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Sizeable chunk of foreign aid remain unutilised till March 31, 2006

Written by: Staff

New Delhi, May 12 (UNI) The Government today admitted that a total amount of Rs 61,023.70 crores committed as foreign assistance on Government account was not drawn as on March 31, this year.

Disclosing this in a written reply to Lok Sabha, the Minister of State for Finance Pawan Kumar Bansal, said the utilisation of the sanctioned foreign assistance for any project is a continuous process spread over its implementation period. As a result, there would be some unutilised amount at any point of time, these amounts will be utilised as the project implementation progresses.

Moreover, the project implementation authorities like the Ministries, Departments, State Governments work under diverse constraints. Some of the steps taken by the Government to improve aid utilisation are ensuring adequate provisioning for externally aided projects in the budgets of the State and Central Government, strengthening of procurement procedures, disintermediation of the flow of external aid to Central Public Sector Undertakings, strengthening of project Monitoring units in some States and Central Ministries, appointment of Nodal officers for the States and regular review of projects.

The details of the commitment charges paid to various foreign agencies as a result of non-utilisation of the foreign assistance during the last year are over Rs 93 crore during 2003-04, over Rs 165 crore during 2004-05 and over Rs 147 crore during 2005-06.

Responding to another question, Mr Bansal said that the Government has instructed all States and departments to issue directions to the project authorities to strictly adhere to the norms for implementing the World Bank sponsored projects.

He said currently, the World Bank is supporting 53 development projects of the value of 11.9 billion US dollars for in India. Given the huge portfolio, the responsibility to execute these projects in accordance with the established guidelines of the bank also assumes criticality.

He said the responsibility for the implementation of the projects, including award and administration of various contracts, rests with the project authorities which includes the line Ministries, State Governments and Public Sector Undertakings. The World Bank's policy requires that the project authorities as well as the bidders, suppliers and contractors under Bank financed contrants observe the Bank guidelines, which may be reiterated to the project authorities so that there is no deviation from the established procedures of the Bank.

Mr Bansal said there have been six allegations of corruption/fraudulent practices in World Bank assisted projects that have come to the notice of the Government.

The Government has taken action as per the existing Indian laws in cases where corruption charges have been held prima facie which includes referring the matter to the investigating agencies, cancellation of contracts, suspension/departmental proceedings against officials involved depending upon the nature of the alleged irregularities, Mr Bansal added.


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