Friday, January 29, 2016

An Ideal framework for rapid roll out of e-gov projects

To begin with, e-governance needs to be architected to be truly citizen-centric, moving away from the current models of being department-centric. This would require a complete overhaul of the manner in which e-governance had been architected till date, writes Jaijit Bhattacharya
To begin with, e-governance needs to be architected to be truly citizen-centric, moving away from the current models of being department-centric. This would require a complete overhaul of the manner in which e-governance had been architected till date, writes Jaijit Bhattacharya
After more than a decade and a half of intense efforts to electronically enable the government and service delivery, it is time to take a pause and re-assess the frameworks used so far
By Jaijit Bhattacharya
To begin with, e-governance needs to be architected to be truly citizen-centric, moving away from the current models of being department-centric. This would require a complete overhaul of the manner in which e-governance had been architected till date. This is not an easy task and is perhaps the holy grail of governance.
What exactly does “being citizen-centric” mean? It means every time the citizen needs to interact with the government, the citizen need not start off on a discovery of which department and agency will provide the specific service required by the citizen. For that matter, the citizen may not even need to ask for the service – the system should be able to predictively find out the requirement of a citizen and deliver the same. So if a thirty five year old pregnant, tribal, handicapped unemployed woman needs to find what are the benefits that she is entitled to from the myriad departments and agencies of the government (as she is (a) pregnant, (b) tribal, (c) handicapped, (d) woman and (e) unemployed), an electronically transformed government should not expect that this lady will know how to login into the Internet, find the URL’s of the various ministries and departments, and apply for her entitlements, possible in English, and also furnish her documents digitally from a pendrive and upload the same.
The lady should be able to go to a single window, possibly run by a single government or government outsourced agency, enter her profile in terms of age, her status as a handicapped, pregnant tribal unemployed woman, and the system should be able to spew out all her entitlements. In addition, the system should be able to then track her pregnancy, delivery of the child, immunization requirements of the child, MNREGA payments made to the lady, and all this without the lady needing to get back and request.
The system should be able to deliver the services in a personalised manner, through predictive analytics, without the citizen (in this case the lady in question), needing to come back to the e-government system. Hence the ASHA worker should visit the child thus born, on a periodic basis to deliver the immunisations without the mother needing to go back and request electronically. That would be a true citizen-centric system.
What is required to build such a system? Technically, the answer is quite straightforward. The departmental systems need to be joined through a few key data masters. These data masters become the single point of truth for citizen information. Many parts of the puzzle are already in place in India. This includes the Unique ID of citizens (Aadhar) and State Residents Data hub.
However, there is also data that is common across two or more departments. Even if the departments agree to cooperate, one has to agree on the Truth Prioritization – that is, which of the departments actually own that data and hence would be responsible to change the data as and when required.
As an example, if someone’s current address changes, and the person goes to book a railway ticket, can the person ask the railways to make the change in his or her address and that should be taken in by all departments as the new truth with respect to this citizen’s address, or should there be a process wherein the person has to necessarily go to say, UIDAI to change the current address before purchasing the railway ticket? The latter would obviously make the process more cumbersome. The former would lead to deterioration of the quality of data as all departments would not be equally equipped to make changes to key data.
Moreover, departments would need to have integrated processes, requiring significant structural changes in the government. As an example, on applying for a government scholarship for education in a foreign university, the Ministry of External Affairs (MEA) should be able to automatically provide a passport to the student, which implies that the MEA should be integrated into the police systems to be able to quickly check the antecedents of the student, before automatically providing the passport.
The above process implies that the processes of the Ministry of Human Resource Development, Ministry of External affairs, Ministry of Home and state Police need to be all integrated. This is indeed a significantly challenging proposition. However, this is necessary in order to bring in the necessary change to make the government truly citizen centric.
What else is required to move to the new framework? The framework needs to be ferociously inclusive. Inclusive in terms of language, interface and access. Hence, government services need to be provided in local languages. But what if the person is illiterate – as is the case with a significant part of the population. Thus the interface could be speech based or other such interfaces that support the print-blind and other physically challenged citizens.
What is access? Access implies that anyone should be able to get access to the system, through appropriate connectivity, through a dedicated access device or through a community access device, at an affordable cost. If someone is living in a remote area, it would be extremely expensive to provide connectivity through either fibre or through satellite.
Hence enabling domestically created technologies such as utilization of TV Whitespaces frequency, that makes it realistically possible to provide rural connectivity at an affordable cost, becomes a critical policy issue. The government needs to take a policy call to keep public radio frequency resources for the public, instead of privatising the entire public resource.
The TV Whitespace technology works on the principle of sharing the radio frequency resources through a community infrastructure, without the need to have large telecom companies involved. The technology senses that no one is using the spectrum and quickly sends or receives the data packet, thus enabling rural connectivity. Since this operates in the lower frequencies, one is able to connect across 20 km through a single set of antennas, as demonstrated by IIT Bombay.
To make this a reality, the government needs to keep 40 MHz of spectrum to be freely used without license by general public, and thus avoid privatization of public resources.
If we can achieve the above framework, we can achieve a truly citizen-centric and inclusive government that is able to care for the last person standing (antodaya).
The author is Partner at KPMG India.
The article first appeared in print edition of Express Computer magazine, February 2016 issue. Read it here : Express Computer, February, 2016
- See more at: http://computer.financialexpress.com/columns/an-ideal-framework-for-rapid-roll-out-of-e-gov-projects/15565/#sthash.d8Y8JNbN.dpuf

