CAG exposes faults in AP budget

31 Mar 2016 5:53 PM

  • TDP
    Government faces CAG’s blame for its failure
  • Budget
    is made incredible
  • State’s
    budget proved irregular
  • Rs.
    24,194 crore borrowed and used in 2014-15
  • The
    indebted amount has to be paid with interest: CAG

AP: Report of Comptroller and Auditor General of India (CAG) commented that the
financial administration of the state Government was irregular and the budget
lacked credibility. The report confirmed the statements delivered by YSRCP
president and leader of opposition YS Jagan in the assembly during discussion
on budget. CAG uncovered the blunders in the state’s budget for 2014-15.  As the revenue expenditure in budget estimation
was mentioned as Rs.98,142 crore, 78.94% of this was drawn from revenue income
and the remaining Rs.24,194 crore was used from funds borrowed by the
Government.

CAG made it clear that the amount
thus borrowed and used should be paid in the coming years along with interest
and that the borrowed money could not fund the ways to face the extra burden of
these debts. The report also expressed concern towards the state’s contempt of
regulations of Fiscal
Responsibility and Budget Management Act
(FRBM) and the state becoming further indebted. The CAG report declared that
the state Government could not achieve the financial reform targets of the
financial year 2014-15. A revenue deficit of Rs.24,194 crore had been
registered in 2014-15 and fiscal deficit had reached
Rs.31,717 crore (6.10%). Fiscal deficit could not exceed 3% of GSDP according
to FRBM act but it had reached 6.10%, informed the report. Total debts should
not exceed 27.60%  of GSDP but they had reached
32.03%, as reported by CAG.

Here are more details of the report given by Comptroller and Auditor General of India.

Failure to get
grants

The
state Government could get only Rs.7,665.84 crore from the Rs.10,611.35 crore
grant recommended by the 13th finance commission. Delay in holding
elections in the local organizations, failure to send consumer certificates and
not following other rules led to the loss of Rs. 2,945.51 crore grant by the
state. Local organizations lost Rs.1,572.78 crore grant due to the state
Government’s fault. The 13th finance commission was supposed to dispense
funds within five days to the local organizations according to guidelines from
the centre. But as the state Government released after exceeding time limit for
17 times, Rs.5.58 crore of avoidable interest had to be paid.

Revenue
Deficit was shown high

CAG
report blamed the state Government for showing revenue deficits higher than in reality.
In the revenue deficit of Rs.24,194 crore, Rs.10,417.49 crore that belonged to
united Andhra Pradesh state  (01-04-2014to01-06-2014) was also shown. Changing of
Rs. 6,994.46 crore of electricity companies’ debt into grants also was shown as
revenue deficit. This was false expenditure, remarked CAG. The report also
mentioned that the capacity to bear debts also was decreasing. It complained
that the debts taken from Government companies and other financial
organizations were not mentioned in the budget.

CAG
specified that the total debts of the state Government amounted to Rs.1,66,580 crore
by March 2015. 50% of the debts were supposed to be paid within 7 years and
hence the state might be immersed in further debts, cautioned CAG. It suggested
that appropriate payment plan was to be made. It stated that there were
conflicts in 2014-15 budget allocations and that there were doubts about budget
system, budget monitoring system and management information system’s strength.

Upon
conducting audit on exchange accounts of the financial year, it was known that
in 10 grants and one appropriation, in each case more than Rs.100 crore, over
20% of total allotments (Rs. 13,464.93 crore) were surplus. This was 73% of the
total surplus amount Rs.18,387.47. The Rs.11,050.16 was in three grants and
this was rising doubts on busget proposals’ certainty and credibility, remarked
CAG. Huge surplus resulting from untrue budget allocations, unnecessary joint
grants, expenditure lacking allocation and more re-appropriation proved faultiness
of budget management, commented CAG.

Low
allotments for sub-plan

CAG
found fault in expenditure for SC-ST sub-plan for the financial year 2014-15. In
SC sub-plan’s estimated expenditure for 2014-15, 17.10% funds should have been
allotted but only 16% has been allotted. In the same way, ST sub-plan should
have been allotted 5.33% but only 5.2% was allotted. Re-appropriation was done
for Rs. 1,418.59 crore under SC sub-plan and for Rs.582.76 crore under ST
sub-plan. This showed the failure in implementation of the scheme, commented
the report given by CAG.

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