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Money has to cross five hurdles before it reaches beneficiaries..

Ever wondered how the money flows to the actual beneficiaries after the the central finance minister announces a grandiose government scheme in the union budget?

This report (yet another one headed by C Rangarajan, former RBI governor) on 'Efficient management of public expenditure' shows that the money flows into five layers of government machinery before reaching the beneficiary. Click here to access the report.

Here is the flow:

central government ------------------> state government ------------------------> DRDAs/ ZPs (Zilla Parishads)---------------------------> block panchayat---------------------->Gram panchayat--------------------------------------------------> beneficiary.

No wonder it takes forever for the money disbursed from the union government to reach a poor farmer in one of the 6.4 lakh villages! If we can remove one layer, it will result in more money in hands of people.

The flow diagram seen in page 22 of the report. Click here to download the image from Box.com


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