eGovernance in India

Improving eGovernance in INDIA

UNDP Funds Invested in NISG, a private limited company which does not come under Indian Parliament control procedures and NISG’s non transparent Activities, raising serious concerns about the credibility of the UNDP in India.

Posted by egovindia on May 28, 2006

UNDP Funds Invested in NISG, a private limited company which does not come under Indian Parliament control procedures and NISG's non transparent Activities, raising serious concerns about the credibility of the UNDP in India.

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Subj: UNDP Funds Invested in NISG, a private limited company which does not come under Indian Parliament control procedures and NISG's non transparent Activities, raising serious concerns about the credibility of the UNDP in India.  


Date: 11/9/2005 9:43:21 A.M. Pacific Standard Time

Mr. Kemal Dervis 


United Nations Development Programme
One United Nations Plaza,
New York, NY 10017 USA
Telephone: (212) 906 5317
Fax: (212) 906 5364

Dear Mr. Kemal Dervis,

Ref: UNDP Funds Invested in NISG, a private limited company which does not come under Indian Parliament control procedures and NISG's non transparent Activities, raising serious concerns about the credibility of the UNDP in India.

I am V. M. Kumaraswamy, a non resident Indian living in USA for the past 30 years.  I am located in California, USA. I moderate India's largest e-governance yahoo-group  under the title eGovINDIA. You can reach this group at

 eGovINDIA is a discussion group dedicated to promoting true e-governance in India, consisting of members from all walks of life from within INDIA and the World over. Many State Ministers and senior bureaucrats of India are members of this group. We do have lawyers, social activists, freelance writers and journalists in the group. The group is meant for serious activists only. Casual members are not allowed to join the group. The group is moderated by an Indian Administrative Service  (IAS) Officer apart from me.  As  on date,  the group has nearly 2200 members.

The focus of this group is true e-governance and use of open source technology in e-governance. The members of this forum have a passion to see a truly e-governed India, resulting in transparency and easy access to government services by  the common man, notably the depressed class people (so called untouchables), women and people living in far flung and difficult areas of India.

Corruption is a stark reality in India. The recent reports put India in the worst category in corruption index. For the group members, e-governance means less corruption too.

The least we expect out of e-governance is transparency.

UNDP had come forward to promote e-governance in India in a large way. We are thankful to the UNDP's  gesture. We are aware that UNDP had committed for the e-governance of India to the tune of $30 millions in the next three –four years. From the funds already provided by UNDP, a private limited company named National Institute of Smart Government (NISG) had been formed in a place called Hyderabad (nearly 1700 from Delhi). Under a Memorandum of Understanding between UNDP and the Government of India, the NISG had been formed. As per NISG's constitution, the company can never be a Government company. It would always remain a private limited company, away from the Controls of the Government.

So far, whatever money that had been used by NISG had come from UNDP only. No private partner had come forward to invest in it. NASSCOM, which is the largest private partner in NISG had not invested any amount in NISG, save for some software contribution which is unnecessary as open source software is available totally free of cost. UNDP had committed its $30 million to be spent only through the NISG. In short NISG means UNDP.

You must be aware that a private limited company in India cannot be supervised by the Indian parliament. For any Government sector company, the Indian Parliament has supervisory powers through its powerful Parliament Committees, such as the Public Accounts Committee (PAC).  The Parliament's writ does not cover any Private limited company in India. Similarly any Government owned company comes under the supervision of Central Vigilance Commissioner (CVC) and the Central Bureau of Investigation (Federal Police). CBI is a powerful anti corruption police at the disposal of the Federal Government of India. But neither of these organizations has any role to play with regard to a private company such as NISG.

The Higher Judiciary, notably the High Courts and Supreme Court of India have writ jurisdictions in the case of State's roles. These are extra ordinary powers to check unlawful and corrupt activities where State's funds are involved. The higher judiciary's writ jurisdiction does not extend to the private companies.

In short NISG which had been formed under the auspicious of UNDP had been left free of any control mechanism in India to be handled by three – four bureaucrats in India.

Our concern with regard to NISG which is solely funded by UNDP goes beyond this.

True e-governance comes only through process automation based governance which calls for total involvement of the government machinery.

NISG had skirted this issue completely and has been championing the so called private public partnership (PPP). The PPP model promoted by NISG has been found to be a bill collection event so far, where the private partner collects the utility bills which does not involve any e-governance. This is tantamount to corruption in  a sense as the funds meant for good governance / e-governance are being diverted for other purposes.

The PPP model goes against the egalitarian principle as this can never work in rural areas of India where 75% of India's population resides.

NISG had not commenced any effort so far in the last one year, involving process automation based e-governance which is the actual e-governance.

This is just one of our concerns and there are much more serious concerns pointing to corrupt activities involving  NISG.

NISG is chaired by Mr.J.Satyanarayana, an IAS officer from Andhra Pradesh who had been found to be corrupt by an independent media – DATAQUEST.

Dataquest is one of the largest circulated IT magazines in India. This reputed magazine had found out that Mr.J.Satyanarayana had favoured only one company in majority of his decisions. The story goes back to his earlier days when he served as Secretary to Government in Andhra Pradesh. As Secretary to Government of Andhra Pradesh, Mr.J.Satyanarayana had cooperated in a scandal called e-seva. The Comptroller and Auditor General had adversely commented about this project stating that the selection procedure was not transparent. Records indicate that Mr.J.Satyanarayana has been promoting the same company (M/s Ram Infotech / CMS consortium) in other states. Notable among them is the Bangalore One project for which Mr.J.Satyanarayana and his NISG acted as Project Managers. For Bangalore One Project Mr.J.Satyanarayana had selected the very same consortium by fabricating the tender documents. These are serious allegations which may bring disrepute to UNDP in the days to come unless immediate and impartial action is taken to do course correction.

