Government To Business (G2B) Initiatives

G2B initiatives encompass all activities of government which impinge upon business organizations. These include registrations under different statutes, licenses under different laws and exchange of information between government and business. The objective of bringing these activities under e-Governance is to provide a congenial legal environment to business, expedite various processes and provide relevant information to business. E-Procurement Project In Andhra Pradesh Prior to the introduction of an e-Procurement system in Andhra Pradesh, procurement in Government departments was done through a manual tendering process. The process consisted of a long chain of internal authorizations and scrutiny which necessitated several visits by the suppliers to government departments. The manual tender system suffered from various deficiencies, including discrimination, cartel formation, delays, lack of transparency etc. The Government of Andhra Pradesh introduced the e-Procurement project in 2003 with the following objectives: i. To reduce the time and cost of doing business for both vendors and government; ii. To realize better value for money spent through increased competition and the prevention of cartel formation; iii. To standardize procurement processes across government departments/agencies; iv. To increase buying power through demand aggregation; v. To provide a single-stop shop for all procurements; and vi. To allow equal opportunity to all vendors. In order to achieve these objectives, the entire e-Procurement process was designed to avoid human interface i.e., supplier and buyer interaction during the pre-bidding and post-bidding stages. The system now ensures total anonymity of the participating suppliers, even to the buyers, until the bids are opened on the platform. The e-Procurement application provides automatic bid evaluation based on the evaluation parameters given to the system. These improved processes have eliminated subjectivity in receipt and evaluation of bids and has reduced corruption to a significant extent. Further, to bring transparency in e-Procurement, tender documents containing all details are hosted on the website. The documents can be downloaded by the interested suppliers free of cost, from the day of publication of a tender. At any time in the procurement cycle, any person associated with the transaction can check and know the status of the transaction. This saves time and effort involved in finding out the status of a purchase order, besides enabling better planning of inventory. At the outset, an effort was made to standardize the procurement processes and forms followed by various departments especially for public works tenders. Today, all the departments are following a common tendering process and forms for works tenders. These processes have been re-engineered to further improve the efficiency and curtail subjectivity in tender evaluation by the department users. The benefits of the new system are as follows:

  • Reduction in tender cycle time: In the pre e-Procurement era, the departments would take 90-135 days for finalization of high value tenders. The tender cycle time gradually came down to an average of 42 days over a period of one year and further reduced to 35 days at the end of the second year.
  • Reduction in opportunities for corrupt practices: The e-Procurement system allows ‘any where’ and ‘any time’ access for bidders and suppliers from the Internet. The entire e-Procurement process has been designed to eliminate the human interface i.e., supplier and department interaction during pre-bid and post-bid processes. The automatic tender evaluation mechanism inherent in the system has reduced subjectivity in tender evaluation and helped to curb opportunities for corrupt practices to a significant extent and increased the accountability of procurement officials. In terms of transparency, any supplier or citizen can get information about tenders through a search engine on the home page. A supplier participating in a tender knows the list of other participating suppliers, the documents furnished by his competitors, price quotations and the evaluation result, as soon as a stage is completed by the departments in the system.
  • Cost Savings: The cost savings could be visualised in the following manner:
  • Supplier participation has increased from an average of 3 per tender in the conventional mode to 4.5 in the e-Procurement mode. Cartels have been eliminated and even small and medium suppliers are now able to bid, as the platform facilitates ‘anywhere anytime’ bidding. The departments have made significant cost savings by an average reduction of 20% in costs for procurement transactions done through the exchange during 2003-04 and 12% in 2004-05 due to a competitive environment.
  • There is also substantial reduction in the advertisement costs in the press media, as e-Procurement tender notices were shortened to contain only basic information on the name of work, estimated costs and the URL of the e-Procurement site. There has been a 25% saving in the column space used, resulting in savings of approximately $0.56 million in a year.
  • Transparency in the bidding process and in the system of automated tender evaluation through smart forms with parameterized qualification criteria has reduced subjectivity in the tender award process and consequently reduced corruption. The MIS feature in the system reveals data on government procurements instantaneously to bureaucrats and ministers. Besides, it has made a visible social impact, as citizens are assured that government procurement is conducted in a transparent manner, saving taxpayers’ money.

