The Kerala government’s bid to ease the strain on its finances by routing the funds parked in commercial banks and the deposits in cooperative banks to the treasury is unlikely to yield the desired results.
Official sources told The Hindu here that as a last-ditch effort, the Finance Department had issued a circular to all heads of departments to immediately resume their funds, totalling around Rs.1,500 crore, parked in commercial banks and credit it to the government account. Heads of departments were also directed to deposit the unutilised cash surplus at their disposal to the government account. Revenue-earning departments were directed to strengthen revenue collection measures in the final lap of the financial year.
The officials in charge are reported to be sceptical about the chances of transferring funds from the commercial banks to the treasury within the available time. Completing the procedures is not easy. Had the government issued a stringent directive to the department heads that they should furnish a certificate about the funds they have transferred, the move would have attained fruition, but no such direction was given, sources said.
Though the government had warned of stringent action against officials who fail to comply with the circular, most of them are understood to have expressed their inability in abiding by the circular.
A similar situation existed in the case of the revenue realisation measures too. Optimising the realisation within the limited time was a tough option. After announcing additional revenue mobilisation efforts, there was no effective follow-up.
There were complaints that stay orders were liberally issued against orders for clearing the arrears, mostly under political pressure.
An earlier directive to departments and public sector undertakings for parking their funds, including subsidies, grants, as well as the earnest money deposit for government works, in the banks was pointed out as the main reason for depleting the treasury of its resources. Large sums were moved from the treasury to the banks and this deprived the government of funds for addressing the crisis.