The Comptroller and Auditor General (CAG) of India has said that the Telangana government has overstated the revenue surplus for 2016-17 at ₹6,778 crore as against the actual surplus of ₹1,386 crore due to irregular accountings.
“Thus, the State had revenue deficit of ₹5,392 crore,” the CAG has said in its report on State’s finances.
For every ₹100 that the State earned in revenues, it paid ₹32.16 in repayment of debts in that year. This was only 7.12 per cent in the previous year.
The CAG said there were several instances of non-observance of financial rules and procedures and absence of financial controls. Utilisation certificates were not furnished in some cases.
The outstanding debt shot up to ₹1,21.236 crore in 2016-17 from ₹91,985 crore in the previous year.
Releasing the report here on Thursday, Ajaib Singh, Principal Accountant General (Audit), said the State had exceeded the FRBM (Fiscal Responsibility and Budget Management) ceiling of 3.5 per cent stipulated by the 14th Finance Commission. The CAG submitted its reports to the Assembly on Thursday, the last day of the Budget session.
Fiscal deficit at ₹35,281 crore constituted 5.46 per cent of the Gross State Domestic Product (GSDP). This was understated by ₹2,500 crore by the government due to crediting of borrowed funds as revenue receipts.
The ratio of fiscal deficit to GSDP, excluding ₹7,500 crore transferred under Uday scheme, was 4.3 per cent, exceeding the FRBM ceiling of 3.5 per cent.
The CAG also finds that the capital expenditure at ₹33,371 crore far exceeded the Budget Estimates of ₹29,313 crore.
Less for infra, assets
Revenue expenditure devoured 69 per cent of the State’s aggregate expenditure, leaving only 31 per cent for investments in infrastructure and asset creation.
The outlook for debt repayment in the next future looks daunting. The State has to repay about half of the ₹56,388 crore debt in the next seven years.
The CAG noticed that excess expenditure over the allocations in the previous two years was not regularised till December 2017.
“The cases of excess expenditure over the grants are serious breaches and are in violation of the wish of the legislature. This needs to be fixed,” the CAG said.