Modified exchequer Control Based Cash Management System in Central Govt

Cash Management system in Central Government – modified exchequer control based expenditure management. All the Demands for Grants of the Union Government are covered under the Cash Management System.

Finance Ministry has issued an OM for effectively implement and follow Cash Management system

F. No.21(1)-B (PD)/2014

Government of India

Ministry of Finance

Department of Economic Affairs

(Budget Division)

Room No.263-B, North Block

New Delhi, dated 02/11/2015

OFFICE MEMORANDUM

Subject: Cash Management system in Central Government – modified exchequer control based expenditure management- regarding.

The Cash Management System was introduced with effect from April 1, 2006. Subsequent to issuance of various orders on the subject, a consolidated order dated July 22, 2015 (attached) was also issued to reiterate the need for effective implementation of Cash Management System.

2. In terms of this Ministry’s O.M. dated 30.07.2012 all the Demands for Grants of the Union Government are covered under the Cash Management System. Ministries/Departments may work out Monthly Expenditure Plan (separately for Plan and Non-Plan Expenditure) (MEP) and include it as an annex to the Detailed Demand for Grants. The required information relating to MEP/QEA may be prepared for the financial year and sent to this Ministry, both as hard copy and soft copy (email:[email protected]) by 15th of every month along with actuals.

3. It has been observed that various Ministries/Departments are not complying above instructions on Cash Management System. Some of the Ministries/Departments have not furnished . their MEP/QEA for the year 2015-16, a list of such Ministries/Departments is annexed. They are requested to furnish their MEP/QEA alongwith actual expenditure immediately.

4. All Financial Advisors of each Ministry/Department are requested to adhere the instructions on Cash Management system in Central Government – modified exchequer
expenditure management.

(H.K. Srivastav)

Director (Budget)

F. No.21(1)-B(PD)/2014
Government of India
Ministry of Finance
Department of Economic Affairs
(Budget Division)

Annex-X

Room No.263-B, North Block
New Delhi, dated July 22, 2015

OFFICE MEMORANDUM

Subject: Cash Management system in Central Government – modified exchequer control based expenditure management and restrictions on expenditure during the last quarter of the financial year- a consolidated guidelines.

The Cash Management System was introduced with effect from April 1,
2006. Subsequent to issuance of various orders on the subject, a need has been felt to consolidate and reiterate them for effective implementation of Cash Management System

2. The Modified Cash Management System seeks to achieve the following objectives:
(i) Obtain greater evenness in the budgeted expenditure within the financial year, especially in respect of items entailing large sums of advance releases and transfers to corpus funds.
(ii) Reduce rush of expenditure· during the last quarter, especially the last month of the financial year. (iii) Reduce tendency of parking of funds.
(iv) Effectively monitor the expenditure pattern.
(v) Better planning of Indicative Market Borrowing Calendar of the Central Government.
3. In terms of this Ministry’s O.M. dated 30.07 .2012 all the Demands for Grants of the Union Government are covered under the Cash Management System. Ministries/Departments may work out Monthly Expenditure Plan (separately for Plan and Non-Plan Expenditure) (MEP) and include it as an annex to the Detailed Demand for Grants. Suggested format is at Annexure.

4. Monthly Expenditure Plan (MEP) would form the basis of Quarterly Expenditure Allocations (QEA). The Department/Ministries may regulate the expenditure within the Quarterly Expenditure Allocation (which would be equal to the sum of provisions under Monthly Expenditure Plan). .

5. The MEP may be finalized taking into account the following measures:
(a) MEP for the month of March may not exceed 15% of the budgeted provision (Budget
Estimate);
(b) MEP for the months from January to March may be so fixed that the QEA for the last quarter may not exceed 33% of the budgeted provision (BE); and
(c) Only Schemes wherein scholarships have to be pa id to the beneficiaries under the
Direct Benefit Transfer (DST) mode, are exempted from above 15% & 33% restrictions.
6. The exchequer control would apply cumulatively at the Demands for Grants level only, i.e. inter se variations between months with a quarter, between plan and non-plan an between schemes would be permissible, subject to statutory· restrictions and extant guidelines.

7. Savings, if any, incurred under the QEA would not be available for automatic carry forward to the next quarter. The Department/Ministry may, however, approach Ministry of Finance within a period of 15 days for revalidation of sue h savings through modification in the MEP and thereby QEA. Spit I over in respect of MEP, not inconsistent with QEA would not require prior revalidation from Ministry of Finance but may be included in the quarterly modification.

8. Monthly Expenditure Plan and Quarterly Expenditure Allocations may be made in gross as indicated in the Detailed Demands for Grants. The MEP and QEA pertaining to the 4th·· quarter of the financial year would be subsumed in the finalization of Revised Estimate for the financial year.

9. The Financial Advisor of each Ministry/Department would be responsible for furnishing the requisite information to the Cash Management Cell. A nodal officer may be nominated for the purpose as a II the Demands for Grants are covered under the Cash Management System and name and designation of the nodal officer may be communicated to Ministry of Finance along with their contact details.

10. The required information relating to MEP/QEA may be prepared for the financial year and send to this Ministry for in. form of hard copy and soft copy (email: [email protected]) by 1 5th of every month along with actual.

(Dr. Rajat Bhargava)

Joint Secretary(Budget)

Annexure

Demand No. _____________

Name of the Ministry/Department ____________For the Financial Year______________

Monthly Expenditure Projection (MEP)

CASH MANAGEMENT SYSTEM IN CENTRAL GOVERNMENT

Reasons for variations if any.

(Rs. In Crore)

April,

May,

June,