|
Finance Department
Policy Note - 2003 - 2004
Demand No. 15
The Finance Department has the important role of preparation of the State Budget and presenting the Budget to the Legislature every year. The Finance Department, being the custodian of the State Exchequer, has the onerous responsibility of balancing receipts and payments and ensuring that debt obligations are met. The State has seen a rapid decline in its financial position since 1998–1999 and this occurred due to the unprecedented increase in expenditure on salary, pension liability and debt servicing. Extraordinary efforts have to be taken to restore the fiscal balance of the State. This reform programme has been launched. This department has the responsibility of balancing the budget by controlling expenditure and exploring the avenues for revenue augmentation. For this purpose, two Commissions, namely "Staff and Expenditure Reforms Commission" and "Tax Reforms and Revenue Augmentation Commission" have been constituted. A policy of prudent fiscal management, being the main objective of the Government, is to be achieved by all departments by internalising the programme of fisical reforms. Fisical reforms are to be adopted by all departments.
2. There are eight Heads of Departments functioning under the administrative control of Finance Department as below.
(i) Small Savings Department.
(ii) Raffles Department.
(iii) Chief Internal Audit and Statutory Boards Audit Department.
(iv) Government Data Centre
(v) Treasuries and Accounts Department.
(vi) Directorate of Pension
(vii) Local Fund Audit Department.
(viii) Co-operative Audit Department.
3. The multi-various functions of these departments are as follows:
SMALL SAVINGS
4. Small Savings plays a vital role in financing infrastructure development and bridging the fiscal deficit of the State. This is through the loan assistance by Government of India based on the net small savings collection made by the State during the year. Government of India since 1.4.2002 is giving as a loan the equivalent of the monthly net small savings collection, every month.
5. There are a number of small savings schemes to suit all categories of people as below:
a) Scheme with high returns:
(i) Kisan Vikas Patra
b) Scheme offering Tax concession:
(i) National Savings Certificate – VIII issue
(ii) 15 Year Public Provident Fund
c) Scheme offering regular income:
(i) Post Office Monthly Income Scheme
(ii) Deposit Scheme for Retired Government Employees/Public Sector Undertakings
d) Scheme for regular savings:
(i) Post Office Recurring Deposit Scheme
e) Fixed Deposit Schemes:
(i) 1 Year Post Office Time Deposit
(ii) 2 Year Post Office Time Deposit
(iii) 3 Year Post Office Time Deposit
(iv) 5 Year Post Office Time Deposit, etc.
6. The rate of interest to the small savings with effect from 1.3.2003 are as below, which are subject to revision by Government of India.
Sl.No.
(1) |
Scheme
(2) |
Rate of Interest
w.e.f. 1.3.2003
(3) |
1. |
Post Office Monthly Income Scheme |
8.00% |
2. |
1 Year Time Deposit
2 Year Time Deposit
3 Year Time Deposit
5 Year Time Deposit |
6.25%
6.50%
7.25%
7.50% |
3. |
Post Office Recurring Deposit Scheme |
Rs.10/- per month becomes Rs.728.90 after 5 years |
4. |
National Savings Certificate-VIII Issue |
8.16% |
5. |
Public Provident Fund |
8.00% |
6. |
Kisan Vikas Patra |
Doubles in eight years and seven months |
7. |
Post Office Savings Bank |
3.5% |
8. |
Deposit Scheme for Retired Government Employees / Public Sector Undertakings |
7.00% |
7. Target and Achievement during 2002-2003:
Target for the year 2002-2003 was fixed at Rs.2400 crores. Against the above target, the achievement is Rs.2700 crores (tentatively. This is Rs.845.60 crores more on the achievement of Rs.1854.40 crores in the year 2001-2002. The implementation of new schemes by the State Government, like the Free Gift Coupon and Investor Incentive Schemes and the systematic efforts taken by the Small Savings Department to create awareness through sustained publicity campaigns in the print and Electronoc Media, intensified Household/School RD campaign, identification and targeting of investor groups, appointment of .additional agents etc. have lead to this record growth.
