Indian Express 14.12.2009

To log out corruption, MCD to put in place new online payment system

To address concerns about “deep-rooted corruption” in the Municipal Corporation of Delhi (MCD), as revealed in the recent ‘ghost employees’ scandal that was costing the civic body Rs 17 crore every month, the MCD has decided to henceforth make all payments online.

The agency has now decided to strengthen its existing Electronic Clearance System and to introduce a new system called Real Time Gross Settlement (RTGS).

Based guidelines set down by the Reserve Bank of India, the RTGS system will be extended primarily to all suppliers and contractors working on various MCD projects to do away with the ‘tender mafia’ in the civic body. Municipal Commissioner K S Mehra had also announced during the MCD budget presentation last week that the RTGS, once implemented, will also curb loss of time as the Corporation will be able to directly transfer money through e-banking within hours

The MCD has of late received numerous complaints from contractors and suppliers over failure to clear outstanding dues. The reason for the delay, say officials, is the time-consuming process of payment. “Currently, once a contracting agency completes work, the Corporation headquarters is informed. The headquarters then issues directions to the corresponding zonal office, which in turn directs the division office to issue cheques,” an official said. “This leads to inordinate delays in payments and the delay also creates further ground for corruption. The new system will eliminate this loss of time,” he said.

The RTGS system is the fastest possible money transfer system through the banking channel. Once implemented, it will help the MCD do away with the system of issuing cheques.

Henceforth, after the completion of a project, the due payment will be directly credited by the MCD’s appointed official bank to the eligible person’s account. The RTGS transactions are settled as soon as they are processed, and as the money transfer takes place in the books of the Reserve Bank of India, the payment is considered irrevocable.

According to MCD officials, besides eliminating any delays, the RTGS will also ensure that the contracting agencies deliver quality work.

“Because of the continued presence of the tender mafia and the accompanying nexus of suppliers and contractors, the quality of work suffers the most. There are innumerable examples in which work is executed only on paper, while the payment is made to the contractor. Once the new system is implemented, there will be no room for such corruption,” the official said.

The MCD will also extend its current biometric attendance system to all employees, including Education department employees and daily wage workers, by introducing mobile devices.