Context: The Rural development ministry will soon rank states on efficient management of financial resources allocated for implementing half a dozen rural development schemes.
Key Points

• During the event of “Strengthening of the Risk-Based Internal Audit of Rural Development Programmes" Union Minister of Rural Development & Panchayati Raj, Agriculture & Farmers’ Welfare said that the Financial Management Index for Rural Development Programmes was needed and also launched soon.
• It seeks to rank states on efficient management of financial resources allocated for implementing half a dozen rural development schemes.
• The department has developed a financial management index that will map the performance of states and rank them on the basis of five parameters. 

These include

• preparation of annual plan; 
• expeditious release of due state share;
• timely utilization of the funds and submission of the utilization certificates; 
• optimum implementation of public financial management system (PFMS); 
• optimum implementation of DBT module for the rural employment guarantee scheme, internal audit and the social audit.

Significance

• It is imperative to lay down minimum essential norms of financial management and accountability for ensuring optimal utilization of funds by the state implementing agencies in the wake of ever increasing time bound targets and consequential higher allocation of funds under rural development (RD) programmes, to help them achieve the desired objectives.
• “The Financial Management Index – Rural Development has been designed to capture the performance of the states on the four important pillars of financial management.