CAG raps Telangana govt over irrigation projects

Hyderabad: The TRS government’s prestigious irrigation projects have come under the lens of CAG. It has observed that project cost was escalated by over Rs70,000 crore due to delay.

The Comptroller and Auditor General on Sunday submitted its ‘State Finances Audit Report’ for 2017-18 fiscal to the Telangana Assembly.

“The State government didn’t disclose financial results of any of the irrigation projects. In respect of 19 irrigation projects, the original cost was Rs41,201 crore. However, delays ranging from three to 11 years led to an escalation of projected cost tot Rs1,32,928 crore. An amount of Rs70,758 crore was spent on these incomplete projects so far. The delays in completion of projects not only adversely affected the quality of the expenditure, but also deprived the state of intended benefits and economic growth,” said CAG in the report.

According to the report, the Telangana government spent Rs79,235 crore on capital projects during 2014-18. Irrigation and flood control account for over 50 per cent of capital expenditure in the state.

The CAG has cautioned the Telangana government over the financial performance of power Discoms. It alerted the state government on increasing loss component at the power discoms. The loss from the power sector was Rs6,202 crore and accounted for 94 per cent of the total loss of Rs6,619 crore incurred by working PSUs in the Telangana state in 2017-18 fiscal.

“The State government’s actions have adversely impacted the Discoms, and this could impact Return on Investment. In order to ensure financial turnaround of Discoms, the state government may release their dues as well as compensate the Discoms, while implementing new government policies,” suggests CAG.

Overstating revenues and understating fiscal deficit

Telangana registered a revenue surplus of Rs3,459 crore, and the fiscal deficit was Rs26,700 crore. CAG observed that revenue surplus was overstated by Rs3,743.74 crore and the fiscal deficit was understated by Rs954.60 crore on account of misclassifications, non-contribution to statutory funds and classifying subsidies as loans. Effectively, there was a revenue deficit of Rs284.74 crore, and the fiscal deficit was Rs27,654.60crore.

Fiscal deficit of Rs26,700 crore was 3.55 per cent of GSDP of Rs7,52,230crore. Fiscal deficit marginally exceeded the ceiling of 3.5 per cent fixed by the 14th Finance Commission. Outstanding public debt to GSDP ratio was 19 per cent. This was within the ceiling of 22.82 per cent of as fixed by the 14th Finance Commission. The outstanding liabilities were 22.05 per cent of GSDP, which was within the prescribed limit of 25 per cent as per the medium-term fiscal policy statement (MFPS) of the state government. 

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