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Contractors providing goods and services to the Maharashtra Government no longer have to hover around government offices for their payments.
In the new fiscal, all such payments are being made using electronic clearing service, which transfers the funds to their accounts immediately.
On an average, about Rs 3,500 crore are being disbursed in this manner every month.
K. Shivaji, Principal Secretary (Expenditure), Maharashtra, told Business Line the electronic clearing service (ECS) will ensure that the payment is done on time and the scope for corruption will be considerably reduced. Before the system was put in place, cheques were held back by some officers for illegal gratification, he said.
Shivaji said that use of cheques has been reduced by all government departments. However, in cases where cheques are still issued, their validity has been reduced from six months to one. Therefore, cheques have to be handed over to the vendors within that time.
Rajesh Aggarwal, Information Technology Secretary of Maharashtra Government, said when the idea of ECS for funds transfer was originally conceived, a number of contractors were taken by surprise. “They found it hard to believe that they could get their dues sitting in their offices,” he said.
Apart from contractors, ECS is also being extensively used for providing salaries, pensions, student scholarships and old-age pensions for the poor families.
A senior officer in the State Government pointed that until 2011, the Education Department was providing scholarships to about one lakh students. But when the Department started insisting on student bank accounts and ECS cash transfer, the number of students availing themselves of the scholarships came down to 60,000.
“In effect, 40,000 students were just bogus entries, they did not exist. It was a ploy used by some schools to siphon government money. Use of ECS exposed this scam,” the officer said.
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