CAG concern over TS fiscal health

Hyderabad: The CAG (Comptroller and Auditor General of India) has found that the outstanding debt and fiscal deficit of the state had exceeded the prescribed limits of GSDP for 2021-22 financial year.

The CAG report (financial accounts) was tabled in the Assembly on the last day of the monsoon session on Sunday. The report said the public debt was above the prescribed limit of 25 per cent of the GSDP. It disclosed that state’s outstanding debt (Rs 3,14,662) was 27.40 per cent of the GSDP.

The fiscal deficit of the state also crossed the prescribed 3 per cent of the GSDP. “The fiscal deficit of Rs 46,639 crore was 4.06 per cent of GSDP for 2021-22. The fiscal deficit shall not exceed 3 per cent during a financial year.”

The report further observed the Telangana government had a revenue deficit of Rs 9,335 crore (0,81 percent of GDP) and said that the state should have maintained revenue surplus.

“Various factors have contributed to the increased state debt burden and fiscal deficit,” Finance officials said, adding that the government sought huge loans from the financial institutions to execute many projects and for the implementation of the welfare schemes. The 2021-22 FY witnessed the impact of the Corona pandemic. As a result, the state registered a dip in the revenues generated from various revenue generating wings.

The state government could mobilise Rs 1.27 lakh crore revenue as against the target of Rs 1.76 lakh crore. “The government could achieve only 72 per cent of the revenue target.” The report said the total revenue receipts including grant in aid, capital receipts and borrowings were Rs 1.74 lakh crore. The government has set the target of Rs 2.21 lakh. It means the government registered a deficit of 50,000 crore in the target in 2021-22 financial year.

The CAG report explained: “The state had a revenue deficit of Rs 9,335 crore and a fiscal deficit of Rs 46,639 crore as on March 31, 2022. The fiscal deficit was met from the net of borrowings and other liabilities (Public Debt Rs 42,936 crore), Public Account (Rs 3,773 crore) and cash balance ((-) Rs 70 crore). Around 50 per cent of the revenue receipts (Rs 1,27,468 crore) of the state government was spent on committed expenditure like salaries (Rs 30,375 crore), interest payments (Rs 19,161 crore) and pensions (Rs 14,025 crore)”.