E-PROCUREMENT IN GUJARAT The system of e-procurement was introduced in the State of Gujarat from October 2004 onwards. Roll out of the system was carried out in a phased manner starting from few works/items for limited departments and was made compulsory for all government departments in 2007. The project was funded by the State Government with the objective of deriving the benefits of increased efficiency from e-enablement of business processes. It aims to establish transparency in procurement process, shortening of procurement cycle, availing of competitive price, enhancing confidence of suppliers and establishing flexible and economical bidding process for suppliers. It has been introduced to cover the following transactions:

  • purchases and procurement of goods, plants, equipments, machinery, medicines, medical and surgical supplies and stores items, food and civil supplies stores items and purchases, printing and stationery items and purchase, all types of vehicle purchases, furniture and fixtures etc.
  • All types of civil construction and related work
  • Outsourcing of required services
  • Auctioning of old plants, equipments, machinery, buildings, vehicles, furniture and fixtures, lands, properties, etc
  • All other purchases and work orders.

As the project followed defined procurement guidelines of the State Government, no changes were required in the legal framework. However, the process of submission of bids underwent a major change as physical submission of bids got converted into online data submission. Assessment of the bids and comparative data is presented by the system itself. Initially, the project was launched on a pilot basis and after successful handling of tenders, the roll out was extended to all departments. One to one training was given to all core team members. The project has resulted in reduction in cycle time to 6.6 days from the earlier 30 days. The project highlighted the importance of training of the stakeholders involved – departmental employees and bidders/suppliers/vendors. This project became a success story because of sustained capacity building and awareness generation. Lessons:

  1. All stakeholders must build capabilities in order to enable them to participate in and take advantage of e-Governance initiatives, especially in G2B projects.
  2. Some of G2B processes like e-procurement do not require extensive back end computerization and hence can be taken up easily.

Accomplishments of MCA 21: The accomplishments of the MCA 21 can be presented under the following heads:

  • Providing access to citizens/stakeholders (G2C services): Section 610 of the Companies Act, 1956 allows inspection of documents kept by the Registrars of Companies by the various stakeholders on payment of statutory fees. After the implementation of MCA 21, this has become history. Presently, nearly 5 crore pages of legacy records consisting of permanent documents of companies (MOA, AOA, subsisting charge documents etc.) and Annual Returns and Balance Sheets for a period of two years preceding have been scanned, digitized and made a part of the MCA 21 electronic Registry. The electronic Registry has been further enriched with the e-filing of all the documents in various Registries with effect from the dates of roll-out of the programme and further mandated for the entire country with effect from September 16, 2006. Accordingly, the facility of inspection of documents granted under Section 610 of the Companies Act, 1956 has been converted into the facility of ‘View Public Documents’ under the MCA 21. Further, keeping in view that not all legacy records were scanned and digitized, a facility of ‘on-demand scanning’ has been provided. Under this facility, a stakeholder can request for certain documents (subject to availability) to be scanned and made available online.
  • G2B services: Companies are required to interface with the Registrar of Companies (ROCs), the Regional Directors (RDs) and the Union Government in accordance with various provisions of the Companies Act. Prior to the implementation of MCA 21, all filings by the companies were in physical paper mode requiring a stakeholder or his representative to physically visit these offices or send the same by post. Handling large volumes of paper was a major problem and there were complaints on account of all sorts of undesirable practices such as loss of paper documents, ante-dated filings, replacement of statutory documents etc. A check on the quality of filings (correct and complete information) had virtually become impossible. Under MCA 21, various Forms have been re-engineered and converted into electronic Forms (e-Forms) to make them compatible with the e-Governance processes. The e-Forms have been designed with the in-built “pre-fill” feature whereby the data in the required fields is captured from the database available in the electronic registry in an automated manner. Requirements of repetitive data entry have been significantly reduced. The process of electronic filing also incorporates the facility of “pre-scrutiny” of the e-Form. This is a completely electronic process where the system verifies if the Form is complete in respect of mandatory fields. This is, however, limited to such checks as can be performed by the computerized system. Secondly, the system of payment of statutory fees has been re-engineered as a part of the overall process. In addition to the conventional challan-based off-line payment system in the pre-MCA 21 system, online payment systems have been introduced, including use of digital signatures based on a Director Identification Number (DIN) database. Third, services are now available on a 24 X 7 X 365 time frame. The outcome is that record management is automatic, digital records have largely replaced paper records and there is no question of ante-date filings or loss or substitution of documents. Elements of speed, certainty and integrity in filing of documents are in place.
  • G2G services and linkages: The architecture of MCA 21 has been designed to meet future challenges and scalability. It is capable of sharing information with other Government Departments/ Ministries/ Regulators in the Corporate Sector and introduction of joined-up services in due course. Presently, free access to company documents having been allowed to the following organisations:

