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Nasscom urges Govt to clear Rs 5,000cr IT sector dues

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Nasscom

Nasscom

Nasscom has requested to the central government to start disbursing Rs 5,000 crore of IT service companies pending with it in the form of contract payments.

Nasscom further suggested the government to make an independent arbitration system to ensure involvement of industry in the Digital India projects.

According to a report, for last two years, Indian IT companies have refrained from actively participating in any government project due to difficulty in payments and complex nature of the contracts.

For over two years, Indian IT companies have stepped away from doing business with the government due to the difficulty in getting payments and the complex  nature of the contracts. In a report surfaced in ET, Nasscom president, R Chandrashekhar explained that the industry is not seeking an immediate disbursal of pending payment; however, there must be some initiative from the government side, otherwise, it will develop lack of confidence in industry resulting into lower participation in the Digital India projects from the industry part.

Digital India is the Modi government’s flagship e-governance project that looks to integrate government departments, and ensure services to citizens that can also be accessed electronically. The Digital India project according to estimates will cost around Rs 1.13 lakh crore and would require active IT industry participation to get started off.
Previous week, Nasscom conducted a half-day session with the Department of Electronics and Information Technology (DeitY) to make a model request-for-proposal to sort out some of the problems faced by IT firms in doing business with the government. As a procuring IT services is very different from other kinds of procurement. A major clause in the new proposed RFP is the making of an arbitration structure governed by a neutral party.

In the present system, any dispute leads to arbitration by the secretary of the department. However, he is a party to the dispute as well. The industry now seeks an independent arbitration to sort out conflicts. Chandrashekhar further suggested that in case the nature of the project is self-sustaining then the fees should go directly to the company instead to the ministry that disburses it further under current practice. This way projects will appeal more to companies if are assured of regular cash flow.

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