The National Institute for Smart Government (NISG) was established in May, 2002 with a vision to establish itself as a centre of excellence by leveraging private sector resources through the public-private partnership mode for the spread of e-governance.

The national taskforce on IT and software development set up in 1998 first came up with the idea of establishing an institute in collaboration with Nasscom. Thereafter, a high-powered committee under the cabinet secretary in January, 2002 recommended the establishing of NISG as a section 25 (not-for-profit organisation) company.

In its initial years, the NISG focused on the purpose for which it was established, i.e. defining e-governance architecture, standards, strategic plans and capacity building. However, with the passing years the organisation has completely changed its focus. It has now become more of a manpower outsourcing agency than a centre of excellence. Currently it is outsourcing manpower to unique identity authority (UIDAI), national e-governance division (NeGD), state e-mission teams (SeMTs) and many other projects.

As of March 31, 2011 there were as many as 280 employees on the rolls of NISG and more are being added. This despite the original concept to evolve a lean and mean organisation. By positioning its manpower as part of SeMTs across various states, it is now following the model of the National Informatics Centre (NIC) which placed its employees in states and districts working for the state governments but on the rolls of central government agency.

Another shocking part is that the company despite nine years of establishment could not get the requisite private partners on board. The only private sector representation on NISG board is that of Nasscom (10%) and IL&FS (5%). The rest of the stake is with the government of India (DIT – 10% and DAR & PG – 10%), government of Andhra Pradesh (10%) and minor stakes with the government of Chattisgarh and Meghalaya and Vizag municipal corporation. With the current equity distribution the majority stake in NISG (over 30%) is with government and less than half ( 15%) with private sector. In such circumstances, the company is in essence a government company and therefore should follow all government procedures especially in recruitment and procurement. It should also come under the preview of C&AG and CVC like any other government organisation.

In a majority of its projects, the NISG just outsources the assignment to private consultants and private IT companies. Instead of becoming a centre of excellence in e-governance, the NISG has become just an organisation which creates business opportunities for consulting and IT organisations and facilitates financial transactions of private organisations with the government departments scuttling the laid down government procedure.

The NISG was not established to outsource government projects or manpower. It was established with a vision of creating a centre of excellence in e-governance. It is time the  NISG management reviewed its purpose and practices.