SNA SPARSH: Transforming Fund Management for Government Schemes

Understanding SNA SPARSH: A New Era in Fund Management

The Government of India has recently launched a transformative mechanism called SNA SPARSH (Samayochit Pranaalee Sheeghr Hastaantaran-Real time System of Integrated Quick Transfers). This initiative aims to improve the management and flow of funds for Centrally Sponsored Schemes (CSS). By utilizing advanced financial management systems, SNA SPARSH ensures a seamless and efficient operation of financial transfers.

How SNA SPARSH Functions

SNA SPARSH has a clear objective and methodology:

• Objective: It aims to provide “just-in-time” fund flows directly from the Centre and State Consolidated Funds to targeted programs and projects.
• Method: By enhancing cash management for CSS, SNA SPARSH replaces outdated, slower methods with a quicker and more responsive financial administration.
• Integration: The mechanism employs an integrated approach that combines the Public Financial Management System (PFMS), State Integrated Financial Management Systems (IFMIS), and the e-Kuber platform of the Reserve Bank of India (RBI).

Components of SNA SPARSH

Here’s a deeper look at the integrated systems involved:

1. Public Financial Management System (PFMS):
   • Function: Tracks and disburses funds directly to implementers, beneficiaries, and vendors, while integrating with central and state treasury systems for real-time monitoring.
   • Example: In government scholarship programs, PFMS ensures timely and transparent disbursement of scholarships directly to students' bank accounts.
2. State Integrated Financial Management Systems (IFMIS):
   • Function: Manages all financial activities within a state, covering budgeting, expenditure management, and revenue collection to enhance governance.
   • Example: For state healthcare services, IFMIS effectively manages hospital budgets and expenditures for medical supplies.
3. e-Kuber Platform of the Reserve Bank of India (RBI):
   • Function: Acts as the core banking solution for RBI, facilitating transactions with government and private sector banks, vital for managing government funds.
   • Example: Enables quick settlement of high-value transactions, such as contractor payments for infrastructure projects.

Benefits of SNA SPARSH

SNA SPARSH offers numerous advantages:

• Cost Efficiency: It minimizes borrowing costs by ensuring that funds are only available as needed, reducing idle fund parking.
• Enhanced Monitoring: The system prevents the accumulation of unused funds and increases transparency in tracking fund releases and their utilization.
• Stakeholder Engagement: Stakeholders can better monitor the release and usage of central funds, fostering accountability and improved governance.

Frequently Asked Questions (FAQs)

Q1. What is the primary purpose of SNA SPARSH?
Answer: The primary purpose is to optimize cash flow management for CSS by ensuring funds are available just in time, minimizing borrowing costs, and maximizing fund efficiency.

Q2. How does SNA SPARSH improve fund management?
Answer: By integrating PFMS, State IFMIS, and e-Kuber, SNA SPARSH enables real-time fund transfers, enhancing the efficiency, speed, and transparency of financial operations for government schemes.

Q3. Can you provide an example of how SNA SPARSH prevents idle parking of funds?
Answer: SNA SPARSH ensures that funds are transferred only when necessary, thus reducing the amount of money sitting unused in accounts, which could otherwise accrue unnecessary costs or lead to mismanagement.

Q4. What are the key components of SNA SPARSH?
Answer: The key components include the Public Financial Management System (PFMS), State Integrated Financial Management Systems (IFMIS), and the e-Kuber platform of the Reserve Bank of India, all working together to enhance fund management.

Q5. How does SNA SPARSH contribute to transparency in fund distribution?
Answer: By providing real-time monitoring and tracking of fund releases, SNA SPARSH enhances transparency, allowing stakeholders to see how funds are utilized and ensuring better accountability in governance.