“If I had to go back in a time machine, I would still prefer joining the government” – Kamlesh Varshney IRS, IIM Lucknow Alumnus, Commissioner of Tax, Government of India
This is the second story in our Career Perspectives Series. The idea is to provide a perspective on careers through interviews with really illustrious alumni from top B schools. We will be interviewing alumni from different walks of life – entrepreneurs, business leaders, social leaders, and artists. We started with Suhas Misra – IIM Calcutta alumnus and Co-Founder of Hector Beverages.
Our illustrious alumnus for this story is Kamlesh Varshney, Commissioner of Income Tax, Government of India. Kamlesh graduated from IIM Lucknow in 1989, and joined the civil services immediately thereafter. He is from the IRS, batch of 1990. This interview offers a brilliant perspective on areas as wide as career choices, public policy and personal experiences. Read on…..
Generally most MBA graduates aim for a cushy job – this has been the case for the last fifty years. What motivated you to ditch that and choose the IRS?
I belong to 1987-89 batch of IIM Lucknow and 1990 batch of IRS. At the time when I joined IRS there was not much difference in salary between Private sector and Government sector. The Government sector had an added advantage of giving an opportunity to do something good and different for your country. Thus the choice was not difficult. At that time there were many IIM graduates who used to appear for civil services. Situation started to change after economic liberalisation ushered in by Mr Narsimha Rao’s Government with Dr Manmohan Singh as the Finance Minister. The gap in salary between Private sector and Government sector started to widen. That led to a situation where less and less IIM graduates are appearing for civil services now. But I have no regrets; I have fully enjoyed the opportunity that Government has given to me. Even if I have to sit on a time machine and go back to 1989, I would still prefer joining Government.
What is the difference between working in a corporate set up versus working in a governmental setup?
I have not worked in the Private sector; hence answer to this question is based on my interaction with friends working in that sector. I think in Private sector there is lot of pressure which sometime leads to unhealthy competition amongst colleagues. In comparison the Government sector provides you with free opportunity to show your skill set without any unhealthy competition. On corruption front I think, corrupt practices are prevalent both in Private sector and Government sector. It depends on individual’s discretion. The disadvantage of Government sector is that there is no incentive to excel. There is no extra salary or out of turn promotion for doing something outstanding. You have to be driven by self actualisation to achieve what you want to achieve. You motivate yourself and subordinates only with the desire to excel and do something different. On this aspect Private sector is better as you get due reward for your outstanding performances.
It can fairly be said that our IIM graduates are selfish and lack any powerful sense of social or community service. What can be done to remedy the situation?
To some extent each individual is selfish. Hence, I would not like to categorise anyone in that manner. But I do agree that there is need for more participation of IIM graduates in social sector. The participation could be indirect as well. The Government has already brought about a change by ushering in Corporate Social Responsibity (CSR) regulation. It is time for IIMs to include social service in their curriculum. I have heard that new Central Government is working on a plan of provide apprentice training in Government. This is a much needed step. There is a need to give training to our young students in Government department. The Government would benefit by fresh ideas and students would get very good inputs on Government working. Both these steps ( including social responsibility in the curriculum and offering training in Government departments) would open up mind of young graduates for doing something good for the society and the country. They may still join Private sector, which is fine. But their outlook towards society and country would be different.
There was a time when the civil services attracted the best talent in the country. That is probably no longer the case – the brightest minds now aim for IIT and IIM. What can be done to change this?
I feel that civil services still attract the best talent. Lot of IITians are still joining civil services. Yes there is a sharp reduction in IIM graduates joining civil services but I heard that this year civil service topper is from IIT Kanpur and IIM Lucknow. Notwithstanding this, the quality of people joining civil services has not got down at all. The pool of students in India, who have not gone to IIT or IIM, is also highly talented. But this fact is also true that many newly recruited civil servants now lack formal education in management, which was not the case earlier. But this is also taken care of. The partial funding scheme of Government of India, in combination with full pay leave for study, has provided very good opportunity for the civil servants to acquire management education while in service. A large number of civil servants now acquire formal management education from top management institutes in India or overseas, after joining the service.
Do you think there is scope to simplify the tax regime at various levels (Indirect Taxes: GST, Income Taxes: changing the slabs etc)?
