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TS budget figures were inflated: CAG Report

Hyderabad, March 27 : The Comptroller and Auditor General of India (CAG) on Monday described the budget figures of Telangana Government as overstated and unrealistic.

In its report on State Finance for the year ended March 2016, the CAG said that the State Government’s claims of Telangana having revenue surplus of Rs. 238 Crore was overstated. It was due to misclassification of grants-in-aid (Rs. 151 crore) under capital heads and crediting off-budget borrowings (Rs. 3,719 crore) to revenue receipts. “Fiscal deficit which stood at 3.23% of GSDP is understated by (Rs. 3,719 crore) due to crediting off budget borrowing to revenue receipts. It would have the effect of increasing the ratio of fiscal deficit to GSDP from 3.23% to 3.87%,” the CAG said in its report.

As per CAG report, total outstanding liabilities constituted 21.37% of GSDP which was within the ceiling of 21.55 per cent prescribed by the 14th Finance Commission. It also pointed out that the State Government inflated figures of revenue receipts. “52.5% of the revenue receipts of Rs. 76,134 crore during 2015-16 came from the Slate’s own tax revenue and 19% came from the revenue receipts from non tax revenue collections, the rest coming from the State’s share of Central taxes (16.2%) as well as central grants (12.3%). During the year, Government issued orders to remit the unspent balances in PD accounts to revenue receipts in violation of accounting provisions inflating revenue receipts to the extent of Rs. 4,218 Crore.

The CAG also said although the State Government accorded adequate fiscal priority to development expenditure during 2015-16, it could not ensure that the allocated funds released were utilised optimally for the intended purposes. It also said that the maturity profile of debt indicates that the State has to repay more than 53% of its total debt within the next years.

“Many instances of unrealistic budgetary assumptions and weaknesses in expenditure monitoring and control were observed during the year. Actual expenditure (Rs. 1,04,098 Crore) incurred was less than the budget provision (Rs. 1,39,360 Crore). Several policy initiatives taken up by government remained either unfulfilled or were partially executed, primarily due to non-approval of the scheme guidelines/modalities, non-commencement of works for want of administrative sanction and poor project implementation, apart from the non-release of funds,” the report said.

The CAG said that excess expenditure of Rs. 5,881 crore was incurred during 2015-16 without legislative authorization. Regularisation of excess expenditure for the year 2014-15 amounting to Rs. 304 crore was yet to be carried out by government by taking legislative approval.

“There were several instances of budgetary misclassification on subsidies, subvention from Central Road Fund etc., which indicated deficiencies in budget formulation. Unrealistic budgetary allocations resulting in substantial savings, unnecessary supplementary grants, expenditure incurred without provision and excess re-appropriations, resulting in excess provision were indicative of poor budget management,” said the report.

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