India is sitting on unutilised foreign assistance of whopping Rs 78,000 crore and paying commitment charges to the World Bank and Asian Development Bank for not using the sanctioned amount.
"Since the external assistance is precious and commitment charges are being paid by the government, initiatives need to be taken to address the issues being faced by...Sectors for not utilising available funds," the Comptroller and Auditor General (CAG) said in its report, which was tabled in Parliament recently.
"As on March 31, 2008, unutilised committed external assistance was of the order of Rs 78,037 crore," the report said, adding the government during 2007-08 paid a commitment charge of Rs 124.54 crore for un-drawn assistance, mainly to the World Bank and Asian Development Bank.
The commitment charges, which are paid on the amount of principal rescheduled for drawal on later dates, points to "continued inadequate planning resulting in avoidable expenditure", the report added.
Inadequate utilisation of foreign assistance assumes significance in view of declining foreign exchange reserves, which slipped by over $60 billion during the current year and efforts are being made by the government at the cost of fiscal prudence to boost the economy reeling under the impact of global financial meltdown.