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Union Finance Minister Nirmala Sitharaman has called on state governments to utilize the over ₹1 lakh crore in unspent funds allocated for critical development programmes before seeking additional resources. As of December 31, 2024, these funds remain idle in various accounts, including State Nodal Agency (SNA) accounts, escrow accounts, and state treasuries.
The Finance Minister highlighted that despite substantial allocations for essential schemes, these funds are not being utilized, undermining the effectiveness of public welfare programs.
Unspent Funds Across Key Development Schemes
The unutilized funds span several flagship initiatives in health, education, housing, and urban development, raising concerns about the slow pace of implementation at the state level. These funds, meant to address urgent needs, are not being deployed effectively:
- Jal Jeevan Mission: ₹30,788 crore remains unspent despite ongoing water supply issues.
- Pradhan Mantri Awas Yojana (PMAY): ₹14,000 crore is yet to be used while housing demand remains high.
- Urban Rejuvenation & Employment: ₹12,377 crore allocated for AMRUT (Atal Mission for Rejuvenation and Urban Transformation) still sits unused in state accounts.
- Swachh Bharat Mission (Urban): ₹12,319 crore has not been spent.
- Education & Nutrition: ₹11,516 crore under Samagra Shiksha and ₹5,205 crore under the Mid-Day Meal Program remain idle.
- Health Programs: ₹2,988 crore under the Flexible Pool for Health and ₹7,059 crore for medical education remain unutilized.
- Rural Employment: ₹4,351 crore for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA) is still unspent.
“Use It, and We’ll Give More” – FM’s Assurance to States
In her statement, FM Sitharaman emphasized that the government is ready to provide more funds, but only after states demonstrate effective use of the existing allocations.
“Ask for more, no problem. But first, use what has already been allocated. The moment you utilize these funds, we will release more,” said Sitharaman.
The Finance Minister also raised concerns about key development goals, such as urban employment, clean drinking water, and rural housing, which remain unmet due to delays in fund utilization.
“These are not small amounts; these are big sums. We are worried about urban unemployment, clean drinking water access, and rural housing. But will the states use the money already in their accounts?” the FM asked.
The Path Forward: Ensuring Accountability and Progress
The FM’s comments come amid growing demands from states for higher allocations under centrally sponsored schemes. However, the government is pressing for accountability, urging states to focus on effectively utilizing funds already available rather than requesting additional resources.
With development goals at stake, the onus now lies on the states to accelerate spending and translate financial resources into real, tangible progress.
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