Sunil Mitra has hardly been able to keep his head above water since he took the hot seat in the revenue department a few weeks before last year's Budget. The mandate for his team had gone beyond just tax collections after the Supreme Court and civil society criticised the government's failure to tackle the menace of black money.

That has meant Mitra's team is working overtime to ensure the return of ill-gotten money stashed overseas. The task is far from easy. "There are many people who legitimately hold money overseas. You first need to prove the criminality of the generation of illicit funds," says Mitra, who is now the finance secretary.

Given that the pursuit of black money is just one of the many tasks at the ministry, Mitra says the division of work has not changed. He is confident though that the Centre will meet its fiscal deficit target of 4.6% in 2011-12 despite concerns over a slowdown in revenue growth. "We had a dream run last fiscal year and collections surpassed the target by Rs 50,000 crore. As I was felicitating officers for their outstanding performance, I merely sounded a note of caution for this fiscal." Amajor cause for worry, says Mitra, is rising oil and commodity prices.

"Any spike in commodity prices is likely to fuel inflation. It is beyond our control." Mitra is also worried about corporate taxes. "We are not doing badly at all on personal income tax, though I do think there is a case to moderate refunds if the government's cash management is hit. There is also scope to finetune expenditure.

But I simply do not foresee any need for another stimulus." The career bureaucrat from West Bengal is emphatic that the India growth story is intact. Mitra, known for dexterity in handling complex issues, took tough decisions on reforms in the power sector in his home state. But he carries people along. That was evident in the balancing act he did to make the new direct taxes code (DTC) more acceptable to all stakeholders.

"We live in a globalised world where there is increasing consciousness on protection of tax bases. A tighter regime to track the flow of illicit funds will be in place when the DTC comes into force. The general anti-avoidance rules, proposed in the DTC, will empower taxmen to lift the corporate veil and examine the substance of a transaction."

Today, a taxpayer can stay in one country, hold assets in another and manage them from a third country for tax arbitrage. MNCs structure their deals through tax havens, fuelling concerns among regulators and tax authorities on roundtripping of funds.

As for black money, India wants the world community to pressurise tax havens into sharing past banking information as well to trace the past flight of capital. The country has a law in place to impose tax sanctions on countries that fail to share information on Indian tax evaders.

But the government is still reluctant to name non-cooperative tax jurisdictions. "We will do so if and when the need arises. But we have to be careful while enforcing the toolbox of measures to counter tax evasion. We need to look at the larger interests of India including attracting FDI." Switzerland, which has been forced to end banking secrecy laws, has confirmed that its revised tax treaty with India will come into force by December.

India has had a breakthrough of sorts in Mauritius as well. "Following pressure from the G20 and the peer review by the global forum on transparency and exchange of information, Mauritius has agreed to resume dialogue through a joint working group. The talks broke down in 2008. This clearly shows that Mauritius wants to move on.

The last word is yet to be out on whether Mauritius will agree to re-work its over three decade tax treaty in India to check its misuse, but resumption of the dialogue is a positive development." Mitra argues that the perception that there is not enough deterrence is misplaced "There is one school of thought that has been actively pursuing criminalisation of tax evasion." But shouldn't the government abandon the move and instead lower tax rates and have a simple and clean tax system? "We will have a neat tax structure with the DTC and compliance will improve."

He is also convinced that the goods and services tax (GST) will curb tax evasion in a big way. "All tax defaults will come up in the system as two vouchers need to be reconciled to endorse a transaction."

Mitra will sign off from North Block when his term ends this month. Black money, GST, DTC... despite the progress, there is a long list of unfinished tasks. Would a longer tenure have helped? "In the finest traditions of the civil service, I do not think any tenure extension is needed. The system does not depend on one individual.

However, if fixed tenures are for security or strategic reasons, Iwould believe that financial security is also important." For his part, the Bengali babu is looking forward to spending his retirement years listening to music.