Model Answer
0 min readIntroduction
India's journey as an economic powerhouse is marked by significant strides, recently achieving the status of the fourth-largest economy globally (IMF, 2025 data), with projections indicating strong growth at 6.6% for 2025-26. This impressive growth trajectory, however, faces impediments from persistent challenges such as under-utilisation and misutilisation of allocated public funds across various sectors. Such leakages not only undermine effective governance and public trust but also hinder the nation's progress towards its ambitious goal of becoming the third-largest economy. Addressing these issues through robust accountability mechanisms is paramount for sustainable and inclusive development.
Ensuring accountability in public fund management is crucial to stop leakages and propel India towards becoming the third-largest economy. This requires a multi-faceted approach encompassing governance reforms, technological leveraging, and institutional strengthening.
1. Enhancing Transparency and Digital Governance
- Public Financial Management System (PFMS): Strengthening the PFMS (launched 2009) to ensure real-time tracking of funds from allocation to expenditure at all levels. Its integration with Direct Benefit Transfer (DBT) has significantly reduced leakages by enabling direct payments to beneficiaries.
- Open Data and Dashboards: Implementing mandatory public dashboards for all major schemes, displaying budget allocations, expenditures, and outcomes in real-time. This promotes citizen oversight and demands accountability.
- Geospatial Technology: Utilizing GIS for monitoring project implementation, especially in infrastructure and rural development schemes, to ensure physical verification of works against funds released.
2. Strengthening Audit and Oversight Mechanisms
- Empowering the Comptroller and Auditor General (CAG): Reinforcing the independence and capacity of the CAG (Article 148 of the Constitution) to conduct performance and forensic audits. Timely submission and action on CAG reports are essential.
- Role of Parliamentary Committees: Strengthening the Public Accounts Committee (PAC) and other legislative committees to rigorously scrutinize audit reports and hold the executive accountable for financial irregularities.
- Internal Audit Systems: Mandating and professionalizing internal audit units within ministries and departments to conduct regular checks and identify potential leakages proactively.
3. Institutional and Administrative Reforms
- Capacity Building: Investing in training and capacity building for government officials at all levels in financial management, project implementation, and ethical governance.
- Streamlined Fund Flow: Simplifying and rationalizing complex fund flow mechanisms, especially in centrally sponsored schemes, to reduce delays and bureaucratic hurdles (e.g., through Single Nodal Agency system).
- Performance-Based Budgeting: Shifting towards outcome-based budgeting where fund releases are linked to tangible progress and achievement of predefined targets, rather than mere expenditure.
- Whistleblower Protection: Implementing robust mechanisms to protect whistleblowers who report corruption and fund misuse, encouraging greater transparency from within.
4. Ethical Governance and Public Participation
- Code of Conduct and Ethics: Strict enforcement of a code of conduct for public servants, promoting integrity and accountability. Regular ethics training and strong punitive measures against corruption.
- Social Audits: Encouraging and facilitating social audits, particularly in rural development and welfare schemes, allowing community members to scrutinize expenditures and implementation.
- Citizen Charters: Mandating citizen charters for government services, clearly outlining service standards, timelines, and grievance redressal mechanisms.
5. Legal and Regulatory Framework
- Anti-Corruption Laws: Strengthening existing anti-corruption laws like the Prevention of Corruption Act, 1988, and ensuring speedy trials and convictions.
- National Financial Reporting Authority (NFRA): Empowering NFRA (established 2018) to monitor and enforce compliance with accounting and auditing standards for public entities beyond just companies.
Conclusion
The aspiration to become the world's third-largest economy demands not just robust economic policies but also impeccable financial governance. Addressing the challenges of fund under-utilization and misutilisation through enhanced accountability, digital transparency, and institutional reforms is critical. By fostering an environment of integrity, efficiency, and public trust, India can significantly reduce leakages, optimize resource allocation, and accelerate its growth trajectory towards achieving its economic potential and ensuring inclusive development for all its citizens.
Answer Length
This is a comprehensive model answer for learning purposes and may exceed the word limit. In the exam, always adhere to the prescribed word count.