Liability Register Payment System – Rural Development Department, Government of Maharashtra

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Case Study

This project basically works on the Direct Benefit Transfer (DBT) where the funds will be distributed directly from state treasury to the vendors or contractors on approvals of their bills by Zilla Parishads via the Digital/Cashless mode of payments. It focuses on the implementation of the Liability Register System in Rural Development Department as it will enable the efficient and effective disbursal of the funds budgeted for various schemes to Zilla Parishads. Also, through this system, actual liabilities are being created in the system instead of disbursing the funds to Zilla Parishads.

Problem

• Manual intervention led to delays in state government getting real time status of the expenditures and utilisation of funds disbursed under various schemes.
• There was lack of tracking of unused financial resources at Zilla Parishads in spite of approvals.
• There was also lack of transparency in the entire process culminating into complex and also time consuming process for all stakeholders involved including beneficiaries and the government.
• There was no proper system of financial transactions available as the unspent or idle money was continuously lying in the Zilla Parishad’s accounts.

Solution

The project is implemented at the Rural Development Department inclusive of users from 3 organisations.

1. Rural Development Department.
2. All the 34 Zilla Parishads.
3. Bank of Maharashtra

The workflow for the system is described below:

• The vendors and Head of Departments from all Zilla Parishads will submit all their financial details along with the valid proofs and register in the system and obtain a unique computer generated registration number.
• The State Government officials will enter the details of the approved works against different Zilla Parishads for the budget sanctioned under various state sponsored and will generate a liability against the approved work in the system.
• The Zilla Parishad officials will assign the vendor in the system for the associated approved work from the State as per the sanctioned budget for various schemes.
• The bill will be approved by the Head of the specific department and shall be passed to the Chief Finance and Accounts Officer (CAFO) at Zilla Parishad after inclusion of all the necessary deductions like taxes, royalty, cess etc. in the system.
• The CAFO will approve the bills obtained from various departments after a thorough verification and send the request for release of payments to State Government.
• The State Government officials will periodically check the request obtained for payments and accordingly make provisions to transfer the cumulative funds from State treasury to Bank of Maharashtra zero balance account.

Outcomes

• Now, there is a proper system of monitoring of funds based on demands from ZPs and provision of appropriate funds on a timely basis.
• The disbursements of funds happens directly to the end-beneficiary (e.g., contractors) account from the state nodal account in a digital mode.
• It shows the real time requirement of funds to be transferred under the various approved works. These requirements of the funds shall be recorded as liabilities in the system, till the demand is generated from the Zilla Parishads to transfer funds for the approved works.
• The system gives a real time analysis of the spend analysis, which aids in preparation/sanctioning of the budget for various works under various schemes.
• The funds will be sanctioned to ZPs on obtaining administrative approval and will be recorded as Liabilities for the various works under specific schemes.
• The funds will be directly transferred to the Vendor account from the State Treasury via Bank of Maharashtra’s Zero Balance Account in 3 working days after the demand is generated.
• It has reduced the fiscal deficit of the State.

For more information, please contact:
Mr Nitin Pawar, Section Officer IT at sosan.rdd-mh@nic.in

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