Demonetisation cripples treasury functioning

As demonetisation cripples the functioning of treasuries across the State, the government is reportedly groping in the dark to find out options for resuming financial transactions at the earliest.

Finance Department sources told The Hindu here on Friday that treasuries were forced to make pension and other payments from their imprest fund provided by banks to meet their urgent needs.

Payments of bills

Payments of bills for all civil works executed by government agencies, Plan projects of local bodies and such others have been suspended due to funds crunch. Treasury personnel are a confused lot as they have not been authorised to collect currency that is not legal tender.

Though Chief Minister Pinarayi Vijayan and Finance Minister T.M. Thomas Isaac had written separate letters to Prime Minister Narendra Modi and Union Finance Minister Arun Jaitley seeking urgent intervention to the impasse in treasuries, it had not elicited any response, sources said.

Local bodies as well as Revenue Department offices that collect property and land tax are finding the going tough for want of specific directions. But the Finance Department has directed Revenue and other government departments to collect taxes, be it Rs.1,000 or Rs.500 denominations.

Urban and rural local bodies are unwilling to accept Rs.1,000 and Rs.500 notes. This has taken a heavy toll on their own fund, that is mainly derived from property and other taxes, sources said.

Treasury being the fulcrum of the financial transactions of the government and other allied agencies, unless the Centre responds to the request for intervention and offer a solution, the crisis will worsen in the coming days. The Centre should essentially clarify whether the treasuries could accept the Rs.1,000 and Rs.500 notes and also continue transactions as usual, or it would further worsen the crisis, sources said.

Lottery draws suspended

Draw of Kerala Lottery would remain suspended for the next two days too. The daily collection from the sale of lottery tickets has dipped from Rs.28 crore to Rs.8 crore. The government would have to review the situation before resuming the draw.

An 80 per cent dip has been reported in the daily collection of the agents attached to the Kerala State Financial Enterprises. This is likely to diminish further, sources said.

Government groping in the dark to find out options for resuming financial transactions

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Printable version | Apr 7, 2020 3:34:28 AM |

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