DEPB scheme misinterpreted and malfunctioned: CAG

NEW DELHI: The Comptroller and Auditor General of India pointed at the deficiencies in government's export incentive scheme, the Duty Entitlement Passbook Scheme ( DEPB) saying that its implementation was mired in policy misinterpretations and malfunctions.

It said that DGFT ( Directorate General of Foreign Trade) did not carry out any outcome assessment of the efficacy of the scheme with regard to its performance strategy nor had a revenue impact assessment done before implementing the scheme on import duty neutralization and financial benefits accrued to the beneficiaries.

CAG in its latest report has said that the DEPB credits were not related to the actual incidence of duty and despite earlier CAG reports, "the scheme implementation was mired in familiar policy misinterpretations and malfunctions".

DEPB, an export incentive, was implemented in April 1997. It initially consisted of two sub-schemes - pre-export DEPB and post-export DEPB.

The pre-export DEPB was abolished in April 2000 and after several extensions, the post-export scheme was phased out in September 2011 and thereafter it was incorporated into the duty drawback schedule with effect from October 2011.

"DGFT has not carried out any outcome assessment of the efficacy of the scheme with regard to its performance nor had a revenue impact assessment of the import duty neutralization been done before implementing the scheme", said the report.

DGFT, the nodal agency under the Ministry of Commerce and Industry is responsible for execution of the import and export Policies of India. "The coordination between DGFT, Customs and RBI required more attention", the report tabled in the Parliament on Friday recommended.