Govt brings in law to speed up public expenditure

Govt brings in law to speed up public expenditure
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In a major fiscal reform, Drabu factors in ‘wide-ranging expenditure rules’ in Appropriation Bill

JAMMU: The Legislative Council on Monday passed Rs 95,666.97 crore budget for J&K for the year 2018-19, comprising revenue component of Rs 51,244.72 crore and capital component of Rs 44,422.24 crore.
The Jammu and Kashmir Appropriation Bill-2018, passed by the Legislative Assembly on Saturday, was moved by Jammu and Kashmir Finance Minister Haseeb Drabu in the Upper House on Monday and was adopted with voice-vote, an official handout read.
According to the handout, the Budget proposals for 2018-19 were, earlier, presented in the House on 11 January in which the finance minister had proposed 20% step up over the last year’s budget size of Rs 79,472 crore.
For the first time in J&K’s fiscal history, the finance minister has factored in wide-ranging Expenditure Reforms in the Appropriation Bill-2018 making the government legally bound to ensure time-bound public expenditure, avoid delays in execution of development works and reduce pilferages, the handout read.
By setting timelines for release of money and its utilisation across departments and executing agencies, the finance minister has linked expenditure reforms with allocation of funds. Enumerating on the Expenditure Reforms factored in the Appropriation Bill, Drabu said the Finance and Planning, Development and Monitoring departments “shall release both revenue and capital budget to all the administrative departments within two weeks of the passage of the Appropriation Bill”.
He said the administrative departments shall, in turn, ensure release of funds to the subordinate offices within four weeks of their receipt, failing which these funds shall be deemed to have been transferred to the intended DDOs on the dates they ought to have been released by the administrative departments /Controlling Officers. “Planning Development and Monitoring Department shall ensure that all plan allocations to be made in the next fiscal bear proper classification, indicating, name of the work/scheme against detailed Head-115 Works,” he said adding that in the absence of the schematic classification, the relevant Capex release shall be deemed as invalid and not open to operationalisation”.
The finance minister said that no payments shall be made by any treasury/PAO from 1 April 2018, under any expenditure head, if the releases for the same have not been made and further received by the spending and bill passing officers via BEAMS. “Treasury officers/PAOs shall be personally liable for making payments on the funds released and received by passing the BEAMS application,” he said.
Drabu further said that the Planning, Development and Monitoring Department shall mandatorily upload on its website the department-wise “Name of the Schemes/Works/Projects”, forming part of the Capex budget for the fiscal 2018-19, along with the respective allocations.
He said the procurement plans of the departments for the next fiscal shall be limited by an outermost cap of 60 days, starting 1st April. “From conceiving the nature and quantity of public goods and services to be procured to preparing tenders/RFQs/EoIs to finally awarding the contract, the departments shall compulsorily finish the whole process by 30 May 2018,” he said adding that any spill-over in timelines shall be automatically visited with the appropriate disciplinary actions.
The finance minister made it clear that the funds shall be spent only on the approved items of the expenditure and strictly for the purpose they have been released for. “There shall be no re-appropriation of funds except where the departments have spent 55% of funds received ending December 2017,” he said. However, where their spending levels are below 55%, the remaining 70% funds shall lapse to the government, he added.
He said the expenditure during the last quarter shall be restricted to not more than 30% of the Revised Estimates. “Treasury officers shall have an added responsibility to ensure that the departments are held responsible to the above expenditure ceiling,” he said.
Drabu said the state share of the centrally sponsored schemes and the expenditure to be incurred on utility shifting, land compensation, etc. under PMDP projects shall be the first charge on the funds lapsing to the government during the last quarter.
The finance minister made it clear that there shall be, henceforth, no engagement of casual workers, need-based workers, etc. by any department. “The Planning, Monitoring and Development Department shall, invariably, condition all developmental/plan releases to the departments to the unconditional vouchsafing by the latter that they shall refrain from making fresh engagements,” he said.
He said the expenditure reforms across the departments shall further be strengthened by initiating measures including bringing complete transparency in the financial and administrative processes through increased IT interventions, ensuring authorisation of such works for execution only which have prior administrative approval, technical sanction and appropriate financial back up and ensure expenditure monitoring on real-time basis through BEAMS and PFMS, the handout read further.
Drabu said this major expenditure reform follows slew of fiscal interventions made over the past 3 years aimed at making the public spending quick, visible and free from corruption. “This historic law will facilitate completion of projects within the approved allocations without time and cost overruns,” he said and added that it will infuse transparency in the public spending and prevent parking of public funds in the FDRs and, in certain cases, the personal bank accounts of the officers managing a maze of developmental agencies.
Drabu said a broader political consensus was emerging in Jammu and Kashmir to put in place a viable economic framework, a robust fiscal management structure and an achievable budgetary policy.