CAG: TS debt piles up to Rs 1.42 lakh crore

Hyderabad: The Comptroller and Auditor General of India has observed that the annual growth of borrowings of the State government was more than the annual growth of the Gross State Domestic Product (GSDP).

The report of the CAG was introduced in the Assembly on Sunday. According to the report, the State had a debt of Rs 1.42 lakh crore in the financial year of 2017-18. It has observed that the interest payments have been increasingly consuming the revenue receipts.

The total loans that the State government owed in the next seven years were Rs 65,740 crore. The debt payment to tax revenue ratio has gone up as it rose to 8.05 per cent from 6.84.

The CAG suggested that the State government should undertake a study to measure its total fiscal commitments and the ability to meet them.

This would inform the risk assessment on future borrowings.

The CAG observed that the guarantees (Rs 41,892 crore) were 51 per cent of the total revenue receipts.

The report stated that the government has been extending guarantees to the bodies which do not finalise their accounts. No revenue has been received through the Guarantee Commission which was Rs 209 crore.

The CAG suggested that the government must comply with its own orders and ensure that comprehensive risk assessment is done which informs the decisions to provide guarantees.

It has been suggested by the CAG that Telangana is yet to amend its FRBM Act in accordance with the recommendations of the Fourteenth Finance Commission.

The FRBM Act requires that the State government must make disclosures under the section 10 of the Act. The State government did not make four out of 10 disclosures required to be made.

It has been observed that the Revenue Receipts (RR) and Revenue Expenditure (RE) have decreased in 2017-18 when compared to 2015-16 to 2016-17.

The CAG stated that the revenue surplus of Rs 3,459 crores was over stated and the fiscal deficit was Rs 26,700 crore in 2017-18 financial year.

The fiscal deficit was understated by 954.60 crore on account of misclassifications, non-contribution to statutory funds and classifying subsidies as loans.

Effectively, there was a revenue deficit of 284.74 crore and fiscal deficit was 27,654.60 crore. The CAG pointed out that the revenue receipts (Rs 88,824 crore) in 2017-18 increased by 6,006 crore (7.25 per cent) over 2016-17.

hey were, however, lower than the budget estimates by Rs 24,259 crore. Telangana fared favorably in its focus on Development Expenditure ( Rs 84,006 crore ) and Capital Expenditure (Rs 3,902 crore) in comparison with other General Category States.

The State, however, lagged behind in the area of education. The CAG said that delays in completion of irrigation and other capital projects not only adversely affected the quality of the expenditure but also deprived the State of intended benefits and economic growth.

It has spent Rs 79,236 crore on capital projects during the years 2014-18. Within the capital projects, more than 50 per cent of the capital expenditure was on Irrigation and flood control.

In respect to 19 irrigation projects, whose original cost was Rs 41,201crore, delays ranging from three to 11 years led to escalation of projected cost to Rs 1.32 lakh crore. An amount of 70,758 crore was spent on the projects.