Model Question and Answers for APSC | Effective utilisation of public funds is crucial to meet development goals. Critically examine the reasons for under- utilisation and mis-utilisation of public funds and their implications.

Ans: Effective utilization of public funds is essential for any country's development. However, the efficient allocation and utilization of public funds have been a persistent challenge in India. The reasons for under-utilization and mis-utilization of public funds are as follows:

• Bureaucratic inefficiencies: The bureaucratic system in India is often slow and inefficient, which leads to delays in the allocation and utilization of public funds. As a result, projects get delayed, and the funds allocated for them remain unutilized, leading to under-utilization.

• Corruption: Corruption is a significant challenge in India, and it has a severe impact on the efficient utilization of public funds. Funds that are meant for developmental projects often get siphoned off by corrupt officials, resulting in mis-utilization of funds.

• Lack of accountability: Lack of accountability in the government system is another reason for the under-utilization and mis-utilization of public funds. There is no proper monitoring and evaluation mechanism in place to ensure that the funds allocated for a project are being used effectively.

• Inadequate planning: Inadequate planning and poor project design are also responsible for the under-utilization of public funds. The lack of proper planning often results in projects that are not viable or feasible, leading to a waste of public funds.

The implications of under-utilization and mis-utilization of public funds are severe. It results in a delay in the completion of projects, which leads to cost overruns. This, in turn, reduces the government's ability to fund new projects, leading to a slowdown in the country's development. Additionally, mis-utilization of public funds results in a loss of public trust in the government, leading to a breakdown of the social contract between citizens and the government.

In conclusion, the effective utilization of public funds is crucial to meet India's development goals. The government needs to address the challenges of bureaucratic inefficiencies, corruption, lack of accountability, and inadequate planning to ensure the efficient allocation and utilization of public funds. This will require the implementation of effective monitoring and evaluation mechanisms, along with a robust anti-corruption framework, to ensure that public funds are used effectively and efficiently.