Thursday, January 21, 2016

Devil is in the NIIF detail

 Published in Financial Express, Janurary 2016


Devil is in the NIIF detail

While the fund is an innovative mechanism to employ, how the government implements the agenda will be key

By: | January 20, 2016 12:03 AM 

          
The government’s plans for revolutionising the quality of infrastructure is impeded by the availability of funds. For the currently envisaged set of infrastructure projects are expected to cost at least $8 trillion over a period of 20 years. To put this in perspective, this is four times the total current GDP of India. To garner this magnitude of funding would require innovative mechanisms.
In addition, it is not merely the issue of raising funds but of raising funds at an affordable cost. Many of the infrastructure projects will be financially infeasible if the cost of funds is not reasonable. A potential solution is to create an institutional framework that would help create a pool of low-cost funds that could be made available for infrastructure creation.
However, such a framework must avoid the pitfalls faced by the past development financial institutions (DFIs) in India. DFIs had weak project assessing capabilities and were involved in Ponzi debt restructuring schemes, which in turn led to rising NPAs. Also, an end to concessional funding prompted development banks to turn to the financial markets for money and, in the process, they incurred higher funding costs. In order to make up for this, they chose to finance high risk projects, a development that also added to the increase in NPAs.
The National Investment and Infrastructure Fund (NIIF) is the proposed institutional framework for resolving the aforementioned issue. As we have been witnessing, a slew of innovations are being adopted by the government for resolving some of the fundamental issues of the economy. NIIF is one such innovation. It is a funding mechanism that will be the fund for banker of bankers, providing funding to bodies such as National Housing Board and Indian Rail Finance Corporation, which in turn provide funding to regular banks. It is proposed to be constituted as a trust which would raise debt to invest into equity of infrastructure finance companies. It proposes to raise Rs 20,000 crore.
This is a very timely initiative. It would help to provide access to large pools of low cost funds to the banker of banks, in turn helping to funnel in the funds into infrastructure. It would provide depth to the funds market for infrastructure development.
But how will NIIF raise its funds? 49% of the corpus will be provided by the Government of India. The balance will be raised as off-shore credit enhanced bonds and investments from anchor investors. This also implies that NIIF will be like a sovereign fund. It would also take in funds from other domestic sources such as pension funds, provident funds, National small savings and proceeds of monetised lands and other such assets of PSUs.  However, NIIF may not be a single fund but multiple funds, operating under SEBI guidelines.
The challenge of such structures created under the government is to attract appropriate talent and have a strong governance system that would not asphyxiate the fund. To avoid a build-up of NPAs, the new development bank must have robust project assessing capabilities. Framing stringent accountability guidelines and getting the funding mechanism to comply with them would address questions about the government’s influence over lending decisions. The government should eventually make the funding mechanism an independent organisation with a self-financing capacity.
In fact, it is proposed that NIIF will have a strong governance system, ring-fenced from the government, with employees hired at market rates. NIIF is envisioned to be supported by one or more Chief Executive Officers and a set of experts forming an investment team which will work at an arm’s length from the government.
In conclusion, NIIF will provide  greater funding headspace for an accelerated rollout of large scale infrastructure. It appears that NIIF has worked out the potential governance and talent issues that would be the critical success factors. The challenge would be in the details, of implementing the fund as per the design.
The author is Partner, Infrastructure and Government Services, KPMG in India

First Published on January 20, 2016 12:03 am 

Tuesday, January 19, 2016

Pan-city initiatives for a smart city


Published in http://www.governancenow.com/gov-next/egov/pan-city-initiatives-smart-city
Governance Now

Pan-city initiatives for a smart city

ShareThis LinkedIn Pinterest
Smart grids can help in reducing the accumulated technical and commercial losses, unscheduled outages and peak demand
Jaijit Bhattacharya | December 10, 2015
Under the ambitious smart city mission, cities are scrambling to put together their plans to transform themselves into smart cities. The smart cities programme is a key initiative of the government that aims to make Indian cities more efficient, livable and vibrant and to infuse economic activity in the country.

