Bhubaneswar: The Centre will tighten the procedures for release of funds to the states and union territories (UTs) under various Central Sponsored Schemes (CSS). The revised norms will come into effect from next financial year (2021-22).
The Department of Expenditure under the Ministry of Finance has sent the draft norms to the state finance department seeking its suggestions and observations.
As per the proposed norms, the state government will have to designate a single nodal agency for implementation of a CSS and the fund will be transferred to a single nodal account in a public sector bank authorized to carry out the state government business.
With an aim to avoid parking of public funds in different bank accounts, the Centre has decided to maintain the fund for a CSS account in one designated bank. Whenever a field level agency requires funds, it can draw the amounts from the nodal account.
“For the seamless management of funds, the main account and all subsidiary accounts will be maintained with the same bank. However, the state governments may choose different PSU banks for opening single nodal accounts of different CSS,” the department of expenditure said in the letter.
In the beginning of a financial year, the Centre will release maximum 25 per cent of the amount earmarked for a state for a CSS for the year in first phase. If any unspent balance of CSS (centre and state share) available with the state government, then the concern ministry will release the first instalment deducting the balance amount.
The second instalment will be released after utilisation of 75 per cent of the sanctioned fund. However, this rule will not be applicable, if the Union Cabinet decided to release a specific quantum of fund under a scheme.
Similarly, all implementing offices will have to refund balance amount of CSS to the state nodal account by April 1, 2021. The amount so refunded will be taken as the opening balance for that scheme and the concerned ministry will release the fund for the next fiscal accordingly.
The state governments will have to release its share within 30 days from the release of the central share.
Commenting on this, a senior officer of the finance department said, “We have forwarded the draft procedures to all departments for their comment on them. The draft procedure is a welcome step for proper maintenance of the public money.
However, the single bank thing may create problem for our state as we don’t have enough bank branches across the state.”
PNN
