Village Voice News

Government wants to increase ministries’ financial spending reporting limitations when the PAC gives its approval

<p>Following permission from, the government plans to update the funding caps for “New Service” and “New Instruments of Service” after a lapse of around eighteen years. The panel has accepted the Finance Ministry’s request to need prior permission from Parliament for spending above Rs 100 crore and to boost the reporting limit for new policy-related expenditure by ministries/departments to over Rs 50 crore but not beyond Rs 100 crore.</p>
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<p>The clearance has set the reporting limit for “New Instrument of Service” at up to 20% of the original allocation or up to Rs 100 crore, whichever is greater. This is in keeping with the growth in the size of the Budget. “In the report titled ‘Revision of Financial Limits for Determining the Cases Relating to ‘New Service/New Instrument of Service,’ Tabled in Parliament on February 7, the Progressive Alliance of Congressmen, led by Congress leader Adhir Ranjan Chowdhury, stated that approval from Parliament would be mandatory for amounts exceeding 20 percent of the original appropriation or above 100 crores, whichever is higher, subject to savings within the same section of the grant.”</p>
<p>Revision of the budgetary restrictions is being proposed, just the fourth time since Independence, with the intention of reducing the number of Supplementary Demands for Grants that Parliament is presented with throughout a fiscal year. The previous iteration of this revision was implemented in 2006. The number of supplemental proposals from the ministries and departments has reportedly increased as a result of the previous low funding caps for new policy-related expenditures. According to the assessment, the time required to get Parliament’s permission would subsequently result in a delay in project completion.</p>
<p>The term “New Service” (NS) describes spending that results from a new policy choice that was not previously announced to Parliament. This might include new investments or activities. A relatively big expense that results from a significant extension of an existing policy is referred to as a “new instrument of service” (NIS). The financial restrictions for “New Service/New Instrument of Service” are applicable each time an expense is made as a result of an existing policy’s growth.</p>
<p>The purpose of the proposed adjustments is to incentivize the Ministries to carefully forecast their financial needs. The PAC report said that the need for the upward adjustment results from an increase in supplemental proposals from Ministries and Departments requesting prior approval from Parliament, which causes delays in project/scheme/program implementation even while savings are available.</p>
<p>The size of the budget is likely to rise significantly over the next ten years due to an estimated growth in GDP of between six and seven percent annually, necessitating an increase in financial restrictions.</p>
<p>said that extensive deliberations resulted in this move, which is the fourth of its kind in the last 50 years. The first such shift in the last fifty years was in 1970. The third one occurred in 2005, while the others followed in the 1980s. The PAC has produced this report for the fourth time. All of these reports are developed after extensive discussions and are unanimous,” he said.</p>
<p>The study claims that a significant increase in budget size has reduced the ministries’ delegated authority, resulting in the submission of extensive proposals for the Parliament’s consideration and approval.</p>
<p>“The amount varied among almost fifty items of expenditure, and the restrictions were very low, ranging from Rs 10 lakh to Rs 2.5 crore. As a result, complying was very challenging and would slow down government expenditure as a whole, a senior government official told The Indian Express.</p>
<p>The Comptroller and Auditor General of India (CAG) and the Policy and Analysis Centre (PAC) have been drawing attention to the increasing number of cases of needless supplementary appropriations that do not follow the NS/NIS limits, as well as reappropriations that are made without informing Parliament or getting the Finance Ministry’s prior approval.</p>
<p>The Parliamentary and Associated Press (PAC) expressed concerns in a separate report titled “Excesses over Voted Grants and Charged Appropriations (2019-20)” that was also presented in Parliament earlier this month. The report detailed the excess expenditure that ranged from 10.04 percent to 79.77 percent for grants and appropriations during FY 2019–20, even after the ministries and departments received significant supplemental grants to meet their additional needs.</p>
<p>In its report to the PAC, the Finance Ministry’s Department of Expenditure explained the need for the proposed amendment by stating that, during the previous four fiscal years, the ministry brought 2,500 tokens to the attention of the Parliament for reappropriation. “Since the previous revision in 2006, the Union Budget has increased in size by over 1000 percent on a gross basis. Several Ministries have a tendency to adopt superfluous supplemental requests when none are essential and the Government has the appropriate authorization from the Parliament or the PAC.</p>
<p>Due to limited NIS restrictions, we have been sending it a lot of reports to review. 2019–20, 2020–21, 2021–22, and 2022–23: We brought 2,500 tokens to the Parliament’s attention about the reappropriation of Rs. 5.45 lakh crore. The number of tokens we would have brought to Parliament for consideration in these years, if we adopt those ideas, would have decreased to around 800, with the value under discussion by Parliament only slightly decreasing by Rs 5.25 lakh crore, the statement said.</p>
<p>The Ministry said that it plans to streamline the procedure so that the Ministries may implement it with ease and the PAC can easily identify any discrepancies. It also said that it will expedite the government’s decision-making process and perhaps quicken the pace of program execution.</p>