The Maharashtra government is finally waking up to its precarious financial condition. It is working on a plan which empowers the Treasury to reject demands for fresh funds unless departments/ ministries give a detailed account of how they have utilised funds disbursed earlier.

By October, the State wants to implement a supervisory system which could help reduce revenue expenditure by ₹4,000 crore.

For FY2015-16, the revenue receipt is estimated to be ₹1.98 lakh crore and expenditure is pegged at ₹2.01 lakh crore, resulting in a revenue deficit of ₹3,757 crore.

In FY2015, the State’s debt had ballooned to over ₹3 lakh crore. It pays an interest of about ₹24,000 crore per annum to service the loan. A senior government official told BusinessLine that the Finance and Planning Department gets delayed information from various departments about their expenses. At a time when the State’s balance sheet is precarious, fiscal discipline is the need of the hour.

When the system gets activated by October, departments will be asked to furnish details of their withdrawals which have happened over the past year.

All departments draw money from the Treasury using the Budget Distribution System (BDS). After money is sanctioned by a Departmental head, a slip is generated by BDS for disbursals. In the new system, the BDS will not generate the slip unless the forms are filled, the official said.

Bring accountability “The system will take a couple of years to stabilise. Those officers who short circuit the procedures for hasty withdrawals will find it very difficult to operate once the system is put in place,” the official said and added this will bring in more accountability on the bureaucracy and ministers.

Related Topics
comment COMMENT NOW