Ministry of Finance Year Ender 2024: Department of Expenditure

Ministry of Finance

Ministry of Finance Year Ender 2024: Department of Expenditure

Posted On: 27 DEC 2024 5:31PM by PIB Delhi

The Department of Expenditure (DoE), Ministry of Finance, has consistently advanced fiscal governance and public welfare through innovative financial management and policy reforms. A pivotal achievement is the implementation of Direct Benefit Transfer (DBT) via the Public Financial Management System (PFMS). This initiative has supported the Digital India mission by enabling real-time, transparent fund transfers for over 1,206 schemes in FY 2024-25, processing transactions worth ₹2.23 lakh crore. Extensive integrations with 117 external systems and seamless interfaces with major banks have enhanced efficiency and accountability. 

In alignment with the 15th Finance Commission’s recommendations, the DoE has strengthened state finances by facilitating additional borrowing capacities, performance-linked incentives, and grants for disaster recovery, healthcare, and regional development. For FY 2024-25, the net borrowing ceiling was set at ₹9.40 lakh crore, with an additional 0.5% of GSDP allocated for power sector reforms. These measures aim to boost operational efficiency and promote economic sustainability across States. 

Public procurement reforms remain a key focus, with increased financial thresholds under the General Financial Rules (GFRs) and the release of a revised Procurement Manual in 2024. These updates prioritise Ease of Doing Business, transparency, and clarity in procurement processes, ensuring alignment with modern governance requirements. The delegation of Financial Powers Rules, 2024, further simplifies decision-making by empowering departments and individuals, fostering efficiency and responsibility in financial management. 

The DoE has also introduced social security reforms for Government employees with the Unified Pension Scheme (UPS), which guarantees assured pensions and inflation-adjusted benefits for retired personnel. Scheduled for implementation from 1^st  April 2025, the scheme reflects the government’s commitment to securing the welfare of its workforce. Simultaneously, disaster management initiatives have included timely release of funds to states affected by floods and landslides, as well as modernisation of fire and emergency services. 

These milestones underscore the DoE’s consistency and vision to maintain fiscal prudence, operational efficiency, and inclusive development. By integrating digital technologies, empowering financial autonomy, and addressing critical needs such as disaster recovery and social security, the DoE continues to strengthen governance and foster economic resilience through support for capital investment.

Following are some of the major achievements of the Department of Expenditure, Ministry of Finance, in 2024:

1. DIRECT BENEFIT TRANSFER [DBT] THROUGH PUBLIC FINANCIAL MANAGENMENT SYSTEM (PFMS)

Public Financial Management System (PFMS) makes a direct and significant contribution to the Digital India Initiative of Government of India enabling Direct Benefit Transfer for Ministries/departments in Government of India.

       DBT THROUGH PFMS AIMS TO ACHIEVE:

• Complete tracking of realisation of funds from its release to credit into the bank account of intended beneficiaries.
• Just in time’ transfer of funds.

      ACHIEVEMENTS OF DIRECT BENEFIT TRANSFER [DBT] (upto 31^st November 2024)

• 1,206 schemes covered under Direct Benefit Transfer (DBT) initiative in 2024-25
• 181.64 crore transaction in FY 2024-25.
• ₹2.23 lakh crore paid to beneficiaries in FY 2024-25.
• 1,212.27 crore transactions from 2014.
• ₹20.23 lakh crore paid to beneficiaries from 2014.
• PFMS-External System Integration: 117 External systems in India are integrated with PFMS.
• Centrally Sponsored (CS) Schemes and Central Sector Schemes (CSS) are on the PFMS and all the Major Banks including RBI have interface with PFMS.

1. 1. Scale of Transactions and payments

1. 2. Major DBT Schemes FY 2024-25 (till Aug – 2024)

1. 3. Major initiative taken to improve DBT Process

2. Net borrowing ceilings (NBC) for the year 2024-25

1. As per the recommendations of Fifteenth Finance Commission [XV-FC], the normal Net Borrowing Ceiling of 3 percent of Gross State Domestic Product (GSDP) has been allowed to States for FY 2024-25.
2. The net borrowing of the States for the year 2024-25 has been fixed at Rs. 9,39,717 crore at 3% of GSDP of the States.
3. Consent of Government of India for Rs. 6,83,203 crore for raising OMB and of Rs. 62,721.57 crore for availing Negotiated loan during FY 2024-25 have been issued under Article 293 (3) of Constitution of India as on 30^th September, 2024.

3. Additional Borrowing of 0.5% of GSDP linked to performance in Power Sector

1. Fifteenth Finance Commission (XV-FC) has recommended performance based additional borrowing space of 0.50 percent of Gross State Domestic Product (GSDP) to States in the power sector.
2. This additional borrowing of 0.50 percent of GSDP is over and above the normal net borrowing ceiling.
3. The objectives of the additional borrowing space are to improve the operational and economic efficiency of the sector, and promote a sustained increase in paid electricity consumption.
4. For the Financial year 2024-25 also, states are eligible for additional borrowing of 0.5% of GSDP (approx Rs. 1,56,619 crore) linked to performance in power sector as per the guidelines issued by the Department of Expenditure dated 09.06.2021.

