 "Cash squeeze could hurt autonomous bodies")
Autonomous institutions set up by the hundreds by various ministries could soon face a cash squeeze. The central government is planning to make them cut back on their cash reserves, simultaneously creating tough oversight rules to control their investments.
This could be like a lightning from the blue for these institutions, ranging from big ones like the University Grants Commission and Council of Scientific and Industrial Research to myriad small ones like Export Inspection Council of India. The proposal is a simple one.
The annual budgets of most of these organisations are rather simple. Their current expense is largely for salary and office management, financed by the ministries. On the capital side, they have few liabilities but large assets, including land and cash reserves, which are deployed mostly as investments in pension funds.
Currently, the ministries, under which each of them is housed, transfer them money for salary and operating expenditure twice a year from the annual Budget of the government. Instead the government's cash managers are considering making the transfers happen when the money is actually to be spent by these institutions, say the day before the disbursement of salaries or when they raise bill for capital expenditure nearer to the point of execution. At that point, the sum needed by the particular institution will be transferred from the government treasury to its accounts cutting out the float. Since the cash management of the government is now run on tech platforms, this will not be a problem at all.
At the same time, the ministries will take over the management of the capital assets of these bodies, especially their investment reserves. The larger combined corpus will yield higher returns; they would also reduce the management fees that each institution pays out to banks and mutual funds when they park their money with the latter. It also makes sense because management of money is not the key responsibility of these autonomous institutions but in the annual budget cycle of governance often becomes the most important one.
This will save the government quite a bit of cash and cut down on a source of corruption in plenty of these institutions. An official in the cost accounts department of the finance ministry said the current annual bill of the government for all these institutions is about Rs 60,000 crore. Placed against the annual expenditure of the government for FY16 of Rs 17,77,000 crore, this is about four per cent, enough to warrant a close look. But these numbers themselves are likely to be under estimates just because the exact number of such institutions is not available.
The Comptroller and Auditor General's report on autonomous bodies for the year 2012-13 has been able to track only 683 of them. Of these, the government told the auditor it has released Rs 36,247.97 crore in the same year for about half or 354 such autonomous bodies. Data for funds placed with the rest are not available at any one place. Based on whatever data was made available in bits and pieces, the auditor has put the figure higher, at Rs 45,805 crore, for 2011-12.
SELF-CONTROL
LARGEST AUTONOMOUS INSTITUTIONS
- Indian Council of
- University Grants Commission
- Prasar Bharati
- Council of Scientific and Industrial Research
- Navodaya Vidyalaya Samiti
- National Council for Teacher Education
- Indira Gandhi National Open University
- Indira Gandhi National Centre for the Arts
- Shri LBS Rashtriya Sanskrit Vidyapeetha
- National Bal Bhavan
- Coal Mines PF Organisation
- NIPER
- Haj Committee of India
- National Commission for Backward Classes
- The Nehru Memorial Museum & Library
No detailed CAG audit since then
Source: CAG
