With a view to help expedite the flow of expenditure in the first four months of the current fiscal, the Orissa government plans to introduce Cash Management System (CMS) in selected major spending departments.
The new system, envisaging formulation of monthly expenditure plans, are proposed to be put in place to avoid rush of expenditure towards the end of every fiscal.
Though ideally, the flow of funds should be evenly paced and commensurate with the revenue receipts, it is observed that the expenditure pattern is skewed and back loaded. In this backdrop, the state finance department would issue guidelines on the CMS soon.
Since the first four months of the current fiscal is the working season before the onset of the monsoon, the state finance department has asked the administrative departments to start incurring expenditure from the first week of April. The departments should chalk out a work programme from the beginning of the fiscal and make the required funds available to the spending units during the current months itself, the finance department suggested. The move of the state government assumes importance as expenditure by various departments isn’t picking up during the first quarter. Consequently, during the rainy season no major work could be taken up, resulting in poor expenditure during the first half of the fiscal.
In a circular issued by the finance department, guidelines have been issued to all the secretaries and heads of the departments to expedite spending during the first four months of 2010-11.
According to the circular, expenditure on creation of capital assets, completion of projects, reduction of non-plan revenue expenditure and cost of operation of various services should be accorded top priority.
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Funds should be released according to a definite action plan for achieving the quantifiable physical target fixed for the year. The secretaries in the administrative departments are required to review physical achievements against expenditures by 15th of every month against the monthly or quarterly targets.
During the first quarter, the statutory dues like value added tax (VAT), municipal tax, compensation for land acquisition, electricity dues, water charges and rent, current and arrear tax and rates should be cleared on the basis of the provisions made in the budget. These payments should be cleared after verification and scrutiny and rebate should be availed wherever possible.
However, if any delayed payment surcharge is levied, the concerned head of the office or Drawing and Disbursing Officers (DDOs) should be held personally responsible for it. Similarly, the maintenance expenditure under non-plan head for roads and bridges, building, urban water supply, rural water supply, major, medium and minor irrigation and flood control work should be limited to 50 percent of the total provision.