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Question

Effective utilization of public funds is crucial to meet development goals. Critically examine the reasons for under-utilization and mis-utilization of public funds and their implications.

This question was previously asked in
UPSC CSE 2019 (Prelims) CSAT Previous Year Paper (02-Jun-2019)

Effective utilization of public funds is indeed the bedrock of achieving national development goals. However, both under-utilization and mis-utilization plague public spending, hindering progress. Reasons for under-utilization often stem from bureaucratic inertia, poor planning, rigid financial rules, or a lack of capacity to implement projects on time. Funds allocated for infrastructure, for example, might remain unspent due to delays in land acquisition or environmental clearances. Mis-utilization, conversely, includes corruption, diversion of funds, inefficient allocation, or spending on non-priority areas. Ghost projects, inflated costs, or funds siphoned off through illicit means are classic examples. The implications are severe: stalled development, erosion of public trust, increased debt burden without corresponding benefits, and a widening gap between policy intent and ground reality. Ultimately, it’s the common citizen who suffers due to lack of essential services and opportunities.

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