ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Aid and Development Policy

An Aid-Worker ARJUN SEN GUPTA ('Aid and Development Policy in the 1990s', EPW March 13) argues "that the reason for resistance to foreign aid in the richer countries may be related not just to the design of the aid programme but to the confidence of the aid givers about the ability of the receiving countries to use that aid efficiently". But he contradicts himself when be further adds "that a micro-level effectiveness related to the ability at the ground level to execute the programme is not a sufficient condition for the full and efficient utilisation of aid'' If micro-level Indian experience in aid utilisation is any guide, then efficient and effective use of foreign aid leaves much to be desired. The recently concluded Joint Consultative Group on Policy (JCGP)of the five UNagencics-UNICEF, UNDP, WFP, UNFPA and lFAD-says that "the financial flow from JCGP agencies is around $ 200 million annually mostly in the form of grants, and is modest compared to the needs of India as is the total amount of external assistance of $7.2 billion pledged to India". [1] The JCGP also admits "that the problem of absorptive capacity in the administration of funds is acute. In some cases the entire amount of funds allocated for the programmes do not get spent. In other cases funds get diverted and do not reach the project on time because of various administrative bottlenecks. There are also delays in project clearance and release of funds that affect project implementation." Why India is not able to use the external aid efficiently and effectively? Why aid is not trickling down? Is there an aid fatigue or aid attrition? If India is to push its aid and development policy in the 1990s what reforms are needed for better absorption, utilisation and disengagement? There are at least five main areas which need to be tackled for better aid use: (a) centre-state relations in respect of aid request and subsequent flow, (b) state district and block level infrastructure for better absorption and utilisation, (c) capacity of public bureaucracy for effective management of aid, (d) maintenance budget and improved operational mechanisms, and (e) effective monitoring, evaluation feedback and an exit policy.
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