GoI is projected to save ₹70,000-75,000 cr in the current fiscal year due to significant under-utilisation of budget allocations across key ministries and flagship welfare schemes. These unspent amounts - arising from slow execution under programmes, such as Jal Jeevan Mission, Pradhan Mantri Awas Yojana and Pradhan Mantri Gram Sadak Yojana - provide fiscal space to absorb higher subsidy costs and offset modest tax shortfalls.
This, however, is a recurrent feature of the public finance system. Earlier, central funds flowed via state treasuries or to implementing societies, involving approvals, parked balances and frequent delays. To address this, GoI reformed fund flows through Single Nodal Agency (SNA) framework, integrated with Public Financial Management System (PFMS) and RBI-managed SPARSH platform. Funds are now released on a just-in-time basis, digitally tracked end-to-end, with state treasuries largely confined to accounting oversight. The intent is to minimise idle balances, enhance transparency and enable real-time monitoring. Yet, transitional challenges - technical integration issues across platforms, multi-layered approvals and limited administrative capacity at state and district levels - continue to delay utilisation. Capacity gaps, audit-related risk aversion and coordination failures between Union ministries, states and implementing agencies compress spending windows.
The macroeconomic costs of such delays are substantial. Unspent funds could finance infrastructure, water, housing and rural connectivity - sectors with high multiplier effects. Idle balances represent not fiscal savings but lost opportunities to raise productivity, improve living standards and strengthen long-term growth prospects.
This, however, is a recurrent feature of the public finance system. Earlier, central funds flowed via state treasuries or to implementing societies, involving approvals, parked balances and frequent delays. To address this, GoI reformed fund flows through Single Nodal Agency (SNA) framework, integrated with Public Financial Management System (PFMS) and RBI-managed SPARSH platform. Funds are now released on a just-in-time basis, digitally tracked end-to-end, with state treasuries largely confined to accounting oversight. The intent is to minimise idle balances, enhance transparency and enable real-time monitoring. Yet, transitional challenges - technical integration issues across platforms, multi-layered approvals and limited administrative capacity at state and district levels - continue to delay utilisation. Capacity gaps, audit-related risk aversion and coordination failures between Union ministries, states and implementing agencies compress spending windows.
The macroeconomic costs of such delays are substantial. Unspent funds could finance infrastructure, water, housing and rural connectivity - sectors with high multiplier effects. Idle balances represent not fiscal savings but lost opportunities to raise productivity, improve living standards and strengthen long-term growth prospects.
