Context:
The SNA system aims at not only improving the transparency of centrally sponsored schemes (CSS), but also improving their efficiency. The current system reserves funds in several accounts to ensure “Just in Time” release. So far, it has helped the Union government save ₹11,000 crores.
Why Use of Fund Must Be Made Efficient?
- Averts wasteful interest servicing, Avoids idle funds and associated fiscal deficits with market, borrowing costs.
- Changes Transparency
- In terms of the most recent Budget statement, ₹1 trillion from CSS happened to remain in state accounts unspent.
- Facilitates cash float management
- Thus, punctual fund availability will be ensured for projects such as Jal Jeevan Mission, Pradhan Mantri Awas Yojana, and Swachh Bharat Mission.
Issues & The Way Forward
- States possess unspent funds
- to identify bottlenecks which inhibit spending.
- Contention for CSS rationalization
- State demands greater spending flexibility and recommends that funds should flow freely from the Centre.
- Future reforms
- Better balancing state authority and central supervision for better economic outcomes may be suggested by finance commissions.
The SNA system is bound to improve governance and fiscal governance through resource trade-off in the country.
Source: BS