The smart city plan (SCP) needs to have these two primary components – the area based interventions which are to be limited to a specified area and the pan city interventions that are supposed to be implemented across the city. There are also marks specified for each of these two components for comparing the plans of the 98 shortlisted cities, with area-based interventions being assigned 55 marks and pan-city interventions being assigned 15 marks.

While area-based interventions are being viewed as the template for a larger rollout of smart city interventions, the pan-city interventions are viewed more as the basic interventions that are required across the city to embark on the transformation journey. The pan-city initiative aims to upgrade the existing city-wide infrastructure through application of smart solutions. For improving the infrastructure and services, the smart solutions would involve leveraging technology and disseminating relevant information for helping the users in making well-informed decisions.

Given that energy, and specifically electricity, is a key requirement of a modern energy guzzling city, smart grid is a popular choice of a pan city project. Smart grid helps attain reliable, sustainable and affordable power supply to the citizens. The traditional power systems face various challenges ranging from leakages in the distribution system to gap in the demand and supply to high accumulated technical and commercial (AT&C) losses. In India, the AT&C losses are around 32 percent of the installed generating electricity. Furthermore, the assets are ageing, poorly monitored and have low efficiency. The citizens lack awareness about the role they can play in managing their energy demand efficiently. The municipal bodies face challenges pertaining to distribution management as the demand, especially at the peak hours, outweighs the supply in many places. The utilities require smart solutions for addressing issues related to network reliability, limiting the outage duration and reducing the average cost per kilowatt-hour (kWh). 

The smart grid technology can help the utilities in addressing the existing issues. It can help in reducing the AT&C losses, unscheduled outages and peak demand by 50 percent, 100 percent and 27 percent respectively. It can also help in increasing the outage response by 21 percent and improving the customer experience by 70 percent. Smart grid makes use of high-speed communications, sensors and controls to provide an intelligent two-way communication system. The two-way communication system can, in turn, improve the demand side management which, at present, is a major challenge being faced by the Indian power market.

For understanding how the demand-side management technology will help conserving energy and saving costs let us consider a hypothetical case of a typical power demand curve for five days. Essentially, the electricity demand is variable. It is the variability of demand that, at times, makes energy management difficult for utilities. Furthermore, it might be the case that the energy requirement for a city during the day is significantly different from the energy requirements in the night.

In general, the base and intermediate loads (See Power Demand Curve) are taken care of through a contract with power generation agency. However, for the fluctuating peak-demand, the utility relies upon power exchange. The power exchange is costly and might lead to losses due to inability of the utility in estimating the demand of energy. These losses can be reduced if the demand curve flattens, somehow. The production/purchase of electricity has to be fine-tuned with the demand for saving costs and conserving energy to flatten the curve.

This flattening of the curve can take place if the users change their time and amount of energy consumed. Changes in consumption patterns can translate to load shifting and energy efficiency and conservation. Smart grid allows load shifting by tuning the parameters associated with load/demand dynamically. The smart grid technology provides a two-way communication channel between the utility and the households. Using the smart grid, the utility can send the rate of electricity at the time of use and other relevant information to the customers.  The utility can also track the energy being used by the households simultaneously.  

To complement the grid, smart meters will be installed at the household level. By the year 2021, India envisages installation of 130 million smart meters. Installing the smart meters is important because they equip customers with enough information that the users can monitor their demand and change their consumption patterns according to the fluctuating prices. Generally, the electricity prices rise during peak hours. If the users are able to shift the load to off peak hours, then the costs incurred by them would reduce. Even the utilities could save costs by not generating/buying additional electricity. Using the information provided by the smart meters, the users can make well-informed decisions and shift their consumption pattern. With better flow of information, even the utilities can operate more effectively by introducing cost efficiency measures. The utility can introduce differential pricing while keeping the users well-informed on a real time-basis. The billing and collection efficiency will be improved through these smart grids. Power consumption can also be monitored on a real-time basis and used for testing pilot projects.

