The finance ministry has loosened cash management standards, allowing departments and ministries to issue plans of Rs 500 crore or more without any limitations, in an effort to speed up public expenditure in the final quarter of the current fiscal year. Finance ministry grants leeway for major departmental spending.
Finance ministry ,For smooth exchequer control, ministries must align bulk expenditure items with monthly GST receipts and quarterly advance tax payments, in accordance with existing cash management principles.
In accordance with the criteria, in order to benefit from GST (Goods and Services Tax) collections, Rs 500 crore and Rs 2,000 crore must be released on the 21st and 25th of each month. Similarly, in order to use direct advance tax payments, bulk expenditures above Rs 2,000 crore must be issued between the 17th and the 25th of the final month of a quarter.
A project above Rs 5,000 crore requires prior clearance from the budget division for each one payment. According to a December 29 office document from the Department of Economic Affairs, it has been agreed to lift all of these prohibitions in order to stimulate capital spending.
The letter states that Financial Advisers (FAs) are responsible for monitoring fund releases to make sure there isn’t any idle parking of funds at any level and that the funds are distributed on a just-in-time basis.
After the Union Budget is presented on February 1, the government will probably go into election mode, thus the most recent advice to departments becomes significant.
As of November in the current fiscal year, the Center’s capital expenditures have increased to 58.5% from 59.6% during the same period last year. Comparatively, revenue expenditures for FY24 have reached 59% of the budget projection, while in the previous fiscal year they had reached 62.5% of the corresponding target.
