Let GSTN function as a private company–Economic Times–12.04.2018

The finance ministry reportedly wants to convert the Goods and Services Tax Network (GSTN), a private company that manages the indirect tax infrastructure, into a government company to ostensibly protect sensitive data.

This is a bad idea. A change in ownership structure does not reduce the vulnerability of the network to cyberattacks. Data showed that 114 government websites were hacked during April 2017 to January 2018.

Recently, a French security researcher shared how he hacked BSNL’s website, and got hold of details of its employees, and the state-owned telco acknowledged this. Last week, the defence ministry and many other government websites faced downtime, though the government rejected cyberattacks.

It is technology, systems and safety protocols that will protect critical networks against cyberattacks, not state ownership.

GSTN was set up as a private company: non-government financial institutions hold 51% equity and the balance 49% is with the government. The idea was to give the company operational freedom to run the network — in which tax receipts and input tax credit claims are uploaded and processed to reconcile claims and spot tax liability — efficiently.

The system needs constant upgradation and maintenance. It makes sense to let the GSTN operate as a private company that is capable of buying services and hardware fast so that the critical system is not held hostage to time-consuming rules of government procurement that mandate purchases at the lowest-quoted price, or L1.

The government exercises strategic control, but the company is free from public sector speed breakers such as audit by the CAG, and complaints to the Vigilance Commission. It is also free to hire professionals laterally and pay market-linked salaries. Keep it as it is.

This piece appeared as an editorial opinion in the print edition of The Economic Times.
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via Let GSTN function as a private company

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