Digital Signatures: Who benefits.
Digital Signatures: Who benefits.
In this country, corruption is now becoming the very basis of formulating the Exim policy much to the detriment of the public interest though each & every public notice states that the same is issued in the public interest. The exporters were in favour of computerization because they felt that it will drive out corruption but that is not the ground reality. Computerization has only shifted the responsibility on the shoulders of the exporters. The tragedy of online applications is that the license can be issued in a day because the RLA s are just doing a printing job but the exporter is not very sure in how many days he will get the file number or a document back, which was submitted for correction. It is difficult to understand that why such a situation should prevail if these offices have really turned efficient. Why the exporter should not be able to generate a file number print out in his office for effecting shipment under the advance license scheme. Why the issuance of Export Obligation Discharge Certificate in case of advance licenses should require 15 days when the documents are the same which are to be examined for issue of Post shipment DFRC. The fact of the matter is that policy makers keep procedures which will keep corruption intact. Nowhere the corruption starts from the bottom, it always starts from the top.
If you will even give a cursory look to the information demanded in the On-line application forms then you will immediately conclude that the manual applications have been just reproduced in the electronic form. Nothing can be more foolish than this. Thus the policy makers are responsible for the biggest of the losses to the exchequer. The data required in the application can be reduced drastically & there should be offline application programme made available by the DGFT so that there is not much online load on the system & the speed of the system can be better to work with. This is critical because every exporter does not have broadband connectivity. Further, another advantage of the offline system is that the exporter has not to fill the applications again & again if repeat licences are required. The DGFT is aware that there is offline software available & that is a better way of functioning but then they do not encourage it because it will close all doors for corruption. The offline market programs are not successful because DGFT makes frequent irritating changes from time to time & the service providers are then not able to help the exporters with updations but if DGFT takes on this responsibility then there cannot be any problem. In computers, it is garbage in & garbage out. This is what is happening in the computerization program of the DGFT because it is used in that manner. If the applications are rationalized then it will ultimately reveal that why the DGFT regional offices are not needed in the first place because these offices are showing work done where there is no work at all. The work is performed by the technology. I am surprised to know that even after having a computerized IEC the DGFT is not in a position to generate a report which will show the position of imports & exports in respect of all the licenses in respect of a particular IEC. This is the very basic requirement to do risk assessment but then even this is missing. I think it is only for the reason that under these circumstances the officials in position can oblige the favoured ones with the goodies on quid pro quo basis. On the one hand they want exporters to sign the applications digitally but on the other hand they don’t even know what is going on in respect of entitlements issued by their office. What a paradox!!! In the first week of March, at Mumbai the entitlements were not getting issued because all sections were busy in issuing reports in respect of defaulters & issuing Notices. What a criminal waste of time & resources to the detriment of exports & exporters just because the computers are not used properly.
IEC updation & BIN number were touted as big things forward. We have told you the position of DGFT but the position of BIN is far more worse in the customs department. This has served no purpose at all. It has remained as another piece of decoration in the documentation. The least which could have been possible is that with the help of this BIN number, the DGFT office should have been in position to access the customs data in respect of the importers & exporters.
Now coming to the story of digital signatures, the first to act on this was the O/O Development Commissioner’s controlling the EOU/SEZ units. They long back announced that Quarterly reports will not be accepted without being digitally signed. Accordingly, application was submitted for the allotment of digital signatures in the month of October, 2003 to DC, SEEPZ, SEZ, Mumbai with the applicable fee of Rs.600 per digital signature. A fee of Rs.600 was rationalistic & reasonable. Though the digital signature application was made no digital Signature has been issued till date nor any reply received. However, now in January’04, the same fee has now been raised to Rs.5000 per digital signatures It is very difficult to understand that what has changed during October’03 & January’04 to raise the price of digital signature by 733.33% with a renewal fee higher by 150% per signature in terms of the charges fixed earlier. Why the DGFT & the service provider should together fleece the exporters. Is it just because the exporters have no alternative available. The policy makers & the service provider may explain this by saying that they have improved the security but then at what cost & to whose benefit. If that is really so then why they did not announce the withdrawl of the earlier scheme in time. What games were being played behind the backs of the exporters ? There are, at the very least more than 1,00,000 IEC holders & almost all of them will require multiple signatories. Thus this means a gift cheque of more than 50 Crores to the service provider & that too in respect of