3 years of Modi Govt: Key initiatives of Department of Expenditure during the last three years

By: | Published: May 15, 2017 7:45 PM

The Department of Expenditure, Ministry of Finance, has been overseeing the Public Financial Management System in the Central government and matters connected with states’ finances.

Finance Minister Arun Jaitley with PM Narendra Modi. (PTI)

The Department of Expenditure, Ministry of Finance, has been overseeing the Public Financial Management System in the Central government and matters connected with states’ finances. Here’re the key initiatives of the department during the last 3 years:

Figure 1: Key Initiatives of Department of Expenditure, Ministry of Finance

# General Financial Rules (GFRs), 2017 was released by Union Finance Minister Arun Jaitley on 7th March, 2017 to enable an improved, efficient and effective framework of fiscal management while providing the necessary flexibility to facilitate timely delivery of services.

# Both Central Sector and Centrally-Sponsored Schemes were rationalized in consultation with the line Ministries, (see Figure 2 below). The number of Central Sector Schemes (CSS) was brought down to 300 from around 1500 earlier, and the number of Centrally Sponsored Schemes was brought down to 28 from 66 earlier.

Figure 2: Rationalisation of Central Sector and Centrally Sponsored Schemes

# Plan and Non-Plan Expenditure distinction done away with: The distinction between plan and non-plan expenditure has been done away with and consequently the appraisal of non-plan expenditure through Committee of Non Plan Expenditure (CNE) has been done away with.

# Direct Benefit Transfer (DBT): For more effective and transparent utilisation of resources, the Government has embarked upon DBT in respect of Government programmes. Public Financial Management System (PFMS) is facilitating DBT payments in various social sector schemes. An amount of Rs 1,02,786.77 crore has been paid using PFMS in various programmes of government, viz. MGNREGA, NHM and food subsidy etc. till February 2017.

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# Outcome Budget: All schemes and projects have now an Outcome Framework, which has been formulated through consultation with the implementing Ministries/ Departments, NITI Aayog and the Department of Expenditure. A consolidated Outcome Budget 2017-18 was presented in the Parliament as a part of the Budget Documents. Each Scheme will now have a start and a sun-set date co-terminus with the Finance Commission Cycle.

#Special Assistance to States: During the year 2016-17, a provision for Special assistance of Rs. 11000 crores was kept in the Union Budget at RE stage for 2016-17 considering the critical development needs, spill over liabilities and socio-economic factors etc., of the States. The Union Government provided special assistance of Rs 10890 crore in total to the States during 2015-16.

# Net borrowing ceilings of the States for the year 2016-17 at Rs. 429353 crore has been fixed anchoring the Fiscal Deficit target of 3% of respective State GSDP as recommended by Fourteenth Finance Commission (FFC) for its award period (2015-20).

# As recommended by the Fourteenth Finance Commission (FFC), the Union Government on 06.04.2016 has approved the year-to-year flexibility for additional fiscal deficit to States for the period 2016-17 to 2019-20 to a maximum of 0.5% over and above the normal limit of 3% in any given year to the States subject to the States maintaining the debt-GSDP ratio within 25% and interest payments-revenue receipts ratio within 10% in the previous year. However, the flexibility in availing the additional fiscal deficit will be available to a State if there is no revenue deficit in the year in which borrowing limits are to be fixed and immediately preceding year.

# Swachh Bharat Kosh (SBK): Around Rs 471.25 crore from the Corporate and Rs 27 lakh from the general public has been received as voluntary contribution since September, 2014. Projects for renovation of 2,46,307 dysfunctional toilets in government schools worth Rs 427.84 crore were approved.

# Seventh Central Pay Commission (CPC): The 7th CPC submitted its report on the structure of emoluments, allowances, conditions of service and retirement benefits of Central Government Employees on 19th November, 2015. The Cabinet approved the proposal for implementation of recommendations of 7th CPC on pay, pension and related issues in the meeting held on 29.06.2016. Based on the decisions of the Government, the Resolution and the Central Civil Services (Revised Pay) Rules, 2016 have been issued on 25.07.2016, benefitting about 47 lakh Central Government employees and 53 lakh pensioners.

# Relief for Disaster Response: During the year 2014-15, 2015-16 and 2016-17 (till 27.02.2017), financial assistance to the tune of Rs 3460.88 crore, Rs 12,451.96 crore and Rs 8,390.87 crore, respectively, was provided to affected States from NDRF for the management of immediate relief operations for people affected by natural calamities like drought, hailstorm, flood, earthquake and cyclone etc.

Figure 3: Relief for Disaster Response to States from NDRF
(* Figures upto 27.02.2017)

# J&K Package: Prime Minister’s Reconstruction Plan of Rs 80,068 crore for the state of Jammu and Kashmir 2015 was announced for development of the state. Under the J&K Package, Special Assistance of Rs. 1194.85 crore was released in 2015-16 towards additional assistance to flood damaged/destroyed houses. During the year 2016-17 (till January 2017) under the J&K package, special assistance of Rs. 1093.34 crore towards permanent restoration of damaged infrastructure and Rs 800 crore towards Interest Subvention on assistance for restoration of livelihood for traders/ self-employed / business establishment, etc was provided.

# A new mechanism of Committee on Establishment Expenditure (CEE) chaired by the Expenditure Secretary has been initiated to appraise the creation of new bodies.

# Launch of Non-Tax Receipt Portal (NTRP): In order to ensure faster realization of Government revenue, other than Direct & Indirect Tax receipts, a Non-Tax Receipt Portal was inaugurated by the Union Finance Minister to provide a one stop window to citizens, corporates and other users for making online payments of Non-Tax Revenue payable to Govt. of India. The System has helped efficient deposit of receipt in Government Account. So far more than 54,000 transactions have been done using this portal, leading to a collection of Rs 91,017 crore.

# Web Responsive Pensioners’ Service (WRPS): The Central Pension Accounting Office (CPAO), Ministry of Finance, took an important step towards empowerment of Central Civil Pensioners. The Union Minister for Finance and Corporate Affairs, Arun Jaitley launched ‘Web Responsive Pensioners’ Service’ of CPAO on 14th Sep, 2016. This IT initiative of Central Pension Accounting Office (CPAO) provides various services including Pension & Payment Information, online Pension Process Tracking & online Grievance Redressal and Tracking for the pensioners.

# Cabinet approved Modifications in the 7th CPC Recommendations on Pay and Pensionary benefits on 03.05.2017: The Cabinet approved modifications in the recommendations of the 7th CPC relating to the method of revision of pension of pre-2016 pensioners and family pensioners based on suggestions made by the Committee chaired by Secretary (Pensions) constituted with the approval of the Cabinet. The modified formulation of pension revision approved by the Cabinet will entail an additional benefit to the pensioners and an additional expenditure of approximately Rs 5031 crore for 2016-17 over and above the expenditure already incurred in revision of pension as per the second formulation based on fitment factor. It will benefit over 55 lakh pre-2016 civil and defence pensioners and family pensioners.

The Cabinet also approved the retention of percentage-based regime of disability pension implemented post 6th CPC, which the 7th CPC had recommended to be replaced by a slab-based system. The decision which will benefit existing and future Defence pensioners would entail an additional expenditure of approximately Rs 130 crore per annum.

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