Latest news with #YadulKrishna
Time of India
10-07-2025
- Business
- Time of India
Why thousands of crores by governments remain unspent and what must change
Yadul Krishna is a policy economist and a legal fellow at Governance Innovation Labs. As the Parliamentary Secretary to a Rajya Sabha MP, he drafted "The Bhagat Singh National Urban Employment Guarantee Bill, 2022," successfully introduced in the 2022 Monsoon Session of Indian Parliament. He previously worked as a finance professional in an investment services company and was briefly a columnist with the British Herald. Krishna's writings on the economy and governance have appeared across the globe, with multiple translations into other languages and have been referenced in research papers and newspaper editorials. An alumnus of SRCC, he is currently pursuing law at the Faculty of Law, University of Delhi. He tweets @Yadul_Krishna LESS ... MORE Despite rising allocations, India's development goals are being quietly derailed by an alarming pattern of unspent government funds across critical sectors. For the first time in India, the Union Budget 2025-2026 has disclosed the amount of total unspent funds available with the states and Union Territories, allocated to them under various centrally sponsored schemes (CSS). As of December 31, 2024, an estimated Rs 1.6 trillion allocated for these schemes was lying with the states. This is not a small amount, accounting for over 40 per cent of the annual expenditure under CSS. India's federal development model is built on the timely and efficient transfer of funds from the Centre to the states. These transfers, often tied to centrally sponsored schemes, are critical for ensuring uniform access to health, education, and infrastructure across a diverse and unequal federal landscape. However, the persistent underutilisation and lapse of centrally-allocated funds have become a recurring and deeply worrying pattern. Far from being a matter of bureaucratic oversight, these lapses represent a deeper malaise afflicting India's fiscal federalism—a combination of procedural rigidity, administrative inertia, and political friction between the Union and the states. The scale of unutilized funds over the past decade is staggering. Between 2014 and 2019, over Rs1.5 lakh-crore remained unspent. The Members of Parliament Local Area Development Scheme (MPLADS) alone saw an unspent balance of Rs 1,734.42 crore during the 16th Lok Sabha—over twice the figure from the previous term. Despite a dip in allocation during the 17th Lok Sabha, largely due to the pandemic, utilisation rates have remained uneven and unpredictable. The core issue lies not merely in how funds are allocated, but in how they are absorbed. Utilisation Certificates (UCs), which are mandatory for the release of further tranches, are frequently delayed or inadequately furnished. As of March 2024, over Rs 5 lakh crore was locked due to pending UCs. Flagship schemes have not been immune. The National Health Mission (NHM), one of the most ambitious public health initiatives by the Centre, saw an average fund utilisation of only 55% across 29 states in 2023–2024. The total unspent central share balances under the Samagra Shiksha scheme from 2018–19 to 2022–23 amounted to approximately Rs 11,000 crore, even as schools across India lacked basic infrastructure. The reasons are manifold and blame lies on both sides. The Union government has, over the years, layered its funding protocols with increasingly complex guidelines. In the name of accountability, ministries insist on exhaustive documentation, multiple layers of approval, and compliance-heavy reporting, all of which delay the actual flow of funds. For example, over Rs 8,000 crore under the Pradhan Mantri Awas Yojana (PMAY) in 2019-2020 remained unutilised, largely due to delayed approvals and procedural roadblocks. States, too, are complicit. Many lack the administrative capacity to absorb funds efficiently. Planning departments are understaffed, procurement processes are slow, and project implementation often lags due to corruption, red tape, and political indifference. In Madhya Pradesh, Rs 3,116 crore out of Rs 12,419 crore allocated under NHM between 2017 and 2022 was left unspent, severely impacting health service delivery. Similar patterns have been observed in schemes such as the Pradhan Mantri Gram Sadak Yojana (PMGSY), where delays in land acquisition and contracting have held up rural road projects, and in the Clean Ganga Mission, where a CAG report revealed that Rs 2,500 crore remained unutilised as of 2017. This persistent failure has disproportionately hurt critical sectors. The health sector, especially post-COVID-19, is in urgent need of capital infusion, yet fund lapses continue to delay infrastructure creation and human resource recruitment. In education, unspent allocations have led to inadequate classrooms, high pupil-teacher ratios, and poor learning outcomes. Rural development schemes like MGNREGA, which act as lifelines in economically fragile states, have seen funds lying idle even as wage payments