CAG picks holes in passbook scheme for exporters

The Comptroller and Auditor General of India (CAG) has said there were lacunae in implementation, monitoring and compliance of the Duty Entitlement Passbook Scheme (DEPB), an export incentive scheme.
In its report on the DEPB scheme, which was tabled in Parliament today, the CAG said despite earlier reports of the government auditor the scheme implementation remained in similar policy misinterpretations and malfunctions.
"There were lacunae in implementation, monitoring and compliance of the scheme as observed during the audit," the report said.
It said that DGFT (Directorate General of Foreign Trade) has not carried 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 neutralisation and financial benefits accrued to the beneficiaries.

It said that the coordination between DGFT, customs and RBI required more attention, in respect of coming up with solutions and talking prompt actions on alerts issued by the department of all rewards and incentive schemes.
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.
The report has also suggested that internal control and audit systems of regional authorities, customs, ports need strengthening for efficient implementation, monitoring and outcome of the incentive schemes.