According to a report by the Comptroller and Auditor General (CAG), as of March 31, 2009, India is sitting on an unutilised foreign assistance of a whopping Rs 78,037 crore. This has been mounting from Rs 56,920 crore in 2001 to Rs 75,935 crore in March 2007. Even as the country's external assistance has grown, usage has declined from 78.65 per cent in 2000-01 to 61 per cent in 2006-07.
Worse, as India negotiates more loans, an internal assessment of the Finance Ministry reveals that the government has been paying commitment charges of several hundred crores of rupees every year. Between 2004-05 and 2008-09, the government paid close to Rs 700 crore for the non-disbursed portion of sanctioned loans to the World Bank, the Asian Development Bank (ADB) and some bilateral donors.
An estimate of such expenditure since 1991 puts the figure upwards of Rs 1,400 crore. Efficient use of these monies will obviously help push the vision of inclusive growth by putting the economy on a sustainable growth trajectory, creating faster and more productive employment and reducing poverty.
The question is, since India cannot deploy the resources, why does it need to borrow so much? Some of the reasons are-
a) Inefficient handling of land acquisition, site handover, utility shifting, rehabilitation and dispute settlement
b) Unavailability of qualified contractors, engineers and consultants with the required domain expertise
c) High fiscal deficit limits the ability of states to share costs of infrastructure development
d) Poor monitoring and evaluation. There is a paucity of qualified and trained people for this task
Considering the poor state of infrastructure and public services, Government and civil society should take this issue seriously. It is a luxury which India can't afford.
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