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Time to re-invent the government

July 26, 2003

Did you know that the financial 'float' sloshing around in the Maharashtra government is Rs 55,000 crore (Rs 550 billion)? Yes, Rs 55,000 crore.

At least, that's the figure cited by companies like Oracle, which see dramatic improvements in government efficiency, possible if e-governance takes wing.

If cash management in the state government could be made even marginally more efficient through a proper treasury management system, then the government could squeeze out more than Rs 5,000 crore (Rs 50 billion), a modest 10 per cent of the money now lying locked up in the system.

If you talk to the software companies, many of whom are waking up to the business potential that governments offer, they will tell you that in terms of computerisation, India's governments are roughly where India's companies were in the 1960s -- but not much behind most governments outside of Europe and North America (which tells you a thing or two about the responsiveness of companies and governments)!

So much so that the World Bank has now said that no loan will be given to a government until that government has put in place a proper treasury management system which can tell the Bank at any point of time what has happened to the money that it has lent.

The amazing fact is that India's manual treasury systems don't permit this with the kind of transparency required.

This is beginning to change. While organisations like the National Informatics Centre and companies like CMC have worked on various projects, some of them pretty ambitious, the poster-boy, so to speak, when it comes to e-governance is the e-seva programme introduced in Hyderabad and Secunderabad by the Andhra Pradesh government, where at some 35 large, multi-counter kiosks, citizens can go and transact 30 different kinds of services, from getting house and land records to paying tax or applying for a driving licence.

That experiment is now being extended to other towns and over 100 municipalities in the state.

Less well known is a computerised registration scheme in Kerala that goes by the acronym Friends, which has become so popular that it has become an important source of revenue for the state government --proving once again that people are willing to pay for good service.

But these remain isolated islands in an ocean of unreformed work processes and systems that often go back to the early days of the colonial raj.

Nasscom estimates that in the next five years, India's governments will spend close to Rs 15,000 crore (Rs 150 billion) on computerising their operations.

We've already got some idea of the difference this can make, in the issuance of passports, for instance -- though the record here is not perfect.

Tomorrow, tax collection could become infinitely more efficient if back-end processes and data base management were to be properly computerised (work on this has begun), yielding more revenue to the government.

More change can come if crime and criminal records are computerised (Andhra Pradesh has an e-cops programme), if there is a national citizen identification system.

Change is needed at the level of municipalities too, since many of them have not closed their books for as long as 15 years -- and these municipalities are going to be given more and more responsibility as development work gets localised.

Transparency will be possible on all manner of subjects, from project details to water quality parameters (in case a citizen wants to check -- as captured in the movie Erin Brockovich).

Back-office efficiency levels could see dramatic improvement, and the quality of government-citizen interface could conceivably go through a transformation.

But it would be a mistake to assume that the solutions lie just with software; the more important challenge is to change the mindsets that operate in government, and in government employees.

Without that, and without modernised systems and processes, the expenditure that Nasscom forecasts on computerisation will be a waste.

In short, as governments wake up to what is possible, they need to also focus on how to re-invent government itself.

Given the fact that governance issues are probably the single biggest factor holding back India's progress on all the key development indicators, someone in New Delhi should decide to make this a core mission for the next decade.

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