The image of the Indian taxman took further beating this week when 50 young officers of the Indian Revenue Service recommended massive tax hikes as a way out of Covid-battered economy.
The ‘dreaded’ IRS was back. And so was India’s pushback against it.
From jokes on the officers of the premier service to more nuanced criticisms of the idea of taxation as a solution to all economic woes – IRS received brickbats from all quarters.
For a whole day after the report was made public, #IRSJokes trended on Twitter. And if the vilification was not enough, the IRS cadre also saw three of their senior officers being charge-sheeted by the Narendra Modi government for creating panic in times of unprecedented uncertainty with the “irresponsible” report.
The biggest joke for these 50 “young IRS” is going to be when @narendramodi is going to throw their stupid suggestion in the dust bin.
My problem is with the entire dept as to how they could even think like this and document their thesis and even release it 🤣🤝 #IRSJokes
— Ashu (@muglikar_) April 26, 2020
Given that the IRS – the eyes and ears of the government’s economic decision-makers – became the source of widespread anxiety at the time of a grave crisis, it is ThePrint’s Newsmaker of The Week.
The not-so-shrewd taxman
In popular imagination, the average IRS officer has seldom been more than a threatening, unsympathetic tax collector, slapping notices and conducting raids.
The report only strengthened this image, with many decrying the report for its lack of theoretical grounding, and Indians cringing at having to pay higher taxes at a time when businesses are shutting down, jobs are being lost and payment of wages is becoming a struggle.
“All Services must urgently review the economics curriculum at their training academies — for it is disturbing that some of our smartest young people should think that raising taxes during an unprecedented economic crisis is a good idea,” wrote Nitin Pai, director of Takshashila Institution, in ThePrint.
But the image of IRS as a tax-obsessed breed of government servants is unfounded.
Even if the IRS officers are seen as the frontline soldiers of a regime accused of ‘tax terrorism’, they are routinely outwitted by the public. Many Indians routinely get away, often with the not-so-tacit consent of the political executive, with not paying taxes or finding legal loopholes.
“The Credit Suisse Report implies that around 3,500 Indians hold wealth that would provide annual rentier incomes in excess of ₹500 crore. But the CBDT data show that only 179 individuals reported this level of income in 2017-18,” C.P. Chandrasekhar and Jayati Ghosh had pointed out.
Year after year, actual tax collections remain less than the steep targets set by the government.
If the IRS officers still continue to be viewed with a sense of deep suspicion by the public, it perhaps has to do with the Indian upper-middle class and upper-class’ aversion to paying taxes.
Prisoners of UPSC cage
But there is another more structural problem that this controversy has highlighted – IRS officers are expected to have the rigour of economists, even as they operate in a system that does little to encourage specialisation.
IRS officers are assigned their area of ‘expertise’ not on the basis of interest or aptitude, but solely on the basis of their marks in an exam they take in their 20s.
IRS officers, like those of the other 20-plus civil services in the country, are products of the same prestigious, competitive UPSC examination that produces officers for the Indian Administrative Service.
So, in a system that assigns domain expertise so arbitrarily, we expect IRS officers to be not just the government’s economic foot soldiers, but also its key economic thinkers. There are a group of people who simply scored marginally less than the toppers of the exam and significantly more than the lakhs who appeared for it.
“Why is it that we should always remain on the margins of decision-making just because we scored lesser than someone in an exam we took 20 years ago?” an IRS officer once asked me.
The perennial runners-up
For the IRS, like any other non-IAS entrants into India’s civil services, the glass ceiling is set from the start.
Even within their domain of finance and revenue, IRS officers are relegated to positions subordinate to the IAS. When was the last time the country had a finance or revenue secretary who was from the revenue service – was the question asked by several IRS officers when the Narendra Modi government came up with a formal policy on lateral entry in 2018.
Yet, despite the systemic biases, the almost 5,000 officers-strong cadre of the IRS has constantly been jostling for more administrative space in the system.
Increasingly, they are serving in all government ministries as directors and joint secretaries – the top positions of secretaries still remain the stranglehold of the IAS – and making policies in areas that have nothing to do with revenue.
They are serving as officers in India’s premier investigative, vigilance and constitutional bodies like the Central Bureau of Investigation, Enforcement Directorate, Central Vigilance Commission, and even the Election Commission – where the second in line to be the Chief Election Commissioner of the country is, in fact, an IRS officer.
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