Even as I write this blog series on government data transparency, a huge battle rages on the utility or otherwise of the Indian union government’s demonetisation exercise. Without going into the merits or otherwise of this exercise (I have written extensively on social media about that), it is interesting to note that those on both sides of the debate rely on bits and pieces of data that support their conclusions. What is being missed by the supporters is the considerable inconvenience that ordinary people are being put through in order to get their legitimately earned money back. The consequences on economic productivity seem to be too large to be estimated at the moment.

But let us put all that behind our backs to notice one interesting thing about the demonetisation exercise. One of the avowed objectives of this exercise is to eliminate black money; that is, money on which tax ought to be paid, but isn’t. Besides, this move comes closely on the heels of a tortuous negotiation that has led to the introduction of GST in India. If one steps back a bit further, one also notices that State governments have gone in for reforms of their taxation measures too over the last decade, enthusiastically embracing e-governance to attempt to streamline commercial taxes, check posts, VAT and property taxes.

What does all this tell us, from the perspective of administrative process reforms?

It tells me that governments, regardless of their political persuasion, tend to be quite enthusiastic and receptive to e-governance measures in taxation systems. Even the current demonetisation measure, though hasty and badly planned, might have the long term consequence of spurring a larger number of Indians to move to banking transactions, where their financial transactions can be captured through formal and measurable means. It might take a decade or so, but it will happen – at considerable cost and pain, largely suffered by the unbanked poor.

However, there is a flip side to this coin.

Even as governments vigorously put in place inter-operable e-governance systems for the administration of taxation systems, we are beginning to lose sight of how governments spend all this money collected from the people. There is little logical data on that.

What is the kind of data that people require to hold their governments accountable for expenditure of the money collected through taxes?

The first step in the disclosure of data relating to expenditure, is budgetary data. We must know how much is allocated, and for what. We need to get to know enough to compare whether we are spending more money on health than on fly-overs, or more money on education rather than irrigation canals.

Second, we must know whether the moneys allocated are actually released to the agencies of the government concerned, for expenditure. When I say ‘released’, it means that the money actually flows through a supply chain to the expenditure authority, and there are no visible or invisible restrictions that apply on the latter, to incur expenditure. By the way, governments of all hues revel in invisible restrictions. Ask anybody working in any finance department on how they curb expenditure even as they seem to be encouraging it, and all you’ll get in return is an enigmatic smile.

Third, we must know whether we are getting value for money. That means we must know everything about the procurement and implementation process. When was the work undertaken? How long did it take? What was the estimated cost? How much did it eventually cost? What was its quality?

Fourth, we need to know enough to gauge the eventual impact of how our money was spent. The government projected that by implementing an expensive public transportation system, the number of private vehicles on the roads would come down by forty percent. Did that happen? Or were there unintended costs, or benefits? Those sort of questions, need to be answered.

However, the system of providing government data rapidly unravels when it comes to expenditure information. Sadly, the same enthusiasm and attention to detail that is lavished on implementing taxation systems is lacking when it comes to tracking our taxed rupee as it is spent. Yet, there are simple ways in which we could improve data transparency when it comes to tracking trails of expenditure. More of that in my next blog.