                             DOR
2   Action Plan (Non           Target V/S Achievement     Other parameters     CBEC          MOF,
    Revenue)                                                                                 DOR

                                                                                             Total     100%   100%   100%   100%   100%
                                                                                             (A+B+D)




                                                                                                                                   207
Customs Tariff Unit

This section is headed by one Director, supported by one Appraising Officer. The total
strength of staff is 4. The section performs the following activities

   1. Classification of goods imported and exported for the purpose of assessment to
       duty, interpretation of Act, rules, regulations, exemption notifications etc. and
       issue of Tariff Advices and instructions relating thereto.
   2. Customs Tariff and any legislative and other preparatory work relating to its
       updating.
   3. Conference of Commissioners of Customs on Tariffs and Allied matters.
   4. Legislative work relating to administration and levy of anti-dumping,
       Countervailing and Safeguard duties;
   5. Project Imports
   6. Work relating to Harmonized Systems Committee of WCO.




                                                                                           208
                                Table 4.34 Performance analysis for Appraising Officer (Custom Tariff Unit)

                                                           Appraising Officer (Custom Tariff Unit)
                                                                                                                  Weightage (across years)
    Key Result Areas             Measurement Unit               Standard            Reference   Evaluator   I     II      III       IV       V
                                                                                    unit
A   Individual Results                                                                                      10%   10%     20%      50%       50%
1   Regular activities                                          E/A/NA/U
    a) Clarification of goods    Number of clarification        Actuals (Trend)     Section     D
    imported and exported        given v/s number sought
    for the purpose of
    assessment to duty
    (legal clarification)
    b) Issuing various           Number of circulars issued     Actuals (Trend)     Section     D
    circulars
    c) Parliamentary             Answering within time          100% Compliance     Section     D
    questions and VIP
    references
2   Quality of Result            Grievances/complaints          Number (Trend)      Section     D
    Achievement                  about section

                                 Pendency level                 %                   Section

                                Quality of work                 Supervisor rating   Self
3   Internal Process Efficiency
    a) Procedure Adherence Audit observations                    % reduction        Section     D
                                classifications/challenged in   (Trend)
                                court

                                 Internal reporting             % reports in time

                                 Delays Caused                  Qualitative
                                                                (Supervisor
                                                                satisfaction)
4   Attendance &                Records                         Minimum Standard    Section     D




                                                                                                                                             209
    Punctuality
5   Availability for work     Behavioral               Critical Incidents   Self          D
6   Dependability for work    Behavioral               Critical Incidents   Self          D
7   Innovation and Contribution
    a)Special                 Supervisor rating        Qualitative          Self          D
    Achievements/Initiatives
    b)Coordination and Co-    Supervisor Rating        Qualitative          Self          D
    operation with other
    offices/peers
8   Subject Knowledge &       Knowledge level          Qualitative          Self          D
    Self Improvement
B   Public Accountability
1   Public Service Delivery   Sevottam rating of HQ    Rating               Headquarter   IA        10%    10%    10%    10%    10%
    Quotient
D   Organizational Results (CBEC)                                                                   80%    80%    70%    40%    40%
1   Action Plan (Revenue)     Target V/S Achievement   Revenue Collection   CBEC          MOF,
                                                                                          DOR
2   Action Plan (Non         Target V/S Achievement    Other parameters     CBEC          MOF,
    Revenue)                                                                              DOR

                                                                                          Total     100%   100%   100%   100%   100%
                                                                                          (A+B+D)




                                                                                                                                210
Field Formations
Under CBEC, there are three different types of field formations.

           Central Customs
           Central Excise and
           Service Tax

Overview of role of field formations

The basic objectives of all field formation are to achieve and ensure proper application of
relevant laws. In general, the field formation is expected to achieve:


               •    Revenue collection
               •    Administer regulatory regime
               •    Check commercial fraud and other violations that violate economic
                    policies or endanger society or environment


In this study, we selected the Service Tax Commissionerate for performance analysis.
The same framework (with contextual modifications) can be applied to other field
formations also.


Functioning of Service Tax, New Delhi: 94

Service tax levy as well as its administration has been experiencing major changes since
its inception.       From a tax on a few services, the tax net has now much widened.
Important pillars tax determination e.g. classification, valuation, eligibility of input/input
services credit, refunds, rebates and recoveries have all undergone major changes over
the years. One of the outcomes of these changes has been the near complete redefinition
of the role and responsibilities of the field staff. The administration of the tax has been
governed considerably by the scheme applicable in central excise, with some changes to
suit convenience from time-to-time. Since the field unit is relatively new, there is no



94
     Material prepared by Service Tax, Delhi


                                                                                          211
fixed duty list of officers. Since projections indicate substantial growth in service tax
collection, the scope of the formation will definitely increase


We were also told that, the procedures of service tax administration have still not
sufficiently stabilized and at the same time it is expected that this tax will remain a
vibrant tax for many years in the future. Moreover following the trend in service tax
evolution, in the future, will see further changes in responsibilities of officers (group A
and B).




As the service tax formation evolves, we expect (and concur with official view) that the
duty list of the officers will be redefined. 95


Primary data was collected from incumbents in the department, the topmost being Deputy
Commissioner. Performance analysis of incumbents is given in the following pages.




95
     When procedures are finalized, the PRP measurement approach should be revisited


                                                                                       212
                              Table 4.35 Performance analysis for Deputy/Assistant Commissioner (Service Tax)

                                                                   DCIT/ACIT/ITO 96 (Service Tax)
                                                                                                                       Weightage (across years)
         Key Result Areas               Measurement Unit       Standard             Reference       Evaluator   I     II      III       IV        V
                                                                                    Unit
 A       Individual Results                                                                                     10%   10%      20%      50%       50%
  1      Regular activities                                    E/A/NA/U
         a) Action Plan (Revenue)       Target V/S             Revenue collection   Division        C
             • Collection               Achievement
             • Anti evasion
             • Arrears
             • Scrutiny/survey
             • Adjudication

         b) Action Plan (Non            Target V/S             % achieved           Division        C
         Revenue)                       Achievement
         c) Grievances redressal        Processed              % achieved           Division        C
         (referred cases in Division)   successfully v/s
                                        received
 2       Quality of Result              Grievances about       Number (Trend)       Division        C
         Achievement                    working division

                                        Pendency of work       %                    Division        C

                                        Confirmation of        % of cases/revenue   Division        C
                                        claims/demand in
                                        appeals

                                        Rectification          Number (Trend)       Self            C
                                        petitions/appeals/co
                                        mplaints

96
     Similar frame work can be used for Commissioner/Joint Commissioner




                                                                                                                                              213
                                         Quality of work      Supervisor rating
 3       Internal Process Efficiency
         a) Procedure Adherence          Audit Observations   % reduction (Trend)    Division   C
                                         Internal reporting   % reports in time
                                         Delays Caused        Qualitative
                                                              (Supervisor rating)
         b) Customer Satisfaction        Measure of Quality   % increase over time   Division   IA
                                         of Service
         c) Employee Satisfaction        Measure of           % increase over time   Division   IA   Not recommended because of small unit
                                         Employee
                                         Satisfaction
 4       Attendance & Punctuality of      Records             Minimum standard       Division   C
         Office
 5       Supervision & Leadership        Supervisor rating    Qualitative            Self       C
                                         through PMS
 6       Innovation and Contribution
         a) Collection cost              Cost of collection   % against CBEC         Division   C
                                                              average (for ST)
         b) Coordination and             Supervisor rating    Qualitative            Division   C
         cooperation with other
         offices
         c) Education Programs/ PR       Number of            Attendance level,      Division   C
         initiatives (measure to widen   programs             Supervisor rating
         tax base) 97
         b)Special                       Supervisor rating    Qualitative            Self       C
         Achievements/Initiatives
 7       Subject Knowledge & Self        Knowledge level      Qualitative            Self       C
         Improvement
 B       Public Accountability


