India sitting on unutilised foreign aid of Rs 78,000 crore

New Delhi, Feb 22 (PTI) India is sitting on unutilised
foreign assistance of whopping Rs 78,000 crore and paying
commitment charges to the World Bank and Asian Development
Bank for not using the sanctioned amount.

"Since the external assistance is precious and
commitment charges are being paid by the government,
initiatives need to be taken to address the issues being faced
by...sectors for not utilising available funds," the
Comptroller and Auditor General (CAG) said in its report,
which was tabled in Parliament recently.

"As on March 31, 2008, unutilised committed external
assistance was of the order of Rs 78,037 crore", the report
said, adding the government during 2007-08 paid a commitment
charge of Rs 124.54 crore for un-drawn assistance, mainly to
the World Bank and Asian Development Bank.

The commitment charges, which are paid on the amount of
principal rescheduled for drawal on later dates, points to
"continued inadequate planning resulting in avoidable
expenditure", the report added.

Inadequate utilisation of foreign assistance assumes
significance in view of declining foreign exchange reserves,
which slipped by over USD 60 billion during the current year
and efforts are being made by the government at the cost of
fiscal prudence to boost the economy reeling under the impact
of global financial meltdown.

According to the CAG report, 35 per cent of the
unutilised foreign assistance amounting to Rs 27,300 crore
pertains to projects in the urban development and road
sectors.

The sectors such as agriculture, environment and
forestry, power, water supply and sanitation account for 30
per cent of the un-drawn balance during 2007-08.

The report further said that within the energy sector,
the unutilised assistance amounts to Rs 4,995 crore.

Even the health sector, it added, "has not been able
to utilise the external assistance of Rs 4,815 crore committed
for various projects despite the fact that the sector requires
large funds for providing minimum health facilities in rural
areas."

Following the global financial crisis, India's foreign
exchange reserves depleted by USD 60 billion since March 31,
2008, to USD 250 billion as on February 13.

In order to boost the economy, the government came out
with two stimulus packages and raised the public expenditure
by 20 per cent during the fiscal to Rs 9 lakh crore, resulting
in a fiscal deficit of 6 per cent of the GDP, as against 2.5
per cent envisaged originally in the budget for 2008-09. PTI
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