To accelerate public spending in the last quarter of the current fiscal, the finance ministry has relaxed cash management guidelines to allow departments and ministries to release Rs 500 crore or more in schemes without any restrictions.
According to extant cash management guidelines, ministries must attune bulk expenditure items to monthly GST collections and quarterly advance tax payments for smooth exchequer control.
Also, prior permission from the budget division is required for any single payment under a scheme over Rs 5,000 crore.
To provide a fillip to capital expenditure, it has been decided to remove all these restrictions, the Department of Economic Affairs said in an office memorandum dated December 29.
“Financial Advisers (FAs) shall monitor the releases to ensure that there is no idle parking of funds at any level and the funds are released on a just-in-time basis,” according to the memorandum.
The latest advisory to departments assumes importance as the government would likely switch to election mode after the presentation of the Union Budget on February 1.
Till November of the current fiscal, the Centre’s capex has reached 58.5% compared with 59.6% in the year-ago period. Similarly, Revenue expenditure has reached 59% of the FY24 budget estimate compared with 62.5% of the relevant target in the previous fiscal.