‘Accounting needs overhaul’

 Union Minister for Minority Affairs K Rehman Khan on Saturday called for more efficiency and transparency in the management of public funds and fiscal matters.

He was speaking at the inauguration of Fiscal Policy Institute’s new building located near Kengeri. A chartered accountant-turned-politician, Khan said the country had lost a lot of public funds due to bad fiscal management.

“When resources are scarce, we have to resort to collection of taxes. People expect taxes to be managed and spent properly. But what is happening in the government expenditure? Due to bad fiscal management, a project faces cost escalation leading to spending money which is not provided in the budget,” Khan said.

Citing the example of the Konkan railway project, Khan said the original cost of the plan was estimated to be Rs 800 crore for three years.

“Due to an overrun of 2-3 years, the project ended up costing Rs 4,000 crore,” he said adding the Indian accounting system and principles followed in government offices needed an overhaul to become more transparent.

Earlier in the programme, Chief Minister Jagadish Shettar said that managing public money was a challenge and unpredictable financial trends might lead to changes in revenue and tax collection. “This is where the FPI is expected to help us prepare for such changes. We also hope the FPI will be able to fix internal risks in finace departments,” he said.

Established in 2007, the Fiscal Policy Institute’s new building is spread over 5 acres built at a cost of Rs 33 crore. Functioning under the Fiscal Responsibility Act (KFRA) Act 2002, the institute would impart training to officers of finance , treasury, accounts, commercial tax , transport and excise departments and officers of local bodies involved in financial operations.FPI Director P R Devi Prasad said the institute would be involved in coming up with newer solutions to predict fiscal management problems based on new data. The FPI website (www.fpibangalore.gov.in) was  launched on the occasion.