GS4 PYQ (Mains Answer Writing): Utilisation of Public Funds, Corruption in Public Service | UPSC Mains: Ethics, Integrity & Aptitude PDF Download

(A) Effective utilization of public funds is crucial to meet development goals. Critically examine the reasons for under-utilization and mis-utilization of public funds and their implications. (UPSC MAINS )

The Importance of Efficient Use of Public Resources: 

Effective utilization of public resources is critical to meeting development goals. Key programs in education and health are overwhelmingly conducted within the public sector. And although private provision of infrastructure has expanded in areas like telecommunications and energy, private investors remain wary of socially-oriented sectors such as water and sanitation, and also show little willingness to invest in the poorest countries. 

At present, though, research indicates that increases in public spending are only weakly correlated with the achievement of development outcomes in most developing countries. Government ineffectiveness — in the form of waste, inefficiency and corruption — is largely responsible.

Reasons of poor utilisation of resources:

• Poor resource usage is due in part to the fact that public spending is a complex, multifaceted process, which is not naturally transparent to the general public. Budgets typically pass through a sequence of stages, including formulation by ministries, scrutiny by legislative committees, approval by the legislature, distribution of funds to ministries, further distribution to state and local authorities, and end-point delivery. Accountability is hampered by deficiencies that include closed door discussions, limited documentation, and poor data reliability. 
• Weakly-performing public institutions, in turn, can seldom be expected to reform themselves in the absence of external pressure. Unlike private companies, public bodies face no direct competitive pressures, and political systems – especially in developing countries – are often inadequate at mobilizing public pressure for specific institutional reform. 
• Weaknesses in public finance management can contribute to ineffective resource use through a number of channels. Corruption can often take a significant toll, but even in countries where government personnel are mostly honest, they can be hobbled by poor systems, inadequate training, or other deficiencies. Wherever allocation decisions are taken outside informed independent scrutiny, societies more powerful and articulate groups tend to sway those decisions – to favor urban areas over rural, middle-class subsidies over pro-poor programs, and certain ethnic/cultural groups over others. 
• Under-utilization of Plan outlays by the States can be attributed to the institutional and procedural bottlenecks in the process of implementation of schemes and deficiencies in the planning process being followed at the district level. 
• The deficiencies in decentralized planning being carried out in the schemes, resulting due to insufficient staff for undertaking planning activities, inadequate attention to their capacity building and minimal role for community participation in the planning process. 
• Bottlenecks in budgetary processes in the schemes, such as delay in the flow of funds, in releasing sanction orders for spending, decision-making in the States being centralized, insufficient delegation of financial powers to the district/ sub-district level authorities and uniform norms of Centrally Sponsored Schemes for all States. Further, lack of need based budgeting in the schemes, which is often carried out without proper analysis of unit costs on the ground, implied allocations for some of the schemes being decided in a top-down and unrealistic manner. 
• • Systemic weaknesses, manifested as shortage of trained, regular staff for various important roles like programme management, finance/accounts and frontline service provision; this contributed to weaken the capacities of the government apparatus in the States for implementation of Plan schemes. 

Few more points will help us to bring clarity in our understanding about this problem: 

• Misutilisation of public funds includes expenditures that are made without proper authorization or that are unlawful or contrary to applicable legislation, regulations, policies and procedures. It also includes purchases that are not necessarily required. e.g.- diversion of public funds towards publicity and advertisements rather than utilizing them for core structural reforms the funds are actually meant for. 
• Underutilisation of public funds includes mean-spirited spending of public funds meant to be spent on various projects, policies, schemes etc. or simply, funds not used in their full potential. Underutilization of public funds is often seen in institutes of higher education where at the end of the financial year a vast amount of money granted by the government or the UGC lies unspent, thereby compromising with the growth of the institutes. 
• Another recent example of this is the CAMPA fund where increase in funding hasn’t resulted in any significant increase in forest cover. Even the SC took note of the serious underutilisation of the CAMPA funds, thereby directing the Central and State government to make efficient utilisation of funds. Underutilisation and misutilisation of public fund leads to blockage in the implementation of various planned schemes and projects. 
• It also compromises with the quality of work done and service rendered to the public. Such handling of public funds also leads to corruption on the part of the authorities concerned. Misutilisation of public funds also runs the risk of making them reluctant to pay taxes or finds ways to save more on them. 
• Under utilisation and misutilisation of public funds often takes place due to political reasons, ill planed economic policies, improper and careless execution of government schemes, inefficient and corrupt, rigid and complex processes for approval and allocation of funds also lead to underutilisation and misutilisation. In the long run, this blooms into an unjust development scenario in which all don’t reap the benefits of development. There may be waste of public money or siphoning off by a particular section. This erodes the legitimacy as well as the capacity of state to rule.

