PANAJI
Panchayat can have stronger autonomy if they follow the double entry system as per international standards and they will be recognised as independent units, a member of the Institute of Chartered Accountants of India (ICAI) has said.
When contacted, ICAI member Pradip Kakodkar stated that the present cap system of accounting followed by panchayats has limitations.
“They record accounts as per house tax received and it is shown as income. People who are supposed to pay are not shown as receivable in their accounts. Besides, panchayats may have different assets like garden but this is not shown as assets,” said Kakodkar.
“Due to these limitations, panchayats do not get loans from banks, cannot float bonds and cannot generate their own resources. They have depend on government grants for some development,” said Kakodkar.
He said the central government has already accepted that panchayats should follow the double entry system of accounting, where a balance sheet is maintained and there is a proper asset liability statement.
“We requested the Panchayats Minister Mauvin Godinho to initiate this double entry system of accounting so that panchayats can apply for government grants, loans, grants from International Monetary Fund and panchayats can also float their bonds. They become self-reliant and can develop the own villages. They can be managed like a business unit,” said Kakodkar
"In this manner, the autonomy of panchayats can become stronger as they will be able to generate their own resources and they will be recognised as an independent body by banks and monetary funds. At present, they are recognised as part of state governments, said Kakodkar.
Kakodkar said Maharashtra has already implemented this system and in 2008, the central government had advised the states to follow the system.
“The State government has recently floated a tender for municipal councils to change system to this double entry system of accounting,” said Kakodkar.
Kakodkar said they have suggested to the State government not to float a big tender at the all-India level, rather a small panchayat-level tender can be floated, so that each charted accountant can guide the panchayat at the local level.
"We want to offer our service so that panchayats become more self-reliant, stronger and our villages can be developed,” said Kakodkar.
“We can advise them on ways to increase revenue and other modes of recovery, TDS guidelines available and we can help panchayat at various levels. The panchayats minister has agreed to a meeting with us in this connection,” Kakoodkar added.
