The government’s fiscal management this financial year has been better than the previous years with expenditure being spread out as opposed to the usual bunching up toward the end of the year, according to Controller General of Accounts, M.J. Joseph.
“The normal trend in government expenditure over the years has been that expenditures increase in the last two quarters of the financial year, mainly Q4. The criticism is that this is wasteful expenditure and that government departments just spend money so as to exhaust the budget. But this year if you look at the trend of the spending, you’ll find that even up to the six-month period, expenditure was more or less 48-50 per cent of the budgeted amount,” Mr. Joseph told The Hindu in an exclusive interview.
“The present government has taken the right decisions to ensure that funds are released right upfront, in the beginning. This requires decision-making,” he added.
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Another factor that is helping the government better manage its finances is the increasing push towards e-payments, with the Direct Benefit Transfer scheme taking centre-stage.
“The big story is the DBT. The PFMS (Plan Fund Management System) portal in our office has become the agency through which all DBT transfers take place in the country. This fiscal… we have added some seven crore beneficiaries on the PFMS portal since April. Once this has happened, there was a lot of pressure from other ministries, state governments and union territories to onboard other schemes onto the portal,” Mr. Joseph said.
However, before the DBT scheme can be expanded further through electronic payments, the software systems in place will need to be upgraded, he said.
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The CGA also expressed concerns about ramping up electronic payments as connectivity was poor across the country.
“You can push through greater amount of payments through e-payments, but connectivity is an issue. We are dependent on the available backbone of connectivity in the country. We have addressed the department of electronics if they can strengthen the connectivity system up to the district level in all 630 districts in India,” Mr. Joseph said.
The CGA has already completed the development of its non-tax portal, which will provide systematic, electronic data on the government’s non-tax revenue, which is around Rs. 2.1 lakh crore in this Budget.
One of the key elements lacking in accounting in India, Mr. Joseph said, is a timely report of the consolidated picture of government accounts.
“At present, there is a time lag of 2-3 years before the consolidated report can be presented. That lag is not good, it needs to be bridged. We have set a healthy precedent in this regard. For the second time since independence, the financial statements of the Centre, namely the appropriation accounts and the finance accounts of the previous financial year were presented to the legislature on December 22 last year, which is in the same calendar year,” he said. While expressing his optimism that the government will meet its fiscal deficit target this year, Mr. Joseph was quite scathing towards economists who have been advising the government to miss the target in favour of increased public spending.
“It’s a vicious cycle. It’s nice for economists to say that public spending has to be stepped up to boost demand. But if that happens then the fiscal deficit target goes out the window. Who’s going to be held accountable? Are the economists going to be held accountable? Governments don’t take decisions because some economists felt that that was the best thing to do. We have enough and more economists who say the wrong things,” he said.