In this article in Financial Express, Kadambari Shah, Senior Associate, and Vibhav Mariwala, Senior Analyst at IDFC Institute, discuss the significance of state capacity in ensuring the Union budget’s allocations are effectively used to achieve its development goals and ensure economic growth. Excerpts below:
“During 2020 Budget, it was reported that the Centre did not spend 34.9% of the assigned funds in the preceding FY; the average magnitude of unspent funds is usually greater at the state and local levels. Also, government allocations are often not aligned with actual spending, i.e. there is disconnect between fiscal allotments and development outcomes associated with that budgetary outlay.”
“The Indian state is big in some aspects, but small in others. For instance, it employs more people than the population of Singapore and Belgium combined. But this is still only 2% of India’s population—and almost every department across levels of government has vacant positions that urgently need to be filled. From 1991 to 2011, India added over a billion people to its citizenry, but civil services employment during this period decreased. There is already a shortage of bureaucrats; due to vacant positions compounded with civil servants’ short tenures, long-term progress gets hindered. For instance, an IAS officer spends an average of 16 months in a single posting. When this phenomenon is coupled with multiple duties on multiple portfolios, spending budget outlays is not an easy task.”
Read the full article here.