97
     Included as a part of Service Tax action plan




                                                                                                                                      214
1   Public Service Delivery     Sevottam rating   Rating of the office   Division   IA          10%    10%    10%    10%      10%
    Quotient                                      (Commissionerate)
C   Organizational Results (Commissionerate)                                                           20%    20%    20%      20%
1   Action Plan (Revenue)       Target v/s        Revenue collection     C’Ate      C.C.
                                Achievement
2   Action Plan (Non Revenue)   Target v/s        Other parameters       C’Ate      C.C.
                                Achievement
D   Organizational Results (CBEC)                                                               80%    60%    50%    20%      20%
1   Action Plan (Revenue)       Target v/s        Revenue Collection     CBEC       MOF, DOR
                                Achievement
2   Action Plan (Non Revenue)   Target v/s        Other parameters       CBEC       MOF, DOR
                                Achievement
                                                                                    Total       100%   100%   100%   100%     100%
                                                                                    (A+B+C+D)




                                                                                                                            215
                                    Table 4.36 Performance analysis for Superintendent (Service Tax)

                                                                Superintendent (Service Tax)
                                                                                                                     Weightage (across years)
    Key Result Areas                Measurement Unit            Standard              Reference   Evaluator   I     II      III        IV       V
                                                                                      Unit
A   Individual Results                                                                                        10%   10%      20%      50%       50%
    Regular activities                                          E/A/NA/U
1
    a) Scrutiny of returns          Number processed in time    PPS                   Division    D.C./A.C
    b) Issue of certificates        Number of certificates      PPS                   Division    D.C./A.C
                                    issued
    c) Revenue realization          Target v/s Achievement      Revenue collection    Division    D.C./A.C
                                                                % achieved
    d) Arrear recovery              Target v/s Achievement      Revenue collection    Division    D.C./A.C
2   Quality of Result Achievement   Grievances/complaints       Number (Trend)        Division    D.C./A.C.
                                    about work
                                                                                      Division
                                    Pendency Levels of          %
                                    different areas                                   Division

                                    Confirmation of             % of cases/revenue    Division
                                    claims/demand in appeals

                                    Quality of work             Qualitative           Self
                                                                (Supervisor rating)
3   Internal Process Efficiency
    a) Procedure Adherence          Audit Observations          % Reduction           Division    D.C./A.C.
                                    Internal report/record      % reports in time
                                    keeping
                                    Delays caused               Qualitative
4   Attendance & Punctuality of      Records                    Minimum Standard      Division    D.C./A.C.
    office
5   Supervision & Leadership        Supervisor rating through   Qualitative           Self        D.C./A.C.
                                    PMS




                                                                                                                                        216
6   Innovation and Contribution
    a)Special                      Supervisor Rating         Qualitative            Self       D.C./A.C.
    Achievements/Initiatives
7   Subject Knowledge & Self       Knowledge Level           Qualitative            Self       D.C./A.C.
    Improvement
B   Public Accountability
1   Public Service Delivery        Sevottam rating           Rating of the office   Division   IA          10%    10%    10%    10%    10%
    Quotient
C   Organizational Results (Division)                                                                             20%    20%    20%    20%
1   Action Plan (Revenue)           Target v/s Achievement   Revenue collection     Division   C’Ate
2   Action Plan (Non Revenue)       Target v/s Achievement   Other parameters       Division   C’Ate
D   Organizational Results (CBEC)                                                                          80%    60%    50%    20%    20%
1   Action Plan (Revenue)           Target v/s Achievement   Revenue                CBEC       MOF, DOR
                                                             Collection
2   Action Plan (Non Revenue)      Target v/s Achievement    Other parameters       CBEC       MOF, DOR

                                                                                               Total       100%   100%   100%   100%   100%
                                                                                               (A+B+C+D)




                                                                                                                                 217
                                      Table 4.37 Performance analysis for Inspector (Service Tax)

                                                                  Inspector (Service Tax)
                                                                                                                    Weightage (across years)
    Key Result Areas               Measurement Unit         Standard        Reference       Evaluator        I     II      III        IV       V
                                                                            Unit
A   Individual Results                                                                                       10%   10%      20%      50%       50%
1   Regular activities                                      E/A/NA/U
    a) Scrutiny work               Number processed in      PPS             Division        A.O./
                                   time                                                     Superintendent
    b) Revenue potential created   Target v/s               Revenue         Division        A.O./
                                   Achievement              collection                      Superintendent
                                                            % achieved
    c) Gathering intelligence      Number of cases          Number of       Division        A.O./
                                   perused                  successful                      Superintendent
                                                            cases
    d) Issue of                    Number of certificates   PPS             Division        A.O./
    registrations/certificates     issued                                                   Superintendent
    e) Assisting AO in search      Number of searches       PPS             Division        A.O./
    and seizure                    participated/assisted                                    Superintendent
    f) Maintaining daily diary     Upkeep/                  % compliance    Division        A.O./
                                   Daily updation                                           Superintendent
    g) Completion of other work    Target v/s               Supervisor      Division        A.O./
    assigned (in time)             Achievement              satisfaction                    Superintendent
                                                            (revenue)
2   Quality of Result              Grievances/complaint     Number          Self            A.O./
    Achievement                    s about work             (Trend)                         Superintendent

                                   Pendency Levels of       %
                                   different areas

                                   Quality of work          Qualitative
                                                            (Supervisor
                                                            rating)




                                                                                                                                               218
 3       Attendance & Punctuality        Records                  Minimum             Self       A.O./
                                                                  Standard                       Superintendent
 4       Availability for work          Behavioral                Critical            Self       A.O./
                                                                  Incidents                      Superintendent
 5       Dependability for work         Behavioral                Critical            Self       A.O./
                                                                  Incidents                      Superintendent
 6       Subject Knowledge & Self       Knowledge Level           Qualitative         Self       A.O./
         Improvement                                                                             Superintendent
 7       Proficiency in computer        Qualitative               Supervisor          Self       A.O./
         applications and software 98                             rating                         Superintendent
                                        Certification             Pass certificate
                                                                  with periodic
                                                                  revalidation
 B       Public Accountability
 1       Public Service Delivery       Sevottam rating            Rating of the       Division   IA               10%    10%    10%    10%    10%
         Quotient                                                 Division
 C       Organizational Results (Division)                                                                               20%    20%    20%    20%

     1   Action Plan (Revenue)       Target v/s                   Revenue             Division   C
                                     Achievement                  collection
     2   Action Plan (Non Revenue)   Target v/s                   Other               Division   C
                                     Achievement                  parameters
 D       Organizational Results (CBEC)                                                                            80%    60%    50%    20%    20%
 1       Action Plan (Revenue)       Target V/S                    Revenue           CBEC        MOF, DOR
                                     Achievement                  Collection
 2       Action Plan (Non Revenue)   Target V/S                   Other              CBEC        MOF, DOR
                                     Achievement                  parameters
                                                                                                 Total            100%   100%   100%   100%   100%
                                                                                                 (A+B+C+D)




98
     if work does not involve use of computers, points may be distributed elsewhere




