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March 23, 1999


Govt units to spend adequately on Y2K compliance

Government departments, public sector undertakings and their affiliations have been asked to allocate as much money as they deem adequate to make their computer systems free from the millennium bug.

Email this story to a friend. Earlier, such government units had been asked to set aside only a collective corpus of Rs 7 billion.

Montek Singh Ahluwalia, Planning Commission member and chairman of the Y2K Action Force, revealed this while speaking at seminar on the millennium bug in New Delhi today.

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He also told reporters that a Rs 350 million contingency fund would be established to help those units that fail to muster the financial resources to get Y2K compliant.

The National Association of Software and Service Companies and the Planning Commission organised the seminar.

The National Task Force on IT and Software Development had recommended the creation of a Rs 7 billion corpus to help government units get Y2K compliant. The Union government, in a gazette notification, had accepted the recommendation.

However, Ahluwalia said two options are there in this regard: either to set aside a Rs 7 billion fund and cut the budget of government departments and PSUs or to ask them to allocate the required sum to solve the millennium bug. ''We have chosen the latter option,'' he said.

NASSCOM President and IT task force member Dewang Mehta pointed out that though creation of a Rs 7 billion corpus has been recommended, it is intended to be by way of expenditure by government departments and PSUs towards solving the Y2K problem. The task force does not talk of setting aside such a sum.

However, S R Mittal, chief general manager, information technology, Reserve Bank of India has said that by definition, a corpus means setting aside a particular sum.

Ahluwalia said the Y2K action force has asked each government department and PSU to set up a group to monitor work towards Y2K compliance in their units.

The RBI is supervising banks' progress in this regard and will prepare a useful feedback, he said.

The RBI has set a deadline of March 31, 1999, for all banks to make their system Y2K compliant. According to the feedback already received from RBI, the targets will be met.

''However, even if there is a certain slippage, I am sure that all banks will solve the Y2K problem by the end of June," he assured.

Mittal, in his presentation, said that of the 104 banks, only 8 would not been able to solve the Y2K problem by March 31. The RBI is issuing them directives to fall in line.

Ahluwalia said the Y2K Action Force has asked the departments and PSUs to get external auditing in this regard.

''I am going to be very sceptical about the feedback received from the departments and that is why I am insisting on external auditing,'' he said.

He said he has urged World Bank officials to do their independent assessment of India's progress in solving the Y2K problem and complete their work by July.

''The assessment by the World Bank will add credibility to our reports,'' he pointed out.

Mittal said banks would be able to solve the high demand for cash on January 1, 2000, as there are enough cash chests in the State Bank of India and associated banks all across the country.

Besides, the cash reserve ratio is quite high in the country when compared to other nations.

He said the RBI would directly ask large non-banking financial companies to solve the problem of the millennium bug and take adequate measures against those not complying with.

The apex bank would, however, indirectly monitor small non-banking finance companies in this regard.

Earlier, Planning Commission Deputy Chairman K C Pant lamented that due to lack of proper awareness and incomplete information on the subject, there is complacency in some quarters that the Y2K problem will not affect India in the same way as developed countries.

Pant was launching NASSCOM's Web site about the Y2K problem in India.

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