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?
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- 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.
- Factors Causing Underutilization:
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- 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
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- Government policies and interventions for development
- Issues relating to planning and implementation of schemes
- Role of cooperative institutions in governance
- GS Paper 3 – Economy:
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- Mobilization of resources, budgetary allocations and their efficient use
- Inclusive growth and cooperative development
- Essay & Ethics (GS4):
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- Public resource management, accountability, and efficient delivery of welfare schemes
