Infosys does tax returns
By Bala Shah

Why am I uneasy about the fact that a private sector firm Infosys will be handling and processing sensitive information about my tax returns?  I have nothing against Infosys as the unease would be the same if it were TCS, Wipro or Satyam.  This would be akin to the US Government hiring IBM or HP to help process the tax returns of Americans.

I am one of those who believe that while much of Government can be handed to the private sector or possibly public-private partnerships, some things should only be done by public servants. Only in India has the Government held a tender process to partially outsource tax returns.  To the best of my knowledge, it does not exist in any other liberal democracy.

In all started in Jan, 2009 when Delhi announced that Infosys had won the contract by the Income Tax (IT) Department to set up a BPO to help do the mundane tasks of tax filing and issuing refunds. Infosys would also set up a call centre to answer queries by Indian tax payers.  It was a Rs. 250 crore contract spread over 5 years.

The Infosys BPO would be known as the Centralized Processing Centre (CPC) and would be set up in Bangalore.  Later, such CPC’s would be set up in other cities as well.

Apparently, there is no Indian law that prevents our politicians from roping in private sector to handle our personal, sensitive data. On paper, there is talk about Government officials overseeing Infosys data entry and techie staff as well as independent auditors. Everything that was restricted to public servants in the past can now be seen by a few hundred Infosys employees.

Yesterday, our Finance Minister announced his budget.

Today, Bangalore Mirror is reporting that around 400 Infosys techies will be working at this Income Tax Centralized Processing Centre in Bangalore. At the very least both the Government and Infosys should tell the Indian public about security precautions to ensure no unauthorized person can see our tax details.

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Bangalore is set to get a new sobriquet: Tax Hub. At least, that is what Union Finance Minister Pranab Mukherjee hinted at in his 2009-10 budget speech when he spoke about how the city is to play host to the Centralised Processing Centre (CPC) where all electronically filed income tax returns will be processed.

In simple terms, Bangalore will be the nerve centre for processing the income tax (IT) returns filed by over six crore tax-payers across the country. The CPC has been set up at Dommasandra, off Sarjapur Road, and will be manned by around 400 techies drafted from software major Infosys. The CPC, which is geared at eliminating distortions on the direct tax side, will eliminate the manual system of processing IT-returns and ensure immediate refund of returns to the tax payers.
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Not many would disagree if the Government announced plans to privatize Air India, banks and hand over most infrastructure projects to public/private partnerships.  Education could get a fillip with the ideas and energies of the private sector.

Perhaps it is not a good idea to hand over personal income tax information to any private company. The very least the Government and Infosys can do is to make public all the security precautions taken in this joint venture.  What is the criterion to select the Infosys employees seconded to work in such sensitive posts? Does the software system have auditing mechanisms to ensure that it logs any person who sees a Tax Return?  How is the data encrypted?  And similar questions. The public has a right to know.