Hyderabad: CAG wants State to streamline budget

Hyderabad: The Comptroller and Auditor General (CAG) asked the State Finance Department to rationalise the budget preparation exercise to the bridge and minimise the gap between the budget estimates and actualexpenditure.

The CAG has made these recommendations making a series of observations considering the fiscal situation of Telangana.

It said there had been an increase in growth of Revenue Receipts (RR) and Revenue Expenditure (RE) during the years 2015-16 to 2018-19. As a percentage of Gross State Domestic Product (GSDP), however, both RR and RE have decreased marginally in 2018-19. But, the growth rates of RR and RE rose in 2018-19 and came close to the growth rate of GSDP.

Contrary to the claims made by the State government that it has been investing in capital expenditure, the public finances watchdog pointed out that the Capital Expenditure (CE) has decreased in 2018-19 in comparison with the preceding year as well as in comparison to GSDP.

Giving its observations on the revenues and fiscal deficit, the CAG report tabled in the State Assembly on Friday said that the State registered a Revenue Surplus of Rs 4,337 crore.

The Fiscal Deficit was Rs 26,949 crore. But, giving ammunition to the charges of the Opposition parties that the State government has been fudging figures, it pointed out that the revenue surplus, however, was overstated to the tune of Rs 9,481.97 crore.

Similarly, the State government had understated the Fiscal Deficit by Rs 217.86 crore on account of misclassifications and non-contribution to Statutory Funds. Effectively, there was a Revenue Deficit of Rs 5,144.97 crore and a Fiscal Deficit of Rs 27,166.86 crore.

The CAG said that the fiscal parameters of the fiscal deficit were within the limits with 3.11 per cent of GSDP ( Rs 8,65,688 crore) and within the limit of 3.25 per cent prescribed by the 14th Finance Commission.

Also, a 3.5 per cent target set out in the Medium-Term Fiscal Policy Statement of the State Government as per the FRBM Act. Similarly, regarding the second fiscal parameter, the total outstanding liabilities (Rs 1,96,963 crore) were 22.75 per cent of the GSDP, which is within the limit of 23.33 per cent prescribed by the 14th Finance Commission. Also, within 25 per cent as targeted by Medium Term Fiscal Policy Statement (MTFP) of the State government.

The Primary Deficit (Rs 14,363 crore), in 2018-19, has decreased by nine per cent in comparison to the preceding year (Rs 15,864 crore). Primary Deficit, though decreased, indicates that the non-debt receipts were not sufficient to meet Primary Expenditure.

On Mobilisation and application of resources, the CAG said that Revenue Receipts (Rs 1,01,420 crore) in 2018-19 increased by Rs 12,596 crore (14 per cent) over FY 2017-18.

However, it was lower than the budget estimates by Rs 29,555 crore (23 per cent). Revenue Expenditure (Rs 97,083 crore) in 2018-19 increased by Rs 11,718 crore (14 per cent) over FY 2017-18. It was, however, lower than the budget estimates by Rs 28,372 crore (23 per cent).

On capital expenditure fronts, it was (Rs 22,641 crore) in 2018-19 decreased by Rs 1,261 crore (five per cent) in comparison to 2017-18, which was, however, lower than the budget estimates by Rs 10,728 crore (32 per cent), it added.