SNA-Sparsh Initiative

The SNA-Sparsh initiative, launched in January 2024, aims to streamline the disbursement of funds for centrally sponsored schemes in India. This new system routes funds directly from the Reserve Bank of India (RBI) rather than passing through state treasuries. While the initiative seeks to enhance efficiency and reduce fund idling, it has led to implementation challenges, particularly in Uttar Pradesh.

Overview of SNA-Sparsh

SNA-Sparsh stands for Single Nodal Account Simplified Payment and Reporting System for Health. It was designed to facilitate quicker fund transfers and improve financial management. The goal is to ensure that funds reach implementing agencies without delays, thereby enhancing the effectiveness of various government schemes.

Transition from Old to New System

Under the previous system, funds were allocated to state treasuries, allowing immediate access for departments. The transition to SNA-Sparsh has disrupted this flow. Implementing agencies now face delays of over 15 days for fund transfers post-approval, creating a backlog in essential programs.

Impact on Centrally Sponsored Schemes

The Swachh Bharat Mission (Rural) is one of the most affected schemes. Officials have reported a critical shortage of funds, with only ₹13-14 crore remaining in the state’s Single Nodal Account. This scarcity threatens the continuity of sanitation projects, which are vital for public health.

Challenges in Implementation

The new system’s portal is still under development, contributing to operational difficulties. State officials have expressed concerns about the lack of readiness of the new framework, which has halted fund flow entirely. The absence of a fully functional system has resulted in confusion and inefficiencies in fund management.

Government Response and Future Outlook

State authorities are actively communicating with the central government to expedite fund releases. Regular videoconferences are held to monitor progress and address challenges. Officials remain optimistic that the transitional issues will be resolved, ensuring that funds can flow smoothly in the future.

Questions for UPSC:

1. Critically analyse the impact of the SNA-Sparsh initiative on the efficiency of centrally sponsored schemes in India.
2. Explain the challenges faced during the transition from the traditional fund flow mechanism to the SNA-Sparsh system.
3. What are the implications of delayed fund disbursement on public health initiatives like the Swachh Bharat Mission? Discuss with suitable examples.
4. What is the role of the Reserve Bank of India in the SNA-Sparsh initiative? How does it affect the financial management of state governments?

Answer Hints:

1. Critically analyse the impact of the SNA-Sparsh initiative on the efficiency of centrally sponsored schemes in India.

1. The SNA-Sparsh initiative aims to streamline fund disbursement by routing payments directly from the RBI.
2. This new system is intended to reduce fund idling and enhance financial management for government schemes.
3. However, the transition has resulted in delays, causing operational challenges for implementing agencies.
4. Some schemes, like the Swachh Bharat Mission, are facing acute fund shortages, hindering their effectiveness.
5. Overall, while the initiative has potential benefits, the current implementation issues have negatively affected scheme efficiency.

2. Explain the challenges faced during the transition from the traditional fund flow mechanism to the SNA-Sparsh system.

1. The transition has caused delays of over 15 days for fund transfers post-approval, creating a backlog.
2. The new system’s portal is still under development, leading to operational difficulties and confusion.
3. State treasuries are no longer receiving funds, disrupting the immediate access that departments previously had.
4. There is a lack of readiness in the new framework, affecting the flow of funds entirely.
5. Regular communication and monitoring are ongoing, but transitional issues remain hurdle.

3. What are the implications of delayed fund disbursement on public health initiatives like the Swachh Bharat Mission? Discuss with suitable examples.

1. Delayed fund disbursement directly impacts the implementation of sanitation projects under the Swachh Bharat Mission.
2. With only ₹13-14 crore remaining in the state’s account, critical projects face a funding crunch.
3. This scarcity can lead to interruptions in sanitation services, affecting public health outcomes.
4. For example, ongoing construction of toilets and sanitation facilities may halt, increasing health risks.
5. Timely fund releases are essential to ensure the continuity and effectiveness of public health initiatives.

4. What is the role of the Reserve Bank of India in the SNA-Sparsh initiative? How does it affect the financial management of state governments?

1. The Reserve Bank of India (RBI) is responsible for directly disbursing funds to implementing agencies under the SNA-Sparsh initiative.
2. This change aims to streamline fund flow and improve spending efficiency for centrally sponsored schemes.
3. However, it has also created a vacuum in fund availability during the transition phase.
4. The reliance on RBI for fund disbursement alters the financial management landscape for state governments.
5. State governments now face challenges in accessing funds promptly, impacting their ability to implement various programs effectively.