Context

Union Finance Minister Nirmala Sitharaman launched the electronic bill (e-Bill) processing system that seeks to bring in broader transparency and expedite the process of payments.

Background

• The Finance Minister had announced this major e-governance initiative in the Union Budget 2022-23 presented in Parliament on February 1.
  • The move is a part of ‘Ease of Doing Business (EoDB) and Digital India eco-system’.
• The electronic bill processing system was launched at an event organised to mark the 46th Civil Accounts Day celebration.

Analysis

What is the e-Bill processing system?

• The e-Bill processing system aims to enhance transparency, efficiency and faceless-paperless payment system by allowing suppliers and contractors to submit their claims online which will be trackable on a real-time basis.
• In a phased manner, the new system will make the entire process of submission and backend processing of bills completely paperless and transparent.
• The objectives of the system are to provide convenience to all vendors and suppliers of the government to submit their bills and claims at anytime, from anywhere.
• It is seen as a major step forward in realizing the vision of “Digital India” and promoting ease of doing business.
• The system will also eliminate the physical interface between suppliers and government officers, enhance efficiency in the processing of bills/claims and reduce discretion in the processing of bills through the First-In-First-Out method.

First In, First Out (FIFO) is an accounting method in which assets purchased or acquired first are disposed of first.

 How are Bills from Suppliers and Vendors processed currently?

• The suppliers of various goods and services to the Government have to submit physical, ink signed copies of their bills to the respective ministries/departments/offices of the Government of India.
• Similarly, government employees also need to submit hard copies of their claims. At the backend too, the processing of bills is done through a mixed system of physical and digital modes.
• The suppliers/vendors or their representatives therefore need to visit the offices to deliver bills. Moreover, they are unable to track the status of the processing of their bills.

How would the current system change the current situation?

• Under the newly launched e-Bill system, vendors/suppliers can upload their bills online along with supporting documents from the convenience of their homes/offices at any time through digital signature.
• For those not having a digital signature, the facility of e-sign using the Aadhaar has also been provided.
• Hence, the suppliers will no longer be required to visit the offices concerned for this purpose.
• At the backend too, the electronic bill received will be processed by the authorities digitally at every stage and finally, the payments will be credited digitally to the bank account of the vendor.
• The vendor/supplier would be able to track the status of the processing of their bills online.
• The new system will bring a lot of efficiency and transparency in the system and is a big citizen-centric decision of the Government of India.

Where has the government implemented this system first?

• The e-Bill system has been developed by the Public Financial Management System (PFMS) Division in the office of the Controller General of Accounts in the Department of Expenditure, Ministry of Finance.
• These bills will be processed by the first-in-first-out method.
• The system has been initially rolled out in pay and accounting units of nine ministries/departments. The e-bill system will be rolled out in other ministries/departments in a phased manner in 2022-23.
• In addition to promoting ease of doing business and bringing convenience to lakhs of vendors/suppliers, the e-Bill system will be environment friendly, eliminating the need to submit crores of paper bills annually and will thus save tonnes of papers every year.
• The e-Bill system has an elaborate digital storage facility for the retrieval of documents and a robust audit trail.