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  1. #1
    Join Date
    Sep 2010

    The persistent problem of unspent funds is a symptom of a deeper malaise

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    Last week, a PTI report that only 7% of the Rs 9,860 crore allocated to 60 cities under the Smart Cities mission had been spent, made headlines. This news comes close on the heels of a Comptroller and Auditor General (CAG) report on the Clean Ganga Mission that pointed to an unspent balance of approximately Rs 2,500 crore in 2017.

    And while politicians have been quick to draw attention to this underspending, the truth is, this failure to spend is not unique to the Modi government. The predecessor to the Smart Cities Mission, the Jawaharlal Nehru Urban Renewal Mission, suffered from the same malaise.

    This persistent failure to spend is a direct consequence of India’s broken governance structures, but there’s a paradox. The Indian State is grossly under-resourced particularly in critical areas like health, education, nutrition. Yet, it is precisely in these areas that underspending is high.

    Consider this. India spends 1.4% of GDP on health and 3.7% of GDP on education -- far lower than other developing countries. Yet, a CAG report found an unspent balance of Rs 9,509 crore for the flagship National Health Mission in 2015-16. And it’s not just health.

    Unspent balances from a wide array of social sector schemes, amounting to approximately Rs 1 lakh crore according to one estimate, are languishing in banks across the country.
    The persistent problem of unspent balances is a symptom of the deep crisis of capability that governance in India faces. Resolving this crisis requires serious and far-reaching investments in administrative reforms. This is what the political debate in light of the smart cities controversy ought to be focusing on.

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