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Q24 (CAPF/2026) Economy › Government Finance & Budget

Which one of the following systems has been adopted by the Government of India to improve cash management, reduce idle balance, enhance transparency and strengthen expenditure efficiency as a major public financial management system reform?

Result
Your answer: —  ·  Correct: C

Explanation

The Government of India has adopted the Just-in-Time (JIT) Fund Release System as a major reform in its Public Financial Management System (PFMS). This system, implemented through mechanisms like the Single Nodal Agency (SNA) model for Centrally Sponsored Schemes and the Treasury Single Account (TSA) for Central Sector Schemes, ensures that funds are released to implementing agencies only when required for actual expenditure.

The primary objectives are to reduce idle balances (float) in bank accounts, minimize the government's interest burden on borrowings, and enhance transparency and efficiency in public spending. By moving away from the traditional system of parking funds in advance, the JIT approach ensures better cash management and real-time tracking of fund utilization. Other options like paper-based clearing are obsolete, while decentralized management often leads to the very idle balances this reform seeks to eliminate.

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