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Telangana out to prove its fiscal discipline
In the wake of CAG rapping the Telangana government on its fiscal management in its 2016-17 audit report released recently, the state government is preparing a detailed note on the state’s financial discipline to be presented in the PAC (Public Accounts Committee) meeting to be held in May.
Hyderabad: In the wake of CAG rapping the Telangana government on its fiscal management in its 2016-17 audit report released recently, the state government is preparing a detailed note on the state’s financial discipline to be presented in the PAC (Public Accounts Committee) meeting to be held in May.
Top officials of the state Finance department have analysed the CAG (Comptroller and Auditor-General) report on the state finances in the recently-held meetings with Chief Minister K Chandrasekhar Rao.
Primarily, the government found some contradictory observations made by the Audit and Accounting wings of the CAG in the report.
The report disclosed that the revenue surplus was overstated by Rs 6,778 crore on account of irregular accounting by the TS government. Thus, the state had revenue deficit of Rs 5,392 crore. Fiscal deficit (Rs 35,281 crore) which stood at 5.46 per cent of the GSDP (Gross State Domestic Product) was understated by Rs 2,5000 due to crediting of borrowed funds as revenue receipts.
The CAG also observed the ratio of the fiscal deficit to GSDP excluding amount transferred under Ujwal DISCOM Assurance Yojana (UDAY) scheme (Rs 7,500 crore) was 4.3 per cent.
“This exceeded the ceiling of 3.5 per cent stipulated for 2016-17 by the 14 Finance Commission and targeted in the Medium Term Fiscal Policy Statement (MFPS) of the state under the Fiscal Responsibility and Budget Management (FRBM) Act.
The state government officials, however, maintained that the state Finance department's borrowings were taken under UDAY scheme only after getting the approval from the Centre and they were within the FRBM limits. Whereas, the CAG considered the borrowings excess to the adopted fiscal policy. A detailed note on the entire issue was under preparation.
The officials said that the state Finance department will make a detailed presentation at the PAC meeting, countering the arguments made by the Opposition parties on the state's financial position.
“The CAG findings in its report are not final. The autonomous auditor will have to prepare another report based on the outcome in the PAC meeting,” officials said, pointing out that the government will set the things right, if required, in the financial management in the just started new financial year.
