While the government talks of doubling Income Tax raids and scrutiny cases, there is never a mention of taxpayer convenience. For instance, compulsory electronic filing of tax returns have imposed significant additional costs on people due to India’s low level of literacy, especially tech literacy. Many taxpayers, especially small businesses, have been forced to seek expert help in filing taxes electronically.

While they follow government diktat, the Tax Department has not even bothered to reciprocate the effort by automating the Tax Refunds process. Instead of crediting refunds to taxpayers’ accounts, the department follows an antiquated system requiring taxpayer to sign on the reverse of the cheque before crediting it to his/her bank account.

Can’t a government department that has access to every taxpayer’s bank accounts at least ensure direct credit of refunds? High transaction costs merely for providing automated or electronic systems need to be examined in the context of capital market transactions as well. A couple of cases that need discussion are the high profitability of the National Stock Exchange (NSE) and the National Securities Depository Ltd (NSDL). Both operate at a whopping and identical operating margin of 53 per cent. In NSE’s case, as much as Rs 300 crore out of its operational income of Rs 372 crore comes from transaction charges alone. Listing fees and other charges are barely double-digit figures.

With infrastructure costs recovered over the decade, a phenomenal increase in trading turnover and no worthwhile competition, there is no pressure on both organisations to reduce transaction charges. Such questions are usually brushed off by comparing international costs; but this is incorrect. India has emerged as the back office of the world, because sharply lower employee costs combined with a continuous drop in hardware, software and telecom costs has given our companies a significant cost advantage in the IT sector. Why does this not apply to the domestic market?

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