The Hindu Business Line : Cash flow statement system a learning experience, says Maharashtra Govt

IT has been six months since the Maharashtra Government has attempted to implement fiscal discipline in all the departments of the State by introducing the cash flow statement (CFS) system.

However, the system still remains concealed by the larger policy decisions of the Government. It is a maiden attempt by the finance department to rein in the disorganised spending of all the other departments. CFS is a guidebook for all the departments to regain financial health. CFS for the year 2005-06 provides monthly estimates for all income receipts and it also gives a department-wise summary of the plan and non-plan expenditure. Since the CFS report is tabled in the legislature, the system has more accountability, said Mr O. P. Gehrotra, Additional Chief Secretary, Finance, Maharashtra Government.

"We want to avoid the March 31 phenomena — when about 25 per cent of the State's Budget is spent on this final day of the financial year. On March 31, 2006, I want all the Government officials to go home by 6.00 pm and not work through the night," Mr Gehrotra said.

If the bills are cleared on March 31, then the system of checks and balances would get diluted, as the Government has no say in the services and products it buys from private vendors. Thus, the product quality is compromised, Mr Gehrotra added.

He pointed out that the CFS system has been a learning experience for the Government. It will take some time for the system to be fully implemented, but the State's income targets would be met soon.

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