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States will soon be ranked on a new financial management index for rural development

The Narendra Singh Tomar-led rural development ministry will soon rank states on efficient management of financial resources allocated for implementing half a dozen rural development schemes.

The department has developed a financial management index that will map the performance of states and rank them on the basis of five parameters. These include preparation of annual plan, expeditious release of due state share, timely utilization of the funds and submission of the utilization certificates; optimum implementation of public financial management system (PFMS); optimum implementation of DBT module for the rural employment guarantee scheme, internal audit and the social audit.

The budgetary allocation for 2020-21 for the rural development ministry is Rs 1.2 lakh crore with the Mahatma Gandhi National Rural Employment Guarantee Scheme, taking the bulk of it at Rs 61,500 crore. However, the allocation to the scheme has later been extended by Rs 40,000 crore during the Covid-19 pandemic to create livelihood opportunities for millions of migrant workers who lost their jobs during the pandemic.

The rural development ministry is of the view that it is imperative to lay down minimum essential norms of financial management and accountability for ensuring optimal utilization of funds by the state implementing agencies in the wake of ever increasing time bound targets and consequential higher allocation of funds under rural development (RD) programmes, to help them achieve the desired objectives.

“The Financial Management Index – Rural Development has been designed to capture the performance of the states on the four important pillars of financial management,” rural development minister Tomar said.

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