NEW DELHI: The Central government is considering stopping rollover of unutilised funds to the next financial year, barring in some key ministries such as defence and home affairs, in order to ensure better fiscal prudence and utilisation of funds among various ministries.
According to sources in the Department of Expenditure, several ministries, including the Ministry of Defence, have requested that unutilised funds should not be sent back to the consolidated funds and rollover of such funds to the next financial year should be allowed.
However, the finance ministry is learnt to be opposed to the idea, as it reflects poorly on the fiscal discipline of the concerned ministries.
“We are considering complete discontinuation of this practice,” a senior finance ministry official told TNIE. Defence minister Nirmala Sitharaman had confirmed extending the request to the finance ministry. “We
have ... made a clear demand that once a defence budget is allocated, the unutilised part shall not go back to the consolidated funds,” Sitharaman said at an event last week, indicating that finance ministry has given a positive response in the matter.
The finance ministry is not willing to give the same concession to other ministries. “Many ministries are very slow on utilisation of funds. For instance, the Ministry of Water Resources, River Development and Ganga Rejuvenation has spent 41 per cent of its budget till January 2019. Even the Ministry of Housing and Urban Affairs had to write to municipal bodies asking them to claim the fund. This practice is not healthy and the unspent fund can be allocated to better performing sectors,” the official added.