Upgrad LLM

Know your Ministry - No. 21 - Finance Department of Expenditure

The Department of Expenditure is responsible for Public Expenditure Management System in the Union Government and for matters connected with State finances. It oversees expenditure management in the Central Ministries/Departments and monitors implementation of recommendations of the Expenditure Reforms Commission. It coordinates the Outcome Budget of different Ministries/Departments, releases funds to State Governments for implementing developmental work and monitors matters relating to the Central Plan.

The principal activities of the Department include overseeing the expenditure management in the central Ministries/ Departments through the interface with the Financial Advisers and the administration of the Financial Rules/ Regulations/ Orders, pre-sanction appraisal of major schemes/ projects, handling bulk of the central budgetary resources transferred to State and the Allocation of Business is documented and published.

The business allocated to the Department of Expenditure is carried out through its Personnel &Establishment Division, Public Finance (States) and Public Finance (Central) Divisions, Office of Controller General of Accounts, Office of Chief Adviser Cost, and Central Pension Accounting Office. The Department also has under its administrative control the National Institute of Financial Management (NIFM), Faridabad, which is an autonomous body


Annual Reports (2017-18), Annual Report on Pay & Allowances, Detailed Demands for Grants and Outcome Budget.


  1. Absence of a clear Vision and Mission to spell out the desired objectives.
  2. Balancing act between the compulsions emanated from the Election Manifesto and the realistic needs for development of economy.
  3. Prioritisation in the execution of long-term and short-term projects under various welfare schemes of the Government.
  4. Lack of Independent audit mechanism to control and monitor the Inflows and Outflows in terms of budgetary allocations.
  5. Scaling up of Overheads and Administrative Expenses to higher proportions due to unscientific allocation of human resources and non-implementation of austerity measures imposed from time to time.
  6. Absence of Intellectual leadership to take up Expenditure Reforms that would be consistent to Planning and Implementation.
  7. Non-establishment of comprehensive centralized audit infrastructure to specifically detect the discrepancies in the costs and expenditure related to Government Schemes leading to mismatch and gaps under Deficit or surplus.


  1. To strengthen the Audit mechanism entrusted to Independent Institutions like CAG of India and undertake all corrective measures to establish a transparent framework in the Administration of Government Expenditure.
  2. To establish a suitable Legal framework that would ensure Public scrutiny of Government Expenditure of both State and Centres.
  3. To periodically implement the recommendations of Expenditure Commission Reforms to ensure proper allocation of resources to schemes and projects that would derive productivity.
  4. To establish a Central Parliamentary Committee  and State Committee comprising of elected members of all political parties having expertise in Finance to scrutinize the expenditure heads of all Ministries independently and place report on the table of houses on a monthly basis.  
  5. To abolish all surplus or unproductive posts in the Department and implement austerity measures in the Department on war footing to increase productivity on a time bound basis.


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