Q. Consider the following statement regarding Financial Management Index:
1. It is published by Ministry of Panchayati Raj
2. Social Audit is one of the key parameter to judge the efficiency of state performance
Which of the above statements is/are correct?

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 and 2

Answer: B

Statement 1 is incorrect- It is released by Ministry of Rural Development 

About Financial management Index: 

  • Aim: To rank states on efficient management of financial resources allocated for implementing rural development programmes. 
  • Parameters: The index will rank the States on the basis of following parameters: 
  • Preparation of annual plan and projecting the requirement of funds for the financial year; 
  • Expeditious release of State’s share; 
  • Timely utilization of the funds and submission of the Utilization Certificates; 
  • Optimum implementation of Public Financial Management System (PFMS) & Direct Benefit Transfer (DBT); 
  • Internal Audit and 
  • Social Audit. 
  • Significance: The performance of the States in the Index would promote the spirit of competitive, cooperative federalism amongst States. 

Source: Article