Just in time funding for Finance Department in Odisha

• Mar 11, 2022
• 1 min

The Odisha government has one of the most advanced treasury management systems in India. However, challenges of manual processing of bills, idle parking of funds, and float in the system persist that lead to sub-optimal fund utilization. MSC is implementing a Just-in-Time funding solution for the finance department of the Government of Odisha. The solution […]

The Odisha government has one of the most advanced treasury management systems in India. However, challenges of manual processing of bills, idle parking of funds, and float in the system persist that lead to sub-optimal fund utilization.

MSC is implementing a Just-in-Time funding solution for the finance department of the Government of Odisha. The solution will ensure that the money owed by the state’s implementing agencies (IA) to the end beneficiary or the payee in a public project is paid directly from the state’s treasury in real or near real-time. These could be urban local bodies, autonomous bodies, or NGOs that undertake public or welfare work on behalf of the government. The solution will mark two key departures from the existing fund flow mechanism. Firstly, the ability to draw the funds directly from the state’s treasury will eliminate the need for the IAs to park funds in the commercial bank accounts outside consolidated funds. Secondly, the pull-based funding mechanism allows the IAs to make payments to their payees in real-time.

The benefit of JIT funding is that it will allow the finance department to reduce ‘idle cash’ outside the treasury and optimize borrowing costs. Also, with real-time visibility on cash balances, the administrative burden associated with expenditure reporting and utilization is likely to get reduced.

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