8. Agency System for Small Savings:
Small Savings Agents play a vital role in Small Savings collection. At present there are 3 kinds of Agencies for different schemes as shown below. One of the major reasons for the record collection during 2002-2003 was the fact that 4,501 new agents were appointed.
S.No.
(1) |
Type of Agency
(2) |
Schemes for which appointed
(3) |
No. of agents at the beginning of the year(1.4.2002)
(4) |
No. of Agents appointed during the year 2002-03
(5) |
Total No. of agents as on 31.3.2003
(6) |
1. |
Standardised Agency System |
KVP, POMIS,
NSC-VIII Issue
POTD |
11,659 |
2,133 |
13,792 |
2. |
Mahila Pradhan Kshetriya Bachat Yojana |
PORD |
17,268 |
2,190 |
19,458 |
3. |
Authorised Agents (Public Provident Fund Scheme) |
PPF |
1,891 |
178 |
2,069 |
| |
Total |
|
30,818 |
4,501 |
35,319 |
9. Agents Incentive:
Agents get the following incentive for their mobilisation efforts.
Sl.No. |
Type of Agents |
GOI Commission |
Additional State Govt. incentive |
Total |
(1) |
(2) |
(3) |
(4) |
(5) |
1.
|
SAS |
0.5% to 1% |
0.5% to 1% |
1% to 2% |
2. |
MPKBY |
4% |
2% |
6% |
3. |
PPF |
1% |
1% |
2% |
Arrangements have been made in all Districts for the credit of incentive payment at the respective accounts of the agents in the post offices itself.
10. Special Schemes:
The following schemes are implemented in the State to motivate and increase Small Savings collection.
(i) Awards for depositors, agents, Local bodies, officials etc.:
In order to motivate and involve all target/potential groups, State Level Awards have been announced by the Government this year for Pay Roll Savings Scheme Group Leaders, Headmasters, School Agents, Investors, Local Bodies, Agents, Postal officials etc. State Level Awards have been disrtributed during World Thrift Day function on 30.10.2002. District/block level awards sanctioned by the Government were also distributed by the Commissioner, Chennai Corporation and other District Collectors. As this scheme has yielded good results and lead to mobilisation of more investors especially school students, it will be continued in the current financial year also.
(ii) Training:
This scheme helps the small savings agents especially newly appointed agents to learn the postal savings rules, Financial Marketing strategies, etc. so that they can adopt suitable methods for marketing small savings schemes among the public.
(iii) Free Gift Coupon Scheme (From 1.12.2002):
To increase collections during the last quarter and to achieve the target, Government has announced a new scheme for small savings investors this year, viz., The 'Free Gift Coupon Scheme'. Under the scheme investors are issued one free gift coupon on an investment of Rs.5,000/- at a time, from 1.12.2002 to 31.3.2003 in select Small Savings Scrips. Total prizes are 282 per draw and about 25 draws are expected to be held. This scheme has received a very good response from the investors as a result of which the gross and net collections have gone up.
(iv) Investors Incentive Scheme: (From 1.1.2003):
This is also a new scheme announced by Government for the last quarter of the year 2002-2003. Investors investing Rs.10,000/- or more in select Small Savings scrips from 1.1.2003 to 31.3.2003 will get a cash incentive ranging from 2% for Recurring Deposit scheme and 1% for other schemes. This scheme has been introduced to achieve high growth during the last quarter.
(v) Local Body Incentive Scheme:
To encourage Local Bodies to participate in small savings, incentive in the form of grant is sanctioned by Government every year based upon incremental net collection by districts in each year over the previous year. For 2002-2003 a sum of Rs.12 crores was sanctioned by the Government for the performance of districts. These funds have been allotted to the respective Districts for implementation of development schemes. This scheme creates a healthy competition amongst local bodies to secure incentive in the form of grant based on their performance in small savings collections.
