THIRUVANANTHAPURAM: This can perhaps be seen as a sign that the state economy is marginally out of the woods. The finance department has slightly eased its control over cash flow. It has now been decided that departmental expenditure of up to Rs 1 crore need not require a 'ways and means' clearance. The upper limit was Rs 25 lakh, fixed in December 2017 when the liquidity crisis turned severe. The expenditure control is tightened or eased on the basis of the state's liquidity position. For instance, in 2010, when growth was soaring, Dr T.M. Thomas Isaac (who was then the finance minister in the V.S. Achuthanandan ministry) had fixed the upper limit as Rs 5 crore, the highest ever.
"At this point, the economy is in a state where some expenditure freedom can be granted to departments. Certain revenue streams like motor vehicle tax and land registration fee have gone up. If the compensation granted by the Centre is also taken into account, tax growth is a reasonable 14 per cent," a top finance department official said. "Still, the GST is a big imponderable. Also, the state has huge social commitments. So we need to keep a balance," the official said.
Ways and Means System is an online platform that allows individuals, departments, PSUs and other institutions to submit proposals for 'ways and means' clearance from government and to enable them to collect a clearance letter. "This is just a book adjustment process. The finance department cannot reject the expenditure proposal, the money has to be given anyway. The only thing that can be done is to defer the payment," a top finance department official said.
In other words, it is a system that releases money on the basis of the liquid cash in the treasury at a given moment. "Say the treasury has just Rs 50 crore as cash balance on a given day and what if there is a demand for Rs 100 crore. We are obliged to pay the money, but the Ways and Means System allows us to defer the payment," the official said. Nonetheless, there will be no restriction on the payment of salaries or pensions or for the state government's priority projects like Life Mission.