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

Utilisation of public funds in a correct manner is a necessary imperative for growth and development. Public fund involves the financial resources of the public held by the state and divided under the revenue and expenditure heads. The sectoral allocations as well the efficiency and economy of utilising public funds has an impact on how well schemes for public welfare function and deliver. 

Reasons for Under-utilisation, Mis-utilisation.

1. Improper planning and budgeting

2. Corruption in utilisation of public funds

3. Utilisation for bailouts of businesses

4. Running loss making PSUs using public money

5. Misplaced government priorities, for example loan waivers for farmers in place of agricultural investments which have better impact on productivity and agricultural income.

Impact of the same:

1. Compromises legal obligations of fair and efficient utilisation.

2. Undermines the principle of accountability with reference to utilisation of funds

3. Undermines openness and transparency, which needs high standards of reporting of correct utilisation of resources

4. The value for money is undermined, utilisation of public fund should have been effective and efficient, without waste and in a way that optimises the public benefit

5. It also compromises sustainability of funds since mis-utilisation can lead to compromising future channels of finance, for example the subsidy burden of food, fuel and fertiliser.

It is therefore a developmental imperative that utilisation of public funds are done with integrity, fairness, openness, transparency, lawfulness, accountability and sustainability.