Recently a cash crunch has happened in the government area, where, due to excess expenditure above the limit of 1/3 rd of the provision of vo (vote on account), given by the public finance management system on 1st February has enforced finance ministry to demolish the salary of the government employees of group A and group B, for the whole month of June. The salary is expected to release at the end of July.
The problem is that the government has overdrawn its expenditure levels, which it initially estimated in February. The expenditure of the government has surpassed its own pre-defined needs.
As far as the specific aspect of the information is concerned,
the employees (group A and group B) of Controller General of Accounts & officials working in PFMS Project Cell, under the department of expenditure.
“It is clarified & informed that Deptt of Expenditure’s Order dated June 18, 2019, relating to disbursal of salary for June 2019 is applicable to only an attached office under Deptt of Expenditure namely, O/o Controller General of Accounts & officials working in PFMS Project Cell”,Ministry Of Finance, tweeted.
“It has been brought to notice that an Internal Confidential Office Order pertaining to the Department of Expenditure, Ministry of Finance is being circulated in various social media platforms.”,Ministry Of Finance, added, “Besides it, the said Order of the Department of Expenditure is also temporary in nature to avoid exceeding the Vote on Account limit.”
The decision of the government is temporary, as it can be altered according to the upcoming condition of the budget.
“Department of Expenditure, Ministry of Finance issues a clarification regarding its Order dated 18th June 2019 relating to the disbursal of salary for the month of June 2019.”,Ministry Of Finance tweeted.
As far as the definition of cash crunch is concerned,
When an organization does not have enough money to operate successfully or in a normal way, then the situation is called ‘cash crunch’.
A perspective even says that the government has done overspending on the enormous projects like MNREGA Pradhan Mantri Awas Yojana, Swach Bharat mission and Pradhan Mantri Krishi Sinchayee Yojana, etc., and this over-spending has resulted in the stoppage of salary-release.
The respective decisions have resulted in a shortage of funds.
Such issues do not occur frequently in our financial system, but it is for sure that the employees would face a lot of hardships due to the salary- devoid month, and generally, it is due to the lack of calculation, in our so-called insightful system.