CHENNAI: The rural development and panchayati raj department has issued a GO to create a nodal account to manage and disburse funds of rural local bodies. Maintaining a nodal account will help the government track flow of funds from the treasury to the end-user in real-time and provide a management information system (MIS). It will help the government make decisions based on expenditure pattern analysis.
The present system has inherent disadvantages as money is kept idle in a few panchayats while it is scarce in others. The account will hold money on behalf of the three-tier rural local bodies and can be operated by its members.
Under the new system, idle money in village/block/district panchayats accounts will be absorbed by the nodal account and used as per procedure. However, panchayats will be required to maintain manual vouchers for easy reconciliation periodically, the GO, issued on October 28, stated.
“The new system focuses on transparency and it doesn’t touch the powers given to elected representatives,” said G Palanithurai, former professor of Gandhigram Rural Institute, adding the government must improve infrastructure in panchayats for it to work.
The GO states at present, 11 bank accounts and 31 registers and forms are maintained by the panchayats. This adds up to over 1.4 lakh bank accounts in 38 banks by 12,525 village panchayats. Daily transactions of these accounts are not available at the district and state-levels and there is no dashboard to view receipt and expenditure details of the rural local bodies.
The nodal account aims to bring in transparency on financial transactions. In the new system, there will only be three accounts — a panchayat general fund account at the headquarters, central finance commission grant at the village panchayats and a miscellaneous account.
However, activists charge the move will take away financial powers of rural local bodies. “The government has not taken steps to create awareness among the rural local bodies on the amount released to them every year. The government must solve problems in the existing system,” said Nandakumar Siva, general secretary of Thannachi, an NGO.
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