On the supply front, smart grid allows integration with alternative sources of energy such as solar, wind, nuclear, hydrocarbon and cleaner technologies. This can help in reducing carbon emissions and ensuring a sustainable source of power supply. For implementing the smart grid, municipal bodies can leverage from the existing government schemes. The government can extend financial assistance for the smart energy management initiative under integrated power development scheme (IPDS), a scheme that envisages bridging the gap in sub transmission & distribution network and metering.

Smart energy management demonstrates one area where the infrastructure and services can be up graded through the technological interventions. The cities can take up solutions related to waste management, urban mobility, e-governance, medicine, education, incubation, public safety and water management. The initiative must be relevant, effective, efficient and sustainable for the city. It should positively impact all the citizens of the city by improving city’s governance or public services or infrastructure.
- See more at: http://www.governancenow.com/gov-next/egov/pan-city-initiatives-smart-city#sthash.ZxsRiOpt.dpuf

Saturday, January 9, 2016

Revitalizing PPP - Kelkar Committee on PPP

http://www.financialexpress.com/article/economy/revitalising-ppp/188779/

Public Private Partnership (PPP) was supposed to be a panacea for the gigantic funding needed by India for transforming its moribund infrastructure and accelerating the economic growth of the country. However, PPP as a mechanism to fund and build large scale infrastructure seemed to have lost steam, with investors having had adverse experiences.
KPMG India estimates that India’s infrastructure funding needs for its current infrastructure aspirations, would be to the tune of $7 trillion. This is almost 10% of the global GDP. Given the enormous appetite that India has for infrastructure, it would be a challenge to meet this requirement without reviving PPP as a credible option. Hence it is imperative to revive and revitalise PPP as a tool for funding, building and operating large infrastructure in India.
This is the objective of the report of the Committee on Revisiting & Revitalising the PPP Model of Infrastructure Development, chaired by Dr. V. Kelkar. The report’s timing could not have been better as government-initiated infrastructure projects are just beginning to accelerate in the form of roads, railways, smart cities, urban infrastructure investments, housing for all etc. All of these projects envision using PPP as a significant mechanism for creating the targeted infrastructure. In fact, India is now the world’s largest market for PPP in the world.
The Kelkar committee report has significant recommendations for reviving PPP in India. One of the key recommendations is to amend the Prevention of Corruption Act, 1988 which does not distinguish between genuine errors in decision-making and malafide action by public servants. This would ring-fence government officers and bureaucrats for their decisions taken with bonafide intention. This in itself would allow bureaucrats to adopt PPP more vigorously.
The report also recommends that contracts should be more focused on service outcomes than mere fiscal benefits and calls for further strengthening of the three key pillars of PPP frameworks namely Governance, Institutions and Capacity. It also stresses on further capacity building of all stakeholders. The report recommends setting up of independent regulators for each sector that adopts PPP, with a unified mandate.
One of the critical reasons for PPP going out of favour was the limited focus on realistic risk assessment and building mitigation strategies. The report therefore recommends revisiting the Model Concession Agreement (MCA), for a more rational assessment of risk across the stakeholders.
Many PPP projects become distressed due to unforeseen reasons such as delay in not being able to acquire land.
These projects could potentially be salvaged by renegotiating the terms of the concessionaire agreement. The report recommends benchmarks to be applied to each proposed renegotiation as well as setting out conditions that should be accepted as valid reasons for a request for amendment of a concession agreement. The report also recommends mechanisms for protecting concessionaires from the loss of bargaining power over time (Obsolescing Bargain).
The report comprehensively addresses the key issues that have hindered PPP adoption in the infrastructure space, large or small. If its recommendations are accepted, it would lead to significant uptake of PPP as a mechanism for funding infrastructure in India in the near term.
By Jaijit Bhattacharya
The author is Partner–Infrastructure and Government Services, KPMG in India

My views on current state of e-Governance

http://computer.financialexpress.com/features/digital-india-footprint-expands-but-big-ticket-items-need-major-push/15183/
Echoing similar sentiments, Jaijit Bhattacharya, partner at KPMG, says that the government has started moving forward and it is beginning to accelerate but much more needs to be done to accelerate the pace. “Focus should also be on big ticket items such as digital locker and eSign facility, as they could be game changers for digital enablement of India.” -

See more at: http://computer.financialexpress.com/features/digital-india-footprint-expands-but-big-ticket-items-need-major-push/15183/#sthash.frQZDqT3.dpuf