Nitish: Fiscal moves

Patna, March 31: The state government stopped the functioning of the treasures around 2pm today — the last day of the 2011-12 financial year — to check “March loot” and avoid withdrawals and expenses made in haste.

“All the treasury offices were closed by 2pm today, the last day of the financial year, to avoid any kind of expenditure in haste. There must be a limit of withdrawal of amount on a single day… We want to maintain some fiscal discipline vis-à-vis incurring expenditure as it must be all through the year,” principal secretary, finance, Rameshwar Singh told The Telegraph.

Asked the reason for issuing such an order, Singh said there are chances of wrong bills getting passed in a hurry as people tend to get everything cleared within the deadline (March 31). People should try to spend on all 365 days of the year instead of making a beeline for clearing the bills in a single day, Singh added.

However, an official, who spoke under cover of anonymity, said the rush continued through the day. “Work was going on till 6pm in the treasury,” he said.

In the past, it had been the usual practice for the treasuries to stay open till late evening to clear the “rush” of bills on March 31.

But that practice, known as “March loot” — to get as many bills as possible passed by the treasuries — has become a thing of the past, another official said.

The Nitish Kumar-led NDA government has, of late, tried to streamline the system and the decision to not allow withdrawals or passage of bills after 2pm on the last working day of the fiscal is a step in that direction, the official said.

The state government, which has been under fire from the Opposition for not utilising funds in the current financial year, has been able to spend Rs 18,000 crore till March 26, 2012, against the total plan outlay of Rs 24,000 crore in 2011-12. The government later decided to reduce the plan size from Rs 24,000 crore to Rs 21,390 crore.

The government has already submitted a proposal to the Planning Commission to prune the outlay and the approval is expected soon, an official said.

However, the Opposition leaders have been gunning for the government for not utilising more than 50 per cent of the allocation and had feared “March loot” of the funds. They cited the examples of several state government departments, which could not utilise the funds to the tune of 50 per cent.

The Opposition cry got shriller when it was revealed that the housing and building construction department had spent Rs 94 lakh in March on renovating and repairing flats and bungalows belonging to legislators which are to be demolished within a couple of months to make way for duplex homes.

Bihar Industries Association president KPS Keshri told The Telegraph that the government could have issued a directive that the work should be done on time to avoid the mad rush.

“If things linger till the eleventh hour, it means that there is a flaw in the system and the government needs to address it. Last-minute clearance of bills and withdrawals should be avoided,” Keshri said.

Bihar was once infamous for “March loot” with builders and contractors queuing up before the budget officers of the departments concerned to get their bills signed, cheques made and withdrawn from the treasures on almost every March 31.

In fact, the comptroller and auditor general, in successive reports in the 1990s and subsequent years, pulled up the state government for the “heavy” or “excess” drawls in March in general and on March 31 in particular.

There were instances when treasuries used to stay open even till 12 midnight on March 31.

But eager to end the “practice” that had drawn flak for the Lalu Prasad-Rabri Devi regime, the NDA government has tried to bring in a semblance of fiscal discipline.

Closing the treasures well ahead of the scheduled time today was said to be a part of the measures to enforce the much-needed discipline.

The NDA government had begun resorting to fiscal discipline ever since it took over the reins of the state. The first instance of enforcing it was the presentation of a full budget from 2006 onwards instead of presenting the vote-on-account that the Lalu-Rabri regime used to do during the better part of its tenure.