Genesis of NISG

Department of Information Technology (DIT) and the Department of Administrative Reforms (DAR&PG), Government of India jointly pursued the setting up of National Institute of Smart Government (NISG) in line with the recommendation # 97 of the National Taskforce on Information Technology and Software Development.

A High Powered Committee (HPC), headed by the Cabinet Secretary was set up with the following members :

  • Mr. R.R. Shah: Secretary, Ministry of Communication and Information Technology, Government of India
  • Mr. V.K. Agnihotri: Additional Secretary, DAR&PG, Government of India
  • Mr. B.P. Mishra: Additional Secretary, Department of Expenditure, Government of India
  • Mr. R. Chandrasekhar: Joint Secretary, Ministry of Defence, Government of India
  • Mr. Kiran Karnik: President, National Association of Software and Services Companies (NASSCOM)
  • Dr. N. Vijayaditya: Director General, National Informatics Center (NIC)
  • Mr. A.P. Sawhney: Secretary – DIT, Government of Andhra Pradesh

In the meeting of the HPC on the 11/01/2002, a presentation was made on the objectives of NISG and the various steps taken to operationalize NISG. In the meeting convened on 18/01/2002 with the HPC, Additional Secretary to the Prime Minister and the Director (PMO), the Additional Secretary of DAR&PG mentioned the following :

  • NISG would be a body registered under section 25 of the Companies Act
  • Government would issue instructions to enable Government departments to utilize the services of NISG as well as depute Government personnel to the Institute. It was the clear intention of the founders to create NISG in this spirit so that departments can use its services.
  • Additional Secretary to the Prime Minister also suggested that while finalizing the Board of the NISG, suitable representation of local bodies may be thought of
  • Personnel policy of NISG should have the flexibility to source its personnel from any stream including, if required from the Government, on deputation or in any other appropriate manner

Formation of NISG

In line with the above decision, NISG was registered as a Section 25 company in May 2002 with its headquarters at Hyderabad.
49% of NISG’s equity is held by Central Government and various State Governments, and 51% is held by institutional investors like NASSCOM and ILF&S. This structure was intended to foster the efficiency and flexibility of Private Sector combined with accountability of Public Sector. The NISG Vision and Mission statements place emphasis on the Public Private Partnership. Thus, partnering with the private sector is an essential element of NISG’s functioning. Bidding for projects against private industry players thus creates a contradictory situation to NISG’s objectives.

NISG’s Clientele

As per the policy laid down at the time of its formation, NISG’s clientele is limited to Central Government Ministries and Departments; State Government Departments; and Public Sector Undertakings. NISG may work with International Development Agencies (Such as World Bank, UNDP, DFID) when the end recipient of that service is the Government. NISG does not enter into any revenue generating engagements with Private sector.
Over the past 10 years, NISG has provided services to several Central Ministries and State Governments and has been associated with 18 of the 27 MMPs. All the engagements executed by NISG so far have been awarded on nomination basis only. As a policy and practice, NISG does not participate in any bidding process. The general practice adopted by all the departments/organizations is to get specific internal approvals by the competent authorities.

NISG’s Performance Appraisal

NISG’s performance as an organization and its employee performance are not based on financial results alone. Its work, revenue, expenses and bottom line are scrutinized by the board on the following crucial parameters :

  • Impact of the engagements on service delivery to citizens
  • Formal & informal feedback from the Government on NISG engagements
  • Whether non-profit spirit & guidelines are adhered to in project costing, revenue & expenses
  • Whether all procurement has been transparent and as per the procedures
  • How effectively the PPP spirit is maintained

While there are no specific incentives, promotions or bonuses to NISG employees based on the project revenues or NISG bottom line; NISG is expected to be a self-sufficient organization.

Some Additional Facts

NISG is recognized by Indian tax authorities and statutory & regulatory bodies as a non- profit service oriented organization and is entitled for TDS exemption for government departments and service tax exemption for any grants-in-aid engagements.
Whenever NISG associates with any schemes funded by grants-in-aid or during program management engagements, NISG is mandated to provide a Utilization Certificate for the expenses incurred.

Lastly, as per the ruling of the Information Commission of India, NISG is considered as a public Institution and comes under the purview of the RTI Act. The above internal policies being paramount, this is a formal mechanism to validate NISG’s commitment to transparency and neutrality.

GFR Rules

GFR does provide for selection of consultants by nomination basis with adequate justification.

Rule 176 states “Under some special circumstances, it may become necessary to select a particular consultant where adequate justification is available for such single- source selection in the context of overall interest of the Ministry or Department. Full justification for single source selection should be recorded in the file and approval of the competent authority obtained before resorting to such single-source selection”.

Considering the specific purpose of NISG formation; its vision & mission; objectives of the founding members combined with the provision in GFR rules, it is permitted and is in the best interest of departments to use NISG’s services for their e- Governance initiatives.