Nilekani panel moots private IT back offices for government

NEW DELHI: The Nandan Nilekani-headed technology advisory group has recommended formation of private-owned bodies run by professionals and bureaucrats to act as IT back offices of the government.

To be called National Information Utilities (NIUs), these bodies should be 51% owned by private firms having a net worth of at least `300 crore to self finance themselves, Nilekani said in his report presented to Finance Minister Pranab Mukherjee on Friday.

Nilekani has suggested that the NIUs should be chaired by a joint secretary or a private professional with a term of five years. These bodies should not be allowed to list on the stock exchanges.

“NIUs would help in various IT projects like Tax Information Network, New Pension Scheme, National Treasury Management Agency, Expenditure Information Network and the Goods and Service Tax,” the finance minister said.
“Effective tax administration and financial governance system calls for creation of IT projects which are reliable, secure and efficient,” he added.

Mukherjee had announced the formation of the Technology Advisory Group for Unique Projects (Tagup) in his budget last year. About 5-6 NIUs are expected to be created, of which the GST network would be the first.

The committee, which has members such as Sebi Chairman CB Bhave and DoT Secretary R Chandrashekhar, was formed last February as part of the Union Budget. It recommends that no single private entity should own more than 25% of the shares in an NIU. “NIUs should be set up as private companies with a public purpose. The government should own at least 26% in an NIU,” wrote Tagup Chairman Nandan Nilekani in the report.

Experts like Neel Ratan, executive director, PricewaterhouseCoopers, say NIUs will provide the right vehicle for speedy implementation. The first NIU-GST network will run the GST portal, which will offer dealer registration, return filing and settlement, integrated with the banking system.

One NIU may handle the social sector projects, the other ones may be for taxation and pension management,” said a committee member, requesting anonymity. For data security, a Chief Information Security Officer will be appointed for each NIU. The data will be hashed and encrypted to prevent attacks of worms such as Stuxnet.

A dedicated mission execution team would be appointed for GST Network. The Expenditure Information Network will also evolve as a NIU. Currently, plan implementation is on the basis of outlay rather than outcome. It is difficult to track the flow of funds and equally difficult to evaluate their utilisation. The NIU for expenditure info network will be able to monitor outcomes up to the last mile, and ensure disbursal of funds to beneficiaries. The government’s Pay And Accounts Office will be able to see each payment authorisation in real time.

Experts like Wipro Technologies e-Governance head Ranbir Singh feel that NIUs would augur well as they would make competitive workforce be available for government projects. “UIDAI, DMRC, are examples where competitive professionals have successfully led projects.” The NIUs would appoint consultants and professionals at market rates on contractual basis. They would also recruit students from various colleges and universities as interns via an internship program. As a paying customer, the government would be free to take its business to another NIU, if necessary. At the same time, the government could moderate the functioning of the NIU by virtue of being the owner, through its position on the Board.

The report also discussed public bodies such as National Payments Corporation of India (NPCI), which has members such as ICICI Bank, HDFC Bank, SBI, Citibank, HSBC, may be recommended for an NIU structure. Centre for Railway Information Systems, which handles the rail reservations and ticketing in the country, may also be turned into an NIU structure, if the GST Network experiment is successful.