Effective utilization of public finds is crucial to meet development goals

The Importance of Efficient use of Public Resources Effective utilization of public resources is critical to meeting development goals. Key programs in education and health are overwhelmingly conducted within the public sector. And although private provision of infrastructure has expanded in areas like telecommunications and energy, private investors remain wary of socially-oriented sectors, such as water and sanitation, and also show little willingness to invest in the poorest countries. At present, though, research indicates that increases in public spending are only weakly correlated with the achievement of development outcomes in most developing countries. Government ineffectiveness — in the form of waste, inefficiency and corruption — is largely responsible. 

Reasons for under-utilization and mis-utilizations of funds: 

• Corruption: The large sum of money earmarked from public activities are taken away by officials as well as politicians in form of bribes. This results in funds not being able to contribute towards development. Ex: Money allocated for construction of houses for poor is siphoned off by corrupt officials. 

• Political rivalry: Sometimes political class indulges in act of vendetta where they do not cooperate in allocation or release of funds to their opposition. They hope to reap the anger against their opponents for political gains. Ex: Government in power not allocating developmental funds to opposition MLAs. 

• Diversion: The funds allocated to one activity is diverted to another in order to meet strict control over finances. Ex: Funds allocated to road repair is diverted to giving freebies. 

• Red Tapism: Colonial bureaucratic attitude sometimes acts as hindrance in carrying out developmental activities. They complicate the process due to which funds are not properly utilized. Implications 

• Public apathy: The public is made to suffer due to under/mis-utilization of funds. The rightful funds do not result in any welfare for society.  

• Rise of extremism: The problems of Naxalism, Maoism are a product of such apathy shown by the authorities. The funds even though allocated by government, do not reach people. 

• Instability: This cycle of vendetta politics result in stalling of political progress in the society. The political blame game results in only in-stable conditions and does not prove fruitful for the society. 

Thus, it is necessary to ensure that the allocated funds reach the public appropriately so that hard-earned tax payers money is put towards a better cause.