I do strongly believe that there is a lot of scope for tax reforms. However, I would like to clarify that, in my view, tax reform does not mean changing slabs. We need to make tax administration simple and taxpayer friendly, which is often referred to as non-adversarial tax administration. In addition, there is a need for tax certainty. My personal experience in interaction with MNCs is that they are more concerned about tax certainty than the tax rate.
So far as direct taxes are concerned, Government of India has already taken a number of steps in this direction, in the past. Off course more needs to be done in future. Use of IT technology in tax administration has simplified tax administration. Due to e-filing, issuance of tax refund has become very smooth and corruption free. Now the technology is being used for grievance redressal. Technology is also being used for making tax investigation non-intrusive. With the use of technology income tax department is determined to bring the necessary change to make it a non-adversarial tax regime. For providing tax certainty Government of India has also taken very important step by introducing and successfully implementing Advance Pricing Agreement (APA) scheme. I have been fortunate to be associated with this scheme right from its beginning.
Just like direct tax, I am sure that indirect tax department has also implemented similar schemes. Having said that I do agree that there is still scope for lot of reforms. We need to move to a situation where honest taxpayers are not harassed and there is incentive for being honest. At the same time tax evaders are prosecuted and there is a fear in the mind of potential tax evaders that if they evade they would immediately come to the notice of tax department. Use of Information Technology and restructuring of income tax department would play a major role in bringing this change. We need to move with greater speed in providing tax certainty to all taxpayers and in particular foreign investors. The new Government is determined to bring this change. Challenges are there but these challenges also provide opportunities to young and talented graduates to join the Government and be part of this reform.
What is the most challenging part of your job and what was the most enjoyable experience?
I have been lucky that Government of India has always given me challenging assignments and have also given me permission to work overseas with Government of Papua New Guinea for five years. At Papua New Guinea I was able to streamline their tax administration and was able to impart skills to their tax auditors. These efforts have benefitted that country immensely. After my five year efforts, a UN study reported that Papua New Guinea is one of the most tax compliant countries in the world.
In India, I was involved in writing the Direct Tax Code which came out for public consultation in 2010. As Director (Foreign Tax Division) I was part of the effort in substantially increasing India’s treaty network, improving its exchange of information capability and resolving cases under Mutual Agreement Procedure. My most enjoyable experience has been to be a part of effort to roll out Advance Pricing Agreement scheme in India. This scheme endeavours to bring certainty relating to transfer pricing in international transactions. I have been associated with this scheme right from the planning stage to implementation stage. It was a real challenge since such an approach has never been part of Indian tax administration. Bringing the required change has been the most challenging part of this job. I am glad that the scheme is working successfully and has been appreciated by everyone in India and overseas. In the very first year of APA, India signed five APAs. No country in the world has been able to achieve results in its very first year of APA implementation.
My five years stint at Papua New Guinea and my involvement in rolling out APA regime in India have been the most satisfying and enjoyable experiences of my life.
How has the MBA helped you in your administrative responsibilities?
The most significant contribution of management education has been to look for solution. While most of the people get bogged down by problems, the management education that I received at IIM Lucknow has trained me to always find solutions even in difficult situations. I have never gone to my bosses with problems without offering alternative solutions. Leadership skill is another important attribute that was acquired by me through my education at IIM Lucknow. In my opinion these attributes have helped me in successfully handling administrative responsibilities.
What is your message to MBA graduates who are about to begin their jobs this season? What is your message to those who are interested in entrepreneurship?
I would like to wish all the graduates a very successful career. They are now educated enough to understand what would give them enjoyment and satisfaction in life. I feel that ultimately you will be happy in life if your job gives you enjoyment and satisfaction. Offcourse, the definition of these two words would also change from person to person depending on their individual needs and expectations from life. So pauce for a second, think what you want from life and then make a choice.
For those interested in entrepreneurships I want to encourage them to go for it. India has been lacking in this space not because of capability but for reluctance to take risks. I think, time has come when we Indians have to show to the world our entrepreneurial capabilities. So those who want to go for it, my best wishes are with you.
We are extremely thankful to Kamlesh Varshney for sparing his valuable time and giving us his extremely insightful responses to our questions – Team InsideIIM.
Read all stories in the Career Perspectives Series here.
Read the previous story – Interview with Suhas Misra, – IIM C Alumnus and co-founder, Hector Beverages here.