Doubling aid utilisation next fiscal

Finance Minister AMA Muhith last week disclosed that the government intends to utilise about USD 7.55 billion of foreign aid in fiscal 2017-18. It makes sense for the government to speed up aid utilisation, particularly in light of the fact that a general election is round the corner, but the bigger question here is: do we have the capacity to do so? If we look at our performance over the last few years, the farthest the government has gone is to utilise USD 4 billion in any fiscal. So precisely what has happened of late that gives the finance ministry the confidence to make such a bold statement?

Yes, things are certainly different in the coming fiscal with talk of mega projects to be launched with foreign development partners like India, China, Japan and Russia. And from what we understand, it is in the government's interest to get some of the mega projects fast-tracked to help both the economy and impress voters. But then (and here we must take such statements with a pinch of salt), our experience of pre-budget slogans usually translate into speedy utilisation of allocated funds for various sectors in the latter half of the fiscal year.

That is where our greatest fears lie. If the government actually intends to expend double the foreign aid money in the coming fiscal, then work on projects must match the expenditure. We are not talking merely about grants here because the bulk of the financing comes as loans – whether it is from India, China or elsewhere. Authorities will have to put in serious checks-and-balances on fund utilisation so as to prevent attempted graft because these monies will have to be paid back with interest. Hence, we hope the focus remains on effective utilisation of funds and not merely spending for the sake of spending.