Best Practices in Financial Management: Accrual Accounting for Defence
Changes in public financial management across the globe have necessitated India to revisit its traditional methods of managing and depicting its public finances. One of the major changes envisaged is a quest to migrate gradually to accrual accounting from the traditional cash-based accounting. Successive Finance Commissions in India have been supportive of the idea, though it is recognized that the advantages would become more evident only in the long run. It would be beneficial to adopt an incremental approach in migrating to accrual accounting, which would enable the policymakers to adopt the best practices of various other countries which are ahead of India in this regard as well as to avoid the problems that would be encountered in achieving this complex transformation. Financial reporting in India would then be synchronized with this modernistic change in the government sector across the world, which is marked by a conscious emphasis on transition from cash-based to standard-based accrual accounting in public finance.
The government invests enormous resources in defence which predicates the need to keep pace with such financial reforms. This is a highly challenging task, given the nature and complexity of this core area of the government. This monograph attempts to explore the way forward despite constraints and the constant need to reprioritize allocating resources to match needs.
About the Author
Sumati Kumar is an officer of the Indian Defence Accounts Service, 1994 batch. She is currently posted as Senior Fellow in the Centre for Defence Economics and Industry at IDSA, New Delhi. She is a post graduate in Political Science and International Relations from Sreemati Nathibai Damodar Thackersey Womens’ University, Mumbai. She earned an M. Phil in Defence and Strategic Studies with distinction from the prestigious National Defence College, New Delhi. She has served in various capacities in the government, both on the finance and on the executive side. She has earlier been posted as Director Cabinet Secretariat, Registrar Ambedkar University, Delhi and Integrated Financial Advisor to Directors General of key defence organizations.
