Apr 12, 2012

All government payments above 25000 will be paid direct to bank account of payee

Government of India passes a rule that all government payment such as builders, contractors, suppliers etc. will be paid to the direct bank account of the payee. This step is taken to make the system clear and to nap the corruption in India. This rule is applicable from 01 April 2012. All the payment above 25000 will be e-payments and this rule will surely control the corruption as well as commission system. Government of India has issued a notification in this regard which is as follows.


PRESS INFORMATION BUREAU
GOVERNMENT OF INDIA
*****
GOVERNMENT TO MAKE PAYMENTS DIRECTLY TO THE 
BANK ACCOUNT OF PAYEES; MEASURE TO ENHANCE 
TRANSPARENCY AND ACCOUNTABILITY IN PUBLIC DEALINGS OF 
THE CENTRAL GOVERNMENT AND ALSO USHER GREEN BANKING 
    New Delhi: Chaitra 21, 1934
April 10, 2012
As part of the  Government’s commitment to good governance and elimination of corruption, the Ministry ofFinance has amended the rules to enable all  the Ministries and Departments to facilitate payments by direct credit to the bank accounts of the payees. Orders have also been issued by the Controller General of Accounts(CGA) that, with effect from  1st April 2012,all payments above Rs.25,000 to supplier contractors, grantee and loanee institutions shall be directly credited to their bank accounts. While  the  government servants shall continue to have the option to receive their salaries by cash or cheques, they could also opt to receive their salaries by direct credit to their bank accounts. However, all other payments to government servants of the amount of above Rs.25,000 shall be credited directly to their bank accounts. Further, all payments towards the settlement of retirement/terminal benefits of the government servants shall also be directly credited to their bank accounts.

The  Union  Finance Minister Shri Pranab Mukherjee  had recently inaugurated  a “Government e-payment gateway” set-up by the Controller General of Accounts(CGA) which will be used by the Pay & Accounts Officers(PAOs) of the Central Civil Ministries/Departments for implementing the above measures. The Controller General of Defence Accounts(CGDA) would also be progressively using this e-payment gateway. The measure is expected to streamline the process of making payment by government departments while minimizing the interface of the payees with  government  offices to receive their dues. This e-payment government measure will enhance transparency and accountability in public dealings of the Central Government and also usher green banking by the Government.
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