                                                                                                                                              219
                            Table 4.38 Performance analysis for Senior/Junior Tax Assistant (Service Tax)

                                                            Senior/Junior Tax Assistant (Service Tax)
                                                                                                                   Weightage (across years)
    Key Result Areas                 Measurement Unit        Standard        Reference     Evaluator        I     II      III        IV       V
                                                                             Unit
A   Individual Results                                                                                      10%   10%      20%      50%       50%
1   Regular activities
    a) Assisting AO in assessing     Number of returns       PPS             Self          A.O./
    the returns, scrutiny and data   processed                                             Superintendent
    entry
    b) Maintenance of various        Number of               PPS             Self          A.O./
    registers/files                  registers/files                                       Superintendent
    d) Completion of other work      Target v/s              % achieved      Self          A.O./
    assigned (in time)               Achievement                                           Superintendent
2   Quality of Result                Grievances/complaint    Number          Self          A.O./
    Achievement                      s about work            (Trend)                       Superintendent
                                     Pendency level          %
                                     Quality of work         Supervisor
                                                             rating
3   Attendance & Punctuality         Records                  Minimum        Self          A.O./
    levels                                                   standard                      Superintendent
4   Availability for work and        Behavioral              Critical        Self          A.O./
    attitude                                                 Incidents                     Superintendent
5   Dependability for work           Behavioral              Critical        Self          A.O./
                                                             Incidents                     Superintendent
6   Subject Knowledge & Self         Knowledge Level         Qualitative     Self          A.O./
    Improvement                                                                            Superintendent
7   Proficiency in computer          Qualitative             Supervisor      Self          A.O./
    applications and software                                rating                        Superintendent
                                     Certification           Pass
                                                             certificate
                                                             with periodic




                                                                                                                                          220
                                                    revalidation

B   Public Accountability
1   Public Service Delivery       Sevottam rating   Rating of the   Division   IA          10%    10%    10%    10%      10%
    Quotient                                        Division
C   Organizational Results (Division)                                                             20%    20%    20%      20%
1   Action Plan (Revenue)         Target V/S        Revenue         Division   C
                                  Achievement       collection
2   Action Plan (Non Revenue)     Target V/S        Other           Division   C
                                  Achievement       parameters
D   Organizational Results (CBEC)                                                          80%    60%    50%    20%      20%
1   Action Plan (Revenue)         Target V/S         Revenue        CBEC       MOF, DOR
                                  Achievement       Collection
2   Action Plan (Non Revenue)     Target V/S        Other           CBEC       MOF, DOR
                                  Achievement       parameters
                                                                               Total       100%   100%   100%   100%     100%
                                                                               (A+B+C+D)




                                                                                                                       221
                                        Chapter V

                      Implementation of PRI & Conclusion


Implementation principles


At this point we would like to once again highlight the fundamental principles supporting
successful PRI schemes, from the business angle. (Please be aware that the same logic
may not apply to all arms of the government.) However considering the fact that
ministries covered in the Cluster II have direct revenue earning potential (akin to business
targets) we consider it as fit to suggest the following:


   1. The PRI scheme should be self sustainable. It means that financing of PRI
       payouts should come from the earnings accrued through the additional work done
       by employees (or effort put in and result to achieved thereof). Income (earning)
       can accrue through per person productivity/output/contribution increase or
       reduction of operating costs. OECD report 2005 indicates that the cost of PRI in
       civil services ranges between 1-5 percent of the total salary bill. In Finland, 1/3 rd
       of cost savings/results is shared with employees in the form of staff rewards.


   2. PRI should ensure that performers and non-performers are differentiated, but only
       to such a degree that it does not lead to dysfunctional behaviors. Too high or too
       low differentiation will lead to negative consequences and hamper team work. In
       short PRP should form a part of the salary, general experience being 15/20%
       average and up to 40/50% at the top. (We noticed the same trend in Indian private
       sector).   (The general pattern of compensation that is evolving across many
       countries is Fixed Compensation + Performance based variable compensation +
       long term benefits. OECD 2005 report also indicates similar trend in
       government.)




                                                                                         222
3. When it comes to computation and making payouts, the scheme should have
   multi-dimensional focus, not just on individual performance. Our scheme design
   presented in chapter 2 and detailed in chapters 3 & 4 is based on the premise that
   PRI should focus on individual, departments/work unit and organisational
   performance. The nature of parameters are suggested by us both quantitative and
   qualitative, including public accountability measures.


4. Ideally PRI scheme should be introduced after the performance facilitating factors
   of the organization (enabling conditions described in chapter 2) are considered
   and enabled, rather than just forcing the same with present conditions in place.
   However we has suggested going ahead with PRI implementation and allowing
   situation to change. Openers to change will be required.


5. It is a fact that all offices are working with less than sanctioned manpower. In our
   opinion, the existing work norms that were used to decide on manpower may not
   represent the correct picture. With computerization (e-governance) and process
   re-engineering, outsourcing etc. being implemented, there will be sufficient
   reason to take a relook at the current sanctioned strength. At the same time, the
   situation should not be such that employees are pushed beyond limits that their
   health and efficiency suffers.


6. Necessary checks and balance should be put in place to avoid possibilities of
   gaming. This has to be taken seriously, since any news about fake results getting
   considered for calculating PRI will affect credibility of the system.


7. PRI system has to be backed by a suitable Performance Management System,
   Audit and MIS. Both require extensive training and familiarization of all
   employees. Particularly the former system has to be carefully handled, since the
   current ACR system is considerered totally unreliable and supervisor –
   subordinate dyad which is the critical part is not connected together with
   performance focus.



                                                                                   223
8. PRI does not mean that it is another system for earning more, over and above the
   salary. In countries like Switzerland, provision for reducing salary based on
   performance rating exists. However we are not recommending such a move, since
   it may create stiff resistance to the initiative. Our model thus will be (1+x) model
   i.e. over and above the salary.


9. PRI becomes a change driver when the system discriminates between performers
   and non-performers. We recommend that the standards (target) set are robust
   enough for discrimination. Initially, a quota system of 20 to 30% is
   recommended.


10. We have recommended that the scheme should cover Group A to C employees
   and Group D employees should continue with the bonus scheme by government.
   Over and above, the reward scheme for investigation staff in CBDT/CBEC may
   be continued. If required, a similar scheme can be introduced in MCA for those
   who investigate serious frauds and find out violations. It is also possible that in
   the case of MCA, the above reward payment can be funded from the fines
   collected for violations. We support this system because investigation and
   recovery work has risks and uncertainties involved and it recognizes to that. In
   addition there will be a deterrence effect created.


11. Suitable grievance (appeal) system should be institutionalized to help escalate the
   issues.


12. Needless to say, fair and transparent HRM policies and practices will be required
   to be put in place for the scheme to be successful. International experience shows
   that in countries like Italy, UK, Finland etc. the system has been developed with
   the buy in of employees unions.




                                                                                   224
   13. Running a pilot scheme as a learning option will help smooth implementation. In
       our opinion this can be voluntary. At the same time, organization should be
       cautions about effects of failure of pilot and the fact that in one year, a group of
       employees will benefit.


The detailed framework for implementation has been discussed in chapter 2 of the report.
When implemented, PRI related work will require sufficient resources to manage the
process. Computerization of data capturing mechanisms, its online validation and
computation of PRI payments, if introduced from the initial stages itself will be very
helpful. Initially we recommend a centralized structure for administration of PRI (which
will also have experts who will help in developing norms, communicating the same
assisting the training division in building capabilities.) and a framework for handling
grievances.




                                                                                       225
       International Practices in related departments


       In the study conducted by World Bank titled “Salary Supplements and Bonus in Revenue
       Departments”, following set of indicators has been used by various countries for PRP
       payment.

