CAG pats TS government for economic growth

HYDERABAD: The Comptroller and Auditor General of India (CAG) praised the Telangana state government for registering a positive growth rate of 2.42 per cent in 2020-21 while the country registered a negative growth rate of 2.97 per cent. The CAG report for 2020-21 was tabled in the Legislative Assembly on Tuesday.

"During 2020-21, the economic slowdown coupled with Covid pandemic had a twin effect of decrease in revenue receipts and increase in revenue expenditure, particularly in the initial months of 2020-21 compared to 2019-20. The state had to depend significantly on ways and means advances. During 2020-21, Telangana registered lowest growth rate in the last five years. However, while the country registered a negative growth rate of 2.97 per cent in 2020-21, it is heartening to note that Telangana could still register a positive growth rate of 2.42 per cent," the report stated.

The report pointed out that the state was not able to achieve any of the three key fiscal targets, namely maintenance of revenue surplus, targets of fiscal deficit to GSDP and total outstanding liabilities to the GSDP. For the second consecutive year, the state registered a revenue deficit of Rs 22,298 crore and fiscal deficit of Rs 49,038 crore.

"The revenue deficit was understated to an extent of Rs 545 crore and the fiscal deficit was understated to an extent of Rs 214 crore due to non-discharge of interest liabilities, short contribution to National Pension Scheme System and on account of certain misclassifications between revenue and capital expenditure," the report noted.

Although the percentage of total outstanding liabilities to the GSDP (28.11 per cent) was within the limit of 29.50 per cent of the GSDP prescribed by 15th Finance Commission for 2020-21, this would be way above the limit at 38.10 per cent if the liabilities of the state government regarding its off-budget borrowings (OBB) of Rs 97,940.45 crore are considered. Non-disclosure of OBB has a dual impact of diluting public financial management and legislative oversight and is in contravention of the recommendations of 15th Finance Commission, the CAG said.

"The state has been persistently trailing in respect of expenditure on education and health when compared to other states. Interest payments, in particular, are increasing year after year. Huge capital expenditure of Rs 1,44,399 crore was incurred on ongoing irrigation projects," it added.

There is a consistent trend of incurring expenditure without budget provision (Rs 1,247 crore in 2020-21) as also expenditure over and above the provision (Rs 81,514.54 crore) across the years in contravention of the Constitutional provisions. Such excess expenditure of Rs 1,32,547 crore from 2014-15 to 2019-20 were yet to be regularised.

The state legislature initially approved a budget of Rs 1,82,959 crore and supplementary provision of Rs 26,131 crore. The actual expenditure incurred was Rs 2,34,088 crore, resulting in net excess expenditure of Rs 24,998 crore.

Municipal administration and urban development (capital voted for Rs 7,547 crore), housing (revenue voted for Rs 7,069 crore) and social welfare (`6,124 crore) were the grants in which major amounts remained unspent during the year. There were persistent savings of more than Rs 1,000 crore in MA&UD, social welfare, tribal welfare and agriculture grants indicating inadequate implementation of welfare schemes.

The entire provisions remained unspent in respect of Hyderabad urban agglomeration (Rs 10,000 crore), construction of 2BHK houses for poor in rural areas (Rs 3,150 crore), 2BHK houses in urban areas (Rs 1,850 crore) and market intervention fund (Rs 1,000 crore). Out of Rs 6,225 crore provided towards Rs 1 lakh crop loan waiver scheme for farmers, only Rs 213 crore was spent leaving an unspent provision of Rs 6,012 crore. In respect of Rs 5,000 crore provided for 2BHK scheme, only Rs 550 crore was utilised resulting in saving of Rs 4,450 crore. Low expenditure on maintenance of irrigation projects continued this year like previous year.