Comptroller and Auditor General calls KM Mani's budget bluff
Ex-FinMin showed impressive revenue deficit by inflating numbers.
THIRUVANANTHAPURAM: The latest report of the Comptroller and Auditor General has exposed former finance minister K. M. Mani's 'number trick' of inflating revenue figures wildly to paint a rosy picture of the economy.
To give the illusion of a lower fiscal deficit, Mr Mani's preferred move was to peg revenue receipts at an unattainably high level. Thus, he was able to project a low revenue deficit while presenting the Budget.
Then, when revenue receipts fell as expected, Mr Mani managed to offset this drop, but only to a very small extent, by cutting down on capital expenditure.
As a consequence, along with revenue loss, the state also suffered from sluggish development. The CAG notes that this had been the practice right from the time K M Mani took over as finance minister, from 2012-13.
The latest CAG figures relate to the budget estimates of 2014-15 fiscal. While presenting the Budget in March 2014, Mr Mani estimated a revenue of Rs 64,842.34 crore, and projected a revenue deficit of Rs 7131.7 crore (1.54 per cent of GSDP), a healthy figure considering the constraints.
However, the final CAG-vetted revenue receipts were only Rs 57,950.47 crore, a shortfall of nearly Rs 7,000 crore. The actual revenue deficit, as a result, was a whopping Rs 13,795.96 crore, an alarming 3.5 per cent of the GSDP.
The shortfall in revenue receipts has taken place mostly in the case of motor vehicles tax, and stamps and registration. Though Rs 2,799.82 crore was expected from motor vehicles, only Rs 2,364.94 crore could be collected (a shortfall of Rs 435 crore).
In the case of stamps and registration, the actual collection was lower by Rs 1,075 crore. Mr Mani ensured that development was the leit motif of his budgets.
In pursuit, he had always kept capital expenditure very high. In 2014-15, for instance, Mr Mani's capital expenditure was Rs 6,636.38 crore. But by the end of the fiscal, the actual money spent on development was only Rs 4,254.59 crore, short by nearly Rs 2,400 crore.