VIJAYAWADA: In the wake of controversy over the Personal Deposit (PD) accounts being maintained by the State government with leaders of BJP and TDP making charges and countercharges against each other on the issue, the Finance Department officials said that PD accounts were neither individual accounts nor bank accounts. PD accounts are opened for convenience as per the guidelines of the government and under complete control of the Finance Department, they said.
Speaking to mediapersons at the Interim Government Complex here on Friday, Finance Department Secretary M Ravichandra said that to avoid mixing of funds received through the Finance Commission and State government grants, grama panchayats and urban local bodies were allotted 3 PD accounts each (one for their own funds, second for the 13th Finance Commission and the third for the State finance grants).
In view of the allegations that officials and sarpanches were using them as individual accounts, Ravichandra explained everything about PD accounts through a PowerPoint presentation.
On CAG mentioning about lesser number of PD accounts in some other states like Gujarat, he said that it was learnt that the Finance Commission grants, other grants and the own funds of panchayats and other local bodies in those states are parked in bank accounts outside the treasury. He also said that several other states are trying to emulate the AP model to avoid parking funds in bank accounts outside the treasury for better cash management and ways and means position.
He further said that it is a well known fact that keeping money in bank accounts is not advisable. As deficit financing costs more than 8 per cent interest, keeping the funds in bank accounts only fetches 3 per cent interest for savings accounts and 0 per cent interest for current accounts, which reflects poor cash management, he said, adding that the State government started a PD account portal in 2014 to have an effective check on expenditure of PD account administrators.
“We have explained the maintenance of PD accounts and about reduction of interest to CAG and it has understood the same.”
“The Centre has been insisting on opening separate bank accounts for major flagship programmes, finance commission grants and externally aided project loans. If these instructions are not complied with, the State stands to lose precious funds. Therefore, while adhering to Centre’s guidelines for opening separate accounts and also avoiding parking of funds outside the treasury, the State government took a conscious decision to open PD accounts.”