Hyderabad

CAG censures TS for economic indiscipline, errors

CAG censures TS for economic indiscipline, errors
Telangana Finance Minister Etala Rajender, announcing the state budget 2018-19 in Legislative Assembly in Hyderabad:Photo:Laeeq

Hyderabad: Alleging that the Telangana State has no economic discipline, the Comptroller & Auditor General has stated in its 2016-17 report that the youngest State has lost several crores of revenue in sand mining.

The report also stated in its report that the Mission Kakathiya was completed only by 28 percent as the government completed 7,901 tanks as against its claim of completing 27,918 and that too with 10 to 100 percent shortfall in silt removal as against estimation and sanction.

The CAG, which placed its report in the Assembly on Thursday, mentioned that the State government had allocated very meager amounts like Rs 19.6 crore in the year 2014-15, Rs 56.4 crores in the year 2015-16 and Rs 49.0 crores 2016-17 only but not released a single rupee. The CAG also mentioned that the GHMC spent Rs 134 crore (99 percent) during 2012-13 and Rs 141 crore (64 percent) during 2013-14. Under the Chief Minister K Chandrasekhar Rao’s regime, the GHMC sanctioned Rs 144 crore in the last three years but failed to spend even Rs 46 crore every year.

The CAG report also mentioned that the actual Revenue deficit was Rs 6,778 crores whereas the State government has shown a surplus of Rs 1,386 crore and fiscal deficit was higher by Rs 2,500 crore than shown in the budget. It also mentioned that during the year, revenue expenditure accounted for 69% of the State’s aggregate expenditure, which was in the nature of current consumption, leaving only 31% for investment in infrastructure and asset creation.

Devolution to the State was enhanced to the tune of Rs. 2,525 crore during 2016-17 on the basis of 14th Finance Commission recommendations. Audit noted that additional devolution led to increase in revenue expenditure by Rs 5.536 crore over previous year. During 2016-17, the government earned a meagre return of 0.54% on its investments in Statutory Corporations, Government Companies, Joint Stock Companies and Co-operatives. These investments were funded mainly through borrowings on which it paid interest at 7.40 %. Investments (Rs. 13,075 crore) increased 10 times (Rs. 11,747 crore) over previous year (Rs. 1,329 crore), the increase in return on investments was negligible at rupees one crore, indicating non-performing investments. The current level of recovery of loans was low with a significant gap between disbursements (Rs. 3,402 crore) and recovery (Rs. 156 crore).

The maturity profile of Debt as on 31 March 2017 indicated that State has to repay 49% of debt amounting to Rs. 56,388 crore within the next 7 years. The repayment of Debt as percentage of tax revenue increased from 7.12 during 2015-16 to 32.16 during 2016-17, said the CAG report .

Elaborating on the Financial Management and Budgetary Control, the CAG report pointed out that there were instances of excess expenditure or substantial savings with reference to provisions made during the year, exhibiting weakness in expenditure monitoring and control. The overall savings of Rs. 31,662.69 crore (18% of budget provision) were the result of savings of Rs. 52,824.28 crore partially offset by an excess of Rs. 21,161.59 crore under various sections (Voted/Charged). In view of the final savings, the supplementary grant of Rs. 41,235 crore proved excessive.

Excess expenditure over the allocations amounting to Rs. 6,184 crore pertaining to the years 2014-15 and 2015-16 was yet to be regularized as of December 2017. The cases of excess expenditure over grants are serious breaches and are in violation of the wish of the Legislature. It is important that responsibility is fixed in this regard. Against the total savings of Rs. 31,662.69 crore, an amount of Rs. 49.283.53 crore was surrendered during the year 2016-17, of which Rs. 41,384.99 crore (84%) was surrendered on the last day of the year, i.e., 31 March 2017. It affects the availability of in priority areas and desired outcomes.

Excessive/unnecessary/inadequate re-appropriation of funds was also observed by the CAG in its audit. Re-appropriations to heads where original provisions were not made, etc., were noticed which showed lack of coordination between Finance and the line departments. Analysis showed that out of 10,060 items of re-appropriations made by the State Government during the year 2016-17, specific reasons were not intimated in respect of 7,338 items (73%).

Several policy initiatives taken up by Government were either unfulfilled or were partially executed, primarily due to non-approval of scheme guidelines/modalities, poor project implementation, apart from non-release/short release or non-utilisation of budgeted funds. Spirit of the statutory provision was disregarded by not utilizing the funds allocated under Scheduled Castes Sub-Plan (60%) and Tribal Sub-Plan (57%). Audit observed various instances of non-observance of financial rules and procedures and absence of financial controls.

The CAG also pointed out that there were variations in Personal Deposit account balances shown at web portal and ledger at the end of the year. An amount of Rs. 10,873 crore was lying in 28,087 Personal Deposit accounts to end of the year. Paying interest at higher rates (7.40%) on borrowings while keeping huge amounts in PD Accounts which did not bear any interest showed poor cash and financial management of the State Government.

Detailed Contingent bills were not submitted for an amount of Rs. 475 crore drawn on 3,485 Abstract Contingent bills. In the absence of DC bills it is not possible to ascertain whether expenditure has taken place or not. Un-adjustment of AC Bills for long periods in violation of prescribed rules and regulations was fraught with the risk of embezzlement and corruption.

Omnibus Minor Head 800 continued to be operated for recording expenditure of Rs. 14,156 crore and receipts of Rs. 3,287 crore affecting transparency in financial reporting and distorting analysis of allocative priorities and quality of expenditure. This was done in several cases even where there were earmarked heads of accounts. (NSS)