Ministries flounder on resource utilisation

The ministries argue that the finance ministry is slow to release funds. But the facts show that the finance ministry has so far this year released Tk 2,658 crore in local funds comprising 24 percent of the domestic resource component while the ministries spent Tk 1,241 crore i.e. 13 percent of the local resources. So, it is not quite a matter of the finance ministry sitting on the money.

The finance minister has linked the ministries' failure to spend foreign aid to their diffidence in fulfilling the conditions attached by donor agencies before releasing the funds, and has stated that the finance ministry will no longer release domestic funds to ministries that do not fully utilise the external assistance.

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The minister has reasons to be tough. Last year saw a dip in foreign aid of 52 per cent due to the various ministries' poor capacity to utilise external assistance, and there is nothing to be gained for the country for aid to be allocated but then lapse due to non-utilisation. While moving away from a dependence on foreign aid is a good thing, full utilisation of all funds that are pledged and committed remains key to a fuller implementation of the ADP.

The real problem is the lack of a workable mechanism for the utilisation of resources -- both domestic and foreign. The procedures by which projects are implemented and funds productively spent remains unacceptably cluttered, as a result of which projects move at a glacial pace, and funds are spent sporadically and haphazardly, if at all. The problem is thus, once again, one of governance.

Ministries need to put in place procedures so that projects can be implemented smoothly from inception to completion and that funds under their control are spent prudently and with maximum efficacy. The current impasse is unacceptable.