i. Reserve Bank of India; ii. Financial Intelligence Unit (FIU-IND); iii. Department of Economic Affairs; iv. Intelligence Bureau; and v. Central Statistical Organisation. Access has been permitted to designated officers in these offices through a secure DSC based login. Once the other Departments implement their e-Governance programmes, and the NSDG develops the national Gateway, the MCA 21 system can be linked with more organizations. The implementation of MCA 21 has provided an enabling environment for stakeholders to approach Government for seeking a complete basket of services in an easy and transparent manner. The implementation of e-Governance has also enabled plugging the leakages. Further, the stakeholder is now in a position to track the transaction status at every stage; from making payment to the processing and ultimately the approval status. The time taken in delivery of services has shown remarkable improvement. Lessons:

  1. installation and stabilization of the system takes time.
  2. acceptability by staff and efficient usage takes much more time.
  3. extensive staff participation is essential, despite best vendors and cutting-edge technology.
  4. involvement of domain specialists is a key pre-requisite.
  5. digitization and validation of data is a slow and error-prone process, especially when migrating from a paper-based system.
  6. stakeholders should be allowed to identify errors in the data through a fool-proof system.
  7. flexibility in the system is a must (e.g. validation of digital signatures required creation of the Director Identification Number database and creation of linkages with the professionals’ database of ICAI).
  8. in the transition period, certain processes from the old system may be allowed to continue.
  9. initiatives aimed at making the new system acceptable to the users need more focus and resources.
  10. benchmarks for service delivery need to be created and communicated to the users.
  11. A focused approach towards implementation of e-Governance projects is needed. For this, a separate team needs to be created within the organization. Implementation of e-Governance projects should not be in the form of an additional responsibility.
  12. Assessment of changes to be made in the legal framework needs to be done in advance.

MCA 21

The Ministry of Corporate Affairs has implemented the MCA 21 Mission Mode Project under the NeGP in September 2006 and presently the project is in the post-implementation phase. The project aims at providing easy and secure online access to all registry related services provided by the Union Ministry of Corporate Affairs to corporates and other stakeholders at any time and in a manner that best suits them. The goals of this project were formulated keeping in mind different stakeholders. These were: a. Business: to enable registration of a company and file statutory documents quickly and easily. b. Public: to get easy access to relevant records and effective grievances redressal. c. Professionals: to enable them to offer efficient services to their client companies. d. Financial Institutions: to easily find charges for registration and verification. e. Employees: to enable them to ensure proactive and effective compliance of relevant laws and corporate governance. The technical aspects of MCA 21 cover the following areas: i. Design and development of application system ii. Setting up of IT infrastructure iii. Setting up the Digital Signature/PKI delivery mechanisms and associated security requirements iv. Setting up of Physical Front Offices (PFOs) v. Setting up of temporary FOs for the peak periods to meet with the requirements and subsequent shutdown of temporary FOs at the end of such peak periods vi. Migrating legacy data and digitization of paper documents to the new system vii. Providing MCA services to all MCA 21 stakeholders in accordance with the Service Oriented Approach viii. Providing user training at all levels and all offices (Front and Back Offices). The MCA 21 is designed to automate processes related to the proactive enforcement and compliance of the legal requirements under the Companies Act, 1956. The implementation of Front Offices (FO) is done in two ways. These can be called as Virtual Front Office (VFO) and Physical Front Office (PFO). The VFO is what the citizen has in front while accessing the MCA21 portal. The PFO is a replacement to the existing RoC counters. Although the PFO accepts paper documents, these are converted into electronic documents by customer service agents manning PFO. The authorised person(s) are required to sign these documents digitally. The back office is what an MCA employee has in front while accessing the back office portal. The back office processes relate to: i. Dynamic routing of documents that have been electronically filed to the concerned official within MCA, based on the type of service request ii. Electronic workflow systems to support speed and certainty in service delivery iii. Storing of all approved documents of companies as part of electronic records, including provision of access to electronic records for the stakeholders iv. Enhancing identification of defaulters v. Increasing efficiency of Technical Scrutiny vi. Ensuring close follow-up on matters related to compliance management including prosecutions vii. Enabling quicker responses to investor grievances viii. Providing alerts when the tasks are not carried out within the stipulated period.