The finance ministry aiming at bringing transparency in fiscal matters and budgeting has forbidden ministries and departments to issue a ‘Letter of Comfort’ to any entity.
Earlier in 2017, the finance ministry had permitted ministries and departments to issue a ‘Letter of Comfort’. The letter was issued to give an assurance to the entity mentioning that the underlying obligation would be met.
The decision was taken as there was a central record available of such a letter of comfort, leading to indiscriminate use of instruments and serious devolution of liability on the government in some cases. Moreover, the letter does not have authorized sanctity, a division or ministry not honoring a letter of consolation wouldn’t replicate properly with the federal government.
The finance ministry will evaluate such letters issued by varied ministries and departments to assess the scenario.
