Description
Disclaimer: Copyright infringement not intended.
Context:
- Union Minister for Finance & Corporate Affairs Nirmala Sitharaman launched the Electronic Bill (e-Bill).
Background:
- The e-Bill processing system was announced in the Budget 2022.
- It will be implemented across all central ministries and departments and suppliers and contractors will now be able to submit their claim online, which will be trackable on a real-time basis.
What is Electronic Billing (e-Billing)?
- Electronic billing (eBilling) is a method of sending and paying bills electronically, rather than through paper billing processes.
- An e-bill is usually generated by an accounting or financial software solution and then sent to the payer by email or a web-based portal.
Benefits of e-Bill in Government procurement:
- This will ensure end-to-end digitisation and make the payment process transparent by using technology not just within the government departments but extending the second leg to the citizen's use.
- The e-Bill, will shut even "any small window which is available" for "misuse in terms of rent-seeking", as a contractor or supplier to the government will be able to file their claims digitally.
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Rent seeking
When a firm uses its resources to procure an unwarranted monetary gain from external elements, be it directly or indirectly, without giving anything in return to them or the society, it is termed as rent-seeking.
Description:
Instead of creating wealth, a firm seeks to obtain financial gains from others through alteration/ manipulation of the environment where economic activities take place. A popular example for rent-seeking is political lobbying by companies. These are primarily done by companies in order to make economic gains through government action.
This might be done by a company to get subsidy from the government for the product which it produces or increasing tariff rates by the government for its services, etc. Such a practice neither leads to creation of new wealth, nor does it benefit the society.
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- Claim has to put with digital signatures, and one would not have to go to government offices. Payment reaches as soon as the claim reaches with a digital signature.
- The common man who works with the government will not have to wait for months, or not even go and meet officials, seeking the release of their dues.
- The system will provide huge convenience to suppliers and contractors. It will have a shorter bill payment cycle, a more effective audit trail.
- It will be an effective tool to facilitate uninterrupted government disbursements in pandemic like situations.
https://www.business-standard.com/article/finance/e-bill-system-will-end-rent-seeking-in-govt-contracts-fm-sitharaman-122030200897_1.html