(vi) Publicity:
Intensive publicity has been undertaken through Press/Electronic media, AIR, TV Channel, ILC, Bus panel advertisements, phamplets distributions, Hoardings, stickers, wall paintings, van publicity in all Panchayat/Blocks/Municipality/Corporation etc. This was useful in motivating investors and in accelerating collections. Publicity efforts will continue to be intensive during 2003-2004 also.
11. Innovative Initiatives:
Apart from the above schemes the small savings department has taken the following initiatives for improving performance and for effective monitoring of Small Savings Schemes.
(i) Introduction of "SEMIPPU" (Savings Enquiry, Monitoring
and Information Processing Programme and Utility) Software.
In order to monitor the work of the Small Savings department, the Agents net work etc. systematically, and to settle the incentive to agents every month, the Directorate of Small Savings has, in co-ordination with NICNET, developed a software package called "SEMIPPU" (Savings Enquiry, Monitoring and Information Processing Programme and Utility). Computeres have been installed at the Small Savings wing of the Collectorates of each District. This software package is to be used to monitor the performance of the agents who form the backbone of the small savings movement, collection performance of Districts etc. The computerisation effort will be strengthened during 2003-2004.
(ii) New web site (www.tnsmallsavings.com) and web enabling of Agents Information System:
Small Savings Directorate has developed a web site www.tnsmallsavings.com which has been linked to the software developed by the Department. The web site gives details about the salient features of various small savings schemes, special schemes offered by the Government of Tamil Nadu for the benefit of investors and agents, various forms etc. In order to provide service of the agents at the doorsteps of the investors, the agents data base with details of Small Savings agents of all the Districts has been linked to the Small Savings Website. This kind of online linkage- in which the Small Savings agents data base has been linked with the Website – has been done for the first time in India. It is planned to offer several new services through the web site including investment advice to the public.
(iii) Interactive Voice Response System (IVRS) facility in six Districts:
This telephone based system facilitates quick access to information regarding Small Savings schemes and scrips by the public. This Public Enquiry System also provides information to the public about the agents, their address, phone numbers etc. This system which was already functioning at Chennai, Coimbatore and Madurai has been extended to Kanchipuram, Tiruchy, Thirunelveli, Salem, Erode and Vellore.
12. All the above schemes have helped to accelerate Small Savings collections and the state is poised for record collections during the year 2002-2003.
RAFFLES
13. The main objective of the Raffle scheme was to mobilise the resources for the implementation of Welfare schemes for the people. Tamil Nadu Lottery enjoyed a strong credibility among the people. Since the other State lotteries were not run in a transparent manner and were deceiving the public, the Government introduced Rules to regulate the conduct of lotteries in the State during the year 2002. As per the rules, no lottery shall be marketed without appropriate orders of the Secretary to Government, Home Department. The other State Governments, their Agents and Distributors did not co-operate with the Government of Tamil Nadu in regulating the sale of their lotteries and continued to sell their tickets in total contravention of the various sections of the Central Act and the Tamil Nadu State Lottery (Regulation) Rules, 2002. Attempts to regulate the sale were challenged in the Courts and delaying the implementation of the rules. The result was that many families especially belonging to the category of daily wage earners and the low-income groups became prey to these lotteries and lost heavily. The Agents of lotteries run by the other States exploited the gullible poor and indulged in illegal trade practices that gave them a disproportionately high share in the market. Therefore with a view to protect the larger interest of the State and its people, especially the poor daily wagers and low-income groups the Government took a decision to ban the sale within the territory of Tamil Nadu, of all lotteries organised, conducted or promoted by every State, including the State of Tamil Nadu, even at the cost of revenue loss from raffles of around Rs.50 crores per annum to the State. The Honourable Madras High Court and the Honourable Supreme Court of India have upheld the validity of ban order issued by the Government of Tamil Nadu.
|
