In line with the recommendation no.97 of the National Taskforce on Information Technology and Software Development, Department of Information Technology (DIT) jointly with the Department of Administrative Reforms (DAR&PG) pursued the setting up of the National Institute of Smart Government (NISG). NISG was planned to serve as an institutional mechanism for leading private sector competencies and resources including financial resources into e Governance projects in order to accelerate effective governance in an effective manner.

A High Powered Committee (HPC) was set up consisting of Mr. R.R. Shah, Secretary - Ministry of Communication and Information Technology, Mr. V.K. Agnihotri , Additional Secretary - DAR&PG, Mr. B.P. Mishra, Additional Secretary -Department of Expenditure, Mr. R. Chandrasekhar - Joint Secretary - Ministry of Defence, Mr. KiranKarnik, President - NASSCOM, Dr. N. Vijayaditya, Director General - NIC, Mr. A.P. Sawhney, Secretary - DIT- Govt. of A.P. headed by the Cabinet Secretary.

In the meeting of the HPC on the 11th of January 2002 under the Chairmanship of Cabinet Secretary, a presentation was made on the objectives of NISG and the various steps taken to operationalize NISG. In the meeting subsequently convened with the HPC, the Additional Secretary to the Prime Minister and Director - PMO  on 18-01-2002 to discuss the progress of NISGand in that meeting the Additional Secretary of DAR&PG mentioned that following discussions were tabled

- NISG would be a body registered under section 25 of the Companies act. Mr. R. Chandrasekhar, Joint Secretary, Ministry of Defence(under transfer to Ministry of Information Technology ) has been identified as the Officer on Special  Duty for the project.
- It was decided that the Government would issue instructions to enable Government departments to utilize the services of NISG as well as depute Government personnel to the Institute.
- The Additional Secretary to the Prime Minister also suggested that while finalizing the Board of the NISG, suitable representation of local bodies may be thought of

Concluding the meeting, the AS to PM suggested that all necessary measures to be taken to ensure that NISG starts functioning by 31st of March 2002. It was also mentioned that the personnel policy of the Institute, it should have the flexibility to source its personnel from any stream including, if required from the Government, on deputation or in any other appropriate manner.

In line with the above decision, NISG was registered as a section 25 company with its headquarters at Hyderabad in May 2002.

NISG has its origins in the recommendations of the National Task Force on IT and Software Development. Forged as a public-private partnership, NISG offers the orientation and efficiency of the private sector combined with the accountability of the public sector. NISG is helping the Government of India and State Governments realize the national e-governance vision.