All Government Scheme Funds to Route via Single Nodal Agency
In a significant move to enhance financial efficiency and transparency, Finance Minister Nirmala Sitharaman has mandated that, starting from the next fiscal year, all government scheme and project funds will be routed through a single nodal agency (SNA). This directive aims to streamline fund flow, reduce redundancies, and ensure better fiscal management across various government initiatives.
Transition to Single Nodal Agency System
The Finance Minister has instructed the Department of Expenditure to collaborate closely with the Controller General of Accounts (CGA) to facilitate a seamless transition to the SNA system. This collaboration is expected to provide the necessary support and guidance to states, ensuring they adapt smoothly to this new framework. Sitharaman emphasized the importance of making the government’s annual accounts more user-friendly, suggesting that the CGA explore possibilities in this direction.
Financial Benefits and Efficiency Gains
The adoption of the SNA system has already yielded substantial financial benefits. Since its implementation in 2021-22, the system has resulted in savings exceeding ₹11,000 crore. This has been achieved by consolidating unspent balances that were previously dispersed across more than 1.5 million bank accounts of various implementing agencies into approximately 4,500 accounts under the SNA. Such consolidation not only enhances transparency but also improves the efficiency of fund utilization.
Nationwide Implementation and Support
While most large government schemes have already transitioned to the SNA system, the upcoming fiscal year will see its application across all schemes and projects. To ensure a smooth rollout, Sitharaman highlighted the necessity for the CGA and the Department of Expenditure to work collaboratively. They are tasked with assisting states in onboarding and transitioning to the SNA-SPARSH platform, ensuring they are well-informed about the benefits and functionalities of this reform.
Enhancing Transparency and Accountability
The move towards a single nodal agency is part of the government’s broader agenda to promote transparency and accountability in public financial management. By centralizing fund flow, the government aims to monitor expenditures more effectively, reduce leakage, and ensure that allocated resources reach their intended beneficiaries promptly. This reform is expected to bolster public trust in government operations and enhance the overall efficacy of public spending.
In conclusion, the directive to channel all government scheme funds through a single nodal agency from the next fiscal year marks a pivotal step towards fiscal prudence and administrative efficiency. As the government continues to implement such reforms, stakeholders anticipate more streamlined processes and improved outcomes in public service delivery.
