Government saved Rs10,000 crore in interest costs during FY22: Union Finance Secretary

8 Jun 2022 , 02:54 PM

T V Somanathan, the Union Finance Secretary, said on June 7, 2022 that the Centre saved Rs10,000 crore on interest payments in FY22. This is an outcome of new accounting processes for central government agencies and centrally sponsored schemes (CSS) for state governments.
 
Somanathan, speaking at a gathering, stated that as of March 31, 2022, there remained an unspent balance of Rs1.2 trillion with state agencies from CSS. This means that for the time being, this sum will be deducted from the Centre’s borrowing, and it might be deemed a short-term cost-cutting measure.
 
The Treasury Single Account (TSA) for central government agencies and autonomous entities and the Single Nodal Agency (SNA) for transferring CSS funding to states are the new accounting procedures in the Public Finance Management System.
 
“Due to the TSA and SNA, we saved Rs10,000 crore on interest payments in FY22.” We have a Rs1.2 lakh crore unspent amount on the SNA. So that’s a sum we won’t have to release or borrow until it’s depleted,” Somanathan explained.
 
The finance secretary was addressing on the occasion of Union Finance Minister Nirmala Sitharaman’s presentation of the SNA dashboard. Such steps, he added, will improve the Centre’s fiscal deficit in a difficult year like FY23.
 
India’s fertilizer subsidy cost for FY23 might reach approximately Rs2.5 trillion, up from Rs1.05 trillion in the Budget.
 
The current wave of excise tax cuts on petrol and diesel would cost the government roughly Rs85,000 crore this year, while recent import duty cuts on other commodities will cost the government between Rs10,000 and Rs15,000 crore.
 
Furthermore, the decision to pay a subsidy of Rs200 per gas cylinder (up to 12 cylinders) to nearly 90 million Pradhan Mantri Ujjwala Yojana beneficiaries will result in a loss of Rs6,100 crore per year.
 
Apart from the Rs1.10 trillion increase in fertilizer subsidies already announced, the Modi government’s decision to prolong the PM Garib Kalyan Anna Yojana (PMGKAY) through September would bring the FY23 food subsidy spending to Rs2.87 trillion, up from Rs2.07 trillion in the Budget Estimate.
 
Sitharaman said at the ceremony that the SNA dashboard, which tracks financial transfers to states and their use, will make the government more transparent and guarantee that every dollar supplied by the Centre is well spent.
 
The dashboard would allow ministries and departments to track their transfers to states and their use by implementing agencies, as well as aid the government with financial management.
 
“Rs4.42 trillion passes through the CSS, which is a significant sum. You are now able to keep track of that money. It is a major step forward in terms of making government more open. That amount of money is also provided in a timely manner. What a better way to realize the worth of every rupee contributed!” According to Sitharaman.