The rules related to the settlement of funds received by the states from the central government are now going to change. After the new rules come into effect, there will be real-time settlement of the unspent amount from the funds sent by the Centre. This system is going to be effective from the beginning of the new financial year i.e. from April 1, 2024.
Change is going to happen from this date
According to an ET report, by the Central Government The unspent portion of the funds sent to the states will be settled in a single day from April 1 through a single nodal agency. Currently it takes more time because their settlement is not done on daily basis. Such funds have to be kept out of the government account for more than 24 hours. This need will also be eliminated with realtime settlement.
What is Single Nodal Agency Account?
There are many such schemes, which are implemented through the state government, But the central government provides funds for them. For such schemes and programs sponsored by the Centre, states receive money from the Center through the Single Nodal Agency (SNA) Account. The deadline for spending such funds coming from the Center is fixed in advance.
Settlement now on monthly or quarterly basis
The portion of the fund which is not spent within the stipulated time. , it is called lapse and that part returns back to the central government. The unspent portion returns to the Central Government after settlement. For this, settlement is done either on monthly basis or on quarterly basis. Now arrangements are being made to do this settlement in real time, for which the Department of Finance Ministry and Expenditure and the Reserve Bank are working together.
Conflicts of interest will end
Due to lack of real time settlement, another dispute arises regarding such funds. For example, the deadline for spending funds sent for a program has expired. In such a situation, that fund will be considered lapsed, but the fund will remain in the SNA account of the state till settlement. There is often a dispute regarding who will get the share on the interest received on that fund from the time of lapse till the date of settlement. This dispute will also end with realtime settlement.
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