Underutilization Of Funds

Context: The Standing Committee on Cooperation flagged significant underutilization of funds by the Ministry of Cooperation during FY 2023–24 and 2024–25.

About Underutilization of Funds:

• What is Underutilization?

• Underutilization refers to spending less than the allocated budget, indicating delays or inefficiencies in scheme execution or fund release.

• Key Data Points: 2023–24: Budget Estimate (BE) was ₹1,150 crore, revised to ₹747 crore (RE), but only ₹689 crore was spent, leaving ₹59 crore (7.7%) unused. 2024–25: Budget Estimate was ₹1,183 crore, revised to ₹750 crore, with ₹573 crore (76%) spent by Feb 2025. The ministry expects to utilize the remaining 24% by year-end.

• 2023–24: Budget Estimate (BE) was ₹1,150 crore, revised to ₹747 crore (RE), but only ₹689 crore was spent, leaving ₹59 crore (7.7%) unused.

• 2024–25: Budget Estimate was ₹1,183 crore, revised to ₹750 crore, with ₹573 crore (76%) spent by Feb 2025. The ministry expects to utilize the remaining 24% by year-end.

• Factors Causing Underutilization:

• Delays in state proposals and approvals. Non-readiness of state machinery. Technical issues like unmapped Single Nodal Agency (SNA) accounts. Transition challenges with new accounting systems.

• Delays in state proposals and approvals.

• Non-readiness of state machinery.

• Technical issues like unmapped Single Nodal Agency (SNA) accounts.

• Transition challenges with new accounting systems.

Relevance in UPSC Exam Syllabus:

• GS Paper 2 – Governance

• Government policies and interventions for development Issues relating to planning and implementation of schemes Role of cooperative institutions in governance

• Government policies and interventions for development

• Issues relating to planning and implementation of schemes

• Role of cooperative institutions in governance

• GS Paper 3 – Economy:

• Mobilization of resources, budgetary allocations and their efficient use Inclusive growth and cooperative development

• Mobilization of resources, budgetary allocations and their efficient use

• Inclusive growth and cooperative development

• Essay & Ethics (GS4):

• Public resource management, accountability, and efficient delivery of welfare schemes