Digital India Initiatives

Digitising the state


From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 3- Overhauling India's digital payments, accounting and transactions.

This article examines the issues with governments account problems and their implications. It also suggests the ways to deal with the problems with data management in India.It is is line with the suggestions made by the CAG in this regard.

Problem with government account keeping

  • The Union budget grew from Rs 197 crore in 1947 to Rs 30 lakh crore last year.
  • Total government expenditure may be higher than Rs 70 lakh crore. (states+union)
  • But the form and manner of keeping accounts have more or less remained unchanged since Independence.
  • Manual transactions and manual payments often lead to manually entered data at different stages in different databases on different systems.
  • This makes data unreliable, violates the principle of “single source of truth”.
  • This also sabotages transparency and good governance.

Issues with computerisation by government

  • Government “computerisation” has often mechanised manual processes rather than “re-engineered processes”.
  • This has created siloed IT systems.
  • It has created various separate databases that lack modern data sharing protocols for organic linking like APIs (Application Programming Interfaces).
  • It leaves fiscal data being incomparable as basic as salary expenditure across states.
  • It creates the problem of obscurity in which large expenditures are booked under omnibus head called other.
  • Non-traceable actual expenditure against temporary advances drawn or funds drawn on contingent bills.
  • It creates the problem of misclassification so that grants in aid is classified as capital expenditure and bookings under suspense heads.

3 Steps to deal with the issues

1)  100% end-to-end data capture

  • All receipts and expenditure transactions including demands, assessment, and invoices should be received, processed, and paid electronically.

2)  Data governance for standards

  •  Data standards are rules for describing and recording data elements with precise meanings that enable integration, sharing, and interoperability.
  • Prescribing data elements for all transactions will ensure standardisation.
  • This standardisation will clarify ambiguity, minimise redundant data, and create protocols for integration across different databases across entities receiving government funds.
  • It will also integrate entities collecting revenues on behalf of the government, and those discharging core functions on behalf of the government.
  • Government-wide data standards coupled with real-time data captured end-to-end will enable the use of cognitive intelligence tools like analytics, artificial intelligence, machine learning.
  • These tools, will support the establishment of budget baselines, detecting anomalies, data-driven project/activity costing, performance comparisons across departments and agencies, and benchmarking.

3) Technology architecture

  • The element of technology architecture must ensure that all IT government systems should conform to a prescribed open architecture framework.
  • This framework should ensure robust security and maintaining privacy.

How will these 3 steps help

  • It will help in recognising off-budget transactions, the last Union budget took steps towards this fiscal transparency and consolidation.
  • These steps will ensure business continuity: electronic records cannot be lost or misplaced like files or paper records.
  • It will also provide an incontrovertible audit trail.
  • It will enable Parliament and legislatures to draw “assurance” that each rupee due to the government has been collected, and each rupee has been spent for the purpose it was allocated.

Consider the question “Government expenditure has increased manifold since 1947 but the form and manner of keeping data have remained more or less the same. In light of this examine the issues with payments, accounting and transactions data system of the government. Suggest the measures to improve it.”


A citizen-centric view of a single source of truth encompassing every rupee of public money would make the 299 remarkable people who wrote India’s Constitution proud of this 21st-century citizen empowerment innovation.

Original Op-ed

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