State likely to face constraints in central funding for schemes
Source: Hueiyen News Service

Imphal, December 26 2013: With the austerity instructions from the Ministry of Finance being put in practice, the Centre is likely to curtail release or sanctioning of the funds for various schemes and projects in the State on account of imprudent utilization of the plan outlay in the current financial year 2013-14 .

The Ministry of Finance has been issuing austerity instructions from time to time with a view to containing non-developmental expenditure and releasing additional resources for priority schemes.

The Department of Expenditure, Ministry of Finance had issued an office memorandum on September 18, 2013 for expenditure management.

The measures taken up by the Ministry of Finance are intended at promoting fiscal discipline without affecting the operational efficiency of the Government.

The Ministry hopes to rationalize expenditure and optimize available resources.

According to the instructions, the Ministries/Departments shall not transfer funds under any Plan schemes in relaxation of conditions attached to such transfers (such as matching funding).

The State Governments are required to furnish monthly returns of Plan expenditure-Central, Centrally sponsored or State Plan- to respective Ministries/Departments along with a report on amounts outstanding in their Public Account in respect of Central and Centrally Sponsored Schemes.

Also, not more than one-third (33 percent) of the Budget Estimates may be spent in the last quarter of the financial year.

Besides, the stipulation that during the month of March the expenditure should be limited to 15 percent of the Budget Estimates is reiterated.

It may be emphasized that the restriction of 33 percent and 15 percent expenditure ceiling is to be enforced both scheme-wise as well as for the Demands for Grant as a whole, subject to RE ceilings.

Minisries/Departments which are covered by the Monthly Expenditure Plan (MEP) may ensure that the MEP is strictly followed.

It is also considered desirable that in the last month of the year payments may be made only for the goods and services actually procured and for reimbursement of expenditure already incurred.

By the end of December this year, at least 67 percent of the funds allocated from various Ministries/Departments should be utilized by the State Governments.

However, the State Government could utilize only about 12 percent from the total plan outlay during the past eight months of this current financial year.

The office memorandum also mentioned that rush of expenditure on procurement should be avoided during the last quarter of the fiscal year and in particular the last month of the year so as to ensure that all procedures are complied with and there is no infructuous or wasteful expenditure.

Moreover, no fresh financial commitments should be made on items which are not provided for in the budget approved by the Parliament.

The recent decision of the State Cabinet urging all HODs of government departments to ensure utilization of plan funds up to 60 percent by the end of this month is against the office memorandum of the Ministry of Finance.

Any violation of these instructions may lead to curtailment of all funds from the Centre.

In such a situation, the Centre is likely block funds for all future schemes and projects to the State.

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