The Government aims to bring all the flagship schemes such as rural Employment Guarantee under e-payment mechanism within the next two years. This will ensure effective use of funds. In an exclusive interview to Business Line , Mr C.R. Sundaramurti, Controller General of Accounts, explains the uses of new payment mechanism. Here are the excerpts:

Who all are going to be included in the first phase for e-payment ?

We will be starting with individual salary payments, payment to vendors, and payment of retirement benefits. There are some government servants those belong to group ‘C' and ‘D' who want their payment in cash. But other than them, we would like to cover all. Petty cash payments such as newspaper allowances, payment for cleaning services, daily wages will not be brought under this.

Can you please specify how much government expenditure the Controller General of Account (CGA) would be able to cover through e-payment mechanism ?

Theoretically, Rs 4 lakh crore of government expenditure is capable of being captured through the e-payment mechanism. These Rs 4 lakh crore of the payment is hard cash outgo from the Government for 140 Centrally-Sponsored Plan Schemes, 800 Central sector schemes along with State Plan schemes and additional Central Assistance. But there are some other areas we will not be able to bring under e-payment mechanism immediately. However, I can assure that these will be brought under over a period of time.

Your plan says all the civil ministries will be brought under the new payment mechanism by March 31, 2012. What about the non-civil ministries such as the Railways, Post and Telegraph and Defence?

I must say that those decisions will have to be taken by the administrative ministries. But we would certainly be telling them that we will be doing it by March 31, and we would expect them also to get their act together by that date. But again we need to understand the state of computerisation in various departments. So depending upon their systems and procedures, I am quiet sure that it will not be not be very late.

Are private sector banks also included in the payment gateway?

The Government today transacts business through three private sector banks, ICICI Bank, HDFC Bank and Axis Bank. All three of them are on board. We are closely involving them. In fact for the Civil Aviation Ministry, ICICI Bank is the banker.

What is the operational cost?

The cost is just of hardware. We have not costed the gain such as not issuing cheques (printed in the Government Security Press), and associated cost in issuing them. I expect the gain will far out go the cost.

Will payment for flagship schemes such as the Mahatma Gandhi National Rural Employment Guarantee Programme be also covered under the new mechanism?

Our disbursement to the DRDA (District Rural Development Agency), to the panchayats can be included in the new mechanism immediately subject to these bodies having accounts in a bank with the core banking system and participant of real-time gross settlement system. This system does not try to capture payments which the panchayat will make to individuals. Disbursement of direct cash subsidy for fertilisers can also be brought on this new system.

What about the security features of the new system?

The entire software has been checked for quality and security certification. Now each of the operations is only through password protection. The biggest problem in the earlier system was majority of it was manual. What could be the matter for worry is can this electronic file be tampered with? But let me assure that all the files are 128 bit encryption. Through the digital signatures, we can assure of security. We are completely complied with the system and procedure laid down by the RBI and provisions of the Information Technology Act.

How would you sum up the system?

It will bring accountability and transparency. It will help in preventing corruption and reduction of administrative cost. It will also ensure integrity of the account we are producing.

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