- [Yearbook] Finance Ministry
- FinMin#1: Department of Economic Affairs (DEA आर्थिक कार्य विभाग)
- FinMin#2: Department of Expenditure (व्यय विभाग)
- FinMin#3: Department of Revenue (राजस्व विभाग)
- FinMin#4: Department of Financial Services (DFS: वित्तीय सेवाएँ विभाग)
- FinMin#5: DIPAM (निवेश एवं लोक परिसंपत्ति प्रबंधन विभाग)
- FinMin#6: Indian Audit and Accounts Department
- Past MCQs from [Yearbook] → FinMin
- In the last article, we saw the basic keywords related to types of organization.
- Now we’ll start with Finance Ministry and its departments, followed by past UPSC MCQs from this ministry.
- Finance Ministry consists of five departments namely,
Functions of DEA:
- DEA is responsible for the fiscal policy, Preparation and presentation of Union budget including the Railway component of budget. Budget for union territories without legislature, budget for States under president rule.
- DEA announces the Interest rates of small saving schemes.
- DEA assigns infrastructure status to a particular sector, maintains a website www.pppinindia.gov.in, to provide information related to PPP.
Organizations under/related to DEA
- Constitutional Body: Art. 280: Finance Commission. DEA liaisons with it.
- Statutory Body: Board for Industrial and Financial Reconstruction (BIFR) – abolished after the coming of another statutory body- Insolvency and Bankruptcy Board of India (IBBI) under Corporate Affairs Ministry.
- Chief Economic Advisor (CEA) is neither Constitutional nor statutory body. He works under DEA. CEA is responsible for preparation of Economic Survey, and cadre control of Indian Economic Service (IES) officers. 2018: Krishnamurthy Subramanian replaced the previous CEA Arvind Subramanian.
- Financial Stability and Development Council (FSDC): is neither Constitutional nor statutory body. FM is chairman. Members include the chiefs of all financial regulatory bodies- such as RBI, SEBI, IRDAI etc. and the chief of Insolvency and Bankruptcy Board of India (IBBI- a statutory body under Corporate Affairs Ministry)
- PSU: Security Printing and Minting Corporation of India Ltd. (SPMCIL). Registered under the Companies Act responsible for printing currency notes, coins, commemorative coins, cheques, postage stamps, non-judicial stamps, passports/visa and other travel documents etc.
- Here the controller General of Account (CGA: महालेखा नियंत्रक from ICAS service) prepares the estimate of how much money will have to be spent from the consolidated fund of India.
- This department also looks after Pay Commission reports, Pension Accounting office.
- Web Portals of Expenditure Department:
- Public Financial Management System (PFMS): for disbursing money to Various Ministries and departments at Union and State level
- Bharatkosh Non Tax Receipts Portal (NTRP): For selling India yearbook Yojana Kurukshetra another products and services by the government of India
As the name itself clearly indicates, this department looks after the taxation matters following bodies.
Statutory Bodies / Quasi-judicial bodies
Attached / Subordinate
Functions of DFS:
- Financial Inclusion Schemes, PSB recapitalization, public sector financial intermediaries, including their regulators (Except EPFO, ESIC etc.)
Organizations under/related to DFS:
- Bank Board Bureau: Neither Constitutional / statutory. Setup through gazette notification for selection of top officials (MD, CEO, Chairman and full-time Directors) for PSBs, LIC and other public sector financial institutions. Actual appointment done by FinMin’s Department of Financial Services → DFS appoints.
- PSU: National Credit Guarantee Trustee Company (NCGTC): For providing credit guarantee for Mudra Loans and Stand up India, loans related to education and skill development.
- Department of Investment and Public Asset Management (DIPAM) looks after Disinvestment of CPSE.
- If Government dilutes its shareholding from 100% upto 51%: Disinvestment.
- If Government dilutes its shareholding in such manner that private party gets managerial control (i.e. in real sense private party getting 51% shareholding) it’s ‘privatization’. Although NITI prefers the term ‘Strategic Disinvestment’.
- Disinvestment Target (Interim Budget 2019-20): ₹ 90,000 crores
- 2005: Public account → National Investment Fund (NIF) was setup to receive money from the proceeds of disinvestment. This money was used for investment in profit making CPSE, recapitalisation of PSBs, selected social sector schemes etc. but now obscure under Modi Government.
- As per IYB-2019, FinMin = 5 dept that we learned above.
- This (lesser known) dept is headed by Constitutional Body: Comptroller and Auditor General (CAG) of India.
(Prelims-2019) The Chairman of public sector banks are selected by the
(a) Banks Board Bureau
(b) Reserve Bank of India
(c) Union Ministry of Finance
(d) Management of concerned bank
(Prelims-2016) With reference to ‘Financial Stability and Development Council’, consider the following statements:
- It is an organ of NITI Aayog.
- It is headed by the Union Finance Minister
- It monitors macro-prudential supervision of the economy.
Which of the statements given above is/ are correct?
- (a) 1 and 2 only
- (b) 3 only
- (c) 2 and 3 only
- (d) 1, 2 and 3
(Prelims-2011) Why is the Government of India disinvesting its equity in the Central Public Sector Enterprises (CPSEs)?
The Government intends to use the revenue earned from the disinvestment mainly to pay back the external debt.
The Government no longer intends to retain the management control of the CPSEs.
Which of the statements given above is/ are correct?
- (a) 1 only
- (b) 2 only
- (c) Both 1 and 2
- (d) Neither 1 nor 2
(Prelim 2010) Which one of the following is responsible for the preparation and presentation of Union Budget to the Parliament?
A. Department of Revenue
B. Department of Economic Affairs
C. Department of Financial Services
D. Department of Expenditure
(CDS-2012) Fiscal Policy in India is formulated by:
(a) the Reserve Bank of India
(b) the Planning Commission
(c) the Finance Ministry
(d) the Securities and Exchange Board of India.
In the next article, we’ll look at the Corporate Affairs Ministry and Commerce Ministry.