                      Table 5.1 Performance Indicators (used by 12 countries)




                                                             South Africa




                                                                                                                                                  Philippines
                                                                                                                  Argentina
                                                                                                        Romania
                                                                                   Hungary
                                     Morocco




                                                                                             Slovenia




                                                                                                                                        Canada
                                                                                                                              Estonia
                                                     Spain




                                                                                                                                                                Score
                                               USA




                                                                            Iran
Performance indicators
Mutual agreement/Managers
                                               X                                                        X         X                     X         X             5
discretion
Collected revenues during fixed
                                                     X       X              X      X                              X                                             5
period
Number of declarations per officer
                                                     X                      X                X                                X                                 4
or processed cases
Revenue collected in excess of
                                                     X                      X      X                    X                                                       4
agreed quota
Fraud detection rate                                         X                     X         X          X                                                       4
Average process time                           X     X       X              X                                                                                   4
Number of audits                                     X                      X                X                                                                  3
Work quality and team work spirit
                                     X         X             X                                                                                                  3
/HRM measures
Customer satisfaction                X         X                                                                                                                2
Productivity                         X         X                                                                                                                2
Type of audits                                       X       X                                                                                                  2
Number of complaints from
                                               X                                             X                                                                  2
business community
Devotion to work                     X                                                                                                                          1
Turnover of audited enterprises                                                    X                                                                            1
Professional knowledge               X                                                                                                                          1
Sense of responsibility              X                                                                                                                          1
Number of measures                   6         6     6       5              5      4         4          3         2           1         1         1
        X- Indicators used




                                                                                                                                                 226
This above chart is based systematic review and evaluation of the use of bonus as salary
supplement to enhance effectiveness in revenue departments in developing countries.
Average numbers of indicators used are 5, and there is definitely some degree of
subjectivity involved in the process.


According to OECD study (2005) PRP schemes introduced at the end of 1980s and 1990s
were far more advanced than the early system that followed merit increases. The recent
approaches aim at creating long-term effect on organizations, as they were introduced in
a more systematic way and with mechanisms which consolidated performance-related
pay increase into pay and pensions (OECD, 2005). 99 The countries which implemented
PRP initially had position-based systems that granted a higher degree of delegation to
managers. The greater individualized accountability in these types of systems facilitated
introduction of individual performance pay. Literature also shows that some traditionally
career-based systems like those in the Czech Republic, France, Korea and Singapore have
also started to implement PRP. This constitutes quite a radical change in these civil
services which are traditionally oriented to collectivism and are based on promotion.


The coverage of PRP also varies greatly. For example, in Canada, Ireland, Italy, and
Norway PRP is applied at management level, with Ireland and Norway have it only for
the most senior officials (OECD, 2005). The Australian Public Service (APS) initially
introduced PRP at the higher level of civil service including the senior executive service
and senior officers but later expanded it to include all levels of APS employees
(O’Donnell, O’Brien, 2000). On the other hand there are two forms of PRP schemes used
in Korea, i.e. merit increments and the bonuses.


The extent of coverage of PRP within the civil service reflects, in part, the degree to
which management is centralized or devolved within the public service. In centralized
countries PRP tends to be standardised and applied to the whole core administration of



99
 Report (2005). Performance related pay policies for government employees, Organisation for Economic
Co-operation and Development, France.


                                                                                                227
the government. Whereas in decentralized countries there is greater diversity as to which
departments and units use it.


Our secondary analysis shows that PRP is popular in revenue department, probably more
than anywhere else because of the advantage of being able to set quantifiable target. The
subsequent paragraphs concentrate on explaining PRP in revenue department of various
countries. (sources: OECD 2005, WB 2001 and other studies).


1. Italy

The experience of Italian Revenue Agency relates to the evolution of the performance
evaluation system towards more defined criteria. On the basis of a specific human
resources management strategy pursued by the revenue agency, a new evaluation system
was introduced in 2002 (SIRIO: Sistema Integrato Risultati Indicatori Obiettivi – Goals,
Indicators and Results Integrated System).


SIRIO system integrates two objectives:
   •   Performance appraisal (with reference to results) and
   •   Evaluation of organisational competences.


SIRIO is based on the principles of Management by Objectives and is intended to be a
useful tool for evaluation, management and development of human resources, in
accordance with the criteria of transparency, objectivity and equity.


Implementation
In 1995 the Revenue Department of the Ministry of Finance introduced for the first time
a system for planning and control, called PPC, in order to define objectives, assign
resources and verify results achieved. In 1998 an agreement between the public sector
and trade unions determined a system for assigning remuneration using quantitative data.
The data referred to results achieved, output produced and financial resources used.
Earlier in 1999 a system called SIVAD was introduced to evaluate mangers in revenue
department. The purpose of introducing SIVAD was to fill the gap in the previous


                                                                                     228
system. SIVAD focused on both qualitative and quantitative objectives to evaluate the
performance.

Issues

Difficulties and problems connected with the previous system (SIVAD) are:
      •      A complex organisational structure
      •      An insufficient involvement of evaluators in the process
      •      The centralization of the system
      •      Insufficient attention to the qualitative aspect of performance.


The purpose of SIRIO has to harmonize the management control system with that of
management development, in order to evaluate quantitative and qualitative aspects
connected to manager’s performance.


2. United Kingdom: Inland Revenue 100

In UK, the approach towards performance related pay varies significantly amongst
different parts of the Civil Service, but the objectives behind its introduction seem to be
fairly common. The performance related pay system in the Inland Revenue department
was introduced in the 1988 Pay Agreement, which had a number of objectives laid down
in its preamble:-


      i)        to recruit, retain and motivate civil servants of appropriate caliber to perform
                efficiently the duties required of them
      ii)       to ensure that civil servant’s pay will be determined fairly
      iii)      to enable the government to reconcile its responsibilities as an employer to
                control public expenditure.
      iv)        to provide better opportunities for career development



100
   David Marsden and Ray Richardson (1992) Motivation and performance related pay in public sector: A
case study of the Inland Revenue, Centre for Economic Performance, London School of Economics,
Discussion paper no. 75.


                                                                                                 229
   v)        to provide for equity of treatment while also providing for flexibility to deal
             with particular pay problems
   vi)       to link the pay and the associated personnel management arrangements
   vii)      to provide incentives for improving and maintaining efficiency in the Inland
             Revenue
   viii)     to reward sustained high performance
   ix)       to maintain the openness of all the rules and provisions of the pay, promotion
             and career development arrangements.


The system was based on two agreements; one for the senior grades and the other for
other staff. The agreement for the senior grades is still in place although most senior
grades are now covered by a central PRP Scheme for all Senior Civil Servants. However,
the Valuation Office as an executive agency attached to the department has a separate
agreement.

Issues

According to the survey conducted, majority of staff support the principle of performance
related pay, but a significant minority feels hostile to it. The experience is that any
positive motivational effects of performance pay have been, at most, very modest among
staff. Even worse, there is clear evidence of some demotivation among staff.


The main reason for failure to motivate staff is that the awards are given only to those
who receive good appraisal ratings and at the same time many feel that the appraisal
system has been corrupted. Second, staff feel that the amount involved is not large
enough to justify change in behaviour. The study also indicates that, many staff feels that
they are already working to the right standard and that they cannot improve any further.




