Friday 18 May 2012

Backward Regions Grand Fund

he mechanism of efficient and simple financial management system and on-line transfer and tracking of funds is presently being implemented in the Backward Regions Grand Fund Scheme administered by the Ministry of Panchayati Raj. The Guidelines of the Scheme, inter-alia, stipulate that all funds will be transferred to the Consolidated Funds of State Governments. Those funds that are to be transferred to Panchayats and Municipalities by the State Governments will be transferred to their bank accounts, following the same stipulations as prescribed for the devolution of 12th Finance Commission Grants, namely, within 15 days of the release of funds to the Consolidated Fund. From the State level, the funds will be directly deposited into the bank accounts of the Panchayat or Municipality concerned, using the mechanism of bank transfers suggested by the Task Force of the Ministry of Panchayati Raj to study the feasibility of rapid transfer of funds through banks to Panchayats. Further, it has also been stipulated that in case of delay in transfer of funds by the State Governments beyond the 15 days period, a penal interest @ equal to RBI bank rate shall be required to be transferred by the State Governments to PRIs / ULBs along with such delayed transfer of fund. 

This information was given by the Minister of Panchayati Raj, Shri V. Kishore Chandra Deo in a written reply in the Rajya Sabha today. 

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