a service, which does not entail any advantage to the exporters. Further, the DGFT’ s approach of showing the stick to the exporters is very deplorable. As on today, the password system with the submission of hard copy the next day has served the exporters needs properly with ample control on misutilization available to both the exporters as well as the authorities. There has been no problem encountered then where is the need to change the system & for what reason? Do you mean to say that with the digital signatures, there will be no hard copy of the application required. If yes, then there is no need of the DGFT offices at all. In any case, the digital signature or submission of hard copy with manual signatures is more better system for the exporters to exercise control. If the hard copy submission continues then what is the basic advantage of the digital signatures to the exporters. Why the DGFT should promote the interest of the service provider by linking reduction in fee to the digital signatures use only. Actually, the reduction in fee was my idea implemented, based on the fact that the RLA s are doing nothing so there is no reason to charge very high fees for the issue of licenses. The reduction in fee is related to electronic filing & that facility should not be taken away from the exporters to the benefit of the service provider. Why the DGFT should permit the benefit of reduction in fee to sell the digital signatures of the service provider. What is the quid pro quo in this case because there is no free lunch available in this world. It becomes a more pertinent question question due to jack up in prices with monopoly status. The digital signatures issued are only for the purpose of obtaining licences from the DGFT office. The policy has to be in public interest & why the small exporters who wish to make small exports should be burdened with these overheads for no reason or disallowance of a lower fee structure. I have been banking with Union Bank of India & they have started e commerce. It is constituent friendly i.e. as on date no charges are levied on the constituent & on the other hand the recipients of payment have offered incentives to the users to make this option more attractive. In all these transactions of e commerce where actual payments are transacted, there is no digital signature ID called for. This can be termed as service with a smile & why the DGFT could not ensure this to begin with. For e.g. in case of use of ICEGATE facility for filing S/B s or B/E online, you can download the user friendly software & use it free of cost.
Another problem with the digital signatures is that in any organization, the work of feeding the data in the online application will be carried out by the professionals & therefore the digital ID has to be shared with these officials. You cannot expect a Director, Partner or Proprietor to file these applications. Thus the organizations will run an unlimited risk, which will be very difficult to manage in case the employee fiddles or leaves the organization. Is the DGFT or service provider ready to shoulder this responsibility?
It is understood that this digital signature ID is to be implemented only in case of EPCG & Advance licences. Now, why the policy makers should aggravate problems for the most legitimate users of the export promotion schemes. Here there are enough of checks in the form of execution of LUT s/ BG s before the utilization of the licences. It is known to everybody that the transferable schemes are prone to the maximum misuse therefore there was every reason to introduce these security measures in respect of the DEPB & the DFRC schemes or the post shipment entitlements. Further, Advance licences & EPCG licences are only a very small percentage of the total licences issued by the DGFT offices as on date. Why only for EPCG & Advance licences only the fee reduction is linked to the use of Digital signature ID. Why in DEPB & DFRC the same is not implemented. Why the DGFT should use the stick approach for a select band of exporters in a discretionary manner.
Even at the time of IEC updation, there was a scam. With each & every IEC online application, Rs.50 postal stamp bearing envelope was collected. Rs.50 stamps were not required in the first place for despatch of a single piece of paper. further, later these IEC were mostly hand delivered across the counters. Now what happened to this self addressed envelopes, only God knows. In any case, these envelopes & postal stamps should not have been wasted. If IEC was updated online, after validation by the authority, an e mail of the IEC or a print out from the site would have been good enough but then who cares.
When the DGFT offices are doing nothing & when there is liberalization & you are not required to pay fee for goods imported as such then why the exporter should pay fee in respect of Export promotion related matters. Is it not absurd that I can import the same goods without paying the fee for actual use because no license is necessary whereas in respect of export related imports, which the DGFT is supposed to promote, the licencee is required to shell out a hefty fee. This fee continues because the policy makers do not apply their mind or use their rationale for making exports competitive. They only concentrate on those systems & opportunities which will give them the power to control & make money on the sides. Where is the service element in issuance of licences? Is checking & printing a service in terms of export promotion & why this service is not charged for when performed by the Customs department (duty drawback). DEPB is not a licence then how & why a fee should be levied in respect of the duty credit. Why the DGFT should befool all the exporters all the time. There can be a nominal fee of Rs.1000 per licence to regulate proper use but you cannot charge exhorbitant fees, which is value based to the detriment of exports & exporters. Please note there is nothing like DGFT offices & fee for export promotion in any of the developed countries. Why should it then continue in India?