remain delayed. Correctives must begin with transparency and real-time monitoring. There is an urgent need for digital public dashboards, AI-driven fund-tracking mechanisms, and automated alerts that flag potential underutilisation. States must be empowered, not merely held accountable. The Centre should invest in building administrative and financial planning capacities at the state level. Rather than punishing states for delays, it should create an enabling environment through technical support, capacity-building programmes, and streamlined fund release procedures. Equally important is the recalibration of incentives. States that demonstrate e fficient and timely fund usage should be rewarded with additional allocations or flexible spending norms. Public-private partnerships must be leveraged not just for financing, but also for improving last-mile delivery. In the long run, a transparent and participatory mechanism for monitoring fund utilisation—one that includes local bodies, civil society, and citizens—can help hold both Union and state governments accountable. India's development aspirations cannot afford to be hostage to bureaucratic gridlock and intergovernmental blame games. The cost of inaction is paid by the most vulnerable: those denied healthcare, children without access to schools, and workers left jobless due to stalled projects. Fixing the fund utilisation crisis is not just about financial efficiency, it is a moral imperative for a nation committed to inclusive growth. The time to act is now. Facebook Twitter Linkedin Email Disclaimer Views expressed above are the author's own.
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Business Standard
29-06-2025
- Business
- Business Standard
How Kerala is charting path to become 1st extreme-poverty-free Indian state
Come November 2025, Kerala is preparing to officially declare itself as the first Indian state to eradicate extreme poverty. This milestone of 100 per cent extreme poverty alleviation follows the launch of the state's comprehensive Extreme Poverty Eradication Programme (EPEP) in 2021. M B Rajesh, Kerala's minister for local self-governments, told Business Standard that the EPEP has so far succeeded in uplifting 93 per cent of the 64,006 families identified as extremely poor. 'The Athidardrya Nirmarjana Project, or EPEP, was started to uplift the population who are outside the support system of the government. In the initial phase, we identified the population for shortlisting beneficiaries. The final shortlisting gave us 64,006 families for whom we had to plan a comprehensive project,' he said. According to think tank NITI Aayog's National Multidimensional Poverty Index (MPI) 2023, Kerala tops the list of states with the lowest multidimensional poverty headcount ratio at just 0.55 per cent. Other leading states include Goa (0.84 per cent), Tamil Nadu (2.20 per cent), Sikkim (2.60 per cent), and Punjab (4.75 per cent). What's different in Kerala's EPEP? Kerala's approach to eradicating extreme poverty stands out for its adoption of the MPI framework, which incorporates factors such as food, shelter, health, and income that can help sustainable family growth in the long term. 'Rather than relying on abstract poverty lines, the government deployed local-level surveys through Kudumbashree and panchayats to identify households in extreme deprivation,' said Yadul Krishna, a policy economist. Kudumbashree, Kerala's flagship programme for poverty eradication and women's empowerment, operates as a community network with a three-tier structure: neighbourhood groups, area development societies, and community development societies. Led by local governments and supported by Kudumbashree, ASHA and Anganwadi workers, as well as various community organisations, the EPEP's methodology involved over 1.4 million people to identify the most marginalised, who were previously invisible to existing systems. Each family's needs were assessed individually, and tailored micro-plans were developed by the Local Self Government Department. 'The programme successfully uplifted 47 per cent of the identified families by November 2023. This figure increased to 70 per cent in 2024, and as of now, we have reached 93 per cent of the total families recognised. By November, we aim to achieve 100 per cent coverage, paving the way for the official declaration,' the minister said. Individualised micro-plans are prepared based on the deprivation factors of the family, which help the relevant departments to act swiftly. Most of the identified families fell under the category of homeless or landless-homeless, which were highlighted as the priority. Indicators such as food, clothing, shelter, and health have been kept as first priorities, followed by income generation, which was addressed through channelling financial aid to those eligible for it, as well as creating employability through programmes such as Ujjeevanam, a 100-day special livelihood campaign under Kudumbashree. 