ASSET DISPOSAL - GOVERNMENT E- COMMERCE PLATFORM CAN SAVE BILLIONS
Suggestive Article by CA A. K. Jain
NEED FOR E- COMMERCE PLATFORM
General lack of transparency and inefficiencies in the handling and disposal of the seized, confiscated, obsolete, surplus, unused assets has time and again created embarrassing situation for the government’s functionaries. Non - standardized assets disposal policies have also resulted into enormous financial losses, bribery, bungling, corruption and crime in this sector.
1. GENERATION OF DISPOSABLE ASSETS
High value disposable assets in considerable quantum are regularly generated by all Government departments, financial institution, banks, public sector organization, local bodies etc. Besides, revenue departments like Income Tax, Customs, VAT, Excise regularly seize / confiscate valuable assets in course of raids or at the time of recovering their dues. NPA accounts are also generating disposal assets in the hands of government.
GENERAL SOURCES :
1. Assets seized by Income Tax Department.
2. Assets seized by Custom Department.
3. Assets seized by Service Tax Department.
4. Assets seized by Central Excise Department.
5. Assets seized by Police and Defence Forces.
6. Assets seized by VAT Department.
7. Assets taken over by Banks & Financial institutions.
8. Assets taken over by official liquidators.
9. Scraped Assets of Central Government.
10. Scraped Assets of State Government.
11. Scraped Assets of Public Sector, Railways and Defence establishment.
12. Scraped Assets of Local Bodies and Municipalities.
2. MANAGEMENT OF DISPOSABLE ASSETS
Disposable assets worth billions are regularly generated due to various reasons mentioned above. However, there is a lack of standardize policy regarding the management of these assets. Soon after collection / seizure these assets loose their value due to lack of proper storage, upkeep, control, maintenance and disposal policy. It is seen that in most of the cases valuable items are either stolen or get junked / rusted.
3. LOSS OF REVENUE
Whenever an asset which is either owned by the government or collected by the revenue officials or bank officials suffers loss of value due to negligence, improper storage or theft, it’s a direct monetary loss for the government. Although no government data is available, it will not be exaggeration, if the loss to the government on this account is running into billions.
4. SOLUTION FOR CRONIC PROBLEM
The colossal monetary loss to the exchequer due to inefficient asset disposal system can be saved by simple application of information technology. Government can float its own E - commerce web portal, exactly, on the lines of flipkart, snapdeal, Olx, ebay, alibaba, amazon etc. All disposable items immediately after retirement or securing custody can be placed for public sale on this web-portal. E-Commerce platform will provide the Government a venue to instantly monetize these retired, surplus and confiscated assets. Timely disposal will result into regular inflow of regular funds and also simultaneously reducing the cost of storage and value degradation. Besides, corruption and briberies will also be substantially reduced.
5. MANAGEMENT OF WEB PORTAL
It may be debated whether government machinery will have the aptitude to handle this kind of massive E-commerce web-portal. In that case, the task of operating the E- commerce platform may be outsourced to one or more private companies on the basis of bidding. MCA portal is the best example of outsourcing from Indian Software Company. Companies like Infosys, TCS, Wipro, HCL etc. will instantly jump on this opportunity. Outsourced vendor activities can be supervised by Ministry of Commerce / Finance through guidelines and an All India Level Managing Committee.
6. CENTRAL E- COMMERCE PLATFORM AND VENDORS
Government can appoint one or multiple vendor companies to manage the E- commerce business. However, all the companies will only work on one central E- commerce portal. The government will have full control on portal management. Vendor companies will use this portal for placing their items on the portal and arranging for delivery and payment etc. Vendor companies may be paid a fixed amount or variable amount based on understanding and their costs.
7. ASSET VALUATION
The assets can be disposed off on the basis of minimum valuation and bidding method. The buyers can offer their bids for purchase of any items listed subject to minimum price management. In this regard, a few rules can be framed by the managing committee from time to time.
8. RULES AND REGULATION
The managing committee nominated by Central Government will be empowering body to design the necessary rules and regulations for the management of the portal. Their decision will be final and will not be subject to any further authorization.
10. REVENUE DISTRIBUTION
The central body will distribute the collected revenue to the concerned department providing the assets on monthly basis. In case of sale of seized assets, revenue will be given to the concerned department after deduction of some fixed cost. A situation may arise where, it is realized that, assets has been wrongly seized and sold. In such cases the Government will deliver to the claimant the value of assets actually realized from sale in the open market operations. Government will not be responsible for any additional compensation. However, the right to get the sale stopped through court always lies with the claimant. The onus of timely approaching the court for stoppage of sale will lie on claimant. Some more rules can be framed for smooth running of this e commerce platform.
It is fairly estimated that, sale of obsolete and confiscated assets by the government annually runs into thousands of crores. However, there is no standardization in the process of disposal. Lack of transparency leads to wide spread corruption and mismanagement and ultimately revenue leak. The centralized E- commerce portal will affectively deal with various weak points in the system and improve marketing at very low cost. Enormous employment potential is also a key feature of the scheme.
This suggestive scheme is inspired by the speech of Our Hob’ble Prime Minister…. Shri Narendra Modiji on 15th August, 2016 from the Red Fort of India.
Suggestive article by CA A. K. Jain, Email : email@example.com
Note: Information placed here in above is only for general perception. This may not reflect the latest status on law and may have changed in recent time. Please seek our professional opinion before applying the provision. Thanks.