Topics Covered- Importance of Public Resources and Their Utilisation

(B) "Non-performance of duty by a public servant is a form of corruption". Do you agree with this view? Justify your answer. (UPSC MAINS )

Here, we need to see that corruption has to be interpreted in a broader way than ordinary meaning in terms of use of public office for private gains. Here, we will mean that any deviation from ideal role and duties of a public servant may be deemed to be corruption. Ordinarily, corruption is the abuse of entrusted power for private gain.
But, corruption is a general term covering misuse of authority as a result of consideration of personal gains which need not be monetary. It leads to a behaviour which deviate public officials from the normal duties. This includes behaviour such as bribery, nepotism and Misappropriation.
Different forms of deviation from duty where personal interests are involved: 

• Embezzlement: It is theft of resources by people who are put to administer it. It occurs when unfaithful employees steal from their employers. This is a serious offence when public officials are misappropriating public resources, when state official steals from the public institution in which he or she is employed and from resources he is supposed to administer on behalf of the public. 
• Nepotism: Nepotism is typical favouritism, in which an officer prefers his proper kinfolk and family members (wife, brothers and sisters, children, nephews, cousins, in-laws). Many unrestricted presidents have tried to secure their (precarious) power position by nominating family members to key political, economic and military/security positions in the state apparatus. 
• Conflict of Interest: It is small but significant part of wider problem of police ethics and corruption. 
• Favouritism: Favouritism is a tool of power abuse implying “privatisation” and a highly biased distribution of state resources, no matter how these resources have been amassed in the first place. Favouritism is the natural human tendency to favour friends, family. Favouritism is closely related to corruption so far as it implies a corrupted distribution of resources. It can be said that this is the other side of the coin where corruption is the accumulation of resources. 
• Fraud: Fraud is a financial crime that involves some kind of deception, swindle or deceit. Fraud involves a manipulation or distortion of information, facts and expertise, by public officials positioned between politicians and inhabitants, who seek to draw a private profit. Fraud is when a public official, who is responsible for carrying out the orders or tasks assigned by his superiors (principal), manipulates the flow of information to his private profit, hence the widely used principalagent or incentive theory employed by economists to study this phenomenon (Eskeland and Thiele 1999). 
• Bribery: This form of corruption is the payment (in money or kind) that is given or taken in a corrupt relationship. A bribe is a fixed sum, a certain percentage of a contract, or any other favour in money of kind, usually paid to a state official who can make contracts on behalf of the state or otherwise distribute benefits to companies or individuals, businessmen and clients. 

Non-performance of duty by a public servant as a form of corruption: 

• Ideally, a public servant should use his office that derives legitimacy from the public and utilizes public resources to serve public interests only. This is the essence of public service or the ‘nature and character’ of public service. 
• Now, there can be various ways to deviate from this ideal type. There may be unaccountable but right use of public resources, there may be abuse of resources by duty elected democratic government, there may be accountable use of resource for sectional interest etc. What one needs to see that there may be occasions where a person who deviates from principles and values of public services is not gaining any benefits in material terms. 
• Still, this doesn’t render that act less corrupt. This is the sum and substance of our discussion. It is not only action but inaction also that may be corrupt. A public servant should be dedicated to serve public interest and should be transparent and accountable in conduct. They must act selflessly. They should be impartial as well. If a police officer is mute at the time of a riot and allows one is supposed to do.

Topics Covered - Reasons for Non-Performance of Duty