Telangana Finance department tightens control on spending

Hyderabad: The state finance department has warned that it would order all banks to stop operation of accounts of other state departments if the latter fail to submit their account details to the finance department. 

Many departments are parking funds released to them in Personal Deposit (PD) accounts for various reasons. When this happens, the finance department is not in a position to know how much funds the departments have. 

Some departments, without spending the funds allotted to them, send proposals to the finance department for release of more amounts. When the state is struggling to provide money, requests of this type are a problem. 

To ensure it knows the funds position of various departments, the finance department told them to send in their bank account details. In a circular, the finance department said: “The finance department is frequently requesting the departments to furnish their bank account details. Some of the departments have furnished the bank details, but most of the departments are not furnishing the details. All departments are requested to furnish all bank account details. If accounts are not furnished with finance department the accounts shall be treated as personal accounts and the finance department will instruct all the banks not to operate such accounts on behalf of the government.”

The general procedure is that the finance department issues budget release orders to other departments as per allocations. The departments have to draw the funds from the general pool. But some departments are drawing the funds from the general pool and opening PD accounts in commercial banks and depositing the funds in that account. The finance department issues budget release orders on a quarterly basis depending on availability of funds. 

In 2017, the finance department noticed that about RS 5,000 crore was deposited in various commercial banks by various government departments. It then asked for bank account details of the departments. Once the finance department has the details of the bank accounts of various departments, it is also able to know actually which departments need the funds.