                                                                                        230
3. Finland


In Finland, collective bargaining is the basis of terms of employment for the state
personnel. There are three levels in these negotiations: national, central for the state, and
agency. For the first two, it is the Ministry of Finance/State Employer’s Office (SEO) that
represents the employer side. For the third, agencies have the employer’s role. The new
pay system policy dates from late 1980s. State Employer’s Salary and Wage Policy
Programme (known more commonly as NPS or New Pay System) was launched in 1992
after several years of preparation. 101


Reasons for introducing PRP


•          Pay scales in the previous pay systems were originally created to favour
           centralized determination of salaries and wages. In practice, such scales led to
           interconnected and inflexible pay hierarchies that resisted basing pay on the job
           demands and individual performance.
•          New Payment System (NPS) was used to reach the operative goals by establishing
           and maintaining the general goals of salary and wage policy.
•          Results-based Rewards System (RBR) can be is used to encourage employees to
           think of the common organisational goals, or those of some units/groups, and to
           generate the overall result.
•          Pay thus became an instrument of management. Pay relations were to effectively
           support activities in terms of results and personal development.


Implementation and Impact


•          Implementation of NPS had a mixed reception. Top management had generally
           accepted NPS and energetically striven for its implementation, even if sometimes
           the amount of necessary input was underestimated. The employee organizations
           had principally accepted NPS.

101
      Performance related pay policies for government employees, OECD, 2005, pp.105-113


                                                                                          231
•        In 2004, about 40% of the state personnel and half of the agencies had
         successfully implemented NPS. The remaining organizations implemented it in
         2005.
•        The results and impact of NPS have not yet been fully surveyed.
         Audits/evaluations are not compulsory, but they are to be started. Recent
         evaluation reports reveal that a minority of organizations which have
         implemented NPS have analysed its effects on functioning of staff.
•        An indirect but still very indicative statistical fact is that salaries and wages in
         organizations that have implemented NPS prove to have been a bit better than in
         other organizations.
•        The overall management process has been improved with NPS. Management feel
         that when linked with pay incentives and sanctions, performance has improved.
•        The introduction of NPS has also resulted in improved staff development and
         training.


Issues


•        In practice, when there is 1 to 5 point scale, the majority of assessments tend to be
         three points. The performance distribution may actually be like that, but this issue
         is continuously watched in the organizations. Using pre-determined distribution is
         discouraged by the SEO and the state sector employee organizations, because in
         their view that tends to compromise the goals of the NPS.


•        Since early 1990s, progress towards the realization of NPS has proved slower and
         more difficult than perceived at first.


•        It is a problem in the agencies where there is no chargeable activity. RBR which
         is self-financed by agencies is often considered relatively modest.


•        There are people who are dissatisfied with the ratings or the distribution of
         rewards. RBR that is considered very modest may also have an effect which is


                                                                                          232
           quite opposite of what was expected, that is, instead of being motivated
           employees get frustrated and lose their faith in the system.




4. Chile


In 1998, Chile introduced performance-related pay (PRP) in its public sector reinforcing
the modernization process. Chile’s reform process was divided into two stages – the
initial stage, from 1998-2002 and its consolidation beginning in 2003. In implementing
PRP, Chile adopted two main tools, that is, PRP was applied at organization level and
expressed in Management Improvement Programs (MIPs) that gave employees a
financial incentive to meet management objectives. And as a second tool, PRP was
created for team work, which was applied on a decentralized basis by the head of each
organisation. 102
Reasons for introducing PRP


The main reason for introducing PRP in Chile’s public sector was to reward good
performance by individuals and organizations, raise the quality of public services,
increase salaries, motivate civil servants and guarantee better overall management.
Specifically, the main reason for introducing MIP was to create a model for improving
performance in agencies and thereby strengthening managerial systems including budget
management. The main reason to create PRP for team work was decentralizing the
financial incentives management.


Issues
During the first year of MIPs, an unequal degree of effort was rewarded equally, which is
undesirable in the case of a financial incentive. These results were due to (among other
factors) uneven level of management within the agencies, and due to inadequate technical
work in setting and verifying commitments.

102
      Performance related pay policies for government employees, OECD, 2005, pp. 174-180.


                                                                                            233
The study on Salary Supplements and Bonuses in Revenue Department 103,
conducted by World Bank show interesting dimensions. We present the same in
tabular format




103
  Final Report (2001). Salary Supplements and Bonuses in Revenue Departments”, working paper no.
33328, World Bank, Washington, DC, USA


                                                                                              234
Country   Approach                               Purpose                    Indicators                       Weakness
Estonia   Bonuses are allocated to individually    • Retain employees         • Number of declarations per   Lack     of     multiple
          selected    employees,     based    on   and attract new ones       officer or processed cases     performance indicators
          individual      performance,       and   • Clarify the relation
          distributed according to manager’s       between performance
          discretion. The value of the bonus is    and salary
          34% of the entry salary level and 12 –   • Establish a more
          15% of the final salary level.           systematic and goal
                                                   oriented effort
                                                   • Prevent corruption
Canada    The performance measures are             • Retain employees         • Mutual agreement/Managers The risk of demotivating
          determined by mutual agreement. The      • Attract new              discretion                  employees that do not
          value of the bonus as a percentage of    employees                                              receive high ratings and
          the basic salary is up to 15% for top    • Strengthen                                           the insignificant amount
          executives and 10% for other             teamwork                                               of money involved.
          executives.                              • Ensure a more
                                                   systematic and goal
                                                   oriented effort.
Hungry    The bonus is based on both collective    • Retain employees         • Revenue collected in excess Objectives are difficult to
          and individual performance, the          • Clarify the relation     of agreed quota                 reach and subsequently
          former counting about 25%, the latter    between performance        • Fraud      detection    rate, to measure.
          75%.                                     and salary                 turnover of audited enterprises
                                                   • Establish a more         • Collected revenues during
                                                   systematic and goal        fixed period
                                                   oriented effort.           • Customer satisfaction.

Morocco   A bonus system exists which covers        • Retain employees        • Devotion to work
          all employees and is based on             • Clarify the link        • Productivity
          individual     performance.    The        between performance       • Professional knowledge
          indicators are determined by mutual       and salary                • Sense of responsibility



                                                                                                                           235
          agreement, and the bonus amounts to      • Fight smuggling and    • Work quality
          at least 60% of the basic salary,        corruption.              • Team work spirit
          depending on the function and salary
          scale.
Argentina Based on individual performance and      • Clarify the relation   • Mutual agreement/Managers
          determined by management                  between performance     discretion
                                                    and salary
                                                   • To ensure at more      • Collected revenues during
                                                    systematic and goal     fixed period
                                                    oriented effort.

Romania    A bonus system exists where                                      • Mutual agreement/Managers The weakness is that the
           management determines the allocation                             discretion                    bonus        funds    are
           of bonuses. Bonuses are distributed                                                            insufficient    and   the
           between all employees, and are based                             • Revenue collected in excess assessment criteria are
           on individual performance (70%) as                               of agreed quota               not clear or well defined
           well as collective performance (30%).                            • Fraud detection rate        enough.


South      Based on mutual agreement between                                • Revenue collected           The bonus system does
Africa     management and employees.                                        • Type of audits              not address teamwork in
                                                                            • Average process time        an adequate way.
                                                                            • Fraud hit rate
                                                                            • HRM measures.
Spain      The bonus system is defined by                                   • Revenue collected           The bonus system is the
           management and integrates different                              • Number of processed cases   difficulty of determining
           elements of the performance (goals                               • Type of audit               goals and measurement
           and fixed productivities)                                        • Average process time        criteria.
                                                                            • Collected revenues during
                                                                            fixed period.




