IN WHAT IS being seen as an indication of the state’s stretched funds, the Chhattisgarh authorities has requested for extra funds from the state’s firms to be deposited within the authorities’s civil deposit account, the Okay-deposit.
A January 20 order launched by the Finance Department, and signed by Special Secretary (Finance) Sharda Verma, asks CEOs and MDs of 20 completely different boards, authorities and firms to deposit the excess quantity of their respective financial institution accounts into the federal government’s Okay-deposit. These 20 firms embody the State Police Housing Corporation, the Khadi and Gramodyog Board, State Marketing Corporation, Beverages Corporation, the State Industrial Development Corporation, State Mineral Development Corporation, and the Chhattisgarh Madhyamik Shiksha Mandal, amongst others. While a few of these boards are utterly depending on state authorities funds, others obtain funding below varied schemes of the Central authorities too. The state might be taking a look at a deposit to the tune of Rs 100 crore from these firms, the sources mentioned.
A Okay-deposit is a civil account maintained by state governments to maintain funds with out incurring any curiosity price. Fund stability within the Okay-deposit helps states current an image of solvency and creditworthiness.
Utilizing unspent funds
It’s not normal for states to get firms to park their funds within the Okay-deposit. While it does assist the state tide over a money crunch within the final quarter, it offers the finance division (the CM holds the finance portfolio right here) full management over funds allotted to the entities.
Acknowledging the order, officers of the state authorities mentioned the choice was taken for higher regulation of funds. Maintaining that the state’s monetary situation “is very good otherwise”, the Finance division mentioned that “the board/corporation/authority can withdraw the money from K-deposit with the Finance department’s approval as and when they need to make a payment”. This transfer, officers consider, will guarantee an extra verify by the CM workplace on the firms’ utilization of funds since CM Bhupesh Baghel additionally holds the Finance portfolio.
Responding to queries, the state Finance division advised The Indian Express, “(The) Accountant General Chhattisgarh has pointed out to State Government that some of the public sector entities (board/corporation/authority) of State Government have drawn the funds from budget and have parked the money into bank accounts. This is a violation of provisions of the Finance code, which clearly states that no money should be drawn from the Consolidated Fund in anticipation of expenditure and it should be drawn only when the payment has to be made in lieu of service, work, procurement etc. Drawal of money in advance adversely affects the finances of the State and should be avoided to maintain fiscal discipline. So the instruction has been issued only to ensure better compliance of rules and regulations.”
Despite the Finance division stating in any other case, Chhattisgarh has been going through a monetary crunch since 2020. In the pandemic yr, the division levied strict restrictions on expenditure.
In a letter to Union Finance Minister Nirmala Sitharaman in November final yr, Baghel had sought monetary sources for Chhattisgarh.
According to an annual research of state funds by the Reserve Bank of India, Chhattisgarh’s deficit noticed a spike in 2019.
While the income deficit of the state was a unfavorable 0.2% of the Gross Domestic State Product in 2018-2019, it rose to 2.8% of the GDSP in 2019-2020. Similarly, the gross fiscal deficit within the state rose from 2.7% of GDSP in 2018 to five.2% in 2019. The state’s downside is compounded by the repeatedly rising acreage of rice farming and an extra weight of Rs 700 per metric tonne that’s being given as MSP to farmers below the Nyaya scheme. Officials say extreme prices in direction of varied Cabinet-rank positions to accommodate details within the ruling Congress get together have additionally been a drain on the examiner.
Meanwhile, the order has left officers of Boards, that are depending on authorities grants, perplexed. “We anyway have not had much input due to the pandemic, and now this order means we will have to give up our fallback money… This money is not to keep the government solvent, but to give back to the public in terms of infrastructure and services,” a member of one of many 20 Boards mentioned on situation of anonymity.
To assist states’ of their funds, the Center had shared two advance installments of their month-to-month devolution. On January 20, the Center launched Rs 3,239.54 crore, comprising one advance installment of tax devolution to the state authorities. In November, an analogous quantity was launched in opposition to the month-to-month installment of Rs 1,619.77 crore. ,With inputs from Sunny Verma, New Delhi
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With inputs from TheIndianEXPRESS