Prior to this, the Centre used to transfer CSS funds to state treasuries which, in turn, released these along with their CSS share (typically 40%) to bank accounts of state SNAs.
Despite just-in-time release instructions, some states delay the transfer of central funds as well as their shares to SNAs, halting implementation of the schemes and/or leading to misuse of central funds for non-scheme purposes by states to finance their fiscal deficits.
The penal interest for such delays on treasuries and interest from SNA accounts fetched the Centre around ₹4,000 crore in FY23 and over ₹5,000 crore in FY25, enough to run a few new schemes, sources said.
Under the new mechanism of routing funds via the RBI, these issues would also be addressed, the sources added.
This story is from the December 09, 2024 edition of Financial Express Delhi.
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This story is from the December 09, 2024 edition of Financial Express Delhi.
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