Utilization of Public Funds

Utilization of Public Funds

This article deals with topic titled ‘Utilization of Public Funds .’ This is part of our series on ‘Ethics’  . For more articles , you can click here


  • Finances are vital for the functioning of the state and for meeting the development goals.
  • Hence, It is essential that public funds are utilized in a way that is fair and impartial .


Problems in Fund Release & Utilization

CAG reports and other studies have revealed many problems. They are outlined briefly below.

  • Ministries release funds mechanically without considering the capacity of State Governments to absorb and utilize those funds
  • Internal audit functions within  departments are  inadequate .
  • State Governments more interested in getting funds from the Central ministries rather than on ensuring the quality of expenditure
  • Central Ministries are also more concerned with expenditure rather than the attainment of the objectives. Large parts of funds are generally released in the last month of the financial year, which could not be expected to be spent by the respective State Governments during that financial year.
  • Veracity and propriety of expenditure data cant be assured and generally expenditure figures given by IAS do not tally with the figure’s reported by the District level agencies. On the whole, expenditure information is unreliable.


How problem of misuse of Public Funds can be corrected

There are various ways to do this

1 . Citizen Participation

How ?

  • Social Audit : Using Social Audit , public fund utilization can be improved. Eg : Seen in the case of Mazdoor Kisan Shakti Sangathan (MKSS) in Rajasthan.


2. Audit

  • Expenditures from all public funds have to be properly accounted for and have to pass through the audit of the Comptroller and Auditor General (CAG).
  • Major irregularities which emerge are also examined by parliamentary committees.

3. Strengthening Parliament oversight over utilization of Funds

Self explanatory

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