'Extreme poverty' eradicated? Despite facing financial constraints, Kerala has been able to invest in welfare schemes and targeted programmes. The minister attributes this to continued and collective effort. 'Instead of limiting ourselves to broad assumptions, we made it a priority to identify, recognise, and take targeted action for those in need. We ensured the active involvement of departments ranging from health to electricity to support families in the most holistic way possible,' the minister said. Along with significant budget allocations, the government has pooled funds under corporate social responsibility and land donation drives to support the EPEP, he added. However, N C Saxena, former secretary of the Union Rural Development Ministry and a member of the erstwhile Planning Commission, said Kerala does have a very low poverty rate according to central government reports, but the claim of eradicating 'extreme poverty' depends on the benchmark used. 'The scale chosen to define poverty can significantly influence such claims,' Saxena said. According to him, the real challenge is to sustain this achievement. 'Low or no income can quickly alter people's living conditions, making unemployment a critical factor. It is important for the state to involve independent agencies, non-governmental organisations, or academic practitioners to conduct thorough studies of such initiatives. An external perspective can help identify potential gaps and provide valuable insights for improving future schemes and projects,' he said. The way forward Kerala aims to declare the official eradication of extreme poverty within the next five months. After the official announcement of this milestone, focus will likely shift to evaluating the effectiveness and sustainability of the initiative. 'First, the state needs a serious expansion of its cooperative and public-sector economy. Kerala Bank, Kerala Financial Corporation, and sectoral cooperatives need capital and autonomy, especially in agro-processing, bio-pharma, and eldercare. There's too much potential here that's being left to private players. Secondly, Kerala needs to structurally reform employment,' Krishna said. He added that the state's model is built on dignity, solidarity, and ecological responsibility. 'If Kerala sticks to that vision, while modernising delivery, it might just offer a future that India desperately needs too,' he added.
Time of India
02-05-2025
- Business
- Time of India
Deregulation at what cost?
Yadul Krishna is a policy economist and a legal fellow at Governance Innovation Labs. As the Parliamentary Secretary to a Rajya Sabha MP, he drafted "The Bhagat Singh National Urban Employment Guarantee Bill, 2022," successfully introduced in the 2022 Monsoon Session of Indian Parliament. He previously worked as a finance professional in an investment services company and was briefly a columnist with the British Herald. Krishna's writings on the economy and governance have appeared across the globe, with multiple translations into other languages and have been referenced in research papers and newspaper editorials. An alumnus of SRCC, he is currently pursuing law at the Faculty of Law, University of Delhi. He tweets @Yadul_Krishna LESS ... MORE The introduction of the Deregulation Commission, staffed by technocrats and policy consultants with little to no mandate for public consultation, echoes a problematic shift in governance—one that privileges executive discretion over democratic process. On April 25, 2025, the Union Government announced the formation of a Deregulation Commission under the broader framework of the Jan Vishwas 2.0 initiative. This body is tasked with identifying and eliminating redundant or outdated compliance obligations in sectors including energy, telecom, logistics, and manufacturing. The aim, the government claims, is to streamline administrative processes, reduce friction for businesses, and invigorate economic growth by eliminating the burdens of regulatory red tape. At first glance, the move appears to carry the promise of economic efficiency. However, its long-term implications raise important questions about the role of the state, the future of federalism, and the protection of public interest in India's developmental trajectory. The Rhetoric of Reform and the Reality of Deregulation The stated rationale behind the Deregulation Commission is not unfamiliar. Cumbersome regulations, time-consuming permits, and overlapping jurisdictions have long been cited as deterrents to enterprise, particularly for small and medium-sized businesses. In its final 2020 edition, the World Bank's Doing Business report placed India at 63rd among 190 economies, identifying weaknesses in areas such as contract enforcement and dealing with construction permits. However, the report was later scrapped by the Bank itself due to data irregularities and political interference, revealing the perils of relying on efficiency indices without interrogating their underlying assumptions. While regulatory reform is indeed necessary, deregulation cannot be synonymous with indiscriminate dismantling. The existing compliance framework, though flawed, serves vital public