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Finance Ministry has decided to continue with relaxations under cash management guidelines (CMG) for the quarter (second quarter) beginning July 1. This means relaxed norms will continue to be applicable for capital expenditure and expenditure under Centrally Sponsored Schemes (CSS) with the size of ₹500 crore or more for the ongoing second quarter.
The Union Budget for FY24 has provided ₹10-lakh crore for capital expenditure and ₹3.7-lakh crore for grants-in-aid to create capital assets, taking the effective total to ₹13.7-lakh crore. Similarly, for 58 CSS, ₹4.76 lakh crore have been provided. All these together account for 41 per cent of the total budget size of over ₹45 lakh crore
In an Office Memorandum (OM) dated June 30, Economic Affairs Department said that instructions dated April 25, which provided relaxation in the April-June quarter, will continue in the July-September quarter. This means relaxations from stipulations prescribed in May 2022 OM will be applicable in the current quarter.
May 2022 OM stipulated preparing the calendar of releases between ₹500 crore and ₹2,000 crore. The range date should be the 21st to the 25th of a month, as GST is deposited after the 20th of every month. For expenditures of ₹500 crore or more, prior approval with two working days’ notice shall be taken from the Budget Division. In the case of a single payment of ₹5,000 crore, prior permission from the Budget Division is a prerequisite. The same will be applicable for autonomous bodies under Treasury Single Account. Now, all these will not be required to follow in the July-September quarter of the current fiscal.
The latest OM also clarified that the relaxation will strictly adhere to the SNA/CNA guidelines issued by the Department of Expenditure. SNA means Single Nodal Agency, and CAN is Central Nodal Agency, which are used for fund disbursement. The OM also asked financial advisors to monitor the releases to ensure there is no idle parking of funds at any level and that the funds are released on a just-in-time basis. It also said that apart from relaxation, any other deviation will require approval from the Finance Ministry.
Relaxation in expenditure is critical, keeping in expenditure push required from the government. In the first two months (April-May) of the fiscal, the Centre spent nearly 14 per cent of the total budget allocation against nearly 15 per cent during the corresponding period of the last fiscal. During the period consideration, capital expenditure rose to nearly 17 per cent against 14 per cent of overall allocation.
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