Government Streamlines Fund Release for Centrally Sponsored Schemes
Govt eases fund release rules for centrally sponsored schemes
Mint
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The Indian government has introduced a new fund flow mechanism to expedite fund releases under centrally sponsored schemes, allowing ministries to issue consolidated 'mother sanctions' for multiple schemes. This change aims to enhance efficiency and transparency in fund utilization, impacting approximately ₹5 trillion allocated annually to various development programs.
- 01New 'mother sanctions' allow consolidated fund approvals for multiple schemes.
- 02The revised mechanism aims to reduce delays and improve fund utilization.
- 03Approximately ₹5 trillion is allocated annually to centrally sponsored schemes.
- 04The changes are effective from April 1 and will enhance transparency in fund tracking.
- 05Experts believe this will improve financial management without disrupting federal structures.
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In a significant move to enhance efficiency in fund disbursement, the Indian government has introduced a new fund flow mechanism for centrally sponsored schemes. This allows ministries to issue 'mother sanctions'—consolidated approvals for multiple schemes—rather than separate sanctions for each scheme. This change is expected to expedite fund releases and reduce administrative delays, ensuring that the ₹5 trillion allocated annually to schemes like the Jal Jeevan Mission and Pradhan Mantri Awas Yojana is utilized effectively. The revised Standard Operating Procedure, effective from April 1, mandates that ministries can only generate a mother sanction if the budget allocations for state-linked schemes are approved. This approach aims to improve financial management by reducing idle fund parking and enhancing transparency through the Public Financial Management System (PFMS). Experts believe that this flexibility will help states receive funds more efficiently while maintaining accountability for their use.
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This new mechanism will ensure that funds are disbursed more quickly to states, improving the implementation of development programs that directly benefit citizens.
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