I also wish to bring to your notice about the funding made by NISG from out of UNDP funds during July, last year (2004). NISG had failed to host the details of the funding in its website. For that matter NISG has been revealing very little about what it does with its funding. Good governance through such implementing partners cannot be obtained by UNDP.

 In the absence of the voluntary information from NISG we get information that the entire funding  or the major portion had been given  to nondescript NGOs for promotion of "good governance". No one knows the outcome of such funding. India needs such funds for true e-governance activities. But NISG under Mr.J.Satyanarayana does not seem to be interested in true e-governance.

There is a valid doubt that Mr.J.Satyanarayana might have chosen the agencies which are either related to him or just friends.

There are substantiated allegations (through Dataquest report) that NISG under the leadership of Mr.J.Satyanarayana had rigged the tenders using UNDP's funds. The authors of this scam had no reply when Dataquest had sought their response quoting specific details. It had also been confirmed through this report that Mr.J.Satyanarayana has been promoting a company called Pricewaterhouse Coopers (PWC) in all his dealings, ignoring canons of justice and fair play.

More details are available in the Dataquest website itself:

NISG has been promoting yet another company under the leadership of  Mr.J.Satyanarayana. The name of the company is C1 India Limited. This company bagged a contract for E-PROCUREMENT through Mr.J.Satyanarayana when he was Secretary to Government, IT Department in Government of Andhra Pradesh. The tender was finalized by PWC on limited tender basis which is illegal. Commerce One India which subsequently became C1 India Limited was hand picked by Mr.J.Satyanarayana and the entire tender procedure was an eye wash. There are allegations that PWC, the pet partner of Mr.J.Satyanarayana conducted the tender evaluation for this project in its Mumbai office without any representation from Government of Andhra Pradesh which is a gross impropriety. The ultimate case of deceit can be found from the fact that the very same consultant – PWC, after choosing C1 India as the implementing company had joined them in the execution of the project in Andhra Pradesh itself. Consultant cannot join the implementing partner at all. This is barred in any international scheme of things. This is not permissible in India too.

As on date, C1 India and PWC jointly bid for the e-procurement contracts with various state governments all over India.

NISG has started promoting C1 India Limited along with PWC in other States in the area of e-procurement. Our latest information is that NISG has been persuading the Government of Karnataka to accept this duo for implementing e-procurement system in that State.

As all of us in India knew that NISG means UNDP. Any bad reputation accrued to NISG is directly attributed to UNDP.

Does UNDP want to earn the tag "Corrupt" through NISG?

This is a serious question to be addressed by you when you are in India.

Failure to promote open source software but very proactive in promoting Microsoft's proprietary technology:

Unlike the rest of the world and against the proclamation of UNDP that it would promote open source software in governments and public services, NISG has been consciously promoting Microsoft products only at a huge cost. To our knowledge, as on date, NISG had not taken up even  a single open source software project. This is matter for your inquiry.

I am sure you would see the scheme behind formation of NISG by the bureaucrats who are in the helm of affairs of NISG today both at Hyderabad and in New Delhi. The Joint Secretary of Ministry of IT and e-governance in Government of India who is in the governing body of NISG is Mr.Chandrasekhar IAS.,

Mr.Chandrasekhar IAS., was a predecessor of Mr.J.Satyanarayana in Andhra Pradesh Government in the same department.

The two of them control the NISG fully. The two of them have configured the NISG as a totally control free private limited company.

We are all aware that Mr.Chandrasekhar has the final say in permitting or not permitting UNDP to invest in developmental activities in India.

What are the reasons behind creating NISG in this way is a question that has to be looked into by you during your stay in India.

To part with,  I wish to bring to your notice that the Government of India's budget for e-governance spending in the next five years is expected to  be Rs.25,000 crores ( one billion dollars). The world bank had already committed US $ 500 millions recently. Right now it is expected that NISG would play a major role in spending this money!

Whose money is it anyway?

It is the public money that is proposed to be routed through NISG which is out of the controls of Government of India, save for the supervision of two or three bureaucrats whose integrity is grossly suspect.

So far, the officials of UNDP in Delhi had failed to look into the long term implications of these corrupt deviations in terms of the credibility of UNDP.

The very fact that the claim of the officials of NISG that they had looked into the complaints  against them and found them to be unsubstantiated shows that things are not happening the way UNDP would like it to happen.

UNDP cannot be a mute  spectator anymore.

UNDP has to seek withdrawal of its association from NISG. It would be just and proper for UNDP to realign with a Government of India organization such as National Informatics Centre (NIC) which is fully under the control and supervision of the Indian parliament.

This would save the name of the UNDP for the time being and in the long run too.

I hope I have made things clear for you to do the follow up.


V.M.Kumaraswamy, MBA

949-857-8578 and 714-357-0206


NISG has been incorporated as a not-for-profit Company under Section 25 of the Companies Act, at Hyderabad on the 28th of May 2002.

The following is the important corporate information.
  Memorandum of Association ( Click here to download ) of Association ( Click here to download) share capital of NISG : Rupees Twenty Five Crores



One Response to “UNDP Funds Invested in NISG, a private limited company which does not come under Indian Parliament control procedures and NISG’s non transparent Activities, raising serious concerns about the credibility of the UNDP in India.”

  1. Soft & Source – Get OpenSource Source easily…

    […]UNDP Funds Invested in NISG, a private limited company which does not come under Indian Parliament control procedures and NISG’s non transparent Activities, raising serious concerns about the credibility of the UNDP in India. « eGovern…

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