Faced with a worsening fiscal situation, the State government has imposed curbs on treasury transactions, including those involving Plan funds, in order to prevent a run on the coffers during the final days of the current financial year.
According to the latest circular issued by the Finance Department, the maximum amount that can be withdrawn from Plan and non-Plan heads has been fixed at ₹5 lakh. Bills above ₹5 lakh will require ways and means clearance. For payment to contractors, accredited agencies, suppliers, the withdrawal ceiling will be ₹1 Lakh for each treasury bill or cheque as the case may be. Higher amounts will require the clearance from the Ways and Means establishment. However, there would be no curbs on medical and food suppliers and dietary charges.
The latest circular of February 15 supersedes a previous one issued in May last year which was more relaxed as far as withdrawals for various purposes were concerned. Earlier, there was no restrictions for transfer crediting Plan funds from the consolidated fund of the State to the Plan Scheme Treasury Savings Bank (PSTSB) account opened exclusively for Plan schemes and Special Treasury Savings Bank (STSB) account for parking non-Plan grant released to various institutions.
Transfer credit for these accounts have been stopped. The ceiling for withdrawal from PSTSB, STSB, Public Deposit and Treasury Public (TP) account has been fixed at ₹5 lakh. The Finance Department has also reissued a list of 30 items that have been exempted from treasury curbs.
The State has always witnessed a financial crunch during the last two months of the financial year. However, the situation was expected to be better this year because the budget for 2018-19 was passed in March itself. But a horde of factors, including poor tax collection, post-flood economic stagnation and Central fund flow together complicated the financial situation. The operative part of the fresh treasury curbs is that government departments and other government agencies would not be able to utilise their Plan funds during the remaining days of the financial year or park the unspent balance in these accounts, according to sources.