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Promoting fiscal discipline

Although the question of bringing about financial reforms has been hanging fire in previous regimes also yet no reforms worth the name were brought in so far. When we get used to a system, we are loath to change it even if the change is positive and more beneficial at the end of the day. Financial system in our State administration is essentially based on the system that prevailed even before freedom dawned in our country. A few reforms have been brought in no doubt, but the fast changing times in which we live, and the obvious constraints imposed by democratic form of Government, call for radical change in the financial system if the State has to keep pace with other States in the country in march towards all round development.The administration has to move fast to keep pace with the rising aspirations of the people and requirements of a democratic governance.
The Government has taken a bold step and announced a slew of reforms to strengthen and streamline fiscal discipline. The conventional practice of dragging the budget to the last quarter and then to the last month of the financial year has been a source of big corruption and delay in delivery. According to new policy of the Government, not more than 30 per cent of the total budget has to be spent during the last quarter of the financial year. So far the practice has been of dragging procurement and tendering process to the last month meaning March of the financial year and then hurrying up and rushing through the tenders, allocations, payments and clearance of balances. The net result was that there used to be great rush and mismanagement all giving rise to corruption. This practice has been discarded now. Fiscal discipline will be prioritized with the announcement of release of 50 per cent revenue and capital expenditure budget provision for upcoming financial year of 2017-18, at least four to five months ahead of schedule and May 15 is fixed as deadline for procurement and tendering process for all kinds of work to give ample time to their execution in view of limited working season in some of the areas. Actually, most of the inhabited areas of the State being winter zone, normal life is disrupted by the harsh elements imposing serious restrictions on work culture. This imposes so many restrictions on administrative and financial aspects of the State. There are clear cut instructions from the Finance Department to the Heads of Departments and other executing agencies to immediately set in motion the procurement and tendering process for the works to complete them latest by May 15, 2017, which means that all budgeted works must be allotted and supply orders issued or procurements made by the specified timeline. The fixing of time line under new directions to the Departmental Heads is a significant change in the stereotype practices observed so far. This is naturally bound to bring fiscal discipline on a new pattern.
Essentially, this drastic measure has been taken by the Government keeping a number of situations in mind. Firstly, now a new dimension is given to Center-State relations in which the Centre categorically asserts that in case of non completion of schemes in time and non submission of utilization certificate the Centre will stop further installments on the project. This condition is not only on paper but has been taken recourse to. Secondly, the routine excuse for non completion of projects is that funds are not released in time. According to new pattern this issue remains tackled and there will be no more complaint because funds will be released much ahead of time and in advance in certain cases. Fiscal discipline will put an end to malpractices which afflicted the Finance and other departments invariably.


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