PIRSA – A Path to Bolster Government Revenue

By Dr. Bankim Debbarma

A prevailing shortage of funds has hindered the timely execution of development plans across several states, particularly in the North-Eastern region of India, including Tripura. The primary source of funding for these states, as reflected in their annual budgets, has historically been the ‘State Share of Fund’ allocated by the Union Government of India. This financial landscape has led to a heavy reliance on market borrowing, resulting in escalating debt liabilities and interest payments, which are projected to reach Rs. 20,000 crores and Rs. 2,000 crores respectively within the next financial year.

Addressing this fiscal challenge requires a paradigm shift in financial management, where generating additional revenue becomes a pivotal aspect of governance. Presently, the focus tends to be centred around utilizing allocated funds, with minimal attention given to revenue generation or efficient financial management. This approach has led to unutilized funds accumulating in accounts, marked by inefficiencies and lack of accountability. Financial mismanagement and malpractices have also come to the forefront, posing significant challenges to achieving public welfare goals.

Introducing the ‘Process for Internal Restructuring of System of Accounting’ (PIRSA) emerges as a potent solution. PIRSA advocates for an accounting principle-based system for meticulous management of government funds. This system is particularly suited for transactions beyond treasury functions, transactions extending from treasury functions to final disbursement, and non-government sources of departmental funds. The aims of PIRSA are two-fold: firstly, to generate non-tax revenue by enhancing accounting practices, and secondly, to establish rigorous control and oversight of government funds through systematic checks and reconciliations.

Importantly, the PIRSA system comes into play after government treasury functions are completed, ensuring precise fund handling, transparent accounting, and enhanced accountability. By implementing PIRSA, opportunities arise to maximize non-tax revenue, as exemplified by the achievements of the FCS & CA Department, Higher Education Department, and TTAADC in Tripura.

Results of PIRSA Implementation:

1. Food, Civil Supplies & Consumer Affairs (FCS&CA) Department:

At present, a substantial transformation is evident within the FCS&CA Department, as its fund position has surged to an impressive Rs. 447.79 crores as of March 2023, in contrast to the relatively meagre total fund position of approximately Rs. 32.45 crores in April 2012. Notably, a significant portion of this progress has been nurtured by the strategic adoption of the PIRSA System.

During the period from April 2012 to March 2023, spanning over 11 years, the department has remarkably harnessed the PIRSA System’s potential to generate substantial revenue. This is vividly portrayed through the accumulated interest earnings of around Rs. 190.95 crores out of the total earned interest amounting to approximately Rs. 191.98 crores. The conceptual implementation of the PIRSA System, initiated on April 1, 2012, has played a pivotal role in this financial journey.

A noteworthy distinction is worth mentioning: the FCS&CA Department has emerged as a self-sufficient entity, setting a noteworthy precedent by garnering the highest and most substantial revenue through ‘Bank Interest.’ This revenue stream originates from non-treasury-related funds. This accomplishment resonates prominently within the Government of Tripura, positioning the FCS&CA Department at the forefront of financial autonomy and efficacy.

2. Department of Higher Education (DHE):

The inception of the PIRSA System within all colleges and institutions falling under the umbrella of the Department of Higher Education occurred on April 1, 2020. This transformative initiative ushered in a remarkable evolution. Prior to the integration of the PIRSA System, the cumulative yearly revenue derived from colleges and institutions within the Department of Higher Education was a modest Rs. 12.95 lakh (Approx.), sourced from an annual average non-treasury fund of around Rs. 11.50 Crores (Approx).

However, the introduction of the PIRSA System yielded a profound change in this landscape. The Department’s revenue trajectory experienced a significant upward surge, with earnings of Rs. 60.00 lakhs in the 2020-21 FY, followed by Rs. 78.71 lakhs in the 2021-22 FY, and a further growth to Rs. 80.61 lakhs in the 2022-23 FY. Impressively, even within the initial months of the ongoing financial year 2023-24, the revenue had already exceeded Rs. 30 lakhs by July 2023. Notably, this enhanced revenue stream originates from the same average fund allocation within the Department. These augmented funds are judiciously allocated to address annual recurrent expenses and catalyse developmental undertakings across the spectrum of colleges and institutions. The PIRSA System’s implementation has truly proven instrumental in fostering financial growth and enabling impactful development within the Department of Higher Education.

3. Tripura Tribal Areas Autonomous District Council (TTAADC):

The inception of the PIRSA System within the Tripura Tribal Areas Autonomous District Council (TTAADC), effective from April 1, 2022, marks a transformative milestone. This implementation entails the uniform application of accounting practices across all departments and a comprehensive count of 89 Drawing and Disbursing Officers (DDOs) operating within the council’s purview. The outcomes arising from the PIRSA System are as follows:

  1. A robust mechanism for systematic cross-validation and harmonization of accounts and records has been firmly established.
  2. Enhanced levels of transparency and accountability have been seamlessly woven into every financial transaction conducted within the council.
  3. A contemporaneous depiction of the financial standing of all council segments has been ensured through a meticulously devised monthly reporting framework, encompassing both online and physical manifestations.
  4. A remarkable financial feat has been achieved, wherein the council garnered an impressive total revenue of Rs. 9.23 crores within a single year (2022-23 FY) through the PIRSA System. This accomplishment stands in stark contrast to the cumulative revenue of Rs. 7.50 crores amassed over the preceding 37 years.

The advent of the PIRSA System has undeniably heralded a new era of efficient financial management, heightened accountability, and revenue generation within the TTAADC, signifying a remarkable leap forward in its financial trajectory.

In essence, the implementation of the PIRSA system has heralded positive outcomes, transforming financial management in Tripura’s key departments and institutions. By focusing on revenue enhancement, prudent fund management, and heightened transparency, PIRSA stands as a beacon for bolstering government revenue and meeting public welfare objectives.

Dr. Bankim Debbarma is Assistant Professor in Department of Commerce, MBB College, Agartala.

Please follow and like us:

9 thoughts on “PIRSA – A Path to Bolster Government Revenue”

  1. We absolutely love your blog and find most of your post’s to be exactly I’m looking for. Do you offer guest writers to write content for you? I wouldn’t mind publishing a post or elaborating on some of the subjects you write regarding here. Again, awesome weblog!

  2. My spouse and i felt now joyous that Chris could complete his investigation via the precious recommendations he got in your web page. It’s not at all simplistic to simply find yourself giving for free thoughts men and women might have been selling. So we consider we need the blog owner to be grateful to because of that. Most of the explanations you’ve made, the straightforward site menu, the relationships you help to engender – it is many astonishing, and it’s really aiding our son in addition to the family believe that that subject is excellent, and that is highly mandatory. Many thanks for all the pieces!

Leave a Comment

Your email address will not be published. Required fields are marked *

Social Share Buttons and Icons powered by Ultimatelysocial

Enjoy this blog? Please spread the word :)