State Finance Division (Plan Finance I)

INTRODUCTION : STATE FINANCE DIVISION

The Division which initially was largely meant for releasing plan assistance to States has now got into all major aspects of the State finances, including debt and liabilities management, major non-plan schemes and fiscal reforms at State level. Hence it is often referred to as State Finance Division.

The State Finance Division has three main branches- Plan Finance branch which administers central assistance for State Plans, Finance Commission branch which implements the award of the Finance Commission as accepted by Government of India, and State Debts and Liabilities branch which is concerned with the state debts and liabilities and administers central facilities and initiatives in this regard. Another branch also exists for maintaining state finance data, analysis of trends of State Finances and for administering the Debt Consolidation and Relief Facility for the States drawn up consequent to recommendations of Twelfth Finance Commission.

Plan Finance branch is primarily concerned with administering Central assistance to State Annual Plans. The Division works closely with Planning Commission in assessment of financial resources for Five Year Plans and Annual Plans of States. Division acts as the disbursement division for Central assistance to States for their States Plans by way of untied Normal Central Assistance (NCA) and assistance for earmarked schemes. The division also advises Finance Minister on policy aspects of block and schematic parts of the Central assistance to State Plans.

Finance Commission branch administers grants part of the Finance Commission award comprising? Non-Plan revenue deficit grants, Calamity relief Fund (CRF), grants for local bodies, health ,education? and other special purpose grants. This division also administers the releases from the National Calamity Contingency Fund.

Debt and Liabilities branch monitors the ways and means and resource position of States, advises the States to take appropriate action whenever they face problems relating to cash management. If necessary, rescheduling, release of funds and other possible measures are planned by this division to help the States tide over their ways and means difficulties. This branch also handles the work relating issuance of consent to States under Article 293(3) of the Constitution for raising borrowing for the plan as provided in the Annual Plans of the States and is increasingly getting involved with all issues concerning the debt and liabilities of the States including pensions.