Watch CutTheClutter: How Modi govt’s accounting reform shows states’ failure to deliver key schemes

In episode 1617, Editor-in-Chief Shekhar Gupta delves into the govt's Single Nodal Agency model, underutilisation of funds, and its implications amid India's growing borrowing burden.

New Delhi: The Single Nodal Agency (SNA) model launched by the government in 2021 for Centrally Sponsored Schemes (CSSs)—praised for improving financial discipline—has been a step towards better governance, greater transparency and reduced wastage.

By implementing real-time funding, the government is making spending more accountable. Previously, funds were released to states in bulk, often sitting idle in various accounts, leading to inefficiencies and additional interest burdens. With SNA, the central government now transfers money just in time, meaning funds are allocated only when expenditure occurs.

However, while the funds remain with the central government, their unused status exposes faultlines with the state government.

The failure to utilise over 50 percent of the allocated funds highlights the non-delivery of six major CSSs, including rural housing, urban rejuvenation, and the Swachh Bharat Mission. Despite the funds being available, states struggled to use them due to bureaucratic inefficiencies, planning delays, and administrative shortcomings.

India’s growing debt is another concern, with central government borrowing reaching Rs 179 trillion, nearly 54 percent of the GDP. High borrowing leads to increased interest payments.

In episode 1617 of Cut The Clutter, Editor-in-Chief Shekhar Gupta delves into the SNA model, the underutilisation of funds, and its implications amid India’s growing borrowing burden.