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Optimizing financial reforms

While presenting the budget for the financial year 2018-19 in the Legislative Assembly, Finance Minister had proposed certain fiscal and expenditure reforms saying that these were overdue and could not be deferred anymore. The main purpose of bringing in reforms is to make State’s financial regime competitive with economic development and visible social transformation. While proposing the reforms, Finance Minister had said that just talking of reforms was not enough unless these were accompanied by comprehensive roadmap about how and with what thrust the reforms had to be implemented. While presenting the budget the FM had said that legislative part of fiscal and expenditure reforms was part of Appropriation Bill, passed by the Legislature, the operational part of the reforms would follow in a detailed set of guidelines.
In fulfilment of his stand on these reforms, the Finance Department has come out with a slew of guidelines with thrust firstly on overall approach of the Administrative departments to new fiscal policy and secondly on major expenditure heads with which the Administrative departments are supposed to deal with. Major concern of the Finance Minister has been that some departments habituated to the old formats and stereotypes of financial dealings may be reluctant to make quick shift to new format and thus become a hurdle in the way of meaningful implementation of the reforms in their true spirit. The apprehension is that the Treasury Officers/PAOs may hold on to prevalent system and make payments accordingly thereby rendering fiscal reformation ineffective. Such an apprehension is also entertained about the Administrative departments as well because apart from human reluctance to change habit, there is also the element of vested interests. This is the reason why the guidelines have emphatically stated that any intended or unintended or circumstantial exigency forcing deviation from the set of reforms will mean a cost for the defaulter. Not only that much, the guidelines also imply that the officer/official at the helm of affairs will be personally held responsible for the default. From the point of view of Finance Department conformity of the administrative organs to the reforms is a foregone conclusion.
The guidelines proposed are to be taken something like a red line beyond which an Administrative department will not move. Therefore, to ensure that the spirit of these reforms is infused into the veins of the departments, Administrative Secretaries will create mechanism within their respective departments of how to ensure implementation of the guidelines down to the lower rungs. We know that previously there was not much control on the expenditures once allocation of the budget to the departments was announced.  Expenditure was altogether the discretion of the departmental authorities. Experience has shown that a number of financial irregularities would take place whether intended or unintended. Re-channelling of the funds or diverting funds from one head to another, inordinately delayed payments, overdrafts and credit payments etc. had to be brought under reforms. Being used to the system cannot be an excuse for not heeding the new dispensation.  The guidelines ultimately would like that the virtues of restrain, discipline and propriety are accepted as policy paradigms of fiscal system in the State.
Fiscal reforms were long due for our State. Work culture has to be redefined and made compatible with the demands of modern times. While the State is right now on the path of multi-faceted development, it is in the fitness of things that our financial system is supportive of the developmental plans. Maybe more financial and expenditure reform will be needed in future because the pace at which the country is developing  will become a compulsion for the Government to be re-assessing its fiscal policy from time to time to make it compatible with our needs. The State Government has taken a right step at right time. The guidelines need to be enforced in letter and in spirit and the seriousness of the Government will be tested in how it deals with cases of wilful disregard of the instructions formally and officially proved against an officer or the department.

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