`Outstanding Public Debt touches Rs.32,373 Cr': CAG express displeasure over AP government's budgetary management

The CAG said comprehensive and visionary budgetary management requires advance planning and accurate estimation of revenues and expenditure.

Disappointed over the faulty fiscal management, the CAG said the state government had failed to take corrective measures despite flagging the issue every year over the last five years.

The CAG audit report for the 2019-20 financial year was tabled in the state assembly on Friday. The CAG said that the state government tabled the supplementary budget estimates for the financial year 2019-20 in the State Legislature in June 2020, that is, after the closure of the financial year and after the funds provided for in supplementary estimates have been expended.

"The poor budgetary plans violate the provisions of the Constitution of India, undermine the principle of legislative sanction and control over budget, and encourage financial indiscipline in management of public resources," said the CAG.

CAG pointed out that there were instances of incurring excess expenditure or large savings with reference to provisions made during the year, which point to flaws in expenditure monitoring and control.

"A majority of controlling officers did not explain the reasons for variations in expenditure vis-à-vis allocations, to the Principal Accountant General (A&E), which affects the accountability mechanism of government and weakens legislative control over expending public finances," the report observed.

The report said that the indiscriminate operation of other expenditure heads affected transparency in financial reporting and obscured proper analysis of allocative priorities and quality of expenditure. It said the operation of PD Accounts lacked clarity and transparency as huge amounts were shown to have been transferred to these accounts during the year but were not actually made available to the departmental officials for incurring the expenditure.

It noted that the diversion of grants-in-aid provided by the Centre for implementation of centrally sponsored schemes for other than intended purposes defeats the envisaged objectives

FINDINGS OF THE CAG REPORT

The state witnessed a decrease of 3.17 percent in Revenue Receipts during the year 2019-20 as compared to the previous year, due to a decrease in collection of own tax revenue and tax transfers from the government of India

Revenue expenditure increased by 6.93 percent due to the implementation of new welfare schemes

This resulted in an increase of revenue deficit of the state by 90.24 percent as compared to the previous year

The state government has reduced the expenditure on asset creation by 38.72 percent over the previous year

The government transferred Rs 1,100 crore funds relating to State Disaster Relief Fund to Personal Deposit Account in violation of the extant Rules and accounting procedure

Outstanding Public Debt at the end of the year has increased by 17.20 percent (Rs.32,373 crore) over the previous year

The state government has also a liability for off-budget borrowings of Rs.26,096.98 crore, which it has not disclosed appropriately as part of its budget documents