4.   Reduction of Performance Security in procurement of Goods and Services contracts:

To reduce financial burden on companies to participate in the Government procurement, Department of Expenditure (DoE) has reduced the quantum of performance security from maximum 10% to 5% of the value of goods/ services by amending General Financial Rules (GFRs), 2017. (OM No.  1/2/2023-PPD dated 01.01.2024, copy enclosed).

5. Increase in Financial limits related to Public Procurement

The monetary thresholds under almost every procurement methods have been increased after nearly two decades through amendment in the relevant provisions of General Financial Rules (GFRs), 2017. (OM No. 1/3/2024-PPD dated 10.07.2024, copy enclosed).

6.    Revision of Manual for Procurement of Goods:

Since the publication of the last Manual in 2022, there have been many developments in the form of policy initiatives with their clarifications, deliberations with stakeholders, Methodology for Assessment of Procurement Systems (MAPS) report 2020, Model Tender Documents for Goods, etc. necessitating the thorough revision of the Goods procurement manual. Department of Expenditure has revised the Manual for Procurement of Goods which was issued in the month of July 2024.

The revised Manual focuses on ease of business for suppliers and clarity for the procurement professionals. A wide range of topics have been rewritten such as clarifying extent of applicability to various entities, categorization of procurements, identification of conflict of interest, interest-free advance payments, new forms of performance securities, outsourcing procurement, auto-extension of bids, capping price variation and liquidated damages, mitigating carter formation, reverse auction, rate contracts, withdrawal by L1 bidders and many others including the latest amendment to General Financial Rules (GFRs).

7. Finance Commission Grants to States
8. 1. Finance Commission Division (FCD), Department of Expenditure undertakes processing of and follows up action on the various recommendations of the Central Finance Commission including release of grants recommended by the successive Central Finance Commissions.  For the year 2024-25, the 15^th Finance Commission (XV-FC) has recommended the grants-in-aid namely, Post Devolution Revenue Deficit Grant, Grants to Local Bodies, Health Sector grant, Central share of State Disaster Response Fund and State Disaster Mitigation Fund, and additional Central assistance from National Disaster Response Fund (NDRF) and National Disaster Mitigation Fund (NDMF) to the State Governments.
9. 2. Various States are experiencing flash flood/flood/landslide situation during the current south-west monsoon of 2024. Therefore, based on the recommendations of Ministry of Home Affairs, a total amount of Rs 15,823.20 crore was released, in advance, by the Ministry of Finance (Department of Expenditure) as Central share of State Disaster Response Fund during F.Y. 2024-25 to the 14 States viz. Andhra Pradesh, Assam, Bihar, Gujarat, Himachal Pradesh, Kerala, Maharashtra, Manipur, Mizoram, Nagaland, Sikkim, Tamil Nadu, Telangana and West Bengal.
10. 3. As recommended by XV-FC, to strengthen the Fire Services in the States, a total assistance of Rs. 757.39 crore has been released for Expansion and Modernization of Fire Services in the States.
11. 4. Based on the 15^th Finance Commission recommendations, the guidelines for Recovery and Reconstruction window under the SDRF & NDRF for providing assistance for post disaster recovery and reconstruction activities have been concurred by Department of Expenditure and issued by M/o Home Affairs on 14^th August, 2024.

1. 5. The details of funds released as per the recommendations of XV-FC to the State Governments for various components during current financial year 2024-25 are as under:

(Rs. in crore)

8. DELEGATION OF FINANCIAL POWERS RULES, 2024

• The Delegation of Financial Powers Rules, 2024, was formulated as a replacement for its predecessor — the Delegation of Financial Powers Rules, 1978 and the revised rules came into force w.e.f. 1st of April, 2024.

Delegation of Financial Powers Rules, 2024 facilitates:

• Simplicity and ease of understanding
• Empowering users with a framework of rules
• Comprehensive and easily navigable rules
• Quick financial decision-making
• Greater autonomy to various levels of authority
• Empowerment of departments and individuals, fostering a sense of ownership and responsibility for financial decisions
• Designed to accommodate updates and modifications in a timely manner, making them adaptive and responsive to future needs

9. UNIFIED PENSION SCHEME:

Based on the recommendation of the NPS Review Committee, the Unified Pension Scheme (UPS) was approved by the Cabinet on 24.08.2024.

• The salient features of the scheme are as under:

• Assured pension: 50% of the average basic pay drawn over the last 12 months prior to superannuation for a minimum qualifying service of 25 years. This pay is to be proportionate for lesser service period upto a minimum of 10 years of service.
• Assured family pension: @60% of pension of the employee immediately before her/his demise.
• Assured minimum pension: @10,000 per month on superannuation after minimum 10 years of service.
• Inflation indexation: on assured pension, on assured family pension and assured minimum pension, Dearness Relief based on All India Consumer Price Index for Industrial Workers (AICPI-IW) as in case of service employees.
• Lump sum payment at superannuation in addition to gratuity: 1/10^th of monthly emoluments (pay + DA) as on the date of superannuation for every completed six months of service this payment will not reduce the quantum of assured pension.

The scheme is to be implemented w.e.f. 01.04.2025. The implementation modalities of the UPS, such as Regulatory, legal, accounting framework etc. are being worked in consultation with the concerned stakeholder departments.

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