The Hindu Business Line : Plan to introduce new accrual system of accounting

The Union Government is planning to introduce new accrual system of accounting for Government accounts so as to make the country’s financial system more transparent and accountable, Mr Vinod Rai, Comptroller and Auditor General of India, has said.

The Government had already prepared a road map for its implementation and also proposed to call a meeting of various State Governments to discuss the process of adopting accrual system of accounting.

The whole process will be completed in 3-5 years, he said adding that switching over to the new system will also help in overcoming the asset liability mismatch.

Mr Rai was delivering a forum of excellence lecture on the topic ‘Strengthening financial management system’ organised by Infrastructures Kerala Ltd (Inkel) here on Monday.

The challenge faced by the public finance system in the country is to ensure that the public money is well spent.

Each rupee spent by the Government should reach its targeted beneficiary.

“We should track each rupee”, Mr Rai said. He also stressed the need for internal system of control in budgetary process as there is a lack of internal control in budgetary allocation.

The CAG pointed out that Kerala has already developed a system of local funds audit. However, such system is not well developed in other states.

In this context, he mentioned that the local self government representatives should be given adequate training to handle larger funds inflow.

According to Mr Rai, the economy grows on the backbone of physical infrastructure.

However, the country woefully lacking in this. Ports, airports, energy sectors are proving to become impediments in the country’s growth stories as projects in these sectors requires huge resources for a long tenure.

He pointed out that the country should go for innovative methods to garner more resources for various projects in these sectors.

India has been growing at nine per cent consistently in the last three years.

Even though there is a talk about slowdown in the economy, the country should grow at 8.8 per cent, he said adding that India has inherent strength to withheld the slowdown with its high human resources.

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