January 2006

Reinventing Government through e-Governance

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According to David Osborne and Ted Gaembler, Governance is the process by which we collectively solve our problems and meet our society needs. Government is the instrument we use. But the government should understand its limitation.  The word government is derived from a Greek word, which means ' to steer.' The job of the government is to steer, not to row the boat.

 

Hence, Government should concentrate on leading society (i.e. governance) rather than doing the things by itself. Good Government set policy framework and help in generating resources for the operational bodies and continuously evaluate their performance but they do not play an operational role. The operational role could be taken over by private companies (where profit could be earned), NGOs (with the financial support of government) and Community based institutions (RWAs in urban areas and Choupal in rural areas).

 

Electronic medium and development in telecommunication can facilitate the coordination between Government & operational bodies. This process of facilitation is E-Governance. Interaction between Government, operational bodies and public though E-Governance can change the power equations between these entities. This will empower the people and provide them with wider choice while making a decision. I will quote few examples from education and financial sectors in India.

 

Few years back, Delhi University started online admission process. It made the admission process, not only easy but also holistic. In case of manual admission (i.e. offline), a student   had to virtually visit all the 80 odd colleges to fill the form.  No student had time or money to spend on visiting all the colleges, buy prospectus and stand for hours in queue to submit their forms. Hence most of them filled forms only in 3 or 4 colleges and prayed to God that luck might favour them. But now, students can fill forms in as many colleges as they want with complete information, which they can download from website of that college. Students can even see the bio-data of all the faculty members before making a choice. What is more, even students sitting in remote villages of Bihar, Orissa or Sikkim can apply online without having to visit Delhi.   The online admission process has not only empowered the students but has also drastically reduced the chances of backdoor admissions. Many other Indian Universities have also now introduced online admission process.

 

Another example, which I would like to cite, is the Government's decision to introduce online trading in the capital markets through Straight through Processing (STP).  According to SEBI, STP is a mechanism that automates the end-to-end processing of transactions of the financial instruments. It involves use of a single system to process or control all elements of the work-flow of a financial transaction, including what is commonly known as the Front, Middle, and Back office, and General Ledger. In other words, STP can be defined as electronically capturing and processing transactions in one pass, from the point of first deal to final settlement.

 

In the traditional method, each and every transaction involves costly multiple data re-entry from paper documents and other sources, which are susceptible to errors, discrepancies, delays and possible fraud. Further, the traditional means and methods of capturing and processing of information such as phone, fax, email etc. requires human intervention, which slows the entire cycle, introduces errors and delays settlement. Usage of STP enables orders to be processed, confirmed, cleared and settled in a shorter time period, more cost effectively and with fewer errors. Apart from compressing the clearing and settlement time, STP also provides a flexible, cost-effective infrastructure, which enables e-business expansion through real-time processing and access to enterprise data. STP also streamlines back-office activities, leading to fewer failures, lower risks and drastically reduces costs per transaction. It embraces a set of applications, business processes and standards, which are set to revolutionize the settlement and processing standards within the capital markets industry.

 

The effect of the introduction of STP is that people have more confidence in investing in the capital markets, and the share of total savings of a household going to equity markets has increased. Instead of having to depend on scrupulous brokers for advice, now investors have all the information online and based on that information, one can transact on-line, fully knowing the price. In order to confirm the price at which deal has been made, investor can log on to nse-India.com and confirm his order details. In near future, an investor who wants to invest in capital markets can make his own decisions after little research without having to depend on brokers, sub brokers and their staff who have their own agenda for giving advice. Many literate housewives and retired people have taken this as a way to earn fair earning by conducting little research on their own in their spare time. This shows that people can take their own decisions provided they are given appropriate tools to facilitate decision making.

 

To summarize, what I want to state is that e-Governance should not limit itself to helping Government serve people better but should target to empower them. If this objective is achieved, then one can think of a true participatory democracy. After all, people do not want more elections, more manifestos, more speeches and more ministers. What people want is information and tools to solve their own problems with the support of the government. Through the above two examples, I wanted to show that e-Governance can help people make a better choice and with more confidence because of the transparency it offers. 

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