The finance ministry has decided to outsource most of its project appraisal work so that funds which come in the form of aid can be utilised faster.
In the current fiscal, the total committed aid was Rs 190,124 crore till December 2002.
However, government and non-government agencies utilised just Rs 10,263.31 crore (Rs 102.63 billion) -- less than 20 per cent of the funds. The comparative figure for the same period in the last fiscal stood at Rs 17,073. 36 crore (Rs 170.73 billion).
The ministry will try to reduce the time needed for clearing large projects which are funded by multilateral institutions.
This initiative is part of a series of measures being taken to revamp the entire process of channelling the aid flowing into the country. It includes stepping up the role of the project management unit within the finance ministry.
The finance ministry plans to ask one or more independent agencies to work out an aid utilisation calendar.
Aid users will be expected to stick to the schedule laid down in the calendar for completion of projects. The agencies will also decide the resources needed for the purpose. This will help the government track the progress of any project and enforce deadlines.
The government can also ask donor agencies to release the next tranche of aid only when it is required. This will also make it easier for the government to evaluate the quantum of aid necessary to get a project off the ground.
The finance ministry has an aid accounts and audit division which looks into the processing of claims and actual withdrawals of funds from donors. However, its functioning is far from adequate.
Similarly, the PMU lacks the resources to manage the entire monitoring work. The monitoring of externally-aided projects also suffers because of the large number of agencies involved.
Besides holding up projects, the delay in utilising committed aid also increases the Centre's interest burden.
Aid appraisal
- Independent agencies to work out an aid utilisation calendar.
- These agencies will also decide the resources needed for the project.
- Aid users will be expected to stick to the schedule laid down in the calendar for completion of projects.
© 2025