Q. 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?
UPSC Mains 2025 GS4 Paper
Model Answer:
India’s rise towards becoming the third-largest global economy is hindered by public fund misutilization and under-utilization, reflecting a severe ethical and administrative deficit in governance.
1. Core Reasons for Fund Mismanagement
- Administrative Apathy: Poor local capacity and flawed top-down planning lead to unspent allocations.
- Ethical Deficit: Vested interests, nepotism, and rent-seeking cause massive leakages (violating Nolan Principles).
- Procedural Red-Tapism: Rigid bureaucratic bottlenecks and complex compliance delay timely disbursements.
2. Specific Measures to Ensure Accountability
- Technological Integration: Mandate 100% real-time financial tracking via the Public Financial Management System (PFMS) and expand the JAM Trinity (eliminating ghost beneficiaries).
- Statutory Social Audits: Institutionalize mandatory community oversight across all sectors, modeled on Meghalaya’s Social Audit Act.
- Proactive Transparency: Strictly enforce Section 4 of the RTI Act for mandatory digital disclosure of project funds, timelines, and contractor details.
- Outcome-Based Budgeting: Shift from mere outlays to tangible outcome metrics, penalizing bureaucratic inertia for under-utilized capital.
- Ethical Vigilance: Institutionalize robust Whistleblower protection frameworks and train officials specifically in financial probity and integrity.
Upholding strict financial integrity ensures that public wealth serves its intended equitable purpose, accelerating India’s sustainable transition into a top-tier global economic power.
