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HindustanTimes Thu,23 Oct 2014

Online mechanism to track govt fund flow

Chetan Chauhan, Hindustan Times  New Delhi, August 26, 2014
First Published: 00:00 IST(26/8/2014) | Last Updated: 00:06 IST(26/8/2014)

In a first step towards abolishing the planning commission, the finance ministry will introduce an online mechanism to track every penny that the Centre spends, or gives to the states, on welfare schemes.

The money will be tracked right from when it is released by the central exchequer to when it is received by the beneficiary in order to check any fund leakage in-between.

The key function of the panel — disbursing funds to states — will now be done by the finance ministry, which began releasing money to central ministries from the first week of August. The Centre, in the current financial year, will be releasing about Rs. 3,00,000 crore to state governments for different welfare schemes.

The finance ministry is developing an integrated web portal through which central funds to the state government will be released, a senior government functionary told HT.

The portal will have bank accounts of all disbursing officers right from those in central ministries to state governments, said a senior government official who didn’t want to be quoted.

“The transfer of money from any agency, central or state, will happen through this portal to ensure transparency and accountability at all levels. We will also ask the RBI and all banks to participate in the new initiative,” the official said.

The portal will allow finance ministry officers to track the money. However, no decision has been taken to open up this information to the public.

During the UPA regime, central funds used to be transferred directly into bank accounts maintained by district-level officers who had to submit a utilisation certificate to receive the next portion of funds.

The NDA won’t have much trouble rolling out the new system as most of the infrastructure for a digital system was developed by the UPA regime for its direct benefit (money) transfer (DBT) scheme. There were 20 schemes in DBT, but it failed to take off the way UPA had hoped.

Another idea behind the portal is to simplify release of funds to the states, which was a long process under the plan panel. It used to direct the ministries to release funds only after the state plans were finalised in consultation with the state chief ministers.

Now the consultation job will be taken over by the ministries before release of funds, an official said.


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