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Karnataka’s fiscal liabilities increased by 71 per cent to Rs 1,03,030 crore in 2011-12 as against Rs 60,142 crore in 2007-08, said the Comptroller and Auditor General of India (CAG).
Fiscal liabilities of the State comprise consolidated fund liabilities to the tune of Rs 65,315 crore and public account liabilities of Rs 37,715 crore.
Limit raised
CAG in its report on finances of the State said, “With the announcement of the economic stimulus package by GOI and consequent amendment to FRA, fiscal deficit limit was raised to 3.5 and four per cent of GSDP during the years 2008-09 and 2009-10 respectively. This resulted in rate of growth of fiscal liabilities at 19 and 16.7 per cent respectively.”
As recommended by 13th Finance Commission and the subsequent amendment to FRA, fiscal deficit limit of 3 per cent was to be attained by 2011-12 with the year 2010-11being the year of consolidation. The growth rate of fiscal liabilities which was 16.7 per cent during 2009-10 decreased to 10.1 per cent during 2010-11.
However, in 2011-12, due to increased borrowings, the growth rate of fiscal liabilities once again increased to 12 per cent. As a result, buoyancy of fiscal liabilities to GSDP was 1.3 during the year 2011-12.
Further, the ratio of fiscal liabilities to GSDP during 2011-12 increased to 24 per cent from 23 per cent in 2010-11, and also buoyancy of fiscal liabilities to revenue receipts increased from 0.5 per cent in 2010-11 to 0.6 per cent in 2011-12.
Assets
The growth rate of assets which was 14 per cent during 2010-11, increased to 18 per cent during 2011-12, while liabilities also increased from 10 per cent in 2010-11 to 12 per cent in 2011-12.
The finance accounts reflected an amount of Rs 54,333 crore as internal debt outstanding as at the end of 2011-12 after taking into account the difference of Rs 505.08 crore in the accounts of LIC, GIC, Nabard and NCDC.
Further, reserve bank of India in its quarterly statement of outstanding balance of state government as on March 31, 2012 reflected closing balance of market loans – not bearing interest as Rs 0.18 crore. However, the finance accounts reflected an amount of Rs 1.58 crore. This clearly indicated that reconciliation between the revenue and capital accounts was required.
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