As a matter of fact, there is no reason for the licenses to be issued in most of the cases because the work can be directly handled by the Customs department on the basis of Bank Guarantees/LUT submitted by the exporter & exporters can work under the bond/LUT/BG signed with the customs department. In post shipment scheme, like in case of duty drawback, the shipping bill in itself can be treated as entitlement for use & all details of entitlements earned & used can be maintained through the BIN number system, which will be very easy to implement. If required, a few export promotion officers can be made to sit in the customs houses to sort out the problems of the exporters/importers where the customs is being unreasonable.
It is also seen that from the changes made on the site that there is documents uploading facility being made available. Now this means that each & every exporter will have to have scanners & related softwares to upload the documents on the site. Once again, the moot question is that why the small exporters should be burdened with the costs. It appears that the documents will have to be loaded in respect of each & every applcation i.e. a lot of storage space will be required with each & every application & this will be a waste as such. There has to be a master data bank & only the key number can then be loaded. In case of exporters who make applications on almost daily basis or more than 1 application in the day, why uploading in respect of each & every application should be necessary. Why the DGFT should waste a lot of resources for no reason. In case of non SION applications & EPCG applications, the details of process of manufacture & catalogues of machines may run into several pages. It is dificult to understand that what the service provider & the DGFT authorities are trying to do?
Thirdly, the DGFT has roped in the services of the few bankers. Now exporters will have to establish accounts with these bankers for no reason. If you will see the modus operandi of the bankers then you will observe that the banks do not even work with digital ID s. They also work with simple password system. Once again it raises the question that why then the DGFT offices are trying to run faster than the others. Why the DGFT should use the digital signatures as a glamour girl!!! Why the DGFT does not think that in other countries, the licences are not required to be issued & even the documents in Customs are filed through the password systems. Further, if required, it is possible to find out from which computer the application was made?
Finally, if you will go to the DGFT site, to make use of the facility by the service provider/DGFT then you will surprisingly face the message that the security certificate of the site has expired or not in force. If the security certificate has expired then where is the system sacrosant & what is the use of the digital signature ID.
If the DGFT really wants to help the exporters then they should concentrate on making the entitlements available through the internet at the office of the exporter. Let the signatures of the DGFT officials be digitally certified & a print thereof should suffice for the availment of entitlement. Why the DGFT cannot do this instead of forcing the exporter to buy the service providers wares. If required DGFT can scan & keep the applications in their record like in case of the property registration documents. The verification of entitlement can be again through e mode because copy of the same entitlement will be transmitted & available with the Customs department for utilization at their end. DGFT should at the very least have a read receipt acknowledgement system in respect of all e mails received & a reply given in respect of the e mails or alternatively have a facility on the website through which e mail can be sent for any clarifications in the Policy/procedures.You can receive a read receipt from the President of India but the DGFT thinks this to be below dignity & this speaks about transparency in policy. The exporter should be able to access the IEC code & all data in respect of the IEC code in respect of imports as well as exports should be available to the exporter so that the exporter knows where he stands in terms of his obligations. This can be the way to help the exporters & not by burdening them with the digital signatures, which yield no benefit. Please show some real benefits to the exporters in making their working more comfortable.
Some people have told me that the service provider is roping in agents for this purpose at a very hefty commission & quite a few of the DGFT official’s relatives have been absorbed in this game. The agents have confirmed that the agency commission per installation will be Rs.1000 & further they will be able to recover Rs.500 as installation charge. What a grand scheme to fleece the exporters!!! Is it not a quid pro quo game being played to force the exporters to open their purse strings for a cool steal.
It is said that by reducing the rate of duty on Gold/Computer Hardware, the grey market has been detroyed but why the officials in position forget or conveniently ignore the fact that effective Customs duties have come down from more than 100% to 20% now therefore where is the incentive to cheat. Why the customs or DGFT officials are not able to believe the exporters in the first place. Why the Customs & DGFT organizations cannot work in perfect harmony & on the basis of risk assessment models sharing information with each other.
I am reminded of the management philosophy of Mr. E. Goldratt where he warns against unnecessary sophistication & says that there is no substitute for common sense. The common sense tells me that it is no use burdening the exporters with high transaction costs; it is ridiculous if the manual applications are reproduced as e commerce applications; it is sheer waste of honest tax payers money to run the DGFT offices if technology performs the function & this can be done by the customs.Technology can bring in benefits only if it diminishes a limitation. Here in our case, the lilmitation of submission of hard copy stays & therefore the benefit is reduced to zero. Under such circumstances, why the DGFT should burden the exporters? The way the duties are required to be reduced & being reduced, the export promotion schemes in a few years will become irrelevant. Till then we can live off well without that glamour of digital signatures.
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