                                                                                                                       236
Iran         The bonuses are distributed to all            The bonus scheme is a             • The collection of revenues
             employees and based on individual             part of the civil servant         during a fixed period
             performance as well as collective             salary system and aimed           • Revenue collected in excess
             performance.      The     individual          to ensure and maintain            of agreed quota
             performance is weighted 10% and the           the living standard               • Number of audits, number
             collective performance is weighted            among the employees.              of processed cases
             90%.                                                                            • average process time

United       Bonus system related to performance  The bonus system is                        • Customs satisfactions             Bonuses are not high
States       where measures are determined with a individual based and                       • HRM goals                         enough to reward good
             mutual      agreement       between  covers all civil servants                  • High performance for a            performances due to
             managements and employees.           in the department. The                     particular assignment               insufficient funds.
                                                  bonus system is based on                   • Average process time
                                                  individual negotiations                    • Number of complaints from
                                                  and thus not equally                       business community.
                                                  distributed between
                                                  employees.
Slovenia     The bonus is based on individual as Bonus system is to                          • Number of frauds detected         Insignificance of funds
             well as collective performance, of promote teamwork,                            • Number of processed cases         and     the     lack    of
             which the individual performance has achieve a more                             • Number of audits                  standardized          and
             the highest priority                 systematic and goal                        • Number of complaints from         common rules for the
                                                  oriented effort, and to                    business community                  distribution of bonuses
                                                  clarify the relation                       • Fraud hit rate.
                                                  between performance and
                                                  salary.
Source: Final Report (2001). Salary Supplements and Bonuses in Revenue Departments”, working paper no. 33328, World Bank, Washington, DC, USA




                                                                                                                                                237
Conclusion
Our study finds that it is feasible to introduce PRI in government, in a phased manner,
with weights for individual and group performance. However sufficient background has
to be prepared and employees made ready to accept a performance based scheme before
the PRI scheme is introduced. This will require internal reorganization and also the
elaborate exercise of fixing performance standards and indicators against which
performance can be evaluated. Introducing a new PMS system, different from the current
ACR system and MIS system to capture relevant data will be other pre-requisites.


We believe that introducing PRI in government is not just a tool to recognize
performance at individual levels and group levels, but also starting point for wide spread
change. At the same time we would place caution, allowing factors lack of seriousness or
dilution of standards or blatant subjectivity in the system can lead to lack of faith in the
system and eventually create one more intervention that has failed to deliver desired
positive results. We would advise that given such a situation, the system may be
discontinued.




                                                                                        238
                                         Annexure I
                                   Frame work of the study
              INDIAN INSTITUTE OF MANAGEMENT, AHMEDABAD


     Proposal for Formulating the Concept, Principles and Parameters for Performance
                             Related Pay (PRP) in Government

Background


The proposal presented below, for formulating the concept, principles and parameters for
performance related pay (PRP) in Government, has been prepared as a follow up to the
correspondence between Member Secretary, Sixth Central Pay Commission and IIMA.
We     have   looked    at   the     Terms   of   Reference   of   the   Commission     at
http://india.gov.in/govt/paycommission.php and the proposed study aims to address key
issues related to linking performance to pay like identifying performance metrics and
assessors and formulating guidelines for enabling conditions in terms of delegation,
transparency, and teamwork.


Need for the Study


Accountability and efficiency of government employees has become very critical for
competent public administration. One of the key ways of achieving this is by linking
performance to pay. PRP has been debated since fourth pay commission but has not yet
been implemented in Indian context. Government faced a lot of criticism for selectively
implementing the recommendations of Fifth Pay Commission that increased the burden
on public exchequer without bringing in the desired work ethos.


Expectations from PRP are manifold and some of them are discussed below:
     1. To incorporate public accountability: Metrics developed to measure
        employees’ customer orientation will bring the much needed shift in their focus
        from political bosses to ordinary citizens. Transparent system will be a deterrent
        to corruption among employees.


                                                                                       239
   2. To provide motivation to employees: Currently only promotion is linked to
       performance and so employees have no other incentive to improve efficiency and
       customer-orientation.
   3. To compete with private sector for managerial talent: Steep rise in salary and
       job conditions like autonomy is making private sector jobs seems much more
       attractive to the younger generation. If government wants to attract good talent in
       future then PRP with delegation and transparency holds the key.
   4. To reduce undue burden on central exchequer: The increase in salary will not
       be across the board but will depend on what each employee deserves.


However, these expectations can only be met with a well thought of and well-designed
PRP structure.


Looking at the global scene we find that India is already slow to respond to this need.
OECD member countries have started introducing PRP from the mid-1970s because of the
economic and budgetary difficulties faced by them. So it is time to look at their experiences
and develop framework and guidelines suitable to Indian conditions.


Terms of Reference
The TOR for the study as specified by the Sixth Central Pay Commission is as follows:


  I. The study should examine the correct basis of pay increases and their relation, if
     any, to performance and productivity of the employees; and examine possibilities of
     evolving a direct correlation between PRP and delivery of services to
     citizens/organization/other departments, as the case may be.


 II. The study should evolve measurable, quantifiable criteria for judging performance
     and productivity of different grades of employees in various government
     organizations * depending on the nature of their work and the relationship with their
     users/clients.




                                                                                         240
III. The study should, inter alia, examine international best practices in this regard.


IV. The study should develop a model suited to Indian conditions which is transparent,
     measurable, fosters accountability and is linked to deliverables.


 V. The study should devise means by which PRP can be introduced in the
     Government. Specifically it should consider the following:
                Should PRP be applied to all jobs and all sectors, or higher managerial
                positions /percentage of jobs or sectors to begin with.
                Should PRP be individual based or group based.
                Should specific percentages be prescribed for restricting number of posts
                to which PRP is given.


Methodology
We propose to conduct separate studies for clusters given in Appendix 1 (we have done
this clustering based on our understanding about the nature of operation of each
ministry). Each cluster study will be undertaken by 2-3 faculty members. In this
proposal we express our interest to undertake separate studies for Clusters 1 to 3.
Each cluster study will cover 2 ministries under Government of India. Selection of
specific ministries will be done by the study team. We are also exploring possibilities of
constituting teams for Ministries of Defense + Home Affairs & Ministry of Railways.


In each study, the following will be looked into:
       Developing generic framework for performance measurement at the ministry
       level.
       Evolving guidelines for developing specific performance measures and MIS.
       Comprehensive illustration with specific performance indicators for 1 department
       for each of the two ministries covered in that cluster.
       Guidelines for implementation of PRP.




                                                                                          241
Our reports will form the basis for consultants/ in-house teams who may be engaged to
develop comprehensive PRP for each ministry.


Conceptual Framework


The overall framework as given here comprises three main parts:
   1. Performance Measures
   2. Modified Pay Structure
   3. Enabling Conditions



                          FRAMEWORK FOR PERFORMANCE-
                          RELATED PAY

         PERFORMANCE
         MEASURES                                       MODIFIED PAY
         1. Competency/ Skill                           STRUCTURE
            (w1%)                                             Fixed (100-x %)
         2. Effort/ Activity (w2%)                                   +
         3. Result/ Output/ Value-                             Variable (x %)
            Added (w3%)                                    (Individual/Group)
         4. Efficiency/ Productivity                               • Incentives,
                                                                   • Increments,
                                                                   • Bonus, etc.



