India is an emerging economic power of the world as it has recently secured the status of fourth largest economy of the world as per IMF projection. However, it has been observed that in some sectors, allocated funds remain either under-utilised or misutilised. What specific measures would you recommend for ensuring accountability in this regard to stop leakages and gaining the status of third largest economy of the world in near future?

Introduction

India's recent achievement of becoming the fourth-largest economy globally, as per the IMF projections, underscores its growing economic stature. However, under-utilisation and misutilisation of allocated funds in key sectors pose significant challenges to achieving the status of the third-largest economy. Addressing these inefficiencies requires robust mechanisms to ensure accountability and prevent leakages in public expenditure.

Value Addition Block — Key Challenges in Fund Utilisation

Measures to Ensure Accountability and Prevent Leakages

1. Strengthening Institutional Mechanisms

• Independent Audits: Conduct real-time audits by agencies like the CAG to track fund utilisation and identify discrepancies.
• Social Audits: Mandate community participation in auditing public projects, ensuring transparency at the grassroots level.
• Performance-Based Budgeting: Link fund allocation to measurable outcomes and penalise underperformance.

2. Leveraging Technology

• Direct Benefit Transfer (DBT): Expand DBT to eliminate intermediaries and ensure funds reach intended beneficiaries.
  • Example: The PM-KISAN scheme has reduced leakages by transferring funds directly to farmers' accounts.
• Geotagging and Digital Monitoring: Use GIS-based tools to monitor infrastructure projects and ensure timely completion.
• Blockchain Technology: Implement blockchain for tamper-proof record-keeping of fund disbursement and utilisation.

3. Capacity Building and Training

• Skill Development for Officials: Train government officials in financial management and project implementation to reduce inefficiencies.
• Public Awareness Campaigns: Educate citizens about their rights to demand accountability under laws like the RTI Act.

4. Strengthening Legal and Regulatory Frameworks

• Whistleblower Protection: Strengthen the Whistleblower Protection Act to encourage reporting of corruption and fund misutilisation.
• Stringent Penalties: Impose strict penalties for misappropriation of funds to deter malpractices.
• Grievance Redressal Mechanisms: Establish dedicated platforms for citizens to report fund misuse.

5. Promoting Transparency

• Open Data Portals: Publish fund allocation and utilisation data on public platforms for scrutiny by citizens and civil society.
  • Example: The Public Financial Management System (PFMS) has improved transparency in fund flow.
• Third-Party Evaluations: Engage independent agencies to evaluate the impact of government schemes.

Way Forward

To achieve the status of the third-largest economy, India must adopt a multi-pronged approach that combines technological innovation, institutional reforms, and citizen engagement. Ensuring accountability in fund utilisation will not only curb leakages but also enhance the efficiency of public expenditure, driving sustainable economic growth.

Conclusion

By addressing the systemic issues of under-utilisation and misutilisation of funds, India can unlock its full economic potential. A focus on transparency, accountability, and efficiency will pave the way for India to achieve its aspiration of becoming the third-largest economy, in alignment with SDG 16 (Peace, Justice, and Strong Institutions) and the vision of a $5 trillion economy.