functions: it regulates emissions, enforces minimum wages, protects workplace safety, ensures transparency in financial transactions, and governs public procurement. If these checks are weakened in the name of agility, the result will not be reform but a weakening of the state's protective capacity. Environmental concerns are particularly germane. Since the 2020 draft Environment Impact Assessment (EIA) notification, successive governments have attempted to dilute environmental safeguards in the name of 'ease of doing business.' The Deregulation Commission risks accelerating this trend by bypassing established procedures for public consultation and environmental scrutiny, effectively excluding communities most affected by extractive development—Adivasi populations, agrarian villages, and forest-dependent households. Centralisation and the Federal Imbalance One of the less discussed yet crucial dimensions of the deregulation project is its centralising tendency. The Commission operates as a central body, without any constitutional mandate to consult states or engage sub-national governments in its agenda-setting. This is troubling in a federal polity like India, where states have historically tailored compliance frameworks to their own socio-economic contexts. Kerala's robust environmental due diligence practices or Tamil Nadu's historically active labour welfare boards cannot be collapsed into a one-size-fits-all model that privileges uniformity over responsiveness. The Union's expanding executive footprint in economic governance—whether through centrally framed labour codes, direct benefit transfer systems with limited state discretion, or now, deregulation templates—has effectively diluted the constitutional balance envisioned in the Seventh Schedule. Without formal mechanisms for intergovernmental consultation, the Commission could reduce states to administrative extensions rather than co-equal partners in economic reform. Disproportionate Gains, Uneven Burdens The promise of deregulation rests on the hope that reduced compliance burdens will attract greater investment, stimulate job creation, and improve India's global competitiveness. Yet empirical evidence for such trickle-down benefits remains sparse. A 2023 Reserve Bank of India bulletin noted that while India had seen an uptick in FDI inflows, employment elasticity in the organised sector remained weak. CMIE's data from March 2024 showed that over 400 million Indians continue to work in the informal sector, with scant access to social protection . What this indicates is that deregulation, in practice, often benefits capital more than labour. In the last five years, corporate tax collections have declined even as incentives have multiplied. While the 2023-24 Union Budget offered ₹1.09 lakh crore in revenue foregone through corporate exemptions , key welfare schemes like MGNREGA saw allocations slashed from ₹73,000 crore in FY22 to ₹60,000 crore in FY23 . PM Awas Yojana (Urban), despite a growing housing deficit, was capped at ₹25,103 crore in the same year . These trends reflect a narrowing fiscal imagination—one that underwrites corporate certainty while shrinking the public provisioning net for the majority. Moreover, labour law 'reforms' introduced since 2020 have increasingly tilted the balance of power away from workers. The Industrial Relations Code allows for retrenchment of up to 300 workers without state permission, effectively legalising precarious employment. In such a policy environment, further deregulation without parallel institutional strengthening could entrench inequalities rather than mitigate them. Reform That Deepens Democracy India does need regulatory reform. Many of its laws date back to colonial times or reflect outdated economic models. But the process of reform must itself be democratic, consultative, and transparent. The Deregulation Commission, as currently constituted, is neither accountable to Parliament nor required to engage with civil society, labour unions, consumer rights bodies, or ecological experts. This absence of participatory architecture undermines the legitimacy of its mandate. What is required is not the wholesale dismantling of the state's regulatory role, but a reimagining of it. A democratic reform process would begin by auditing existing compliance burdens, disaggregated by sector and region. It would then involve state governments and key stakeholder groups in shaping sector-specific reforms that balance growth with sustainability and inclusion. Reform, in other words, must be dialogic, not technocratic. India is at a moment when the language of governance is being rewritten—away from participation and towards efficiency, from social protection towards deregulation, and from federalism towards executive centralism. While these shifts may deliver short-term gains on paper, they risk undermining the constitutional ethos that frames economic policy not just as a function of growth but as a vehicle for justice and equity. Facebook Twitter Linkedin Email Disclaimer Views expressed above are the author's own.
