Money rolls with IT rhythm while the world sleeps

JAIPUR, INDIA: Meeting Dipankar Sengupta, Sr. Technical Director, Accounts Informatics Division, NIC is a delight not only because he breaks the usual clichés of PSU CIOs effortlessly, but also because he is as fore-sighted, enthusiastic, objective and savvy as any Silicon Valley celebrities you may randomly pick. That explains in part why e-payment infrastructure running under the aegis of NIC cannot be shrugged off as any usual caboose. For the rest, let's talk to him here.

Tell us why or why not is IT relevant for your work area?

IT is extremely relevant for our area and when it is about accounts, finance etc and ensuring all payments (think figures like 10 lakh crores of earnings or 13 lakh crores of payments or five million transactions a year) are a smooth execution, IT is critical. The other side of receipts, accounting of revenue collections, or maintaining five to ten crores of challans that hit the system on quarter endings, that too needs a lot of technology support.

Then there is non-tax revenue side too. So without IT the scenario can be very rough. Earlier we had a manual system but this area has not seen much manpower growth in 30 years (correspond that to a staggering jump in revenue transactions)and to top it there is little application of human mind in specific tasks, so there IT is very useful change.

Some more peek into the action space of your project?

In his budget speech, the Finance Minister, stated that this year, 2011-12 would be a transition towards a more transparent and result oriented economic management system in India. The Finance Minister had stated that the Govt. would take major steps in placing the administrative procedures concerning taxation, trade and tariffs and social transfers on electronic interface, free of discretion and bureaucratic delays. The e-payment system is in furtherance of these objectives while being fully aligned with the organizational vision and IT strategy of the Controller General of Accounts. While substantial payments were being made by various Govt. offices through electronic clearing system, national electronic fund transfer and real time gross settlement, There was a need to introduce in Government a payment system which is secure, digital signature based and complaint with the provisions of the IT Act.

How does it work?

Electronic Payment Systems accounts for 41% of the total volume of transactions while it represents 90% of the total value of transactions. Introduction of electronic payment products such as Electronic clearing service and electronic funds transfer, which over the years have metamorphosed into National ECS and National EFT and RTGS have ushered in new ways of payment processing. The need for an e-payment system has been acutely felt by the Government of India with technology being one of the major movers and enablers for a secure and efficient means of payments which would enable faster payment delivery systems to beneficiaries and agencies in far flung areas where conventional modes of payments viz. Cheques / Drafts takes substantial time. It would also facilitate transaction wise prompt reconciliation and near real-time settlements.

This system will bring the government expenditure on to the e-mode, a further step to the e-receipt mode which has already been introduced in government sector.

Government e-payment system is a secure payment delivery system for direct credit of dues from the Government of India into the account of beneficiaries using digitally signed electronic advice (e-advice) through the ‘Government e-Payment Gateway' (GePG). This system enables the successful delivery of payment services from Pay & Accounts Offices (PAOs) for online payment into beneficiaries' accounts in a seamless manner under a secured environment. GePG serves as middleware between COMPACT (Computerized Payment and Accounts) application at PAOs and the Core Banking Solution (CBS) of the agency banks/RBI to facilitate paperless transaction, reducing overall transaction cost and promoting green banking.

 

How much change has it brought in?

At the end of the day one needs information to do proper cash and debt management. How to get that data timely and contextually is a big challenge. Without IT it's hard to even think of that. Look back at 2003, in the pre-IT era and information about spends or revenue at Government level had a range as much as 45 days and that window is now reduced to one day.

There was a need felt by the Government to bring transparency and expedite direct payments from central paying units relating to all government payments which is already a declared objective of the government. This would increase the adoption of other e-services due to its efficiency and ease-of-use for all Central Government Ministries and Departments for online payment transactions. The e-payment system would save time and efforts in effecting payments and will facilitate elimination of physical cheques and their manual processing.

Where exactly did IT turn things around?

The system hence has expedited direct payments from central paying units relating to existing and retired Government employees, contractors and other entities receiving payments. The digitally signed e-advices is pushed by the PAOs on GePG, which are then consumed by the concerned banks to credit the beneficiaries' accounts through CBS/NEFT/RTGS. The e-payment system effects payments without involving conventional payment instruments such as cash, cheques and demand drafts, and thus save time and constraints of manual deposit. The system facilitates online reconciliation of transactions and efficient compilation of payment accounts.

By this initiative, the Controller General of Accounts expects to bring about increased transparency and promote good governance in the public sector.

What tangibles have you observed already?

Quite many of them like generation of digitally signed e-payment advices (over 28,38,816) and pushed into GePG for payments; over 28,18,401 successful transactions reported by participating banks; reissue of 20,415 transactions which had failed; reconciliation and accounting for all payments; about 30 Lakh Cheques eliminated from the system so far (savings of ` 1.5 Crores to the public exchequer); and tracking of each and every e-payment transaction of Govt. of India in the system for Pay and Accounts Officers. Besides we have seen, saving in time and efforts due to online fund transfer using digitally signed unique e-authorization ID. Payment life cycle shrunk from 20.07 days in the Cheque era to 5.21 days now.

So a lot of positive side-effects?

Now it's about a secured mode of payment, as digital signature based payment system is security compliant. It's about transparency in payment procedures; a tool for good governance and reduction of corruption; elimination of physical cheques and their manual processing that incidentally also helps environmental protection by eliminating paper based physical payment instruments.

Overall you can see that e-Payments through GePG touched Rs.6,87,636.99Crores as on 01-Mar 2014 with over 50,82,327 successful e-payment authorizations from 370 Pay and Accounts Offices of 51 Ministries and Departments made through 22 Public Sector and Private Sector Banks. The Payment Life Cycle has shrunk to 4.15 days during September,2013 from the Bill preparation Date to Beneficiary Account Credit date as against the average of 20.07days in the Cheque based mode of payments before introduction of e-payments.

And how does downtime affect scenarios at your desk?

There is no downtime as we cannot afford to have one so a failover system is in place in each accounting system. In the worst case of any situation, one has to deal with a day-old data. We leverage public networks as bandwidth to push that level of data can be an issue. At the end of the day, data at different functional heads is collated, made tamper-proof and encrypted data is pushed forth for other action spots.

Did you face the usual challenges that accompany big IT transitions?

Lack of awareness and receptivity were some issues we addressed. People may have great accounting skills but computing-skill learning curve could be different and that in terms of 650 locations can be quite a challenge.

Do you see analytics as the next leverage level?

We are doing a lot of that in tax planning, debt management etc. For instance, think of how government borrowing in pre-system era was worked out. Now spending pattern for each year coupled with trend analysis can be done in much better ways with proper planning and less-ad-hoc management of borrowings and spends. We can be less penny-wise and pound-foolish in any area where we can map trends and plan with analytics. It brings in optimal use of money based on yearly patterns as well as better projection of spends with statistical models.