            ENABLING CONDITIONS
            Delegation    Transparency Multiple Assessors         Benchmarking
                   Miscellaneous



Performance Measures

The starting point for the study would be to clearly identify the metrics for five measures
of performance. These measures are:
1. Competency/ Skill Measures (w1%)
2. Effort/ Activity Measures (w2%)
3. Result/ Output/ Value-Added Measures (w3%)


                                                                                       242
4. Efficiency/ Productivity Measures (w4%)
5. Quality/ Customer Satisfaction Measures (w5%)


Indices for applicable (relevant to respective organizations) measures are to be developed
in this study. The weightages will be determined as part of the study. Total of these
weightages will be 100.


Modified Pay Structure


The current pay structure does not provide sufficient flexibility to properly implement
PRP. The modified pay structure will have two main components: Fixed & Variable. The
variable component will comprise of incentives, increments, bonuses, etc. and will be
linked to the performance measures. Variable component will be x % of total pay, and
this x will depend upon a number of factors. This study is going to look into these factors
and suggest a range for x. Variable pay can be at individual and/or group level. There is a
trend towards group measures rather than individual measures in countries who have
implemented PRP. Their experience suggests that objectives of PRP are better achieved
when some of the measures are at group level.


Enabling Conditions


PRP cannot be effective without proper enabling conditions. The study is going to
prepare guidelines for these conditions. Some of these conditions are described here:
Delegation: Delegation of authority giving required autonomy to the department heads
and other employees is important for motivating employees as well as for establishing
public accountability.
Transparency: Transparency is needed not only for measuring performance but also for
linking it to variable component. This will help to increase employee motivation, improve
public accountability, and reduce corruption.




                                                                                        243
Multiple Assessors: Multiple assessors increase the reliability and dependability of the
assessment process. Public accountability can be incorporated by taking customer
feedback. Team-efficiency also improves team members assess each other.
Benchmarking: Organizations should have data pertaining to national/international
standards for the indices used in performance measures.
Miscellaneous: Some other factors like proper communication of the objectives of the
process, better interaction among various departments, top management support, etc. are
also important for successful implementation of PRP.




                                                                                    244
                                       Annexure II
                                     List of Meetings


    Meetings with officials of Ministry of Company Affairs

Sr. Date of
                  Details about the Meeting      Name of the Person   Designation
No. Meeting
1   16th March    Introductory meeting at    Mr. Anurag Goel          Secretary
                  MCA, Shastri Bhawan, Delhi
                                             Mr. Y.S. Malik           Joint Secretary
2    20th March   Introductory meeting at    Mr. H. Banerjee          Official
                  Office of OL, Ahmedabad                             Liquidator
3    3rd April    Introductory meeting at    Mr. Manoj K. Arora       Director
                  MCA, Shastri Bhawan, Delhi
                                             Mr. C. M. Verma          Consultant
4    5th - 6th    Meeting with section heads Mr. C. M. Verma          Consultant
     April        at MCA, Shastri Bhawan,
                  Delhi                      M/s Suman Lata Thakur    Under Secretary
                                                                      (Legal)

                                                 Mr. B.K. Bansal      Joint Director
                                                                      (Inspection)
5    9th April    Introductory meeting at        Mr. T.P. Shami       Registrar of
                  ROC, Nehru Place                                    Companies
6    26th April   Introductory meeting at RD,    Mr. Rakesh Chandra   Regional Director
                  Noida
7    4th May      Clarification meeting at       Mr. H. Banerjee      Official
                  Office of OL, Ahmedabad                             Liquidator
8    11th June    Clarification meeting at RD,   Mr. J.K.Jolly        Deputy Director
                  Noida
9    11th June    Clarification Meeting at       Mr. T.P.Shami        Registrar of
                  ROC, Nehru Place                                    Companies
                                                 Mr. P.K. Malhotra    Dy. Registrar of
                                                                      Companies




                                                                                  245
  Partial list of people (MCA) who participated in data collection


                    MCA, Shastri Bhawan (Delhi), 10th -12th April
   Inspection        Recodification    Admin I           Budget             Policy
                          Cell
Maha Singh         S.K. Sharma      N.K. Vij          R.K. Mishra     Suman L. Thakur
Anshu Tandon       M. S. Kaushik    Vijay Soni        S.S. Pandey     S.P. Kumar
Savita Sharma                       Rajiv K. Singh R.K. Dhar          M.S. Pachauri
Madhu B. Kumar                      Mohini Bala       C. S. Bindra    Narendre Kumar
                                    A. Ravindaram                     Monika Gupta
                                    Anju Sharma                       G.K. Uppadhay



                        ROC, Nehru Place (Delhi) , 17th -19th April
  T.P. Shami            Durga Rajpal       Manjeet Singh         Ram Krishan Saini
  P.K.Malhotra          Vandana Paliwal    Ram Prasad            Poonam Sharma
  M.C. Saxena           Kusum Kashyap      Sudhir Kapoor         Chander Singh Naval
  V.N. Sharma           Kirti Lata         Usha Devi             Kishor Gupta
  V.K. Gupta            Saroj Kumari       Raj Kumar             Vinay Kumar
  Anil Kakkar           Arun Albert        Pawan Kumar Garg Rakesh Kaker
  Kiran Mehta           Sushil Sahai       Lalita Sharma         C.J. Reddy
  Rashmi Singhal        Achla Sath         Gulab Chand           Munesh Kumar
  Rajendra Kumar        Meenu Mathur       Anupam Z. Harkar Hukam Singh
  Radha Gaur            D. K. Sharma       Rashmi Mathur         Vyas Dev
  Arun Raizada          Inderjeet Magu     Taranjeet Kuar        Manmohan Malhotra
  K.G. Mathur           Mangal Ram         Kamal Khurana         Nand lal Busri
  Meena                 V.K.Batra          R.K. Shah


                          Regional Directorate (Noida), 7th – 8th May
   J.K. Jolly                   Janak Mehandiratta           K. Venkal Raman
   S.B. Gautam                  Deepak Prabhakar             Dinesh K. Dwivedi
   Sanjay K. Verma              Prashant Kumar               K.M. S. Narayan
   Deepak Banga                 Ravindra K. Sinha            K.K. Gupta
   Janak Mehandiratta           R.V. Dani



                         Office Of OL, Ahmedabad, 22nd -24th March
  H. Banerjee                   N.J. Kansara              J.N. Chawan
  P.P. Shah                     K.M Motwani               Naresh Chandra
  P.P. Rawat                    P.M. Daryarani            R.C. Rawal
  Dharti R.Shah                 Suresh Srivastwa




                                                                                 246
     Meetings with officials of Central Board of Direct Taxes (CBDT)


Sr.     Date of     Details of the meeting     Name of the          Designation
No.     meeting                                person
1                   Introductory meeting at    Mr. S.M. Chander     Secretary, Revenue and
                    Delhi                      Shaker               team
2       2nd May     Introductory meeting at    Ms. Saroj Bala and   Director General
                    IIM, Ahmedabad             team
3       10th May    Introductory meeting at    Mr. Amitabh          Addl. Director, Income
                    DOMS, Delhi                Kumar                Tax
4       18th May    Introductory meeting at    Mr. Mohnish          Addl. Director, Income
                    Directorate                Verma                Tax
                    Investigation, Delhi
5       19th May    Introductory meeting at    Mr. Sushil Madhok    Addl. Commissioner,
                    Commissionerate,                                Income Tax
                    Baroda
6       21st May    Meeting with                      ----          Union Leaders
                    Association at IIM,
                    Ahmedabad
7       23rd May    Introductory meeting at    Mr. Narottam         Addl. Director, Income
                    Commissionerate,           Mishra               Tax
                    Ahmedabad
                                               Mr. Soni             Joint Commissioner,
                                                                    Income Tax
8       29th May    Meeting at NIDT,           Ms. Saroj Bala and   Director General
                    Nagpur                     team
9       5th June    Introductory meeting at    Mr. Sebichen         Addl. Commissioner,
                    Commissionerate,           Mathew               Income Tax
                    Bangalore
10      6th June    Introductory meeting at    Mr. Venket Reddy     Addl. Commissioner,
                    CBDT Headquarter,                               Income Tax
                    Mumbai
11      13th June   Clarification meeting at   Mr. Amitabh          Addl. Commissioner,
                    DOMS, Delhi                Kumar                Income Tax
12      17th June   Clarification meeting at   Mr. Mohnish          Addl. Director, Income
                    Directorate                Verma                Tax
                    Investigation, Delhi




