E-governance projects of governments my bring some cheers in SMEs

The e-governance projects recently initiated by the Central and state governments have brought some cheer for small and medium enterprises (SMEs) in the IT/ITeS segment, that have been hit by the ongoing downturn. Industry sources say that over Rs 70,000 crore worth of projects, including e-governance and technology upgrades by various public sector entities, have been kick-started in the country.

If 10 per cent is reserved for SMEs it would make a big difference to them, said Arun Ram, a member of the Tamil Nadu government’s IT & Communications Task Force. A few state governments— such as Tamil Nadu, Andhra Pradesh and Gujarat— have started allocating such projects to SMEs. To make others follow suit, trade bodies like the Federation of Indian Chambers of Commerce and Industry (Ficci) is planning to ask the government to reserve some e-governance projects for SMEs.

The government’s unique identity project is a Rs 40,000 crore programme, apart from which the Central and state governments are expected to spend around $10 billion over the next five years on e-governance projects and on upgrading their technology. Of this, India Post, Indian Railways, Life Insurance Corporation and other state entities alone are expected to spend $6 billion. These projects especially the e-governance projects offer big opportunities for SMEs.

The Central government launched the National e-Governance Plan (‘NeGP’) on May 18, 2006. The three pillars of the plan are connectivity (statewide area networks), data centres (National Data Bank, State Data Centres) and Common Service Centres, according to e-Governance 2020, a Ficci-Ernst Young report on emerging themes for e-Governance in India.The total cost of the NeGP until 2011 is estimated at Rs 23,000 crore. The outlays for its components are: Rs 1,623 crore for state data centres, Rs 313 crore for the capacity building scheme, Rs 3,334 crore for statewide area networks, and Rs 5,742 crore for the common service centres scheme (CSCS). The participation of SMEs in these projects will not only be cost-effective, it will also generate more employment opportunities.