New Delhi: The Army is considering a new budget management plan to decentralise the control of certain heads, and financially empower its commands by letting them make the decisions, ThePrint has learnt.
Army sources said the plan, called Command Budget Management Model, is expected to be implemented by financial year 2020-21.
“Once implemented, all the command headquarters would be empowered to plan their budget estimates, allocations and expenditures as per their respective priorities,” a senior Army officer told ThePrint.
“It will incentivise savings and optimise the revenue expenditure,” said the officer, who did not wish to be named.
The model was recently tested in the central command, and now, a second phase of modalities is being worked out for its full implementation.
Sources said the proposed new model will be applicable to non-salary revenue budget heads.
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Advantages of the new model
The new budget model was discussed at the last Army Commanders’ Conference in October.
This decentralised model can help schedule the utilisation of the budget, cut down on inefficiency, and optimise every rupee being spent. It will also allow field commanders to decide and prioritise the budget for the commands based on their requirements.
Right now, the Vice-Chief of Army Staff and the commanders have certain additional financial powers.
“There will be no change in the Army commanders’ financial powers or the powers of the VCOAS. Only formulation of expenditures is delegated to one level low,” the officer quoted above said.
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Process of implementation
A total of 40 budget code heads have been identified, on which command headquarters were to forward budget forecasts and estimates to the Army headquarters by the end of the year. This process is already complete, according to Army sources.
These budget heads include engineers, stores, ordinance stores, etc.
Based on the forecast and the total budget received from the government, the budget plan for each command headquarters will be chalked out by the Army headquarters. The process will be over by February 2020.
“This is for re-appropriation of financial power to Army commanders. This has been processed by the Army and approval from the defence ministry’s finance department is expected soon,” an Army source said.
“Incentivisation of savings is the fundamental principle of this model, as command headquarters need additional funds at times. With this model, savings can be made on certain heads, because one level of processing will be reduced,” the source said. “The commands will now make the budget according to their priority.”
The Controller General of Defence Accounts is simultaneously conducting a study to rationalise the number of code heads under services, to ensure greater visibility of flow of funds to every command headquarters.
It is looking at reconfiguring the coding of the budget, which will facilitate automation and reduce the number of code heads for easier and better management.
“There could be some teething issues, which would be resolved when it comes to effect,” the source said.
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In any government such experiments are being done to improve the system. System improvement depends upon intent who are managing the system. Those who are supposed to check irregularities are becoming part of irregularities.
Check findings of earlier Cromptoller and Auditor General of repoerts on ministries and departnts of
India.
Appreciate this article because the way financial and budgetary procedures were explained. This is complicated task to write on complicated issues of finance.