Management of Government Grants

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Management of Government Funds

Background

The Government allocate and release funds for running various schemes for welfare of poor, for development of society, during calamities in disasters such as flood relief, earthquake, drought development in the states having turmoil due to problem of terrorism. However rarely it has happened that the money being pumped in has gone to right hand and used for the right purpose due to weak governance, corruption and nexus between political-Govt officials-implementers. As per assessment of the CAG and other governing bodies, the implementation of these schemes has many loopholes where the executives and operatives take the benefit and these schemes or the development programmes have not yielded optimum results because significant portion of the funds are siphoned off.

There is need to find the management solution to this problem with a view to ensure effective management of funds released for any such scheme or programme are utilised effectively.

Proposal

To have an operational model for effective management of funds allocated and released for any welfare scheme or development programme.

Detailed Analysis of Problem

The Governments allocate and release funds for running various schemes for welfare of poor, for development of society, during calamities in disasters such as flood relief, earthquake, drought, development in the states having turmoil due to problem of terrorism. Even the International agencies or the developed nations release funds as aid or loan to various Nations, States or NGOs for the purposes similar in nature.

However rarely it has happened that the money being pumped in has gone to right hand and used for the right purpose due to weak governance, corruption and nexus between political-Govt officials-implementers. As per assessment of the CAG and other governing bodies, the implementation of these schemes has many loopholes where the executives and operatives take the benefit and these schemes or the development programmes have not yielded optimum results because significant portion of the funds are siphoned off.

Even due to bureaucratic processes or lack of initiative or lack of accountability lead to poor utilisation or even no utilisation of these funds leading to surrender.

There is a need to analyse the problem and find a management solution so that this funds are utilised effectively for the right purpose. The solution should be managerial and applicable at all levels. To analyse the diversion of These aids are being diversed for various reasons to different agencies as being discussed.

Corrupt Practices
In 2009, a government investigation into the working of the National Rural Employment Guarantee Scheme with an annual budget of Rs 40,000 crore has revealed the siphoning off of a whopping 40% of the allocation and woefully inadequate implementation of the scheme in districts where it is needed most. In a recent report by US , it was brought out that more than $ 125 billion worth of funds meant for the uplift of Indians were illegally siphoned out of India by corrupt politicians and corporates between 2000 and 2008, hindering inclusive growth. An upcoming report from Global Financial Integrity (GFI) stated that "Much of the funds flowing out are generated at home within India and then sent illegally abroad.”

The research arm of the Centre for International Policy (CIP) also stated that " the growth of corruption and India's underground economy contributes significantly to illicit financial flows from the country. Corruption is rampant in India as it is in almost all developing countries. Both corrupt political and corporate officers manage to siphon off funds - intended to aid the people of India - off to political and private sector elite." "Recent efforts in India to challenge this corrupt affront on humanity have been met with severe violence," junior GFI economist Karly Curcio said in a blog on the...
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