IT spending by the government sector grew only at 12%, way below the average growth of the domestic industry market. However, it would be wrong to attribute this entirely to IT losing importance as a priority area for the government. In fact, both the Union Government and a host of state governments gave a boost to the domestic IT market and was equally responsible for the market reaching Rs 4,089 crore. What happened was earlier all government departments were only purchasing hardware to use up the allocated budget. In 2003-04, it was more of a case of making strategic IT investments to facilitate administrative and executive functions.

There was significant adoption of IT initiatives happening on the Central Government front. The Ministry of Finance was one of the principal players as it went about automating the income tax network in India. This included the setting up of an IP-VPN for 501 locations, a converged network data, voice and video and a secure extranet. HP supplied 8000 PCs and Microsoft close to 11,000 licenses for the software solutions for the project, that was monitored by an empowered committee under the chairmanship of Dr Vijay Kelkar. The combined contract value of HP and Microsoft was slated to be around $10 mn.

The reform measures initiated by former finance minister Jaswant Singh in tax administration involved substantial computerization. Multibanking facility for paying central value-added tax, smart Permanent Account Number cards and computer-generated refund advice-all this and more were launched during 2003-04. UTI Investors Services Ltd (UTIISL) was entrusted with the supply applications, receiving completed PAN applications and taking responsibility for printing and delivering the smart PAN cards. But these measures were just the tip of the iceberg. The revenue department's most ambitious project, the Tax Information Network, expected to be completed in two years was also launched during the year. The project, which was outsourced to the National Securities Depository, meant that each high-value transaction anywhere in the country would be tracked by a supercomputer. Another milestone was the use of Electronic Data Interchange to produce online processing of returns, risk analysis, profiling and management.

Not only the Income Tax department, even other areas like the Election Commission, Railways and the Customs saw widespread automation. The elections were not only path-breaking in terms of the surprise results, this was also the first time EVMs were used across the country and hence all results were declared within four to six hours after the counting began. The much maligned railway reservation system performed reservations for 6,75,000 seats and berths every day (during peak season this went up to around a million), and the system responded to any reservation transaction from anywhere in the country within two seconds, 365 days a year, with a 99% uptime. Even ticket bookings happened online, albeit only from Mumbai and Delhi. The customs website received 1,00,000 hits a day with importers and exporters logging on to file or check something. With over 95% of all paperwork filed in this fashion, the number of processing steps was cut from 18 to 6 for imports and from 15 to 5 in the case of exports.

Linux was one flavor of the year for both Union and the state governments. Several government departments ported their critical enterprise applications on Linux. These included Indian Railway Catering and Tourism Corporation (IRCTC) and the Department of Treasury Government of West Bengal who ported their Oracle applications and further development on Red Hat. IBM's e-governance framework delivered for the Uttaranchal government was developed only on open source platform.

State governments have always been on the forefront of IT adoption by the government sector. Nasscom's analysis of e-Governance implementation undertaken in 10 key States revealed that the southern States of Andhra Pradesh, Karnataka, and Tamil Nadu were leading in terms of implementing projects at different citizen - Government interface points. However, others like Kerala, Gujarat, Maharashtra, MP, West Bengal and Rajasthan, started catching up fast during 2003-04. But, despite the islands of excellence, e-Governance has not been able to make rapid progress due to several operational, economic, personnel, planning & implementation issues.

E-governance in India has also focused heavily towards investing in hardware and very little on developing software and services, which could maximize hardware investments. For the first time, there was a change in this pattern witnessed during 2003-04. Perhaps the government dictum that each state should allocate 2% of its total budget on IT had something to do with this. Some of the more prominent projects this year were the SETU project in Maharashtra, Banglar Mukh in West Bengal, Mahiti Shakti in Goa and even the GSWAN implementation in Gujarat.

The technologically advanced states like Karnataka and AP also went full steam, though there have been some reservations because of change in governments. Significant projects included KhajaneNet and VAT Commercial Tax Department in Karnataka. KhajaNet involved interconnecting all the treasuries with the hub at Bangalore and a DR site at Dharwad.

Rajneesh De in Mumbai