To contain “non-developmental expenditure and thereby make available additional resources for other priority schemes'', the Delhi Government's Finance Department has issued expenditure management guidelines to all the departments for the year 2010-11. It has clearly spelt out that while not more than 33 per cent of the Budget estimates should be spent in the last quarter, the expenditure should be limited to 15 per cent in the last month of the year, which is March.
The guidelines were issued recently by Principal Secretary (Finance) J.P. Singh to “promote fiscal discipline without restricting the operational efficiency of the Government''.
The notice to all the departments also states that the Union Finance Ministry has also been issuing instructions to balance the pace of expenditure. “Rush of expenditure towards the end of the financial year continues to be an area of concern,'' it said, adding that as per Rule 56(3) of the General Financial Rules “rush of expenditure, particularly in the closing months of the financial year, is to be regarded as breach of financial propriety'' and therefore should be avoided.
Since in the last fiscal about 40 per cent of the funds had only been spent in the last quarter, the notice demands that the monitoring mechanism to oversee flow of the expenditure should also be tightened so as to keep “monthly watch'' over the implementation. “It should also be ensured that the flow of expenditure should be organised in such a manner that rush of expenditure, particularly in the closing months of the financial year, may be avoided.''
The guidelines call upon the Heads of Departments to hold monthly review meetings to ensure even flow of expenditure to “avoid March rush'' for effective fiscal discipline and better results.
Instructions have also been issued to the departments to ensure that “no expenditure shall be incurred which may have the effect of exceeding the total grand authorised''. Besides, the Finance Department has stated that all the proposals for allocation of additional funds must only be sent after locating matching savings.
For prudent financial management, periodical reconciliation of expenditure has been suggested to avoid the instances of unauthorised expenditure.
As for Centrally-sponsored schemes, the entire expenditure would have to be incurred out of the funds released by the Union Government and therefore the departments have been instructed to keep close contact with the Central ministries concerned for timely release of adequate funds.
It has also been directed that the expenditure for a Centrally-sponsored schemes should only be incurred after the Finance Department approves of it.