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Staff Shortage, Poor Planning & Delayed Flow of Funds -- Biggest Hurdles in Utilization of Funds in Developmental Schemes

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By Pervez Bari

New Delhi: Shortage of staff in managerial, accounts and service delivery positions, poorly drawn up scheme-specific plans, delayed preparation and submission of those plans and the consequent delay in approval and release of funds from the Centre are the biggest hurdles in utilization of funds in developmental schemes in the country -- finds a study carried out by People’s Budget Initiative, (PBI).

PBI, a coalition of civil society organizations from across the country that engage consistently with government budgets, carried out the study for tracking the flow of funds and utilization in 14 districts, spread across 11 states for six important schemes (SSA, NRHM, National Rural Drinking Water Programme, (NRDWP); Nirmal Bharat Abhiyan, (NBA); Rashtriya Krishi Vikas Yojana, (RKVY); and MGNREGS). These studies on SSA (in four districts across Gujarat, Odisha and Jharkhand), NRHM (in one district in Chhattisgarh), NBA (in two districts in Assam and Andhra Pradesh), NRDWP (in two districts in Andhra Pradesh and Maharashtra), RKVY (in three districts across Madhya Pradesh, Rajasthan and Uttar Pradesh) and MGNREGS (in one district in Tamil Nadu) have been carried out by civil society organizations in the respective states, which are members of the PBI coalition. The study was coordinated by the Delhi-based Centre for Budget and Governance Accountability, (CBGA).

The Report of this study, titled "What Ails Utilization of Funds in Development Schemes?” was released on Thursday in the two-day National Convention on “People’s Expectations on Budgetary Priorities from the Next Union Government” being organized by PBI in New Delhi. The extent of utilization of available funds and the quality of utilization does vary across the six schemes, with MGNREGS in Tamil Nadu presenting a relatively better picture on utilization of funds, followed by RKVY (in Rajasthan, Madhya Pradesh and UP) and the NRDWP (in Andhra and Maharashtra) showing the highest levels of under utilization of funds as well as problems in terms of violation of guidelines. The study on NBA in Assam also captured clear evidence of misappropriation of funds in the scheme, while the study on SSA in Sundargarh district in Odisha implies similar problems of corruption.

In fact in almost all the studies across the 14 districts, accessing financial information at the district and sub district level was very difficult. It revealed that the level of budget transparency in India at the district and sub district level is still quite low.

The factors affecting the extent and quality of fund utilization in different schemes do differ to some extent. However, there are some common factors that seem to have constrained the implementation most of the schemes if not all. For instance, lack of need based budgeting in the schemes, which are also carried out without any analysis of unit costs on the ground, has led to the problem of schemes being provided funds to implement plans that are completely top-down and partly unrealistic.

“Acute shortage of trained/skilled staff in various kinds of positions has been a major hurdle in effective utilization of funds, particularly in NRHM, NRDWP, NBA and also in SSA and RKVY” said Subrat Das, Executive Director of CBGA.

“The process of planning in the schemes is being carried out in a superficial manner and in practice it is just for filling up formats for quantities of pre decided components”, said Nilachala Acharya of CBGA who coordinated the study.

[Pervez Bari is a senior Journalist based at Bhopal, Madhya Pradesh. He is associated with IndianMuslimObserver.com as Bureau Chief (Madhya Pradesh). He can be contacted at pervezbari@eth.net]
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