                                                                                       247
Partial list of people (CBDT) who have participated in data collection


           Commissionerate of Income Tax (Ahmedabad), 24th -25th May
P.B. Solanki         H.B. Shastri         K.M. Parmar          Soma Sundaran
Priti Chakrabotry    Parsotam C. Jadav    R.C. Gandhi          G.K. Shaikh
Rajendra Prabhakar   Rohit Kumar          Sultana K. Panchal   Yogesh Dave
Husena A. Shaikh     B.K. Srimali         S.N. Goswami         J.R. Parmar
Jyoti Gomes          V.M. Datnia          M.M. Patel           N.B. Leuva
Vinay Cheran         I.A. Pathan          Ram Kumar Sharma Sheeba Sundaran
Valsamma Prakash     Varsha Patil         Vijay K. Prashant    S.G. Nikumbh,
P. Somasundaran




                    CBDT, Headquarter (Mumbai), 7th – 8th June
B.D. Nanaware        Ashok Doke        Meena Padwe          Blalwalkar
Vijay R. Kshirsagar Laxmi Narayan      Sheela Varghese      Ajinkya
Ramesh P. Pai        Deepak Talreja    R. Vishwanathan      Moghe
M/s Archana Bhide    Damayanti M       Sashi Iyer           P.K. Nathal
Leela D. Sawant      Satish Kamble     R.K. Anand           Umesh Pauranik



           Commissionerate of Income Tax (Bangalore), 6th – 8th June
S. Padmanabhan     Swapna N. Ambett    A Ramachanadram        S Durgappa
H.H. Rajeshwari    Sajora              E. Jaya Raj            Anandalakshmidevi
Radha Bai M        Srinivasa           K.L. Murthy            M.H.Hussain
Seethamma          M.G. Bhatt          Dawood Khan            Sujatha



        Directorate of Organisation and Management Studies(Delhi), 17th May
S.L. Dhawar                 Ms Nidhi Sehgal            M/s Sangeeta Nega
M/s Urmil Sethi             Santosh Chadha             Moly Madan
Suresh                      Dharam C. Sharma           Deepak Sharma
Kamal Talreja



                   Directorate of Investigation (Delhi), 18th May
Arun K. Gujjar                Manoj Tiwari                   Rajender Singh
Chitranjan Dass               Himmat Kumar                   Sashi Rai




                                                                              248
Meetings with officials of Central Board of Excise and Customs (CBEC)


Sr. Date of
                    Details of the meeting    Name of the person    Designation
No. meeting
1                   Introductory meeting at Mr. S.M. Chander        Secretary,
                    Delhi                   Shaker                  Revenue and
                                                                    team
2     4th April     Introductory meeting at   Mr. Vijay Singh and   Director General
                    NACEM, Faridabad          team
3     8th May       Introductory meeting at   Ms. Kamashwari        Joint Secretary
                    North Block, Delhi        Subarmanyam and
                                              team
4     9th May      Introductory meeting at    Mr. V.K. Garg and     Commissioner,
                   Commissionerate of         team                  Income Tax
                   Service Tax, Delhi
5     21st May     Meeting with Revenue               ---           Union Leaders
                   Union at IIM,
                   Ahmedabad
6     1st June and Meeting at                         ---           Department
      4th June     International Air                                Head
                   Custom, Cochin
7     13th June    Clarification meeting at   Mr. V.K. Garg         Commissioner,
                   Commissionerate of                               Income Tax
                   Service Tax, Delhi




                                                                                  249
    Partial list of people (CBEC), who participated in data collection

                        CBEC, North Block (Delhi), 15th- 16th May
Custom            Custom Policy       International      Tariff Unit          Air Custom
Coordination                          Custom Division

Mridula Pawar     Anupam Prakash      Sravan Dass      Virendra Singh         Aseem Kumar
Santosh Arora                         Jitendre Singh   Geetha Ramesan         Lavkush Kumar
R.C. Sharma                           R.M.S. Ruhil     (steno with JS)
Subhash Chand                         Rakesh Sharma
Vivek Ashtana                         Ved Prakash H.
G.L. Bhardwaj                         Vaiphe Gopal
Ishwer Singh                          Dutt Anil Sajwan
                                      P.J. Thomas



                                     Service Tax, Delhi
                                      11th – 14th May
Ashok K. Pandey           Ravinder Mohan         A.K. Paliwal            Vinod Dhawal
K.C. Meena                Gopal Datt Joshi       Tajvinder Kumar         M/s Neelima E. Beck
Roshan Lal                Ramesh Kumar           M.K. Gupta              Anshuman Jain
A.K. Chavahan             Sanjeev K. Verma       D.K. Mishra             Kamakhya Kumar
Sunil Mahajan             R.S. Sahni             Arun Kumar




                                                                                      250
                                Annexure III
                 Outcome Budget Framework (for MCA)


1   MCA21 e-Governance Project
2   Legislative initiative
    a) Limited Liability Partnership Bill, 2006
    b) New Companies Act
    c) Amendments to the Competition Act, 2006
3   Indian Institute of Corporate Affairs (IICA)
    a) IICA-Plan Scheme
4   Capacity Building Initiatives (Non-Plan)
    a) Restructuring of ICLS
    b) Training for capacity building
5   Investors Education and Protection Fund (IEPF)
    a) Investor Education and protection
6   Infrastructure Strengthening
    a) Acquisition of built-up office space and furnishing
    b) Construction of new office complexes
    c) Renovation and furnishing of existing offices
7   New Institutions
    a) Competition Commission of India
    b) National Company Law Tribunal (NCLT) and NCLAT




                                                             251
                                       Annexure IV
                    Action Plan Framework (for CBDT/CBEC)


                        Action Plan for Central Board of Direct Taxes
A    Revenue Targets               B       Non Revenue Targets
1    Budget Collection             1       Widening of tax base
2    Recovery of demand            2       Deepening of tax base
     a) Arrear demand              3       Disposal of audit objection
     b) Current demand             4       Disposal of appeals
                                   5       Review of assessment order by administrative
                                           CsIT
                                   6       Computerization and tax payer’s service
                                   7       Lunching of prosecution for non technical
                                           offenders
                                   8       Action against stop filers


          Action Plan for Central Board of Custom and Excises (Service Tax)
A   Revenue Targets                B       Non Revenue Targets
1   Budget Collection              1       Staffing and Infrastructure
2   Collection of arrear revenue   2       Broadening of assessee base and de-
                                           registration
3   Anti Evasion                   3       Profiling of service sector
4   Survey, Intelligence and       4       Information Technology
    Verifications
                                   5       Profiling of assessee
                                   6       Profiling of audit
                                   7       Tax Payer’s education
                                   8       Inter active web site
                                   9       Registration and filing of returns
                                   10      Pending adjudication cases
                                   11      Rebate and refund claims
                                   12      Court/Tribunal matters



                                                                                       252

				
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