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TCS bags big contract from MP government

This is the third such project the company has won. The current assignment involves public finance reforms and institutional strengthening for the Madhya Pradesh government.

T O D A Y

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Work on the project, worth $775,000, began two months ago and will be executed in association with Ernst & Young, Canada. The completion is scheduled for April 1999, says TCS-Delhi Management Consultant Snimer K Sahni.

The project would reform Madhya Pradesh's tax system, improve its tax administration, develop expenditure management control system for the state, increase transparency in its rules and regulations and strengthen its fiscal and social sector institutions.

Fiscally, Madhya Pradesh has slipped from a comfortable 1992-93 surplus of Rs 2.85 billion to a 1995-96 deficit of Rs 4.72 billion.

Since nearly 35 per cent of the state's revenue is currently derived from the centre, the project would also address the state's increased dependence on central funding.

The state finance minister's 1997-98 budget speech had announced implementation of the value added tax system for traders with an annual turnover exceeding Rs 10 million.

The project's key module, therefore, involves assisting Madhya Pradesh's transition from a sales tax system to the VAT system.

The new system will have an extended tax base, rationalised procedures and computerised tax administration.

A crucial objective of the project would be to strengthen fiscal institutions including the revenue earning departments of commercial taxes, transport and excise.

The state's property valuation procedure would be revamped to strengthen the CTD's Stamp and Registration Directorate.

TCS will help the state create a State Budgeting and Fiscal Analysis Unit that would assist future governments in scientifically planning revenue and expenditure.

TCS will also develop a management information system for the state's finance and other revenue earning departments. This would allow consolidation and LAN-based accessing of revenue data.

TCS will carry out an institutional strengthening exercise for the state's health and education sectors. Issues to be analysed include private financing in health and education, cost recovery, efficiency of health delivery systems and decentralisation of primary education to local urban and rural bodies.

The project's success would be gauged from the state's ability to increase revenues and control expenditure without neglecting social sector investment.

This should result in manageable deficit, greater social sector spending and robust growth rates.

- Compiled from the Indian media

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