Procedural delays hit Central schemes’ fund use at district level

Tracking the flow of funds of centrally-sponsored schemes up to the grassroots level reveals difficulties in utilisation of allocated budgets, according to a study by Tata Trusts and Centre for Budget and Governance Accountability (CBGA) that covered the period from November 2017 to December 2019.

Fund utilisation was analysed in Balasore and Bolangir districts of Odisha; Chandrapur (Maharashtra); East Singhbhum (Jharkhand); and Krishna (Andhra Pradesh). The 10 schemes covered included the Integrated Child Development Scheme (ICDS), Sarva Shiksha Abhiyan (SSA), Mahatma Gandhi National Rural Employment Gaurantee Scheme (MGNREGS), National Social Assistance Programme (NSAP), National Rural Drinking Water Programme (NRDWP), Swachh Bharat Mission – Gramin (SBM-G), Pradhan Mantri Awas Yojana (PMAY), Pradhan Mantri Fasal Bima Yojana (PMFBY), National Health Mission (NHM) and the Mid-Day Meal (MDM) scheme.

District level data

The analysis found that the budget for Take Home Ration component within the ICDS came only during the fourth quarter of 2018-19 in East Singhbhum, depriving infants of nutrition for almost the whole year. Even among older children going to school, the nutrition provision was affected.

“In 2018-19, the Mid-Day Meal scheme has taken a beating in all districts except East Singhbhum where utilisation was 91 per cent. On the other hand, in Krishna, Chandrapur, Bolangir and Balasore it hovered between 50 per cent and 72 per cent,” the report said.

In Chandrapur, the first instalment of the PMAY came only by the end of first quarter 2018-19, which is the beginning of monsoon season as a result of which beneficiaries could not start building houses. The beneficiaries were unable to complete the first stage of construction in the prescribed time and hence became ineligible for the second instalment.

In the case of Sarva Shiksha Abhiyan (SSA) implementation, delay in finalising the budget led to Balasore receiving funds only in September 2019, which pushed the procurement of school uniforms to the third quarter of 2019-20.

The report says that under-utilisation of funds cannot be generalised across districts. More than 85 per cent of the available funds for SBM-G and NRDWP were utilised in three districts.

Even in the districts that did well, more than 33 per cent of the spending has been in the last quarter. According to the guidelines set in the Budget Circular (2018-19) by the Department of Economic Affairs, more than 33 per cent of the total budget cannot be spent in the last quarter of the financial year.

Sometimes States did not release their matching share on time, and as a result districts had to postpone financial decisions as the Centre’s contribution alone was insufficient to take up the planned activities. “Also, district authorities reported that they receive funds in 12-13 instalments and the first was credited into the bank account of the Drawing and Disbursing Officer only by the end of the first quarter of 2018-19. Thus, the districts were unable to spend during first quarter of the financial year,” the report states.

High levels of utilisation are seen in components for which expenditure is relatively easy, for example the salary component, which is recurring and the unit cost is fixed. “But components like civil works, procuring medicines, equipment under NHM, supply of goods and services under MDM require a certain process of tendering. Construction cannot be undertaken in all seasons, so budget allocated to build schools and toilets cannot be uniformly spent,” states the study.

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